Phathom Pharmaceuticals (PHAT) PT Lowered to $44 at Needham & Company to Reflect vonoprazan Launch Dynamic, "Remain Confident in the Commercial Potential"

Needham & Company analyst Joseph Stringer lowered the price target on Phathom Pharmaceuticals (NASDAQ: PHAT) to $44.00 (from $55.00) while maintaining a Buy rating, following news that the company's NDA for vonoprazan had been accepted by the FDA.

The analyst comments: "PHAT announced this morning that FDA has accepted the NDA for vonoprazan for the treatment of Erosive Esophagitis (EE). FDA assigned a standard review and set a PDFUA date of 1/11/23. We anticipate US approval and an EE launch in 1Q23. While we remain confident in the commercial potential of vonoprazan as a best-in-class acid blocker, we are adjusting our models to reflect our updated thoughts on launch dynamics and relative sales contributions in H. pylori, EE, and Non-Erosive Esophagitis. We outline the changes to our model in the note below. With the EE NDA acceptance, $25M debt becomes available, and an additional $160M cash payment to PHAT would be triggered upon US approval. Based on our updated vonoprazan estimates, we project cash runway into 4Q24. Reiterate BUY, but lower $PT to $44 (from $55) to reflect the changes to our model."

By Vlad Schepkov

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