Our Stock of the Week is Xeris Pharmaceuticals (XERS). Recent developments are creating a significant opportunity for the stock, but the market has yet to recognize it.
Xeris Biopharma is a commercial-stage specialty pharmaceutical company focused on developing and commercializing "ready-to-use" therapies for patients with endocrine and rare diseases. Based in Chicago, the company has successfully evolved from a clinical-stage, research-intensive biotech into a high-growth commercial entity that achieved its first-ever quarterly net profit in late 2025.
Xeris differentiates itself through its proprietary formulation technology platforms that address the stability and solubility issues that plague traditional injectable drugs. XeriSol is a technology that allows drugs that typically require refrigeration or reconstitution to remain liquid-stable at room temperature. XeriJect is a platform for ultra-high-concentration, small-volume injections of biologics (like monoclonal antibodies), making them easier for patients to self-administer at home.
Xeris currently generates revenue from three FDA-approved products, providing a diversified revenue base that is very rare for a small-cap biotech:
- Recorlev® (levoketoconazole): A cortisol synthesis inhibitor for patients with Cushing's syndrome. This is currently the company's fastest-growing asset, with revenue up by more than 100% year-over-year.
- Gvoke® (glucagon): A liquid-stable, pre-mixed autoinjector for severe hypoglycemia (extremely low blood sugar in diabetics). It competes directly with traditional kits that require manual mixing.
- Keveyis® (dichlorphenamide): The first and only FDA-approved treatment for Primary Periodic Paralysis, a rare neurological condition.
Xeris is an attractive stock based on its three current products, but the market has yet to appreciate the potential of XP-8121. This drug is a once-weekly subcutaneous injection of levothyroxine for hypothyroidism and has a total addressable market of over $1 billion. Current treatment for hypothyroidism requires daily oral pills taken on an empty stomach, which many patients struggle to adhere to or absorb properly. Xeris' product is a once-a-week injection that could revolutionize the standard of care for millions of patients. XP-8121 is currently Phase 3-ready, with the major trial expected to begin in the second half of 2026.
Xeris' stock sold off following its very good third-quarter report, partially due to the wait for further development of XP-8121 and partially due to concerns about competition for Recorlev. The company is increasing its sales force and stated that new competition would likely just help to create great recognition of the medical issue and increase the total market.
On December 31, 2025, the FDA issued a Complete Response Letter (CRL) to Corcept Therapeutics (CORT) for relacorilant, which is a direct competitor to Recorlev. The FDA requested additional efficacy data, potentially delaying relacorilant's entry into the Cushing's market by years. This removes major competition, and since Xeris recently doubled its sales and patient support teams in anticipation of this market battle, Xeris has a clear, uncontested window to capture market share in a sector experts believe could triple to $3 billion by 2030. Recorlev already holds Orphan Drug Exclusivity until late 2028, and this CRL removes the most immediate threat to its growth trajectory.
Xeris reported record-breaking numbers in its most recent quarter ending September 30, 2025, driven almost entirely by Recorlev's strong growth. Total Product Revenue: $74.1 million (+40% YoY). This tremendous revenue growth has helped Xeris reach a financial inflection point, moving from a "survival-mode" biotech to a self-sustaining specialty pharma company.
Q3 2025 EPS: was breakeven at $0.00. This compares to an EPS of ($0.11) in the same period last year. Net Income: $0.6 million—the first positive net Income in company history. Adjusted EBITDA: $17.4 million in Q3, a $20 million improvement year-over-year. Cash Position: Ended the quarter with $91.6 million in cash and short-term investments. Management has stated they have a stable cash runway for over 3 years if they maintain current cash flow levels.
Following the strong Q3 results and the expansion of the Recorlev sales force, management raised its floor for the year: with 2025 Revenue Guidance of $285M – $290M (Up from the previous $280M–$290M range). This represents ~42% growth over 2024. Management reaffirmed they expect to remain Adjusted EBITDA positive for the full year and going forward.
Official 2026 guidance is typically issued in March. Consensus analyst estimates now project 2026 revenue to surpass $360 million and 2026 annual EPS to reach approximately $0.18 to $0.23, marking the company's first full year of GAAP profitability.
The Corcept (CORT) CRL is a massive "free" gift to Xeris's bottom line. Because Xeris had already doubled its sales force and patient support teams in Q3/Q4 2024, the infrastructure is already paid for and is reflected in the SG&A increase to $46.5M.
With a competitor delayed, Xeris can now leverage that investment in marketing to capture more of the Cushing's market without having to significantly increase spending further. This "operating leverage" is why analysts like Oppenheimer are projecting such high price targets ($18)—nearly every new dollar of Recorlev revenue now drops straight to the bottom line.
The next earnings date is around March 5, 2026, and there should be some presentations at investment conferences before then, where the benefit of the Corcept CRL will become clearer to that analyst community.
This post is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this post. Do not buy, sell, or trade the stocks mentioned herein. We WILL actively trade this stock differently than discussed herein. We will sell into strength and buy or sell at any time for any reason. We will actively trade into any unusual activity. At the time of this post, principals, employees, and affiliates of Shark Investing, Inc. and/or principals, clients, employees, and affiliates of Hammerhead Financial Strategies, LLC, directly or indirectly, controlled investment and/or trading accounts containing positions in XERS. To accommodate the objectives of these investing and/or trading accounts, the trading in these shares will be contrary to and/or inconsistent with the information contained in this posting.
