Xeris Biopharma(XERS) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Presents the unaudited condensed consolidated financial statements and accompanying notes for the periods ended June 30, 2025 Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheets (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $59,285 | $71,621 | | Total current assets | $185,578 | $167,662 | | Total assets | $334,686 | $323,060 | | Liabilities | | | | Total current liabilities | $95,171 | $100,443 | | Long-term debt, net | $218,626 | $217,006 | | Total liabilities | $353,990 | $352,675 | | Stockholders' Equity (deficit) | | | | Total stockholders' equity (deficit) | $(19,304) | $(29,615) | Condensed Consolidated Statements of Operations and Comprehensive Loss Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Product revenue, net | $67,708 | $46,512 | $125,510 | $86,775 | | Total revenue | $71,539 | $48,065 | $131,658 | $88,703 | | Total costs and expenses | $67,057 | $56,252 | $130,266 | $111,135 | | Income (loss) from operations | $4,482 | $(8,187) | $1,392 | $(22,432) | | Net loss | $(1,928) | $(15,005) | $(11,148) | $(33,985) | | Net loss per common share - basic and diluted | $(0.01) | $(0.10) | $(0.07) | $(0.24) | | Weighted average common shares outstanding - basic and diluted | 159,459,413 | 148,345,549 | 155,972,048 | 144,372,512 | Condensed Consolidated Statements of Stockholders' Equity (Deficit) Condensed Consolidated Statements of Stockholders' Equity (Deficit) (in thousands) | Item | December 31, 2024 | March 31, 2025 | June 30, 2025 | | :--- | :--- | :--- | :--- | | Common Stock (Shares) | 149,429,410 | 156,014,050 | 161,224,762 | | Common Stock (Amount) | $15 | $16 | $16 | | Additional Paid In Capital | $642,256 | $645,962 | $663,713 | | Accumulated Deficit | $(671,861) | $(681,081) | $(683,009) | | Total Stockholders' Equity (Deficit) | $(29,615) | $(35,128) | $(19,304) | Condensed Consolidated Statements of Cash Flow Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(9,849) | $(30,651) | | Net cash used in investing activities | $(292) | $(15,047) | | Net cash provided by (used in) financing activities | $(2,195) | $35,853 | | Decrease in cash, cash equivalents and restricted cash | $(12,336) | $(9,845) | | Cash, cash equivalents and restricted cash, end of quarter | $63,408 | $61,829 | Notes to Condensed Consolidated Financial Statements Provides detailed explanations and disclosures for the condensed consolidated financial statements Note 1. Organization and Business - Xeris Biopharma Holdings, Inc is a commercial-stage biopharmaceutical company focused on developing and commercializing therapies for chronic endocrine and neurological diseases in the United States[18] - The company's commercial products include Recorlev for Cushing's syndrome, Gvoke for severe hypoglycemia, and Keveyis for Primary Periodic Paralysis (PPP)[18] - Xeris leverages its proprietary formulation technologies (XeriSol and XeriJect) for new product creation (e.g, XP-8121) and development partnerships[18] - The company has incurred operating losses since inception, with an accumulated deficit of $683.0 million as of June 30, 2025[21] - Cash resources are believed to be sufficient for at least the next 12 months, but the company may seek additional equity or debt financing, subject to market conditions and potential dilution or restrictions[21][22] Note 2. Basis of presentation and summary of significant accounting policies and estimates - The condensed consolidated financial statements are unaudited and prepared in accordance with GAAP for interim financial information and SEC regulations[23][25] - Revenue is recognized when the customer obtains control of promised goods or services, recorded at net product sales price, including estimated allowances for discounts, rebates, and returns[32][33] - For the three and six months ended June 30, 2025, four customers accounted for 96% of gross product revenue, and 86% of trade accounts receivable as of June 30, 2025[36] - New accounting pronouncements include ASU 2023-09 (Income Tax Disclosures, effective FY2025), ASU 2024-03 (Expense Disaggregation Disclosures, effective FY2026), and ASU 2024-04 (Induced Conversions of Convertible Debt, effective FY2025)[37][39][40][41] Note 3. Disaggregated Revenue Disaggregated Revenue by Product (in thousands) | Product | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Recorlev | $31,444 | $13,338 | $56,974 | $23,937 | | Gvoke | $23,467 | $20,046 | $44,312 | $36,625 | | Keveyis | $11,485 | $13,128 | $22,912 | $26,213 | | Other product revenue | $1,312 | $0 | $1,312 | $0 | | Product revenue, net | $67,708 | $46,512 | $125,510 | $86,775 | | Royalty, contract and other revenue | $3,831 | $1,553 | $6,148 | $1,928 | | Total revenue | $71,539 | $48,065 | $131,658 | $88,703 | Note 4. Inventory Inventory Components (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Raw materials | $35,685 | $31,732 | | Work in process | $10,516 | $10,991 | | Finished goods | $21,081 | $5,452 | | Inventory, net | $67,282 | $48,175 | | Inventory reserves | $10,100 | $7,700 | Note 5. Property and Equipment Property and Equipment, Net (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total property and equipment (gross) | $12,788 | $12,825 | | Less: accumulated depreciation and amortization | $(7,504) | $(7,263) | | Property and equipment, net | $5,284 | $5,562 | | Depreciation and amortization expense (Q2) | $0.3 million | $0.3 million | | Depreciation and amortization expense (YTD) | $0.6 million | $0.6 million | Note 6. Intangible Assets Identified Intangible Assets (in thousands) | Asset | Life (Years) | Gross Assets | Accumulated Amortization (June 30, 2025) | Net (June 30, 2025) | Net (December 31, 2024) | | :--- | :--- | :--- | :--- | :--- | :--- | | Keveyis | 5 | $11,000 | $(8,250) | $2,750 | $3,850 | | Recorlev | 14 | $121,000 | $(30,250) | $90,750 | $95,071 | | Total intangible assets | | $132,000 | $(38,500) | $93,500 | $98,921 | Expected Amortization Expense (in thousands) | Year | Amount | | :--- | :--- | | 2025 | $5,422 | | 2026 | $10,293 | | 2027 | $8,643 | | 2028 | $8,643 | | 2029 | $8,643 | | Thereafter | $51,856 | | Total | $93,500 | Note 7. Other Accrued Liabilities Other Accrued Liabilities (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Accrued employee costs | $15,043 | $19,577 | | Accrued interest expense | $1,724 | $2,123 | | Accrued supply chain costs | $783 | $871 | | Accrued marketing costs | $2,166 | $1,506 | | Accrued research and development costs | $2,508 | $766 | | Accrued other costs | $2,745 | $2,873 | | Total other accrued liabilities | $24,969 | $27,716 | Note 8. Debt Debt Components (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Convertible senior notes | $33,950 | $49,204 | | Loan agreement | $187,342 | $185,995 | | Debt, net of unamortized debt issuance costs | $218,626 | $232,108 | | Current portion | $0 | $15,102 | | Non-current portion | $218,626 | $217,006 | - In March and April 2025, $15.2 million of 2025 Convertible Senior Notes were converted into 4,978,151 shares of common stock, leaving an outstanding balance of $33.6 million for the 2028 Convertible Notes as of June 30, 2025[54] - The 2028 Convertible Notes have an effective interest rate of 8.9% and a fair value of approximately $57.9 million as of June 30, 2025[54][56] - The Amended and Restated Credit Agreement (2029 Loans) provides $200.0 million in term loans, maturing on March 5, 2029 (or January 15, 2028, under certain conditions related to the 2028 Convertible Notes)[57][58] - The 2029 Loans incur interest at a floating rate of 6.95% plus the greater of SOFR (three-month tenor) or 2.00% per annum, with an effective interest rate of approximately 11.4%[59] Future Minimum Principal Payments (in thousands) | Year | Amount | | :--- | :--- | | 2025 remaining | $0 | | 2026 | $0 | | 2027 | $0 | | 2028 | $33,574 | | 2029 | $200,000 | | Thereafter | $0 | | Total | $233,574 | - Interest expense for the three months ended June 30, 2025, was $7.4 million (down from $8.0 million in 2024), and for the six months ended June 30, 2025, was $14.7 million (down from $15.0 million in 2024), primarily due to a lower principal amount of debt outstanding[64] Note 9. Warrants Outstanding Warrants as of June 30, 2025 | Classification | Warrants Outstanding | Exercise Price per Warrant | Expiration Date | | :--- | :--- | :--- | :--- | | Warrants classified as liabilities: | | | | | 2018 Term B Warrants | 40,292 | $11.169 | September 2025 | | Warrants classified as equities: | | | | | Avenue Capital loan agreement | 209,633 | $2.390 | December 2025 | | Horizon and Oxford loan agreement | 125,999 | $3.130 | December 2026 | | Armistice securities purchase agreement | 5,119,454 | $3.223 | February 2027 | | Hayfin Amended and Restated Credit Agreement | 263,158 | $2.280 | March 2029 | | Total Equity Warrants | 5,718,244 | | | - In August 2025, Armistice Capital exercised warrants for 1,706,485 shares of common stock for $5.5 million, leaving 3,412,969 outstanding warrants[66] Note 10. Fair Value Measurements - Fair value measurements are classified into Level 1 (unadjusted quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (significant unobservable inputs)[68][69] Fair Value Hierarchy (in thousands) | Item | Total as of June 30, 2025 | Level 1 | Level 2 | Level 3 | | :--- | :--- | :--- | :--- | :--- | | Cash and money market funds | $59,285 | $59,285 | $0 | $0 | | Restricted cash | $4,123 | $4,123 | $0 | $0 | | Total Assets | $63,408 | $63,408 | $0 | $0 | | Item | Total as of December 31, 2024 | Level 1 | Level 2 | Level 3 | | :--- | :--- | :--- | :--- | :--- | | Cash and money market funds | $71,621 | $71,621 | $0 | $0 | | Restricted cash | $4,123 | $4,123 | $0 | $0 | | Total Assets | $75,744 | $75,744 | $0 | $0 | Note 11. Stock Compensation Plan - The company operates several stock compensation plans: 2011 Plan, 2018 Plan (6.1 million shares available), 2018 Employee Stock Purchase Plan (ESPP) (6.1 million shares available), Inducement Plan (0.9 million shares available), and Assumed Plans (0.2 million shares available)[72][75][76][77] Stock Option Activity (Six Months Ended June 30, 2025) | Item | Number of Options | Weighted Average Exercise Price Per Share | | :--- | :--- | :--- | | Outstanding - December 31, 2024 | 8,832,170 | $5.31 | | Exercised | (1,682,222) | $3.63 | | Forfeited | (22) | $5.29 | | Expired | (72,414) | $9.00 | | Outstanding - June 30, 2025 | 7,077,512 | $5.66 | | Vested and expected to vest | 7,077,512 | $5.66 | | Exercisable | 7,077,470 | $5.66 | | Total intrinsic value (June 30, 2025) | | $5.7 million | | Unrecognized stock-based compensation expense | | < $0.1 million | Restricted Stock Unit (RSU) Activity (Six Months Ended June 30, 2025) | Item | Number of Units | Weighted Average Grant Date Fair Value Per Share | | :--- | :--- | :--- | | Unvested balance - December 31, 2024 | 16,420,640 | $2.12 | | Granted | 5,468,000 | $3.71 | | Vested | (6,827,525) | $2.09 | | Forfeited | (592,812) | $2.30 | | Unvested balance - June 30, 2025 | 14,468,303 | $2.73 | | Total fair value of RSUs vested (YTD) | | $25.5 million | | Unrecognized stock-based compensation expense | | $29.1 million | | Weighted-average remaining vesting period | | 1.8 years | - As of June 30, 2025, there was $4.0 million of unrecognized stock-based compensation expense related to Stock Appreciation Rights (SARs), expected to be recognized over a weighted-average remaining vesting period of 1.5 years[85] Total Stock-Based Compensation Expense (in thousands) | Expense Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $444 | $382 | $768 | $719 | | Selling, general and administrative | $4,564 | $3,851 | $8,683 | $7,281 | | Total stock-based compensation expense | $5,008 | $4,233 | $9,451 | $8,000 | Note 12. Leases - The company has non-cancellable operating leases for office and laboratory space, expiring between 2031 and 2036[86] - As of June 30, 2025, operating leases had a weighted-average remaining lease term of 10.2 years and a weighted-average discount rate of 11.9%[90] Lease Expense (in thousands) | Expense Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Operating lease expense | $1,272 | $1,340 | $2,567 | $2,680 | | Variable lease expense | $974 | $325 | $1,949 | $566 | | Sublease income | $(291) | $(52) | $(584) | $(105) | | Total lease expense | $1,955 | $1,613 | $3,932 | $3,141 | Maturities of Lease Liabilities (in thousands) as of June 30, 2025 | Year | Amount | | :--- | :--- | | 2025 remaining | $3,063 | | 2026 | $6,232 | | 2027 | $6,389 | | 2028 | $6,549 | | 2029 | $6,714 | | Thereafter | $38,727 | | Total lease payments | $67,674 | | Less: Effect of discounting | $(29,077) | | Present value of lease liabilities | $38,597 | | Current operating lease liabilities | $6,156 | | Non-current operating lease liabilities | $32,441 | Note 13. Commitments and Contingencies - The company has a supply agreement with Taro Pharmaceuticals for Keveyis, extended until March 2027, with annual minimum marketing spend and purchase order quantity requirements[96] - As of June 30, 2025, the company had $4.1 million in unused letters of credit, collateralized by restricted cash, primarily for leases[97] - Management is not aware of any existing, pending, or threatened legal actions that would have a material impact on the company's financial position or results of operations[98] - The 2029 Loans may mature earlier (January 15, 2028) if the 2028 Convertible Notes are outstanding and certain conditions regarding their extension or redemption are not met[99][101] Note 14. Net Loss Per Common Share - Basic and diluted net loss per common share are the same for all periods presented due to the anti-dilutive effect of potentially dilutive securities[102] Anti-Dilutive Securities Excluded from EPS Computation | Security Type | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Shares to be issued upon conversion of Convertible Notes | 10,971,895 | 15,939,216 | | Vested and unvested stock options | 7,077,512 | 8,943,175 | | Restricted stock units | 14,468,303 | 16,765,889 | | Warrants | 5,758,536 | 8,362,270 | | Total anti-dilutive securities | 38,276,246 | 50,010,550 | Note 15. Segment Reporting - The company operates as a single operating and reporting segment, focused on developing and commercializing therapies for chronic endocrine and neurological diseases[104] - The Chief Executive Officer (CODM) reviews consolidated financial information, including net loss, budget vs actual results, and revenue trends, to assess performance and allocate resources[105][106] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Provides management's perspective on financial condition, operational results, and cash flows for the reported periods Cautionary statements for forward-looking information - The discussion contains forward-looking statements subject to various important factors and risks, including regulatory approvals, macroeconomic conditions, market volatility, and the ability to market products[108] - The company disclaims any obligation to update forward-looking statements[108] Business Overview and Strategy Xeris Biopharma focuses on chronic diseases using proprietary technologies to grow commercial products and develop new therapies Commercial Products - Recorlev is approved for endogenous hypercortisolemia in adult Cushing's syndrome patients[112] - Gvoke is a ready-to-use, liquid-stable glucagon for severe hypoglycemia in pediatric and adult patients (age 2+)[112] - Keveyis is the first approved therapy in the U.S for hyperkalemic, hypokalemic, and related variants of Primary Periodic Paralysis (PPP)[112] Our Pipeline - XP-8121 is a once-weekly, subcutaneous injection of levothyroxine in development for hypothyroidism, with plans to initiate a Phase 3 clinical trial[112] - The company is pursuing formulation and development partnerships to apply its XeriSol and XeriJect technologies to enhance other companies' proprietary drugs[112] Our Strategy - The strategy is to build a profitable biopharmaceutical company by growing its three commercial products and investing in therapies for unmet medical needs[113] Patent Rights - As of July 31, 2025, the company owned 180 patents globally, including composition of matter patents for its ready-to-use glucagon formulation expiring in 2036[114] - Patents related to Recorlev's proprietary formulations provide protection through 2040[114] Financing - Operations have been funded primarily through stock sales and debt financing, resulting in an accumulated deficit of $683.0 million as of June 30, 2025[115] - The company expects to incur net losses for at least the next 12 months due to continued marketing, R&D, public company operations, and increased borrowing costs[115][120] - Future capital requirements may necessitate additional public equity or debt financing, which may not be available on acceptable terms or at all[115] Components of our Results of Operations Explains the accounting policies and components that make up the company's revenue and expense lines Product revenue, net - Net product revenue represents gross sales less estimated allowances for patient copay assistance, prompt payment discounts, payor rebates, chargebacks, service fees, and product returns[117] Royalty, contract and other revenue - Royalty and contract revenue is recognized as earned in accordance with contract terms when reasonably estimable and collectability is assured, including revenue from collaboration and technology partnerships[118] Cost of goods sold - Cost of goods sold primarily includes product costs (raw materials, manufacturing, overhead), shipping, distribution, and losses from excess or obsolete inventory[119] Research and development expenses - R&D expenses are recognized as incurred and include costs for preclinical studies, clinical trials, personnel, lab supplies, outsourced development, regulatory activities, and facility costs[121] - The company expects to incur significant R&D expenses as it advances pipeline candidates, plans clinical trials, and prepares regulatory filings[122] Selling, general and administrative expenses - SG&A expenses primarily consist of compensation, marketing, selling, professional fees, and facility costs not included in R&D[124] Amortization of intangible assets - Amortization of intangible assets relates to Recorlev (14-year period) and Keveyis (5-year period), using the straight-line method[125] Other income (expense) - Other income (expense) includes interest expense on debt, interest income, debt refinancing costs, and changes in fair value of Contingent Value Rights (CVRs)[126] Results of Operations Analysis Analyzes financial performance, highlighting significant changes in revenue, costs, and net loss compared to the prior year Summary of Results of Operations (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total revenue | $71,539 | $48,065 | $23,474 | 48.8% | $131,658 | $88,703 | $42,955 | 48.4% | | Total cost and expenses | $67,057 | $56,252 | $10,805 | 19.2% | $130,266 | $111,135 | $19,131 | 17.2% | | Income (loss) from operations | $4,482 | $(8,187) | $12,669 | (154.7)% | $1,392 | $(22,432) | $23,824 | (106.2)% | | Net loss | $(1,928) | $(15,005) | $13,077 | (87.2)% | $(11,148) | $(33,985) | $22,837 | (67.2)% | Product Revenue, Net Overall product revenue increased significantly, driven by strong growth in Recorlev and Gvoke Recorlev Revenue - Recorlev net revenue increased by $18.1 million (135.7%) for Q2 2025 YoY, primarily due to higher volume (141.3%) offset by unfavorable net pricing (5.6%)[129] - Recorlev net revenue increased by $33.0 million (138.0%) for YTD 2025 YoY, driven by higher volume (148.1%) offset by unfavorable net pricing (10.1%)[130] Gvoke Revenue - Gvoke net revenue increased by $3.4 million (17.1%) for Q2 2025 YoY, due to higher volume (4.0%) and favorable net pricing (13.1%)[131] - Gvoke net revenue increased by $7.7 million (21.0%) for YTD 2025 YoY, due to higher volume (9.0%) and favorable net pricing (12.0%)[131] Keveyis Revenue - Keveyis net revenue decreased by $1.6 million (12.5%) for Q2 2025 YoY, due to lower volume (20.5%) partially offset by favorable net pricing (8.0%)[132] - Keveyis net revenue decreased by $3.3 million (12.6%) for YTD 2025 YoY, due to lower volume (20.5%) partially offset by favorable net pricing (7.9%)[133] Other Product Revenue - Other product revenue increased by $1.3 million for both Q2 and YTD 2025, including the sale of VialDx to American Regent[134] Cost of Goods Sold - Cost of goods sold increased by $4.1 million (52.7%) for Q2 2025 YoY and $6.9 million (49.9%) for YTD 2025 YoY[135] - COGS as a percent of total product revenue increased to 17.6% for Q2 2025 (from 16.7%), primarily due to higher write-offs of Gvoke components ($1.5 million or 2.2%) offset by higher sales of lower COGS products (1.4%)[136] - COGS as a percent of total product revenue increased to 16.4% for YTD 2025 (from 15.9%), primarily due to a one-time credit for Keveyis in 2024 (1.9%) offset by higher sales of lower COGS products (1.3%)[137] Research and Development Expenses - R&D expenses increased by $2.3 million (39.9%) for Q2 2025 YoY and $2.2 million (16.4%) for YTD 2025 YoY[138] Research and Development Expenses by Type (in thousands) | Expense Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Pipeline | $2,444 | $941 | $5,030 | $4,071 | | Technology development | $529 | $301 | $815 | $840 | | Personnel related expenses | $4,325 | $3,579 | $8,552 | $7,007 | | Lab supplies and equipment depreciation | $434 | $384 | $776 | $764 | | Other | $323 | $554 | $635 | $898 | | Total | $8,055 | $5,759 | $15,808 | $13,580 | Selling, General and Administrative Expenses - SG&A expenses increased by $4.4 million (11.0%) for Q2 2025 YoY and $10.0 million (12.8%) for YTD 2025 YoY, primarily due to higher personnel-related expenses from investments in the Recorlev commercial organization[139][140] Amortization of Intangible Assets - Amortization of intangible assets remained consistent at $2.7 million for Q2 2025 and $5.4 million for YTD 2025, compared to the same periods in 2024[141] Other Income (Expense) - Interest expense decreased by $0.6 million (7.6%) for Q2 2025 YoY and $0.3 million (2.2%) for YTD 2025 YoY, primarily due to a lower principal amount of debt outstanding[142] Liquidity and Capital Resources Discusses cash flow activities, funding sources, and future capital requirements Financing Transactions - The company has an Open Market Sale Agreement with Jefferies LLC for up to $75.0 million of common stock, with no shares sold to date[145] - In September 2023, $32.0 million of 2025 Convertible Notes were exchanged for $33.6 million of 2028 Convertible Notes[146] - In March 2024, an Amended and Restated Credit Agreement provided $200.0 million in term loans and up to an additional $15.2 million for redeeming 2025 Convertible Notes[147] - In March and April 2025, $15.2 million of 2025 Convertible Senior Notes were converted into 4,978,152 shares of common stock, leaving $33.6 million of 2028 Convertible Notes outstanding as of June 30, 2025[148] Capital Resources and Funding Requirements - The company has an accumulated deficit of $683.0 million as of June 30, 2025, but believes current cash resources are sufficient for at least the next twelve months[149] - Substantial additional expenditures are expected for marketing, sales, and R&D, leading to anticipated net losses for at least the next twelve months[149] - Future capital requirements depend on commercialization success, R&D costs, regulatory actions, competition, and intellectual property defense, potentially requiring additional financing[149][150] Cash Flows Analysis Provides a detailed breakdown of cash flows from operating, investing, and financing activities Summary of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(9,849) | $(30,651) | | Net cash used in investing activities | $(292) | $(15,047) | | Net cash provided by/(used in) financing activities | $(2,195) | $35,853 | Operating Activities - Net cash used in operating activities decreased to $9.8 million for YTD 2025, from $30.7 million for YTD 2024, primarily driven by higher sales[152] Investing Activities - Net cash used in investing activities decreased to $292.0 thousand for YTD 2025, from $15.0 million for YTD 2024, due to fewer purchases of short-term investments[153] Financing Activities - Net cash used in financing activities was $2.2 million for YTD 2025, a shift from $35.9 million provided in YTD 2024[154] - The cash used in YTD 2025 was driven by repurchases of common stock for taxes and proceeds from stock awards, while YTD 2024 was primarily from $38.2 million net proceeds from a term loan[154] CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES AND ASSUMPTIONS - There have been no significant changes to the company's critical accounting policies since December 31, 2024[155] NEW ACCOUNTING STANDARDS - Refer to Note 2 for a description of recent accounting pronouncements applicable to the financial statements[156] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Discusses the company's exposure to interest rate and foreign currency exchange rate fluctuations Interest Rate Risk - A hypothetical one-percentage point change in interest rates would increase or decrease annual interest income on cash, cash equivalents, restricted cash, and investments by approximately $0.6 million[158] - The company is exposed to interest rate risk on its SOFR-indexed borrowings under the Amended and Restated Credit Agreement, which has a floating rate[159] - The 2028 Convertible Notes have a fixed interest rate of 8.0% annually, thus not subjecting the company to interest rate risk[159] Foreign Currency Exchange Risk - The company may be subject to foreign currency exchange rate fluctuations from international contracts, but net foreign currency gains and losses did not materially affect results for the three and six months ended June 30, 2025[160] ITEM 4. CONTROLS AND PROCEDURES Details management's evaluation of disclosure controls and procedures, concluding they were effective as of June 30, 2025 Evaluation of Disclosure Controls and Procedures - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[161] Changes in Internal Control Over Financial Reporting - No changes in internal control over financial reporting occurred during the three months ended June 30, 2025, that materially affected or are reasonably likely to materially affect internal control over financial reporting[162] PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Reports no material legal proceedings that would adversely affect the company's financial position or operations - The company is not currently subject to any material legal proceedings[164] - Management does not believe any existing claims would individually or in aggregate have a material adverse effect on the company's business, financial position, or results of operations[164] ITEM 1A. RISK FACTORS Refers to the comprehensive risk factors discussed in the Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to the company's risk factors have occurred since the filing of its Annual Report on Form 10-K for the year ended December 31, 2024[166] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Reports no unregistered sales of equity securities or issuer purchases of equity securities during the reporting period - There were no recent sales of unregistered securities[167] - The section on use of proceeds from initial public offering is not applicable[168] - There were no issuer purchases of equity securities[169] ITEM 3. DEFAULTS UPON SENIOR SECURITIES Reports that there are no defaults upon senior securities to disclose for the reporting period - This item is not applicable[170] ITEM 4. MINE SAFETY DISCLOSURES Reports that there are no mine safety disclosures required for the reporting period - This item is not applicable[171] ITEM 5. OTHER INFORMATION Details a Rule 10b5-1 trading plan adopted by the Chairperson of the board for selling shares to cover tax obligations - On June 12, 2025, Marla Persky, Chairperson of the board, adopted a Rule 10b5-1 trading plan to sell up to 31,000 shares of common stock to satisfy tax withholding obligations from RSU vesting, effective until June 30, 2026[172] - No other directors or officers adopted, materially modified, or terminated Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements during the six months ended June 30, 2025[173] ITEM 6. EXHIBITS Lists all exhibits filed as part of the Quarterly Report on Form 10-Q - The exhibits filed include Amended and Restated Certificate of Incorporation and By-laws, certifications of Principal Executive and Financial Officers (31.1, 31.2, 32.1), and various Inline XBRL Taxonomy Extension Documents[176] SIGNATURES Formally concludes the Quarterly Report on Form 10-Q with the required signatures from executive officers - The report is signed by John Shannon, Chief Executive Officer and Director, and Steven M Pieper, Chief Financial Officer, on August 7, 2025[181]