Xeris Biopharma Holdings, Inc.

Hello and welcome to today's Xeris Biopharma second quarter 2022 financial results call. My name is Elliot and I'll be coordinating your call today. If you would like to register a question during the presentation, you may do so by pressing star followed by one on your telephone keypad. I would now like to hand over to Alison Way, Senior Vice President of Investor Relations and Corporate Communications. The floor is yours. Please go ahead.

Thank you, Elliot. Good morning and welcome to Xeris Biopharma's second quarter 2022 financial results and corporate update conference call and webcast. A press release with the company's second quarter 2022 financial results was issued earlier this morning and can be found on our website. We are joined this morning by Paul Edick, 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 questions. Before we would 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 constitute forward-looking statements for the purposes of the Safe Harbor provisions 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, various business, financial condition, operations, clinical trials, and third-party suppliers and manufacturers, and other risk factors, 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 will now turn the call over to Paul.

Thanks, Alison. Good morning to everybody and thank you for joining us today. This morning I want to start with a brief look at what we're trying to build at Xeris. The most important lesson that we've learned as a team in building companies over the years is to know what you are, what you want to be, and to execute with absolute clarity. Our goal at the beginning and end of each day is to build a substantial, patient-centric, profitable biopharma enterprise with multiple products in multiple therapeutic areas, a targeted development pipeline with promise, and value-added partnerships on our unique technologies. With the commercial launch of GVOC, the acquisition of StrongBridge, the addition of the commercial team for Cabeus, the subsequent launch of Recorlove, and the increasing difficult hurdles of cost and complexity in advancing numerous Phase II development assets simultaneously, who we are as a company has clearly had to evolve. Where we were once a technology-based 505 development company, We are now an all-in commercial execution company. That is not to say we are walking away from our unique formulation technologies or product development at all. However, once we cross the line into being a commercial business, our focus absolutely has to be predominantly on commercial success. Other aspects of the enterprise, in turn, are scrutinized more harshly in our internal prioritization process. Where once upon a time we had a goal of becoming a fully capable pharma company with equal emphasis on development and commercial, we have evolved to a commercially driven biopharma company selling differentiated and innovative products across a range of therapeutic areas. We continue development of a limited number of assets with our unique formulation capabilities, and we will take them forward if they prove uniquely differentiated additionally valuable and achievable based on evolving FDA requirements. Otherwise, we will make the early and hard decision to discontinue their development. We will also continue to partner our unique technologies as a potential value stream down the road and will be increasingly selective as to what we work on, with whom we work, and on only those projects that have a clear potential for potential pathway to development and commercial value for Xeris. With that said, we are a commercial business first and foremost, and we are executing. Our 2022 momentum continued in the second quarter, delivering record growth in patient demand and net revenues with continued pipeline development. We generated a record 25.3 million in net product revenue in the quarter, which is a 34% increase compared to Q2 last year on a pro forma basis. We saw continued strong GVOTE prescription growth throughout the quarter and year to date. We had another record quarter for Coveas in terms of net revenue. We are gaining a lot of traction in the early stage of record level launch with a steady rate of referrals and an increasing pace of getting patients started on therapy. And we dosed the final cohort of healthy volunteers in the phase one study of our weekly sub-Q levothyroxine product candidate. Importantly, our year-to-date performance of all three products gives us confidence to reiterate our guidance of net product revenue between $105 and $120 million. At any point in that range, we see the outlook for our 2022 commercial performance as great to outstanding. Our cash position is strong and we expect our year end cash balance to still be within our previously communicated range of 90 to 110 million. We expect our cash position to adequately fund our operations to cash flow break even, currently expected to happen by year end 2023. Now I'll go into some specific highlights for each product behind this performance. I usually start with GVOTE, but today I'm going to lead with Coveas, given its record Q2 performance. Coveas had its best quarter to date in terms of net revenue at $12.8 million. Year-to-date, Coveas net revenue has grown 20% over the same period in 2021 on a pro forma basis, and we expect to continue to grow Coveas for the foreseeable future. Now, moving on to our launch products, starting with GVOTE. GVOC had another strong quarterly performance with net revenue of $11.5 million for the second quarter. And year to date, GVOC sales increased 42% compared to the same period last year. We also continue to see impressive prescription growth. In the second quarter, GVOC total prescriptions were 34,000, growing more than 60% compared to last year. Year to date, GVOC total prescriptions were over 65,000, growing more than 73%, compared to the same period in 2021. The total glucagon market continued to grow 10% in the second quarter versus prior year, and glucagon continues to outpace and drive that growth quarter after quarter. Now onto Recor11. Newly launched Recor11 net sales were $1 million in Q2. Importantly, all sales in the quarter were demand-based sales, not stocking or inventory. All sales for Recorlev are based on identified patients beginning therapy. And while we're thrilled with our second quarter results, we're even more excited by the weekly growth of referrals and new patients coming on to therapy. Keep in mind, Q2 was our first full quarter with Recorlev, with our reps having just made the first trip through their territories in February and March. As such, Recorlev continues to show great long-term growth potential. From a commercial perspective, the continued strong performance of GVOC and early success of RecoraLive has led us to pull forward a previously planned addition of approximately 25 territories to our endocrinology-focused field organization from early 2023 into the fourth quarter of this year. We expect that this will ensure and accelerate the growth of these recently launched products over the course of 2023. A couple words on OGLUO. Last week, we announced that Tetras Pharma, our commercialization partner for Ogalloh in the UK and EU, has been acquired by Aracor Therapeutics, a UK-based, publicly traded, globally focused biopharmaceutical company. We are very pleased with the acquisition and look forward to having Aracor as our commercial partner. Having Ogalloh in the hands of a well-capitalized company dedicated to the diabetes space, is a very positive step forward for the millions of patients with diabetes in the UK and EU, in our view. And we are working closely with Ericor to ensure a smooth transition and no disruption of commercial activities, and we will continue to support the commercial efforts going forward. From a development perspective, a few words about our Xerosol Levothyroxine. As I mentioned previously, we dosed the last cohort in the phase one pharmacokinetic study of our potential once-weekly subcutaneous levothyroxine product candidate. We will compile all the data from a range of doses to assess dose proportionality early in the fourth quarter. This latest data should provide us an increased level of confidence that we have a product candidate with the potential of once-weekly dosing. This is an important starting point for developing our Phase 2-3 program with the FDA. And we are using this information to support our FDA meeting request regarding a registration strategy, which we will anticipate having in the early part of 2023. Exercise-induced hypoglycemia. Based on our earlier Phase 2 data and our discussions with the FDA, we have an agreed plan for an additional phase two study in order to collect additional utilization data later this year. We're in the process of planning the initiation of that study. That said, initiation of the EIH study and further development of the EIH program is being reviewed as part of our clinical prioritization and commercial opportunity assessment later this year, taking the requirements that we've gotten from the FDA and cost into consideration. Before I turn the call to Steve for detail on our second quarter financial performance, I'd like to reiterate. Xeris has a record quarter on several fronts as I just reviewed. We are prioritizing our spend to accelerate the growth of our enterprise. We remain confident in our ability to achieve our guidance for the year for both revenue and ending cash position. And delivering on these two commitments affirms our expectation that we will achieve cash flow breakeven by year end 2023. without the need to raise additional equity. We believe our performance is a clear demonstration that we're building an increasingly valuable enterprise, energetically and aggressively, but with discipline.