Okay, good morning, everybody. I'm Kristen Kluska, one of the biotech analysts at Cantor. Very happy to be hosting Phathom Pharmaceuticals with Steve Bosta, the President and CEO. Thank you so much for being here. Thanks for the invitation. It's a pleasure. Awesome. Maybe to start, do you mind just giving us a high-level overview of the company? Phathom is a super simple story for investors. We've got one product. VOQUEZNA is the next-generation treatment for gastroesophageal reflux. It is a best-in-class current treatment. The current state of the art is PPI therapy that has been around for 30 years. PPIs work pretty well to raise pH, but 30%, 40% of the patients that are on PPIs are continuing to have pain. We provide the next improvement in care with an opportunity to increase pH further and alleviate pain for all of those patients. That population of 30%, 40% of GERD patients that are still having residual pain is an enormous population that we're uniquely positioned to go after. Okay, so you've been at the company for five months now, a very exciting time, by the way, to join. Pretty quickly, one of the things that you evaluated was how the sales force was being deployed. Can you tell us what the strategy was beforehand, what was working, what wasn't? Right. I think the sort of most straightforward way to think about it is the strategy that the company had been pursuing was really predicated upon the history of the drug in Japan. VOQUEZNA was first launched by Takeda in Japan. Over the past 10 years, it became the clear leader in treatment for gastroesophageal reflux. A very widely prescribed drug, at one point, actually, at periodic points, has been the most prescribed drug in Japan. It's been broadly adopted. When you think about it from that lens, the strategy had been built to say the entire PPI market is our opportunity to go and convert patients. As I came in, that led to salesforce targeting that reflected the fact that many PPI scripts are written by primary care physicians, as well as gastroenterologists. There was a broad strategy to go after both the GI opportunity and the primary care opportunity and target the salesforce broadly at both audiences. The view that I brought to the salesforce targeting and the reallocation of time is really predicated upon that point that I made earlier around the fact that 30%- 40% of GERD patients are still in pain. Those patients are disproportionately distributed into GI offices, and those are the patients who actually need our drug. Even though VOQUEZNA would be appropriate very broadly for any patient with gastroesophageal reflux, because of the market access rules and it requires a prior authorization where a patient has failed a prior PPI, the need state of patients skews much more to the gastroenterology community than to the typical patient that's in a primary care office. We get faster and better uptake within gastroenterology offices than we do within a primary care office. In the future, I think there's going to be an opportunity to grow that primary care practice. The shift we've made is to reallocate salesforce time heavily to the GI opportunity where they have patients who are being referred to them because they're in pain, even though they've been on a PPI, and that's the patient who needs our drug. Those patients are disproportionately in a GI practice. Okay, with the previous strategy, do you have a sense of what percent of the salesforce was really dedicating their time to the primary care physicians versus the gastroenterologists? We actually track that number on a regular basis. We were spending well north of 60% of our salesforce calls and salesforce call time in primary care. North of 30% was going into GI. In fact, if you think about it, sort of 30% of our sales calls were going into gastroenterology offices and 70% of our scripts were coming out of those 30% of our sales calls. Okay. We are inverting that. We are shifting the majority of salesforce time to the gastroenterologist. That's a more productive sales call. We were getting 4x the productivity out of our GI calls in terms of the total scripts per call. We were getting 4x the productivity out of our GI calls versus our primary care calls. Over time, I think that that's going to yield better effectiveness for the GI sales calls in the future than for the primary calls that we've been doing. At what point in the treatment lifestyle management does a patient go to a primary care physician, the proton pump inhibitors aren't working, and then the doctor says, "I'm going to refer you to a gastroenterologist"? I think exactly as you describe it, it's sort of the nature of the conversation. You've got a patient who's got gastroesophageal reflux. They go to their primary care physician. They say, "Doc, I'm having heartburn." First thing they do is they put them on a PPI. They'll prescribe omeprazole or esomeprazole or one of the standard PPIs. They're all generics. You can either get a script or you can get it over the counter. Patient's doing fine for a period of time. A year, two years, five years later, the patient comes in, sees their primary care physician. They're like, "Doc, you know, I'm still having heartburn. I can't sleep at night." First thing the physician does typically is either double their dose, prescribe b.i.d. dosing, so morning and evening if you're having nighttime heartburn, tell you to take an antacid or an H2RA on top of your PPI and see if that handles it. If you've done that and you're still having heartburn, at that point, the physician needs an expert opinion on, is there something else wrong? Why is this patient still having heartburn? What can we do for them? That's when they get a referral to a gastroenterologist. The patient who gets to a gastroenterologist typically has been on a PPI for years, sometimes has been on double-dose PPIs, sometimes has been on a PPI plus an H2RA, and they're still having heartburn. The physician needs a stronger solution. That's where our drug comes into play. Here's the important part. After their gastroenterologist has prescribed VOQUEZNA and the patient's feeling better, they get sent back to their primary care physician. The next year they come in to see their primary care physician, doc's got in his or her notes that the patient had lots of severe heartburn the year before, is asking them about it. They hear about how good our drug is. That's when we're going to have an opportunity with softness in the primary care market to start converting primary care physicians. I think that's coming. In 2027, 2028, there's going to be an opportunity to really go deep in primary care. For the next 18 months, we'll focus heavily on GI. It sounds so simple when you say it that GIs are prescribing more because they have a different patient base that has essentially tried everything and now is the time for a new mechanism of action. One other thing is there was a lot of work previously around the DTC campaign. Did you find that that part of the strategy was doing the right job, getting these patients to actually go and see the doctor, or was it more focused towards helping with the VOQUEZNA launch? The DTC initiative really matched the prior strategy. If you think about the entire PPI market as an available market to be converted, then advertising to patients with GERD to have them go in and talk to their physician about a new drug makes a lot of sense. Yeah. If you presume that, because it takes more work to prescribe our drug, it's not hard. It's super simple prior authorization, but it does take a prior authorization. It takes a little bit of work for the physician to prescribe our drug, and there's a $25 copay for a patient. If you get a PPI, it's free. In order to get over that, to get the activation energy to make that prescription happen, the patient has to have a need for this drug, which means they have to still be experiencing symptoms despite current standard of care therapy. The DTC campaign really reflected the broad strategy. We're going to try to go after the broad PPI market. If you take the new vantage point that the patients who are in pain are the ones who are going to be highly motivated, and that's the easier opportunity to switch those patients, the DTC program, I think, was just premature. We were running a broad DTC campaign, but we were sending patients with reflux into their primary care physician, and primary care physicians hadn't yet adopted this product, and they weren't prescribing it. It really wasn't providing meaningful return. What works is the conversations we have with gastroenterologists on why did your patient get to you, why is your heartburn patient in your office. They're in your office because they saw their primary care physician several times and they were still in pain. Yeah. That's why they're here. That's why they need our drug. It's a really straightforward conversation. Okay, so we laid out why there may be more success with this strategy to target gastroenterologists, but as we think about the ones that use VOQUEZNA today, can you give us a very rough split about the percent that are writing few scripts, a moderate amount of scripts, and a high level of scripts? We categorize physicians in different stages along an adoption ladder. You've got physicians who've tried the product once or twice. You've got physicians who try the product periodically. You've got physicians who are consistent writers of the product. They write it generally, at least in NRX, every other week. You've got physicians who are adopters, and the serious adopters are writing virtually every week. That's not the peak of what we're going to be able to accomplish. That's sort of our top-tier category today: docs who are writing scripts every week. The real opportunity is how can we get somebody who writes one or two or three scripts every week to write three scripts a day? They're seeing five to 10 patients a day who are on PPIs. How do we actually get them to think about writing multiple scripts per day? How do we get the docs who are writing every other week to start writing every week, then write two or three times a week, and then write two or three times a day? Yeah. It's growing physicians through those stages of adoption. What that generally looks like is severity of patients. The easiest, lowest-hanging fruit for a sales rep to a physician conversation is around erosive esophagitis. You have patients with grade C or D erosive esophagitis. Our data is clearly superior to PPIs in healing and in maintenance of healing. If you've got a patient who's got severe esophageal erosions, they absolutely ought to be on VOQUEZNA. The next time the sales rep is in and they're having conversations with a physician, they start talking to them about their other erosive esophagitis patients who might heal better with VOQUEZNA than they would on a PPI and for which patients it makes sense to use this product. You start opening up the conversation to a broader group of patients with erosive esophagitis. You start having conversations with a physician about patients who are still in pain despite being on a PPI. Maybe they're still having nighttime heartburn. Maybe they have breakthrough episodes. Maybe they've doubled their dose of PPI, but they're still having pain. They still can't eat the foods that they want. They're still having sensitivity to wine. They're still complaining that this is really uncomfortable for them. As you have a physician start thinking about broader categories of patients, their usage grows. That naturally fits with the reinforcement pattern that comes as a physician hears from their patients how much better they feel. Patients who are having severe heartburn, breakthrough episodes are letting the physician know that they feel much better on our drug than they felt ever on a PPI and/or than they have in years. That reinforcement enables the rep to have a conversation with the physician about broadening their use. You change those behavior patterns over time. You grow utilization to several scripts a week, several scripts a day, and that's how you create a path to really significant growth. Okay, you alluded to the fact that you already do have some gastroenterologists that do this. Is the behaviors that you just laid out, is that the pattern that you saw with them to go from, you know, two, three scripts a week, a month, to now where they are at today? Absolutely. We see that consistently. It's interesting. We track the number of adopters, the number of consistent writers based upon frequency of scripts. We've been updating that every month over the last few months as we're looking at those patterns. What's happening is both the number of physicians in each category is going up. We have 1,500, 1,700 physicians now in our top two categories, most frequent writers, but that number keeps on going up. Every month it's greater. The number of scripts per quarter, so the number of TRXs per quarter for each category, goes up over time. What we're seeing is both more physicians are migrating into those top categories and those top category writers are writing more scripts every quarter than they were before. That's exactly the pattern we would want to see. We're coaching the salesforce to think about physicians graduating up that adoption ladder. The goal is to get several thousand gastroenterologists into those categories and that's how we grow revenue. Okay, so obviously the big focus now is gastroenterologists. We talked about the fact that those that are writing few to moderate scripts are a key priority. Is there also an angle for those GIs that either haven't used the product yet, either because they weren't maybe approached by the company yet, or maybe because the salesforce was not spending as much time with them? Right. We have, again, the original strategy targeted broadly any writer of PPI scripts. Right. In fact, the salesforce had been allocated, their salesforce time had been allocated based upon top decile PPI prescribers. That only captured about 2/3 of gastroenterologists. The bottom third of gastroenterologists, even though they've got more severe patients, may not write as many PPI scripts as the top primary care writers. Because they have more severe patients, they are going to be naturally more significant adopters of our product. We've realigned the salesforce. In our retargeting that we just did in July, we have brought all of those GIs into the salesforce target lists so that the salesforce is calling on those additional GIs, gastroenterologists that aren't yet writing because we haven't been calling on them. There's an opportunity for us to get a significant expansion of the writer base among those gastroenterologists, as well as to continue growing everybody through those stages of the adoption ladder. Thank you. Gastroenterologists have clearly seen it all. They've probably had patients that had PPIs b.i.d. They switched brands, PPIs. They've seen it all, right? Right. Now you're offering them a brand new mechanism of action and drug. What is resonating with them the most about why they like this drug and why they continue to prescribe it? A few things. One, gastroenterologists have, by and large, heard about this category of drugs for a while. These drugs were available in Asia. This drug was launched first in Japan. There were other PCABs that were launched in South Korea. They've heard about PCABs as a mechanism of action and recognized that these were really potent acid-reducing agents. These elevate pH significantly. There's that broad base of awareness. What we now need to do is go from that broad base of awareness and enthusiasm to here's how you adopt it, here's how you write it. Yes, doc, it is going to get covered. It's a simple PA. It's not going to be a lot of work. There's that education that has to happen to drive the adoption process. There's a broad awareness of this. The other basic mechanistic phenomenon is we're really trying to do just one thing. All we're trying to do is change the pH of the stomach. That's all we're trying to do. We're trying to do one really basic thing with our drug. If you sort of think about the baseline pH of the stomach is two to three, the PPI therapies that have been standard of care can generally get stomach acid reduced to the point where you're north of a pH of four for part of the day. We can get to a pH of five or six. It's a really simple conversation that if acidity in the stomach is harming the lower regions of the esophagus, if you reduce acidity in the stomach and you raise pH, you will do less harm to the esophagus. It's a really simple premise. We've got really simple data in a comparative study that shows that we can elevate pH more than a PPI. The MOA is not complicated. It's super simple. It's just like, "Doc, you're just trying to do one thing and we do it better." That's all there is. It's a really simple conversation. It's a better drug. It's a better drug, by the way, for a population of 65 million patients that have GERD. This is an enormous market opportunity. Absolutely. I would imagine that there were some PPIs that meant a lot and were not PPIs, excuse me, primary care physicians. I would imagine there are still some that are important and were driving a lot of adoption. How do you still maintain those relationships while shifting a lot of the focus to gastroenterologists? Yeah, so in our retargeting that we just did, and this literally just happened in July, we're still in early days, and it's going to take one or two or three quarters before you start to see the impact of this in terms of sales trajectory, because you don't make one call on a physician and have them immediately adopt a product. You make five, six, eight calls on a physician and have them start to adopt it, and then another five or six calls to have them really grow. This takes months to do. In the retargeting that we did, we added in the additional gastroenterologists. We've maintained within our call pattern the top decile primary care prescribers, or the top decile primary care prescribers of proton pump inhibitors, and all primary care prescribers of VOQUEZNA. Any primary care physician who had adopted VOQUEZNA is still in our call pattern. That's an early adopter. That's a physician who's got the right mindset that they need this product. We can grow that customer. The top most prolific proton pump inhibitor writer physicians will have a lot of patients who need our product. That totally makes sense as a population to call on. The focus, the majority of our salesforce time is going into gastroenterology. That's the core shift that's happened. We're not giving up at all in the primary care community. We're still going after the high volume opportunity set there. It's creating a base from which to broaden in the coming years. Is having a greater emphasis on GIs in your practice going to help with reimbursement? I was, as I would imagine, they've probably had more experience on other drugs. They generally are well set up to work through the prior authorization process and submit the right documentation because they're doing it for all of the biologics that are being prescribed for IBD, for Crohn's disease, for a number of specialty therapies. They have to do this work anyway. They've got teams within their offices that are set up to do this. That's a more routine process in a specialist office than it is in a primary care office. Okay. How is the partnership with BlinkRx structured to help access VOQUEZNA affordability, and any plans to support any other channels across other areas of reimbursement? We are constantly looking at other channels. I'll take the second half of your question first, which is we are constantly looking at ways that we can make the retail experience better, that we can enable a patient who doesn't have access to the product because of their healthcare coverage, may not have healthcare coverage, or they might be covered by a plan that does not cover this drug. How do we make access possible for those patients? We are constantly doing that. An example of that is what we've done recently with Blink. Our core conversation with physicians about where to send a script is our recommendation is to send it to Blink. The reason for that is that we have business rules set up at Blink that enable a patient to get best price availability. Blink will first test whether or not the patient's insurance will cover the product. They'll send reminders to the physician regarding any prior authorization that's required. They'll facilitate that process. It's almost like a hub, but it's sort of a lighter touch process. We will help to drive the PA process. We'll help to drive coverage. If a patient can get coverage, then they get a copay of $25, which is the lowest cost access for the patient. If their insurance doesn't cover the product, they're under a high deductible plan, for example, and they won't, they'll have to pay full price out of pocket. Blink can instead offer them the cash pay price. We'll offer a $50 cash pay price to that patient. That allows a physician to have confidence when they're prescribing the product that if they send the script to Blink, their patient is going to get the best lowest cost access for the patient, which imparts more confidence to a physician and makes it easier for a physician to write the script. Blink can then provide optimization support for which path makes the most sense and provides the best access for the patient. Thank you. Beyond marketing VOQUEZNA for its currently approved indications, what part of the story or pipeline are you most excited about after? We've started the conversation with investors about building a long-term stable GI business, which will involve in the future bringing in additional products. That's not a near-term activity. It's a thing we're starting to look at, maybe in the next one or two years, we start to in-license products. We're judiciously starting to think about that. The core focus for this year and next year is how do we drive revenue to get to profitability. Once we get to profitability, once we get to positive cash flow, we've got a lot more flexibility to chart our future and create sustainable advantage. The clear near-term focus is this is an amazing drug. Physicians need this drug. Patients need this drug. The market is enormous. Let's just build on this opportunity in the near term and drive growth to profitability. Okay, this, again, I mentioned you came in at a very exciting time because the Citizen Petition was victorious for you. Congratulations on that. Thanks. With this now behind you, we can focus back to the launch, right? Why is it an ideal time for investors to take a look now? One quick note on the Citizen Petition. Most investors were aware of it, but for anybody who doesn't have context, the importance of that is that it has clarified our regulatory exclusivity period. Because our first approval for this drug was as part of a treatment pack for H. pylori, that's an anti-infective indication, we were able to avail ourselves of the GAIN Act exclusivity extension. We got an extra five years of extension on our standard five-year NCE exclusivity. That exclusivity period runs to May of 2032. What that actually provides is exclusivity into 2033. The reason that that happens that way is because May of 2032 is the earliest date that a generics company is allowed to file an ANDA. Typical ANDA review timelines are 10- 18 months, sometimes longer. It's going to be well into 2033 before the first generic entry can launch. There are some strategies that might extend that even further, but that's what an investor can sort of factor into their calculations today. What that provides is confidence that we are going to have enough time to create meaningful value for our shareholders beyond the point where we get to cash flow sort of positive runway. The other thing that goes hand- in- hand with that is the revamped strategy that we've implemented where we've brought down expenses and we're continuing our revenue ramp with this focus on gastroenterology. We might, in future quarters, be able to even accelerate our revenue ramp. We can get to EBIT positive operations by sometime next year and positive cash flow shortly thereafter. In that context, have a multi-year runway where we're generating positive cash flow to create significant value for our shareholders. That's the big inflection point. Obviously, you saw that reflected in our stock price movement once we got the Citizen Petition clarification on extension. The way that we create value for shareholders out of that is by generating meaningful positive cash flow that provides a return to our shareholders. We love a Friday 2:00 P.M. positive announcement, right? It's always a good thing. I would have taken that positive announcement on any day of the week. That would have been fine. Good start to the weekend. Yep, it was all good. Okay, awesome. Is there anything else our audience should take away about the story? You know, the GERD market is an enormous market opportunity. If you sort of think back to PPI days, now that goes, you know, back 20, 30 years, there were multiple drugs that were $3+ billion in market size. The entire category was north of $10 billion. This is an enormous market. Now, we are not going to replace all PPIs. That's not our opportunity. Yes, of course. Our opportunity is those 30%- 40% of patients, that's in the tens of millions of patients who are still in pain on a PPI. That's an enormous market opportunity that we can penetrate with a product that is already proven and has a 10-year history internationally at having been transformative in this space. The other advantage in marketing this product is the driver for adoption here is that it makes patients feel better. You know, if you're launching a new hypertension med, it's really hard for a patient to provide feedback to a physician on how much better they feel because they don't feel the difference. With VOQUEZNA, patients feel the difference. The real driver of adoption here is when a physician prescribes this for a patient and the patient comes back in and says, "Oh my God, Doc, I haven't felt like this in years. This is amazing." That's the positive reinforcement that starts the flywheel around adoption, around prescribing that is our path to $1 billion in revenue. We just need to make that flywheel happen with 10,000 gastroenterologists. It's super simple. This is super simple. We need to get 10,000 gastroenterologists to prescribe this a few times to their patients, get feedback from their patients on how much better they feel. They will all be prescribing this every week. That's our path to $1 billion. It's no more complex than that. We're rooting for you. Thank you. Congratulations again on a great start to joining the company. Thank you. Thank you so much for being here. Thank you so much for the invitation today.