Phathom Pharmaceuticals (PHAT 9.45%), a biopharmaceutical company specializing in treatments for gastrointestinal diseases, announced its second quarter 2025 earnings on August 7, 2025. The company's results were highlighted by a jump in GAAP revenue that surpassed analyst forecasts and robust growth in prescriptions for its lead product, VOQUEZNA, a novel acid blocker. GAAP revenue reached $39.5 million in Q2 2025, compared to consensus estimates of $36.3 million, while non-GAAP net loss narrowed to $56.5 million from $73.3 million a year earlier. Expenses showed early signs of reduction, though operating losses remain. The period reflected both strong commercial execution and the company’s efforts to streamline operations as it targets profitability in fiscal 2026.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $(0.79) | $(0.95) | $(1.25) | 36.8% |
| Revenue (GAAP) | $39.5 million | $36.32 million | $7.3 million | 441.1 % |
| Non-GAAP Operating Expenses | $86.1 million | $77.1 million | 11.7 % | |
| Non-GAAP Net Loss | $(56.5) million | $(73.3) million | 22.9 % decrease |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Strategic Focus
Phathom Pharmaceuticals is focused on advancing treatments for acid-related gastrointestinal disorders, primarily through its lead compound, vonoprazan. Vonoprazan is a potassium-competitive acid blocker (PCAB), a newer class of drug designed to provide more rapid and lasting acid suppression than traditional proton pump inhibitors (PPIs). Unlike PPIs, vonoprazan does not require activation by stomach acid, can be taken without regard to meals.
The company’s business rests heavily on effective commercialization of its VOQUEZNA product family, which includes prescription tablets and eradication packs for H. pylori infection. Key to its strategy are expanding specialist adoption, ensuring widespread insurance coverage, and leveraging regulatory exclusivity. Focused cost management and the ability to rapidly scale sales—while navigating exclusivity windows and market competition—are critical for long-term success.
Highlights and Key Developments in the Quarter
GAAP revenue increased by 441% compared to the second quarter of 2024. This boost was driven by continued prescription growth for VOQUEZNA, with cumulative prescriptions exceeding 580,000 as of July 25, 2025, up 49% since May 1, 2025. During Q2 2025, approximately 173,000 VOQUEZNA prescriptions were filled—a 36% sequential increase from Q1. The prescriber base expanded to more than 29,300 unique healthcare providers as of July 18, 2025, reflecting a 24% rise since the last quarterly update, with approximately 70% of prescriptions written by gastroenterology specialists.
Access to VOQUEZNA improved further, with commercial insurance coverage for more than 120 million U.S. lives as of Q2 2025. The retail pharmacy channel accounted for approximately 68% of filled prescriptions in Q2 2025, while the remainder were sourced through cash-pay options such as BlinkRx. The company's payer mix and gross-to-net discount (that is, the difference between list price and final realized price after discounts) continue to evolve, with guidance for discount rates remains within 55–65% for the remainder of 2025. Some prior-quarter retail channel softness, attributed to seasonality and insurance resets, was offset by broader access efforts in Q1 2025.
Cost control became a centerpiece of Phathom’s strategy this quarter. Operating expenses (GAAP) fell to $94.4 million in Q2 2025 from $103.7 million in Q1 2025. Non-GAAP operating expenses are expected to drop below $60 million in Q3 2025 and below $55 million in Q4 2025. The cutbacks included a 6 % reduction in staff, reduced spending on direct-to-consumer TV advertising, and a pivot toward digital marketing and in-person specialist sales. R&D spending increased year over year in Q2 2025 due to one-time restructuring charges, but the company paused new clinical studies—including a planned Phase 2 trial in eosinophilic esophagitis—pending regulatory clarity and financial review, as disclosed in Q1 2025.
The company’s net loss narrowed on both a GAAP and non-GAAP basis in Q2 2025 compared to Q2 2024, with Non-GAAP adjustments primarily related to non-cash stock-based compensation and financing charges. The cash balance was $149.6 million as of June 30, 2025. Management cited its expectation that, excluding stock-based compensation, these resources are sufficient to support the business through the transition to profitability in 2026.
Product Portfolio, Execution, and Operational Shifts
The VOQUEZNA line—comprising prescription tablets, a triple pack, and a dual pack for H. pylori—continues to drive Phathom’s business. VOQUEZNA, as a PCAB, aims to resolve key limitations of older PPIs by delivering faster, more consistent symptom relief for patients with gastroesophageal reflux disease or H. pylori infections.
Management reinforced its commitment to specialty engagement, noting that gastroenterologists now account for the majority of prescriptions. The field sales team remains at full capacity, with new leadership brought on to further deepen these relationships. The company’s decision to wind down high-dollar TV advertising was influenced by data showing limited impact compared to sales team efforts, freeing capital for more targeted and digital promotion.
Phathom secured an important regulatory win as the U.S. Food and Drug Administration (FDA) granted ten years of New Chemical Entity exclusivity for VOQUEZNA tablets through May 2032, as reflected in the FDA's June 2025 Orange Book update. This delays any generic drug applications for the product until at least that time, with management expects generic entry for VOQUEZNA to be unlikely before 2033, based on the June 2025 FDA Orange Book update reflecting 10-year NCE exclusivity for VOQUEZNA 10 mg and 20 mg tablets through May 2032. However, the period is not without risks—pending regulatory petitions and potential legal actions could still affect this timeline.
Operationally, the company is on a tighter cost discipline footing. Alongside headcount reduction, several pipeline projects, including a planned study for eosinophilic esophagitis, have been paused, with future initiation to be evaluated. All third-party contracts are under review. These changes are expected to reduce 2025 operating expenses by approximately $60 to $70 million.
Looking Ahead
Management reaffirmed its outlook for full-year 2025 revenue in the $165 million to $175 million range, reflecting confidence in current prescription trends and commercial execution. Non-GAAP operating expenses are projected to be below $60 million in Q3 2025 and under $55 million in Q4 2025. Profitability from operations, excluding stock-based compensation, is targeted for 2026.
On the watch list for investors will be the sustainability of the current prescription ramp, execution of cost-reduction plans, and ongoing regulatory milestones. Some pipeline development programs outside VOQUEZNA have been paused or deferred, including the planned Phase 2 study in eosinophilic esophagitis; future initiation will be evaluated. The company does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
