Xeris Biopharma Holdings, Inc.

Hello, everyone, and welcome to the Xeris Biopharma Fourth Quarter 2021 Financial Results Conference Call and Webcast. My name is Seb, and I'll be the operator for your call today. There will be an opportunity to ask a question, and if you would like to do so, please press star 1 on your telephone keypad or press star 2 if you wish to withdraw your question. I will now hand the floor over to Alison Way to begin. Please go ahead.

Thank you. Good morning and welcome to Xeris Biopharma's fourth quarter of 2021 financial results and corporate update conference call and webcast. A press release of the company's fourth quarter and full year 2021 financial results was issued earlier this morning and can be found on our website. We are joined this morning by Paul Edith, Chairman and CEO, and Steve Piper, our CFO. Paul will provide opening remarks, Steve will provide details on our financial results, and then we will open the call for Q&A. Before we begin, I would like to remind you that this call will contain forward-looking statements concerning Xeris's business practices, Xeris's future expectations, plans, prospects, clinical approvals, commercialization, corporate strategy, performance, and the impact of COVID-19 on Xeris's business practices, which contain forward-looking statements for the purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including the effect of uncertainties related to the COVID-19 pandemic on the U.S. and global markets, services, business, financial condition, operations, clinical trials, and third-party suppliers and manufacturers, and other risks, including those discussed in our filings with the SEC. In addition, any forward-looking statements represent our views only as of the date of this call and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligations to update such statements. I'll now turn the call over to Paul Edith.

Good morning, everyone. Thanks for joining us today. This morning, I'll review our 2021 accomplishments and then focus my remarks on our 2022 plans and outlook. 2021 was a remarkable year for Xeris with many significant achievements. Most notable was the acquisition and integration of StrongBridge Biopharma that enabled Xeris to expand our portfolio of commercialized products and to take an important step forward in creating the critical mass necessary to become a fully capable and profitable pharmaceutical company. Other key highlights include impressive total product sales of $79 million on a pro forma basis for GVOC and Cabeas, which is a 56% increase over 2020. GVOC prescriptions in the fourth quarter and full year 2021 grew by 85% and 144% respectively compared to last year. The number of primary paralysis patients benefiting from Cabeas continued to grow throughout 2021, and net sales increased year over year, reaching the top end of our $38 million to $40 million guidance. We also formed two important partnerships that could create a significant value in the future, with Tetris Pharma to commercialize Oglo, which is our international trade name for GVOC, in the U.K. and Europe, and with Merck to access our Xeroject technology for an as-yet-undisclosed monoclonal antibody. We also received multiple FDA approvals in 2021. First for the room temperature shelf life extension for our one milligram presentation of the GVOC hypopen and pre-filled syringe from 24 months to 30 months of room temperature stability. And for our GVOC kit, which is a single use vial and syringe presentation, giving patients another ready to use GVOC option. The kit will be available for sale next week. and very importantly for Recoriliv, an important new treatment option for patients suffering from Cushing syndrome. We also made advancements in our development pipeline, having submitted INDs in support of various programs, most recently for exercise-induced hypoglycemia. And we ended the year in a very strong financial position with $102 million on the balance sheet and then added to that strength with an additional $30 million private placement at the start of 2022. When coupled with the debt restructuring with Hathan that we announced this morning, Xeris's financial position is as strong as it has ever been since the company's inception. More specifically, we believe that we will end 2022 with $90 to $110 million, assuming achievement of our product revenue guidance, and we will reach cash flow breakeven by year-end 2023. Steve will go into more detail on our 2021 financial performance and 2022 financial outlook. Now I'd like to go into a little bit more detail on our three commercial products, starting with GVOC. For GVOC, our message to physicians and other healthcare providers is clear and simple. Everyone on insulin is at increased risk of experiencing a severe low blood sugar event and therefore should have a ready-to-use glucagon product available for rescue. That message continues to resonate strongly in the medical community. In fact, the ready-to-use products have grown to 60-plus percent of the total group of gun market in just over two years. Every week, new prescribers come on board. Every week, prescribers add additional insulin patients in their practices that should have ready-to-use GVOC Hypopen at hand, all of which are contributing to GVOC's impressive and accelerating performance. In the fourth quarter, GVOC prescriptions grew 7 percent from the third quarter. This is particularly strong performance considering the glucagon market declined 8% over the same period. You will recall from our previous reviews that third quarter is the quarter in which glucagon prescriptions normally surge as a part of a back-to-school phenomenon, and so fourth quarter has historically declined in comparison. We continue to outpace the overall glucagon market due to strong demand for our product, with G-Boat's retail market share currently standing at approximately 20%. That GVO grew so strongly into such a headwind reinforces our enthusiasm for continuing strong performance in the future. Moving on to Cabeas, Cabeas also enjoyed a strong 2021, achieving pro forma product sales at the top end of our $38 to $40 million guidance. As we have discussed previously, periodic peripheral paralysis patients are extremely hard to identify. So this strong performance is a testament to the collective expertise of the team and the close working relationship with the healthcare community. The smooth transition of the Cabeas Commercial Operations to Xeris also helped ensure continued strong performance. And now for Rekorlev. We received an early FDA approval for Rekorlev on December 30th, 2021. Because of the incredible amount of work during the integration by the teams at the end of the year, Within a few weeks after approval, we were able to hold our virtual launch meeting with the sales team and ship product to our specialty pharmacy partner. As we've discussed, the key value driver of the StrongBridge acquisition was the market opportunity for Recorlove and the fit with our existing GVote commercial infrastructure. We remain very excited about the prospects of Recorlove. We estimate there are approximately 8,000 patients requiring pharmacologic treatment, of whom 40% are poorly controlled. The estimated total addressable market for this therapy is approximately $2 billion in the U.S. By leveraging Xeris' commercial infrastructure targeted at endocrinology and the legacy StrongBridge organization's experience in supporting people with rare diseases, we believe that we're in a great position to help Cushing syndrome patients who are inadequately controlled achieve a more normal lifestyle. And while it's only been a few weeks since launch, we have already placed several patients on Recorlo and have been able to support them through our Xeris Care Connection. Xeris Care Connection provides support services throughout the entire treatment journey to patients and healthcare professionals with direct access to pharmacists, reimbursement specialists, and access managers. Just a couple of updates on some of our pipeline programs. As we previously announced, we initiated and continue to dose participants in a single ascending phase one study of our novel formulation of levothyroxine to evaluate the potential for a once weekly subcutaneous injection. We expect complete results from a range of dosage and dosage proportionality from the phase one study in the third quarter of 2022. We recently submitted an IND for exercise-induced hypoglycemia and received FDA clearance in March. We expect to start additional Phase II work later this year. And moving on to our outlook for 2022, on our third quarter call, we committed to providing total company product revenue guidance for 2022. Our focus is obviously on driving the entire product portfolio. Therefore, I want to reemphasize that we will be only providing outlook for the total company product revenue. We expect product sales of all three branded products to total between $105 and $120 million in 2022. Assuming company performance is consistent with our 2022 guidance and our internal 2023 outlook, we expect to end 2022 with $90 to $110 million in cash, and we expect to achieve cash flow break even by year end 2023. We also believe that given our exceptionally strong cash position, As a result of cash on hand, revenue generated from our three commercial products, the addition of cash from the recent private placement, and with our debt refinance, we would not anticipate needing to raise additional capital in order to fund our ongoing operations. A return to the capital markets would be most likely for M&A purposes only. Our company has arrived at a very important strategic inflection point in our history, and we look ahead to 2022 and beyond. I couldn't be more pleased with what the future holds for our stakeholders, the patient communities we serve, our employees, our shareholders, and our healthcare professional partners. 2022 is a year of execution. With that, I'll turn it over to Steve to review the details of our financial performance.