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August 22, 2019
David Socks
President and Chief Executive Officer
Phathom Pharmaceuticals, Inc.
70 Williow Road
Suite 200
Menlo Park, CA 94025
Re: Phathom Pharmaceuticals, Inc.
Draft Registration Statement on Form S-1
Submitted July 26, 2019
CIK No. 0001783183
Dear Mr. Socks:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. If you do not believe our comments apply to your facts and circumstances
or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments.
Draft Registration Statement on Form S-1
Overview, page 1
1. We note your disclosure that you believe you can leverage Takeda's
clinical data to
rapidly advance vonoprazan through pivotal trials in the United States
and Europe. Please
revise this disclosure and similar disclosure throughout the prospectus
to remove any
implication that you will be successful in commercializing your product
candidate in a
rapid or accelerated manner as such statements are speculative.
2. We note your disclosure that you plan to initiate two pivotal Phase 3
clinical trials in the
fourth quarter of 2019 for vonoprazan. Please revise to disclose that
you will need to
submit investigational new drug applications to the FDA before you can
begin those trials
David Socks
FirstName LastNameDavidInc.
Phathom Pharmaceuticals, Socks
Comapany NamePhathom Pharmaceuticals, Inc.
August 22, 2019
August 22, 2019 Page 2
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as discussed in the risk factor on page 15, that the FDA may not
accept or view the
clinical trial results from Takeda or independent investigators in
Japan as sufficient to
allow you to advance to Phase 3 trials as discussed in your risk
factor on page 18 and
may require you to conduct additional trials and that the FDA may not
accept the results
of your planned Phase 3 trials since they will be conducted outside of
the United States as
discussed in the risk factor on page 26.
Our Soultion: Vonoprazan, page 3
3. We note your comparison of vonoprazan to PPIs. Efficacy is a
determination that is
solely within the authority of the FDA or similar foreign regulators.
Additionally,
comparisons to other available treatments require head to head trials.
Please delete the
statements indicating that vonoprazan has been shown to provide more
rapid, potent and
durable acid control than PPIs and non-inferiority to lansoprazole.
Please replace the
statements of efficacy with a discussion of the observations from the
trials. If you are
relying on head to head trials conducted by Takeda Pharmaceuticals,
you may compare
the trial observations related to vonoprazan use to the trial
observations of the PPI used in
the study.
Vonoprazan Clinical Data, page 3
4. We note the references to p-values here and elsewhere in the
prospectus. Please disclose
the meaning and significance of p-values in this section.
Risks Related to Our Business, page 5
5. Please expand your discussion to disclose that your assumptions about
the potential
approval of your product candidate are based on the development and
commercial
experience of vonoprazan in Japan and other Asian countries and trial
data collected by
Takeda and independent investigators in Japan, which the FDA may not
accept, as
discussed in your risk factors on pages 15 and 16.
Implications of Being an Emerging Growth Company and a Smaller Reporting
Company, page 7
6. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
MD&A
Liquidity and Capital Resources
Commercial Bank Debt, page 91
7. We note your disclosure on page 39 that you have agreed not to
encumber your
intellectual property assets without SVBs prior written consent unless
a security interest in
David Socks
FirstName LastNameDavidInc.
Phathom Pharmaceuticals, Socks
Comapany NamePhathom Pharmaceuticals, Inc.
August 22, 2019
August 22, 2019 Page 3
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FirstName LastName
the underlying intellectual property is necessary to have a security
interest in the accounts
and proceeds that are part of the assets securing the Term Loans, in
which case your
intellectual property will automatically be included within the assets
securing the Term
Loans. Please revise the disclosure in this section to reflect that.
Common Stock Valuations, page 96
8. Once you have an estimated offering price or range, please explain to
us how you
determined the fair value of the common stock underlying your equity
issuances, and the
reasons for any differences between the recent valuations of your
common stock leading
up to the IPO and the estimated offering price. This information will
help facilitate our
review of your accounting for equity issuances including stock
compensation and
beneficial conversion features.
Fair Value of Warrant Liabilities and Convertible Promissory Note, page 96
9. You state that if you had made different assumptions including, among
others, those
related to the timing and probability of various corporate scenarios,
discount rates,
volatilities and exit valuations, the carrying values of your warrant
liabilities and
convertible promissory notes could have been significantly different.
Please disclose a
sensitivity analysis that demonstrates how changes in the key
assumptions used would
impact your warrant liability and convertible promissory note
estimates.
Management's discussion and analysis
Critical Accounting Policies and Significant Judgments and Estimates
In-Process Research and Development , page 96
10. Please disclose the significant assumptions used to estimate the value
of your acquired in-
process research and development assets or direct us to existing
disclosures. Please
disclose a sensitivity analysis that demonstrates how changes in the
key assumptions used
would impact your acquired in-process research and development asset
and related
expense estimate.
Mechanistic Differences Between PPIs and Vonoprazan
Vonoprazan, page 105
11. We note your disclosure that vonoprazans differentiated mechanism of
action has enabled
it to achieve more rapid, potent, and durable anti-secretory effects
than PPIs. If this
statement is based on the results of the trial comparing vonoprazan to
the PPI
esomeprazole discussed on page 106, please make that clear. Please
avoid making these
general statements regarding the efficacy of your product candidate
and instead present
balanced trial data stating the actual results and quantifying the
results as necessary.
Additionally, revise the mechanistic and pharmacologic summarization
in the table on
page 106 to delete the statements indicating efficacy. You may present
clinical trial end
points and objective data resulting from the trial without concluding
efficacy.
David Socks
FirstName LastNameDavidInc.
Phathom Pharmaceuticals, Socks
Comapany NamePhathom Pharmaceuticals, Inc.
August 22, 2019
August 22, 2019 Page 4
Page 4
FirstName LastName
Clinical Data for Vonoprazan in GERD, page 109
12. Please delete your statement of belief that the data suggests that
vonoprazanan has an
improved clinical profile over PPIs. Efficacy is within the sole
authority of the FDA and
similar foreign regulators. You may compare the objective results of
the comparative
trials without presenting your conclusions regarding efficacy.
Healing of Erosive Esophagitis Clinical Trials in Japan and Asia, page 109
13. We note your reference to a Confidence Interval of treatment
difference on page 111.
Please explain what this means in this section.
Additional Vonoprazan Development Opportunities
Indications, page 124
14. Please revise to disclose that two Phase 3 clinical trials of
vonoprazan in Japanese patients
with endoscopically confirmed NERD conducted by Takeda did not
demonstrate a
statistically significant difference in symptom scores between
vonoprazan and placebo as
discussed in your risk factor on page 26.
License Agreement with Takeda Pharmaceutical Company Limited, page 129
15. We note your disclosure that you have agreed to make tiered royalty
payments at
percentages in the very low to mid double digits on net sales of
licensed products. Please
revise your disclosure to narrow the royalty range to no more than ten
percentage points
for each tier. For example, you may include a twenty point range if
the agreement
provides for two tiers.
Description of Capital Stock, page 173
16. We note that you refer shareholders to, in part, the relevant
provisions of the Delaware
General Corporation Law. It is not appropriate to qualify your
disclosure by reference to
information that is not included in the filing or filed as an exhibit.
Please revise
accordingly.
Choice of Forum, page 177
17. We note your disclosure that your exclusive forum provision
establishing the Court of
Chancery of the State of Delaware as the sole and exclusive forum for
certain types of
actions will not apply to suits brought to enforce a duty or liability
created by the
Exchange Act. Please ensure that the exclusive forum provision in your
amended and
restated certificate of incorporation clearly states that it does not
apply to actions arising
under the Exchange Act or tell us how you will inform investors in
future filings that the
provision does not apply to any actions arising under the Exchange
Act.
Combined Statements of Stockholders' Deficit, page F-5
David Socks
Phathom Pharmaceuticals, Inc.
August 22, 2019
Page 5
18. Please tell us why you do not show any common shares issued for the
caption "issuance of
common stock to founders" in 2018. We note you present 2,791,364
weighted-average
shares outstanding for 2018 on the statements of operations. Refer to
ASC 805-50-45-5.
General
19. Please provide us proofs of all graphics, visual, or photographic
information you will
provide in the printed prospectus prior to its use, for example in a
preliminary prospectus.
Please note that we may have comments regarding this material.
You may contact Ibolya Ignat at 202-551-3636 or Lisa Vanjoske at
202-551-3614 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Ada Sarmento at 202-551- 3798 or Suzanne Hayes at 202-551-3675 with any
other
questions.
FirstName LastNameDavid Socks Sincerely,
Comapany NamePhathom Pharmaceuticals, Inc.
Division of
Corporation Finance
August 22, 2019 Page 5 Office of
Healthcare & Insurance
FirstName LastName