What Phathom Pharmaceuticals (PHAT) Said on Its Q3 Earnings Call

Key Points

• Q3 revenue rose 71% year over year to $84.7 million, while Phathom generated $5.8 million in operating profit excluding stock-based compensation and about $2.1 million in operating cash flow. The company maintained its 2026 revenue guidance of $310 million to $325 million.
• VOQUEZNA prescription growth continued, with approximately 380,000 prescriptions filled in Q3 and more than 2 million since launch. Phathom is expanding its “Access First” strategy, including prior-authorization support and a $0 copay program through BlinkRx, to improve coverage and affordability.
• Phathom expects EoE trial data in Q4 2026 and is advancing an as-needed GERD study, while defending VOQUEZNA’s exclusivity through May 2032 in ongoing litigation. Management said current cash and expected operating cash generation should support investments without another debt or equity raise.

Phathom Pharmaceuticals NASDAQ: PHAT reported third-quarter 2026 revenue growth and a second consecutive quarter of positive operating profit excluding stock-based compensation, as the company continued efforts to expand access to its GERD treatment VOQUEZNA.

Net revenue reached $84.7 million, up 71% from the prior-year quarter and 14% sequentially. The company reported cash operating expenses of $60.5 million, positive operating profit excluding stock-based compensation of $5.8 million, and approximately $2.1 million in cash generated from operations.

President and CEO Steve Basta said the company is focused on reducing prescribing and affordability barriers for physicians and patients. Phathom maintained its full-year 2026 revenue guidance of $310 million to $325 million.

Prescription Growth and Access Initiatives

Through Oct. 16, more than 2 million VOQUEZNA prescriptions had been filled since launch, according to Phathom. The company reached its first million prescriptions just over two years after launch and its second million in less than a year.

Approximately 380,000 prescriptions were filled during the third quarter. Of those, about 248,000, or 65%, were covered prescriptions, while roughly 132,000 were cash-pay prescriptions. Covered prescription volume grew 19% from the second quarter, while cash volume increased 6%.

Phathom has implemented an “Access First” strategy intended to help physician offices navigate prior authorization requirements and improve patient affordability. The company’s sales representatives are educating providers and office staff on prior authorization documentation, payer-specific requirements, patient-support programs and the use of pharmacy partner BlinkRx.

Basta said prescriptions routed through BlinkRx have shown higher prior authorization submission and approval rates, as well as higher overall fill rates than prescriptions sent to traditional retail pharmacies. The company introduced a $0 copay offering through BlinkRx at the end of the third quarter for eligible commercially insured patients, excluding patients in Massachusetts.

“Rather than focusing on the potential difference in out-of-pocket costs between VOQUEZNA and a generic PPI, physicians can now consider whether VOQUEZNA is an appropriate treatment option,” Basta said.

During the question-and-answer session, Basta described physician adoption of BlinkRx as more a matter of overcoming established prescribing habits than active resistance. Physicians commonly send prescriptions to a patient’s local pharmacy by default, he said, while Phathom is seeking to demonstrate that BlinkRx can provide support with prior authorizations, patient communication and affordability.

Chief Financial and Business Officer Sanjeev Narula said the $0 copay program could have a minor effect on gross-to-net discounts but is expected to be net positive because of the contribution from incremental filled prescriptions.

Margins, Expenses and Cash Position

Phathom’s gross profit margin was approximately 78% in the third quarter, below company guidance because of certain one-time charges in cost of revenue. Narula said the margin impact was primarily related to a one-time manufacturing charge and that the company does not see incremental recurring pressure from distribution or fulfillment costs.

The company’s third-quarter cash operating expenses increased modestly from the prior quarter. Research and development spending rose due to clinical trial costs for eosinophilic esophagitis, or EoE, and as-needed treatment studies, while selling, general and administrative costs reflected sales and marketing investments tied to Access First.

Phathom ended the quarter with $184.6 million in cash and cash equivalents. Beginning Oct. 1, its required cash holding level under its Revenue Interest Financing Agreement was approximately $119 million. Narula said the company expects its current cash balance and future operating cash generation to support business investment and covenant compliance without another debt or equity raise, based on current expectations.

• Full-year 2026 gross-to-net discount is expected toward the lower end of the company’s 55% to 59% guidance range.
• Full-year gross margin guidance remains approximately 80%.
• Cash operating expense guidance remains $235 million to $245 million, excluding stock-based compensation, with spending tracking toward the lower end of the range.
• The company continues to expect durable positive cash flow in 2027.

Clinical Programs and Exclusivity Litigation

Phathom expects top-line data in the fourth quarter from its Phase II pHalcon-EoE study of VOQUEZNA in EoE. The trial’s primary endpoint evaluates histologic improvement, measured by reductions in eosinophil counts after 12 weeks of treatment, while symptom improvement is a secondary endpoint. An additional 12-week open-label safety extension remains ongoing.

Basta said full 24-week data, including the open-label portion, is expected toward the latter part of the first quarter of 2027. If the results support further development, Phathom plans to discuss a Phase III program with the FDA in 2027, including whether a pediatric written request could support a six-month pediatric exclusivity extension.

The company’s Phase III pHalcon-NERD-302 study for as-needed treatment of non-erosive GERD is enrolling patients. Top-line data are expected in the first quarter of 2028. Basta said a successful trial and approval could address patients who do not want to take proton pump inhibitors daily.

Phathom also discussed litigation related to VOQUEZNA’s regulatory exclusivity. BDR Pharmaceuticals filed suit against the FDA on Oct. 21, challenging what it alleges was the agency’s application of the GAIN Act to extend new chemical entity exclusivity for VOQUEZNA tablets. A second purported abbreviated new drug application filer has indicated it intends to seek consolidation with BDR’s case.

The FDA previously concluded, following review of Phathom’s citizen petition, that 10 years of NCE exclusivity as extended by the GAIN Act applies to products containing vonoprazan. VOQUEZNA tablets are listed in the Orange Book with exclusivity through May 3, 2032. Phathom has intervened in the BDR litigation and said it intends to defend its statutory exclusivities.

Commercial Strategy Beyond 2026

Management said Phathom expects its commercial infrastructure to remain broadly consistent in 2027, though it has not yet issued formal guidance for next year. The company said it will continue to prioritize gastroenterologists, where it currently directs more than 70% of sales calls, rather than shifting near-term emphasis to primary care physicians.

Basta also said Phathom intends to build a broader gastrointestinal business over time by pursuing additional commercial or clinical-stage assets. The company expects potential future additions to be products that could be launched before its potential 2033 exclusivity loss, though management did not provide a timetable for transactions.

About Phathom Pharmaceuticals (NASDAQ:PHAT)

Phathom Pharmaceuticals, Inc NASDAQ: PHAT is a biopharmaceutical company focused on developing and commercializing treatments for gastrointestinal diseases. The company's principal product is Voquezna (vonoprazan), a potassium-competitive acid blocker designed to suppress stomach acid through a mechanism distinct from traditional proton pump inhibitors.

In the United States, Voquezna is approved for the treatment of Helicobacter pylori infection in combination with antibiotics and for certain forms of gastroesophageal reflux disease (GERD), including erosive esophagitis and heartburn associated with non-erosive GERD.

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