Xeris Biopharma Holdings, Inc. — FY2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. This is an annual report, not a standalone fourth-quarter report; the supplied filing does not provide a clear Q4-only financial summary. Financial figures below are in U.S. dollars.
Business context
Xeris is a commercial-stage biopharmaceutical company with three marketed products: Gvoke for severe hypoglycemia, Keveyis for primary periodic paralysis, and Recorlev for endogenous Cushing’s syndrome. It also develops products using its XeriSol and XeriJect formulation platforms and pursues pharmaceutical partnerships. Recorlev was approved in December 2021 and launched in 2022. Keveyis entered the portfolio through the October 2021 Strongbridge acquisition, so full-year 2022 and 2021 product revenues are not directly comparable.
Key financial results
| Metric | FY2022 | FY2021 | Change / context |
|---|---|---|---|
| Total revenue | $110.2 million | $49.6 million | Up 122.3% |
| Net product revenue | $109.3 million | $49.3 million | Up 121.7% |
| Gvoke revenue | $52.5 million | $38.9 million | Up 35%; prescriptions grew 54%, partly offset by lower net pricing |
| Keveyis revenue | $49.3 million | $10.4 million | 2022 includes a full year following the 2021 acquisition |
| Recorlev revenue | $7.4 million | None reported | Launched in 2022 |
| Operating loss | $81.9 million | $115.2 million | Loss narrowed by $33.2 million |
| Net loss | $94.7 million | $122.7 million | Loss narrowed by $28.1 million |
| Net loss per share | $0.70 | $1.55 | Basic and diluted |
| Operating cash flow | $(102.9) million | $(95.5) million | Cash used increased $7.4 million |
| Cash and cash equivalents | $122.0 million | $67.3 million | Also had $4.3 million restricted cash; no short-term investments at year-end |
| Total current assets / liabilities | $186.8 million / $73.6 million | $142.6 million / $79.0 million | Year-end 2022 current ratio approximately 2.5 |
| Long-term debt, net of issuance costs | $187.1 million | $88.1 million | Increase primarily reflects Hayfin financing |
Cost of goods sold, excluding intangible amortization, was $22.6 million; research and development was $21.0 million; selling, general and administrative expense was $137.7 million; and intangible amortization was $10.8 million. The filing does not present a headline gross-margin figure. Interest expense rose to $15.3 million from $7.2 million, mainly due to the Hayfin loan. A $1.4 million income-tax benefit was recorded in 2022.
Material changes and financing
- In January 2022, the company raised approximately $30 million gross through a private placement of common stock and warrants.
- In March 2022, it entered into a Hayfin credit facility, borrowing $100 million initially and the remaining $50 million delayed-draw amount in December. It used part of the proceeds to repay the prior loan, whose outstanding balance was $43.5 million.
- At year-end, principal outstanding was $150 million under Hayfin and $47.2 million on 5% convertible senior notes due 2025. Hayfin debt bears a floating rate; the stated effective rate, including debt-cost amortization, was 11.8%.
- Hayfin debt is secured by substantially all company assets, including intellectual property, subject to exceptions, and carries restrictive covenants. If the convertible notes remain outstanding on January 15, 2025, Hayfin maturity may accelerate to that date unless specified extension or financing conditions are met.
- Common shares outstanding increased to 136.3 million from 124.9 million. The company also had outstanding options, restricted stock units, warrants, convertible notes and contingent value rights that may dilute shareholders.
Outlook, commentary and risks
- Management said existing cash resources were sufficient for at least 12 months from the financial statements’ issuance date, while expecting continued net losses for at least the next 12 months. The company may need further financing; availability and terms are uncertain.
- Management plans to continue commercializing Gvoke, Keveyis and Recorlev and developing its pipeline. It planned to begin a Phase 2 dose-finding study of once-weekly subcutaneous levothyroxine candidate XP-8121 in 2023, following positive topline Phase 1 data in October 2022. This is a plan, not a guarantee of execution or success.
- Keveyis’s U.S. orphan-drug exclusivity expired in August 2022, and the FDA approved a generic version late in 2022. The company said its patent applications concerning Keveyis were pending on appeal.
- Recorlev has U.S. orphan-drug exclusivity through December 30, 2028, but competes with approved and off-label treatments. Acquisition-related contingent value rights could require payments if specified Keveyis or Recorlev milestones are achieved; the liability was $25.7 million at year-end.
- Key risks include ongoing losses and cash burn; dependence on product acceptance, pricing and reimbursement; generic and other competition; reliance on single-source or limited third-party manufacturers; clinical, regulatory and product-safety uncertainty; and possible dilution or constraints from financing and debt.
- The company reported that COVID-related customer access and supply-chain lead times affected its business, though it did not anticipate a supply interruption at the time of filing. Inflation, higher interest rates and geopolitical uncertainty could also affect costs and access to capital.
- KPMG gave an unqualified opinion on the consolidated financial statements. Management concluded disclosure controls and internal control over financial reporting were effective as of December 31, 2022; the auditor was not engaged to opine on internal-control effectiveness.
Most important facts for investors to verify
- Whether revenue growth continues after accounting for the Strongbridge acquisition, and whether Gvoke demand growth can offset net-price pressure.
- Keveyis sales, pricing and retention following generic approval and the loss of orphan exclusivity.
- Recorlev’s launch trajectory, payer access and progress toward the sales milestones tied to contingent value rights.
- Cash burn, working-capital needs and management’s 12-month liquidity assessment against subsequent operating results and financing activity.
- Hayfin’s floating-rate cost, covenants, collateral and potential January 2025 maturity trigger, as well as the convertible notes’ maturity and dilution implications.
- XP-8121’s Phase 2 start, results and development costs, alongside supply reliability for products dependent on third-party or single-source suppliers.