In my article from October, "My Top 5 Biotech Stocks Big Pharma Could Buy Next," I mentioned how Phathom Pharmaceutical's ( PHAT ) Voquezna and Voquezna Triple Pak is actively capturing share in the U.S. GERD and H. pylori infection treatment markets.With over two decades of dedicated experience in investment, Allka Research has been a guiding force for individuals seeking lucrative opportunities. Its conservative approach sets it apart, consistently unearthing undervalued assets within the realms of ETFs, ...

Group 1 - Phathom Pharmaceutical's Voquezna and Voquezna Triple Pak are gaining market share in the U.S. GERD and H. pylori infection treatment markets [1] Group 2 - Allka Research has over two decades of experience in investment, focusing on uncovering undervalued assets in ETFs, commodities, technology, and pharmaceuticals [2] - The firm aims to simplify investment strategies for both seasoned and novice investors, fostering a community of informed investors [2]

Summary of Phathom Pharmaceuticals Conference Call Company Overview - **Company**: Phathom Pharmaceuticals - **Product**: VOQUEZNA, a next-generation treatment for gastroesophageal reflux disease (GERD) licensed from Takeda, which has shown significant success in Japan [2][4] Market Opportunity - **Target Market**: Focus on the 30%-40% of GERD patients who are on PPIs (Proton Pump Inhibitors) but still experience symptoms [3][6] - **Revenue Growth**: Achieved $55 million in revenue in 2024, with guidance for $170-$175 million in 2025 [3] - **Gastroenterology Focus**: Shifted strategy to concentrate on gastroenterology, which is expected to drive growth over the next few years [3][19] Competitive Landscape - **Market Positioning**: VOQUEZNA is not positioned as a direct competitor to PPIs; it is intended for patients who have failed prior PPI therapy [12][13] - **Prescription Opportunity**: There are approximately 20 million PPI prescriptions written annually by gastroenterologists, representing a significant market for VOQUEZNA [7][9] Sales Strategy - **Sales Force Reallocation**: 70% of sales efforts are now focused on gastroenterologists, up from 30% previously targeting primary care [19][21] - **Productivity Metrics**: Sales calls to gastroenterologists yield four times the productivity compared to primary care [21] Exclusivity and Regulatory Strategy - **Exclusivity Timeline**: VOQUEZNA has exclusivity through May 2032, with potential extensions into 2034 depending on ongoing trials and FDA reviews [28][29] - **GAINS Act Utilization**: The company successfully leveraged the GAINS Act to extend exclusivity for the product [27] Financial Projections - **Revenue Potential**: Aiming for $1 billion in revenue from the gastroenterology market, with a clear path to achieving this through increased market penetration [10][36] - **Growth Rate Stability**: The company has maintained a stable growth rate despite the transition in sales strategy [24][44] Coverage and Access - **Insurance Coverage**: VOQUEZNA is covered by over 80% of commercial lives, with varying requirements for prior PPI failures [17][46] - **Cash Pay Strategy**: The company is also focusing on cash pay prescriptions to ensure patient access, which can later convert to covered prescriptions [53][56] Patient Experience and Persistence - **Patient Retention**: Early data suggests strong persistence rates for patients switching to VOQUEZNA, driven by significant symptom relief [42][40] - **Long-term Outlook**: The company anticipates that positive patient experiences will lead to sustained prescription growth over time [57] Conclusion - Phathom Pharmaceuticals is strategically positioned to capture a significant share of the GERD treatment market through VOQUEZNA, with a focused sales strategy, strong revenue growth, and a clear path to exclusivity that supports long-term financial success [36][58]

Summary of Phathom Pharmaceuticals Conference Call Company Overview - **Company**: Phathom Pharmaceuticals - **Product**: VOQUEZNA, a first-in-class P-CAB approved for gastroesophageal reflux disease (GERD) treatment - **Market Focus**: Targeting patients who are refractory to traditional PPI therapies Key Points and Arguments Commercial Strategy and Market Focus - Phathom has pivoted its commercial strategy to focus more on the gastroenterology (GI) community, which is where the majority of patients experiencing significant GERD symptoms are referred [4][6] - The company aims to target the 20 million PPI prescriptions written within GI practices, with a current penetration of approximately 3% [10][11] - The goal is to increase penetration to 20%-30% within the GI community, potentially generating $1 billion in revenue from this segment alone [12] Financial Performance - Revenue growth has been significant, with $10 million increases from Q1 to Q2 and Q2 to Q3, reaching $49.5 million in Q3 [7][8] - Operating expenses were reduced from $98 million in Q1 to $49 million in Q3, achieving a 50% cut in cash operating expenses [8] - The company expects to reach positive operating profit by 2026, focusing on cash basis excluding stock compensation and interest expenses [9] Sales Force Realignment - The sales force has been realigned to focus 70% of their time on gastroenterologists, shifting from a previous 70/30 split favoring primary care [20][27] - Territories have been remapped to optimize call frequency on gastroenterologists, allowing for better engagement and education about VOQUEZNA [29] Adoption and Utilization - Adoption patterns among physicians are gradual, with initial focus on patients who have failed multiple PPI therapies [18][19] - The company tracks physician prescribing frequency to reinforce habits and increase script volume [45][46] - There is a strong emphasis on patient feedback to encourage physician adoption, as patients report significant improvements in their symptoms [32][66] Medicare and Patient Access - The introduction of Medicare coverage has positively impacted prescription volumes, with a notable increase in cash prescriptions due to the availability of the Blink patient assistance platform [48][56] - The company is tracking both covered and cash prescriptions separately, with cash prescriptions growing since the Medicare rollout [49][56] Future Opportunities - Phathom is initiating a clinical trial for eosinophilic esophagitis (EOE), which could lead to additional market opportunities and an extension of exclusivity for VOQUEZNA [67][70] - Successful trials could result in a six-month exclusivity extension, potentially delaying generic competition until late 2033 or 2034 [70] Additional Important Insights - The company has implemented financial discipline in its spending, which is expected to support future profitability [72] - The transformative effect of VOQUEZNA on patient quality of life is a key selling point that is expected to drive further adoption among physicians [33][66]

Summary of Phathom Pharmaceuticals FY Conference Call Company Overview - **Company**: Phathom Pharmaceuticals (NasdaqGS:PHAT) - **Product**: Voquezna, a drug for treating gastroesophageal reflux disease (GERD) Key Points Industry Context - The healthcare industry is focused on treating patients effectively, particularly in the area of gastroesophageal reflux disease (GERD) where there is a significant unmet need [2][3] - Approximately 30%-40% of patients on chronic PPI therapy still experience pain, indicating a large potential market for Voquezna [2] Product Performance - Voquezna is described as a transformative drug that significantly improves patient care by raising stomach pH more effectively than PPIs [3][4] - Positive patient testimonials and feedback from physicians highlight the drug's effectiveness [3] Strategic Shift - The company has pivoted its strategy to focus on gastroenterologists (GIs) rather than primary care physicians, as GIs are more likely to treat patients still experiencing significant symptoms [6][7] - The sales force has been realigned to increase efficiency in targeting GIs, with a goal of having over 70% of sales efforts directed towards this group [15][16] Financial Performance - In Q3, Phathom Pharmaceuticals reported a 23% growth in revenue and a 28% increase in prescriptions, reflecting the success of the new strategy [11] - Operating expenses were reduced from $89 million in Q2 to $49 million in Q3, indicating improved expense management [11][12] - The company expects to achieve operating profitability next year [11] Market Opportunity - The total PPI prescription market from gastroenterologists is estimated at 20 million annually, with Phathom currently capturing only 3% [17] - The company aims to increase its market share to 20-30%, representing a potential billion-dollar revenue opportunity [17][21] Competitive Landscape - The PPI market was previously valued at over $12 billion, with several products generating north of $3 billion before going generic [20] - Phathom's strategy is to capture a portion of this market, particularly focusing on the unmet needs of patients still in pain [20][21] Future Growth and Trials - The company is conducting a trial for eosinophilic esophagitis (EOE), which could extend exclusivity for Voquezna and open additional market opportunities [38][39] - Data from the EOE trial is expected in 2027, with potential for significant revenue from this indication [39] Financial Health - Phathom has a strong financial position with $135 million in cash and an available ATM facility [45] - The company is positioned to generate positive cash flow by 2027, allowing for potential in-licensing of new products [42][43] Conclusion - Phathom Pharmaceuticals is strategically positioned to capitalize on the unmet needs in the GERD market with Voquezna, supported by a focused sales strategy and strong financial management. The ongoing trials and potential for new product introductions further enhance the company's growth prospects [2][11][42]

Core Insights - Phathom Pharmaceuticals has initiated the Phase 2 pHalcon-EoE-201 clinical trial for VOQUEZNA (vonoprazan) as a treatment for eosinophilic esophagitis (EoE) in adults, marking a significant step in addressing unmet medical needs in gastrointestinal diseases [1][2][4] Company Overview - Phathom Pharmaceuticals is focused on developing and commercializing novel treatments for gastrointestinal diseases, having in-licensed the rights to vonoprazan for the U.S., Europe, and Canada [30] - VOQUEZNA is currently approved in the U.S. for multiple indications, including the treatment of Erosive Esophagitis and as part of combination therapies for H. pylori infection [29][30] Clinical Trial Details - The pHalcon-EoE-201 study is a two-part, randomized, double-blind, placebo-controlled trial involving approximately 80 adults with endoscopic-confirmed EoE and dysphagia, with the first part lasting 12 weeks [2][4] - Topline primary and secondary results from the trial are expected to be available in 2027 [3] Treatment Context - Eosinophilic esophagitis is a chronic immune condition characterized by eosinophil accumulation in the esophagus, leading to inflammation and swallowing difficulties [5] - Current treatment options for EoE are limited, with only two approved therapies available, highlighting the potential significance of VOQUEZNA's acid suppression profile as a non-steroidal treatment option [2][5]

Core Insights - Phathom Pharmaceuticals reported a quarterly loss of $0.15 per share, outperforming the Zacks Consensus Estimate of a loss of $0.30, and showing improvement from a loss of $1.32 per share a year ago, resulting in an earnings surprise of +50.00% [1] - The company achieved revenues of $49.5 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 0.64% and significantly up from $16.35 million in the same quarter last year [2] - Phathom Pharmaceuticals' stock has increased by approximately 66.6% since the beginning of the year, compared to a 17.2% gain in the S&P 500 [3] Earnings Outlook - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the next quarter is -$0.17 on revenues of $55.35 million, and for the current fiscal year, it is -$2.31 on revenues of $172.56 million [7] Industry Context - The Medical - Biomedical and Genetics industry, to which Phathom Pharmaceuticals belongs, is currently ranked in the top 38% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5][6]

Financial Data and Key Metrics Changes - The company reported net revenue of $49.5 million for Q3 2025, representing a 25% growth quarter-over-quarter, exceeding expectations of approximately $47 million [9][24] - Cash operating expenses were $49.3 million, significantly lower than the target of below $60 million, marking a 43% decrease from Q2 2025 and a 50% decrease from Q1 2025 [10][27] - Cash usage for Q3 was less than $15 million, down 77% compared to Q2 [10][29] - The company narrowed its full-year revenue guidance to the top half of the previously communicated range, now expecting $170 to $175 million [24] Business Line Data and Key Metrics Changes - The company reported 790,000 filled prescriptions as of October 17, 2025, with Q3 seeing 221,000 filled prescriptions, of which 144,000 were covered prescriptions, growing approximately 23% quarter-over-quarter [11][12] - Cash prescriptions filled in Q3 totaled 77,000, reflecting a 38% growth quarter-over-quarter [12] Market Data and Key Metrics Changes - The company has shifted its focus to gastroenterology prescribers, with 70% of prescriptions coming from gastroenterologists [12][13] - The target universe for gastroenterology includes approximately 24,000 writers, with an opportunity to convert 20% to 30% of the 20 million PPI prescriptions written annually, potentially exceeding $1 billion in revenue [16][17] Company Strategy and Development Direction - The company is concentrating on a gastroenterology-focused strategy, aiming to deepen relationships with prescribers rather than broadening the base [12][13] - A salesforce realignment has been implemented to better target gastroenterology practices, with expectations of approximately 300 sales representatives by Q1 2026 [15][90] - The company is also initiating a Phase 2 clinical trial for eosinophilic esophagitis, which could enhance its market position if successful [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving operating profitability by 2026, supported by reduced cash operating expenses and growing revenues [29][75] - The company is monitoring prescription trends and believes that the current cash balance can support operations through the anticipated point of achieving profitability [29][30] Other Important Information - The company has updated its exclusivity status with the FDA, now having exclusivity through May 2032, which may extend to 2033 due to ANDA filing timelines [19][20] - There has been no disruption in the availability of the triple pack product, despite previous concerns [20] Q&A Session Summary Question: Prescription growth expectations for Q4 - Management acknowledged that while prescription growth has been strong, guidance for Q4 reflects a balance between ongoing momentum and the salesforce transition [33][35] Question: Impact of advertising cuts on future quarters - Management indicated that the cuts were not driving top-line growth and do not expect a negative impact from the paused advertising [36] Question: Focus on primary care physicians (PCPs) - The company continues to engage with high-performing PCPs while shifting the majority of salesforce time to gastroenterology [40][41] Question: Sales territory realignment and productivity - The territory realignment has been executed, and the company expects to see productivity reflected in the top line as new representatives are onboarded [89][90] Question: Factors for expanding back into primary care - The decision to return to primary care will depend on metrics such as NBRX per sales call, which is currently higher in gastroenterology [91][92]

THIRD QUARTER 2025 EARNINGS CONFERENCE CALL Question & Answer Steven Basta, President & Chief Executive Officer Sanjeev Narula, Chief Financial and Business Officer Robert Breedlove, Principal Accounting Officer OCTOBER 2025 NASDAQ: PHAT Today's Agenda Business Update Steven Basta, President & Chief Executive Officer Q3 2025 Financial Results Sanjeev Narula, Chief Financial and Business Officer Closing Remarks Steven Basta, President & Chief Executive Officer 2 Safe harbor This presentation contains forward ...

Product Performance - Vonoprazan generated peak net sales of approximately $850 million for Takeda and continues to achieve volume growth during its tenth year on the market since its approval in Japan in 2014 [112]. - As of October 17, 2025, over 790,000 prescriptions for VOQUEZNA products have been filled, written by more than 34,100 prescribers, with over 120 million U.S. commercial lives having access to VOQUEZNA tablets [114]. - The FDA approved VOQUEZNA for the treatment of Erosive GERD and H. pylori infection on November 1, 2023, with commercial launch initiated in Q4 2023 [113]. - Product revenue for the three months ended September 30, 2025, was $49.5 million, a significant increase of $33.2 million compared to $16.4 million in the same period of 2024 [134]. - For the nine months ended September 30, 2025, product revenue was $117.5 million, an increase of $91.9 million from $25.6 million in 2024 [139]. Financial Performance - The company incurred net losses of $200.1 million and $259.9 million for the nine months ended September 30, 2025 and 2024, respectively, with an accumulated deficit of $1.5 billion as of September 30, 2025 [119]. - Net loss for the three months ended September 30, 2025, was $30.0 million, an improvement of $55.6 million compared to a net loss of $85.6 million in 2024 [134]. - Total operating expenses for the nine months ended September 30, 2025, were $256.6 million, an increase of $17.2 million compared to $239.5 million in 2024 [139]. - Cash and cash equivalents as of September 30, 2025, were $135.2 million, indicating the company's liquidity position [145]. - Interest expense for the nine months ended September 30, 2025, was $51.7 million, a decrease of $1.7 million from $53.4 million in 2024 [143]. Restructuring and Expenses - Total restructuring charges incurred during the nine months ended September 30, 2025, were $9.2 million, with a workforce reduction of approximately 6% [121]. - Research and development expenses decreased to $7.0 million for the three months ended September 30, 2025, from $8.7 million in 2024, a reduction of $1.7 million [136]. - Selling, general and administrative expenses were $51.6 million for the three months ended September 30, 2025, down $24.5 million from $76.1 million in 2024 [137]. - Approximately $145.3 million was spent on ongoing research and development and selling, general and administrative activities for the nine months ended September 30, 2025 [174]. Funding and Capital Requirements - The company has raised approximately $543.3 million from the sale of 34,737,032 shares of common stock and 2,608,922 pre-funded warrants since inception through September 30, 2025 [118]. - The company expects to finance cash needs through equity offerings and additional debt financings, with potential collaborations and licenses [120]. - The company believes existing cash and anticipated product revenues are sufficient to fund operations for at least the next twelve months [169]. - Future capital requirements will depend on market acceptance, sales and marketing costs, and the timing of clinical trials and regulatory reviews [170]. - The company must maintain a minimum cash balance of 20% of the outstanding principal balance at all times, which may increase under certain performance conditions [159]. Debt and Financing Agreements - The company entered into a Fourth Amendment to Loan and Security Agreement, increasing the term loans from $200 million to $300 million, with additional tranches available subject to milestones [150]. - Tranche 2 of $50 million was partially funded, with $40 million on December 14, 2023, and the remaining $10 million on March 15, 2024 [150]. - The cash interest rate was reduced from 10.75% to a variable rate capped at 10.35%, with potential further reductions based on milestones [150]. - The company received $100 million from the Revenue Interest Financing Agreement and an additional $160 million upon FDA approval of vonoprazan for Erosive GERD in Q4 2023 [161]. - The company is obligated to pay a 10% royalty on net sales of products containing vonoprazan, with a cap payment option available after April 30, 2024 [162]. Cash Flow and Operating Activities - Net cash used in operating activities for the nine months ended September 30, 2025, was approximately $161.8 million, a decrease of $41.5 million compared to $203.3 million in 2024 [174]. - The net cash used in financing activities for the nine months ended September 30, 2025, was primarily related to employee tax obligations, contrasting with $156.7 million provided in 2024 from debt issuance and stock offerings [176]. - The net decrease in cash for the nine months ended September 30, 2025, was $162.1 million, compared to a decrease of $46.7 million in 2024, indicating a significant cash flow challenge [173]. Compliance and Risk Factors - As of September 30, 2025, the company was in compliance with all covenants under the Loan Agreement, but does not expect to meet the revenue threshold to draw the Sixth Tranche [156]. - The company is classified as a smaller reporting company, allowing it to take advantage of scaled disclosures [181]. - No off-balance sheet arrangements were reported during the periods presented [183]. - As of September 30, 2025, there have been no material changes in market risk factors compared to the previous fiscal year [184]. - The company continues to evaluate estimates and assumptions that affect reported amounts in its financial statements, which may differ from actual results [179].