Good morning all. I would like to welcome you all to Xeris Biopharma Second Quarter 2023 Financial Results Call. My name is [Prika], and I will be your moderator for today’s call. All lines are on mute for the presentation portion of the call today with an opportunity for questions and answers at the end. [Operator Instructions] I would now like to pass the conference over to your host, Allison Wey, Senior Vice President of Investor Relations and Corporate Communications to begin. So Allison, please go ahead.

Thank you, Prika. Good morning and welcome to Xeris Biopharma second quarter financial results conference call and webcast. A press release with the company’s financial results was issued earlier this morning and can be found on our website. We are joined this morning by Paul Edick, Chairman and CEO; and Steve Pieper, CFO. Paul will provide opening remarks, Steve will provide details on our financial results, then we will open the call for Q&A. Before we begin, I would like to remind you that, this call will contain forward-looking statements, which may include but are not limited to statements concerning our business practices, future expectations, plans, prospects, clinical approvals, commercialization, corporate strategy and performance, which constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements made during this call, as a result of various factors, including our financial position and need for financing including to fund our product development programs or commercialization efforts. Whether our products will achieve and maintain market acceptance in a competitive business environment. Our reliance on third-party suppliers, including single-source suppliers, our reliance on third-parties to conduct clinical trials. The ability of our product candidates to compete successfully with existing and new drugs, adverse effects of macroeconomic conditions on our business operations and clinical activities, and our and our collaborators ability to protect our intellectual property and proprietary technology, as well as other risk factors set forth in our filings with the Securities and Exchange Commission. Any forward looking statements on this call 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. Subject to obligations under applicable law, we disclaim any obligations to update such statements. I will now turn the call over to Paul.

Thanks, Allison. Good morning everyone and thank you for joining us today. For the past several quarters, I have started by reiterating what kind of company we are building at Xeris. I’m excited to once again say that the entire organization continues to execute, performing at a high level and absolutely delivering on our vision. What I hope you take away from today’s call and our continued positive performance is that everyone at Xeris remains intensely focused on delivering for patients by continuing to build a substantial patient-centric, commercially focused and self-sustaining biopharma enterprise. I believe that all three pillars of our business, multiple growing commercial products, a highly targeted development pipeline and value added technology partnerships are contributing to our vision and will result in long-term shareholder value. I will start with key highlights of another record quarterly performance. We recorded total revenue of $38 million in the second quarter a 50% increase from second quarter of 2022, and a 14% increase from first quarter of this year. This is our third consecutive quarter of at least 50% revenue growth year-over-year. We ended the second quarter with over $80 million in cash, cash equivalents and short-term investments of very healthy cash position to support our continued growth. Based on our performance year-to-date and our outlook for the rest of 2023, we have tightened our full-year 2023 guidance as well. Our revised guidance for 2023 is total net revenue of $145 million to $165 million, cash utilization of between $57 million and $67 million, and 2023 year-end cash balance of between $55 million and $65 million. Importantly, we remain on track to hit a cash flow breakeven point by year-end 2023, and we will continue to be a self-sustaining company thereafter. Steve will get into more of our financial performance…

Thanks, Paul and good morning, everyone. We had another great quarter driven by the continued growth of all three products, both in net revenues and underlying market demand. Coupled with our disciplined cash management, we exited the second quarter with an extremely healthy cash position and are on-track to hit cash flow breakeven in the fourth quarter. For the second quarter, total revenue was a record 38 million, representing a 50% increase over the same quarter last year. It is worth highlighting that, this is the third consecutive quarter of at least 50% revenue growth. Strong underlying patient demand for all three products, coupled with revenue from our collaboration partnerships drove this growth in total revenue. Let’s start with Recorlev, as we are excited by the momentum we are generating with this product. Recorlev net revenue was 7.2 million for the second quarter, and 11.6 million on a year-to-date basis compared to Q1 2023, net revenue increased by 2.7 million. This growth is the result of an increased in number of patient on therapy growing 38% quarter-over-quarter. We expect these strong results to continue as we are generating high-quality referrals and providing full service support to help patients start and stay on therapy. Gvoke net revenue for the quarter was a record 15.6 million, representing a 36% increase compared to the same period last year. Year-to-date net revenue was 30.7 million, representing a 28% increase compared to last year. In the quarter Gvoke prescription topped 51,000 for the first time, a 50% increase compared to the same period in 2022. In the second quarter, the total Glucagon prescription market grew 1% compared to the first quarter. Notably Gvoke, total prescriptions grew 12% in the same period ending the quarter with total retail market share of approximately 29%. Gvoke continues to…

We have our first question on the phone lines from Oren Livnat of H. C. Wainwright.

On Gvoke to start, I think we have seen some flattening of the share, I guess, since mid-May. And, I think that is a pattern we have seen every year, since launch in the summer into early September, some flattening or actually in prior years, even decline in share. Can you just remind us what the dynamics are there, and how confident you are, not just market growth going forward, but a reacceleration in September and beyond of market share?

What you see is that, a little bit of seasonality. When we start to get into the back-to-school period, mostly July August, our share doesn’t accelerate as fast as vaccine, for example. Back-to-school is really a peed endo or pediatric endo business. And Lilly is or has been historically and still is extremely strong in pediatric endo. So our business continues to increase. The sales of Gvoke continued to increase, but the share capture doesn’t - slows a little bit. It is an annual phenomenon. You can see it every year for the last - since launch.

Is there any difference with Amphastar promoting this product now versus Lilly, and not just on their promotional or infrastructure side, but maybe on contracting you know I noticed your prescriptions were up 12% as you highlighted quarter-over-quarter sales were a little flatter. So is there any underlying change there or is that just noise quarter-to-quarter in terms of gross to nets or inventory moves?

It is noise quarter-to-quarter. We haven’t seen any commercial activity to speak of at all on vaccine. We actually are hoping that Amphastar has a strong commercial effort to continue to accelerate market growth. Having both Lilly and Xeris in the game early on was really important and we hope that that continues. But no contracting activity at all.

But on Keveyis, you had a record sales of up 10%, I think, quarter-over-quarter despite, I guess, some of our anxieties about the presence of a generic in the market. I guess, how did that happen? What do you see in with regards to any impact of a generic and are you still expecting potentially a second entrant to Xeris?

I will start with the second question first. Our planning scenario was we always expected from the get go a second entry, we haven’t seen one yet. We will cross that bridge when we come to it, but our strategy has been the same as what we said we were going to do. Our care connections is extremely important to our physician customers and very, very helpful to patients. And that is a big part of why we are able to continue to keep people on the branded product. Physicians are willing to fight for brand, patients are willing to fight for brand because they get tremendous support in terms of negotiating reimbursement. Our patient assistant managers are constantly in touch with patients and helping them with whatever their needs are. We have patient mentors, which are patients who have been on Keveyis for a long time, helping patients who are new to Keveyis through their titration period. It is a very, very white glove hands-on service and we think that is had a great deal to do with our ability to maintain the business. We are also continuing to add patients. We are growing referrals and we are growing patients quarter-over-quarter. Obviously, if there are multiple generics in the future, will pricing erode a little? Yes. Might we lose some patients in the future? Yes. But as we have said, we are going to defend this business and continue to invest for as long as necessary.

And if I may, just speaking of your white glove services per se, on the Recorlev front how is that hub working versus expectations on not only getting Recorlev patients on therapy from referral to paid therapy timeline wise and success rate wise, but also keeping them on that. I understand that a lot of you are still early in the launch, but some of these plans I understand require recertification or reauthorization quite frequently for these expensive drugs. How is your experience been on getting patients on and keeping them on drugs?

It has been excellent. So, once again, these are rare disease products and it is a negotiation patient, one patient at a time. So, you are not getting contracted formulary additions and things like that. If you were to compare the success rate that we have with getting patients approved for Recorlev therapy, it is as high as you would see if you were in a normal therapeutic category trying to get formulary access. We have tremendous success. We are getting great access. Denials are relatively low and we apply the similar care connections to Recorlev lab that we have for Keveyis and keeping people on drug has been very successful. As you know, they have to titrate overtime and we kind of handhold them through that process. There is a little bit of a correction in the first quarter of every year in terms of people getting reauthorization of their insurance, but that has not been an obstacle at all.

Next question comes from David Amsellem with Piper Sandler.

This is [Skylar] (Ph) on for David. Few questions here. Can you speak to the typical patient that is receiving Recorlev or more broadly the patient mix particularly in terms of prior exposure to racemic ketoconazole, and in that vein, what is the payer landscape look like for those who want to use Recorlev in the first line? Are you hearing that payers are requiring patients to step through ketoconazole?

So the patient mix is not dominated by ketoconazole at all. We are getting patients from all over. We are getting, post surgical De Novo patients. So the first line therapy doesn’t require a step through that is what is really exciting about it. The fact that we are getting a lot of an increasing number of patients who are being referred to Recorlev straight after surgery is unusual this early in the game. And we are getting patients from all of the other branded products, including, well and some are coming from keto, but it is not an outsized number at all.

We now have Glen Santangelo of Jefferies.

Paul, I just want to follow-up on a couple of points that you discussed. Obviously, a good quarter on Recorlev and Keveyis. But I wanted to dig into Gvoke a little bit, because it seemed to suggest the IQVIA data seem to suggest that maybe, revenues would have been a little bit higher than what they were which I guess is sort of, just based on the script number. And it kind of feels like a little bit of the same scenario from last quarter where you are maybe making a little bit less money on a per script basis. Could you just unpack that the Gvoke revenues a little bit and give us a better sense for what is happening on the script and pricing side?

That requires a little bit of math, which I will turn over to Steve to answer.

So, I think if you just did the math and assume that the IQVIA data would extrapolate to net revenues, that would suggest that, our Gvoke revenues would be about a $1 million higher. I think what we saw again in the second quarter was a further tightening of wholesaler channel inventory levels, by about a half a week. It is not necessarily a bad thing that there is tighter correlation, I think, between what is going on in the channel in terms of the inventory levels in the true demand that we see in the IQVIA data. So again, that was a bit of a drag on net revenue. If you look at kind of historical averages over the last three-years, it can go up a couple weeks in terms of the inventory levels and down a couple of weeks. And so, the first half, it has been a bit of a drag on net revenue. But I would say, look, the underlying demand, the underlying patient demand is what is going to carry, at the end of the day and that continues to be really strong. And the inventory levels in the channel should follow that. Particularly in the first quarter in back-to-school.

Just two quick financial ones. With respect to the Horizon contract and Paul, you mentioned the $6 million, success payment that you were hopefully going to receive. Do you have any idea, or when you are expecting to receive that and I’m kind of curious if any of that is embedded within this year’s guidance?

This is Steve. I will take that one. So, based on the work plan and our current progress, we expect to complete that work plan in the fourth quarter. So yes, that is factored into our guidance both from a revenue and cash perspective.

And then last question on the cash flow, Steve. I mean, you mentioned a number of times how you expect to be a cash flow break even by the end of this year. And I just want to reconcile that based on the guidance that you are sort of putting out there, right? Because you generated 71 million in Revs in the first half, which to hit the midpoint, you need to generate 84 million in the second half, which is a nice step up, but it also feels like your expenses are going up you, obviously with your revenues. You also mentioned that you are expanding the Gvoke Salesforce by 20 reps. And you said you are expanding the Recorlev Salesforce to 30. I’m not sure how many incremental additions there are, but just looking at the loss from operations this quarter, trying to forecast the incremental revenues in the back half with an anticipated increase in expenses. I’m just trying to reconcile all those data points and think about that path to cash flow break even by the end of this year.

So, as Paul mentioned that the expansion, at least on the Gvoke side is very modest with an inside sales expansion. So most of those folks, it is not as costly as an expansion, as a traditional field expansion. We do have, as I just mentioned, the six million from Horizon in our guidance as well in the fourth quarter. That certainly helps some other one-timers. I would say, in general our SG&A should be relatively flat year-over-year. So, we saw an increase in this quarter. Some of that was just timing of marketing expenses just preparing for the back-to-school push in the third quarter for Gvoke, but on a year-over-year basis, it should be relatively flat. So I think that all kind of points to it and we feel, again, very confident about hitting cash flow break even in the fourth quarter, very confident.

We have a final question on the line from Roanna Ruiz of SVB.

This is [Nick Gasek] (Ph) on for Roanna Ruiz. Thanks for taking our question. First maybe a bigger picture question. What are some of the pushes and pulls that was getting closer to the high end of your new guidance? Which of your commercial products you think are most likely to drive you towards the higher end of this range of a quick follow-up?

This is Steve. I will take that one. So, one, I think it has been a pretty resilient first half for Keveyis in the face of generics. So, that has given us increased confidence, and I think where we saw Recorlev exiting Q2 also gave us really good confidence in terms of raising that low end. So, Gvoke will continue to perform that has been on our bag for nearly four-years now. So, we have pretty good confidence in how that will perform, particularly in the second half. But I think, what has happened with Keveyis and how resilient it is been in the first half of this year, and the growing momentum with Recorlev, getting those patients started and staying on therapy, gives us confidence to raise the low-end of the revenue range.

And just a quick follow-up on Gvoke. Could you talk a little bit about pricing? Curious if you could share your outlook on gross to net dynamics for the back half of the year and expect these to generally stable or potentially tick up or how should we think about those dynamics for the back half?

As I think even going back to the second half of last year, we have said that, gross to nets have stabilized. So we don’t anticipate any uptick in the second half, from a gross to net perspective at all.

And if I may, one more question on Recorlev. How should we think about growth in new patient additions into next year? And maybe, I know you mentioned this earlier, but what are you hearing from physicians in the field on the dose titration process and how are patients doing on the drug overall? Could you talk a bit more about that?

This is Paul. I will take that one. patients are doing very well. I think part of the reason that doctors are starting to get comfort, starting patients first line is because of the performance of the patients they have already put on the drug in terms of efficacy and low and manageable side effects. We expect patient acquisition referrals and patients on drug to continue to grow at a similar pace, going into the fourth quarter or the second half of the year and toward the end of the year. We are not going to really give any guidance for 2024 yet, but we expect continued momentum, and we are seeing great response from physicians.

Thank you. You now have another follow-up question from Oren Livnat.

Some follow-up. Just two real quickly on Keveyis, is there any update on the patent front? And on Vivo your guidance for data by first half next year, sounds, I guess, a little faster than my -- than the conservative expectations, you sort of gave us before about how hard it is to find patients and sort of reiterated the challenge there. That 25% enrollment so far, are you running ahead of schedule despite the screen failures that you would do and expect it to see? Are things going a little faster? Thanks.

I wouldn’t say things are going faster. Screen failures are high as we anticipated, because finding patients that are stable on Vivo for three-months. it is proving to be what we anticipated as hard. We didn’t know what we didn’t know going into the study in terms of timing. So I think being conservative in terms of enrollment, when we first started out in terms of what we anticipated and what we conveyed to you. Adding a couple more sites, I think, is going to help us to continue to push the enrollment. But I think the first half is still achievable.

Correct. And on that Keveyis on the patent front?

On the patent. We did have our - as you know, there are several layers of appeal in the patent process as we have discussed. You go through a direct appeal, then you go to an appeals board and you have to get through all of that before you end up with the ability to potentially go to court. As we anticipated that appeal to the patent trade appeals panel they upheld the examiner’s decision. So the next step is Federal Circuit Court, and that is where we are headed next.

Thank you. I would like to hand it back to Mr. Edick for some closing remarks.

Thank you, operator. Thanks again to everybody for joining us today. We are very proud of what we are building here at Xeris to service our patients and our healthcare professional customers. I’m especially proud of our team’s performance and all we have accomplished to-date. Three consecutive quarters of at least 50% revenue growth is not something that a lot of companies can brag about today, and I’m excited that for us to build on the first half of the year for the remainder of 2023. I also want to thank our many loyal investors who see the potential Xeris possesses and continue to support us as we build a special kind of company. Thanks again for joining our call.

Thank you all for joining. I can confirm today’s call with Xeris Biopharma has now concluded. Please have lovely rest of your day and you may now disconnect your lines.