Xeris Biopharma Holdings, Inc. (XERS) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call indicates strong financial performance with raised revenue guidance and a significant increase in Recorlev revenue. Despite increased expenses, the company maintains positive adjusted EBITDA and achieved net income for the first time, highlighting operational strength. The Q&A reinforces confidence in Recorlev's growth potential and market expansion, with no major competitive threats identified. These factors suggest a positive stock price movement over the next two weeks.
Key Financial Performance
Total product revenue $74 million, representing a 40% increase year-over-year. The increase was fueled by robust patient demand across all 3 products.
RECORLEV revenue $37 million, a year-over-year increase of 109%. This growth was driven by a 108% increase in the average number of patients on therapy and expanded prescriber breadth and depth.
Gvoke revenue $25 million, up nearly 10% from the same period last year. Growth was driven by a 5% increase in total Gvoke prescriptions and some favorability in gross to net.
KEVEYIS revenue $12 million, driven by growth in the average number of patients on therapy and a healthy pace of new patient starts.
Gross margin 85%, driven primarily by improved product mix.
Research and development expenses $7.5 million for the quarter, a $1.6 million increase versus last year. This increase reflects continued investment in the pipeline and technology platforms.
Selling, general and administrative expenses $46.5 million, an increase of approximately 3% compared to prior year. The increase reflects incremental personnel-related expenses.
Adjusted EBITDA $17.4 million, improving more than $20 million compared to the third quarter 2024. This improvement underscores the strength of the operating model and actions taken to drive long-term value creation.
Net income Achieved for the first time in the company's history, highlighting growing commercial strength and operational discipline.
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Operating Highlights
RECORLEV revenue: Generated $37 million in Q3, a 109% year-over-year increase, driven by 108% growth in the average number of patients on therapy.
Gvoke revenue: Delivered $25 million in Q3, up nearly 10% year-over-year, supported by a 5% increase in total prescriptions and favorable gross-to-net adjustments.
KEVEYIS revenue: Achieved $12 million in Q3, driven by growth in the average number of patients on therapy and new patient additions.
XP-8121 pipeline progress: Continued advancement with plans to initiate Phase III clinical trials in the second half of 2026, supported by positive feedback from key opinion leaders.
Commercial expansion for RECORLEV: Initiated a strategic expansion nearly doubling sales and patient support teams to capture market opportunities and scale efficiently in 2026 and beyond.
Revenue growth: Total product revenue exceeded $74 million in Q3, a 40% year-over-year increase. Full-year revenue guidance raised to $285-$290 million, representing a 42% growth at the midpoint.
Gross margin improvement: Achieved 85% gross margin in Q3, driven by improved product mix.
First-time net income: Reported positive net income for the first time in company history, alongside strong adjusted EBITDA of $17.4 million.
Investment in growth: Incremental investments planned in RECORLEV commercial organization and XP-8121 Phase III preparation, aligned with long-term growth priorities.
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Risk or Challenges
Regulatory Risks: The company is preparing for a Phase III clinical trial for XP-8121 in 2026, which involves regulatory approvals and compliance. Any delays or issues in meeting regulatory requirements could impact the timeline and success of this product.
Increased SG&A and R&D Expenses: The company expects an increase in selling, general, and administrative (SG&A) expenses and research and development (R&D) spending starting in Q4 2025. These increased costs could pressure profitability and financial performance in the near term.
Market Penetration Challenges: While RECORLEV, Gvoke, and KEVEYIS have shown growth, the company faces the ongoing challenge of expanding market penetration and reaching more patients and clinicians, which is critical for sustaining revenue growth.
Operational Scaling Risks: The company is nearly doubling its sales and patient support teams as part of its commercial expansion. This scaling effort could face operational challenges, including hiring, training, and integration, which may impact efficiency and execution.
Pipeline Development Risks: The development of XP-8121, a once-weekly subcutaneous form of levothyroxine, involves complex drug manufacturing and device validation processes. Any setbacks in these areas could delay the product's launch and affect future revenue streams.
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Guidance & Outlook
Full Year 2025 Revenue Guidance: The company has raised the lower end of its full year total revenue guidance to a range of $285 million to $290 million, representing a 42% increase at the midpoint compared to 2024.
RECORLEV Commercial Expansion: The company is nearly doubling its sales and patient support teams to enhance its ability to reach more clinicians and serve more patients, aiming to capitalize on significant market opportunities in 2026 and beyond.
XP-8121 Phase III Clinical Trial: The company plans to initiate a Phase III clinical trial for XP-8121, a once-weekly subcutaneous form of levothyroxine for primary hypothyroidism, in the second half of 2026. Manufacturing and device validation work is currently in progress.
Incremental Investments in SG&A and R&D: The company expects an increase in SG&A and R&D expenses starting in Q4 2025 to support the RECORLEV commercial expansion and the preparation for the XP-8121 Phase III clinical trial.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:What is the impact of the expanded sales force for RECORLEV, and when will the new reps reach full productivity?
A:The RECORLEV commercial team was expanded by 50% last year, reaching around 42 reps by Q3. These reps achieved optimal productivity by Q1-Q2 this year. The next expansion will bring new reps onboard in January, and they are expected to reach optimal productivity after a couple of quarters of training and field experience.
Q:Did RECORLEV capitalize on the competitor's supply issues in Q3?
A:No unusual trends were observed in Q3 regarding patient sources. Most patients were new to RECORLEV therapy, with the rest coming from competitors, maintaining the usual mix.
Q:What are the persistency trends and discontinuation rates for RECORLEV?
A:Persistency trends and discontinuation rates remain consistent with past metrics. The high level of new patient starts keeps these metrics stable. Specific 6- or 12-month discontinuation rates for RECORLEV or the condition were not disclosed, but they are typical for a specialty product in a complex disease state.
Q:What are the expectations for RECORLEV's top-line growth and its market potential?
A:RECORLEV is expected to grow significantly, driven by market expansion and increased screening for hypercortisolemia. The product is on track to become a $1 billion product, supported by ongoing investments in sales force expansion and market development.
Q:What is the expected cadence of R&D and SG&A expenses for RECORLEV and the 8121 trial?
A:R&D expenses for the 8121 trial will ramp up into mid-next year, peaking in 2027. SG&A expenses for RECORLEV will increase as new reps are brought on in January. Despite these investments, the company remains committed to staying adjusted EBITDA positive.
Q:Does the long-term sales guidance for RECORLEV anticipate further sales force expansion?
A:Yes, further investments in sales force, pharmacy, patient services, and commercial infrastructure are planned to manage patient load and support growth as RECORLEV scales to a $1 billion product.
Q:What are the gating steps for the initiation of the 8121 trial?
A:The company is focused on manufacturing scale-up, device verification, and ensuring the clinical trial uses a ready-to-go commercial product. The trial will start once these steps are completed to avoid delays.
Q:Does the infrastructure for RECORLEV support bringing in additional products?
A:Currently, the infrastructure is dedicated to RECORLEV's growth. However, as the company matures, leveraging the infrastructure for additional products may make sense.
Q:What are the competitive dynamics for RECORLEV with the potential approval of Corcept's relacorilant?
A:The approval of relacorilant is seen as a positive development that could expand the market by increasing screening and detection of hypercortisolemia. The company views this as an opportunity rather than a threat.
Q:Are there plans to target general practitioners (GPs) for RECORLEV?
A:Yes, the company plans to expand into GP areas, particularly those with endocrinology-like practices, as part of its data-driven approach to market expansion.
Q:What momentum is RECORLEV seeing among new and repeat prescribers?
A:RECORLEV is experiencing strong momentum among both new and repeat prescribers, contributing to a 108% increase in patients and prescriptions.
Q:What seasonality trends or volume growth drivers are expected for RECORLEV?
A:The only potential seasonality impact is related to deductible resets in Q1, which is not expected to be overly material.
Q:What is the durability of the KEVEYIS franchise, and is there any competition?
A:KEVEYIS remains a durable asset with new patients being added weekly. The company continues to monitor for competition but has not reported any significant threats.
Q:Review of Unclear Management Responses
A:Management avoided providing specific discontinuation rates for RECORLEV or the condition, stating only that they are typical for a specialty product in a complex disease state. Additionally, no detailed financial guidance or specific metrics were disclosed for RECORLEV's top-line growth or the expected impact of Corcept's relacorilant approval.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
American Thyroid
Annual Meeting
Association Annual
Biopharma release
CFO remark
Communications Biopharma
Communications information
Cushing marketplace
Gvoke effectiveness
Gvoke period
Meeting number
PPP product
RECORLEV backbone
RECORLEV benefit
RECORLEV engine
RECORLEV increase
RECORLEV position
Relations section
Thyroid Association
XP form
XP plan
XP potential
ability clinician
ability value
addition increase
administration array
backbone expansion
benefit number
breadth depth
capability formulation
clinician experience
clinician patient
commitment patient
confidence RECORLEV
confidence end
conviction XP
date result
dedication patient
device
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