Phathom Pharmaceuticals Announces Pricing of $130 Million Offering of Common Stock and Pre-Funded Warrants

Rhea-AI Summary

Phathom Pharmaceuticals (Nasdaq: PHAT) has announced the pricing of an underwritten offering of 8,695,652 shares of common stock at $11.50 per share and 2,608,922 pre-funded warrants at $11.499 per warrant. The gross proceeds are expected to be approximately $130 million. The offering is set to close around August 20, 2024. Phathom plans to use the net proceeds for commercialization expenses, clinical development of vonoprazan, working capital, and general corporate purposes. The offering is being managed by Evercore ISI, Stifel, and Guggenheim Securities as joint bookrunning managers, with H.C. Wainwright & Co., Needham & Company, and Craig-Hallum as co-lead managers.

Positive

• Successful pricing of a $130 million offering, providing significant capital infusion
• Funds allocated for commercialization and clinical development of vonoprazan, potentially accelerating growth
• Strong support from reputable financial institutions as underwriters

Negative

• Potential dilution of existing shareholders' ownership due to new share issuance
• Increase in outstanding shares may put downward pressure on stock price

Insights

Financial Analyst

Phathom Pharmaceuticals' $130 million offering is a significant capital raise that will bolster the company's financial position. The pricing at $11.50 per share represents a 15% discount to the previous closing price, which is within the typical range for secondary offerings. This dilution is offset by the substantial cash infusion, which will fund critical commercialization efforts for vonoprazan and support further clinical development.

The inclusion of pre-funded warrants alongside common stock is a strategic move to attract institutional investors who may have restrictions on direct stock purchases. This structure provides flexibility and potentially broadens the investor base. The expected $130 million gross proceeds, before expenses, should significantly extend Phathom's cash runway, potentially reducing the need for additional near-term financing.

Market Research Analyst

This capital raise signals confidence in Phathom's commercialization strategy for VOQUEZNA® and its pipeline. The market's reception to this offering will be important to watch, as it reflects investor sentiment towards the company's growth prospects in the competitive gastrointestinal disease space. The participation of multiple reputable investment banks as joint bookrunners and co-lead managers lends credibility to the offering.

The timing of this raise, following the recent FDA approvals for VOQUEZNA®, suggests a strategic move to capitalize on positive momentum. However, investors should monitor how effectively Phathom deploys this capital to drive market penetration and advance its clinical programs. The success of vonoprazan's commercialization will be critical in justifying this dilution and potentially driving future stock appreciation.

Biotech Industry Expert

Phathom's focus on vonoprazan, a first-in-class potassium-competitive acid blocker (PCAB), positions it uniquely in the gastrointestinal treatment landscape. The recent FDA approvals for multiple indications, including Non-Erosive GERD, Erosive GERD and H. pylori infection, provide a solid foundation for commercial success. This $130 million raise is timely, as it will fuel the critical early stages of product launch and market penetration.

The company's strategy of offering multiple formulations (VOQUEZNA® tablets, TRIPLE PAK® and DUAL PAK®) demonstrates a comprehensive approach to addressing various gastrointestinal conditions. This diversification could help mitigate risks associated with single-product dependency. Investors should closely monitor prescription trends and market share gains in the coming quarters to gauge the early success of Phathom's commercialization efforts.

FLORHAM PARK, N.J., Aug. 19, 2024 (GLOBE NEWSWIRE) -- Phathom Pharmaceuticals, Inc. (Nasdaq: PHAT), a biopharmaceutical company focused on developing and commercializing novel treatments for gastrointestinal diseases, announced today the pricing of its underwritten offering of 8,695,652 shares of its common stock and pre-funded warrants to purchase 2,608,922 shares of common stock. The shares of common stock are being sold at a price of $11.50 per share and the pre-funded warrants are being sold at a price of $11.499 per pre-funded warrant, which represents the per share price for the common stock less the $0.001 per share exercise price for each such pre-funded warrant. The gross proceeds to Phathom from the offering, before deducting the underwriting discounts and commissions and other offering expenses, are expected to be approximately $130 million. The offering is expected to close on or about August 20, 2024, subject to satisfaction of customary closing conditions.

Phathom intends to use the net proceeds from the offering to fund commercialization expenses and further clinical development of vonoprazan and for working capital and general corporate purposes.

Evercore ISI, Stifel and Guggenheim Securities are acting as joint bookrunning managers for the offering. H.C. Wainwright & Co., Needham & Company and Craig-Hallum are acting as co-lead managers for the offering.

The securities described above are being offered by Phathom pursuant to a shelf registration statement previously filed and declared effective by the Securities and Exchange Commission (SEC). An electronic copy of the accompanying prospectus was filed with the SEC and is available on the website of the SEC at http://www.sec.gov. When available, copies of the final prospectus supplement and the accompanying prospectus relating to the offering may be obtained from: Evercore Group L.L.C., Attention: Equity Capital Markets, 55 East 52nd Street, 35th Floor, New York, NY 10055, by telephone at (888) 474-0200 or by email at ecm.prospectus@evercore.com; Stifel, Nicolaus & Company, Incorporated, One Montgomery Street, Suite 3700, San Francisco, CA 94104, Attention: Syndicate, or by phone at (415) 364-2720, or by email at syndprospectus@stifel.com; or Guggenheim Securities, LLC, Attention: Equity Syndicate Department, 330 Madison Avenue, 8th floor, New York, NY 10017, by telephone at (212) 518-9544, or by email at GSEquityProspectusDelivery@guggenheimpartners.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

About Phathom Pharmaceuticals, Inc.
Phathom Pharmaceuticals is a biopharmaceutical company focused on the development and commercialization of novel treatments for gastrointestinal diseases. Phathom has in-licensed the exclusive rights to vonoprazan, a first-in-class potassium-competitive acid blocker (PCAB) that is currently marketed in the United States as VOQUEZNA® (vonoprazan) tablets for the treatment of heartburn associated with Non-Erosive GERD in adults, the healing and maintenance of healing of Erosive GERD in adults and associated heartburn, in addition to VOQUEZNA® TRIPLE PAK® (vonoprazan tablets, amoxicillin capsules, clarithromycin tablets) and VOQUEZNA® DUAL PAK® (vonoprazan tablets, amoxicillin capsules) for the treatment of H. pylori infection in adults.

Forward-Looking Statements
Phathom cautions you that statements contained in this press release regarding matters that are not historical facts are forward-looking statements. These statements are based on the company’s current beliefs and expectations. Such forward-looking statements include, but are not limited to, statements relating to the satisfaction of customary closing conditions related to the offering, the expected closing of the offering and the anticipated gross proceeds from the offering and Phathom’s intended use of proceeds therefrom. The inclusion of forward-looking statements should not be regarded as a representation by Phathom that any of its plans will be achieved. Actual results may differ from those set forth in this press release due to the risks and uncertainties associated with market conditions and the satisfaction of customary closing conditions related to the offering, as well as risks and uncertainties inherent in Phathom’s business described in the Company’s prior press releases and the Company’s filings with the Securities and Exchange Commission (SEC), including under the heading “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and any subsequent filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and Phathom undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

CONTACTS

Media Contact:
Nick Benedetto
1-877-742-8466
media@phathompharma.com

Investor Contact:
Eric Sciorilli
1-877-742-8466
ir@phathompharma.com

© 2024 Phathom Pharmaceuticals. All rights reserved. VOQUEZNA, VOQUEZNA DUAL PAK, VOQUEZNA TRIPLE PAK, Phathom Pharmaceuticals, and their respective logos are registered trademarks of Phathom Pharmaceuticals, Inc.

FAQ

What is the size and price of Phathom Pharmaceuticals' (PHAT) recent stock offering?

Phathom Pharmaceuticals (PHAT) priced an offering of 8,695,652 shares of common stock at $11.50 per share and 2,608,922 pre-funded warrants at $11.499 per warrant, totaling approximately $130 million in gross proceeds.

When is the closing date for Phathom Pharmaceuticals' (PHAT) stock offering?

The stock offering is expected to close on or about August 20, 2024, subject to customary closing conditions.

How does Phathom Pharmaceuticals (PHAT) plan to use the proceeds from its recent offering?

Phathom Pharmaceuticals intends to use the net proceeds for commercialization expenses, further clinical development of vonoprazan, working capital, and general corporate purposes.

Which financial institutions are managing Phathom Pharmaceuticals' (PHAT) stock offering?

Evercore ISI, Stifel, and Guggenheim Securities are acting as joint bookrunning managers, while H.C. Wainwright & Co., Needham & Company, and Craig-Hallum are co-lead managers for the offering.