MANAGEMENT’S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF XERIS BIOPHARMA HOLDINGS, INC. (Form 10-Q)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF XERIS BIOPHARMA HOLDINGS, INC.  (Form 10-Q)

Precautionary Statements for Forward-Looking Information


The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our financial statements and notes
to those financial statements appearing elsewhere in this Quarterly Report on
Form 10-Q and with the audited financial statements and the notes to those
financial statements included in the Annual Report on Form 10-K filed on March
11, 2022 with the U.S. Securities and Exchange Commission. In addition to
financial information, the following discussion contains forward-looking
statements that reflect our plans, estimates and beliefs. All statements in this
document other than statements of historical fact are, or could be,
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Words such as "will," "would," "may," "should,"
"expects," "intends," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential," "continue," and terms of similar meaning are also
generally intended to identify forward-looking statements. Actual results may
differ materially from those indicated by such forward-looking statements as a
result of various important factors, including without limitation, the
regulatory approval of our product candidates, our ability to market and sell
our products and product candidates if approved, the effect of uncertainties
related to the current coronavirus pandemic, or any other health epidemic, on
U.S. and global markets, our business, financial condition, operations,
third-party suppliers or the global economy as a whole, and other factors
discussed in Item 1A of Part II of this Quarterly Report on Form 10-Q. Any
forward-looking statements contained herein speak only as of the date hereof,
and Xeris expressly disclaims any obligation to update any forward-looking
statements, whether as a result of new information, future events or otherwise.

Overview


Unless otherwise indicated, references to "Xeris," the "Company," "we," "our"
and "us" in this Quarterly Report on Form 10-Q refer to Xeris Pharmaceuticals,
Inc. ("Xeris Pharma") when referring to periods prior to the acquisition of
Strongbridge Biopharma plc, an Irish public limited company ("Strongbridge")
(discussed below) on October 5, 2021 and to Xeris Biopharma Holdings, Inc. when
referring to periods on or subsequent to October 5, 2021. Throughout this
document, unless otherwise noted, references to Gvoke include Gvoke PFS, Gvoke
HypoPen, Gvoke Kit and Ogluo (glucagon).

We are a growth-oriented biopharmaceutical company committed to improving
patients lives by developing and commercializing innovative products across a
range of therapies. We currently have three commercially available products,
Gvoke, a ready-to-use liquid glucagon for the treatment of severe hypoglycemia,
Keveyis, the first and only U.S. Food and Drug Administration ("FDA") approved
therapy for primary periodic paralysis ("PPP") and Recorlev, approved by the FDA
in December 2021 for the treatment of endogenous hypercortisolemia in adult
patients with Cushing's Syndrome. We also have a pipeline of development
programs to bring new products forward using our proprietary formulation
technology platforms, XeriSolTM and XeriJectTM.

Strongbridge acquisition


On May 24, 2021, Xeris Pharma and Strongbridge entered into the Transaction
Agreement together with Xeris Biopharma Holdings, Inc., a Delaware corporation
("the Company"), and Wells MergerSub, Inc., a Delaware corporation ("MergerSub")
(the "Transaction Agreement") whereby we would acquire Strongbridge (the
"Acquisition") pursuant to a scheme of arrangement (the "Scheme") under Irish
law. Under the terms of the Transaction Agreement, (i) the Company acquired
Strongbridge by means of the Acquisition pursuant to the Scheme and (ii)
MergerSub merged with and into Xeris Pharma, with Xeris Pharma as the surviving
corporation in the merger (the "Merger," and the Merger together with the
Acquisition, the "Transactions"). As a result of the Transactions, both Xeris
Pharma and Strongbridge became wholly owned subsidiaries of the Company. The
Company acquired all of the outstanding Strongbridge ordinary shares
("Strongbridge Shares") in exchange for (i) 0.7840 of a share of the Company's
common stock ("Company Shares") and cash in lieu of fractions of Company Shares
due to a holder of Strongbridge Shares per Strongbridge Share and (ii) one (1)
non-tradeable contingent value right, worth up to a maximum of $1.00 per
Strongbridge Share settleable in cash, additional Company Shares, or a
combination of cash and additional Company Shares, at the Company's sole
discretion. On October 5, 2021, pursuant to the Transaction Agreement, we
completed the Transactions.

Through the Acquisition, we added Keveyis (dichlorphenamide) to our commercial
product portfolio. Keveyis is the first and only treatment approved by FDA for
hyperkalemic, hypokalemic, and related variants of primary periodic paralysis
("PPP"), a group of rare hereditary disorders that cause episodes of muscle
weakness or paralysis. In addition, we added a clinical-stage product candidate
for rare endocrine diseases, Recorlev. Recorlev (levoketoconazole), the pure
2S,4R enantiomer of the enantiomeric pair comprising ketoconazole, is a
next-generation steroidogenesis inhibitor which serves as a chronic therapy for
adults with endogenous Cushing's syndrome. Levoketoconazole has received orphan
designation from the FDA and the European Medicines Agency. Recorlev was
acquired as an in-process research and development asset and subsequently
approved by the FDA on December 30, 2021 for the treatment of endogenous
hypercortisolemia in adult patients with Cushing's syndrome for whom surgery is
not an option or has not been curative. Recorlev was commercially launched in
January 2022.

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patents


We currently own 143 patents issued globally, including a composition of matter
patent covering our ready-to-use glucagon formulation that expires in 2036. Upon
completion of the Transactions, Xeris Biopharma Holdings, Inc. controls the
patents of Xeris Pharma and Strongbridge Dublin Limited, the latter of which has
53 granted patents globally related to proprietary formulations of
levoketoconazole (the active pharmaceutical ingredient in Recorlev) and the uses
of such formulations in treating certain endocrine-related diseases and
syndromes. This includes US Patent No. 11,020,393, which was granted on June 1,
2021, and which provides patent protection through 2040 for the use of Recorlev
in the treatment of certain patients with persistent or recurrent Cushing's
syndrome.

Perspectives and strategies


Our goal is to build a leading and profitable biopharmaceutical company that
innovates products that improve the lives of patients. To achieve our goal, we
are pursuing the following strategies:

         <           Maximize the commercial potential of our three 

Commercial products. We have built

                     out a robust endocrinology and rare disease-focused 

commercial infrastructure –

                     including fully operational patient and provider 

support teams – ready to bring

                     the benefits of our products to a wider range of 

patients with unmet needs. Our

                     sales, marketing, market access and patient service 

capabilities in the United States

                     States are positioned to drive the growth of our 

products We believe that our

                     ability to execute on this strategy is enhanced by the 

significant business

                     experience of key members of our management team.
         <           Create momentum through commercial execution leading 

to profitability. We have

                     three innovative commercial assets: Gvoke, Keveyis and 

Recorlev. Gvoke and Keveyis

                     are growing in large untapped addressable markets. We 

are executing the launch of

                     Recorlev, leveraging our experienced,

business focused on endocrinology

                     infrastructure, in a large and unsatisfied Cushing 

syndrome market. Through

                     the momentum created by the execution of our three 

commercial products, we believe

                     we will have a path to profitability.
         <           Continue to leverage our technology and expertise to 

develop a portfolio of

                     product candidates. We have a pipeline of development 

programs to bring new

                     products forward using our formulation technology 

platforms, supporting long-term

                     product development and commercial success. XeriSol 

and XeriJect have extensive

                     application and have the potential to be utilized 

across a potential range

                     product candidates in multiple therapeutic areas.
         <           Collaborate with pharmaceutical and biotechnology

companies to apply our

                     technology platforms to enhance the formulations of 

its patented products and

                     candidates. We are pursuing formulation and 

development partnerships to apply our

                     XeriSol and XeriJect technology platforms to broaden 

our income stream and

                     enhance the formulation, delivery and clinical profile 

from other companies

                     proprietary drugs and biologics. We currently are 

collaborating with several important

                     pharmaceutical companies on the development of 

proprietary formulations

                     therapeutics with XeriSol or XeriJect. Our strategic 

the goal is to finally enter

                     into commercial licensing agreements with these 

partners to success

                     completion of formulation development.


We believe these four pillars of our strategy can bring new products to market
and transform the lives of patients with life-impacting diseases and ultimately
drive value for Xeris' shareholders. Pursuing these strategies provides Xeris
with a range of value driving opportunities that are incremental to the value
already realized by the Xeris enterprise.

Financing


We have funded our operations to date primarily with proceeds from the sale of
our preferred and common stock and debt financing. We have received gross
proceeds of $253.0 million from public equity offerings of our common stock
(including our June 2018 initial public offering ("IPO") and our February 2019,
February 2020, June 2020, March 2021 offerings), $30.0 million from a private
placement of our common stock in January 2022, $104.9 million from sales of our
preferred stock, $86.3 million from our June 2020 Convertible Notes offering,
$63.5 million from the Amended and Restated Loan and Security Agreement (as
amended, the "Amended Loan Agreement") with Oxford Finance LLC and Silicon
Valley Bank, of which $20.0 million was repaid in June 2020 and the remaining
$43.5 million was repaid in March 2022, and $100.0 million (and access to the
additional $50 million remaining) from the Hayfin Loan Agreement in March 2022.

For the three months ended September 30, 2022 and September 30, 2021, we
reported net losses of $21.8 million and $26.0 million, respectively. For the
nine months ended September 30, 2022 and September 30, 2021, we reported net
losses of $81.7 million and $71.9 million, respectively. We have not been
profitable since inception, and, as of September 30, 2022, our accumulated
deficit was $541.8 million. In the near term, we expect to continue to incur
significant expenses, operating losses and net losses as we:

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       <            continue our marketing and selling efforts related to

gvoke Marketing,

                    Keveyis and Recorlev;
       <            continue our research and development efforts; and
       <            continue to operate as a public company.


We may continue to seek public equity and debt financing to meet our capital
requirements. There can be no assurance that such funding may be available to us
on acceptable terms, or at all, or that we will be able to commercialize our
product candidates, if approved. In addition, we may not be profitable even if
we commercialize any of our product candidates.

Development of candidate products.

Active programs:

         <                Ready-to-Use Product for Endocrinology 

(Levothyroxine; XP-8121): We are currently

                          in Phase 1 development with product candidate 

XP-8121, a potential once a week

                          sub-cutaneous injection designed to address 

maintenance treatment in patients with

                          congenital or acquired hypothyroidism who require 

daily thyroid hormone

                          replacement. The third dosage cohort has been 

done and we are collecting the

                          data. We have requested a meeting with the FDA 

and wait for comments by the end of the year to

                          end our Phase 1 interaction and propose our Phase 2 and Phase 3 programs.
Unfunded programs:
         <                Ready-to-Use Glucagon (XP-9164) for 

Gastroenterology: We have completed Phase 1

                          development with product candidate XP-9164, an 

early stage compound for

                          gastroenterology. XP-9164 is intended to address 

unmet needs in the growing

                          procedural gastroenterology market.
         <                Ready-to-Use Glucagon for Exercise-Induced 

Hypoglycemia (EIH) in Diabetes: We have

                          completed Phase 2 for our ready-to-use glucagon 

for exercise-induced hypoglycaemia

                          in diabetes. Based on FDA interactions and 

expectations for a record

                          program to support a mini-dose prevention 

indication of Glucagon RTU in EIH,

                          submitted an IND in February 2022 and received FDA clearance in March 2022.
Inactive programs:
         <                XeriSol Pramlintide-Insulin Co-formulation 

(XP-3924): We have developed a novel,

                          investigational fixed-ratio co-formulation of 

pramlintide and regular human

                          insulin (XP-3924) to improve glycemic control in 

adult and pediatric patients with

                          diabetes mellitus (T1D and T2D). Xeris' 

proprietary formulation technology

                          (XeriSol™) enables the 2 peptides (pramlintide 

and insulin), which require

                          different aqueous pH environments for optimal 

stability, to be co-formulated in a

                          stable ready-to-use solution. The current 

the formulation patent exists until

                          least Q4 2032, expected to extend through 

2041-2042 with formulation in progress

                          development work. This product is available for 

development license and

                          commercialization rights in the US.
         <                Ready-to-Use Diazepam (XP-0863): XP-0863 is a

liquid formulation of diazepam for

                          intramuscular injection being studied for the 

RAS treatment. xeris patent

                          protected technology XeriSol™ has been used to 

develop a stable at room temperature,

                          ready-to-use, small-volume solution of diazepam 

for intramuscular injection

                          delivered by an auto-injector, which will provide 

patients and caregivers

                          alternative to rectal and nasal administrations 

of benzodiazepines. XP-0863 is

                          designed to address variable absorption, and 

Suboptimal pharmacokinetic profiles of

                          currently marketed formulations of 

benzodiazepines, by offering a longer duration

                          of action, consistent absorption of drug 

administered intramuscularly

                          administration, and a convenient and reliable 

autoinjector form factor.

                          XP-0863 has been granted an orphan designation by 

the FDA for the treatment of ARS

                          and Dravet syndrome in patients with epilepsy. At 

this time we are not actively

                          seeking a license agreement for this development project.


Impact of COVID-19

The COVID-19 pandemic has presented a substantial public health and economic
challenge around the world and has impacted our business operations, employees,
patients and communities as well as the global economy and financial markets.
The COVID-19 pandemic continues to evolve and has, over time, led to the
implementation of various public health responses.

To date, we and our suppliers and third-party manufacturing partners have been
able to continue to supply our products and product candidates to our patients
and clinical trials, respectively, and currently do not anticipate any
interruptions in supply. However, while our third-party contract manufacturing
partners continue to operate at or near normal levels, we are seeing
increasingly long lead times. While we currently do not anticipate any
interruptions in our manufacturing process that would impact supply of our
products and product candidates, it is possible that the COVID-19 pandemic,
response efforts related to COVID-19, and its repercussions such as supply chain
delays, may have an impact in the future on our third-party suppliers and
contract manufacturing partners' ability to supply and/or manufacture our
products and product candidates.

We believe that customer demand for our products has been adversely impacted by
COVID-19 due to the disruption the pandemic has caused in patients' normal
access to healthcare as well as our sales and marketing personnel's access to
customers. Remote interactions, when required, generally are not as effective as
in-person interactions. In addition, several conferences and other programs at
which we intended to market our products were postponed, canceled and/or
transitioned to virtual meetings.

We have incurred operating losses since inception, and we have an accumulated
deficit of $541.8 million at September 30, 2022. Although we believe that our
cash, cash equivalents, investments, and expected revenue from sales of Gvoke,
Keveyis, and Recorlev

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will enable us to fund our operating and capital expenditure requirements for at
least the next 12 months, we cannot predict the impact of the COVID-19 pandemic
on our future results of operations and financial condition due to a variety of
factors, including the health of our employees, the ability of suppliers to
continue to operate and deliver, the ability of Xeris and our customers to
maintain operations, continued access to transportation resources, the changing
needs and priorities of customers, any further government and/or public actions
taken in response to the pandemic, the emergence of variants and acceptance of
vaccines, and if COVID-19 persists. As further detailed in "Liquidity and
Capital Resources" below, we have relied on equity and debt financing for our
funding to date and completed concurrent convertible debt and equity offerings
in June/July 2020 under which we raised gross proceeds of $109.4 million and a
registered direct offering in March 2021 under which we raised gross proceeds of
$27.0 million. On January 3, 2022, we entered into a securities purchase
agreement in connection with a private placement for aggregate gross proceeds of
approximately $30.0 million. In March 2022, we entered into a Credit Agreement
and Guaranty which provided for the lenders to extend $100.0 million in term
loans to us on the closing date and up to an additional $50.0 million in delayed
draw term loans during the one year period immediately following the closing
date.

We are closely monitoring the impact of the COVID-19 pandemic on all aspects of
our business, including the impact on our operations and the operations of our
customers, suppliers, vendors and business partners. We may take further
precautionary and preemptive actions as may be required by federal, state or
local authorities. In addition, we have taken and continue to take steps to try
and minimize the current environment's impact on our business, including
devising contingency plans and backup resources.

The full extent to which the COVID-19 pandemic will directly or indirectly
impact our business, results of operations and financial condition, including
sales, expenses, reserves and allowances, manufacturing, clinical trials,
research and development costs and employee-related costs, will depend on future
developments that are highly uncertain, including as a result of new information
that may emerge concerning COVID-19 and the actions taken to contain or treat
it, as well as the economic impact on local, regional, national and
international markets. If we, or any of the third parties with whom we engage,
were to experience shutdowns or other business disruptions, our ability to
conduct our business in the manner and on the timelines presently planned could
be materially or negatively affected, which could have a material adverse impact
on our business, results of operations and financial condition.

Components of our Results of Operations

The following discussion sets forth certain components of our Xeris statement of operations for the three and nine months ended September 30, 2022 Y
September 30, 2021 as well as the factors that impact those items.

Product revenue, net


Product revenue, net, represent gross product sales less estimated allowances
for patient copay assistance programs, prompt payment discounts, payor rebates,
chargebacks, service fees, and product returns, all of which are recorded at the
time of sale to the pharmaceutical wholesaler or other customer. We apply
significant judgments and estimates in determining some of these allowances. If
actual results differ from our estimates, we make adjustments to these
allowances in the period in which the actual results or updates to estimates
become known.

Cost of goods sold

Cost of goods sold primarily includes product costs, which include all costs
directly related to the purchase of raw materials, charges from our contract
manufacturing organizations, and manufacturing overhead costs, as well as
shipping and distribution charges. Cost of goods sold also includes losses from
excess, slow-moving or obsolete inventory and inventory purchase commitments, if
any. Manufacturing costs for Gvoke and Recorlev incurred prior to approval and
initial commercialization were expensed as research and development expenses.

Research and development expenses


Research and development expenses consist of expenses incurred in connection
with the discovery and development of our product candidates. We recognize
research and development expenses as incurred. Research and development expenses
that are paid in

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advance payments are capitalized until the services are rendered or the goods are delivered. Research and development expenses include:


       <            the cost of acquiring and manufacturing preclinical 

study and clinical trial

                    materials and manufacturing costs related to commercial 

production and scaling

                    until a product is approved and initially available for 

commercial sale;

       <            expenses incurred under agreements with contract 

research organizations (“CROs”)

                    as well as investigative sites and consultants that 

carry out our preclinical

                    studies and clinical trials;
       <            personnel-related expenses, which include salaries, 

benefits and share-based

                    compensation;
       <            laboratory materials and supplies used to support our

Research activities;

       <            outsourced product development services;
       <            expenses relating to regulatory activities, including

filing fees paid to

                    regulatory agencies; and
       <            allocated expenses for facility-related costs.


Research and development activities are central to our business model. We expect
to continue to incur significant research and development expenses as we advance
our pipeline candidates and in particular plan and conduct clinical trials,
prepare regulatory filings for our product candidates, and utilize internal
resources to support these efforts. Our research and development costs have
declined as compared to previous levels as a result of directing significant
funding to our commercial activities.

Our research and development expenses may vary significantly over time due to
uncertainties relating to the timing and results of our clinical trials,
feedback received from interactions with the FDA and the timing of regulatory
approvals.

Selling, general and administrative expenses


Selling, general and administrative expenses consist principally of compensation
and related personnel costs, marketing and selling expenses, professional fees
and facility costs not otherwise included in research and development expenses.
We expect to continue to incur significant marketing and selling expenses in the
near term related to the commercialization of Gvoke, Keveyis and Recorlev in the
United States.

As a public reporting company, we have incurred increased expenses, including higher payroll, legal and compliance, accounting, insurance and investor relations costs. We expect that some of these costs will continue to increase along with our anticipated growth and complexity as a public reporting company.

Amortization of intangible assets


Amortization of intangible assets relates to the amortization of our products:
Keveyis and Recorlev. These two intangible assets are being amortized over a
five-year and fourteen-year period, respectively, using the straight-line
method.

Other income (expenses)


Other income (expense) consists primarily of interest expense related to our
convertible debt, Hayfin Loan Agreement, Amended Loan Agreement, interest income
earned on deposits and investments, and the change in fair value of our warrants
and CVRs.

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Results of Operations

The following table summarizes our results of operations for the three and nine months ended September 30, 2022 Y September 30, 2021 (in thousands):

                                     Three Months Ended September 30,                Change                 Nine Months Ended September 30,                 Change
                                         2022                2021                $            %                 2022                2021                $            %
Product revenue:
Gvoke                                $   13,663          $  11,035          $  2,628          23.8          $   37,595          $  27,921          $  9,674          34.6
Keveyis                                  13,371                  -            13,371               nm           35,506                  -            35,506               nm
Recorlev                                  2,520                  -             2,520               nm            3,623                  -             3,623               nm
Product revenue, net                 $   29,554          $  11,035         

$18,519 167.8 $76,724 $27,921 $48,803 174.8 Royalties, contracts and other income 171

                 25               146               nm              380                240               140          58.3
Total revenue                            29,725             11,060            18,665         168.8              77,104             28,161            48,943         173.8

Cost and expenses:
Cost of goods sold, excluding             5,260              3,220             2,040          63.4              16,343              8,429             7,914          93.9
amortization of intangible assets
Research and development                  6,043              5,663               380           6.7              16,011             15,078               933           6.2
Selling, general and administrative      34,491             26,535             7,956          30.0             103,388             71,539            31,849          44.5
Amortization of intangible assets         2,711                  -             2,711               nm            8,132                  -             8,132               nm
Total cost and expenses                  48,505             35,418            13,087          37.0             143,874             95,046            48,828          51.4
Loss from operations                    (18,780)           (24,358)            5,578         (22.9)            (66,770)           (66,885)              115          (0.2)
Other income (expense):
Interest and other income                   472                 66               406               nm              735                243               492         202.5
Interest expense                         (3,989)            (1,798)           (2,191)        121.9             (10,958)            (5,384)           (5,574)        103.5
Change in fair value of warrants              9                 81               (72)        (88.9)              1,746                 91             1,655               nm
Change in fair value of contingent          118                  -               118               nm           (7,569)                 -            (7,569)              nm
considerations
Total other expense                      (3,390)            (1,651)           (1,739)        105.3             (16,046)            (5,050)          (10,996)        217.7
Net loss before benefit from income     (22,170)           (26,009)            3,839         (14.8)            (82,816)           (71,935)          (10,881)         15.1
taxes
Benefit from income taxes                   339                  -               339               nm            1,086                  -             1,086               nm
     Net loss                        $  (21,831)         $ (26,009)         $  4,178         (16.1)         $  (81,730)         $ (71,935)         $ (9,795)         13.6


1 nm: not meaningful

Product revenue, net

Gvoke net revenue increased by $2.6 million or 23.8% and $9.7 million or 34.6%
for the three and nine months ended September 30, 2022 compared to the same
periods ended September 30, 2021, respectively. Gvoke prescriptions grew 40.9%
and 59.2% during the three and nine months ended September 30, 2022 compared to
the same periods ended September 30, 2021. The growth in product demand was
partially offset by a decrease in net pricing.

Keveyis, which was added to our commercial product portfolio through the Acquisition, had net income of $13.4 million Y $35.5 million for the three and nine months ended September 30, 2022respectively.


Recorlev, which received FDA approval in December 2021, had net revenue of $2.5
million and $3.6 million for the three and nine months ended September 30, 2022,
respectively.

Cost of goods sold

Cost of goods sold were $5.3 million and $16.3 million for the three and nine
months ended September 30, 2022, respectively. The increases were attributable
to an increase in sales as well as product mix and increased costs.

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Research and development expenses


Research and development expenses increased $0.4 million or 6.7% for the three
months ended September 30, 2022 when compared to the same period ended September
30, 2021. The increase was primarily driven by clinical services costs.

Research and development expenses increased $0.9 million or 6.2% for the nine
months ended September 30, 2022 compared to the same period ended September 30,
2021. The increase was primarily driven by higher personnel related costs,
offset by lower product development costs.

Selling, general and administrative expenses


Selling, general and administrative expenses increased $8.0 million or 30.0% and
$31.8 million or 44.5% for the three and nine months ended September 30, 2022,
respectively, compared to the same periods ended September 30, 2021.
Personnel-related costs increased by $4.6 million and $24.2 million,
respectively, primarily to support Keveyis, acquired in October 2021, and
Recorlev, launched in 2022, as well as an expansion of our endocrinology sales
force. We also had a $2.6 million and $4.5 million increase in marketing
expenses, respectively, primarily to support the launch of Recorlev.

Amortization of intangible assets


For the three and nine months ended September 30, 2022, amortization of
intangible assets was $2.7 million and $8.1 million, respectively, from Keveyis
and Recorlev, each of which was acquired as part of the Strongbridge Acquisition
in October 2021.

Other income (expense)

For the three and nine months ended September 30, 2022, interest expense
increased $2.2 million or 121.9% and $5.6 million or 103.5% in comparison to the
same periods ended September 30, 2021, respectively. The higher interest
expenses in both periods was primarily due to higher interest expense related to
the Hayfin loan.

Liquidity and Capital Resources


Our primary uses of cash are to fund costs related to the manufacturing,
marketing and selling of products, the research and development of our product
candidates, general and administrative expenses and working capital
requirements. Historically, we have funded our operations primarily through
private placements of convertible preferred stock, public equity offerings of
common stock, and issuance of debt. In June 2018, we completed our IPO of
6,555,000 shares of our common stock at a price of $15.00 per share for
aggregate net proceeds of $88.9 million after deducting underwriting discounts
and commissions as well as other equity offering expenses. In February 2019, we
completed an equity offering and sold an aggregate of 5,996,775 shares of common
stock at a price of $10.00 per share. Net proceeds from this equity offering
were $55.5 million after deducting underwriting discounts and commissions as
well as other equity offering expenses. In September 2019, we entered into the
Amended Loan Agreement that provided for term loans of up to an aggregate of
$85.0 million, of which $60.0 million was drawn in September 2019 and of which
$20.0 million was repaid in June 2020. In August 2019, we filed a shelf
registration statement on Form S-3 with the SEC, which covered the offering,
issuance and sale by us of up to an aggregate of $250.0 million of our common
stock, preferred stock, debt securities, warrants and/or units. We
simultaneously entered into a Sales Agreement with Jefferies LLC, as sales
agent, to provide for the offering, issuance and sale by us of up to $50.0
million of our common stock from time to time in "at-the-market" offerings under
the shelf. As of October 5, 2021, the acquisition closing date, we have sold an
aggregate of 204,427 shares of common stock in at-the-market offerings under the
shelf for gross proceeds of $1.8 million. The shelf ceased to be available upon
the consummation of the Transactions. In January 2022, we filed a shelf
registration statement on Form S-3 with the SEC, which was declared effective on
February 7, 2022, and which covers the offering, issuance and sale by us of up
to an aggregate of $250.0 million of our common stock, preferred stock, debt
securities, warrants and/or units.

In February 2020, we completed an equity offering and sold 10,299,769 shares of
common stock. Net proceeds from this equity offering were $39.8 million after
deducting underwriting discounts and commissions as well as other equity
offering expenses. In June 2020, we completed a public notes offering and sold
$86.3 million aggregate principal amount of 5.00% Convertible Senior Notes,
including $11.3 million pursuant to the underwriters' option to purchase
additional notes which was fully exercised in July 2020. Concurrently with the
public notes offering, in June 2020, we completed an equity offering and sold
8,510,000 shares of common stock, including 1,110,000 shares pursuant to the
underwriters' option to purchase additional shares of common stock which was
also fully exercised in July 2020. Net proceeds from both June 2020 offerings
(including the net proceeds from the exercise of the underwriters'
over-allotment options in July 2020) were $102.8 million after deducting
underwriting discounts and commissions as well as other offering expenses.
During the second half of 2020, $39.1 million in principal amount of Convertible
Notes were converted into 13,171,791 shares of our common stock. In March 2021,
we completed a registered direct offering of 6,553,398 shares of our common
stock, the net proceeds of which were $26.9 million. As of September 30, 2022,
the outstanding balance of Convertible Notes was $47.2 million. In October 2020,
we entered into a fourth amendment to the Amended Loan Agreement which provided
for an additional $3.5 million term loan which was drawn in November 2020. On
January 2, 2022, we entered into a securities purchase agreement in connection
with the Private Placement with Armistice for aggregate gross proceeds of
approximately $30.0 million and completed the transaction on January 3, 2022.

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In March 2022, we, Xeris Pharma and certain subsidiary guarantors, entered into
a Credit Agreement and Guaranty (the "Hayfin Loan Agreement") with the lenders
from time to time parties thereto (the "Lenders") and Hayfin Services LLP, as
administrative agent for the Lenders, pursuant to which we and our subsidiaries
party thereto granted a first priority security interest on substantially all of
our assets, including intellectual property, subject to certain exceptions. The
Hayfin Loan Agreement provided for the Lenders to extend $100.0 million in term
loans (the "Initial Loan") to us on the closing date and up to an additional
$50.0 million in delayed draw term loans during the one year period immediately
following the closing date (the "Delayed Draw Term Loans" and, together with the
Initial Loan, the "Loans") in no more than three drawings of no less than $10.0
million per drawing subject to us being in pro forma compliance with the
financial covenants and other conditions set forth therein. In conjunction with
the execution of the Hayfin Loan Agreement, the Amended Loan Agreement balance
of $43.5 million was repaid in full and fees of $2.1 million in connection with
the loan repayment were paid. In addition to utilizing the proceeds to repay the
obligations under the Amended Loan Agreement in full, the proceeds will
otherwise be used for general corporate purposes. After repayment, the Loans may
not be re-borrowed. On September 29, 2022, the Company entered into Amendment
No. 1 to Credit Agreement and Guaranty, which provides for the Lenders' consent
to and allows for the issuance of the letter of credit that was issued to the
landlord under the Amended and Restated Lease dated September 29, 2022.

Capital resources and financing requirements


We have incurred operating losses since inception, and we have an accumulated
deficit of $541.8 million at September 30, 2022. Based on our current operating
plans and existing working capital at September 30, 2022 and access to the
additional $50.0 million remaining from the Hayfin Loan Agreement, we believe
that our cash resources are sufficient to sustain operations and capital
expenditure requirements for at least the next 12 months. We expect to incur
substantial additional expenditures in the near term to support the marketing
and selling of Gvoke, Keveyis and Recorlev as well as our ongoing research and
development activities. We expect to continue to incur net losses for at least
the next 12 months. Our ability to fund marketing and selling of Gvoke, Keveyis
and Recorlev, as well as our product development and clinical operations,
including completion of future clinical trials, will depend on the amount and
timing of cash received from product revenue and potential future financings.
Our future capital requirements will depend on many factors, including:

       <            our degree of success in commercializing Gvoke, Keveyis 

and Recorlev;

       <            the successful integration of the Acquisition and 

achievement of expected income

                    and synergies;
       <            the costs of commercialization activities, including

product marketing, sales and

                    distribution;
       <            the costs, timing and outcomes of clinical trials and

regulatory reviews

                    associated with our product candidates;
       <            the effect on our product development activities of 

actions taken by the FDA or

                    other regulatory authorities;
       <            the number and types of future products we develop and

market;

       <            the emergence of competing technologies and products

and other adverse market

                    developments; and
       <            the costs of preparing, filing and prosecuting patent

applications and

                    maintaining, enforcing and defending intellectual 

property-related claims.



As we continue the marketing and selling of Gvoke, Keveyis and Recorlev, we may
not generate a sufficient amount of product revenue to fund our cash
requirements. Accordingly, we may need to obtain additional financing in the
future which may include public or private debt and/or equity financings. There
can be no assurance that such funding may be available to us on acceptable
terms, or at all, or that we will be able to successfully market and sell Gvoke,
Keveyis and Recorlev. Market volatility resulting from the COVID-19 pandemic or
other factors could also adversely impact our ability to access capital as and
when needed. The issuance of equity securities may result in dilution to
stockholders. If we raise additional funds through the issuance of additional
debt, which may have rights, preferences and privileges senior to those of our
common stockholders, the terms of the debt could impose significant restrictions
on our operations. The failure to raise funds as and when needed could have a
negative impact on our financial condition and ability to pursue our business
strategies. If additional funding is not secured when required, we may need to
delay or curtail our operations until such funding is received, which would have
a material adverse impact on our business prospects and results of operations.

Cash Flows

                                                   Nine Months Ended September 30,
(in thousands)                                           2022                     2021

Net cash used in operating activities       $        (86,772)                  $ (66,589)
Net cash provided by investing activities             25,293                

61,362

Net cash provided by financing activities             78,317                      27,122


Operating activities

Net cash used in operating activities was $86.8 million for the nine months
ended September 30, 2022, compared to $66.6 million for the nine months ended
September 30, 2021. The increase in net cash used in operating activities was
primarily driven by higher

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personnel related costs from increased headcount and restructuring costs related
to the Strongbridge acquisition. For a discussion regarding product revenue, net
and increases in spending, refer to "Results of Operations" included in this
"Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations."

Investment activities


Net cash provided by investing activities was $25.3 million for the nine months
ended September 30, 2022, compared to $61.4 million for the nine months ended
September 30, 2021. The decrease in cash provided by investing activities in
2022 was primarily due to a lower number of investments maturing or being sold.

Financing activities


Net cash provided by financing activities was $78.3 million for the nine months
ended September 30, 2022, compared to $27.1 million for the nine months ended
September 30, 2021. The increase was primarily due to the net proceeds of $30.0
million from the January 2022 private placement of our common stock with an
affiliate of Armistice, proceeds net of debt issuance costs of $92.5 million
from the March 2022 Hayfin Loan Agreement, partially offset by the payoff of the
principles on the Amended Loan Agreement of $43.5 million in March 2022, as
compared to the proceeds of $27.0 million from the March 2021 registered direct
offering of our common stock.

CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES AND ASSUMPTIONS


Our Annual Report on Form 10-K for the year ended December 31, 2021 describes
the critical accounting policies for which management uses significant judgments
and estimates in the preparation of our consolidated financial statements. There
have been no significant changes to our critical accounting policies since
December 31, 2021.

NEW ACCOUNTING RULES


Refer to "Note 2 - Basis of presentation and summary of significant accounting
policies and estimates", for a description of recent accounting pronouncements
applicable to our financial statements.

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