Phathom Pharmaceuticals: Can VOQUEZNA Drive Profitability by 2026?

Phathom Pharmaceuticals (NASDAQ: FATH) is betting big on its lead drug, VOQUEZNA (vonoprazan), to fuel a path to profitability by 2026. The company has outlined aggressive expansion plans for its GERD treatment alongside sweeping cost-cutting measures. But can this strategy pay off? Let’s dig into the details.

The VOQUEZNA Growth Engine

VOQUEZNA, a potassium-competitive acid blocker (PCAB), has become the cornerstone of Phathom’s strategy. As of April 2025, the drug has racked up over 390,000 prescriptions, with sequential quarterly growth of ~8% despite seasonal headwinds. The prescriber base has also expanded to 23,600 healthcare providers, up 18% since late 2023.

This growth is underpinned by strong commercial access: VOQUEZNA now covers ~120 million U.S. lives, or 80% of commercial plans, with minimal prior authorization hurdles. A celebrity partnership with Saturday Night Live’s Kenan Thompson—whose GERD story went viral—has also boosted brand awareness.

Cost-Cutting: A Necessity, Not a Luxury

While VOQUEZNA’s sales are rising, Phathom’s losses remain daunting. In Q1 2025, the company reported a net loss of $94.3 million, driven by soaring marketing expenses (G&A costs hit $94.5 million, up 52% year-over-year). To address this, Phathom has launched a $60–$70 million cost-cutting initiative, targeting expenses below $55 million per quarter by Q4 2025.

Key moves include:
- Workforce reduction: A 6% cut to its 452-employee headcount, with non-core roles eliminated.
- Paused trials: The Phase 2 study for eosinophilic esophagitis (EoE) was shelved to conserve cash.
- Marketing shift: DTC advertising (e.g., TV ads) slashed, with funds reallocated to salesforce growth.

These measures are critical. Without them, Phathom’s cash runway—currently at $212.3 million as of March 2025—would evaporate long before 2026.

Regulatory and Patent Risks: The Sword of Damocles

Phathom’s 2026 profitability hinges on two key regulatory milestones:
1. FDA’s Citizen Petition: In December 2024, Phathom petitioned the FDA to extend VOQUEZNA’s exclusivity to May 2032 (from its current 2030 expiration). A favorable ruling would delay generic competition, preserving revenue.
2. Patent Protection: Even if the petition fails, existing patents are expected to shield VOQUEZNA until mid-2030.

However, the FDA’s response—which is due within 180 days—could make or break Phathom. A rejection would open the door to generics, potentially slashing sales by over 50%.

The Financial Math: Can They Make It?

Phathom’s goal is operational profitability (excluding stock-based compensation) by 2026. Here’s the math:
- Revenue Growth: VOQUEZNA’s 2024 sales hit $55.3 million, up from $0.7 million in 2023. If prescriptions keep rising at 30% annually, sales could hit $200–$250 million by 2026—a “blockbuster” target.
- Expense Reduction: The $60–$70 million cut would bring annual expenses to ~$200 million, aligning with revenue projections.

The numbers pencil out—if everything goes perfectly. But risks loom:
- Regulatory Delays: A delayed FDA decision on exclusivity could force Phathom to burn cash longer.
- Generic Competition: Even a mid-2030 patent expiration leaves a narrow window to achieve profitability before losses return.

Conclusion: A High-Reward, High-Risk Gamble

Phathom’s strategy is bold: slash costs, double down on VOQUEZNA’s growth, and hope for favorable FDA news. The math suggests profitability is possible by 2026—if the company can:
1. Sustain prescription growth at ~30% annually.
2. Stick to its $60M+ cost-cutting plan without harming sales.
3. Win the FDA’s approval on exclusivity.

Investors should weigh the potential rewards against the risks. With $212 million in cash and a drug that’s already showing strong adoption, Phathom has a fighting chance. But if the FDA says “no” or generic competition arrives early, this could become a cautionary tale.

Bottom Line: Buy if you’re willing to bet on VOQUEZNA’s dominance in GERD—and a favorable regulatory outcome. Otherwise, wait for clearer signs of success.