Xeris Biopharma Holdings, Inc. (XERS) Q3 2026 Earnings Call Transcript

Operator: Hello, everyone. Thank you for joining us, and welcome to Xeris Biopharma Third Quarter 2026 earnings conference call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. Those on the webcast can submit a text question by clicking the Q&A button on the bottom right corner of the screen. I will now hand the conference over to Cristi Barnett, Vice President of Investor Relations. Please go ahead.

Cristi Barnett: Thank you, Bella. Good morning, everyone, and welcome to Xeris Biopharma's Third Quarter 2026 Financial Results Conference Call. Earlier this morning, we issued a press release detailing our third quarter 2026 financial and operating results. This press release can be found on our website at xerispharma.com. Joining me on today's call are John Shannon, our Chairman and Chief Executive Officer, and Steve Pieper, our Chief Financial Officer. Following our prepared remarks, we will open the call for your questions. Before we begin, I'd like to remind you that today's discussion will include forward-looking statements regarding Xeris' future expectations, plans, strategies, objectives, and financial performance, including our full year 2026 financial guidance and our 2030 outlook. These forward-looking statements are based on management's current assumptions and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied. For a discussion of these risks and uncertainties, please refer to the risk factors described in our filings with the SEC, including our most recent annual report on Form 10-K and our subsequent filings with the SEC, as well as the forward-looking statements disclaimer in our earnings release. In addition, during today's call, we will reference certain financial measures that are presented on a non-GAAP basis. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures is included in our earnings release. Before I turn it over to John, I'd like to briefly introduce myself. I'm Cristi Barnett, and I recently joined Xeris to lead investor relations following Allison Wey's retirement. Some of you may know me from my previous companies, and for those who I haven't yet met, I look forward to connecting and working with you. We will miss Allison here at Xeris, and I'm pleased to carry the investor relations baton forward. I look forward to an open dialogue and to keeping you informed about Xeris' progress. With that, I'll turn it over to John.

John Shannon: Thank you, Cristi, and welcome to Xeris. We are happy to have you on the team. Good morning, everyone. I am pleased to report that Xeris had a spectacular third quarter, and we now see our company on a new growth curve, one that is both accelerating our near-term financial outlook and redefining what we believe is possible for this company. Importantly, this new trajectory reflects expected growth from the entire enterprise, Recorlev, Gvoke, and KEVEYIS. Total revenue grew more than 44% year-over-year, led by Recorlev, where the expanded commercial team moved from build to yield and delivered record referrals and new patient starts. Gvoke delivered a better-than-expected back-to-school prescription lift, and prescription demand is back in solid growth mode. KEVEYIS continued its steady, high-value contribution. Now, with a recently issued patent, we intend to intensify our efforts to identify more patients that could benefit from therapy.. Results like these reflect years of disciplined execution and focused innovation, and they reflect who Xeris has become, a leading endocrine and rare disease biopharmaceutical company committed to helping people realize better lives through the development and commercialization of innovative medicines. We convert innovation into durable revenue growth that continues to compound. This is our model, and this quarter is further evidence it is working. Given the strong momentum across Recorlev, Gvoke, and KEVEYIS, we are raising our full-year total revenue guidance to $395 million-$405 million, and we see this new trajectory extending well beyond 2026. We are now on a path to reach more than a billion in total revenue in 2030, up from our prior outlook of $750 million, which we first disclosed back in June of 2025. We also now see Recorlev on a path to a billion in annual net revenue three to four years sooner than we previously projected. These are meaningful increases to our expectations, grounded in the progress we are making right now. We are building on a stronger foundation and creating a larger opportunity than we previously envisioned. Beyond 2030, we see significant incremental opportunity with our late-stage pipeline asset, XP-8121. With that, let's turn to our brands, beginning with Recorlev. Recorlev continues to demonstrate exceptional momentum, and in the third quarter, it shifted into a higher gear. Net revenue increased to more than $71 million, an increase of 93% or $35 million year-over-year. Quarter after quarter, Recorlev has delivered exceptional growth that speaks to the execution by our commercial team, and most importantly, the deepening confidence prescribers have in Recorlev as their treatment of choice for endogenous Cushing syndrome. We believe Recorlev should be the standard of care, and we intend to drive it there. On our last call, we said the benefits of our January commercial expansion would begin to show up in the third quarter, and they have. Our expanded team is trained, deployed, and productive. We had a record number of new referrals, new patient starts in the quarter. The team's productivity is now running ahead of our expectations and is the key driver behind the upward revision of our 2026 and our 2030 outlooks. Also, favorable dynamics should continue to fuel an expansion of the hypercortisolism market. Just last month, the American Diabetes Association and the European Association for the Study of Diabetes issued updated guidance on the role of hypercortisolism in difficult-to-control type two diabetes and included recommendations for additional screening. Recorlev's growth continues to benefit from expanded screening that is helping clinicians to identify more patients. Our medical affairs team recently convened our fourth annual Cortisol Summit Scientific Advisory Board, bringing together leading pituitary and adrenal experts to advance research priorities and clinical management of Cushing syndrome. At the Cardiometabolic Health Congress, we presented real-world evidence illustrating the systemic benefits of cortisol normalization in a patient with uncontrolled type two diabetes, hypertension, and multiple other comorbidities, further underscoring the significant and growing opportunity ahead for Recorlev. Now turning to Gvoke. Gvoke delivered better-than-expected back-to-school prescription growth in the third quarter, with total prescriptions growing 20% over Q2 and 5% year-over-year. We continue to build the evidence base for ready-to-use glucagon. At the recent Breakthrough T1D Clinical & Research Congress, we presented real-world data on the gap between healthcare provider awareness of prescribing guidelines for ready-to-use glucagon and actual prescribing practices. That gap is precisely the opportunity in front of us. Of the roughly 15 million people with diabetes who should have a potentially life-saving product like Gvoke, only about a million do. Closing that gap remains an important opportunity for us and a meaningful way to improve patient lives. I am extremely proud of the team's work here. We began to see Gvoke demand generation build in the second quarter, accelerate in Q3, and carry right into Q4. Our prescription growth reflects improving underlying demand, giving us confidence that Gvoke is on a sustainable growth trajectory. Despite a one-time gross-to-net adjustment in the period, which Steve will walk through shortly, we are confident that Gvoke is now back to contributing steady unit and dollar growth in the future. Finally, KEVEYIS. KEVEYIS delivered more than $13 million in net revenue, demonstrating the brand's continued strength as a meaningful growth contributor to our business going forward. Maintaining patients on therapy remains the ultimate proof point, and our results continue to reflect both the clinical value of KEVEYIS and the patient-centric support infrastructure we have built for the PPP community. Last month, our steadfast multi-year effort to secure important IP protection for KEVEYIS was realized. On October 13th, the U.S. Patent Office issued a new patent covering KEVEYIS with protection through at least 2043. With this patent now issued and having demonstrated such remarkable durability, we are investing incrementally in KEVEYIS and the PPP community to identify and support even more patients. Turning to our pipeline, specifically our late-stage XP-8121 program. In September, we hosted our XP-8121 program overview, providing a detailed look at our comprehensive clinical development strategy, including Cornerstone, our pivotal phase III study designed for regulatory approval, Capstone, our pediatric study, and Touchstone, our study in patients with inconsistent control despite oral therapy. We remain on track to initiate Cornerstone by year-end, with top-line data expected in late 2028 and potential approval and launch in 2030. Since our September update, we have continued to advance all work required to initiate our Cornerstone phase III study. We are especially encouraged by our startup study activities and the enthusiasm of sites to participate in Cornerstone. In parallel, our real-world evidence program continues to advance. This week, at the American Thyroid Association annual meeting in Philadelphia, we are presenting real-world evidence on biochemical control among patients treated with oral levothyroxine. These efforts are helping us deepen our understanding of the treatment challenges in hypothyroidism and further inform the opportunity for XP-8121. We also continue to strengthen the intellectual property supporting XP-8121. on October 6th, we were granted our third U.S. patent covering the program, reinforcing XP-8121's patent protection, which extends to October 2043. This patent represents another important milestone in building the long-term foundation for XP-8121. We believe XP-8121 has the potential to address persistent challenges faced by patients and healthcare providers in managing hypothyroidism. With peak sales potential of $1 billion-$3 billion, XP-8121 represents a significant long-term commercial opportunity and has the potential to become foundational to Xeris' future growth and long-term value creation. Before I turn the call over to Steve, let me briefly recap the progress we are making against the three critical priorities we outlined in March and remain focused on. First, driving rapid revenue growth. Through the first nine months of the year, total revenue grew 37% year-over-year. Based on that performance, we now expect full-year revenue of $395 million-$405 million, or growth of 37% at the midpoint. Second, advancing our pipeline. We laid out a comprehensive XP-8121 development program in September and remain on track to initiate our pivotal phase III Cornerstone study by year-end. We also secured a third U.S. patent. And third, executing with discipline. Adjusted EBITDA grew 77% year-over-year, even as we continued to make strategic investments for growth. Our record commercial momentum and disciplined execution against our strategic priorities positions us well for the future, and I am incredibly proud of the company we have built and confident in our ability to deliver long-term value for shareholders through the 2030s and beyond. And with that, I'll turn the call over to Steve.

Steve Pieper: Thanks, John. Good morning, everyone. Before I begin, I would also like to welcome Cristi to the Xeris team. It's great to have you with us. As John highlighted, the third quarter delivered what we said it would, our investments converting into growth with record revenue and continued Adjusted EBITDA expansion. Total revenue for the third quarter was $107.2 million, up 44% year-over-year and 16% sequentially. Net product revenue was $106.3 million, up 43% or $32.2 million year over year. Recorlev generated net revenue of $71.5 million, representing growth of 93% or $34.6 million year-over-year. On a sequential basis, net revenue increased $14.8 million, or 26%. As John described, our expanded commercial team has moved from build to yield, and we expect continued contribution from that expansion in Q4 and beyond. Gvoke generated net revenue of $21.7 million in the third quarter, compared to $25.2 million in the third quarter of 2025. Gvoke prescription demand grew 5% year-over-year. This growth was offset by a $4 million one-time gross-to-net adjustment in our Medicaid channel. We believe Gvoke's return to growth in the third quarter is the beginning of a new growth trajectory. KEVEYIS delivered another great quarter, generating net revenue of $13 million, representing growth of 9% compared to the prior year. This performance represents the fourth quarter in a row of year-over-year growth, fueling our confidence that KEVEYIS can contribute to our growth expectations longer term. Gross margin for the third quarter was 88%, compared to 85% in the prior year period, and this improvement was driven by continued favorable product mix. Turning to operating expenses. R&D expenses totaled $11.1 million in the third quarter, an increase of $3.6 million compared to prior year. This increase reflects continued investment in XP-8121 as we prepare to initiate the Cornerstone study by year-end. SG&A expenses were $64.1 million, an increase of $17.6 million versus the prior year. This increase is primarily due to higher personnel-related expenses for the commercial enterprise. Adjusted EBITDA for the third quarter was $30.8 million, an improvement of $13.3 million, or 77% versus the prior year. It is also worth noting that in the third quarter, we delivered net income of $11.3 million, compared to $0.6 million in the same period last year. Moving to our full-year 2026 outlook, starting with revenue. With this quarter's record performance, we are raising our full-year total revenue guidance to $395 million-$405 million, representing approximately 37% growth at the midpoint. Our gross margin guidance remains unchanged, as we expect continued improvement versus prior year. Moving to expenses. R&D expenses are now expected to increase approximately $15 million compared to 2025, which is lower than our prior expectation of a $25 million increase. This reduction is mainly due to the expected timing of when certain expenses related to the XP-8121 program will be incurred. SG&A is now expected to increase approximately $60 million compared to 2025, up from our prior expectation of $50 million. This reflects increases in personnel-related expenses, as well as deliberate investments across areas of our portfolio where we see compelling near-term growth opportunities. On Adjusted EBITDA, through the first three quarters of 2026, we have nearly doubled year-over-year, growing from $34 million-$65 million, and we expect continued Adjusted EBITDA growth through the remainder of the year. Beyond 2026, as John shared earlier, we are now on a new path to generating more than $1 billion in total revenue in 2030, compared to our previous outlook of $750 million. Our portfolio is delivering, and we are on a new growth trajectory that should extend into 2030 and beyond. With that, I'll hand the call over to the operator for Q&A. Thank you.

Operator: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Chase Knickerbocker with Craig-Hallum. Your line is now muted. Please go ahead. Hello? Mr. Knickerbocker, your line is now unmuted. Please go ahead. My apologies. Roanna Ruiz with Leerink Partners, please go ahead.

Roanna Ruiz: Hey, morning, everyone. Recorlev had a strong quarter, and can you talk about the relative magnitude of different drivers behind that, talking about the new and repeat prescribers and the field force, et cetera? Could you help us also understand if this growth in the product could potentially be a good tailwind into 2027, maybe mitigate some of the payer dynamics that we typically see in the early part of the year?

John Shannon: Thanks, Roanna. Yeah, it's basically kind of our January expansion really kicking into gear on top of some really outstanding market dynamics where more and more patients are being tested, screened for hypercortisolism, and we're in a perfect position to capture those patients with Recorlev. We are getting business from existing prescribers and new prescribers. It's coming across the board, so it's both depth and breadth of prescribers. Yes, we see this momentum going into 2027 and beyond.

Roanna Ruiz: Great. I have a quick follow-up. I noticed you announced some new IP for XP-8121 and KEVEYIS in particular. Can you talk about the relative strength of these patents, and is this helping to build your conviction in the long term and part of your longer-term guidance raise?

John Shannon: XP-8121 is building on. We now have three patents on that product that go as far as composition of matter. That is extremely strong. KEVEYIS is one that we have been fighting for, I think, nine years to get that patent. We think it is a very important patent. We think it is a very strong patent, and it really gives us what we need to really focus on finding more patients and investing in this community in a way that we can do that for a long time. We are now in a perfect position to be able to do that. We have had four quarters of growth on KEVEYIS now, and we are adding investments there so that we continue to build on finding more PPP patients and getting them on brand.

Roanna Ruiz: Sounds good. Thanks.

Operator: Your next question comes from the line of David Amsellem with Piper Sandler. Please go ahead.

David Amsellem: Hey, thanks. I had a couple of Recorlev questions. I wanted to dive more into how you think you are going to be able to leverage the recent ADA and European updated guidance document, and do you think that could be a source of acceleration in volume and sales as we move through next year? That is number one. Then, can you just give us an update on how access is, how access dynamics are for Recorlev, and as the footprint of the product grows, do you expect any access dynamics to become more challenging or evolve in any way? Thank you.

John Shannon: Yeah, let me start with the guidance. Guidance just adds to kind of what's been going on in this space where more and more clinicians are screening and diagnosing more patients with hypercortisolemia, where drugs should be working and are not working. This is just adding to that body of evidence and creating an environment where more and more clinicians are screening and detecting. We see that as a good thing across the board, and it certainly will help future growth in terms of a market dynamic. Then in terms of your second question was—

Steve Pieper: Access.

John Shannon: Access. David, you know this market pretty well. This is an area where everything is a prior auth, and we still see that. It's really going down the path of medical necessity, and an area where you continue to have to put resources behind and help the clinicians and patients get coverage for these drugs. We don't see that dynamic changing right away, or maybe someday down the road, but right now, we don't see any of that happening.

David Amsellem: All right. Thank you.

Operator: Your next question comes from the line of Leland Gershell with Oppenheimer. Your line is now unmuted. Please go ahead.

Tracy: Hi, this is Tracy on for Leland. Congrats on the quarter, and thanks for taking our question. Just one from us. You now estimate the total revenue outlook of $1 billion by 2030. Can you comment on any changes in your underlying assumptions to up that number from $750 million? Thank you.

Steve Pieper: Yeah, Tracy, I will take this one. This is Steve. Thanks for the question. So, I think it really starts with just a comment on the overall commercial portfolio. One, we expect all three brands to be contributing to growth, primarily led by Recorlev. And that is really on the back of what we are seeing unfold in Q3 and into Q4. But importantly, we expect all three brands to be contributing to that growth, and that is really what is driving the uptick in our outlook, which I would remind folks is really only three short years away, so.

Tracy: Thank you. Appreciate the time.

Steve Pieper: Thanks, Tracy.

Operator: Your next question comes from the line of Brandon Folkes. Your line is now open. Please go ahead.

Brandon Folkes: Hi. Thanks for taking my questions, and congrats on another very good quarter. Maybe just one from me. With the increased 2030 guidance, with that obviously comes additional cash flow. How do you think about that additional capital deployment? We have obviously got a good roadmap on XP-8121 now, but beyond that, how should we think about the incremental investments in the base business between now and 2030? Do you account for a much larger team, or just anything we should think about there in terms of that additional cash generation that comes with that guidance? Thank you.

John Shannon: Thanks, Brandon. Let us start with our existing products. We see opportunity to invest across the board in those to drive incremental growth. So, our prioritization is to invest in our commercial assets, invest in our pipeline XP-8121, and then if we still have more to invest, then we will be looking at business development type activities, focused on things that fit into our commercial footprint and our current capabilities, leveraging what we have built to date, and especially things that could generate incremental revenue to our revenue growth between now and 2030, for example. So, that is kind of the priorities, and we will continue to focus on that as we generate even more cash.

Brandon Folkes: Thank you very much.

Operator: Your last question comes from the line of Chase Knickerbocker with Craig-Hallum. Please go ahead.

Chase Knickerbocker: Good morning. Thanks for taking the questions. Can you guys hear me all right?

John Shannon: Yeah.

Steve Pieper: Yeah. Yeah.

Chase Knickerbocker: Awesome. Okay. Sorry about that. I just wanted to double-click on KEVEYIS, actually. Best quarter since 2024. I just want to get a sense for the drivers. Your increased focus, some additional resources, how much impact is that actually having in the quarter? And then secondly on that front, I just wanted to get a sense for what you think your market share is by volume in that market right now, just as we think about the impact of some of your litigation. Thanks.

John Shannon: Chase, the first question is a little easier for us. The new resources that we put in just left training a few weeks ago. A lot of those are going to really go into the fourth quarter and then into next year, and it will take some time to ramp up. We anticipated and we have been watching the steady growth of KEVEYIS, and so we got ahead of that and started making the investments just based on the durability of the brand. Then in terms of market share in that, this is a really super small, ultra-rare disease area. There is really no way to measure market share. We are the only one generating and finding new patients in the marketplace. From that perspective, it is hard to tell what other brands or products that these patients are on. But in terms of the patients on KEVEYIS, there is really no other competition in terms of getting patients started and treated.

Chase Knickerbocker: Got it. Maybe just another follow-up on the ADA guidelines. Is there a way that you kind of think about what percentage of the endo community that is not routinely testing right now, or how do you guys kind of model the impact as we look into out years?

John Shannon: That is a really good question, and I think it really extends beyond the endo community, really into the primary care community, the areas where these clinicians are treating a lot of patients in these resistant, stubborn conditions, whether it is cardiometabolic or diabetes or obesity. I think that is where it really helps having the guidance going forward to add to the body of evidence that when these things are not working, you should look for something else.

Chase Knickerbocker: Since I'm last here, I'm going to sneak one more in, John. Sorry. Just on the kind of whether or not you need to generate any evidence specifically for Recorlev in these treatment-resistant diabetics to fully benefit from the guidelines. Just how you're thinking about that.

John Shannon: Yes, of course. And we've said we're investing in our commercial footprint, but we're also investing in evidence generation. And you're going to start seeing that come out over the next several years. And like I said, we're now investing in both areas so that we can add to and someday become a leader in this space as this market matures over time.

Chase Knickerbocker: Great. Thanks.

Operator: We have reached the end of the Q&A session. I will now turn the call back over to John Shannon for closing remarks.

John Shannon: Thanks, everyone, and thanks for your questions. As you heard, this third quarter put us on a new growth curve, and the momentum behind it is broad and compounding. Today, we raised our 2026 full-year revenue guidance to $395 million-$405 million, and our 2030 total revenue outlook to more than $1 billion. We also now see Recorlev on a path to $1 billion in annual net revenue three to four years sooner than we previously projected. These are not aspirational numbers. They are the logical extension of the momentum this business is generating right now, and we're just getting started. Thank you for joining us today, and thank you for your continued support and interest in Xeris.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.