On Friday, H.C. Wainwright maintained a Buy rating and a $28.00 price target for NASDAQ:PHAT, Phathom Pharmaceuticals. This affirmation follows the recent FDA approval and subsequent label expansion for the company's Voquezna oral tablets. Voquezna, a novel potassium-competitive acid blocker (PCAB), is now approved for a broader range of uses within the gastroesophageal reflux disease (GERD) treatment market.
Voquezna is now sanctioned for adult Non-Erosive Gastroesophageal Reflux Disease (Non-Erosive GERD, NERD) heartburn relief, a segment that constitutes over 70% of the GERD market. Moreover, the medication is approved for the healing and ongoing maintenance of erosive GERD as well as a combination therapy with antibiotics for H. pylori infection treatment.
The expanded label allows Voquezna to cater to the full spectrum of GERD, whether erosive or non-erosive. This has significant implications for the 65 million annual adult patients in the U.S., out of which approximately 22 million are diagnosed and receive prescription therapy.
The broader label is expected to create substantial growth opportunities, as it simplifies the treatment pathway by potentially eliminating the need for endoscopy to determine erosion before prescription.
The market's accessibility to Voquezna is further enhanced by the fact that it can be prescribed directly after standard proton pump inhibitor (PPI) therapy, without the barrier of endoscopy. This ease of transition is poised to facilitate increased adoption among healthcare providers.
Looking ahead, H.C. Wainwright anticipates initial positive impacts from the label expansion to become evident in the second half of 2024. The firm's stance underscores the potential for Phathom Pharmaceuticals to capitalize on the expanded indications of Voquezna, which now serves a broader segment of the GERD market.
In other recent news, Phathom Pharmaceuticals has received FDA approval for VOQUEZNA® (vonoprazan) 10 mg tablets, a new treatment for Non-Erosive Gastroesophageal Reflux Disease (Non-Erosive GERD) in adults. This marks a significant advancement in GERD treatment, being the first of its kind approved by the FDA in over three decades.
The approval was based on the PHALCON-NERD-301 study, demonstrating a significant reduction in heartburn episodes compared to placebo.
Further, financial services firm Stifel has assigned a Buy rating to Phathom Pharmaceuticals following the successful launch of VOQUEZNA. The drug, developed as a potassium competitive acid blocker (PCAB), introduces a new mechanism of action in treating these conditions, potentially setting it as the new standard of care. Stifel has also noted the positive reception in the physician community and the drug's smooth market introduction.
Phathom Pharmaceuticals is expected to expand the market with a new drug application for non-erosive GERD by July 19, 2024, and ongoing studies for as-needed GERD dosing and eosinophilic esophagitis (EoE).
InvestingPro Insights
Following the positive outlook from H.C. Wainwright on Phathom Pharmaceuticals, current metrics from InvestingPro provide a mixed financial picture for the company. Despite the recent FDA approval and label expansion for Voquezna, Phathom Pharmaceuticals is experiencing a rapid cash burn and is not expected to be profitable this year, according to InvestingPro Tips. With a market capitalization of $677.12 million, the company is trading at a high revenue valuation multiple, which could be indicative of investor confidence in the company's future growth prospects.
InvestingPro Data further reveals a gross profit margin of 77.14% for the last twelve months as of Q1 2024, suggesting that while the company's sales are not high, it retains a significant portion of its revenue as gross profit. Additionally, Phathom Pharmaceuticals has demonstrated strong stock performance in the short term, with a 24.64% return over the last three months and a 49.27% increase over the last six months. These figures may reflect investor optimism following the recent developments with Voquezna.
For readers looking to delve deeper into Phathom Pharmaceuticals' financial health and future prospects, there are additional InvestingPro Tips available. These tips can provide valuable guidance for making informed investment decisions. To explore these insights and more, visit https://www.investing.com/pro/PHAT, and don't forget to use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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