Phathom Pharmaceuticals — Third Quarter 2026 Earnings Summary

Financial Performance:

• Q3 2026 net revenues were $84.7 million, a 71% increase year-over-year compared to $49.5 million in Q3 2025, and a 14% increase sequentially from Q2 2026.
• Net loss for Q3 2026 was $13.9 million, improved from a $30.0 million net loss in Q3 2025.
• Non-GAAP adjusted net income for Q3 2026 was $3.0 million, compared to a non-GAAP adjusted net loss of $11.2 million in Q3 2025.
• Operating expenses for Q3 2026 were $66.4 million, up from $58.6 million in Q3 2025, driven by higher clinical development and commercial investment costs.
• Non-GAAP operating expenses (excluding stock-based compensation) for Q3 2026 were $60.5 million, compared to $49.3 million in Q3 2025.
• Research and development expenses were $8.7 million in Q3 2026, up $1.7 million from $7.0 million in Q3 2025.
• Selling, general and administrative (SG&A) expenses were $57.7 million in Q3 2026, up $6.1 million from $51.6 million in Q3 2025.
• Cash and cash equivalents totaled $184.6 million as of September 30, 2026, an increase of $2.1 million from the second quarter of 2026.
• The company generated positive operating cash flow for the second consecutive quarter.
• Gross margin is guided at approximately 80% for the full year 2026.

Guidance and Future Outlook:

• Phathom reaffirmed its full-year 2026 financial guidance:
  • Net revenue: $310–325 million.
  • Gross-to-net discount: 55–59%.
  • Gross margin: ~80%.
  • Non-GAAP operating expenses (excluding stock-based compensation): $235–245 million.
• Management stated confidence in meeting financial obligations and delivering on full-year 2026 guidance.
• Topline results for the Phase 3 pHalcon-NERD-302 study (VOQUEZNA for as-needed use in NERD) are expected in Q1 2028.
• Topline results for the Phase 2 pHalcon-EoE-201 trial (VOQUEZNA in Eosinophilic Esophagitis) are expected in Q4 2026.

Business Segments and Product Lines:

• VOQUEZNA is the company's primary commercial product, a first-in-class potassium-competitive acid blocker (PCAB) for gastrointestinal diseases.
• Over 2 million total VOQUEZNA prescriptions have been filled since launch through October 16, 2026.
• Approximately 380,000 VOQUEZNA prescriptions were filled in Q3 2026, including ~248,000 covered prescriptions and ~132,000 cash-pay prescriptions.
• Covered prescriptions represented approximately 65% of total Q3 2026 prescriptions, with volume increasing approximately 19% sequentially.
• Cash-pay prescription volume increased approximately 6% sequentially.
• The company launched a new copay offering via BlinkRx, allowing eligible commercially insured patients to pay as little as $0 for VOQUEZNA.
• VOQUEZNA is marketed for Non-Erosive GERD, healing and maintenance of Erosive GERD, and as part of VOQUEZNA DUAL PAK and TRIPLE PAK for H. pylori infection.

Market and Competitive Landscape:

• At the ACG 2026 Annual Scientific Meeting, Phathom presented data projecting VOQUEZNA to be cost-effective compared with proton pump inhibitors (PPIs) for healing and maintenance of Erosive GERD.
• A new predictive cost-effectiveness analysis suggested potential healthcare cost savings based on clinical healing outcomes and fewer anticipated downstream interventions.
• Vonoprazan (the active drug in VOQUEZNA) was the subject of 38 independent, investigator-initiated abstracts presented at ACG 2026.
• Phathom is defending its 10-year New Chemical Entity (NCE) regulatory exclusivity for VOQUEZNA tablets through May 3, 2032, granted by the FDA.

Risks and Challenges:

• Litigation filed by BDR Pharmaceuticals against the FDA regarding VOQUEZNA's regulatory exclusivity is ongoing; Phathom has intervened in the case.
• The FDA opened a public comment docket on the exclusivity issues, with comments due November 23, 2026.
• There is a risk that the FDA may reconsider, modify, or reverse its prior decision recognizing the GAIN Act extension of NCE exclusivity based on public comments or litigation outcomes.
• Potential adverse outcomes in litigation could result in earlier approval of ANDAs referencing VOQUEZNA tablets, leading to competition.
• Risks include potential delays in clinical trials, negative trial results, regulatory developments, and dependence on third parties for commercialization and manufacturing.

Management Commentary and Tone:

• CEO Steve Basta expressed pleasure with "continued solid revenue growth and improved operating profitability," highlighting the milestone of two million prescriptions filled.
• CFO Sanjeev Narula described the results as reflecting a "significant financial transformation" with revenue growth of 71% year-over-year and positive cash flow.
• Management emphasized a "stronger financial foundation" achieved through revenue growth and disciplined expense management, maintaining flexibility to invest in commercial and clinical priorities.
• The tone was confident regarding the ability to meet financial obligations and achieve full-year guidance.

Other Key Points:

• Phathom implemented "Access First" field messaging and promotional materials to improve VOQUEZNA access dynamics.
• The company believes cash on hand and anticipated future cash from operations will be sufficient to fund the business and satisfy debt obligations without requiring additional debt or equity financing.
• The company hosts a conference call and webcast on October 29, 2026, at 8:00 a.m. EDT to discuss results.
• Non-GAAP financial measures exclude non-cash stock-based compensation, non-cash interest expense related to revenue interest financing liability, and interest expense related to debt discount amortization.