GUGGENHEIM 3RD ANNUAL HEALTHCARE INNOVATION CONFERENCE - PHATHOM PHARMACEUTICALS INC

Financial Performance:

• Q3 revenue run rate is approximately $380,000 prescriptions (75% from GI), driving full-year 2023 revenue guidance of $310–$325 million.
• Revenue represents significant growth, approximately doubling from the previous year's $175 million.
• Company achieved positive cash flow for the first time over the last two quarters.
• Operating profitability (excluding stock comp) has been reached, with results very close to profitability even including stock comp.
• Approximately 35% of current scripts are cash-filled (non-insured), with a strategic goal to reduce this percentage over time through improved prior authorization success.
• Access program "BlinkRx" offers a $0 copay for covered patients, serving as a critical enabler for prescription fill confidence.

Guidance and Future Outlook:

• Company projects 2023 growth of approximately 70% year-over-year.
• Formal guidance for 2027 will be established during the Q4 earnings call; no specific numbers provided for 2027 yet.
• Long-term revenue target includes two $1 billion opportunities: one derived from Gastroenterology (GI) and one from Primary Care.
• Current GI penetration is estimated at 5% of the total PPI/H2 blocker script universe (20 million annual scripts); potential to reach $1B+ at 20–30% penetration.
• Primary care expansion is expected to drive the second $1 billion as patients transition from GI to PCP for maintenance and as "as-needed" labeling opens new use cases.

Business Segments and Product Lines:

• Core Product: Voquesna (Laqueuna), a potent acid-suppression therapy for GERD, marketed as a superior alternative to PPIs for patients with uncontrolled symptoms.
• Sales Force Strategy: Pivot completed to focus on GI specialists (24,000 prescribers); 70% of sales calls target this group, yielding 75% of prescriptions.
• Growth Drivers: Deepening utilization within existing GI practices (moving from severe to moderate cases) and expanding the primary care prescriber base.
• Pipeline Developments:
  • As-Needed (PRN) Indication: Phase 3 trials currently active; data expected in H1 2028 with potential label approval filing in early 2029.
  • EoE Indication: Phase 2 trial underway (first of its kind for acid suppression as first-line EoE therapy); initial 12-week data release imminent, with full trial completion expected Q1 next year.
  • OTC Potential: Extensive planning for Over-the-Counter launch, leveraging the product's rapid onset and patient feedback; potential to be a billion-dollar+ franchise, likely timed near loss of exclusivity but under assessment for earlier launch.
• H. Pylori Packs: Maintain exclusivity until May 2032 under the GAIN Act for H. pylori treatment packs.

Market and Competitive Landscape:

• Market Opportunity: Enormous GERD market with 20 million annual PPI/H2 blocker scripts; significant patient demand for alternatives to daily chronic PPI therapy due to perceived long-term risks.
• Competitive Positioning: Voquesna positioned to displace PPIs as first-line or second-line therapy in EoE and to replace daily PPIs with PRN usage.
• Market Share: Currently capturing approximately 5% of the relevant script volume; competitive advantage lies in efficacy perception and patient satisfaction ("no ambiguity" in symptom relief).
• Prescriber Sentiment: 97% of Gastroenterologists view Voquesna as effective and superior to PPIs for their patients.

Risks and Challenges:

• Litigation: Ongoing litigation regarding the application of the GAIN Act to NCE exclusivity for Voquesna tablets; management views the FDA's June decision as robust and correct but acknowledges investor uncertainty due to legal unpredictability.
• Access/Coverage: High cash-fill percentage (35%) highlights ongoing challenges with insurance prior authorizations; success depends on improving PA throughput and physician confidence in the BlinkRx partnership.
• Patient Adherence: While patient feedback is positive, maintaining adherence through the transition from GI to primary care and ensuring consistent access remains a focus.

Management Commentary and Tone:

• Tone: Highly confident and optimistic, emphasizing a clear path to profitability and sustained double-digit growth.
• Strategic Focus: Management is pivoting sales efforts from efficacy education (which is already accepted) to access and affordability education ("Access First" initiative).
• Confidence: Strong belief in the "patient-driven" nature of the therapy, noting patients rarely wish to switch back to PPIs once on Voquesna.
• Financial Discipline: Highlighted as a key achievement, positioning the company as a leader in the GI space with a sustainable profit trajectory.

Analyst Questions and Answers:

• Question: What drives Q3 growth and the trajectory into 2027?
  • Answer: Growth driven by depth in GI (maximizing existing 24k prescribers) and expansion into primary care; 2027 guidance to be set at Q4 earnings.
• Question: What is the specific revenue opportunity in GI?
  • Answer: Current $300M run rate represents ~25% of the path to a $1B GI opportunity; achieving 20-30% penetration of the PPI market is the target.
• Question: Can you clarify the "Access First" initiative and BlinkRx role?
  • Answer: Initiative focuses on educating physicians on BlinkRx for $0 copay access and cash backup; aims to remove friction in the prescribing/dispensing process.
• Question: What is the timeline for EoE and PRN indications?
  • Answer: EoE data expected this quarter (12-week) and Q1 next year (full); PRN data expected H1 2028 with filing in early 2029.
• Question: How does management view the litigation?
  • Answer: FDA has already ruled in favor of the May 2032 exclusivity date for tablets; management believes this is the correct application of policy despite the litigation noise.

Other Key Points:

• The company is in its third year of commercialization and has successfully reached its milestone of operating profitability (excluding stock comp).
• The "handoff" of patients from GI to Primary Care is expected to increase as the patient base expands and the "as-needed" label opens new treatment segments.
• OTC potential is considered "enormous," potentially exceeding current PPI OTC revenues when adjusted for inflation and the product's dual-use profile (daily + PRN).
• Management emphasizes that the primary barrier to growth is no longer efficacy awareness but rather the physician's confidence in patient access and affordability.