10-Q: Xeris Biopharma Reports Q3 2024 Results: Revenue Growth Driven by Gvoke and Recorlev, Pipeline Progress Continues

Xeris Biopharma's Q3 2024 results show revenue growth driven by Gvoke and Recorlev, alongside continued investment in their pipeline, particularly XP-8121.

Summary

• Xeris Biopharma reported a net loss of $15.7 million for the third quarter of 2024, compared to a net loss of $12.2 million for the same period in 2023.
• Total revenue for Q3 2024 was $54.3 million, a 12.3% increase from $48.3 million in Q3 2023.
• Product revenue increased by 26.8% to $52.9 million, driven by growth in Gvoke and Recorlev sales, while Keveyis sales declined.
• Gvoke net revenue increased by 29.4% to $22.9 million, and Recorlev net revenue increased by 118.9% to $17.7 million.
• Keveyis net revenue decreased by 23.1% to $12.2 million.
• Cost of goods sold increased by 65.7% to $13.6 million, primarily due to a write-off of Gvoke components.
• Research and development expenses increased by 17.0% to $5.9 million, driven by pipeline development, particularly XP-8121.
• Selling, general, and administrative expenses increased by 20.6% to $45.0 million, due to CEO succession costs and Recorlev expansion.
• The company's accumulated deficit was $666.7 million as of September 30, 2024.
• Xeris believes its cash resources are sufficient to sustain operations for at least the next 12 months.

Sentiment

Score: 5

Explanation: The document presents a mixed picture. While there is positive revenue growth in Gvoke and Recorlev, the company is still operating at a loss, has a significant accumulated deficit, and faces risks related to its supply chain and debt. The sentiment is neutral to slightly negative.

Positives

• Gvoke and Recorlev sales are showing strong growth, indicating successful commercial execution.
• The company is actively investing in its pipeline, particularly XP-8121, which has shown promising Phase 1 and Phase 2 results.
• Xeris has a strong patent portfolio, providing intellectual property protection for its products and technologies.
• The company believes its current cash resources are sufficient to sustain operations for at least the next 12 months.
• The company has secured a $200 million term loan and an additional $15.2 million loan available to redeem the 2025 convertible notes.

Negatives

• Keveyis sales declined by 23.1% in Q3 2024 compared to Q3 2023.
• Cost of goods sold increased significantly due to a write-off of Gvoke components.
• The company continues to incur net losses and has a substantial accumulated deficit.
• Selling, general, and administrative expenses increased due to CEO succession costs and Recorlev expansion.
• The company is reliant on third-party suppliers, which poses a risk to their supply chain.

Risks

• The company relies on single-source suppliers for key materials, which could disrupt production if these suppliers fail.
• The company's third-party suppliers may not comply with regulations, leading to sanctions or delays.
• The company may not be able to secure additional funding on acceptable terms, which could impact its operations.
• The company is subject to risks from geopolitical instability, including the ongoing conflict in the Middle East, which could affect its supply chain.
• The company is subject to interest rate risk on its floating rate debt.

Future Outlook

The company expects to continue to incur net losses for at least the next 12 months and will need to obtain additional financing in the future. The company is focused on driving growth through commercial execution of its products, leveraging its formulation science, and collaborating with other companies.

Management Comments

• The company is focused on executing against the opportunities made possible by Gvoke, Recorlev, and Keveyis in order to maintain our momentum of growth and enable the financial self-sufficiency of our Company.
• The company is pursuing formulation and development partnerships to apply our XeriSol and XeriJect formulation platforms to enhance the drug delivery and clinical profile of other companies' proprietary drugs and biologics.
• The company believes these three distinct pillars of our strategy can bring new products to market and transform the lives of patients with life-impacting diseases and ultimately drive value for Xeris' shareholders.

Industry Context

Xeris operates in the competitive biopharmaceutical industry, focusing on specialty therapeutics for endocrine and metabolic disorders. The company's growth is tied to the successful commercialization of its products and the advancement of its pipeline. The company is leveraging its proprietary formulation technologies to differentiate itself in the market.

Comparison to Industry Standards

• Xeris's revenue growth in Gvoke and Recorlev is a positive sign, but the decline in Keveyis sales is a concern. Companies like Novo Nordisk and Eli Lilly, which also have diabetes and endocrine products, have much larger revenue bases and established market positions.
• The company's R&D spending is relatively low compared to larger pharmaceutical companies, which may limit its ability to develop new products quickly. Companies like Vertex Pharmaceuticals and BioMarin Pharmaceutical, which focus on rare diseases, invest heavily in R&D.
• Xeris's reliance on third-party manufacturers is common in the industry, but the company's dependence on single-source suppliers is a risk. Companies like Catalent and Lonza are major contract manufacturers that serve many biopharma companies.
• The company's accumulated deficit is significant, indicating a need for continued financing. Many early-stage biopharma companies operate at a loss while developing their products, but Xeris needs to demonstrate a path to profitability.
• The company's debt levels are high, which could limit its financial flexibility. Many biopharma companies use debt financing, but Xeris's debt is significant relative to its revenue.

Stakeholder Impact

• Shareholders may be concerned about the company's continued losses and reliance on external funding.
• Employees may be affected by the company's restructuring and CEO succession plan.
• Customers may benefit from the company's innovative products, but supply chain risks could impact product availability.
• Suppliers may be affected by the company's financial performance and supply chain management.
• Creditors may be concerned about the company's debt levels and ability to repay its obligations.

Next Steps

• The company will continue to focus on commercializing Gvoke, Recorlev, and Keveyis.
• The company will continue to develop its pipeline, particularly XP-8121, and expects an FDA End-of-Phase 2 interaction by year-end.
• The company will continue to pursue formulation and development partnerships.
• The company will continue to seek public equity and debt financing to meet its capital requirements.

Key Dates

Keywords

Xeris Biopharma, Gvoke, Recorlev, Keveyis, XP-8121, glucagon, Cushing's syndrome, Primary Periodic Paralysis, hypoglycemia, levothyroxine, biopharmaceutical, endocrinology