Phathom Pharmaceuticals(PHAT) - 2021 Q2 - Quarterly Report

Financial Performance - Net loss for the six months ended June 30, 2021, was $71,395,000, compared to a net loss of $41,242,000 for the same period in 2020, indicating an increase in losses of approximately 73.2%[11] - The net losses for the six-month periods ended June 30, 2021, and 2020 were $71.4 million and $41.2 million, respectively, with an accumulated deficit of $456.9 million as of June 30, 2021[114] - For the six months ended June 30, 2021, total operating expenses were $68.9 million, an increase of $28.5 million from $40.4 million in the same period of 2020[127] - Research and development expenses for the six months ended June 30, 2021, were $42.2 million, up from $30.7 million in 2020, reflecting an increase of $11.5 million[127] - General and administrative expenses for the six months ended June 30, 2021, were $26.7 million, an increase of $17.0 million from $9.7 million in 2020[128] Assets and Liabilities - Total current assets decreased from $291,368,000 as of December 31, 2020, to $211,338,000 as of June 30, 2021, representing a decline of approximately 27.5%[9] - Total liabilities decreased from $100,840,000 as of December 31, 2020, to $82,451,000 as of June 30, 2021, a reduction of about 18.2%[9] - Total stockholders' equity decreased from $194,271,000 as of December 31, 2020, to $132,128,000 as of June 30, 2021, a decline of about 32.0%[9] - Cash and cash equivalents decreased from $287,496,000 at the beginning of the period to $209,669,000 at the end of the period, a decrease of about 27.1%[19] - As of June 30, 2021, the company had cash and cash equivalents of $210 million[134] Cash Flow - Net cash used in operating activities for the six months ended June 30, 2021, was $78,129,000, compared to $20,761,000 for the same period in 2020, indicating a significant increase in cash outflow[19] - The company reported a net decrease in cash of $77.8 million for the six months ended June 30, 2021, compared to a net increase of $3.5 million in the same period of 2020[146] - Net cash provided by financing activities for the six months ended June 30, 2021, was $516, primarily from the issuance of common stock from the exercise of stock options[149] Funding and Capital - The Company has incurred net losses and negative cash flows from operating activities since inception, with total net proceeds of approximately $191.5 million from the sale of 10,997,630 shares of common stock in its 2019 IPO[24] - In December 2020, the Company raised net proceeds of $88.6 million from the sale of 2,250,000 shares at a public offering price of $39.48 per share[24] - The company completed an underwritten public offering on December 16, 2020, selling 2,250,000 shares at $42.00 per share, generating net proceeds of $88.8 million after underwriting discounts[141] - The company expects existing cash and cash equivalents to be sufficient to meet anticipated cash requirements into the fourth quarter of 2022, supporting ongoing clinical trials[142] - The company anticipates future capital requirements will depend on various factors, including clinical trial costs and market acceptance of products[144] Research and Development - Research and development expenses for the three months ended June 30, 2021, were $21,597,000, up from $14,859,000 in the same period of 2020, reflecting a growth of about 45.3%[11] - Research and development expenses consist primarily of salaries, payroll taxes, employee benefits, and external costs related to clinical trials of vonoprazan[39] - The company has incurred approximately $61.8 million in research and development and general administrative activities during the first half of 2021[147] - The company expects to report top-line data from the PHALCON-EE trial in October 2021 and plans to submit regulatory filings for vonoprazan in September 2021[110] - The company has not generated any revenue and does not expect to do so from product sales until the development and regulatory approval of vonoprazan, which may take several years[115] Debt and Obligations - Total debt as of June 30, 2021, was $47,685,000 net of debt discount, which includes a current portion of $10,345,000 and a non-current portion of $39,655,000[70] - The Term Loans bear interest at a floating rate of the higher of the Wall Street Journal Prime rate plus 1.75% or 7.25%, with an interest-only payment period extended until December 31, 2021, contingent on positive clinical trial data[136] - The company has a final payment fee obligation of 8.25% of the original principal amount of the Term Loans, with prepayment options subject to fees[137] - Future minimum principal and interest payments under the Term Loans total $60.56 million, with $10.56 million attributed to interest and final payment fees[78] Stock and Equity - The weighted-average shares of common stock outstanding increased from 32,733,750 for the six months ended June 30, 2020, to 36,468,498 for the same period in 2021, an increase of approximately 11.1%[11] - The Company issued 1,084,000 shares of common stock to Takeda in connection with the Takeda License[81] - The Company has a total of 7,588,000 shares of common stock included in the calculation of basic weighted-average common shares outstanding due to the Takeda Warrant[49] - The Company granted 220,000 performance-based stock units in 2020, with an additional 109,050 granted in 2021, contingent on FDA approval milestones[90] - The Employee Stock Purchase Plan (ESPP) allows participants to purchase common stock through payroll deductions, with 858,783 shares remaining available for issuance as of June 30, 2021[93] Legal and Compliance - The company is not currently subject to any material legal proceedings, which could impact resources and costs[164] - There have been no changes in internal control over financial reporting that materially affected the company during the six months ended June 30, 2021[161] - The company has maintained effective disclosure controls and procedures, achieving a reasonable assurance level as evaluated by the principal executive officer and principal financial officer[160] - There have been no material changes to the risk factors disclosed in the previous Form 10-K[165] - The company has not engaged in any unregistered sales of equity securities[166]