Financial Data and Key Metrics Changes - The company is in a pivotal phase two/three for ischemic stroke and is simultaneously conducting a phase two study for preeclampsia, with key data expected in the next sixty days [3][34] - The market opportunity for early onset preeclampsia is estimated at about 30,000 patients in the U.S., with a focus on severe cases that require hospitalization [13][14] Business Line Data and Key Metrics Changes - DM199 is a recombinant human tissue kallikrein-1 (KLK1) serine protease enzyme, which has shown potential in increasing perfusion and lowering blood pressure in preeclampsia patients [7][15] - The current treatment options for preeclampsia are described as antiquated and ineffective, highlighting the need for a new therapy like DM199 [14][19] Market Data and Key Metrics Changes - In the U.S., early onset preeclampsia occurs in up to 1% of pregnancies, translating to approximately 40,000 live births annually, indicating a significant market potential for DM199 [13][14] - The company anticipates a high penetration rate for DM199 in the market due to the lack of effective current treatments [13][15] Company Strategy and Development Direction - The company aims to address the unmet need in preeclampsia treatment by providing a therapy that does not cross the placental barrier, thus reducing risks to the fetus [15][19] - The strategy includes leveraging clinical data from existing studies in China to inform the development of DM199 for ischemic stroke and preeclampsia [35][39] Management's Comments on Operating Environment and Future Outlook - Management emphasizes the critical need for effective treatments in preeclampsia, as current medications often fail to manage the disease effectively [19][54] - The company is optimistic about the upcoming data readouts and believes that successful results could validate the efficacy of DM199 in both preeclampsia and ischemic stroke [34][50] Other Important Information - The company is conducting a KOL event on May 28 to discuss the unmet needs in preeclampsia and the design of their clinical trials [58][60] - The pivotal REMEDY two trial for DM199 in acute ischemic stroke is targeting patients who are not eligible for existing treatments, representing a large market opportunity [43][44] Q&A Session Summary Question: Can you discuss the clinical development of DM199 for preeclampsia? - The company is in a pivotal phase two/three for ischemic stroke and simultaneously conducting a phase two study for preeclampsia, with data expected soon [3][34] Question: What is the market opportunity for DM199 in preeclampsia? - The market opportunity is estimated at about 30,000 patients in the U.S., focusing on severe cases that require hospitalization [13][14] Question: Why was South Africa chosen for the preeclampsia trial? - South Africa was selected due to high rates of preeclampsia and the expertise of local investigators in conducting rigorous clinical trials [21][23] Question: What are the key endpoints for the preeclampsia study? - Key endpoints include assessing whether DM199 crosses the placental barrier and its efficacy in lowering blood pressure [30][31] Question: How does DM199 compare to existing treatments for stroke? - DM199 has a 24-hour treatment window, which is significantly longer than existing treatments, potentially allowing more patients to receive effective care [47][49]

Core Viewpoint - Phathom Pharmaceuticals, Inc. (PHAT) is experiencing significant selling pressure, with a 45.8% decline over the past four weeks, but is now positioned for a potential trend reversal as it enters oversold territory, supported by positive earnings expectations from Wall Street analysts [1]. Group 1: Technical Indicators - The Relative Strength Index (RSI) is a key technical indicator used to determine if a stock is oversold, with a reading below 30 typically indicating oversold conditions [2]. - PHAT's current RSI reading is 20.52, suggesting that the heavy selling may be exhausting itself, indicating a potential bounce back towards previous supply and demand equilibrium [5]. Group 2: Fundamental Analysis - There is strong consensus among sell-side analysts that earnings estimates for PHAT have increased by 12.9% over the last 30 days, which often correlates with price appreciation in the near term [7]. - PHAT holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further indicating a potential turnaround [8].

Core Viewpoint - Phathom Pharmaceuticals reported a quarterly loss of $1.07 per share, slightly worse than the consensus estimate of a loss of $1.06, but an improvement from a loss of $1.42 per share a year ago [1] Financial Performance - The company posted revenues of $28.52 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 1.06% and significantly up from $1.91 million in the same quarter last year [2] - Over the last four quarters, Phathom Pharmaceuticals has surpassed consensus EPS estimates two times and topped consensus revenue estimates four times [2] Stock Performance - Phathom Pharmaceuticals shares have declined approximately 47.2% since the beginning of the year, contrasting with the S&P 500's decline of 5.3% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.97 on revenues of $38.23 million, and for the current fiscal year, it is -$3.55 on revenues of $167.86 million [7] Earnings Outlook - The estimate revisions trend for Phathom Pharmaceuticals is currently favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] - The sustainability of the stock's price movement will depend on management's commentary during the earnings call [3][4] Industry Context - The Medical - Biomedical and Genetics industry, to which Phathom Pharmaceuticals belongs, is currently ranked in the top 32% of over 250 Zacks industries, suggesting a favorable outlook for stocks within this sector [8]

Financial Data and Key Metrics Changes - The company reported net revenues of $28.5 million for Q1 2025, which is a slight decrease on a sequential quarterly basis despite an increase in prescriptions filled [30][21] - The gross to net discount rate improved to 53%, with expectations to range between 55% and 65% for the remainder of 2025 [31][76] - Non-GAAP R&D expenses were $7.9 million, a 4% decrease year-over-year, while non-GAAP SG&A expenses were $90.3 million, a 57% increase compared to the same period in 2024 [32] Business Line Data and Key Metrics Changes - Approximately 127,000 filled Vaquesna prescriptions were recorded in Q1 2025, representing an 8% growth over Q4 2024 [25] - 75% of prescriptions filled in Q1 were from repeat patients, indicating strong retention [26] - The company has seen a cumulative total of over 390,000 prescriptions filled since launch, with a 30% growth over the last eight weeks [24] Market Data and Key Metrics Changes - The company maintains commercial coverage for over 120 million lives, representing more than 80% of the total commercially insured market [28] - The proportion of prescriptions flowing through retail pharmacies changed to approximately 70% from 75% in the previous quarter, indicating a shift towards cash pay options [27] Company Strategy and Development Direction - The company aims to achieve profitable operations by 2026 while managing costs and focusing on growing Vaquesna sales [10][12] - A shift in strategy includes implementing cost-saving initiatives to reduce operating expenses to less than $55 million per quarter by Q4 2025 [12] - The company is prioritizing field sales activities over direct-to-consumer (DTC) advertising due to lower ROI from the latter [50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the regulatory exclusivity of Vaquesna, with the FDA's decision on the citizens petition expected in early June [19][88] - The CEO emphasized the importance of maintaining a disciplined approach to spending and the need to adapt to current capital market conditions [10][36] - Management remains optimistic about the product's market potential and the positive feedback from both patients and physicians [23][97] Other Important Information - The company is experiencing a potential future disruption in the supply of Baquesna triple packs but does not anticipate a material impact on revenues [22] - A reduction in force is planned, affecting approximately 6% of total staffing, to streamline operations [14] Q&A Session Summary Question: Can you provide more color on the timing of the C-suite changes and their impact on the citizens petition process? - Management confirmed that there will be no interruption in the citizens petition activities, and the key team members will continue to engage with the FDA [40][41] Question: Are you speaking to the same individuals at the FDA as before? - There is some continuity in the FDA staff, but senior policy decisions have changed with the new administration [52] Question: How should investors think about the potential impact on overall script growth from the discontinuation of DTC TV spend? - Management indicated that the field sales activities are the primary drivers of growth, and the discontinuation of DTC spending is not expected to adversely impact revenue ramp [58][60] Question: What is the level of conviction regarding the citizens petition response timing? - Management expressed cautious optimism but acknowledged the potential for delays due to FDA turnover [88] Question: Are there still plans to continue pediatric studies? - The EOE study has been deferred pending the citizens petition decision, but other paths for pediatric extension are being evaluated [90]

Financial Data and Key Metrics Changes - The company reported net revenues of $28.5 million for Q1 2025, which is a slight decrease compared to the previous quarter despite an increase in prescriptions filled [27][28] - Cash and cash equivalents stood at $212 million, which is expected to support operations until profitability is reached in 2026 without additional financing [19][32] - The gross to net discount rate improved to 53%, with expectations to range between 55% and 65% for the remainder of 2025 [28][70] Business Line Data and Key Metrics Changes - Approximately 127,000 filled prescriptions for Vaquesna were recorded in Q1 2025, reflecting an 8% growth over Q4 2024 [22] - The proportion of prescriptions filled by repeat patients was about 75%, indicating strong ongoing patient engagement [23] - The company has seen a significant increase in prescribers, with over 23,600 prescribers writing filled prescriptions as of April 11, up from over 20,000 previously [24] Market Data and Key Metrics Changes - The commercial coverage remains consistent, with over 120 million lives covered, representing more than 80% of the total commercially insured market [25] - A new cash pay consignment program was rolled out to improve access for government patients whose insurance does not cover Vaquesna [25] Company Strategy and Development Direction - The company aims to grow Vaquesna sales while managing costs to achieve profitable operations by 2026, reflecting a shift in strategy due to current capital market conditions [10][11] - Cost-saving initiatives are being implemented, targeting operating expenses to be less than $55 million per quarter by Q4 2025 [11][29] - The focus will remain on field sales activities as the primary driver for new prescriber adoption, with a reduction in direct-to-consumer (DTC) spending due to lower ROI [44][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the potential of Vaquesna and the importance of the upcoming FDA decision on the citizens petition for regulatory exclusivity [16][18] - The company is committed to being good stewards of investor funds and aims to reward investor confidence through disciplined spending and revenue growth [33] Other Important Information - The company announced a reduction in force of approximately 6% as part of its cost-saving measures [13] - There is a potential future disruption in the supply of Baquesna triple packs, but it is not expected to materially impact revenues or operations [20] Q&A Session Summary Question: Timing of C-suite changes and impact on CP process - Management confirmed that there will be no interruption in the citizens petition activities, and the team will continue to engage with the FDA [36] Question: Conversations with FDA and potential scenarios - Management indicated that they are in ongoing discussions with the FDA and will take necessary actions based on the response received [39] Question: Impact of DTC pullback on script growth - Management clarified that the focus will remain on field sales activities, which have proven to be effective in driving revenue growth, and they do not expect a negative impact from the DTC pullback [52] Question: Conviction on CP timing - Management expressed cautious optimism about the CP decision being on time but acknowledged the potential for delays due to FDA turnover [80] Question: Plans for pediatric studies - The EOE study has been deferred pending the CP decision, but management remains open to exploring other paths for pediatric exclusivity extensions [82]

Sales Performance - Vonoprazan generated peak net sales of approximately $850 million and continues to achieve volume growth during its tenth full year on the market since its approval in 2014 [106]. - Product revenue for the three months ended March 31, 2025, was $28.5 million, a significant increase from $1.9 million in the same period of 2024, representing a growth of 1,400% [128]. - Gross profit for the three months ended March 31, 2025, was $24.8 million, compared to $1.5 million in 2024, indicating an increase of 1,570% [128]. - The company has secured broad commercial coverage for VOQUEZNA, with over 120 million, or over 80%, of total U.S. commercial lives having access to VOQUEZNA tablets [109]. Financial Position - The company had cash and cash equivalents of $212.3 million as of March 31, 2025, which is expected to fund operations for at least the next twelve months [112]. - As of March 31, 2025, the company reported a net cash used in operating activities of approximately $84.9 million, an increase from $69.0 million in the same period of 2024 [161]. - The company reported a net decrease in cash of $84.9 million for the three months ended March 31, 2025, compared to a decrease of $59.2 million in the same period of 2024 [160]. - The company has sufficient cash and cash equivalents to fund operations for at least the next twelve months, but future capital requirements will depend on various factors including product revenues and clinical trial costs [156][159]. Expenses and Losses - Net losses for the three months ended March 31, 2025, were $94.3 million, compared to $82.9 million for the same period in 2024, with an accumulated deficit of $1.4 billion [113]. - Selling, general and administrative expenses rose to $94.5 million in Q1 2025 from $62.0 million in Q1 2024, an increase of $32.5 million or 52.6% [131]. - Interest expense for the three months ended March 31, 2025, was $18.1 million, up from $17.2 million in the same period of 2024, reflecting an increase of $0.9 million or 5.2% [132]. - Net loss for the three months ended March 31, 2025, was $94.3 million, compared to a net loss of $82.9 million in 2024, an increase in loss of $11.5 million or 13.9% [128]. Research and Development - Research and development expenses for the three months ended March 31, 2025, totaled $9.184 million, a decrease from $9.430 million in the same period in 2024 [121]. - The company plans to reduce investment in direct-to-consumer promotion and suspend several clinical and product development programs [108]. - The net cash used in operating activities for Q1 2025 included approximately $76.0 million spent on research and development and administrative activities [161]. Financing and Agreements - The Loan Agreement with Hercules allows for term loans up to $300 million, with various tranches available based on milestones [138]. - The cash interest rate under the Loan Agreement was reduced to a variable rate of 9.85%, with a cap at 10.35% [138]. - The company entered into a Revenue Interest Financing Agreement, receiving $100 million initially and an additional $160 million upon FDA approval of vonoprazan for Erosive GERD in Q4 2023 [149]. - The Initial Investors are entitled to a 10% royalty on net sales of products containing vonoprazan, with a cap payment option available after April 30, 2024 [150]. - The company has a shelf registration statement allowing for the sale of up to $150 million of common stock, with no shares sold as of March 31, 2025 [154]. - The company anticipates financing future cash needs through equity offerings, the Revenue Interest Financing Agreement, and potential collaborations [157]. Workforce and Costs - The company expects to incur one-time costs of approximately $7 million to $10 million in connection with a workforce reduction of 28 employees, or approximately 6% [108]. - The company does not expect to meet the revenue threshold to draw the Fifth or Sixth Tranche based on current projections [144]. - The minimum cash covenant requires the company to maintain a minimum cash balance of 20% of the outstanding principal balance at all times [148]. Regulatory Approvals - The FDA approved VOQUEZNA 10 mg tablets for the relief of heartburn associated with Non-Erosive GERD on July 17, 2024 [107].

Revenue Performance - Phathom reported net revenues of $28.5 million for Q1 2025, a significant increase from $1.9 million in Q1 2024, driven by the continued momentum of VOQUEZNA products[9] - Total product revenue for Q1 2025 was $28.519 million, a significant increase from $1.912 million in Q1 2024, representing a growth of approximately 1,493%[20] - Approximately 127,000 VOQUEZNA prescriptions were filled in Q1 2025, reflecting an 8% sequential growth despite seasonal headwinds[7] - The company has filled over 390,000 VOQUEZNA prescriptions to date, representing approximately 30% growth since the last earnings report[8] - Gross profit for Q1 2025 reached $24.795 million, compared to $1.486 million in Q1 2024, indicating a substantial increase in profitability[20] Financial Losses - The net loss for Q1 2025 was $94.3 million, compared to $82.9 million in Q1 2024, with a non-GAAP adjusted net loss of $77.1 million[9] - The net loss for Q1 2025 was $94.316 million, compared to a net loss of $82.852 million in Q1 2024, showing a decline in financial performance[20] - Non-GAAP adjusted net loss for Q1 2025 was $77.077 million, compared to $64.796 million in Q1 2024, indicating a worsening trend[22] - The company reported a GAAP net loss per share of $1.31 for Q1 2025, slightly improved from a loss of $1.42 per share in Q1 2024[22] Operating Expenses - Total operating expenses in Q1 2025 were $103.658 million, up from $71.440 million in Q1 2024, reflecting an increase of about 45%[20] - General and administrative expenses increased to $94.5 million in Q1 2025, up from $62.0 million in Q1 2024, primarily due to higher advertising and promotional costs[9] - Research and development expenses for Q1 2025 were $9.2 million, a slight decrease from $9.4 million in Q1 2024[9] - Phathom is implementing cost reductions expected to decrease operating expenses by $60 to $70 million in 2025, targeting quarterly cash operating expenses below $55 million in Q4 2025[3] Cash and Assets - Phathom's cash and cash equivalents as of March 31, 2025, were $212.3 million, sufficient to fund operations and achieve profitability from operations in 2026[9] - Cash and cash equivalents decreased to $212.315 million as of March 31, 2025, down from $297.263 million at the end of 2024[18] - Total assets fell to $294.208 million as of March 31, 2025, compared to $378.318 million at the end of 2024, a decline of approximately 22%[18] - Total liabilities remained relatively stable at $632.584 million as of March 31, 2025, compared to $631.898 million at the end of 2024[18] Leadership and Strategic Changes - Leadership changes include a workforce reduction of approximately 6% and the appointment of Jonathan Bentley as Senior Vice President, Head of Sales[4] - The company has paused the planned Phase 2 study of VOQUEZNA in eosinophilic esophagitis (EoE) as part of its cost optimization strategy[7] Shareholder Impact - The weighted-average shares of common stock outstanding increased to 71,969,411 in Q1 2025 from 58,371,480 in Q1 2024, reflecting a dilution in share value[22]

Core Insights - Phathom Pharmaceuticals is undergoing significant operational changes, including cost reductions and leadership transitions, to enhance revenue growth and achieve profitability by 2026 [2][4][5] Financial Performance - For Q1 2025, Phathom reported net revenues of $28.5 million, a substantial increase from $1.9 million in Q1 2024, driven by the ongoing commercial success of VOQUEZNA [4][10] - The net loss for Q1 2025 was $94.3 million, compared to $82.9 million in Q1 2024, with a non-GAAP adjusted net loss of $77.1 million versus $64.8 million in the same period last year [16][24] - Cash and cash equivalents as of March 31, 2025, were $212.3 million, which the company believes is sufficient to fund operations and achieve profitability by 2026 [6][16] Strategic Initiatives - The company is implementing a workforce reduction of approximately 6% and expects to cut operating expenses by $60 to $70 million in 2025, targeting quarterly cash operating expenses below $55 million by Q4 2025 [2][5][10] - Phathom is focusing on its sales force as a core growth driver, with Jonathan Bentley appointed as Senior Vice President, Head of Sales, to lead this initiative [5][10] VOQUEZNA Launch Progress - Over 390,000 prescriptions for VOQUEZNA have been filled, with approximately 127,000 prescriptions filled in Q1 2025, reflecting an 8% increase from the previous quarter [4][10] - The product maintains strong commercial access, covering over 120 million lives, with more than 80% of commercially insured patients having access [10] Organizational Changes - Key leadership transitions include the departure of the Chief Operating Officer, Chief Commercial Officer, and Chief Financial and Business Officer, with a new commercially-focused leadership team being established [5][10] - The company is also reducing investment in direct-to-consumer promotion and deferring several clinical and product development programs to optimize costs [5][10]

Core Insights - Phathom Pharmaceuticals is set to present real-world data on its first-in-class treatment VOQUEZNA (vonoprazan) for gastroesophageal reflux disease (GERD) at Digestive Disease Week (DDW) from May 3-6, 2025, in San Diego, CA [1][3] - VOQUEZNA is the only treatment approved by the U.S. FDA for adults for heartburn relief associated with Non-Erosive GERD and for treating all severities of Erosive Esophagitis (Erosive GERD) [1][34] - The data presented will analyze treatment patterns and patient characteristics, indicating VOQUEZNA's potential role for patients inadequately managed by existing therapies [3] Company Activities - Two Phathom-sponsored posters will be presented on May 5, 2025, at the conference, along with a Product Theater highlighting VOQUEZNA [2] - The company will maintain a strong presence at the conference with a booth (1743) on the exhibit floor [2] Industry Context - GERD affects approximately 1 in 5 U.S. adults, with around 70% of the GERD population suffering from Non-Erosive GERD [31][32] - Erosive GERD, affecting about 30% of the GERD population, can lead to severe complications if inadequately treated [33] - The conference will showcase over 5,600 abstracts and hundreds of lectures on the latest advances in GI research, medicine, and technology [8]

Company Overview - Phathom Pharmaceuticals, Inc. is a biopharmaceutical company focused on developing and commercializing novel treatments for gastrointestinal diseases [3] - The company has in-licensed exclusive rights to vonoprazan, a first-in-class potassium-competitive acid blocker (PCAB) [3] - Vonoprazan is marketed in the U.S. as VOQUEZNA® for various gastrointestinal conditions, including Non-Erosive GERD and H. pylori infection [3] Upcoming Events - Management will host a live webcast on May 1, 2025, at 8:00 am EDT to report first quarter 2025 financial results and provide a business update [1] - Additional information and access to the webcast can be found on the Events & Presentations section of the Phathom website [2] - A recording of the webcast will be available for 90 days following the event [2]