0000950170-23-020109 | 10-Q | XBRL Viewer | Phathom Pharmaceuticals INC

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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2023	May 08, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes
Document Period End Date	Mar. 31, 2023
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q1
Entity Registrant Name	PHATHOM PHARMACEUTICALS, INC.
Entity Central Index Key	0001783183
Entity Tax Identification Number	82-4151574
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity File Number	001-39094
Entity Shell Company	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Small Business	true
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	100 Campus Drive
Entity Address, Address Line Two	Suite 102
Entity Address, City or Town	Florham Park
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	07932
City Area Code	877
Local Phone Number	742-8466
Entity Common Stock, Shares Outstanding		43,614,075
Title of 12(b) Security	Common Stock, $0.0001 par value per share
Trading Symbol	PHAT
Security Exchange Name	NASDAQ

Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 129,574	$ 155,385
Prepaid expenses and other current assets	10,269	5,127
Total current assets	139,843	160,512
Property, plant and equipment, net	1,275	1,207
Operating lease right-of-use assets	2,088	2,287
Restricted cash	505	505
Other long-term assets	299	299
Total assets	144,010	164,810
Current liabilities:
Accounts payable (including related party amounts of $78 and $35, respectively)	4,805	9,997
Accrued expenses (including related party amounts of $2,608 and $2,499, respectively)	8,015	14,678
Accrued interest	911	854
Operating lease liabilities, current	712	708
Total current liabilities	14,443	26,237
Long-term debt, net of discount	96,638	95,264
Revenue interest financing liability	114,679	109,525
Operating lease liabilities	945	1,098
Other long-term liabilities	7,500	7,500
Total liabilities	234,205	239,624
Commitments and contingencies (Note 4)
Stockholders’ equity:
Preferred stock, $0.0001 par value; authorized shares - 40,000,000 at March 31, 2023 and December 31, 2022; no shares issued and outstanding at March 31, 2023 and December 31, 2022
Common stock, $0.0001 par value; authorized shares - 400,000,000 at March 31, 2023 and December 31, 2022; issued shares - 43,602,984 and 41,723,308 at March 31, 2023 and December 31, 2022, respectively; outstanding shares - 43,571,140 and 41,468,871 at March 31, 2023 and December 31, 2022, respectively	4	3
Treasury stock - 19 shares at March 31, 2023 and December 31, 2022, respectively	0	0
Additional paid-in capital	674,708	652,276
Accumulated deficit	(764,907)	(727,093)
Total stockholders' (deficit) equity	(90,195)	(74,814)
Total liabilities and stockholders’ equity	$ 144,010	$ 164,810

Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Accounts payable, related parties	$ 78	$ 35
Accrued expenses, related parties	$ 2,608	$ 2,499
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, authorized shares	40,000,000	40,000,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, authorized shares	400,000,000	400,000,000
Common stock, issued shares	43,602,984	41,723,308
Common stock, outstanding shares	43,571,140	41,468,871
Treasury stock, shares	19	19

Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating expenses:
Research and development (includes related party amounts of $175 and $1,430, respectively)	$ 11,479	$ 17,660
General and administrative (includes related party amounts of $3 and $0, respectively)	18,598	20,246
Total operating expenses	30,077	37,906
Loss from operations	(30,077)	(37,906)
Other income (expense):
Interest income	1,460	7
Interest expense	(9,217)	(2,759)
Other income (expense)	20	(7)
Total other expense	(7,737)	(2,759)
Net loss and comprehensive loss	$ (37,814)	$ (40,665)
Net loss per share, basic	$ (0.89)	$ (1.07)
Net loss per share, diluted	$ (0.89)	$ (1.07)
Weighted-average shares of common stock outstanding, basic	42,354,520	38,036,960
Weighted-average shares of common stock outstanding, diluted	42,354,520	38,036,960

Statements of Operations and Comprehensive Loss (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
Research and development expenses, related party	$ 175	$ 1,430
General and administrative expenses, related party	$ 3	$ 0

Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid-in Capital	Accumulated Deficit
Beginning balance at Dec. 31, 2021	$ 72,156	$ 3		$ 601,523	$ (529,370)
Beginning balance, shares at Dec. 31, 2021		30,511,226	1
Cashless exercise of common stock warrants, shares		7,359,285	18
401(k) matching contribution	254			254
401(k) matching contribution, shares		16,756
Vesting of restricted shares, shares		222,595
Stock-based compensation	5,775			5,775
ESPP shares issued	515			515
ESPP shares issued, shares		39,951
Net loss	(40,665)				(40,665)
Ending balance at Mar. 31, 2022	38,035	$ 3		608,067	(570,035)
Ending balance, shares at Mar. 31, 2022		38,149,813	19
Beginning balance at Dec. 31, 2022	$ (74,814)	$ 3		652,276	(727,093)
Beginning balance, shares at Dec. 31, 2022	41,468,871	41,468,871	19
401(k) matching contribution	$ 456			456
401(k) matching contribution, shares		52,130
Vesting of restricted shares, shares		414,119
Stock-based compensation	7,048			7,048
ESPP shares issued	856			856
ESPP shares issued, shares		121,801
Issuance of common stock under ATM facility, shares		1,514,219
Issuance of common stock under ATM facility	14,073	$ 1		14,072
Net loss	(37,814)				(37,814)
Ending balance at Mar. 31, 2023	$ (90,195)	$ 4		$ 674,708	$ (764,907)
Ending balance, shares at Mar. 31, 2023	43,571,140	43,571,140	19

Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended		63 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023
Cash flows from operating activities
Net loss	$ (37,814)	$ (40,665)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	146	128
Stock-based compensation	7,048	5,775
Issuance of PIK interest debt	877	848
Accrued interest on revenue interest financing liability	5,154
Amortization of debt discount	496	518
Other	763	591
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(5,143)	(4,384)
Accounts payable and accrued expenses (includes changes in related party amounts of $137 and $2,719, respectively)	(11,303)	(6,075)
Accrued clinical trial expenses		(1,402)
Accrued interest	57	4
Operating right-of-use assets and lease liabilities	50	22
Other long-term assets		(117)
Net cash used in operating activities	(39,669)	(44,757)
Cash flows from investing activities
Cash paid for property, plant and equipment	(214)	(67)
Net cash used in investing activities	(214)	(67)
Cash flows from financing activities
Net cash provided by financing activities	14,072
Net decrease in cash and cash equivalents and restricted cash	(25,811)	(44,824)
Cash and cash equivalents and restricted cash - beginning of period	155,890	183,419
Cash and cash equivalents and restricted cash - end of period	130,079	138,595	$ 130,079
Supplemental disclosure of cash flow information
Interest paid	2,546	1,388
Supplemental disclosure of noncash investing and financing activities
Property and equipment purchases included in accounts payable and accrued expenses		120
Settlement of ESPP liability in common stock	856	515
Settlement of 401(k) liability in common stock	456	$ 254
At-the-Market Offering Program
Cash flows from financing activities
Net proceeds from issuance of common stock	$ 14,072		$ 38,700

Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Cash Flows [Abstract]
Related parties accounts payable and accrued expenses	$ 137	$ 2,719

Organization, Basis of Presentation and Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Basis of Presentation and Summary of Significant Accounting Policies

1. Organization, Basis of Presentation and Summary of Significant Accounting Policies

Organization and Basis of Presentation

Phathom Pharmaceuticals, Inc., or the Company or Phathom, was incorporated in the state of Delaware in January 2018. The Company is a biopharmaceutical company focused on developing and commercializing novel treatments for gastrointestinal diseases. The Company’s financial statements are prepared in accordance with U.S. generally accepted accounting principles, or GAAP.

Liquidity and Capital Resources

From inception to March 31, 2023, the Company has devoted substantially all of its efforts to organizing and staffing the Company, business planning, raising capital, in-licensing its initial product candidate, vonoprazan, meeting with regulatory authorities, managing the clinical trials of vonoprazan, preparing for commercialization of its initial products containing vonoprazan, and providing other general and administrative support for these operations. The Company has a limited operating history, has never generated any revenue, and the sales and income potential of its business is unproven. The Company has incurred net losses and negative cash flows from operating activities since its inception and expects to continue to incur additional net losses in the future as it continues to develop and prepares for commercialization of vonoprazan. From inception to March 31, 2023, the Company has funded its operations through the issuance of convertible promissory notes, commercial bank debt, revenue interest financing debt, the sale of 10,997,630 shares of common stock for net proceeds of approximately $191.5 million in its 2019 IPO, the sale of 2,250,000 shares of common stock for net proceeds of approximately $88.6 million in its December 2020 follow-on public offering, the sale of 3,929,116 shares of common stock for net proceeds of approximately $38.7 million in its issuances of common stock pursuant to the Open Market Sale AgreementSM, or the Sales Agreement, with Jefferies LLC, or the Sales Agent, under which the Company may, from time to time, sell shares of its common stock having an aggregate offering price of up to $125.0 million, or the ATM Offering, through March 31, 2023.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities in accordance with GAAP. Management is required to perform a two-step analysis over the Company’s ability to continue as a going concern. Management must first evaluate whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern (Step 1). If management concludes that substantial doubt is raised, management is also required to consider whether its plans alleviate that doubt (Step 2).

Management believes that it has sufficient working capital on hand to fund operations through at least the next twelve months from the date these financial statements were issued. There can be no assurance that the Company will be successful in acquiring additional funding, if needed, that the Company’s projections of its future working capital needs will prove accurate, or that any additional funding would be sufficient to continue operations in future years.

Use of Estimates

The preparation of the Company’s financial statements requires it to make estimates and assumptions that impact the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying notes. The most significant estimates in the Company’s financial statements relate to accruals for research and development expenses and the valuation of various equity instruments. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results could differ materially from those estimates and assumptions.

Fair Value Measurements

The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or non-recurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices in active markets.

Level 2: Inputs, other than the quoted prices in active markets that are observable either directly or indirectly.

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, are classified within the Level 1 designation discussed above, while prepaid and other current assets, accounts payable, and accrued liabilities, approximate fair value due to their short maturities.

The Company has no financial assets measured at fair value on a recurring basis. None of the Company’s non-financial assets or liabilities are recorded at fair value on a non-recurring basis. No transfers between levels have occurred during the periods presented.

As of March 31, 2023, the estimated fair value of the Company’s long-term debt approximated the carrying amount given its floating interest rate basis. The fair value of the Company’s long-term debt was estimated for disclosure purposes only and was determined based on quoted market data for valuation, and thus categorized as Level 2 in the fair value hierarchy.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. Cash and cash equivalents include cash in readily available checking accounts and money market funds.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held.

Property, Plant, and Equipment, Net

Property, plant and equipment are recorded at cost, less accumulated depreciation. Depreciation expense is recognized using the straight-line method over the useful life of the asset. Computer equipment and related software are depreciated over two to three years. Furniture and fixtures are depreciated over three years. Leasehold improvements are amortized over the lesser of the lease term or the estimated useful lives of the related assets. Expenditures for repairs and maintenance of assets are charged to expense as incurred. Upon retirement or sale, the cost and related accumulated depreciation of assets disposed of are removed from the accounts and any resulting gain or loss is included in loss from operations.

Impairment of Long-Lived Assets

The Company reviews long-lived assets, including property, plant and equipment, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than the carrying amount. The impairment loss, if recognized, would be based on the excess of the carrying value of the impaired asset over its respective fair value. No impairment losses have been recorded through March 31, 2023.

Leases

At the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. If both criteria are met, the Company records the associated lease liability and corresponding right-of-use asset upon commencement of the lease using the implicit rate or a discount rate based on a credit-adjusted secured borrowing rate commensurate with the term of the lease. The Company additionally evaluates leases at their inception to determine if they are to be accounted for as an operating lease or a finance lease. A lease is accounted for as a finance lease if it meets one of the following five criteria: the lease has a purchase option that is reasonably certain of being exercised, the present value of the future cash flows is substantially all of the fair market value of the underlying asset, the lease term is for a significant portion of the remaining economic life of the underlying asset, the title to the underlying asset transfers at the end of the lease term, or if the underlying asset is of such a specialized nature that it is expected to have no alternative uses to the lessor at the end of the term. Leases that do not meet the finance lease criteria are accounted for as an operating lease. Operating lease assets represent a right to use an underlying asset for the lease term and operating lease liabilities represent an obligation to make lease payments arising from the lease. Operating lease liabilities with a term greater than one year and their corresponding right-of-use assets are recognized on the balance sheet at the commencement date of the lease based on the present value of lease payments over the expected lease term. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. As the Company’s leases do not typically provide an implicit rate, the Company utilizes the appropriate incremental borrowing rate, determined as the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and in a similar economic environment. Lease cost is recognized on a straight-line basis over the lease term and variable lease payments are recognized as operating expenses in the period in which the obligation for those payments is incurred. Variable lease payments primarily include common area maintenance, utilities, real estate taxes, insurance, and other operating costs that are passed on from the lessor in proportion to the space leased by the Company. The Company has elected the practical expedient to not separate between lease and non-lease components.

Revenue Interest Financing Liability

The Company entered into a revenue interest financing agreement, or the Revenue Interest Financing Agreement, with entities managed or advised by NovaQuest Capital Management, or NQ, Sagard Holdings Manager LP, or Sagard, and Hercules Capital, Inc., or Hercules, together with NQ and Sagard, the Initial Investors, in which the Company received funds in return for royalties on net sales of products containing vonoprazan. The net proceeds received under the transaction were recognized as short-term and long-term liabilities with interest expense based on an imputed effective rate derived from the expected future payments. The Company recalculates the effective interest rate each period based on the current carrying value and the revised estimated future payments. Changes in future payments from previous estimates are included in current and future financing expense.

Research and Development Expenses and Accruals

All research and development costs are expensed in the period incurred and consist primarily of salaries, payroll taxes, employee benefits, stock-based compensation charges for those individuals involved in research and development efforts, external research and development costs incurred under agreements with contract research organizations, or CROs, and consultants to conduct and support the Company’s ongoing clinical trials of vonoprazan, and costs related to manufacturing vonoprazan for clinical trials.

The Company has entered into various research and development contracts with clinical research organizations, clinical manufacturing organizations and other companies. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and payments made in advance of or after performance are reflected in the accompanying balance sheets as prepaid expenses or accrued liabilities, respectively. The Company records accruals for estimated costs incurred for ongoing research and development activities. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the services, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates may be made in determining the prepaid or accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates.

In-Process Research and Development

The Company evaluates whether acquired intangible assets are a business under applicable accounting standards. Additionally, the Company evaluates whether the acquired assets have a future alternative use. Intangible assets that do not have future alternative use are considered acquired in-process research and development. When the acquired in-process research and development assets are not part of a business combination, the value of the consideration paid is expensed on the acquisition date. Future costs to develop these assets are recorded to research and development expense as they are incurred.

General and Administrative Expenses

General and administrative expenses consist of salaries, stock-based compensation, facilities and third-party expenses. General and administrative expenses are associated with the activities of the commercial, executive, finance, accounting, information technology, legal, medical affairs and human resource functions.

Stock-Based Compensation

Stock-based compensation expense represents the cost of the grant date fair value of equity awards recognized over the requisite service period of the awards (generally the vesting period) on a straight-line basis with forfeitures recognized as they occur.

The Company also maintains an employee stock purchase program, or ESPP, under which it may issue shares. The Company estimates the fair value of shares that will be issued under the ESPP, and of stock options using the Black-Scholes valuation model, which requires the use of estimates. The Company recognizes stock-based compensation cost for shares that it will issue under the ESPP on a straight-line basis over the requisite service period of the award.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the statement of operations in the period that includes the enactment date.

The Company recognizes net deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

The Company records uncertain tax positions on the basis of a two-step process whereby (i) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability.

Beginning in 2022, the Tax Cuts and Jobs Act, or TCJA, eliminates the option to deduct research and development expenditures currently and requires taxpayers to amortize domestic and foreign research and development expenditures over 5 years and 15 years, respectively. The requirement did not impact cash from operations in the current period.

Comprehensive Loss

Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. The Company’s comprehensive loss was the same as its reported net loss for all periods presented.

Segment Reporting

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions on how to allocate resources and assess performance. The Company views its operations and manages its business as one operating segment.

Net Loss Per Share

Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding for the period, without consideration for potentially dilutive securities. For the three months ended March 31, 2023 and 2022, the Company has excluded weighted-average unvested shares of 132,514 and 1,022,885, respectively, from the weighted-average number of common shares outstanding. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and dilutive common stock equivalents outstanding for the period determined using the treasury-stock and if-converted methods. Dilutive common stock equivalents are comprised of unvested common stock, options and warrants. For the periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding as inclusion of the potentially dilutive securities (warrants, stock options, and common shares subject to repurchase) would be antidilutive.

Recently Adopted Accounting Standards

There were no recently adopted accounting standards which would have a material impact on the Company's financial statements.

Recently Issued Accounting Pronouncements

The Company assesses the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board or other standard setting bodies on the Company's financial statements as well as material updates to previous assessments, if any, from the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. There were no new material accounting standards issued in the first quarter of 2023 that impacted the Company.

Balance Sheet Details

3 Months Ended

Mar. 31, 2023

Balance Sheet Related Disclosures [Abstract]

Balance Sheet Details

2. Balance Sheet Details

Property, Plant and Equipment, net

Property, plant and equipment, net, consist of the following (in thousands):


	March 31,			December 31,
	2023			2022
Computer equipment and software	$	1,087		$	1,078
Furniture and fixtures		1,086			1,086
Leasehold improvements		115			115
Construction in process		604			399
Total property, plant and equipment, gross		2,892			2,678
Less: accumulated depreciation		(1,617	)		(1,471	)
Total property, plant and equipment, net	$	1,275		$	1,207

Depreciation expense for each of the three months ended March 31, 2023 and 2022 was approximately $0.1 million. No property, plant or equipment was disposed of during the three months ended March 31, 2023 or the year ended December 31, 2022.

Accrued Expenses

Accrued expenses consist of the following (in thousands):


	March 31,		December 31,
	2023		2022
Accrued research and development expenses	$	2,497	$	3,080
Accrued compensation expenses		3,490		8,447
Accrued professional & consulting expenses		1,972		3,000
Accrued other		56		151
Total accrued expenses	$	8,015	$	14,678

Related Party Transactions

3 Months Ended

Mar. 31, 2023

Related Party Transactions

3. Related Party Transactions

Frazier is a principal stockholder of the Company with representation on the Board of Directors. Frazier is compensated for their participation on the Board of Directors and as of March 31, 2023 and December 31, 2022, the Company had $17,000 and $15,000, respectively, outstanding accounts payable and accrued expenses related to these services. For the three months ended March 31, 2023 and 2022, the Company incurred $3,000 and no expense, respectively, of expenses related to participation on the Board of Directors. Frazier is also a principal stockholder in PCI Pharma Services, or PCI. In the third quarter of 2019, the Company engaged PCI for clinical manufacturing services. As of March 31, 2023 and December 31, 2022, the Company had $1.2 million and $1.1 million, respectively, outstanding accounts payable and accrued expenses related to these manufacturing services. For the three months ended March 31, 2023 and 2022, the Company incurred $0.1 million and $0.3 million, respectively, of expenses related to services performed by PCI.

Takeda became a common stockholder of the Company in connection with the May 2019 license agreement (see Note 4). In conjunction with this license, Takeda provides proprietary supplies for the Company’s ongoing clinical development of vonoprazan in addition to the exclusive license for the commercialization of vonoprazan in the United States, Canada and Europe. On May 5, 2020, the Company entered into a Commercial Supply Agreement, or the Commercial Supply Agreement, with Takeda, pursuant to which Takeda will supply commercial quantities of vonoprazan bulk drug product or drug substance. Pursuant to the Commercial Supply Agreement, Takeda has agreed to supply the Company with, and the Company has agreed to purchase from Takeda, certain quantities of vonoprazan bulk drug product according to approved specifications at a fixed price per batch of bulk drug product in order to commercialize vonoprazan in accordance with the Takeda License. Unless terminated earlier, the term of the Commercial Supply Agreement extends for a period of two years from the date the Company places an order for bulk drug product or drug substance for the first commercial launch of vonoprazan in any jurisdiction in the licensed territory, provided that this two-year period will expire no later than December 31, 2023. The Commercial Supply Agreement will terminate immediately upon the termination of the Takeda License in accordance with its terms. In connection with the Takeda License, the Company entered into a temporary services agreement, or the Temporary Services Agreement, with Takeda on November 24, 2020. Pursuant to the Temporary Services Agreement, Takeda agreed to provide or procure the provision of services related to the ongoing clinical development of vonoprazan. The Temporary Services Agreement will terminate immediately upon termination of the Takeda License in accordance with its terms. As of March 31, 2023 and December 31, 2022, the Company had $1.5 million and $1.4 million, respectively, in outstanding accounts payable and accrued expenses related to these agreements. For the three months ended March 31, 2023 and 2022, the Company incurred $0.1 million and $1.1 million, respectively, of expenses related to these agreements. The Company has no remaining minimum purchase obligation related to these agreements.

Commitments and Contingencies

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

4. Commitments and Contingencies

License Agreement

On May 7, 2019, the Company entered into a license agreement with Takeda pursuant to which it was granted an exclusive license to commercialize vonoprazan fumarate in the United States, Canada and Europe, or, the Takeda License. The Company also has the right to sublicense its rights under the agreement, subject to certain conditions. The agreement will remain in effect, on a country-by-country and product-by-product basis, until the later of (i) the expiration of the last to expire valid patent claim covering vonoprazan fumarate alone or in combination with at least one other therapeutically active ingredient, (ii) the expiration of the applicable regulatory exclusivity and (iii) 15 years from the date of first commercial sale, unless earlier terminated. The Company may terminate the Takeda License upon six months’ written notice. The Company and Takeda may terminate the Takeda License in the case of the other party’s insolvency or material uncured breach. Takeda may terminate the Takeda License if the Company challenges, or assists in challenging, licensed patents.

In consideration of the Takeda License, the Company (i) paid Takeda $25.0 million in cash, (ii) issued Takeda 1,084,000 shares of its common stock at a fair value of $5.9 million, (iii) issued the Takeda Warrant to purchase 7,588,000 shares of its common stock at an exercise price of $0.00004613 per share at an initial fair value of $47.9 million, and (iv) issued a right to receive an additional common stock warrant, or, the Takeda Warrant Right, should Takeda’s fully-diluted ownership of the Company represent less than a certain specified percentage of the fully-diluted capitalization, including shares issuable upon conversion of then outstanding convertible promissory notes, calculated immediately before the closing of the Company’s IPO, with a nominal initial fair value due to the low probability of issuance. The Takeda Warrant Right expired without effect since no fair value had been allocated to it upon completion of the IPO, and no additional warrant was issued. In addition, the Company is obligated to pay Takeda up to an aggregate of $250.0 million in sales milestones upon the achievement of specified levels of product sales, and a low double-digit royalty rate on aggregate net sales of licensed products, subject to certain adjustments. The Takeda Warrant had an exercise price of $0.00004613 per share, and was to expire on May 7, 2029 and became exercisable upon the consummation of the IPO. As of March 31, 2023, all Takeda Warrants have been exercised.

Purchase Commitments

In December 2020, the Company entered into a supply agreement with Sandoz pursuant to which Sandoz will supply commercial quantities of amoxicillin capsules and clarithromycin tablets, package these antibiotics with vonoprazan, and provide in finished convenience packs. The supply agreement commits the Company to a minimum purchase obligation of approximately $3.8 million in the first 24-month period following the launch of the final product. The Company has not incurred any expenses under the agreement during the three months ended March 31, 2023 and 2022.

Contingencies

In the event the Company becomes subject to claims or suits arising in the ordinary course of business, the Company would accrue a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.

Lease Commitments

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Lease Commitments

5. Lease Commitments

As of March 31, 2023, the Company had operating leases for office space in both Buffalo Grove, Illinois and Florham Park, New Jersey, with remaining lease terms of 2.1 years and 2.4 years, respectively. All operating leases contain an option to extend the term for one additional five year period, which was not considered in the determination of the right-of-use asset or lease liability as the Company did not consider it reasonably certain that it would exercise such options.

The total rent expense for the three months ended March 31, 2023 and 2022 was $0.3 million and $0.2 million, respectively.

The following table summarizes supplemental balance sheet information related to the operating leases (in thousands):


	March 31,		December 31,
	2023		2022
Assets:
Operating lease right-of-use assets	$	2,088	$	2,287
Total right-of-use assets		2,088		2,287

Liabilities:
Operating lease liabilities, current		712		708
Operating lease liabilities, non-current		945		1,098
Total operating lease liabilities	$	1,657	$	1,806

As of March 31, 2023, the future minimum annual lease payments under the operating leases were as follows (in thousands):


2023		552
2024		753
2025		513
Total minimum lease payments		1,818
Less: amount representing interest		(161	)
Present value of operating lease liabilities		1,657
Less: operating lease liabilities, current		(712	)
Operating lease liabilities	$	945

Weighted-average remaining lease term (in years)		2.3
Weighted-average incremental borrowing rate		8.20	%

Operating cash flows for the three months ended March 31, 2023 and 2022 included cash payments for operating leases of approximately $0.2 million and $0.1 million, respectively.

Debt

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Debt

6. Debt

Total debt consists of the following (in thousands):


	March 31, 2023
Long-term debt, current portion	$	—
Long-term debt, non-current portion		105,351
Unamortized debt discount		(8,713	)
Total debt, net of debt discount	$	96,638

On September 17, 2021, or the Closing Date, the Company entered into a Loan and Security Agreement, or, the Loan Agreement, with Hercules Capital, Inc., in its capacity as administrative agent and collateral agent and as a lender, or, in such capacity, the Agent or Hercules, and the other financial institutions that from time to time become parties to the Loan Agreement as lenders, or, collectively, the Lenders.

The Loan Agreement provides for term loans in an aggregate principal amount of up to $200.0 million, or the Term Loan, under multiple tranches. The tranches consist of (i) a first tranche consisting of term loans in an aggregate principal amount of $100.0 million, all of which was funded to the Company on the Closing Date, or First Advance, (ii) a second tranche consisting of up to an additional $50.0 million, which became available to the Company upon achievement of the protocol-specified primary efficacy endpoints in the Company’s Phase 3 trial studying vonoprazan for the healing and maintenance of healing of Erosive GERD with acceptable safety data, such that the results support the submission of a New Drug Application, or NDA, or supplemental NDA without the need to conduct another Phase 3 study and will be available, if specified conditions are met, through December 15, 2022, see amendment to later date below, (iii) a third and fourth tranche consisting of an additional total $50.0 million, which became available to the Company in May 2022 upon the achievement of (a) Food and Drug Administration, or FDA, approval of the Company’s NDA for vonoprazan and amoxicillin, or its New Drug Application for vonoprazan, amoxicillin and clarithromycin, in each case for an indication relating to the treatment of Helicobacter pylori, or H. pylori, with an approved indication on the claim that is generally consistent with that sought in the Company’s NDA submission; and (b) filing of the Company’s NDA or supplemental NDA for vonoprazan for indications relating to the healing and maintenance of healing of Erosive GERD. The third and fourth tranches will remain available until September 30, 2023, and March 31, 2024, respectively.

On September 27, 2022, the Company entered into an amendment to the Loan Agreement, or the Second Loan Amendment, pursuant to which the date the second tranche of funding of $50 million will remain available to the Company has been moved until May 15, 2023, rather than December 15, 2022.

The Company paid a $1.25 million facility charge in connection with the closing of the Loan Agreement and would need to pay 0.5% of any advances made under the third and fourth tranches.

The Term Loan will mature on October 1, 2026, or the Maturity Date. The Term Loan bears (i) cash interest at a variable annual rate equal to the greater of (a) 5.50% and (b) the Prime Rate (as reported in the Wall Street Journal) plus 2.25%, or the Interest Rate, and (ii) payment-in-kind interest at a per annum rate of interest equal to 3.35%. Phathom may make payments of interest only through October 1, 2024, which was extended to October 1, 2025, upon the achievement of the Second Performance Milestone in May 2022 prior to September 30, 2024 and met the condition that no default or event of default exists, and which is further extendable to October 1, 2026, subject to FDA approval of the Company’s NDA (or supplemental NDA) for vonoprazan for an indication relating to the healing and maintenance of healing of erosive esophagitis with an approved indication on the label that is generally consistent with that sought in the Company’s NDA submission (or supplemental NDA submission), or the Third Performance Milestone, on or prior to September 30, 2025 and no default or event of default exists, or the interest only period. After the interest-only period, the principal balance and related interest will be required to be repaid in equal monthly installments and continuing until the Maturity Date.

In addition, the Company is obligated to pay a final payment fee of 7.50% of the original principal amount of amounts actually advanced under the Term Loan, or, each a Term Loan Advance and together, the Term Loan Advances. As of March 31, 2023, the aggregate final payment fee for the first Term Loan Advance of $7.5 million has been recorded as an other long-term liability.

The Company may elect to prepay all or a portion of the Term Loan Advances prior to maturity, subject to a prepayment fee of up to 1.25% of the then outstanding principal balance of the Term Loan Advances being prepaid. After repayment, no Term Loan amounts may be borrowed again.

As collateral for the obligations, the Company has granted Hercules a senior security interest in all of the Company’s right, title, and interest in, to and under substantially all of Company’s property, inclusive of intellectual property.

The Loan Agreement contains customary closing fees, prepayment fees and provisions, events of default, and representations, warranties and covenants, including a financial covenant requiring the Company to maintain certain levels of cash subject to a control agreement in favor of the Agent (minus accounts payable not paid within 120 days of invoice), or Qualified Cash, and commencing on May 15, 2023, trailing three-month net product revenue from the sale of vonoprazan and products containing vonoprazan. The revenue covenant will be waived at any time in which the Company maintains Qualified Cash equal to at least 60.0% (prior to the Third Performance Milestone), and 35% (following the Third Performance Milestone) of the total outstanding Term Loan principal amount, or the Company’s market capitalization is at least $900.0 million. Upon the occurrence of an event of default, subject to any specified cure periods, all amounts owed by the Company may be declared immediately due and payable by Hercules, as collateral agent. As of March 31, 2023, the Company was in compliance with all applicable covenants under the Loan Agreement.

Under the Second Loan Amendment, the commencement date for the covenant based on trailing three-month net product revenue from the sale of vonoprazan and products containing vonoprazan was moved from May 15, 2023, to November 15, 2023.

In connection with the entry into the Loan Agreement, the Company issued to Hercules a warrant, or, the Warrant, to purchase a number of shares of the Company’s common stock equal to 2.5% of the aggregate amount of the Term Loan advances funded, and will issue to Hercules additional warrants when future Term Loan advances are funded. On the Closing Date, the Company issued a Warrant for 74,782 shares of common stock. The Warrant will be exercisable for a period of seven years from the date of issuance at a per-share exercise price equal to $33.43, which was the closing price of the Company’s common stock on September 16, 2021. The Warrant is exercisable any time until September 17, 2028 and had an initial fair value of approximately $1.3 million.

The initial $1.3 million fair value of the Warrant, the $7.5 million final interest payment fee and $3.1 million of debt issuance costs have been recorded as debt discount and are being amortized to interest expense using the effective interest method over the term of the Term Loan.

Future minimum principal payments under the Term Loan, including the final payment fee, as of March 31, 2023 are as follows (in thousands):


Year ending December 31:
2023		—
2024		—
2025		29,707
2026		94,764
Total principal and interest payments		124,471
Less payment-in-kind and final payment fee		(24,471	)
Total term loan borrowings	$	100,000

During the three months March 31, 2023 and 2022, the Company recognized $4.0 million and $2.8 million, respectively, of interest expense, including amortization of the debt discount, in connection with the Hercules Loan Agreement. As of March 31, 2023, the Company had an outstanding loan balance of $105.4 million and accrued interest of $0.9 million.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI https://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 1I
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-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1E
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
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-Paragraph 1B
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
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-Paragraph 1B
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Revenue Interest Financing Liability

3 Months Ended

Mar. 31, 2023

Contract with Customer, Liability [Abstract]

Revenue Interest Financing Liability

7. Revenue Interest Financing Liability

On May 3, 2022, Phathom entered into a Revenue Interest Financing Agreement with Initial Investors NQ, Sagard, and Hercules pursuant to which the Company will receive up to $260 million in funding from the Initial Investors. Under the terms of the Revenue Interest Financing Agreement, the Company received $100 million at the initial closing and can receive an additional $160 million upon FDA approval of vonoprazan for treatment of Erosive GERD on or before March 31, 2024. At any time prior to December 31, 2022, the Company also had the right to obtain a written commitment from a third party for up to $15 million of funding upon FDA approval of vonoprazan for Erosive GERD. In addition, the Company has the right at any time prior to June 30, 2024, to obtain a written commitment from a third party for up to $25 million of funding upon achievement of a sales milestone. The Initial Investors have a right of first offer if the Company seeks to obtain such additional funding. The total amount funded by the Initial Investors and any subsequent investors is referred to herein as the Investment Amount.

On October 31, 2022, the Company entered into a Joinder Agreement with the Initial Investors and CO Finance LVS XXXVII LLC, or the Additional Investor, and Hercules Capital, Inc. Under the terms of the Joinder Agreement, the Initial Investors waived their rights of first offer regarding the Additional Investor Funding and the Additional Investor joined the Revenue Interest Financing Agreement to extend commitments for the Additional Investor Funding.

Under the Revenue Interest Financing Agreement, the investors are entitled to receive a 10% royalty on net sales of products containing vonoprazan. The royalty rate is subject to a step-down on net sales exceeding certain annual thresholds and if the Company receives FDA approval for vonoprazan for an indication relating to the treatment of heartburn associated with Non-Erosive GERD. The investors’ right to receive royalties on net sales will terminate when the investors have aggregate payments equal to 200% of the Investment Amount. In addition, at any time after the earlier of (i) April 30, 2024 and (ii) the date that the payment for Erosive GERD regulatory approval is made, the Company has the right to make a cap payment equal to 200% of the Investment Amount less any royalties already paid, at which time the agreement will terminate.

If the investors have not received aggregate payments of at least 100% of the Investment Amount by December 31, 2028, and at least 200% of the Investment Amount by December 31, 2037, each a Minimum Amount, then the Company will be obligated to make a cash payment to the investors in an amount sufficient to gross the investors up to the applicable Minimum Amount.

Upon the occurrence of an event of default taking place prior to April 1, 2025, between April 1, 2025, and April 1, 2028, and after April 1, 2028, the Company is obligated to pay 1.30 times Investment Amount, 1.65 times Investment Amount, and 2.0 times investment amount, respectively, less any amounts the Company previously paid pursuant to the agreement.

Upon the occurrence of a change in control event taking place prior to the earlier of April 1, 2024, or FDA approval of vonoprazan for Erosive GERD, the Company is obligated to pay 200% of the Investment Amount plus either 15% of the Investment Amount if occurrence prior to May 3, 2023, or plus 30% of the Investment Amount if occurrence thereafter.

During the year ended December 31, 2022, the Company received gross proceeds of $100.0 million before deducting transaction costs of $4.6 million, which resulted in net proceeds of $95.4 million.

The Company has evaluated the terms of the Revenue Interest Financing Agreement and concluded that the features of the Investment Amount are similar to those of a debt instrument. Accordingly, the Company has accounted for the transaction as a debt obligation with interest expense based on an imputed effective rate derived from the initial carrying value of the obligation and the expected future payments. The Company recalculates the effective interest rate each period based on the current carrying value and the revised estimated future payments. Changes in future payments from previous estimates are included in the current and future financing expense. The carrying value of the revenue interest financing liability was $114.7 million as of March 31, 2023.

Total revenue interest financing liability consists of the following (in thousands):


	March 31, 2023
Proceeds from the Revenue Interest Financing Agreement	$	100,000
Less: transaction costs		(4,554	)
Less: royalty payments and payables		—
Plus: interest expense		19,233
Ending liability balance	$	114,679

During the three months ended March 31, 2023, the Company recognized $5.2 million of interest expense in connection with the revenue interest financing liability.

The Company will record liabilities associated with additional funding upon FDA approval of vonoprazan for Erosive GERD and achievement of the sales milestone when such contingent events occur. To determine the accretion of the liability related to the Revenue Interest Financing Agreement, the Company is required to estimate the total amount of future royalty payments and estimated timing of such payments based on the Company’s revenue projections. As royalty payments are made, the balance of the debt obligation will be effectively repaid. Based on the Company’s periodic review, the exact timing of repayment is likely to be different in each reporting period as compared to those estimated in the Company’s initial revenue projections. A significant increase or decrease in actual net sales of vonoprazan compared to the Company’s revenue projections could impact the interest expense associated with the revenue interest financing liability. Also, the Company’s total obligation can vary depending on change in control or default events and the achievement of FDA approval of vonoprazan for Erosive GERD and achievement of the sales milestone.

Stockholders' Equity

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Stockholders' Equity

8. Stockholders’ Equity

Common Stock

In March 2019, subsequent to the Merger, the Company sold 1,491,072 shares of the Company’s common stock to Frazier.

In March 2019, the founders granted the Company a repurchase right for the 3,373,408 shares of common stock originally purchased in 2018. The Company has the right, but not the obligation, to repurchase unvested shares in the event the founder’s relationship with the Company is terminated, subject to certain limitations, at the original purchase price of the stock. The repurchase right lapsed for 843,352 shares in March 2019 and the repurchase right for the remaining 2,530,056 shares lapses in equal monthly amounts over the following 48-month period ending in March 2023. The fair value of the founder shares at the date the repurchase right was granted is being recognized as stock-based compensation expense on a straight-line basis over the vesting period. As of March 31, 2023, no shares of common stock were subject to repurchase by the Company and there is no associated repurchase liability. The amount of recognized and unrecognized stock-based compensation related to the founder stock was immaterial for all periods presented.

In May 2019, the Company issued Takeda 1,084,000 shares of common stock in connection with the Takeda License.

For the period from January 1, 2019 to May 6, 2019, the Company issued 2,524,852 shares of common stock to various employees and consultants of the Company for aggregate proceeds of approximately $1,000. Upon issuance, these shares were subject to a repurchase option by the Company at the original purchase price of the shares. The repurchase rights generally lapse as to 25% of the shares on the first anniversary of the vesting commencement date, and the repurchase right lapses as to 1/48th of the shares each one-month period thereafter, subject to the purchaser remaining continuously an employee, consultant or director of the Company. In November 2019, the Company repurchased 17,560 shares at the original purchase price for an aggregate purchase price of $5.20. As of March 31, 2023, 31,843 shares remain available for repurchase by the Company and the associated repurchase liability was not significant.

On October 29, 2019, upon completion of the IPO, the Company sold 10,997,630 shares of common stock, which included the exercise in full by the underwriters of their option to purchase 1,434,473 additional shares at a public offering price of $19.00 per share. The net proceeds were approximately $191.5 million, after deducting underwriting discounts, commissions and offering costs.

In November 2020, the Company entered into the Sales Agreement, pursuant to which, the Company will pay the Sales Agent a commission for its services in acting as an agent in the sale of common stock in an amount equal to 3% of the gross sales price per share sold. In September 2022, the Company sold 2,414,897 shares for net proceeds of approximately $24.6 million under the ATM Offering after deducting $0.8 million of issuance costs. In February 2023, the Company sold 1,514,219 shares for net proceeds of approximately $14.1 million under the ATM Offering after deducting $0.4 million of issuance costs. As of March 31, 2023, the Company has utilized $39.9 million of the available $125.0 million under the ATM Offering.

On December 16, 2020, the Company completed an underwritten public offering, in which it sold 2,250,000 shares of its common stock at a price of $42.00 per share for total gross proceeds of $94.5 million. The net purchase price after deducting underwriting discounts and commissions was $39.48 per share, which generated net proceeds of $88.8 million. The Company incurred an additional $0.2 million of offering expenses in connection with this public offering.

A summary of the Company’s unvested shares is as follows:


Balance at December 31, 2022	254,437
Share vesting	(222,593	)
Balance at March 31, 2023	31,844

For accounting purposes, unvested awards are considered issued, but not outstanding until they vest.

Common stock reserved for future issuance consists of the following:


	March 31, 2023
Common stock warrants		91,228
Stock options and performance-based awards outstanding		9,046,999
Shares available for issuance under the 2019 Incentive Plan		681,762
Shares available for issuance under the ESPP Plan		1,048,370
Balance at December 31, 2023		10,868,359

Preferred Stock

The Company is authorized to issue up to 40 million shares of preferred stock. As of March 31, 2023 and December 31, 2022, there were no shares of preferred stock issued or outstanding.

Equity Incentive Plan

The Company’s 2019 Equity Incentive Plan, or the Existing Incentive Plan, provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, and other stock awards to eligible recipients, including employees, directors or consultants of the Company. The Company had 2,231,739 shares of common stock authorized for issuance under the Existing Incentive Plan, of which, 1,400,528 stock options and 16,260 restricted stock awards were granted. As a result of the adoption of the 2019 Incentive Award Plan, or the 2019 Plan, in October 2019, no further shares are available for issuance under the Existing Incentive Plan.

2019 Incentive Award Plan

In October 2019, the board of directors adopted, and the Company’s stockholders approved, the 2019 Plan, which became effective in connection with the IPO. Under the 2019 Plan, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units and other awards to individuals who are then employees, officers, non-employee directors or consultants of the Company or its subsidiaries. The number of shares initially available for issuance will be increased by (i) the number of shares subject to stock options or similar awards granted under the Existing Incentive Plan that expire or otherwise terminate without having been exercised in full after the effective date of the 2019 Plan and unvested shares issued pursuant to awards granted under the Existing Incentive Plan that are forfeited to or repurchased by the Company after the effective date of the 2019 Plan, with the maximum number of shares to be added to the 2019 Plan pursuant to clause (i) above equal to 1,416,788 shares, and (ii) an annual increase on January 1 of each calendar year beginning in 2020 and ending in 2029, equal to the lesser of (a) 5% of the shares of common stock outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as determined by the board of directors. As of March 31, 2023, 681,762 shares remain available for issuance, which reflects 2,391,070 of stock option, performance-based unit, or PSU, and restricted stock unit, or RSU, awards granted, and 28,782 of awards cancelled or forfeited, during the three months ended March 31, 2023 as well as an annual increase of 2,086,165 shares authorized on January 1, 2023.

Performance-based Units

During 2020, the Company granted the initial PSUs whereby vesting depends upon the approval by the FDA of vonoprazan for H. pylori and then, or concurrent with, Erosive GERD. In 2022, the Company granted an additional 37,500 PSUs to employees. In 2023, the Company granted an additional 597,650 PSUs to employees. As of March 31, 2023, the PSU milestones had not been achieved and no related compensation cost had been recognized. The following table summarizes PSU activity under the 2019 Incentive Award Plan during the three months ended March 31, 2023.


	Number of Stock Units		Weighted- Average Grant Date Fair Value Per Share
Unvested balance at December 31, 2022		412,300	$	30.97
Granted		597,650		10.89
Vested		—		—
Forfeited		—		—
Unvested balance at March 31, 2023		1,009,950	$	19.09

As of March 31, 2023, there was approximately $19.3 million of related unrecognized stock-based compensation expense, which will begin to be recognized upon vesting.

Restricted Stock Units

The following table summarizes RSU activity under the 2019 Incentive Award Plan during the three months ended March 31, 2023.


	Number of Stock Units			Weighted- Average Grant Date Fair Value Per Share
Unvested balance at December 31, 2022		877,467		$	11.03
Granted		749,760			8.36
Vested		(191,526	)		11.36
Forfeited		(2,817	)		10.26
Unvested balance at March 31, 2023		1,432,884		$	9.59

As of March 31, 2023, the Company had $11.5 million of unrecognized stock-based compensation expense, which is expected to be recognized over a weighted-average period of 2.3 years.

Employee Stock Purchase Plan

In October 2019, the board of directors adopted, and the Company’s stockholders approved, the Employee Stock Purchase Plan, or the ESPP, which became effective in connection with the IPO. The ESPP permits participants to purchase common stock through payroll deductions of up to 20% of their eligible compensation, which includes a participant’s gross base compensation for services to the Company, including overtime payments and excluding sales commissions, incentive compensation, bonuses, expense reimbursements, fringe benefits and other special payments. A total of 270,000 shares of common stock were initially reserved for issuance under the ESPP. In addition, the number of shares available for issuance under the ESPP will be annually increased on January 1 of each calendar year beginning in 2020 and ending in 2029, by an amount equal to the lesser of: (i) 1% of the shares outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by the board of directors. As of March 31, 2023, 1,048,370 shares of common stock remain available for issuance, which includes the 121,801 shares sold to employees during the three months ended March 31, 2023 as well as an annual increase of 417,233 shares authorized on January 1, 2023.

The ESPP is considered a compensatory plan, and the Company recorded related stock-based compensation of $0.1 million for the three months ended March 31, 2023 and 2022. The weighted-average assumptions used to estimate the fair value of ESPP awards using the Black-Scholes option valuation model were as follows:


	Three Months Ended March 31,
	2023			2022
Assumptions:
Expected term (in years)		0.49			0.49
Expected volatility		69.10	%		72.41	%
Risk free interest rate		4.77	%		0.37	%
Dividend yield		—			—

The estimated weighted-average fair value of ESPP awards for the three months ended March 31, 2023 and 2022, were $2.87 and $5.31, respectively. As of March 31, 2023, the total unrecognized compensation expense related to the ESPP was $0.2 million, which is expected to be recognized over a weighted-average period of approximately 0.3 years.

401(k) Plan

The Company established a 401(k) savings plan during the year ended December 31, 2020. The Company’s contributions to the plan are discretionary. During the three months ended March 31, 2023 and 2022, the Company incurred $0.8 million and $0.6 million, respectively, of expense related to estimated employer contribution liabilities, which was based on a 75% match of employees’ contributions during the periods. In August 2021, the Board of Directors approved a semi-annual discretionary match for 2021, which was settled by contributing 18,394 shares. In January 2022, the Board of Directors approved a second semi-annual discretionary match for 2021, which was settled by contributing 16,756 shares. In July 2022, the Board of Directors approved a semi-annual match for 2022, which was settled by contributing 84,784 shares. In January 2023, the Board of Directors approved a semi-annual match for 2022, which was settled by contribution 52,130 shares.

Stock Options

The fair value of each employee and non-employee stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company, prior to the IPO on October 29, 2019, was a private company and lacked company-specific historical and implied volatility information. Therefore, it estimated its expected volatility based on the historical volatility of a publicly traded set of peer companies. Due to the lack of historical exercise history, the expected term of the Company’s stock options for employees was determined utilizing the “simplified” method for awards. The expected term of stock options granted to non-employees was equal to the contractual term of the option award. The risk-free interest rate was determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield was zero based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

A summary of the Company’s stock option activity and related information is as follows:


	Options Outstanding			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value (in thousands)
Balance at December 31, 2022		5,586,470		$	23.40		7.90	$	4,476
Options granted		1,043,660			8.38
Options exercised		—			—
Options cancelled		(25,965	)		34.66
Balance at March 31, 2023		6,604,165		$	20.98		8.00	$	170
Options exercisable as of March 31, 2023		3,019,036			23.99		7.19		138

The estimated weighted-average fair value of employee and nonemployee director stock options granted during 2023 was $5.13 per option. As of March 31, 2023, the Company had $37.3 million of unrecognized stock-based compensation expense, which is expected to be recognized over a weighted-average period of 2.1 years.

The weighted-average assumptions used to estimate the fair value of stock options using the Black-Scholes option valuation model were as follows:


	Three Months Ended March 31,
	2023			2022
Assumptions:
Expected term (in years)		6.08			6.08
Expected volatility		63.77	%		66.19	%
Risk free interest rate		3.46	%		1.70	%
Dividend yield		—			—

Stock-Based Compensation Expense

Stock-based compensation expense recognized for all equity awards, including founder stock, has been reported in the statements of operations and comprehensive loss as follows (in thousands):


	Three Months Ended March 31,
	2023		2022
Research and development expense	$	1,776	$	1,139
General and administrative expense		5,272		4,636
Total	$	7,048	$	5,775

Subsequent Event

3 Months Ended

Mar. 31, 2023

Subsequent Events [Abstract]

Subsequent Event

9. Subsequent Event

Amendment to Loan and Security Agreement

On May 9, 2023, the Company entered into the Third Amendment to Loan and Security Agreement, or the Third Loan Amendment, with the lenders thereunder and Hercules Capital, Inc., in its capacity as administrative agent and collateral agent and as a lender (in such capacity, the “Agent” or “Hercules”), pursuant to which, among other things, (i) the second tranche availability was extended from May 15, 2023, to December 15, 2023, to become available on October 1, 2023 or earlier subject to certain conditions, (ii) the third tranche availability was extended from September 30, 2023, to December 15, 2023, to become available on October 1, 2023 or earlier subject to certain conditions, (iii) the effective date of the Performance Covenants was amended to provide an option to extend the covenant trigger date, subject to certain conditions, and (iv) the warrant agreement with Hercules was amended as described below. In connection with the Third Loan Amendment, a tranche extension amendment fee of $150,000 and a covenant extension amendment fee of $100,000 was paid to the Agent.

Amendment to Warrants

In connection with the entry into the Third Loan Amendment, the Company amended the form of warrant agreement, the Revised Warrant Agreement, to purchase shares of the Company’s common stock, par value $0.0001 per share, the Common Stock, to be issued upon drawdowns of future tranches under the Term Loan. The exercise price under the Revised Warrant Agreement shall be equal to the lesser of (i) $11.6783, which was the trailing ten-day volume-weighted average price, or VWAP, prior to entering into the Third Loan Amendment, and (ii) the trailing ten-day VWAP preceding the date on which the Company drawdown future tranches. The number of shares of Common Stock shall continue to be equal to 2.5% of the amount of the Term Loan advances funded, as such amounts are funded. The warrants shall be exercisable for a period of seven years from the date of issuance.

The exercise price and terms of the outstanding warrants to purchase 74,783 shares of our Common Stock previously issued to Hercules remain unchanged. The Company entered into the First Amendment to Warrant, or the Warrant Amendment, to make technical changes to the defined terms to provide that the outstanding warrant only covers the initial $100.0 million advance already drawn under the Term Loan.

Organization, Basis of Presentation and Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Basis of Presentation	Organization and Basis of Presentation Phathom Pharmaceuticals, Inc., or the Company or Phathom, was incorporated in the state of Delaware in January 2018. The Company is a biopharmaceutical company focused on developing and commercializing novel treatments for gastrointestinal diseases. The Company’s financial statements are prepared in accordance with U.S. generally accepted accounting principles, or GAAP.
Liquidity and Capital Resources	Liquidity and Capital Resources From inception to March 31, 2023, the Company has devoted substantially all of its efforts to organizing and staffing the Company, business planning, raising capital, in-licensing its initial product candidate, vonoprazan, meeting with regulatory authorities, managing the clinical trials of vonoprazan, preparing for commercialization of its initial products containing vonoprazan, and providing other general and administrative support for these operations. The Company has a limited operating history, has never generated any revenue, and the sales and income potential of its business is unproven. The Company has incurred net losses and negative cash flows from operating activities since its inception and expects to continue to incur additional net losses in the future as it continues to develop and prepares for commercialization of vonoprazan. From inception to March 31, 2023, the Company has funded its operations through the issuance of convertible promissory notes, commercial bank debt, revenue interest financing debt, the sale of 10,997,630 shares of common stock for net proceeds of approximately $191.5 million in its 2019 IPO, the sale of 2,250,000 shares of common stock for net proceeds of approximately $88.6 million in its December 2020 follow-on public offering, the sale of 3,929,116 shares of common stock for net proceeds of approximately $38.7 million in its issuances of common stock pursuant to the Open Market Sale AgreementSM, or the Sales Agreement, with Jefferies LLC, or the Sales Agent, under which the Company may, from time to time, sell shares of its common stock having an aggregate offering price of up to $125.0 million, or the ATM Offering, through March 31, 2023. The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities in accordance with GAAP. Management is required to perform a two-step analysis over the Company’s ability to continue as a going concern. Management must first evaluate whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern (Step 1). If management concludes that substantial doubt is raised, management is also required to consider whether its plans alleviate that doubt (Step 2). Management believes that it has sufficient working capital on hand to fund operations through at least the next twelve months from the date these financial statements were issued. There can be no assurance that the Company will be successful in acquiring additional funding, if needed, that the Company’s projections of its future working capital needs will prove accurate, or that any additional funding would be sufficient to continue operations in future years.
Use of Estimates	Use of Estimates The preparation of the Company’s financial statements requires it to make estimates and assumptions that impact the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying notes. The most significant estimates in the Company’s financial statements relate to accruals for research and development expenses and the valuation of various equity instruments. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results could differ materially from those estimates and assumptions.
Fair Value Measurements	Fair Value Measurements The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or non-recurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets. Level 2: Inputs, other than the quoted prices in active markets that are observable either directly or indirectly. Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, are classified within the Level 1 designation discussed above, while prepaid and other current assets, accounts payable, and accrued liabilities, approximate fair value due to their short maturities. The Company has no financial assets measured at fair value on a recurring basis. None of the Company’s non-financial assets or liabilities are recorded at fair value on a non-recurring basis. No transfers between levels have occurred during the periods presented. As of March 31, 2023, the estimated fair value of the Company’s long-term debt approximated the carrying amount given its floating interest rate basis. The fair value of the Company’s long-term debt was estimated for disclosure purposes only and was determined based on quoted market data for valuation, and thus categorized as Level 2 in the fair value hierarchy.
Cash and Cash Equivalents	Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. Cash and cash equivalents include cash in readily available checking accounts and money market funds.
Concentrations of Credit Risk	Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held.
Property, Plant, and Equipment, Net	Property, Plant, and Equipment, Net Property, plant and equipment are recorded at cost, less accumulated depreciation. Depreciation expense is recognized using the straight-line method over the useful life of the asset. Computer equipment and related software are depreciated over two to three years. Furniture and fixtures are depreciated over three years. Leasehold improvements are amortized over the lesser of the lease term or the estimated useful lives of the related assets. Expenditures for repairs and maintenance of assets are charged to expense as incurred. Upon retirement or sale, the cost and related accumulated depreciation of assets disposed of are removed from the accounts and any resulting gain or loss is included in loss from operations.
Impairment of Long-Lived Assets	Impairment of Long-Lived Assets The Company reviews long-lived assets, including property, plant and equipment, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than the carrying amount. The impairment loss, if recognized, would be based on the excess of the carrying value of the impaired asset over its respective fair value. No impairment losses have been recorded through March 31, 2023.
Leases	Leases At the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. If both criteria are met, the Company records the associated lease liability and corresponding right-of-use asset upon commencement of the lease using the implicit rate or a discount rate based on a credit-adjusted secured borrowing rate commensurate with the term of the lease. The Company additionally evaluates leases at their inception to determine if they are to be accounted for as an operating lease or a finance lease. A lease is accounted for as a finance lease if it meets one of the following five criteria: the lease has a purchase option that is reasonably certain of being exercised, the present value of the future cash flows is substantially all of the fair market value of the underlying asset, the lease term is for a significant portion of the remaining economic life of the underlying asset, the title to the underlying asset transfers at the end of the lease term, or if the underlying asset is of such a specialized nature that it is expected to have no alternative uses to the lessor at the end of the term. Leases that do not meet the finance lease criteria are accounted for as an operating lease. Operating lease assets represent a right to use an underlying asset for the lease term and operating lease liabilities represent an obligation to make lease payments arising from the lease. Operating lease liabilities with a term greater than one year and their corresponding right-of-use assets are recognized on the balance sheet at the commencement date of the lease based on the present value of lease payments over the expected lease term. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. As the Company’s leases do not typically provide an implicit rate, the Company utilizes the appropriate incremental borrowing rate, determined as the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and in a similar economic environment. Lease cost is recognized on a straight-line basis over the lease term and variable lease payments are recognized as operating expenses in the period in which the obligation for those payments is incurred. Variable lease payments primarily include common area maintenance, utilities, real estate taxes, insurance, and other operating costs that are passed on from the lessor in proportion to the space leased by the Company. The Company has elected the practical expedient to not separate between lease and non-lease components.
Revenue Interest Financing Liability	Revenue Interest Financing Liability The Company entered into a revenue interest financing agreement, or the Revenue Interest Financing Agreement, with entities managed or advised by NovaQuest Capital Management, or NQ, Sagard Holdings Manager LP, or Sagard, and Hercules Capital, Inc., or Hercules, together with NQ and Sagard, the Initial Investors, in which the Company received funds in return for royalties on net sales of products containing vonoprazan. The net proceeds received under the transaction were recognized as short-term and long-term liabilities with interest expense based on an imputed effective rate derived from the expected future payments. The Company recalculates the effective interest rate each period based on the current carrying value and the revised estimated future payments. Changes in future payments from previous estimates are included in current and future financing expense.
Research and Development Expenses and Accruals	Research and Development Expenses and Accruals All research and development costs are expensed in the period incurred and consist primarily of salaries, payroll taxes, employee benefits, stock-based compensation charges for those individuals involved in research and development efforts, external research and development costs incurred under agreements with contract research organizations, or CROs, and consultants to conduct and support the Company’s ongoing clinical trials of vonoprazan, and costs related to manufacturing vonoprazan for clinical trials. The Company has entered into various research and development contracts with clinical research organizations, clinical manufacturing organizations and other companies. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and payments made in advance of or after performance are reflected in the accompanying balance sheets as prepaid expenses or accrued liabilities, respectively. The Company records accruals for estimated costs incurred for ongoing research and development activities. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the services, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates may be made in determining the prepaid or accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates.
In-Process Research and Development	In-Process Research and Development The Company evaluates whether acquired intangible assets are a business under applicable accounting standards. Additionally, the Company evaluates whether the acquired assets have a future alternative use. Intangible assets that do not have future alternative use are considered acquired in-process research and development. When the acquired in-process research and development assets are not part of a business combination, the value of the consideration paid is expensed on the acquisition date. Future costs to develop these assets are recorded to research and development expense as they are incurred.
General and Administrative Expenses	General and Administrative Expenses General and administrative expenses consist of salaries, stock-based compensation, facilities and third-party expenses. General and administrative expenses are associated with the activities of the commercial, executive, finance, accounting, information technology, legal, medical affairs and human resource functions.
Stock-Based Compensation	Stock-Based Compensation Stock-based compensation expense represents the cost of the grant date fair value of equity awards recognized over the requisite service period of the awards (generally the vesting period) on a straight-line basis with forfeitures recognized as they occur. The Company also maintains an employee stock purchase program, or ESPP, under which it may issue shares. The Company estimates the fair value of shares that will be issued under the ESPP, and of stock options using the Black-Scholes valuation model, which requires the use of estimates. The Company recognizes stock-based compensation cost for shares that it will issue under the ESPP on a straight-line basis over the requisite service period of the award.
Income Taxes	Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the statement of operations in the period that includes the enactment date. The Company recognizes net deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions on the basis of a two-step process whereby (i) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability. Beginning in 2022, the Tax Cuts and Jobs Act, or TCJA, eliminates the option to deduct research and development expenditures currently and requires taxpayers to amortize domestic and foreign research and development expenditures over 5 years and 15 years, respectively. The requirement did not impact cash from operations in the current period.
Comprehensive Loss	Comprehensive Loss Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. The Company’s comprehensive loss was the same as its reported net loss for all periods presented.
Segment Reporting	Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions on how to allocate resources and assess performance. The Company views its operations and manages its business as one operating segment.
Net Loss Per Share	Net Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding for the period, without consideration for potentially dilutive securities. For the three months ended March 31, 2023 and 2022, the Company has excluded weighted-average unvested shares of 132,514 and 1,022,885, respectively, from the weighted-average number of common shares outstanding. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and dilutive common stock equivalents outstanding for the period determined using the treasury-stock and if-converted methods. Dilutive common stock equivalents are comprised of unvested common stock, options and warrants. For the periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding as inclusion of the potentially dilutive securities (warrants, stock options, and common shares subject to repurchase) would be antidilutive.
Recently Adopted and Issued Accounting Pronouncements	Recently Adopted Accounting Standards There were no recently adopted accounting standards which would have a material impact on the Company's financial statements. Recently Issued Accounting Pronouncements The Company assesses the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board or other standard setting bodies on the Company's financial statements as well as material updates to previous assessments, if any, from the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. There were no new material accounting standards issued in the first quarter of 2023 that impacted the Company.

Balance Sheet Details (Tables)

3 Months Ended

Mar. 31, 2023

Balance Sheet Related Disclosures [Abstract]

Schedule of Property, Plant and Equipment, Net

Property, plant and equipment, net, consist of the following (in thousands):


	March 31,			December 31,
	2023			2022
Computer equipment and software	$	1,087		$	1,078
Furniture and fixtures		1,086			1,086
Leasehold improvements		115			115
Construction in process		604			399
Total property, plant and equipment, gross		2,892			2,678
Less: accumulated depreciation		(1,617	)		(1,471	)
Total property, plant and equipment, net	$	1,275		$	1,207

Schedule of Accrued Expenses

Accrued expenses consist of the following (in thousands):


	March 31,		December 31,
	2023		2022
Accrued research and development expenses	$	2,497	$	3,080
Accrued compensation expenses		3,490		8,447
Accrued professional & consulting expenses		1,972		3,000
Accrued other		56		151
Total accrued expenses	$	8,015	$	14,678

Lease Commitments (Tables)

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Summary of Supplemental Balance Sheet Information Related to the Operating Leases

The following table summarizes supplemental balance sheet information related to the operating leases (in thousands):


	March 31,		December 31,
	2023		2022
Assets:
Operating lease right-of-use assets	$	2,088	$	2,287
Total right-of-use assets		2,088		2,287

Liabilities:
Operating lease liabilities, current		712		708
Operating lease liabilities, non-current		945		1,098
Total operating lease liabilities	$	1,657	$	1,806

Summary of Future Minimum Lease Payments Under Operating Leases

As of March 31, 2023, the future minimum annual lease payments under the operating leases were as follows (in thousands):


2023		552
2024		753
2025		513
Total minimum lease payments		1,818
Less: amount representing interest		(161	)
Present value of operating lease liabilities		1,657
Less: operating lease liabilities, current		(712	)
Operating lease liabilities	$	945

Weighted-average remaining lease term (in years)		2.3
Weighted-average incremental borrowing rate		8.20	%

Debt (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule of Total Debt

Total debt consists of the following (in thousands):


	March 31, 2023
Long-term debt, current portion	$	—
Long-term debt, non-current portion		105,351
Unamortized debt discount		(8,713	)
Total debt, net of debt discount	$	96,638

Schedule of Future Minimum Principal and Interest Payments Under Term Loan

Future minimum principal payments under the Term Loan, including the final payment fee, as of March 31, 2023 are as follows (in thousands):


Year ending December 31:
2023		—
2024		—
2025		29,707
2026		94,764
Total principal and interest payments		124,471
Less payment-in-kind and final payment fee		(24,471	)
Total term loan borrowings	$	100,000

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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+ Details

Revenue Interest Financing Liability (Tables)

3 Months Ended

Mar. 31, 2023

Contract with Customer, Liability [Abstract]

Schedule of Total Revenue Interest Financing Liability

Total revenue interest financing liability consists of the following (in thousands):


	March 31, 2023
Proceeds from the Revenue Interest Financing Agreement	$	100,000
Less: transaction costs		(4,554	)
Less: royalty payments and payables		—
Plus: interest expense		19,233
Ending liability balance	$	114,679

Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2023

Summary of Unvested Shares

A summary of the Company’s unvested shares is as follows:


Balance at December 31, 2022	254,437
Share vesting	(222,593	)
Balance at March 31, 2023	31,844

Summary of Common Stock Reserved for Future Issuance

Common stock reserved for future issuance consists of the following:


	March 31, 2023
Common stock warrants		91,228
Stock options and performance-based awards outstanding		9,046,999
Shares available for issuance under the 2019 Incentive Plan		681,762
Shares available for issuance under the ESPP Plan		1,048,370
Balance at December 31, 2023		10,868,359

Summary of PSU Activity Under the 2019 Incentive Award Plan

The following table summarizes PSU activity under the 2019 Incentive Award Plan during the three months ended March 31, 2023.


	Number of Stock Units		Weighted- Average Grant Date Fair Value Per Share
Unvested balance at December 31, 2022		412,300	$	30.97
Granted		597,650		10.89
Vested		—		—
Forfeited		—		—
Unvested balance at March 31, 2023		1,009,950	$	19.09

Summary of Weighted-Average Assumptions Used to Estimate Fair Value of Stock Options Granted and ESPP Awards

The weighted-average assumptions used to estimate the fair value of ESPP awards using the Black-Scholes option valuation model were as follows:


	Three Months Ended March 31,
	2023			2022
Assumptions:
Expected term (in years)		0.49			0.49
Expected volatility		69.10	%		72.41	%
Risk free interest rate		4.77	%		0.37	%
Dividend yield		—			—

Summary of Stock Option Activity

A summary of the Company’s stock option activity and related information is as follows:


	Options Outstanding			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value (in thousands)
Balance at December 31, 2022		5,586,470		$	23.40		7.90	$	4,476
Options granted		1,043,660			8.38
Options exercised		—			—
Options cancelled		(25,965	)		34.66
Balance at March 31, 2023		6,604,165		$	20.98		8.00	$	170
Options exercisable as of March 31, 2023		3,019,036			23.99		7.19		138

Summary of Weighted-Average Assumptions Used to Estimate Fair Value of Stock Options

The weighted-average assumptions used to estimate the fair value of stock options using the Black-Scholes option valuation model were as follows:


	Three Months Ended March 31,
	2023			2022
Assumptions:
Expected term (in years)		6.08			6.08
Expected volatility		63.77	%		66.19	%
Risk free interest rate		3.46	%		1.70	%
Dividend yield		—			—

Summary of Stock-Based Compensation Expense

Stock-based compensation expense recognized for all equity awards, including founder stock, has been reported in the statements of operations and comprehensive loss as follows (in thousands):


	Three Months Ended March 31,
	2023		2022
Research and development expense	$	1,776	$	1,139
General and administrative expense		5,272		4,636
Total	$	7,048	$	5,775

Restricted Stock Units (RSUs)

Summary of Unvested Shares

The following table summarizes RSU activity under the 2019 Incentive Award Plan during the three months ended March 31, 2023.


	Number of Stock Units			Weighted- Average Grant Date Fair Value Per Share
Unvested balance at December 31, 2022		877,467		$	11.03
Granted		749,760			8.36
Vested		(191,526	)		11.36
Forfeited		(2,817	)		10.26
Unvested balance at March 31, 2023		1,432,884		$	9.59

Organization, Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Details)		1 Months Ended				3 Months Ended		4 Months Ended	63 Months Ended
	Oct. 29, 2019 USD ($) shares	Feb. 28, 2023 USD ($) shares	Sep. 30, 2022 USD ($) shares	Dec. 31, 2020 USD ($) shares	May 31, 2019 shares	Mar. 31, 2023 USD ($) Segment shares	Mar. 31, 2022 shares	May 06, 2019 USD ($) shares	Mar. 31, 2023 USD ($) shares
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Impairment losses \| $						$ 0
Number of operating segment \| Segment						1
Domestic
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Research and development expenditures, amortization period						5 years
Foreign
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Research and development expenditures, amortization period						15 years
Unvested Shares
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Unvested shares excluded from computation of weighted average earnings per share \| shares						132,514	1,022,885
Furniture and Fixtures
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Property and equipment, useful life						3 years
Minimum \| Computer Equipment and Related Software
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Property and equipment, useful life						2 years
Maximum \| Computer Equipment and Related Software
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Property and equipment, useful life						3 years
Common Stock
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Common stock shares issued \| shares						1,514,219		2,524,852
Net proceeds from issuance of common stock \| $								$ 1,000
Common Stock \| Takeda License
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Common stock shares issued \| shares					1,084,000
IPO \| Common Stock
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Common stock shares issued \| shares	10,997,630
Proceeds from Initial Public Offering (IPO) \| $	$ 191,500,000
Follow-on Public Offering \| Common Stock
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Common stock shares issued \| shares				2,250,000
Net proceeds from issuance of common stock \| $				$ 88,600,000
At-the-Market Offering Program
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Common stock shares issued \| shares		1,514,219	2,414,897						3,929,116
Net proceeds from issuance of common stock \| $		$ 14,100,000	$ 24,600,000			$ 14,072,000			$ 38,700,000
At-the-Market Offering Program \| Maximum \| Open Market Sale Agreement with Jefferies LLC
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Aggregate offering price through equity financing \| $						$ 125,000,000.0

Balance Sheet Details - Schedule of Property, Plant and Equipment, net (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	$ 2,892	$ 2,678
Less: accumulated depreciation and amortization	(1,617)	(1,471)
Total property, plant and equipment, net	1,275	1,207
Computer equipment and software
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	1,087	1,078
Furniture and Fixtures
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	1,086	1,086
Leasehold Improvements
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	115	115
Construction In Progress
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	$ 604	$ 399

Balance Sheet Details - Additional Information (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Balance Sheet Related Disclosures [Abstract]
Depreciation expense	$ 100,000	$ 100,000
Disposal of property, plant or equipment	$ 0		$ 0

Balance Sheet Details - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Accrued Liabilities, Current [Abstract]
Accrued research and development expenses	$ 2,497	$ 3,080
Accrued compensation expenses	3,490	8,447
Accrued professional & consulting expenses	1,972	3,000
Accrued other	56	151
Total accrued expenses	$ 8,015	$ 14,678

Related Party Transactions - Additional Information (Details) - USD ($)		3 Months Ended
	May 05, 2020	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Related Party Transaction [Line Items]
Outstanding accounts payable and accrued expenses		$ 17,000,000		$ 15,000,000
Commercial Supply and Temporary Services Agreement
Related Party Transaction [Line Items]
Minimum purchase obligation		0
Commercial Supply Agreement
Related Party Transaction [Line Items]
Agreement extends period for termination	2 years
PCI Pharma Services
Related Party Transaction [Line Items]
Expense related to services		3,000,000	$ 0
PCI Pharma Services \| Clinical Manufacturing Services
Related Party Transaction [Line Items]
Outstanding accounts payable and accrued expenses		1,200,000		1,100,000
Expense related to services		100,000	300,000
Takeda \| Commercial Supply and Temporary Services Agreement
Related Party Transaction [Line Items]
Outstanding accounts payable and accrued expenses		1,500,000		$ 1,400,000
Expense related to services		$ 100,000	$ 1,100,000

Commitments and Contingencies - Additional Information (Details) - USD ($)		3 Months Ended
	May 07, 2019	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Commitments And Contingencies [Line Items]
Common stock fair value		$ 4,000		$ 3,000
Common stock, shares issued		43,602,984		41,723,308
Expenses incurred related to purchase commitments		$ 0	$ 0
Minimum
Commitments And Contingencies [Line Items]
Purchase obligation in the first 24-month period		$ 3,800,000
Takeda License \| Takeda
Commitments And Contingencies [Line Items]
License agreement description		The agreement will remain in effect, on a country-by-country and product-by-product basis, until the later of (i) the expiration of the last to expire valid patent claim covering vonoprazan fumarate alone or in combination with at least one other therapeutically active ingredient, (ii) the expiration of the applicable regulatory exclusivity and (iii) 15 years from the date of first commercial sale, unless earlier terminated. The Company may terminate the Takeda License upon six months’ written notice. The Company and Takeda may terminate the Takeda License in the case of the other party’s insolvency or material uncured breach. Takeda may terminate the Takeda License if the Company challenges, or assists in challenging, licensed patents.
Agreement expiration term from date of first commercial sale	15 years
Cash consideration paid for license	$ 25,000,000.0
Common stock fair value	$ 5,900,000
Common stock, shares issued	1,084,000
Warrants exercise price	$ 0.00004613
Initial fair value of warrants	$ 47,900,000
Additional warrant issued	0
Maximum amount payable in sales milestones upon achievement of specified levels of product sales	$ 250,000,000.0
Warrants expiration date	May 07, 2029
Takeda License \| Takeda \| Common Stock
Commitments And Contingencies [Line Items]
Warrants issued to purchase shares	7,588,000

Lease Commitments - Additional Information (Details) $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($) Option	Mar. 31, 2022 USD ($)
Lessee Lease Description [Line Items]
Operating leases, rent expense \| $	$ 0.3	$ 0.2
Cash payments for operating lease costs \| $	$ 0.2	$ 0.1
Buffalo Grove, Illinois
Lessee Lease Description [Line Items]
Operating leases, remaining lease terms	2 years 1 month 6 days
Operating lease number of option to extend \| Option	1
Operating lease, option to extend description	operating leases contain an option to extend the term for one additional five year period
Operating lease, renewal term	5 years
Florham Park, New Jersey
Lessee Lease Description [Line Items]
Operating leases, remaining lease terms	2 years 4 months 24 days
Operating lease number of option to extend \| Option	1
Operating lease, option to extend description	operating leases contain an option to extend the term for one additional five year period
Operating lease, renewal term	5 years

Lease Commitments - Summary of Supplemental Balance Sheet Information Related to the Operating Leases (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Assets:
Operating lease right-of-use assets	$ 2,088	$ 2,287
Liabilities:
Operating lease liabilities, current	712	708
Operating lease liabilities, non-current	945	1,098
Total operating lease liabilities	$ 1,657	$ 1,806

Lease Commitments - Summary of Future Annual Minimum Lease Payments Under Operating Leases (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Leases [Abstract]
2023	$ 552
2024	753
2025	513
Total minimum lease payments	1,818
Less: amount representing interest	(161)
Total operating lease liabilities	1,657	$ 1,806
Less: operating lease liabilities, current	(712)	(708)
Operating lease liabilities	$ 945	$ 1,098
Weighted-average remaining lease term (in years)	2 years 3 months 18 days
Weighted-average incremental borrowing rate	8.20%

Debt - Schedule of Total Debt (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Debt Disclosure [Abstract]
Long-term debt, non-current portion	$ 105,351
Unamortized debt discount	(8,713)
Total debt, net of debt discount	$ 96,638

- Definition

Amount, excluding unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Debt - Additional Information (Details) - USD ($)		3 Months Ended
Debt - Additional Information (Details) - USD ($)	Sep. 17, 2021	Mar. 31, 2023	Mar. 31, 2022	Sep. 27, 2022
Debt Instrument [Line Items]
Term loans aggregate principal amount		$ 100,000,000
Loan Agreement
Debt Instrument [Line Items]
Debt instrument, final payment fee or end of term charge	$ 7,500,000
Percentage of qualified cash prior to Third performance milestone	60.00%
Minimum percentage of qualified cash following third performance milestone	35.00%
Minimum market capitalization amount	$ 900,000,000.0
Percentage of debt funded to be issued as warrants to purchase common stock	2.50%
Warrants exercise price	$ 33.43
Warrants expire term	7 years
Warrants expiration date	Sep. 17, 2028
Fair value of warrants	$ 1,300,000
Debt issuance costs	$ 3,100,000
Loan Agreement \| Common Stock
Debt Instrument [Line Items]
Warrants issued to purchase shares	74,782
Loan Agreement \| Term Loan
Debt Instrument [Line Items]
Term loans aggregate principal amount	$ 200,000,000.0
Payment for facility charge	$ 1,250,000
Debt instrument, facility charge percentage	0.50%
Debt instrument, maturity date	Oct. 01, 2026
Loan Agreement \| Term Loan \| Floor Rate
Debt Instrument [Line Items]
Debt instrument interest rate	5.50%
Loan Agreement \| Term Loan \| Prime Rate
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	2.25%
Loan Agreement \| Term Loan \| Payment In Kind PIK Interest Rate
Debt Instrument [Line Items]
Debt instrument, interest rate	3.35%
Loan Agreement \| Term Loans, Aggregate Principal Amount Tranches One
Debt Instrument [Line Items]
Term loans aggregate principal amount	$ 100,000,000.0
Loan Agreement \| Term Loans, Aggregate Principal Amount Tranches Two
Debt Instrument [Line Items]
Term loans aggregate principal amount		50,000,000.0
Loan Agreement \| Term Loans Aggregate Principal Amount Tranches Three And Four
Debt Instrument [Line Items]
Term loans aggregate principal amount		50,000,000.0
Loan Agreement \| Term Loan Advance
Debt Instrument [Line Items]
Debt instrument, final payment fee percentage	7.50%
Debt instrument, final payment fee or end of term charge		7,500,000
Loan Agreement \| Term Loan Advance \| Maximum
Debt Instrument [Line Items]
Debt instrument, prepayment fee percentage of outstanding principal amount	1.25%
Hercules and SVB Term Loan
Debt Instrument [Line Items]
Term loans aggregate principal amount		105,400,000
Accrued interest		900,000
Hercules Loan Agreement
Debt Instrument [Line Items]
Interest expense		$ 4,000,000.0	$ 2,800,000
Amendment to Loan Agreement
Debt Instrument [Line Items]
Term loans aggregate principal amount				$ 50,000,000

Debt - Schedule of Future Minimum Principal and Interest Payments Under Term Loans (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Debt Disclosure [Abstract]
2023	$ 0
2024	0
2025	29,707
2026	94,764
Total principal and interest payments	124,471
Less payment-in-kind and final payment fee	(24,471)
Total term loan borrowings	$ 100,000

Revenue Interest Financing Liability - Additional Information (Details) - USD ($) $ in Thousands		3 Months Ended	11 Months Ended
	May 03, 2022	Mar. 31, 2023	Mar. 31, 2023
Revenue Interest Financing Liability [Line Items]
Investors right to receive royalties termination description		The investors’ right to receive royalties on net sales will terminate when the investors have aggregate payments equal to 200% of the Investment Amount. In addition, at any time after the earlier of (i) April 30, 2024 and (ii) the date that the payment for Erosive GERD regulatory approval is made, the Company has the right to make a cap payment equal to 200% of the Investment Amount less any royalties already paid, at which time the agreement will terminate.
Investors receipt description		If the investors have not received aggregate payments of at least 100% of the Investment Amount by December 31, 2028, and at least 200% of the Investment Amount by December 31, 2037, each a Minimum Amount, then the Company will be obligated to make a cash payment to the investors in an amount sufficient to gross the investors up to the applicable Minimum Amount.
Default obligation description		Upon the occurrence of an event of default taking place prior to April 1, 2025, between April 1, 2025, and April 1, 2028, and after April 1, 2028, the Company is obligated to pay 1.30 times Investment Amount, 1.65 times Investment Amount, and 2.0 times investment amount, respectively, less any amounts the Company previously paid pursuant to the agreement.
Change in control description		Upon the occurrence of a change in control event taking place prior to the earlier of April 1, 2024, or FDA approval of vonoprazan for Erosive GERD, the Company is obligated to pay 200% of the Investment Amount plus either 15% of the Investment Amount if occurrence prior to May 3, 2023, or plus 30% of the Investment Amount if occurrence thereafter.
Gross proceeds		$ 100,000
Transaction costs		4,554
Net proceeds		95,400
Revenue interest financing liability		114,679	$ 114,679
Interest expense with revenue interest finance liability		$ 5,200	$ 19,233
Revenue Interest Financing Agreement
Revenue Interest Financing Liability [Line Items]
Percentage of investor share of royalty in net sales	10.00%
Percentage of aggregate payments on investment amount to investors on net sales	200.00%
Revenue Interest Financing Agreement Upon Occurrence of Event of Default Prior to April 1, 2025
Revenue Interest Financing Liability [Line Items]
Percentage of aggregate payment on investment amount to investors	1.30%
Revenue Interest Financing Agreement Upon Occurrence of Event of Default between April 1, 2025, and April 1, 2028
Revenue Interest Financing Liability [Line Items]
Percentage of aggregate payment on investment amount to investors	1.65%
Revenue Interest Financing Agreement Upon Occurrence of Event of Default after April 1, 2028
Revenue Interest Financing Liability [Line Items]
Percentage of aggregate payments on investment amount to investors on net sales	2.00%
Revenue Interest Financing Agreement Upon Occurrence of a Change in Control Event Earlier of April 1, 2024 or FDA Approval If Occurrence Prior May 3, 2023
Revenue Interest Financing Liability [Line Items]
Percentage of aggregate payments on investment amount to investors on net sales	200.00%
Revenue Interest Financing Agreement Upon Occurrence of a Change in Control Event Earlier of April 1, 2024 or FDA Approval If Occurrence Prior May 3, 2023
Revenue Interest Financing Liability [Line Items]
Additional percentage to be paid with obligated payment on investment amount	15.00%
Revenue Interest Financing Agreement Upon Occurrence of a Change in Control Event Earlier of April 1, 2024 or FDA approval If occurrence is Thereafter to May 3, 2023
Revenue Interest Financing Liability [Line Items]
Additional percentage to be paid with obligated payment on investment amount	30.00%
Initial Investors NQ, Sagard, and Hercules \| Revenue Interest Financing Agreement
Revenue Interest Financing Liability [Line Items]
Funds received from initial closing	$ 100,000
Initial Investors NQ, Sagard, and Hercules \| Revenue Interest Financing Agreement, Funding Commitment On or Before March 31, 2024
Revenue Interest Financing Liability [Line Items]
Investors additional funding amount upon FDA approval of vonoprazan for treatment of erosive esophagitis	160,000
Initial Investors NQ, Sagard, and Hercules \| Revenue Interest Financing Agreement Funding upon FDA Approval at any Time Prior to December 31, 2022
Revenue Interest Financing Liability [Line Items]
Potential additional investor funding amount	15,000
Initial Investors NQ, Sagard, and Hercules \| Revenue Interest Financing Agreement Funding upon Achievement of Sales Milestone at any Time Prior to June 30, 2024
Revenue Interest Financing Liability [Line Items]
Investors funding commitment potential amount available upon achievement of sales milestone	$ 25,000
Minimum \| Revenue Interest Financing Agreement Percentage on Investment Amount On December December 31, 2028
Revenue Interest Financing Liability [Line Items]
Percentage of aggregate payment on investment amount to investors	100.00%
Minimum \| Revenue Interest Financing Agreement Percentage On Investment Amount by December 31, 2037
Revenue Interest Financing Liability [Line Items]
Percentage of aggregate payment on investment amount to investors	200.00%
Maximum \| Initial Investors NQ, Sagard, and Hercules \| Revenue Interest Financing Agreement
Revenue Interest Financing Liability [Line Items]
Investors funding amount	$ 260,000

Revenue Interest Financing Liability - Schedule of Total Revenue Interest Financing Liability (Details) - USD ($) $ in Thousands	3 Months Ended	11 Months Ended
	Mar. 31, 2023	Mar. 31, 2023
Contract with Customer, Liability [Abstract]
Proceeds from the Revenue Interest Financing Agreement	$ 100,000
Less: transaction costs	(4,554)
Plus: interest expense	5,200	$ 19,233
Ending liability balance	$ 114,679	$ 114,679

Stockholders' Equity - Additional Information (Details)			1 Months Ended											3 Months Ended		4 Months Ended	12 Months Ended	63 Months Ended
Stockholders' Equity - Additional Information (Details)	Dec. 16, 2020 USD ($) $ / shares shares	Oct. 29, 2019 USD ($) $ / shares shares	Feb. 28, 2023 USD ($) shares	Jan. 31, 2023 shares	Sep. 30, 2022 USD ($) shares	Jul. 31, 2022 shares	Jan. 31, 2022 shares	Aug. 31, 2021 shares	Nov. 30, 2020	Nov. 30, 2019 $ / shares shares	Oct. 31, 2019 shares	May 31, 2019 shares	Mar. 31, 2019 shares	Mar. 31, 2023 USD ($) $ / shares shares	Mar. 31, 2022 USD ($) $ / shares shares	May 06, 2019 USD ($) shares	Dec. 31, 2019 shares	Mar. 31, 2023 USD ($) shares	Jan. 01, 2023 shares	Dec. 31, 2022 shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock Issued During Period, Value, New Issues \| $														$ 14,073,000
Preferred stock, shares authorized														40,000,000				40,000,000		40,000,000
Preferred stock, shares issued														0				0		0
Preferred stock, shares outstanding														0				0		0
Stock options, granted														1,043,660
Stock-based compensation cost \| $														$ 7,048,000	$ 5,775,000
Common stock reserved for issuance														10,868,359				10,868,359
Unrecognized stock-based compensation expense \| $														$ 37,300,000				$ 37,300,000
Unrecognized stock-based compensation expense, weighted-average period for recognition														2 years 1 month 6 days
Defined contribution plan employer contribution liabilities expense \| $														$ 800,000	$ 600,000
Defined contribution plan, employer matching contribution, percentage														75.00%
Employer discretionary match number of shares settled				52,130		84,784	16,756	18,394
Dividend yield														0.00%	0.00%
Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Dividend yield														0.00%
Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized stock-based compensation expense \| $														$ 11,500,000				$ 11,500,000
Unrecognized stock-based compensation expense, weighted-average period for recognition														2 years 3 months 18 days
2019 Equity Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock, shares authorized for issuance																	2,231,739
Stock options, granted																	1,400,528
Number of shares available for issuance											0
2019 Equity Incentive Plan \| Restricted Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock awards, granted																	16,260
2019 Incentive Award Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Annual increase to shares available for issuance percentage of outstanding common stock											5.00%
Equity plan, description														The number of shares initially available for issuance will be increased by (i) the number of shares subject to stock options or similar awards granted under the Existing Incentive Plan that expire or otherwise terminate without having been exercised in full after the effective date of the 2019 Plan and unvested shares issued pursuant to awards granted under the Existing Incentive Plan that are forfeited to or repurchased by the Company after the effective date of the 2019 Plan, with the maximum number of shares to be added to the 2019 Plan pursuant to clause (i) above equal to 1,416,788 shares, and (ii) an annual increase on January 1 of each calendar year beginning in 2020 and ending in 2029, equal to the lesser of (a) 5% of the shares of common stock outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as determined by the board of directors. As of March 31, 2023, 681,762 shares remain available for issuance, which reflects 2,391,070 of stock option, performance-based unit, or PSU, and restricted stock unit, or RSU, awards granted, and 28,782 of awards cancelled or forfeited, during the three months ended March 31, 2023 as well as an annual increase of 2,086,165 shares authorized on January 1, 2023.
Number of shares remain available for issuance, annual increase														2,086,165				2,086,165
Common stock reserved for issuance														681,762				681,762
2019 Incentive Award Plan \| Performance-Based Stock Units (PSU)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock awards, granted														597,650	37,500
Stock-based compensation cost \| $														$ 0
Unrecognized stock-based compensation expense \| $														$ 19,300,000				$ 19,300,000
2019 Incentive Award Plan \| Stock options, PSUs and RSUs
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of awards, granted														2,391,070
Number of awards, cancelled or forfeited														28,782
2019 Incentive Award Plan \| Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock awards, granted														749,760
Employee Stock Purchase Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares available for issuance														1,048,370				1,048,370
Annual increase to shares available for issuance percentage of outstanding common stock											1.00%
Equity plan, description														In addition, the number of shares available for issuance under the ESPP will be annually increased on January 1 of each calendar year beginning in 2020 and ending in 2029, by an amount equal to the lesser of: (i) 1% of the shares outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by the board of directors. As of March 31, 2023, 1,048,370 shares of common stock remain available for issuance, which includes the 121,801 shares sold to employees during the three months ended March 31, 2023 as well as an annual increase of 417,233 shares authorized on January 1, 2023.
Number of shares remain available for issuance, annual increase																			417,233
Stock-based compensation cost \| $														$ 100,000	$ 100,000
Common stock reserved for issuance											270,000			1,048,370				1,048,370
Number of shares issued														121,801
Estimated weighted-average fair value \| $ / shares														$ 2.87	$ 5.31
Unrecognized stock-based compensation expense \| $														$ 200,000				$ 200,000
Unrecognized stock-based compensation expense, weighted-average period for recognition														3 months 18 days
Underwritten Public Offering
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock shares issued	2,250,000
Common stock, price per share \| $ / shares	$ 42.00
Proceeds from issuance initial public offering gross \| $	$ 94,500,000
Purchase price per share after deducting underwriting discounts and commissions \| $ / shares	$ 39.48
Net proceeds after deducting underwriters commission \| $	$ 88,800,000
Purchase of additional offering expenses \| $	$ 200,000
At-the-Market Offering Program
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock shares issued			1,514,219		2,414,897													3,929,116
Proceeds from issuance of shares \| $			$ 14,100,000		$ 24,600,000									$ 14,072,000				$ 38,700,000
Stock issuance costs \| $			$ 400,000		$ 800,000
Amount utilized of equity financing \| $														39,900,000
Available equity financing amount \| $														$ 125,000,000.0
Employee and Nonemployee Director
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Estimated weighted-average fair value \| $ / shares														$ 5.13
Open Market Sale Agreement with Jefferies LLC \| At-the-Market Offering Program
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Sales commission payable as a percentage of sale of gross sales price per share									3.00%
Common Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock shares issued														1,514,219		2,524,852
Stock Issued During Period, Value, New Issues \| $														$ 1,000
Number of shares authorized to repurchase													3,373,408
Stock repurchase program, number of shares right lapse													843,352
Remaining number of shares to be repurchased													2,530,056
Stock repurchase program, period in force													48 months
Stock repurchase program expiration period													2023-03
Proceeds from issuance of shares \| $																$ 1,000
Repurchase right lapse each month after first anniversary, shares																0.000208
Repurchases of shares										17,560
Shares aggregate repurchase price \| $ / shares										$ 5.20
Employer discretionary match number of shares settled														52,130	16,756
Common Stock \| 2019 Incentive Award Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Additional number of shares available for issuance											1,416,788
Common Stock \| Employee Stock Purchase Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Maximum percentage of eligible compensation contributed by participants											20.00%
Common Stock \| IPO
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock shares issued		10,997,630
Common stock, price per share \| $ / shares		$ 19.00
Proceeds from Initial Public Offering (IPO) \| $		$ 191,500,000
Common Stock \| Underwritten Public Offering
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock shares issued		1,434,473
Common Stock \| Employees
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Remaining number of shares to be repurchased														31,843				31,843
Common Stock \| First Anniversary
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Initial repurchase right lapse rate																25.00%
Common Stock \| Takeda License
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock shares issued												1,084,000
Common Stock \| Founders
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Remaining number of shares to be repurchased														0				0
Common Stock \| Frazier
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock shares issued													1,491,072

Stockholders' Equity - Summary of Unvested Shares (Details)	3 Months Ended
	Mar. 31, 2023 shares
Share-Based Payment Arrangement [Abstract]
Balance at December 31, 2022	254,437
Share vesting	(222,593)
Balance at March 31, 2023	31,844

Stockholders' Equity - Summary of Common Stock Reserved for Future Issuance (Details) - shares	Mar. 31, 2023	Oct. 31, 2019
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Common stock reserved for future issuance (in shares)	10,868,359
Common stock warrants
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Common stock reserved for future issuance (in shares)	91,228
Stock Option Performance Based Awards Outstanding
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Common stock reserved for future issuance (in shares)	9,046,999
2019 Incentive Award Plan
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Common stock reserved for future issuance (in shares)	681,762
ESPP Plan
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Common stock reserved for future issuance (in shares)	1,048,370	270,000

Stockholders' Equity - Summary of PSU and RSUs Activity Under the 2019 Incentive Award Plan (Details) - $ / shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Balance at December 31, 2022	254,437
Balance at March 31, 2023	31,844
2019 Incentive Award Plan \| Performance-Based Stock Units (PSU)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Balance at December 31, 2022	412,300
Stock awards, granted	597,650	37,500
Balance at March 31, 2023	1,009,950
Weighted Average Grant Date Fair Value Per Share, Unvested Beginning Balance	$ 30.97
Weighted Average Grant Date Fair Value Per Share, Granted	10.89
Weighted Average Grant Date Fair Value Per Share, Unvested Ending Balance	$ 19.09
2019 Incentive Award Plan \| Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Balance at December 31, 2022	877,467
Stock awards, granted	749,760
Number of Stock Units, Vested	(191,526)
Number of Stock Units, Forfeited	(2,817)
Balance at March 31, 2023	1,432,884
Weighted Average Grant Date Fair Value Per Share, Unvested Beginning Balance	$ 11.03
Weighted Average Grant Date Fair Value Per Share, Granted	11.36
Weighted Average Grant Date Fair Value Per Share, Vested	8.36
Weighted Average Grant Date Fair Value Per Share, Forfeited	10.26
Weighted Average Grant Date Fair Value Per Share, Unvested Ending Balance	$ 9.59

Stockholders' Equity - Summary of Weighted-Average Assumptions Used to Estimate Fair Value of Stock Options Granted and ESPP Awards (Details)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Assumptions:
Expected term (in years)	6 years 29 days	6 years 29 days
Expected volatility	63.77%	66.19%
Risk free interest rate	3.46%	1.70%
Dividend yield	0.00%	0.00%
Employee Stock Purchase Plan
Assumptions:
Expected term (in years)	5 months 26 days	5 months 26 days
Expected volatility	69.10%	72.41%
Risk free interest rate	4.77%	0.37%

Stockholders' Equity - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]
Options Outstanding, Beginning Balance	5,586,470
Options Outstanding, Options granted	1,043,660
Options Outstanding, Options cancelled	(25,965)
Options Outstanding, Ending Balance	6,604,165	5,586,470
Options Outstanding, Options exercisable as of March 31, 2022	3,019,036
Weighted-Average Exercise Price, Beginning Balance	$ 23.40
Weighted-Average Exercise Price, Options granted	8.38
Weighted-Average Exercise Price, Options cancelled	34.66
Weighted-Average Exercise Price, Ending Balance	20.98	$ 23.40
Weighted-Average Exercise Price, Options exercisable as of March 31, 2022	$ 23.99
Weighted-Average Remaining Contractual Term	8 years	7 years 10 months 24 days
Weighted-Average Remaining Contractual Term, Options exercisable as of March 31, 2022	7 years 2 months 8 days
Aggregate Intrinsic Value, Balance	$ 170	$ 4,476
Aggregate Intrinsic Value, Options exercisable as of March 31, 2022	$ 138

Stockholders' Equity - Summary of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 7,048	$ 5,775
Research and Development Expense
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	1,776	1,139
General and Administrative Expense
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 5,272	$ 4,636

Subsequent Event - Additional Information (Details) - USD ($)	May 09, 2023	May 03, 2022	Mar. 31, 2023	Dec. 31, 2022	Sep. 27, 2022
Subsequent Event [Line Items]
Common stock, par value			$ 0.0001	$ 0.0001
Long-term debt outstanding			$ 100,000,000
Revenue Interest Financing Agreement
Subsequent Event [Line Items]
Percentage of investor share of royalty in net sales		10.00%
Amendment to Loan Agreement
Subsequent Event [Line Items]
Long-term debt outstanding					$ 50,000,000
Subsequent Event \| Amendment to Loan Agreement
Subsequent Event [Line Items]
Tranche extension amendment fee	$ 150,000
Covenant extension amendment fee	$ 100,000
Subsequent Event \| Amendment to Warrants
Subsequent Event [Line Items]
Common stock, par value	$ 0.0001
Warrants exercise price	$ 11.6783
Percentage of debt funded to be issued as warrants to purchase common stock	2.50%
Warrants expire term	7 years
Long-term debt outstanding	$ 100,000,000.0
Subsequent Event \| Amendment to Warrants \| Common Stock
Subsequent Event [Line Items]
Outstanding warrants issued to purchase shares	74,783