Xeris Biopharma Holdings - Earnings Call - Q4 2024

Executive Summary

• Record Q4 2024 total revenue of $60.1M (+35% YoY) and net product revenue of $57.0M (+34% YoY); Recorlev delivered $22.6M (+131% YoY), Gvoke $23.3M (+25% YoY), Keveyis $11.1M (-21% YoY).
• Gross margin reached 84% in Q4, up ~100 bps YoY, aided by favorable mix; adjusted EBITDA turned positive at $8.3M; GAAP EPS improved to $(0.03) from $(0.11) in Q3.
• Management issued FY 2025 revenue guidance of $255–$275M; at midpoint, >30% YoY growth; expects adjusted EBITDA to remain positive, gross margin to improve modestly, SG&A+R&D to grow mid-to-high single digits.
• Catalyst: acceleration in Recorlev patient adds and sustained Gvoke prescription growth; Beta Bionics milestone contributed $3.0M in Q4; company emphasized no need to dilute shareholders given operating trajectory.

What Went Well and What Went Wrong

What Went Well

• “We exceeded our full year guidance with total revenue of over $203 million, growing 24% versus last year,” driven by Recorlev and Gvoke; Recorlev grew 118% for the year to $64.3M; Gvoke grew 24% to $82.8M.
• Q4 gross margin of 84% (+100 bps YoY) and positive adjusted EBITDA; management expects adjusted EBITDA to remain positive going forward.
• 2025 guide implies >30% growth at midpoint ($255–$275M), underpinned by record Recorlev patient referrals and steady Gvoke prescription gains; Beta Bionics milestone added $3.0M in Q4.

What Went Wrong

• Keveyis Q4 revenue declined 21% YoY to $11.1M, reflecting reduced product shipments and ongoing reimbursement/net pricing pressure, though patient demand held steady.
• Q3 COGS as % of product revenue rose to 25.7% due to a $3.6M Gvoke component write-off from capacity expansion; gross margin rebounded in Q4 but highlights manufacturing transition costs.
• GAAP net loss persisted for FY 2024 ($(54.8)M); interest expense remains elevated ($30.5M FY), highlighting leverage in capital structure despite improving operating performance.

Transcript

Operator (participant)

Good morning and welcome to the Xeris Biopharma Fourth Quarter and Full Year 2024 Financial Results. My name is Harry, and I'll be your operator today. All lines are currently in listen-only mode, and there will be an opportunity for Q&A after management's prepared remarks. If you would like to enter the queue for questions, please dial star followed by one on your telephone keypad. I would now like to hand the call over to Alison Wey, Senior Vice President of Investor Relations and Corporate Communications. Thank you, you may proceed.

Allison Wey (SVP of Investor Relations and Corporate Communications)

Thank you, Harry. Good morning, everyone. We appreciate you joining our call today. I'm joined by John Shannon, our CEO, and Steve Pieper, our CFO. This morning, we issued a press release with our detailed results, which can be found on our website. After our prepared remarks, we'll open the lines for questions. Before we begin, I'd like to remind you that this call will contain forward-looking statements concerning the company's future expectations, plans, prospects, 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 file. Any forward-looking statements in this call represent our views only as of the date of this call and subject to applicable law. We disclaim any obligation to update such statements.

Please note some metrics we will discuss today are presented in a non-GAAP basis. We've reconciled the comparable GAAP and non-GAAP figures in our earnings release. Let me pass the call over to John for opening remarks.

John Shannon (CEO)

Thanks, Alison, and good morning, everyone. 2024 was an unprecedented year of exceptional commercial execution, focused pipeline development, and disciplined capital management. I want to thank our employees, the healthcare community, and the patients we serve for helping us to meet or exceed all of our goals consistent with our journey to become a fast-growing, self-sustaining biopharmaceutical company. Our focus, execution, and performance in 2024 has positioned Xeris perfectly for what I will call a transformational year in 2025. Let me start with the highlights for 2024. I will cover the full-year results at a high level, and Steve will provide more detail on Q4 and full year in his remarks. I'm proud to report that we exceeded our full-year guidance with total revenue of over $203 million, growing 24% versus last year, led by strong demand for Recorlev, Gvoke, and continuing durability of the Keveyis brand.

Across all three products, the commercial team continued to execute our plans, resulting in 28% product revenue growth for the full year 2024 versus 2023. Looking specifically at each of our products, let's start with Recorlev, which is rapidly becoming our flagship brand. We saw a record number of referrals and new patient starts, especially in the back half of the year, representing more than $64 million in total revenue in 2024, and an impressive 118% growth versus 2023. Our focused and targeted investments in Recorlev are paying off, and we see this momentum continuing as we enter 2025. Turning now to Gvoke, what a great year. This product continues to deliver steady, predictable growth. On a full year basis, Gvoke achieved nearly $83 million in revenue, an increase of 24% versus 2023.

We saw the same increase in prescriptions, totaling $265,000, coming from an increase in new prescribers as well as an increasing number of repeat prescribers. Next is Keveyis. The durability of this brand continues to impress. It maintains strong support in the medical and patient community, resulting in continued dedication to the brand. Keveyis ended the year with approximately $50 million in revenue for the full year. Although revenues declined 13% on a full-year basis, we ended the year with approximately the same number of patients on therapy as we started with. We achieved this principally by continuing to find new PPP patients and support their journey to brand. In 2024, our partnership revenue held steady with approximately $6 million in other revenue as we continued to successfully deliver for our technology partners. Moving on to our pipeline, specifically XP-8121, our phase three, once-weekly sub-queue product for hypothyroidism.

In 2024, we successfully completed our phase two study for XP-8121 and generated the data we needed to progress into phase three. In preparation for phase three, we advanced the development of our final drug formulation and device design and had ongoing discussions with the agency to ensure alignment on critical aspects of the clinical study and a path to an eventual regulatory approval. As I move on to 2025, I want to reiterate that we remain focused on the three strategic priorities I outlined back in August when I became CEO. As a reminder, those are: one, we will drive rapid and sustained growth of our commercial products. Two, we will remain financially disciplined, maintaining a healthy balance sheet and funding our growth opportunities while, importantly, not diluting shareholders. Finally, we will enhance our communications and transparency with you, our stakeholders.

With that as a backdrop, let's talk about 2025. Clearly, our Xeris business has reached a whole new level of growth and momentum. As such, I'm excited to share that we are guiding total company revenue between $255 million and $275 million in 2025, representing more than 30% year-over-year growth at the midpoint. Let me repeat that. That's more than 30% year-over-year growth at the midpoint. Also, in our press release, for the first time, we reported adjusted EBITDA, which turned positive in the fourth quarter and will continue to be positive going forward. With our exceptional top-line revenue growth, attractive and improving margin profile, and planned investments to both drive our revenue growth and develop XP-8121, we believe adjusted EBITDA is the right metric to demonstrate we are a thriving commercial biopharmaceutical company capable of fueling its own growth.

The focus and efforts that will enable such a transformative 2025 are fundamentally the same things that contributed to our exceptional growth in the second half of 2024, starting with Recorlev. Recorlev is emerging as the right product at the right time with what we believe is a best-in-class profile to safely and effectively normalize cortisol levels in the treatment of endogenous hypercortisolemia in adult patients with Cushing's syndrome. The hypercortisolemia marketplace is expanding rapidly in light of new evidence that sustained high levels of cortisol could be a factor in stubborn forms of many chronic medical conditions, including diabetes and cardiovascular disease. As such, more and more people are being screened, tested, and diagnosed with hypercortisolemia and ultimately treated. As a reminder, we shared our view of this emerging opportunity last year and rapidly increased our investments in our sales and patient support organizations by 50%.

We've already begun to see the impact of these investments and expect that they should fuel continuing growth for the foreseeable future. Moving to Gvoke. Of the 15 million people on insulin or sulfonylureas, we estimate that only about 1 million have a prescription for a life-saving therapy such as Gvoke HypoPen. We continue to chip away at the total addressable patient population of 14 million people still unprotected. Our Gvoke sales team is working every day on behalf of these patients who, based on the medical guidelines, should be protected but are not. Specifically, our team, the Gvoke team, is focused on helping physicians to understand and become more compliant with the new medical guidelines. In January, we announced a multi-year strategic partnership with ADA to reinforce the importance of prescribing a ready-to-use glucagon, such as Gvoke HypoPen, for those at high risk for hypoglycemia.

With such a large untapped market and Gvoke's patent protection to 2036, we expect Gvoke to steadily grow for many years to come. On to Keveyis. The durability of this brand remains impressive, and we expect that durability to continue into 2025. We plan to continue our efforts to find new PPP patients every week and get them on Keveyis so they can enjoy the benefits of therapy. Just a brief mention of our technology partner programs. We remain committed to our technology platform and are actively working on current programs and seeking new partnerships. We continue to deliver for our partners, meeting their technical and target product profile requirements. We are confident that we will continue to deliver in this manner for our current and future partners.

However, because this area of our business is largely dependent on each partner's business objectives, we'll only provide updates as they advance and become more meaningful contributors to our business results. In 2025, we see our partner revenue continuing to deliver results similar to the past couple of years. Moving on to XP-8121. As we stated before, we are really excited about this product and the unmet medical need it can address in the hypothyroidism market. What is interesting about hypothyroidism treatment is that there has been no real innovation or research for decades in this metabolic condition affecting approximately 20 million people in the U.S.

We estimate that approximately 20% of these patients do not consistently meet their clinical goal of normalizing thyroid hormone levels, and they cannot reach their goals with oral forms of therapy for a multitude of factors, including certain GI conditions like celiac disease, to taking common medications such as proton pump inhibitors, all of which affect oral bioavailability. If approved, XP-8121 will be the first and perhaps only self-administered therapy that isn't affected by these challenges. We are taking a very planful development approach for XP-8121. We continue to have favorable engagement with the FDA and expect to provide a fulsome update mid-year. This update will further highlight the unmet medical need, the market opportunity, the phase three study design, as well as projected timing of our development program. Keeping in mind that our development of XP-8121 is enabled by our very own proven XeriSol technology.

Additionally, our commercial capability is highly leverageable, including our extensive endocrinology sales footprint and our proven patient, payer, and channel support capabilities. With that, I'm going to hand it over to Steve to review our financial results for the quarter and year and provide more details on our 2025 guidance.

Steve Pieper (CFO)

Thanks, John, and good morning, everyone. Our fourth quarter 2024 performance marked the end of a very successful year, and I can say that Xeris has never been financially stronger. This quarter, we ended with net product revenue of $57 million and total revenue of $60.1 million, increasing by approximately 34% and 35% compared to prior year. This is the 13th consecutive quarter with greater than 20% product revenue growth. On a full-year basis, net product revenue was $196.6 million and total revenue was $203.1 million, increasing by approximately 28% and 24% compared to prior year. Recorlev net revenue in the fourth quarter was $22.6 million, a 131% increase compared to the same period in 2023. This growth was driven by the average number of patients on Recorlev, increasing 123% from the same period in 2023.

For the year ending 2024, Recorlev net revenue was $64.3 million, a 118% increase compared to 2023. On a sequential basis, Recorlev net revenue increased by a record $5 million in the fourth quarter. The strategic investments we made in the Recorlev commercial organization in mid-2024, coupled with favorable and evolving market dynamics, helped drive the accelerated revenue gains we saw in the back half of 2024. Gvoke net revenue was $23.3 million for the quarter and $82.8 million for the year, representing a 25% and 24% increase compared to the same period last year. This growth was primarily driven by an increase in total Gvoke prescriptions, growing 18% and 23% compared to prior year. Keveyis net revenue for the quarter and year-to-date was $11.1 million and $49.5 million. In the fourth quarter, we saw average patients on Keveyis hold relatively steady compared to the third quarter.

We also generated $3.1 million in other revenue in the fourth quarter and for the year, $6.4 million. In the fourth quarter, we successfully formulated a unique XeriSol formulation of glucagon for Beta Bionics, resulting in the recognition of $1 million in revenue. Moving on to gross margin. Gross margin was 84% in the fourth quarter, a 1% improvement compared to the same period in 2023. This improvement was driven by a favorable product mix. For the year, gross margin was 82%, relatively flat to prior year. Improvements to our gross margin in the year from a favorable product mix were offset by previously reported Gvoke capacity expansion costs in the third quarter 2024. Research and development expenses were $6.1 million for the fourth quarter, relatively flat compared to the same quarter 2023. For the year, research and development expenses were $25.6 million, a $3.2 million increase compared to prior year.

This increase was to support XP-8121 and increased personnel costs for the continued investment in our technology platforms and partnerships. Selling, general and administrative expenses were $40.1 million and $163.5 million for the quarter and year, respectively, an increase of 7% and 12% compared to the same period last year. These increases were driven by personnel costs, primarily due to the Recorlev commercial expansion. In addition, for the year, we incurred a one-time charge of $6.1 million in the third quarter related to the CEO succession plan and related corporate restructuring. Rounding out our 2024 results, in the fourth quarter, we continued to maintain a very healthy cash position, generating over $2 million in cash and ending the year with $71.6 million. Looking ahead to 2025, and as we announced earlier today, we expect total revenue to be between $255 million-$275 million.

Using the midpoint of this guidance, total revenue would grow over 30% annually, exceeding our growth rate in 2024. Primary drivers of this growth in 2025 will be Recorlev and Gvoke, and we expect Keveyis will continue to hold its own. We do anticipate contribution from our partnerships, which we believe will be consistent with the revenue generated over the past few years. For Recorlev, we continue to see a growing pipeline of referrals and expect another record number of patients on therapy in the first quarter. Over the course of 2025, we expect patient demand to grow at or above what we drove in the second half of 2024. For Gvoke, we expect steady prescription growth as we endeavor to serve the 14 million patients that are unprotected today.

Rounding out the products for Keveyis, we may see continued pressure on reimbursement and net pricing, similar to what we experienced in 2024. However, we expect patient demand to remain steady as we work to keep existing patients on therapy and add new patients to Keveyis. Moving down the P&L, we expect a modest improvement in 2025 to our already attractive gross margin. This improvement, we expect, will be driven by a favorable product mix. We anticipate SG&A and R&D expenses, which in total were approximately $189 million in 2024, to only increase modestly, with a growth rate in the mid to high single digits compared to 2024. Our second half 2024 Recorlev commercial expansion and continued investment in this brand, combined with the incremental investment supporting XP-8121, will primarily drive the increases in SG&A and R&D, respectively.

Given our strong top-line growth expectations, our healthy and improving gross margin profile, our disciplined expense management, and strong cash position, it is clear that Xeris will turn an important financial corner in 2025 that will position the company to execute on its priorities without the need to dilute shareholders. Furthermore, in keeping with our commitment to greater transparency, we are now reporting on adjusted EBITDA. This is not only an appropriate financial measure for this stage of the company's evolution, but more importantly, we believe this is an appropriate measure to assess the strength of the company's true operating performance. It is our belief that as we report on this metric moving forward, it should provide confidence that the company is financially healthy with sufficient capital to fund our priorities.

As mentioned in this morning's press release, we reported adjusted EBITDA of over $8 million in the fourth quarter, and we anticipate that Xeris will be adjusted EBITDA positive on a go-forward basis. In closing, Xeris has never been financially stronger. Our accelerating revenue growth, coupled with our attractive and improving margin profile and disciplined capital allocation, will result in a financially transformative 2025 for Xeris. With that, Operator, please open the line for questions.

Operator (participant)

Thank you. To ask a question, please dial star followed by one on your telephone keypad now. If you change your mind and would like to exit the queue, please dial star followed by two. Finally, when preparing to ask your question, please ensure that your phone is unmuted locally. Our first question today will be from the line of Chase Knickerbocker with Craig-Hallum. Please go ahead. Your line is open.

Chase Knickerbocker (Senior Research Analyst)

Good morning. Thanks for taking the questions and congrats on a record quarter here. First, kind of just on the Recorlev strength, just help us better characterize, I guess, specifically kind of the strength there of prescribers who are already writing. What kind of growth are you seeing from them? And then what kind of growth in overall writers are you seeing? Basically, how much of this growth is going deeper with existing writers and kind of benefiting from their growth in prescriptions as people have kind of just a better appreciation of this disease state versus you guys successfully expanding your writer base?

John Shannon (CEO)

Hey, Chase, it's John. It's both. We continue to expand our writer base, but we also are getting more and more writers writing more patients. As they get comfortable in utilizing Recorlev, they begin to add more patients. We have both happening. With the expansion of the sales force, that's also allowing us to get to new patients. It's coming from all places.

Chase Knickerbocker (Senior Research Analyst)

Do you get a sense of kind of what the increase in year-over-year kind of prescriptions in kind of hypercortisolemia is in the market? Do you have any kind of sense?

John Shannon (CEO)

We don't. I mean, as you know, there's no data out there that supports exactly where all these patients are. It is hard to kind of figure that out, but obviously, that's why you have people in the field so that you can find these patients.

Chase Knickerbocker (Senior Research Analyst)

Yep, got it. Obviously, what you're seeing so far on Q1 kind of gives you the confidence for what's a really strong guide here. Anything else you can give us just from deeper than the kind of Recorlev pipeline and kind of incrementally what you're seeing even better than Q4, that sort of thing? Lastly from me on Keveyis, how should we think about it on a year-over-year basis in 2025? Should we be thinking about kind of the same decline as what we saw in 2024, or should we be kind of annualizing what we saw in Q4? Thanks.

John Shannon (CEO)

I think to your first question, we're trying to really point what we saw in the back half of 2024, we anticipate we're going to see for all of 2025. We're seeing this acceleration in growth of our business that we're confident we're going to be able to do in 2025 and even better than we did on a full year basis for 2024. It is a lot of the same stuff that we've been executing on. For Keveyis, I think Keveyis may have found maybe its bottom, but we do not know exactly what's going to happen, but it looks like we're really holding our own, especially as we hold on to patients.

Chase Knickerbocker (Senior Research Analyst)

Great. Thanks, guys.

Operator (participant)

Our next question will be from the line of Oren Livnat with H.C. Wainwright. Please go ahead. Your line is open.

Oren Livnat (Managing Director and Senior Equity Research Analyst)

Thanks for taking the question. Just first, I want to just clarify that last commentary on Recorlev growth. Just so we understand, when you talk about growth rates consistent or better than what we saw in the latter part of 2024, are you talking about year-over-year patient add rates? I mean, that was in the mid-125% range. Is that what we're talking about, or are we just talking about sort of sequential average quarterly revenue growth?

Steve Pieper (CFO)

Yeah, probably not on a growth rate percentage, right, because it's off of a higher end now, right? But I think on an absolute, from an absolute perspective, I think what we saw in the back half should, we expect, will continue throughout 2025. We've reached kind of a new trajectory, and this thing isn't slowing down, Aaron. So I would think about it more from the underlying number of patient adds rather than a growth percentage.

Oren Livnat (Managing Director and Senior Equity Research Analyst)

Okay. That makes sense. In general, have there been any changes to access in that market? Obviously, the market itself is growing, but is there anything changing within it with regards to off-label prescribing or lack thereof, changes in managed care positioning within that space? Also, how are you doing on sort of post-initiation interaction with patients and offices as we think about patients titrating up over time? Is that something you guys are proactively interacting with offices and patients to sort of push them to continue to check levels and optimize therapy? I have one follow up there.

John Shannon (CEO)

On the first part of your question, no changes in reimbursement. Everything's pretty much the same. Obviously, there's a great opportunity, and once a patient is on, is to help them and keep them on. We continue to invest in that and work on that as an important aspect of helping to drive our growth.

Oren Livnat (Managing Director and Senior Equity Research Analyst)

Okay. Just lastly, obviously, you guys are really excited about 8121, and we've all been sort of waiting for a while to get that clarity. It sounds like you're still planning to give us more mid-year. Pardon me. Are you able to talk about now, maybe if there's anything still TBD on that front between now and mid-year updates, or is it just about preparing how you want to roll out the reveal there, so to speak?

John Shannon (CEO)

We're still having a dialogue with the agency. As we planned, this is all part of our plan here was how we go to the agency, how do we work out the clinical, the device, and the path to regulatory approval was a process that we've been running. We'll be prepared to talk more about exactly where that all lands by mid-year.

Oren Livnat (Managing Director and Senior Equity Research Analyst)

All right. Appreciate it. Great quarter and guidance. Thanks.

Steve Pieper (CFO)

Thanks, Oren.

John Shannon (CEO)

Thanks, Oren.

Operator (participant)

The next question today will be from the line of Glen Santangelo with Jefferies. Please go ahead. Your line is open.

Glen Santangelo (Senior Healthcare Analyst)

Yeah. Thanks for taking my questions. Just a couple of quick financial ones. Steve, I think you said that gross margin was 84% in the fourth quarter, and that was up 100 basis points. Recognizing sort of what happened in the third quarter, when we look at that gross margin expansion in fourth quarter, is that the right way to think about 2025 based on the mix assumptions that you're sort of making for 2025?

Steve Pieper (CFO)

Yeah. Yeah. I think that's a good starting assumption right there, Glen, moving forward, plus or minus.

Glen Santangelo (Senior Healthcare Analyst)

All right. But then moving on to your expenses, I mean, it seems like I think you used the word that you expect your operating expenses to be up only modestly when looking at R&D was flat in Q4 and SG&A was up about 7%. So how should we think about that term sort of up modestly? Because it starts to seem like there's a lot of leverage in the model, obviously, which you know. But just sort of help us put those operating expenses into context. Thanks.

Steve Pieper (CFO)

Yeah. I think you hit the nail on the head, Glen, that we are creating some leverage in the P&L with our operating expenses. We continue to invest in Recorlev, and we had some adds to SG&A in the second half as a result of the Recorlev expansion. You'll get the full year effect of that in 2025. I think we'll invest incrementally in 8121. The real spend, though, it's worth pointing out, the real bolus of spend when you start talking about clinical spend will be more of a 2026 phenomenon.

Glen Santangelo (Senior Healthcare Analyst)

Okay. Thanks, Bob.

Steve Pieper (CFO)

Sure.

Operator (participant)

The next question will be from the line of David Amsellem with Piper Sandler. Please go ahead. Your line is open.

David Amsellem (Managing Director, Senior Research Analyst Biotechnology)

Thanks. Just a couple for me. Number one is looking at one of your competitors with Corlyn, there's significant growth in sales and marketing spend for that company. A lot of it, of course, is supporting this expanded market and expanded understanding of the prevalence of hypercortisolemia. I guess that sort of begs the question, how are you thinking about the long-term spend to support Recorlev? Do you expect significant headcount expansion in terms of the sales force? Do you expect significant overall promotional growth and promotional spend to support the product? Just help us understand that as our understanding of the market evolves and we have greater clarity on the extent to which this is a much bigger market compared to our understanding of it historically. That's number one.

Number two, can you just remind us how we should think about the durability and exclusivity runway for Recorlev? That would be helpful. Thank you.

John Shannon (CEO)

Wow. A lot to unpack there. We see the expansions both of Corcept and Recordati in this space as really adding to the opportunity, raising awareness, raising testing. We'll get more and more people identified and treated. We see that all as positive and adding to the tailwinds that we're all enjoying in this space. I think that's important that that continues, and it's helping all of us really find these patients and get them on therapy. That is all the positive and adding to the positive momentum in the space. What was the second part? Somebody.

Steve Pieper (CFO)

Exclusivity on Recorlev.

John Shannon (CEO)

Oh, exclusivity on Recorlev. I think our patents are on Recorlev goes to 2040, and we have orphan exclusivity through 2029, 2028.

Steve Pieper (CFO)

2028, end of 2028.

John Shannon (CEO)

Again, a lot of runway here, a lot of opportunity to continue to advance this market. The other piece of this is we have Recorlev. We think Recorlev is, as I said in my remarks, the right product at the right time. I think we have the best in class in terms of normalizing the synthesis of cortisol, which is a very important aspect to treating these patients. I think it's just perfect timing for us.

David Amsellem (Managing Director, Senior Research Analyst Biotechnology)

Headcount expansion, what's your expectation longer term?

John Shannon (CEO)

Longer-term investments in Recorlev will continue as we see the opportunity, and we will continue to advance our investments in here because, like we said, we have plenty of runway and a really accelerating market that says, "Yeah, invest." How we invest, I'm not going to talk about exactly how that works out over the next several months, but we definitely see that as one of our key priorities of investment.

David Amsellem (Managing Director, Senior Research Analyst Biotechnology)

All right. Thanks.

Operator (participant)

The next question will be from the line of Leland Gershell with Oppenheimer. Please go ahead. Your line is open.

Leland Gershell (Managing Director and Senior Analyst, Biopharmaceuticals)

Great. Good morning. Great to see the positive EBITDA and thanks for taking our questions. Just two from us. Just first, John, just wanted to ask with respect to Gvoke, given the updated guidelines, if you could just maybe go into some detail on maybe how you're leveraging that update with respect to growing the product. Also want to ask on 8121, as we look forward to the unveiling of the broader plan mid-year, would you be able to say that you at least intend to enter the kind of into phase three potentially by the end of the year? Thank you.

John Shannon (CEO)

Yeah. Let me start with Gvoke and the guidelines. The guidelines are pretty clear, and our job and our team is really focused on not only raising awareness of the guidelines, but also helping clinicians' offices become more compliant with the guidelines so that we can get the 14 million people today that are not protected, they're unprotected, and should be protected based on the guidelines. Our focus in those offices every day is to help those offices advance their practice in a way that can get these people protected. Our Gvoke team is doing that on an everyday basis. We see that as a long-term opportunity. It's going to take effort, and we continue to invest in that effort. XP-8121, I think Steve pointed out, yeah, we're making investments this year. They're not super large investments.

They're more phase three readiness so that we can get started in the clinic. Probably our thinking is sometime in 2026. Yeah, it's more phase III readiness this year.

Leland Gershell (Managing Director and Senior Analyst, Biopharmaceuticals)

Got it. Thanks very much.

Operator (participant)

The next question will be from the line of Mazahir Alimohamed with Leerink Partners. Please go ahead. Your line is open.

Mazahir Alimohamed (Biotech Equity Research Analyst)

Hi. This is [Mazi] on for Ruanna Ruiz. Just a couple from us. I guess firstly, as we think about the expansion with Recorlev and the recent sales expansion, is there any thoughts in terms of 2025 of increasing the sales force or any changes to the commercial strategy?

Steve Pieper (CFO)

I think sitting here today, we feel pretty confident with what we have in terms of our commercial footprint for Recorlev. That being said, we've had two expansions over the last 15 months. We'll be opportunistic as the market dynamics unfold. If we see an opportunity to invest incrementally in Recorlev this year, we'll do that. Right now, sitting here today, no, we don't have any firm plans for an expansion.

Mazahir Alimohamed (Biotech Equity Research Analyst)

Great. Thanks. Last one for me. On 8121, as we think about kind of moving through the trials and into a potential commercialization phase for that, how would the synergies of your current existing products play a role in that? Is that something that you guys could build upon as you think about commercial, kind of taking advantage of your already strong footprint within the endocrine space?

John Shannon (CEO)

That's exactly it. That's why we're another reason why we're so excited about XP-8121 is it fits perfectly with our endocrinology footprint across Gvoke and Recorlev for that matter. We have all the capabilities from patient support to channel and pharmacy. It is a perfect fit for us, and we'll be able to slide it right into our existing footprint. Another exciting reason. The other thing that's exciting about it, it's our own organic development program. It's XeriSol technology, which we know how to use, we know how to work with, and proven in our Gvoke product. Again, those are two things that really get us excited about our ability to get this to market and be successful once we get there.

Mazahir Alimohamed (Biotech Equity Research Analyst)

Great. That makes a lot of sense. Thanks for the time.

Operator (participant)

As a reminder, for any further questions, please dial star followed by one now. Our next question will be from the line of Oren Livnat with H.C. Wainwright. Please go ahead. Your line is open.

Oren Livnat (Managing Director and Senior Equity Research Analyst)

Hey, thanks for the follow-ups. I just wanted to clarify on the guidance. You talked about sort of sustained positive EBITDA. Are you able to put a stake in the ground right now and say that for the full year or before year-end that you'll be cash flow break-even this year? On Recorlev, just wanted to check on seasonality. Obviously, orphan drugs are subject to pretty material gross-to-net changes in Q1 typically. Obviously, you're talking about really strong patient growth and overall revenue growth there. Can you just talk about the cadence and whether we should expect sequential growth quarter-over-quarter in net revenue, you think, in Q1, or like most competitors, should we see maybe a divot before we accelerate into the year? Thanks.

John Shannon (CEO)

All right. Let me take the Recorlev one, and then I'll throw Steve the first question you asked. Like every company that's in, especially in the rare disease space, there are resets and things that go on in the first quarter. You see a little bit of slowdown in the first January, February timeframe, and that starts to rebound towards the end of the quarter. Q1 is always a little bit slower, and then it picks back up. I don't really call it a seasonality. It's just it's all about the payer resets. We see that across all of our products, but specifically, more importantly, Recorlev and Keveyis probably feel it the most.

Steve Pieper (CFO)

Oren, on your cash question, I think you probably picked up on the fact that we're not really guiding on cash going forward. Let me just start with one. We have plenty of cash to operate the business moving forward. Hopefully, clear from the guidance we provided this morning that the company is on really solid financial ground with a really promising outlook for 2025, right? 30% revenue growth at the midpoint of our guidance, already healthy and improving gross margins and modest operating expense growth. Obviously, adjusted EBITDA moving forward, positive moving forward. I think what we're saying here is we're transitioning from a kind of a cash burn story that we have been historically, and we want to focus investors on the growing strength of our P&L and the operations of the business.

That's kind of answering your question without answering it, but I think what's important is that we feel really good about where this business is heading, particularly in 2025.

Oren Livnat (Managing Director and Senior Equity Research Analyst)

Yeah. All right. Thanks so much.

Operator (participant)

Thank you. This concludes Q&A. I will now hand the call back to John Shannon for closing remarks.

John Shannon (CEO)

Thank you. Thank you, everyone, for your questions. As you just heard, the continued momentum of our commercial business, our exciting pipeline, along with our unrelenting focus on execution, will create even more value for our patients and our shareholders and set Xeris up for a transformational 2025. Thank you.

Operator (participant)

Thank you. This concludes the Xeris Biopharma Holdings Fourth Quarter and Full Year 2024 financial results. You may now disconnect your lines.