GUGGENHEIM 3RD ANNUAL HEALTHCARE INNOVATION CONFERENCE - PHATHOM PHARMACEUTICALS INC

Explicit Guidance:

• FY2024 Revenue: Full-year guidance of $310 million to $325 million (vs. $175 million in FY2023).
• Financial Trajectory: Company has achieved positive cash flow for the last two quarters and reached operating profitability (excluding stock-based compensation), with results very close to profitability even including stock comp.
• Growth Outlook: Management anticipates continued profitable growth over the coming years, though no specific numerical guidance is provided for 2027 or beyond.

Business-Segment Outlook:

• GI Universe (Core Engine): Current penetration of ~5% of the 20 million annual PPI/H2 blocker script market (380,000 Q3 scripts, ~75% from GI). Target is 20–30% penetration to reach a $1 billion+ revenue run rate from this segment alone.
• Primary Care Expansion: Expected to become an increasing portion of the business over the next 1–2 years, driven by patient "handoffs" from GI to primary care for maintenance therapy.
• Market Inflection (As-Needed): Anticipated shift in 2029 to treat "as-needed" use cases (patients wishing to avoid daily therapy) rather than just severe refractory cases.
• Access Strategy ("Access First"): Initiative to shift physician prescribing behavior by emphasizing ease of access and affordability (via BlinkRx partner) rather than efficacy, targeting a reduction in the current 35% cash-pay script mix over time.

Market and Competitive Outlook:

• Demand Trends: Strong patient preference for Vaquesna over PPIs due to superior symptom relief, leading to high persistence and low switch-back rates.
• Competitive Position: Positioning to displace PPIs as first-line therapy for Eosinophilic Esophagitis (EoE) and second-line for GERD, bypassing biologics and steroids.
• Long-Term Opportunity: Potential for a second $1 billion revenue run rate from the primary care segment.
• OTC Potential: Identified as an "enormous" opportunity; potential to become a $1 billion+ OTC brand leveraging existing brand equity rather than patent protection, with timing likely near loss of exclusivity or potentially earlier.

Macro / Industry Outlook:

• Regulatory/Exclusivity: FDA has applied a May 2032 exclusivity date to Vaquesna tablets under the GAIN Act (umbrella policy). Management views this decision as robust and likely to hold despite ongoing litigation.
• Litigation Status: Acknowledges investor uncertainty caused by pending litigation but asserts the FDA's rationale regarding the 2032 date is correct. Exact litigation timelines remain unpredictable.
• Market Perception: Addressing patient concerns regarding chronic PPI side effects (osteoporosis, B12 risks) as a driver for switching to Vaquesna.

Strategic Initiatives:

• Phase 2 EoE Trial: Blinded 12-week data expected this quarter; full trial (including open-label) completes Q1 2025. Goal is to define Phase 3 program and secure FDA request to include pediatric patients, potentially granting a 6-month exclusivity extension.
• Phase 3 EoE Program: Timeline to be determined post-Phase 2 data; potential for pediatric inclusion expected to yield data in 2027.
• As-Needed (PRN) Indication: Phase 3 trial ongoing; data expected in H1 2028, with NDA filing anticipated in early 2029.
• OTC Development: Planning Phase 3 trials and launch strategy underway; no specific timeline confirmed yet.
• Sales Force Reallocation: Shifted resource focus to 24,000 GI prescribers (covering virtually the entire universe) to deepen utilization; maintaining expansion into new primary care writers.

Risks and Headwinds to Outlook:

• Access/Coverage: Current 35% cash-pay mix remains a risk; reliance on successful Prior Authorization (PA) processes at BlinkRx to secure commercial coverage.
• Litigation Uncertainty: Unpredictable sequence of legal events could create short-term market noise, though the underlying exclusivity date is viewed as secure.
• Implementation Lag: Benefits from the "Access First" initiative and patient-driven switching are expected to be gradual impacts over multiple quarters.

Management Tone on the Future:

• Confidence: High confidence in the "clear path to a billion-dollar opportunity" in GI and a "second billion" in primary care.
• Trajectory: Describes the company as being on a "significant growth path" with "financial discipline," marking a meaningful advance to a leader in the GI space.
• Caution: Management is hesitant to provide specific 2027 guidance or forecasts, citing the need to wait for Q4 earnings to establish annual guidance.

Miscellaneous:

• Pipeline Extensions: The EoE program aims to demonstrate acid suppression as first-line therapy to displace PPIs and biologics/steroids.
• Patient Dynamics: Emphasizes "patient-driven" growth where patient satisfaction creates a self-reinforcing loop of adherence and prescribing.