NASDAQ:PHAT Phathom Pharmaceuticals Q3 2024 Earnings Report $4.11 -0.01 (-0.24%) Closing price 04:00 PM EasternExtended Trading$4.12 +0.01 (+0.24%) As of 07:08 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-$1.32Consensus EPS -$1.57Beat/MissBeat by +$0.25One Year Ago EPS-$0.76Phathom Pharmaceuticals Revenue ResultsActual Revenue$16.35 millionExpected Revenue$12.54 millionBeat/MissBeat by +$3.81 millionYoY Revenue GrowthN/APhathom Pharmaceuticals Announcement DetailsQuarterQ3 2024Date11/7/2024TimeBefore Market OpensConference Call DateThursday, November 7, 2024Conference Call Time8:30AM ETUpcoming EarningsPhathom Pharmaceuticals' Q1 2025 earnings is scheduled for Thursday, May 1, 2025, with a conference call scheduled at 8:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by Phathom Pharmaceuticals Q3 2024 Earnings Call TranscriptProvided by QuartrNovember 7, 2024 ShareLink copied to clipboard.There are 11 speakers on the call. Operator00:00:02Hello, and welcome to the Fathom Pharmaceuticals Third 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 call is being recorded. With that, I would like to turn the conference over to Eric Chiarelli, Fathom's Head of Investor Relations. Operator00:00:30Please go ahead. Speaker 100:00:34Thank you, operator. Hello, everyone, and thank you for joining us this morning to discuss Fathom's Q3 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 Abouzi, our Chief Operating Officer will also be joining the team during the Q and A portion of today's call. Just a couple of logistical items before we get started. Speaker 100:00:59Earlier 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. These forward looking statements involve risks and uncertainties, many of which are beyond Fallon's control. Speaker 100:01:28Actual results can materially differ from the forward looking statements, and any such risks can materially adversely affect the business, the results of operations and trading prices for Fallon's 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 Teri Curran, Fathom's President and CEO, to kick us off. Teri? Speaker 200:02:05Thank you, Eric, and thank you to all those joining us on today's call. I'm excited to provide an update on SANAD's recent progress. Successful commercial launch of ZYPESTA remains our top priority, and I'm pleased to share that we're seeing growing interest from physicians and patients as well as increased coverage from payers. Week over week and month over month, important key performance indicators have trended positively with respect to prescription data, market sentiment and patient access. These outcomes inspire confidence that our launch strategies have been impactful. Speaker 200:02:41As we continue our launch journey, I'm confident that our teams are positioned appropriately to deliver on VEQUESTA's sizable market opportunity. The Q3 of 2024 was momentous for Fathom and the Quezna. We achieved several important milestones, which advanced our commercial launch and strengthened our balance sheet to enable continued investment in our business. On the commercial front, we secured FDA approval for VEQUESNA as a treatment for non erosive GERD and greatly expanded commercial access, which has now surpassed 80% of lives covered. On the financial side, we leverage these achievements to successfully raise gross proceeds of $130,000,000 in an equity follow on, which we view as evidence that the capital markets have confidence in the opportunity that lies ahead. Speaker 200:03:34In July, the Quezna was approved for the release of heartburn associated with non erosive GERD in adults. As the largest subcategory of GERD, this label expansion greatly increased the Quezna's addressable market to roughly 22,000,000 U. S. Adults. And since the non rosuf good market dynamics are nearly identical to those of the rosuf good, our teams have been able to quickly leverage the sales and marketing plans we already had in place for our roasted GERD launch. Speaker 200:04:04The feedback so far has been tremendous. Ultimately, with both major GERD indications now approved, we believe the Quesna can be a game changer with its rapid onset of action and durability of effect providing relief to millions of patients who are dissatisfied with their existing treatment options. In parallel, we have also made important progress on enhancing the Aqueza's commercial coverage in the Q3. Late in July, we announced the addition of Aqueza to CVS Caremark National Formularies, the largest of the country's 3 major pharmacy benefits managers. Between this important accomplishment and several other formulary placements, over an estimated 120,000,000 commercially insured lives now have access to VEQUESNA. Speaker 200:04:53And for the majority of those lives, we successfully secured coverage subject to a single step through a generic TPI prescription. One of our launch goals has always been to ensure the Quezna is widely accessible and affordable to commercial patients. We feel we've done a good job in advancing this effort, and we are both proud of the quantity and quality of the coverage we have earned. In the months to come, we believe our commercial access will serve as a tailwind, increasing utilization across both GERD indications. In fact, the effects of securing both non erosive approval and broader commercial coverage are already having a positive impact on our results. Speaker 200:05:39We believe our Q3 2024 launch data are impressive, highlighted by increasing VEQUESNA volume. In less than a year since launch, over 143,000 prescriptions have already been filled by patients. We believe the growth trajectory of this metric validates the unmet need in the market and serves as evidence that we are elevating brand awareness. With the Q4 underway, our goal is to improve on this momentum, expanding the number of the Quezna prescribers and the number of the Quezna scripts ultimately being filled by patients. Outside the quantitative data, I continue to be impressed by the recognition that Quezna has earned in the marketplace. Speaker 200:06:27In addition to the many patient and physician testimonials we receive on a weekly basis, the Quezna has recently won multiple industry awards touting its innovation. Media coverage for the Quesna has also increased sharply, especially following our approval for non erosive GERD. And on the medical front, our team recently attended the American College of Gastroenterology Conference, where it was clear that the GI community and attending physicians continue to be excited by having the bequesna as a new option in their toolkit. Across these various sources of feedback, what I find most noteworthy is the consistency of the sentiment. Physicians, patients, key opinion leaders all describing a positive experience with Zekwezna, all reinforcing its potential to disrupt the PPI market. Speaker 200:07:21Turning now to our pipeline. We've begun reviewing Miquesna's early real world non neurosis GERD data to understand consumer usage patterns and position prescribing habits. Although additional data are needed, we believe these insights will help assess the value and potential timing of advancing a Phase 3 program to validate the as need dosing of the questioner for active heartburn episodes. Separately, we're in the final stages of obtaining FDA alignment on a Phase 2 program investigating bequesna as a potential treatment to eosinophilic esophagitis or EoE, which we now plan to initiate in the first half of twenty twenty five. On the financial side, Mollie will further detail our Q3 2024 results, for which we reported net revenues of $16,400,000 and ended with $335,000,000 in cash. Speaker 200:08:16We remain confident that our strength in balance sheet will enable us to continue delivering on our business strategies. I'm very happy with today's results. We believe our accomplishments in the Q3 were key steps in allowing Fathom to recognize the Quezna's full market opportunity. Our vision has always been focused on successfully executing our commercial strategy, and I believe we're making terrific progress. We've appropriately invested in our people, technology and data to enable us to best understand and predict marketing levers that help drive growth. Speaker 200:08:52With recent approval secured, commercial coverage expanded and continued brand investment, I'm confident we can achieve the blockbuster opportunity we believe is possible for VICRESSNA. I'll now turn the call over to Martin to provide further details on our recent commercial updates. Martin? Speaker 300:09:11Thanks, Terry, and hello, everyone. I'd like to start by echoing Terry's comments that we're pleased with our Q3 results. Following Voquesa's approval for non erosive GERD and increased market access coverage, our teams have been working diligently to realize the expanded market opportunity. Today's results are clear evidence of the progress we've made. As we have done previously, I will begin with sharing updates on our launch data and follow with additional color on the efforts that have helped drive our successful Q3. Speaker 300:09:43Now turning to our metrics, I'd like to note that we are no longer reporting total demand, defined as the number of scripts written even if not filled as one of our quarterly data points. As we've mentioned in the past, demand was only meant to be an early launch metric. It was intended to serve as an indicator of market interest for VOCESNA, while we work to establish commercial coverage. Now, given our widespread commercial access, we believe the fill prescriptions metric is an accurate measure of usage amongst prescribers and patients. With that being said, we have now surpassed 143,000 prescriptions filled by patients from launch through October 25. Speaker 300:10:27This has more than doubled since our last report, displaying a growth of nearly 140%. In the Q3 specifically, we recorded approximately 69,000 filled Vopresna prescriptions, also just about doubling the amount we reported for the Q2. We believe the recent label expansion for nonarosib GERD was the key driver of this growth. In fact, filled prescriptions for 10 milligram, the approved dose for nonarosib GERD increased by over 2 30% between Q2 and Q3. As a reminder, these figures include volumes filled through retail pharmacies, which are captured by IQVIA as well as those filled through BlinkRx, one of our patient assistant programs. Speaker 300:11:14Consistent with our previous updates, as Laquesna's commercial coverage expanded, we expected the proportion of volume flowing through retail pharmacies to increase. As such, for the prescriptions filled in Q3, approximately 70% were filled through retail pharmacies and captured by IQVIA. In parallel, the total number of physicians who have written the filled script increased to over 13,600 as of October 18, compared to over 8,200 as of our last report. We are pleased that the growth in VENCESNA writers continues to indicate strong adoption. Through the end of Q3, about 12,400 cumulative prescribers have written a filled VENCESNA prescription, up approximately 70% compared to Q2. Speaker 300:12:01Our data shows that repeat writing is growing, meaning those that prescribe VOQESNA are doing so often. Therefore, one of our key objectives has been to generate new writers with the aim that they will join those who write more frequently once they see VEQUESNA benefit their patients. I'm happy to report that this strategy is working and we're excited by the early results. All of this encouraging data stems from the widespread commercial access we have secured for VEQUESNA. Early in Q3, we announced that CVS Caremark included VEQUESNA on its national formularies with utilization management according to strategy, requiring only a single step through a generic prescription PPI. Speaker 300:12:44In the months following, downstream health plans have assigned VEQUESNA similar positioning on their formularies. Since the start of Q3, VEQUESTA has been added to formularies responsible for covering over 42,000,000 commercial lives. And importantly, we see the significant growth in prescriptions for 10 milligram as evidence that access is available for non erosive GERD patients. With major payer wins secured, we're proud of the availability and affordability that we set forth for commercial patients. In less than a year, we have successfully negotiated access for all approved indications with appropriate utilization management across the majority of plans for which VEQUESNA is covered. Speaker 300:13:27As a result, VEQUESNA's total covered population now captures over an estimated 120,000,000 people or more than 80% of all U. S. Commercial lives. On the promotional front, we remain focused on increasing awareness with target physicians. In the early days of launch, gastroenterologists were first to embrace VEQUESNA as they were largely aware of the new mechanism coming to the market. Speaker 300:13:54Since then and accelerating with non erosive GERD, we've been focused on growing the primary care prescriber base. In fact, Q3 was the Q1 since launch where the majority of new VEQUESTA prescribers were primary care physicians. These doctors are responsible for most GERD patient management decisions. So our aim is to make Voquesna a leading treatment option amongst this group. As for consumers, we know that positive feedback and direct requests can often impact physician prescribing choices. Speaker 300:14:26Fortunately, patient sentiment has been terrific and we believe that patients taking VEQUESNA quickly notice the benefits and relay their experience back to their prescriber. In tandem, we continue to encourage patients to ask their physician about VEQUESNA through further investment in our VEQUESNA can kick some acid DTC campaign, which is expanded to include non erosive GERD messaging. While the data is still maturing, our preliminary analysis have confirmed that the campaign is reaching the appropriate audience and that exposed consumers are converting to aequesna. As we approach the 1st anniversary of aequesna's initial launch for erosive GERD and H. Pylori, I'm confident in the foundation we've built and the momentum that has followed in these recent months. Speaker 300:15:14We continue to be excited by our quarterly progress, and I believe we are poised to continue delivering outstanding results. With the non erosive GERD indication having launched not even 4 months ago, we believe there is opportunity for significant growth as we work toward displacing PPIs and getting VEQUESNA into patients' hands. I'll now pass it off to Mollie to walk through our financial results. Mollie? Speaker 400:15:40Thank you, Martin, and hello to everyone on the call. I'm pleased to share our Q3 2024 financial results with you today. 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 early into launch. Additionally, I will be commenting on both GAAP and non GAAP financial measures. Speaker 400:16:03Supporting 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. Turning to our results. During the Q3 ended September 30, 2024, we reported net revenues of $16,400,000 which represents an over 120% sequential quarter over quarter increase. In connection with the momentum from our non erosive GERD launch, we believe the label expansion also contributed to the revenue growth in the Q3. While we are still assessing inventory stocking patterns, early data following the launch of non erosive GERD have remained largely consistent with previous quarters, signaling that wholesalers are holding about 2 weeks' worth of retail product on hand. Speaker 400:16:47Regarding gross to net, discount rates are once again in line with the expectations we set forth pre launch. We will continue to monitor the evolution of our GTN discount, especially in the Q4, which will be our 1st full quarter to include the impacts of non erosive GERD and commercial coverage above 80% for the entire quarter. For the quarter ended September 30, 2024, we reported gross profit of $14,000,000 which equates to a gross margin of 86%, an increase of about 4.40 basis points over last quarter. Looking down the P and L to our operating expenses, we reported non GAAP R and D spend of $7,400,000 for the Q3, which represents a 32% decrease compared to Q3 2023. This also reflects a 22% increase sequentially compared to last quarter. Speaker 400:17:34The decrease compared to Q3 2023 reflects the wind down of spend related to our completed Phase III non erosive daily dosing trial, while the sequential quarterly increase reflects standard business operations related to our ongoing regulatory and clinical activities. As for SG and A, we reported non GAAP expenses of $71,800,000 for the Q3 of 2024. This represents an increase of $53,100,000 relative to the same period in 2023, primarily driven by the build out of our commercial infrastructure in support of the VEQUESNA launch in late 2023. Additionally, this period's SG and A expense included advertising costs of approximately $17,500,000 in connection with our ongoing DTC campaign, which compares to $16,700,000 reported last quarter. On a sequential quarterly basis, this quarter's overall SG and A expenses were flat compared to the 2nd quarter as expected and previously communicated. Speaker 400:18:30Going forward, we anticipate increased investments in our commercial activities for the remainder of 2024 and into 2025 based on the early results from our direct to consumer campaign. As for EPS, we reported non GAAP adjusted net loss of $67,900,000 for the Q3 of 2024 or $1.05 loss per share compared sequentially to $73,300,000 or $1.25 loss per share for the Q2 of this year. Similar to previous quarters, the most significant reconciling item between GAAP and non GAAP operating expenses was non cash stock based compensation. Other non GAAP reconciling items included non cash interest on our revenue interest financing liability and non cash interest expense related to amortization of debt discount. Turning to the balance sheet. Speaker 400:19:16As of September 30, 2024, cash and cash equivalents were $335,000,000 up to an additional $125,000,000 from our debt facility 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. This cash balance includes proceeds received from the equity financing we closed upon in August. Following the approval of non Erosive GERD, our expanded commercial coverage and strong Q2 results, we felt it was an opportune time to further strengthen the balance sheet. The August financing was initiated by reverse interest from select investors and resulted in gross proceeds of 130,000,000 dollars Beyond enhancing our cash position, we felt our ability to complete the financing in this challenging capital markets signal confidence in our team's ability to deliver on Bauquaza's significant market opportunity. With this additional capital, we believe we have cash runway through cash flow positivity based on our current operating plan, estimated product revenues and funds available under our term loan. Speaker 400:20:17I'd like to close by reiterating our solid Q3 2024 results and highlighting our focus on the remainder of 2024 and start of 2025. We continue to believe we have a blockbuster opportunity with BOPESNA and we are keenly focused on our capital allocation strategy and to ensure we have a strong return on investments made in our commercial and our direct to consumer campaigns as well as our R and D activities. We look forward to keeping the market updated on our strategy in these areas. With that, I would like to turn the call back over to Teri for closing comments. Teri? Speaker 200:20:48Thank you, Molly, and thank you again to everyone joining us on today's call. We're very happy with our Q3 accomplishments. Over the last few months, we launched prequisitive for non erosive GERD, expanded commercial coverage for patients and strengthened our balance sheet. Each of these milestones will play a major role in our ongoing commercialization of the Quezna. From the beginning, we focused on 3 goals that we felt would fuel a successful launch: communicating differentiation, driving brand awareness and building commercial access. Speaker 200:21:22To date, we have made great progress on each of these pillars as evidenced by our quarterly results. In the Q4, we'll continue to execute on our launch strategy and build upon our early launch success. By expanding our DTC efforts, we believe we can enhance brand awareness among patients and physicians, ultimately fortifying the Ocresna's position in the marketplace. We believe Ocresna is still very much in its early phases of growth, and I'm confident that we're prepared to help it reach its full potential. Thank you again for joining us today. Speaker 200:21:59We 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? Operator00:22:29Our first question or comment comes from the line of Annabel Samimy from Stifel. Ms. Samimy, your line is open. Speaker 500:22:37Hi, everyone. Thanks for taking my questions and congratulations on this great uptick. So just want to try to clarify a little bit. Your coverage uptake was really impressively rapid. And so to what extent is the increased prescriptions from the actual access, because clearly you had blink versus the uptick that you might have expected from, the non erosive GERD indications? Speaker 500:23:08In other words, is this the inflection that we should start seeing from this nerd indication that we have? And what percent of prescriptions is now 60 days? Speaker 300:23:20Okay. Thanks, Annabel. It's Martin. First of all, thanks for recognizing the rapid coverage that we have. I think you heard us say before, it's a highlight for us and we couldn't be happier about it. Speaker 300:23:31In terms of the growth we're seeing, I got to say, it's a mixture of both. More scripts are getting through, which is exactly what we intended, but we also know that we're seeing increased demand tied to the launch of non erosive. And so why do we know that we're seeing that demand? Well, 10 milligrams, you just saw an immediate rise that continues to grow. Now 10 milligram can also be used for erosive GERD, but clearly that's a tie to non erosive. Speaker 300:23:59So it really is a mixture of the 2. And then the last piece, I just want to make sure I have clarity. Did you say what percent are 60 days? Speaker 500:24:09Yes. I thought so I think one of the things that we noted is that some of the prescriptions are 60 day prescriptions. So do you see a change in that pattern? Speaker 300:24:22Yes. No, we're not seeing a change. So yes, so scripts in general, most of the scripts are written for 30 days, but there are some that are either for 60 or maybe 90. A lot of that's dictated by different health plans and what they require and or allow, but really it's driven mostly by the 30 days. But there is some that's a little bit more than that. Speaker 300:24:43Thanks. Speaker 500:24:43Okay. So it's more driven by health plans as opposed to physicians feeling confident that, okay, you need to use this. We can prescribe this for 2 months as opposed to 1. Speaker 300:24:55Yes. It's a combination. I mean, if you were to go to your doctor today, it depends upon how they write refills. So that's step number 1. And then step number 2 is what the plan allows. Speaker 500:25:05Okay, got it. And then one last question. Is there I noticed that I thought you're going to initiate the as needed trial in the Q3 and it looks like you're trying to do a little bit more analysis on the patterns of usage. Are you thinking that maybe you don't need that additional trial on as needed basis or to get it on the label because it's already being used that way? Speaker 200:25:30Yes. Annabel, it's Teri. I'll take that question. Yes. So since we had the non erosive indication approved, we've been evaluating real world utilization. Speaker 200:25:40And we really want to spend a couple of months just evaluating that data to ensure that we get good ROI on that trial. So over the next couple of months, we'll evaluate that. And then what we have seen is that even at ACG, the Phase 2 on demand results were presented and a number of physician papers have been published that incorporate on demand into the recommendation. So we're hearing from physicians that they profile the rapid response. They really see it clinically. Speaker 200:26:14And so we just want to really evaluate that data before we proceed with that. So yes. Speaker 500:26:21Okay, great. Thank you so much. Congratulations again. Operator00:26:26Thank you. Our next question or comment comes from the line of Paul Choi from Goldman Sachs. Mr. Choi, your line is now open. Speaker 600:26:37Hi, thank you and good morning. Thanks for taking our questions and congrats on the progress. My first question is for Molly. If you could maybe just sort of comment on your latest thinking on gross to net given the expansion in insurance coverage and number of lives covered. I guess any uptick that you're thinking of going into 2025? Speaker 600:27:01Any color there would be helpful. And my second question maybe for Terry is, can you update us on the status of your GAIN application for lenoprazem monotherapy? What are sort of the gating factors there or sort of ongoing discussion points? And I guess what gives you conviction that the moiety will be covered under a non infectious disease application such as a NERD or erosive GERD? Thank you very much. Speaker 400:27:30Thanks, Bob. So sure. As it relates to GTN, the range is coming the results are coming right in the range of what we expected pre launch, which was 50% to 65% discount. So if you do the math, you can calculate that we're right within that range. Because we're going into holiday period with Q4 and then changing health plans going into next year, and as you pointed out with the inclusion of non erosive, we expect to still stay within that range, but we might see variability over the next couple of quarters. Speaker 400:28:00But all that being said, we continue to expect to tighten that range and be right within where we expected. Speaker 200:28:08And Paul, it's Teri. I'll take your question regarding the Orange Book. So yes, we are engaged in discussions with FDA regarding the exclusivity that's reflected in the orange book. And ultimately, we continue to firmly believe the orange book listing for the Quizna should be updated to reflect the full 10 years of NCE exclusivity that the molecule received when the combo packs were approved as QIDP products. So our external counsel believes that our regulatory exclusivity should protect the Quezna from generic entries into 2,032. Speaker 200:28:44And we're currently in the process of evaluating the best path forward to ensure the FDA does reflect this in the orange book, and we'll provide updates if we have any material progress to report. But as it stands now, nothing has changed from our side. We're still operating under the assumption that the FDA should not accept an ANDRE application from a generic until 2,032, and we're very confident in that position. Speaker 600:29:11Great. Thank you very much. Operator00:29:14Thank you. Our next question or comment comes from the line of Mr. Joseph Stringer from Needham and Company. Mr. Stringer, your line is open. Speaker 700:29:24Hi, thanks for taking our questions. Can you comment on what you're seeing in terms of overall refill rates? And how does this compare to say what is typically seen for prescription PPIs? Speaker 300:29:40Yes. So Joey, the refill rate, so I don't have a specific rate to share with you. But what I will say and it kind of echoes my comments is we're seeing more physicians, right? And we've seen a really large increase in new writers, which just tells us that the business is really healthy and going in the right direction. So as you have new writers, they haven't had the opportunity to do the refills yet. Speaker 300:30:02That's all coming on board. But we do know for those that have started to write that they're writing more. And what we do track and we're looking at is the persistency. And when you take a look at that and looking at patients that started earlier on in the launch and that are going back month after month, we're seeing refill rates that are healthy and reflect, as you just said, what you would expect to see in the PPI prescription market. So we feel really good about where we are. Speaker 700:30:30Great. Thank you very much. Operator00:30:33Thank you. Our next question or comment comes from the line of Yatin Suneja from Guggenheim. Ms. Suneja, your line is open. Speaker 800:30:43Hey, guys. Good morning. Can you hear me? Speaker 200:30:46Yes. Speaker 800:30:47Very good. Congratulations on very solid quarter. Just a couple from me. Could you maybe talk about how we should think about duration of therapy? Are you able to monitor compliance and any comments there? Speaker 800:31:03So that's one. 2nd is with regard to gross to net, I think if we assume seventy-thirty split between retail or IQVIA versus Blink, I think we get to about a gross to net discount, at least on the retail, up about 55%, 56%. Is that sort of is our math correct? Could you maybe talk about that and how it should evolve, specifically in Q1 of next year, which I think is a little bit you do have that one time issues there. And then finally, any thoughts on establishing or thinking about establishing guidance? Speaker 800:31:43Thank you. Speaker 300:31:47So thanks, Yatin. I caught a couple of those and then I'll cover them maybe not in the order that you had them and then turn it over to Mollie. So first on the duration, I think this is a little bit of what I was speaking to Joey's question. So what we're tracking right now is, persistency. And when patients get drug, how long are they on? Speaker 300:32:07And we're seeing that to be very consistent with what is happening with the PPI. So we've always said that the days of therapy are somewhere up between that 140160 on an annual basis, and we have no reason to believe right now that it's going to be less than that, but we continue to study it as Terry was mentioning earlier. And then the BLINK conversion, I think was another part of your question or I call it that as the percent of scripts that are going through BLINK. As was commented earlier, we moved from early on about 50% of the prescriptions, only being captured by IQVIA and the balance going through BlinkRx or cash. So for here, let's just call it cash. Speaker 300:32:46We've really progressed that over time exactly like we said we would is that, that was going to evolve. And as Access came on board, we would see, yes, less utilization of the patient support of cash. And that's what's really had us move through sequential quarters of actually getting down to 30% cash and 70% going through traditional retail. So we're making that progress. It will continue to flow through, as we move on. Speaker 300:33:13You do raise a good point though regarding Q1 next year. I think Mollie was alluding to this a little bit earlier. Things change in Q1 for every company and every brand. You typically see a dip in prescriptions just early on. And then in the quarter that rebounds. Speaker 300:33:32So what I will say is we expect that it would probably be something that follows trends in the industry. We obviously have the Blink Rx cash option for patients as they need it. And that's the reason the dip happens is because patients are either changing plans or their deductibles are resetting. So there's a little bit of burden for patients early on. But what I can tell you and I'll just leave it at this before I turn it over to Molly is that's common for every company, but what I do feel certain about is 20 25 overall is going to be a big growth year for us. Speaker 400:34:04Great. And as it relates to guidance, so Speaker 200:34:06yes, we continue to feel comfortable as Speaker 400:34:08it relates to full year 2024 consensus. We want to make sure that we're very confident in whatever guidance we put out as it relates to revenue. So we'll continue to monitor trends and make sure it's something when we do put out guidance that is something we can feel very comfortable with. So at this point for the rest of this year, we'll continue to reiterate that we feel comfortable with the current full year 2024 consensus. Speaker 800:34:31Got it. And any comment on the gross to net math that we did? Is that sort of in line? Speaker 200:34:37Gross to net. Speaker 300:34:38We are Speaker 800:34:39getting about 55%, 56% for retail. Speaker 400:34:42Yes. Gross to net, sure, yes. As the other question asked, we expect to continue to stay within the range that we provided pre launch, which was at that 50% to 65% discount. And as you point out, we're right within that range. We expect some volatility going into the beginning of next year as we indicated, but I continue to believe we'll stay within that range. Speaker 800:35:04Thank you. Operator00:35:09Our next question or comment comes from the line of Chase Knickerbocker from Craig Hallum. Speaker 900:35:18Good morning and congrats on the really impressive continued progress here. So I guess just first for me, maybe just starting on kind of primary care with obviously the NERD launch in the quarter. Do you feel like it's still very early days from a standpoint just kind of your awareness level within primary care? What are you seeing from a demand level there? And, again, do you think it's very early days and you really haven't seen that boost from primary care yet? Speaker 900:35:48I would love your thoughts there, Martin. Speaker 300:35:52Yes, Chase. So I'll tell you, we had always said that primary care was going to be a big player for non erosive and it's certainly coming true. You hit on 3 pieces. 1 is awareness. We have seen awareness grow amongst primary care. Speaker 300:36:08And if you think about it, as I mentioned earlier in my comments, when we launched, gastroenterologists knew about PKABS and they knew something was coming and that was less for primary care. So we've seen that general awareness of OQESNA since our sales force has been in place out talking to physicians grow. We have also seen a pop in the number of PCP prescribers. Our new writers in primary care have actually overtaken the new writers in gastroenterologists. So they are welcoming VOPESNA. Speaker 300:36:39And I can tell you actually having met some of these physicians, they're actually seeing the results that Terry mentioned earlier is that rapid uptake in the durability or I should say the rapid effect in the durability, the symptom relief. So, we're definitely seeing that boost and the boost will continue. Speaker 900:36:58Great. And then maybe just a little bit Martin about how you're tracking success there with your sales reps, any kind of specific metrics that you're kind of comping them to as far as that awareness level with PCPs or just kind of like ordering primary care physicians within their territories? And then the last one for me to Molly, would just be kind of, I guess, thoughts on potential guidance for 2025. When that time comes kind of early next year, do you think that guys will be in a position from a visibility perspective into your business that you'll be able to give kind of 2025 full year guidance? Thank you. Speaker 300:37:34So I'll go first, Chase. So what we're doing with the sales force is we're working with them, obviously, in providing direction and then taking their on the ground feedback as to what's happening. But what we focus on is who are they seeing, the frequency with which they're seeing them and then following up with those physicians and are they getting the messages we intended for them to receive. And I can tell you across all of those metrics, we feel really good. And then we also just do general awareness tracking, as most brands do. Speaker 300:38:07Our physicians or intended prescribers or targets, aware of our brand. And, as I mentioned earlier, that continues to increase, including primary care. Mollie? Speaker 400:38:18Yes. So as it relates to guidance for 25, Chase, as you pointed out, we're seeing some really nice trends in the script, Adam. We'll want to make sure that we've got really good visibility and confidence in whatever range and guidance we provide. But because we're still so early in the non erosive, it's only been on the market 4 months now. I would expect that we continue to want to see several more months of the trends and the impact of non erosive before we put out the guidance. Speaker 400:38:42But certainly, it's something we're focused on and something we want to make sure that we provide a range that we can achieve once we do. Speaker 900:38:51Great. Thanks everyone. Operator00:38:54Thank you. Our next question or comment comes from the line of Umer Raffat from Evercore ISI. Your line is open. Speaker 1000:39:09Hi, good morning. This is Chen Zhang on for Umer. Congrats on the quarter. A few questions, if I may. The first one is, we've seen the fill rate increase from around 30% to 50% in the last few quarters. Speaker 1000:39:20I know you're not you're no longer reporting written prescription, but could you give more color on what is the trend of fill rate in this quarter? And secondly, there is a clear inflection on the 10 milligram dose after the NERD launch. I know it's still early, but currently how much of the total volume is from NERD indication? And lastly, about IP, so the QIDP is tied on the molecule. So just want to confirm that even if you get the new indication on QIDP, it does not give you another 5 year exclusivity? Speaker 1000:39:51Thank you. Speaker 300:39:53Yes. So, Umer, I'll go first. In terms of the fill rate, yes, and you said it you called it out, right? So at this point, we've dropped tracking that as a key metric that we're reporting out on. But what I can tell you is that we had always intended that to be a very temporary as we shared with you all metric that we would be reporting because at the time, it was the right thing to do because we only had 38% commercial access. Speaker 300:40:17And now that we're in excess of 80%, we feel the key metrics to look at are both the access, the growth in TRxs and the growth in prescribers. What I can tell you is that the physician prescribing continues to grow to levels that we feel really good about and are consistent with successful launches. So hopefully that answers that. And then the 10 milligram inflection, I'm not sure I got the entire question, but we definitely have seen, upon approval of non erosive, an immediate uptake of the 10 milligram. I will remind you that 10 milligram can also be used for non erosive, but we also know that it's tied specifically to non erosive. Speaker 300:40:55And it's really, we believe, making up the majority. We don't have a tieback specifically yet by ICD-ten codes, but we feel it's tied directly to non erosive. Teri? Speaker 200:41:07Yes. And then regarding the regulatory exclusivity, so the 5 years for an NCE was for the VEQUESNA moiety and then the 5 years for QIDP is applied to the VEQUESNA chemical entity. So that's 10 years to get to 2,032. Speaker 1000:41:28Okay. Thank you. Operator00:41:31Thank you. Our last question comes from the line of Matthew Cauffield from H. C. Wainwright. Mr. Operator00:41:38Coffey, your line is now open. Speaker 700:41:41Hey, good morning guys. Can you hear me okay? Speaker 200:41:44Yes. Speaker 700:41:45Great. Thank you. And congrats on the commercial progress. Just one follow-up from us. So thinking more broadly, are there any observations from the H. Speaker 700:41:54Pylori side of the label? Clearly, that's a smaller part of your focus, understandably, but has there been any change in prescriber engagement versus standard of care? And even as a potential gateway to getting those same patients ultimately on to erosive or non erosive prescriptions? Thanks a lot. Speaker 300:42:13Yes. So, yes, so to answer the question on H. Pylori, it's important part of our business, but clearly we the GERD market is so large that we tend to focus on that. So, I would say that what really works for H. Pylori kind of ties into your last part of your question is the benefits for GERD. Speaker 300:42:31It's that it really demonstrates that it's a potent acid suppressant and that when we speak to physicians, we tend to tie that message in. So it has an ultimate payoff of the overall mechanism of action. So that's how it's tied into non erosive. And there are some patients afterwards, when they are healed or their infection is eradicated, that might turn flip over to be a non erosive patient if in fact they continue to have GERD. But in terms of physicians, we do see that there are physicians who are starting to adopt H. Speaker 300:43:02Pylori as their preferred treatment, that they are using both the dual and the triple pack. So I think it's made a welcome addition and I think it's the differentiation that VEQUESNA brings to the treatment of H. Pylori that is driving that. Speaker 700:43:17Great. Very helpful guys. Thank you and congrats again. Operator00:43:22Thank you very much. This concludes the Q and A session. Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Operator00:43:31Everyone have a wonderful day.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallPhathom Pharmaceuticals Q3 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Phathom Pharmaceuticals Earnings HeadlinesPhathom Pharmaceuticals to Report First Quarter 2025 Financial Results and Provide Business Update on Thursday, May 1, 2025April 23 at 8:00 AM | globenewswire.comPhathom Pharmaceuticals (NASDAQ:PHAT) Earns "Buy" Rating from Needham & Company LLCApril 22 at 1:49 AM | americanbankingnews.comReal Americans Don’t Wait on Wall Street’s Next MoveWhat's happening in the markets right now should concern every freedom-loving American who's worked hard and saved smart. Your 401(k) doesn't deserve to be dragged through the mud by tariffs, trade wars, reckless spending, and political standoffs. And you don't have to stand by while Wall Street plays roulette with your future.April 25, 2025 | Premier Gold Co (Ad)Phathom Pharmaceuticals (NASDAQ:PHAT) shareholders have endured a 87% loss from investing in the stock five years agoApril 18, 2025 | finance.yahoo.comPhathom Pharmaceuticals appoints Schroeder to board of directorsApril 16, 2025 | markets.businessinsider.comPhathom Pharmaceuticals Appoints Ted Schroeder to its Board of DirectorsApril 16, 2025 | globenewswire.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 Market Anticipation Builds: Joby Stock Climbs Ahead of EarningsIs Intuitive Surgical a Buy After Volatile Reaction to Earnings?Seismic Shift at Intel: Massive Layoffs Precede Crucial EarningsRocket Lab Lands New Contract, Builds Momentum Ahead of EarningsAmazon's Earnings Could Fuel a Rapid Breakout Tesla Earnings Miss, But Musk Refocuses and Bulls ReactQualcomm’s Range Narrows Ahead of Earnings as Bulls Step In Upcoming Earnings Cadence Design Systems (4/28/2025)Welltower (4/28/2025)Waste Management (4/28/2025)AstraZeneca (4/29/2025)Booking (4/29/2025)DoorDash (4/29/2025)Honeywell International (4/29/2025)Mondelez International (4/29/2025)PayPal (4/29/2025)Regeneron Pharmaceuticals (4/29/2025) 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. 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There are 11 speakers on the call. Operator00:00:02Hello, and welcome to the Fathom Pharmaceuticals Third 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 call is being recorded. With that, I would like to turn the conference over to Eric Chiarelli, Fathom's Head of Investor Relations. Operator00:00:30Please go ahead. Speaker 100:00:34Thank you, operator. Hello, everyone, and thank you for joining us this morning to discuss Fathom's Q3 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 Abouzi, our Chief Operating Officer will also be joining the team during the Q and A portion of today's call. Just a couple of logistical items before we get started. Speaker 100:00:59Earlier 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. These forward looking statements involve risks and uncertainties, many of which are beyond Fallon's control. Speaker 100:01:28Actual results can materially differ from the forward looking statements, and any such risks can materially adversely affect the business, the results of operations and trading prices for Fallon's 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 Teri Curran, Fathom's President and CEO, to kick us off. Teri? Speaker 200:02:05Thank you, Eric, and thank you to all those joining us on today's call. I'm excited to provide an update on SANAD's recent progress. Successful commercial launch of ZYPESTA remains our top priority, and I'm pleased to share that we're seeing growing interest from physicians and patients as well as increased coverage from payers. Week over week and month over month, important key performance indicators have trended positively with respect to prescription data, market sentiment and patient access. These outcomes inspire confidence that our launch strategies have been impactful. Speaker 200:02:41As we continue our launch journey, I'm confident that our teams are positioned appropriately to deliver on VEQUESTA's sizable market opportunity. The Q3 of 2024 was momentous for Fathom and the Quezna. We achieved several important milestones, which advanced our commercial launch and strengthened our balance sheet to enable continued investment in our business. On the commercial front, we secured FDA approval for VEQUESNA as a treatment for non erosive GERD and greatly expanded commercial access, which has now surpassed 80% of lives covered. On the financial side, we leverage these achievements to successfully raise gross proceeds of $130,000,000 in an equity follow on, which we view as evidence that the capital markets have confidence in the opportunity that lies ahead. Speaker 200:03:34In July, the Quezna was approved for the release of heartburn associated with non erosive GERD in adults. As the largest subcategory of GERD, this label expansion greatly increased the Quezna's addressable market to roughly 22,000,000 U. S. Adults. And since the non rosuf good market dynamics are nearly identical to those of the rosuf good, our teams have been able to quickly leverage the sales and marketing plans we already had in place for our roasted GERD launch. Speaker 200:04:04The feedback so far has been tremendous. Ultimately, with both major GERD indications now approved, we believe the Quesna can be a game changer with its rapid onset of action and durability of effect providing relief to millions of patients who are dissatisfied with their existing treatment options. In parallel, we have also made important progress on enhancing the Aqueza's commercial coverage in the Q3. Late in July, we announced the addition of Aqueza to CVS Caremark National Formularies, the largest of the country's 3 major pharmacy benefits managers. Between this important accomplishment and several other formulary placements, over an estimated 120,000,000 commercially insured lives now have access to VEQUESNA. Speaker 200:04:53And for the majority of those lives, we successfully secured coverage subject to a single step through a generic TPI prescription. One of our launch goals has always been to ensure the Quezna is widely accessible and affordable to commercial patients. We feel we've done a good job in advancing this effort, and we are both proud of the quantity and quality of the coverage we have earned. In the months to come, we believe our commercial access will serve as a tailwind, increasing utilization across both GERD indications. In fact, the effects of securing both non erosive approval and broader commercial coverage are already having a positive impact on our results. Speaker 200:05:39We believe our Q3 2024 launch data are impressive, highlighted by increasing VEQUESNA volume. In less than a year since launch, over 143,000 prescriptions have already been filled by patients. We believe the growth trajectory of this metric validates the unmet need in the market and serves as evidence that we are elevating brand awareness. With the Q4 underway, our goal is to improve on this momentum, expanding the number of the Quezna prescribers and the number of the Quezna scripts ultimately being filled by patients. Outside the quantitative data, I continue to be impressed by the recognition that Quezna has earned in the marketplace. Speaker 200:06:27In addition to the many patient and physician testimonials we receive on a weekly basis, the Quezna has recently won multiple industry awards touting its innovation. Media coverage for the Quesna has also increased sharply, especially following our approval for non erosive GERD. And on the medical front, our team recently attended the American College of Gastroenterology Conference, where it was clear that the GI community and attending physicians continue to be excited by having the bequesna as a new option in their toolkit. Across these various sources of feedback, what I find most noteworthy is the consistency of the sentiment. Physicians, patients, key opinion leaders all describing a positive experience with Zekwezna, all reinforcing its potential to disrupt the PPI market. Speaker 200:07:21Turning now to our pipeline. We've begun reviewing Miquesna's early real world non neurosis GERD data to understand consumer usage patterns and position prescribing habits. Although additional data are needed, we believe these insights will help assess the value and potential timing of advancing a Phase 3 program to validate the as need dosing of the questioner for active heartburn episodes. Separately, we're in the final stages of obtaining FDA alignment on a Phase 2 program investigating bequesna as a potential treatment to eosinophilic esophagitis or EoE, which we now plan to initiate in the first half of twenty twenty five. On the financial side, Mollie will further detail our Q3 2024 results, for which we reported net revenues of $16,400,000 and ended with $335,000,000 in cash. Speaker 200:08:16We remain confident that our strength in balance sheet will enable us to continue delivering on our business strategies. I'm very happy with today's results. We believe our accomplishments in the Q3 were key steps in allowing Fathom to recognize the Quezna's full market opportunity. Our vision has always been focused on successfully executing our commercial strategy, and I believe we're making terrific progress. We've appropriately invested in our people, technology and data to enable us to best understand and predict marketing levers that help drive growth. Speaker 200:08:52With recent approval secured, commercial coverage expanded and continued brand investment, I'm confident we can achieve the blockbuster opportunity we believe is possible for VICRESSNA. I'll now turn the call over to Martin to provide further details on our recent commercial updates. Martin? Speaker 300:09:11Thanks, Terry, and hello, everyone. I'd like to start by echoing Terry's comments that we're pleased with our Q3 results. Following Voquesa's approval for non erosive GERD and increased market access coverage, our teams have been working diligently to realize the expanded market opportunity. Today's results are clear evidence of the progress we've made. As we have done previously, I will begin with sharing updates on our launch data and follow with additional color on the efforts that have helped drive our successful Q3. Speaker 300:09:43Now turning to our metrics, I'd like to note that we are no longer reporting total demand, defined as the number of scripts written even if not filled as one of our quarterly data points. As we've mentioned in the past, demand was only meant to be an early launch metric. It was intended to serve as an indicator of market interest for VOCESNA, while we work to establish commercial coverage. Now, given our widespread commercial access, we believe the fill prescriptions metric is an accurate measure of usage amongst prescribers and patients. With that being said, we have now surpassed 143,000 prescriptions filled by patients from launch through October 25. Speaker 300:10:27This has more than doubled since our last report, displaying a growth of nearly 140%. In the Q3 specifically, we recorded approximately 69,000 filled Vopresna prescriptions, also just about doubling the amount we reported for the Q2. We believe the recent label expansion for nonarosib GERD was the key driver of this growth. In fact, filled prescriptions for 10 milligram, the approved dose for nonarosib GERD increased by over 2 30% between Q2 and Q3. As a reminder, these figures include volumes filled through retail pharmacies, which are captured by IQVIA as well as those filled through BlinkRx, one of our patient assistant programs. Speaker 300:11:14Consistent with our previous updates, as Laquesna's commercial coverage expanded, we expected the proportion of volume flowing through retail pharmacies to increase. As such, for the prescriptions filled in Q3, approximately 70% were filled through retail pharmacies and captured by IQVIA. In parallel, the total number of physicians who have written the filled script increased to over 13,600 as of October 18, compared to over 8,200 as of our last report. We are pleased that the growth in VENCESNA writers continues to indicate strong adoption. Through the end of Q3, about 12,400 cumulative prescribers have written a filled VENCESNA prescription, up approximately 70% compared to Q2. Speaker 300:12:01Our data shows that repeat writing is growing, meaning those that prescribe VOQESNA are doing so often. Therefore, one of our key objectives has been to generate new writers with the aim that they will join those who write more frequently once they see VEQUESNA benefit their patients. I'm happy to report that this strategy is working and we're excited by the early results. All of this encouraging data stems from the widespread commercial access we have secured for VEQUESNA. Early in Q3, we announced that CVS Caremark included VEQUESNA on its national formularies with utilization management according to strategy, requiring only a single step through a generic prescription PPI. Speaker 300:12:44In the months following, downstream health plans have assigned VEQUESNA similar positioning on their formularies. Since the start of Q3, VEQUESTA has been added to formularies responsible for covering over 42,000,000 commercial lives. And importantly, we see the significant growth in prescriptions for 10 milligram as evidence that access is available for non erosive GERD patients. With major payer wins secured, we're proud of the availability and affordability that we set forth for commercial patients. In less than a year, we have successfully negotiated access for all approved indications with appropriate utilization management across the majority of plans for which VEQUESNA is covered. Speaker 300:13:27As a result, VEQUESNA's total covered population now captures over an estimated 120,000,000 people or more than 80% of all U. S. Commercial lives. On the promotional front, we remain focused on increasing awareness with target physicians. In the early days of launch, gastroenterologists were first to embrace VEQUESNA as they were largely aware of the new mechanism coming to the market. Speaker 300:13:54Since then and accelerating with non erosive GERD, we've been focused on growing the primary care prescriber base. In fact, Q3 was the Q1 since launch where the majority of new VEQUESTA prescribers were primary care physicians. These doctors are responsible for most GERD patient management decisions. So our aim is to make Voquesna a leading treatment option amongst this group. As for consumers, we know that positive feedback and direct requests can often impact physician prescribing choices. Speaker 300:14:26Fortunately, patient sentiment has been terrific and we believe that patients taking VEQUESNA quickly notice the benefits and relay their experience back to their prescriber. In tandem, we continue to encourage patients to ask their physician about VEQUESNA through further investment in our VEQUESNA can kick some acid DTC campaign, which is expanded to include non erosive GERD messaging. While the data is still maturing, our preliminary analysis have confirmed that the campaign is reaching the appropriate audience and that exposed consumers are converting to aequesna. As we approach the 1st anniversary of aequesna's initial launch for erosive GERD and H. Pylori, I'm confident in the foundation we've built and the momentum that has followed in these recent months. Speaker 300:15:14We continue to be excited by our quarterly progress, and I believe we are poised to continue delivering outstanding results. With the non erosive GERD indication having launched not even 4 months ago, we believe there is opportunity for significant growth as we work toward displacing PPIs and getting VEQUESNA into patients' hands. I'll now pass it off to Mollie to walk through our financial results. Mollie? Speaker 400:15:40Thank you, Martin, and hello to everyone on the call. I'm pleased to share our Q3 2024 financial results with you today. 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 early into launch. Additionally, I will be commenting on both GAAP and non GAAP financial measures. Speaker 400:16:03Supporting 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. Turning to our results. During the Q3 ended September 30, 2024, we reported net revenues of $16,400,000 which represents an over 120% sequential quarter over quarter increase. In connection with the momentum from our non erosive GERD launch, we believe the label expansion also contributed to the revenue growth in the Q3. While we are still assessing inventory stocking patterns, early data following the launch of non erosive GERD have remained largely consistent with previous quarters, signaling that wholesalers are holding about 2 weeks' worth of retail product on hand. Speaker 400:16:47Regarding gross to net, discount rates are once again in line with the expectations we set forth pre launch. We will continue to monitor the evolution of our GTN discount, especially in the Q4, which will be our 1st full quarter to include the impacts of non erosive GERD and commercial coverage above 80% for the entire quarter. For the quarter ended September 30, 2024, we reported gross profit of $14,000,000 which equates to a gross margin of 86%, an increase of about 4.40 basis points over last quarter. Looking down the P and L to our operating expenses, we reported non GAAP R and D spend of $7,400,000 for the Q3, which represents a 32% decrease compared to Q3 2023. This also reflects a 22% increase sequentially compared to last quarter. Speaker 400:17:34The decrease compared to Q3 2023 reflects the wind down of spend related to our completed Phase III non erosive daily dosing trial, while the sequential quarterly increase reflects standard business operations related to our ongoing regulatory and clinical activities. As for SG and A, we reported non GAAP expenses of $71,800,000 for the Q3 of 2024. This represents an increase of $53,100,000 relative to the same period in 2023, primarily driven by the build out of our commercial infrastructure in support of the VEQUESNA launch in late 2023. Additionally, this period's SG and A expense included advertising costs of approximately $17,500,000 in connection with our ongoing DTC campaign, which compares to $16,700,000 reported last quarter. On a sequential quarterly basis, this quarter's overall SG and A expenses were flat compared to the 2nd quarter as expected and previously communicated. Speaker 400:18:30Going forward, we anticipate increased investments in our commercial activities for the remainder of 2024 and into 2025 based on the early results from our direct to consumer campaign. As for EPS, we reported non GAAP adjusted net loss of $67,900,000 for the Q3 of 2024 or $1.05 loss per share compared sequentially to $73,300,000 or $1.25 loss per share for the Q2 of this year. Similar to previous quarters, the most significant reconciling item between GAAP and non GAAP operating expenses was non cash stock based compensation. Other non GAAP reconciling items included non cash interest on our revenue interest financing liability and non cash interest expense related to amortization of debt discount. Turning to the balance sheet. Speaker 400:19:16As of September 30, 2024, cash and cash equivalents were $335,000,000 up to an additional $125,000,000 from our debt facility 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. This cash balance includes proceeds received from the equity financing we closed upon in August. Following the approval of non Erosive GERD, our expanded commercial coverage and strong Q2 results, we felt it was an opportune time to further strengthen the balance sheet. The August financing was initiated by reverse interest from select investors and resulted in gross proceeds of 130,000,000 dollars Beyond enhancing our cash position, we felt our ability to complete the financing in this challenging capital markets signal confidence in our team's ability to deliver on Bauquaza's significant market opportunity. With this additional capital, we believe we have cash runway through cash flow positivity based on our current operating plan, estimated product revenues and funds available under our term loan. Speaker 400:20:17I'd like to close by reiterating our solid Q3 2024 results and highlighting our focus on the remainder of 2024 and start of 2025. We continue to believe we have a blockbuster opportunity with BOPESNA and we are keenly focused on our capital allocation strategy and to ensure we have a strong return on investments made in our commercial and our direct to consumer campaigns as well as our R and D activities. We look forward to keeping the market updated on our strategy in these areas. With that, I would like to turn the call back over to Teri for closing comments. Teri? Speaker 200:20:48Thank you, Molly, and thank you again to everyone joining us on today's call. We're very happy with our Q3 accomplishments. Over the last few months, we launched prequisitive for non erosive GERD, expanded commercial coverage for patients and strengthened our balance sheet. Each of these milestones will play a major role in our ongoing commercialization of the Quezna. From the beginning, we focused on 3 goals that we felt would fuel a successful launch: communicating differentiation, driving brand awareness and building commercial access. Speaker 200:21:22To date, we have made great progress on each of these pillars as evidenced by our quarterly results. In the Q4, we'll continue to execute on our launch strategy and build upon our early launch success. By expanding our DTC efforts, we believe we can enhance brand awareness among patients and physicians, ultimately fortifying the Ocresna's position in the marketplace. We believe Ocresna is still very much in its early phases of growth, and I'm confident that we're prepared to help it reach its full potential. Thank you again for joining us today. Speaker 200:21:59We 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? Operator00:22:29Our first question or comment comes from the line of Annabel Samimy from Stifel. Ms. Samimy, your line is open. Speaker 500:22:37Hi, everyone. Thanks for taking my questions and congratulations on this great uptick. So just want to try to clarify a little bit. Your coverage uptake was really impressively rapid. And so to what extent is the increased prescriptions from the actual access, because clearly you had blink versus the uptick that you might have expected from, the non erosive GERD indications? Speaker 500:23:08In other words, is this the inflection that we should start seeing from this nerd indication that we have? And what percent of prescriptions is now 60 days? Speaker 300:23:20Okay. Thanks, Annabel. It's Martin. First of all, thanks for recognizing the rapid coverage that we have. I think you heard us say before, it's a highlight for us and we couldn't be happier about it. Speaker 300:23:31In terms of the growth we're seeing, I got to say, it's a mixture of both. More scripts are getting through, which is exactly what we intended, but we also know that we're seeing increased demand tied to the launch of non erosive. And so why do we know that we're seeing that demand? Well, 10 milligrams, you just saw an immediate rise that continues to grow. Now 10 milligram can also be used for erosive GERD, but clearly that's a tie to non erosive. Speaker 300:23:59So it really is a mixture of the 2. And then the last piece, I just want to make sure I have clarity. Did you say what percent are 60 days? Speaker 500:24:09Yes. I thought so I think one of the things that we noted is that some of the prescriptions are 60 day prescriptions. So do you see a change in that pattern? Speaker 300:24:22Yes. No, we're not seeing a change. So yes, so scripts in general, most of the scripts are written for 30 days, but there are some that are either for 60 or maybe 90. A lot of that's dictated by different health plans and what they require and or allow, but really it's driven mostly by the 30 days. But there is some that's a little bit more than that. Speaker 300:24:43Thanks. Speaker 500:24:43Okay. So it's more driven by health plans as opposed to physicians feeling confident that, okay, you need to use this. We can prescribe this for 2 months as opposed to 1. Speaker 300:24:55Yes. It's a combination. I mean, if you were to go to your doctor today, it depends upon how they write refills. So that's step number 1. And then step number 2 is what the plan allows. Speaker 500:25:05Okay, got it. And then one last question. Is there I noticed that I thought you're going to initiate the as needed trial in the Q3 and it looks like you're trying to do a little bit more analysis on the patterns of usage. Are you thinking that maybe you don't need that additional trial on as needed basis or to get it on the label because it's already being used that way? Speaker 200:25:30Yes. Annabel, it's Teri. I'll take that question. Yes. So since we had the non erosive indication approved, we've been evaluating real world utilization. Speaker 200:25:40And we really want to spend a couple of months just evaluating that data to ensure that we get good ROI on that trial. So over the next couple of months, we'll evaluate that. And then what we have seen is that even at ACG, the Phase 2 on demand results were presented and a number of physician papers have been published that incorporate on demand into the recommendation. So we're hearing from physicians that they profile the rapid response. They really see it clinically. Speaker 200:26:14And so we just want to really evaluate that data before we proceed with that. So yes. Speaker 500:26:21Okay, great. Thank you so much. Congratulations again. Operator00:26:26Thank you. Our next question or comment comes from the line of Paul Choi from Goldman Sachs. Mr. Choi, your line is now open. Speaker 600:26:37Hi, thank you and good morning. Thanks for taking our questions and congrats on the progress. My first question is for Molly. If you could maybe just sort of comment on your latest thinking on gross to net given the expansion in insurance coverage and number of lives covered. I guess any uptick that you're thinking of going into 2025? Speaker 600:27:01Any color there would be helpful. And my second question maybe for Terry is, can you update us on the status of your GAIN application for lenoprazem monotherapy? What are sort of the gating factors there or sort of ongoing discussion points? And I guess what gives you conviction that the moiety will be covered under a non infectious disease application such as a NERD or erosive GERD? Thank you very much. Speaker 400:27:30Thanks, Bob. So sure. As it relates to GTN, the range is coming the results are coming right in the range of what we expected pre launch, which was 50% to 65% discount. So if you do the math, you can calculate that we're right within that range. Because we're going into holiday period with Q4 and then changing health plans going into next year, and as you pointed out with the inclusion of non erosive, we expect to still stay within that range, but we might see variability over the next couple of quarters. Speaker 400:28:00But all that being said, we continue to expect to tighten that range and be right within where we expected. Speaker 200:28:08And Paul, it's Teri. I'll take your question regarding the Orange Book. So yes, we are engaged in discussions with FDA regarding the exclusivity that's reflected in the orange book. And ultimately, we continue to firmly believe the orange book listing for the Quizna should be updated to reflect the full 10 years of NCE exclusivity that the molecule received when the combo packs were approved as QIDP products. So our external counsel believes that our regulatory exclusivity should protect the Quezna from generic entries into 2,032. Speaker 200:28:44And we're currently in the process of evaluating the best path forward to ensure the FDA does reflect this in the orange book, and we'll provide updates if we have any material progress to report. But as it stands now, nothing has changed from our side. We're still operating under the assumption that the FDA should not accept an ANDRE application from a generic until 2,032, and we're very confident in that position. Speaker 600:29:11Great. Thank you very much. Operator00:29:14Thank you. Our next question or comment comes from the line of Mr. Joseph Stringer from Needham and Company. Mr. Stringer, your line is open. Speaker 700:29:24Hi, thanks for taking our questions. Can you comment on what you're seeing in terms of overall refill rates? And how does this compare to say what is typically seen for prescription PPIs? Speaker 300:29:40Yes. So Joey, the refill rate, so I don't have a specific rate to share with you. But what I will say and it kind of echoes my comments is we're seeing more physicians, right? And we've seen a really large increase in new writers, which just tells us that the business is really healthy and going in the right direction. So as you have new writers, they haven't had the opportunity to do the refills yet. Speaker 300:30:02That's all coming on board. But we do know for those that have started to write that they're writing more. And what we do track and we're looking at is the persistency. And when you take a look at that and looking at patients that started earlier on in the launch and that are going back month after month, we're seeing refill rates that are healthy and reflect, as you just said, what you would expect to see in the PPI prescription market. So we feel really good about where we are. Speaker 700:30:30Great. Thank you very much. Operator00:30:33Thank you. Our next question or comment comes from the line of Yatin Suneja from Guggenheim. Ms. Suneja, your line is open. Speaker 800:30:43Hey, guys. Good morning. Can you hear me? Speaker 200:30:46Yes. Speaker 800:30:47Very good. Congratulations on very solid quarter. Just a couple from me. Could you maybe talk about how we should think about duration of therapy? Are you able to monitor compliance and any comments there? Speaker 800:31:03So that's one. 2nd is with regard to gross to net, I think if we assume seventy-thirty split between retail or IQVIA versus Blink, I think we get to about a gross to net discount, at least on the retail, up about 55%, 56%. Is that sort of is our math correct? Could you maybe talk about that and how it should evolve, specifically in Q1 of next year, which I think is a little bit you do have that one time issues there. And then finally, any thoughts on establishing or thinking about establishing guidance? Speaker 800:31:43Thank you. Speaker 300:31:47So thanks, Yatin. I caught a couple of those and then I'll cover them maybe not in the order that you had them and then turn it over to Mollie. So first on the duration, I think this is a little bit of what I was speaking to Joey's question. So what we're tracking right now is, persistency. And when patients get drug, how long are they on? Speaker 300:32:07And we're seeing that to be very consistent with what is happening with the PPI. So we've always said that the days of therapy are somewhere up between that 140160 on an annual basis, and we have no reason to believe right now that it's going to be less than that, but we continue to study it as Terry was mentioning earlier. And then the BLINK conversion, I think was another part of your question or I call it that as the percent of scripts that are going through BLINK. As was commented earlier, we moved from early on about 50% of the prescriptions, only being captured by IQVIA and the balance going through BlinkRx or cash. So for here, let's just call it cash. Speaker 300:32:46We've really progressed that over time exactly like we said we would is that, that was going to evolve. And as Access came on board, we would see, yes, less utilization of the patient support of cash. And that's what's really had us move through sequential quarters of actually getting down to 30% cash and 70% going through traditional retail. So we're making that progress. It will continue to flow through, as we move on. Speaker 300:33:13You do raise a good point though regarding Q1 next year. I think Mollie was alluding to this a little bit earlier. Things change in Q1 for every company and every brand. You typically see a dip in prescriptions just early on. And then in the quarter that rebounds. Speaker 300:33:32So what I will say is we expect that it would probably be something that follows trends in the industry. We obviously have the Blink Rx cash option for patients as they need it. And that's the reason the dip happens is because patients are either changing plans or their deductibles are resetting. So there's a little bit of burden for patients early on. But what I can tell you and I'll just leave it at this before I turn it over to Molly is that's common for every company, but what I do feel certain about is 20 25 overall is going to be a big growth year for us. Speaker 400:34:04Great. And as it relates to guidance, so Speaker 200:34:06yes, we continue to feel comfortable as Speaker 400:34:08it relates to full year 2024 consensus. We want to make sure that we're very confident in whatever guidance we put out as it relates to revenue. So we'll continue to monitor trends and make sure it's something when we do put out guidance that is something we can feel very comfortable with. So at this point for the rest of this year, we'll continue to reiterate that we feel comfortable with the current full year 2024 consensus. Speaker 800:34:31Got it. And any comment on the gross to net math that we did? Is that sort of in line? Speaker 200:34:37Gross to net. Speaker 300:34:38We are Speaker 800:34:39getting about 55%, 56% for retail. Speaker 400:34:42Yes. Gross to net, sure, yes. As the other question asked, we expect to continue to stay within the range that we provided pre launch, which was at that 50% to 65% discount. And as you point out, we're right within that range. We expect some volatility going into the beginning of next year as we indicated, but I continue to believe we'll stay within that range. Speaker 800:35:04Thank you. Operator00:35:09Our next question or comment comes from the line of Chase Knickerbocker from Craig Hallum. Speaker 900:35:18Good morning and congrats on the really impressive continued progress here. So I guess just first for me, maybe just starting on kind of primary care with obviously the NERD launch in the quarter. Do you feel like it's still very early days from a standpoint just kind of your awareness level within primary care? What are you seeing from a demand level there? And, again, do you think it's very early days and you really haven't seen that boost from primary care yet? Speaker 900:35:48I would love your thoughts there, Martin. Speaker 300:35:52Yes, Chase. So I'll tell you, we had always said that primary care was going to be a big player for non erosive and it's certainly coming true. You hit on 3 pieces. 1 is awareness. We have seen awareness grow amongst primary care. Speaker 300:36:08And if you think about it, as I mentioned earlier in my comments, when we launched, gastroenterologists knew about PKABS and they knew something was coming and that was less for primary care. So we've seen that general awareness of OQESNA since our sales force has been in place out talking to physicians grow. We have also seen a pop in the number of PCP prescribers. Our new writers in primary care have actually overtaken the new writers in gastroenterologists. So they are welcoming VOPESNA. Speaker 300:36:39And I can tell you actually having met some of these physicians, they're actually seeing the results that Terry mentioned earlier is that rapid uptake in the durability or I should say the rapid effect in the durability, the symptom relief. So, we're definitely seeing that boost and the boost will continue. Speaker 900:36:58Great. And then maybe just a little bit Martin about how you're tracking success there with your sales reps, any kind of specific metrics that you're kind of comping them to as far as that awareness level with PCPs or just kind of like ordering primary care physicians within their territories? And then the last one for me to Molly, would just be kind of, I guess, thoughts on potential guidance for 2025. When that time comes kind of early next year, do you think that guys will be in a position from a visibility perspective into your business that you'll be able to give kind of 2025 full year guidance? Thank you. Speaker 300:37:34So I'll go first, Chase. So what we're doing with the sales force is we're working with them, obviously, in providing direction and then taking their on the ground feedback as to what's happening. But what we focus on is who are they seeing, the frequency with which they're seeing them and then following up with those physicians and are they getting the messages we intended for them to receive. And I can tell you across all of those metrics, we feel really good. And then we also just do general awareness tracking, as most brands do. Speaker 300:38:07Our physicians or intended prescribers or targets, aware of our brand. And, as I mentioned earlier, that continues to increase, including primary care. Mollie? Speaker 400:38:18Yes. So as it relates to guidance for 25, Chase, as you pointed out, we're seeing some really nice trends in the script, Adam. We'll want to make sure that we've got really good visibility and confidence in whatever range and guidance we provide. But because we're still so early in the non erosive, it's only been on the market 4 months now. I would expect that we continue to want to see several more months of the trends and the impact of non erosive before we put out the guidance. Speaker 400:38:42But certainly, it's something we're focused on and something we want to make sure that we provide a range that we can achieve once we do. Speaker 900:38:51Great. Thanks everyone. Operator00:38:54Thank you. Our next question or comment comes from the line of Umer Raffat from Evercore ISI. Your line is open. Speaker 1000:39:09Hi, good morning. This is Chen Zhang on for Umer. Congrats on the quarter. A few questions, if I may. The first one is, we've seen the fill rate increase from around 30% to 50% in the last few quarters. Speaker 1000:39:20I know you're not you're no longer reporting written prescription, but could you give more color on what is the trend of fill rate in this quarter? And secondly, there is a clear inflection on the 10 milligram dose after the NERD launch. I know it's still early, but currently how much of the total volume is from NERD indication? And lastly, about IP, so the QIDP is tied on the molecule. So just want to confirm that even if you get the new indication on QIDP, it does not give you another 5 year exclusivity? Speaker 1000:39:51Thank you. Speaker 300:39:53Yes. So, Umer, I'll go first. In terms of the fill rate, yes, and you said it you called it out, right? So at this point, we've dropped tracking that as a key metric that we're reporting out on. But what I can tell you is that we had always intended that to be a very temporary as we shared with you all metric that we would be reporting because at the time, it was the right thing to do because we only had 38% commercial access. Speaker 300:40:17And now that we're in excess of 80%, we feel the key metrics to look at are both the access, the growth in TRxs and the growth in prescribers. What I can tell you is that the physician prescribing continues to grow to levels that we feel really good about and are consistent with successful launches. So hopefully that answers that. And then the 10 milligram inflection, I'm not sure I got the entire question, but we definitely have seen, upon approval of non erosive, an immediate uptake of the 10 milligram. I will remind you that 10 milligram can also be used for non erosive, but we also know that it's tied specifically to non erosive. Speaker 300:40:55And it's really, we believe, making up the majority. We don't have a tieback specifically yet by ICD-ten codes, but we feel it's tied directly to non erosive. Teri? Speaker 200:41:07Yes. And then regarding the regulatory exclusivity, so the 5 years for an NCE was for the VEQUESNA moiety and then the 5 years for QIDP is applied to the VEQUESNA chemical entity. So that's 10 years to get to 2,032. Speaker 1000:41:28Okay. Thank you. Operator00:41:31Thank you. Our last question comes from the line of Matthew Cauffield from H. C. Wainwright. Mr. Operator00:41:38Coffey, your line is now open. Speaker 700:41:41Hey, good morning guys. Can you hear me okay? Speaker 200:41:44Yes. Speaker 700:41:45Great. Thank you. And congrats on the commercial progress. Just one follow-up from us. So thinking more broadly, are there any observations from the H. Speaker 700:41:54Pylori side of the label? Clearly, that's a smaller part of your focus, understandably, but has there been any change in prescriber engagement versus standard of care? And even as a potential gateway to getting those same patients ultimately on to erosive or non erosive prescriptions? Thanks a lot. Speaker 300:42:13Yes. So, yes, so to answer the question on H. Pylori, it's important part of our business, but clearly we the GERD market is so large that we tend to focus on that. So, I would say that what really works for H. Pylori kind of ties into your last part of your question is the benefits for GERD. Speaker 300:42:31It's that it really demonstrates that it's a potent acid suppressant and that when we speak to physicians, we tend to tie that message in. So it has an ultimate payoff of the overall mechanism of action. So that's how it's tied into non erosive. And there are some patients afterwards, when they are healed or their infection is eradicated, that might turn flip over to be a non erosive patient if in fact they continue to have GERD. But in terms of physicians, we do see that there are physicians who are starting to adopt H. Speaker 300:43:02Pylori as their preferred treatment, that they are using both the dual and the triple pack. So I think it's made a welcome addition and I think it's the differentiation that VEQUESNA brings to the treatment of H. Pylori that is driving that. Speaker 700:43:17Great. Very helpful guys. Thank you and congrats again. Operator00:43:22Thank you very much. This concludes the Q and A session. Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Operator00:43:31Everyone have a wonderful day.Read morePowered by