Q1 2024 Phathom Pharmaceuticals Inc Earnings Call

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Operator: Hello, and welcome to Fab and Pharmaceuticals' first quarter 2024 earnings results call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference call is being recorded. With that, I would like to turn the conference call over to Eric Sciorilli, Phantom's head of investor relations. Please go ahead.

Speaker Change: Hello, and welcome to Southern Florida pursued Kohl's first quarter 2024 earnings results call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session.

Speaker Change: Ask a question during the session you will need to press star one on your telephone you will then hear an automated message advising that your hand is raised to withdraw your question. Please press star one again.

Speaker Change: Please be advised that today's conference is being recorded.

Speaker Change: That I would like to turn the conference call over to Eric Shirley Phantoms head of Investor Relations. Please go ahead.

Eric Sciorilli: Thank you, Operator. Hello, everyone, and thank you for joining us this morning to discuss Phathom's first quarter 2024 results. This morning's presentation will include remarks from Terrie Curran, our President and CEO, Martin Gilligan, our Chief Commercial Officer, and Molly Henderson, our Chief Financial Officer. Azmi Nabulsi, our Chief Operating Officer, will also be joining the team during the Q&A portion of today's call. Just a couple of logistical items before we get started.

Eric Shirley: Thank you operator, Hello, everyone and thank you for joining us this morning to discuss items first quarter 2024 results.

Eric Shirley: This morning's presentation will include remarks from Terrie Curran, our president and CEO Martin <unk>, our Chief commercial officer, and Molly Henderson, Our Chief Financial Officer.

Eric Shirley: <unk>, our chief operating officer will also be joining the team during the Q&A portion of today's call.

Eric Shirley: A couple of logistical items before we get started earlier. This morning, we issued a press release detailing the results, where 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 a recording of today's webcast can be found under the events and presentations section of our corporate website.

Eric Sciorilli: Earlier 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 in the News Releases section of our corporate website. Additionally, the recording of today's webcast can be found in the Events and Presentation section of our corporate website.

Eric Sciorilli: 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 Phathom's control. Actual results can materially differ from these forward-looking statements, and any such risk can materially adversely affect the business, the results of operations, and trading prices for Phathom'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-K and subsequent SEC filings.

Eric Shirley: Before we begin let me remind you that we will be making a number of forward looking statements throughout today's presentation.

Eric Shirley: Forward looking statements involve risks and uncertainties many of which are beyond <unk> control.

Eric Shirley: Actual results could 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 <unk> common stock and 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-K and subsequent SEC.

Eric Shirley: 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.

Eric Sciorilli: All forward-looking statements made on this call are based on the beliefs of Phathom as of this date, and Phathom disclaims any obligation to update these statements. With that, I will now turn the call over to Terrie Curran, Phathom's President and CEO, to kick us off.

Speaker Change: I will now turn the call over to Terrie, Curran Adams, President and CEO to kick us off sorry.

Terrie J. Curran: Thank you, Eric, and thank you to all those joining us on today's call. I'm excited to report on the great progress we've made since the start of 2024. Throughout our first full quarter of launch, our team continued to deliver on our three main launch goals: communicating the QISNA's clinical superiority versus the PPI, driving brand awareness, and building access for commercial patients. Most importantly, the increased enthusiasm surrounding Quesna is clear. I'm pleased to share that there are now upwards of 43,000 prescriptions written and launched to date, a notable increase relative to the number reported just two months ago.

Speaker Change: Thank you Eric and thank you to all those joining us on today's call I'm excited to report on the great progress. We've made since the start of 2020 for <unk>.

Speaker Change: <unk>, our first full quarter of launch our team continued to deliver on our three main launch calls can be a cutting the craziness clinical superiority versus the PPI driving brand awareness and building access to commercial patients.

Speaker Change: Most importantly, the increased enthusiasm surrounding the prisoner is clay I'm pleased to share that they are now upwards of 43000 prescriptions written launch to date.

Speaker Change: Notable increase relative to the number you reported just two months ago.

Terrie J. Curran: This latest demand metric is evidence of how our teams have been successfully executing. I'll now share more on the progress we've made on each of our launch goals. Beginning with communicating superiority versus a PPI, our sales force has made great strides to inform target positions of the clinical differentiation that the Quesna can offer patients. With each incremental sales call, we see our promotional messages resonating.

Speaker Change: <unk> latest demand metric is evidence of how our teams have been successfully executing.

Speaker Change: I'll now share more on the progress we've made on each of our launch calls.

Speaker Change: Beginning with communicating superiority versus the TPI. Our sales force has made great strides to inform physicians of the clinical differentiation that <unk> can offer patients.

Speaker Change: With each incremental sales call, we see a promotional message messages resonating.

Terrie J. Curran: Physician excitement and feedback continues to be overwhelmingly positive, in part due to real-world patient experiences. On several occasions, we've received unsolicited comments from both patients and doctors telling us how Gwizdna has delivered improved symptom release. Patients are describing life-changing effects, especially for those that have suffered from this condition for many years.

Speaker Change: Physician excitement and feedback continues to be overwhelmingly positive.

Speaker Change: Part due to real world patient experiences.

Speaker Change: On several occasions, we received unsolicited comments from both patients and doctors, telling us how the question that I have delivered improved symptom relief pay.

Speaker Change: Patients are describing life changing effects, especially for those that have suffered from this condition for many years. We are proud to be able to help these patients and we know these types of testimonials encourage physicians to expand their prescribing behaviors.

Terrie J. Curran: We're proud to be able to help these patients, and we know these types of testimonials encourage physicians to expand their prescribing behavior. From the outset, we've been determined to drive brand awareness with both physicians and consumers. At the end of March, we expanded these efforts in a significant way, launching a new direct-to-consumer, or DTC, campaign titled, The Quesna Can Kick Some Assets. Our market research indicates that patient requests are a major driver of the prescribing decision, so we crafted a television commercial aimed at motivating consumers to ask their doctors for Requesna. Later in the call, Martin will share more about the campaign and the early positive receptivity we're hearing from the marketplace.

Speaker Change: From the outset, we've been determined to drive brand awareness with both physicians and consumers.

Speaker Change: At the end of March we expanded these efforts in a significant way launching a new direct to consumer or DTC campaign titled the question to kick some asset.

Speaker Change: Our market research indicates that patient requests are a major driver of the prescribing decision. So we crafted a TV commercial aimed at motivating consumers to ask their doctor for the equipment.

Speaker Change: Later in the call not move share more about the campaign and the early positive receptivity, we're hearing from the marketplace.

Terrie J. Curran: On the access front, we announced the addition of Quesna to the Express Scripts or ESI National Formula E midway through Q1. This early outcome validated the belief that our access strategy would resonate with large payers. Now, midway through Q2, I'm proud to share that Quesna was recently added to the Cigna Healthcare Formularies with a single step edit, similar to ESI. As a result, approximately 72 million commercially insured lives now have access to Quesna. We continue to negotiate coverage with other major payers with the aim to expand commercial access throughout 2024. Earlier, I touched on how delivering our strategy has generated growth in total demand.

Speaker Change: On the access front, we announced the addition of <unk> to the express scripts, so ASR national formulary midway through Q1.

Speaker Change: This early outcome validated the belief that our exit strategy will resonate with large payers now midway through Q2, I am proud to share that <unk> was recently added to the Cigna health care formularies with a single step edit similar to ASI.

Speaker Change: As a result, approximately $72 million commercially insured lives now have access to the equation we.

Speaker Change: We continue to negotiate coverage with other major payers with the aim to expanding commercial access throughout 2024.

Speaker Change: Earlier I touched on how in delivering our strategy has generated growth in total demand.

Terrie J. Curran: I'm equally happy to report that filled the Quesna prescriptions, meaning those that reached the hands of patients, have also significantly increased. We've recorded over 17,500 Bequevna prescriptions being filled to date. These volume metrics are very exciting early indicators.

Speaker Change: Equally happy to report that films, the questioner prescriptions, meaning those that reach the hands of patients and also significantly increased.

Speaker Change: We have recorded over 17500, the questioner prescriptions being filled launch date.

Speaker Change: <unk> volume metrics are very exciting early indicators.

Terrie J. Curran: With anticipated expansion in commercial coverage, ongoing rollout of our DTC efforts, and a potential approval of non-erosive GERD, we remain steadfast in our belief in the blockbuster opportunity for Quesna. Focusing now more closely on non-erosive GERD, we're anticipating this potential label expansion to be an important catalyst in the second half of 2024. This indication represents the largest subcategory of GERD, more than doubling that of its erosive counterpart, with an estimated 15 million U.S. adults diagnosed and treated for the disease annually. Despite the difference in the population size, the patient journey from symptom onset to receiving treatment is largely identical. More importantly, the doctors providing care are the same for both indications.

Speaker Change: With anticipated expansion in commercial coverage ongoing rollout of our DTC efforts and a potential approval of <unk>, we remain steadfast in our belief of the blockbuster opportunities for liquidity.

Speaker Change: Focusing now more closely all known or is it. Good we're anticipating this potential label expansion to be an important catalysts in the second half of 2024. This.

Speaker Change: This indication represents the largest subcategory of good more than doubling that I'll get cirrhosis counterpart with an estimated 50 million U S. Adults diagnosed and treated for the disease annually.

Speaker Change: Spot the difference in the population size the patient journey from symptom onset to receiving treatment is largely identical.

Speaker Change: More importantly, the doctors, providing care and the same for both indications. We believe that this means our sales force is appropriately sized and already building relationships with these prescribers.

Terrie J. Curran: We believe that this means our sales force is appropriately sized and is already building relationships with these prescribers. If approved, our goal is for our current commercial team to be able to communicate non-erosive GERD promotional messages within days of the FDA's decision, with a July 19th PDUFA target action date. We're excited to soon be able to offer a potential new treatment option to these patients. In parallel with our launch journey, we continue to advance development opportunities for vinoprazole.

Speaker Change: If approved our goal is for our current conventional team to be able to communicate Nara to good promotional messages within days of the Fda's decision.

Speaker Change: With the July 19, <unk> target action date, we're excited to soon be able to offer a potential new treatment option to these patients.

Speaker Change: In parallel with that Lowe's journey, we continued to advance development opportunities open up presenting.

Terrie J. Curran: Later this year, we are planning to initiate a Phase 3 trial for adenine dosing and non-erosive goods. We believe that this study will build on the positive results we observed from our previous Phase 2 trial. Additionally, we are planning to initiate a Phase 2 trial for eosinophilic esophagitis, or EOE, later this year. Subject to trial success, Monoprazen could be positioned as a first-line replacement of PPIs, which are the current standard of care. Phenoxazine's rapid, potent, and durable acid suppression profile is the foundation for exploring these GI conditions.

Speaker Change: Later this year, we are planning to initiate a phase three trial fascinated dosing and non erosive GERD.

Speaker Change: We believe that this study will build on the positive results.

Speaker Change: We observed from our previous phase III trial. Additionally, we are planning to initiate a phase II trial for Ethernet feel like a soft guidance or AOA.

Speaker Change: Later this year subject to trial success and not presenting could be positioned as a first line replacement of Kpis, which had the current standard of care.

Speaker Change: And I'll present rapid potent and durable acid suppression profile is a foundation for exploring these gi conditions.

Terrie J. Curran: Our aim for both programs is to further differentiate Monoprix and PPIs which are not approved for either of these indications. If approved, both label enhancements would further expand the total addressable market for Bequesta products. On the financial side, Molly will further detail our first quarter 2024 results later in the call, for which we reported revenues of $1.9 million and ended with $322 million in cash. We remain confident that our strong balance sheet will enable us to continue delivering on our launch and development strategies.

Speaker Change: Our aim for both programs is to further differentiate and I'll present, some kpis, which are not approved for either of these indications.

Speaker Change: Approved both label enhancements will further expand the total addressable market for the question of products.

Speaker Change: On the financial side, Molly will further detail our first quarter 2024 results later in the call, but which we reported revenues of $1 9 million and ended with $322 million in cash.

Speaker Change: We remain confident that our strong balance sheet will enable us to continue delivering on our launch and development strategies.

Terrie J. Curran: As you've likely heard me say, the key elements of a potential blockbuster launch are present in this market. It now comes down to execution, and in this first quarter of 2024, our teams have continued to deliver. This launch is still in its infancy. The end of March marked only our first full quarter of operation. Yes, the progress we've made is impressive. We will continue to promote superiority in erosive GERD and leverage our full-scale DTC efforts to reach the millions of patients suffering from this condition.

Speaker Change: As you've likely heard me say the key elements of our potential blockbuster launch are present in this market. It now comes down to execution and in this first quarter of 2024. Our teams have continued to deliver this launch is still in its infancy at the end of March marked.

Speaker Change: Our first full quarter of launch yet the progress we've made is impressive.

Speaker Change: We will continue to promote superiority in erosive GERD and leverage our full scale DTC efforts to reach the millions of patients suffering from this condition.

Terrie J. Curran: In tandem, we're working diligently to pair awareness with broad commercial coverage, which we expect to expand throughout the remainder of 2024. These tactics, in conjunction with the anticipated launch of non-erosive GERD, give us confidence that Quesna's launch ramp is only just beginning. I'll now turn the call over to Martin to dive deeper into recent commercial updates.

Speaker Change: In tandem we are working diligently to pair awareness with broad commercial coverage, which we expect to expand throughout the remainder of 2024.

Speaker Change: These tactics in conjunction with the anticipated launch of Nomura.

Speaker Change: Give us confidence that equation as loan shrimp is only just beginning.

Speaker Change: I'll now turn the call over to Martin to dive deeper into recent commercial update Martin.

Martin J. Gilligan: Thanks, Terrie, and hello everyone. Let me first echo that we believe the launch of Equesna is off to a great start. Our sales team continues to share positive feedback from their conversations with physicians. The breadth and depth of their outreach among high-volume prescribers are increasing daily. And beyond the doctors, the sentiment among patients is also very positive. We're now seeing some of the early users of Echresna come back for refills, further signaling their positive experiences.

Martin: Thanks, Teri Hello, everyone let.

Martin: Let me first echo that we believe the launch of a question is off to a great start our sales team continues to share positive feedback from our conversations with physicians.

Martin: The breadth and depth of their outreach among high volume prescribers increases daily and beyond the doctors the sentiment among patients is also very positive.

Speaker Change: We're now seeing some of the early users of Khazna comeback for refills further signaling their positive experiences.

Martin J. Gilligan: At the end of March, we significantly elevated our DTC efforts with the goal of increasing brand awareness among consumers and empowering them to request Quesno. We've also made progress on the commercial coverage front to best ensure that those who want Bequezna can get it. I'll dive into each of these items in more detail, but let me start by providing an update on our most recent launch metrics.

Speaker Change: At the end of March we significantly elevated our DTC efforts with the goal of increasing brand awareness among consumers and empowering them to request request now.

Speaker Change: We've also made progress on the commercial coverage front to best ensure those who want for closer can get requests not.

Speaker Change: I'll dive into each of these items in more detail, but let me start by providing an update on our most recent launch metrics.

Martin J. Gilligan: Today, we're reporting our latest available written and filled prescription data as of April 26, which is just nine weeks removed from our previously reported data. In roughly two months, the number of Equestria prescriptions written has grown by 207% to over 43,000, while the number of filled prescriptions has grown by 361% to over 17,500. As we've heard us say, it takes time to disrupt long-established behaviors, but these latest metrics are an exciting testament to the willingness of physicians and patients to try something new and different.

Speaker Change: Today, we're reporting our latest available written and filled prescription data as of April 26, which is just nine weeks removed from our previously reported data.

Speaker Change: And roughly two months the number of <unk> prescriptions written has grown by 207% to over 43000.

Speaker Change: While the number of filled prescriptions has grown by 361% to over 17500.

Speaker Change: As you've heard US say it takes time to disrupt long established behaviors, but these latest metrics are an exciting testament to the willingness to physicians and patients to try something new and different.

Martin J. Gilligan: Looking more closely at the over 17,500 prescriptions filled, we're also seeing notable growth on a monthly basis. In fact, phytoquestin prescriptions for each month of the first quarter increased sequentially by more than 100%. Keep in mind that these figures reflect prescriptions flowing through retail pharmacies, which are captured by Acuvia, as well as those flowing through our $50 cash pay assistance program, which are captured by BlinkRx.

Speaker Change: Looking more closely at the over 17500 prescriptions filled we're also seeing notable growth on a monthly basis and.

Speaker Change: In fact fill to request the prescriptions for each month of the first quarter increased sequentially by more than 100%.

Speaker Change: Keep in mind that these figures reflect prescriptions flowing through retail pharmacies, which are captured by <unk> as well as those flowing through our $50 cash paid assistance program, which are captured by Blink Rx.

Martin J. Gilligan: Within Q1, we recorded roughly 9,500 filled Bequesta prescriptions, of which approximately 60% were filled through retail pharmacies and captured by IQVIA. In tandem with growing volume, the number of physicians writing for Quesna has also increased. As of April 19th, upwards of 3,800 physicians have written to request a prescription that has been filled. This reflects a growth of over 215% relative to what we previously reported as of mid-February. This includes writing by a mix of our target specialties, favoring GIs more heavily during these early phases of launch.

Speaker Change: Within Q1, we recorded roughly 9500 filled with <unk> prescriptions.

Speaker Change: Of which approximately 60% were filled through retail pharmacies and captured by <unk>.

Speaker Change: In tandem with growing volume the number of physicians writing request has also increased.

Speaker Change: As of April 19 upwards of 3800 physicians have written up requests a prescription that has been filled.

Speaker Change: This reflects a growth of over 215% relative to what we previously reported as of mid February.

Speaker Change: This includes rating by a mix of our target specialties favoring Gi is more heavily during these early phases of launch.

Martin J. Gilligan: Importantly, our latest data shows a strong degree of repeat writers. Over 50% of requested prescribers have written multiple times, which we see as an encouraging lead indicator. Doctors are witnessing the impact of healing and 24-hour heartburn relief on patients' lives, which we believe bolsters their intent to prescribe. We anticipate this early breadth and depth of our prescriber base will grow with increasing brand awareness and further engagement by our sales. Beyond filled loquesna prescriptions, I mentioned earlier that over 43,000 total prescriptions have been written by physicians.

Speaker Change: Importantly, our latest data shows a strong degree of repeat writers over 50% of requests of prescribers have written multiple times, which we see as an encouraging lead indicator.

Speaker Change: Doctors are witnessing the impact of healing in 24 hour heartburn relief on patients' lives, which we believe bolsters their intent to prescribe.

Speaker Change: We anticipate this early breadth and depth of our prescriber base will grow the increasing brand awareness and further engagement by our sales force.

Speaker Change: Beyond filled rhopressa prescriptions I mentioned earlier that over 43000 total prescriptions have been written by physicians.

Martin J. Gilligan: This is a strong gauge of the existing and growing total demand in the marketplace. Recall that the metrics we shared during our last earnings call did not yet reflect any impact from the addition of Aquesna to ESI's national formula.

Speaker Change: This is a strong gauge of the existing and growing total demand in the marketplace.

Speaker Change: Recall that the metrics we shared during our last earnings call did not yet reflect any impact from the addition of a questionnaire to ESI national Formularies.

Martin J. Gilligan: With that coverage in place, we are now starting to see a narrowing of the proportional gap between written and filled prescriptions. As commercial coverage is secured, we anticipate closing the gap further, and therefore realizing more and more of the revenue opportunity associated with this level of total demand. On that note, we continue to make good progress on our goal of securing widespread access for patients with commercial insurance. I'm happy to expand upon Terrie's earlier Cigna update. As of May 1, Boquesna was added to Cigna formularies, which provides coverage to over 9 million commercially insured people. Importantly, we were successful in negotiating access subject to a single step edit, exactly as intended.

Speaker Change: With that coverage in place we are now starting to see a narrowing of the proportional gap between written and filled prescriptions.

Speaker Change: As commercial coverage is secured we anticipate closing the gap further therefore, realizing more and more of the revenue opportunity associated with this level of total demand.

Speaker Change: On that note, we continue to make good progress on our goal of securing widespread access for patients with commercial insurance.

Speaker Change: Im happy to expand upon Terry's earlier Sigma update as of May one. The question was added to Cigna, formularies, which provides coverage to over $9 million commercially insured people.

Speaker Change: Importantly, we were successful in negotiating access subject to a single step edit exactly as intended.

Martin J. Gilligan: With this inclusion, approximately 72 million commercial lives now have access to Bequesna. As we move deeper into 2024, we anticipate that an increasing number of plans will initiate Bequesta coverage, including other major payers with which we are actively negotiating. While access is a key driver of converting filled prescriptions, our promotional efforts are essential to increasing overall demand. In March, we rolled out our full-scale direct-to-consumer campaign, which you heard Terrie mention. The Vaquesna Can Kick Some Acid campaign initially went live across several consumer-facing platforms, most notably in the form of a television commercial on popular streaming services such as Hulu and Prime.

Speaker Change: With this inclusion approximately 72 million commercial lives now have access to the questioner.

Speaker Change: As we move deeper into 2024, we anticipate that an increasing number of plans, we will initiate a request to coverage, including other major payors with which we are actively negotiating.

Speaker Change: While access is a key driver of converting filled prescriptions, our promotional efforts are essential to increasing overall demand.

Speaker Change: In March we rolled out our full scale direct to consumer campaign, which you heard Terry mentioned.

Speaker Change: The requested and kick some acid campaign initially went live across several consumer facing platforms, most notably in the form of a TV commercial on popular streaming services, such as Hulu and prime.

Martin J. Gilligan: We're extremely proud of this effort, which tested very well while in development with target audiences. Consumers told us the campaign is different, memorable, and motivating. Our intent with the commercial is to raise awareness that Boquesna is the first and only treatment of its kind, helps heal erosions and maintain healing, and provides 24-hour heartburn relief.

Speaker Change: We're extremely proud of this effort, which tested very well while in development with target audiences.

Speaker Change: Consumers told us the campaign is different memorable and motivating.

Speaker Change: Our intent with the commercial is to raise awareness of <unk> as the first and only treatment of its kind helps heal erosions and maintain healing and provides 24 hour heartburn relief.

Martin J. Gilligan: Between a unique approach and strong messaging, we aim to motivate consumers to ask their physicians for recommendations. The in-market feedback thus far has been tremendous, and we're excited to announce that the commercial is now airing more broadly across major television networks as of late April. The first quarter of 2024 included several meaningful steps in the launch of Equestna. Our progress on the marketing and promotional front was significant. We saw notable increases in total demand generated and the number of prescriptions filled.

Speaker Change: Between the unique approach and strong messaging, we aimed to motivate consumers to ask their physician for requests now.

Speaker Change: The end market feedback, thus far has been tremendous and we're excited to announce that the commercial is now airing more broadly across major TV networks as of late April.

Speaker Change: The first quarter of 2024 included several meaningful steps in the launch of requests now are.

Speaker Change: Our progress in the marketing and promotional front with significant we saw notable increases in total demand generated and the number of prescriptions filled.

Martin J. Gilligan: The ramp of commercial coverage was strengthened by the addition of a question to Cigna formularies and remains on track with positive inflection points anticipated throughout the remainder of this first year of launch. We believe the pairing of expanded coverage and widespread promotional efforts, plus the nearing potential entry into the non-erosive GERD market, serve as fundamental drivers of continued growth. With each additional building block, we get closer to our goal of displacing PPIs and realizing the blockbuster opportunity for Voquesna. I'll now pass it off to Molly to walk you through our financial results. Molly

Speaker Change: The ramp of commercial coverage was strengthened by the addition of request sent a signal formularies and remains on track with positive inflection points anticipated throughout the remainder of this first year of launch.

Speaker Change: We believe the pairing of expanded coverage and widespread promotional efforts.

Speaker Change: The nearing potential entry into the non erosive GERD market service fundamental drivers of continued growth.

Speaker Change: With each additional building block, we get closer to our goal of displacing <unk> and realizing the blockbuster opportunity for requests now.

Speaker Change: I'll now pass it off to Mali to walk through our financial results Molly.

Molly Henderson: Thanks, Martin, and hello to everyone on the call. I'm happy to share our first quarter 2024 financial results with you today. As you've heard from Terrie and Martin, we've made important progress related to the launch of EQUESMA in such a short period of time. But before going into the numbers, I'd like to note two things. First, during this call, and similar to last quarter, we will not be providing financial guidance regarding projected revenues, spend, or earnings, as we are still in the early stages of launch.

Mali: Thanks, Martin and Hello to everyone on the call I'm happy to share our first quarter 2024 financial results with you today as.

Mali: As you've heard from Terry Martin we've made important progress related to the launch of a president in such a short period of time.

Mali: Before going into the numbers I'd like to note two items first during this call and similar to last quarter, we will not be providing financial guidance regarding projected revenues spend or earnings as we are still early stages of launch. Additionally.

Molly Henderson: Additionally, I will be commenting on both GAAP and non-GAAP financial measures. Reporting schedules with detailed reconciliations between non-GAAP measures and their most directly comparable GAAP measure will be discussed later in my section and can be found in this morning's press release. Now, turning to the numbers.

Mali: Additionally, I will be commenting on both GAAP and non-GAAP financial measures.

Mali: Supporting schedules with detailed reconciliations between non-GAAP measures and their most directly comparable GAAP measure will be discussed later in my section and can be found in this morning's press release.

Molly Henderson: For the first quarter of 2024, we reported net revenues of $1.9 million. Keeping in mind that this was our first full quarter of launch, this represents a 180% sequential quarterly increase. Growing demand and filled prescriptions led the way to inventory restocking by wholesalers. Although it is difficult to estimate stocking behaviors this early into launch, we anticipate being able to get a better sense of stocking patterns over the next couple of quarters.

Mali: Now turning to the numbers for the first quarter 2024, we reported net revenues of $1 9 million.

Mali: Keeping in mind that this was our first full quarter of launch this represents a 180% sequential quarterly increase.

Mali: Growing demand and filled prescriptions led the way to inventory restocking by wholesalers.

Mali: Although it is difficult to estimate snacking behaviors. This early into launch we anticipate being able to get a better sense of stocking patterns over the next couple of quarters.

Molly Henderson: On the growth to net discount front, we would like to flag that our growth to net discount this quarter was better than expected. This resulted from a three-week period during the first quarter where a patient co-pay savings card was unavailable due to the changed healthcare cyber attack. For the quarter ended March 31, 2024, we reported gross profit of $1.5 million, which equates to a gross margin of 78%, a sequential quarterly increase of about 220 basis points.

Molly Henderson: And the gross to net discount front, we would like to flag that Eric gross to net discount this quarter with better than expected.

Mali: This resulted from a three week period during the first quarter, where our patient co pay savings card with unavailable due to that change healthcare cyber attack.

Molly Henderson: For the quarter ended March 31, 2024, we reported gross profit of $1 5 million, which equates to a gross margin of 78% a sequential quarterly increase of about 220 basis points.

Molly Henderson: Moving down the P&L to our operating expenses, we reported non-GAAP R&D spend of $8.2 million for the first quarter 2024, which represents a 16% reduction in spend compared to the first quarter 2023. The decrease in R&D expenses was primarily related to lower clinical trial costs associated with a wind-down of activities related to our Phase III non-erosive daily dosing trial, which we read out last year.

Molly Henderson: Moving down the P&L to our operating expenses, we reported non-GAAP R&D spend of $8 2 million for the first quarter 2024, which represents 16% reduction in spend compared to the first quarter 2023.

Molly Henderson: The decrease in R&D expenses was primarily related to lower clinical trial costs associated with the wind down of activities related to our phase III non erosive daily dosing trial, which we read out last year.

Molly Henderson: As for SG&A, we reported non-GAAP expenses of $57.6 million for the first quarter of 2024. This represents an increase of over 330% relative to the same period of 2023. The increase was largely driven by the buildout of our commercial infrastructure and marketing activities in support of the commercial launch of Aquesna. Most notably, the first quarter of 2024 includes nearly a complete quarter of costs related to our full-strength sales force. Additionally, this quarter's ST&A expenses included advertising costs, which approximated $6.8 million and were primarily related to the initiation of our WQESNA Can Kick Some Acid DTC campaign.

Molly Henderson: As for SG&A, we reported non-GAAP expenses of $57 6 million for the first quarter of 2020 for.

Molly Henderson: This represents an increase of over 330% relative to the same period in 2033.

Molly Henderson: The increase was largely driven by the buildout of our commercial infrastructure and marketing activities in support of the commercial launch of a question.

Molly Henderson: Most notably the first quarter 2024 includes nearly a complete quarter of costs related to our full strength salesforce.

Molly Henderson: Additionally, this quarter's SG&A expenses included advertising costs, which approximated $6 8 million and were primarily related to the initiation of our plasma can kick some asset DTC campaign.

Molly Henderson: For both spend categories, the most significant reconciling item between GAAP and non-GAAP operating expenses for these periods was non-cash stock-based compensation. Other non-GAAP reconciling items include non-cash interest on our revenue interest financing liability and non-cash interest expense related to amortization of debt disbursements. Turning to EPS, we've reported a non-GAAP adjusted net loss of $64.8 million for the first quarter 2024, or $1.11 loss per share, compared sequentially to $46 million, or $0.80 loss per share, for the fourth quarter 2023.

Molly Henderson: For both spend category the most significant reconciling items between GAAP and non-GAAP operating expenses for these periods with noncash stock based compensation.

Molly Henderson: Other non-GAAP reconciling items include noncash interest on a revenue interest financing liability and noncash interest expense related to amortization of debt discount.

Molly Henderson: Turning to EPS, we reported non-GAAP adjusted net loss of $64 8 million for the first quarter of 2024 or $1 11 loss per share compared sequentially to $46 million or 80% loss per share for the fourth quarter of 2023.

Molly Henderson: As of March 31, 2024, cash and cash equivalents were $322 million. Up to an additional $150 million remains available via our debt facility, of which $50 million is available this year and $100 million is available next year, subject to achievement of certain revenue milestones. We believe that we are in a solid financial position and reaffirm our expectation that we will have cash runway through the end of 2026, based on our current operating plan, expected product revenues, and funds available under our term loan.

Molly Henderson: As of March 31, 2024, our cash and cash equivalents were $322 million up to an additional $150 million remains available via our debt facility of which 50 million is available this year and $100 million is available next year subject to achievement of certain revenue milestones.

Molly Henderson: Believe that we are in a solid financial position and reaffirm our expectation that we have cash runway through the end of 2026 based on our current operating plan expected product revenues and funds available under our term loan.

Molly Henderson: Overall, our first full quarter launch yielded results that were in line with our expectations. We saw a proportional increase in filled scripts and a better than expected growth to net discount due to certain one-time events. We continue to diligently manage our spend while ensuring we invest appropriately to enable brand awareness and commercial access for patients in need of a Quesna. With notable milestones on the horizon, we're excited about continuing to meet our goals for the rest of 2024. With that, I'll now turn the call back over to Terrie for closing comments.

Molly Henderson: Overall, our first full quarter of launch yielded results that were in line with our expectations. We saw a proportional increase in film scripts and a better than expected gross to net discount due to certain onetime events.

Terrie: We continue to diligently manage our spend while ensuring we invest appropriately to enable brand awareness and commercial access for patients in need of a questioner.

Terrie: With notable milestones on the horizon, we're excited about continuing to meet our goals for the rest of 2024.

Terrie: With that I'll now turn the call back over to Terry for closing comments.

Molly Henderson: <unk>.

Terrie J. Curran: Thank you, Molly, and thank you again to everyone joining us on today's call. When Quesna was approved, I shared this slide to outline our perceived path to a potential blockbuster opportunity. Now, six months into our journey, we have delivered according to the plan. Our first quarter results demonstrate that Phathom is off to a strong start in 2024.

Terrie: Thank you Mollie and thank you again to everyone joining us on today's call.

Terrie J. Curran: And the question was approved I shared this slide to outline out the same path to a potential blockbuster opportunity now.

Terrie J. Curran: Now six months into our journey, we have delivered according to the plan.

Terrie J. Curran: Our first quarter results demonstrate that fathom is off to a strong start in 2024.

Terrie J. Curran: We've made significant progress in growing demand, accelerating filled prescriptions, and expanding brand awareness. Our launch metrics are proof that the power of Equestria is responding with both physicians and consumers. In upcoming quarters, we'll look to continue our efforts on all of these fronts, with an acute focus on establishing widespread commercial coverage throughout 2024. Simultaneously, we're nearing closer to the potential approval and label expansion of Aquesna for the daily dosing of non-erosive GERD. We believe the large patient population in this indication and similar commercial dynamics with erosive GERD create an important catalyst.

Terrie J. Curran: We've made significant progress in growing demand accelerating filled prescriptions and expanding brand awareness.

Terrie J. Curran: Our launch metrics that proves that the power of our questionnaire is resonating with both physicians and consumers.

Terrie J. Curran: In upcoming quarters, we will look to continue our efforts of all of these fronts with an acute focus on establishing widespread commercial coverage throughout 2024.

Terrie J. Curran: Simultaneously nearing closer to the potential approval and label expansion of equation of the daily dosing of non erosive GERD.

Terrie J. Curran: Believe the large patient population in this indication and similar commercial dynamics with erosive create an important catalyst in.

Terrie J. Curran: Internally, when we think about the potential for the Quesna, our bar is high, and we're committed to realizing this opportunity. We remain focused on our goal of displacing PPIs in this very large market, and we look forward to sharing our progress throughout the remainder of the year. Thank you for joining us today. We 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. Thank you.

Terrie J. Curran: Internally when we think about the potential for the Quesnel, our bar is high and we are committed to realizing this opportunity.

Terrie J. Curran: We remain focused on our goal of displacing <unk> in a very large market and we look forward to sharing our progress throughout the remainder of the year.

Terrie J. Curran: Thank you for joining us today, we appreciate your continued interest and support I'll now turn it over to the operator to facilitate a 10 minute question, it's efficient operator.

Operator: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A list. Our first question comes from Yatin Suneja of Guggenheim. Your line is open.

Terrie J. Curran: At this time, we will conduct a question and answer session.

Yatin Suneja: Hey guys, thank you for taking my question. A very nice update today. A couple for me, and a real quick one. Could you, I don't know if you just mentioned this, but could you talk about the split between Blink, Rx, and IMS? It seems like the fill rate has really improved to almost 41% now versus that 27-ish percent when you reported last time. Where you are on the fill rate, if you can talk about that specifically for Blink, Rx, that would be great.

Martin J. Gilligan: Okay. Good morning, Yatin. I'll cover all those things. This is Martin.

Unknown Speaker: And you just touched on, and I'd love to hear from you, how should we think about inflection when you get that label? Unknown Speaker Okay. Good morning, Yatinal.

Speaker Change: Okay Uhm, good morning, and I'll I'll cover all those as Martin. So first let me talk about Uhm Blinken Q V. I think your percentages are pretty spot on in terms of the split and I think as we always said in the past is that as we gained more access moving through the process you would start to see a shift more towards coverage scripts going to blink versus cash.

Martin J. Gilligan: So first, let me talk about Blink and Acuvia. I think your percentages are pretty spot on in terms of the split. And I think, as we've always said in the past, as we gained more access moving through the process, you would start to see a shift more towards covered scripts going to Blink versus Cache. So I think our awareness of Blink is really growing, and we're seeing it heavily utilized, but I just want to make sure for everyone on the line that we're really clear when we're talking about Blink. I think many people just think of it as the cache component of it.

Martin J. Gilligan: Cash so I think our awareness that blink is really growing and we're seeing it heavily utilized but I just wanna make sure for everyone. On the line that you are really clear when we're talking about Blink I think many people just think of it as like cash component of it.

Martin J. Gilligan: You know, there we're offering that patient support that I mentioned earlier, but as you see more coverage come on board, as we just have, you'll probably see less scripts being filled over time there. And then I'll just remind you that any script that is going to blink, that is covered, is going to a partner pharmacy that is picked up by QVIA. So that drives the rates that you're seeing and the fill rates.

Martin J. Gilligan: They're the they're we're offering that patient support that I mentioned earlier, but did you see more coverage come onboard. So we just have you'll probably see less perhaps being filled over time, there and then I'll just remind you that any script that is going to blink that is covered is going to a partner pharmacy that is picked up by qv's. So that drives the rates that you're seeing.

Martin J. Gilligan: And the fill rates and then I think the last part of your question was regarding the inflection. So we envision as we said both on the access front that we expect inflections during Q2 and Q3 as we grow our coverage just like you saw.

Martin J. Gilligan: And then I think the last part of your question was regarding the inflection. So we anticipate, as we said, both on the access front that we expect inflections during Q2 and Q3 as we grow our coverage, just like you saw, as we had with Cigna announcing today. And then I think the other inflection we'll be expecting is when we get the approval and start marketing for non-erosive CURD.

Martin J. Gilligan: As we had with Cigna announcing today.

Martin J. Gilligan: And then I think the other inflection will be expecting us upon the approval and would start marketing for non erosive guard.

Operator: Thank you. One moment for our next question. Our next question comes from Umer Raffat of Evercore. Umer, your line is open.

Speaker Change: Thank you one moment for our next question.

Umer Raffat: The next question comes from rapid of Evercore rumors your line is open.

Junshan Nong: Hi, this is Junshan Nong from Umer. Thanks for taking our question. I guess the first one, on growth to net, how much improvement should we expect throughout the year, especially towards the end of the year? And second question, on potential indication expansion. Do you expect an inflection in terms of volume in the second half, or will it be a more gradual ramp?

Umer Raffat: Oh, Hi, this is <unk>. Thanks for taking your question I guess first one gross and net how much improvement should we expect throughout the year, especially towards the end of the year and the second question.

Junshan Nong:

Junshan Nong: It's on the potential indication expansion to expect an infection in terms of volume in the second half or it will be a more gradual rent.

Molly Henderson: Hi, Sure, I'll take the growth net and then turn it over to Martin on the inflection. So, as we said, we experienced a somewhat better than expected growth net for the first quarter because of our copay assistance program not being available due to the cyber attack. We're not specifically commenting on our growth net projections for the rest of the year as we're still in negotiations with a couple other payers. But at this point, we're not seeing significant variations from our expectations.

Speaker Change: Hi, sure I'll take that Grad student mentoring never can Martin at an infection and.

Molly Henderson: As I said, we experienced a stomach better than expected <unk> for the first order and because of our Co-pay assistance program that being available due to the cyber attack and we're not specifically comedy and address projections for the rest of their as we are still in negotiations with a couple of other pairs and but at this point, we're not seem significant variations.

Martin: Expectations and.

Martin J. Gilligan: And then I'll turn it over to Martin for the inflection on NERD.

Molly Henderson: And then I'll turn it over Martin for the infection.

Martin J. Gilligan: Yeah, so I think, as I mentioned a little earlier, you know, a question before is that we do expect an inflection for non-erosive GERD. And so what we're seeing is we're going to be entering a much larger market. Erosive GERD affects 7 million patients, and that non-erosive is 15 million patients who are both diagnosed and treated. We really feel that we're not going to be starting this launch at zero like we did back in January.

Martin: Yeah, So I think as I as I mentioned, a little earlier question before is that we do expect an inflection for <unk>.

Martin J. Gilligan: And so what we're what we're seeing is we're going to be entering a much larger market erosive GERD is 7 million patients and that non erosive is 15 million patients were both diagnosed and treated but we really feel that we're not going to be starting this launch it zero like we did back in January we're going to be of the same salesforce, calling on the same physicians while.

Martin J. Gilligan: We're going to have the same sales force calling on the same physicians, but the patients have different diagnoses. Their symptoms are the same, the journeys are the same, and we hear the same level of dissatisfaction, the same level of discussion in terms of switching PPIs and adding on. So we know that the category is searching for a new mechanism, and we believe that Poquesna is that mechanism for them as it's playing out for erosive GERD. So we believe that we've started our momentum, and the erosive experience we have had thus far will really benefit us moving into the non-erosive launch.

Martin J. Gilligan: While the patients have different diagnoses or or symptoms are the same the journeys are the same and we hear the same level of dissatisfaction the same level of discussion in terms of switching ppi's and adding on so we know that the category searching for a new mechanism and we believe that request is that mechanism for them as displaying out for rose.

Martin J. Gilligan: Occurred so we believe that our we've started our momentum and the erosive experience. We have thus far will really benefit us moving into the non erosive lodge.

Unknown Speaker: Thanks. I just want to follow up. How much of the reported sales was inventory?

Speaker Change: I just wanted to follow up how how much of the reported sales inventory.

Molly Henderson: If I understand that way, inventory is inventory. So the majority of the sales for the first quarter would have been demand-related, related to those prescriptions that were filled. We're still a little bit early in the cycle to see stocking behavior, but what we're seeing so far is pretty commensurate with what you'd see in the industry. And I'd say probably around that two to three weeks range. But again, it's still a little bit early for us to see the stocking pattern.

Speaker Change: If I understood that way is inventory so the majority of the sales for the first part of it would've been demand related and related to those prescriptions that were filled.

Molly Henderson: Still a little bit early in the cycle to see stacking behavior and what we're seeing so far it's pretty can measure it with what you see in the industry and I'd say probably around that to treat me uhm range, but again, it's still a little bit early processes and patterns.

Speaker Change: Alright, thank you so much.

Operator: Thank you very much. One moment for our next question. Our next question comes from Joseph Stringer of Niedermann Company. Joseph, your line is open.

Speaker Change: Thank you very much one moment for our next question.

Operator: Our next question comes from Joseph Stringer of Needham and company Joseph Your line is open.

Joseph Robert Stringer: Hi, good morning. Thanks for taking our questions. Just a clarifying question on the link IQVIA split. If we kind of back into the numbers based on the TRX metrics you provided, I think since your last update in early March, there have been around 13,700 TRX tokens filled, and around 7,300 IQVIA scripts. So that implies a 53-47 split or roughly one-to-one IQVIA to blank since the last update. So, is that a fair assessment, question number one, and then, you know, that one-to-one split is similar to what you provided in March.

Joseph Robert Stringer: Hi, good morning, Thanks for taking our questions I just want a clarifying question on the link I Q split if we cut it back into the numbers based on the tier X matrix you provided things since our last update early March there have been around 13700 terex filled in around 7300 Ikea square.

Joseph Robert Stringer: So that requires.

Joseph Robert Stringer: Like a 50 347 splatter or roughly one to one ikea to blink since the last update so.

Joseph Robert Stringer: Is that a fair assessment of.

Joseph Robert Stringer: Question number one and then.

Joseph Robert Stringer:

Joseph Robert Stringer: That was one of the ones that are similar to what you provided and marks just want to get.

Joseph Robert Stringer: Just want to get clarification on that and then, secondly, on the potential label expansion to NERD daily dosing. Can you talk a little bit about the different market access dynamics, in particular from a payer perspective, between the current launch and erosive GERD and the potential launch in NERD? For example, you're securing coverage for the bottle right now, as we understand it, so when it comes time for label expansion to NERD, it's not a separate negotiation with payers is for the indication is, is that also a fair Okay, Joey.

Joseph Robert Stringer: Clarification on that and then secondly.

Joey: On the potential label expansion to nerd.

Speaker Change: Daily dosing.

Joey: Talk a little bit about the different market access dynamics and can take off from a payer perspective between.

Joey: The current law generoso occur.

Joseph Robert Stringer: And the potential are launching <unk> for example, your current coverage for the bottle right now as as we understand it. So when it comes time for label expansion 200 indication.

Joey: It's not a separate negotiation with with Payors or the indication is.

Joey: Is that also fair assumption.

Martin J. Gilligan: Okay, Joey, so I'll split this into two parts. I just want to make sure on the first one that I understand the question. Your question is, you were estimating that on our last earnings call, the ratio between Blink and Acuvia was one to one. And you're asking if it's 60-40 now, is that correct? Yeah, so I might have lost you.

Joseph Robert Stringer: Hey, Joey so uhm out of us.

Joey: <unk> into two parts I, just Wanna make sure on the first one I understand the question. Your question as you are estimating that in our last earnings call the ratio between Blink.

Martin J. Gilligan: Blink and <unk> was one to one.

Martin J. Gilligan: And you're asking if it's 60 40 now is that correct.

Martin J. Gilligan: So the answer to that question is yes, but I want to make sure I understand it. So right now, what we're reporting is that about 50% of the scripts are going through what I'll call the retail channel versus going through our cash support, which is exactly what we set out when we spoke on the last earnings call, that as more access comes on board, you would expect that there would be a shift in the ratio between what you see in a QVIA versus cash scripts.

Joey: Yeah, So I might've lost Ya, but yet. So these are the answer that question is yes, I Wanna make sure I understood. It so right now what we're reporting is at about 60% of the scripts are going through what I'll call the retail channel versus going through our cash support which is exactly I think that we set out when we spoke and the last earnings call.

Martin J. Gilligan: That is more access comes on board you would expect that our capitals b a shift in ratio between what you see in the queue via versus cash scripts and we anticipate that continues as we get more coverage, which leads into the second part of your question in terms of non erosive in the daily dosing, we are expecting the approval.

Martin J. Gilligan: And we anticipate that continuing as we get more coverage. Which leads into the second part of your question in terms of non-erosive and daily dosing. We are expecting approval with our PDUFA on July 19. And right now, generally, as we look at coverage, it's always for packaging or presentation, not by indication. And this is how payers work.

Martin J. Gilligan: With our producer of July 19, and right now generally as we look at our coverage for pack is always for packaging our presentation not by indication and this is how.

Martin J. Gilligan: Players work, so when we'd been reporting our data as of right now today of $72 million.

Martin J. Gilligan: So when we've been reporting our data as of right now today, of 72 million, that's all about the bottle. So we would anticipate that that bottle coverage will carry forward for non-erosive, and it's our expectation that we would see the same type of coverage after approval with non-erosive that we have prior to.

Martin J. Gilligan: It's all about the bottle. So we would anticipate that that bottle coverage will carry forward for non erosive and it's our expectation that we would see the same type of coverage after approval with non erosive that we have prior to.

Joseph Robert Stringer: Great. That's very helpful. Thank you for taking the time to answer our question.

Speaker Change: Great. That's very helpful. Thank you for taking our questions.

Operator: Thank you very much. One moment for our next question. Our next question comes from Paul Choi of Goldman Sachs. Paul, your line is open.

Speaker Change: Thank you very much one moment for our next question.

Paul Choi: Hi, good morning, team. And thanks for taking our questions. I have two.

Paul Choi: Our next question comes from Paul truly of Goldman Sachs. Paul Your line is open.

Paul Choi: The first one is, Martin, I want to follow up a little bit on your comments and your prepared remarks regarding refills. And can you maybe just comment or help us quantify what percentage of patients who get a script filled come back and are able to stick with the treatment get a second bottle just to help us understand how many patients are sticking with the treatment from the start of treatment. Onto the maintenance phase, any quantification there would be would be helpful.

Paul Choi: Hi, Good morning came and thanks for taking our questions I have to the first one is Martin and I wanted to follow up a little bit on your comments in your prepared remarks regarding refills and can you may be just comment helped us quantify what percentage of patients who are getting a script fell to come back.

Paul Choi: And are able to.

Paul Choi: Stick with Ah get a second bottle just to help us understand how many patients are sticking with the treatment from with with requests from treatment onto the maintenance phase any quantification there would be would be helpful.

Paul Choi: And my second question is, as you look at the mix between the bottle and the pack, at least as expressed by the IQVIA data, do you think that's a fair proxy for what the mix will look like in the indications going forward here as you expand into NRDA as well? Thanks for taking our questions.

Paul Choi: And my second question is.

Paul Choi: As you look at the mix between the.

Paul Choi: The bottle and the packs at least as expressed by the Ikea data do you think that's a fair proxy for what the mix will look like.

Paul Choi: Indications.

Paul Choi: Going forward here as you expand into a nerd as well thanks for taking our questions.

Martin J. Gilligan: Absolutely. So the first one on refills, yes, so we are seeing two things that are also related to refills. We're seeing more patients come back now and continue on therapy. So I'm not ready to quantify that for you today, but I can tell you that that's exactly what's happening. And you see that in our TRX numbers as those TRXs continue to increase. We also know that more physicians are writing. And as I just said before, they're also writing for more patients.

Speaker Change: Absolutely. So the first one on the rebuild yet so we are seeing two things that are also related to refill says, we're seeing more patients come back now and continuing on therapy. So I'm not ready to quantify that for you today, but I can tell you that.

Martin J. Gilligan: That's exactly what's happening and you see that in our tier X numbers.

Martin J. Gilligan: Those to your ex has continued to increase we also know that more physicians are writing and as I said before there are also writing for more patients. So I think that's what you're seeing reflective in the Trs data and then your question on the mix of bottle versus packs yeah. The pact, that's about 10% and are planning that's what we always assumed to see.

Martin J. Gilligan: So I think that's what you're seeing reflected in the TRX data. And then your question on the mix of bottles versus packs. Yeah, the packs are about 10%. And in our planning, that's what we always assume to see in our mix. And you should expect that to carry forward.

Martin J. Gilligan: And our mix and you should expect that to carry forward.

Operator: Great. Okay. Thank you. Thank you very much. One moment for our next question. Our next question comes from Chase Knickerbocker of Craig Hollum. Chase, your line is open.

Speaker Change: Great. Okay. Thank you.

Speaker Change: Thank you very much one moment for our next question.

Operator: Our next question comes from Chase Knickerbocker of Craig Harlem finish your line is open.

Chase Richard Knickerbocker: Hi, good morning, everyone. This is Abir Hu on behalf of Chase here. Just one from us for BlinkRx. So, you know, when should we expect the volume that is under BlinkRx here to become a really fairly small amount of the overall volume? Let's say less than 20%. You know, should we think of that kind of being in the latter half of 2024? Or do you think it won't won't happen until 2025?

Chase Richard Knickerbocker: Good morning, everyone. This is Harper, who entre chase here, just one from us for a blinker X.

Chase Richard Knickerbocker: So when should we expect a volume that is under Blink R X here to become really fairly small amount over of the overall volume, let's say less than 20 per cent should we think of that kind of being in the latter half of 2024 or do you think.

Chase Richard Knickerbocker: Doesn't that won't happen until 2025.

Martin J. Gilligan: So, Chase, I think it's hard to put a number on that. I think what you can expect is that, as I've been saying, that it's going to decline over time. You know, we've got an interesting launch and a positive launch. We're bringing on new physicians, we're bringing on new payers, and we're in the middle of a launch, and we're getting ready for a launch. So, as this continues to grow, you're just going to see a lot of movement on a lot of metrics, given all those factors.

Speaker Change: So chase I think it's hard to put a number on that I think what you can expect is it that's going to as I've been saying is that that has been a decline over time, we've got an interesting launch in a positive launch we're bringing on new physicians were bringing a new payers and we're in the middle of a launch and we're getting ready for a launch so.

Martin J. Gilligan: I think the key signals for us are two things. You heard today the increase in access, and you heard, as we said last time, start to see that shift. What would be the patient support or cash that goes through Blink? So, I don't have a number to give you today. I think there's a lot of movement in the market for us that's all very positive, as I just mentioned, and you'll continue to see that decline during the year.

Martin J. Gilligan: This continues to grow with you are just going to see a lot of movement on a lot of metrics given all those factors I think the key signal to one or two things you heard today the increase in access.

Martin J. Gilligan: And you've occurred as we said last time start to see that shift.

Martin J. Gilligan: What would be the patient support or cash that goes through blink. So don't have a number to give you today I think there's a lot of movement in the market for us. That's all very positive as I, just mentioned and you will continue to see that decline during the during the year.

Speaker Change: Thank you.

Operator: Thank you very much. One moment for our next question. Our next question comes from Annabelle Smimmy of Staffel. Annabelle, your line is open.

Speaker Change: Thank you very much one moment for our next question.

Annabelle Smimmy: Our next question comes from Annabel swimming of stifle Annabel Your line is open.

Annabelle Smimmy: Hi all, thanks for taking my question. I guess I'm going to get just a little bit more granular on Blink for a minute. So you said that it's going to decrease over time, but is there a scenario where you have increased demand faster than you get payers on board, and perhaps you have the percentage going through Blink increasing before it decreases? I guess that's the first question. And as far as coverage is concerned and what the tail of Blink might be, is there a steady state of coverage that you think that you'll get to, like 70% or 80%, and, you know, on that tail end, is Blink going to continue, or is it going to stop at some point, and then those patients just don't get prescriptions fulfilled? And so just trying to understand the go-forward dynamics there. Thanks.

Annabelle Smimmy: Hi, all thanks for taking my question.

Annabelle Smimmy: I guess I'm going to get just a little bit more granular I'm blank for a minute. So you said that is going to decrease over time, but is there a scenario where.

Annabelle Smimmy: You have increased demand faster than you get parents onboarding, perhaps it has the percentage of <unk> Blink increasing before it decreases I guess, that's the first question and as far as coverage is concerned and what the tail of Blink might be is there a stage set of coverage that you think that you'll get to like 70% or 80% to that.

Annabelle Smimmy: And on that talent.

Annabelle Smimmy:

Annabelle Smimmy: Blinking to continue or are you just a 10 point kind of stock in the notes patience.

Annabelle Smimmy: Don't get prescription stuff note uhm. Thanks, So I'm just trying to understand the Gulf War dynamics, Sir thanks.

Martin J. Gilligan: Yeah, so Annabelle, there were a couple of questions there, but they all have a common thread and are related, so I think I'm going to hit them all here. Is there a case where demand might grow faster than payer coverage? I, that's an interesting question. I think we've seen steady growth. And that's what we feel good about our demand is that it's steadily growing. So I think you'll continue to see that. And we're far along in negotiations with the other major payers, which will be continuing through Q2 and Q3. So I don't think that's going to be the case.

Speaker Change: Yeah. So <unk> there were a couple of questions that are but they're all have a common ribbon related so.

Martin J. Gilligan: Think I'm going to hit a mall here is is there a case where demand may grow faster than payer coverage.

Martin J. Gilligan: That's an interesting question I think we've seen a steady growth and that's what we feel good about our demand is it steadily growing so I think you'll continue to see that and we're we're far along in negotiations with the other major payers, which will be continuing through Q2 and Q3. So I don't think that's going to be the case I think we're gonna have.

Martin J. Gilligan: I think we're going to have coverage come on board as we see growth in prescriptions. And I think the next part of that was, would we see an increase in cash blink coverage scripts before we saw a decrease? I'm not prepared to say that that's correct or incorrect, but it's not what we're expecting.

Martin J. Gilligan: Coverage come onboard as we see growth in prescript prescriptions and I think the next part of that was wood.

Martin J. Gilligan: Would we see an increase in cash blinked covered scripts before we saw decreased I'm not prepared to say that that's that's correct or incorrect, but it's not what we're expecting.

Martin J. Gilligan: I think you saw a big change from our last earnings call, where we had that one to one versus 60-40. So our anticipation is that it will continue to decline. And then, will we continue Blink? I mean, we'll always look to do the right things for patients. There will probably always be some level of coverage that doesn't exist, and we want to make sure that we do the right things for patients. So we'll always be there.

Martin J. Gilligan: I think he saw a big change from our last earnings call where.

Martin J. Gilligan: Where we had that one to one versus 60 40. So our anticipation is that will continue to decline.

Martin J. Gilligan: And then will we continue blink.

Martin J. Gilligan: <unk> will always look to do the right things for patients Uhm, though I'll, probably always be some level of coverage that doesn't exist.

Martin J. Gilligan: And we wanted to make sure that we do the right things for patients. So will always be in there and then in terms of I think one of the other questions was steady state for coverage I think we're going to see it continue to grow as I, just said a moment ago between going into Q2, which were in and you'll see already seen it. So we've kind of kept that.

Martin J. Gilligan: And then in terms of, I think, one of your other questions was steady state for coverage. I think we're going to see it continue to grow, as I just said a moment ago, between going into Q2, which we are in, and you've already seen it. So we've kind of kept that statement that we made on the last earnings call that we expected to see more growth in Q2 and Q3. So we've already had our first step in Q2, and we believe there's more to come in Q2 and Q3.

Martin J. Gilligan: That statement that we made in the last year and his call that we expected to see more growth in Q2 and Q3. So we've already had our first step in Q2, when we believe there's more to come in Q2 and Q3.

Speaker Change: Okay. Thank you.

Operator: Thank you very much. One moment for our next question. Our next question comes from Matthew Caufield of H.C. Wainwright. Matthew, your line is open.

Speaker Change: Thank you very much one moment for our next question.

Matthew Coleman Caufield: Our next question comes from Matthew Caulfield of HC Wainwright Matthew Your line is open.

Matthew Coleman Caufield: Hi, good morning, guys. So for the launch, is there any granularity that you can share at this stage between the prescriptions coming from GI or primary care? And do you anticipate one or the other being a greater target or contributor for growth?

Matthew Coleman Caufield: Hi, Good morning, guys. So for the launch is there any granularity that you can share at this stage between the prescriptions coming from Gi or primary care.

Matthew Coleman Caufield: And do you anticipate one or the other being a greater target or contributor for growth.

Matthew Coleman Caufield: Thanks.

Martin J. Gilligan: So, I'm sorry. Did you finish?

Matthew Coleman Caufield: I'm, sorry did you finish [laughter] yeah yeah.

Speaker Change: Okay, I'm, sorry, I thought I cut you off just wanted to make sure. So yes.

Unknown Speaker: Yeah. Yeah. Yeah. Okay. I'm sorry. I thought I would cut you off.

Martin J. Gilligan: So right now we're seeing not to our surprise that.

Martin J. Gilligan: Just want to make sure. So yeah, so right now we're seeing, not to our surprise, that the percentage of scripts is leaning heavier towards GI. So, what's the rationale for that? I know we've spoken in the past that when we sent our sales force out, their objective was to start at the higher deciles, which would be the higher volume position. So really, starting on those decile 10s and working down to 9, 8, etc.

Unknown Speaker: The percentage of scripts are leaning heavier towards Gi so what's the rationale for that.

Martin J. Gilligan: I know he's spoken in the past that when we send our sales force out there.

Martin J. Gilligan: Their objective was to start at the higher decile, which would be the higher volume physician. So really starting on those decile 10, some working down to nine eight et cetera, and that's where you see the imbalance between the G I as being the higher docile and the primary care being lower so yeah. So right now at this point, we're seeing a higher slant towards gastroenterologist, but we're actually seeing.

Martin J. Gilligan: And that's where you see the imbalance between the GIs being the higher decile and the primary care being the lower decile. So, yes, so right now, at this point, we're seeing a higher slant towards gastroenterologists, but we're actually seeing primary care come on board.

Martin J. Gilligan: Primary care come onboard so it's playing out exactly as we thought it would.

Martin J. Gilligan: Very helpful. Thank you. And then maybe if I could just ask one more quick question. In regards to the current fill rate, do you know how that kind of stacks up against something like a more established PPI? Presumably, not all the PPI prescriptions are getting filled either, but just curious how that could compare.

Martin J. Gilligan: Very helpful. Thank you and then maybe if I could just ask one more quick question in regards to the current feel right [noise].

Martin J. Gilligan: No how that kind of stacked up against something like a more established VPI, presumably not all the PPI prescriptions are getting filled either but just curious how that could compare possibly.

Martin J. Gilligan: Yeah, so I think that's a hard comparison. I think when you're looking at something that's a generic product that's been around for 30 some odd years and is also OTC, a better way to look at it is our fill rate as it compares to a launch product and where we are. And what you heard today was a rate we have of 41%. And we know, looking at other launches, that not only is that, you know, consistent, but it's actually in a really good position right now at our place of launch.

Speaker Change: Yeah. So I think I think that's a hard comparison.

Martin J. Gilligan: I think when you're looking at something that's a generic product that's been around for 30, some odd years and is also OTC.

Martin J. Gilligan: I think a better way to look at it as <unk> as a compares to a large product and where we are.

Martin J. Gilligan: And what you heard today was right we have of <unk>.

Martin J. Gilligan: 41% and we know looking at other launches that not only is that you know.

Martin J. Gilligan: Consistent but it's actually in a really good position right now at our place at launch so a.

Martin J. Gilligan: So, you know, and a lot of that's kind of driving in terms of the coverage we have right now has come on board, as we announced today with Cigna, and that fill rate will only go up moving forward. Great. Very helpful.

Martin J. Gilligan: A lot of let's go driving in terms of the coverage we have right now has come on board.

Martin J. Gilligan: As we announced today with Cigna.

Martin J. Gilligan: That fill rate will only go up moving forward.

Matthew Coleman Caufield: Great. Very helpful, guys. I appreciate it.

Speaker Change: Great very helpful guys I appreciate it.

Matthew Coleman Caufield: [noise] services.

Operator: Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect.

Operator: And your email address.

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