Hello. Good morning, and welcome to the Xeris Pharmaceuticals Second Quarter Financial Results. My name is Gemma, and I will be the call operator today. [Operator Instructions] I will now hand you over to our host, Allison Wey, Senior Vice President of Investor Relations. Please go ahead, Allison.

Thank you, Gemma. Good morning. Welcome to Xeris Pharmaceuticals Second Quarter 2021 Financial Results and Corporate Update Conference Call. A press release with the company's second quarter financial results was issued earlier this morning and can be found on our website. We are joined this morning by Paul Edick, Chairman CEO; and Steve Pieper, our new CFO. Paul will provide opening remarks, Steve will provide details of our financial results and then we will open the lines for Q&A. John Johnson and Rich Kollender from Strongbridge will also be available to answer select questions. We would like to remind you that the Strongbridge transaction is subject to the Irish Takeover rules. And as a result, we may be restricted from answering certain questions. Before we begin, I would like to remind you that this call will contain forward-looking statements concerning the impacts of COVID-19 on Xeris' business practice, Xeris' future expectations, plans, profit, clinical approvals, commercialization, corporate strategy and performance, which constitute forward-looking statements for the purposes of the safe harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including the effect of uncertainties related to the COVID-19 pandemic on U.S. and global markets, Xeris' business financial conditions, operations, clinical trials and third-party suppliers and manufacturers and other risks, including those discussed in our filings with the SEC. In addition, any forward-looking statements represent our views only as of the date of this call and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligations to update such statements. I'd like to turn the call over to Paul.

Thanks, Allison. Good morning to everyone who's listening. We appreciate your interest in Xeris and our discussion this morning. Xeris had a very strong second quarter, especially with Gvoke following a strong first quarter and maintaining momentum with our -- with what is clearly our #1 priority. We've shown steady and consistent progress in all leading indicators for the core business. We also announced a major move in the process of transitioning our business to a commercially focused rare disease and specialty pharma company as well as a number of other key achievements. I'll start with a few highlights. The major highlight of the second quarter was the continued strong demand for Gvoke, driven by the HypoPen sales, as evidenced by impressive increases in several key metrics that I'll share with you shortly. Equally important was the announcement of the proposed acquisition of Strongbridge Biopharma, a major step to becoming a more commercially focused, rare disease and specialty pharma company, which we'll discuss in more detail as well in my follow-on remarks. We also found in Tetris Pharma a great U.K. and EU partner to prioritize the commercialization of Ogluo in that territory. We received FDA approval during the quarter for an extended shelf life of the Gvoke 1 milligram HypoPen and prefilled syringe, moving from 24 months to 30 months at room temperature. We renegotiated our Oxford-SVB venture debt facility to extend our cash runway. And based on feedback -- FDA feedback, we determined it was best to terminate the mini-dose post-bariatric hypoglycemia prevention program and advance our micro-dose, exercise-induced hypoglycemia prevention program with an interim Phase II study in a broader diabetes population, which we'll talk further about as well. Let me start with Gvoke. Since the launch of Gvoke HypoPen, a strong foundation has been built and…

Thanks, Paul. Good morning, everyone. I'm pleased to meet you all virtually today, and I look forward to future opportunities to engage with everyone. Being the CFO of Xeris is an exciting opportunity for me personally. And I look forward to sharing the positive developments at our company both today and in future company updates. My remarks this morning will focus on a few of the key financial results, the details of which are in the press release issued earlier this morning and our 10-Q that will be filed later today. As Paul said, we had another strong quarter from a Gvoke revenue perspective, reporting $8.8 million in Gvoke net sales in the second quarter, which is up approximately 10% from the first quarter of 2021 and up approximately 345% from the second quarter of 2020. The $8.8 million of Gvoke net sales was driven by strong demand from our wholesalers and other direct customers, with Gvoke unit sales up 36% from the first quarter of 2021. As Paul mentioned in his opening remarks, the second quarter Gvoke net sales of $8.8 million included adjustments to the accrued returns reserve related to prior year sales and based on the actual returns experienced that decreased revenue by approximately $900,000. Gvoke net sales on a year-to-date basis through June 30 was $16.9 million, which is an increase of approximately 360% versus the 6 months ended June 30, 2020. As you may recall, in Q1 of this year, we recorded an adjustment to rebate and patient assisted co-pay accruals which were recorded in prior years based on actual claims experience. This adjustment increased revenue by approximately $900,000 in Q1. There is no impact to net sales on a year-to-date basis as a result of the Q1 adjustment and the returns reserve adjustment in…

Thanks, Steve, and welcome to the role. Before we open up for Q&A, owing to our rather large retail investor segment, we thought it would be helpful to address a few of the frequently asked questions that we get on a regular basis.

Number one, and the one we've gotten most frequently of late. Why do the Strongbridge acquisition? I think at the end of the day, a better question would be, in my mind, why not? We're frequently asked from analysts and investors what we're going to add to our bag in order to complement Gvoke. This should be viewed as the perfect answer to that question. And the acquisition of Strongbridge Biopharma is perfect for Xeris. As I stated in my remarks, the resulting pro forma company will have 2 growing revenue products producing assets in 2 therapy areas. We'll move into rare disease and specialty. We have a potential product launch in our core endocrinology franchise on the horizon. The launch organization is significantly larger than Strongbridge would have been able to assemble on a stand-alone basis. We will have a stronger balance sheet, and we will recognize potentially $50 million-plus in synergies. I think that is the perfect acquisition for our company. Second question we get on a regular basis in the last year or 2. Why do you believe COVID-19 pandemic is still impacting your business? There's no question that the pandemic over the last 18 months has had a significant impact on our business in general and on the launch of Gvoke specifically. Like it or not, what I'd say is this absolutely remains the case today. We're all seeing stores and restaurants open and full of people. I will tell you that's just not the case in doctors' offices so far. The rate of opening of endocrinology offices, access to physicians in those offices that are open, and time with prescribers remain below pre-pandemic levels. I can't emphasize enough that offices, open patient visits, diagnoses and prescriptions written in the second quarter were still not back…

[Operator Instructions] Our first question comes in from Difei Yang of Mizuho Group.

So Paul, I was wondering if you are able to comment on the $0 co-pay card, the usage trended over the past several quarters. And how should we think about the co-pay card, the $0 co-pay card on a move-forward basis? It looks like it's a central component for executing the commercial strategy.

Thanks, Difei. I appreciate the question. The $0 co-pay was initially a launch incentive and it has become a central part of our ongoing commercial process with Gvoke. The usage has remained relatively steady over time, and we continue to see it. It's one of those things where the pandemic has really had a devastating effect on a lot of people, especially in this community. And we just think it's important to do whatever we can to continue to maintain the easiest access possible to Gvoke. There are 6 million -- over 6 million people with diabetes who are on insulin. Every single one of them should have a prescription for glucagon. Obviously, we hope it's Gvoke. And we want to -- we continue to want to make it as easy and as affordable as possible. We reevaluate the $0 co-pay on a quarterly basis. And at some point, we may make a decision to discontinue. But for the time being, it's the mainstay of our process.

Our next question comes from David Amsellem of Piper Sandler.

So just a few. First, you mentioned Delta COVID. Anything you are hearing anecdotally in the field about more restrictions? And anything that you think could be negatively impacting your Gvoke business? And just overall thoughts on what you think the back-to-school season is going to look like and how we should think about quarterly cadence in the second half of the year. That's number one. Number two, just general thoughts on the impact of the Zealand product, Zegalogue. And how do you think that product fits into the market, if at all? If you think it will have any impact whatsoever, just wanted to get your latest thoughts there. And then lastly, with Strongbridge coming onboard, how are you thinking about your delivery technology and bringing more proprietary products into the clinic?

Thanks, David. I really appreciate it. Several excellent questions in there. Let me start with restrictions. I think we are seeing health care systems across the country beginning to mandate that people are -- well, they've always mandated masking, So -- and that continues. But that doesn't hinder our reps. Many, many health care systems are now mandating vaccination in order to get access. So we're diligently working to make sure that our organization is vaccinated. I think, as a company, we're about 90% vaccinated right now. And obviously, there's people here and there that have health issues, et cetera, that really cannot get vaccinated right away. So we're working diligently on that to work with the health care systems in order to be vaccinated. So that's not hindering us at this point. As I mentioned in my remarks, endocrinology offices aren't as open as we're seeing our society open. So there continues to be that access issue. And we've been fighting that for now 17 months. We continue to fight it. But the good news is we're back out in the field. We're seeing a lot of physicians face-to-face. And it's very refreshing, actually, to be back out there and calling on doctors. But it's still not back to pre-pandemic levels. I won't mislead in any manner. It's still a little bit of a struggle. You mentioned back-to-school. Every indication is that across the country, kids are going to go back to in-person schools. But with the resurgence of the Delta variant, it's anybody's guess what's really going to happen at the end of the day. So what I've been saying, David, is the normal spike that you see in the third quarter, you saw in 2017, 2018, 2019, and then in 2020, you saw kind of a dome,…

Yes, very helpful.

We have no further questions. I will hand it back to Paul Edick for closing remarks.

Thank you to those who asked questions. Hopefully, our prepared questions helped a lot of people that are e-mailing and texting us and looking for answers on a regular basis. We're happy to provide as much information as we can. We appreciate everybody listening. And I want to thank you and wish you all well. Good day.

Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines.