Xeris Biopharma's Q1 2025 Surge: Recorlev Drives Growth Amid Strategic Challenges

Xeris Biopharma Holdings, Inc. (NASDAQ:XERS) delivered a strong start to 2025, reporting Q1 revenue of $60.12 million, a 48% year-over-year increase that surpassed Wall Street estimates of $57.61 million. The results, announced during the company’s May 8 earnings call, underscored the transformative impact of its lead product Recorlev (leverton), which saw revenue jump 141% to $25.5 million compared to the prior year. This performance, combined with tightened full-year guidance of $260–275 million, signals renewed confidence in Xeris’s ability to capitalize on its endocrine therapy portfolio. However, challenges such as declining sales of Keveyis and rising expenses highlight the need for strategic execution.

Key Highlights from Q1 2025

1. Recorlev’s Dominance: The Cushing’s syndrome treatment now accounts for 42% of total revenue, up from 17% in Q1 2024. The patient base grew by 124%, driven by expanded clinical adoption and reimbursement approvals.
2. Gvoke Growth: Sales of the severe hypoglycemia treatment rose 26% year-over-year to $20.8 million, reflecting strong demand in diabetes management.
3. Keveyis Struggles: Revenue from the periodic paralysis drug dropped 13% to $11.4 million, attributed to reduced product shipments and competitive pressures.
4. Profitability Milestones: While net loss widened slightly to $9.2 million ($0.06 EPS), adjusted EBITDA turned positive at $4.4 million, an $8.4 million improvement from Q1 2024.

Pipeline Progress and Strategic Focus

Xeris’s pipeline advancements, including the Phase 2 completion of XP-8121 (a hypothyroidism treatment), position the company for future growth. Management emphasized plans to advance XP-8121 into Phase 3 trials, which could open new revenue streams by 2026. CEO John Shannon noted, “Recorlev’s momentum is a testament to our commercial execution, but XP-8121 and other pipeline candidates will be critical to sustaining this trajectory.”

Challenges and Risks

• Cost Pressures: SG&A expenses rose 15% to $44 million, driven by investments in expanding Recorlev’s salesforce and infrastructure.
• Reimbursement Headwinds: Xeris faces ongoing negotiations with insurers to maintain net pricing for its high-cost therapies.
• Market Penetration: While Recorlev’s patient growth is robust, the hypercortisolism market remains niche, with only ~10,000 diagnosed U.S. patients.

Analyst Outlook and Valuation

Analysts are cautiously optimistic. The average target price of $6.25 (up 39% from May 8’s close at $4.48) reflects confidence in Recorlev’s scalability and pipeline potential. However, GuruFocus’s $4.30 fair value estimate highlights concerns over execution risks.

Conclusion

Xeris Biopharma’s Q1 results mark a pivotal moment for the company. The $25.5 million Recorlev sales and positive EBITDA demonstrate its ability to monetize a breakthrough drug while diversifying its pipeline. With 2025 revenue guidance narrowed to $260–275 million, Xeris aims to capitalize on Recorlev’s momentum, even as it navigates rising costs and market saturation risks.

The stock’s 12-month upside potential hinges on two factors:
1. Recorlev’s Market Share: Can it continue capturing new patients in a limited but growing Cushing’s syndrome population?
2. Pipeline Execution: Will XP-8121’s Phase 3 trials yield data strong enough to secure FDA approval and commercialization?

For investors, XERS presents a high-risk, high-reward opportunity. With $260 million in projected 2025 revenue and a 30% growth target, the company is well-positioned—if it can mitigate cost inflation and reimbursement hurdles. Those willing to bet on Xeris’s drug pipeline and execution could see significant returns, but the path remains fraught with execution challenges.

In the words of CFO Steve Pieper: “We’re not just building for today—we’re laying the groundwork for sustained leadership in endocrine therapies.” The next 12 months will test that vision.