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Xeris Biopharma: Undervalued Gem with Promising Pipeline and Licensing Deals on the Horizon

TipsForTraders | June 4, 2024

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Xeris Biopharma (XERS) might not be a household name on Wall Street, but for investors seeking a compelling combination of steady revenue growth, a promising drug development pipeline, and potential for lucrative licensing deals, XERS deserves a closer look.

Despite its strong fundamentals and significant growth potential, XERS has remained under the radar, trading far below its peers. This article dives into the company’s current position, its exciting pipeline, and the reasons why XERS could be on the cusp of a major breakout.

Solid Foundation with Existing Products

Xeris is not a speculative startup. The company already boasts three commercially available drugs generating approximately $180 million in annual revenue. Gvoke, for treating low blood sugar, and Recorlev, for treating Cushing’s syndrome, are both experiencing healthy growth. Even Keyeyis, facing generic competition, has shown surprising resilience.

This existing revenue stream positions XERS for profitability, especially considering the company’s efficient use of capital. Analyst firm HC Wainwright emphasized this point, highlighting XERS’ “undervaluation on the current business alone” and assigning a $6 price target.

Beyond Existing Products: A Promising Pipeline

The most compelling aspect of XERS lies in its future potential. The company is actively developing its own drug portfolio, with the recently announced positive Phase 2 results for subcutaneous levothyroxine for thyroid eye disease a major highlight.

This condition affects millions globally, and the current oral form of the drug is a top-selling generic. Xeris’ formulation offers significant advantages, including a once-weekly dosage and easier control. While revenue from this program isn’t factored in yet, a partnership with a major pharmaceutical company to develop and commercialize the drug could be a significant near-term catalyst. Notably, Xeris is presenting at a Jeffries investor event this week, where this potential partnership is likely to be a key discussion point.

Licensing Deals: An Additional Revenue Stream

Beyond its in-house development, Xeris is collaborating with industry giants like Amgen (AMGN), Regeneron (REGN), and Beat Bionics to utilize its innovative drug delivery system in their product pipelines. While details remain confidential, these collaborations indicate significant progress and the potential for lucrative licensing deals in the future.

Undervalued and Poised for Growth

For long-term investors, XERS presents a rare opportunity. The company has a strong foundation with growing revenues, a promising internal pipeline with a potential blockbuster in the making, and the potential for significant licensing deals. Despite these compelling attributes, the stock remains significantly undervalued compared to its peers.

With more information about its drug development efforts and potential licensing deals becoming available, Xeris Biopharma is poised to gain more attention from the market. Investors seeking a hidden gem with the potential for explosive growth should take a closer look at XERS.