Our Stock of the Week is Xeris (XERS). We have been following XERS for several years and it has been a disappointment despite its tremendous potential. We now believe that it is on the cusp of being recognized as more information is released by its in-house drug development, as well as the potential for licensing its drug delivery system.
XERS is a small biotechnology company that already has three revenue-producing drugs. Gvoke for the treatment of low glucose and Recorlev for the treatment of Cushing’s syndrome are growing fast. XERS has a third drug, which has generic competition, but it is holding up better than expected.
These drugs produce about $180 million in annual revenue, and if the company was doing nothing else, it would be profitable and would probably receive a higher valuation. Currently, the stocks is far below several comparisons, and HC Wainwright states, ‘Xeris is highly undervalued on the current business alone.’
What is most exciting about Xeris is the programs that it has in the pipeline. Last week, it announced positive Phase 2 results for subcutaneous levothyroxine for the treatment of thyroid eye disease. This is a huge market, and the oral form of the drug is one of the top-selling generics. The Xeris formulation has several substantial benefits, such as being once-weekly and making dosage easier to control.
It will take a while for this program to develop, but the short-term catalyst here is that Xeris may look for a partner. The company is presenting later this week at Jeffries, and this is very likely to be a topic of discussion.
In addition to this in-house drug development, Xeris is working with Amgen (AMGN), Regeneron (REGN), and Beat Bionics on products that use its drug development system. News of a license agreement could come at any time and should be a substantial catalyst.
As always, we will not chase the stock on Monday, but we are looking for opportunities to trade it aggressively as it develops.
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 anytime 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.
