Okay. Good afternoon, everyone. Welcome to Guggenheim Healthcare Innovation Conference. Our next presenting company is Phathom Pharmaceuticals. From the company, we have a few executives here. We will be chatting here with the Chief Executive Officer, Steven Basta, and we also have recently newly joined Chief Financial Officer, Sanjeev Narula. Steve, I'm going to hand it over to you. Why don't you make some opening comments? Obviously, VOQUEZNA has been on a good journey from a launch perspective. You came in, you sort of changed a lot of things. Just tell me how the experience has been, what have you achieved so far, and how are the next, let's say, one to three years looking for the company? Okay. That's several questions in part. We'll take sort of how the experience has been, and then we'll jump into the next several years. Just first principles, we're in the healthcare business. We're in the business of treating patients and having patients and physicians have great experiences. VOQUEZNA is an amazing drug. This is a transformative drug for one of the most common conditions that happens for patients. The treatment of gastroesophageal reflux has been a staple in medical practice for years. PPIs have become almost ubiquitous as key therapies, and there's a perception that they've made an enormous impact. However, 30%-40% of patients who are on chronic PPI therapy are still experiencing pain. There is an enormous unmet need population. VOQUEZNA fundamentally improves the care of patients with gastroesophageal reflux simply because it enables the mechanism of action; it enables us to raise pH in the stomach to a meaningfully greater degree than with a PPI. If you elevate pH with a PPI, you feel better. If you do not have full resolution, you elevate pH further with VOQUEZNA, you feel better. It is that simple and that transformative. The thing that coming in, I am now six months into the job, every day, every week, I hear regularly from physicians, from our sales reps, from patient testimonials that we get unsolicited into the website on a regular basis. This is a transformative drug in terms of the patient's experience. Patients who are in significant pain feel a whole lot better. I will offer my own testimonials. A patient who has switched to our product, it feels totally different from a PPI. This is just a meaningful improvement in care. I use it as well, so. Right. I mean, the drug's really terrific. It really does work. On demand is going to be an interesting possibility as well, that it opens up that possibility much more significantly. First observation, drug's amazing, patient outcomes are terrific, and there's an enormous population and creates an enormous opportunity. Now, a couple of other things that have been fundamental to the transition in our business is that in coming in, it was clear that the original strategy for the company had been formed around the concept that most PPI scripts are being written by primary care physicians. We've since shifted that and pivoted the strategy because, yeah, most PPI scripts are coming in primary care, but the patients who need our product most are patients who are still in pain. A disproportionate number of those patients are being referred by their primary care physician to a GI. In the GI practice, you get patients who are still experiencing significant heartburn, significant discomfort. That is where we are able much more efficiently and effectively to transition patients to a therapy that works better. We have pivoted the strategy, we have pivoted the sales force, we are getting really nice uptake in GI. Got it. Sanjeev, you recently joined the company. Could you maybe just sort of introduce yourself? Tell us what led you to join Phathom? Sure, sure. This is my sixth week, like six months, six weeks, but as I said, I'm drinking from a fire hose, but it's a great time. I'll tell you a couple of reasons. I think what Steve mentioned is just for me. I'm in pharmaceutical for the last 20 years. Majority of my career was in Pfizer, about 16 years, did about CFO jobs for both innovative and established business. Then I became the CFO for Viatris, which was the merger of my division, Upjohn and Mylan. I ended up with this CFO job, which I did four years, amazing work. I had the urge to go back to the innovative side, being in Big Pharma for a long period of time. That's why I joined Intra-Cellular Therapies, and I joined them last year. Great opportunity to make a big difference. Again, the transaction happened with changes. Sometimes you do not plan for those things, but an amazing situation. Then when I was looking for my next chapter, I was not kind of in a hurry to do that. Then when I got talking to Steve about this opportunity, again, the same thing. You have got a company which has got a tremendous opportunity. I think I would say we are fairly very undervalued in my opinion, the way I looked at my research on that. The drug is amazing. Steve talked about that. Best in class drug from that. Then there is an opportunity to make a difference. Small companies, you know, you can make a big impact versus a large company where you do a lot of stuff, importants. That was the reason that drew me here and amazing people. I am very excited to be here. Very good, very good. Good to have you here. Maybe if we can sort of just review the financial performance specifically for the third quarter, and I think you tighten or sort of increase some of the guidance, just help us understand. Maybe why don't you just review it and then ask more questions in terms of how we should think about Q4 and 2026? Yeah, sure, sure. I think third quarter, if you think about it, is a great reflection of what the strategy Steven implemented, right? I think the strategy has got two or three pillars on that, and I can walk you through the numbers and explain to you that one is obviously focus on GI, focus on GI, and that is driving the productivity. You saw a 23% growth in revenue, 28% growth in prescriptions. That is kind of what you saw, which is continuation on the strategy. Number two, discipline expense management, right? The expenses were about $89 million in the second quarter, came down to $49 million, much better than the guidance the company had given from there. You can clearly see where the focus is, and then results are reflective of that, right? As we look forward, I think that expense trend will continue, in my opinion. There's going to be some minor uptick because of some of the EoE trial, but that's the base of the company. You continue to see the top line growth by the focus on GI, and the expense level will be this, and that will drive the company to be operating profitability next year, as we've talked about that before. Got it. So the significant reduction in OpEX, was it just primarily driven by you not doing the DTC, or what else you've done to drive that? There were three things. Obviously, the team did realize the DTC was probably not giving the return because the focus was on primary care, which was not where there were no primary care focus. We obviously paused the DTC. That was one reason. Second is personnel and restructuring. We obviously looked at the expenses that we did, that we needed, did not need for this kind of level of the company. Third was the vendor cost. There were a lot of costs that were being incurred. Those were the three reasons that you saw a significant reduction. This is not one time. The important point to note is this is the sustainable level of spend that we have reached. Reading into what next year is going to be is not going to be exactly the same, but you can imagine the baseline. What would basically pivot from there is if there are additional trials, we're doing it like we talked about EoE trial. We'll see quarter four expense to be slightly going up a little bit, but that's the level that we are in now. Okay. So you've managed the expenses, you've brought them in a range where you want to be. Now, can you just talk about the top line? How should we think? What are some of the growth pillars? Where exactly is the growth going to come in from? The core growth driver for us is our sales force focus on gastroenterologists. I mean, just really simple metrics. It took half as many sales calls to convert a gastroenterologist first writer as it did primary care. Our gastroenterologists write twice as many scripts as primary care physicians on average once they convert. We were getting four times the productivity with sales calls on GI versus primary care. By shifting sales force time, ultimately where we want to get to is north of 70% of our sales force time is going to be with calls on GIs. We're actually approaching that number. We've been ramping that over the last several months. We just did a realignment of territories to enable us to more efficiently do that because we had some territories with too many GIs to be able to call on them with enough frequency, some territories with not enough gastroenterologists to be able to spend enough time in that space. We have rebalanced it. That is going to enable us to make calls on the most productive physicians, PAs, nurses to drive penetration. When we think about growth and what the growth opportunity is, today we have only 3% penetrated the GI PPI opportunity. There are 20 million prescriptions per year for PPIs coming out of that population of gastroenterologists and the APPs that work with them. Of that 20 million, we are at a run rate of about 600,000 today. About 150,000 scripts of our script total in Q3 came out of GI. We're running at about 3%. Now, we know most of the patients who are receiving PPIs in gastroenterology clinics got referred to the GI because they were still in pain. That was the complaint that they had to their primary care physician that caused their referral. There is a significant opportunity to get a significant percentage of those patients. Our top GI prescribers today are already north of 20%. We believe we can get to 20%-30% of that GI 20 million script market, which represents a billion dollar revenue opportunity coming out of GI. Our core near-term growth, the next two, three, four years, is all about how do you drive depth in GI prescribing to try to get to that 20%-30% of those 20 million scripts. From the breadth perspective, how many are you touching right now, GI? We are now calling on virtually every gastroenterologist. I mean, there are a few who don't see patients who just do procedures, but we're calling on virtually everybody. Are there any reasonable comps for us to look at in this space? I think investors, when we talk, do always ask this question. I think some bring LINZESS. You could certainly think about LINZESS or a number of products in terms of recent GI launches, but I actually think that you can look much more specifically in the GERD market at the PPI launches. The PPI market, when the products were branded before they went generic, was over $12 billion in revenue. In terms of market size and opportunity for the prescription market, several of the PPIs were north of $3 billion in revenue and collectively well north of the $10 billion-$12 billion in revenue in terms of that penetration. Now, obviously, those products have gone generic. We are not trying to capture the entire GERD market the way that one would think about PPI usage. If 30%-40% of those patients who are on PPI are still in pain, 30%-40% of that $12 billion opportunity is available to us. That was at a much lower price point than our current price point. There is a significant multi-billion dollar market opportunity available here. Okay. I think it's easy to sort of think that you have 3% penetration out of the 20 million. The question is at what cadence, at what speed you can get to that 20%-30%? Right. We do not make those long-term predictions on exactly what the revenue ramp is going to be, but exactly that is the source of many of our internal conversations. It is really about what are the sales tactics that drive adoption? What is our sampling strategy? What is the call strategy in terms of the hierarchy and the evolution of a patient up the adoption or of a physician up the adoption ladder? How do you get somebody to initial trial? How do you get them to the reinforcement of how much better their patients feel? How do you get them to use this in all of their erosive esophagitis patients? How do you get them to think about using it in their nighttime heartburn patients? How do you think about using it everywhere where you have a patient still in pain? Okay. Very helpful. Can you talk a little bit about the seasonal fluctuation? Any particular dynamic in 4Q that we need to keep an eye on? I know Q1 tends to be generally seasonally weak for most of the oral drugs. Just curious about these dynamics that we need to focus on. There is a dynamic that we talked about on our last call that is going to be important for this year's fourth quarter. That is, we've guided to somewhat more moderate growth in Q4 than we had experienced in Q3. That partly reflects the fact that we're expecting, by the way, to see even greater trajectory over time of call effectiveness in gastroenterology as we spend more time in gastroenterologists and reinforce those calls. That's going to have an increasingly impactful demonstration through the course of our revenue growth. In Q4, we're realigning our territories. There is a balance between the increased efficiency of calling on gastroenterologists and the fact that we're doing a territory realignment during Q4. Not knowing exactly how that balance is going to come out, we wanted to take a cautious view to how we were tempering guidance for this quarter. We're going to get through that and then be expanding the sales force in Q1, or filling the open positions in Q1, and that will position us really well for continued growth. Typical seasonality we always will experience is Q1 is going to be light. It may be modest growth or it may be flat, where we see significant growth in Q2, Q3, and Q4 every year. That is just the health plan resets, deductible resets, all of the stuff that impacts branded pharmaceuticals on a regular basis. Got it. Where are we on the access front? Yeah, where are we on the access front? And how should we think about the evolution of gross to net because you added more Medicare patient? We've got pretty stable access with north of 80% of commercial covered lives that are able to access the product. Most commonly, that is with just a single step requirement, that is failure of a prior PPI. When a physician documents that a patient has been on a PPI and is still experiencing symptoms, is still experiencing pain, that qualifies them for the product. That's actually been relatively stable. We expect it to be stable going forward. We don't expect to see much movement in GTN on the patients that are receiving the product on a covered basis. We are seeing growth of the patient population that is receiving the cash pay opportunity. That's not actually a shift from one category to another. It's not a covered patient who now gets cash pay. There's growth in the covered patients. There's also growth in the cash pay patients because those patients don't have coverage. We've not moved anybody from one category to another, but you're simply seeing that category grow faster because we turned on access for Medicare patients. There's a large population of Medicare patients that are growing in that cash pay channel. Our gross to net this year, we tightened the range at about 55%-60%, right? Again, not giving the guidance, but I do not expect because of the reason that Steve just talked about it, gross to net to be in a different zip code. It could be directionally in line with that level because we got the coverage that we are looking for, and the rest is going through the cash pay, which does not impact the gross to net in any meaningful way. Got it. As we go into next year, and this is not a question on OpEX, it's all about are there areas within the sales organization that you need to fill in and hire more outside those open positions? No, so that's the final step. We did a several stage transition for the sales force where we were changing the incentive comp plan, then changed the territory target physician lists for each territory. In October, we changed the territory maps. In the context of changing those territory maps, you do get dislocation of some territories because you have some territories that do not have enough gastroenterologists. You have other territories that had too many gastroenterologists that were being split into more than one territory. That caused a bit of dislocation for a few of our sales positions. We are refilling those territories. Overall, we had a sales force in Q3 of approximately 280 reps. We are going to come out of this transition with a sales force of approximately 300 that will be better aligned to optimize call frequency on every gastroenterology office. Got it. In terms of the, that was the previous comment on the Medicare side, should we expect the IQVIA/Blink Health split to sort of stabilize in that 65-35 range, or that could change? I'm not expecting that it changes significantly, although it could migrate a little bit. If we were to see Medicare scripts grow, that percentage that is the Blink cash dispense scripts might go up, but it doesn't change the ability to anticipate our revenue based upon the IQVIA numbers. What everybody's looking at in terms of the IQVIA numbers, those are the covered scripts. Those covered scripts are driving the bulk of our revenue, and that predictability based upon the IQVIA numbers, it's just additive if you add more cash pay scripts on top of it. Got it. I have a question on the IP. I think you are consistently saying now that a generic cannot file until May 2032. 2032. That's correct. Can you tell us exactly why that's the case, why it's unique to you? Right. So our exclusivity comes from NCE exclusivity, so the standard five-year exclusivity that you get with any new drug, extended to a 10-year period because of the GAIN Act. The GAIN Act provides for that extension associated with drugs that are approved for an infectious disease indication. Our first approval for VOQUEZNA was for H. pylori, an infectious disease indication, as a combination treatment with amoxicillin, actually with amoxicillin in one case and with amoxicillin and clarithromycin for our triple pack. Through that combination, and just briefly how that works is if you elevate pH in the stomach, you actually activate bacteria that allows amoxicillin to kill the bacteria much more effectively. The combination works really well. That anti-infective exclusivity period applies to all VOQUEZNA forms for all uses. We have exclusivity through May of 2032 that prohibits an ANDA filing until the end of that exclusivity date. Once a generic company files an ANDA, it's typically a 10-month review for the first round review. If there are any comments, then the second round review is an additional eight months plus whatever time to respond to the comments. You're looking at a minimum of 10 months, potentially 18 months plus, potentially a third round review for some ANDA filings. That could take you into early 2033 or late 2033, depending upon how much review time the generic handles need. Okay. You have the EoE study that is also going to help you from the pediatric front. Can you just talk about that pediatric angle and then the study? Exactly. The pediatric exclusivity requirement under the 2023 guidance from FDA requires that you do all of your post-NDA approval required pediatric work where that work is in process. We are underway with that. In addition, generate data in a pediatric indication of interest to the FDA. FDA has indicated to us that EoE would qualify for that. If our phase II study is successful and hits the appropriate endpoints, that would trigger a conversation with FDA around designing a phase III program that would include at least adolescents, but certainly include some pediatric patients. That program should, we believe, qualify for written request that would give us the opportunity, if we complete those studies, to get the six month extension. Obviously, that's dependent upon the end of the phase two trial and then the subsequent conversation with FDA. When are we going to, I mean, I know you just started the study. When is the expectation for the data from EoE? And then how would you put the market opportunity there in perspective? There are really three values to doing the EoE program. First, to answer your question on data, data is available in 2027 from the phase two trial. There are three upside opportunities that come from us doing the EoE study. One is obviously the ability to extend exclusivity by six months, which could take us into 2034 from an exclusivity perspective. If the drug is doing $2 billion in revenue, that's another $1 billion in revenue that we capture by virtue of an extra six months. Huge ROI just on the exclusivity portion. The second opportunity is there is a market today in EoE where there are probably on the order of 1 million PPI scripts per year as first-line therapy for EoE patients. There are 500,000 EoE patients. First-line treatment for EoE patients is PPIs. It could in fact be north of a million scripts a year that are being used for EOE patients. There is a meaningful market. It's not as big as the 20 million script GERD market in GI, but it's a meaningful additional sort of several tens of millions of revenue per year that could be incremental that provides economic upside. The third component is just the halo effect of doing work to answer a question that gastroenterologists really want answered. There hasn't been a large well-controlled trial of an acid suppression therapy in EoE. Everyone believes that it works. There are a number of published case series and case reports. That's why PPIs have been adopted. We're now doing the study that the GI community really wants to see. That will create a sense of goodwill and a halo effect for the product because we're doing really good science. Got it. Final questions. How are you thinking about building the company beyond Voquezna? Beyond VOQUEZNA, I expect that we're going to leverage the relationships that we are building with 16,000 gastroenterologists and another 7,000 nurses and PAs that are in these practices to bring a second, third, fourth product into the bag. We're not going to distract the sales force by adding something in next year. That's not the intent. Could we in-license something that's in phase two or phase three trials that we would then fund the trials out of our positive cash flow? Because by sometime next year, we're going to be starting to generate cash. Certainly by 2027, we're going to be generating positive cash flow so we can fund additional clinical programs. If in 2028, 2029, 2030, we're launching a second product or a third product into the same sales force, leveraging those GI relationships, it also freshens the conversation with the gastroenterologists. You not only are capturing revenue on the new product, but you're also enhancing the perception of the company and the perception of the lead product. It has lots of synergistic effects to do that. Got it. Maybe final question for Sanjeev. How's the balance sheet? Oh, so I tell you what. With the results and the strategy that you see, I think we're going to have a very strong financial position. This quarter, as you looked at quarter three, our operating expenses before share-based comp and interest were almost equal to the top line, right? I think we're getting there where we can support and sustain the company. That's one thing. As the top line continues to grow, we get the operating leverage. We got $135 million of cash sitting in the balance sheet. We got the ATM facility available. We feel very good about where we are on the balance sheet. Very good. Very good, gentlemen. Thank you so much. Yeah, thank you so much. Thank you. Appreciate the time. Appreciate the opportunity to be here. Thank you. Thank you.