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Phathom Pharmaceuticals Reports Fourth Quarter and Full Year 2023 Financial Results and Provides Business Update

FLORHAM PARK, N.J., March 07, 2024 (GLOBE NEWSWIRE) — Phathom Pharmaceuticals, Inc. (Nasdaq: PHAT), a biopharmaceutical company focused on developing and commercializing novel treatments for gastrointestinal diseases, today reported financial results for the fourth quarter and full year ended December 31, 2023, and provided recent business highlights.

“Last year was transformative for Phathom, with key regulatory, commercial, and financial accomplishments, culminating with the launch of VOQUEZNA, marking the first new class of treatment for Erosive GERD approved in the U.S. in over three decades,” said Terrie Curran, President and CEO of Phathom. “We are incredibly pleased with the progress and execution in the early stages of our launch, including both physician and payer reception to VOQUEZNA. We are seeing robust demand and a willingness to prescribe, which we believe signals strong momentum for the quarters ahead. Discussions with top PBMs are also progressing as planned and we anticipate prescription volume to grow as formulary coverage continues to build. In addition, the potential approval of VOQUEZNA for Non-Erosive GERD in the third quarter is expected to unlock the largest segment of the GERD market and drive even further uptake of VOQUEZNA.”

Recent Business Highlights and Fourth Quarter & Full Year 2023 Results:

VOQUEZNA® Launch Progress:

Recent Business and Regulatory Highlights:

Fourth Quarter and Full Year 2023 Financial Results:

Conference Call and Webcast
Phathom will host a conference call and webcast to discuss its fourth quarter and full year 2023 financial results and business highlights today, March 7, 2024, at 8:30 a.m. ET. A live webcast will be available on the investors page of Phathom’s website under Events & Presentations. A replay of the webcast will be available following the completion of the event and will be archived for up to 90 days.

Non-GAAP Financial Measures
This press release includes financial results prepared in accordance with accounting principles generally accepted in the United States (GAAP), and also certain non-GAAP financial measures. In particular, Phathom has provided non-GAAP adjusted net loss and adjusted net loss per share, adjusted to exclude the items below. Non-GAAP financial measures are not an alternative for financial measures prepared in accordance with GAAP. However, Phathom believes the presentation of non-GAAP adjusted net loss and adjusted net loss per share, when viewed in conjunction with GAAP results, provides investors with a more meaningful understanding of ongoing operating performance. These measures exclude (i) non-cash share-based compensation, which is substantially dependent on changes in the market price of common shares, (ii) interest expense related to the accounting for our revenue interest financing liability, which are in excess of the actual interest owed, and (iii) interest expense related to the amortization of debt discount on our term loan.

Phathom believes the presentation of these non-GAAP financial measures provides useful information to management and investors regarding Phathom’s results of operations. When GAAP financial measures are viewed in conjunction with these non-GAAP financial measures, investors are provided with a more meaningful understanding of Phathom’s ongoing operating performance and are better able to compare Phathom’s performance between periods. In addition, these non-GAAP financial measures are among those indicators Phathom uses as a basis for evaluating performance, and planning and forecasting future periods. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for GAAP financial measures. A reconciliation between these non-GAAP measures and the most directly comparable GAAP measures is provided later in this press release.

About Phathom Pharmaceuticals, Inc.
Phathom Pharmaceuticals is a biopharmaceutical company focused on the development and commercialization of novel treatments for gastrointestinal diseases. Phathom has in-licensed the exclusive rights to vonoprazan, a first-in-class potassium-competitive acid blocker (PCAB) and currently marketed in the United States as VOQUEZNA® (vonoprazan) tablets for the treatment of Erosive GERD and relief of heartburn associated with Erosive GERD in adults, in addition to VOQUEZNA® TRIPLE PAK® (vonoprazan tablets, amoxicillin capsules, clarithromycin tablets) and VOQUEZNA® DUAL PAK® (vonoprazan tablets, amoxicillin capsules) for the treatment of H. pylori infection in adults. For more information about Phathom, visit the company’s website at www.phathompharma.com and follow on LinkedIn and X.

Forward-Looking Statements
This press release contains forward-looking statements. Investors are cautioned not to place undue reliance on these forward-looking statements, including statements about the timing of regulatory review and commercial launch of vonoprazan as a daily treatment for Non-Erosive GERD, the timing of commencement of our Phase 3 As Needed dosing Non-Erosive GERD and Phase 2 EoE trials, the availability of additional funds under our term loan agreement, future growth in demand and our ability to secure additional commercial coverage for our products, and our cash runway. The inclusion of forward-looking statements should not be regarded as a representation by Phathom that any of its plans will be achieved. Actual results may differ from those set forth in this press release due to the risks and uncertainties inherent in Phathom’s business, including, without limitation: we may not be able to successfully commercialize VOQUEZNA, VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PACK, which will depend on a number of factors including coverage and reimbursement levels from governmental authorities and health insurers as well as market acceptance by healthcare providers; we may use our capital resources sooner than expected, or our operating plan may overestimate our expected product revenues, which could require us to reduce expenses or raise additional capital sooner than expected; the inherent risks of clinical development of vonoprazan; Phathom’s dependence on third parties in connection with product manufacturing, research and preclinical and clinical testing; regulatory developments in the United States and foreign countries; unexpected adverse side effects or inadequate efficacy of vonoprazan that may limit its development, regulatory approval and/or commercialization, or may result in recalls or product liability claims; Phathom’s ability to access additional capital under its term loan facility and royalty interest finance agreements is subject to certain conditions; Phathom’s ability to obtain and maintain intellectual property protection and non-patent regulatory exclusivity for vonoprazan; Phathom’s ability to comply with its license agreement with Takeda; and other risks described in the Company’s prior press releases and the Company’s filings with the Securities and Exchange Commission (SEC), including under the heading “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and any subsequent filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and Phathom undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

MEDIA CONTACT
Nick Benedetto
1-877-742-8466
media@phathompharma.com

INVESTOR CONTACT
Eric Sciorilli
1-877-742-8466
ir@phathompharma.com

Selected Condensed Balance Sheets
(in thousands)
 
    December 31,
2023
    December 31,
2022
 
Assets            
Cash and cash equivalents   $ 381,393       $ 155,385    
Total assets   $ 413,842       $ 164,810    
Total liabilities   $ 486,601       $ 239,624    
Total stockholders’ deficit   $ (72,759 )     $ (74,814 )  
                     
Statements of Operations and Comprehensive Loss
(in thousands, except share and per share amounts)
 
    Three Months Ended
December 31,
  Year Ended
December 31,
      2023       2022       2023       2022  
Product revenue, net   $ 682     $     $ 682     $  
Cost of revenue     167             167        
Gross profit     515             515        
                 
Operating expenses:                
Research and development   $ 13,393     $ 15,946     $ 49,899     $ 71,441  
General and administrative     56,996       30,695       117,928       100,999  
Total operating expenses     70,359       46,641       167,827       172,440  
Loss from operations     (69,874 )     (46,641 )     (167,312 )     (172,440 )
Other income (expense):                
Interest income     3,347       1,286       7,876       2,132  
Interest expense     (13,028 )     (9,603 )     (41,968 )     (27,305 )
Other (expense), net     (14 )     (89 )     (188 )     (110 )
Total other expense     (9,695 )     (8,406 )     (34,280 )     (25,283 )
Net loss and comprehensive loss   $ (79,569 )   $ (55,047 )   $ (201,592 )   $ (197,723 )
Net loss per share, basic and diluted   $ (1.39 )   $ (1.33 )   $ (3.93 )   $ (5.05 )
Weighted-average shares of common stock outstanding, basic and diluted     57,294,412       41,310,887       51,289,092       39,118,215  
 
Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except share and per share amounts)
(unaudited)
 
  Three months ended
December 31,
  Year Ended
December 31,
    2023       2022       2023       2022  
Reconciliation of GAAP to Non-GAAP adjusted net loss:              
GAAP net loss ($79,569 )   ($55,047 )   ($201,592 )   ($197,723 )
Stock-based compensation expense (A)   24,583       6,657       45,025       24,133  
Non-cash interest on revenue interest financing liability   8,462       5,730       24,727       14,079  
Interest expense related to amortization of debt discount   566       497       2,127       2,110  
Non-GAAP adjusted net loss ($45,957 )   ($42,163 )   ($129,713 )   ($157,401 )
               
Reconciliation of GAAP to Non-GAAP adjusted net loss per share — basic and diluted:              
GAAP net loss per share — basic and diluted ($1.39 )   ($1.33 )   ($3.93 )   ($5.05 )
Stock-based compensation expense   0.43       0.16       0.88       0.62  
Non-cash interest on revenue interest financing liability   0.15       0.14       0.48       0.36  
Interest expense related to amortization of debt discount   0.01       0.01       0.04       0.05  
Non-GAAP net loss per share — basic and diluted ($0.80 )   ($1.02 )   ($2.53 )   ($4.02 )
               
Weighted-average shares of common stock outstanding, basic and diluted   57,294,412       41,310,887       51,289,092       39,118,215  
(A) Stock-based compensation consists of the following:      
  Three months ended
December 31,
  Year Ended
December 31,
  2023   2022   2023   2022
Research and development 7,325   1,657   12,302   5,534
Selling, general and administrative 17,258   4,999   32,723   18,599


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