Steven Pieper: Thanks, Alison. So as we discussed, we will achieve cash flow breakeven for the fourth quarter and plenty — we will have plenty of cash to meet our obligations moving forward. Therefore, we don’t anticipate diluting shareholders.
Allison Wey: Thanks, Steve. Another one coming your way. At this point — at what point do you expect to achieve full year profitability, not just cash flow breakeven but net income?
Steven Pieper: So, we haven’t given guidance to that level. But as I mentioned a few times here this morning, we have enough cash to meet our obligations while continuing to invest in the growth in the enterprise and remain a self-sustaining company.
Allison Wey: Our next one. Why are operational expenses scaling in tandem with revenue growth?
Steven Pieper: Actually, our operating expenses on a year-to-date basis grew by 7%, whereas our total revenue grew by 55%. Translated to dollars, operating expenses grew by $10 million compared to revenue growth of over $42 million. And half of that expense growth is due to an increase in cost of goods sold and an increase in cost of goods sold is expected in a company where revenues are growing like Xeris are.
Allison Wey: Thank you. Can you provide some insight into the strategies in place to ensure enhanced operating levers?
Steven Pieper: So as I just covered, we continue to grow our revenues significantly faster while holding our operating expenses at a growth rate that is a fraction of our revenue growth. This really means that we’re executing on our strategy.
Allison Wey: Thanks. When will we see better operating leverage in that so far this year, expenses are growing nearly as fast as revenue?
Steven Pieper: So I think we just covered that, that revenues are growing at a much higher clip than expenses are.
Allison Wey: Thanks. What initiatives are being considered to curtail elevated SG&A expenses?
Steven Pieper: So as I covered in my prepared remarks, our continuous management of expenses has actually resulted in a decrease in SG&A relative to last quarter and we are expecting a further decrease in the fourth quarter.
Allison Wey: Thanks. Are there plans in motion to mitigate interest burdens through strategic longer payments?
Steven Pieper: So in addition to what I just covered from operating expense management, we are equally focused on our cost to finance the enterprise. We, like many others, are facing an increased cost of borrowing, given the macroeconomic hyperinflationary environment. The good news is, given the health of our business, we can meet these obligations. That being said, we are actively looking for ways to reduce that cost burden.
Allison Wey: Thank you. Would Xeris consider a buyback with extra cash on hand to reduce the float?
Steven Pieper: Good question. Currently, we believe investing in our 3 pillars to support our growth strategy will deliver greater value for the company and our shareholders rather than a share buyback. Therefore, we have no immediate plans to do a share buyback.
Allison Wey: The last one for you, Steve. Please address the CVRs for the legacy Strongbridge shareholders.
Steven Pieper: Sure. As I mentioned in my opening remarks, year-to-date 2023 Keveyis revenue is over $42 million, exceeding the CVR Keveyis milestone of $40 million. This achievement will trigger the CVR milestone in 2023 which will be settled in Xeris equity in late Q1 2024. We believe that the delivery of over $40 million of Keveyis revenue this year is a great outcome for Xeris and our shareholders.
Allison Wey: Thanks, Steve. The next set of questions is about our commercial products and the pipeline. So why are Gvoke sales growing slowly. John, do you want to take that?
John Shannon: Sure. Well, first of all, we don’t agree with the characterization that Gvoke sales have grown slowly. This year alone, you just heard, we’ve grown Gvoke prescriptions over 50% compared to last year. The glucagon market in the same time period is growing approximately 10%. So Gvoke growth is significantly outpacing the market growth. We’re very proud of what our commercial team has been able to get — have been able to get Gvoke in the hands of people with diabetes and we certainly wouldn’t characterize 50% increase as slow growth.
Allison Wey: Thanks, John. Can you please elaborate on initiatives in place to accelerate the sales momentum for both Gvoke and Ogluo?
John Shannon: Sure. Let me go backwards. Let me start with Ogluo. As you know, we’ve licensed Ogluo to our European partner Arecor. They are executing on their plan which consists of increasing utilization in the countries where they’ve already launched and they continue to launch in additional countries where it makes sense in Europe. With regard to Gvoke in the U.S., as I mentioned previously, we’ve already seen a 50% growth in prescriptions this year alone. So our sales and marketing teams will continue to execute our commercial plans which are driving awareness, increasing utilization and most importantly, leveraging the recently updated medical guidelines from ADA, Endo, ACE, all of which Paul just mentioned earlier. Basically recommend that anyone on insulin or sulfonylureas should have a ready-to-use glucagon on hand, such as Gvoke, just in case of a severe low blood sugar.
