Phathom Pharmaceuticals Inc (PHAT) Q4 2024 Earnings Call Highlights: FDA Approval Boosts ...

GuruFocus.com
07 Mar

Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Phathom Pharmaceuticals Inc (NASDAQ:PHAT) secured FDA approval for non-erosive GERD, enhancing their product portfolio.
  • The company reported strong commercial coverage, with over 120 million lives covered, facilitating access to their product.
  • Phathom Pharmaceuticals Inc (NASDAQ:PHAT) achieved over 300,000 prescriptions filled, indicating strong market demand.
  • The company is investing in a new consumer campaign to increase brand awareness and drive growth.
  • Phathom Pharmaceuticals Inc (NASDAQ:PHAT) ended the year with $297 million in cash, providing a solid financial foundation for future investments.

Negative Points

  • Phathom Pharmaceuticals Inc (NASDAQ:PHAT) anticipates a softened first quarter in 2025 due to industry-wide seasonal dynamics.
  • The company faces limited Medicare and Medicaid coverage, which could restrict access for some patients.
  • There is uncertainty surrounding the FDA's decision on their citizen petition, which could impact regulatory exclusivity.
  • Phathom Pharmaceuticals Inc (NASDAQ:PHAT) reported a GAAP net loss of $74.5 million for the fourth quarter of 2024.
  • The company expects increased R&D and SG&A expenses in 2025, which could pressure profitability.

Q & A Highlights

  • Warning! GuruFocus has detected 5 Warning Signs with PHAT.

Q: Could you help us understand the timelines around the citizen petition and what options you have if the decision doesn't go in your favor? Also, do you expect growth in Q1 relative to Q4? A: Terry Curran, President and CEO: We submitted the citizen petition in December, and the FDA is required to respond within 180 days. We anticipate a response by June and are confident in our legal position. If the decision doesn't go our way, we may pursue litigation. Regarding Q1, we expect it to be softer due to industry dynamics, but we are still working through the quarter.

Q: For the phase 3 on-demand trial, when do you think you'll have enough real-world data to make a go/no-go decision? A: Terry Curran, President and CEO: We are evaluating real-world utilization and expect to have enough information by mid-year to make a decision on proceeding with the study.

Q: Is the significant increase in prescribing physicians driven by the DTC campaign, and how do you balance this with cash runway to profitability? A: Martin Gilligan, Chief Commercial Officer: The campaign is an evolution of our current efforts and has motivated patients to ask physicians for our product. We've seen a 55% increase in physicians receiving requests. We will evaluate the ROI mid-year to ensure it's the best use of resources. Molly Henderson, CFO: Our OpEx guidance for 2025 includes a significant investment in DTC, and we will assess its effectiveness mid-year.

Q: Can you speak to early metrics on refill trends and usage for non-erosive GERD? A: Martin Gilligan, Chief Commercial Officer: We are tracking well with refill rates and persistency, in line with PPIs. The 10 mg dosage is growing faster due to non-erosive GERD, and feedback from physicians indicates patients are doing well and continuing treatment.

Q: Regarding the ODT formulation, would you seek pediatric extension first, or the formulation patent? Also, can you clarify the gross-to-net calculation? A: Unidentified Executive: The ODT formulation has broader applicability beyond pediatrics and will run in parallel with patent efforts. Molly Henderson, CFO: Gross-to-net takes gross revenue to net revenue, considering different price points for retail and Blink RX channels. The lion's share of gross-to-net is from rebating and wholesaler discounts.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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