Phathom Pharmaceuticals, Inc.

Hello, and welcome to Fathom Pharmaceuticals' fourth quarter and full year 2025 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, please press star 1-1 on your telephone keypad. Please be advised that today's call is being recorded. With that, I would like to turn the call over to Eric Chiarelli, Fathom's Head of Investor Relations. Please go ahead.

Thank you, operator. Hello, everyone, and thank you for joining us this morning to discuss Fathom's fourth quarter and full year 2025 results. This morning's presentation will include remarks from Steve Basta, our president and CEO, and Sanjeev Nallula, our chief financial and business officer. A couple of notes before we get started. Earlier this morning, we issued a press release detailing the results we'll be discussing during the call. A copy of that press release can be found under the news releases section of our corporate website. Further, the recording of today's webcast and the slides we'll be reviewing can also be found on our corporate website under the Events and Presentations section. Before we begin, let me remind you that we'll 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 Fathom's control. Actual results may materially differ from the forward-looking statements, and any such risks may materially adversely affect our business and results of operations and the trading prices for Fathom's common stock. A discussion of these statements and risk factors is available in the current Safe Harbor slide, as well as in the risk factors section of our most recent Form 10-K and subsequent SEC filings. All forward-looking statements made on this call are based on the beliefs of Fathom as of this date, and Fathom disclaims any obligation to update these statements. Later in the call, we will be commenting on both GAAP and non-GAAP financial measures. Specifically in the scope of this discussion, when we refer to cash operating expenses, please note we are referring to the non-GAAP form of this measure, which excludes non-cash stock-based compensation. As always, detailed reconciliations between our non-GAAP results and the most directly comparable GAAP measures are included in this morning's press release. With that, I will now turn the call over to Steve Basta, BASM's President and CEO, to kick us off. Steve? Thank you, Eric.

And thank you to our investors and analysts for joining our call this morning. Thank you even more to the FABIM colleagues for your diligence and dedication throughout 2025. It was a transformational year for the company, and we're now set to execute our growth and profitability plan. Let me start by summarizing the key points Sanjeev and I will be discussing today. We had a successful Q4. We delivered on expectations for both revenue and cash operating expense levels, coming in at the better end of our guided ranges. We've taken key steps in the recent two months to enhance our capital structure, reduce our interest expense, and modify our outstanding term loan obligations. As a result, we believe our cash on hand, along with anticipated future cash generated from operations, will be sufficient to satisfy all obligations under both our term debt and our revenue interest financing agreements. We're on track in guiding to operating profitability beginning in Q3 of this year and for full year 2026. Our 320 million to 345 million revenue guidance for 2026 reflects our operating expectation of continued solid growth from our GI-focused strategy and includes an accounting-related classification change, which Sanjeev will cover in more detail. Our sales organization is positioned to deliver, and we're seeing clear signs that our GI strategy is working. I'm very proud of what our team accomplished in 2025. We believe we've set ourselves up for success both financially and operationally. Beginning the update today with our financial highlights for Q4 and full year 2025, our results are in line with our preannounced estimates from January and incrementally a bit better on expenses and on cash usage. We delivered on the plan we set forth on our May earnings call and reiterated our earnings calls in August and in October. Net revenues were $175.1 million for the full year 2025, representing 217% year-over-year growth. Q4 sequential quarterly growth was solid during a period of Salesforce alignment, as we had discussed in our October call. In August, we guided to $165 million to $175 million for 2025 revenue. We updated that in October to $170 to $175 million narrowing it to the top half of the range. And ultimately, we delivered at the high end of that range. Our Q4 revenue was $57.6 million in line with our pre-release January estimate of $57 to $58 million. Cash operating expenses, excluding stock-based compensation, were $50.3 million for Q4, better than both the less than $55 million target we guided to and to our re-announced range of $51 to $53 million. We delivered solid growth through the last three quarters of 2025 while cutting quarterly cash operating expenses by nearly 50%. Our net cash usage for Q4 of 2025 was approximately $5 million. That's 64% lower than Q3 and consistent with our expectations of reaching operating profitability beginning in Q3 2026 and cash flow positivity in 2027. We've taken significant steps to enhance our capital structure. Our goals were one, to reduce any financing overhang or potential risks stemming from repayment obligations or cash covenants, and two, to reduce our interest expenses. In 2025, we got the fundamentals of our business in order, growing revenue and reducing expenses. That improved financial profile enabled us to complete a successful equity offering in January and to renegotiate our debt terms as we announced today. We have modified our term loan agreement to extend the maturity date, which had previously been December of 2027. We've extended it to February 2029. And we've reduced our interest expense obligation and reduced the total outstanding principal amount. As a result of these capital structure enhancements, we believe our current cash, plus the cash that we expect to generate from operations, in the coming years will be sufficient to meet all obligations under both our term loan and our revenue interest financing agreements. Sanchit will provide further details on these items and take you through our 2026 guidance. I'm very proud of our operating and financial progress these last 12 months. The entire Fathom team is dedicated to our objectives of growing revenue while being disciplined on expenses. We're exhibiting strong momentum, which we expect to carry forward throughout 2026. A few quick notes on our commercial progress. I said before how fortunate we are to be able to positively impact the lives of so many patients. Through February 13th, over 1.1 million Vaquesna total prescriptions have been filled to more than 230,000 patients. We believe we're just starting to penetrate an enormous market. About 65 million patients have gastroesophageal reflux, of which 40% experienced inadequate symptom relief from PPIs. About 273,000 prescriptions were filled in Q4 alone. 174,000 of these were covered prescriptions growing 21% quarter over quarter and representing approximately 64% of the total prescriptions filled in Q4, while 99,000 were filled as cash pay prescriptions. Covered prescription volume drives our revenues, while cash-paid prescription volume improves physician perception of access and makes it easier for physicians to prescribe Viquezna with confidence that their patients will be able to get the drug. Most importantly, both paths enable us to help patients in need of Viquezna. Additionally, in November, we turned on a good RX offering, providing an alternative payment option for patients filling Viquezna prescriptions sent to retail pharmacies. Looking forward, we have confidence in 2026 growth. We just completed our national sales meeting, and the sentiment from the field is terrific. We start March with more than 285 of our 300 sales positions currently filled, a nearly full-strength sales organization. Our strategy to drive depth and frequency of calls to gastroenterologists is solid, and we believe it will ramp utilization and writing frequency among GIs treating GERD. 2026 will be an important year for us as we drive sales growth and transition to profitability. Overall, we continue to deliver as we guided on each of our previous earnings calls. Our 2025 results ended at the better ends of our revenue and cash operating expense guidance ranges we communicated, and we believe we're on track to transition operating profitability beginning Q3 of this year and to reach cash flow positivity in 2027. We've taken important steps to enhance our capital structure and mitigate any covenant or repayment concerns. The sales force is nearly full strength and energized following our national sales meeting. We're well positioned to execute and deliver on our strategy in 2026. I'll now turn the call over to Sanjeev to take you through our detailed financial updates.