Xeris Biopharma Holdings, Inc.

Hello everyone and welcome to the Xeris Biopharma first quarter 2024 financial results conference call and webcast. My name is Seb and I'll be the operator for your call today. If you would like to ask a question during the Q&A session, you may do so by pressing 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 the call. Please go ahead when you're ready.

Thank you, John. Good morning, and welcome to Xeris' first quarter 2024 financial results conference call and webcast. This morning, we issued our press release, which 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 line for questions. Before we begin, I would 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 including in our SEC filings in our annual report on Form 10-K that will be filed following this call. 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.

Thanks, Alison. Good morning, everyone, and thank you for joining us today. Let me start again by thanking everyone who contributed in some meaningful way to us delivering an outstanding quarter for the company, including the patients we serve, the healthcare providers we enable, and the dedicated Xeris team that executes at a high level every day. The headline for today's call is 22% growth in total revenue versus last year with momentum already building in the second quarter, giving us confidence to tighten our total revenue guidance, raising the bottom from 170 to 175 million, making for a great start to 2024. At a high level, we have continued our strong commercial performance across all three of our products, The Korolev, GVOC, and Caveas together grew net sales by a combined 25% in the first quarter compared to last year. On Monday, we announced another technology partnership, entering into a new collaboration and license agreement with Beta Bionics. And you'll recall that in January, we announced Amgen had executed the exclusive worldwide license agreement to develop, manufacture, and commercialize a subcutaneous formulation of Tepesa using our Xeroject technology in thyroid eye disease. I'm excited by the momentum we've already generated, the continued momentum into April, and I believe we're well positioned to deliver on all fronts in 2024. Let's start with the performance of our commercial products in the first quarter. We're going to start with Recorlove today. We grew Recorlove net sales to 10.6 million in the quarter, a 137% increase compared to last year. We're very excited with Recorlove's progress. driving a quarterly record for patient referrals and converting those referrals into new patients on drug at a record pace. As patient referrals continue to grow, the underlying patient demand has shown increasing growth with average patients on drug growing 18% versus the previous quarter and 139% versus first quarter 2023. The number of unique prescribers with referrals also continues to grow. Growth in the first quarter was fueled not only by the significant increase in our patient referral pipeline and new patient starts, but importantly by a significant increase in the number of unique prescribers who recognize the value in treating patients with Recoralev. It bears repeating that we see tremendous potential for Recoralev in an increasingly dynamic Cushing's market. The key advantage prescribers recognize with Recoralev versus most other products used in the category is that Recorlev actually treats the underlying conditions in Cushing's by normalizing cortisol levels in the body. Increasingly, prescribers recognize this and that Recorlev is an ideal therapy for treatment of quick patients with Cushing's. Capitalizing on this momentum, we continue to add to our commercial team and patient assistance resources in support of continued Recorlev growth. Moving to Cabeus. The Cabeas brand remains incredibly resilient in the face of generic competition. We're off to a much stronger start in 2024 than we anticipated, with Cabeas growing 3% compared to the first quarter last year. I stated last quarter that we expected to see a decline in Cabeas sales in the first quarter and for the year, driven by generic competition and payer resets. This didn't happen as rapidly as we expected. Unpredictably, underlying patient demand for Cabeus remained stronger in the first quarter than we anticipated, which we believe was driven by our continued ability to find and start new patients, as well as retain existing Cabeus patients. This resulted in sales that significantly exceeded our expectations for the quarter. And importantly, we're also seeing this momentum carry well into the second quarter. We're committed to the primary periodic paralysis community, and finding new patients continues to be the key to maintaining Coveas' contribution to our commercial portfolio. Moving to GVOC. GVOC net sales increased approximately 10% in the quarter compared to prior year, while GVOC prescriptions grew 27%. This net sales increase was largely driven by GVOC's gain in market share and the continued growth of the glucagon market in January and February. As of the last published weekly figures in April, GVOC's share of total prescriptions was over 36%. The total glucagon market started off the year with growth consistent with historical trends as well. For reference, in February, the glucagon market grew a healthy 15% compared to prior year. However, the glucagon market, our script growth, And importantly, the utilization of our copay assistance program were all negatively impacted in late February and March when Change Healthcare announced their cybersecurity breach and shut down their claims processing systems. For those who are less familiar with the situation, Change Healthcare is the largest US clearinghouse that adjudicates prescription claims between pharmacies and payers. This shutdown essentially prevented the adjudication of many prescriptions by many pharmacies, especially certain chains through normal means starting in February through early April. This meant that many of our retail pharmacies struggled to dispense GVOC prescriptions and GVOC patients were unable to utilize our copay assistance program for several weeks. Not only did this impact prescribed prescription processing, but it also resulted in tightening of inventory by wholesalers. We calculate based on the change in the utilization of our copay card, that the change healthcare cyber security breach had as much as a $3 million temporary impact on GVOC net sales in the first quarter. To be clear, this unprecedented situation did not have a similar impact on Recorlev or Cabeas as they are dispensed through a single specialty pharmacy that was able to quickly switch to alternate means of prescription adjudication. Importantly, In late April and early May, we have seen recovery in prescription fulfillment and wholesaler purchases commensurate with script demand. Based on the most recent week of GVOC new prescription data, new prescription market share for GVOC has increased to 37%, and we believe the total glucagon market will return to historical growth trends by the end of the second quarter. To be very clear, were it not for the change healthcare situation, we believe we would have exceeded expectations for GVOC and total product revenue in the quarter. Moving to our technology platforms. Our Xerasol and Xeroject platform science is a growing and increasingly important part of our overall enterprise development. Not only is our formulation science what has enabled the development of GVOC and our levothyroxine pipeline product, but it's also enabling a growing number of partnerships that could deliver considerable revenue well into the future. On our latest partnership, on Monday, we announced that we entered into an exclusive worldwide collaboration and license agreement with Beta Bionics for the development and commercialization of a new and unique Xerosol-based formulation of a liquid stable glucagon for use in bi-hormonal pumps or pump systems. Just to be clear, this is not GVOC. We are formulating a new glucagon specifically for use in a pump. Through this partnership, we have the potential to receive payments through clinical development and low double-digit royalties on future sales of Xeris glucagon for pumps and pump systems. Some other notable developments in the quarter, as we announced in January, Amgen executed the exclusive license agreement to develop, manufacture, and commercialize a subcutaneous formulation of tepratupumab using our Xeroject technology in thyroid eye disease. With Regeneron, 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, commercialization of any of the molecules in the platform, which would trigger additional one-time milestones. Now on to an update of our Xerosol levothyroxine program, a potential once-weekly subcutaneous injection. We successfully completed the phase two clinical study and data will be available by the end of the second quarter. As a reminder, this oral dose conversion data will help 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 three study design, we can start that study as early as mid 2025. Here is my overriding message today. Our commercial product portfolio is generating significant growth and we are adding new meaningful technology partnerships. We continue to meet or exceed expectations across the board despite the temporary impact of external uncontrollable events such as change healthcare. That continued performance and our future outlook is what gives us confidence in tightening our revenue guidance for 2024. We are raising the low end of our total revenue range from $170 to $175 million. Our revised total revenue guidance is now $175 million to $200 million. Our overall strong business performance is also enabling us to make incremental investments in our commercial business, our technology business, and our internal pipeline, while maintaining our cash guidance of $55 to $75 million at year end 2024. We continue to build a healthy, self-sustaining enterprise. I'll now turn the call over to Steve for additional details on our financial performance.