Phathom Pharmaceuticals (PHAT) FY Conference June 11, 2025 10:40 AM ET Speaker0 Okay. We'll continue with the next session. Good morning, everyone. I'm Paul Choi, and I cover the biotech sector here at Goldman Sachs. It's my pleasure to have Fathom Pharmaceuticals here for our next session and Steve Fosta, CEO, to my immediate left. Maybe what we'll do is kick it off by letting Steve kinda introduce himself, maybe provide a little bit of background. There has been some changes at at Fathom recently, and so ...

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]