Xeris Biopharma Holdings Inc

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and notes to those financial statements appearing elsewhere in this Quarterly Report on Form 10-Q and with the audited financial statements and the notes to those financial statements included in the Annual Report on Form 10-K filed on March 6, 2024 with the U.S. Securities and Exchange Commission. In addition to financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. All statements in this document other than statements of historical fact are, or could be, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "will," "would," "may," "should," "expects," "focus," "goal," "intends," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue," and terms of similar meaning are also generally intended to identify forward-looking statements. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including without limitation, the regulatory approval of our product candidates, our ability to market and sell our products and product candidates if approved, and factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023 and in our other subsequent filings with the U.S. Securities and Exchange Commission, including elsewhere in this Quarterly Report on Form 10-Q. Any forward-looking statements contained herein speak only as of the date hereof, and Xeris expressly disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and notes to those financial statements appearing elsewhere in this Quarterly Report on Form 10-Q and with the audited financial statements and the notes to those financial statements included in the Annual Report on Form 10-K filed on March 6, 2025 with the U.S. Securities and Exchange Commission. In addition to financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. All statements in this document other than statements of historical fact are, or could be, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "will," "would," "may," "should," "expects," "focus," "goal," "intends," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue," and terms of similar meaning are also generally intended to identify forward-looking statements. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including without limitation, the regulatory approval of our product candidates, including potential impacts of regulatory agency staffing cuts and reduced resources as well as shifting policy priorities and the impact on regulatory feedback and timing thereof, changes in macroeconomic conditions such as the possibility of an economic downturn or general economic uncertainty, our ability to market and sell our products and product candidates if approved, increasing geopolitical tensions and market volatility, including announced or implemented tariffs, and factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024 and in our other subsequent filings with the U.S. Securities and Exchange Commission, including elsewhere in this Quarterly Report on Form 10-Q. Any forward-looking statements contained herein speak only as of the date hereof, and Xeris expressly disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Previous wording

Unless otherwise indicated, references to "Xeris," the "Company," "we," "our" and "us" in this Quarterly Report on Form 10-Q refer to Xeris Biopharma Holdings, Inc. Throughout this document, unless otherwise noted, references to Gvoke include Gvoke PFS, Gvoke HypoPen, Gvoke Kit and Ogluo (glucagon).

Current wording

Xeris Biopharma Holdings, Inc. along with its subsidiaries, is referenced herein as the "Company", "Xeris", "Xeris Biopharma", "we" or "our". Throughout this document, unless otherwise noted, references to Gvoke include Gvoke PFS, Gvoke HypoPen, and Gvoke Kit.

Previous wording

•Keveyis is the first therapy approved in the United States to treat hyperkalemic, hypokalemic, and related variants of Primary Periodic Paralysis ("PPP"). PPP is a rare genetic, neuromuscular disorder that can cause extreme muscle weakness and/or paralysis; some forms are also commonly associated with myotonia or muscle stiffness. The estimated total addressable market for this therapy is greater than $0.5 billion in the United States.

Current wording

•Keveyis is the first therapy approved in the United States to treat hyperkalemic, hypokalemic, and related variants of PPP. PPP is a rare genetic, neuromuscular disorder that can cause extreme muscle weakness and/or paralysis; some forms are also commonly associated with myotonia or muscle stiffness. The estimated total addressable market for this therapy is greater than $0.5 billion in the United States.

Previous wording

Our company name, Xeris, is derived from the ancient Greek word xērós meaning 'dry' or 'without water/non-aqueous'. Our proprietary, non-aqueous formulation capabilities are designed to enable the convenient injection of medicines previously uninjectable or poorly injectable when utilizing aqueous approaches. Both XeriSol and XeriJect offer the opportunity to create ready-to-use, room-temperature stable, highly concentrated, injectable formulations of both small and large molecules. These proprietary formulation capabilities can enable subcutaneous (SC) or intramuscular (IM) administration in lieu of intravenous (IV) infusion, allow for convenient, cost-effective storage, and provide an improved patient, caregiver, and healthcare provider experience. XeriSol and XeriJect have broad applications and enable us to develop our own internal product development candidates in endocrinology, neurology and other therapeutic areas. They also enable us to pursue formulation and development partnerships pursuant to which our proprietary formulation science is applied with the goal of enhancing the product formulation, delivery and clinical profile of other companies' proprietary drugs and biologics.

Current wording

Our company name, Xeris, is derived from the ancient Greek word xērós meaning 'dry' or 'without water/non-aqueous'. Our proprietary, non-aqueous formulation capabilities are designed to enable the convenient injection of medicines previously uninjectable or poorly injectable when utilizing aqueous approaches. Both XeriSol and XeriJect offer the opportunity to create ready-to-use, room-temperature stable, highly concentrated, injectable formulations of both small and large molecules.

Previous wording

Once Weekly Subcutaneous Injection of Levothyroxine (XP-8121)

Current wording

•XP-8121: We are in the process of developing the first and only, once-weekly, subcutaneous injection of levothyroxine for the treatment of hypothyroidism. We are working with the FDA to plan and initiate a Phase 3 clinical trial of our XP-8121 product candidate. The estimated total addressable market for this therapy is 3-5 million patients or more in the United States which we estimate is a $1.0 billion or greater market opportunity.

Previous wording

We currently own 179 patents issued globally, including composition of matter patents covering our ready-to-use glucagon formulation that expire in 2036. Included in the total patents, we have 64 granted patents globally related to our platform technologies and 8 patents granted in the United States and listed in the United States FDA Orange Book covering proprietary formulations of levoketoconazole (the active pharmaceutical ingredient in Recorlev) and the uses of such formulations in treating certain endocrine-related diseases and syndromes. The latter includes United States Patent Nos. 11,020,393, 11,278,547 and 11,903,940, which were granted on June 1, 2021, March 22, 2022, and February 20, 2024, respectively, and which provide patent protection through 2040 for the use of Recorlev in the treatment of certain patients with persistent or recurrent Cushing's syndrome.

Current wording

We currently own 167 patents issued globally, including composition of matter patents covering our ready-to-use glucagon formulation that expire in 2036. Included in the total patents, we have 66 granted patents globally related to our platform technologies and 8 patents granted in the United States and listed in the United States Food and Drug Administration ("FDA") Orange Book covering proprietary formulations of levoketoconazole (the active pharmaceutical ingredient in Recorlev) and the uses of such formulations in treating certain endocrine-related diseases and syndromes. The latter includes United States Patent Nos. 11,020,393, 11,278,547 and 11,903,940, which were granted on June 1, 2021, March 22, 2022, and February 20, 2024, respectively, and which provide patent protection through 2040 for the use of Recorlev in the treatment of certain patients with persistent or recurrent Cushing's syndrome.

Previous wording

For the nine months ended September 30, 2024 and September 30, 2023, we reported net losses of $49.7 million and $48.9 million, respectively. We have not been profitable since inception, and, as of September 30, 2024, our accumulated deficit was $666.7 million. In the near term, we expect to continue to incur significant expenses, operating losses and net losses as we, among other things:

Current wording

For the three months ended March 31, 2025 and March 31, 2024, we reported net losses of $9.2 million and $19.0 million, respectively. We have not been profitable since inception, and, as of March 31, 2025, our accumulated deficit was $681.1 million. In the near term, we expect to continue to incur significant expenses, operating losses and net losses as we, among other things:

Previous wording

The following discussion sets forth certain components of the statement of operations of Xeris for the three and nine months ended September 30, 2024 and 2023 as well as factors that impact those items.

Current wording

The following discussion sets forth certain components of the statement of operations of Xeris for the three months ended March 31, 2025 and 2024 as well as factors that impact those items.

Previous wording

Research and development activities are central to our business model. We expect to continue to incur significant research and development expenses as we advance our pipeline candidates and in particular plan and conduct clinical trials, prepare regulatory filings for our product candidates, and utilize internal resources to support these efforts. Our research and development costs have declined as compared to previous levels as a result of directing significant funding to our commercial activities.

Current wording

Research and development activities are central to our business model. We expect to continue to incur significant research and development expenses as we advance our pipeline candidates and in particular plan and conduct clinical trials, prepare regulatory filings for our product candidates, and utilize internal resources to support these efforts.

Previous wording

Amortization of intangible assets relates to the amortization of our products: Keveyis and Recorlev. These two intangible assets are being amortized over a five-year and fourteen-year period, respectively, using the straight-line method.

Current wording

Amortization of intangible assets relates to the amortization of our products: Recorlev and Keveyis. These two intangible assets are being amortized over a five-year and fourteen-year period, respectively, using the straight-line method.

Previous wording

Other income (expense) consists primarily of interest expense related to our convertible debt, senior secured credit facility, interest income earned on deposits and investments, debt refinancing costs and gains and losses on the change in fair value of the CVRs.

Current wording

Other income (expense) consists primarily of interest expense related to our convertible debt and loan, interest income earned on deposits and investments, debt refinancing costs and gains and losses on the change in fair value of the Contingent Value Rights ("CVRs").

Previous wording

The following table summarizes our results of operations for the three and nine months ended September 30, 2024 and 2023 (in thousands):

Current wording

The following table summarizes our results of operations for the three months ended March 31, 2025 and 2024 (in thousands):

Previous wording

Net revenue decreased by $3.7 million or 23.1% for the three months ended September 30, 2024 compared to the same period ended September 30, 2023. The decrease was due to lower volume ($2.9 million or 18.0%) and unfavorable net pricing ($0.8 million or 5.1%).

Current wording

Net revenue decreased by $1.7 million or 12.7% for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was due to unfavorable net pricing ($2.3 million or 17.0%), offset by higher volume ($0.6 million or 4.3%).

Previous wording

Cost of goods sold increased by $5.4 million or 65.7% and $6.3 million or 29.8% for the three and nine months ended September 30, 2024 compared to the same periods ended September 30, 2023, respectively.

Current wording

Cost of goods sold increased by $2.8 million or 46.2% for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Previous wording

Cost of goods sold as a percent of total product revenue increased by 6.0%, to 25.7% for the three months ended September 30, 2024 compared to 19.7% for the same period ended September 30, 2023, primarily due to the write-off of Gvoke components as a result of manufacturing process changes required to support Gvoke capacity expansion efforts ($3.6 million or 6.8%), offset by higher sales of products with a lower cost of goods sold (0.8%).

Current wording

Cost of goods sold as a percent of total product revenue increased by 0.3%, to 15.1% for the three months ended March 31, 2025 compared to 14.8% for the same period ended March 31, 2024, primarily due to a one-time credit for Keveyis purchased in 2024 (4.1%), offset by higher sales of products with a lower cost of goods sold (3.8%).

Previous wording

The following table summarizes our research and development expenses by type for the three and nine months ended September 30, 2024 and 2023:

Current wording

The following table summarizes our research and development expenses by type for the three months ended March 31, 2025 and 2024:

Previous wording

For the three and nine months ended September 30, 2024 and September 30, 2023, amortization of intangible assets were both $2.7 million and $8.1 million, respectively.

Current wording

For the three months ended March 31, 2025 and March 31, 2024, amortization of intangible assets were both $2.7 million.

Previous wording

For the three and nine months ended September 30, 2024, interest expense increased $0.9 million or 13.7% and $3.2 million or 16.3% compared to the same periods ended September 30, 2023, respectively. The increases in both periods were primarily due to a higher principal amount and increased interest rates.

Current wording

For the three months ended March 31, 2025, interest expense increased $0.3 million or 3.9% compared to the three months ended March 31, 2024. The increase is primarily due to a higher principal amount and increased interest rates.

Previous wording

In March 2024, we, Xeris Pharma and certain subsidiary guarantors, entered into an Amended and Restated Credit Agreement and Guaranty (the "Amended and Restated Credit Agreement") with the lenders from time to time parties thereto (the "New Lenders") and Hayfin Services LLP, as administrative agent for the New Lenders, pursuant to which the Company and its subsidiaries party thereto granted a first priority security interest on substantially all of their assets, including intellectual property, subject to certain exceptions. The Amended and Restated Credit Agreement amended and restated the Hayfin Loan Agreement in its entirety. The Amended and Restated Credit Agreement provided for the New Lenders to extend $200.0 million in term loans to the Company on the closing date and up to an additional $15.2 million in additional term loans, which additional term loans are available only to redeem the Company's existing 2025 Convertible Notes.

Current wording

In March 2024, we entered into an Amended and Restated Credit Agreement and Guaranty (the "Amended and Restated Credit Agreement") with the lenders from time to time parties thereto (the "Lenders") and Hayfin Services LLP, as administrative agent for the New Lenders, pursuant to which we and our subsidiaries granted a first priority security interest on substantially all of our assets, including intellectual property, subject to certain exceptions. The Amended and Restated Credit Agreement provides for the Lenders to extend $200.0 million in term loans to the Company on the closing date and up to an additional $15.2 million in additional term loans, which additional term loans are available only to redeem the Company's 2025 Convertible Notes.

Previous wording

In September 2023, we completed the exchange of $32.0 million in aggregate principal amount of the 2025 Convertible Notes for $33.6 million in aggregate principal amount of the 2028 Convertible Notes. As of September 30, 2024, the outstanding balance of the 2025 Convertible Notes was $15.2 million and the outstanding balance of the 2028 Convertible Notes was $33.6 million.

Current wording

In March 2025, certain holders of our 2025 Convertible Senior Notes converted $3.2 million in aggregate principal amount of the notes into 1,045,751 shares of the Company's common stock. As of March 31, 2025, the outstanding balance of the 2025 Convertible Notes was $12.0 million and the outstanding balance of the 2028 Convertible Notes was $33.6 million.

Previous wording

We have incurred operating losses since inception, and we have an accumulated deficit of $666.7 million at September 30, 2024. Based on our current operating plans and existing working capital at September 30, 2024, we believe that our cash resources are sufficient to sustain operations and capital expenditure requirements for at least the next 12 months. We expect to incur substantial additional expenditures in the near term to support the marketing and selling of Gvoke, Recorlev and Keveyis as well as our ongoing research and development activities. We expect to continue to incur net losses for at least the next 12 months. Our ability to fund the marketing and selling of Gvoke, Recorlev and Keveyis, as well as our product development and clinical operations, including completion of future clinical trials, will depend on the amount and timing of cash received from product revenue and potential future financings. Our future capital requirements will depend on many factors, including, but not limited to:

Current wording

We have incurred operating losses since inception, and we have an accumulated deficit of $681.1 million at March 31, 2025. Based on our current operating plans and existing working capital at March 31, 2025, we believe that our cash resources are sufficient to sustain operations and capital expenditure requirements for at least the next twelve months. We expect to incur substantial additional expenditures in the near term to support the marketing and selling of Recorlev, Gvoke and Keveyis as well as our ongoing research and development activities. We expect to continue to incur net losses for at least the next twelve months. Our ability to fund the marketing and selling of Recorlev, Gvoke and Keveyis, as well as our product development and clinical operations, including completion of future clinical trials, will depend on the amount and timing of cash received from product revenue and potential future financings. Our future capital requirements will depend on many factors, including, but not limited to:

Previous wording

As we continue the marketing and selling of Gvoke, Recorlev and Keveyis, we may not generate a sufficient amount of product revenue to fund our cash requirements. Accordingly, we may need to obtain additional financing in the future which may include public or private debt and/or equity financings. As detailed in "Note 1 – Liquidity and capital resources" above, there can be no assurance that such funding may be available to us on acceptable terms, or at all, or that we will be able to successfully market and sell Gvoke, Recorlev and Keveyis.

Current wording

As we continue the marketing and selling of Recorlev, Gvoke and Keveyis, we may not generate a sufficient amount of product revenue to fund our cash requirements. Accordingly, we may need to obtain additional financing in the future which may include public or private debt and/or equity financings. As detailed in "Note 1 – Liquidity and Capital Resources" above, there can be no assurance that such funding may be available to us on acceptable terms, or at all, or that we will be able to successfully market and sell Recorlev, Gvoke and Keveyis.

Previous wording

Net cash used in operating activities was $39.0 million for the nine months ended September 30, 2024, compared to $54.5 million for the nine months ended September 30, 2023. The decrease in net cash used in operating activities was primarily driven by reduced working capital usage. For a discussion regarding product revenue, net and increases in spending, refer to "Results of Operations" included in this "Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations" of Part I of this Quarterly Report on Form 10-Q.

Current wording

Net cash used in operating activities was$10.0 million for the three months ended March 31, 2025, compared to $20.3 million for the three months ended March 31, 2024. The decrease in net cash used in operating activities was primarily driven by higher sales. For a discussion regarding product revenue, net and increases in spending, refer to "Results of Operations" included in this "Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations" of Part I of this Quarterly Report on Form 10-Q.

Previous wording

Net cash used in investing activities was $5.1 million for the nine months ended September 30, 2024, compared to $20.9 million for the nine months ended September 30, 2023. Cash used in investing activities in 2024 was primarily due to net purchases of short-term investments.

Current wording

Net cash used in investing activities was$13.0 thousand for the three months ended March 31, 2025, compared to $19.7 million for the three months ended March 31, 2024. The decrease in cash used by investing activities for thethree months ended March 31, 2025 was due to fewer purchases of short-term investments.

Previous wording

Net cash provided by financing activities was $35.8 million for the nine months ended September 30, 2024, compared to net cash used in financing activities of $0.4 million for the nine months ended September 30, 2023. The cash provided by financing activities in 2024 was primarily due to the net proceeds of $38.2 million from the term loan made to the Company on the closing date of the Amended and Restated Credit Agreement.

Current wording

Net cash used in financing activities was$3.1 million for the three months ended March 31, 2025, compared to $35.2 million provided by financing activities for the three months ended March 31, 2024. The cash used by financing activities in the three months ended March 31, 2025 was driven by repurchases of common stock withheld for taxes and the proceeds from the exercise of stock awards. The cash provided by financing activities in the three months ended March 31, 2024 was primarily due to the net proceeds of $38.2 million from the term loan made to the Company on the closing date of the Amended and Restated Credit Agreement.