Phathom Sees First Profit, Faces Rx Friction

Phathom Pharmaceuticals Inc. reported a pivotal second quarter in 2026, marked by its first operating profit, excluding stock-based compensation, and a substantial 88% surge in revenue to $74.3 million. This growth was fueled by the successful implementation of its 'GI First' strategy. The company also achieved a significant operational feat by generating positive cash from operations for the first time, concluding the quarter with $182.5 million in cash reserves.

Despite these positive developments, Phathom faces hurdles. Physicians are encountering difficulties with the prior authorization process for Voquezna, a factor that could restrain its wider adoption among less severe GERD patients. Consequently, the company has marginally lowered its full-year 2026 revenue forecast to $310-$325 million. Furthermore, Phathom anticipates utilizing cash throughout the remainder of the year due to working capital shifts, pushing durable cash flow positivity into 2027. Strategic investments, including a Phase 3 trial for as-needed GERD, will lead to increased cash operating expenses in the second half of 2026.

The competitive landscape is also evolving, with the potential introduction of a second PCAB, tegoprazan, which could impact gross-to-net discounts. Phathom's leadership, however, views this development as an opportunity to expand the market category, citing Voquezna's superior healing rates compared to tegoprazan.