10-Q: Xeris Biopharma Achieves Q3 Profit Amid Strong Revenue Growth

Xeris Biopharma Holdings, Inc. reported a significant increase in total revenue and a shift to positive net income for the third quarter of 2025, driven by robust Recorlev sales.

Summary

• Total revenue for the three months ended September 30, 2025, increased by 37.1% to $74.4 million, compared to $54.3 million in the same period of 2024.
• The company achieved a net income of $0.6 million in Q3 2025, a substantial improvement from a net loss of $15.7 million in Q3 2024.
• For the nine months ended September 30, 2025, total revenue grew by 44.1% to $206.0 million, up from $143.0 million in the prior year period.
• Net loss for the nine months ended September 30, 2025, significantly narrowed to $10.5 million from $49.7 million in the same period of 2024.
• Recorlev net revenue surged by 108.6% in Q3 2025 and 125.5% for the nine months, primarily due to increased patient demand.
• Operating activities generated $8.6 million in cash for the nine months ended September 30, 2025, a positive swing from $39.0 million cash used in the prior year period.
• Total stockholders' equity (deficit) improved significantly from $(29.6) million at December 31, 2024, to $(0.9) million at September 30, 2025, primarily due to increased additional paid-in capital from equity issuances.
• Cost of goods sold as a percentage of total product revenue improved to 14.8% in Q3 2025 from 25.7% in Q3 2024, mainly due to higher sales of products with a lower cost of goods sold and a reduction of Gvoke inventory write-offs.

Sentiment

Score: 7

Explanation: The company demonstrated strong revenue growth and a significant improvement in profitability, achieving net income in Q3 2025 and positive operating cash flow for the nine-month period. While an accumulated deficit remains and future losses are expected, the financial trajectory is positive, driven by key product performance.

Positives

• Total revenue increased by 37.1% to $74.4 million in Q3 2025 and by 44.1% to $206.0 million for the nine months ended September 30, 2025.
• Achieved net income of $0.6 million in Q3 2025, a significant turnaround from a $15.7 million net loss in Q3 2024.
• Recorlev net revenue more than doubled, increasing by 108.6% in Q3 2025 to $37.0 million and by 125.5% for the nine months to $93.9 million, driven by higher patient demand.
• Gvoke net revenue increased by 9.6% in Q3 2025 to $25.2 million and by 16.6% for the nine months to $69.5 million, benefiting from higher volume and favorable net pricing.
• Cost of goods sold as a percentage of total product revenue improved significantly to 14.8% in Q3 2025 from 25.7% in Q3 2024, reflecting better product mix and reduced write-offs.
• Generated $8.6 million in cash from operating activities for the nine months ended September 30, 2025, a positive shift from a $39.0 million cash outflow in the prior year.
• Total stockholders' equity (deficit) improved from $(29.6) million at December 31, 2024, to $(0.9) million at September 30, 2025.
• Cash and cash equivalents increased to $91.6 million at September 30, 2025, from $71.6 million at December 31, 2024.

Negatives

• Keveyis net revenue decreased by 2.1% in Q3 2025 to $11.9 million and by 9.3% for the nine months to $34.8 million, primarily due to unfavorable net pricing.
• The company continues to incur net losses for the nine months ended September 30, 2025, totaling $10.5 million, and expects to continue incurring net losses for at least the next 12 months.
• Accumulated deficit increased to $682.4 million as of September 30, 2025, from $671.9 million at December 31, 2024, reflecting ongoing losses over time.
• Research and development expenses increased by 27.1% in Q3 2025 to $7.5 million and by 19.6% for the nine months to $23.3 million, indicating continued high investment.
• Selling, general and administrative expenses increased by 3.3% in Q3 2025 to $46.5 million and by 9.3% for the nine months to $134.9 million, reflecting increased operational costs.
• Interest and other income decreased by 25.6% for the nine months ended September 30, 2025, driven by a decline in interest rates.

Risks

• Reliance on a number of single-source suppliers and manufacturers for products and product candidates, with potential for negative impact from disruptions.
• Exposure to risks and uncertainties from political and macroeconomic events, including U.S. trade tariffs, global credit market instability, changes in U.S. governmental policies, geopolitical instability (Russia-Ukraine, Israel-Hamas, Middle East), elevated and fluctuating interest rates, inflationary pressures, and tightening lending standards.
• Inability to successfully market and sell Recorlev, Gvoke, and Keveyis.
• Inability to raise additional capital on acceptable terms or at all, or that such financing may be subject to restrictions.
• Issuance of equity securities may result in dilution to stockholders.
• Issuance of additional debt may impose significant restrictions on operations.
• Failure to raise funds as and when needed could negatively impact financial condition and ability to pursue business strategies, potentially leading to delays or curtailment of operations.
• The 2029 Loans may mature earlier on January 15, 2028, if the 2028 Convertible Notes are outstanding and not sufficiently covered by permitted equity raises or convertible debt, together with no more than $15.6 million of cash on hand.
• Concentration of credit risk with four customers accounting for 97% of gross product revenue and 98% of trade accounts receivable for the nine months ended September 30, 2025.

Future Outlook

The company expects to continue incurring net losses for at least the next 12 months. It plans to advance its pipeline candidate XP-8121 by planning and initiating a Phase 3 clinical trial and will continue to invest in marketing and selling its commercial products (Recorlev, Gvoke, Keveyis). The company is also pursuing formulation and development partnerships using its XeriSol and XeriJect technologies. Cash resources are believed to be sufficient for at least the next 12 months, but additional financing through public equity or debt may be sought.

Management Comments

• "Our top priority is maximizing the potential of our three commercial products."
• "Xeris is uniquely positioned to execute on this strategy through the continued growth of our three commercial products, which enables us to invest in and develop therapies for unmet medical needs."
• "We believe this will generate value to all of our stakeholders."
• "We expect to continue to incur significant research and development expenses as we advance our pipeline candidates and in particular plan and conduct clinical trials, prepare regulatory filings for our product candidates, and utilize internal resources to support these efforts."

Industry Context

The biopharmaceutical industry is characterized by high R&D investment, regulatory hurdles, and the need for successful commercialization of therapies for chronic diseases. Xeris Biopharma operates in niche markets for endocrine and neurological diseases, leveraging proprietary formulation technologies. The strong growth of Recorlev suggests successful market penetration in the Cushing's syndrome segment, while Gvoke maintains steady growth in severe hypoglycemia. The slight decline in Keveyis revenue indicates competitive or pricing pressures in the Primary Periodic Paralysis market. The company's focus on pipeline development (XP-8121) and partnerships aligns with industry trends of innovation and leveraging core technologies for broader applications. The macroeconomic environment, including elevated interest rates and tightening lending standards, poses a challenge for capital-intensive biotech companies, which Xeris acknowledges as a risk to its ability to access capital.

Comparison to Industry Standards

• NA

Corporate Governance

Legal Proceedings

• No material legal proceedings are currently subject to the company.
• Management is not aware of any existing, pending, or threatened legal actions that would have a material impact on financial position or results of operations.

Stakeholder Impact

• Shareholders: Potential for dilution if additional equity financing is pursued. Improved financial performance (net income, operating cash flow) could positively impact shareholder value. Conversion of 2025 Convertible Notes into common stock increased outstanding shares.
• Employees: Continued stock-based compensation plans (options, RSUs, SARs, ESPP) provide incentives. Increased R&D and SG&A expenses indicate continued investment in personnel.
• Customers: Continued availability and development of therapies for chronic endocrine and neurological diseases.
• Creditors: Improved operating cash flow and reduced net losses enhance the company's ability to service its debt. The potential for accelerated maturity of 2029 Loans if 2028 Convertible Notes are not addressed poses a risk.
• Suppliers: Reliance on single-source suppliers creates dependency and potential risk for the company's operations.

Next Steps

• Plan and initiate a Phase 3 clinical trial for XP-8121 (once-weekly subcutaneous levothyroxine).
• Continue selling and marketing efforts for commercial products (Recorlev, Gvoke, Keveyis).
• Continue research and development efforts for pipeline candidates.
• Pursue formulation and development partnerships using XeriSol and XeriJect technologies.
• Implement ASU 2023-09 for the fiscal year ending December 31, 2025, for expanded income tax disclosures.
• Evaluate the timing and effects of ASU 2024-03, ASU 2024-04, and ASU 2025-01 on disclosures.

Key Dates

Recommendation

The company has shown significant financial improvement, moving to net income in Q3 2025 and generating positive operating cash flow. Recorlev's strong growth is a key driver. However, the company still projects net losses for the next 12 months, has a substantial accumulated deficit, and faces risks related to capital raising and debt maturity conditions. While the trajectory is positive, the underlying financial health still requires sustained performance and careful management of debt obligations, suggesting a 'hold' until further consistent profitability and debt reduction are demonstrated.

Keywords

Biopharmaceutical, Cushing's syndrome, Severe hypoglycemia, Primary Periodic Paralysis, Recorlev, Gvoke, Keveyis, XeriSol, XeriJect, XP-8121, SEC filing, 10-Q, Financial results, Revenue growth, Net income, Operating cash flow, Debt conversion, Biotech, Endocrine diseases, Neurological diseases