42nd Annual J.P. Morgan Healthcare Conference Transcript

Host: Hope you’re have hope you had a great day for at the J. P. Morgan Healthcare Conference. I’m Bhavna Balakrishnan, an associate here in the Healthcare Investment Banking Team. Thank you so much for joining the presentation of Xeris Biopharma. With us today, we have Paul Edick, who is the Chairman and Chief Executive Officer, and Allison Wey, SVP of IR and Public Communications.

We’ll leave time at the end for questions, but for now, over to you, Paul.

Paul Edick: I appreciate it. Welcome. Good to see everybody today, and thank you to J. P. Morgan for having us. I’m going to go through our presentation today, and we’ll save some time for questions. We are a public company. Please pay attention to our forward looking statement.

If you take the time to read that, it would be appreciated. Xeris is a, is an emerging biopharma company. We’re a self sustaining, growth oriented business. Committed to making a difference in patients. I’m going to talk about the three pillars of our business. The core of our business is supported by formulation technologies.

I’ll get into the, the offspring of those technologies and how we’re applying them. The second pillar of our business is a, a robust and growing commercial business with three products, marketed products on the, in the, that we’re currently promoting. And then also I’ll talk a little bit about technology partnerships.

Many of you might have heard or seen that we had a press release yesterday. Seems like a few days ago, but yesterday that we signed a new license agreement with Amgen that I’ll talk briefly about later on in the presentation. Bottom line is that Xeris is executing, we’re executing on our strategy.

We’re driving growth we’re adding leverage to our business we continue to develop new products, we’re adding partnerships, and we’re, as of the fourth quarter, we were cash flow positive in the fourth quarter. We will be continuing forward in 2024. We’ll talk a little bit about some of our guidance for next year.

But if you look at our guidance for last year, and look at what we did in 2022, from a total revenue basis, we’re about a 110 million business. This year we guided to 135 to 165, and as we’ve said recently, we’re gonna finish at the high end of that range. From a casualization perspective, last year we burned about 103 million.

We guided to 50 to 77. This year we’re going to be even lower than that, 52. And we’ll end up in the low end. Whoa. That got really loud, really fast. We’ll end up in the low end of the range. Should I use this one? Yeah, please, sir. Okay. Sorry about that. We’ll end up in the low end of the range in terms of cash utilization and in terms of our position cash.

We had guided originally last year we had 122 we guided to 45 to 65. We’re gonna end up way above that range this year at around 72 million. So very healthy business all going in the right direction. And as you can see, our, our growth remains very strong, across all of our products, every quarter for the last several years, up and to the right, we’re growing consistently.

We’ve had six record quarters. And if you look at our portfolio, the marketed products, Gvoke Ogluo is Gvoke in the, in the UK. We’re developing a levothyroxine product that I’ll talk briefly about and then our partnership with Amgen. Essentially we signed an agreement for a license of our tech XeriJect technology with Amgen to build a subcutaneous 15 second injection of their Tepezza product.

And we’re also working with Regeneron on similar kinds of formulation initiatives. That all of which are undisclosed at this point. Speaking about our three commercial products, Gvoke is our product for severe hypoglycemia. It’s, you know, people refer to it as EpiPen for diabetics. Very easy, very simple.

And I’ll kind of show you a picture of that later on in the presentation. Recorlev is our drug for Cushing’s disease. Launched about a year and a half ago. Doing extremely well. And Keveyis is a product for primary periodic paralysis, which is an ultra rare condition. In 2023, with generic competition, we actually grew Cavaeus business.

It’s a very healthy growing product. That we’re, we remain very excited about. Going a little bit deeper in our products, if you look at GVOKE, it’s a ready to use liquid glucagon, the first room temperature stable glucagon product for rescue with, in an auto injector produced by our partners SHL.

For severe hypoglycemia, if you look at the, the product itself, extremely easy to use. You pull off the red cap, you press the yellow cap on exposed skin, you wait 5 seconds, you wait for the second click, and you know that you’ve gotten the complete dosage. There’s also, you can see in the picture, there’s a little window it’s clear before you administer and it’s red after you administer.

So very easy and it basically has changed the world of rescue in severe hypoglycemia where now you have self administration, you can save your own life. Which is a dramatic difference in, in diabetic people’s ability to rescue themselves. If you look at what’s going on in the space, there are between patients who are on insulin, which is clearly a, a risk factor, you’re at increased risk if, for severe low if you’re on insulin.

You’re also at an increased risk for severe low if you’re on sulfonylureas. You look at that entire population in the world of diabetes, you’ve got almost 15 million people that are on insulin or sulfonylureas, all at increased risk for severe low. And only about a million of those patients are actually getting a prescription for rescue glucagon today.

So there is tremendous amount of room for growth. And one of the things that we’re really proud of is all of the advocacy organizations, all of the societies have recently updated their guid guidelines or guidance to include or emphasize the use of, or the ability, the Having available a rescue glucagon, a ready to use rescue glucagon for in the event of a severe hypo.

The ADA has recently updated theirs and we’re partnering with them on an ongoing basis to try to get the word out that if you’re on one of these products, you should have a ready to use rescue glucagon handy just in case. And so it’s a, it’s a tremendous opportunity that we’ve only just begun to, to penetrate.

If you look at the glucagon market in general, over, over the last five or six years it has continued to grow, but the growth has been relatively modest, two, three, four, five percent. In 2023 we finally got back to double digit growth, growing about ten percent year over year in terms of total glucagon and it’s accelerating so that’s a very good sign and we hope to be able to continue to accelerate that growth.

Gvoke itself is growing, is rapidly growing, you can see from this slide. Every quarter we continue to increase, every quarter has been a record quarter for the past year. And you can also see that the ready to use products have really started to dominate this market. It’s, it, really about 80, 81 percent of the market is in the ready to use products at this point.

And then from launch, you can, you can see how well we’ve done with Gvoke last year, 52 million, year to date through the third quarter, 48 million and as, and that’s contributing greatly to our high end of the range revenue for next year. Moving on to Recorlev for Cushing Syndrome. We launched Recorlev about, I don’t know, about a year and a half ago.

Cushing’s is a very severe condition with a lot of different potential maladies. We are the only pro one of the only products that actually treats the underlying cause of Cushing’s, which is elevated cortisol production. We actually normalize cortisol. You can see on this slide, there are a number of products available or being used for Cushing’s.

Only a couple of which are actually indicated for Cushing’s. And we have data and a label that is an indication for Cushing’s. And We normalize cortisol in the process. So we do treat the underlying disease. One of the biggest drugs in the category, Coraline patients do well, but it does not necessarily normalize cortisol.

We do, so we think we’re very competitive in the, in the category.

If you look at the population, patients who are would be candidates for our product. It’s about 8000. So it is a very rare condition. We have the broadest indication and treat the root cause of the disease. We get to rapid and sustained reduction of cortisol. We resolve the symptoms. And we think it’s the best in class, ongoing full support for the patients.

We surround the patients with all kinds of services to help them do well on on the product. Since launch, we continue to do well with Recorlev. It’s grown every single quarter, continues to grow every single quarter. We’re going to have a great year in 2023 with Recorlev, and we’re going to continue to grow it in 2024.

Moving on to Keveyis. Keveyis is a product that is probably not on anybody’s radar. Very, very ultra rare condition in primary periodic paralysis. These are patients that have had a series of maladies over the course of many years. Almost never identified as PPP by healthcare professionals. We find the patients for physicians.

We analyze billing data and diagnosis data. And when we see a constellation of ailments that have been treated over time. We approach the physician and recommend that they identify who the patient is in their practice that may be a candidate. Get them in, get them evaluated, and get them treated.

There are about, by most estimates, somewhere between 4, potential PPP patients in the, in the United States. They all have different triggers. Some of them could be potassium or carbohydrates. Symptoms are, are varied greatly. But, Left untreated, these patients are frequently become almost housebound.

If you think about it, if you have the potential of a trigger that could cause a paralysis behind the wheel of a car many of these people no longer drive cars, they’re not going to dinner, they’re not going to the movies, their lives are really reduced in, from all intent, for all intent and purpose.

What we do is we give them their life back. They can get back behind the wheel of a car, they can be out at dinner, go to movies they are you know, back into a somewhat normal life once they’re on Cavaeus.

The product we know is clinically shown to reduce the frequency, severity, and duration of attacks within a few months. It’s a sustained benefit over time, works across all, all the different patients that we’ve bumped into. Very well tolerated with dosage that is titrated to each individual’s needs.

We support these patients much like we, I said, we do with Recorlev, but we support them with our care connections, which are, we have case managers to assist them with their prescription with their reimbursement. We also have patient assistance managers to guide them through the process. We even have patient mentors who are patients who’ve been on, on Keveyis for a number of years who will work with patients, hold their hand, help them through sounding board as they get into their Keveyis therapy and get titrated to the right dose and deal with some of the early side effects.

Once again, you look at the revenue that we’ve generated with Keveyis has continued to to do extremely well In the acquisition of strong bridge. There was a CVR for Keveyis for 2023 of 40 million dollars we’ve been growing the product in a way that we triggered that CVR in the third quarter of the year.

Didn’t even take a full quarter, full year. Year to date, we’re at 42, and we grew beyond that, so we had a really good year with Keveyis in spite of a generic available for the entire year.

The other thing I wanted to talk about a little bit is our formulation technologies and our development pipeline. We have two different technologies, two different basically formulation chemistries, Xerisol, which is the way in which we develop Levothyroxine, our, our pipeline product, but also Gvoke, which is our lead product in our commercial business.

We’re able to take products that are not stable in solution. and make them stable liquids. Gvoke is stable at room temperature for 30 months. Which is very different. It used to always be a reconstitution of a, of a rescue kit. We also have a technology we call Xeriject, which is essentially a, an injectable paste.

A low viscosity paste that we can put in, in a pre filled syringe or an auto injector. And we basically can take large molecules, monoclonal antibodies that are delivered predominantly through IV, and we can administer them subcutaneously in a 15 second injection. The way we do that is by super concentrating the molecule and suspending it in our medium.

Once that, that medium is injected, our medium dissipates. All that’s left is the drug substance. And the drug substance reconstitutes using bodily fluids. Very elegant chemistry. Really tomorrow’s technology. And when you look at What we’re able to do for products, for example, going back to Xerisol for a second Levothyroxine, huge product used, 100 million prescriptions a year it’s a daily oral, and a significant percentage of these patients do not do well with gastrointestinal side effects, a lack of absorption and widely varying blood levels.

What we’re building is a once weekly liquid stable formulation that we can put in a pre filled syringe or an auto injector or a dial a dose pen. And patients can use whatever dose is necessary in one device. And we estimate that there’s close to about 25 or 30 percent of the total population that have one or more of those issues.

That we can bypass the gut. We can do it for a week at a time. And we can smooth out blood levels over time. If you look at pricing and you look at that market, even at today’s pricing that segment could be worth anywhere from one to two billion dollars. We’re completing, we’ve completed enrollment in our phase two trial and we should have data on phase two which will confirm the conversion ratio from oral to liquid and we’ll go to the FDA in the second half of the year.

with a proposed Phase 3 program. We hope to get Phase 3 started sometime in the first half of 2025. Going, going back and forth, sorry about that, but if you look at Xeriject, I wanted to talk briefly about the Amgen deal that you may have seen we signed a couple days ago, yesterday, or announced yesterday.

What we’re able to do is we’re working with their Horizon product, which is Tepeza. It’s a multi billion dollar franchise, and we’re going to turn that IV product into a subcutaneous 15 second injection. There’s a bunch going on on this slide, but the, the, if you go to our website and you look at the, the video that’s on there, you’ll see that it is a very elegant process where Our low viscosity liquid is injected, dissipates, all you’ve got left is the actual drug substance.

We can build any number of different products that are currently IV, we can, we can turn them into sub Q.

One of the questions we get all the time is, everybody’s familiar with Halozyme, how does it compare? Halozyme is still an infusion, it, good, good, good in technology. Very helpful in terms of the administration of drugs. You can move from IV to a push infusion, but you’re still in, in the office. You still have an office procedure.

Our goal is to get these patients home and give them something they can self administer in the home. Less, less costly, less burdensome and equally effective at getting the drug substance into the body. One of the things that’s even just as critically important is all of our technologies and everything we do is supported by an incredibly extensive patent estate, both U.S. and Europe or around the world. And our products are covered, our technology covers products into the 2030s late 2030s. So any drug we work on is going to have a robust patent estate behind it.

The team that we’ve assembled for at Xeris is a team that’s been together for a long time. In one version or another, we’ve been together in multiple companies for anywhere from 20 to 30 years. So we’re, we’re a very experienced team. We know what we’re doing and we think we’re building a very, very important enterprise.

And in conclusion, if you look at the company and you look at the three pillars that we’re building we’re, we’re fundamentally a formulation technology company built on technologies and chemistry that is adaptable in many different situations across multiple types of products. We have a growth engine in our commercial business with Gvoke, Recorlev, and Keveyis that is the core of our forward looking business.

And we have the ability to partner our technologies with big companies to help them move patients from office based procedures into the home. We also have a deal with Regeneron that we’re working on a number of their pre pre clinical and commercial assets in order to do the same thing for them. We hope that that translates into equally beneficial for both companies, partnerships and licensing deals down the road.

All basically focused on making a, a big difference in patient lives, patient’s lives. We’re either saving lives or we’re changing lives, which is our mission at the end of the day. And we think we’re building a pretty interesting enterprise in order to do that. So I think I’m on time and we’ll open it up to questions.

Host: On time to the second, actually. Thanks Paul. Any questions from the audience?

I can kick us off with one, something that you said towards the end and also you’ve been touching on through your presentation about the Regeneron program. Is there any, can you tell us when we can expect any update on, on that program?

Paul Edick: No, we just, we just started the Regeneron program not even a year ago.

The things that we work on, the formulations that we do, we go through a, a numerous cycles, excuse me, numerous cycles of formulation for any particular product we’re working on. We might do 100 to 150 different formulations in several cycles. And as you saw on the one slide, there’s several elements to that, including spray drying stages, et cetera.

That takes many months. We’re in that process. We’re late in the, in that process with both assets we’re working on so far. But it’ll be a while yet before there’s anything, anything conclusive. Yeah.

Host: And shifting gears a little bit, you talked about your levothyroxine phase two study. And that you expect to start in second half of 2024.

What does good data look like?

Paul Edick: The phase two study is, is we originally went to the FDA with a phase one healthy volunteer study that basically was to determine the, the conversion ratio from oral to liquid. And we showed a statistical analysis based on a couple of different dosages that that was about four to one.

This phase two study is in actual patients on levothyroxine that is designed to confirm that ratio that conversion ratio. So is it four to one? Is it three to one? Is it five to one? So we’ll get that data and we’ll be able to go to the FDA with a confirmatory study that will inform a phase three program.

The other thing that is interesting about that study is we’re doing it in our target is patients who are stable on levothyroxine today. Yeah. What is really reinforcing the purpose for building the drug is those patients are really hard to find. So the screen failure numbers are pretty high because there are very few people who are actually stable on today’s Synthroid, for example.

Which is the reason we’re building the, the once weekly subcutaneous drug in the first place. So that, that is reinforcing of the need for the drug. We’ll have the conversion ratio and we’ll go to the FDA with proposed phase 3 program. Yeah.

Host: And also, thinking about your strategy a little at a higher level, is M&A a part of your strategy at all or do you believe in More of a stand alone approach.

Paul Edick: Both. So if you look at our history, we developed Gvoke and we bought a company called Strongbridge, which got us Keveyis and Recorlev. So, our go forward strategy is to build all three pillars. We want to drive our commercial business we can drive that business by way of developing more products in our own pipeline with our technologies.

such as levothyroxine. We are focused on potential acquisitions in order to add to our pipeline and most importantly our commercial business through acquisition. And those partnerships allow us to generate incremental revenue to do all of the above. Yeah.

Host: And given all your updates recently, your stock has been performing well and including the announcement recently on Amgen, what do you think investors should be focused on in the near

Paul Edick: term?

Well, I think, I think very importantly, what, what we’re hearing from investors is that we’re executing and, and what we say we’re going to do, we do. And I think that’s becoming more and more evident to investors and they should continue to focus on all three pillars. How are we doing in terms of driving our commercial business?

And we’re, we’ve had six great quarters in a row. I think people are finally starting to realize and, and see that. That we are executing. We said what we’re going to do and we did it. We’re developing Levothyroxine and hopefully we’ll bring more products forward in the future. And we’ve said all along, these technologies are, especially Xeriject and the ability to move from IV to sub Q is critically important for a lot of companies that have, that are in a very competitive space where sub Q is almost a cost of entry these days that we’re going to continue executing there and the engine deal proves that we are and that I think that is great validation of not only our technology but our ability to actually execute.

So what we say to investors is pay attention to all three. And we said we were going to be cash flow positive in the fourth quarter. We are. We said we’re gonna have a modest, you know, relatively small burn in 24. We’ll finish the year with enough cash to run our business and do everything we need to do.

And they should pay attention to that because we will.

Host: And that kind of leads me to my next question. You announced your preliminary 2023 results recently and also your cash flow positive for the first time. What sort of was the journey to this point and what should we look forward to in 2024 ahead of guidance.

Paul Edick: So we haven’t done. We haven’t done any guidance for 2024 yet.

We’ll provide 24 24 guidance with our earnings fourth quarter and full year in early March. But what we have said is we will have, like I said, you know, a tiny bit of burn. We’re going to continue to invest in our business. We’re not going to be stagnant. But we will finish 2024 with plenty of cash to, to run our business, meet all of our obligations, continue to grow our business.

We have said that we’re going to continue to grow our products. Keveyis, you know, remains a product that has pressure because there is generic competition. But we’ve been pretty successful at defending that business so far. We’re going to continue to try to defend that business. And record love is just in the early stages of growth.

It’s going to continue to grow. And we have, we’ve said publicly that we will continue to grow our business from a revenue perspective in 24. And we’ll be more specific about that in March.

Host: Wanna send out a last call for questions. If not, I think I want to turn back to you, Paul, for any closing remarks.

Paul Edick: No, just thank you very much for having us. We appreciate it. We appreciate you holding the special slot for us. So we are unencumbered by other presentations throughout the week. There’s no, there’s no noise that we have to break through. We’re all by ourselves and we really appreciate that.

Host: Thank you.

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