PHAT Stock Falls 7% As Leerink Sees Little Near-Term Upside — CEO Plays Down Upcoming Rival

• Leerink opened coverage of PHAT with a Market Perform rating and a $10 price target. 
• Speaking the same day at Cantor Fitzgerald’s healthcare conference, Chief Executive Steve Basta and Chief Financial Officer Sanjeev Narula argued the commercial story for VOQUEZNA is stronger than the stock implies.
• Basta also argued a second launch in the drug category could expand it rather than simply steal share.

Shares of Phathom Pharmaceuticals (PHAT) slid about 7% on Wednesday after Leerink Partners opened coverage with a Market Perform rating and a $10 price target, arguing the company’s acid-reflux drug faces a crowded, price-sensitive market.

Cautious First Look From Leerink

The firm said that VOQUEZNA competes in a “highly genericized” gastroesophageal reflux disease market against long-available proton pump inhibitors (PPI). The forecasts sit close to Street consensus, and the firm sees few near-term sources of upside to those estimates.

The $10 target sits only modestly above Tuesday’s closing price of $9.43. According to data from Koyfin, 10 of the 11 analysts covering PHAT stock rate it ‘Buy’ or higher while one rates it ‘Hold.’ The stock has an average 12-month price target of $21.50.

Management: Demand Is Not The Problem

Speaking the same day at Cantor Fitzgerald’s healthcare conference, Chief Executive Steve Basta and Chief Financial Officer Sanjeev Narula argued the commercial story is stronger than the stock implies. Basta said about 30% to 40% of reflux patients still have significant pain on PPIs and that VOQUEZNA raises stomach pH more effectively. Among gastroenterologists surveyed, 97% believe the drug is more effective than older options, he said.

The bottleneck, he added, is “access friction”: prescribing it takes more work than writing a PPI, he said. “They (physicians) aren't confident always about whether or not their patient is actually going to be able to get the drug or what their patient's going to have to pay for the drug, and so that causes a bit of hesitation around when you prescribe,” Basta said.

Competition Concerns

CEO Steve Basta also addressed the rival potassium-competitive acid blocker that the FDA is slated to decide on in the first quarter of 2027 and could potentially launch next year. “We have already got an established 3-year commercial lead in this space,” he said.

He pointed to healing data in erosive esophagitis, the more severe form of GERD. “In our phase III erosive esophagitis trial, 93% of erosive esophagitis patients healed within 8 weeks. In the competitive PCAB trial, it was around 85%.” That, he said, is “a really good indicator of how strong our drug is.”

Basta also argued a second launch could enlarge the category rather than simply steal share. A second product, he said, changes physician thinking from “this is a product that I need to think about relative to other products” to “this is now the new class of drugs.” In that shift, “the lead product in the category captures the majority of the uplift,” the CEO said. Phathom, he added, “should remain the leading product for a durable future in this space.”

VOQUEZNA Contribution

VOQUEZNA is Phathom’s only commercial product and the company’s entire revenue engine. It is approved for erosive gastroesophageal reflux disease (GERD), heartburn from non-erosive GERD, and, in combination packs, H. pylori infection. In the second quarter, net sales reached a record $74.3 million, up 88% from a year earlier and 27% from the first quarter. The company filled about 325,000 prescriptions in the quarter, bringing the cumulative total since launch to roughly 1.7 million.

That growth has not been friction-free. On July 30, the company cut 2026 revenue guidance to $310 million–$325 million from $320 million–$345 million, citing prior-authorization delays, especially in milder GERD.

Cost cuts still helped Phathom post operating profitability excluding stock-based compensation in the second quarter. Cash stood at $182.5 million at midyear. Management still expects that adjusted profitability to hold for the rest of 2026 and cash-flow positivity in 2027.

Pipeline Catalysts Later This Year

Phathom is currently attempting to expand the market for VOQUEZNA.

Enrollment is complete in a 95-patient mid-stage trial of VOQUEZNA in eosinophilic esophagitis; 12-week data are due in the fourth quarter. Positive results could open FDA talks on a later program, including pediatric work that might add six months of exclusivity.

Phathom also plans to start a late-stage study of as-needed dosing in non-erosive GERD in the same quarter.

How Did PHAT Retail Traders React?

On Stocktwits, retail sentiment around PHAT stock rose from ‘neutral’ to ‘bullish’ over the past 24 hours, while message volume increased from ‘low’ to ‘normal’ levels.

PHAT stock has fallen 47% year-to-date. 

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