One Analyst Is Bullish While Another Sees Overhang On Phathom Pharma Stock After Two Rejection Letters

FDA issued two Complete Response Letters to Phathom Pharmaceuticals Inc's PHAT vonoprazan marketing application for the erosive esophagitis (EE) indication and H. pylori (HP) indication post-approval supplement.
Phathom expects to meet with the FDA in the first quarter of this year to discuss the resubmission plan and timeline.
Goldman Sachs writes that the FDA could need up to 6 months to review the company's resubmission.
A base case scenario would be a 6-month study of the recently produced commercial product under accelerated conditions (i.e., high temperature and humidity) that could allow for an early 2024 launch versus the prior assumed late 2023/early 2024.
The worst-case scenario would be a 24-month study under room temperature conditions.
Overall, the overhanging nitrosamine impurity issues will likely keep the stock trading sideways until the company can resolve these issues and satisfy the FDA's requirement.
GS maintains a Neutral rating and a price target of $9.
Needham says that the CRL does not impact the FDA's view on the nature of the required stability data.
It is still possible that FDA is open to approval on 3-month accelerated stability data, and it appears this data would be available by the Type A meeting.
After the Type A meeting, much visibility would be available, and the analyst writes that positive resolution is coming and vonoprazan approval in EE by YE23 is likely. With a Buy rating, it lowers the price target from $25 to $23.
Price Action: PHAT shares are down 29.7% at $8.13 on the last check Friday.

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