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Phathom Pharmaceuticals, Inc. (PHAT)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 net revenues were $29.7M, up 81% sequentially from Q3, with gross margin at 87% and GAAP net loss of $74.5M ($1.05 loss per share) as the VOQUEZNA launch scaled across GERD indications .
  • VOQUEZNA momentum accelerated: 118k filled prescriptions in Q4 (vs ~69k in Q3), cumulative filled scripts surpassed 300k by Feb 21, 2025, and prescribers expanded to >20k; retail pharmacy capture rose to ~75% .
  • Management introduced 2025 non-GAAP operating expense guidance of $360–$390M and narrowed 2025 gross-to-net discount guidance to 55–65%; they expect Q1 2025 revenue softness due to seasonality and ~3 weeks wholesaler inventory at year-end .
  • Catalysts: FDA Citizen Petition outcome on VOQUEZNA NCE exclusivity by mid-June 2025, new DTC campaign roll-out, and planned EoE Phase 2 initiation in Q2 2025 (subsequently deferred in Q1 2025 for cost optimization) .
  • Management stated they are comfortable with 2025 revenue consensus of ≈$165M; S&P Global consensus detail for Q4 was unavailable today (SPGI rate limit), so we cannot assess beat/miss for Q4 versus Street .

What Went Well and What Went Wrong

What Went Well

  • VOQUEZNA adoption inflected: “over 118,000 prescriptions... in the fourth quarter 2024” and cumulative >300,000 by Feb 21, 2025, demonstrating strong demand and refill continuity .
  • Coverage breadth and access improved: VOQUEZNA covered for >120M lives, >80% of U.S. commercial lives, generally requiring only one prior generic PPI step, aiding pull-through .
  • Margin progression: gross margin reached 87% in Q4 (up 155 bps QoQ), reflecting favorable cost structure and consistent gross-to-net discounts (~57% in last three quarters) .
  • CEO tone confident: “We fully believe VOQUEZNA can reach blockbuster status,” with PCP focus and DTC acceleration to further drive brand adoption .

What Went Wrong

  • Profitability still distant: GAAP net loss of $74.5M in Q4; non-GAAP adjusted net loss of $56.4M; SG&A elevated ($76.7M) given DTC and commercial build-out .
  • Seasonality and inventory headwinds: management flagged softened Q1 revenue due to holidays, deductible resets, and ~3 weeks wholesaler inventory vs typical 2 weeks .
  • Regulatory and exclusivity uncertainty: outcome of the FDA Citizen Petition on NCE exclusivity remains pending; management indicated litigation may be pursued if the decision is unfavorable .

Financial Results

Quarterly Comparison (sequential)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$7.324 $16.352 $29.664
Gross Profit ($USD Millions)$5.948 $13.996 $25.849
Gross Margin %~81.2% (calc from revenue/gross profit) 86% 87%
GAAP Net Loss ($USD Millions)$(91.446) $(85.577) $(74.451)
GAAP EPS ($)$(1.56) $(1.32) $(1.05)
Non-GAAP Adjusted Net Loss ($USD Millions)$(73.295) $(67.850) $(56.376)
Non-GAAP Loss per Share ($)$(1.25) $(1.05) $(0.79)

Q4 Year-over-Year

MetricQ4 2023Q4 2024
Revenue ($USD Millions)$0.682 $29.664
Gross Profit ($USD Millions)$0.515 $25.849
R&D Expense ($USD Millions)$13.393 $8.583
SG&A Expense ($USD Millions)$56.996 $76.683
GAAP Net Loss ($USD Millions)$(79.569) $(74.451)
GAAP EPS ($)$(1.39) $(1.05)

Estimates vs Actuals (Q4 2024)

MetricActual Q4 2024S&P Global Consensus Q4 2024
Revenue ($USD Millions)$29.664 N/A – SPGI consensus unavailable today
EPS ($)$(1.05) N/A – SPGI consensus unavailable today

Note: S&P Global consensus data could not be retrieved (SPGI rate limit). We therefore cannot assess Q4 beat/miss versus Street.

KPIs

KPIQ2 2024Q3 2024Q4 2024
Filled Prescriptions (period)>35,000 ~69,000 ~118,000
Cumulative Filled Prescriptions (launch-to-date)>60,000 >143,000 >300,000 (as of Feb 21, 2025)
Cumulative Prescribers (as of date)>8,200 (Jul 19, 2024) >13,600 (Oct 18, 2024) >20,000 (Feb 14, 2025)
Retail Pharmacy Capture (% of filled scripts)—~70% ~75%
Commercial Coverage (lives)116M >120M >120M
Gross-to-Net Discount Rate——~57% in last 3 quarters; 2025 guidance 55–65%
Refill Mix (Q4 scripts continuing therapy)——~70%
Avg Prescriptions per patient (6-month cohort)——3.5 (Q2’24 starters over 6 months)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Non-GAAP Operating Expenses ($)FY 2025N/A$360–$390MIntroduced
Gross-to-Net Discount (%)FY 202550–65% (pre-launch commentary) 55–65%Narrowed
Revenue CommentaryQ1 2025N/A“Softened first quarter revenues” expected due to seasonality and elevated year-end inventory (~3 weeks)Cautioned
Revenue ViewFY 2025N/A“Comfortable with current 2025 consensus revenues of approximately $165 million”Commentary (not formal guidance)
EoE Phase 2H1 2025“Initiate in Q2 2025” Planned initiation reiterated in Q4 callTiming affirmed

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2024)Trend
Coverage & AccessQ2: 116M lives; PBM adds (CVS Caremark), UHC PDL; >77% coverage . Q3: >120M lives; single-step PPI access .>120M lives covered; broad commercial access emphasized .Stable-high; quality of access emphasized.
DTC MarketingQ2: Initial campaign; momentum building . Q3: DTC expanded; $17.5M advertising .DTC spend increased ($20.2M in Q4); new campaign planned; aim to boost brand awareness .Increasing investment (near-term).
Prescriber Mix (PCP vs GI)Q3: Majority of new prescribers were PCPs; PCP awareness growing .PCPs surpassed GI in cumulative writers; focus on high-volume PCPs .PCP adoption accelerating.
Product Performance (Prescriptions, Refill, Persistency)Q3: ~69k filled prescriptions; retail capture ~70%; refill trends “healthy” tracking PPI persistency .~118k Q4 filled; ~70% refills; average 3.5 scripts over 6 months for Q2 cohort .Strengthening usage and continuity.
Margins & GTNQ2: GM ~81% (derived); GTN tracking to 50–65% . Q3: GM 86% .GM 87% (+155 bps QoQ); GTN ~57% over last 3 quarters; 2025 GTN guidance 55–65% .Improving GM; GTN consistent.
Regulatory/Legal (Exclusivity)Q3: Orange Book exclusivity discussions; belief in 10-year NCE to 2032 .Citizen Petition timeline (180 days); confident; litigation possible if denied .Decision pending (stock catalyst).
R&D Execution (EoE, On-Demand, ODT)Q2: Plan Phase 3 On-Demand and Phase 2 EoE initiation by year-end . Q3: Real-world data to inform On-Demand timing; EoE to initiate H1 2025 .EoE Phase 2 finalized (target Q2 2025); evaluating On-Demand go/no-go by midyear; ODT formulation strategy advancing .Advancing; timelines clarified.
Macro/SeasonalityQ3: Typical inventory patterns (~2 weeks) .Q1 softness expected; ~3 weeks inventory at year-end .Seasonal headwinds flagged.

Management Commentary

  • “VOQUEZNA’s first full year on the market has been exceptional… we believe we are on the path to blockbuster success” – Terrie Curran, CEO .
  • “Commercial coverage has held consistently above 120 million lives… over 300,000 prescriptions filled to date” – CEO .
  • “We will be rolling out an exciting new consumer campaign… expanding upon ‘VOQUEZNA Can Kick Some Acid’” – CEO .
  • “We are estimating our non-GAAP operating expenses for 2025 to range between $360 million and $390 million” – CFO .
  • “We are comfortable with the current 2025 consensus revenues of approximately $165 million” – CFO .
  • “Citizen Petition… timeline is 180 days… if it does not go as anticipated… most likely pursue litigation” – CEO .

Q&A Highlights

  • Exclusivity CP timeline and strategy: FDA response due within 180 days; confident in position; litigation likely if denied .
  • Q1 revenue trajectory: management expects a softer Q1 due to seasonality and year-end inventory dynamics (≈3 weeks vs typical 2 weeks) .
  • On-Demand dosing study: go/no-go decision targeted by midyear based on real-world data and emerging guidelines incorporating VOQUEZNA on-demand use .
  • DTC ROI and spend cadence: increased investment in H1’25 with midyear pause to review ROI; Q4 advertising spend $20.2M (+15% QoQ) .
  • GTN mechanics and channels: blended GTN influenced by WAC differences (retail ~$680/bottle vs Blink $50), yielding ~57% discount recently .

Estimates Context

  • S&P Global consensus for Q4 2024 revenue and EPS was unavailable today due to SPGI rate limits; we cannot determine beat/miss versus Street for Q4.
  • Management indicated comfort with FY 2025 consensus revenue of approximately $165M, providing directional context despite no formal revenue guidance .

Key Takeaways for Investors

  • Sequential growth and margin expansion validate launch quality; watch for Q1 seasonal softness, then resumption of demand trends thereafter .
  • PCP penetration is the pivotal growth lever; sales force focus on high-volume PCPs and simplified PA processes should drive TRx acceleration .
  • DTC amplification is lifting patient requests and physician willingness to prescribe; monitor midyear ROI review for spend optimization .
  • Exclusivity decision (Citizen Petition) is a major near-term catalyst; an extension to 2032 would bolster durability, while denial may prompt litigation; patent coverage remains into at least mid-2030 either way .
  • Non-GAAP opex guidance ($360–$390M) and GTN range (55–65%) frame 2025 cash usage; margin trends are positive, but SG&A intensity remains high near term .
  • Inventory normalization from ~3 weeks at YE should aid Q2 sell-through; monitor retail capture trends (~75%) and refill mix (~70% continuing therapy) to gauge persistency .
  • Management’s comfort with FY25 revenue consensus (~$165M) signals confidence in trajectory; however, limited government coverage and macro cost controls (and later restructuring) should be watched for impact on growth and timelines .