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spk04: Hello, everyone, and welcome to the Xeris Biopharma third quarter 2023 financial results call. My name is Bruno, and I'll be operating your call today. During this presentation, you can register to ask a question by pressing star followed by one on your telephone keypad. I will now hand over to your host, Alison Wei, Senior Vice President of Investor Relations. Please go ahead.
spk00: Thank you, Bruno. Good morning, and welcome to Xeris Biopharma's third quarter financial results conference call and webcast. A press release with the company's 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, John Shannon, our Chief Operating Officer, and Steve Piper, our Chief Financial Officer. After our prepared remarks, we will open the lines for questions. In addition, we will be extending the Q&A portion to answer a number of questions we've been routinely receiving from some of our shareholders. Before we begin, I'd like to remind you that this call will contain forward-looking statements concerning the company's future expectations, plans, prospects, and financial performance. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those forward-looking statements. For more information on such risks, please refer to our earnings press release and risk factors included in our SEC filings, including our quarterly report on Form 10-Q that will be filed later today. Any forward-looking statements in this call represent our views only as of the date of this call and subject to applicable law. We disclaim any obligations to update such statements. I'll now turn the call over to Paul.
spk01: Thanks, Alison. Good morning to everybody, and thank you for joining us today. I'm excited to once again, excuse me, a little bit of a cold. I'm excited to once again say that the entire Xeris organization continues to perform at a very high level, most importantly, delivering for patients And we remain focused on building a substantial patient-centric, self-sustaining biopharma enterprise. We recorded total net revenue of $48 million in the third quarter, which is a 63% increase from the third quarter of 2022, making this the fourth consecutive quarter of at least 50% net revenue growth from prior year. And we posted a 27% increase from the second quarter of this year, We are executing on all three pillars of our business. First, our three innovative commercial products, G-Vote, Caveas, and Recorlove, collectively generated approximately $42 million in net product revenue in the third quarter, an impressive 41% increase over third quarter last year, and 13% increase over second quarter of this year. Second, our highly targeted new product development pipeline. We're now over 80% enrolled in our levothyroxine phase two clinical study. And third, our value-added technology partnerships. We successfully formulated the ultra-concentrated, ready-to-use, subcutaneous version of Zerijek Tepeza. And by executing on all pillars, our performance allows us to once again tighten our full year 2023 total revenue guidance to between $160 and $165 million, meaning we expect to hit the top end of our original 2023 guidance. Steve will discuss our financial performance in more detail. For now, let's dig into the commercial business a bit more. GVOC had another record quarter of net revenue and prescriptions, generating $17.7 million in net revenue, which is a 30% increase compared to third quarter of 2022. Total prescriptions for the third quarter were over 58,000, growing 52% compared to the same period last year, and a 14% increase from second quarter of 2023. Market growth for glucagon products is now consistently in double digits, and GVOC continues to outpace all other products by driving the majority of that market growth. GVOC also continues to capture market share. At the end of October, GVOC market share of new and total prescriptions in the retail glucagon market grew to approximately 33% and 31%, respectively. The new ready-to-use glucagon products now represent 80% of both new and total prescriptions. As we mentioned in the last call, we have invested in another modest expansion of our inside sales team to continue GVOC's momentum in the growing glucagon market. We have added inside reps in the fourth quarter this year, bringing that sales team to approximately 50. This is a very productive group. They're quick to generate GVOC awareness and to drive GVOC share. Even with steady double-digit market growth, we're just scratching the surface of this opportunity. Less than 10% of people at increased risk of severe hypoglycemia event have a ready-to-use rescue glucagon product on hand, leaving far too many people with diabetes still left without protection against a potentially life-threatening severe low blood sugar event. Obviously, this opportunity is large. based on recently updated guidelines by ADA, ENDO, ACE, and ISPAD. Also, most recently, ASCP introduced hypoglycemia, similar management protocols for older patients in long-term care or assisted living. So all of the professional organizations see this opportunity in the same light. We estimate that approximately 15 million people with diabetes are at increased risk of severe low blood sugar, a primary risk factor is being on insulin and sulfonylureas. And those who are should be carrying a ready-to-use rescue glucagon like GFOC Hypopen. The universe of healthcare professional stakeholders and advocates have declared the addition of ready-to-use rescue glucagon such as GFOC should be a key element of standards of care. We still need to get healthcare professionals to adopt them as standards of practice. On to McCorla. Recoral have generated $8.1 million in net revenue for the third quarter, an increase of 221% over the same period in 2022, and an increase of 13% over the second quarter of 2023. We're very pleased with the steady increase in Recoral revenue quarter over quarter. Patient referrals continue to be robust, and the underlying patient demand grew 12% over the second quarter. We anticipate continued double-digit patient growth in the fourth quarter as well. Our healthy pipeline of patient referrals and over is the key indication that Recorlev is seen by the healthcare community as an important option for their Cushing's patients. Given Recorlev's multi-pronged approach to suppressing cortisol production, healthcare professionals are also often value Recorlev as a first-line treatment for Cushing's syndrome post-surgery. As with GVOC, to take advantage of our momentum in the growing Cushing's market, We have added modestly to the sales team as well as the patient support team to handle increased referrals and accelerate conversion of referrals to patients on therapy. Moving to Cabeas, Cabeas had another great quarter in terms of revenue and new referrals, and the steady number of patients on therapy continues to show tremendous durability in the face of an approved generic. Third quarter revenue for Cabeas was $15.9 million. which represents an increase of approximately 19% compared to the same period in 2022, and an increase of 13% from the second quarter of this year. The medical community recognizes the value of our Xeris Care Connections team, which provides patient advocates and mentors to support PPP patients and support providers by processing referrals to assist in securing reimbursement authorization, as well as initiation and maintenance of therapy. Now our Xerosol Levothyroxine, a potential once-weekly sub-Q injection. As I mentioned earlier, the Phase II study, which we began enrolling in the second quarter, is now over 80% enrolled, which means patients enrolled being that patients have been dosed. Our goal is to complete the study in the first half of next year with data available mid-year. And as I've said previously, data from this Phase II study will help inform our proposal to the FDA for a pivotal Phase III program. Now an update on our formulation technology business. Again, as I mentioned, we announced that we successfully formulated the pre-specified target product profile of Xergec Tepesa, and as such, received the associated $6 million success payment from Amgen, which was recently acquired by, which recently acquired Horizon. We're waiting on their decision whether they want to exercise their option for an exclusive license to Xerogec technology in the primary indication to further the development of Xerogec subcutaneous TPEZA. If the option is executed and the Amgen continues clinical development and eventual commercialization of Xerogec sub-Q TPEZA, we may be entitled to receive development milestones, regulatory milestones, sales-based milestones, and royalties based on future sales. As for the Regeneron collaboration, we are currently formulating the two molecules of the platform program and expect to deliver the pre-specified Xeroject formulations for evaluation to Regeneron. Regeneron also has the option to nominate additional molecules for formulation development at any time or to execute a license for further clinical development and commercialization of any of the molecules in the platform. In addition, we continue to discuss additional Xerojet collaborations with numerous companies. Our delivery system provides unique and significant advantages over other available formulation technologies in delivering large molecules and biologics subcutaneously. In summary, we have delivered another great quarter of record revenue from the growth of our commercial portfolio and successful delivery of the target formulation with one of our partners. We continue strong commercial performance, prudent allocation of resources, and disciplined expense management. We also continue to maintain a healthy cash position, which supports our ability to continue to be a self-sustaining enterprise. We are not providing 2024 financial guidance at this time. However, I want to share a quick high-level outlook. We expect total net revenue to grow from 2023 levels operating expenses to remain flat, continuing to reduce our cash burn, and to again have enough cash at the end of the year to fund our company, meet our obligations, and continue to invest in the growth of the enterprise. More specific, 2024 financial guidance will be provided in March when we report fourth quarter and full year 2023. I will now turn the call over to Steve for additional details on our third quarter financial performance.
spk06: Thanks, Paul, and good morning, everyone. As Paul mentioned, we are executing on all fronts. We have continued to generate net revenue growth across all three products. We succeeded in formulating the pre-specified target product profile of Zerijek Tepeza. We continued to demonstrate disciplined cash management. We exited the third quarter in an extremely healthy cash position and are on track to hit cash flow break even for the fourth quarter. Lastly, we created significant financial flexibility to run our business by exchanging approximately two-thirds of our 5% convertible senior notes due in 2025 for 8% convertible senior notes due in July 2028, leaving only $15 million of the 2025 convertible notes remaining and no other debt due until 2027. For the third quarter, total revenue was a record $48.3 million, representing more than a 60% increase over the same quarter last year. The increase was driven by strong patient demand for all three products, coupled with the successful formulation of the pre-specified target product profile for Zerijek Tepeza, which triggered a one-time revenue recognition in the quarter of $6 million. GVOC net revenue for the quarter was a record $17.7 million, representing a 30% increase compared to the same period last year. Year-to-date net revenue was $48.4 million, representing a 29% increase compared to last year. In the quarter, GVOC prescriptions topped $58,000 for the first time, a 52% increase compared to the same period in 2022. In the third quarter, the total glucagon prescription market grew 16% versus prior quarter. GVOC total prescriptions grew 14% in the same period, ending the quarter with total retail market share of approximately 29%. GVOC's strong performance has continued into October, ending the month with a total retail prescription market share of over 31%. Moving to RecoraLab. Recorlove net revenue was $8.1 million for the third quarter and $19.7 million on a year-to-date basis. Compared to Q2 2023, net revenue increased by 13% due to an increase in patient demand and net pricing. We are encouraged by Recorlove's steady patient demand growth. Furthermore, referrals continue to remain strong, which bodes well for the future growth of Recorlove. Moving to Cabeas. Caveas net revenue for the quarter was $15.9 million, representing a 19% increase compared to the same period last year. Year-to-date net revenue was $42.7 million, representing a 20% increase compared to the same period last year. Consistent with my previous remarks, our strategy to invest in Caveas and defend brand prescribing has been successful to date. We will continue to invest in Cabeus and Xeris Care Connections as they offer the best-in-class therapy and support for PPP patients. Before I move on to our technology partnerships, I wanted to mention that we have received questions regarding the Cabeus CVR milestone. We wanted to acknowledge that the year-to-date 2023 Cabeus revenue is over $42 million, exceeding the CVR Cabeus milestone of $40 million. This achievement will trigger the CVR milestone in 2023, which will be settled with Xeris Equity in late Q1, 2024. Moving over to our technology partnership business. As previously mentioned, we successfully formulated the pre-specified target product profile for Xeroject to PESA, which triggered a one-time revenue recognition of $6 million in the quarter. We subsequently received the payment in October. Looking ahead for the full year 2023, based on our overall year-to-date results and achievements in our formulation technology collaborations, we are raising the low end of our previously issued revenue guidance, which was $155 to $165 million to $160 to $165 million. This means we will come in at the high end of our original 2023 revenue guidance. Moving down the P&L, Cost of goods sold in the third quarter was $8.2 million, a 56% increase compared to the same quarter last year. For the year, cost of goods sold was $21.1 million, an increase of 29% compared to the same period last year. These increases are mainly driven by higher product sales. Research and development expenses were $5 million for the quarter and $16 million on a year-to-date basis, which is flat prior year. Selling general and administrative expenses were $37.3 million for the quarter, an increase of approximately $2.8 million relative to the same period last year. This increase was primarily driven by an increase in personnel costs from last year's fourth quarter Salesforce expansion. Compared, however, to last quarter, SG&A actually decreased by $300,000 in the quarter. And looking ahead, we expect a further decrease to SG&A expenses in the fourth quarter. On a year-to-date basis, SG&A was $108.5 million, an increase of only approximately $5 million or 5% versus year-to-date 2022. This is consistent with our previous guidance that SG&A would be relatively flat for the year compared to 2022. We ended the quarter with a very healthy cash position. As of September 30th, we had a total cash of approximately $66 million compared to $81 million at June 30th. We are executing on our strategy, and as we previously mentioned, we expected cash utilization to moderate through the middle of 2023 until the fourth quarter when we expected to achieve cash flow breakeven. We remain firmly on track to achieve cash flow breakeven for the fourth quarter, the drivers of which include additional cash flow from our products and partnerships, including the one-time payment from Amgen, a reduction of SG&A expenses in the fourth quarter, and timing of various vendor payments. We have previously guided to finishing 2023 with at least 65 to 70 million of cash. Given our ending cash in Q3, we will finish 2023 with at least 66 million of cash, cash equivalents, and short-term investments. This would imply cash utilization for the full year 2023 of no more than 56 million, a significant improvement over 2022 cash utilization of over 100 million. Really a dramatic improvement. As Paul mentioned, while it is still too early to provide specific 2024 guidance, our initial outlook for 2024 assumes revenue will continue to grow from 2023 levels and total operating expenses will remain relatively flat, which coupled together will continue to reduce our overall net cash outflow in 2024. We believe we will have enough cash at the end of the year to meet our obligations while continuing to invest in the growth of the enterprise and remain a self-sustaining business. We will provide specific 2024 guidance in March when we announce full year 2023 financial results. Operator, please open the line for questions.
spk04: Thank you. Ladies and gentlemen, if you'd like to ask a question, please press star 1 on your telephone keypad. That's star 1 on your telephone keypad. To withdraw your question, star followed by 2. And please do also remember to unmute your microphone when it's your turn to speak. OK, we do have our first question. It comes from David Amselim from Piper Sander. David, your line is now open.
spk02: Hey, thanks. So just to have a few, first on RecordLive, can you go into some specifics on what the patient footprint is like and what you're seeing in terms of patients who are treatment-naive versus treatment-experienced and how you're thinking about the trajectory in 2024? And secondly, on RecordLive, just competitive landscape longer term. Can you talk to the... potential presence of Core Cephs, Relacoralent, and then how that could impact Recorlev. And then lastly, on GVOC, can you just talk to how you're thinking about the presence of Amphistar in the market with Baccini and, you know, what your view is regarding Share Voice in the space with the product changing hands. Thank you.
spk01: Thanks, David, and good morning. I'm going to do my best. I'm kind of losing my voice here. I may need to go to John Shannon for some of these answers. Let me start at the end of your question. GVote, Share Voice, and competition. We think the market actually, and I've said this many, many times, We need other voices in this market. The goal is to have 15 million people who are on insulin or sulfonylureas to be protected, to have that fire extinguisher in the home, to be carrying their Jibo Kypopen or any ready-to-use rescue glucagon. That's the goal because people can die. So more voice, more activity, more people talking about Rescue glucagon, ready-to-use products, we think is a really good thing. We're hoping Lilly would continue to be loud in the market, but we're looking forward to Amphistar helping to build market penetration. In terms of Corecept and the new product or their replacement product, I think it's going to be pretty much that. At least our view is it's going to be pretty similar in performance, and they're going to be trading out business. As you know and as we've talked about, Coralim is a pretty big product and one that doesn't really normalize cortisol. We normalize cortisol, and so we think we've got a better product. We think it performs better, and we're starting to see, as a result, physicians who are beginning to use Recorlev first line. That says a lot about a product that's so young in its lifespan. And then RecoraLev in terms of patient footprint, I'm not quite sure what you mean by that. And then the competitive environment with RecoraLev. Do you help?
spk02: Hey, sorry. What I meant is how many patients are on drugs. That's what I meant.
spk01: Oh. Oh, you sneaky guy, you. We are... For competitive reasons, we don't really talk about that. And I know that's a metric that everyone would love to have. But right now, we're too new in the business and we're growing. But relative to that, we're having great success versus the competition. And our referral base continues to be strong and You know, the variability in RecorLev is the speed with which we convert those referrals into actual patients on drug.
spk04: Okay, thank you. Our next question comes from Ruana Ruiz from Landry Partners. Ruana, your line is not open. Please go ahead.
spk03: Great, thanks. Good morning, everyone. So another Recorilab question from me. I was curious, just broad strokes, what proportion of existing Recorilab patients have reached stable or maintenance doses? And anecdotally, could you talk about what discontinuation rates you're seeing, if any, for Recorilab so far?
spk01: So it's too early to have a sense of the DC rate, but I would tell you it's very, very low. It's single digits. And, you know, reasons could vary in terms of, you know, end of the year insurance, various other things. So, it's too early to have a handle on an ongoing DC rate. But, you know, so far negligible. In terms of patients being stable at whatever dose, we're still really early in the whole titration. I mean, we're seeing people who sort of level out in the 400 range, but are not at the end of their titration. We're seeing people who remain at starting doses for quite a while. So physicians aren't being terribly aggressive at the titration, but we are starting to see titration. The optimal dose in the 5 to 600 range, very few have really gotten there yet.
spk03: Got it. And one question for GVOC as well. I was curious if you could talk a little bit more about any back-to-school trends you might have seen in the quarter or other drivers of the revenue growth in 3Q.
spk01: Yeah, I mean, I think we did well in back-to-school. As you know, back-to-school is very much a pediatric endocrinology period. Lilly has historically been very strong in pediatric endocrinology. Also, it's a really tiny segment of the market, and by and large has been saturated over time. Most kids have something, and most parents make sure they have something, but it's a pretty small segment. Where we're getting the vast majority of our growth is really with adults, and that's where the opportunity is. Of the 15 million, probably 14 are adults and not kids. So that's really what we're targeting is adult. And during the period back to school, we did well in PEDS, but we also did really well in adult during that period and continued to grow both our total scripts and share.
spk03: Great. Helpful. Thanks.
spk04: I would now like to turn the call over to Allison Way for additional Q&A. Over to you.
spk00: Thanks, Bruno. At this time, the team will take questions that we've been receiving from some of our shareholders. So, we've grouped the questions by topic. So, let's start with the financial questions, Steve. Is Xeris committed to cash flow positives and no dilution?
spk06: Thanks, Alison. So, as we discussed, we will achieve cash flow breakeven for the fourth quarter, and we will have plenty of cash to meet our obligations moving forward. Therefore, we don't anticipate diluting shareholders.
spk00: Thanks, Steve. Another one coming your way. At this point, at what point do you expect to achieve full-year profitability, not just cash flow break-even, but net income?
spk06: So we haven't given guidance to that level, but as I mentioned a few times here this morning, we have enough cash to meet our obligations while continuing to invest in the growth in the enterprise and remain a self-sustaining company.
spk00: Our next one, why are operational expenses scaling in tandem with revenue growth?
spk06: Actually, our operating expenses on a year-to-date basis grew by 7%, whereas our total revenue grew by 55%. Translated to dollars, operating expenses grew by $10 million compared to revenue growth of over $42 million. And half of that expense growth is due to an increase in cost of goods sold. And an increase in cost of goods sold is expected in a company where revenues are growing like Xeris's are.
spk00: Thank you. Can you provide some insight into the strategies in place to ensure enhanced operating leverage?
spk06: So as I just covered, we continue to grow our revenue significantly faster while holding our operating expenses at a growth rate that is a fraction of our revenue growth. This really means that we're executing on our strategy.
spk00: Thanks. When will we see better operating leverage in that so far this year expenses are growing nearly as fast as revenue?
spk06: So I think we just covered that, that revenues are growing at a much higher clip than expenses are.
spk00: Thanks. What initiatives are being considered to curtail elevated SG&A expenses?
spk06: So as I covered in my prepared remarks, our continuous management of expenses has actually resulted in a decrease in SG&A relative to last quarter, and we are expecting a further decrease in the fourth quarter.
spk00: Thanks. Are there plans in motion to mitigate interest burdens through strategic loan repayments?
spk06: So in addition to what I just covered from operating expense management, we are equally focused on our cost to finance the enterprise. Like many others, are facing an increased cost of borrowing, given the macroeconomic hyperinflationary environment. The good news is, given the health of our business, we can meet these obligations. That being said, we are actively looking for ways to reduce that cost burden.
spk00: Thank you. Would Xeris consider a buyback with extra cash on hand to reduce the bloat?
spk06: Good question. Currently, we believe investing in our three pillars to support our growth strategy will deliver greater value for the company and our shareholders rather than a share buyback. Therefore, we have no immediate plans to do a share buyback.
spk00: The last one for you, Steve. Please address the CVRs for the legacy StrongBridge shareholders.
spk06: Sure. As I mentioned in my opening remarks, year-to-date 2023 CAVEAS revenue is over $42 million. exceeding the CVR CAVEAS milestone of $40 million. This achievement will trigger the CVR milestone in 2023, which will be settled in Xeris Equity in late Q1 2024. We believe that the delivery of over $40 million of CAVEAS revenue this year is a great outcome for Xeris and our shareholders.
spk00: Thanks, Steve. The next set of questions is about our commercial products and the pipeline. So why are GVOC sales growing slowly? John, you want to take that?
spk05: Sure. Well, first of all, we don't agree with the characterization that GVOC sales have grown slowly. This year alone, you just heard, we've grown GVOC prescriptions over 50% compared to last year. The glucagon market in the same time period has grown approximately 10%. So GVOC growth is significantly outpacing the market growth. We're very proud of what our commercial team has been able to get GVOC has been able to get GVOC in the hands of people with diabetes, and we certainly wouldn't characterize 50% increase as well growth.
spk00: Thanks, John. Can you please elaborate on initiatives in place to accelerate the sales momentum for both GVOC and OGLUO?
spk05: Sure. Let me go backwards. Let me start with OGLUO. As you know, we've licensed OGLUO to our European partner, Aircor. They are executing on their plan, which consists of increasing utilization in the countries where they've already launched. And they continue to launch in additional countries where it makes sense in Europe. With regard to GVOC in the US, as I mentioned previously, we've already seen a 50% growth in prescriptions this year alone. So our sales and marketing teams will continue to execute our commercial plans, which are driving awareness, increasing utilization, and most importantly, leveraging the recently updated medical guidelines from ADA, ENDO, ACE, all of which Paul just mentioned earlier. basically recommend that anyone on insulin or sulfonylurea should have a ready-to-use glucagon on hand, such as Jivo, just in case of a severe low blood sugar. Our commercial team is focused on making this new standard of care, outlined in all the medical guidelines, the new standard of practice for healthcare professionals.
spk00: Thanks, John. In addition, can we expect any material updates on the sales progression of Aglo in the European market and timing of any associated milestone receipts?
spk05: Well, first, OGLU is doing fine in Europe. In the near term, we don't expect any material updates regarding OGLU, and we don't have any near-term expectations regarding milestones.
spk00: Thanks. Considering the pronounced prevalence of diabetes in specific international markets, such as Mexico, could the team shed some light on the market entry strategy for GVOC?
spk05: So we've evaluated all the larger markets outside the U.S., and with the exception of our partnership in Europe, based on the market opportunity financial analysis, yet the economics simply don't work for Xeris, and therefore we don't have any plans to launch Evoque in any other major markets.
spk00: Thanks, John. Any updates on the Coveas patent? Paul, you want to take that?
spk01: Yeah. As I've mentioned it a couple of times in our previous calls, we have continued to go through the appeal process. We're now in the process of filing our appeal with the Federal Circuit Court, and that We'll update as we have future events.
spk00: Thanks. Are there plans to add more to the development pipeline other than levothyroxine in the coming quarter?
spk01: We've said we're going to be very disciplined about how we approach our pipeline and how we use our technologies for our own portfolio. Right now, levothyroxine, once weekly sub-Q injection is our focus. It's the best opportunity that we have. That said, down the road, as we are able from an allocation of resources perspective, we will continue to use our technologies to develop new products that we can bring into our pipeline and eventually into our portfolio. Right now, the focus is levothyroxine.
spk00: Thanks, Bob. Moving on to our Xeroject technology and the current and potential partnerships. So please provide a comprehensive update on the strategic trajectory with Regeneron, Amgen, Horizon, outlining anticipated timelines and potential inflection points expected by year end 2023.
spk01: This is a great question, and I think people are going to hate the answer. The projects and partnerships that we have with both Amgen Horizon and Regeneron are highly confidential. We're working on other people's molecules and other people's products with our formulation technology, and there's very little that we're able to say publicly. What I can say is Amgen Horizon has gone quite well. We hit the target product profile, we got our payment, and now we're waiting on their decision whether they want to pick up the license for further development. I think that's a great outcome. The Horizon, I've said previously, we're in the process of formulating the initial products. They can continue to add products from the platform at any time, and they can pick up a license at any point in time for continued development as well. So we're very pleased with where those partnerships are at this point. I will add that they do take time. I mean, the formulation process is not something that happens overnight.
spk00: Thanks, Paul. So what are the competitive advantages of the Xeroject platform relative to other providers of the subcutaneous injection process? Don, you want to take that? Oh, sure.
spk05: So with our Xeroject platform, we can reach ultra-high concentrated sub-Q injections. So what does that mean? Our Xeroject technology allows us to formulate 400 to 600 milligrams per milliliter in a sub-Q delivery that can be administered in a 15 to 30 second injection. through a very small gauge needle. This is in comparison to other technologies that might deliver a one to seven minute sub-Q infusion. Our zero depth technology allows us to formulate drugs that are traditionally IV administration and potentially moving them out of the infusion center or doctor's office into a self-administration form, potentially even at home.
spk00: Wow, that's great. So, John, can you talk through how your team identifies potential medicines like Depezo or potential partners that could benefit from having a Xeroject formulation of their molecule?
spk05: Well, yeah, I think it just covered the value proposition of Xeroject. So, the ideal candidate today is a drug that is currently IV administered in an infusion center or doctor's office and could benefit from becoming a sub-Q administration, potentially at home. So when talking to companies, we focus on those types of products as true partnering opportunities.
spk00: Okay, thanks. So Paul, how long does it take to determine if a technology platform is a good fit?
spk01: Yeah, each partnership is different, and we go through several months of formulation refinement to work to achieve a desired target product profile. As John was going through, the identification of a target is immediately a fit. We've not failed to formulate anything that we've attempted to or been given by a potential partner to formulate. At the end of the day, getting to whether or not that is a viable asset takes several rounds of formulation and hundreds of rounds of optimization of that formulation.
spk00: So then why has no one moved forward with a license yet?
spk01: That's a good question. We get asked that a lot. That is 100% in the purview of the partner. In today's world of monoclonal antibodies and biologics and large molecules, it's incredibly competitive. One of the reasons that it's so confidential in terms of what we can and can't talk about. But the price of entry is no longer an IV product. The price of entry for a lot of these molecules for a lot of these companies is really you have to at least be a subcutaneous injection. And then once we can deliver that, what happens is every one of those companies goes through their own internal prioritization process to say, okay, of all the assets that we have, what do we want to spend money on in clinical development? So it's more of a market-based analysis that they're doing on their pipeline. We're giving them the sub-Q option at the end of the day. If you look at some of the partnerships you know Merck very successful formulation process but they chose not to take their product forward for competitive reasons in the market that they were targeting same thing with well similar with Asahi Kasai a couple years ago they we've successfully formulated their product failed to meet its endpoint in clinical studies so nothing to do with us so it's a process and it's in it's a It's a decision that is a pipeline-based decision for portfolios in the partner companies.
spk00: Thanks, Bill. The last few questions are for you. So why aren't management and the board buying any Zara shares?
spk01: You know, that's a good question. Our management team has bought, I think every single member of our management team has acquired shares, you know, with their own investments. We always have, and whatever companies we're in, we will continue to do that. And I, as I think people can see in the public record, buy shares at least annually, kind of almost semi-annually. I believe in this company and I continue to invest heavily with my own assets in this business and I believe eventually it's going to really pay off in a pretty significant way.
spk00: And you haven't sold any shares, correct?
spk01: None of the shares have been sold. I don't even contemplate selling at this point.
spk00: Thanks, Bob. You've mentioned in the past that part of the ZERA strategy includes acquisitions and that you would use that. What is the likelihood of a purchase of an additional asset or an organization in 2024, given your recent statement?
spk01: I don't know the answer to that. I think as things become available, we're very active. We're looking at a lot of things. We look at anything that comes across our radar. We're going to be very opportunistic But our goal is to continue to add to the enterprise. So if there's an opportunity to efficiently and financially benefits us to add a product that's affordable, we'll pursue it. Same thing with potential company acquisitions.
spk00: Thanks. Has the company been approached with any acquisition offers to date? And if so, could you delineate the financial parameters that would make such a transaction compelling?
spk01: Yeah, as a public company, nobody will ever answer that question.
spk00: What efforts are being undertaken to cultivate and deepen relationships with institutional funds, and how might achieving a cash flow break-even point influence long-term institutional participation?
spk01: I think moving to cash flow break-even or getting to profitability in any company is going to attract more and better institutional investment. I mean, that's almost a given, I think. We spend a great deal of time with all of our shareholders and investors from minor retail all through some of the biggest institutions in the business. And we're at a lot of banking conferences. I think we're going to three in the next couple of weeks. And our calendars are full. So we're constantly having those conversations.
spk00: Thanks. One final question. The team has had success together building other companies. Is this team still committed to returning the same results as in the past? Paul, as the leader of this team, what are your strategic goals for Xeris over the medium term?
spk01: So talking about the team, the team is 100% committed. We came together to build an enterprise, and we're not done with that. We're really... still in the early stages. We continue to execute and have demonstrated this by driving significant revenue growth over all three products. We've built a promising pipeline. It may be a single asset, but it could be a blockbuster asset. And we've established an emerging technology business. And I emphasize the word emerging. It's early. And we've done this in the face of significant headwinds over the years, which speaks to the kind of DNA we've built in this company. And I think in closing, We're building a growth-oriented biopharmaceutical company committed to improving patient lives across the range of therapies and as a self-sustaining and continuing self-sustaining organization. I think that's it for the questions. I appreciate everybody sending them in. You know, we hopefully have accumulated and aggregated the questions that came in in a lot of different forms to answer a lot of questions. I think there's, to some degree, a lot of the questions we get pretty routinely, and hopefully we've clarified as best possible. And I'd like to thank everybody for joining us today for your thoughtfulness. And if you have additional questions, please continue to send them in to Allison. And to conclude, I'd like to say that we're very proud of our performance to date and look forward to growing an enterprise for which we can all be proud. And once again, to thank the healthcare professionals and the patients and the Xeris employees who make it happen every day.
spk00: Thank you, Paul.
spk04: Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines. Have a great day. Thank you.
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