Bullish indicating open at $55-$60, IPO prices at $37
On Friday, H.C. Wainwright analyst Matthew Caufield adjusted the price target for Phathom Pharmaceuticals (NASDAQ:PHAT) shares, reducing it to $20.00 from the previous $28.00, while maintaining a Buy rating on the stock. Currently trading at $3.36, the stock has seen an 81.6% decline over the past six months. According to InvestingPro analysis, PHAT appears undervalued, with analysts maintaining an overall bullish consensus of 1.44 (where 1 is Strong Buy). The revision follows the company’s first full year of VOQUEZNA™ on the market and recent strategic shifts that were unexpected by the analysts.
Phathom Pharmaceuticals has decided to scale back its direct-to-consumer (DTC) marketing efforts, a move that Wainwright analysts found surprising. Instead, the company is focusing on its salesforce and leveraging the gastrointestinal (GI) specialist channel for prescriptions. There’s an additional strategy to tap into primary care for further growth, complementing the success with GI prescribers. InvestingPro data reveals impressive revenue growth, though the company maintains a ’FAIR’ overall financial health score of 1.95 out of 5.
Wainwright’s analysts acknowledged the company’s aim to reach operating profit by 2026. They noted the conclusion that the DTC campaign was not effectively bringing in new patients at this stage of VOQUEZNA™’s commercial journey. The expectation is that the upcoming quarters will provide Phathom Pharmaceuticals with an opportunity to showcase the effectiveness of its commercial optimization strategies.
The analysts expressed continued confidence in the unique value of VOQUEZNA™, a differentiated potassium competitive acid blocker (PCAB) oral tablet for the treatment of gastroesophageal reflux disease (GERD) and non-erosive reflux disease (NERD). Despite the lowered price target, the firm’s outlook on Phathom Pharmaceuticals remains positive, as they anticipate the company’s commercial initiatives to evolve and yield results in the near term.
In other recent news, Phathom Pharmaceuticals reported its first quarter of 2025 financial results, surpassing earnings expectations. The company achieved an earnings per share (EPS) of -1.07 USD, outperforming the forecast of -1.11 USD, and generated revenue of 28.5 million USD, exceeding the forecast of 27.75 million USD. Despite this positive outcome, the company is implementing cost-cutting measures to target profitability by 2026, including a reduction in staff and marketing expenses. Phathom Pharmaceuticals remains focused on growing sales of its drug, Vaquesna, which has shown a strong prescription growth rate. The company’s gross margin stood at 87%, reflecting effective cost management. With cash and cash equivalents amounting to 212 million USD, Phathom aims to achieve profitable operations without additional financing. CEO Steve Bosta emphasized the company’s transition towards profitability and highlighted ongoing efforts to manage costs and drive revenue growth.
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