Xeris Biopharma Holdings Aktie

Hello, everyone. Thank you for joining us, and welcome to Xeris Biopharma Third Quarter 2026 Earnings Conference Call. [Operator Instructions]

I will now hand the conference over to Cristi Barnett, Vice President of Investor Relations. Please go ahead.

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. Any forward-looking statements made on this call speak only as of today's date. And except as required by law, the company undertakes no obligation to update or revise these statements.

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.

And with that, I'll turn it over to John.

Thank you, Cristi, and welcome to Xeris. We're happy to have you on the team, and good morning, everyone. I'm 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. And Keveyis continued its steady high-value contribution. And now with the 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 to $405 million, and we see this new trajectory extending well beyond 2026. We are now on a path to reach more than $1 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 $1 billion in annual net revenue 3 to 4 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. And 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's 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 outlook.

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 2 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's syndrome. And at the Cardiometabolic Health Congress, we presented real-world evidence illustrating the systemic benefits of cortisol normalization in a patient with uncontrolled type 2 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 health care 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 1 million do. Closing that gap remains an important opportunity for us and a meaningful way to improve patient lives.

I'm 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. And 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.

And 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. And last month, our steadfast multiyear effort to secure important IP protection for Keveyis was realized. On October 13, 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 start-up 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 6, 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 health care providers in managing hypothyroidism. With peak sales potential of $1 billion to $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 3 critical priorities we outlined in March and remain focused on. First, driving rapid revenue growth. Through the first 9 months of the year, total revenue grew 37% year-over-year. Based on that performance, we now expect full year revenue of $395 million to $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 continue 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.

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 to $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 3 quarters of 2026, we have nearly doubled year-over-year, growing from $34 million to $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 Instructions] Your first question comes from the line of Chase Knickerbocker with Craig-Hallum.

Roanna Ruiz with Leerink Partners, please go ahead.

So 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? And 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?

Thanks, Roanna. Yes, 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. And yes, we see this momentum going into '27 and beyond.

Great. And as a quick follow-up, so I noticed you announced some new IP for 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?

Well, 8121 is building on -- we now have 3 patents on that product that go as far as composition of matter. So that's extremely strong. Keveyis is one that we've been fighting for, I think, 9 years to get that patent. We think it's a very important patent. We think it's 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. And so we are now in a perfect position to be able to do that. We've had 4 quarters of growth on Keveyis now, and we're adding investments there so that we continue to build on finding more PPP patients and getting them on brand.

Your next question comes from the line of David Amsellem with Piper Sandler.

I had a couple of Recorlev questions. I wanted to dive more into how you think you're 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? So that's number one. And 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?

Yes. Let me start with the guidance. And guidance just adds to kind of what's been going on in the space where more and more clinicians are screening and diagnosing more patients with hypercortisolemia where drugs and should be working and are not working. So this is just adding to that body of evidence and creating an environment where more and more clinicians are screening and detecting. So we see that as a good thing across the board, and it certainly will help future growth in terms of a market dynamic.

And then in terms of your second quarter -- your second question was...

Access.

Access. So David, you know this market pretty well. This is an area where everything is a prior auth, and we still see that. So 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.

Your next question comes from the line of Leland Gershell with OpCo.

This is Tracy on for Leland. Congrats on the quarter. 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?

Yes, Tracy, I'll take this one. This is Steve. Thanks for the question. So yes, I think it really starts with just a comment on the overall commercial portfolio. One, we expect all 3 brands to be contributing to growth, primarily led by Recorlev. And that's really on the back of kind of what we're seeing unfold in Q3 and into Q4. But importantly, we expect all 3 brands to be contributing to that growth, and that's really what's driving the uptick in our outlook, which I'd remind folks is really only 3 short years away. So...

Your next question comes from the line of Brandon Folkes.

Congrats on another very good quarter. Maybe just one for me. With the increased 2030 guidance, with that obviously comes additional cash flow. How do you think about that additional capital deployment, right? We've obviously got a good road map on 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?

Thanks, Brandon. And let's 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 8121. And then if we still have more to invest, then we'll be looking at business development type activities, focused on things that fit into our commercial footprint and our current capabilities, leveraging what we've built to date and especially things that could generate incremental revenue to our revenue growth in the -- between now and 2030, for example. So that's kind of the priorities, and we'll continue to focus on that as we generate even more cash.

Your last question comes from the line of Chase Knickerbocker with Craig-Hallum.

Can you guys hear me all right now?

Yes.

Yes.

Awesome. Okay. Sorry about that. So I just wanted to double-click on Keveyis actually, best quarter since 2024. 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.

Chase, the first question is a little easier for us. The new resources that we put in just left training a few weeks ago. So 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. So we are -- we anticipated and we've been watching the steady growth of Keveyis. And so we've got ahead of that and they started making the investments just based on the durability of the brand. And then in terms of market share in that, this is a highly -- really super small ultra-rare disease area. There's really no way to measure market share. We're the only one generating and finding new patients in the marketplace. And so from that perspective, it's hard to tell what other brands or products that these patients are on. So -- but for -- in terms of the patients on Keveyis, there's really no other competition in terms of getting patients started and treated.

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's not routinely testing right now? Or how do you guys kind of model the impact as we look into out years?

Chase, that's 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's cardiometabolic or diabetes or obesity. So I think that's where it really helps having the guidance going forward to add to the body of evidence that when these things aren't working, you should look for something else.

Since I'm last, I'm going to sneak one more in, John, sorry. Just on 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?

Yes. I would -- 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.

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

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 to $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 3 to 4 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.

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

Hello, everyone. Thank you for joining us, and welcome to Xeris Biopharma XP-8121 Program Overview. [Operator Instructions]

I will now hand the conference over to Allison Wey, Senior Vice President of Investor Relations. Allison, please go ahead.

Good morning, everyone, and welcome. I'm Allison Wey, Senior Vice President of Investor Relations. On behalf of the entire Xeris team, thank you for joining us today for XP-8121's program overview. We will start the presentation today with John Shannon, Chairman and Chief Executive Officer of Xeris, who will set the stage for everything you're about to hear, including why we believe our candidate drug product, XP-8121, a once-weekly subcutaneous injection of levothyroxine for the treatment of hypothyroidism has the potential to be a blockbuster.

From there, you'll hear from Dr. David Robertson, a leading endocrinologist and an investigator in our Phase III registrational study. Dr. Robertson will share his clinical perspective on why XP-8121 has the potential to be a game changer for people living with hypothyroidism and the physicians working to treat them. Dr. Anh Nguyen, our Chief Medical Officer, will cover our comprehensive integrated evidence generation program for 8121 in detail, including Cornerstone, our Phase III study, Capstone, our pediatric study, Touchstone, our special population study and our real-world evidence strategy. Josh Bennett, our Head of Strategy, will reinforce the unmet need, the competitive moat and highlight our commercial readiness. After a quick summary by John, we'll wrap up today with a question-and-answer session consisting of the full Xeris team.

Before we begin, this presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Please see Slide 3 of the accompanying presentation and our SEC filings for important risk factors that could cause our actual performance and results to differ materially from those expressed or implied in these forward-looking statements. We undertake no obligation to update or revise the information provided on this call as a result of new information or future results or developments.

With that, I'll turn the call over to John.

Thanks, Allison. A year ago, we set out our ambition to become the next great biopharmaceutical company. Today, we're here to show you exactly how we're delivering on that ambition.

Let me start with where we stand today. Our strategy is straightforward, and it's working. The first part of our strategy is to build a fast-growing commercial enterprise. Recorlev, Gvoke and Keveyis are performing with Recorlev leading the way towards our goal of $750 million in total revenue by 2030. Second part of our strategy is to execute on our pipeline. Layered on top of our strong commercial momentum is XP-8121, our lead pipeline asset and our next big catalyst that we believe will deliver Xeris' long-term growth. These are the 2 core elements of our strategy, a commercial engine generating growth today and continuing investment in our own organic product development. This is how we become the next great biopharmaceutical company.

XP-8121 is the reason we're here today. We want you to understand exactly why we believe this asset has the potential to deliver continued growth for Xeris well into the next decade. In a few moments, our team will take you through how we see 8121 solving a serious unmet medical need impacting millions of patients. To understand why we are so confident in 8121, you need to understand the real problem it may solve for patients. Hypothyroidism is a prevalent condition where the body does not produce enough thyroid hormone. Approximately 20 million Americans are diagnosed and treated today with daily oral levothyroxine.

But here is a very important data point, 3 million to 5 million of those patients are failing to achieve biochemical control with the current oral therapy. These patients are diagnosed, they are on medicine, but because of challenges, such as GI absorption, their medicine is failing them. This is not a small clinical inconvenience. Uncontrolled hypothyroidism may lead to heart disease and increased mortality. The consequences are real and physicians and patients deserve a better solution. XP-8121 is just that, an innovative and patented once-weekly subcutaneous levothyroxine formulation that bypasses GI absorption challenges.

For the millions of patients who fail to achieve biochemical control with current therapy, 8121 has the potential to impact their clinical outcomes and improve their lives. This is exactly the kind of opportunity that fulfills our company's mission and vision to raise the standard of care by uniting scientific advancement and genuine human connection. You will hear today that we will execute a comprehensive clinical development program aimed at achieving registration and differentiation. You will hear we are leveraging our formulation technology, our drug device expertise, along with our existing medical and commercial infrastructure to bring an innovative important solution to millions of patients.

You will hear we are on track. We intend to initiate Cornerstone, our Phase III pivotal study before year-end, fully aligned with FDA on endpoints and statistical power. Based on our enrollment assumptions, we expect data in late 2028 and an FDA approval and launch in 2030. And Cornerstone is just the beginning. We're executing a comprehensive clinical program in hypothyroidism, Cornerstone, Capstone, Touchstone, along with real-world evidence, all designed from the ground up to establish 8121 as the definitive differentiated standard of care for patients with poorly controlled hypothyroidism. And you will hear how this clinical development program has a high probability of success.

You will hear our program is protected. Our IP strategy covers composition of matter and the methods of use and our formulation technology and the science underpinning that protection is solid. You will hear we are ready. This is a program we are executing now. The development plan and full-scale commercial launch are entirely self-funded. We have the science, the people and the innovation to run a comprehensive clinical program of this scale. And when approval comes, we plan to launch quickly and efficiently using the commercial infrastructure we have already built and proven. We are not waiting to develop capabilities. We have them.

And you will hear, most importantly, the commercial opportunity is substantial. We are targeting a defined reachable population of 3 million to 5 million patients who are already diagnosed, already treated and still not controlled on oral therapy. Once approved and launched, we believe that XP-8121 will achieve $1 billion to $3 billion in peak sales potential. And we believe the clinical and patient communities are waiting for exactly what XP-8121 has to offer.

Before we go deeper, I want to bring in a thought leader whose perspective means more to me than any financial model or market research report. Dr. Robertson has spent nearly 3 decades on the front lines of endocrine medicine at Atlanta Diabetes Associates and Piedmont Hospital, treating patients with exactly the kinds of complex thyroid and metabolic conditions we're focused on, and we're grateful he could join us today. Physicians who treat hypothyroidism see inadequate thyroid control every day. The patients do everything right and their thyroid stimulating hormone or TSH is still out of range, visit after visit. Clinicians have been waiting a long time for a treatment like XP-8121, and Dr. Robertson is one of them. When a clinician of his caliber tells us he is excited about an entirely new approach and is willing to join the study himself, that really means something.

And now I'll hand it over to Dr. Robertson.

Thanks for having me, John. As you mentioned, I'm an endocrinologist based in Atlanta, where I care for over the last 30 years, literally 1,000 or more patients with hypothyroidism. I'm also a clinical investigator, and I've been involved in 35 to 45 endocrine trials over the last 2 to 3 decades, including my plan to be an investigator in the upcoming Cornerstone trial.

When I first learned about XP-8121, I was excited. In my practice, I see patients every day who are still struggling despite being on standard therapy. And the truth is there haven't been very many meaningful advances in how we treat hypothyroidism in a long time. The idea that XP-8121 could potentially offer something different for my patients, that's what drew me in. In my practice, there's a group of patients who just can't achieve TSH normalization on existing oral medications despite my best efforts. The reasons vary, unreliable absorption, GI disorders, drug interactions and in some cases, no clear explanation at all. What it leads to is a cycle of dose escalations, repeated testing and persistent symptoms and ultimately, long-term comorbidities. It's frustrating to me and it's frustrating to the patient.

While we still can't get to goal, my treatment options are limited. I can switch generics, I can try a brand name product or I can move to an oral liquid solution. They help some patients, but ultimately, all of these options still rely on the GI tract absorption and thus have a low likelihood of changing the outcome. For the first time in decades, XP-8121 offers a new approach to levothyroxine. It bypasses the GI tract, which may help difficult-to-treat patients achieve biochemical control and reach their treatment goals. Based on the Phase I and Phase II data, I'm reassured by a safety profile and its dose conversion results.

Levothyroxine is still levothyroxine, but I can see how this approach could help some of my patients today. Before XP-8121 can become available, it must complete a Phase III trial as part of the FDA approval process. That is why I'm an investigator in the Cornerstone trial to help evaluate this potential treatment and hopefully move it one step closer to the patients who need it.

And when I think about patients who could benefit, one comes to mind right away. A 38-year-old female with hypothyroidism and Crohn's disease who has frequent flares. Each episode alters absorption of her thyroid replacement, resulting in hypothyroid symptoms. When I make a dose adjustment, her gastrointestinal symptoms improve, absorption once again improves and then there's a risk of developing hyperthyroid phase, which could again impact her Crohn's disease. The up and down dose adjustments of thyroid replacement is resource-intensive and disruptive to her quality of life.

And she's certainly not alone. Many of my other patients with inflammatory bowel disease and also celiac disease find themselves in similar scenarios and an injectable therapy that bypasses absorption issues could provide an important new option for GI patients. I look forward to participating in and completing the Cornerstone study. I also appreciate that Xeris is planning future studies in uncontrolled patients, giving me further guidance and confidence in XP-8121.

With that, I'll turn it over to Anh Nguyen, Xeris' Chief Medical Officer, who can take you through the developmental program in greater detail.

Thank you, Dr. Robertson, for detailing the everyday clinical concerns of hypothyroidism medical management. The clinical challenge in hypothyroidism extends beyond diagnosis and treatment initiation. Maintaining patients within their optimal therapeutic range remains difficult and both undertreatment and overtreatment are associated with meaningful health consequences. We believe the next frontier in thyroid hormone replacement is to enable consistent thyroid control over time. XP-8121 is being developed to improve the reliability of thyroid hormone replacement, helping patients maintain target thyroid levels more consistently. By addressing the critical limitations of current management, we aim to unlock better long-term outcomes and maximize the benefits of effective thyroid control.

The thyroid hormone replacement landscape has seen limited therapeutic innovation and clinical evidence generation over the past several decades, yet inconsistent thyroid control continues to expose patients to the risk associated with both under and overtreatment. By pairing an intuitive therapy such as subcutaneous levothyroxine with a comprehensive clinical data generation program, we intend to build the evidence base clinicians need to drive confidence, accelerate adoption, unlock patient demand and support long-term growth.

Our development strategy for XP-8121 is defined by 3 reinforcing pillars and together, they form the foundation for a transformative new approach to therapy. Our first pillar is regulatory approval. At the heart of our Phase III program is Cornerstone. Our registrational trial is designed to secure regulatory approval. Cornerstone is designed to establish that weekly subcutaneous XP-8121 is therapeutically equivalent to daily oral therapy, while at the same time, supporting the comparative advantages of this new approach from a label perspective. I will share more about the Cornerstone study in a moment.

Our second pillar is extending safety and dosing across all ages through Capstone. XP-8121 thus far demonstrated a compelling safety and tolerability profile confirmed in completed Phase I and Phase II trials in adults with repeat dosing. We extend that confidence to the pediatric population through our Capstone study with an aim to confirm dosing and safety in children.

And our third pillar, clinical differentiation. Clinical differentiation is where XP-8121's full promise becomes most visible. Our Touchstone study is designed to demonstrate that consistent thyroid control is achievable even in patients who have had historically been difficult to treat. Importantly, these findings will address a population that remains underserved despite existing therapies.

Complementing Touchstone, our real-world evidence programs document the significant unmet need in hypothyroidism with many patients continuing to experience persistent symptoms, impaired quality of life and reduced functional well-being despite current treatments. To accelerate this work, we are also committing significant grant resources towards investigator-initiated research with details to be unveiled at the Annual Meeting of the American Thyroid Association this November. Together, these efforts reinforce XP-8121 as a potential new therapy for improved thyroid control that addresses the outcomes that matter the most for people living with hypothyroidism.

We've designed a robust Phase III pivotal study named Cornerstone. To approve XP-8121, the FDA requires that we demonstrate that once a week subcutaneous XP-8121 is therapeutically equivalent to daily oral levothyroxine in well-controlled hypothyroid patients. Cornerstone will enroll 500 adults and adolescents with well-controlled hypothyroidism at more than 50 U.S. clinical trial sites that represent both community and academic settings. Subjects will be randomized 1:1 to receive either oral levothyroxine or subcutaneous XP-8121 for 54 weeks. Both treatment changes and lab assessments will be recorded every 6 weeks throughout the 54-week study, building a robust data set.

The primary endpoint will be the proportion of subjects with TSH within normal range at both 48 and 54 weeks. Our most important secondary endpoints are the proportion of time that TSH and Free T4, which is a primary hormone made by the thyroid gland, are each within normal range during the last 30 weeks of the study. The most compelling differentiation versus daily oral levothyroxine may come from the supportive secondary PK/PD endpoints as they quantify the advantages of once-weekly subcutaneous delivery.

Cornerstone's design enables a clear and predictable regulatory pathway and a strong probability of success. Following alignment with FDA on a 15% non-inferiority margin, we've sized the study to 500 patients, representing over 90% power. A study of this size allows us to evaluate highly meaningful secondary endpoints like time in range and thyroid control consistency. It also allows us to evaluate outcomes that matter to patients and providers, including symptom burden, quality of life, functional status and treatment preference.

Together, these endpoints are expected to build a differentiated evidence package that supports regulatory approval and broad clinical adoption. We're on track to initiate Cornerstone by year-end. We are engaged in clinical trial site activation activities and investigators are telling us they are excited about this new approach to therapy and the patients ready to enroll.

The Cornerstone study alone gives us a promising path towards drug approval. In addition, our continued focus is to further support clinical adoption through clear clinical differentiation and establish XP-8121 as the preferred therapy. An estimated 3 million to 5 million patients continue to struggle with inadequate thyroid control on their daily oral levothyroxine, yet the field has generated remarkably little new evidence or innovation to address their needs. We believe that this unmet need represents a compelling opportunity for a differentiated therapeutic solution.

Touchstone is our prospective single-arm clinical study designed to establish efficacy within the inadequately treated patient population who will most benefit from XP-8121. We will enroll patients who have inconsistent control despite being on maximal oral therapy, convert them on to XP-8121 and measure the rate of TSH normalization over 6 months. The Touchstone study will be completed in time for inclusion with our NDA submission.

Beyond the XP-8121 clinical program, we are building a comprehensive real-world data set designed to accelerate clinical adoption, support market access and define the patients most likely to benefit. Working closely with leading endocrinology experts, we are leveraging claims and real-world data sets to quantify the burden of inadequate thyroid control, characterize poorly controlled patient populations and demonstrate the clinical and economic consequences of current treatment limitations. This data will provide us a strong evidence-based framework to identify appropriate patients, strengthen payer value discussions and create a compelling foundation for strong uptake of XP-8121 into clinical practice.

Importantly, our real-world evidence strategy is already working. We have already presented data at multiple congresses and those presentations have catalyzed deeper, more substantive conversations with key opinion leaders about the persistent unmet need in hypothyroidism and XP-8121's potential to address it. This recurring engagement reinforces our confidence in both the clinical value proposition and the commercial opportunity.

Together, Cornerstone, Capstone, Touchstone and the real-world evidence program provide a clear predictable path towards drug approval, establish meaningful clinical differentiation and position XP-8121 as the preferred therapy for patients who need reliable, sustained thyroid control across all stages of life.

The critical path for XP-8121 is clear and well defined. Cornerstone initiates by year-end, completes in 2028, delivers top line results in late 2028 and positions us for an NDA filing and regulatory approval in 2030. Touchstone and Capstone advance in parallel. Running alongside all of this is our real-world evidence program continuously generating the outcomes data that will inform clinical practice, strengthen payer conversations and support guideline discussions well before launch.

The result is a steady cadence of clinical and real-world evidence milestones from now through 2030. Each study progressively strengthens the evidence base and drives the path forward. By 2030, we will not simply have an approval. We will have a strong label, a robust real-world evidence package, a well-prepared market, a patented product and the foundation for clinical adoption and payer access.

Now I'll turn it over to Josh to walk through what it means for the commercial opportunity.

Thank you, Anh. Our approach to developing 8121 has been laser-focused on patients like Dr. Robertson described. Not only does her Crohn's disease impact how levothyroxine is absorbed, but the impact varies over time. For patients like her and the health care professionals striving to help them, an injectable therapy that bypasses gastrointestinal absorption could offer an important new treatment option.

When treating hypothyroidism, the clinical guidelines are clear. Treat with levothyroxine until thyroid hormone levels measured by TSH are normal. Keeping levels in range is so important that both guidelines and product labels require regular monitoring. And yet look at the numbers. Currently, 3 million to 5 million patients are diagnosed, treated but not well controlled. That is roughly 20% of all hypothyroid patients. The standard is clear, 1 in 5 patients isn't meeting.

A major reason is the oral route. Absorption of oral levothyroxine is disrupted by underlying GI conditions, interacting medications and supplements, food and administration timing, patient-specific physiology and the sheer complexity of treatment. Any one of them can push a patient out of range. But when more than one is present, it's a daunting challenge. The answer, subcutaneous administration bypasses GI absorption entirely.

Our team has accomplished something no one else has. We've created a product that can solve this high unmet need. Turning levothyroxine into a product that meets all requirements is a formidable undertaking. Levothyroxine is inherently unstable. It's a narrow therapeutic index drug, which means the FDA holds manufacturers to a stringent dose accuracy standard, and it must be available in a wide range of doses to meet the needs of all patients. The barrier to entry is solving all these simultaneously.

Our solution is novel, but the ingredients are not. The key components of 8121 are already on the market. Levothyroxine has been approved for decades. Our proprietary XeriSol technology already used in our approved Gvoke product line produces a stable, high concentration formulation. We modified a pen injector that was designed for accuracy and already approved in Europe. The device is adjustable across the range of doses the patients need and similar to commonly used injectors.

And our progress to date increases our confidence. We're building on a strong clinical record. Across Phase I and Phase II, 8121 showed an acceptable safety and tolerability profile, predictable PK/PD with sustained weekly exposure, biochemical efficacy and strong patient preference, the key elements typically required before a pivotal trial. The regulatory pathway is well defined. Cornerstone was designed in close collaboration with KOLs and the FDA is aligned with its design and statistical power and 8121 is protected. Issued patents covering methods of use and composition of matter provide IP coverage through at least 2043.

The combination of a known API, Phase I and II safety data and clear regulatory path is why we believe 8121 has a higher probability of success than a typical Phase III program. XP-8121 is innovative, addresses a well-defined unmet medical need, backed by positive Phase I and II clinical data, aligned with the FDA based on a well-designed clinical program and protected to at least 2043.

Now let me share why we believe 8121 can be a $1 billion to $3 billion product for Xeris. To achieve that, our job is to ensure that it reaches all the patients who can benefit, a readily identifiable population defined by a single lab value already in their medical record. We don't need to find them, and we don't need to persuade anyone they exist. They are already diagnosed, already treated, already failing and their physicians already know it. We've confirmed this in market research. 75% of physicians we surveyed reported high intent to prescribe XP-8121. This level of interest is rare and points to a community ready for a solution.

And we're already planning for a successful launch. Everything required to make 8121 a blockbuster is a capability that already exists in Xeris. First, HCPs need to be prepared. Clinicians understand the problem. They live it every day. Our job is to quantify it and ensure the broader clinical community sees it as clear. That means data defining the unmet need paired with KOL engagement to bring these insights to the community. It is the same approach behind every brand we've commercialized. And as you heard today, those efforts are well underway and driving KOL enthusiasm.

Then we need to reach HCPs, especially the endocrinologists who see the greatest concentration of poorly controlled patients. We call on them today for our commercial products and understand their needs. And finally, patients need to be able to get 8121 through their insurance, including when prior authorizations are required. Our market access and patient services teams understand this space and navigate coverage and access across our 3 currently marketed brands. This is a space we know, technology we own and a team that is proven and will get it done. That is why we believe peak sales of $1 billion to $3 billion are achievable. The market is big, the need is real. The clinical and regulatory path are clear. The technology is differentiated and protected. Patients need 8121 and clinicians are ready for it.

And with that, I will turn it back to John.

Thanks, Josh, Anh and Dr. Robertson. Before we turn to Q&A, let me bring it all together. What you heard today is not just a vision. It's a strategy we are executing right now. The case for XP-8121 comes down to 4 key points.

First, there is a well-established unmet need. 3 million to 5 million patients are diagnosed, being treated and are not achieving biochemical control on the current standard of care. We believe we have the answer to solve this unmet need.

Second, our development program has high probability of success. Our Phase I and Phase II trials give us strong confidence going into our registrational Phase III Cornerstone trial. We will enter the study with the go-to-market formulation and device, putting us on track for launch in 2030.

Third, we are investing in data generation that will differentiate XP-8121 and maximize target population adoption. With Cornerstone, Capstone, Touchstone and real-world evidence running in parallel, we are building the data, evidence and outcomes now to support every prescriber conversation, every payer discussion and every treatment guideline. Market leadership requires more than a strong label.

And lastly, we have everything we need to execute. We are self-funded. We have our proprietary XeriSol technology. We have strong IP. We have a proven medical and commercial infrastructure. We're not building capabilities. We're deploying them. This is why we are confident that XP-8121 will reach $1 billion to $3 billion in peak sales and cement Xeris as a leading biopharmaceutical company. And most importantly, why once approved, 8121 has the potential to meaningfully improve the lives of millions of patients.

Before we turn to Q&A, it must be noted that we could not achieve our objectives without the support of our patients, caregivers, investigators, employees and you. Thank you for joining us today. And with that, I'll hand over to the operator.

[Operator Instructions] Your first question comes from the line of Leland Gershell with Oppenheimer.

Two questions, if I may. First one for Dr. Robertson. Thank you for your commentary. I'm just saying the 3 million to 5 million patients who are uncontrolled. I wanted to sort of better understand who among those patients would be kind of the most at risk and therefore, the most in need of a product like XP-8121. What sort of -- given that there's different degrees of uncontrol, wondering your thoughts on among, let's say, your patients, what would that have to look like in terms of pushing you over the edge to prescribe the medication?

Leland, this is Allison. So Dr. Robertson couldn't be with us for the Q&A session here, but I'm sure we can answer that question amongst the 3 others. Anh, do you want to try that one?

Thank you, Leland. So overall, at any one time, 20% of people are out of range, even if they're considered within consistent control. And this issue becomes one of undertreatment and overtreatment. So we are doing activities in order to identify and clinical community about these concerns of both the clinical and economic consequences of undertreatment and overtreatment.

Great. And then just a question on the package for the FDA. Just given that oral levothyroxine was approved some time ago, wondering if there are any other studies in addition to the ones you outlined in your announcement that you may need to run or you'd like to run even just to modernize the trial?

Yes. Leland, it's John. The package -- the comprehensive program we put together will get us what we need from a regulatory approval as well as allow us to maximize the commercial opportunity and really get after the true unmet need in this space. So we think we've got everything laid out here today and no need to do any additional work.

Your next question comes from the line of Roanna Ruiz with Leerink Partners.

So 2 questions for me. For the first one, can you talk a bit more about your expected penetration rates for 8121 in the first couple of years of launch, if you started to think about that? And what strategies could drive you to the higher end of your estimated peak sales range?

Thanks, Roanna. I'm going to let Josh take that one.

Yes. Thanks for the question, Roanna. So just to frame this, our forecast assumes that we get no more than 10% of the 3 million to 5 million patients on therapy at peak. And I think what you've highlighted is correct in that the range primarily reflects a degree of penetration. So that's why we are investing aggressively and early in the real-world data package that brings the highest unmet need patients, especially those with underlying GI disorders like Dr. Robertson talked about, really quantifies the burden that those patients face and brings them to life to make sure that we're powering adoption in the early phases of launch.

And then as we think about the total opportunity, as Anh said, not only are the 3 million to 5 million patients not meeting their goals, but guidelines don't distinguish the reason. They say bring them into range. So we believe that the opportunity is large, but we premised our goals on what we believe is an achievable market share.

Got it. That helps. And a quick follow-up. Could you talk a bit more about the patient experience currently with standard of care? Do they notice when they're uncontrolled and actually are actively seeking better options? And do you expect any education that needs to happen either with the physicians or the patients as 8121 launches?

Yes. Thanks for the question. I think it starts with one of the things we mentioned, which is that because this is a narrow therapeutic index drug, patients are required to be tested at least annually and often more often, sometimes physicians test more frequently. So the evidence of being out of range is in the chart today and they're reminded of it every year, they get a negative result. So none of the -- no education is needed to point that out.

On top of it, some patients are asymptomatic, they still need to be brought into range and some suffer symptom burden and are especially motivated to seek new options. So what we've seen in all of our research as well as our Phase II studies is a highly motivated physician and patient population. It really struck us that in our Phase II study, when we took patients who were well controlled and converted them to 8121, 72% said that they would prefer to stay on 8121 moving forward. That was a really positive signal. And as we study the uncontrolled population more, we expect that to increase.

The next question comes from the line of Chase Knickerbocker with Craig-Hallum.

Maybe just first on Touchstone. Can you just describe how inconsistently controlled is defined, just kind of the enrollment criteria for where these patients are, how far they are out of range, if they're on kind of maximum oral dosage, et cetera?

Yes, we'll let Anh answer that question.

Thanks, Chase. So Touchstone focuses on the patients who need therapy correction the most and where they have inconsistent control, which is defined by having at least 2 TSH ranges out of range.

Got it. And then just as we kind of shift to how you might be treated from a payer perspective, I mean, is this kind of how you think a potential step edit might look? Is it 2 kind of reads out of range going to be sufficient, do you think for a future step edit? Or how should we be thinking about the potential right patient population for you, if approved as it relates to how payers will treat you?

Go on, Josh. Chase, he's going to jump in.

Thanks, Chase. Great question, right? And I think first, you implied something that we believe is we're planning for step edits to be the norm. And as Anh and John said, we're in a position in which the failure is documented in the chart. So we don't need to generate any data that exists today. We just have to activate the patient. And I think you're right to say that the initial adoption is especially going to be concentrated in patients with the highest unmet need when they're not only out of range, but being out of range is tied to a known underlying reason like a GI malabsorption disorder.

The other thing I'd say, though, is that this is -- 8121 is essentially the definition of a medical necessity. We'll be treating patients where the only available option has already been demonstrated to fail. Failure is proven with the lab, the lab doesn't meet guidelines. And it's a narrow therapeutic index drug, which payers recognize is signaling both a higher unmet need and the need to try new options more aggressively.

Do you think there'll be a document -- a need for documented kind of, call it, max titration? Or where do you think that will fall? And just kind of along those same lines, do you think about any sort of consideration with potential kind of workup required? I mean just how kind of in depth do you perceive it to be? You talked about some of those comorbidities, H. pylori, et cetera. Do you think a workup there will be required?

Yes, I don't think so. And I think that we're really anchored on the fact that being out of range by itself represents health risk. Having an underlying condition speaks to a mechanistic and known reason for why that's happening and emphasizes the unmet need. But it doesn't really matter. I think you heard Dr. Robertson say that patients can be out of range for a variety of reasons, sometimes not even identifiable.

The reason doesn't change the health risk, right? Patients who are out of range face real long-term morbidities, cardiovascular, osteoporosis, even mortality on top of the burden to the system. So our strategy is premised on being out of range is the problem. Everything else is additive data to enable clearer diagnosis and treatment. And we think that, that will be sufficient to navigate payers.

Very helpful, Josh. Maybe just last for me. Just on the cost for the program, Steve, previous expectations were 1,000 patients, now 500, but we've got some ancillary studies that we're also going to do as well. Just maybe your thoughts on overall incremental costs for the program relative to current R&D run rate.

Yes. Thanks, Chase, for the question. So the clinical -- the total cost for the clinical program that the team covered today is approximately $70 million over the next several years. And you mentioned the step-up in R&D spend this year. So some of that's factored into the step-up this year. And then the balance is really split evenly between '27 and '28.

Your next question comes from the line of Dennis Ding with Jefferies.

I have one question and then one follow-up. So on Cornerstone, look, I appreciate noninferiority maybe the regulatory bar, but do you think that will be enough to convince payers to reimburse for this product appropriately? And on stat specifically, how much power do you have to hit the key secondaries? And then what hierarchy will they be tested? Because it seems really important for the secondaries to hit because if you show noninferiority, but then miss on the secondaries, payers might not reimburse for that profile.

Yes. We're going to have Josh answer the payer question first, and then Anh can come back on the secondaries.

Yes. Great question, Dennis. So let me start with the prescription intent that we saw in our research. Prescription intent -- we -- 75% physicians after we adjusted for the typical over response that physicians say, said that they were likely to prescribe 8121. And that was based on only having non-inferiority data without any proven superiority out of Cornerstone and without Touchstone. So we see a clear signal from physicians that because they understand how levothyroxine works and because the idea of the subcutaneous route is so intuitive, that they're likely to prescribe with only non-inferiority.

And when we combine that with what we discussed earlier that the patients have a demonstrated failure to meet their goals, the physician enthusiasm combined with the demonstrated lack of reaching treatment goals with orals is sufficient to navigate payer access and prior authorizations. So all of the things that we're building on top of it, whether it's secondary endpoints in Cornerstone, Touchstone or real-world evidence are really designed not to secure payer access, but to increase confidence and enthusiasm for faster adoption and launch.

Dennis, thanks again. And Josh, I want to reiterate your comments is that at the end of the day, the 8121 program, this is a therapy which is highly intuitive to the clinical community. right? This is a known molecule through an entirely different administration given at a different cadence once a week versus daily, which because as we've seen in the Phase I/II program, has a very consistent, reliable, predictable PK/PD. And this will be reevaluated and demonstrated within the context of registrational program.

Now mind you, just at the end of the day, this is highly intuitive, right? I think the [indiscernible] understands it. This is a drug approval pathway, which allows us to show durability, consistent reliability of the PK/PD, which has not been observed in the very little data generation across the oral therapy landscape, right? And so -- and our primary endpoint, the 6-week difference, which is consistent with treatment guidelines is designed in order to demonstrate that there could be differences there between oral and us.

Now the overall program, 500 study participants has well over 90% power in order to hit on the primary endpoint. And that same statistical power will be applied to the key secondary endpoints, i.e., the proportional time in range. And as you I think have implied, Dennis, yes, we also agree that this proportional time in range is a critical component. But in itself, the program hitting on the primary endpoint is differentiated in itself, right? And mind you again, because even on the label, you're not going to have all the oral drug interactions and whatnot. And I think, again, very intuitive to the clinical community.

Got it. That's very helpful. But what do you tell doctors who say that they treat the symptoms and not the biomarker? And in your market research, do you think that doctors will prescribe 8121 essentially to subclinical hypothyroid patients based on your research?

Thanks for this, Dennis. Let me start with -- we've spoken to over 500 physicians just in the last year, and I've personally spoken to over 100. And the conversations we have are amazingly consistent. First time somebody is exposed to 8121, they say, "Oh, what's this? Oh, subcutaneous levothyroxine, that makes sense." And then they name a patient. And each one names a different patient, but they have the common thread of being not meeting their biochemical treatment goals usually with an identified reason.

And then they think of other reasons why a patient may not reach their treatment goals biochemically that justifies use of 8121. So we've been struck by the consistency. And that's why our strategy is really clear. There are -- this is a large diverse condition. And we're not focused on the patients where the unmet need is debatable or marginal. We're focused on the patients where the unmet need is real and clearly demonstrated.

The next question comes from the line of David Amsellem with Piper Sandler.

Two quick ones for me. First, on your sales organization, I know you were already calling on endocrinologists, but I was wondering about the extent to which you will need to expand headcount in order to more fully capture the target prescriber audience? And also how you're thinking about potentially calling on general practitioners given that there are GPs that do write for levothyroxine. So that's number one.

And then number two is on pricing. And I know this is perhaps early to talk about, but can you maybe talk generally to where you think a good range could be on pricing? Would a good analog be, say, a branded levothyroxine oral levothyroxine product like Amneal Unithroid? Is that a good way to think about pricing? Any kind of guidance you can provide on that would be helpful.

Yes. Thanks, David. So let me start with the sales force question. So as we said, 8121 perfectly leverages the capabilities we've built. And the endocrinologists that our Gvoke team calls on today are the exact same physicians who are going to write 8121. In fact, as Dr. Robertson talked about treating 1,000 patients over his career, there are individual endocrinologists who have over 1,000 hypothyroid patients treated at any one time and many, many that have hundreds.

So they have the highest concentration of the high unmet need patients. And so we're very confident that our existing capability to reach them is leverageable. Of course, we're going to expand our capacity, including into primary care. And all of that is captured with what Steve said and John said about this being part of our plan and self-funded.

So then turning to pricing, it's a great question. And let me start out to say that we are absolutely not thinking of any oral therapy as the reference price because oral -- these are priced for therapies that are failing for these patients where we intend to provide the solution. So we're going to be in a different price category. Our pricing assumptions, we believe are reasonable. And as you said, obviously, we're not going to guide on price specifically before initiating Phase III. That's something we'll do closer to launch.

But I will say that when you think about the revenue ranges we've given and anchor on that our share requires no more than 1 out of 10 of the 3 million to 5 million poorly controlled patients. I think that can guide to the range of pricing that we think is achievable, is supported by analogs we see in the market and analogs that are similarly treating a subset of patients where a cheap generic therapy is currently failing and give you a reasonable range of how we're thinking about this.

The next question comes from the line of Brandon Folkes with H.C. Wainwright.

Just want to follow on. So in terms of the 10% penetration of the 3 million to 5 million out of control patients to get to peak sales, any color on the subset of the 3 million to 5 million patients you're assuming you have the biggest uptake? Are those mainly patients who are maxed out on Levo or drug-drug interaction concerns?

And then any color in terms of what your peak sales that you've put out represent in terms of penetration of that subset of patients? And then along the same line, any color on the 3 million to 5 million patients are out of control that don't respond to Levo at all or are maxed out on Levo therapy?

Yes. Thanks for the question. There are a few pieces of this. So let me kind of take them in turn. The 10% -- our peak sales is premised on no more than 10% of the 3 million to 5 million. When we think about the 3% to 5% and kind of the subdivisions within it, I think that's something we'll share a lot more as our real-world evidence program advances and we bring more quantification and color to that. But go back to what we hear from physicians is we don't hear them identifying a single etiology for why patients out of range. We hear a variety and all of our research as well as informal discussions are consistent about that. So we think the 10% is going to come from a variety of etiologies of patients who are not meeting the treatment goals, and that's what we base the launch on.

That is all the time we have for the Q&A. This concludes today's call. Thank you for attending. You may now disconnect.

Hello everyone, thank you for joining us and welcome to Xeris Biopharma Second Quarter Earnings Conference Call. [Operator Instructions] I will now hand the conference over to Allison Wey, Senior Vice President of Investor Relations. Allison, please go ahead.

Thank you, Leah. Good morning everyone and welcome to Xeris Biopharma Second Quarter Financial Results Conference. Early this morning, we issued a press release detailing our results. This press release can be found on our website. Joining me on today's call is John Shannon, our Chairman and Chief Executive Officer; and Steve Pieper, our Chief Financial Officer. Following our prepared remarks, we'll 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. 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 discussion of these risks and uncertainties, please refer to the risk factors described in our filings with the SEC. Any forward-looking statements made on this call speak only as of today's date, and except as required by law, the company undertakes no obligation to update or revise these statements. 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. And with that, I'll turn the call over to John.

Thank you, Allison, and good morning, everyone. The second quarter was another record-breaking quarter for Xeris, one that demonstrated once again that the commercial momentum we have built is durable and accelerating. Total revenue reached $92 million with net product revenue of $91 million, representing 34% growth year-over-year. Recorlev led the way with 81% growth, Keveyis delivered another quarter of steady, reliable performance, and Gvoke improved sequentially, as we expected.

But the second quarter was more than a commercial story. It was a quarter of meaningful strategic progress. We made significant strides in strengthening our intellectual property portfolio across both our commercial franchise and our pipeline. And shortly after quarter end, we completed the full retirement of our convertible notes, simplifying our capital structure and eliminating nearly $3 million in annual interest expense. The progress we achieved reflects the breadth and defensibility of our science, the financial strength we have earned, and reinforces our confidence in the long-term value of what we're building.

Taken together, a record commercial performance, a stronger IP portfolio, and an enhanced balance sheet, the second quarter reflects the disciplined, compounding progress we are making to build a high-value biopharmaceutical company. In other words, we're executing and we're just getting started. Based on our strong first half performance and our conviction in the growth trajectory of this business, we are raising the bottom end of our full year 2026 total revenue guidance to $385 million to $390 million. This reflects our confidence in this team, the performance of our diversified commercial portfolio, and the long-term growth outlook of our business.

With that, let's turn to our brands, beginning with Recorlev. Recorlev continues to demonstrate exceptional momentum and in the second quarter it delivered yet again. Recorlev net revenue increased to nearly $57 million in the quarter, representing 81% growth year-over-year, an increase of over $25 million. Behind that number, Recorlev had a record number of referrals, new patient starts, patients on therapy, new prescribers, and total prescribers. Quarter after quarter, Recorlev has delivered sustained growth that speaks to the execution of our commercial team, and most importantly, the deepening confidence prescribers have in Recorlev as their treatment of choice for endogenous Cushing's syndrome.

We believe Recorlev should be the standard of care, and we intend to build on that. Importantly, we are still in the early stages of realizing the benefits of the commercial expansion we completed in January. Throughout the second quarter, our focus was on training and deploying our expanded team. Execution is tracking in line with our expectations, and we are increasingly well positioned to accelerate growth as these investments gain traction in the second half.

Turning to Gvoke. After a slow start to the year, Gvoke rebounded nicely in the second quarter, delivering net revenue of approximately $23 million and prescription growth of 10% versus the first quarter. I am proud of the team's work to put Gvoke back into growth mode, and the sequential improvement gives us confidence that Gvoke is back on the right track. Looking ahead, the back-to-school season should provide its typical third quarter lift as families with children managing diabetes ensure they have a ready-to-use Gvoke on hand for the school year.

The long-term opportunity for Gvoke remains unaltered and our commitment to it is unwavering. Of the 15 million people with diabetes who should have a potential life-saving product like the Gvoke HypoPen, only a million or so do. Closing that gap remains an important opportunity for us, and more importantly, a meaningful way to improve patient outcomes.

And finally, Keveyis. Keveyis delivered nearly $12 million in net revenue. Once again, demonstrating the remarkable durability of this brand in an ultra-rare market. 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. Our commitment to this brand and this community couldn't be more evident than through our steadfast multi-year effort to secure important IP protection for Keveyis. On June 11, we received a notice of allowance from the U.S. Patent Office for a new patent covering Keveyis. Once issued, it will provide renewed protection for Keveyis through at least 2039.

With a clear line of sight to such extended protection and having evidenced such astounding durability during its period of non-exclusivity, we intend to invest incrementally in both Keveyis and the PPP community in order to expand efforts to identify and support even more patients in the future.

Turning to our pipeline and specifically XP-8121. The second quarter was a busy period for our program. During the quarter, we continue to build an even stronger intellectual property estate around this important product and our proprietary formulation technology. On July 28th, we received our second U.S. patent covering XP-8121. Just one week earlier, we also received a notice of allowance for an additional patent application, which when issued will be our third U.S. patent. Our expanding intellectual property portfolio speaks to the depth of our innovation and the long-term defensibility of this product.

Those achievements build on the significant progress we made during the second quarter. Our technical and clinical teams made great progress in advancing the program through critical milestones. Importantly, we finalized our clinical site selections and those sites are busy preparing in advance of an expected Phase III start by year end. We also maintained a strong presence at key medical conferences throughout the quarter. The feedback we received from the endocrinology community has been exceptional, further reinforcing both our conviction in the significant unmet need in hypothyroidism and the multi-billion dollar commercial opportunity we have laid out. All of this momentum makes our planned XP-8121 program overview that much more exciting.

On Wednesday, September 9th, we will host a dedicated 8121 webinar where you will hear directly from an important key opinion leader as well as members of our program team. We will walk you through the unmet medical need, the market opportunity, and our planned Phase III program in detail, including trial design, primary and secondary endpoints, target patient population, as well as expected development and related regulatory timelines. We believe XP-8121 represents a significant advancement in addressing the real and persistent challenges of treating hypothyroidism, and we believe it has the potential to be a blockbuster.

Before I turn the call over to Steve, I want to briefly recap the strong progress we are making against the three critical priorities we outlined in March and continue to keep in our focus. First, driving rapid revenue growth. We delivered 33% growth in the first half, and we are now guiding to full year revenue growth of 33% at the midpoint. Our commercial business is growing fast. Second, advancing our pipeline. The XP-8121 program remains on track, and on September 9, we will provide the market with a comprehensive look at the program. We look forward to that conversation.

And third, executing with discipline. The full retirement of our convertible notes completed in July is a direct expression of this priority in action. A proactive, planful step made possible by the ever-strengthening financial position of Xeris. With our sustained commercial momentum and disciplined execution against our strategic priorities, I couldn't be more excited about the company we're building.

And with that, I'll turn the call over to Steve.

Good morning everyone. As John highlighted, our momentum from the first quarter carried into the second, reflecting solid execution and growing confidence in the performance of our business. Net product revenue of $91 million, up 34% or over $23 million year-over-year, is the headline for this quarter. This performance drove total revenue to $92.1 million, representing 29% year-over-year growth and reflects the sustained commercial momentum John just described.

Recorlev generated net revenue of $56.8 million, representing growth of 81% year-over-year, an increase of $25.3 million, reflecting continued expansion of our patient base. New patient starts continued at a strong pace and the underlying commercial metrics all support momentum accelerating in the back half of the year where we expect to see incremental contributions from our commercial expansion completed at the start of the year. Gvoke net revenue of $22.5 million in the second quarter, up 8% sequentially, and was in line with our expectations. We expect Gvoke's performance to normalize and track more consistently with historical seasonal patterns in the second half of the year.

Keveyis delivered another solid quarter, generating net revenue of $11.7 million, reflecting modest improvements in both net pricing and the number of patients on therapy compared to prior year. Gross margin for the second quarter was approximately 86%, an improvement of nearly 400 basis points compared to last year, driven by favorable product mix. Turning to operating expenses, R&D expenses totaled $10.7 million in the quarter, an increase of $2.6 million compared to prior year. This increase reflects continued investment advancing XP-8121 toward Phase III initiation planned for later this year.

SG&A expenses were $61 million for the second quarter, driven primarily by the full deployment of our expanded Recorlev commercial team and patient support infrastructure. Adjusted EBITDA for the second quarter was $19.3 million, an improvement of $6.7 million versus the prior year, representing over 50% growth year-over-year, even as we made incremental commercial and R&D investments this quarter. I also want to take a moment to discuss our balance sheet and specifically the full retirement of our 2028 convertible notes because it will be visible in our GAAP results this quarter.

In July, we completed the full retirement of our convertible notes, settled through a combination of cash and equity. As of July 15th, not a single convertible note remains outstanding. The exchange agreement we signed on June 10th with certain holders of the convertible notes triggered a re-measurement of the convertible notes under GAAP, resulting in a one-time non-cash charge of approximately $31 million recognized in the second quarter. This charge does not impact adjusted EBITDA and there will be no additional income statement charge related to these notes in Q3.

The bottom line, we eliminated $34 million of debt, creating approximately $3 million in annual interest savings and a meaningfully cleaner balance sheet. This was a proactive step made possible by the consistent financial performance of our business. Moving to our 2026 outlook. We are raising the bottom end of our full year total revenue guidance and tightening the range to $385 million to $390 million. This outlook reflects the strong performance we delivered in the first half of the year, as well as our confidence that this momentum will continue as our expanded Recorlev commercial team moves from build to yield, and we continue to see Gvoke rebound from its slow start this year.

On SG&A, at the start of the year, we outlined an expected full year increase of approximately $45 million versus 2025. Based on our strong first half results and current outlook, we are making further incremental investments in our commercial enterprise, resulting in a full year SG&A increase of approximately $50 million. We see meaningful opportunities across our portfolio and remain committed to investing where we can create sustainable long-term value.

Let me summarize our full year 2026 guidance. Total revenue is now expected to be between $385 million to $390 million. Gross margin remains consistent with our prior expectation of a modest improvement compared to 2025. R&D remains consistent with prior expectations. We expect an increase of approximately $25 million compared to 2025. SG&A is now expected to increase an additional $5 million versus our prior guidance of a $45 million increase compared to last year. And lastly, we continue to expect adjusted EBITDA to increase on an absolute dollars basis compared to 2025.

I want to close with this. Our business continues to strengthen and with it our financial condition. We remain committed to the priorities that John outlined and are confident that we can maintain a path toward a continuing expansion of adjusted EBITDA even as we make incremental investments to support a rapid growth of our enterprise.

With that, I'll hand the call over to the operator for Q&A.

[Operator Instructions] Your first question comes from the line of Dennis Ding with Jefferies.

This is Georgia Bank on the line for Dennis Ding. I had a question about raising the low end of your guidance. I see that you raised it again to $385 million but held the $390 million top. And given Recorlev's momentum and you said the expansion benefit is still mostly ahead in the second half, I guess, what's capping the ceiling? And then on the expansion, you notice that it's tracking in line still...

Could you repeat? Could you, operator or somebody, we cannot hear this question at all.

Are you able to hear me now?

Yes. Much better. Thank you, Georgia.

Oh, sorry about that. Okay. So on the guidance raise, you raised the low end again in Q2 to $385 million, but held the top at $390 million. Given Recorlev's momentum, and you've said the expansion benefit is still mostly ahead in the second half, I guess what's capping the ceiling there? And then on that sales expansion, you noted that the execution is tracking in line and still early, maybe can you unpack what in line looks like underneath? Which leading indicators, referrals, new starts, et cetera, that you're watching to confirm that the H2 setup is materializing?

Thanks for the questions, Georgia. On the guidance, yes, I mean just another great quarter gave us the confidence to raise the bottom end, and we've tightened it. We've to a range of $5 million at this point, and we're confident that we can hit that. It still reflects some significant growth in the back half of the year. And again, that points to the contributions we're expecting from the Recorlev commercial expansion as well as growth from Gvoke in the back half of the year. So yes, really confident in the guidance that we provided and it reflects over 30% revenue growth.

And then on the second question, I think the second question was just around Recorlev and what we're seeing. Yes, I think we're seeing early signs of contributions from that expansion. We saw that in the second quarter. Again, this is our third time doing this expansion and the contributions we're seeing are tracking exactly in line with our expectations. And we see it continuing into the third quarter, which gives us all the confidence in the world to meet the revenue guidance that we outlined.

Your next question comes from the line of Brandon Folkes with H.C. Wainwright.

Congratulations on the quarter. Can you just further detail the second half of the year, the core of the growth drivers, just how much is driven by prior territories versus sort of the new sales reps? Any way to just characterize where those new reps are in terms of productivity? And then any other tailwinds you're expecting in the second half of the year, whether it be average dose, persistency, just how those sorts of metrics are tracking?

Yes, Brandon, thanks for the question. In terms of the back half of the year, we made this expansion to increase not only the breadth of our calls, so we expanded our targets, but the depth within our calls. So it's going to come across existing prescribers and new prescribers, and it's going to come across all territories, new and existing. So we see it coming across everywhere. And that's kind of how we set up the expansion.

In terms of changes to anything like dosing or anything else like that, with the amount of expansion we're going through and the number of new starts, we are watching all those metrics, but we don't expect them to materially change in this time and period of growth at these rates, so we continue to monitor those, we track them, and all of those trends are tracking as we expected and within line, and until they become more material, we really won't change our expectations around some of those things.

Great. And maybe just one on 8121. Can you just elaborate on what still needs to be done before the Phase III initiation? And do you expect all of that to be done by the time you host the webinar? And if not, sort of how should we think about timing for what needs to be done?

Yes, I think I've said this before is, we're not going to start that Phase III trial till we have the go-to-market commercial presentation ready to go into that Phase III trial. And that's what we're doing, is we're going through all of the work it takes to be able to have the commercial ready, product, device, formulation, everything. And we will be in a real -- we're in a great position by the webinar to tell you where exactly all those timelines are. I will tell you they're all on track. They're all tracking to what we said back last June in terms of start of the trial, data, regulatory submissions, and approval. So we're still on track for all that for our 2030 launch.

Your next question comes from the line of David Amsellem with Piper Sandler.

So just a couple for me. First on Recorlev, can you talk about prescriber breadth and depth? And sorry if I missed this, can you give color on how many prescribers there are and repeat prescribers? So that's #1. #2 is on 8121, can you talk to how long you think it's going to take to enroll the Phase III and do you think results could be a 2028 event? And then lastly, business development, M&A, just given the commercial infrastructure in place, how aggressive are you going to be in terms of looking for assets where you can leverage that infrastructure?

Okay. Start with Recorlev, so what we have said is we have 12,000 targets that we basically aligned our sales efforts against. And what I can tell you is that those are new and existing prescribers, and they're all good targets for cortisol normalization and hypercortisolemia and Cushing's syndrome. So we are targeting those. We are successfully covering them and it really goes to us having a record quarter of new prescribers as well as existing prescribers, so all of those metrics are growing and growing at the pace that we expected in our guidance. So we continue to see that for the balance of the year and going forward as we go deeper and deeper in those accounts.

The next question was on 8121, and I think it was related to data by '28. We'll be able to give you a lot more clarity around that whole clinical program and timing on September 9. You'll be able to see all that, so the clinical and regulatory timelines will be really, really clear at that point.

And then as business development, and we've said this before, is we're focused on driving top line growth and making investments that will continue to drive more and more growth within our company. And so from a business development standpoint, and with our financial position where it's at, we're looking at more and more opportunities that can deliver growth between now and even before the launch of 8121 in 2030. And all those are all the kinds of things that we would focus on, especially ones that leverage our endocrinology footprint and or our rare product capabilities that we have within Xeris.

Your next question comes from the line of Chase Knickerbocker with C.H.

This is Jake on for Chase. First, just on Recorlev, I was hoping that you could characterize the growth in the market. We are seeing, as you all do have better data than us, how many patients do you think are currently on therapy for hypercortisolism and what share of new patient starts do you think you are capturing?

Wow. We haven't really dug into that in the past. And it's really hard to triangulate that because we don't have good external data sources that could tie back to that. But what I will tell you is that more than 60% of our patients are new to therapy, first time on drug. So I would say that points to a couple of things. One is the majority of our patients are market growth and us capturing a significant share of those. And the fact that the dynamics in this marketplace with everybody growing in it says that there's still a lot of opportunity for market growth.

And having said that, there doesn't seem to be an increase in switching, and/or -- so we're all getting and driving more screening, more detection, and more growth in the marketplace, and really kind of positioning our product in a sense to kind of win those new patients.

And then second, how do you think we should think about the new Keveyis patent? Obviously this represents a barrier to any potential future generic. Should we also be thinking about this as relevant to the current generic that's on the market right now?

Well, I think the way we think about it is with this kind of protection, we for sure are really confident in investing more, in finding more patients and getting them on therapy, so from that perspective, we have maintained this brand for the last 1.5 years based on driving new patients in a space with a non-exclusive situation. So we know we can grow it in a non-exclusive situation, and it only gets better if it somehow becomes more exclusive later on. But for now, we're excited in and of itself that we can continue to grow this and really drive some growth in the future.

Your next question comes from the line of Roanna Ruiz with Leerink.

You have Ryan on for Roanna. Congrats on the quarter. Maybe just two from us. Can you help frame how discontinuation rates are looking for Recorlev? And are you seeing any signs of patients reentering the funnel that may have previously dropped off therapy? And then maybe as you think about peak sales for Recorlev, like what are the key levers here that could potentially accelerate the timeline to that peak sales of a billion dollars?

So discontinuation rates have been pretty steady and stable. We don't really see any movement in that. We do see small amounts of patients that go off and come back and things like that. So again, none of those trends have really changed, but they've been pretty consistent.

In terms of peak, I think this is an important point for everybody is this is a market where it takes a lot of effort. These are complex patients that need to be diagnosed, screened, and treated, so it's more of a scalable kind of process to get these patients on drug and get them stabilized on drug, get them titrated, and keep them on drugs. So it's one of those areas where continued investment will be required both from a commercial standpoint, but also from a data generation and or data dissemination standpoint. Those are critical aspects to really sustaining the long-term growth of this category.

Your next question comes from the line of Leland Gershell with OpCo.

This is Tracy on for Leland. Congrats on the quarter. Just one from us. Can you give us a sense of how to think about the XP-8121 Phase III program's impact on OpEx going forward?

Yes, so I think Tracy, thanks for the question. I'll take this one. We guided to an increase in R&D this year of $25 million. That increase is almost entirely for XP-8121 and starting the trial later this year, so it's everything that goes into that. As the trial unfolds next year, I think it's reasonable to expect a similar increase in R&D spend as the trial ramps up. And so we'll lay that out in terms of our guidance early next year specifically and you'll be able to understand exactly how that kind of tracks out with everything that we're laying out in terms of the program in September at the webinar.

There are no further questions at this time. I will now turn the call back to John Shannon for closing remarks.

Thanks everyone. As you just heard, the second quarter marked another remarkable period for Xeris, underscoring sustained commercial momentum and disciplined execution against our strategic priorities. Recorlev is growing and driving the business, Gvoke is back on track, and Keveyis has delivered a landmark IP win.

At the same time, we continue to advance the next phase of our growth story. Our XP-8121 program is progressing well, and with Phase III initiation expected before year end, we believe we're approaching an important inflection point for the program. Our XP-8121 program overview on September 9 will provide investors with a closer look at what we are building. In closing, we entered the second half of 2026 with strong commercial momentum, a strengthened financial foundation, and a pipeline that positions us well for continued growth. Thank you for joining us today, and thank you for your continued support and interest in Xeris Biopharma.

This concludes today's conference. Thank you for attending. You may now disconnect.

Good morning, and welcome to the Xeris Biopharma Q1 '26 Earnings Conference Call. [Operator Instructions]

I will now pass the call over to Allison Wey for opening remarks. Please go ahead.

Thank you, Sarah. Good morning, everyone, and welcome to Xeris' First Quarter Financial Results Conference Call. Earlier this morning, we issued a press release detailing our first quarter 2026 financial and operating results. This press release can be found on our website.

Joining me today is John Shannon, our 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. 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.

Any forward-looking statements made on this call speak only as of today's date. And except as required by law, the company undertakes no obligation to update or revise these statements. In addition, during today's call, we will reference certain financial measures that are represented on a non-GAAP basis. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures is included in our press release.

With that, I will now turn the call over to John for his opening remarks.

Thank you, and good morning, everyone. We are off to an amazing start in 2026. First quarter net product revenue grew an impressive 43% to more than $82 million, driven by Recorlev, which nearly doubled with 95% growth, while Keveyis increased 4% and Gvoke remained flat year-over-year. Given the strong start to the year and the positive demand trends we are seeing overall, especially for Recorlev, we are raising the bottom end of our revenue guidance. We now expect full year revenue of $380 million to $390 million, representing more than 30% revenue growth.

Turning now to each product, starting with Recorlev. As I said, Recorlev revenue nearly doubled to $50 million, representing a $24 million increase compared to last year. This was driven by both record referrals and record new patient starts. Importantly, coming out of the typical Q1 payer resets, we saw a significant increase in new patients, especially in March, which is fueling our optimism for another outstanding year.

I'm also pleased to share that our commercial expansion was completed exactly as planned, significantly expanding our sales force and patient support teams. This enhanced infrastructure will allow us to increase both the quantity and quality of our interactions with health care providers and patients, driving even greater awareness of Recorlev's value proposition in treating hypercortisolemia and Cushing's syndrome.

We anticipate the impact of this commercial expansion to begin contributing incrementally in the second half of this year and continue to deliver sustained benefits well into the future. The trajectory we are seeing reinforces our conviction that Recorlev is well positioned to realize its full commercial potential. It remains solidly on path for significant continued growth and is well on its way to achieving $1 billion in revenue by 2035.

Turning to Gvoke. Gvoke generated revenue of nearly $21 million in the first quarter. While we anticipated some seasonal headwinds from typical payer resets, Gvoke's performance was slightly below our internal expectations. This was primarily due to Medicare policy and plan changes, which impacted patients' coverage, deductibles and most importantly, out-of-pocket costs, resulting in a reduction in the number of patients getting their prescriptions filled. We expect Gvoke to recover from its first quarter challenges, and it's already beginning to see an increase in prescription demand. Importantly, Gvoke's growth potential remains well intact and untapped since the vast majority of the 15 million patients who should have a ready-to-use glucagon rescue therapy still do not have one.

Finally, Keveyis. Keveyis once again delivered exceptional performance in the first quarter with revenue of approximately $12 million, representing a 4% increase year-over-year. This is the second consecutive quarter of year-over-year growth and demonstrates the remarkable brand strength and durability of Keveyis in this ultra-rare market. This performance not only highlights the inherent clinical value of Keveyis itself, but also the importance of the comprehensive patient-centered support infrastructure we have built to serve individuals living with primary periodic paralysis.

Turning to our pipeline. XP-8121 is progressing well, and we are on track to begin Phase III later this year. Millions of hypothyroid patients still struggle to achieve stable hormone levels due to GI absorption issues, and XP-81 is designed to address this important unmet medical need. XP-8121 will also enable us to leverage a tremendous amount of existing capability. First, it requires our XeriSol formulation technology, the same technology inside of Gvoke. It will also leverage our drug device combination expertise, our deep connections with the endocrinology community and our extensive commercial infrastructure.

From a medical communication standpoint, XP-8121 is receiving significant attention this year as the medical conference season gets underway. This quarter alone, we're presenting 4 separate abstracts, each carefully designed to advance the understanding of hypothyroidism management while highlighting the persistent clinical challenges that prevent many patients from achieving and maintaining stable control. Building on this momentum, we'll plan to host a comprehensive program review later this fall, where we will share additional details of our Phase III trial design.

Before I turn the call over to Steve, I want to briefly recap the strong progress we have made against the 3 priorities I outlined in March. First, we remain clearly focused on driving rapid revenue growth. Our first quarter performance and upward revised full year outlook gives us tremendous confidence that our business is on track. Second, we remain focused on advancing our pipeline with key deliverables on track and XP-8121's Phase III start anticipated later this year. And third, we remain committed to disciplined financial management and to maintaining a strong balance sheet, which is driving much of the outstanding performance that Steve will highlight in more detail.

With that, I'll turn the call over to Steve.

Good morning, everyone. As John highlighted, we are off to a strong start in 2026. Our results reflect solid execution and growing confidence in the performance of our business. Total revenue reached $83.1 million in the first quarter, representing growth of 38% year-over-year. This performance demonstrates the strength of our commercial execution and the traction Recorlev continues to generate as we drive rapid and sustained revenue growth. Net product revenue grew 43% year-over-year to $82.5 million, an increase of nearly $25 million compared to Q1 of last year.

Recorlev generated net revenue of $49.8 million, representing growth of 95% year-over-year, an increase of $24.2 million, reflecting continued expansion of our patient base with momentum gaining in March and continuing into April.

Gvoke generated net revenue of $20.8 million in the first quarter, flat year-over-year with soft prescription demand partially offset by favorable net pricing. As John mentioned, Gvoke's soft start to the year reflects lower total prescription volume, which was primarily driven by a decline in the Medicare channel, resulting from higher-than-normal out-of-pocket costs and a reduction in patients getting their prescriptions filled. Even with this soft start, we still expect modest growth from Gvoke this year, and we are confident it will return to being a steady growth contributor for years to come.

Keveyis delivered strong financial results in the first quarter, generating net revenue of $11.9 million. The year-over-year growth of 4% reflects modest improvements in both net pricing and the number of patients on therapy compared to the first quarter of 2025.

Turning to gross margin. Our gross margin for the first quarter was 87%, an increase of 2% versus last year. This improvement was primarily driven by favorable product mix dynamics. R&D expenses totaled $8.8 million in the first quarter, representing an increase of 13% compared to the prior year period. This increase reflects higher personnel costs related to incremental investments in our XP-8121 program as we advance towards Phase III initiation later this year.

SG&A expenses were $53.1 million for the quarter, reflecting growth of 21% year-over-year. This increase was primarily related to our strategic commercial expansion activities associated with the nearly doubling of our Recorlev commercial team. These incremental investments in both R&D and our commercial organization represent our disciplined approach to scaling the organization in alignment with our growth trajectory, ensuring we have the infrastructure necessary to maximize the potential of both our current commercial portfolio and our Phase III-ready asset.

Adjusted EBITDA for the first quarter was $15.1 million, an improvement of $10.7 million versus last year, demonstrating our continued commitment to profitable growth. Underscoring the progress we have made in our profitability journey, we delivered net income of $2.2 million in the first quarter, a significant improvement of more than $11 million compared to last year. Together, these metrics reflect the operating leverage we are generating as we scale our business and validate our disciplined approach to balancing growth investments with financial performance.

Moving to our revised 2026 guidance and outlook. As John mentioned earlier, the overall growth of our diversified portfolio is ahead of our initial expectations and the strong performance of both Recorlev and Keveyis are more than offsetting early softness from Gvoke. We expect our overall strong performance to continue as we move throughout the balance of 2026. As such, we are raising the low end of our total revenue guidance to a range of $380 million to $390 million compared to our prior range of $375 million to $390 million. This upward revision reflects the outstanding results we delivered in the first quarter and our confidence that this momentum will continue throughout the year, especially as incremental contributions from Recorlev's expanded commercial infrastructure begin to yield more meaningful results in the second half of the year.

On R&D, we continue to expect an increase of approximately $25 million year-over-year, driven by the planned Phase III initiation of XP-8121 later this year, a deliberate and disciplined investment to unlock what we believe is a $1 billion to $3 billion peak sales opportunity. On SG&A, we continue to assume an increase of approximately $45 million, reflecting primarily the full year cost of the Recorlev commercial expansion.

Finally, we remain committed to delivering positive adjusted EBITDA in 2026, growing on an absolute dollar basis versus 2025. Our financial story this quarter is one of solid execution and confidence. We are driving exceptional top line growth, improving already strong gross margins and investing deliberately in the commercial and pipeline initiatives that will grow Xeris for years to come. With that, I will now hand the call over to the operator for Q&A.

[Operator Instructions] Your first question comes from the line of Chase Knickerbocker with Craig-Hallum.

Congrats on a nice quarter here. Can you maybe just help us understand a little bit more on the Gvoke dynamics? Were there any actual formulary changes in the quarter? Or are these strictly kind of redesign dynamics? And then if it's the latter, can you just give us some thoughts on why you guys might be getting a little bit more impacted than some other assets, particularly your competitor in the ready-to-use space?

Thanks, Chase. So a couple of things there. One is there's always payer change resets that happen in the first quarter. There's probably a couple of small changes that are in there, nothing really big. It's primarily the Medicare resets. And as I said, that really impacted deductibles and mostly out-of-pocket costs in -- especially in the first quarter for Gvoke. And we saw that pretty standard in the first part of the quarter, and then it started to creep back up a little bit in March, but not quite as much as we would expect, and we can see that it was primarily in Medicare.

So we're confident we know where it's at and what's going on there. And then in terms of did it affect BAQSIMI? In Medicare, yes, it did. We can see that in the data. But overall, BAQSIMI probably has a very much -- a very different split of their channel mix than we do. We are -- we've always done very well in the Medicare space, and I think this hit us particularly harder than our competitors.

And just a follow-up there and then one on Recorlev. So just on another one there on -- with the redesign dynamics, I mean, would you expect a pretty significant recovery in the second half then as some of these beneficiaries hit catastrophic? And then second, just on Recorlev, can you help us understand if you're seeing any benefit yet from the commercial team expansion? Maybe discuss the top of the funnel a little bit if there are some early indicators on some benefit from those new reps.

Yes. So back to Gvoke, yes, we expect it to recover. We feel good about that. And there's 15 million people out there, again, that don't have a ready-to-use rescue med, and we need to get it in their hands. So there's plenty of opportunity. We'll continue to drive that, and we feel good about the long-term potential of Gvoke.

With Recorlev, yes, I mean, it's -- we saw an unbelievable start to the quarter and driven by record new starts, record referrals at the top of the funnel, as you indicated. But understand this, we don't really think we'll see the real kind of drive and expansion until later in the year. We know from prior experience, this takes 6 to 9 months for them to really fully hit stride. And so that real push will come more in the back half of the year.

Your next question comes from the line of Dennis Ding with Jefferies.

This is Georgia Bank on the line for Dennis Ding. Two from me. One, despite some Q1 payer resets and any winter-related disruption, Recorlev showed strong sequential growth. Maybe you can help unpack what's driving that underlying momentum a little bit more and what you're seeing in terms of any recovery from seasonal dynamics as you move through March and April into May? And then given the raised low end of guidance, how much contribution from the January commercial expansion is already assumed in your outlook versus what still represents upside as the team ramps through the year?

Let me start with kind of the payer resets. I think we saw typical resets, specifically around Recorlev. And then as March kicked in, we continue to grow. And that growth really comes into play with the market dynamics. There are still -- there's lots and lots of people with -- that are being tested and screened and diagnosed with hypercortisolemia. And we're in a perfect position now with our expanded field organization to capture more and more of those patients and get them on drug. So -- and we see that will continue to progress throughout the year. Steve, do you want to...

Yes, I'll take the -- yes, I'll take the second question on the guidance. So I think based on our prepared remarks, Recorlev performed better than our initial expectations, and that's part of the reason why we raised the bottom end of our guidance. The contribution from the expanded commercial footprint was already embedded in our original guidance. And that's predicated on history, our experience with these expansions. So I think that's what's already assumed in our guidance of $380 million to $390 million.

Your next question comes from the line of Brandon Folkes with H.C. Wainwright.

Congratulations on a very good quarter. Maybe just 2 for me. I'll switch gears a little bit. Can you just update us on your latest capital allocation thinking, especially as things track better than anticipated? And then secondly, can you just update us on the gating factors between now and starting the 8121 trial that needs to be done?

Do you want to start with 8121?

Yes. Why don't I start with 8121. As I said, we're on track. We're hitting our milestones this year. We're on track to start this trial by the start of the year. But what I've also said is that we're not going to start this trial until we have kind of the go-to-market commercial presentation ready. It's really important that we start this trial with the go-to-market presentation. So what we're doing now and what we've been doing over the last several months is really scaling up all of that, the device, the formulation, the commercial scale formulation and then putting those 2 things together before we put -- start the trial. So we're going to get all that stuff done prior, and we're on track to do that. And we'll stay on pace and we'll share more about that later this year as we kind of do a full kind of program review later in the fall.

And then, Brandon, from a capital allocation perspective, yes, certainly, the performance of the business is driving towards a healthy and -- healthier balance sheet that gives us a lot of optionality with our business. I would say, first and foremost, we're focused on reinvesting in the business for growth. So that's kind of the primary lens by which we're deciding on where to invest our next dollar. And then obviously, we have options around what we can do with our balance sheet and our capital structure in terms of debt. That's always -- it's always an option for us. But I'd say primarily, we're focused on things that are going to drive additional growth.

Your next question comes from the line of Jason Dorr with Oppenheimer.

It's Jason on for Leland. Congrats on the quarter. To what degree is there appetite to expand the pipeline beyond 8121? And if there's appetite there, would that involve bringing in external innovation, something to tune for Recorlev? Or would that be more on the end of developing new molecules with the XeriSol, XeriJect technologies?

Thanks, Jason. You just heard Steve talk about our flexibility around our capital and the fact that we're -- our performance is driving our ability to do more things. And we'll focus those things on growth. So things that can drive growth will be the areas we'll spend that capital on. And if that's future pipeline, yes, if it's external inorganic things, yes, especially if they fit in and allow us to leverage our capabilities, both from an R&D perspective as well as from a commercial perspective. So we're looking at all those things with an eye on growth, additional growth.

Your next question comes from David Amsellem with Piper Sandler & Company.

This is Alex von Riesemann on for David. So firstly, looking at Recorlev, can you help give us a better sense of what kinds of patients are getting the product? And how are you thinking about other subgroups of patients beyond uncontrolled hypertension and uncontrolled type 2 diabetes? And then secondly, regarding the expansion of the sales force, can you remind us how many reps you have in the field, how many doctors they're targeting and the audience breakdown?

Thanks, Alex. Well, our patients are coming -- our patients are, I think, I've said this before, and they continue on the same path. About 60% of our patients are new to therapy, naive to drug. So most of them are first diagnosed and coming into Recorlev. And then the rest are coming from probably switches and from the various other products on the market. In terms of what your next question was around?

Number of reps.

Number of reps.

And targets.

Yes. I think we raised our targets from about 7,000, 8,000 to somewhere in the 12,000 range. So we probably added about 6,000 targets out there with the expansion. We're up to around 80 reps. And then we've also expanded our patient services, reimbursement services and capabilities around pharmacy. So all of those things support the revenue growth that we're seeing and are anticipating.

I think you also asked another question around subgroups of patients. I think the thing to think about our patients are all of these patients have hypercortisolemia. They have cortisol levels at 1.8 above the upper limit of normal or even higher. And all of them have other comorbidities that really constitute Cushing's syndrome. And it's across the board. I think obviously, there's probably some skew towards diabetes, resistant diabetes, but it's really across the board, all the various comorbidities. So...

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

As you just heard, Q1 marked another strong quarter for Xeris and an exceptional start for the year, underscoring sustained commercial momentum and disciplined execution against our strategic priorities. We remain focused on delivering impressive revenue growth while continuing to operate with financial discipline. Our performance to date reinforces the confidence we have in achieving our updated full year guidance. We are encouraged by underlying demand trends and the meaningful progress our teams are making to expand market penetration and strengthen long-term value creation. Thank you for joining us today.

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

All right. I think we're all set.

Good morning. It's still morning. Good morning, and welcome to the Barclays Miami Healthcare Conference. My name is Jenna Davidner. I'm one of the analysts here on the Specialty Pharmaceuticals team. And on stage with me, I have Xeris Biopharma. And from the company, we have the CEO, John Shannon. And on the end, we have Steve Pieper, the CFO.

Thank you, guys, for joining, and welcome to the conference.

Thanks for having us.

So maybe just to level set the conversation, John, can you just give investors that are less familiar a brief overview of the company and your current product portfolio?

Yes. I'll just go really high level because I know we're going to dig into some of this. So Xeris is a -- it's a fast-growing commercial biopharma company. We have 3 commercial products on the market, Gvoke for hypoglycemia. It's a rescue pen for hypoglycemia, basically an EpiPen for diabetics.

Keveyis. Keveyis is for primary periodic paralysis, which is an ultra-rare hereditary genetic disorder. We can talk a little bit about that asset in a little bit. And then Recorlev. Recorlev is for hypercortisolemia and Cushing's syndrome, which is our big grower in the business.

On top of that, we have XP-8121, which is our next potential blockbuster, and that's a once-weekly subcu levothyroxine for hypothyroidism. And that's Phase III ready. We're going to get that Phase III started this year. And it's really set us up to really develop and we're on this journey to build this multibillion-dollar -- commercial biopharmaceutical company. And that's what I really want people to hear today as we talk about the brands.

Awesome. And before we dive into the products and guidance, 2025 was a really big year for the company. You transitioned to positive EBITDA. Recorlev became the #1 product. So maybe just looking back over the course of the year, can you talk about the trends and things that maybe went even better than you expected through 2025?

As you pointed out, it was a transformational year for us. We delivered $292 million in revenue, which was above the high end of our range for the year. That's 44% revenue growth for the year. And the most exciting things about that was we then delivered $60 million of adjusted EBITDA. On top of that, we were net income -- we had net income for the full year, which really allowed us to transition to and really prove once and for all for people that we could fund our strategy, we could self-fund our strategy, our pipeline and our future.

So switching over to Recorlev. This product has grown over 100% for the past 2 years. It's still pretty early in the launch. Can you just talk about the launch trajectory from the beginning because it really started to inflect towards the end of 2024.

And with that, just the drivers, whether patient demand and also along the way, you've made some incremental investments in sales. So if you can, as you're walking through this trajectory, remind us of where you've made those incremental sales investments and where we stand today?

Yes. So Recorlev is a great story. So we saw going out just before 2024 that there was a real dynamic changing in the marketplace. So in this marketplace of hypercortisolemia and Cushing's syndrome, more and more patients were being screened and diagnosed with cortisol levels 1.82x above the upper limit of normal, and they had these other conditions, which were resistant to drugs that should normally be working.

This dynamic was starting to happen. And so at that time frame, we took our sales organization from 28 to 42 people in order to take advantage of that dynamic in the marketplace of more people coming in, right? So the growing population of people coming in being diagnosed.

So as we expanded into that, we saw that coming. We made that first expansion 1.5 years ago, maybe a little more than that in front of that. And we were able to capture. That's why you see the acceleration in our growth as we find those patients and then get them on to Recorlev.

And seeing that trend and where it's going has really allowed us to make incremental and additional investments, which is what we did this year. So we already have doubled our sales organization, our whole commercial footprint because it's not just salespeople. It's the patient services, reimbursement services, pharmacy services, all the things it takes to be able to get these patients on therapy, keep them on therapy and really help them get through this normalization of cortisol.

Awesome. And we're going to go back Recorlev, but let's talk about Gvoke and Keveyis. So Gvoke, can you talk about maybe the overall revenue growth in the most recent quarter and the dynamics between unit volumes and pricing on the ready-to-use side, there's another key competitor, and they've talked about focusing more on unit growth as opposed to pricing. So I'm just maybe curious for an update on the market and how penetration into that opportunity is going and maybe how you're thinking about it for next year -- this year?

Yes. And I would start with Gvoke has been a very steady growing asset for us since we launched it 7 years ago. I think it's 7. And that product itself is all about getting the patients today that should be protected that are not protected. And when I talk about that, the people on insulin sulfonylureas, there's about 15 million of them. They should have -- based on the guidelines, they should have a ready-to-use rescue just in case, they don't. There's only about 1 million people out there.

So all of our efforts have been getting more and more people on therapy. And that's what's allowed us to grow, is bringing on more people, more people on therapy. You mentioned the pricing. The pricing was a little bit of a difference this year because we've been also doing things to kind of improve that gross to net on the way during this process. And those things were showing up in our revenue numbers as well. So -- but the game here is really to grow this thing. And we see this growing in the high single digits to low double digits for a very long time with so many patients out there that still need to be protected.

Awesome. And then Keveyis has obviously turned generic with some competitors on the market. But in the fourth quarter, the product actually returned to growth after the first 3 quarters of some expected decline in 2025. So just can you talk about the outlook on the competitive landscape and maybe how that product -- we should think about the trajectory of that product?

Yes.

Yes. [indiscernible].

This is an asset that we're really, really proud of and its performance and how it's been so resilient since generic competition came in 3, 4 years ago and really hasn't made a dent. And as you mentioned, we actually saw growth. We saw growth from an overall patient perspective on the full year in 2025.

Obviously, there's always pricing dynamics when you have generic competition, but those have been on balance with the patient growth kind of been neutralized. And we see Keveyis continuing to be a steady contributor to our business. And it's not just the product itself, all the services that we put around the patient to support them on their journey has really made that product really resilient for us from a contribution perspective.

Awesome. So tying these 3 products together into your recent 2026 guidance that you gave, which came in well ahead of what people thought. We talked about the trends in Keveyis, high single-digit growth from Gvoke, that leaves Recorlev. And I'm just curious, given the very strong 100%, almost 120% growth the past 2 years prior. Just can you help us understand the low end to the high end of that range? What gives you confidence that there's any layer of conservatism just given how strong Recorlev has been performing?

Steve, I'll let you take that one too.

Yes. I'll pick that one. So -- no, we're really confident in our guidance. And I think we've established a track record of meeting or beating guidance over the last couple of years. So we put out numbers that we feel like we can meet or beat. And to your point, I think you're seeing that the growth is really coming from Recorlev. Majority of the growth we're expecting in '26 is coming from Recorlev.

As John mentioned, we doubled down on our commercial footprint for Recorlev this year. And so we're going to start to see the tailwinds of that really start to accelerate in the back half of the year. This is our third expansion with Recorlev. So we have a history of how these expansions performed. This was our most significant expansion, but we're really expecting to see the tailwinds from that expansion kind of in Q3 and beyond.

Awesome. And just -- as for people listening that might not be familiar, quickly on Recorlev with guidance. Was there any -- is there any part of the guidance that included -- there was a competitive product that was -- it received a CRL towards the end of 2025. Like was there -- did that impact your guidance at all?

Not at all.

Yes.

Not at all.

And just sticking on that point, is the way you think about the competitive landscape, like how do you view another player entering the market and maybe having more resources out there talking about it, and we're going to review the differentiated nature of Recorlev. So I'm just curious if having more people marketing a product can be a rising tide that lifts all boats.

Yes, that's exactly how we think about it is more and more products coming into this space, finding patients, screening them, diagnosing them with hypercortisolemia and Cushing's syndrome allows for a greater opportunity here. And so that's really what's going on in this marketplace is all -- everybody is out there finding new patients. More than 60% of our patients today are naive to therapy coming on to drug.

So that would suggest a couple of things. One is we're becoming more and more first line as the last guy into the marketplace. And then number two is that that's what we're all doing is finding those patients, so we can treat them. So we see that as, again -- and this market is very early in kind of evolving and growing.

So we're looking at all these metabolic disorders where drugs that should be working are not working. And if you go and look and find cortisol as the culprit, that's certainly not a clinician knows what to treat.

Yes. And thinking about the products that are on the market and even one has -- there's now a generic player involved and just the traditional therapies and with Cushing's, sometimes the issue has been the side effect profile as well as treating more of the symptoms rather than the underlying condition. So can you help frame Recorlev from that perspective and just how it's been different on those fronts relative to what's approved?

So the way Recorlev works is it normalizes and brings down cortisol levels by going after the source of synthesis of cortisol. So -- and it does it by hitting it at 3 enzymatic places in that design.

So by slowing it down and bringing the cortisol into normal levels, you can -- a, the clinician can track that and you can see the progress to all the comorbidities that comes with bringing cortisol back in the normal range.

So some -- other products will block the cortisol at the receptor level. So the cortisol is still being produced. It's running around. It's just not having an effect on certain things, right? So that's how we're very different in that respect.

So our conversation with clinicians is like if you want to go after the source and we want to bring cortisol back into the range, let's talk about our product, which is very different than at least some of the competitors on the marketplace.

Awesome. And you hosted an Analyst Day earlier last year, and you laid out some peak sales estimates for Recorlev and your pipeline, which we'll get to. But just considering where we are today, 2025 was around $140 million. The peak sales target is $1 billion. I think it just emphasizes how much of a runway there still is. And sometimes the question we get now that this one product is in such high focus and for good reason.

But I think we should talk about that peak sales, which is still about 10 years or so relative to when you gave it. So that's a long runway of growth. So just maybe talk about some of the assumptions behind that and maybe the -- how you see this playing out over time?

Yes. The main assumptions behind that are that we'll continue to see the dynamics in the marketplace where more and more people are screened and diagnosed. And this is one of those things where it's going to take time and it will move up and you'll have to scale along with it, right? So that's why we say by 2035, we'll get this to $1 billion. And we're -- and I'll tell you sitting here today just a year into it, we're on pace. I mean we're at where we want to be.

The other thing we want to be really clear on with everybody is it will take investment on the way there, like we laid out this year, a doubling of our commercial footprint to be able to get -- have the reach and frequency to get at those patients. and then all the resources you need to bring those patients on. So there will be additional investments that will need to be made over the next several years to continue to keep that growth rate going and stay on the curve. And we'll -- in addition to that, we are also looking at and doing work around what other data generation, other things we can do to basically bring even more value into this space.

Awesome. And we're going to touch back on profitability, but I'll wait until we talk about the Phase III trial. So the recent Paragraph IV lawsuit, I just wanted to touch on that and just maybe help people better appreciate the nature of these ANDA filers and the timing on when the window can open for them to file, and how maybe that impacted you and like whether or not you expected this and just kind of talk us through that?

Yes. So we expected it. We were not surprised by this. We anticipated it. It was almost on the day that we anticipated it. The first day that they could file would have been technically the first of the year, which gets them to where they all ended up.

So we had -- and we were ready for it. We filed the lawsuits within 10 days because we knew it was coming, we were prepared. And we feel so strongly we have such great IP going all the way out to the 4 patents that everybody is challenging go -- there's 4 of them, and they go out to 2040.

Yes.

And so -- and they're related to methods of use. They're related to methods of use on things that is very common utilized with people with hypercortisolemia, Cushing's. So we feel really strongly that we can defend those patents.

And that's why -- and we knew that even when we put out that $1 billion back in July of last year -- June of last year. And I'll say it every single time I'm out here, our strategy does not -- has not changed. We have this product on a path to $1 billion. I don't see any scenario that takes us off that path.

Awesome. And you mentioned it, but it's just worth probably talking about again because, obviously, you gave the peak sales. You expected that this was coming. It's clearly contemplated in that forecast. And I just want to double highlight that because based on the market reaction, maybe if people haven't been following as closely, it's almost like you react first and then figure it out later. So it's just good to hear that this is as expected, it doesn't change anything. And I'm assuming that's all fair to say.

That's all fair to say.

Yes.

I couldn't reiterate that as much as I could. I mean we're making significant investments, and we'll continue to do that to drive that $1 billion of value.

Perfect. And speaking of investments in the long-term, you have an asset in Phase III now, and we turned into EBITDA profitability last year. You have some step-ups from investments, R&D to fund the trial. Can you talk about the profitability outlook this year and what you expect just for 2026.

Yes.

You take that one.

So thanks for the question, Jenna. So yes, we guided to this year, starting at the top, 30% growth at the midpoint of revenue, and that allows us to fund these additional investments, both from an R&D perspective as well as SG&A. So we've guided to increasing SG&A $45 million this year and $25 million incrementally for R&D to support XP-8121. And we'll continue to invest incrementally in those 2 assets beyond '26, okay?

But the good news is that's powered by the growth that we're seeing on the top line. And importantly, I think it's worth noting, we're -- we finished the year with 85% gross margin. We also guided to our gross margin modestly improving this year as well. So that -- again, those 2 factors really allow us to kind of reinvest back into the business.

Yes. And as Recorlev progresses towards that peak sales, and as you mentioned along the way, there will be incremental investments. It's probably too early because you just gave guidance for this year, but the way you think about the path to $1 billion, is there like a time frame on when you might, or certain milestones or metrics that would determine when we might see these incremental investments? Is it a step-up every year with new sales force addition or just anything to help us think about the longer-term profitability?

I'll try and take this one. So yes, I think we've been pretty opportunistic. This has been -- this is our third expansion with Recorlev. So as the market conditions warrant, we'll make those investments, and we have capacity to now invest incrementally. So there isn't like a set time, but we're expecting we will continue to invest incrementally behind those assets.

And it's all about scaling it at the right pace so that you can really keep up and make sure not only are you filling the top of the funnel with referrals, but being able to pull those patients through on drug, and then also keep them on drug. So really important.

And now we'll talk about the pipeline. So maybe just walk us through this asset. What makes you so excited? I mean the peak sales is 3x what you gave for Recorlev. So that's very interesting in the time line of when we might expect any data readouts and milestones and things like that.

Yes. We're -- as you pointed out, we're really excited about XP-8121. And starting with -- it was formulated, and it's made possible by our own formulation technology. So it's homegrown, developed inside, and it fits right into everything we do from drug device combo to endocrinology and our sales teams and commercial teams. So it's like the perfect fit for us going forward.

And as we've got it to this point, we're about ready to start the Phase III, we can see that there's a real unmet medical need in the marketplace. So this is hypothyroidism. There's 20 million people out there on replacement therapy, daily orals. And somewhere between 3 million and 5 million of them cannot come into the range or cannot -- the clinicians can't even get them in the range because of GI absorption issues. This bypasses the GI, right? So doing a once weekly subcu can really solve a problem, not only for the patients, for the clinicians. These are really challenging patients to manage.

So we are going about this as building as it's a blockbuster. We're taking our time to do all the things right before you even start the clinical trial and making sure that we can successfully navigate that. And we'll give a lot more about the trial design, endpoints and all the things everybody wants to know probably later this summer, early fall, right before we start that trial.

Awesome. And then maybe we'll touch on the balance sheet as well, Steve. Just we talked earlier about transitioning to profitability and being able to really fund the current -- the commercial products as well as the pipeline and just give us maybe a balance sheet update and any thoughts that you're willing to share on capital allocation priorities?

Yes. So as you mentioned, our balance sheet continues to improve. It's never been stronger. We ended the year with over $110 million in cash. And given our guidance, we expect that to continue to grow. And the capital allocation priorities right now are Recorlev and XP-8121 and funding their futures. And then beyond that, there are things that we can do inorganic, things from a balance sheet perspective with regard to our debt. So a lot of options open up to us as our balance sheet continues to improve.

Awesome. So in review, 2025 milestone year, Recorlev, top product, EBITDA profitable. You gave preliminary strong 4Q. You reiterated those results and also then guided ahead of the Street. So these updates have been incrementally positive.

And just if we take a step back and think about just how the stock has traded, and I mean, I think we might -- we kind of discussed the answer to this, but I just wanted to give you the last word on what you're thinking is the most dislocated between what's going on at the company and all these positive trends and outlook versus maybe how the stock has responded to some of the news that we've seen this year.

Yes. I think our position on this is we're just going to keep executing. That's what we do. And at some point, there'll be more rational movements in the markets and that -- and we'll see that. But if we continue to do exactly what we said, which we've been doing, there's no reason that the stock wouldn't just follow the right kind of trajectory up as it was following just a few months ago.

Awesome. And I think we're out of time. So this will be a good place to stop. Thank you so much.

Thank you.

Thank you, Jenna.

Hello, everyone. Thank you for joining us, and welcome to the Xeris Biopharma Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] I will now hand the call over to Allison Wey, Senior Vice President of Corporate Communications and Investor Relations. Please go ahead.

Thank you, Warren. Good morning, and welcome to the Xeris Biopharma 2025 Full Year Financial Results Conference Call. Earlier this morning, we issued a press release detailing our 2025 financial and operating results and financial guidance for 2026. This press release is available on our website. Joining me on the call today is John Shannon, our CEO; and Steve Pieper, our CFO.

Following our prepared remarks, we will open the call for questions. Before we begin, I'd like to remind you that today's discussion will include forward-looking statements regarding Veris' future expectations, plans, strategies, objectives and financial performance. 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. Any forward-looking statements made on this call speak only as of today's date and except as required by law, the company undertakes no obligation to update or revise these statements.

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.

With that, I will now turn the call over to John for his opening remarks.

Thanks, Allison, and good morning, everyone. We expected 2025 to be a transformational year for Xeris and it was. Our performance extended well beyond our incredible fourth quarter and full year revenue growth. Across the organization, we executed with discipline and focus, advancing our strategic priorities and driving measurable progress throughout the business. Most importantly, we reached a defining milestone, financial self-sustainability.

Our progress across the entire business has enabled us to forever put behind us the question of our ability to self-fund our strategy, our pipeline and our future. Now as we enter 2026, we do so with clear momentum positioned to drive rapid revenue growth, execute on our advanced pipeline and thoughtfully prepare for even greater opportunities ahead. I'm excited and confident that our long-term strategy is firmly on track. Before diving into the details, I want to recognize and thank the entire Xeris team. The performance you delivered in 2025 and the strength of our outlook for 2026 is a direct result of your extraordinary commitment, focus and disciplined execution across every part of our enterprise. Now to the results. Fourth quarter total revenue grew 43% year-over-year to nearly $86 million. This outstanding quarterly result was driven by strong demand across all 3 products. For the full year, total revenue increased by an incredible 44% to $292 million. This performance was broad-based and strengthened as the year unfolded. Most importantly, it fueled our ability to deliver nearly $60 million in adjusted EBITDA and for the first time, net income on a full year basis.

The exceptional performance we delivered in the fourth quarter was no aberration. It reflects consistent progress throughout the year as we executed with increasing discipline and effectiveness. As a result, we exited 2025 with strong momentum, increased confidence in our strategy and a significantly stronger operating platform.

With that, let me walk you through performance across our 3 commercial products. First, Recorlev. Recorlev remained the primary growth engine for Xeris in 2025 and delivered another strong quarter in Q4. Recorlev growth was driven by continued expansion of the patient base, ending the year at approximately 700 patients nearly doubling the number of patients on therapy from a year-end 2024. This growth reflects expanding prescriber awareness in a very dynamic market coupled with increasing confidence in Recorlev's differentiated clinical profile.

Turning to this year. In January, we nearly doubled our Recorlev commercial team significantly expanding our sales and patient support organizations to increase the quantity and quality of our health care provider and patient interactions. This expanded commercial footprint is expected to further escalate awareness and adoption, and we expect to see the impact of this expansion, most notably in the second half of this year and continuing well into the future. We believe Recorlev is still in the early stages of realizing its full commercial potential.

Last week, we filed a patent infringement lawsuit against 2 ANDA filers to vigorously enforce our rights and defend Recorlev. We are very confident in the quality and strength of our intellectual property, our legal position and our long-term outlook for Recorlev. We have built a strong IP foundation for Recorlev with 4 Orange Book-listed patents that run until March 2040 and orphan drug exclusivity, which runs through the end of 2028. Our Recorlev strategy is unchanged. Recorlev is and will continue to be on an exciting journey for many years to come. And our expectation shared during our Investor Day last June of $1 billion of peak sales by 2035 remains securely intact.

Moving to Gvoke. Gvoke delivered steady, reliable growth in 2025 reinforcing its role as a durable and predictable contributor to our portfolio. On a full year basis, revenue grew 14%, supported by broad access, strong prescriber awareness and continued alignment with treatment guidelines. Gvoke remains a potentially life-saving rescue product that should be in the hands of every person with diabetes at risk of having their blood sugar go too well.

Keveyis. Keveyis continues to outperform expectations, and 2025 was no exception. The brand's strength and durability have only become more evident given that we were able to end the year with an increase in the number of patients on therapy versus 2024. As we highlighted throughout 2025, success with Keveyis reflects not only the product itself, but the comprehensive support we provide to patients living with primary periodic paralysis. Importantly, Keveyis represents our long-standing commitment to serving a small, highly underserved patient community, and it remains deeply aligned with our mission to make a meaningful difference in the lives of patients with rare diseases.

Turning to our pipeline. XP-8121 continues to advance according to plan. The anticipated initiation of Phase III in the second half of 2026 marks a significant value creation inflection point for the program and underscores our conviction in its blockbuster commercial potential. XP-8121 addresses a significant unmet medical need. There are over 20 million patients with hypothyroidism on daily oral replacement therapy today. Of those 20 million patients, we believe there are 3 million to 5 million patients who are unable to achieve and sustain normal range due to GI absorption issues. XP-8121 is a once-weekly subcutaneous levothyroxine injection that potentially solves this problem for many patients. As we look ahead to Phase III, the program is entering a pivotal stage, 1 where execution, milestones and value creation become increasingly tangible and visible.

We believe XP-8121 has the attributes to become a differentiated high-impact therapy for patients and a meaningful growth driver for Xeris. Building on our strong commercial momentum, we are entering 2026 with 3 clear priorities. First, we remain focused on driving rapid revenue growth and are making targeted investments across our sales, patient support and commercial infrastructure. Second, we will continue to advance XP-8121, our once-weekly subcutaneous levodiroxi for hypodyabroitis. We believe XP-8121 has the opportunity to become our next blockbuster potentially generating $1 billion to $3 billion in peak revenue. As we have prepared to initiate our Phase III program in the second half of 2026, we intend to significantly step up our R&D investments marking a critical milestone for both the asset and the company.

Third, we remain committed to maintaining a strong balance sheet with disciplined operating execution. This approach preserves our flexibility to make ongoing prioritized investments in our business. Together, these priorities position Xeris perfectly to drive sustained performance over the near, medium and long-term.

With that momentum as context, before turning the call over to Steve, I'd like to briefly share our outlook for 2026. For the full year, we are expecting total revenue between $375 million and $390 million, representing more than 30% growth at the midpoint compared to 2025. We will continue to be adjusted EBITDA positive even as we significantly step up our R&D and commercial investments.

Now with that, I'll turn the call over to Steve, who will take you through our financial results in greater detail and review our guidance for 2026.

Thanks, John. The results we are reviewing today are the product of a year defined by discipline, focus and strong execution across the organization. I, too, want to thank our employees for your dedication, accountability and relentless focus on delivering against our priorities. Your efforts continue to strengthen our operational foundation and position us for sustained success.

Turning now to the fourth quarter and full year results. Total revenue for the fourth quarter was $85.8 million, representing 43% growth year-over-year. The strong performance reflects continued underlying demand across our portfolio. Importantly, this performance reinforces the momentum we carried through the end of the year as we enter 2026 with a solid foundation for continued growth. For the full year, total revenue was $291.8 million, an increase of 44% compared to 2024. This growth was driven by robust demand across all 3 commercial products, or Recorlev, Gvoke and Keveyis.

Looking at our performance from a product level. Recorlev revenue was $45.3 million in the fourth quarter and $139.3 million for the full year. This reflects growth of more than 100% both for the fourth quarter and the full year and was driven almost entirely by a continued expansion of the patient base, reflecting strong underlying demand and increasing prescriber confidence.

Gvoke delivered revenue of $24.6 million in the fourth quarter and $94.1 million for the full year. Performance reflected steady prescription growth broad access and favorable gross to net dynamics. Gvoke continues to serve as a stable and predictable contributor to our revenue base.

Keveyis generated revenue of $12.8 million in the fourth quarter and $47.6 million for the year, supported by an increase in the average number of patients on therapy. Our performance continues to benefit from our focused approach to ongoing health care provider and patient support. Overall, the breadth of contribution across our portfolio reinforces the durability of our revenue base and the focus of our team to meet and exceed goals. Gross margin for the fourth quarter was 87% and for the full year was 85%, reflecting steady improvement relative to prior year, driven by favorability from product mix. R&D expenses were $7.9 million for the quarter and $31.2 million for the year. The 22% increase year-over-year primarily reflects our continued disciplined investment in advancing our pipeline including increased spend to support our preparation for the upcoming Phase III clinical trial, XP-8121.

SG&A expenses were $47.5 million for the quarter, representing an increase of approximately 18% compared to prior year. For the full year, SG&A expenses were $182.4 million, an increase of approximately 12% driven by incremental personnel-related investments to support the rising demand for our commercial products. Adjusted EBITDA for the fourth quarter was $25.1 million an improvement of $16.8 million compared to last year. For the full year, adjusted EBITDA was $59.4 million. The improved results reflect continued operating leverage and underscores our ability to scale revenue while maintaining a disciplined approach to expense management.

We also delivered another period of net income in the fourth quarter and as a result, we reported net income on a full year basis for 2025. Importantly, our 2025 performance resulted in an improved balance sheet which provides us with the flexibility to fund continued revenue growth, advance XP-8121 and operate the business from a position of financial strength. As John outlined, we have entered 2026 guided by a clear set of priorities that underpin our decision-making.

These priorities include: one, driving continued rapid revenue growth; two, initiating the Phase III study for XP-8121, a significant milestone for the company. And lastly, maintaining disciplined investment prioritization as we continue to enhance operating leverage. We believe this balanced approach positions us well for 2026 and beyond.

Turning to our outlook for 2026. We expect total revenue to be between $375 million and $390 million for the full year, representing over 30% growth at the midpoint. This outlook reflects expanding patient demand across our products. Our revenue growth is also expected to drive a modest improvement in gross margin as we continue to benefit from a favorable product mix.

Moving to R&D. As we plan to initiate our Phase III study for XP-8121 in the second half of the year, we expect R&D to increase by approximately $25 million. This step-up reflects a deliberate and disciplined allocation of capital to advance XP-8121 and is critical to unlocking its significant long-term value and future potential which we believe is $1 billion to $3 billion in peak sales.

Looking at SG&A, we continue to invest and scale our commercial enterprise to support Recorlev on its own journey to $1 billion in peak sales by 2035. As such, we plan to increase SG&A by approximately $45 million in 2026 primarily due to the expansion we recently completed. This deliberate material step-up in investment will drive significant revenue growth, resulting in improved operating leverage across the business. As we committed to in 2025, we expect to remain adjusted EBITDA positive moving forward. And specific to 2026, we expect adjusted EBITDA will grow on an absolute dollars basis compared to 2025. Our business has never been on more solid financial ground. The sales growth momentum is enabling our reinvestment strategy and every dollar we deploy is aimed at expanding our capabilities and positioning Xeris for sustained long-term growth.

With that, I'll turn the call over to the operator for Q&A.

[Operator Instructions] Your first question comes from the line of David Amsellem with Piper Sandler.

So just a couple for me. Helpful color on the spend this year. I was wondering, though, as you think about the expansion of Recorlev and the widening of the addressable market that you've seen and certainly your competitors are seeing. Can you talk about the extent of additional operating leverage that you think you're going to be able to realize longer term? And specifically interested in further sales force expansion? Or I guess we've seen, for instance, your competitor expand the sales force a few times. Is that a good way to think about what you're going to need to do to adequately support Recorlev. So that's number one.

And then number two, as you think about the IP litigation, and I realize this is going to play out over the long term, but just help us understand how that's playing into your sense of urgency regarding the potential acquisition of an asset where you can leverage your now expanded commercial organization. That would be helpful color as well.

Thanks, David. It's John. Let's start with the expansion. And we just doubled our commercial footprint as of the first of January. And when I say that, it's not only our salespeople, but all the patient support, medical affairs, pharmacy services, all of those things that it takes to manage this very complex patient as you bring them on to therapy. So we see that as a significant move that we need to do in order to continue to drive the growth we're driving and get those patients on therapy and keep them on therapy. As we continue to expand into outer years, we'll need to add more resources in that capacity. It just takes more to, again, manage the patient loads. So we see that as continuing and continuing based on scale and how we grow there. We're also making additional investments in data, studies, things like that. So we'll see that over time as well.

And we -- so we see a constant and consistent increase in expense and investment on Recorlev for the next several years.

As it relates to your question, I think, around IP litigation and how does that change anything? Well, as I said in my opening comments, our strategy is unchanged on Recorlev. We will continue to do exactly what we said we were going to do. We think -- we know we can get this thing to $1 billion by 2035. Those investments will again continue to come on a scaled approach so that we can, again, manage the growth that we're driving. So we see that as longer term, and we feel strongly that we'll continue to do that, and we'll be able to get this to a $1 billion product by 2035.

Your next question comes from the line of Brandon Folkes with H.C. Wainwright.

Very good quarter. So maybe just following on from the earlier line of questioning. Can you just help us think about the evolution of capital deployment beyond 2026. As you realize this operating leverage in the business, what's your updated thinking about sort of internal allocations that you've laid out today on the call versus perhaps external business development. Does the emergence of this IP litigation change your appetite to perhaps sort of bring in something between sort of now and when 8121 comes to market to just sort of hedge the product concentration risk.

And then secondly, maybe I'll just ask this because maybe it goes in -- can you just talk about the evolution of gross margin here longer term? How should we think about gross to net in 2026 across your portfolio as we think about the evolution PAUSE just with regards to product mix?

Let me try to start this, Brandon, and I don't know that we got all those questions in there, so we'll try to answer them all. So as you heard in our comments, we're in a position where we're self-sustainable in terms of the amount of leverage we're getting from the business and our ability to support whatever is in front of us, specifically 8121 and RECORLEV growth. And as it relates to the IP, again, nothing's changed. It's unchanged. We weren't surprised by these lawsuits. So we knew this was coming. We saw this coming. We're prepared for it. And we still see a future where we have lots of opportunities in front of us. With respect to our own existing technology and capabilities to drive growth for a long time as well as external. So we see all of that in front of us. And now that we're at this point, we're forever have situations where as long as we continue to grow, we'll be able to continue to leverage that in the future growth. So -- and then I'll let Steve cover any of the kind of...

Yes, I'll just add on to John's comments around operating leverage and some of the questions that have come up. I mean, I think when you start to do the math on our growth trajectory and look at even with the step-up in investment, it's becoming clear that the balance sheet is as strong as ever, and it will continue to improve, and our operating leverage will continue to improve and so that opens up capacity to do other things. The good news is we don't have to do other things. We've got great assets both commercial assets and asset in the pipeline, a blockbuster in the wings, but certainly opens up capacity to do other things. We'll continue to be disciplined about business development and evaluating those things.

Touching on your question around gross margin and gross to net, our gross to net, we benefited on Gvoke specifically this year. I would say gross to nets on balance have kind of steadied out. So we're not expecting any material movement either way in '26 on the gross to net front. From a gross margin perspective, as we've noted over the last 1.5 years, we've seen a nice steady increase in our gross margin really benefiting from product mix. We see that continuing for the foreseeable future and approaching kind of best-in-class gross margin profile for a company that looks like us. So hopefully, that addresses your questions, Brandon.

Your next question comes from the line of Chase Nickerbacher with Craig Hallam.

Congrats on all the progress here. Maybe just first to start out a little bit more color on guidance would be helpful. Can you just kind of walk us through maybe with kind of some rough outlines how you're kind of thinking about the top line by product in 2026, obviously, largely being driven by RECORLEV. But any sort of thoughts kind of down the product portfolio would be helpful.

Chase. Yes, I'll take this one. So on the revenue, I think maybe I'll start with the easiest 1 is Keveyis. We see that Keveyis kind of been a steady contributor over the last 5, 6 quarters in terms of its revenue contribution and it's kind of flattening out, so to speak. So I think that's a fair assumption moving forward. On Gvoke, I think what we've talked about over the last year is that we see that, again, being a steady contributor in that high single-digit, low double-digit growth. And I would anticipate that we're going to see that play out in 2026 that way.

And then for RECORLEV, that is the growth driver. So you can kind of back into the math there in terms of the contribution there. But that's on balance what we're expecting. And we do expect some contribution from our partnerships other revenue. Historically, it's been in that 5% to 10% range. I think that's a fair assumption for 2026.

Helpful. And maybe just specifically on RECORLEV. Obviously, very strong implied guide. Can you maybe talk to us about kind of what you've seen so far in Q1 even kind of before that sales force expansion benefit that you will get here and there was a competitive product that was kind of expected in the market in 2026. I mean any kind of anticipation that you sensed in the market from that is kind of now unwound and kind of come to your benefit? Just some thoughts there would be helpful.

Yes, Chase, it's John. I think the first quarter is as we expected, it's pretty typical. We get a lot of payer resets and co-pay resets and things like that, that slowed down the quarter early on in January. We see that it's another typical year. But that's all kind of starting to revolve pretty aggressively in February and going into it usually does so in March. So we're seeing that standard in terms of a lack of a new competitor, I don't think that's really changed much. The market dynamic is still very strong towards finding and diagnosing people with hypercortisolemia and getting them treated. So that is -- that momentum continues in the marketplace. And now with our expanded team in there, we're in a great position to capture more of it. And we don't see any of that slowing down in our organization as well as with any of our competitors.

Your next question comes from the line of Dennis Ding with Jefferies.

We have 2 on cordless. So number one, it's been a few years since the launch. So I guess what is holding you back from issuing RECORLEV guidance? And I guess, what additional data do you need to make in an informed approach to guidance? And then number two, -- any updated thoughts on how you're thinking about the market if Teva indeed is able to secure specialty pharmacy to distribute generic Korlym. And if you think that's a risk at all.

Yes. Dennis, the first 1 is we don't give specific product guidance, and we haven't. And so we just give a total revenue guidance and try to give the color Steve just gave -- so there's no hesitation there. It's just -- that's what we do. And then I don't know I understood or could even hear your last question. So maybe you could repeat that.

Yes. Maybe I'll just repeat that. Yes, I was just wondering if you have any updated thoughts on how you're thinking about the Cushing's market and for RECORLEV specifically if Teva is indeed able to secure a specialty pharmacy to distribute generic Korlym if you think that is a risk at all for your business moving forward?

Yes. We don't see that as a risk at all for our business with respect to generic Korlym. We haven't seen that for the last couple of years. We don't see that going forward. This is a scenario where a clinician will have to write a referral for someone to normalize cortisol in order to get to RECORLEV, and that's a very different approach than what Korlym does.

Your next question comes from the line of Rohan overlies with Leerink Partners.

This is Michael on for Ron Reata Partners. Congrats on your great quarter. We have some questions about XP-8121. Could you provide more color on your interactions with the FDA regarding the upcoming initiation of the Phase III program? And are there any remaining gating items or regulatory dependencies that needs to be handled before the initiation.

So we've had all the interactions with the agency. We're we're very much aligned on everything we need to do. So no regulatory gating. The gating that we're going through right now is we want to enter that Phase III trial with the actual go-to-market device and formulation scale up for commercial scale-up. So we're going through all the steps before we start that Phase III to get all that work done and enter that Phase III with the actual go-to-market device, scaled up at commercial scale, which is really important when you're going into kind of a narrow therapeutic window area with a lot of range of doses. We want to make sure we take the time now so that we don't create delays later in the approval process.

So that's what's really the gating item, and that's what we're working on.

Got it. Great. And are you thinking about any partnership optionality for 8121 at all?

That's a great question. We don't need to do a partnership. We have what we need to get this to market. We think it's an outstanding opportunity for ourselves. And from that perspective, we don't need to, but it doesn't mean that the right situation came along that we wouldn't consider that.

That would drive incremental value.

Your next question comes from the line of Jason Door with OpCo.

Jason on for Louise. Congrats on the strong quarter.Understanding earlier in the process, Can you provide any guidance on the patent infringement suit for RECORLEV against the ANDA filers? Maybe what might the time lines be? And what does a favorable outcome look like for the sites team.

Well, as you can tell, we're very early in. We just filed on Thursday, the lawsuit. Timing-wise, I don't know, years, months. So more to come on that. We feel really strongly in our 4 Orange Book patents that were until 2040. So that's really important that we kind of make sure we defend and stay behind those.

Your next question comes from the line of Jenna David with Barclays.

I was just curious on the RECORLEV litigation, what your openness or appetite for a settlement could be appreciating your confidence in the 2040 patent time frame, but also maybe the balance between removing any potential overhang that could, in theory, last several years versus settling for a couple of years prior to 2040. I'm just curious what your thought process there is.

Thanks for the question, Gena. I clearly can't comment on legal strategy and litigation strategy. So -- but I do appreciate the question.

There are no further questions at this time. I will now turn the call back to John Shannon, CEO, for closing remarks.

Thanks, and thanks, everyone, for your questions. In closing, 2025 was a defining year for Xeris. We exited the year with strong momentum, a more durable operating foundation and tremendous confidence in our strategy. We believe our commercial portfolio is well positioned to drive continued rapid revenue growth in our pipeline, specifically XP-8121 and extended meaningful longer-term value as we look ahead. As we enter 2026, our priorities are clear. We believe the immediate and long-term opportunities for Xeris are increasingly exciting, and we remain committed to translating our continued success and momentum into long-lasting value for the patients we serve and our shareholders. We appreciate your time and your continued support, and thank you.

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

Hello, everyone, and thank you for joining us today for the Xeris Biopharma Q3 2025 Earnings Conference Call. My name is Sami, and I'll be coordinating your call today. [Operator Instructions] I'd now like to hand over to your host, Allison Wey, Senior Vice President of Investor Relations and Corporate Communications, to begin. Please go ahead, Allison.

Thank you, Sami. Good morning, and welcome, everyone, to the Xeris Biopharma Third Quarter 2025 Earnings Call. You can find this morning's earnings release and our detailed financial results on the Investor Relations section of our website. Today, I'm joined by John Shannon, CEO; and Steve Pieper, our CFO. After our prepared remarks, we will open the line for questions. Before we begin, I'd like to remind you that this call will contain certain 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 our risks, please refer to our earnings release and risk factors included in our SEC filings. Any forward-looking statements in this call represent our views only as of the date of this call and subject to certain applicable laws. We disclaim any obligation to update such statements. Please note that some metrics we will discuss today are presented on a non-GAAP basis. We have reconciled the comparable GAAP and non-GAAP figures in our earnings release. I'll now turn the call over to John for opening remarks.

Thanks, Allison, and good morning, everyone. I'm excited to share that Q3 marked another record-setting quarter for Xeris. Total product revenue exceeded $74 million, representing a 40% increase year-over-year. As highlighted in this morning's press release, the strength of our year-to-date results gives us the confidence to raise the lower end of our full year total revenue guidance. We now expect total revenue for the year to be in the range of $285 million and $290 million, a 42% increase at the midpoint. Our performance was fueled by robust patient demand across all 3 of our products, reflecting the tremendous value our therapies are bringing to patients and the consistent and outstanding execution of our team.

RECORLEV remained the primary growth engine with revenue more than doubling versus the prior year. This momentum reflects the continuing expansion of new patients and prescribers. Gvoke delivered another quarter of steady, reliable growth, demonstrating the effectiveness of our efforts to expand awareness and reinforce adherence to established medical guidelines. KEVEYIS outperformed our expectations, supported by new patient additions, which drove an increase in the average number of patients on therapy.

Let's take a closer look at each product, starting with RECORLEV. RECORLEV generated revenue of $37 million in the quarter, a year-over-year increase of 109%. We continue to expand our prescriber breadth and depth as more clinicians gain experience with RECORLEV and recognize the important clinical benefits. The average number of patients on therapy grew by 108% versus the same period last year, reinforcing our confidence in RECORLEV's position in the growing hypercortisolemia and Cushing's syndrome marketplace.

Turning to Gvoke. Gvoke delivered another solid quarter with revenue of more than $25 million, up nearly 10% from the same period last year. As we continue to educate patients and providers, we see considerable potential to reach more individuals who could benefit from having a ready-to-use glucagon on hand.

Moving to KEVEYIS. KEVEYIS continues to serve a critical need for patients living with primary periodic paralysis. Quarterly revenue was approximately $12 million, driven by growth in the average number of patients on therapy. These results underscore what we know to be true, that effective treatment of PPP requires more than just delivering a product. It requires a sustained, holistic commitment to supporting patients throughout their journey.

Our continued strong commercial performance this year has enabled us to accelerate our strategic priorities. As previewed during our August call, the third quarter marked the initiation of our next commercial expansion, a key milestone in laying the foundation for future scalable growth. This initiative is centered on expanding our commercial footprint to capture the significant opportunity ahead for RECORLEV while simultaneously strengthening the operational backbone required to scale efficiently in 2026 and beyond. This strategic expansion, nearly doubling our sales and patient support teams will enhance our ability to reach more clinicians and serve more patients and allows us to capitalize on the significant market opportunity ahead.

Let's turn now to our pipeline in XP-8121, our once-weekly subcutaneous form of levothyroxine for primary hypothyroidism. XP-8121 continues to advance according to plan. Leveraging our proprietary XeriSol technology and drug device development capabilities, we are creating a novel formulation and a high-precision delivery system that will enable the administration across a wide array of doses. Important drug manufacturing and device validation work is in process, and we remain on track to initiate our Phase III clinical trial in the second half of 2026.

As we've stated before, we're really excited about this product and the unmet medical need it can address. While at the recent American Thyroid Association's Annual Meeting, we enjoyed a large number of enthusiastic discussions with key opinion leaders who further reinforced our conviction in XP-8121's blockbuster potential. Before I turn the call over to Steve to walk through the details of our exceptional quarter, I want to leave you with this. We are focused. Our ability to deliver remarkable performance quarter after quarter highlights the value of our commercial product portfolio, the effectiveness of our strategy and most importantly, our dedication to serving patients. With that, let me hand the call over to Steve.

Thanks, John, and good morning, everyone. Before diving into our financial performance, I want to highlight the considerable progress our company has made this year. Over the past 9 months, we've generated outstanding revenue growth, fueled by both robust demand for our therapies and a high-performing commercial organization. At the same time, our gross margin has continued to improve, underscoring the strength of our operations.

In the third quarter, we generated significant positive cash flow as well as net income for the first time in the company's history. We also delivered strong adjusted EBITDA growth, further demonstrating the scalability of our business and reinforcing our ability to translate consistent top line performance and bottom line results. These results are a clear testament to the discipline, focus and execution across the organization, and they reinforce the solid foundation we've established for sustainable growth well into the future.

Turning to our third quarter results. On a year-over-year basis, net product revenue increased 40% to $74.1 million with total revenue of $74.4 million. RECORLEV delivered another record quarter with net revenue of $37 million. Compared to the prior year, net revenue once again more than doubled, increasing approximately 109%, driven almost entirely by patient growth of 108%. Gvoke net revenue was $25.2 million, an increase of approximately 10% compared to the same period last year. This growth was driven by a 5% increase in total Gvoke prescriptions as well as some favorability in our gross to net. KEVEYIS net revenue was $11.9 million. We saw a modest increase in the average number of patients on therapy in the third quarter, and we continue to see a healthy pace of new patient starts, underscoring the durability of this franchise.

Turning to gross margin. We delivered a significant improvement this quarter with gross margin growing to 85%, driven primarily by improved product mix. Research and development expenses were $7.5 million for the quarter, a $1.6 million increase versus last year. This increase primarily reflects our continued investment in our pipeline and technology platforms. Selling, general and administrative expenses were $46.5 million in the quarter, an increase of approximately 3% compared to prior year. The increase in SG&A primarily reflects incremental personnel-related expenses. Adjusted EBITDA for the quarter was $17.4 million, improving more than $20 million compared to the third quarter 2024. This impressive result underscores the strength of our operating model and validates the actions we have taken to drive long-term value creation.

As I mentioned earlier, for the first time since the company's inception, we reported quarterly net income. This achievement highlights our growing commercial strength and operational discipline. As we continue to make targeted investments across a range of growth opportunities, we do expect some variability in quarterly EPS results going forward. And to be clear, we remain committed to maintaining positive adjusted EBITDA even as we make these incremental investments.

Moving to our near-term outlook and guidance. As John highlighted, our strong performance year-to-date, coupled with the momentum we are seeing in the fourth quarter, gives us the confidence to raise our full year 2025 guidance for total revenue. We are raising the low end of our previous range, which, as a reminder, was $280 million to $290 million, to $285 million to $290 million. The new range represents growth of 42% at the midpoint compared to 2024. Additionally, as we make incremental investments in our RECORLEV commercial organization and as we prepare for our Phase III clinical study start for XP-8121 in 2026, we expect an increase in both SG&A and R&D spend starting in the fourth quarter.

These investments are aligned with our strategic priorities of supporting near and long-term growth. Before we move to Q&A, I want to reiterate my earlier comments and emphasize our considerable progress this year. We delivered strong top line growth once again reflecting robust ongoing demand for our therapies. With gross margins around 85%, strong cash generation and significantly positive adjusted EBITDA, we continue to prove the strength of our business model. Overall, this has been a year defined by exceptional execution and transformational progress. With that, I'll turn the call over to the operator for Q&A.

[Operator Instructions] Our first question comes from Dennis Ding from Jefferies.

I'd like to ask on RECORLEV. Can you just please talk about the impact of the expanded sales force that you guys have implemented last year and if productivity has ramped up yet? And as you're thinking about further expansion, when do you think those reps will be fully trained and get to productivity? And then as a follow-up on RECORLEV, your competitor continues to have supply issues with its specialty pharmacy. Just curious, were you able to capitalize on that in Q3? Or should we see more of a tailwind from that in Q4?

Steve, do you want to?

Yes. So the expansion last year, we increased the size of the RECORLEV commercial team by 50%. So we were at around 42 reps starting in the third quarter of last year. And as you know, it takes a little bit of time to ramp up productivity. But I would say that starting in the first quarter, second quarter this year, those reps were operating at optimal productivity. Looking ahead, we expect more of the same in terms of productivity from our next expansion. And the timing of that would be, we'll bring those reps on board in January, take some time to train them up, get them out in the field, get a couple of quarters under their belt before they're operating at optimal productivity. John, do you want to take the competition?

Yes. I would say we didn't see anything unusual in Q3 as it relates to where our patients were coming from. We continue to see the majority of our patients are new to therapy for RECORLEV and the rest come from competition, all the same mix as we've seen in the past. So I would say nothing unusual and everything is as status quo.

Our next question comes from Chase Knickerbocker from Craig-Hallum.

Congrats on the quarter. Maybe just to start on some kind of under-the-cover stuff on RECORLEV. Can you maybe just give us an update on kind of what you're seeing from a persistency perspective? Any sort of help you can give us as far as kind of the current discontinuation rates and how that's trended over the last couple of quarters?

Yes, Chase, I think everything is, again, same as what we've had in the past. We're again adding so many new patients that that's really keeping all of those metrics in check right now. So we're getting the same amount of people started, the same time to get them started. No real change in dropout rates, average dose, all those things. We're too new in our life cycle here to see any kind of real significant changes in there. And again, they're overwhelmed by the high level of new starts.

Can you just remind us what kind of 6 or 12 months discontinuation rates are either for the condition or specifically for RECORLEV?

I don't know exactly what they are for the condition. I would tell you, RECORLEV is pretty typical to a specialty product like this in a complex disease state. I think what we're seeing is as expected in the space, but we haven't really disclosed any of that directly.

Got it. And then maybe just as we kind of look into 2026, you've had pretty remarkable progress, particularly on the RECORLEV front this year. Would you be willing to share kind of any thoughts as we go into 2026 and start having some more impressive comps to deal with, obviously, as we look at the impressive RECORLEV performance this year? I mean any thoughts on kind of how to set expectations as far as top line growth, either for RECORLEV specifically or the business as a whole?

Yes, I'll try to take that on the context of RECORLEV. As you heard, we're investing on more expansion around RECORLEV. That's driven by a market that is ripe for expansion. There's more and more people being screened for hypercortisolemia. We have, in my opinion, the best product for normalizing cortisol. And we're expanding into a market that's continuing to grow as we're expanding. So I see plenty of growth for RECORLEV. We said back in June, we think this is on pace to be a $1 billion product. And this is all part of our plan to get to that $1 billion.

Maybe just last one for me. Steve, I hear your comments as far as some variability on the bottom line as far as we think about expenses in the go forward. Any additional thoughts you'd be willing to give us as far as kind of when that cadence of R&D should be fully reflected from enrollment perspective as it comes to the 8121 trial? I mean, should we ramp that up into mid next year and then that's kind of peak enrollment? Or just kind of give us some thoughts on particularly the R&D line next year, but also obviously, SG&A as we think about the RECORLEV expansion?

Yes. Good to talk to you, Chase. As we think about -- in my comments earlier, we're going to start to see some of those investments for both RECORLEV and 8121 stepping up in the fourth quarter. John highlighted in his prepared remarks that we plan to start the trial in the second half of next year. So I think that's when you'll really start to see the spend start to ramp up and then obviously well into '27. That's probably where it will peak off.

And then in terms of the RECORLEV investment, we started to make some of these investments this quarter, late third quarter, but we're bringing on the reps starting in January. So that's where you're going to see another step-up in SG&A spend. But again, all things under the umbrella of supporting growth in our strategic priorities. And as we've said a number of times, even with these investments, we are committed to remaining adjusted EBITDA positive going forward. So that's a really important point here is even with the significant step-up in spend, over the next 15 months, we will remain adjusted EBITDA positive.

Our next question comes from Leland Gershell from Oppenheimer.

Congrats on the continued progress. Just a question with regard to your longer-term sales guidance for RECORLEV. Just wondering if that anticipates any further build-out of the sales force or if you expect that you'll be able to achieve those targets based on your current force?

Thanks, Leland. We said that we're going to continue to invest over the next several years on RECORLEV. And we'll need to do that to manage the patient load, so we'll have to make investments in pharmacy, patient services, all the commercial footprint it takes to be successful in this space. We'll also need to and look to start investing even more in data and other things that can help drive more growth in this space and position us to really capture that growth. So yes, there will be investments all the way through to the end for this product. As you build a $1 billion product, you continue to scale your investments with that growth level.

Got it. And I also wanted to ask, we have 8121 coming through and we still have a bump in R&D over the next couple of years as it gets through its pivotal program. But then R&D should come back down unless that we'll be looking for maybe other candidates to be coming out of XeriSol or the company's platform to maybe fill in, in the early pipeline.

That's a great question. One of the beauties of the business here at Xeris is we continuously find great ways to invest in our technology, using our technology for new opportunities. 8121 is a perfect example of that to be able to create using our XeriSol technology, a once-weekly subcu product that can really meet an unmet medical need. So in those time frames, sure, we're not prepared to say what those would be now, but we see it as an opportunity for us always to make incremental investments with the platforms we have and the capabilities we have to continue to drive even more growth than we've already stated in our plans.

Our next question comes from Brandon Folkes from H.C. Wainwright.

Congrats on the progress. Can you just remind me of the gating steps between now and the initiation of 8121 trial? And then maybe just following on from some of the questioning. As you make these multiyear investments in the infrastructure behind these products, does that infrastructure ever get large enough where it makes sense to bring in additional products? Just any comment there would be great.

Let me answer the first one on 8121. So we've been really clear that we're planning and building a blockbuster here with 8121. And we're taking all the necessary steps before we start the Phase III trial to basically make sure we've got the ready-to-go commercial product to take into that Phase III trial. So we're right now in the middle of manufacturing scale-up, device verification and design that device verification and making sure that what we go into the clinical trial with can deliver the wide range of doses that are necessary in this space.

And we just need to make sure that we get that done before we start the Phase III trial so that we're not going back later on and dealing with delays because we weren't able to do that. So we're going to do this very carefully, planfully, and we'll start that trial when all that work is done, and we can go into it with the commercial presentation. Remind me on the second question.

The infrastructure and leverage for business development.

Yes. Of course, yes, the infrastructure -- I mean, we're in such a growth mode right now, the infrastructure is pretty much dedicated to the brands we're driving the growth with. But as we get a little more mature, yes, sure, it makes sense to use that infrastructure to kind of leverage even more opportunities and capabilities.

Our next question comes from David Amsellem from Piper Sandler.

This is Alex on for David. My first question is, how are you thinking about competitive dynamics for RECORLEV to the extent that Corcept's relacorilant gains approval by the end of the year? And what are your base case scenarios for the impact of that potential entrant on RECORLEV? And then maybe also a second question just on the headcount for RECORLEV. Do you have any plans in the future to call on general practitioners? And I'm sorry if I missed that earlier on the call.

So yes, we anticipate relacorilant gets approved by the end of the year. We've said this in the past, and I'll say it again, is we think that this is a market where there's so much opportunity and so much potential that another player in this marketplace talking about screening, detection and finding people with hypercortisolemia is a good thing. So we think relacorilant will help the market. We know they're going to make great -- and they're already making great investments to drive that. And we see that as opportunity as well. And then in terms of numbers on the expansion, I'll let Steve maybe.

Yes, I think the question was around targeting GPs. Are we going to be targeting GPs?

Yes. So we're approaching this data-driven kind of approach to expansion and focus. And where the patients are is where we will go with our commercial footprint. And that leads you into some GP area. Most of those GPs are endo-like, high diabetologists, things like that. So yes, as we expand, of course, we'll be moving into those spaces to really go where the opportunity is.

[Operator Instructions] Our next question comes from Roanna Ruiz from Leerink Partners.

So a follow-up question on RECORLEV. I wanted to see if you could talk about how much momentum you're seeing across new and repeat prescribers. And just thinking ahead to 2026, any seasonality trends or volume growth drivers we should consider for RECORLEV going forward?

So yes, we're seeing repeat prescribers and new prescribers come on. And we have momentum on both of those with 108% increase in patients and prescriptions, you're getting from both. So we're excited to see that momentum. We see that momentum is still very, very strong, and obviously, the reason why we're expanding into that opportunity.

In terms of seasonality for RECORLEV, maybe a little bit with deductibles that get reset in the first quarter, and you see that across all of our products really. But I wouldn't say that that's overly material for RECORLEV. We're not expecting it to be overly material, but that's something we pay attention to every year at the first of the year. So that would be the only potential seasonality impact, Roanna, that I would expect for RECORLEV.

Yes. That makes sense. And one other question I had was just could you talk a bit more about the KEVEYIS franchise durability? It seems to be continuing pretty steadily. Do you expect that to persist into next year? And have you been hearing anything else about competition to KEVEYIS?

Well, we're always watching for more competition in this space. But like you, I'm excited every time we talk about KEVEYIS because this is just a great model where what we do for patients is really important. And starting with finding the patients, helping them get diagnosed for the first time, working them through treatment and helping them stay and remain on treatment. All of those things really, really matter in this space, and that's why KEVEYIS continues to hang in there, and it remains to be a very durable asset for us. We continue to bring on new patients to brand every week, which is just really exciting in this space because we're really making an impact on those patients in the marketplace.

We currently have no further questions, so I'd like to hand it back to John for some closing remarks.

I want to quickly thank everyone for their questions and continued interest in Xeris. As we look ahead to the end of 2025, I couldn't be more proud with how our team delivered this year. We are finishing the year from a position of real strength, evidenced by our strong commercial and financial performance. At the same time, we're building for the future with the foundation in place to initiate the XP-8121 Phase III clinical study next year and continue advancing our broader strategic priorities. We believe these efforts position Xeris exceptionally well heading into 2026, a year where our operational momentum will continue to translate into outstanding revenue growth, profitability and long-term value creation. Thanks again for joining us today and for your continued support.

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