Hello, everyone. Thank you for joining us, and welcome to the Xeris Biopharma Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] I will now hand the call over to Allison Wey, Senior Vice President of Corporate Communications and Investor Relations. Please go ahead.

Thank you, Warren. Good morning, and welcome to the Xeris Biopharma 2025 Full Year Financial Results Conference Call. Earlier this morning, we issued a press release detailing our 2025 financial and operating results and financial guidance for 2026. This press release is available on our website. Joining me on the call today is John Shannon, our CEO; and Steve Pieper, our CFO. Following our prepared remarks, we will open the call for questions. Before we begin, I'd like to remind you that today's discussion will include forward-looking statements regarding Xeris' future expectations, plans, strategies, objectives and financial performance. These forward-looking statements are based on management's current assumptions and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied. For a discussion of these risks and uncertainties, please refer to the risk factors described in our filings with the SEC. Any forward-looking statements made on this call speak only as of today's date and except as required by law, the company undertakes no obligation to update or revise these statements. In addition, during today's call, we will reference certain financial measures that are presented on a non-GAAP basis. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures is included in our earnings release. With that, I will now turn the call over to John for his opening remarks.

Thanks, Allison, and good morning, everyone. We expected 2025 to be a transformational year for Xeris and it was. Our performance extended well beyond our incredible fourth quarter and full year revenue growth. Across the organization, we executed with discipline and focus, advancing our strategic priorities and driving measurable progress throughout the business. Most importantly, we reached a defining milestone, financial self-sustainability. Our progress across the entire business has enabled us to forever put behind us the question of our ability to self-fund our strategy, our pipeline and our future. Now as we enter 2026, we do so with clear momentum positioned to drive rapid revenue growth, execute on our advanced pipeline and thoughtfully prepare for even greater opportunities ahead. I'm excited and confident that our long-term strategy is firmly on track. Before diving into the details, I want to recognize and thank the entire Xeris team. The performance you delivered in 2025 and the strength of our outlook for 2026 is a direct result of your extraordinary commitment, focus and disciplined execution across every part of our enterprise. Now to the results. Fourth quarter total revenue grew 43% year-over-year to nearly $86 million. This outstanding quarterly result was driven by strong demand across all 3 products. For the full year, total revenue increased by an incredible 44% to $292 million. This performance was broad-based and strengthened as the year unfolded. Most importantly, it fueled our ability to deliver nearly $60 million in adjusted EBITDA and for the first time, net income on a full year basis. The exceptional performance we delivered in the fourth quarter was no aberration. It reflects consistent progress throughout the year as we executed with increasing discipline and effectiveness. As a result, we exited 2025 with strong momentum, increased confidence in our strategy and a…

Thanks, John. The results we are reviewing today are the product of a year defined by discipline, focus and strong execution across the organization. I, too, want to thank our employees for your dedication, accountability and relentless focus on delivering against our priorities. Your efforts continue to strengthen our operational foundation and position us for sustained success. Turning now to the fourth quarter and full year results. Total revenue for the fourth quarter was $85.8 million, representing 43% growth year-over-year. The strong performance reflects continued underlying demand across our portfolio. Importantly, this performance reinforces the momentum we carried through the end of the year as we enter 2026 with a solid foundation for continued growth. For the full year, total revenue was $291.8 million, an increase of 44% compared to 2024. This growth was driven by robust demand across all 3 commercial products, Recorlev, Gvoke and Keveyis. Looking at our performance from a product level. Recorlev revenue was $45.3 million in the fourth quarter and $139.3 million for the full year. This reflects growth of more than 100% both for the fourth quarter and the full year and was driven almost entirely by a continued expansion of the patient base, reflecting strong underlying demand and increasing prescriber confidence. Gvoke delivered revenue of $24.6 million in the fourth quarter and $94.1 million for the full year. Performance reflected steady prescription growth, broad access and favorable gross to net dynamics. Gvoke continues to serve as a stable and predictable contributor to our revenue base. Keveyis generated revenue of $12.8 million in the fourth quarter and $47.6 million for the year, supported by an increase in the average number of patients on therapy. Our performance continues to benefit from our focused approach to ongoing health care provider and patient support. Overall, the breadth…

[Operator Instructions] Your first question comes from the line of David Amsellem with Piper Sandler.

So just a couple for me. Helpful color on the spend this year. I was wondering, though, as you think about the expansion of Recorlev and the widening of the addressable market that you've seen and certainly your competitors have seen. Can you talk about the extent of additional operating leverage that you think you're going to be able to realize longer-term? And specifically interested in further sales force expansion? Or I guess we've seen, for instance, your competitor expand the sales force a few times. Is that a good way to think about what you're going to need to do to adequately support Recorlev. So that's #1. And then #2, as you think about the IP litigation, and I realize this is going to play out over the long-term, but just help us understand how that's playing into your sense of urgency regarding the potential acquisition of an asset where you can leverage your now expanded commercial organization. That would be helpful color as well.

Thanks, David. It's John. Let's start with the expansion. And we just doubled our commercial footprint as of the first of January. And when I say that, it's not only our salespeople, but all the patient support, medical affairs, pharmacy services, all of those things that it takes to manage this very complex patient as you bring them on to therapy. So we see that as a significant move that we need to do in order to continue to drive the growth we're driving and get those patients on therapy and keep them on therapy. As we continue to expand into outer years, we'll need to add more resources in that capacity. It just takes more to, again, manage the patient loads. So we see that as continuing and continuing based on scale and how we grow there. We're also making additional investments in data, studies, things like that. So we'll see that over time as well. And we -- so we see a constant and consistent increase in expense and investment on Recorlev for the next several years. As it relates to your question, I think, around IP litigation and how does that change anything? Well, as I said in my opening comments, our strategy is unchanged on Recorlev. We will continue to do exactly what we said we were going to do. We think -- we know we can get this thing to $1 billion by 2035. Those investments will again continue to come on a scaled approach so that we can, again, manage the growth that we're driving. So we see that as longer-term, and we feel strongly that we'll continue to do that, and we'll be able to get this to a $1 billion product by 2035.

Your next question comes from the line of Brandon Folkes with H.C. Wainwright.

Congratulations on another very good quarter. So maybe just following on from the earlier line of questioning. Can you just help us think about the evolution of capital deployment beyond 2026. As you realize this operating leverage in the business, what's your updated thinking about sort of internal allocations that you've laid out today on the call versus perhaps external business development. Does the emergence of this IP litigation change your appetite to perhaps sort of bring in something between sort of now and when 8121 comes to market to just sort of hedge the product concentration risk. And then secondly, maybe I'll just ask this because maybe it goes in. Can you just talk about the evolution of gross margin here longer-term? How should we think about gross to net in 2026 across your portfolio as we think about the evolution just with regards to product mix?

Let me try to start this, Brandon, and I don't know that we got all those questions in there, so we'll try to answer them all. So as you heard in our comments, we're in a position where we're self-sustainable in terms of the amount of leverage we're getting from the business and our ability to support whatever is in front of us, specifically 8121 and Recorlev growth. And as it relates to the IP, again, nothing's changed. It's unchanged. We weren't surprised by these lawsuits. So we knew this was coming. We saw this coming. We're prepared for it. And we still see a future where we have lots of opportunities in front of us with respect to our own existing technology and capabilities to drive growth for a long time as well as external. So we see all of that in front of us. And now that we're at this point, where we're forever have situations where as long as we continue to grow, we'll be able to continue to leverage that in the future growth. So -- and then I'll let Steve cover any of the kind of...

Yes, I'll just add on to John's comments around operating leverage and some of the questions that have come up. I mean, I think when you start to do the math on our growth trajectory and look at even with the step-up in investment, it's becoming clear that the balance sheet is as strong as ever, and it will continue to improve, and our operating leverage will continue to improve and so that opens up capacity to do other things. The good news is we don't have to do other things. We've got great assets both commercial assets and asset in the pipeline, a blockbuster in the wings, but certainly opens up capacity to do other things. We'll continue to be disciplined about business development and evaluating those things. Touching on your question around gross margin and gross to nets. Yes, gross to net, we benefited on Gvoke specifically this year. I would say gross to nets on balance have kind of steadied out. So we're not expecting any material movement either way in '26 on the gross to net front. From a gross margin perspective, as we've noted over the last 1.5 years, we've seen a nice steady increase in our gross margin really benefiting from product mix. We see that continuing for the foreseeable future and approaching kind of best-in-class gross margin profile for a company that looks like us. So hopefully, that addresses your questions, Brandon.

Your next question comes from the line of Chase Knickerbocker with Craig-Hallum.

Congrats on all the progress here. Maybe just first to start out a little bit more color on guidance would be helpful. Can you just kind of walk us through maybe with kind of some rough outlines how you're kind of thinking about the top line by product in 2026, obviously, largely being driven by Recorlev, but any sort of thoughts kind of down the product portfolio would be helpful.

Chase. Yes, I'll take this one. So on the revenue, I think maybe I'll start with the easiest one is Keveyis. We see that Keveyis kind of been a steady contributor over the last 5, 6 quarters in terms of its revenue contribution and it's kind of flattening out, so to speak. So I think that's a fair assumption moving forward. On Gvoke, I think what we've talked about over the last year is that we see that, again, being a steady contributor in that high single-digit, low double-digit growth. And I would anticipate that we're going to see that play out in 2026 that way. And then for Recorlev, that is the growth driver. So you can kind of back into the math there in terms of the contribution there. But that's on balance what we're expecting. And we do expect some contribution from our partnerships other revenue. Historically, it's been in that 5% to 10% range. I think that's a fair assumption for 2026.

Helpful. And maybe just specifically on Recorlev. Obviously, very strong implied guide. Can you maybe talk to us about kind of what you've seen so far in Q1 even kind of before that sales force expansion benefit that you will get here and there was a competitive product that was kind of expected in the market in 2026. I mean any kind of anticipation that you sensed in the market from that is kind of now unwound and kind of come to your benefit? Just some thoughts there would be helpful.

Yes, Chase, it's John. I think the first quarter is as we expected, it's pretty typical. We get a lot of payer resets and co-pay resets and things like that, that slowed down the quarter early on in January. We see that it's another typical year. But that's all kind of starting to revolve pretty aggressively in February and going into it usually does so in March. So we're seeing that standard. In terms of a lack of a new competitor, I don't think that's really changed much. The market dynamic is still very strong towards finding and diagnosing people with hypercortisolemia and getting them treated. So that is -- that momentum continues in the marketplace. And now with our expanded team in there, we're in a great position to capture more of it. And we don't see any of that slowing down in our organization as well as with any of our competitors.

Your next question comes from the line of Dennis Ding with Jefferies.

We have 2 on Recorlev. So #1, it's been a few years since the launch. So I guess what is holding you back from issuing Recorlev guidance? And I guess, what additional data do you need to make in an informed approach to guidance? And then #2, do you have any updated thoughts on how you're thinking about the market if Teva indeed is able to secure specialty pharmacy to distribute generic Korlym. And if you think that's a risk at all.

Yes. Dennis, the first one is we don't give specific product guidance, and we haven't. And so we just give a total revenue guidance and try to give the color Steve just gave. So there's no hesitation there. It's just -- that's what we do. And then I don't know I understood or could even hear your last question. So maybe you could repeat that.

Yes. Maybe I'll just repeat that. Yes, I was just wondering if you have any updated thoughts on how you're thinking about the Cushing's market and for Recorlev specifically if Teva is indeed able to secure a specialty pharmacy to distribute generic Korlym, if you think that is a risk at all for your business moving forward?

Yes. We don't see that as a risk at all for our business with respect to generic Korlym. We haven't seen that for the last couple of years. We don't see that going forward. This is a scenario where a clinician will have to write a referral for someone to normalize cortisol in order to get to Recorlev, and that's a very different approach than what Korlym does.

Your next question comes from the line of Roanna Ruiz with Leerink Partners.

This is Michael Ahn for Roanna Ruiz at Leerink Partners. Congrats on your great quarter. We have some questions about XP-8121. Could you provide more color on your interactions with the FDA regarding the upcoming initiation of the Phase III program? And are there any remaining gating items or regulatory dependencies that needs to be handled before the initiation.

So we've had all the interactions with the agency. We're very much aligned on everything we need to do. So no regulatory gating. The gating that we're going through right now is we want to enter that Phase III trial with the actual go-to-market device and formulation scale up for commercial scale-up. So we're going through all the steps before we start that Phase III to get all that work done and enter that Phase III with the actual go-to-market device, scaled up at commercial scale, which is really important when you're going into kind of a narrow therapeutic window area with a lot of range of doses. We want to make sure we take the time now so that we don't create delays later in the approval process. So that's what's really the gating item, and that's what we're working on.

Got it. Great. And are you thinking about any partnership optionality for 8121 at all?

That's a great question. We don't need to do a partnership. We have what we need to get this to market. We think it's an outstanding opportunity for ourselves. And from that perspective, we don't need to, but it doesn't mean that the right situation came along that we wouldn't consider that.

That would drive incremental value.

Your next question comes from the line of Jason Dorr with OpCo.

Jason on for Leland Gershell. Congrats on the strong quarter. Understanding you're in the process, could the team provide any guidance on the patent infringement lawsuit for Recorlev against the ANDA filers? Maybe what might the time lines be? And what does a favorable outcome look like for the Xeris team?

Well, as you can tell, we're very early in. We just filed on Thursday, the lawsuit. Timing-wise, I don't know, years, months. So more to come on that. We feel really strongly in our 4 Orange Book patents that run until 2040. So that's really important that we kind of make sure we defend and stay behind those.

Your next question comes from the line of Jenna Davidner with Barclays.

I was just curious on the Recorlev litigation, what your openness or appetite for a settlement could be appreciating your confidence in the 2040 patent time frame, but also maybe the balance between removing any potential overhang that could, in theory, last several years versus settling for a couple of years prior to 2040. I'm just curious what your thought process there is.

Thanks for the question, Jenna. I clearly can't comment on legal strategy and litigation strategy. So -- but I do appreciate the question.

There are no further questions at this time. I will now turn the call back to John Shannon, CEO, for closing remarks.

Thanks, and thanks, everyone, for your questions. In closing, 2025 was a defining year for Xeris. We exited the year with strong momentum, a more durable operating foundation and tremendous confidence in our strategy. We believe our commercial portfolio is well positioned to drive continued rapid revenue growth in our pipeline, specifically XP-8121, adds extended meaningful longer-term value as we look ahead. As we enter 2026, our priorities are clear. We believe the immediate and long-term opportunities for Xeris are increasingly exciting, and we remain committed to translating our continued success and momentum into long-lasting value for the patients we serve and our shareholders. We appreciate your time and your continued support, and thank you.

This concludes today's call. Thank you for attending. You may now disconnect.