Phathom Pharmaceuticals Q1 Earnings Call Highlights

Key Points

• Commercial push: Phathom has expanded its salesforce to more than 290 reps focused on gastroenterology and is targeting $1 billion in annual GI revenue as VOQUEZNA shows early adoption—about 45% new-to-brand share among the top 300 GI writers and >30% across the top 3,000 in Q1 versus PPIs.
• Financials and guidance: Q1 net revenue doubled to $58.3 million (104% YoY) with ~1.35 million prescriptions filled through April 17, and the company reiterated 2026 guidance of $320–345 million in revenue while aiming for operating profitability excluding stock-based compensation by Q3 and positive cash flow in 2027 (cash on hand ~ $181M).
• Pipeline and competitive outlook: The Phase II eosinophilic esophagitis trial is enrolling ahead of schedule with top-line data expected late Q4 2026/early Q1 2027, and management is preparing for a potential second P-CAB entrant (tegoprazan) in 2027 but sees no compelling reason for physicians to switch from VOQUEZNA based on current data.

Phathom Pharmaceuticals NASDAQ: PHAT reported first-quarter 2026 net revenue of $58.3 million, more than doubling the $28.5 million recorded in the same period a year ago, as the company emphasized continued progress in deepening adoption of its acid-suppression medicine VOQUEZNA among gastroenterologists.

On the company’s quarterly conference call, President and CEO Steven Basta said Phathom has “transitioned the strategy and profile of this business” toward a gastroenterology-focused commercial approach and believes early indicators—particularly new-to-brand switching—support that strategy, even as total prescription trends reflected typical first-quarter seasonality.

Commercial execution centers on gastroenterology

Basta said Phathom expanded its sales team in recent months, adding “nearly 50 new sales representatives trained and deployed into the field,” and that the company began the second quarter with “more than 290 reps in place.” He said sales force alignment for high-frequency calls on gastroenterologists is complete and that the company is rolling out enhanced healthcare professional (HCP) marketing programs to support the field team.

Phathom’s goal, he said, is to build toward “$1 billion in annual revenue from gastroenterology prescriptions,” with a longer-term opportunity in primary care that could potentially be larger as patients return to primary care physicians (PCPs) and share their VOQUEZNA experience.

Discussing market opportunity, Basta pointed to the volume of proton pump inhibitor (PPI) prescribing in gastroenterology and Phathom’s belief that a 20% to 30% market share among gastroenterology prescribers could support the $1 billion target. He highlighted prescription share metrics among high-volume GI writers:

• Among Phathom’s top 300 gastroenterology writers in Q1, VOQUEZNA achieved approximately 45% new-to-brand (NBRx) market share compared to PPIs, according to Basta.
• Across the top 3,000 gastroenterology writers in Q1, cumulative NBRx share remained “north of 30%” compared to PPIs, he said.

Basta said the company views NBRx growth as a leading indicator of future total prescription (TRx) growth because it reflects patients being switched to VOQUEZNA for the first time and then potentially remaining on therapy. He cited company analysis showing that among a cohort of patients who started VOQUEZNA in 2024, an average of about six bottles were dispensed over the subsequent 12 months, adding that 18% of patients who had stopped therapy restarted within 12 months of their original prescription.

Prescription and coverage trends

Basta said that through April 17, about 1.35 million VOQUEZNA prescriptions had been filled. In the first quarter, roughly 268,000 prescriptions were filled, including about 168,000 covered prescriptions (approximately 63% of total) and about 100,000 cash-pay prescriptions.

On a year-over-year basis, the company said covered prescriptions grew about 91%, while total prescriptions filled rose about 115%, which Basta attributed to the introduction of a cash-pay option for Medicare patients in April 2025.

He also noted the resolution of an “incremental IQVIA reporting gap” by mid-March, adding that the TRx numbers shared on the call include prescriptions IQVIA did not capture.

Looking into the second quarter, Basta said prescription trends improved late in the first quarter and early in April. He said weekly TRxs in March approached prior December highs and that two of the first three weeks in April reached new all-time highs for covered prescriptions.

Management also addressed the mix between cash-pay and covered prescriptions. Basta said the company saw “a little bit of a bump up” in cash-pay in Q1 and attributed it to insurance reset dynamics and high-deductible plans. Chief Financial and Business Officer Sanjeev Narula added that the company was already seeing that mix moderate after Q1.

Financial results, cash position, and 2026 guidance maintained

Narula said first-quarter revenue of $58.3 million represented 104% year-over-year growth and 1% sequential growth over Q4 2025. He described revenue as “somewhat light compared to our internal expectation” due to market access seasonality, winter storms, and the deployment timing of new sales team members, but said the company remains confident given recent weekly prescription growth and the expanded sales force now in place.

Narula said first-quarter gross-to-net discount came in at the lower end of the company’s 55% to 59% guidance range, influenced by channel mix and a higher proportion of cash-pay prescriptions. Gross margin was approximately 80%, in line with guidance, and now reflects certain third-party fulfillment costs being accounted for in cost of goods sold rather than gross-to-net adjustments, he said.

Cash operating expenses, excluding stock-based compensation, were $56.2 million. Narula said the sequential step-up was expected and driven by:

• Sales force expansion
• The annual national sales meeting in February
• Ramp-up of the phase II eosinophilic esophagitis (EoE) trial

Despite the quarter’s expense level, Narula said cash operating expenses were down about 43% year-over-year versus Q1 2025, which he attributed to ongoing cost discipline.

Phathom reported a loss from operations excluding stock-based compensation of approximately $9.9 million, according to Narula. The company ended the quarter with about $181 million in cash and cash equivalents. Narula said Q1 net cash usage for operations was about $15 million, driven by timing of annual bonus payouts and working capital timing, and noted cash usage also reflected flows tied to an equity raise and a debt amendment.

For full-year 2026, Narula said the company is maintaining prior guidance, including:

• Net revenue of $320 million to $345 million
• Gross-to-net discount of 55% to 59%
• Gross margin of approximately 80%
• Cash operating expenses (excluding stock-based compensation) of $235 million to $255 million

Narula said the company expects revenue to be more heavily weighted to the second half of the year and that expenses should “modestly step up” in Q2 due to a full quarter of the expanded sales force and EoE trial timing. He reiterated the company’s expectation to achieve operating profitability excluding stock-based compensation by Q3 and for full-year 2026, with positive cash flow in 2027.

Pipeline update and competitive backdrop

Narula said Phathom’s phase II EoE trial is enrolling ahead of schedule and that the company now anticipates top-line data by late Q4 2026 or early Q1 2027.

Basta also discussed investor questions about a potential new P-CAB competitor in the U.S. market, saying Phathom is preparing for a potential second P-CAB approval in 2027. He referenced two tegoprazan abstracts released ahead of Digestive Disease Week (DDW), describing them as supporting the effectiveness of P-CABs as a class. While noting that cross-trial comparisons have limitations and the studies were not head-to-head, he compared results from Phathom’s VOQUEZNA phase III erosive esophagitis trial—where he said about 93% of patients achieved healing by eight weeks—with the reported tegoprazan study, which he said showed about 85% healing by eight weeks.

During Q&A, Basta said awareness of tegoprazan is currently low given the lack of a commercial organization and that a second entrant could shift physician mindset toward viewing P-CABs as a category. He said prior market experience suggests first movers often retain a large share as category awareness grows. He also said he sees “no compelling reason” for physicians to switch patients from VOQUEZNA to another P-CAB based on the currently available data.

On longer-term strategy, Basta said Phathom is beginning outreach to identify complementary GI assets that could be added to its sales force but said there is “not urgency” and he does not want to distract the field team from building VOQUEZNA adoption. He also said the company is evaluating potential additional VOQUEZNA opportunities, including as-needed dosing and potential use scenarios related to reflux symptoms in patients taking GLP-1s, while declining to discuss potential intellectual property strategies around future indications.

About Phathom Pharmaceuticals NASDAQ: PHAT

Phathom Pharmaceuticals is a clinical‐stage biopharmaceutical company focused on developing and commercializing novel treatments for gastrointestinal (GI) diseases. The company's core mission centers on addressing serious GI disorders by leveraging innovative mechanisms of action to improve patient outcomes. Phathom's research and development efforts concentrate on conditions such as Helicobacter pylori infection, erosive esophagitis, gastroparesis and other functional GI disorders where significant unmet medical needs persist.

The company's lead asset is vonoprazan, a potassium‐competitive acid blocker (P-CAB) licensed for use in the United States.

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