10-Q
--12-31false0001783183Q2P2Y0.02080001783183phat:EmployeeStockPurchasePlanMember2019-10-012019-10-310001783183us-gaap:OverAllotmentOptionMemberus-gaap:CommonStockMember2023-05-232023-05-230001783183us-gaap:GeneralAndAdministrativeExpenseMember2022-01-012022-06-300001783183phat:PCIPharmaServicesMemberus-gaap:RelatedPartyMember2022-04-012022-06-300001783183phat:CommercialSupplyAgreementAndTemporaryServicesAgreementMemberphat:TakedaPharmaceuticalCompanyLimitedMember2023-06-300001783183phat:TwoThousandNineteenEquityIncentivePlanMember2019-01-012019-12-310001783183srt:MinimumMemberphat:RevenueInterestFinancingAgreementPercentageOnInvestmentAmountOnDecemberThirtyOneTwoThousandAndTwentyEightMember2022-05-030001783183phat:CommonStockWarrantMember2023-06-3000017831832022-04-012022-06-300001783183us-gaap:ComputerEquipmentMember2022-12-310001783183us-gaap:TreasuryStockCommonMember2021-12-310001783183phat:HerculesLoanAgreementMember2023-04-012023-06-300001783183phat:AmendmentToLoanAgreementMember2022-09-270001783183phat:RevenueInterestFinancingAgreementMember2022-05-032022-05-030001783183phat:TakedaPharmaceuticalCompanyLimitedMemberphat:TakedaLicenseAgreementMember2019-05-072019-05-0700017831832023-01-012023-03-310001783183phat:TwoThousandNineteenIncentiveAwardPlanMember2023-01-012023-06-300001783183us-gaap:CommonStockMember2019-03-012019-03-310001783183us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-300001783183phat:LoanAgreementMember2021-09-172021-09-170001783183phat:LoanAgreementMemberphat:TermLoanMemberphat:PaymentInKindPikInterestRateMember2021-09-170001783183us-gaap:LeaseholdImprovementsMember2022-12-310001783183us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001783183us-gaap:AdditionalPaidInCapitalMember2023-03-3100017831832023-04-012023-06-3000017831832022-01-012022-12-310001783183us-gaap:RestrictedStockMemberphat:TwoThousandNineteenEquityIncentivePlanMember2019-01-012019-12-310001783183phat:LoanAgreementMemberphat:TermLoanAdvanceMember2023-06-300001783183phat:TakedaPharmaceuticalCompanyLimitedMemberphat:TakedaLicenseAgreementMember2023-01-012023-06-300001783183us-gaap:ResearchAndDevelopmentExpenseMember2023-04-012023-06-300001783183us-gaap:RestrictedStockUnitsRSUMemberphat:TwoThousandNineteenIncentiveAwardPlanMember2023-01-012023-06-300001783183us-gaap:TreasuryStockCommonMember2022-01-012022-03-3100017831832023-08-0800017831832022-12-310001783183us-gaap:CommonStockMemberus-gaap:IPOMember2019-10-292019-10-290001783183us-gaap:TreasuryStockCommonMember2022-12-3100017831832022-03-310001783183phat:TermLoansAggregatePrincipalAmountTranchesThreeMemberphat:LoanAgreementMember2023-06-3000017831832023-01-012023-06-300001783183us-gaap:DomesticCountryMember2023-01-012023-06-300001783183us-gaap:OtherNoncurrentAssetsMember2023-06-3000017831832023-03-310001783183us-gaap:CommonStockMember2022-12-310001783183us-gaap:PerformanceSharesMemberphat:TwoThousandNineteenIncentiveAwardPlanMember2023-01-012023-06-300001783183phat:LoanAgreementMemberus-gaap:CommonStockMember2021-09-170001783183us-gaap:ResearchAndDevelopmentExpenseMember2022-04-012022-06-300001783183us-gaap:GeneralAndAdministrativeExpenseMember2023-04-012023-06-300001783183us-gaap:TreasuryStockCommonMember2023-06-300001783183us-gaap:CommonStockMemberphat:AmendmentToWarrantsMember2023-05-090001783183us-gaap:CommonStockMember2022-06-300001783183us-gaap:CommonStockMember2023-01-012023-03-310001783183us-gaap:RelatedPartyMemberphat:TakedaPharmaceuticalCompanyLimitedMemberphat:CommercialSupplyAgreementAndTemporaryServicesAgreementMember2023-01-012023-06-300001783183srt:MinimumMemberphat:RevenueInterestFinancingAgreementPercentageOnInvestmentAmountOnDecemberThirtyOneTwoThousandAndThirtySevenMember2022-05-030001783183phat:RevenueInterestFinancingAgreementUponOccurrenceOfAChangeInControlEventEarlierOfAprilOneTwoThousandAndTwentyFourOrFdaApprovalMember2022-05-0300017831832021-08-012021-08-310001783183phat:PCIPharmaServicesMemberphat:ClinicalManufacturingServicesMember2022-12-3100017831832023-01-012023-01-310001783183phat:TakedaPharmaceuticalCompanyLimitedMemberphat:TakedaLicenseAgreementMember2019-05-070001783183us-gaap:CommonStockMemberphat:FollowOnPublicOfferingMember2023-05-012023-05-310001783183us-gaap:TreasuryStockCommonMember2023-03-310001783183phat:EmployeeStockPurchasePlanMember2022-01-012022-06-300001783183phat:TermLoansAggregatePrincipalAmountTranchesOneMemberphat:LoanAgreementMember2021-09-170001783183us-gaap:CommonStockMember2022-03-3100017831832023-06-300001783183us-gaap:OverAllotmentOptionMember2020-12-162020-12-160001783183us-gaap:SubsequentEventMemberphat:TwoThousandNineteenIncentiveAwardPlanMember2023-07-142023-07-140001783183us-gaap:OverAllotmentOptionMember2023-04-012023-06-300001783183us-gaap:RetainedEarningsMember2022-03-310001783183phat:PCIPharmaServicesMemberphat:ClinicalManufacturingServicesMemberus-gaap:RelatedPartyMember2022-01-012022-06-300001783183phat:ATMOfferingProgramMember2023-01-012023-06-300001783183us-gaap:ConstructionInProgressMember2023-06-300001783183us-gaap:PrimeRateMemberphat:LoanAgreementMemberphat:TermLoanMember2021-09-172021-09-170001783183phat:UnvestedSharesMember2022-04-012022-06-300001783183us-gaap:RetainedEarningsMember2021-12-310001783183phat:RevenueInterestFinancingAgreementUponOccurrenceOfEventOfDefaultBetweenAprilOneTwoThousandAndTwentyFiveAndAprilOneTwoThousandAndTwentyEightMember2022-05-030001783183phat:EmployeeStockPurchasePlanMember2023-01-012023-06-300001783183us-gaap:OverAllotmentOptionMember2023-05-230001783183us-gaap:RelatedPartyMemberphat:CommercialSupplyAgreementAndTemporaryServicesAgreementMemberphat:TakedaPharmaceuticalCompanyLimitedMember2022-01-012022-06-300001783183us-gaap:RetainedEarningsMember2023-03-310001783183phat:EmployeeStockPurchasePlanMember2023-06-300001783183us-gaap:GeneralAndAdministrativeExpenseMember2022-04-012022-06-300001783183phat:PCIPharmaServicesMemberus-gaap:RelatedPartyMember2022-01-012022-06-3000017831832022-06-300001783183us-gaap:RetainedEarningsMember2022-01-012022-03-310001783183phat:TwoThousandNineteenIncentiveAwardPlanMember2023-06-300001783183phat:RevenueInterestFinancingAgreementFundingUponAchievementOfSalesMilestoneAtAnyTimePriorToJuneThirtyTwoThousandAndTwentyFourMemberphat:InitialInvestorsNqSagardAndHerculesMember2022-05-030001783183phat:ATMOfferingProgramMemberus-gaap:CommonStockMember2023-01-012023-03-310001783183us-gaap:AdditionalPaidInCapitalMember2022-12-310001783183stpr:NJ2023-06-300001783183phat:TwoThousandNineteenEquityIncentivePlanMember2019-10-310001783183phat:ShareBasedPaymentArrangementEmployeeAndNonemployeeMember2023-01-012023-06-300001783183phat:ATMOfferingProgramMember2022-09-012022-09-300001783183us-gaap:LeaseholdImprovementsMember2023-06-300001783183us-gaap:AdditionalPaidInCapitalMember2023-06-300001783183stpr:NJ2023-01-012023-06-300001783183us-gaap:CommonStockMember2019-11-012019-11-300001783183phat:EmployeeStockPurchasePlanMember2019-10-310001783183us-gaap:AdditionalPaidInCapitalMemberus-gaap:OverAllotmentOptionMember2023-04-012023-06-3000017831832022-05-032023-06-300001783183us-gaap:CommonStockMember2019-03-310001783183phat:TwoThousandNineteenEquityIncentivePlanMember2019-12-310001783183phat:CommercialSupplyAgreementsMember2020-05-052020-05-050001783183phat:AmendmentToWarrantsMember2023-05-092023-05-090001783183us-gaap:PerformanceSharesMemberphat:TwoThousandNineteenIncentiveAwardPlanMember2022-12-310001783183phat:PCIPharmaServicesMemberphat:ClinicalManufacturingServicesMemberus-gaap:RelatedPartyMember2023-01-012023-06-300001783183us-gaap:EmployeeStockOptionMember2023-01-012023-06-300001783183phat:InitialInvestorsNqSagardAndHerculesMemberphat:RevenueInterestFinancingAgreementFundingCommitmentOnOrBeforeMarchThirtyOneTwoThousandAndTwentyFourMember2022-05-032022-05-030001783183us-gaap:CommonStockMember2019-01-012019-05-060001783183phat:AmendmentToWarrantsMember2023-05-090001783183phat:EmployeeStockPurchasePlanMember2023-04-012023-06-300001783183us-gaap:OverAllotmentOptionMember2023-05-232023-05-230001783183us-gaap:CommonStockMember2023-03-310001783183phat:TwoThousandNineteenIncentiveAwardPlanMember2019-10-012019-10-310001783183phat:InitialInvestorsNqSagardAndHerculesMemberphat:RevenueInterestFinancingAgreementFundingUponFdaApprovalAtAnyTimePriorToDecemberThirtyOneTwoThousandAndTwentyTwoMember2022-05-032022-05-030001783183srt:MaximumMemberphat:ComputerEquipmentAndSoftwareMember2023-06-300001783183us-gaap:RestrictedStockUnitsRSUMemberphat:TwoThousandNineteenIncentiveAwardPlanMember2023-06-300001783183us-gaap:AdditionalPaidInCapitalMemberphat:ATMOfferingProgramMember2023-01-012023-03-310001783183us-gaap:RetainedEarningsMember2023-01-012023-03-310001783183phat:PCIPharmaServicesMemberus-gaap:RelatedPartyMember2023-04-012023-06-300001783183phat:PCIPharmaServicesMemberphat:ClinicalManufacturingServicesMemberus-gaap:RelatedPartyMember2023-04-012023-06-300001783183phat:UnvestedSharesMember2023-01-012023-06-300001783183srt:MaximumMemberphat:LoanAgreementMemberphat:TermLoanAdvanceMember2021-09-172021-09-170001783183us-gaap:CommonStockMemberphat:TakedaLicenseAgreementMember2019-05-012019-05-310001783183us-gaap:RelatedPartyMemberphat:TakedaPharmaceuticalCompanyLimitedMemberphat:CommercialSupplyAgreementAndTemporaryServicesAgreementMember2023-04-012023-06-300001783183us-gaap:CommonStockMember2022-01-012022-03-310001783183us-gaap:RetainedEarningsMember2023-06-300001783183us-gaap:RelatedPartyMember2023-06-300001783183phat:PCIPharmaServicesMemberus-gaap:RelatedPartyMember2023-01-012023-06-300001783183us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-06-300001783183us-gaap:CommonStockMember2023-04-012023-06-300001783183phat:RevenueInterestFinancingAgreementUponOccurrenceOfEventOfDefaultAfterAprilOneTwoThousandAndTwentyEightMember2022-05-030001783183phat:LoanAgreementMemberphat:TermLoanAdvanceMember2021-09-172021-09-170001783183phat:RevenueInterestFinancingAgreementMember2022-05-030001783183us-gaap:CommonStockMemberphat:TakedaPharmaceuticalCompanyLimitedMemberphat:TakedaLicenseAgreementMember2019-05-070001783183phat:PCIPharmaServicesMemberphat:ClinicalManufacturingServicesMemberus-gaap:RelatedPartyMember2022-04-012022-06-300001783183phat:LoanAgreementMemberphat:TermLoanMemberus-gaap:BaseRateMember2021-09-172021-09-170001783183us-gaap:OverAllotmentOptionMemberus-gaap:CommonStockMember2019-10-292019-10-290001783183phat:RevenueInterestFinancingAgreementUponOccurrenceOfAChangeInControlEventEarlierOfAprilOneTwoThousandAndTwentyFourOrFdaApprovalIfOccurrenceIsThereafterToMayThreeTwoThousandAndTwentyThreeMember2022-05-030001783183phat:ATMOfferingProgramMember2018-01-012023-06-300001783183phat:ATMOfferingProgramMember2023-01-012023-03-310001783183srt:MaximumMemberphat:ATMOfferingProgramMemberphat:OpenMarketSaleAgreementWithJefferiesLLCMember2023-01-012023-06-300001783183us-gaap:TreasuryStockCommonMember2022-03-310001783183phat:StockOptionPerformanceBasedUnitAndRestrictedStockUnitMemberphat:TwoThousandNineteenIncentiveAwardPlanMember2023-01-012023-06-300001783183phat:EmployeeStockPurchasePlanMember2022-04-012022-06-300001783183phat:RevenueInterestFinancingAgreementUponOccurrenceOfAChangeInControlEventEarlierOfAprilOneTwoThousandAndTwentyFourOrFdaApprovalIfOccurrencePriorToMayThreeTwoThousandAndTwentyThreeMember2022-05-030001783183us-gaap:CommonStockMemberphat:TwoThousandNineteenIncentiveAwardPlanMember2019-10-012019-10-310001783183phat:HerculesLoanAgreementMember2023-01-012023-06-3000017831832022-01-012022-03-310001783183phat:UnvestedSharesMember2023-04-012023-06-300001783183phat:ATMOfferingProgramMemberphat:OpenMarketSaleAgreementWithJefferiesLLCMember2020-11-012020-11-300001783183us-gaap:RestrictedStockUnitsRSUMemberphat:TwoThousandNineteenIncentiveAwardPlanMember2022-12-310001783183phat:TermLoansAggregatePrincipalAmountTranchesTwoMemberphat:LoanAgreementMember2023-06-300001783183us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001783183us-gaap:PerformanceSharesMemberphat:TwoThousandNineteenIncentiveAwardPlanMember2022-01-012022-12-310001783183phat:HerculesLoanAgreementMember2022-04-012022-06-300001783183srt:MinimumMemberphat:ComputerEquipmentAndSoftwareMember2023-06-300001783183us-gaap:CommonStockMemberphat:EmployeeStockPurchasePlanMember2019-10-310001783183stpr:IL2023-01-012023-06-300001783183phat:UnvestedSharesMember2022-01-012022-06-300001783183us-gaap:OverAllotmentOptionMemberus-gaap:CommonStockMember2023-04-012023-06-300001783183us-gaap:CommonStockMemberphat:FollowOnPublicOfferingMember2020-12-012020-12-310001783183phat:EmployeeStockPurchasePlanMember2023-01-010001783183us-gaap:AdditionalPaidInCapitalMember2022-06-300001783183phat:LoanAgreementMemberphat:TermLoanMember2021-09-172021-09-170001783183phat:LoanAgreementMemberphat:TermLoanMember2021-09-170001783183us-gaap:RelatedPartyMember2022-12-310001783183us-gaap:RestrictedStockUnitsRSUMemberus-gaap:SubsequentEventMemberphat:TwoThousandNineteenIncentiveAwardPlanMember2023-07-142023-07-140001783183us-gaap:RetainedEarningsMember2022-04-012022-06-300001783183phat:TermLoansAggregatePrincipalAmountTranchesFourMemberphat:LoanAgreementMember2023-06-300001783183phat:StockOptionPerformanceBasedUnitMember2023-06-300001783183us-gaap:CommonStockMemberphat:EmployeesMember2023-06-3000017831832022-07-012022-07-310001783183us-gaap:AdditionalPaidInCapitalMember2022-03-310001783183phat:RevenueInterestFinancingAgreementUponOccurrenceOfEventOfDefaultPriorToAprilOneTwoThousandAndTwentyFiveMember2022-05-030001783183us-gaap:CommonStockMemberphat:FrazierLifeSciencesIXLimitedPartnerMember2019-03-012019-03-310001783183phat:CommercialSupplyAgreementAndTemporaryServicesAgreementMemberphat:TakedaPharmaceuticalCompanyLimitedMember2022-12-310001783183phat:InitialInvestorsNqSagardAndHerculesMemberphat:RevenueInterestFinancingAgreementMember2022-05-030001783183us-gaap:CommonStockMember2019-11-300001783183us-gaap:CommonStockMember2021-12-310001783183phat:HerculesLoanAgreementMember2022-01-012022-06-300001783183us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-06-3000017831832022-01-012022-01-310001783183us-gaap:SubsequentEventMember2023-07-012023-07-310001783183stpr:IL2023-06-300001783183us-gaap:CommonStockMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2019-05-060001783183us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001783183us-gaap:AdditionalPaidInCapitalMember2021-12-310001783183us-gaap:CommonStockMemberphat:FoundersMember2023-06-300001783183us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-06-300001783183us-gaap:CommonStockMemberus-gaap:IPOMember2019-10-290001783183us-gaap:CommonStockMember2022-04-012022-06-300001783183srt:MinimumMember2023-06-300001783183us-gaap:ComputerEquipmentMember2023-06-300001783183us-gaap:RetainedEarningsMember2023-04-012023-06-300001783183us-gaap:FurnitureAndFixturesMember2023-06-300001783183us-gaap:PerformanceSharesMemberphat:TwoThousandNineteenIncentiveAwardPlanMember2023-06-300001783183srt:MaximumMemberphat:InitialInvestorsNqSagardAndHerculesMemberphat:RevenueInterestFinancingAgreementMember2022-05-032022-05-030001783183phat:HerculesAndSvbTermLoanMember2023-06-300001783183us-gaap:RelatedPartyMemberphat:CommercialSupplyAgreementAndTemporaryServicesAgreementMemberphat:TakedaPharmaceuticalCompanyLimitedMember2022-04-012022-06-300001783183us-gaap:TreasuryStockCommonMember2022-06-300001783183phat:LoanAgreementMember2021-09-170001783183us-gaap:CommonStockMember2023-06-300001783183us-gaap:CommonStockMember2019-05-060001783183us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-06-300001783183us-gaap:OverAllotmentOptionMember2020-12-160001783183us-gaap:RetainedEarningsMember2022-06-300001783183us-gaap:RetainedEarningsMember2022-12-3100017831832022-01-012022-06-300001783183us-gaap:ForeignCountryMember2023-01-012023-06-300001783183phat:CommercialSupplyAgreementAndTemporaryServicesAgreementMember2023-06-300001783183phat:ATMOfferingProgramMember2023-02-012023-02-280001783183us-gaap:FurnitureAndFixturesMember2022-12-310001783183phat:AmendmentToLoanAgreementMember2023-05-092023-05-090001783183phat:PCIPharmaServicesMemberphat:ClinicalManufacturingServicesMember2023-06-300001783183us-gaap:ConstructionInProgressMember2022-12-3100017831832021-12-31xbrli:purephat:Optionxbrli:sharesiso4217:USDxbrli:sharesphat:Segmentiso4217:USD

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 001-39094

 

PHATHOM PHARMACEUTICALS, INC.

(Exact name of Registrant as specified in its charter)

 

 

Delaware

82-4151574

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

100 Campus Drive, Suite 102

Florham Park, New Jersey

07932

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: (877) 742-8466

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

 

PHAT

 

Nasdaq Global Select Market

 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

Emerging growth company

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of August 8, 2023, the registrant had 56,803,183 shares of common stock ($0.0001 par value) outstanding.

 

 

 


 

TABLE OF CONTENTS

 

PART I. FINANCIAL INFORMATION

 

Item 1

Financial Statements (unaudited)

F-1

 

Balance Sheets

F-1

 

Statements of Operations and Comprehensive Loss

F-2

 

 

Statements of Stockholders’ Equity (Deficit)

F-3

 

 

Statements of Cash Flows

F-4

 

 

Notes to Unaudited Financial Statements

F-5

Item 2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

21

Item 3

Quantitative and Qualitative Disclosures About Market Risk

32

Item 4

Controls and Procedures

32

 

PART II. OTHER INFORMATION

 

Item 1

Legal Proceedings

33

Item 1A

Risk Factors

33

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

33

Item 3

Defaults Upon Senior Securities

33

Item 4

Mine Safety Disclosures

33

Item 5

Other Information

33

Item 6

Exhibits

34

 

 

Signatures

35

 

 

 


 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

PHATHOM PHARMACEUTICALS, INC.

Balance Sheets

(Unaudited)

(in thousands, except share and par value amounts)

 

 

 

June 30,
2023

 

 

December 31,
2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

248,847

 

 

$

155,385

 

Prepaid expenses and other current assets

 

 

8,760

 

 

 

5,127

 

Inventory

 

 

111

 

 

 

 

Total current assets

 

 

257,718

 

 

 

160,512

 

Property, plant and equipment, net

 

 

1,158

 

 

 

1,207

 

Operating lease right-of-use assets

 

 

1,886

 

 

 

2,287

 

Restricted cash

 

 

528

 

 

 

505

 

Other long-term assets

 

 

3,749

 

 

 

299

 

Total assets

 

$

265,039

 

 

$

164,810

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable (including related party amounts of $27 and $35, respectively)

 

$

4,174

 

 

$

9,997

 

Accrued expenses (including related party amounts of $2,786 and $2,499, respectively)

 

 

15,451

 

 

 

14,678

 

Accrued interest

 

 

927

 

 

 

854

 

Operating lease liabilities, current

 

 

717

 

 

 

708

 

Current portion of revenue interest financing liability

 

 

276

 

 

 

 

Total current liabilities

 

 

21,545

 

 

 

26,237

 

 

 

 

 

 

 

Long-term debt, net of discount

 

 

97,806

 

 

 

95,264

 

Revenue interest financing liability

 

 

119,799

 

 

 

109,525

 

Operating lease liabilities

 

 

789

 

 

 

1,098

 

Other long-term liabilities

 

 

7,500

 

 

 

7,500

 

Total liabilities

 

 

247,439

 

 

 

239,624

 

 

 

 

 

 

 

Commitments and contingencies (Note 4)

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.0001 par value; authorized shares — 40,000,000 at June 30, 2023 and December 31, 2022; no shares issued and outstanding at June 30, 2023 and December 31, 2022

 

 

 

 

 

 

Common stock, $0.0001 par value; authorized shares — 400,000,000 at June 30, 2023 and December 31, 2022; issued shares — 56,639,085 and 41,723,308 at June 30, 2023 and December 31, 2022, respectively; outstanding shares — 56,639,085 and 41,468,871 at June 30, 2023 and December 31, 2022, respectively

 

 

5

 

 

 

3

 

Treasury stock — 19 shares at June 30, 2023 and December 31, 2022, respectively

 

 

 

 

 

 

Additional paid-in capital

 

 

823,467

 

 

 

652,276

 

Accumulated deficit

 

 

(805,872

)

 

 

(727,093

)

Total stockholders’ equity (deficit)

 

 

17,600

 

 

 

(74,814

)

Total liabilities and stockholders’ equity

 

$

265,039

 

 

$

164,810

 

 

See accompanying notes.

F-1


 

PHATHOM PHARMACEUTICALS, INC.

Statements of Operations and Comprehensive Loss

(Unaudited)

(in thousands, except share and per share amounts)

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development (includes related party amounts of $233, $370, $407 and $1,800, respectively)

 

$

12,764

 

 

$

18,815

 

 

$

24,242

 

 

$

36,475

 

General and administrative (includes related party amounts of $14, $0, $17 and $0, respectively)

 

 

18,937

 

 

 

26,548

 

 

 

37,536

 

 

 

46,795

 

Total operating expenses

 

 

31,701

 

 

 

45,363

 

 

 

61,778

 

 

 

83,270

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(31,701

)

 

 

(45,363

)

 

 

(61,778

)

 

 

(83,270

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

348

 

 

 

112

 

 

 

1,808

 

 

 

119

 

Interest expense

 

 

(9,615

)

 

 

(5,667

)

 

 

(18,832

)

 

 

(8,426

)

Other income (expense)

 

 

3

 

 

 

(2

)

 

 

23

 

 

 

(8

)

Total other expense

 

 

(9,264

)

 

 

(5,557

)

 

 

(17,001

)

 

 

(8,315

)

Net loss and comprehensive loss

 

$

(40,965

)

 

$

(50,920

)

 

$

(78,779

)

 

$

(91,585

)

Net loss per share, basic and diluted

 

$

(0.84

)

 

$

(1.33

)

 

$

(1.73

)

 

$

(2.40

)

Weighted-average shares of common stock outstanding, basic and diluted

 

 

48,500,516

 

 

 

38,272,044

 

 

 

45,444,496

 

 

 

38,155,151

 

 

See accompanying notes.

F-2


 

PHATHOM PHARMACEUTICALS, INC.

Statements of Stockholders’ Equity (Deficit)

(Unaudited)

(in thousands, except share amounts)

 

 

 

Common Stock

 

 

Treasury Stock

 

 

Additional
Paid-in

 

 

Accumulated

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Capital

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2022

 

 

41,468,871

 

 

$

3

 

 

 

19

 

 

$

652,276

 

 

$

(727,093

)

 

$

(74,814

)

401(k) matching contribution

 

 

52,130

 

 

 

 

 

 

 

 

 

456

 

 

 

 

 

 

456

 

Vesting of restricted shares and restricted stock units

 

 

414,119

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

7,048

 

 

 

 

 

 

7,048

 

ESPP shares issued

 

 

121,801

 

 

 

 

 

 

 

 

 

856

 

 

 

 

 

 

856

 

Issuance of common stock under ATM facility

 

 

1,514,219

 

 

 

1

 

 

 

 

 

 

14,072

 

 

 

 

 

 

14,073

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(37,814

)

 

 

(37,814

)

Balance at March 31, 2023

 

 

43,571,140

 

 

$

4

 

 

 

19

 

 

$

674,708

 

 

$

(764,907

)

 

$

(90,195

)

Vesting of restricted shares and restricted stock units

 

 

259,194

 

 

 

 

 

 

 

 

 

6

 

 

 

 

 

 

6

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

7,253

 

 

 

 

 

 

7,253

 

Issuance of common stock from exercise of stock options

 

 

15,000

 

 

 

 

 

 

 

 

 

111

 

 

 

 

 

 

111

 

Issuance of common stock in connection with underwritten public offering, net

 

 

12,793,750

 

 

 

1

 

 

 

 

 

 

141,389

 

 

 

 

 

 

141,390

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(40,965

)

 

 

(40,965

)

Balance at June 30, 2023

 

 

56,639,085

 

 

$

5

 

 

 

19

 

 

$

823,467

 

 

$

(805,872

)

 

$

17,600

 

 

 

 

Common Stock

 

 

Treasury Stock

 

 

Additional
Paid-in

 

 

Accumulated

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Capital

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2021

 

 

30,511,226

 

 

 

3

 

 

 

1

 

 

 

601,523

 

 

 

(529,370

)

 

 

72,156

 

Cashless exercise of common stock warrants

 

 

7,359,285

 

 

 

 

 

 

18

 

 

 

 

 

 

 

 

 

 

401(k) matching contribution

 

 

16,756

 

 

 

 

 

 

 

 

 

254

 

 

 

 

 

 

254

 

Vesting of restricted shares and restricted stock units

 

 

222,595

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

5,775

 

 

 

 

 

 

5,775

 

ESPP shares issued

 

 

39,951

 

 

 

 

 

 

 

 

 

515

 

 

 

 

 

 

515

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(40,665

)

 

 

(40,665

)

Balance at March 31, 2022

 

 

38,149,813

 

 

$

3

 

 

 

19

 

 

$

608,067

 

 

$

(570,035

)

 

$

38,035

 

Vesting of restricted shares and restricted stock units

 

 

222,590

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

5,885

 

 

 

 

 

 

5,885

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(50,920

)

 

 

(50,920

)

Balance at June 30, 2022

 

 

38,372,403

 

 

$

3

 

 

 

19

 

 

$

613,952

 

 

$

(620,955

)

 

$

(7,000

)

 

See accompanying notes.

 

F-3


 

PHATHOM PHARMACEUTICALS, INC.

Statements of Cash Flows

(Unaudited)

(in thousands)

 

 

 

Six Months Ended
June 30,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$

(78,779

)

 

$

(91,585

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

269

 

 

 

277

 

Stock-based compensation

 

 

14,301

 

 

 

11,660

 

Issuance of PIK interest debt

 

 

1,772

 

 

 

1,713

 

Accrued interest on revenue interest financing liability

 

 

10,550

 

 

 

2,657

 

Amortization of debt discount

 

 

769

 

 

 

1,049

 

Other

 

 

1,157

 

 

 

874

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

(3,633

)

 

 

1,402

 

Accounts payable and accrued expenses (includes changes in related party amounts of $264 and $1,102, respectively)

 

 

(8,447

)

 

 

2,865

 

Accrued clinical trial expenses

 

 

 

 

 

(1,061

)

Accrued interest

 

 

73

 

 

 

88

 

Operating right-of-use assets and lease liabilities

 

 

99

 

 

 

(293

)

Inventory

 

 

 

 

 

 

Other long-term assets

 

 

 

 

 

(119

)

Net cash used in operating activities

 

 

(61,869

)

 

 

(70,473

)

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

Cash paid for property, plant and equipment

 

 

(220

)

 

 

(495

)

Net cash used in investing activities

 

 

(220

)

 

 

(495

)

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

Proceeds from issuance of common stock from exercise of stock options

 

 

111

 

 

 

 

Net proceeds from underwritten public offering

 

 

141,390

 

 

 

 

Net proceeds from revenue interest financing transaction

 

 

 

 

 

95,446

 

Net proceeds from issuance of common stock under ATM facility

 

 

14,073

 

 

 

 

Net cash provided by financing activities

 

 

155,574

 

 

 

95,446

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents and restricted cash

 

 

93,485

 

 

 

24,478

 

Cash and cash equivalents and restricted cash – beginning of period

 

 

155,890

 

 

 

183,419

 

Cash and cash equivalents and restricted cash – end of period

 

$

249,375

 

 

$

207,897

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information

 

 

 

 

 

 

Interest paid

 

$

5,310

 

 

$

2,920

 

Supplemental disclosure of noncash investing and financing activities

 

 

 

 

 

 

Inventory purchases included in accounts payable and accrued expenses

 

$

3,561

 

 

$

 

Property and equipment purchases included in accounts payable and accrued expenses

 

$

 

 

$

16

 

Settlement of ESPP liability in common stock

 

$

856

 

 

$

515

 

Settlement of 401(k) liability in common stock

 

$

456

 

 

$

254

 

Operating lease liabilities arising from obtaining right-of-use assets

 

$

 

 

$

554

 

 

See accompanying notes.

F-4


 

PHATHOM PHARMACEUTICALS, INC.

Notes to Unaudited Financial Statements

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 June 30, 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 June 30, 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 $