Phathom Pharmaceuticals Inc

Current report

Our future growth and ability to compete depends on retaining our key personnel and recruiting additional qualified personnel.

Current report

We are highly dependent on the management, commercial, development, clinical, and financial experience of our senior management. Although we have entered into employment agreements with our executive officers, each of them may terminate their employment with us at any time. We do not maintain “key person” insurance for any of our executives or employees. This lack of insurance means that we may not have adequate compensation for the loss of the services of these individuals. For example, effective April 1, 2025, Steven Basta was appointed as our President and Chief Executive Officer, replacing Terrie Curran. In addition, effective April 30, 2025, Azmi Nabulsi, M.D., our Chief Operating Officer, Molly Henderson, our Chief Financial Officer, Martin Gilligan, our Chief Commercial Officer, and Tom Harris, our Chief Development Sciences Officer resigned as officers and we announced that Jonathan Bentley will join us as our Senior Vice President, Head of Sales. Executive leadership transitions can be inherently difficult to manage and, as a result, we may experience disruption or have difficulty in managing our operations and achieving our business objectives. Competition for qualified personnel in the biopharmaceutical field is intense, and our future success depends upon our ability to attract, retain and motivate highly skilled commercial, scientific, technical and managerial employees. We face competition for personnel from other biopharmaceutical companies and other organizations. If our recruitment and retention efforts are unsuccessful in the future, it may be difficult for us to implement business strategy, which could harm our business. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating and implementing our development and commercialization strategy. Our consultants and advisors may be employed by employers other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability to us. If we are unable to continue to attract, retain and motivate necessary personnel to accomplish our business objectives, we may experience constraints that will significantly impede achievement of our commercial and development objectives, our ability to raise additional capital and our ability to implement our business strategy.

Current report

We currently rely on, and expect to rely on for the foreseeable future, Evonik and Catalent for the manufacture of vonoprazan drug substance and drug product for clinical development and commercial sale, and we expect to rely on Sandoz for commercial supplies of VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK and the amoxicillin and clarithromycin in those products. This reliance on third parties increases the risk that we will not have sufficient quantities of finished product which could delay, prevent or impair our development or commercialization efforts.

Current report

We do not own or operate manufacturing facilities and have no plans to build our own clinical or commercial scale manufacturing capabilities. We have entered into an agreement with Catalent for the supply of finished drug product, an agreement with Evonik for the supply of drug substance, and an agreement with Sandoz for commercial supply of amoxicillin, clarithromycin and finished convenience packs containing VOQUEZNA and one or both of those antibiotics. As a result, we currently rely, and expect to continue to rely, on third parties for the manufacture of vonoprazan and supply of related raw materials for clinical development and commercial sale. If Catalent, Evonik or Sandoz fails to fulfill its obligations under its respective supply agreement, or if any of the vonoprazan drug product or drug substance supplied by Catalent or Evonik cannot be utilized due to quality or cGMP or similar concerns, adverse findings during regulatory inspections or other reasons, our development plans and commercialization of vonoprazan, if approved, could be significantly delayed or otherwise adversely affected. We have been informed by Sandoz of a potential disruption in the supply of clarithromycin tablets, a component of VOQUEZNA TRIPLE PAK. While we have not experienced any disruptions in supply to date, any disruption for such supply would result in our inability to continue to commercialize the VOQUEZNA TRIPLE PAK.

Current report

Further, the facilities used by Catalent and Evonik to manufacture vonoprazan and by Sandoz to manufacture amoxicillin and clarithromycin and to package the antibiotics and vonoprazan must be approved by the FDA and foreign regulatory authority pursuant to inspections that may be conducted after we submit marketing authorizations to the FDA and comparable foreign regulatory authorities. We do not control the manufacturing process of, and are completely dependent on, Catalent, Evonik and Sandoz for compliance with applicable cGMP or similar requirements. If Catalent, Evonik, Sandoz, or any other third-party manufacturer we contract with in the future, cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or others, including requirements related to the manufacturing of high potency compounds, they will not be able to secure and/or maintain regulatory approval for their manufacturing facilities. In addition, we have no control over Catalent’s, Evonik’s, Sandoz’s, or any other third-party manufacturer’s ability to maintain adequate quality control, quality assurance and qualified personnel. If the FDA or a comparable foreign regulatory authority does not approve of facilities of the third-party manufacturer for the manufacture of vonoprazan or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to continue to develop, obtain additional regulatory approvals for or continue to market our current products.

Current report

Our failure, or Catalent’s, Evonik’s, Sandoz’s or any other third-party manufacturer’s failure, to comply with applicable regulations could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, seizures or recalls of product candidates or products, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our products.

Current report

Our or Catalent’s, Evonik’s or Sandoz’s failure, or the failure of any future third-party manufacturer, to execute on our manufacturing requirements, to do so on commercially reasonable terms and comply with cGMP or similar foreign requirements, could adversely affect our business in a number of ways, including:

Current report

an inability to initiate and continue clinical trials of vonoprazan or any future product candidates;

Current report

delay in submitting regulatory applications, or receiving marketing approvals for new indications for vonoprazan or for any future product candidates;

Current report

requirements to cease development or to recall batches of our current products and any future product candidates; and

Current report

an inability to meet commercial demands for our current products or any future product candidates.

Current report

Reliance on third-party manufacturers entails additional risks, including:

Current report

Our current products, including VOQUEZNA, and any product candidates that we may develop, may compete with other product candidates and products for access to manufacturing facilities. Moreover, there may be a limited number of manufacturers that operate under cGMP or similar regulations and that might be capable of manufacturing for us.

Current report

Any performance failure on the part of Catalent, Evonik, Sandoz or any future manufacturers could delay clinical development or additional marketing approvals, and any related remedial measures may be costly or time consuming to implement. We do not currently have arrangements in place for redundant supply or a second source for all required raw materials used in the manufacture of our current products. If Catalent, Evonik, or Sandoz cannot perform as agreed, we may be required to replace them and we may be unable to replace them on a timely basis or at all. Further, Catalent, Evonik, Sandoz and any other third-party manufacturers we may use may experience manufacturing or shipping difficulties due to resource constraints or as a result of natural disasters, labor disputes, unstable political environments, or public health emergencies or ongoing hostilities in the Ukraine and the Middle East. If Catalent, Evonik, Sandoz or other third-party manufacturers were to encounter any manufacturing or shipping difficulties or delays due to these factors, our ability to provide vonoprazan to patients in clinical trials, or to provide product for treatment of patients if approved, would be jeopardized.

Current report

Our current and anticipated future dependence upon others for the manufacture of our current products or any future product candidates or products may adversely affect our future profit margins and our ability to commercialize any products that receive marketing approval on a timely and competitive basis.

Previous report

If the scope of any patent protection or non-patent regulatory exclusivity we obtain is not sufficiently broad, or if we lose or fail to obtain any of our patent protection or non-patent regulatory exclusivity, our ability to prevent our competitors from commercializing similar or identical product candidates would be adversely affected.

Previous report

The patent position of biopharmaceutical companies generally is highly uncertain, involves complex legal and factual questions, and has been the subject of much litigation in recent years. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Our in-licensed pending and future patent applications may not result in patents being issued which protect vonoprazan or any future product candidates or which effectively prevent others from commercializing competitive product candidates.

Previous report

Moreover, the coverage claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted after issuance. Even if patent applications we own in the future or license currently issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors or other third parties from competing with us, or otherwise provide us with any competitive advantage. Any future patents that we own or license, now or in the future, may be challenged or circumvented by third parties or may be narrowed or invalidated as a result of challenges by third parties. Consequently, we do not know whether vonoprazan or any future product candidates will be protectable or remain protected by valid and enforceable patents. Our competitors or other third parties may be able to circumvent our future patents or the patents of our current and future licensors by developing similar or alternative technologies or products in a non-infringing manner which could materially adversely affect our business, financial condition, results of operations and prospects.

Previous report

The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our future patents or the patents of our current and future licensors may not cover vonoprazan or any future product candidates or may be challenged in the courts or patent offices in the United States and abroad. We may be subject to a third party pre-issuance submission of prior art to the USPTO, or become involved in opposition, derivation, revocation, reexamination, post-grant review, or PGR, and inter partes review, or IPR, or other similar proceedings in the USPTO or foreign patent offices challenging our patent rights. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we or our predecessors and the patent examiner were unaware during prosecution. There is no assurance that all potentially relevant prior art relating to our in-licensed patents and patent applications has been found. There is also no assurance that there is not prior art of which we, our predecessors or licensors are aware, but which we do not believe affects the validity or enforceability of a claim in our in-licensed patents and patent applications, which may, nonetheless, ultimately be found to affect the validity or enforceability of a claim. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate or render unenforceable, our patent rights, allow third parties to commercialize vonoprazan or any future product candidates and compete directly with us, without payment to us. It is possible that defects of form in the preparation or filing of our or our current and future licensors’ patents or patent applications may exist, or may arise in the future, for example with respect to proper priority claims, inventorship, claim scope, or requests for patent term adjustments. If there are material defects in the form, preparation, prosecution, or enforcement of our future patents or future patent applications or our current and future licensors’ patents or patent applications, such patents may be invalid and/or unenforceable, and such applications may never result in valid, enforceable patents.

Previous report

Any loss of patent rights, loss of exclusivity or in patent claims being narrowed, invalidated or held unenforceable could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of vonoprazan or any future product candidates, which could materially and adversely impact our business. Such proceedings also may result in substantial cost and require significant time from our scientists and management, even if the eventual outcome is favorable to us. In addition, if the breadth or strength of protection provided by our future patents and future patent applications or the patents and patent applications of our current and future licensors is threatened, regardless of the outcome, it could dissuade companies from collaborating with us to license, develop or commercialize vonoprazan or any future product candidates.

Previous report

In addition to patent exclusivity, the successful commercialization of our products also depends, in part, on our ability to obtain and maintain periods of non-patent exclusivity during which time the FDA is precluded from accepting new drug applications, or NDAs, submitted under Section 505(b)(2) of the FDCA or abbreviated new drug applications, or ANDAs, for certain competitive products. In May 2021, FDA granted qualified infectious disease product, or QIDP, designations to vonoprazan tablets in combination with both amoxicillin capsules and clarithromycin tablets, and with amoxicillin capsules alone, respectively, for the treatment of H. pylori infection. On May 3, 2022, the FDA approved our NDAs for these products, branded as VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK, respectively. Because these approvals were for QIDP-designated drugs containing the active moiety, vonoprazan, which had not previously been approved, the FDA granted five-years of NCE exclusivity, which was extended by an additional five-years pursuant to the GAIN Act, resulting in a total of ten-years of NCE exclusivity, until May 3, 2032.

Previous report

In November 2023, we received approval for VOQUEZNA, which also contains vonoprazan. NCE exclusivity protects against the submission and the FDA’s acceptance of a 505(b)(2) NDA or ANDA referencing that NCE for the duration of the exclusivity period, and the FDA interprets this form of exclusivity to attach to the active moiety such that the submission and the FDA’s acceptance of ANDAs and 505(b)(2) NDAs for a drug with that active moiety may not occur until the innovator’s exclusivity has expired, whether or not FDA has approved other versions of the drugs entitled to exclusivity, and regardless of the specific listed drug product to which the ANDA or 505(b)(2) application refers. Consequently, we believe that VOQUEZNA, because it contains vonoprazan, should benefit from the same extended period of NCE exclusivity granted in connection with our NDAs for VOQUEZNA DUAL PAK and VOQUEZNA TRIPLE PACK, until May 3, 2032.

Previous report

The FDA publication, “Approved Drug Products with Therapeutic Equivalence Evaluations,” referred to as the Orange Book, identifies that VOQUEZNA benefits from the same five-year period of NCE exclusivity as VOQUEZNA DUAL PAK and VOQUEZNA TRIPLE PAK, but does not currently identify the GAIN Act extension of an additional five-years of NCE exclusivity to which we believe it is entitled. We informally requested that the FDA correct the VOQUEZNA listings to reflect the same extended NCE exclusivity period as VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK. However, the FDA has not yet updated those listings. Based on feedback from the FDA, we plan to evaluate our alternatives, which may include pursuing a citizen petition or legal or other actions at the appropriate time. If the FDA ultimately concludes that the GAIN Act extension of NCE exclusivity granted in connection with our VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK NDAs does not extend to our VOQUEZNA NDA, there is the potential we could be subject to competition earlier than we currently anticipate given that our regulatory exclusivity would no longer extend beyond the current expected expiry of our vonoprazan drug patents in 2030 (assuming the grant of patent term extension). If this occurs, it would have a material adverse effect on our business and financial condition.