Q2 2024 Phathom Pharmaceuticals Inc Earnings Call

August 8, 2024

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Operator: Hello, and welcome to the Phantom Pharmaceuticals second quarter 2024 earnings results call. At this time, all participants are in a listen-only mode. After the presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automatic message advising that your hand is raised. Please be advised that today's conference is being recorded. With that, I would like to turn the conference over to Eric Sciorilli, Phathom's Head of Medicine Relations. Please go ahead.

Speaker Change: Hello, and welcome to the Phenom Pharmaceuticals second quarter 2024 earnings results call.

Speaker Change: At this time, all participants on a listen only mode.

Speaker Change: After the presentation, there will be a question and answer session to ask a question. During this session you will need to press star one one on your telephone you will then hear an automatic message advising your hand is Reyes. Please.

Please be advised that today's conference is being recorded with that I would like to turn the conference over to Eric Shirley <unk> 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 second 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 that in second quarter 2024 results.

Speaker Change: 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, Nino <unk>, Our Chief operating Officer will also be joining the team during the Q&A portion of today's call.

Speaker Change: Just a couple of logistical items before we get started 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 under the news releases 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: 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. In addition, the recording of today's webcast can be found in the events and presentations section of our corporate website.

Further the recording of today's webcast can be found under the events and presentations section of our corporate website.

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 Phahom's control. Actual results can materially differ from these forward-looking statements, and any such risks can materially adversely affect the business, the results of operations, and the 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.

Speaker Change: 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 <unk> control.

Speaker Change: 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.

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 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. Thank you.

fathom: 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.

fathom: With that I will now turn the call over to Terrie, Curran balanced president and CEO to kick us off sorry.

Terrie Curran: Thank you, Eric, and thank you to all those joining us on today's call. Phathom was founded on a vision and a set of goals that, from the start, many considered lofty. But over the last five years, we've checked one box after another.

Terrie Curran: Thank you Eric and thank you to all of those joining us on today's call.

Terrie Curran: <unk> was founded in one vision and a set of goals that from the start many consented lofty, but over the last five years, we've checked one box after another <unk> <unk>.

Terrie Curran: We've demonstrated differentiation versus a 30-year-old standard of care, earned approvals for broad labels, launched multiple products spanning three indications, and secured favorable commercial coverage in a genericized market. To date, we've accomplished exactly what we set out to do. So whether you're new to the story or have followed us since the start, I encourage you to reflect on our track record as it sets the stage for how we intend to continue delivering on our goals for the QEDNA.

Terrie Curran: Demonstrated differentiation versus a 30 year old standard of care and approval for broad levels launched multiple products spanning three indications and secure the favorable commercial coverage and a generic sized market to date, we've accomplished exactly what we set out to do.

Terrie Curran: So whether you're unusual that story or followed us since the start I encourage you to reflect on our track record as it sets the stage for how we intend to continue delivering on our goals for the equipment.

Terrie Curran: Today, I'm excited to report specifically on the great progress made during the second quarter of 2024. The team has been focused on executing our commercial launch strategies with physicians, patients, and payers. In only our second full year following launch, we believe the results of these efforts have been impressive and demonstrate strong momentum as we enter the back half of 2024. Before diving into our latest launch metrics, I'd like to provide an update on two major developments.

Terrie Curran: Today, I'm excited to report specifically on the great progress we made during the second quarter of 2024. The team has been focused on executing our commercial launch strategies with physicians, patients, and payers. In only our second full quarter following launch, we believe the results of these efforts have been impressive and demonstrate strong momentum as we enter the back half of 2024. Before diving into our latest launch metrics, I'd like to provide an update on two major developments.

Terrie Curran: Today I'm excited to report specifically on the great progress we made during the second quarter of 2024. The team has been focused on executing our commercial launch strategies with physicians patients and payers.

Terrie Curran: And only our second full quarter. Following launch we believe the results of these efforts have been impressive and demonstrates strong momentum as we enter the back half of 2024.

Speaker Change: Before diving into our latest launch victrix I'd like to provide an update on two major developments.

Terrie Curran: The Quasen is a Pribble for non-erotic good and our expanded commercial coverage. As we announced on July 18, the FDA approved the Quesna for the relief of heartburn associated with non-erosive GERD in adults. We're extremely pleased with the strength of the label, which highlighted Quesna's rapid onset of action and durability of effect. This outcome was a key milestone in our commercialization journey, expanding the total addressable markets for Quesna. GERD conditions impact about 65 million U.S. adults annually, with about 22 million being diagnosed and treated with a prescription medication. Non-erosive good is alone responsible for over two-thirds of this population.

Terrie Curran: The Questioner's Approval for Non-Oriented Goods and our expanded commercial coverage. As we announced on July 18, the FDA approved Quizna for the relief of heartburn associated with non-erosive GERD in adults. We're extremely pleased with the strength of the label, which highlighted Quesna's rapid onset of action and durability of effect. This outcome was a key milestone in our commercialization journey, expanding the total addressable markets for Quesna. GERD conditions impact about 65 million U.S. adults annually, with about 22 million being diagnosed and treated with a prescription medication. Non-erosive good is alone responsible for over two-thirds of this population.

Terrie Curran: The equation is approval for <unk> is good.

Terrie Curran: Our expanded commercial coverage.

Terrie Curran: As we announced on July 18, the FDA approved <unk> for the relief of heartburn associated with non erosive GERD in adults.

Terrie Curran: Screamingly pleased with the strength of the label, which highlighted the question is rapid onset of action and durability of effect.

Terrie Curran: This outcome was a key milestone in our commercialization journey expanding the total addressable market for the question.

Terrie Curran: Good conditions impacted about 65 million U S. Adults annually with about 22 million being diagnosed and treated with a prescription medication.

Terrie Curran: Non erosive good alone is responsible for either two thirds of this population.

Terrie Curran: This impressively large market has demonstrated the need for an alternative treatment option, given the higher degree of patient dissatisfaction and inadequate symptom relief. Building upon our previous approval for erosive GERD, this third and largest indication allows Quesna to be considered as a treatment option for all patients suffering from GERD or H. pylori. In anticipation of Producer Action Day, our existing sales force was pre-trained and prepared to begin promotion in the field immediately upon approval.

Terrie Curran: This impressively large market has demonstrated the need for an alternative treatment option, given the higher degree of patient dissatisfaction and inadequate symptom relief. Building upon our previous approval for erosive GERD, this third and largest indication allows Quesna to be considered as a treatment option for all patients suffering from GERD or H. pylori. In anticipation of PDUFA Action Day, our existing sales force was pre-trained and prepared to begin promotion in the field immediately upon approval.

Terrie Curran: This is principally large market has demonstrated the need for an alternative treatment option given the high degree of patient dissatisfaction and inadequate symptom relief.

Terrie Curran: Building upon our previous approval rates are good.

Terrie Curran: Third and largest indication allows <unk> to be considered as a treatment option for all patients suffering from GERD all H pylori.

Speaker Change: In anticipation of the Paducah action day.

Speaker Change: Existing salesforce was pre trained and prepared to begin promotion in the field immediately upon approval.

Terrie Curran: It is important to note that the non-erosive GERD patient journey and target prescriber base mirrors that of erosive GERD, which allows us to leverage our existing promotional efforts. In fact, over the past two weeks, we've already seen a notable increase in demand for 10 milligram tablets, which is the approved dose for non-erosive GERD. Moreover, we believe the commercial access we have secured thus far also applies to non-erosive GERD patients who are prescribed the Quizna bottles. Given the overlapping commercial dynamics across GERD conditions, our strategy has always been to hit the ground running.

Terrie Curran: It is important to note that the non-erosive GERD patient journey and target prescriber base mirrors that of erosive GERD, which allows us to leverage our existing promotional efforts. In fact, over the past two weeks, we've already seen a notable increase in demand for 10mg tablets, which is the approved dose for non-erosive GERD. Moreover, we believe the commercial access we have secured thus far also applies to non-erosive GERD patients who are prescribed the Quizna bottles. Given the overlapping commercial dynamics across GERD conditions, our strategy has always been to hit the ground running.

Terrie Curran: It is important to note that the non erosive patient journey and target prescriber base mirrors that of erosive, GERD, which allows us to leverage our existing commercial efforts in fact over the past two weeks, we've already seen a notable increase in demand for 10 milligram tablets, which are.

Terrie Curran: The approved dose for non erosive GERD.

Terrie Curran: We believe the commercial access we have secured thus far also applies to non erosive GERD patients who are prescribed equipment bustles.

Terrie Curran: Given the overlapping commercial dynamics across good conditions, our strategy has always been to hit the ground running with this approval the equation and has now cleared another hurdle and is poised to recognize the full good market opportunity as we work towards our goal of displacing PPI.

Terrie Curran: With this approval, Quesna has now cleared another hurdle and is poised to recognize the full GERD market opportunity as we work towards our goal of displacing PPI. Our recent expansion of commercial coverage will be a key driver in achieving that goal. After announcing our placement on Cigna formularies midway through Q2, we recently announced the addition of Quesna to CVS Caremark's national formularies. As the country's largest pharmacy benefit manager, responsible for over 26 million commercial lives, this was a major development in ensuring widespread coverage for Quesna, and later in this call, Martin will provide an update on several other key payers for which we recently secured former replacement.

Terrie Curran: Our recent expansion of commercial coverage will be a key driver in achieving that fall after announcing our placement on Cigna formularies Midway through Q2, we recently announced the addition of the quest to Cvs Caremark National Formularies.

Terrie Curran: As of the country's largest pharmacy benefit manager responsible for over 26 million commercial lives. This was a major development and ensuring widespread coverage for the equipment.

Terrie Curran: And later in this call Martin will provide an update on several other key payors for which we've recently secured formulary placement.

Terrie Curran: Our efforts have resulted in an estimated 116 million commercially insured lives now having access to Quesna. Importantly, across the majority of this coverage, we were successful in securing positions on formeries in line with our single-step strategy through a generic PPI prescription.

Terrie Curran: Our efforts have resulted in an estimated 116 million commercially insured lives now having access to Quesna. Importantly, across the majority of this coverage, we were successful in securing positional informeries in line with our single-step strategy through a generic PPI prescription.

Martin: Our efforts have resulted in an estimated $116 million commercially insured lives now having access to the questioner.

Martin: Importantly across the majority of this coverage we were successful in securing positional formularies in line with our single step strategy through a generic PPI prescription.

Terrie Curran: We're extremely pleased with this broad commercial coverage we've achieved for Quesna while still in the early stages of launch. One of the most impressive examples of our launch success has been the evolution of Quesna volume. I'm pleased to share that, since launch, Total Demand has now surpassed 122,000 scripts written, of which over 16,000 have been filled by patients. We're remaining energized by these metrics and believe their growth trajectories are a testament to increasing interest from prescribers and expanded availability for patients.

Terrie Curran: We're extremely pleased with this broad commercial coverage we've achieved for Requisna while still in the early stages of launch. One of the most impressive examples of our launch success has been the evolution of Quesna volume. I'm pleased to share that, since launch, Total Demand has now surpassed 122,000 scripts written, of which over 16,000 have been filled by patients. We're remaining energized by these metrics and believe their growth trajectories are a testament to increasing interest from prescribers and expanded availability for patients.

Terrie Curran: Extremely pleased with its broad commercial coverage, we've achieved for the question and while still in the early stages of launch.

Martin: One of the most impressive examples of our success has been the evolution of the quick no volume I'm pleased to share that launch to date total demand has now surpassed the 122000 scripts written.

Terrie Curran: All of which are the 60000 had.

Terrie Curran: Had been filled by patients we remaining energized by these metrics and believe the growth trajectories are testament to increasing interest from prescribers and expanded availability for patients.

Terrie Curran: Over the last few months, we've continued to see extraordinary testimonials pour in from these physicians and patients alike. We receive positive feedback almost daily telling us how Ciguesna is relieving symptoms quickly and improving lives. Pictures of healed erosion, stories of sleeping through the night for the first time in years, and overall quality of life improvements are just some of the anecdotes that have made us proud to be able to offer this first-in-class treatment option to patients suffering from acid-related conditions.

Terrie Curran: Over the last few months, we've continued to see extraordinary testimonials pour in from these physicians and patients alike. We receive positive feedback almost daily telling us how Ciguesna is relieving symptoms quickly and improving lives. Pictures of healed erosions, stories of sleeping through the night for the first time in years, and overall quality of life improvements are just some of the anecdotes that have made us proud to be able to offer this first-in-class treatment option to patients suffering from acid-related conditions.

Terrie Curran: Over the last few months, we've continued to see extraordinary testimonials pull in from these physicians and patients alike. Almost daily received positive feedback telling us how the questioner is relieving symptoms quickly and improving lives, which is the yield erosion stories at sleeping through the night for the first time in years.

Terrie Curran: And overall quality of life improvements and just some of the anecdotes that have made us proud to be able to offer. This first in class treatment option to patients suffering from ACA related conditions.

Terrie Curran: And with non-erosive now approved, we're thrilled by the opportunity to provide these benefits to millions more patients in need. In parallel with LAUNCH, we continue to explore development opportunities for Quesna. We're planning to initiate two clinical programs, a phase three trial for as-needed dosing in non-erosive GERD, and a phase two trial in eosinophilic esophagitis or EOE. Both programs aim to leverage the rapid, potent, and durable asset suppression profile of the questioner.

Terrie Curran: And with non-erosive now approved, we're thrilled by the opportunity to provide these benefits to millions more patients in need. In parallel with LAUNCH, we continue to explore development opportunities for Quesna. We are planning to initiate two clinical programs, a phase three trial for as-needed dosing in non-erosive GERD and a phase two trial in eosinophilic esophagitis or EOE

Terrie Curran: And with <unk> now approved we're thrilled by the opportunity to provide these benefits to millions more patients they made.

Speaker Change: In parallel with launch we continue to explore development opportunities for requests that we're planning to initiate two clinical programs a phase III trial for as needed dosing and non erosive GERD and our phase two trial in eastern affiliate Gustavo <unk> or <unk>.

Terrie Curran: Both programs aim to leverage the rapid, potent, and durable asset suppression profile of the Quesna. If these programs lead to FDA approvals, we believe these indications will continue to expand that total addressable market and further differentiate the Quesna from PPIs, which are not approved for either indication. On the financial side, Molly will further detail our second quarter 2024 results later in the call, for which we reported revenues of $7.3 million and ended with $276 million in cash.

Terrie Curran: Both programs aimed to leverage the rapid potent and durable assets depression profile of the Quiznos.

Terrie Curran: If these programs lead to FDA approvals. We believe these indications will continue to expand the total addressable market and further differentiate the questioner from PPI, which are not approved for either indication.

Terrie Curran: On the financial side, Molly will further detail our second quarter 2024 results later in the call for which we reported revenues of $7 3 million and ended with $276 million in cash we have.

Terrie Curran: We remain confident that our strong balance sheet will enable us to continue delivering on our launch and development strategy. After two full quarters on the market, Quesna's commercialization journey has progressed extremely well. Each quarter, we build upon our previous successes, bringing us closer to achieving the blockbuster opportunity we believe is possible for Quesna. Today's results are evidence of our preparedness and commitment to delivering critical milestones in a short period of time.

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

Terrie Curran: After two full quarters on the market, Quesna's commercialization journey has progressed extremely well. Each quarter, we build upon our previous successes, bringing us closer to achieving the blockbuster opportunity we believe is possible for Quesna. Today's results are evidence of our preparedness and commitment to delivering critical milestones in a short period of time. We have unlocked the largest segment of the GERD market and enhanced access for millions of patients. I'm looking forward to continuing this journey and seeing Quesna's position grow in the marketplace. I'll now turn the call over to Martin to dive deeper into recent commercial updates.

Speaker Change: After two full quarters on the market acquaintances commercialization journey has progressed extremely well each quarter, we build upon our previous successes, bringing us closer to achieving the blockbuster opportunity. We believe is possible falls equivalent today.

Speaker Change: Today's results are evidence of our preparedness and commitment to delivering critical milestones in a short period of time.

Terrie Curran: We've unlocked the largest segment of the GERD market and enhanced access for millions of patients. I'm looking forward to continuing this journey and seeing Quesna's position grow in the marketplace. I'll now turn the call over to Martin to dive deeper into recent commercial updates.

Terrie Curran: We've unlocked the largest segment of the good market and enhanced access to millions of patients.

Terrie Curran: Looking forward to continuing this journey and seeing the business position grow in the marketplace I will now turn the call over to Martin to dive deeper into recent commercial update Martin.

Martin Gilligan: Thanks, Terrie, and hello, everyone. I'm excited to share further details on the great progress we've made over the last three months. The Quesna launch is advancing as anticipated, and we're happy with our latest performance metrics, which I will touch on shortly. As for the scope of the launch timing, we still consider ourselves in the early stages of the journey, and we've already made significant strides in building brand recognition and commercial coverage.

Martin Gilligan: Thanks, Terrie, and hello everyone. I'm excited to share further details on the great progress we've made over the last three months. The Quesna launch is advancing as anticipated, and we're happy with our latest performance metrics, which I will touch on shortly. In terms of launch timing, we still consider ourselves in the early stages of the journey, and we've already made significant strides in building brand recognition and commercial coverage.

Martin: Thanks, Terry and Hello, everyone I'm excited to share further details on the great progress we've made over the last three months.

Martin: <unk> launches advancing as anticipated and we're happy with our latest performance metrics, which I will touch on shortly.

Martin: And the scope of launch timing, we still consider ourselves in the early stages of the journey that we've already made significant strides in building brand recognition and commercial coverage.

Martin Gilligan: I'll share updates on several of our commercial tactics, but allow me to begin with perhaps the clearest indicators of progress, our launch metrics. Today, we're reporting our latest available written and filled prescription data as of July 26, which is exactly three months since our previously reported data. Over that period, the number of EQUESMA scripts written has grown by more than 180% to over 122,000 prescriptions, while the number of scripts filled has grown by more than 240% to over 60,000 prescriptions. In tandem, the number of prescribers who have written a filled script has now increased to roughly 8,200 as of July 19. We are pleased to see sustained material growth across all three of these metrics.

Terrie Curran: Sure updates on several of our commercial tactics, but allow me to begin with perhaps the clearest indicators are for progress our launch metrics.

Terrie Curran: Today, we are reporting our latest available written and filled prescription data as of July 26, which is exactly three months since our previously reported data.

Terrie Curran: Over that period, the number of <unk> scripts written has grown by more than 180% to over 122000 prescriptions, while the number of scripts filled has grown by more than 240% to over 60000 prescriptions.

Terrie Curran: In tandem the number of prescribers, who have written a filled script has now increased to roughly 8200 as of July 19th.

Terrie Curran: We are pleased to see sustained material growth across all three of these metrics.

Martin Gilligan: On a quarterly basis, we observed sequential growth of more than 265%, with the number of filled scripts increasing from 9,500 in Q1 to 35,000 in Q2. As we've clarified in previous quarters, these figures include prescriptions flowing through retail pharmacies, which are captured by IQVIA, as well as those flowing through BlinkRx, one of our patient assistant programs. Of the scripts filled in Q2, approximately 65% were filled through retail pharmacies and captured by Acuvue.

Terrie Curran: On a quarterly basis, we observed sequential growth of more than 265% with the number of build scripts increasing from 9500 in Q1 to 35000 in Q2.

Terrie Curran: As we've clarified in previous quarters. These figures include prescriptions flowing through retail pharmacies, which are captured by <unk> as well as those flowing through Blink Rx one of our patient assistant programs.

Terrie Curran: Of the scripts filled in Q2, approximately 65% were filled through retail pharmacies and captured by <unk>.

Martin Gilligan: Additionally, we are also proud to share the growing number of physicians writing Bequezna Courtals. At the end of Q2, about 7,250 prescribers had written a filled Ploquestin prescription, which reflects a growth of approximately 150% compared to Q1's cumulative writer count. We've previously called out the specialty mix leaning towards GIs, which continues to hold true.

Martin Gilligan: Additionally, we are also proud to share the growing number of physicians writing the Quesna Quarterly. At the end of Q2, about 7,250 prescribers had written a filled requested prescription, which reflects a growth of approximately 150% compared to Q1's cumulative writer count. We've previously called out the specialty mix leaning towards GIs, which continues to hold true.

Terrie Curran: Additionally, we are also proud to share the growing number of physicians writing request the quarterly.

Terrie Curran: At the end of Q2 about 7250 prescribers have written to field request, the prescription which reflects the growth of approximately 150% compared to Q1's cumulative writer count.

Terrie Curran: We've previously called out the specialty mix leaning towards Gis, which continues to hold true.

Martin Gilligan: More recently, we have started to observe an increase in nurse practitioners and physician assistants who are important writers in the long-term management of GERD patients, and with the non-arrows of Label Expansion now approved, we believe we will see the specialty mix continue to evolve as primary care physicians consider a network for the millions of patients with acid-related heartburn. Another important development has been the improvement in the conversion rate between total demand and fill requests and prescriptions. Since our last earnings report, our loss-to-date fill rate has increased from 41 percent to nearly 50 percent, reflecting the impact of pull-through from commercial coverage.

Martin Gilligan: More recently, we have started to observe an increase in nurse practitioners and physician assistants who are important players in the long-term management of GERD patients. And with the non-erosive label expansion now approved, we believe we will see the specialty mix continue to evolve as primary care physicians consider Bequesna for the millions of patients with acid-related heartburn. Another important development has been the improvement in the conversion rate between total demand and filled bequests and prescriptions. Since our last earnings report, our loss-to-date fill rate has increased from 41 percent to nearly 50 percent, reflecting the impact of pull-through from commercial coverage.

Terrie Curran: More recently, we have started to observe an increase in nurse practitioners and physician assistants, who are important writers in the long term management of GERD patients.

Terrie Curran: And with the non erosive label expansion now approved we believe we will see the specialty mix continue to evolve as primary care physicians consider request for the millions of patients with acid related heartburn.

Speaker Change: Another important development has been the improvement in the conversion rate between total demand and Phil Good question prescriptions since our last earnings report our loss to date fill rate has increased from 41% to nearly 50%, reflecting the impact of pull through from commercial coverage.

Martin Gilligan: We see this as an impressive accomplishment compared to what might typically be expected at this stage of launch. With recent access wins, we believe our film rate will continue to improve, allowing us to realize more of the revenue potential associated with our total demand. As you heard Terrie mention earlier, we have made some terrific advances in securing widespread commercial coverage. However, this part of our launch strategy, in particular, was often questioned given the complexity of the payer systems and because of its entrance into a genericized market.

Martin Gilligan: We see this as an impressive accomplishment compared to what might typically be expected at this stage of launch. With recent access wins, we believe our fill rate will continue to improve, allowing us to realize more of the revenue potential associated with our total demand. As you heard Terrie mention earlier, we have made some terrific advances in securing widespread commercial coverage. However, this part of our launch strategy, in particular, was often questioned given the complexity of the payer systems and Bequezna's entrance into a genericized market. Skepticism frequently surfaced about whether Roquezna would require evidence of endoscopy to obtain reimbursement, or if it would be available only to severely patients.

Speaker Change: We see this as an impressive accomplishment compared to what may typically be expected at this stage of launch.

Speaker Change: With the recent access wins, we believe our fill rate will continue to improve allowing us to realize more of the revenue potential associated with our total demand.

Speaker Change: As you heard Terry mentioned earlier, we have made some terrific advances in securing widespread commercial coverage.

Terry: This part of our launch strategy in particular was often questions given the complexity of the payer systems and requested entrants into a generic sized market.

Martin Gilligan: Skepticism frequently surfaced about whether Roquezna would require evidence of endoscopy to obtain reimbursement, or if it would be available only to severe patients. But today, I'm proud to share that those questions are behind us, and we've delivered exactly as we intended. After being placed on formularies at Express Scripts and Cigna earlier this year, Bekwesna recently earned formulary placement with several other key payers, including CVS Caremark, UnitedHealthcare, Optum, Aetna, and Prime Therapeutics.

Terry: Skepticism frequently surfaced about whether request and that would require evidence of endoscopy to obtain reimbursement or if it would be niche to only severe patients, but today I'm proud to share that those questions are behind us and we've delivered exactly as we intended.

Martin Gilligan: But today, I'm proud to share that those questions are behind us, and we've delivered exactly as we intended. After being placed on formularies at Express Scripts and Cigna earlier this year, Bekwesna recently earned formulary placement with several other key payers, including CVS Caremark, UnitedHealthcare, Optum, Aetna, and Prime Therapeutics. Since the end of Q2, we've added about 38 million commercial lives to Bequesna's covered population, bringing the total to an estimated 116 million people, or 77% of all U.S. commercial lives. Not surprisingly, all plans govern utilization management differently.

Speaker Change: After being placed on formularies at express scripts and Cigna earlier. This year requests are recently earned formulary placement with several other key payors, including Cvs Caremark.

Speaker Change: Healthcare, Optum, Aetna and Prime therapeutics.

Martin Gilligan: Since the end of Q2, we've added about 38 million commercial lives to Bequesna's covered population, bringing the total to an estimated 116 million people, or 77% of all U.S. commercial lives. Not surprisingly, all plans govern utilization management differently.

Speaker Change: Since the end of Q2, we've added about 38 million commercial lives to <unk> covered population, bringing the total to an estimated 116 million people or 77% of all U S commercial lives.

Speaker Change: Surprisingly all plans govern utilization management differently, but across the vast majority of covered lives. We believe we have been successful in negotiating access subject to a single step edit through a generic PPI prescription.

Martin Gilligan: But across the vast majority of covered lives, we believe we have been successful in negotiating access to Bequesta subject to a single step edit to a generic PPI prescription. As a result, Bequesta is now available and affordable to millions of commercially insured patients. Additionally, our access wins were extremely timely as we recently kicked off Quesna's launch of non-erosive GERD. Since coverage is contracted for the bottle presentation, we believe commercially covered patients with GERD, regardless of type or severity, are now able to easily access requests. With coverage in place at all three major PBMs and several other large payers, our aim now is to pull through demand via the plans for which Bequesna is on formulary. This begins with promotion.

Speaker Change: As a result, but question is now available and affordable to millions of commercially insured patients.

Speaker Change: Additionally, our access wins were extremely timely as we recently kicked off a question is launch of non erosive GERD.

Speaker Change: Since coverage is contracted for the bottle presentation, we believe commercially covered patients with GERD, regardless of type of severity are now able to easily access request.

Speaker Change: With coverage in place at all three major Pbms and several other large payers. Our aim now is to pull through demand via the plans for which the president is on formulary.

Martin Gilligan: Immediately following the non-erosive approval, our sales force began sharing the news with physicians. One of our main goals is to inform prescribers that Bequesna can now be used for all GERD sufferers with broad commercial coverage in place, providing access to patients. We're simultaneously emphasizing Bequest's rapid, potent, and durable acid suppression profile, which is reinforced by our strong product label. The reps are also communicating promotional messages focused on the key elements of differentiation, such as requesting a sustained effect with all day and all night heartburn relief.

Speaker Change: Now this begins with promotion immediately following the non erosive approval, our Salesforce began sharing the news with physicians.

Speaker Change: One of our main goals is to inform prescribers that request can now be used for all GERD sufferers with broad commercial coverage in place providing access to patients.

Speaker Change: We're simultaneously emphasizing for question is rapid potent and durable assets depression profile, which is reinforced by our strong product label.

Speaker Change: The reps are also communicating promotional messages focus on the key elements of differentiation such as the equivalent of sustained effect with all day and all night Heartburn relief.

Martin Gilligan: Meanwhile, with consumers, the Vaquesna can kick some acid DTC campaign continues to have an impact as it airs across digital channels, as well as streaming and broadcast television. Without a doubt, word is spreading about the positive real-world experiences patients are having with Vaquesna. With access in place and an expanded label applicable to the entire GERD population, our mission is to ensure that as many physicians and patients as possible know about Bequesna and its power to help treat GERD.

Speaker Change: Meanwhile, with consumers the requested can kick some acid DTC campaign continues to have an impact as it airs across digital channels as well as streaming and broadcast television without a doubt word is spreading about the positive real world experiences patients are having with quick ones now.

Speaker Change: With access in place and an expanded label applicable to the entire GERD population. Our mission is to ensure as many physicians and patients as possible no about <unk> and its power to help treat GERD.

Martin Gilligan: Over the last three months, we've made significant progress across numerous aspects of the law. We have elevated our promotional efforts, heightened Bequesia brand awareness, increased written and filled script, expanded commercial access, and unlocked the full GERD market. I want to emphasize that these were foundational elements of our launch plan, and with each in place, we're well positioned to take advantage of the opportunity that lies ahead. Further, the feedback from these early months of the erosive launch and early weeks of the non-erosive launch has been very strong, and in the coming quarters, we will continue to execute with the aim of delivering on the high bar we have set for the Vicoesn We are excited about our momentum and confident in our ability to realize this blockbuster opportunity. I'll now pass it off to Molly to walk through our financial results. Molly Thank you, Martin.

Speaker Change: Over the last three months, we've made significant progress across numerous aspects of launch.

Speaker Change: We have elevated our promotional efforts heightened brand awareness increase written and filled scripts.

Speaker Change: Standard commercial access and unlock the full GERD market.

Speaker Change: I want to emphasize that these were foundational elements of our launch plan and with each in place we are well positioned to take advantage of the opportunity that lies ahead.

Speaker Change: Further the feedback from these early months of the erosive launch and early weeks of the non erosive launch has been very strong and.

Martin Gilligan: In the coming quarters, we will continue to execute with the aim of delivering on the high bar we have set for the Bequesna brand. We are excited by our current momentum and confident in our ability to realize this blockbuster opportunity. I'll now pass it off to Molly to walk through our financial results. Molly. Thank you, Martin.

Speaker Change: In the coming quarters, we will continue to execute with the aim of delivering on the high bar, we have set for the <unk> brand.

Speaker Change: We are excited about our current momentum and confident in our ability to realize this blockbuster opportunity.

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

Molly Henderson: Thank you, Martin, and hello to everyone on the call. I'm happy to share our second quarter 2024 financial results with you today. We have made great strides in achieving regulatory and commercial milestones, which have translated into a strong quarter for Phathom. Before going into the numbers, I'd like to note two things.

Molly: Thank you Martin and Hello to everyone on the call I'm happy to share our second quarter 2024 financial results with you today.

Speaker Change: <unk> made great strides in achieving regulatory and commercial milestones, which have translated into a strong quarter for Canada.

Molly Henderson: First, during this call, and similar to previous calls, we will not be providing financial guidance regarding projected revenues or earnings, as we are still in the early quarters of launch. Additionally, I will be commenting on both GAAP and non-GAAP financial measures. Supporting schedules with detailed reconciliations between non-GAAP measures and their most directly comparable GAAP measures will be discussed later in my section and can be found in this morning's press release. Now, turning to the numbers.

Speaker Change: Before going into the numbers I'd like to note two items first during this call and similar to previous calls we will not be providing financial guidance regarding projected revenues our earnings as we are still in the early partners launch.

Molly Henderson: First, during this call, and similar to previous calls, we will not be providing financial guidance regarding projected revenues or earnings as we are still in the early quarters of launch. Additionally, I will be commenting on both GAAP and non-GAAP financial measures. Supporting schedules with detailed reconciliations between non-GAAP measures and their most directly comparable GAAP measures will be discussed later in my section and can be found in this morning's presser. Now, turning to the numbers.

Speaker Change: Additionally, I will be commenting on both GAAP and non-GAAP financial measures supporting schedules with detailed reconciliations between non-GAAP measures and their most directly comparable GAAP measures will be discussed later in my section and can be found in this morning's press release.

Molly Henderson: For the second quarter, 2024, we reported net revenues of $7.3 million, which represents a 283% sequential quarterly increase, driven primarily by the increase in sales per Quesna prescription. Changes in inventory stocking had a lesser impact this quarter. Following the non-erosive label expansion, we believe it will still be another couple quarters before we have a better sense of steady-state stocking behaviors and their impact. As for Gross-to-net, we observed a discount rate in line with our expectations we set forth at the outset of launch. There were no one-time events impacting GTN this quarter, as there were in the first quarter.

Molly Henderson: For the second quarter, 2024, we reported net revenues of $7.3 million, which represents a 283% sequential quarterly increase, driven primarily by the increase in sales per Quesna prescription. Changes in inventory stocking had a lesser impact this quarter. Following the non-erosive label expansion, we believe there will still be another couple of quarters before we have a better sense of steady state stocking behaviors and their impact. As for gross to net, we observed a discount rate in line with our expectations we set forth at the outset of launch. There were no one-time events impacting GTN this quarter, as there were in the first quarter.

Speaker Change: Now turning to the numbers for the second quarter 2024, we reported net revenues of $7 3 million, which represents a 283% sequential quarterly increase driven primarily by the increase in sales for plasma prescriptions.

Speaker Change: Changes in inventory stocking had a lesser impact this quarter.

Speaker Change: Following the non erosive label expansion, we believe it will still be another couple of quarters before we have a better sense of steady state snacking behaviors and their impact.

Speaker Change: As for gross to net we observe that discount rate in line with our expectations, we set forth at the outset of launch.

Speaker Change: There were no one time events impacting GTS this quarter as they were in the first quarter.

Molly Henderson: As a result of recently expanded access with major payers and the non-erosive launch, we believe our GTN discount will continue to evolve over the course of the third quarter and through the end of calendar year 2024. For the quarter ended June 30, 2024, we reported gross profit of 5.9 million, which equates to a gross margin of 81%, a sequential quarterly increase of about 350 basis points. Moving down the P&L to our operating expenses, we reported non-GAAP R&D spend of $6 million for the second quarter ended 2024, which represents a 45% reduction in spend compared to the second quarter of 2023.

Speaker Change: As a result of recently expanded access with major Payors in the non erosive launch we believe our TTM discount will continue to evolve over the course of the third quarter and through the end of calendar year 2024.

Speaker Change: For the quarter ended June 32024, we reported gross profit of $5 9 million, which equates to a gross margin of 81% a sequential quarterly increase of about 350 basis points.

Speaker Change: Moving down the P&L to our operating expenses, we reported non-GAAP R&D spend of $6 million for the second quarter ended 224, which represents a 45% reduction in spend compared to the second quarter 2023.

Molly Henderson: This also reflects a 26% decrease sequentially compared to last quarter. Both decreases were primarily related to lower clinical trial costs associated with the line-down activities related to our Phase 3 non-erosive daily dosing trial, which we read out about here.

Molly Henderson: This also reflects a 26% decrease sequentially compared to last quarter. Both decreases were primarily related to lower clinical trial costs associated with the winding down of activities related to our Phase 3 non-erosive daily dosing trial, which we read out last year.

Speaker Change: This also reflects a 26% decrease sequentially compared to last quarter.

Speaker Change: Both decreases were 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 $71.1 million for the second quarter of 2024. This represents an increase of about $57.6 million relative to the same period of 2023 and a sequential increase of approximately $13.5 million compared to Q1. Both increases were driven by the continued build-out of our commercial infrastructure and marketing activities in support of the ProQuesno line. In particular, this period's FQ&A expenses include our first full quarter of advertising costs, which approximated $16.7 million and were primarily related to our ongoing BoQuesna Conquixim Acid DPC media campaign.

Speaker Change: As for SG&A, we reported non-GAAP expenses of $71 1 million for the second quarter 2024. This represents an increase of about $57 6 million relative to the same period of 2023, and a sequential increase of approximately $13 5 million compared to Q1.

Speaker Change: Both increases were driven by the continued buildout of our commercial infrastructure and marketing activities in support of <unk> launch.

Molly Henderson: In particular, this period's SGNA expenses include our first full quarter of advertising costs, which approximated $16.7 million and were primarily related to our ongoing BoQuesna Conquixim Acid DTC media campaign. We do not anticipate a significant increase in spend relative to our DTC campaign for the remainder of 2024. Similar to previous quarters, the most significant reconciling item between gap and non-gap of Abernese Census for these periods with non-cash stock-based compensation. Other non-gap reconciling items include non-cash interest on a Revenue Interest Financing liability and non-cash interest expense related to amortization of debt fits.

Speaker Change: In particular this periods SG&A expenses include our first full quarter of advertising costs, which approximated $16 7 million and were primarily related to our ongoing book questioner can kick some asset DTC media campaign.

Molly Henderson: We do not anticipate a significant increase in spend relative to our DTC campaign for the remainder of 2024. Similar to previous quarters, 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 a revenue interest financing liability and non-cash interest expense related to amortization of debt.

Speaker Change: We do not anticipate a significant increase in spend relative to our DTC campaign for the remainder of 2024.

Speaker Change: Similar to previous quarters, the most significant reconciling item between GAAP and non-GAAP operating expenses for these periods with noncash stock based compensation.

Speaker Change: 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 a non-GAAP adjusted net loss of $73.3 million for the second quarter of 2024, or $1.25 loss per share, compared sequentially to a loss of $64.8 million or $1.11 loss per share for the first quarter of 2024. As of June 3, 2024, cash and cash equivalents were $276 million. Of note, this balance includes the drawdown of $25 million from our debt facility in mid-June. Up to an additional $125 million remains available, of which $25 million is available this year and $100 million is available next year, subject to achievement of certain revenue miles.

Speaker Change: Turning to EPS, we reported a non-GAAP adjusted net loss of $73 3 million for the second quarter of 2024 or $1 25 loss per share compared sequentially to a loss of $64 8 million or $1 11 loss per share for the first quarter of 2024.

Speaker Change: As of June 32024, our cash and cash equivalents were $276 million.

Speaker Change: Note. This balance includes the drawdown of $25 million from our debt facility in mid June.

Speaker Change: Two an additional $125 million remains available of which $25 million available this year and $100 million is available next year subject to achievement of certain revenue milestones.

Molly Henderson: We believe we are in a strong financial position to continue supporting the Viquezno launch, which now spans three indications. We remain invested in the long-term growth potential of the brand and reaffirm our expectation that we will have cash runway through the end of 2026, based on our current operating plan, expected revenues, and funds available under our term. After two full quarters of lunch, we are pleased with our financial results. Heading into the back half of 2024, we remain focused on ensuring our teams have the resources needed to maximize the bequest opportunity.

Molly Henderson: We believe we are in a strong financial position to continue supporting the Bukwesna launch, which now spans three indications. We remain invested in the long-term growth potential of the brand and reaffirm our expectation that we will have cash runway through the end of 2026, based on our current operating plan, expected revenues, and funds available under our term limits. After two full quarters of launch, we are pleased with our financial results. Heading into the back half of 2024, we remain focused on ensuring our teams have the resources needed to maximize the bequest and opportunity.

Speaker Change: We believe we are in a strong financial position to continue to support and to the question of launch, which now spans three indications we remain invested in the long term growth potential of the brand and reaffirm our expectation that we have cash runway through the end of 2026 based on our current operating plan expected revenues and funds available under our term loan.

Speaker Change: After two full quarters of launch we are pleased with our financial results heading into the back half of 2024, we remain focused on ensuring our teams have resources needed to maximize the request an opportunity. We believe our key payer wins will translate to a proportional increase in script filled through the retail channel for revenue contributions are most significant.

Molly Henderson: We believe our key payer wins will translate to a proportional increase in scripts filled through the retail channel, where revenue contributions are most significant, thereby driving top line growth into year end. With that, I will now turn the call back over to Terrie for closing comments.

Speaker Change: Thereby driving topline growth into year end.

Speaker Change: With that I will now turn the call back over to Terry for closing comments.

Speaker Change: Barry.

Speaker Change: Thank you Mollie.

Terrie Curran: and thank you again to everyone joining us on today's call. In wrapping up today's call, I want to reiterate three numbers. 122,000 prescriptions raised. 60,000 prescriptions filled. 8,200 cumulative riders, all of which we achieved in just under 8 months since launch, and mostly without broad access or an expanded label. And now, having secured 77% commercial coverage, consider what Bequesna can achieve as a new good treatment option proven to help relieve heartburn

Terrie Curran: and thank you again to everyone joining us on today's call. In wrapping up today's call, I want to reiterate three numbers. 122,000 prescriptions written. 60,000 prescriptions filled. 8,200 cumulative riders, all of which we achieved in just under eight months since launch, and mostly without broad access or an expanded label. And now, having secured 77% commercial coverage, consider what Bequesna can achieve as a new good treatment option proven to help relieve heartburn

Speaker Change: And thank you again to everyone joining us on today's call and wrapping up todays call I want to reiterate three numbers.

Speaker Change: 122000 prescriptions written 60000 prescriptions filled.

Speaker Change: 8200 cumulative riders all of which we achieved in just under eight months since coach and mostly without broad access or expanded label.

Speaker Change: And now having secured 77% commercial coverage considering what the president can achieve as a new good treatment option proven to help relieve heartburn.

Terrie Curran: We believe the key building blocks are in place for Phathom to realize Quesna's potential peak revenue opportunity of greater than $3 billion, and I believe the numerous accomplishments we've covered today support an acceleration in our adoption rate. We've stayed true to our strategy, even achieving certain milestones ahead of schedule or with better than expected outcomes. In the upcoming quarters, we will continue to drive value through commercial execution, and we look forward to further improving the lives of patients suffering from acid-related conditions. Thank you again 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.

Terrie Curran: We believe the key building blocks are in place for Phathom to realize the Questioner's potential peak revenue opportunity of greater than $3 billion, and I believe the numerous accomplishments we've covered today support an acceleration in our adoption trend. We've stayed true to our strategy, even achieving certain milestones ahead of schedule or with better than expected outcomes. In the upcoming quarters, we will continue to drive value through commercial execution, and we look forward to further improving the lives of patients suffering from acid-related conditions. Thank you again 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.

Speaker Change: We believe the key building blocks are in place with them to realize the quickness potential peak revenue opportunity of greater than $3 billion.

Speaker Change: And I believe the numerous accomplishments we've covered today support an acceleration in our adoption trends.

Speaker Change: We have stayed true to our strategy, even achieving certain milestones ahead of schedule.

Speaker Change: Better than expected outcomes.

Speaker Change: In the upcoming quarters will continue to drive value through commercial execution, and we look forward to further improving the lives of patients suffering from acid related conditions.

Speaker Change: You again 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.

Operator: Thank you. Ladies and gentlemen, 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, simply press star 1-1 again. Please stand by while we compile the Q&A list. Now, the first question coming from the lineup, Annabelle Samimi with CIPO, your line is open.

Operator: Thank you. Ladies and gentlemen, 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 questions, simply press star 1-1 again. Please stand by while the complainer answers.

Speaker Change: Thank you, ladies and gentlemen to ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw your question simply press Star. One again, please standby on the compounded Q&A roster.

Operator: Not the first question, coming from the line-up: Annabelle Smealy, with Steve Paul, and Yelena Sulfin.

Speaker Change: And our first question coming from the line of Annabel <unk> with Stifel. Your line is open.

Annabelle Smealy: Hi, thanks for taking my question. Congratulations on all the progress.

Annabelle Samimi: Hi, thanks for taking my question. Congratulations on all the progress.

Annabel <unk>: Hi, Thanks for taking my question and congratulations.

Speaker Change: All the progress.

Annabelle Smealy: Just want to talk a little bit about the NERD expansion opportunity. I guess one of the things I'm curious about is to what extent you need to really start tapping the primary care market to gain access to those patients. Just from conversations we've had with GIs, the GIs are very familiar with the product. The QCQs are less familiar, and that's where the drug they claim would be pretty revolutionary. So just try to understand what your efforts are going to be over there.

Annabelle Samimi: Just want to talk a little bit about the NERD expansion opportunity. I guess one of the things I'm curious about is to what extent you need to really start tapping the primary care market to gain access to those patients. Just from conversations we've had with GIs, the GIs are very familiar with the product. The QCQs are less familiar, and that's where the drug they claim would be pretty revolutionary. So just try to understand what your efforts are going to be over there.

Speaker Change: Can you talk a little bit about the nerve.

Speaker Change: <unk> expansion opportunity.

Speaker Change: I guess one of the things I was curious as to what extent you need to really started tapping the primary care market today in actual patients.

Speaker Change: Hi, guys just from conversations with cloud with Gis.

Speaker Change: The Gis I'm very familiar with the product.

Speaker Change: Familiar and Thats, where <unk> been.

Annabel <unk>: They claim would be pretty revolutionary.

Speaker Change: I understand what youre, what youre going to be over there.

Annabelle Samimi: And then the second question I have is, you know, in terms of the access that you have for the formulary, the access you have right now. Do you have a sense of the various different types of plans and what percent are more open access plans versus very restricted plans? Or is the access that you have much wider? Then, you know, is it just wider? Like, can you just help us sort of qualify or, you know, characterize some of the plan, the formularies within the plan?

Annabel <unk>: And then the second question I have.

Annabel <unk>: Yes.

Annabel <unk>: In terms of the access that you have for the formula for the formulary.

Annabel <unk>: The access you have right now.

Annabel <unk>: Do you have a sense of.

Annabel <unk>: Various.

Annabel <unk>: Different types of plant and what percent are more open access brands versus very restricted plans.

Annabel <unk>: Or is the assets that you have much broader.

Annabel <unk>: None.

Annabel <unk>: Is it just broader like can you just help us.

Speaker Change: To qualify our.

Annabelle Samimi: Characterize some of the plan the formularies with one plan.

Martin Gilligan: Hey, Annabelle, it's Martin. I have got your question in two parts. First, I'll take the NERD expansion. And if I summarize it correctly, you're asking about tapping into primary care physicians. So I would agree with you that GIs have a much higher awareness of Loquesna than primary care physicians, but that doesn't mean primary care physicians don't have any awareness. If you recall, you know, as we launched back in January, we very much focused on the top decile positions. That's where we went first and had our highest frequency, and they were mostly gastroenterologists. But I do think what we do know is that we're not starting at ground zero.

Annabelle Smealy: And then the second question I have is, you know, in terms of the access that you have for the formula, the access you have right now. Do you have a sense of the various different types of plans and what percent are more open access plans versus very restricted plans, or is the asset that you have much broader? Then, you know, it is just broader like, can you just help us sort of qualify or characterize the plan? The formula is just in the plan. Hey Annabelle, it's Martin.

Martin Gilligan: Hey Annabelle, it's Martin.

Speaker Change: Hey, Annabel its Martin I got.

Martin: To your question in two parts first I'll take the nerve expansion if I summarize it correctly you are asking about tapping into primary care physicians.

So I would agree with you that.

Speaker Change: <unk> have a much higher awareness of Rhopressa.

Annabel <unk>: Primary care physicians, but that doesn't mean primary care physicians don't have any awareness. If you recall as we launched back in January we very much focus on the top decile physicians, that's where we went first and at our highest frequency and they were mostly gastroenterologists, but.

Martin Gilligan: With primary care physicians, we're going to be calling on the same physicians, as Terrie mentioned earlier, that we called on before. And the patients have the same journey with the same symptoms, and the level of unmet need is equally as high. And we know that patients are actually searching for a new mechanism, as well as primary care physicians, who welcome the opportunity for that. So we've got the momentum going.

Speaker Change: But I do think what we do know is that we're not starting at ground zero with the primary care physicians, who are going to be calling on the same physicians as Terry mentioned earlier that we called out before and that patients have the same journey with the same symptoms and the level of unmet need is equally as high.

Speaker Change: We know that patients are actually searching for a new mechanism as well as primary care welcome the opportunity for that so we've got some momentum going.

Speaker Change: We've been reaching out to primary care, obviously will be dialing that up as we're moving forward and then I'll also mentioned the direct to consumer is going to play a really big role that we already know.

Martin Gilligan: We've been reaching out to primary care. Obviously, we'll be dialing that up as we move forward. And then I'll also mention that direct-to-consumer is going to play a really big role in that. We already know from doing some work that when we went to physicians who prescribe Loquesna, 25% of them had already said that they'd been contacted by their patient who specifically requested Loquesna.

Martin Gilligan: We've been reaching out to primary care, and obviously, we'll be dialing that up as we move forward. And then I'll also mention that direct-to-consumer is going to play a really big role in that. We already know from doing some work that when we went to physicians who prescribed Loquesna, 25% of them had already said that they'd been contacted by their patient who specifically requested Loquesna. And 80% of those physicians granted that request. And that's exactly what we communicated that our expectation was going forward. And those patients are already going to primary care. So we feel really good about, you know, our trajectory heading into primary care. I'll switch now to your access.

Martin Gilligan: From doing some work.

Annabel <unk>: When we went to physicians, who have prescribed 25% of them had already said that they've been contacted by their patient, who specifically requested blockbuster and 80% of those physicians granted that request and that's exactly what we communicated that our expectation was going forward. So and those patients are already go into primary care. So we feel really good about.

Martin Gilligan: And 80% of those physicians granted that request. And that's exactly what we communicated that our expectation was going forward. And those patients are already going to primary care. So we feel really good about our trajectory heading into primary care. Now, I'll switch to your access.

Annabel <unk>: Our trajectory heading into primary care.

Martin Gilligan: So, listen, here's what I like to say about our access: numbers are great. 115 million lives, 77% commercial coverage, but it's really the quality of the coverage that truly, really counts. And it's completely aligned with our strategy of one step through a PPI. And I'll just say, I think we've done a tremendous job. Each of our, obviously, each PBM and payer is comprised of multiple plans and multiple formularies, but we've contracted for one step as the key criteria. ExpressTrip, Cigna, Prime, Therapeutics, CVS, Caremark, Aetna, UnitedHealthcare. So our expectation is that a patient will have completed an experience with one PPI and have the opportunity to go on bequest now.

Martin Gilligan: So, listen, here's what I like to say about our access: numbers are great. 115 million lives, 77% commercial coverage, but it's really the quality of the coverage that truly, really counts. And it's completely aligned with our strategy of one step through a PPI. And I'll just say, I think we've done a tremendous job. Each of our, obviously, each PBM and payer is comprised of multiple plans and multiple formularies, but we've contracted for one step as the key criteria. ExpressTrip, Cigna, Prime, Therapeutics, CVS, Caremark, Aetna, UnitedHealthcare. So, our expectation is that a patient will have completed an experience with one PPI and have the opportunity to go on bequest now.

Martin Gilligan: Also I'll switch now to your access.

Speaker Change: Listen here's what I'd like to say about our access numbers are great 115 million lives, 77% commercial coverage, but it's really the quality of the coverage that truly really counts and it's completely aligned with our strategy of one step through our PPI and I will just say I think we've done a tremendous job.

Speaker Change: Each of our obviously, each PVM and payer is comprised of multiple plants and multiple formularies.

Speaker Change: We've contracted for one step is the key criteria.

Martin Gilligan: For us troops Cigna Prime Therapeutics, Cvs Caremark, Aetna, United Healthcare. So our expectation is is that a patient will have completed an experience with one PPI and have the opportunity to go on record as well.

Speaker Change: Great. Thanks for the color.

Martin Gilligan: Thank you. And our next question, coming from the lineup, is Joseph Stringer with Neatham and Company.

Martin Gilligan: Thank you. And our next question, coming from the lineup, is Joseph Stringer with Neatham and Company. Your line is open.

Martin Gilligan: Thank you.

Martin Gilligan: And our next question coming from the line of Joseph Stringer with Needham <unk> Company. Your line is open.

Joseph Stringer: Hi, good morning. Thanks for taking our questions. You mentioned that you can leverage the existing salesports for the nerd launch here. I guess when do you anticipate we'll see an impact on IQ via TRX data? Number one, and then number two, maybe as a follow-up to the previous question. So on the NERD approval and the impact on insurance coverage, you mentioned, of course, 77% of commercial lives covered. What percentage of that is for the bottle?

Joseph Stringer: Hi, good morning. Thanks for taking our questions. You mentioned that you can leverage the existing sales force for the NERD launch here. I guess, when do you anticipate we'll see an impact on the IQvia TRX data? Number one, and then number two, maybe as a follow-up to the previous question: So on the NERD approval and the impact on insurance coverage, you mentioned, of course, 77% of commercial lives covered. What percentage of that is for the bottle?

Joseph Stringer: Hi, good morning, Thanks for taking our questions.

Joseph Stringer: Mentioned that you can leverage the existing sales force for the nerd launch here.

Joseph Stringer: I guess when do you anticipate we'll see an impact.

Speaker Change: In the IQ via T Rx data.

Joseph Stringer: Number one and then number two maybe as a follow up to the previous question.

Joseph Stringer: And you mentioned that you anticipate this coverage would carry over to the NERD indication. But, I guess, is there any scenario in which that wouldn't be the case, meaning the coverage is safe for erosive girth, but it would not be for NERD.

Speaker Change: On the <unk> approval and the impact on the insurance coverage.

Joseph Stringer: You mentioned, 477% of commercial lives covered what percentage of that is for the bottle and you mentioned that you anticipate this coverage would carryover to the nerd indication.

Joseph Stringer: But I guess is there any scenario in which that wouldn't be the case, meaning.

Speaker Change: The coverage is.

Speaker Change: For erosive GERD, but it would not be for nerd.

Martin Gilligan: Sure, Joey. So first, I'll talk about the sales force. Yeah, even we say we say we're leveraging, we're actually utilizing, and that was part of our vision and our plan. We set up the sales force knowing that non-erosive was coming. So our footprint has been in place. We've been calling on these positions. I think you probably saw, specifically in the past two weeks, but really last week, a jump in our prescriptions, which we believe is tied to both ends of your question.

Martin Gilligan: Sure, Joey. So first, I'll talk about Salesforce. Yeah, even though we say we're leveraging, we're actually utilizing, and that was part of our vision and our plan. We set up the Salesforce knowing that non-erosive was coming, so our footprint has been in place, and we've been calling on these physicians. I think you probably saw, specifically in the past two weeks, but really last week, a jump in our prescriptions, which we believe is tied to both ends of your question.

Joey: Sure Joey.

Speaker Change: First I will talk about the sales force, even though we say we say, we're leveraging we're actually utilizing and that was part of our vision and our plan we set up the salesforce knowing that non erosive was coming so our footprint has been in place we've been calling on these physicians I think you probably saw specifically in the past few weeks, but really last week.

Martin Gilligan: Jump in our prescriptions.

Martin Gilligan: We believe is tied to cups at both ends of your question. So first it's clearly a non erosive launch.

Martin Gilligan: Right. So first, it's clearly a non-erosive launch, which is what we anticipated. We were going to start seeing a jump there, so that will continue to grow over time. But we've got all our engines running.

Martin Gilligan: So first, it's clearly a non-erosive launch, which is what we anticipated. We were going to start seeing a jump there, so that will continue to grow over time. But we've got all the engines running, so we've got the DTC running, and then, as we just announced, the details of increasing our commercial coverage. So they all do kind of go together, and they're working in tandem. In terms of coverage, what we're communicating is that this is the coverage for the bottle.

Martin Gilligan: Which is what we anticipated we were going to start seeing a jump there. So that will continue to grow over time, but we've got all engines running so we've got the DTC running and then as we just announced the details of it increasing our commercial coverage. So they all do kind of go together.

Martin Gilligan: So we've got the DTC running, and then, as we just announced, the details of increasing our commercial coverage. So they all do kind of go together, and they're working in tandem. In terms of the coverage, what we're communicating is that it is the coverage for the bottle. You're correct.

Martin Gilligan: And they're working in tandem in terms of the.

Speaker Change: The coverage what we're communicating is that as the coverage for the bottle Youre correct, so 77% commercial coverage.

Martin Gilligan: So 77% commercial coverage. And it's our belief that that coverage is also for coverage for all indications. So all of our contracts where we have one step through a PPI indicate a request for as it's indicated. And we've obviously informed all of the payers of our approval, and we continue to move forward.

Martin Gilligan: You're correct, so 77% commercial coverage, and it's our belief that that coverage is also for coverage for all indications. So all of our contracts where we have one step through a PPI indicate Boquesna for as it's indicated. And we've obviously informed all of the payers of our approval, and we continue to move forward.

Martin Gilligan: It's our belief that that coverage is also for coverage for the all indications. So all of our contracts, where we have one step through PPI indicate a question for as its indicated and.

Martin Gilligan: And we've obviously informed all of the payers of our approval.

Martin Gilligan: And we continue to move forward.

Martin Gilligan: Great. Thanks so much for taking our questions.

Joseph Stringer: Great. Thanks so much for taking our questions.

Speaker Change: Great. Thanks, so much for taking my questions.

Operator: Thank you. And our next question coming from the lineup, Yatin Suneja with Guggenheim, your line is open.

Speaker Change: Thank you.

Speaker Change: Our next question coming from the line of.

Speaker Change: Financials with Guggenheim Your line is open.

Yatin Suneja: Hey guys, congrats on a very good quarter. I have just a couple of questions for you.

Yatin Suneja: Hey, guys congrats on a very good quarter.

Yatin Suneja: A couple of questions from me number one on gross to net.

Yatin Suneja: Could you maybe help us understand where you are in terms of the <unk>.

Yatin Suneja: Number one on gross to net, could you maybe help us understand where you are in terms of the net yield? I think my map suggests that it is maybe close to 40% net yield for the quarter. If you can confirm or deny how close we are to that number and how it will evolve, should we expect an improvement in the yield, or because of the NOD indication, should there be sort of a reduction in that yield? So that's just the first question.

Yatin Suneja: Number one on gross to net, could you maybe help us understand where you are in terms of the net yield? I think my math suggests that it is maybe close to 40% net yield for the quarter. If you can confirm or deny how close we are to that number and how it will evolve, should we expect an improvement in the yield, or because of the NOD indication, should there be some sort of reduction in that yield? So that's just the first question.

Speaker Change: I think my math suggest that it is maybe close to 40% net yield for the quarter.

Speaker Change: Can confirm or deny.

Yatin Suneja: How close we are to that number and how will that evolve which should we expect an improvement in the yield.

Molly Henderson: Sure. Hi Yatin.

Molly Henderson: Or because of the not the indication there should be sort of a reduction in net yield. So thats just first question.

Molly Henderson: Sure. Hi Yatin.

Molly Henderson: So yeah, GTN is playing out also, as we had expected going into launch. I think the numbers that you're estimating are right within the range that we estimated and not inconsistent with what we see as well. As far as going forward with the improved access that we've recently won, we continue to expect to see a building on that GTN. But like I said, going into launch, we continue to believe it'll be in that 50 to 65% discount on a steady state basis.

Adam: Sure Hi, Adam so.

Speaker Change: So yes, <unk> is playing out also as we had expected going into launch.

Molly Henderson: I think the numbers that you're estimating a rate within the range that we estimated and not inconsistent with what we see as well.

Molly Henderson: As far as going forward with the improved access that we've recently won we continue to expect to see a building on that TTM, but like I said going into launch we continue to believe it'll be in that 50% to 65% discount on a steady state basis.

Molly Henderson: And that's just the V kind of part, right? Not the always-on-the-blend, basically that you're that important. That's right.

Molly Henderson: And that's just the retail part, right? Not the... Or it's a blend, basically, that you're employing. That's right.

Speaker Change: And Thats just the the retail part right.

Molly Henderson: We are always on a blended basis.

Molly Henderson: That's right; that's Rita.

Molly Henderson: That's right that's retail.

Yatin Suneja: Okay, very good. And then, with regard to the NERD sort of uptake, could you maybe talk about what the average duration of treatment for NERD will be and how that would compare to EE? And also, if you can articulate what you are seeing in terms of the refill rate, are patients getting refilled, and at what frequency? Thank you.

Martin Gilligan: Okay, very good. And then with regard to the NERD sort of uptake, could you maybe talk about the average duration of treatment for NERD and how that compares to EE? And also, if you can articulate what you are seeing in terms of the refill rate, are patients getting refilled, and at what frequency? Thank you. So.

Speaker Change: Okay very good and then with regard to the nod.

Speaker Change: What sort of uptake.

Speaker Change: I mean.

Yatin Suneja: Could you maybe talk about like what will be an average duration.

Yatin Suneja: Of treatment for now and how will that compare to <unk> and also if you can articulate what you are seeing in terms of the refill rate.

Speaker Change: Our patients getting LIFO and at what frequency.

Yatin Suneja: <unk>.

Martin Gilligan: So, Yatin, I had commented earlier that the patient journey is very similar between an erosive and a non-erosive patient, and it goes beyond similarities. Things are almost spot on. What we know from PPI utilization is that, on average, on an annual basis, it's about 150 to 160 days for both indications. So, again, it's very similar.

Speaker Change: So I had commented early earlier that the patient journey is very similar between erosive and non erosive patient.

Martin Gilligan: And it goes beyond similarities things are almost spot on what we know from PPI utilization is that on average on an annual basis. It's about 150 to 160 days for both indications. So again, it's very similar so I think we've been communicating that 160 day per year number.

Martin Gilligan: So, I think we've been communicating that 160-day-per-year number, and then, in terms of refills, we're tracking exactly as you would expect for a successful launch. Right now, we're at about 50% new prescriptions, 50% refills, but we expect a lot of fluctuation in that as we now enter non-erosive, and new patients are starting to come on board as DTC is running. So, there's going to be a lot of fluctuation in that in the coming months, but right now, we're right on track where we should be for a successful launch.

Martin Gilligan: So, I think we've been communicating that 160-day-per-year number, and then, in terms of refills, we're tracking exactly as you would expect for a successful launch. Right now, we're at about 50% new prescriptions, 50% refills. But we expect a lot of fluctuation in that as we now enter non-erosive, and new patients are starting to come on board as DTC runs. So, there's going to be a lot of fluctuation in that in the coming months, but right now, we're right on track where we should be for a successful launch.

Martin Gilligan: And then in terms of refills, we're tracking exactly as you would expect from a for a.

Martin Gilligan: A successful launch right now we are at about 50, 50%, new prescriptions, 50% refills, but we expect a lot of fluctuation in that as we now enter a non erosive and new patients are starting to come onboard as DTC is running so theres going to be a lot of fluctuation in that in the coming months, but right now we're right on track, where we should it should be for a successor.

Martin Gilligan: We'll launch.

Speaker Change: Thank you.

Operator: Thank you. And our next question comes from the line now. Umer Raffat with EmerCorps ISI, Yolanda Thelpen

Speaker Change: Thank you and our next question coming from the line.

Umer Raffat: Moreover, with Evercore ISI your line is open.

Umer Raffat: Hi, good morning. This is Chuen-Hsiang Ong from Umer.

Jay Olson: Oh Hi, good morning. This is Jay so awful boomer. Thanks for taking my questions I guess, firstly on the launch how many of the scripts are filled.

Umer Raffat: Thanks for taking our questions. I guess firstly, on the NERD launch, how many of the scripts are from the 2Q number? And secondly, on the inventory level, I think last quarter you commented there were about 2 to 3 weeks of inventory. Has that number changed in the second quarter?

Speaker Change: Two Q number and secondly on the inventory level I think last quarter. You commented about two to three weeks ago inventory number changed in the second quarter.

Umer Raffat: Okay.

Martin Gilligan: Yeah, I think we caught a little bit of that. I think the last part was on inventory, so I'll cover that first and maybe repeat the first question after that, but it's a really big cemetery stocking. We're still early in launch, but what we're seeing is around two weeks, which is consistent with where we were at the end of the first quarter. So we're not seeing a significant impact on revenues per se relative to stocking. It's more driven by demand. And then, if you could repeat the first question, that would be helpful. The first one:

Martin Gilligan: Yeah, I think we caught a little bit of that. I think the last part was on inventory, so I'll cover that first and maybe repeat the first question after that.

Speaker Change: Yes, I think we got a little bit of that I think the last part was on inventory. So I'll cover that first and maybe just repeat the first question after that but as it relates to inventory stocking.

Speaker Change: Early in launch, but what we're seeing is around two weeks, which is consistent with where we were at the end of the first quarter. So we're not seeing a significant impact on the revenues per se relative to stocking it's more driven by demand and then if you could repeat the first question that would be helpful.

Martin Gilligan: But as it relates to inventory stocking, we're still early in launch, but what we're seeing is around two weeks, which is consistent with where we were at the end of the first quarter. So we're not seeing a significant impact on revenues per se relative to stocking. It's more driven by demand. And then if you could repeat the first question, that would be helpful. Oh, yeah. The first one.

Umer Raffat: Oh yeah, the first one is on NERC launch. How many of the scripts are we seeing from the number reported for the second quarter?

Speaker Change: The first one.

Speaker Change: Uh huh.

Speaker Change: Scripts are we seeing from the number reported for the second quarter.

Martin Gilligan: So, Umer, we had a little bit of a hard time hearing you, but if your question is about the number of scripts for the non-erosive launch, it's just really early to tell that. We're just weeks into this. I think what you can clearly say is, you know, much of the growth that we've seen over the past couple of weeks is probably tied to that. Again, we also have the addition of access and consumer running.

Speaker Change: So merger, we had a little bit of a hard time hearing you, but if your question is about the number of scripts for the non erosive launch. It's just really early to tell that.

Martin Gilligan: Just weeks into this I think what you can clearly say is.

Martin Gilligan: Some of the much of the growth that we've seen over the past couple of weeks is probably tied to that again. We also have the addition of access and consumer running but we would expect going forward that those three things will really be key drivers, which is the approval of non erosive of the growth in commercial access and then the running of DTC, but right now.

Martin Gilligan: But we would expect going forward that those three things will really be key drivers, which is the approval of non-erosive, the growth in commercial access, and then the running of DTC. But right now, you know, we wouldn't have the data to answer that question specifically.

Martin Gilligan: We wouldn't have the data to answer that question specifically.

Umer Raffat: Thank you.

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

Speaker Change: Our next question coming from the line of.

Paul Choi: Paul Choi with Goldman Sachs. Your line is open.

Paul Choi: Hi, good morning team, and congratulations on all the progress. My first question is for Martin, and can you maybe just clarify or elaborate on your prioritization of nurse practitioners and nursing assistants in the primary care channel just as a driver of the nerd indication and opportunity versus the GI specialist and just kind of how much of your sales force effort is going to be directed there? And my second question is from Molly, which is regarding access to additional capital under the Hercules agreement.

Paul Choi: Hi, good morning team and congrats on all the progress.

Paul Choi: Hi, good morning team, and congratulations on all the progress. My first question is for Martin, and can you maybe just clarify or elaborate on your prioritization of nurse practitioners and nursing assistants in the primary care channel just as a driver of the NERD indication and opportunity versus the GI specialists and just kind of how much of your Salesforce effort is going to be directed there? And my second question is for Molly, which is regarding access to additional capital under the Hercules Agreement.

Paul Choi: First question is for Martin.

Paul Choi: Can you maybe just.

Paul Choi: Clarify or elaborate on your prioritization of the nurse practitioners and nursing assistants in the primary care channel.

Paul Choi: Driver of the nerd indication an opportunity versus the.

Speaker Change: Gi specialist centers.

Paul Choi: Russia your Salesforce effort is going to be directed there.

Paul Choi: And my second question is for Mali, which is regarding the access to additional capital under the Hercules agreement can you just remind me what the criteria and the trigger our SAR four for accessing that at this point sort of what how youre thinking about the planning and timing relative to your current burn rate. Thank you very much for taking our questions.

Paul Choi: Can you just remind me what the criteria and the triggers are for accessing it at this point and sort of how you're thinking about the planning and timing relative to your current burn rate? Thank you very much for taking our questions.

Martin Gilligan: I'll go first, Paul. Yeah, you hit on the magic category of nurse practitioner and physician assistant. They play a really big role, and they play a big role in erosive, third, but specifically in non-erosive. They are the folks who are first-line diagnosed and make treatment decisions. And in primary care, they'll play a really important role. So our sales force definitely spends time with them. Gastroenterologists will always remain important. They're high-volume physicians. They're influential in the category. But definitely, as you said, we've seen growth amongst those NPs and DAs, and we expect to see that going forward.

Martin Gilligan: I'll go first, Paul. Yeah, you hit on the magic category of nurse practitioner or physician assistant. They play a really big role, and they play a big role in erosive. Third, but specifically in non-erosive.

Speaker Change: I'll go first of all yes.

Paul Choi: You hit on the Magic category of nurse practitioner physician assistant safely.

Martin Gilligan: Really big role they played a big role in erosive third, but specifically in non erosive. They are the folks who are first line.

Martin Gilligan: They are the folks who are first-line diagnosed and make treatment decisions. And in primary care, they'll play a really important role. So our sales force definitely spends time with them. Gastroenterologists will always remain important. They're high-volume physicians. They're influential in the category. But definitely, as you said, we've seen growth among those NPs and PAs, and we expect to see that going forward.

Speaker Change: Diagnose and making treatment decisions and in primary care they'll play a really important role so our salesforce definitely spend side with them gas.

Martin Gilligan: Gastroenterologist will always remain to be important they're high volume positions. They are influential in the category.

Paul Choi: Definitely as you said, we've seen a growth amongst those NPS in Tas and we expect to see that going forward.

Molly Henderson: And then as it relates to, Paul, your question on the debt triggers, we expect that, I think, as I mentioned in my prior remarks, there's $25 million remaining available this year under the next tranche. That is unencumbered, meaning that we have free access to pull that down at our discretion.

Molly Henderson: And then as it relates to follow your question on the debt triggers, we expect that, I think, as I mentioned in my fair to mark, there's 25 million remaining available this year under the next tranche, that is unencumbered, meaning that we have free access to pull that down at our discretion. There's another 100 million that we have available under the facility that has two triggers next year, and those are based upon revenue milestones, but as we continue to reiterate, we feel we have a very good cash position and that we have runway through the end of 2026, and that does assume a drawdown of those debt facilities.

Speaker Change: And then as it relates to follow your question on the debt triggers.

Molly Henderson: We expect.

Molly Henderson: I think as I mentioned in my prepared remarks, there's $25 million remaining available. This year under the next tranche that is unencumbered, meaning that we have free access to pull that down at our discretion. There is another $100 million that we have available under the facility that.

Molly Henderson: There's another $100 million that we have available under the facility that has two triggers next year, and those are based on revenue milestones. But as we continue to reiterate that we feel we have a very good cash position and that we have runway through the end of 2026, and that does assume a drawdown of those debt facilities. And I think one other point I'll make relative to our spend is another comment in my prepared remarks mentioned our DTC spend.

Molly Henderson: Has two triggers next year and those are based upon revenue milestones, but as we continue to reiterate that we feel we have.

Molly Henderson: Very good cash position and that we have runway through the end of 2026 and that does assume a drawdown of those depths.

Molly Henderson: Debt facilities.

Speaker Change: One other point ill make relative to our spend is another comment in my prepared remarks mentioned, our DTC spend we know that's something that's often fluctuate through launches that we feel good with our current amount of spend and as Martin has indicated the resources. We have in place really helped drive the non erosive lands, we don't expect a significant increase.

Molly Henderson: We know that's something that often fluctuates through launches, but we feel good with our current amount of spend. And, as Martin has indicated, the resources we have in place really help drive the non-erosive launch. We don't expect a significant increase in OPEC spend relative to our commercial activities. Great. Thanks.

Martin Gilligan: And I'll expand relative to our commercial activities.

Molly Henderson: Great, thanks for the additional color, Molly.

Molly Henderson: Great. Thanks for the additional caller, Molly.

Molly Henderson: Great. Thanks for the additional color Molly.

Molly Henderson: Yes.

Molly Henderson: Thank you.

Operator: And our next question comes from the line up: Chase Knickerbocker, with Greg Calhemi on his open.

Molly Henderson: And our next question comes from the line up: Chase Knickerbocker, Whit Crick, HowlinMail, and Anasulpin.

Molly Henderson: Our next question coming from the line of Jason.

Molly Henderson: Jason <unk> with Craig Hallum. Your line is open.

Molly Henderson: Yeah.

Chase Knickerbocker: Good morning, thanks for taking the questions and congratulations on the continued progress. Just first for me, and I'm sorry I joined late here, and I might make you repeat yourself, but on the Caremark contract, can you just update me on a little bit more of the details there? Does this also include an OTC at the station for the step through?

Chase Knickerbocker: Good morning, thanks for taking the questions and congratulations on the continued progress. Just first for me, and I'm sorry, I joined late here. And I might make you repeat yourself. But on the Caremark contract, can you just update me on a little bit more of the details there? Does this also include an OTC at the station for the step through?

Chase Knickerbocker: Good morning, Thanks for taking the questions and congrats.

Speaker Change: Congrats on the continued progress.

Chase Knickerbocker: First for me and I'm, sorry, I joined late here.

Chase Knickerbocker: And that might make you repeat yourself, but on the caremark contract.

Chase Knickerbocker: Can you just update me on that a little bit more of the details. There does this also include an OTC.

Speaker Change: At the station for the for the sector.

Martin Gilligan: Yeah, so in terms of Caremark, it's like the others that I described. It's one step through the PPI, and it does not include that OTC attestation. But I just want to flag something here. When we came out of the gates with Express Scripts and Cigna, that was beyond even our strategy or what we thought the best case could be. So I just caution you, you know; don't take that as an opportunity lost.

Speaker Change: Yes so.

Speaker Change: In terms of caremark, it's like the others that I described it's one step through our PPI and it does not include that OTC FF station, but I just I want to flag something here. When we came out of the gates with express scripts Cigna.

Martin Gilligan: That was beyond even our strategy or what we thought the best case could be so I just caution you don't take that as a opportunity loss thats not with Cvs Caremark, it's really that that was just above and beyond for the others. So.

Martin Gilligan: That's not with CVS Caremark. It's really that that was just above and beyond for the others. So we're right on strategy with that one step through the prescription PPI.

Martin Gilligan: We're right on strategy without one step through a prescription PPI.

Chase Knickerbocker: No, that makes sense. And kind of asking the question in the light of, you know, that being, you know, kind of an upside case to your previous expectations of that, you know, 77% of covered lives now from commercial patients in the United States that we have, you know, under contract, what portion of that does include that OTC attestation? And then second, just kind of, you know, previously, we've discussed kind of street expectations to kind of orient people on how you're thinking about the year.

Speaker Change: No it makes sense.

Speaker Change: Kind of asking the question in light of that.

Chase Knickerbocker: That being kind of an upside case to your previous expectations of that 77% of covered lives now.

Chase Knickerbocker: From commercial patients in United States that we have under contract what portion of that does include that OTC attestation.

Chase Knickerbocker: And then second just kind of previously we've discussed kind of street expectations to kind of Orient people on how youre thinking about the year.

Chase Knickerbocker: You know, as we talk to GIs, which are still the majority of your writers here, at least to my knowledge, they definitely speak to, you know, kind of a multiple of prescriptions that they would expect for NERD patients relative to erosive, kind of speak to your confidence and kind of back half numbers, which again, as it sits today, is a 50% increase kind of from Q2 to Q3, with that kind of in mind Thanks.

Chase Knickerbocker: You know, as we talk to GIs, which are still the majority of your writers here, at least to my knowledge, they definitely speak to, you know, kind of a multiple of prescriptions that they would expect for NERD patients relative to erosive, kind of speak to your confidence and kind of back half numbers with again, as it sits today, a 50% increase kind of from Q2 to Q3 with kind of that in mind. Thanks.

Chase Knickerbocker: As we talk to Gis, which are still the majority of your of your writers here at least to my knowledge.

Chase Knickerbocker: They definitely speak to kind of a multiple of <unk>.

Chase Knickerbocker: Prescriptions that they would expect for nerd patients relative to erosive.

Chase Knickerbocker: Speak to your confidence in kind of back half numbers with <unk> again as it sits today is a 50% increase from Q2 to Q3 with kind of that in mind. Thanks.

Martin Gilligan: Yeah, so a couple parts to your question. In terms of what percent of the population would also have that OTC access station, I'm just going to say roughly, and I'm going off memory, Chase said out of the 115 million lives, about maybe 22 million of them fall under Express Scripts. So I think that answers the first part. In terms of the second part, I think your question was really about the fill rate. Is that correct, moving forward?

Speaker Change: Yes, so a couple of parts to your question.

Martin Gilligan: In terms of what percent of the access is.

Martin Gilligan: <unk>.

Martin Gilligan: Also have that OTC FM station I'm, just going to say roughly and I'm going off memory J said out of the 115 million lives about maybe $22 million of them fall under express scripts.

Martin Gilligan: So I think that answers the first part in terms of the second part I think your question was really about the fill rate is that correct moving forward.

Chase Knickerbocker: Yeah, more so just on kind of the increased demand that we'll drive from NERD. I mean, in some of our checks, we hear, you know, kind of multiples of prescriptions that they'll write for NERD relative to or relative to your current writers, and then kind of informing how you guys are thinking about kind of street expectations in the second half, which you've kind of oriented people on before. It calls for a 50% increase sequentially into Q3. Please just speak to your confidence in that number. Thanks.

Chase Knickerbocker: Yeah, more so just on kind of the increased demand that we'll drive from NERD. I mean, in some of our checks, we hear, you know, kind of multiples of prescriptions that they'll write for NERD relative to Erosiv with your current riders, and then kind of informing how you guys are thinking about kind of street expectations in the second half, where you've kind of oriented people on before, it calls for a 50% increase sequentially into Q3, and just speak to your confidence in that number. Thanks. Yeah, so

Speaker Change: Yes, Marshall just on kind of the increased demand that will drive from nerd and some of our checks we hear kind of multiples of prescriptions Dell right for <unk> relative to <unk> with your current writers and then kind of informing how you guys are thinking about kind of street expectations in the second half, where you've kind of oriented people on before that calls for a 50% increase.

Speaker Change: <unk> into Q3, and just speak to your confidence in that number.

Martin Gilligan: Yeah, so I'll take I'll take the first part of that and then pass it off to Molly. So, you know, one of the things that we've been talking to all of you about for a number of years now is that non-erosive was really the biggest indication. It's three times larger than erosive, so we have really just opened up the entire GERD market. And I think our opportunity there is the fact that we have a real differentiated product.

Molly Henderson: Yeah, so I'll take I'll take the first part of that and then pass it off to Molly. So, you know, one of the things that we've been talking to all of you about for a number of years now is that non-erosive was really the biggest indication. It's three times larger than erosive, so we have really just opened up the entire GERD market. And I think our opportunity there is the fact that we have a real differentiated product.

Martin Gilligan: You know, it works all day and all night, but it also works very quickly. Right on our label, it talks about full effect on day two, which is something that a PPI would not have. And then also continues that same effect for both the four week period, as well as the 20 week extension. So it's really got sustainability. So it's differentiated, and I can tell you, going back to, you know, Paul's earlier question, all physicians recognize that you're seeing the experience.

Speaker Change: Yes, so I'll take I'll take the first part of that and then ask about some Ali so one of the things that we've been talking to all of you about for a number of years now is that non erosive was really the biggest indication is three times larger than erosive. So we really just opened up the entire GERD market and I think our opportunity there is the fact that.

Molly Henderson: We have a real differentiated product.

Molly Henderson: It works all day, and all night, but also it works very quickly right in our label it talks about.

Molly Henderson: You know, it works all day and all night, but it also works very quickly. Right on our label, it talks about full effect on day two, which is something that a PPI would not have. And then also continues that same effect for both the four week period as well as the 20 week extension. So it's really got sustainability. So it's differentiated, and I can tell you, going back to, you know, Paul's earlier question, all physicians recognize that you're seeing the experience.

Martin Gilligan: But as Paul brought up, those nurse practitioners and physician assistants, they are just welcoming this product. So we think that, you know, non-erosive is exactly as we said it was just a really large opportunity.

Molly Henderson: Full effect at day, two of which is something that our PPI would not have and then also continues that same effect for both the four week period as well as the 20 week extension. So it's really got the sustainability. So it's differentiated and I can tell you going back to Paul's earlier question, all physicians recognize that youre seeing the experience, but it's.

Molly Henderson: Paul brought up those nurse practitioners and physician assistance. They are just welcoming those products. So we see that.

Paul Choi: Non erosive is exactly as we set out to do is just a really large opportunity.

Molly Henderson: Yeah, and as it relates to guidance, as you know, we're not providing specific guidance on a quarterly basis, but going into launch, we always knew the back half of 2024 was going to be significant between further access, the DTC campaign up and running, and the non-erosive label. So those three items are really what's going to drive us home for the rest of this year. And we continue to reiterate that we feel comfortable with a full year consensus of where it is.

Speaker Change: Yeah, and as it relates to guidance as you know, we're not providing specific guidance on a quarterly basis, but going into launch we always knew the back half of 2024 was going to be significant between further access DTC campaign up and running in non erosive label. So those three items are really what's going to drive us down for the rest of this year and we continue to reiterate that we.

Molly Henderson: But as Paul brought up, those nurse practitioners and physician assistants, they are just welcoming this product. So we think that, you know, non-erosive is exactly as we said it would be. It's just a really large opportunity.

Molly Henderson: Yeah, and as it relates to guidance, as you know, we're not providing specific guidance on a quarterly basis, but going into launch, we always knew the back half of 2024 was going to be significant between further access, the DTC campaign up and running, and non-erosive labels. So those three items are really what's going to drive us home for the rest of this year. And we continue to reiterate that we feel comfortable with a full year consensus of where it is now.

Molly Henderson: Still comfortable with the full year.

Molly Henderson: Consensus of where it is now.

Molly Henderson: Great. Thanks, guys, and curious, yeah.

Chase Knickerbocker: Great, thanks guys, and congrats again.

Speaker Change: Great Thanks, guys and congrats again.

Jay: Thanks Jay.

Operator: Thank you. And our last question comes from the line of Matthew Caufield with HC Wainwright, Elana Saltman.

Speaker Change: Thank you and our last question is coming from the line of Matthew coupled with H C. Wainwright. Your line is open.

Matthew Caufield: Hi, thank you. Good morning, guys. Just quickly here, so for the prescription mix currently favoring GIs, is that more a factor of those patients already having progressed to seeing a GI specialist, at least at this stage, or are primary care physicians at all less receptive to prior authorizations, and then patients are essentially being passed forward to GI specialists? Are there any further distinctions there, kind of for that, Nick?

Matthew Caufield: Hi, thank you. Good morning, guys.

Matthew Caufield: Hi, Thank you. Good morning, guys just quickly here so for the prescription mix currently favoring Gis is that more a factor of those patients already having progressed as seen in Gi specialists at least at this stage or are primary care physicians at all less receptive to prior authorizations and then patients are essential.

Matthew Caufield: Just quickly here, so for the prescription mix currently favoring GIs, is that more a factor of those patients already having progressed to seeing a GI specialist, at least at this stage, or are primary care physicians at all less receptive to prior authorizations, and then patients are essentially being passed forward to GI specialists? Are there any further distinctions there, kind of for that mix?

Dean: Dean pass forward to Gi specialists.

Matthew Caufield: Is there any further distinctions there kind of for that mix.

Martin Gilligan: Yeah, so actually, let me mix your different topics here just to clarify. First of all, I think the high utilization of GI is obviously one specialist adopts new products sooner, new mechanisms sooner. But also, and I think I referenced this earlier, out of the gates, we really focused on the highest SL positions for Rosep Gerd, and they were naturally gastroenterologists. So I think you should look at it more as where we put both our reach and our frequency in the early months of launch.

Matthew Caufield: Yes.

Matthew Caufield: So actually let me.

Speaker Change: I might have missed your different topics here just to clarify first of all I think the high utilization of GI is obviously, one specialists adapt product new product sooner new mechanism sooner, but also and I think I referenced this earlier out of the gates, we really focus on the highest decile physicians for erosive GERD and.

Martin Gilligan: Do you not interpret that as primary care, do not see the opportunity, or this differentiated product for primary care? And the other thing I'll just say is just to clarify the PA for, I'll say, for that one step through a PPI, the only thing that a physician really needs to do is identify that that patient has been on a PPI. So there are different levels of prior authorization, and many of them are actually picked right up at the pharmacy, so the physician has no action. So I'm not sure the primary care actually has that much work to do to get both by stuff. Okay, very helpful.

Matthew Caufield: Okay, very helpful. I appreciate it.

Martin Gilligan: We're naturally gastroenterologists. So I think you should look at it more of where we put both our reach and our frequency.

Martin Gilligan: In the early months of launch.

Martin Gilligan: Did you not interpret that as primary care? Do not see the opportunity or this differentiated product for primary care. And the other thing I'll just say is just to clarify the PA for that one step through a PPI, the only thing the physician really needs to do is identify that patient has been on a PPI. So there are different levels of prior authorization, and many of them are actually picked right up at the pharmacy, so the physician has no action. So I'm not sure primary care actually has that much work to do to get before us now. Okay, very helpful.

Speaker Change: Did you not interpret that as primary care do not see the opportunity or this differentiated product for.

Martin Gilligan: For primary care.

Martin Gilligan: And the other thing I would just say is just to clarify the PAA for.

Martin Gilligan: I'll save.

Martin Gilligan: For that one step through our PPI. The only thing the physician really needs to do is identify that that patient has been on the PPI.

Martin Gilligan: So there's different levels of prior authorizations and many of them are actually picked right up at the pharmacy. The physician has no action. So im not sure. The primary care actually has that much work to do to get the cross sell.

Operator: And that's all the time we have for our Q&A session. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.

Matthew Caufield: Okay, very helpful. I appreciate it.

Martin Gilligan: Okay very helpful. I appreciate it.

Matthew Caufield: Thank you.

Operator: And as we have all the time we have for our CUNY session, ladies and gentlemen, this concludes the conference call. Thank you for your participation, and you may not disconnect.

Matthew Caufield: And that's all the time, we have far Kenny session, Ladies and gentlemen. This concludes today's conference call. Thank you for your participation and you may now disconnect.

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Terrie Curran: If these programs lead to FDA approvals, we believe these indications will continue to expand that total addressable market and further differentiate the questioner from the API, which is not approved for either indication. On the financial side, Molly will further detail our second quarter 2024 results later in the call, for which we reported revenues of $7.3 million and ended with $276 million in cash. We remain confident that our strong balance sheet will enable us to continue delivering on our launch and development strategy.

Paul Choi: Can you just remind me what the criteria and the trigger are for accessing it at this point and sort of how you're thinking about the planning and timing relative to your current burn rate? Thank you very much for taking our questions.

Molly Henderson: And I think one other point I'll make relative to our spend is another comment in my prepared to mark mentioned our DTC spend. We know that's something that often fluctuates through launches, but we feel good with our current amount of spend, and, as Martin has indicated, the resources we have in place really help drive the non-arrows of launch, and we don't expect a significant increase and nor do we expect it to extend relative to our commercial activities. Great, thanks.

Q2 2024 Phathom Pharmaceuticals Inc Earnings Call

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