Xeris Biopharma Holdings, Inc.

Hello everyone and welcome to the Xeris fourth quarter and full year 2023 financial results conference call and webcast. My name is Emily and I'll be coordinating your call today. After the presentation there will be the opportunity for you to ask any questions which you can do so by pressing start followed by the number one on your telephone keypad. I'll now turn the call over to Alison Way, Senior Vice President of Investor Relations. Please go ahead.

Thank you Emily. Good morning and welcome to Xeris Biopharma's fourth quarter and full year 2023 financial results and conference call. This morning we issued two press releases, one on the company's financial results and the other on refinancing our debt facility with Pafe and Capital. Both can be found on our website. We're joined this morning by Paul Edick, Chairman and CEO, and Steve Piper, our CFO. After our prepared remarks, we will open the lines for questions. Before we begin, I would like to remind you that this call will contain certain 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. Any forward-looking statements on 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.

Thanks, Allison. Good morning, everyone, and thank you for joining us today. Let me start by thanking everyone who contributed in some meaningful way to us delivering an outstanding year for the company. including the patients we serve, the healthcare providers we enable, and the dedicated Xeris team that executes at a very high level every day. 2023 was an exceptional year of performance and growth for Xeris, highlighted by our total revenue, which grew an impressive 49% from 2022 to $164 million in 2023, and ending 2023 with over $72 million in cash. This revenue growth, along with Xeris' strong cash position, continues to demonstrate the sustainability of the enterprise we're building. In 2023, we significantly advanced our once weekly subcutaneous Xerosol levothyroxine program. We completed enrollment in our phase two clinical study and have made considerable progress on manufacturing and device development. Even more exciting, we're starting to demonstrate the potential value of our Xeros technology business. In 2023, we successfully advanced this business and generated over $10 million in total revenue. I'm going to focus the majority of my remarks on our full year performance, and Steve will touch base on the full year and fourth quarter performance in his prepared remarks, starting with our commercial business and starting with GVOC. GVOC had another outstanding year in 2023. We grew revenue by 28% to $67 million. We grew GVOC prescriptions to over 215,000 in 2023. And GVOTE continues to outpace all other products in the category and drove 10% glucagon market growth in 2023. The new ready-to-use glucagon products now represent almost 80% of both new and total prescriptions. And GVOTE continues to capture market share. At the end of February, GVOTE market share of new and total prescriptions in the retail glucagon market are approximately 34% and 32% respectively. As I've said before, we see tremendous opportunity for GVOC. We estimate that approximately 15 million people with diabetes are at increased risk of severe low blood sugar. A primary risk factor for a severe low is being on insulin and sulfonylureas, and those who are should be carrying a ready-to-use rescue glucagon like GVOC HypoTen. However, less than 10% of people at risk of a severe hyperglycemic 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. We are just scratching the surface of this opportunity. The universe of healthcare stakeholders and advocates have declared that the addition of a ready-to-use rescue glucagon, such as GVOC, should be a key element in the standards of care in diabetes. The challenge remains getting practicing healthcare professionals to adopt these standards of care as their standards of practice. As I mentioned previously, GVOC is driving the majority of market growth in this category, and we believe that GVOC will continue to be the primary and dominant voice in the market. On to Recorlev. We're very pleased with our progress with Recorlev, driving patient referrals and converting them to new patient starts. We see tremendous potential for Recorlev in increasing dynamic Cushing's market, The key difference from most other products used in the category is that RecoraLove actually treats the underlying condition in Cushing's by normalizing cortisol levels in the body, which is a differentiation that resonates with physicians. We grew RecoraLove net revenues to 29.5 million, nearly a 300% increase compared to the prior year. And referrals and new patient starts have outpaced our expectations each quarter in 2023. RecoraLove generated $9.8 million in net revenue for the fourth quarter, and an increase of 158% over the same period in 2022, and an increase of 21% over the third quarter 2023. We're very pleased with the steady increase in RecoraLove revenue quarter over quarter. Patient referrals continue to be robust, and the underlying patient demand grew 28% over the third quarter. The number of unique prescribers with new referrals also continues to grow. The average number of patients on Recorlev increased over 145% from the same period in 2022. Our health food pipeline of patient referrals and healthcare professionals using Recorlev as a first-line therapy are key indications that Recorlev is seen as an important option for Cushing's patients, especially given Recorlev's multi-pronged approach to suppressing cortisol production as post-surgery treatment for Cushing's syndrome. Moving to Coveas. We grew Coveas revenue 15% compared to 2022, despite the launch of a generic competitor in early 2023. This performance exceeded our expectations for the brand in 2023 by delivering $56.8 million, well in excess of the $40 million revenue milestone which triggered a CVR for StrongBridge shareholders. Steve will provide more detail on the CVR. In the fourth quarter, revenue for Coveas was $14.1 million, which is an 11% decrease from the third quarter of this year. However, it was a 2% increase compared to the same period in 2022. In the second half of the year, we started to see modest patient loss to generic competition. The fourth quarter was the first quarter we saw pressure from the generic impacting our net revenue. That said, even with a whole year of generic competition, we exited 2023 retaining over 90% of our patients on Cabeas. This is a testament to our team's ability to find new patients and the value of our Xeris Care Connections team, which provides support for primary periodic paralysis patients and providers. As a result, patients and medical community are willing to fight for the Coveas brand. That said, we expect payer pressure will persist and we may see sequential quarterly decline in Coveas revenue in 2024, which we've accounted for in our 2024 guidance that we'll talk about later. However, we continue to find new patients and build the top of the referral funnel, which is key to maintaining Coveas' contribution to our commercial portfolio. Before I move on to our levothyroxine program, a quick comment on the changed healthcare cybersecurity issue two weeks ago. We believe this has the potential to temporarily slow adjudication of pharmaceutical prescriptions in general. The degree to which that potential for delayed adjudication may impact our specialty pharmacy and retail business is yet unclear and really too early to stop. Now on to our Xerosol levothyroxine program, a potential once weekly subcutaneous injection. The last patient, last visit was just last week, which keeps us on track for data from the phase two study mid-year. This oral liquid dose conversion data will help to inform our proposal to the FDA for a pivotal phase three program. We anticipate requesting an end of phase two meeting later this year. If we gain alignment with FDA on a Phase III study program, we could start that study as early as mid-2025. Now onto our formulation technology business. We're very excited about the potential value this business can provide for patients, caregivers, healthcare professionals, and our Xeris partners. We made a lot of progress validating the Xeris technology in 2023, from signing the Regeneron platform deal a year ago to successfully formulating the pre-prescribed target product profile for Xeroject to PESA, and as such, receiving the associated $6 million success payment from Amgen. As recently as January, Amgen executed the exclusive worldwide license agreement to develop, manufacture, and commercialize a subcutaneous formulation of Sepsis Tumorab using our Xeroject technology in thyroid eye disease. Under terms of the agreement, Xeris has the potential to receive up to $75 million in development regulatory and sales-based milestones, as well as an escalating single-digit royalty based on future sales of Tepeza using the Xeroject technology. Next step in this program, a newly integrated Amgen team has been formed around the Xeroject program. Development work continues, and planning is underway in preparation for initial clinical stage activities. As for the Regeneron collaboration, We have completed formulation development for both initial molecules. Regeneron's stability and non-clinical evaluations will take place over the next six months. Assuming continued success, that could lead to their potentially executing a license option for further clinical development and commercialization of any of the molecules in the platform, which would trigger an additional one-time payment. Regeneron also has the option to nominate additional molecules for formulation development at any time for which we would receive an additional upfront per molecule. We're excited about the potential for our Zerijek business and believe this could be a significant contributor to the growth of ZERIS over time. We continue to discuss additional Zerijek collaborations with numerous companies. And before I go into our 2024 financial guidance, I want to touch on our debt refinance with Hafen Capital that we announced this morning. Since we began our relationship with Hafen two years ago, we have proven to them that we can execute on our strategy, growing and de-risking our enterprise. This has given them the confidence in Xeris to further support us by committing an additional $50 million at closing transaction with another 15 million of committed capital at our discretion to settle the 2025 convertible notes and by providing $100 million of uncommitted capital for potential M&A purposes, while lowering our total cost of capital overall. HAPR has been a great partner to Xeris, willing to support the growth of our enterprise with non-diluted capital. Steve will go into more details on the transaction. Looking at 2024, as our momentum continues, we expect to grow total revenue in the range of $170 to $200 million, Our total revenue range implies a 4% growth at the low end, 22% growth at the high end, and 13% at the midpoint. However, net of non-recurring partner revenue, our range for 2024 represents approximately a 10% growth at the low end, 30% at the high end, and 20% at the midpoint. Very positive potential continued growth of the enterprise either way you look at it. Recall in 2023, we initially gave a wide revenue range as we were not sure of the rate of expected decline in Cabeas due to generic competition and revenue contribution from technology partners, which is an episodic in nature altogether. Same unknowns and uncontrollables exist for 2024. That said, this double-digit revenue growth coupled with our recent debt financing and continued disciplined cash management allows us to further invest in the growth of our commercial products, fund phase three readiness activities for our pipeline levothyroxine program, and lastly, make incremental investments in our emerging technology business. And we still expect to end 2024 with a very healthy cash position of between $55 and $75 million, further demonstrating the sustainability of the enterprise that we're building. I'm now going to turn the call over to Steve for additional details on our financial performance.