Company Performance - Phathom Pharmaceuticals reported a quarterly loss of $1.25 per share, which was worse than the Zacks Consensus Estimate of a loss of $1.20, and compared to a loss of $0.84 per share a year ago, indicating a significant decline in performance [1] - The company posted revenues of $7.32 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 29.72%, compared to zero revenues a year ago [2] - Over the last four quarters, the company has surpassed consensus EPS estimates three times [2] Stock Movement and Outlook - Phathom Pharmaceuticals shares have increased by approximately 18.4% since the beginning of the year, outperforming the S&P 500's gain of 9% [3] - 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 coming quarter is -$1.30 on revenues of $10.94 million, and for the current fiscal year, it is -$4.80 on revenues of $40.48 million [7] Industry Context - The Medical - Biomedical and Genetics industry, to which Phathom Pharmaceuticals belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable industry outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact the stock's performance [5]

Core Insights - Phathom Pharmaceuticals reported significant growth in the demand and sales of its VOQUEZNA products, with over 122,000 prescriptions written, marking a 184% increase since the last quarterly report [1][3] - The company achieved net revenues of $7.3 million in Q2 2024, a substantial increase of over 280% compared to $1.9 million in Q1 2024 [1][5] - VOQUEZNA is now FDA-approved for treating heartburn associated with Non-Erosive Gastroesophageal Reflux Disease (GERD), addressing a market of over 22 million diagnosed patients [1][4] Launch Progress - The commercial launch of VOQUEZNA has accelerated, with total prescription demand exceeding 122,000, up from 43,000 in the previous report, representing a 184% increase [3] - Over 60,000 prescriptions have been filled, reflecting a more than 240% increase from 17,500 filled prescriptions previously [3] - The prescriber base has expanded by over 115%, with more than 8,200 prescribers generating filled prescriptions as of July 19, 2024 [3] Commercial Coverage - VOQUEZNA tablets now have commercial coverage for over 116 million lives in the U.S., which is approximately 77% of total U.S. commercial lives [3] - CVS Caremark and UnitedHealthcare have added VOQUEZNA to their formularies, enhancing access for millions of patients [3][4] Financial Results - The net loss for Q2 2024 was $91.4 million, compared to $41.0 million in Q2 2023, with a non-GAAP adjusted net loss of $73.3 million [5][12] - Research and development expenses decreased to $7.4 million from $12.8 million in the same quarter last year, while selling, general, and administrative expenses rose to $75.9 million from $18.9 million [5][12] - As of June 30, 2024, the company had cash and cash equivalents of $276.2 million, with an additional $125 million available under a term loan [5][11] Regulatory Highlights - The FDA approved VOQUEZNA 10 mg tablets for Non-Erosive GERD on July 18, 2024, marking the third FDA approval for the product [4] - Phathom plans to initiate a Phase 3 study for As Needed dosing of VOQUEZNA and a Phase 2 study for Eosinophilic Esophagitis (EoE) later this year [4]

Core Insights - VOQUEZNA has received FDA approval for the treatment of Non-Erosive Gastroesophageal Reflux Disease (GERD), marking a significant advancement in GERD treatment in over 30 years [1][4][12] - The approval is based on the successful results of the Phase 3 pivotal trial, which demonstrated a significant reduction in heartburn episodes among patients [6][7] - VOQUEZNA is the first and only FDA-approved treatment of its kind available in the U.S., providing a new class of acid suppression therapy for patients [2][4] Company Overview - Phathom Pharmaceuticals, Inc. is a biopharmaceutical company focused on developing and commercializing novel treatments for gastrointestinal diseases [14] - The company has in-licensed the U.S. rights to vonoprazan, the active ingredient in VOQUEZNA, from Takeda, which markets the product in Japan and other regions [13][14] - Phathom is committed to providing savings programs for eligible patients facing coverage or affordability issues [9] Industry Context - Non-Erosive GERD is the largest category of GERD, affecting an estimated 45 million U.S. adults, with around 15 million treated with prescription medications annually [5][12] - Despite existing treatment options, many patients remain dissatisfied and continue to experience heartburn, impacting their quality of life [5][6] - The introduction of VOQUEZNA is expected to change the treatment landscape for GERD, offering patients a new option for relief [2][6]

VOQUEZNA is now approved and available to treat the largest category of Gastroesophageal Reflux Disease (GERD) VOQUEZNA met its primary endpoint in its Phase 3 pivotal trial by demonstrating a significant and rapid reduction of heartburn with daily treatment VOQUEZNA represents the first major innovation in GERD treatment in over 30 years and the only FDA-approved treatment of its kind available in the U.S. A Media Snippet accompanying this announcement is available by clicking on this link. FLORHAM PARK, N ...

My Thoughts and Analysis On Phathom's Prospects For Success Investment Overview Analysing Phathom's Steady Share Price Declines Since Post-IPO Peak Looking Ahead - Can Phathom Stage A Recovery As A Commercial Entity & Secure Additional Approval Next Month? I last covered Phathom Pharmaceuticals (NASDAQ:PHAT) for Seeking Alpha around three and a half years ago, in January 2021, when the biotech's stock traded ~$39 per share, more than double its October 2019 IPO price of $19 per share (the IPO raised >$200m) ...

FLORHAM PARK, N.J., May 28, 2024 (GLOBE NEWSWIRE) -- Phathom Pharmaceuticals, Inc. (Nasdaq: PHAT), a biopharmaceutical company focused on developing and commercializing novel treatments for gastrointestinal (GI) diseases, announced today that members of its management team are scheduled to participate in the following investor conferences in June: Jefferies Global Healthcare Conference in New York, NY Date: Wednesday, June 5, 2024 Live Webcast: 12:30 p.m. ET Management to participate in one-on-one meetings ...

Financial Data and Key Metrics Changes - For Q1 2024, the company reported net revenues of $1.9 million, representing a 180% sequential quarterly increase, attributed to growing demand in filled prescriptions and inventory restocking by wholesalers [2] - Gross profit for the quarter was $1.5 million, equating to a gross margin of 78%, with a sequential quarterly increase of about 220 basis points [3] - Non-GAAP adjusted net loss was $64.8 million, or $1.11 loss per share, compared to a loss of $46 million, or $0.80 loss per share in Q4 2023 [7] - Cash and cash equivalents were $322 million, with an additional $150 million available via a debt facility [7][8] Business Line Data and Key Metrics Changes - Non-GAAP R&D spend was $8.2 million, a 16% reduction compared to Q1 2023, primarily due to lower clinical trial costs [4] - Non-GAAP SG&A expenses were $57.6 million, an increase of over 330% compared to the same period in 2023, driven by the build-out of commercial infrastructure and marketing activities [5] Market Data and Key Metrics Changes - The company reported over 43,000 prescriptions written and over 17,500 prescriptions filled for VOQUEZNA, with filled prescriptions increasing by 361% [77] - Approximately 72 million commercially insured lives now have access to VOQUEZNA following its addition to major formularies [66][83] Company Strategy and Development Direction - The company aims to establish widespread commercial coverage throughout 2024 and is focused on the potential approval and label expansion of VOQUEZNA for nonerosive GERD, which represents a significant market opportunity [12][68] - The strategy includes a direct-to-consumer campaign to increase brand awareness and drive demand [65][84] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the financial position, expecting a cash runway through the end of 2026 based on current operating plans and anticipated product revenues [8] - The company is optimistic about the potential for VOQUEZNA to displace PPIs in a large market, with a focus on executing its launch strategy effectively [13][73] Other Important Information - The company is planning to initiate a Phase III trial for as-needed dosing in nonerosive GERD and a Phase II trial for eosinophilic esophagitis later this year [70][71] - The anticipated approval for nonerosive GERD is set for July 19, 2024, which could serve as a significant catalyst for growth [69] Q&A Session Summary Question: Update on fill rate for BlinkRx - Management confirmed that the fill rate has improved to nearly 41%, up from approximately 27% previously reported, indicating increased access and utilization [16][18] Question: Expectations for gross to net improvement - Management noted that while the first quarter saw better-than-expected gross to net due to a temporary issue, they are not providing specific projections for the rest of the year as negotiations with payers are ongoing [21][22] Question: Clarification on prescription split between Blink and IQVIA - Management confirmed that approximately 60% of scripts are now going through retail channels, indicating a shift from cash support to covered scripts as access improves [30][31] Question: Insights on refill rates and patient retention - Management indicated that over 50% of prescribers have written multiple prescriptions, suggesting positive patient experiences and retention [80] Question: Future dynamics of BlinkRx and payer coverage - Management stated that while there may always be some level of coverage through Blink, they expect overall coverage to grow as negotiations with payers progress [45][46]

Sales and Market Performance - Vonoprazan generated approximately $850 million in net sales in its seventh full year on the market since its approval in Japan in late 2014[132]. - As of April 26, 2024, over 43,000 prescriptions for VOQUEZNA tablets, VOQUEZNA Triple Pak, and VOQUEZNA Dual Pak have been written, with over 17,500 prescriptions filled[136]. - Approximately 72 million, or an estimated 48 percent, of U.S. commercial lives now have access to VOQUEZNA tablets[136]. - Product revenue for the three months ended March 31, 2024, was $1.9 million, attributed to the sales of VOQUEZNA launched in Q4 2023[155]. Financial Performance - The net loss for the three months ended March 31, 2024, was $82.9 million, compared to $37.8 million for the same period in 2023[139]. - As of March 31, 2024, the accumulated deficit was $1.0 billion[139]. - The company has incurred significant operating losses since inception and expects to continue doing so for the foreseeable future[139]. - The company anticipates continued net losses and negative cash flows from operations for the foreseeable future[161]. - Net cash used in operating activities was approximately $69.0 million for the three months ended March 31, 2024, compared to $39.7 million for the same period in 2023[189]. - The company incurred approximately $61.9 million in research and development and administrative expenses for the three months ended March 31, 2024[189]. Research and Development - The company plans to initiate a Phase 3 trial for a novel dosing regimen of vonoprazan as an "as-needed" treatment for episodic heartburn relief in 2024[135]. - Research and development expenses decreased to $9.4 million from $11.5 million year-over-year, a reduction of $2.1 million[157]. Cash and Financing - The company has cash and cash equivalents of $322.2 million as of March 31, 2024, and believes this is sufficient to fund operations through the end of 2026[138]. - The company expects to fund operations for at least the next twelve months and through the end of 2026 with existing cash, cash equivalents, and remaining $150 million under the Loan Agreement[184]. - The Loan Agreement with Hercules allows for term loans up to $300 million, with various tranches available based on milestones[166]. - The cash interest rate under the Fourth Loan Amendment is capped at 10.35%, with a variable rate starting at 9.85%[167]. - The company generated net proceeds of approximately $14.1 million from the sale of 1,514,219 shares under the 2020 ATM Offering for the year ended December 31, 2023[182]. - The company completed an underwritten public offering, selling 12,793,750 shares at a price of $11.75 per share, generating net proceeds of $141.8 million[183]. Expenses and Liabilities - Cost of revenue for the same period was $0.4 million, with prior manufacturing costs related to VOQUEZNA already expensed[156]. - Selling, general and administrative expenses increased significantly to $62.0 million from $18.6 million, an increase of $43.4 million[159]. - Interest income rose to $4.3 million for the three months ended March 31, 2024, compared to $1.5 million in the same period of 2023[160]. - Interest expense increased to $17.2 million for the three months ended March 31, 2024, from $9.2 million in the prior year[160]. - The company is obligated to pay a 10% royalty on net sales of products containing vonoprazan to the Initial Investors until aggregate payments equal 200% of the Investment Amount[178]. - The company recorded a $1.3 million fair value of the warrant and $9.7 million in final interest payment fees as debt discount, amortized over the term of the Term Loan[176]. Regulatory and Market Considerations - The FDA has assigned a PDUFA target action date of July 19, 2024, for the NDA seeking approval of vonoprazan for Non-Erosive GERD[135]. - The company plans to evaluate commercial partnerships for vonoprazan in Europe and Canada and expand development into other indications and formulations[137]. - The company remains an emerging growth company until it meets certain criteria, including total annual gross revenue of at least $1.235 billion[196]. - The market value of the company's common stock held by non-affiliates must exceed $700 million to be deemed a "large accelerated filer"[196]. - There are no off-balance sheet arrangements currently in place as defined under SEC rules[198]. - As of March 31, 2024, there have been no material changes in market risk, including interest rate risk, foreign currency exchange risk, and inflation risk[199].

Phathom Pharmaceuticals Reports First Quarter 2024 Financial Results and Provides Business Update Exhibit 99.1 "Phathom is quickly establishing VOQUEZNA as the first and only FDA-approved treatment of its kind for Erosive GERD and we are thrilled with the promising strides made in our first full quarter post-launch," said Terrie Curran, President and CEO of Phathom. "We're pleased that prescribers are embracing VOQUEZNA as a powerful new treatment option and that demand is rapidly growing. The positive feed ...

Financial Performance - The company incurred a net loss of $201.6 million for the year ended December 31, 2023, compared to a net loss of $197.7 million for 2022, with an accumulated deficit of $928.7 million as of December 31, 2023[311]. - The company expects to continue incurring significant operating losses for the foreseeable future, with uncertainty regarding achieving profitability[311][312]. - The company anticipates that existing cash and cash equivalents, along with a remaining $160 million drawdown under its loan agreement, will fund operations for at least the next 12 months and through the end of 2026[316]. Product Development and Commercialization - The company relies entirely on the success of its recently launched products: VOQUEZNA, VOQUEZNA TRIPLE PAK, and VOQUEZNA DUAL PAK, which were introduced in Q4 2023[308]. - The successful commercialization of its products will depend on obtaining adequate reimbursement and favorable pricing policies from governmental authorities and health insurers[310]. - The commercialization of VOQUEZNA, VOQUEZNA TRIPLE PAK, and VOQUEZNA DUAL PAK is dependent on the company's marketing, sales, and distribution capabilities, which were only developed in late 2023 due to prior delays[322]. - The company has limited experience in commercializing products, which may hinder its ability to successfully market its product candidates[308]. - The company faces uncertainty regarding third-party payer coverage and reimbursement, which is essential for patient access to products like VOQUEZNA[335]. Regulatory and Compliance Risks - The company faces risks related to regulatory approvals and the potential for delays in clinical trials, which could impact its product pipeline[310][318]. - The FDA and other regulatory authorities may impose ongoing requirements for post-approval studies and surveillance, leading to significant additional expenses for the company[323]. - The company must comply with the Medicaid Drug Rebate Program, which imposes extensive reporting obligations and penalties for non-compliance[342]. - The ongoing review of EU pharmaceutical legislation may significantly impact the company's business and regulatory environment in the long term[327]. - The company must comply with various regulatory requirements for drug approval in foreign markets, which may pose additional risks[361]. Financial Obligations and Funding - The company is required to make milestone and royalty payments to Takeda, which could impact its financial position and operational capabilities[314]. - The company has entered into a Loan Agreement with Hercules, borrowing $100 million initially and an additional $40 million in December 2023, with a total borrowing capacity of up to $260 million[434]. - Under the Revenue Interest Financing Agreement, the company can receive up to $300 million in funding, with $175 million received following FDA approval of vonoprazan for Erosive GERD treatment[438]. - Investors under the Revenue Interest Financing Agreement are entitled to a 10% royalty on net sales of products containing vonoprazan, with a step-down on exceeding certain annual thresholds[439]. Market Competition - The company faces significant competition from larger pharmaceutical firms and research institutions, which may adversely affect its ability to develop and commercialize products[349]. - The company expects VOQUEZNA to compete primarily with generic PPIs in both prescription and OTC markets, as well as with Talicia for H. pylori infection treatment[350]. - The company is aware of multiple competitors developing similar products, including Daewoong and Cinclus, which may launch products in the near future[351]. Clinical Trials and Development Challenges - The company faces risks related to delays in clinical trials, regulatory approvals, and potential adverse events that could impact the commercialization of vonoprazan[366]. - The timeline for recruiting patients and conducting trials may be significantly delayed if a sufficient number of patients cannot be enrolled[384]. - The company must conduct extensive clinical trials to demonstrate the safety and efficacy of vonoprazan for new indications before obtaining marketing approvals[375]. - Delays in clinical trials could increase costs and hinder the ability to generate revenue from vonoprazan and future product candidates[380]. Intellectual Property and Licensing - The company relies on the Takeda License for exclusive rights to develop and commercialize vonoprazan in the United States, Europe, and Canada, with potential termination risks impacting business prospects[411]. - The company has in-licensed patents related to vonoprazan from Takeda, but currently does not own any issued patents or pending patent applications[479]. - There is uncertainty regarding the ability to enforce pending patent applications, which may not result in issued patents providing sufficient protection[480]. - The patent position of biopharmaceutical companies is highly uncertain, affecting the commercial value of patent rights[492]. Legal and Regulatory Compliance - The company is subject to the U.S. federal Anti-Kickback Statute and other laws that impose strict penalties for non-compliance, which could include exclusion from government healthcare programs[446]. - The company may face civil and criminal penalties for noncompliance with healthcare and data privacy laws, impacting operations and profitability[475]. - The company is subject to the EU GDPR, which imposes fines of up to €20 million or 4% of annual global revenues for noncompliance[469]. Operational Risks - The company faces risks related to epidemic diseases, such as COVID-19, which could disrupt business activities and supply chains, impacting clinical trials and commercialization efforts[432]. - The company anticipates challenges in managing growth due to limited experience in handling significant operational expansion[444]. - The company must maintain certain financial covenants under its Loan Agreement, which could limit operational flexibility and expose it to default risks[436].