NASDAQ:PHAT Phathom Pharmaceuticals Q2 2024 Earnings Report $2.76 -0.60 (-17.86%) Closing price 05/2/2025 04:00 PM EasternExtended Trading$2.81 +0.05 (+1.81%) As of 05/2/2025 07:58 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Phathom Pharmaceuticals EPS ResultsActual EPS-$1.35Consensus EPS -$1.39Beat/MissBeat by +$0.04One Year Ago EPSN/APhathom Pharmaceuticals Revenue ResultsActual Revenue$7.32 millionExpected Revenue$5.65 millionBeat/MissBeat by +$1.67 millionYoY Revenue GrowthN/APhathom Pharmaceuticals Announcement DetailsQuarterQ2 2024Date8/8/2024TimeN/AConference Call DateThursday, August 8, 2024Conference Call Time8:30AM ETConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by Phathom Pharmaceuticals Q2 2024 Earnings Call TranscriptProvided by QuartrAugust 8, 2024 ShareLink copied to clipboard.There are 11 speakers on the call. Operator00:00:00Hello, and welcome to the Pfannen Pharmaceuticals Second Quarter 20 24 Earnings Results Call. At this time, all participants are in a listen only mode. After the presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. With that, I would like to turn the conference over to Eric Chiarelli, Fathom's Head of Investor Relations. Operator00:00:29Please go Speaker 100:00:31ahead. Thank you, operator. Hello, everyone, and thank you for joining us this morning to discuss Fathom's Q2 2024 results. This morning's presentation will include remarks from Terry Curran, our President and CEO Martin Gilligan, our Chief Commercial Officer and Molly Henderson, our Chief Financial Officer. Asmin Abulsi, our Chief Operating Officer will also be joining the team during the Q and A portion of today's call. Speaker 100:00:54Just a couple of logistical items before we get started. Earlier this morning, we issued a press release detailing the results we will be discussing during the call. A copy of that press release can be found under the News Releases section of our corporate website. Further, the recording of today's webcast can be found under the Events and Presentations section of our corporate website. Before we begin, let me remind you that we will be making a number of forward looking statements throughout today's presentation. Speaker 100:01:20These forward looking statements involve risks and uncertainties, many of which are beyond Thousand's control. Actual results can materially differ from the forward looking statements and any such risks can materially adversely affect the business, the results of operations and the trading prices for 1,000,000 common stock. A discussion of these statements and risk factors is available on the current Safe Harbor slide as well as in the Risk Factors section of our most recent Form 10 ks and subsequent SEC filings. All forward looking statements made on this call are based on the beliefs of Fathom as of this date and Fathom disclaims any obligation to update these statements. With that, I will now turn the call over to Terry Curran, Fathom's President and CEO to kick us off. Speaker 100:02:01Teri? Speaker 200:02:03Thank you, Eric, and thank you to all those joining us on today's call. Fathom was founded on a vision and a set of goals that from the start, many considered lofty. But over the last 5 years, we've checked one box after another. We've demonstrated differentiation versus a 30 year old standard of care, earned approval for broad labels, launched multiple products spanning 3 indications and secured favorable commercial coverage in a genericized market. To date, we've accomplished exactly what we set out to do. Speaker 200:02:37So whether you're new to the story or have followed us since the start, I encourage you to reflect on our track record as it sets the stage for how we intend to continue delivering on our goals for the Buquebena. Today, I'm excited to report specifically on the great progress we made during the Q2 of 2024. The team has been focused on executing our commercial launch strategies with physicians, patients and payers. In only our 2nd full quarter following launch, we believe the results of these efforts have been impressive and demonstrate strong momentum as we enter the back half of twenty twenty four. Before diving into our latest launch metrics, I'd like to provide an update on 2 major developments: the Quezna's approval for non erosive GERD and our expanded commercial coverage. Speaker 200:03:31As we announced on July 18, the FDA approved the quizner for the release of heartburn associated with non erosive GERD in adults. We're extremely pleased with the strength of the label, which highlighted the Cozena's rapid onset of action and durability of effect. This outcome was a key milestone in our commercialization journey, expanding the total addressable market for the equesna. GERD conditions impact about 65,000,000 U. S. Speaker 200:03:59Adults annually with about 22,000,000 being diagnosed and treated with a prescription medication. Nynorosa GERD alone is responsible for over 2 thirds of this population. This impressively large market has demonstrated the need for an alternative treatment option given the high degree of patient dissatisfaction and inadequate symptom relief. Building upon our previous approval for erosive GERD, this 3rd and largest indication allows ZEQUESNA to be considered as a treatment option for all patients suffering from GERD or H. Pylori. Speaker 200:04:39In anticipation of the PDUFA action date, our existing sales force was pretrained and prepared to begin promotion in the field immediately upon approval. It is important to note that the non erosive GERD patient journey and target prescriber base mirrors that of erosive GERD, which allows us to leverage our existing promotional efforts. In fact, over the past 2 weeks, we've already seen a notable increase in demand for 10 milligram tablets, which is the approved dose for non erosive GERD. Moreover, we believe the commercial access we have secured thus far also applies to non erosive GERD patients who are prescribed the Quizner bottles. Given the overlapping commercial dynamics across GERD conditions, our strategy has always been to hit the ground running. Speaker 200:05:30With this approval, the Quezna has now cleared another hurdle and is poised to recognize the full GERD market opportunity as we work towards our goal of displacing PPIs. Our recent expansion of commercial coverage will be a key driver in achieving that goal. After announcing our placement on Cigna Formularies midway through Q2, we recently announced the addition of the Quezna to CVS Caremark's National Formularies. As the country's largest pharmacy benefit manager responsible for over 26,000,000 commercial lives, this was a major development in ensuring widespread coverage for Bequisna. And later in this call, Martin will provide an update on several other key payers for which we recently secured form replacement. Speaker 200:06:21Our efforts have resulted in an estimated 116,000,000 commercially insured lives now having access to the Krasner. Importantly, across the majority of this coverage, we were successful in securing position on Formalase in line with our single step strategy through a generic PPI prescription. We're extremely pleased with this broad commercial coverage we've achieved for VEQUESNAR while still in the early stages of launch. One of the most impressive examples of our launch success has been the evolution of the Requesna volume. I'm pleased to share that launch to date, total demand has now surpassed 122,000 scripts written, of which over 60,000 have been filled by patients. Speaker 200:07:08We're remaining energized by these metrics and believe their growth trajectories are a testament to increasing interest from prescribers and expanded availability for patients. Over the last few months, we've continued to see extraordinary testimonials pour in from these physicians and patients alike. Almost daily, we receive positive feedback telling us how Seguesnard is relieving symptoms quickly and improving lives. Pictures of heal erosion, stories of sleeping through the night for the first time in years and overall quality of life improvements are just some of the anecdotes that have made us proud to be able to offer this 1st in class treatment option to patients suffering from acid related conditions. And with non erosive now approved, we're thrilled by the opportunity to provide these benefits to millions more patients in need. Speaker 200:08:00In parallel with launch, we continue to explore development opportunities for VIEQESNA. We're planning to initiate 2 clinical programs, a Phase 3 trial for as needed dosing in non erosive GERD and a Phase 2 trial in eosinophilic esophagitis or EOE. Both programs aim to leverage the rapid, potent and durable asset suppression profile of the Quezna. If these programs lead to FDA approvals, we believe these indications will continue to expand the total addressable market and further differentiate the Aqueousna from PPIs, which are not approved for either indication. On the financial side, Molly will further detail our Q2 2024 results later in the call, for which we reported revenues of $7,300,000 and ended with $276,000,000 in cash. Speaker 200:08:55We remain confident that our strong balance sheet will enable us to continue delivering on our launch and development strategies. After 2 full quarters on the market, the Quezna's commercialization journey has progressed extremely well. Each quarter, we build upon our previous successes, bringing us closer to achieving the blockbuster opportunity we believe is possible for Bequisna. Today's results are evidence of our preparedness and commitment to delivering critical milestones in a short period of time. We've unlocked the largest segment of the GERD market and enhanced access for millions of patients. Speaker 200:09:34I'm looking forward to continuing this journey and seeing the Quiznos position grow in the marketplace. I'll now turn the call over to Martin to dive deeper into recent commercial updates. Martin? Speaker 300:09:46Thanks, Terry, and hello, everyone. I'm excited to share further details on the great progress we've made over the last 3 months. The VIEQUEZAL launch is advancing as anticipated and we're happy with our latest performance metrics, which I will touch on shortly. In the scope of launch timing, we still consider ourselves in the early stages of the journey and we've already made significant strides at building brand recognition and commercial coverage. I'll share updates on several of our commercial tactics, but allow me to begin with perhaps the clearest indicators for progress, our launch metrics. Speaker 300:10:20Today, we're reporting our latest available written and filled prescription data as of July 26, which is exactly 3 months since our previously reported data. Over that period, the number of VEQUESTA scripts written has grown by more than 180% to over 122,000 prescriptions, while the number of scripts filled has grown by more than 240% to over 60,000 prescriptions. In tandem, the number of prescribers who have written a filled script has now increased to roughly 8,200 as of July 19. We are pleased to see sustained material growth across all three of these metrics. On a quarterly basis, we observed sequential growth of more than 2 65 percent with the number of filled scripts increasing from 9,500 in Q1 to 35,000 in Q2. Speaker 300:11:15As we've clarified in previous quarters, these figures include prescriptions flowing through retail pharmacies, which are captured by IQVIA, as well as those flowing through BlinkRx, one of our patient assistant programs. Of the scripts filled in Q2, approximately 65% were filled through retail pharmacies and captured by IQVIA. Additionally, we are also proud to share the growing number of physicians writing VEQUESNA quarterly. At the end of Q2, about 7,250 prescribers had written a filled VEQUESTA prescription, which reflects the growth of approximately 150% compared to Q1's cumulative writer count. We've previously called out the specialty mix leaning towards GIs, which continues to hold true. Speaker 300:12:01More recently, to observe an increase in nurse practitioners and physician assistants who are important writers in the long term management of GERD patients. And with the non erosive label expansion now approved, we believe we will see the specialty mix continue to evolve as primary care physicians consider bequesna for the millions of patients with acid related heartburn. Another important development has been the improvement in the conversion rate between total demand and filled VOQESAN prescriptions. Since our last earnings report, our launch to date fill rate has increased from 41% to nearly 50%, reflecting the impact of pull through from commercial coverage. We see this as an impressive accomplishment compared to what might typically be expected at this stage of launch. Speaker 300:12:48With the recent access wins, we believe our fill rate will continue to improve, allowing us to realize more of the revenue potential associated with our total demand. As you heard Terry mention earlier, we have made some terrific advances in securing widespread commercial coverage. This part of our launch strategy, in particular, was often questioned given the complexity of the payer systems and VEQUESNA's entrance into a genericized market. Skepticism frequently surfaced about whether VEQUESNA would require evidence of endoscopy to obtain reimbursement or if it would be niche to only severe patients. But today, I'm proud to share that those questions are behind us and we've delivered exactly as we intended. Speaker 300:13:30After being placed on formularies at Express Scripts and Cigna earlier this year, LaQuesta recently earned formulary placement with several other key payers, including CVS Caremark, UnitedHealthcare, Optum, Aetna and Prime Therapeutics. Since the end of Q2, we've added about 38,000,000 commercial lives to bequesna's covered population, bringing the total to an estimated 100 and 16,000,000 people or 77% of all U. S. Commercial lives. Not surprisingly, all plans govern utilization management differently. Speaker 300:14:05But across the vast majority of covered lives, we believe we have been successful in negotiating access subject to a single step edit to a generic PPI prescription. As a result, VYKESSA is now available and affordable to millions of commercially insured patients. Additionally, our access wins were extremely timely as we recently kicked off the Quezna's launch of non erosive GERD. Since coverage is contracted for the bottle presentation, we believe commercially covered patients with GERD, regardless of type or severity, are now able to easily access VEQUESNA. With coverage in place at all 3 major PBMs and several other large payers, our aim now is to pull through demand via the plans for which VEQUESNA is on formulary. Speaker 300:14:53Now this begins with promotion. Immediately following the non erosive approval, our sales force began sharing the news with physicians. One of our main goals is to inform prescribers that Viquesna can now be used for all GERD sufferers with broad commercial coverage in place providing access to patients. We're simultaneously emphasizing VEQUESTA's rapid, potent and durable asset suppression profile, which is reinforced by our strong product label. The reps are also communicating promotional messages focused on the key elements of differentiation such as VEQUESNA's sustained effect with all day and all night heartburn relief. Speaker 300:15:32Meanwhile, with consumers, the VIEQUEZEN can kick some acid DTC campaign continues to have an impact as it airs across digital channels as well as streaming and broadcast television. Without a doubt, word is spreading about the positive real world experiences patients are having with Poquesna. With access in place and an expanded label applicable to the entire GERD population, our mission is to ensure as many physicians and patients as possible know about VEQUESNA and its power to help treat GERD. Over the last 3 months, we've made significant progress across numerous aspects of launch. We have elevated our promotional efforts, heightened VICOZA brand awareness, increased written and filled scripts, expanded commercial access and unlocked the full GERD market. Speaker 300:16:22I want to emphasize that these were foundational elements of our launch plan and with each in place, we're well positioned to take advantage of the opportunity that lies ahead. Further, the feedback from these early months of the EROSIVE launch and early weeks of the non EROSIVE launch has been very strong. In the coming quarters, we will continue to execute with the aim of delivering on the high bar we have set for the Viquesna brand. We are excited by our current momentum and confident in our ability to realize this blockbuster opportunity. I'll now pass it off to Molly to walk through our financial results. Speaker 300:16:56Molly? Speaker 200:16:58Thank you, Martin, and hello to everyone on the call. I'm happy to share our Q2 2024 financial results with you today. We have made great strides in achieving regulatory and commercial milestones, which have translated into a strong quarter for Fathom. Before going into the numbers, I'd like to note 2 items. 1st, during this call and similar to previous calls, we will not be providing financial guidance regarding projected revenues or earnings as we are still in the early quarters of launch. Speaker 200:17:24Additionally, I will be commenting on both GAAP and non GAAP financial measures. Supporting schedules with detailed reconciliations between non GAAP measures and their most directly comparable GAAP measures will be discussed later in my section and can be found in this morning's press release. Now turning to the numbers. For the Q2 2024, we reported net revenues of $7,300,000 which represents a 283 percent sequential quarterly increase, driven primarily by the increase in field Rhopesna prescriptions. Changes in inventory stocking had a lesser impact this quarter. Speaker 200:17:57Following the non erosive label expansion, we believe there will still be another couple of quarters before we have a better sense of steady state stocking behaviors and their impact. As for gross to net, we observed a discount rate in line with our expectations we set forth at the outset of launch. There were no one time events impacting GTN this quarter as they were in the Q1. As a result of recently expanded access with major payers and the non erosive launch, we believe our GTN discount will continue to evolve over the course of the Q3 and through the end of calendar year 2024. For the quarter ended June 30, 2024, we reported gross profit of $5,900,000 which equates to gross margin of 81%, a sequential quarterly increase of about 3 50 basis points. Speaker 200:18:46Moving down the P and L to our operating expenses. We reported non GAAP R and D spend of $6,000,000 for the Q2 ended 2024, which represents a 45% reduction in spend compared to the Q2 of 2023. This also reflects a 26 percent decrease sequentially compared to last quarter. Both decreases were primarily related to lower clinical trial costs associated with the wind down of activities related to our Phase 3 non erosive daily dosing trial, which we read out last year. As for SG and A, we reported non GAAP expenses of 71 $100,000 for the Q2 of 2024. Speaker 200:19:21This represents an increase of about $57,600,000 relative to the same period of 2023 and a sequential increase of approximately $13,500,000 compared to Q1. Both increases were driven by the continued build out of our commercial infrastructure and marketing activities in support of the Ocweno launch. In particular, this period's SG and A expenses include our 1st full quarter of advertising costs, which approximated $16,700,000 and were primarily related to our ongoing vopecesna can kick some asset DTC media campaign. We do not anticipate a significant increase in spend relative to our DTC campaign for the remainder of 2024. Similar to previous quarters, the most significant reconciling item between GAAP and non GAAP operating expenses for these periods was non cash stock based compensation. Speaker 200:20:11Other non GAAP reconciling items include non cash interest on our revenue interest financing liability and non cash interest expense related to amortization of debt discount. Turning to EPS, we reported a non GAAP adjusted net loss of $73,300,000 for the Q2 of 2024 or $1.25 loss per share compared sequentially to a loss of $64,800,000 or $1.11 loss per share for the Q1 of 2024. As of June 30, 2024, cash and cash equivalents were $276,000,000 Of note, this balance includes the drawdown of $25,000,000 from debt facility in mid June, up to an additional $125,000,000 remains available, of which $25,000,000 is available this year and $100,000,000 is available next year, subject to achievement of certain revenue milestones. We believe we are in a strong financial position to continue supporting the VEQUESNA launch, which now spans 3 indications. We remain invested in the long term growth potential of the brand and reaffirm our expectation that we have cash runway through the end of 2026 based on our current operating plan, expected revenues and funds available under our term loan. Speaker 200:21:23After 2 full quarters of launch, we are pleased with our financial Heading into the back half of twenty twenty four, we remain focused on ensuring our teams have the resources needed to maximize the Boquesen opportunity. We believe our key payer wins will translate to a proportional increase in script filled through the retail channel where revenue contributions are most significant, thereby driving top line growth into year end. With that, I will now turn the call back over to Teri for closing comments. Teri? Thank you, Molly, and thank you again to everyone joining us on today's call. Speaker 200:21:56In wrapping up today's call, I want to reiterate three numbers: 122,000 prescriptions written, 60,000 prescriptions filled, 8,200 cumulative riders, all of which we achieved in just under 8 months since launch and mostly without broad access or expanded label. And now having secured 77% commercial coverage, consider what Vipuzana can achieve as a new GERD treatment option proven to help relieve heartburn. We believe the key building blocks are in place for Fathom to realize the Quezna's potential peak revenue opportunity of greater than $3,000,000,000 And I believe the numerous accomplishments we've covered today support an acceleration in our adoption trends. We have stayed true to our strategy, even achieving certain milestones ahead of schedule or with better than expected outcomes. In the upcoming quarters, we will continue to drive value through commercial execution, and we look forward to further improving the lives of patients suffering from acid related conditions. Speaker 200:23:05Thank you again for joining us today. We appreciate your continued interest and support. I'll now turn it over to the operator to facilitate a 10 minute question and answer session. Operator? Operator00:23:17Thank you. Our first question coming from the line of Annabel Samimy with Stifel. Your line is open. Speaker 400:23:37Hi. Thanks for taking my question and congratulations on all the progress. Just wanted to talk a little bit about expansion opportunity. I guess one of the things I'm curious is to what extent do you need to really start tapping the primary care market to gain access to those patients. Just from conversations we've had with GIs, the GIs are very familiar with the product, the PCCs are less familiar and that's where the drug they claim would be pretty revolutionary. Speaker 400:24:11So I'm just trying to understand what your efforts are going to be over there. And then the second question I have is in terms of the access that you have for the formula the access you have right now. Do you have a sense of the various different types of plans and what percent are more open access plans versus very restricted plans? Or is the access that you have much broader than is it just broader? Like can you just help us sort of qualify or characterize the formularies within the plans? Speaker 400:24:52Thanks. Speaker 300:24:54Hey, Annabel, it's Martin. I got your question in 2 parts. First, I'll take the NERD expansion. And if I summarize it correctly, you're asking about tapping into primary care physicians. So I would agree with you that GIs have a much higher awareness of VOPESNA than primary care physicians, but that doesn't mean primary care physicians don't have any awareness. Speaker 300:25:15If you recall, as we launched back in January, we very much focused on the top decile physicians. That's where we went first and had our highest frequency and they were mostly for entrologists. But I do think what we do know is that we're not starting at ground 0. With the primary care physicians, we're going to be calling on the same physicians, as Terry mentioned earlier, that we called on before. And the patients have the same journey with the same symptoms. Speaker 300:25:40And the level of unmet need is equally as high. And we know that patients are actually searching for a new mechanism as well as primary care welcome the opportunity for that. So we've got the momentum going. We've been reaching out to primary care. Obviously, we'll be dialing that up as we're moving forward. Speaker 300:25:56And then I'll also mention the direct to consumer is going to play a really big role in that. We already know, from doing some work, 20 when we went to physicians who prescribed, 25% of them had already said that they've been contacted by their patient who specifically requested Vopresna. And 80% of those physicians granted that request. And that's exactly what we communicated that our expectation was going forward. So and those patients are already going to primary care. Speaker 300:26:24So we feel really good about our trajectory heading into primary care. I'll switch now to your access. So listen, here's what I'd like to say about our access. Numbers are great, 115,000,000 lives, 77% commercial coverage, but it's really the quality of the coverage that truly, really counts. And it's completely aligned with our strategy of 1 step through a PPI. Speaker 300:26:46And I'll just say, I think we've done a tremendous job. Each of our obviously, each PBM and payer is comprised of multiple plans and multiple formularies. But we've contracted for 1 step as the key criteria, ExpressTrip, Cigna, Prime, Therapeutics, CVS Caremark, Aetna, UnitedHealth Care. So our expectation is that a patient will have completed experience with 1 PPI and have the opportunity to go on bequestive. Speaker 400:27:16Great. Thanks for the color. Operator00:27:20Thank you. And our next question coming from the line of Joseph Springer with Needham and Company. Your line is open. Speaker 500:27:29Hi, good morning. Thanks for taking our questions. You mentioned that you can leverage the existing sales force for the NERD launch here. I guess, when do you anticipate we'll see an impact in the IQVIA TRx data, number 1? And then number 2, maybe as a follow-up to the previous question, so on the NERD approval and the impact on insurance coverage, you mentioned of course 77% of commercial lives covered. Speaker 500:27:57What percentage of that is for the bottle? And you mentioned that you anticipate this coverage would carry over to the NERD indication. But I guess is there any scenario in which that wouldn't be the case, meaning the coverage is say for erosive GERD, but it would not be for NERD? Speaker 300:28:20Sure, Joey. So first I'll talk about the sales force. Yes, even we say we're leveraging, we're actually utilizing and that was part of our vision and our plan. We set up the sales force knowing that non erosive was coming. So our footprint has been in place. Speaker 300:28:34We've been calling on these physicians. I think you probably saw specifically the past 2 weeks, but really last week, a jump in our prescriptions, which we believe is tied to both ends of your question, right? So first, it's clearly a non ROSA launch, which is what we anticipated. We were going to start seeing a jump there. So that will continue to grow over time. Speaker 300:28:55But we've got all engines running. So we've got the DTC running and then, as we just announced, the details of increasing our commercial coverage. So they all do kind of go together, and they're working in tandem. In terms of the coverage, what we're communicating is that is the coverage for the bottle. You're correct. Speaker 300:29:13So 77% commercial coverage. And it's our belief that that coverage is also for coverage for the all indications. So all of our contracts where we have one step through a PPI indicate VOCUSNA for as it's indicated. And we've obviously informed all of the payers of our approval, and we continue to move forward. Speaker 500:29:39Great. Thanks so much for taking our questions. Operator00:29:44Thank you. And our next question coming from the line of Yatin Snajuk with Guggenheim. Your line is open. Speaker 600:29:52Hey guys, congrats on a very good quarter. Just one a couple of questions for me. Number 1 on gross to net, could you maybe help us understand where you are in terms of the net yield? I think my math suggests that it is maybe close to 40% net yield for the quarter. If you can confirm or deny how close we are to that number and how will that evolve? Speaker 600:30:19Should we expect an improvement in the yield? Or because of the NOD indication there should be sort of reduction in that yield? So that's just first question. Speaker 200:30:30Sure. Hi, Yan. So yes, GTN is playing out also as we had expected going into launch. I think the numbers that you're estimating are right within the range that we estimated and not inconsistent with what we see as well. As far as going forward with the improved access that we've recently won, we continue to expect to see a building on that GTN. Speaker 200:30:52But like I said, going into launch, we continue to believe it will be in that 50% to 65% discount on a steady state basis. Speaker 600:31:01And that's just the retail part, right, not the or is on a blend basis that you're implying? Speaker 200:31:08That's right. That's retail. Speaker 600:31:11Okay. Very good. And then with regard to the NORD sort of uptake, I mean, could you maybe talk about like what will be an average duration of treatment for NERD and how that compared to EE? And also if you can articulate what you are seeing in terms of the refill rate, are patients getting refill and at what frequency? Thank you. Speaker 300:31:41So, Jan, I had commented earlier that the patient journey is very similar between a ROSA and a non ROSA patient. And it goes beyond similarities. Things are almost spot on. What we know from PPI utilization is that on average on an annual basis, it's about 150 to 160 days for both indications. So again, it's very similar. Speaker 300:32:04So I think we've been communicating that 160 day per year number. And then in terms of refills, we're tracking exactly as you would expect for a successful launch. Right now, we're at about 50% new prescriptions, 50% refills, but we expect a lot of fluctuation in that as we now enter non erosive and new patients are starting to come on board as DTC is running. So there's going to be a lot of fluctuation in that in the coming months. But right now, we're right on track where we should be for a successful launch. Speaker 600:32:36Thank you. Operator00:32:39Thank you. And our next question coming from the line of Umer Raffat with Evercore ISI. Your line is open. Speaker 700:32:48Hi, good morning. This is Chen Zhang on for Umar. Thanks for taking our questions. I guess, firstly, on Nerd launch, how many of the scripts are from the 2Q number? And secondly, on the inventory level, I think last quarter you commented there about 2 to 3 weeks of inventory. Speaker 700:33:04Has number changed in the Q2? Speaker 200:33:08Yes. I think we caught a little bit of that. I think the last part was on inventory. So I'll cover that first and maybe if you can repeat the first question after that. But as it relates to inventory stocking, we're still early in launch, but what we're seeing is around 2 weeks, which is consistent with where we were at the end of the Q1. Speaker 200:33:26So we're not seeing a significant impact on the revenues per se relative to stocking. It's more driven by demand. And then if you could repeat the first question, that would be helpful. Speaker 700:33:37Okay. The first one is on the launch. How many of the scripts are we seeing from the number reported for the Q2? Speaker 300:33:49So, Umer, if you're we had a little bit of hard time hearing you, but if your question is about the number of scripts for the non Erosive launch, it's just really early to tell that. We're just weeks into this. I think what you can clearly say is some of the much of the growth that we've seen over the past couple of weeks is probably tied to that. Again, we also have the addition of access and consumer running. But we would expect going forward that those three things will really be key drivers, which is the approval of non erosive, the growth in commercial access and then the running of DTC. Speaker 300:34:21But right now, we wouldn't have the data to answer that question specifically. Speaker 700:34:27Thank you. Operator00:34:30Thank you. And our next question coming from the line of Paul Choi with Goldman Sachs. Your line is open. Speaker 800:34:38Hi, good morning team and congrats on all the progress. My first question is for Martin and can you maybe just clarify or elaborate on your prioritization of the nurse practitioners and nursing assistants in the primary care channel just as a driver of the NERD indication and opportunity versus the GI specialist and just kind of how much of your sales force effort is going to be directed there? And my second question is for Molly, which is regarding the access to the additional capital under the Hercules agreement. Can you just remind me what the criteria and the triggers are for accessing it at this point and sort of what how you're thinking about the planning and timing relative to your current burn rate? Thank you very much for taking our questions. Speaker 300:35:24I'll go first, Paul. Yes, you hit on the magic category of nurse practitioner and physician assistants. They play, a really big role and they played a big role in erosive 3rd, but specifically in non erosive. They are the folks who are first line, diagnosed and making treatment decisions. And in primary care, they'll play a really important role. Speaker 300:35:47So our sales force definitely spends time with them. Gastroenterologists will always remain to be important. They're high volume positions. They're influential in the category. But definitely, as you said, we've seen a growth amongst those NPs and PAs and we expect to see that going forward. Speaker 200:36:05And then as it relates to Paul your question on the debt triggers, we expect that I think as I mentioned in my prepared remarks, there's 25,000,000 dollars remaining available this year under the next tranche that is unencumbered, meaning that we have free access to pull that down at our discretion. There's another $100,000,000 that we have available under the facility that has 2 triggers next year and those are based upon revenue milestones. But as we continue to reiterate that we feel we have very good cash position and that we have runway through the end of 2026 and that does assume a drawdown of those debt facilities. And I think one other point I'll make relative to our spend is another comment in my prepared remarks mentioned our DTC spend. We know that's something that's often fluctuates through launches, but we feel good with our current amount of spend. Speaker 200:36:56And as Martin has indicated, the resources we have in place really help drive the non erosive launch. We don't expect a significant increase in OpEx spend relative to our commercial activities. Speaker 800:37:08Great. Thanks for the additional color, Molly. Operator00:37:13Thank you. And our next question coming from the line of Jason Kniebarger with Craig Hallum. Your line is open. Speaker 900:37:22Good morning. Thanks for taking the questions and congrats on the continued progress. Just first for me and I'm sorry, I joined late here and I might make you repeat yourself. But on the Caremark contract, can you just update me on a little bit more of the details there? Does this also include an OTC attestation for the step through? Speaker 300:37:48Yes. So, in terms of Caremark, it's like the others that I described. It's one step through a PPI and it does not include that OTC FS station, but I just I want to flag something here. When we came out of the gates with Express Scripts Cigna, that was beyond even our strategy or what we thought the best case could be. So I just caution you, don't take that as an opportunity loss, that that's not with CVS Caremark. Speaker 300:38:13It's really that that was just above and beyond for the other. So, we're right on strategy with that one step through a prescription PPI. Speaker 900:38:23No, makes sense. And kind of asking the question in the light of that being kind of an upside case to your previous expectations of that 77% of covered lives now from commercial patients in the United States that we have under contract. What portion of that does include that OTC attestation? And then second, just kind of previously we've discussed kind of street expectations to kind of orient people on how you're thinking about the year. As we talk to GIs, which are still the majority of your writers here, at least to my knowledge, They definitely speak to kind of a multiple of prescriptions that they would expect for NERD patients relative to erosive. Speaker 900:39:08Kind of speak to your confidence in kind of back half numbers, which again as it sits today as a 50% increase kind of from Q2 to Q3 with kind of that in mind? Thanks. Speaker 300:39:19Yes. So a couple of parts to your question. In terms of what percent of the access is would also have that OTC attestation, I'm just going to say roughly and I'm going off memory, Jay said, out of the 100 and 15,000,000 lives, about maybe 22,000,000 of them fall under Express Scripts. So I think that answers the first part. In terms of the second part, I think your question was really about the fill rate. Speaker 300:39:47Is that correct moving forward? Speaker 900:39:50Yes, more so just on kind of the increased demand that we'll drive from NERD. I mean, in some of our checks, we hear kind of multiples of oriented people on before where you've kind of oriented people on before, that calls for a 50% increase sequentially into Q3 and just speak to your confidence in that number? Thanks. Speaker 300:40:14Yes. So I'll take the first part of that and then pass it off to Mali. So one of the things that we've been talking to all of you about for a number of years now is that non erosive was really the biggest indication. It's 3 times larger than erosive. So we really just opened up the entire GERD market. Speaker 300:40:31And I think our opportunity there is the fact that we have a real differentiated product. It works all day and all night, but also it works very quickly, right in our label, it talks about full effect at day 2, which is something that a PPI would not have and then also continues that same effect for both the 4 week period as well as the 20 week extension. So it's really got the sustainability. So it's differentiated. And I can tell you going back to Paul's earlier question, all physicians recognize that. Speaker 300:41:04You're seeing the experience, but as Paul brought up those nurse practitioners and physician assistants, they are just welcoming this product. So we think that non erosive is exactly as we set out to do. It's just a really large opportunity. Speaker 200:41:17Yes. And as it relates to guidance, as you know, we're not providing specific guidance on a quarterly basis. But going into launch, we always knew the back half of twenty twenty four was going to be significant between further access, DTC campaign up and running and non erosive label. So those three items are really what's going to drive us home for the rest of this year. And we continue to reiterate that we feel comfortable with the full year consensus of where it is now. Speaker 900:41:44Great. Thanks guys and congrats again. Speaker 400:41:47Thanks, Jason. Operator00:41:49Thank you. And our last question is coming from the line of Matthew Kupfeld with H. C. Wainwright. Your line is open. Speaker 1000:41:57Hi, thank you. Good morning, guys. Just quickly here. So for the prescription mix currently favoring GIs, is that more a factor of those patients already having progressed to seeing a GI specialist, at least at this stage? Or are primary care physicians at all less receptive to prior authorizations and then patients are essentially being passed forward to GI specialists? Speaker 1000:42:19Is there any further distinctions there kind of for that mix? Speaker 300:42:24Yes. So actually let me I might miss your different topics here just to clarify. First of all, I think the high utilization of GI is obviously one specialist adopt new products sooner, new mechanism sooner. But also, and I think I referenced this earlier, out of the gates, we really focused on the highest decile physicians for ROSAFF GIRD and they were naturally gastroenterologists. So I think you should look at it more of where we put both our reach and our frequency in the early months of launch. Speaker 300:42:57Did you not interpret that as primary care, do not see the opportunity or this differentiated product for primary care. And the other thing I'll just say is, just to clarify the PA for I'll say for that one step through a PPI, the only thing that physician really needs to do is identify that that patient has been on a PPI. So there's different levels of prior authorizations and many of them are actually picked right up at the pharmacy. So the physician has no action. So I'm not sure the primary care actually has that much work to do, to get book wise up. Speaker 1000:43:35Okay, very helpful. I appreciate it. Operator00:43:41Thank you. And that's all the time we have for our Q and A session. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation and you may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallPhathom Pharmaceuticals Q2 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Phathom Pharmaceuticals Earnings HeadlinesPhathom Pharmaceuticals, Inc. (NASDAQ:PHAT) Given Average Rating of "Buy" by BrokeragesMay 4 at 1:57 AM | americanbankingnews.comPhathom Pharmaceuticals, Inc. (PHAT) Q1 2025 Earnings Call TranscriptMay 3 at 3:57 AM | seekingalpha.comThe Trump Dump is starting; Get out of stocks now?The first 365 days of the Trump presidency… Will be the best time to get rich in American history.May 4, 2025 | Paradigm Press (Ad)Phathom Pharmaceuticals, Inc. (NASDAQ:PHAT) Q1 2025 Earnings Call TranscriptMay 2 at 12:51 PM | msn.comPhathom Pharmaceuticals Inc (PHAT) Q1 2025 Earnings Call Highlights: Strong Revenue Growth Amid ...May 2 at 7:49 AM | finance.yahoo.comRetail Interest in Phathom Soars As Firm Pledges Profit Path, Cuts Costs After Q1 MissMay 2 at 7:49 AM | msn.comSee More Phathom Pharmaceuticals Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Phathom Pharmaceuticals? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Phathom Pharmaceuticals and other key companies, straight to your email. Email Address About Phathom PharmaceuticalsPhathom Pharmaceuticals (NASDAQ:PHAT), biopharmaceutical company, focuses on developing and commercializing treatments for gastrointestinal diseases. The company has the rights in the United States, Europe, and Canada for an investigational potassium-competitive acid blocker (P-CAB) that blocks acid secretion in the stomach. It is also developing vonoprazan for the treatment of erosive gastroesophageal reflux disease; and in combination with antibiotics for the treatment of Helicobacter pylori infection. The company was incorporated in 2018 and is headquartered in Florham Park, New Jersey.View Phathom Pharmaceuticals ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Amazon Earnings: 2 Reasons to Love It, 1 Reason to Be CautiousMeta Takes A Bow With Q1 Earnings - Watch For Tariff Impact in Q2Palantir Earnings: 1 Bullish Signal and 1 Area of ConcernVisa Q2 Earnings Top Forecasts, Adds $30B Buyback PlanMicrosoft Crushes Earnings, What’s Next for MSFT Stock?Qualcomm's Earnings: 2 Reasons to Buy, 1 to Stay AwayAMD Stock Signals Strong Buy Ahead of Earnings Upcoming Earnings Palantir Technologies (5/5/2025)Vertex Pharmaceuticals (5/5/2025)Realty Income (5/5/2025)Williams Companies (5/5/2025)CRH (5/5/2025)Advanced Micro Devices (5/6/2025)American Electric Power (5/6/2025)Constellation Energy (5/6/2025)Marriott International (5/6/2025)Energy Transfer (5/6/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. Start Your 30-Day Trial MarketBeat All Access Features Best-in-Class Portfolio Monitoring Get personalized stock ideas. Compare portfolio to indices. Check stock news, ratings, SEC filings, and more. Stock Ideas and Recommendations See daily stock ideas from top analysts. Receive short-term trading ideas from MarketBeat. Identify trending stocks on social media. Advanced Stock Screeners and Research Tools Use our seven stock screeners to find suitable stocks. Stay informed with MarketBeat's real-time news. Export data to Excel for personal analysis. Sign in to your free account to enjoy these benefits In-depth profiles and analysis for 20,000 public companies. Real-time analyst ratings, insider transactions, earnings data, and more. Our daily ratings and market update email newsletter. Sign in to your free account to enjoy all that MarketBeat has to offer. Sign In Create Account Your Email Address: Email Address Required Your Password: Password Required Log In or Sign in with Facebook Sign in with Google Forgot your password? Your Email Address: Please enter your email address. Please enter a valid email address Choose a Password: Please enter your password. Your password must be at least 8 characters long and contain at least 1 number, 1 letter, and 1 special character. Create My Account (Free) or Sign in with Facebook Sign in with Google By creating a free account, you agree to our terms of service. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
There are 11 speakers on the call. Operator00:00:00Hello, and welcome to the Pfannen Pharmaceuticals Second Quarter 20 24 Earnings Results Call. At this time, all participants are in a listen only mode. After the presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. With that, I would like to turn the conference over to Eric Chiarelli, Fathom's Head of Investor Relations. Operator00:00:29Please go Speaker 100:00:31ahead. Thank you, operator. Hello, everyone, and thank you for joining us this morning to discuss Fathom's Q2 2024 results. This morning's presentation will include remarks from Terry Curran, our President and CEO Martin Gilligan, our Chief Commercial Officer and Molly Henderson, our Chief Financial Officer. Asmin Abulsi, our Chief Operating Officer will also be joining the team during the Q and A portion of today's call. Speaker 100:00:54Just a couple of logistical items before we get started. Earlier this morning, we issued a press release detailing the results we will be discussing during the call. A copy of that press release can be found under the News Releases section of our corporate website. Further, the recording of today's webcast can be found under the Events and Presentations section of our corporate website. Before we begin, let me remind you that we will be making a number of forward looking statements throughout today's presentation. Speaker 100:01:20These forward looking statements involve risks and uncertainties, many of which are beyond Thousand's control. Actual results can materially differ from the forward looking statements and any such risks can materially adversely affect the business, the results of operations and the trading prices for 1,000,000 common stock. A discussion of these statements and risk factors is available on the current Safe Harbor slide as well as in the Risk Factors section of our most recent Form 10 ks and subsequent SEC filings. All forward looking statements made on this call are based on the beliefs of Fathom as of this date and Fathom disclaims any obligation to update these statements. With that, I will now turn the call over to Terry Curran, Fathom's President and CEO to kick us off. Speaker 100:02:01Teri? Speaker 200:02:03Thank you, Eric, and thank you to all those joining us on today's call. Fathom was founded on a vision and a set of goals that from the start, many considered lofty. But over the last 5 years, we've checked one box after another. We've demonstrated differentiation versus a 30 year old standard of care, earned approval for broad labels, launched multiple products spanning 3 indications and secured favorable commercial coverage in a genericized market. To date, we've accomplished exactly what we set out to do. Speaker 200:02:37So whether you're new to the story or have followed us since the start, I encourage you to reflect on our track record as it sets the stage for how we intend to continue delivering on our goals for the Buquebena. Today, I'm excited to report specifically on the great progress we made during the Q2 of 2024. The team has been focused on executing our commercial launch strategies with physicians, patients and payers. In only our 2nd full quarter following launch, we believe the results of these efforts have been impressive and demonstrate strong momentum as we enter the back half of twenty twenty four. Before diving into our latest launch metrics, I'd like to provide an update on 2 major developments: the Quezna's approval for non erosive GERD and our expanded commercial coverage. Speaker 200:03:31As we announced on July 18, the FDA approved the quizner for the release of heartburn associated with non erosive GERD in adults. We're extremely pleased with the strength of the label, which highlighted the Cozena's rapid onset of action and durability of effect. This outcome was a key milestone in our commercialization journey, expanding the total addressable market for the equesna. GERD conditions impact about 65,000,000 U. S. Speaker 200:03:59Adults annually with about 22,000,000 being diagnosed and treated with a prescription medication. Nynorosa GERD alone is responsible for over 2 thirds of this population. This impressively large market has demonstrated the need for an alternative treatment option given the high degree of patient dissatisfaction and inadequate symptom relief. Building upon our previous approval for erosive GERD, this 3rd and largest indication allows ZEQUESNA to be considered as a treatment option for all patients suffering from GERD or H. Pylori. Speaker 200:04:39In anticipation of the PDUFA action date, our existing sales force was pretrained and prepared to begin promotion in the field immediately upon approval. It is important to note that the non erosive GERD patient journey and target prescriber base mirrors that of erosive GERD, which allows us to leverage our existing promotional efforts. In fact, over the past 2 weeks, we've already seen a notable increase in demand for 10 milligram tablets, which is the approved dose for non erosive GERD. Moreover, we believe the commercial access we have secured thus far also applies to non erosive GERD patients who are prescribed the Quizner bottles. Given the overlapping commercial dynamics across GERD conditions, our strategy has always been to hit the ground running. Speaker 200:05:30With this approval, the Quezna has now cleared another hurdle and is poised to recognize the full GERD market opportunity as we work towards our goal of displacing PPIs. Our recent expansion of commercial coverage will be a key driver in achieving that goal. After announcing our placement on Cigna Formularies midway through Q2, we recently announced the addition of the Quezna to CVS Caremark's National Formularies. As the country's largest pharmacy benefit manager responsible for over 26,000,000 commercial lives, this was a major development in ensuring widespread coverage for Bequisna. And later in this call, Martin will provide an update on several other key payers for which we recently secured form replacement. Speaker 200:06:21Our efforts have resulted in an estimated 116,000,000 commercially insured lives now having access to the Krasner. Importantly, across the majority of this coverage, we were successful in securing position on Formalase in line with our single step strategy through a generic PPI prescription. We're extremely pleased with this broad commercial coverage we've achieved for VEQUESNAR while still in the early stages of launch. One of the most impressive examples of our launch success has been the evolution of the Requesna volume. I'm pleased to share that launch to date, total demand has now surpassed 122,000 scripts written, of which over 60,000 have been filled by patients. Speaker 200:07:08We're remaining energized by these metrics and believe their growth trajectories are a testament to increasing interest from prescribers and expanded availability for patients. Over the last few months, we've continued to see extraordinary testimonials pour in from these physicians and patients alike. Almost daily, we receive positive feedback telling us how Seguesnard is relieving symptoms quickly and improving lives. Pictures of heal erosion, stories of sleeping through the night for the first time in years and overall quality of life improvements are just some of the anecdotes that have made us proud to be able to offer this 1st in class treatment option to patients suffering from acid related conditions. And with non erosive now approved, we're thrilled by the opportunity to provide these benefits to millions more patients in need. Speaker 200:08:00In parallel with launch, we continue to explore development opportunities for VIEQESNA. We're planning to initiate 2 clinical programs, a Phase 3 trial for as needed dosing in non erosive GERD and a Phase 2 trial in eosinophilic esophagitis or EOE. Both programs aim to leverage the rapid, potent and durable asset suppression profile of the Quezna. If these programs lead to FDA approvals, we believe these indications will continue to expand the total addressable market and further differentiate the Aqueousna from PPIs, which are not approved for either indication. On the financial side, Molly will further detail our Q2 2024 results later in the call, for which we reported revenues of $7,300,000 and ended with $276,000,000 in cash. Speaker 200:08:55We remain confident that our strong balance sheet will enable us to continue delivering on our launch and development strategies. After 2 full quarters on the market, the Quezna's commercialization journey has progressed extremely well. Each quarter, we build upon our previous successes, bringing us closer to achieving the blockbuster opportunity we believe is possible for Bequisna. Today's results are evidence of our preparedness and commitment to delivering critical milestones in a short period of time. We've unlocked the largest segment of the GERD market and enhanced access for millions of patients. Speaker 200:09:34I'm looking forward to continuing this journey and seeing the Quiznos position grow in the marketplace. I'll now turn the call over to Martin to dive deeper into recent commercial updates. Martin? Speaker 300:09:46Thanks, Terry, and hello, everyone. I'm excited to share further details on the great progress we've made over the last 3 months. The VIEQUEZAL launch is advancing as anticipated and we're happy with our latest performance metrics, which I will touch on shortly. In the scope of launch timing, we still consider ourselves in the early stages of the journey and we've already made significant strides at building brand recognition and commercial coverage. I'll share updates on several of our commercial tactics, but allow me to begin with perhaps the clearest indicators for progress, our launch metrics. Speaker 300:10:20Today, we're reporting our latest available written and filled prescription data as of July 26, which is exactly 3 months since our previously reported data. Over that period, the number of VEQUESTA scripts written has grown by more than 180% to over 122,000 prescriptions, while the number of scripts filled has grown by more than 240% to over 60,000 prescriptions. In tandem, the number of prescribers who have written a filled script has now increased to roughly 8,200 as of July 19. We are pleased to see sustained material growth across all three of these metrics. On a quarterly basis, we observed sequential growth of more than 2 65 percent with the number of filled scripts increasing from 9,500 in Q1 to 35,000 in Q2. Speaker 300:11:15As we've clarified in previous quarters, these figures include prescriptions flowing through retail pharmacies, which are captured by IQVIA, as well as those flowing through BlinkRx, one of our patient assistant programs. Of the scripts filled in Q2, approximately 65% were filled through retail pharmacies and captured by IQVIA. Additionally, we are also proud to share the growing number of physicians writing VEQUESNA quarterly. At the end of Q2, about 7,250 prescribers had written a filled VEQUESTA prescription, which reflects the growth of approximately 150% compared to Q1's cumulative writer count. We've previously called out the specialty mix leaning towards GIs, which continues to hold true. Speaker 300:12:01More recently, to observe an increase in nurse practitioners and physician assistants who are important writers in the long term management of GERD patients. And with the non erosive label expansion now approved, we believe we will see the specialty mix continue to evolve as primary care physicians consider bequesna for the millions of patients with acid related heartburn. Another important development has been the improvement in the conversion rate between total demand and filled VOQESAN prescriptions. Since our last earnings report, our launch to date fill rate has increased from 41% to nearly 50%, reflecting the impact of pull through from commercial coverage. We see this as an impressive accomplishment compared to what might typically be expected at this stage of launch. Speaker 300:12:48With the recent access wins, we believe our fill rate will continue to improve, allowing us to realize more of the revenue potential associated with our total demand. As you heard Terry mention earlier, we have made some terrific advances in securing widespread commercial coverage. This part of our launch strategy, in particular, was often questioned given the complexity of the payer systems and VEQUESNA's entrance into a genericized market. Skepticism frequently surfaced about whether VEQUESNA would require evidence of endoscopy to obtain reimbursement or if it would be niche to only severe patients. But today, I'm proud to share that those questions are behind us and we've delivered exactly as we intended. Speaker 300:13:30After being placed on formularies at Express Scripts and Cigna earlier this year, LaQuesta recently earned formulary placement with several other key payers, including CVS Caremark, UnitedHealthcare, Optum, Aetna and Prime Therapeutics. Since the end of Q2, we've added about 38,000,000 commercial lives to bequesna's covered population, bringing the total to an estimated 100 and 16,000,000 people or 77% of all U. S. Commercial lives. Not surprisingly, all plans govern utilization management differently. Speaker 300:14:05But across the vast majority of covered lives, we believe we have been successful in negotiating access subject to a single step edit to a generic PPI prescription. As a result, VYKESSA is now available and affordable to millions of commercially insured patients. Additionally, our access wins were extremely timely as we recently kicked off the Quezna's launch of non erosive GERD. Since coverage is contracted for the bottle presentation, we believe commercially covered patients with GERD, regardless of type or severity, are now able to easily access VEQUESNA. With coverage in place at all 3 major PBMs and several other large payers, our aim now is to pull through demand via the plans for which VEQUESNA is on formulary. Speaker 300:14:53Now this begins with promotion. Immediately following the non erosive approval, our sales force began sharing the news with physicians. One of our main goals is to inform prescribers that Viquesna can now be used for all GERD sufferers with broad commercial coverage in place providing access to patients. We're simultaneously emphasizing VEQUESTA's rapid, potent and durable asset suppression profile, which is reinforced by our strong product label. The reps are also communicating promotional messages focused on the key elements of differentiation such as VEQUESNA's sustained effect with all day and all night heartburn relief. Speaker 300:15:32Meanwhile, with consumers, the VIEQUEZEN can kick some acid DTC campaign continues to have an impact as it airs across digital channels as well as streaming and broadcast television. Without a doubt, word is spreading about the positive real world experiences patients are having with Poquesna. With access in place and an expanded label applicable to the entire GERD population, our mission is to ensure as many physicians and patients as possible know about VEQUESNA and its power to help treat GERD. Over the last 3 months, we've made significant progress across numerous aspects of launch. We have elevated our promotional efforts, heightened VICOZA brand awareness, increased written and filled scripts, expanded commercial access and unlocked the full GERD market. Speaker 300:16:22I want to emphasize that these were foundational elements of our launch plan and with each in place, we're well positioned to take advantage of the opportunity that lies ahead. Further, the feedback from these early months of the EROSIVE launch and early weeks of the non EROSIVE launch has been very strong. In the coming quarters, we will continue to execute with the aim of delivering on the high bar we have set for the Viquesna brand. We are excited by our current momentum and confident in our ability to realize this blockbuster opportunity. I'll now pass it off to Molly to walk through our financial results. Speaker 300:16:56Molly? Speaker 200:16:58Thank you, Martin, and hello to everyone on the call. I'm happy to share our Q2 2024 financial results with you today. We have made great strides in achieving regulatory and commercial milestones, which have translated into a strong quarter for Fathom. Before going into the numbers, I'd like to note 2 items. 1st, during this call and similar to previous calls, we will not be providing financial guidance regarding projected revenues or earnings as we are still in the early quarters of launch. Speaker 200:17:24Additionally, I will be commenting on both GAAP and non GAAP financial measures. Supporting schedules with detailed reconciliations between non GAAP measures and their most directly comparable GAAP measures will be discussed later in my section and can be found in this morning's press release. Now turning to the numbers. For the Q2 2024, we reported net revenues of $7,300,000 which represents a 283 percent sequential quarterly increase, driven primarily by the increase in field Rhopesna prescriptions. Changes in inventory stocking had a lesser impact this quarter. Speaker 200:17:57Following the non erosive label expansion, we believe there will still be another couple of quarters before we have a better sense of steady state stocking behaviors and their impact. As for gross to net, we observed a discount rate in line with our expectations we set forth at the outset of launch. There were no one time events impacting GTN this quarter as they were in the Q1. As a result of recently expanded access with major payers and the non erosive launch, we believe our GTN discount will continue to evolve over the course of the Q3 and through the end of calendar year 2024. For the quarter ended June 30, 2024, we reported gross profit of $5,900,000 which equates to gross margin of 81%, a sequential quarterly increase of about 3 50 basis points. Speaker 200:18:46Moving down the P and L to our operating expenses. We reported non GAAP R and D spend of $6,000,000 for the Q2 ended 2024, which represents a 45% reduction in spend compared to the Q2 of 2023. This also reflects a 26 percent decrease sequentially compared to last quarter. Both decreases were primarily related to lower clinical trial costs associated with the wind down of activities related to our Phase 3 non erosive daily dosing trial, which we read out last year. As for SG and A, we reported non GAAP expenses of 71 $100,000 for the Q2 of 2024. Speaker 200:19:21This represents an increase of about $57,600,000 relative to the same period of 2023 and a sequential increase of approximately $13,500,000 compared to Q1. Both increases were driven by the continued build out of our commercial infrastructure and marketing activities in support of the Ocweno launch. In particular, this period's SG and A expenses include our 1st full quarter of advertising costs, which approximated $16,700,000 and were primarily related to our ongoing vopecesna can kick some asset DTC media campaign. We do not anticipate a significant increase in spend relative to our DTC campaign for the remainder of 2024. Similar to previous quarters, the most significant reconciling item between GAAP and non GAAP operating expenses for these periods was non cash stock based compensation. Speaker 200:20:11Other non GAAP reconciling items include non cash interest on our revenue interest financing liability and non cash interest expense related to amortization of debt discount. Turning to EPS, we reported a non GAAP adjusted net loss of $73,300,000 for the Q2 of 2024 or $1.25 loss per share compared sequentially to a loss of $64,800,000 or $1.11 loss per share for the Q1 of 2024. As of June 30, 2024, cash and cash equivalents were $276,000,000 Of note, this balance includes the drawdown of $25,000,000 from debt facility in mid June, up to an additional $125,000,000 remains available, of which $25,000,000 is available this year and $100,000,000 is available next year, subject to achievement of certain revenue milestones. We believe we are in a strong financial position to continue supporting the VEQUESNA launch, which now spans 3 indications. We remain invested in the long term growth potential of the brand and reaffirm our expectation that we have cash runway through the end of 2026 based on our current operating plan, expected revenues and funds available under our term loan. Speaker 200:21:23After 2 full quarters of launch, we are pleased with our financial Heading into the back half of twenty twenty four, we remain focused on ensuring our teams have the resources needed to maximize the Boquesen opportunity. We believe our key payer wins will translate to a proportional increase in script filled through the retail channel where revenue contributions are most significant, thereby driving top line growth into year end. With that, I will now turn the call back over to Teri for closing comments. Teri? Thank you, Molly, and thank you again to everyone joining us on today's call. Speaker 200:21:56In wrapping up today's call, I want to reiterate three numbers: 122,000 prescriptions written, 60,000 prescriptions filled, 8,200 cumulative riders, all of which we achieved in just under 8 months since launch and mostly without broad access or expanded label. And now having secured 77% commercial coverage, consider what Vipuzana can achieve as a new GERD treatment option proven to help relieve heartburn. We believe the key building blocks are in place for Fathom to realize the Quezna's potential peak revenue opportunity of greater than $3,000,000,000 And I believe the numerous accomplishments we've covered today support an acceleration in our adoption trends. We have stayed true to our strategy, even achieving certain milestones ahead of schedule or with better than expected outcomes. In the upcoming quarters, we will continue to drive value through commercial execution, and we look forward to further improving the lives of patients suffering from acid related conditions. Speaker 200:23:05Thank you again for joining us today. We appreciate your continued interest and support. I'll now turn it over to the operator to facilitate a 10 minute question and answer session. Operator? Operator00:23:17Thank you. Our first question coming from the line of Annabel Samimy with Stifel. Your line is open. Speaker 400:23:37Hi. Thanks for taking my question and congratulations on all the progress. Just wanted to talk a little bit about expansion opportunity. I guess one of the things I'm curious is to what extent do you need to really start tapping the primary care market to gain access to those patients. Just from conversations we've had with GIs, the GIs are very familiar with the product, the PCCs are less familiar and that's where the drug they claim would be pretty revolutionary. Speaker 400:24:11So I'm just trying to understand what your efforts are going to be over there. And then the second question I have is in terms of the access that you have for the formula the access you have right now. Do you have a sense of the various different types of plans and what percent are more open access plans versus very restricted plans? Or is the access that you have much broader than is it just broader? Like can you just help us sort of qualify or characterize the formularies within the plans? Speaker 400:24:52Thanks. Speaker 300:24:54Hey, Annabel, it's Martin. I got your question in 2 parts. First, I'll take the NERD expansion. And if I summarize it correctly, you're asking about tapping into primary care physicians. So I would agree with you that GIs have a much higher awareness of VOPESNA than primary care physicians, but that doesn't mean primary care physicians don't have any awareness. Speaker 300:25:15If you recall, as we launched back in January, we very much focused on the top decile physicians. That's where we went first and had our highest frequency and they were mostly for entrologists. But I do think what we do know is that we're not starting at ground 0. With the primary care physicians, we're going to be calling on the same physicians, as Terry mentioned earlier, that we called on before. And the patients have the same journey with the same symptoms. Speaker 300:25:40And the level of unmet need is equally as high. And we know that patients are actually searching for a new mechanism as well as primary care welcome the opportunity for that. So we've got the momentum going. We've been reaching out to primary care. Obviously, we'll be dialing that up as we're moving forward. Speaker 300:25:56And then I'll also mention the direct to consumer is going to play a really big role in that. We already know, from doing some work, 20 when we went to physicians who prescribed, 25% of them had already said that they've been contacted by their patient who specifically requested Vopresna. And 80% of those physicians granted that request. And that's exactly what we communicated that our expectation was going forward. So and those patients are already going to primary care. Speaker 300:26:24So we feel really good about our trajectory heading into primary care. I'll switch now to your access. So listen, here's what I'd like to say about our access. Numbers are great, 115,000,000 lives, 77% commercial coverage, but it's really the quality of the coverage that truly, really counts. And it's completely aligned with our strategy of 1 step through a PPI. Speaker 300:26:46And I'll just say, I think we've done a tremendous job. Each of our obviously, each PBM and payer is comprised of multiple plans and multiple formularies. But we've contracted for 1 step as the key criteria, ExpressTrip, Cigna, Prime, Therapeutics, CVS Caremark, Aetna, UnitedHealth Care. So our expectation is that a patient will have completed experience with 1 PPI and have the opportunity to go on bequestive. Speaker 400:27:16Great. Thanks for the color. Operator00:27:20Thank you. And our next question coming from the line of Joseph Springer with Needham and Company. Your line is open. Speaker 500:27:29Hi, good morning. Thanks for taking our questions. You mentioned that you can leverage the existing sales force for the NERD launch here. I guess, when do you anticipate we'll see an impact in the IQVIA TRx data, number 1? And then number 2, maybe as a follow-up to the previous question, so on the NERD approval and the impact on insurance coverage, you mentioned of course 77% of commercial lives covered. Speaker 500:27:57What percentage of that is for the bottle? And you mentioned that you anticipate this coverage would carry over to the NERD indication. But I guess is there any scenario in which that wouldn't be the case, meaning the coverage is say for erosive GERD, but it would not be for NERD? Speaker 300:28:20Sure, Joey. So first I'll talk about the sales force. Yes, even we say we're leveraging, we're actually utilizing and that was part of our vision and our plan. We set up the sales force knowing that non erosive was coming. So our footprint has been in place. Speaker 300:28:34We've been calling on these physicians. I think you probably saw specifically the past 2 weeks, but really last week, a jump in our prescriptions, which we believe is tied to both ends of your question, right? So first, it's clearly a non ROSA launch, which is what we anticipated. We were going to start seeing a jump there. So that will continue to grow over time. Speaker 300:28:55But we've got all engines running. So we've got the DTC running and then, as we just announced, the details of increasing our commercial coverage. So they all do kind of go together, and they're working in tandem. In terms of the coverage, what we're communicating is that is the coverage for the bottle. You're correct. Speaker 300:29:13So 77% commercial coverage. And it's our belief that that coverage is also for coverage for the all indications. So all of our contracts where we have one step through a PPI indicate VOCUSNA for as it's indicated. And we've obviously informed all of the payers of our approval, and we continue to move forward. Speaker 500:29:39Great. Thanks so much for taking our questions. Operator00:29:44Thank you. And our next question coming from the line of Yatin Snajuk with Guggenheim. Your line is open. Speaker 600:29:52Hey guys, congrats on a very good quarter. Just one a couple of questions for me. Number 1 on gross to net, could you maybe help us understand where you are in terms of the net yield? I think my math suggests that it is maybe close to 40% net yield for the quarter. If you can confirm or deny how close we are to that number and how will that evolve? Speaker 600:30:19Should we expect an improvement in the yield? Or because of the NOD indication there should be sort of reduction in that yield? So that's just first question. Speaker 200:30:30Sure. Hi, Yan. So yes, GTN is playing out also as we had expected going into launch. I think the numbers that you're estimating are right within the range that we estimated and not inconsistent with what we see as well. As far as going forward with the improved access that we've recently won, we continue to expect to see a building on that GTN. Speaker 200:30:52But like I said, going into launch, we continue to believe it will be in that 50% to 65% discount on a steady state basis. Speaker 600:31:01And that's just the retail part, right, not the or is on a blend basis that you're implying? Speaker 200:31:08That's right. That's retail. Speaker 600:31:11Okay. Very good. And then with regard to the NORD sort of uptake, I mean, could you maybe talk about like what will be an average duration of treatment for NERD and how that compared to EE? And also if you can articulate what you are seeing in terms of the refill rate, are patients getting refill and at what frequency? Thank you. Speaker 300:31:41So, Jan, I had commented earlier that the patient journey is very similar between a ROSA and a non ROSA patient. And it goes beyond similarities. Things are almost spot on. What we know from PPI utilization is that on average on an annual basis, it's about 150 to 160 days for both indications. So again, it's very similar. Speaker 300:32:04So I think we've been communicating that 160 day per year number. And then in terms of refills, we're tracking exactly as you would expect for a successful launch. Right now, we're at about 50% new prescriptions, 50% refills, but we expect a lot of fluctuation in that as we now enter non erosive and new patients are starting to come on board as DTC is running. So there's going to be a lot of fluctuation in that in the coming months. But right now, we're right on track where we should be for a successful launch. Speaker 600:32:36Thank you. Operator00:32:39Thank you. And our next question coming from the line of Umer Raffat with Evercore ISI. Your line is open. Speaker 700:32:48Hi, good morning. This is Chen Zhang on for Umar. Thanks for taking our questions. I guess, firstly, on Nerd launch, how many of the scripts are from the 2Q number? And secondly, on the inventory level, I think last quarter you commented there about 2 to 3 weeks of inventory. Speaker 700:33:04Has number changed in the Q2? Speaker 200:33:08Yes. I think we caught a little bit of that. I think the last part was on inventory. So I'll cover that first and maybe if you can repeat the first question after that. But as it relates to inventory stocking, we're still early in launch, but what we're seeing is around 2 weeks, which is consistent with where we were at the end of the Q1. Speaker 200:33:26So we're not seeing a significant impact on the revenues per se relative to stocking. It's more driven by demand. And then if you could repeat the first question, that would be helpful. Speaker 700:33:37Okay. The first one is on the launch. How many of the scripts are we seeing from the number reported for the Q2? Speaker 300:33:49So, Umer, if you're we had a little bit of hard time hearing you, but if your question is about the number of scripts for the non Erosive launch, it's just really early to tell that. We're just weeks into this. I think what you can clearly say is some of the much of the growth that we've seen over the past couple of weeks is probably tied to that. Again, we also have the addition of access and consumer running. But we would expect going forward that those three things will really be key drivers, which is the approval of non erosive, the growth in commercial access and then the running of DTC. Speaker 300:34:21But right now, we wouldn't have the data to answer that question specifically. Speaker 700:34:27Thank you. Operator00:34:30Thank you. And our next question coming from the line of Paul Choi with Goldman Sachs. Your line is open. Speaker 800:34:38Hi, good morning team and congrats on all the progress. My first question is for Martin and can you maybe just clarify or elaborate on your prioritization of the nurse practitioners and nursing assistants in the primary care channel just as a driver of the NERD indication and opportunity versus the GI specialist and just kind of how much of your sales force effort is going to be directed there? And my second question is for Molly, which is regarding the access to the additional capital under the Hercules agreement. Can you just remind me what the criteria and the triggers are for accessing it at this point and sort of what how you're thinking about the planning and timing relative to your current burn rate? Thank you very much for taking our questions. Speaker 300:35:24I'll go first, Paul. Yes, you hit on the magic category of nurse practitioner and physician assistants. They play, a really big role and they played a big role in erosive 3rd, but specifically in non erosive. They are the folks who are first line, diagnosed and making treatment decisions. And in primary care, they'll play a really important role. Speaker 300:35:47So our sales force definitely spends time with them. Gastroenterologists will always remain to be important. They're high volume positions. They're influential in the category. But definitely, as you said, we've seen a growth amongst those NPs and PAs and we expect to see that going forward. Speaker 200:36:05And then as it relates to Paul your question on the debt triggers, we expect that I think as I mentioned in my prepared remarks, there's 25,000,000 dollars remaining available this year under the next tranche that is unencumbered, meaning that we have free access to pull that down at our discretion. There's another $100,000,000 that we have available under the facility that has 2 triggers next year and those are based upon revenue milestones. But as we continue to reiterate that we feel we have very good cash position and that we have runway through the end of 2026 and that does assume a drawdown of those debt facilities. And I think one other point I'll make relative to our spend is another comment in my prepared remarks mentioned our DTC spend. We know that's something that's often fluctuates through launches, but we feel good with our current amount of spend. Speaker 200:36:56And as Martin has indicated, the resources we have in place really help drive the non erosive launch. We don't expect a significant increase in OpEx spend relative to our commercial activities. Speaker 800:37:08Great. Thanks for the additional color, Molly. Operator00:37:13Thank you. And our next question coming from the line of Jason Kniebarger with Craig Hallum. Your line is open. Speaker 900:37:22Good morning. Thanks for taking the questions and congrats on the continued progress. Just first for me and I'm sorry, I joined late here and I might make you repeat yourself. But on the Caremark contract, can you just update me on a little bit more of the details there? Does this also include an OTC attestation for the step through? Speaker 300:37:48Yes. So, in terms of Caremark, it's like the others that I described. It's one step through a PPI and it does not include that OTC FS station, but I just I want to flag something here. When we came out of the gates with Express Scripts Cigna, that was beyond even our strategy or what we thought the best case could be. So I just caution you, don't take that as an opportunity loss, that that's not with CVS Caremark. Speaker 300:38:13It's really that that was just above and beyond for the other. So, we're right on strategy with that one step through a prescription PPI. Speaker 900:38:23No, makes sense. And kind of asking the question in the light of that being kind of an upside case to your previous expectations of that 77% of covered lives now from commercial patients in the United States that we have under contract. What portion of that does include that OTC attestation? And then second, just kind of previously we've discussed kind of street expectations to kind of orient people on how you're thinking about the year. As we talk to GIs, which are still the majority of your writers here, at least to my knowledge, They definitely speak to kind of a multiple of prescriptions that they would expect for NERD patients relative to erosive. Speaker 900:39:08Kind of speak to your confidence in kind of back half numbers, which again as it sits today as a 50% increase kind of from Q2 to Q3 with kind of that in mind? Thanks. Speaker 300:39:19Yes. So a couple of parts to your question. In terms of what percent of the access is would also have that OTC attestation, I'm just going to say roughly and I'm going off memory, Jay said, out of the 100 and 15,000,000 lives, about maybe 22,000,000 of them fall under Express Scripts. So I think that answers the first part. In terms of the second part, I think your question was really about the fill rate. Speaker 300:39:47Is that correct moving forward? Speaker 900:39:50Yes, more so just on kind of the increased demand that we'll drive from NERD. I mean, in some of our checks, we hear kind of multiples of oriented people on before where you've kind of oriented people on before, that calls for a 50% increase sequentially into Q3 and just speak to your confidence in that number? Thanks. Speaker 300:40:14Yes. So I'll take the first part of that and then pass it off to Mali. So one of the things that we've been talking to all of you about for a number of years now is that non erosive was really the biggest indication. It's 3 times larger than erosive. So we really just opened up the entire GERD market. Speaker 300:40:31And I think our opportunity there is the fact that we have a real differentiated product. It works all day and all night, but also it works very quickly, right in our label, it talks about full effect at day 2, which is something that a PPI would not have and then also continues that same effect for both the 4 week period as well as the 20 week extension. So it's really got the sustainability. So it's differentiated. And I can tell you going back to Paul's earlier question, all physicians recognize that. Speaker 300:41:04You're seeing the experience, but as Paul brought up those nurse practitioners and physician assistants, they are just welcoming this product. So we think that non erosive is exactly as we set out to do. It's just a really large opportunity. Speaker 200:41:17Yes. And as it relates to guidance, as you know, we're not providing specific guidance on a quarterly basis. But going into launch, we always knew the back half of twenty twenty four was going to be significant between further access, DTC campaign up and running and non erosive label. So those three items are really what's going to drive us home for the rest of this year. And we continue to reiterate that we feel comfortable with the full year consensus of where it is now. Speaker 900:41:44Great. Thanks guys and congrats again. Speaker 400:41:47Thanks, Jason. Operator00:41:49Thank you. And our last question is coming from the line of Matthew Kupfeld with H. C. Wainwright. Your line is open. Speaker 1000:41:57Hi, thank you. Good morning, guys. Just quickly here. So for the prescription mix currently favoring GIs, is that more a factor of those patients already having progressed to seeing a GI specialist, at least at this stage? Or are primary care physicians at all less receptive to prior authorizations and then patients are essentially being passed forward to GI specialists? Speaker 1000:42:19Is there any further distinctions there kind of for that mix? Speaker 300:42:24Yes. So actually let me I might miss your different topics here just to clarify. First of all, I think the high utilization of GI is obviously one specialist adopt new products sooner, new mechanism sooner. But also, and I think I referenced this earlier, out of the gates, we really focused on the highest decile physicians for ROSAFF GIRD and they were naturally gastroenterologists. So I think you should look at it more of where we put both our reach and our frequency in the early months of launch. Speaker 300:42:57Did you not interpret that as primary care, do not see the opportunity or this differentiated product for primary care. And the other thing I'll just say is, just to clarify the PA for I'll say for that one step through a PPI, the only thing that physician really needs to do is identify that that patient has been on a PPI. So there's different levels of prior authorizations and many of them are actually picked right up at the pharmacy. So the physician has no action. So I'm not sure the primary care actually has that much work to do, to get book wise up. Speaker 1000:43:35Okay, very helpful. I appreciate it. Operator00:43:41Thank you. And that's all the time we have for our Q and A session. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation and you may now disconnect.Read morePowered by