Xeris Biopharma Holdings, Inc.

and thank you for joining the Zarius RFRMA second quarter 2025 earnings conference call. My name is Sammy, and I'll be coordinating your call today. During the presentation, you can register a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two on your telephone keypad to remove yourself from the question queue. I'll now hand over to your host, Allison Way, Senior Vice President of Investor Relations and Corporate Communications to begin. Please go ahead, Allison.

Thank you, Sammy. Good morning, everyone, and thank you for joining our call today. I'm joined with John Shannon, our CEO, and Steve Piper, our CFO. Earlier this morning, we issued a press release with our detailed results, which can be found on our website. After our prepared remarks, we will open the lines for questions. Before we would begin, I'd like to remind you that this call will contain forward-looking statements concerning the company's future expectations, plans, projects, 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 a risk, please refer to our earnings release and the risk factors included in our FTC filing. Any forward-looking statements in this call represent our views only as the date of this call, and subject to applicable law, we disclaim any obligation to update such statements. Please note some metrics we will discuss today represented in a non-GAAP basis. We've reconciled the comparable GAAP and non-GAAP figures in our press release. Please let me pass the call over to John for his opening remarks.

Thanks, Allison, and good morning, everyone. I'm excited to report that the strong momentum we established in the first quarter continued into the second quarter, driving another period of incredible performance and positioning us to outperform our original expectations for 2025. Our total revenue grew 49% to a quarterly record of almost 72 million. This success is being fueled by the strength of our commercial product portfolio, which grew 46% to approximately 68 million in Q2. Our exceptional performance was driven by an increased patient demand across all three products. RecoraLift continues to lead our growth with very strong demand driven by its differentiation as a much needed treatment for patients with hypercortisillemia and endogenous Cushing syndrome. GVOC once again delivered consistent, steady growth, supported by our efforts to increase awareness and reinforce adherence to medical guidelines. And at the same time, Cavaeus remains strong as we continue to add new patients, which led to an increase in the average number of patients on therapy in Q2. Building on this strong foundation and the exceptional results from both Q1 and Q2, we are raising our full year revenue guidance to reflect the very positive trajectory we see ahead. Our revised outlook anticipates total revenue in the range of 280 to 290 million, surpassing the high end of our previous guidance and representing year over year growth of 40% at the midpoint. This significant upward revision reflects our confidence in the growing demand for our commercial products and our operational discipline as we execute against our strategic priorities. Now let's turn to a more detailed review of performance by product beginning with RecoraLift. In the second quarter, RecoraLift grew an impressive 136% year over year, reaching over 31 million of revenue in the quarter. The average number of patients on therapy grew by more than 122% year over year, reinforcing our confidence that RecoraLift is solidifying its position as an important treatment option for patients with Cushing's syndrome. As we outlined during our June Analyst Day, RecoraLift is the right product at the right time. It's uniquely positioned to capitalize on the fast growing hypercortisolemia and Cushing's syndrome market. We are making deliberate and strategic investments to drive sustained growth for RecoraLift over the near and long term. These efforts are focused on a deepening engagement with healthcare professionals to accelerate patient identification while simultaneously strengthening our support model for patients as they navigate their therapeutic journey. Turning to GVOC. GVOC posted another great quarter with revenue of 23 million, a 17% increase compared to the second quarter of last year. Prescription volume continued its steady upward trend driven by both growth in prescribers and increased adoption among existing ones. We expect GVOC to remain a strong and dependable driver of our overall performance throughout the remainder of the year. Given the extensive number of people with diabetes that don't yet carry ready to use Gugagon, GVOC is well positioned for steady long term growth for many years to come. Now let's turn to Caveus. Caveus continues to demonstrate its importance in the treatment of patients with primary periodic paralysis. With revenue of more than 11 million in the second quarter, we saw a modest increase in the average number of patients on therapy, along with growth in new patient starts, underscoring the strength of the Caveus brand and our team's focus on execution. In fact, today is the 10 year anniversary of Caveus' FDA approval. And Caveus remains an important part of our portfolio, consistently serving patients with PPP and reinforcing our commitment to addressing the needs of this ultra rare community with a dependable and proven therapy. In addition to strong commercial execution, as I mentioned earlier, the second quarter was also defined by an important strategic milestone, our first ever Analyst and Investor Day. This event was a pivotal moment for us as we outlined our long term vision and key growth drivers, most notably Recorolive and our lead pipeline asset XP8121. The engagement we received from the investment community underscores the excitement we feel about the opportunities ahead. As many of you heard on Investor Day, we believe that XP8121, our novel once weekly subcutaneous therapy in development for the treatment of hypothyroidism is a very special product in the making. Of all the patients with primary hypothyroidism in the US, we estimate that three to five million of them are ideal candidates for this therapy because of their inability to achieve control with daily oral levothyroxine due to gastrointestinal absorption issues. We believe XP8121 represents a transformative opportunity in a space that has seen little to no meaningful innovation for decades, despite there being a significant unmet medical need. This is not for lack of trying, but because of the technical challenges are substantial. We've invested the time and resources to solve for those challenges, leveraging our proprietary zero-sol technology to develop a novel formulation and a high-precision delivery system capable of reliably administering a wide array of doses. Our clinical program will also generate a wealth of meaningful data, including regular thyroid hormone monitoring and quality of life assessments, which we believe can improve patient care, enhance our regulatory submission, and potentially support differentiated claims. Before I turn the call to Steve, I want to reiterate that our strong performance in the first half of the year further reinforces our confidence in the strength of our business and growth opportunities ahead of us. The increase in our 2025 revenue guidance reflects the momentum we've built by remaining focused on our strategic priorities, executing with discipline, and delivering value for patients, providers, and shareholders. With that, I will now turn the call over to Steve, who will provide a comprehensive review of our financial performance for the quarter and provide detail around our updated guidance and outlook.

Thanks, John, and good morning, everyone. We had another record-breaking quarter. On a -over-year basis, total revenue grew 49 percent to $71.5 million, while net product revenue increased 46 percent to $67.7 million. RecorLiv net revenue was $31.4 million, representing a 136 percent increase -over-year. Sequentially, revenue grew by a record $5.9 million. This performance was primarily driven by a higher average number of patients on RecorLiv, which increased 122 percent compared to the prior year and 24 percent compared to the prior quarter. RecorLiv has continued its strong momentum into August, with no signs of slowing down. GVOC net revenue was $23.5 million, increasing 17 percent versus last year. This increase was attributable to total GVOC prescriptions growing 5 percent, coupled with some favorability in our gross to net. Caveus net revenue was $11.5 million, a slight uptick compared to the first quarter 2025. The average number of patients on therapy modestly increased, and we continue to capture a healthy number of new patient starts. Royalty contract and other revenue generated in the quarter was $3.8 million. As we announced in March, Xerox received FDA approval for GVOC File DX, which triggered a one-time milestone payment from our commercial partner, American Region, that accounted for the majority of other revenue in the quarter. Turning to gross margin, gross margin in the quarter was 82 percent, slightly below the first quarter due to expenses associated with GVOC capacity expansion efforts that were non-routine. On a -to-date basis, gross margin was 84 percent. Research and development expenses were $8.1 million for the quarter, a $2.2 million increase versus last year. This increase primarily reflects our continued investment in our pipeline, namely XP8121 and our products. Selling, general, and administrative expenses were $44.4 million in the quarter, an increase of 11 percent compared to prior year. The increase in SG&A expenses primarily reflects the impact from the Q3 2024 RecurLev commercial expansion, as well as other personnel-related costs. On a sequential basis, SG&A expenses were flat. Turning to adjusted EBITDA, I'm pleased to report that adjusted EBITDA in the quarter was a positive $12.5 million. Compared to prior year, this reflects an improvement of nearly $13 million. This further demonstrates our ability to translate strong top-line performance into meaningful bottom-line results. That operational efficiency empowers us to reinvest strategically and high-impact organic growth opportunities. Before moving to our near-term outlook and guidance, I want to reiterate that our strong financial position gives us the flexibility to execute on our strategic priorities with confidence. We are taking deliberate, value-driven actions to advance Zaris to its next phase of growth. By leveraging our operational and financial strengths, we are well positioned to realize the full potential of our portfolio and pipeline. Our focus remains clear to drive meaningful, durable growth and deliver lasting value for our shareholders. Turning to our near-term outlook and guidance, we are revising our full year 2025 outlook to account for the strong -to-date performance. We are raising our total revenue guidance to $280-290 million from the previous range of $260-275 million. This new range represents -over-year growth of 40% at the midpoint and reflects our confidence in the growing demand for our products, particularly the continued acceleration and adoption of RecorLive. From a gross margin perspective, we continue to expect a modest improvement in gross margin compared to 2024. As we highlighted during Investor Day, we will continue to make incremental, value-driven investments. Given the outperformance of our commercial products this year, we are accelerating investments in both RecorLive and XP 8121. This will result in a modest -over-year increase in total SG&A and R&D expenses. We now anticipate a -mid-teens percentage increase -over-year compared to our prior expectations of a -to-high single-digit increase. This reflects continued investment in further expanding our RecorLive commercial footprint and ensures we remain on track to initiate patient dosing in our pivotal Phase III trial for XP 8121 in 2026. It is important to note that with our raised revenue guidance and deliberate incremental value-driven investments, we remain committed to delivering continued, positive-adjusted EBITDA going forward. With that, I'll now hand the call over to the operator for Q&A. Operator.

Thank you very much. To ask a question, please press star, followed by one on your telephone keypad now. If you change your mind, please press star, followed by two. I'm preparing to ask your question. Please ensure your device is unmuted locally. Our first question comes from Chase Nickerbocker from Craig and Hallam. Your line is open. Please go ahead.

Thanks for the question. Good morning. I'm passing on a nice quarter here. Maybe just first on GVO. Can you talk about that -to-net benefit? Is that going to be something that's kind of one time or something you can hold onto?

Yeah, Chase, this is Steve. I'll just take that question. Yeah, we anticipate that favorability to continue for the balance of the year.

Got it. And so, if I think about kind of the script growth that was seen in the quarter, is that kind of the way that we should think about the GVOC franchise in the back half? Or just some general thoughts on GVOC, and then I've got to follow up on our core left.

Thanks. Chase, you know, on GVOC, the third quarter is always a bigger growth quarter with the -to-school movement. So, definitely you see a script growth that will increase in Q3 and then usually is consistent in the Q4. So, I think you're going to see an increase coming up and then getting back to more kind of that, I think it's in that high single-digit growth rate on a -to-quarter basis.

Helpful, and good to see the continued, pretty impressive momentum, obviously, in core left. Can you just kind of give us an update on where your prescriptions are coming from, from a physician perspective, is it still very much majority endo? And then any sort of update you'd be willing to give us just on kind of the average dosage per patient or kind of average, call it lack price per patient at this point?

Yeah, it's pretty much endo. And, you know, at least half of our patients are new to therapy. So, again, and all of our growth is coming from new starts. So, there's really no movement, that leads to virtually no movement and kind of the increase in dose. I think that's, you know, with the amount of people we're adding on new and the way they go slow and titrate up, again, we don't think that we're gonna see real material movement in the dose range, at least for, you know, some time ahead, I don't know, maybe it's next year or sometime, but it's definitely out, it'll be out for a while.

And then last thing for me, John, you know, there's a potential for, you know, existing competitive, launching new drug, obviously around the end of the year. Can you just kind of refresh us on your thoughts on kind of how or if you think that changes the competitive environment in the hypercortalism market towards the end of the year?

Yeah, I think, you know, look, more voice in this market because it's growing so quickly and there's so much attention on testing for cortisol in situations where, you know, things you're on today that should be working aren't working, specifically thinking about, you know, if you're on insulin and it's not working, what's going on? Let's look for, you know, things like cortisol levels. And when you find elevated cortisol, that is really generating the market movement and the dynamics in this marketplace. So another player in this space, you know, brings more noise to that situation and I think that's good for all of

us. Great, thanks for taking the questions.

Our next question comes from David Amselen from Piper Sandler. Your line is open, David. Please go ahead.

Hi, thanks so much. This is Alex on for David. Just one for us, from us, with the hypercortisolism market expanding, how are you envisioning long-term spend to support RecordLiv? And do you foresee any headcount or promotional expansion in the near term? And then in that vein, do you have plans to call on general practitioners in the future? Thank you.

Alex, you know, we outlined in our investor day back in June that we would continue to invest into this space, given that the dynamics of the marketplace. And so, yes, we anticipate, and we said we will be increasing our commercial footprint. We, you know, we've begun that process. We're working through that and making sure that we continue to expand to support the dynamic growth in this marketplace. So, and we'll be making tremendous investments over the next several years as we continue to build the RecordLiv brand. Because as I said in our comments at investor day and again today, we think RecordLiv is the right product at the right time coming into this marketplace. And so it's ripe for the investment and we will be making those.

Our next question comes from Christian Clark from LeoRink Partners. Your line is open, Christian. Please go ahead.

Good morning. This is Chris Clark on for Rwanda Ruiz. Just have one question. Do you have any plans to generate further clinical data to further solidify RecordLiv's value proposition beyond cortisol normalization, particularly in patients with secondary core mobilities like stubborn diabetes?

Long term, yes. I mean, but even in our own existing data, things like diabetes, those core morbidities are resolved. And that exists in our current data sets when you treat the elevations in cortisol. So yes, and we'll continue to generate more and more data around that.

Thank you very much.

As a reminder, to ask a question, please press star followed by one on your telephone keypad. Our next question comes from Jason Dore from Oppenheimer. Your line is open, Jason. Please go ahead.

Hey, good morning. It's Jason here on for Lou and Michelle. And thank you for taking the question. A couple of questions on GVOKE. How do you see the future of RecordLiv? How do you see the treatment landscape evolving over the next two to three years, especially in regards to competitors? And can you provide any additional color on how the revenue might look in the next two to three years with the -Vial-DX collaboration with American region? Thank you.

I'm gonna try to break that down. The first question was with respect to GVOKE and the opportunity in patients with diabetes is the way I heard it. So as you know, and as we've talked a lot about, there are 15 million patients out there today that should have a ready to use rescue glucagon on hand just based on the medical guidelines. And from our estimates, probably only about a million of them actually have something on hand. So our job, along with our competitors, is to find those patients who are not currently protected with a rescue med and get them protected. And that's a lot of work getting to the clinicians to basically help them understand the guidelines in some cases and then also assure that they're adhering to them in a way that their patients get protected. That's the process, that's what we're doing, that's what the competitors should be doing, and that's the long-term landscape. So there's a lot of runway there to continue to do that. As for the VIOKE-DX opportunity out there, more to come on that as we go. Our partner's gonna launch by the end of the year. And as they get out there in the marketplace, we'll be able to give further guidance. For this year, there's not much impact, much more impact to our revenues than we've already seen. But in out years, we'll probably be in a better position and next year and beyond to really give some guidance on where that's going and how that's performing.

Really appreciate it, thank you.

We currently have no further questions, so I'll now have to hand back to John Shannon with some closing remarks.

Thanks. As I look back on my first year leading Xeris, I'm incredibly proud of what we've accomplished together. Stepping into this role, my priority was to build on the company's strong foundation while positioning us to deliver robust growth across the commercial franchise and advancing our pipeline. Q2 was another great quarter for Xeris. Underscoring the continued momentum of our business, our performance reflects not only strong execution across our commercial portfolio, but also our unwavering commitment to delivering meaningful value to patients, healthcare providers, and shareholders alike. We remain committed to driving meaningful growth and operational excellence. Our team is energized and aligned around executing our strategic priorities, ensuring that our differentiated products continue to improve patient outcomes. Thank you again for your time this morning.

This concludes today's call. We thank everyone for joining. You may now disconnect your lines.