Phathom Pharmaceuticals, Inc. Price & Performance (PHAT)

Everyone, and thank you for joining us this morning to discuss Fabulous fourth quarter and full year 2024 results. This morning's presentation will include remarks from Terry Curran, our President and CEO Martin Gilligan, Chief Commercial Officer and Molly Henderson, our Chief Financial Officer. Osmi Nabulsi, our Chief Operating Officer, will also be joining the team during the Q and A portion of today's Just a couple of logistical items before we get started. Earlier this morning, we issued a press release detailing the results we will be discussing during the call. A copy of that press release can be found under the News Releases section of our corporate web Further, the recording of today's webcast can be found under the Events and Presentations section of our corporate website. Before we begin, remind you that we will be making a number of forward looking statements throughout today's presentation. These forward looking statements involve risks, uncertainties. Many of which are beyond Fathom's control. Actual results can materially differ from the forward looking statements Any such risk can materially adversely affect the business, results of operations and the trading prices for Baven's common stock. A discussion of these statements and risk factors is available on the current Safe Harbor slide as well as in the Risk Factors section of today's Form 10 ks.

All forward looking statements made on this call are based on the beliefs of Fathom as of this date, and Fathom disclaims any obligation to update these statements. With that, I will now turn the call over to Terry Curran, Adam's President and CEO to kick us off. Terry? Thank you, Eric, and thank you to all those joining us on today's call. I'm excited to report on the great progress we made during 2024 and the work that's underway to ensure 2025 is a year of strong growth Throughout our first full year of product availability, we reported many accomplishments and consistently exceeded expectations.

Most noteworthy, we secured broad commercial act launched a full scale consumer campaign and received FDA approval for nonerose and GERD. As I reflect on the past year, it's clear that we've built a strong foundation with each of our accomplishments serving as key feedback from physicians, testimonials from patients, and continued demand give us confidence that the Questa is a game changing product We're proud of the work we've done so far, but this is just the beginning. We'll continue building off this strong foundation and focus on pivotal growth drivers in 2025. We fully believe Aquasnet can reach blockbuster status Importantly, our launch data reinforces story. Commercial coverage has held consistently above 120,000,000 lives. With the majority of these lives being able to access the Quesna after stepping through only one generic PCI prescription, a pretty satisfied criteria for most acid reflux patients, And with over 300,000 prescriptions filled to date, the pull through from this coverage is evident. Without a doubt, the non arresect approval sparked an inflection in our launch. And we believe that momentum will continue throughout 2025 and beyond. Looking more broadly at Saturn's future, there is so much to be excited about related to our ongoing launch in Up upcoming development goals.

On the commercial front, we will continue to invest with the objective of making the [indiscernible] The product physicians and patients think of they think of heartburn. In fact, I'm pleased to share that we'll soon be rolling out an exciting new consumer campaign, expanding upon the Questner Kentixson app And aims at further enhancing brand awareness. [indiscernible] on reaching primary care physicians who are the largest group of GERD treated We've got amazing awareness with GIs, but PCPs are where we can make a big Different Every year, there are hundreds of thousands of PCPs who write PPIs for their patients. We think adding Maquaza to their toolkit can materially help the way they treat GERD. For now, we're focused on driving growth by calling on the highest volume PCTs with increased frequency. Our reps are working to ensure these positions recognize the Equinna brand and know that the access process is often as easy as checking a box. We believe this is the path to displacing PPIs and Matt will share more on these efforts later in the call. On the development front, we've always used Aquasana as a pipeline and a product. And we believe eosinophilic esophagitis or EOE can be the next indication to expand the label.

In fact, we recently finalized the Phase two design with the FDA. This is a space we're excited about because we think the PRESIDTA can make a difference. EOE is a chronic inflammatory condition of the esophagus, which is drawing increased attention from the medical community as both the incidence and prevalence have grown in recent years. Although compared to good, EOEs are smaller market, we believe it could be a unique opportunity given the importance of the condition, the need for lifelong management and the overlap with the gastroenterology market. Patients with EOE usually present with heart burn symptoms and difficulty swallowing. The unmet need is significant given the current treatment options are limited Although an approved corticosteroid and biologic offered two options, PPIs continue to be first line therapy despite not being approved this indication the rationale is that PPIs are meant to reduce a Sova deal inflammation and neutralize acid reflux symptoms. Based on this, we believe the potency of the QuestNA may potentially provide an alternative first line therapy ahead of PPIs Biologics and corticosteroids, Our study will be the first large well controlled study in AOE for either acid secretory class PPIs or PCAPs It will include approximately 150 subjects with both adult and adolescent segments.

Aquinas' efficacy will be 2027. Although data on the EPIC C and PCADs for EOE is limited, reviews of retrospective data from Japan showed promise of lenoprazole potential impact. Recently, we've also been working on the development of an orally disintegrating tablet or ODT formulation for Aquestna. This is another key pillar to our development strategy that complements the work we are doing in EOE. Once available, an ODT formulation could present a rutivit administration more desirable for patients with difficulty swallowing. Which is the core symptom among those suffering from AOE and also common among pediatric and elderly patients Additionally, an ODC formulation offers the opportunity for new intellectual property potentially further protecting the brand. An OTC formulation could be a longer term source of differentiation for an over the counter Aquasya product, In fact, we believe the Questner is uniquely suited for prescriptions over the counter or OCC switch. Such an effort to create a long term durable revenue stream. The total OCC asset control market generates the approximately $3,000,000,000 in annual sales, PPIs specifically account for roughly a third of those sales with branded products making up about 35% of the corresponding TPI unit volume. We believe the quiz is rapid potent and durable acid suppression profile supports the potential to capture market share by providing rapid and complete heartburn relief as needed.

However, there's work to be done before we can achieve that vision Throughout 2025, we'll be analyzing the OTC market opportunity and developing our long term strategy. Separately, we're exploring real world data to understand the prevalence of GERD symptoms among the increasing wave of GLP-1U users and the utilization of acid suppressants to relieve such symptoms.

Our review will help us to determine if further efforts are warranted to evaluate the potential of the Quesma to provide relief to those patients. Before turning the call over to Martin, I'd like to take a moment to mention our active citizen petition to the FDA and potential outcomes. On 12/11/2024, we submitted a citizen petition or CP to the FDA requesting that they update the Orange Book to reflect a ten year period of new chemical entity exclusivity for our ten milligram and twenty milligram bottles based on the fact that the underlying drug substance across all the Quezna products contains the same new [indiscernible] We continue to feel confident in the strength of our legal position as outlined in the CP We are now just about halfway through the one hundred and eighty day period the FDA to review and provide a response. If the FDA grants our CP on or before the June deadline, we expect the Orange book to be quickly updated to reflect regulatory exclusivity through May 2032 for all the Aquamna products.

However, even in the case where the FDA rules against our fee period request, we are equally confident in our patent position Our composition of matter patent is strong and we expect its expiry will be extended to at least mid-two thousand and thirty pending the granting of our requested patent term extension under the Hatch Waxman Act. Additionally, we have a separate patent for venoprazen formulation.

Lastly, on the financial side, Mollie will further detail our fourth quarter twenty twenty four results. Later in the call, for which we reported net revenues of $297,000,000 dollars and ended with $297,000,000 in cash. We remain confident that our balance sheet and the available capital under our debt agreement can support the investments needed to pursue our launch and development plans. In 2024, we built a strong foundation We are now leveraging our commercial and development expertise to grow the launch and continue exploring new opportunities for the Viquiza franchise.

We here at Fathom are passionate, resilient and determined to deliver on the Quezna's blockbuster potential. We're just getting started and have excited by the opportunities that lie ahead in 2025. I'll now turn the call over to Martin to provide further details on our recent commercial updates.

Thanks, Terry, and hello, everyone. As you heard Terry mention, we are extremely happy with the progress we made in 2024. Our results continue to prove we're successfully executing on our strategy and I'm incredibly proud of the Fathom team. Launching the drug is hard. Launching a retail focused drug and disrupting a massive genericized market is even harder. However, that is what we set out to do and I believe we're doing it well. Many of you have told us it's been a long time since you've seen a launch quite like this. I attribute our success largely to the impact Bozeman is having on patients and to the agility of this team. I will begin with sharing updates on our key performance metrics since we last [indiscernible] However, today, you will also hear me share a few additional data points that highlight new information we've learned from being on the market for a little over a year.

I'd like to note ahead of time that not all of these are necessarily metrics that we will share on a recurring basis. However, we feel they are important to share at this stage to provide a view into 2024 results.

Starting with the latest on VUEZEN prescriptions, we have now surpassed 300,000 scripts filled by patients from launch through February 21. Over the seventeen weeks since our last report, this figure has more than doubled displaying growth of approximately 110%. In the fourth quarter specifically, we recorded approximately 118,000 filled VLEXAN prescriptions equating to a growth of over 70% compared to our third quarter report. As always, these figures include volumes filled through retail pharmacies as well as those filled through BlinkRx, one of our patient assistant programs. Consistent with previous quarters, the proportion of scripts in Q4 flowing through retail pharmacies and captured by IQVIA continue to increase now reaching approximately 75%. As we begin 2025, it's worth noting that branded products typically experienced seasonal slowness to start the year, The effects of holidays patient health plan changes and deductible resets are fell industry wide and Boquesna is no exception. As such, we anticipate the impact from these events will reflect historical trends as it relates to Q1 filled script growth and the ratio of retail filled prescriptions. That being said, we believe previous trends will quickly return after the first Furthering this belief is the fact that we have seen total demand continue to increase over the last two months.

To us, this signals a growing opportunity to fill Juquesne's scripts which we believe should materialize after the standard volatility in early year for Separately, we've also been monitoring both Wesna's refill rate. Among scripts filled in the fourth quarter, we observed about seventy percent being filled by patients continuing voclosumab therapy. Based on where we are in launch, I'm pleased with this ratio, especially with other successful launches. It implies that patients are initiating VUEZA treatment and remaining on therapy. In fact, what gives you more confidence is our preliminary duration of therapy analysis, which complements these refill patterns. Now that we're a year into Bequesta availability, we've had the chance to monitor usage among some of our earliest cohorts of patients, Specifically, we looked at patients who initiated therapy on Bequesen of ten milligram twenty milligram in the second quarter of twenty twenty four and track the number of bottle prescriptions they filled over the subsequent six months.

In that timeframe, an average of 3.5 requested prescriptions were filled implying a run rate above prelaunch expectations. Again, paired with refill data, this is very encouraging. We are seeing patients initiate treatment and continue on therapy in line with PPIU This very early data is sourced from a relatively small sample given the approximate to launch but we're happy with the preliminary results we plan to continue monitoring patients' persistency and compliance over longer periods. In parallel, the total number of physicians who have written the field script has increased to over 20,000 as of February 14, compared to over 13,600 as of our last report demonstrating continued adoption among new writers. Through the end of Q4, about 17,800 cumulative drivers have written a filled requested prescription of nearly 45% to Q3.

In addition to the growing number of writers, we're equally excited about the proportion who continue to write VOQUESNA signaling their positive experience. Among all Boquesna writers, about 75% have written more than once. From physician feedback and patient testimonials, we know that ViquesNA is having positive impact on patients' lives. This repeat writer statistic validates that once physicians begin prescribing VOPESNA, they continue writing. As Terry said, our goal is to bring on more new writers to continue this pattern and we believe focusing on primary care is a clear path to achieving this. As we think about the Vipressa opportunity, PCPs are the area where we can drive the most growth we are determined to increase adoption among this group. In fact, we're starting to see writer trends shift especially following the approval of Nonarosa Gird. Our market research shows that primary care awareness of Ocwena has almost [indiscernible] cumulative TCP writers surpassed the total number of GI writers. We knew this would be the case given the difference in sizes and the SKU of our target panel. However, to see it come to fruition so quickly as [indiscernible] is still more work to do on this front.

Right now, although smaller in size, our GI base makes up the majority of total writing. By focusing on primary care, we aim to increase both the number of writers and the frequency of their writing. Ultimately, our goal is for the volume being written by PCPs to surpass that of GIs. Meanwhile, the ability of patients to access VOQUESNA at an affordable price when their physician rights is equally important. On the commercial front, despite the usual shifting of formularies to start the year, Vyquesner remains above 80% covered equating to over 120,000,000 lives. On the Medicare and Medicaid front, we continue to have limited coverage, we're working on ways to enhance access for government patients. Importantly, we remain pleased with the quality of our commercial coverage. The majority of covered lives, we have secured access subject to a single step through a generic DPI prescription. In practice, this takes the form of a simple PA for prior authorization and we are working to educate prescribers on this process. New branded products are often expected to be difficult to access. We want to disrupt that perception. Whether it be through the completion of a simple PA or the use of LinkRx, our patient assistance program, we are working to help physicians understand how easy it can be to get VOquesna to their commercial patients.

The communication of this message by our sales force, especially to PCPs, is a key focus area for 2025. In the meantime, we've been pleased to see that VOQUESISLACE in therapy so far is exactly where we planned. Among a representative sample of Oquesnybodel patients, over eighty percent have been on one PPI or less within the year prior to starting therapy. This is evidence that VLEQUESNA is not being reserved only for patients that have tried and failed multiple PPIs. Physicians are thinking about VOQUESTA as an early ultra This aligns with our formulary positioning and this one step market segment is not small by any means. On the consumer front, it is equally important to have patients aware of the brand and to motivate them to ask their doctors for VOQUESNA. This is one of our top priorities in 2025. Our initial investment in the VOQUESMA can kick some assid campaign is working. Since its televised launch in April of last year, there's been a 55% growth in the proportion of physicians who report receiving a request for VOQUESNA. And among physicians aware of Oquestna, our market research indicates that nearly three out of four likely to write a prescription if asked by a patient.

Based on this data and other internal metrics, we have chosen to increase our investment in DTC efforts especially in the first half of twenty twenty five. We are doubling down on consumer brand awareness. Our investments will focus on ensuring that our reach and frequency is comprehensive Additionally, we are working on an exciting new campaign that will further enhance our powerful messaging and distinctive look by leveraging a unique real book Quesna patient to drive greater engagement and demand. We are planning to go live on digital media in the next few weeks and anticipate reaching broadcast TV early in the second quarter. And stay tuned we expect there to be some buzz around this new campaign. Overall, we feel our early launch performance has been impressive and we're looking forward to growing demand in 2025. We have several key focus areas. Increasing primary care adoption, ensuring awareness of the simple PA process expanding DTC promotion, We believe these will be pivotal drivers of growth The foundation is set and now we push for acceleration on the heels of the non Orosive launch. I'll now pass it off to Molly to walk through our financial results. Molly?

Thanks, Martin. Hello, everyone, and thanks for joining us. I'm pleased to share our fourth quarter and full year 2024 financial results with you today. Similar to previous quarters, I'd like to note that I will be commenting on both GAAP and non GAAP financial measures. Supporting schedules with detailed reconciliations between non GAAP measures and their most directly comparable GAAP measures, will be discussed later in my section and can be found in this morning's press release.

Turning to our results.

For the fourth quarter twenty twenty four, we reported net revenues of $29,700,000 which represents a sequential quarter over quarter increase of 81%. Strong VOPESNA demand resulting from the approval of NanoROSE ERD last July was one of the primary drivers of our growth.

For the full year 2024, we reported net revenues of $55,300,000 Most notably, during each quarter of twenty twenty four, we saw strong revenue growth and we are pleased with our financial results from VOQUESNA's first full year of launch of EROSSAGEARD and partial year launch of non EROSSAGE. Regarding gross to net, discount rates are once again in line with our expectations we set forth prelaunch. For the last three quarters of twenty twenty four, our gross to net discount approximated 57%. Based on this trend, resetting deductibles and evolving payer rebating levels over time, we are narrowing the range of our GTN discount rate guidance to be between 5565% for 2025.

For the quarter ended 12/31/2024, we reported gross profit of $25,800,000 which equates to gross margin of 87%.

An increase of 155 basis points over the third quarter For the full year, we reported gross profit of $47,300,000 and a gross margin of 86%. Moving down to P and L for our operating expenses. For R and D, we reported GAAP expenses of $8,600,000 for the fourth quarter, which represents a 36% decrease compared to this period in 2023. The year over year change is driven primarily by lower stock based compensation expense in 2024 compared to the fourth quarter of twenty twenty three which included a one time vesting event for performance shares tied to the EROSM Gird approval.

As for SG and A, we reported GAAP expenses of $76,700,000 for the fourth quarter twenty twenty four. This represents an increase of $19,700,000 compared to the fourth quarter twenty twenty three, primarily driven by the ongoing expansion of our commercial efforts in support of the VOQUESNA launch. During the fourth quarter twenty twenty four, we incurred advertising costs of $20,200,000 in connection with our expanding DTC campaign representing a 15% increase compared to third quarter twenty twenty four.

As for our projected operating expenses for 2025, there are couple of items to keep in mind. As Terry mentioned, we plan to initiate our Phase II esophagus trial in the We anticipate this trial and other investments in life cycle management opportunities will lead to increased R and D spend throughout the year. And on the SG and A side, you heard Martin talk about the positive impact our DTC campaign is having on brand awareness. In the first half of twenty twenty five, we plan to increase our In the second half of the year, we will evaluate the effective metrics from the enhanced campaign to inform our continued capital allocation strategy in this area.

Overall, with the initiation of the EOE trial, and growing DTC efforts, we are estimating our non GAAP operating expenses for 2025 to range between $360,000,000 and $390,000,000 for the full year.

We anticipate the split between R and D and SG and A will be similar to 2024 R and D accounted for about 10% of the total spend compared to SG and A's 90 We have provided non GAAP spend guidance as we believe As for EPS, we reported GAAP net loss for the fourth quarter twenty twenty four of $74,500,000 or $1.05 loss per share compared to $79,600,000 $1.39 loss per share for the fourth quarter of twenty twenty three. Non GAAP adjusted net loss for the fourth quarter of twenty twenty four was $0.56400000.0 dollars or $0.79 loss per share compared to 46,000,000 or $0.8 loss per share in the fourth quarter of twenty twenty three. Similar to previous quarters, the most significant reconciling item between GAAP and non GAAP operating expenses was non cash stock based compensation. Other non GAAP reconciling items include non cash interest on our revenue interest financing liability and non cash interest expense related to amortization of debt discount. Turning to cash. As of December 31, 2024, cash and cash equivalents were $297,000,000 up to an additional $100,000,000 from our debt facility remains available this year subject to the achievement of certain revenue milestones.

Based on our current operating plan, estimated product revenues, and funds available under our term loan, we remain confident that we have run right through cash flow positivity. Lastly, looking ahead to 2025 revenues.

As is common in our industry, we note that the first quarter is often a soft This dynamic stems from lingering impacts of holidays shortened months patient health plan changes, deductible resets, and working through year end stocking. Specifically as it relates to inventory, we noted an elevated level of stocking by our wholesalers at the end of twenty twenty four. Approximating about three weeks of inventory on hand, compared to the typical two weeks we've been seeing.

As a result of all these dynamics, we are anticipating softened first revenues.

Revenue of approximately $165,000,000 Overall, we are pleased with our 2024 financial results and lift forward to leveraging our strong foundation to ensure a successful 2025. We continue to view Vokuznet as a blockbuster opportunity and we are allocating capital strategically to recognize this vision. With investments in our pipeline, expanded DTC marketing, and ongoing physician promotion, we are excited about Fathom's future. Look forward to keeping the market updated on our progress throughout the year. With that, I'll turn the call back over to Terri for closing remarks. Terry?

Thank you, Molly, and thank you again to everyone joining us on today's call. With the great progress of 2024 in the rearview, we look forward to all that's ahead in 2025. Our focus is on leveraging our highly experienced teams to drive growth. From a commercial perspective, we plan to further disrupt the GERD market with our largest established field force and expanded DTC efforts. And on the development front, we're excited to investigate new indications and formulations with the goal of better serving patients with acid related disorders. For now, accelerating the path to peak the Quezent adoption is our top priority.

Based on the tremendous feedback we're hearing from patients and physicians, we we believe we're on track to displace PTIs in this very large market. This is an element we think is currently being underappreciated. The dynamics of the GERD market the Quezna's benefit to patients and the importance of commercial execution have not changed. Our story remains tied to delivery and we are prepared to demonstrate continued success in 2025. With the non erosive girdle still in its early days, this is just the beginning of our journey. Thank you again for joining us today. We appreciate your continued interest and support. I'll now turn it over to the operator facilitate a ten minute question and answer session. Operator?

Our first question comes from Yatin Suneja with Guggenheim.

Guys. Thank you for taking my question. Two questions for me. First one is on the on this citizen petition, Could you maybe help us understand the timelines around it? I think our understanding is in June, but given some of the the political stuff happening at the FDA, Just curious if FDA has to sort of give you an opinion by June. So that's one. And then if in a scenario the decision doesn't go in your favor, what are certain options that you have. The second one is on Q1 specifically. Thank you for flagging the inventory in land and other dynamics. But just to just to confirm, are you you do expect growth in Q1 relative to Q4? Or are you sort of trying to imply that it could be a down quarter? Thank you.

Thanks, Yatin. It's Sherry here. I'll take you first question on the CP and then I'll hand over to Molly regarding Q1. So with the CP, we submitted you're correct, we submitted in December. So the timeline there is one hundred and eighty days within that timeline, the FDA is required to respond to us. So we anticipate our response from them on that day or if not before the one hundred and eighty days. We don't see the changes within the [indiscernible] timeline. We are very pleased with the progress that we're making on the CP as expected. We're proactively involved with key influential stakeholders in Washington. And industry groups and we're also pleased to see on the CP docket that we have posts from KOLs as well as industry and patient groups So very pleased with the progress we're making and remain very confident in that petition. If it does not go, if as anticipated, we will evaluate next steps, but most likely pursue litigation as we believe we have a very strong legal position. Loy? Sure. Hi, Yatin.

Sure.

As it relates to Q1, as we've been signaling that industry dynamics certainly point to a softened Q1. We haven't provided any more specifics, but I think it's safe to assume, we're still two thirds through the quarter. So we've got some more work to do, but it's safe to assume that it will be a bit softer than obviously industry as the industry is showing. Our next question comes from Joseph Hi, good morning. Thanks for taking our questions.

For the Phase three on demand trial, when do you think you'll have enough real world data to make a go no go decision there and when could we potentially anticipate an announcement of this?

Thanks.

Yes. Thanks, Joey. We're continuing to evaluate the real world utilization of the Quiznosnare on demand as well as the publication of white papers and guidelines that are already starting to incorporate the utilization or recommendation of the Quezner as an on demand option because of its profile. So I would say by midyear, we'll have enough information to make a decision in determining whether we proceed with that study.

Our next question comes from Annabel Samimy Hi. Thanks for taking my question. Great quarter. I wanted to, I guess, talk about the DTC a little bit. You shared some metrics on DTC. Is that what's driving the significant increase in [indiscernible] primarily patient driven? Or is it your [indiscernible] education of physicians. Just I guess help us understand the metrics around that. Balance with the decision to make another campaign and then think about the cash and I guess runway to profitability and how this is all balanced. At what point do you pull back on some of the the DTC to sort of drive the profitability, I guess. And some timing around that, if possible?

Good morning, Annabelle. It's Martin. I guess one thing I just want to clarify in your question is the campaign is it's an evolution of our current campaign. So what it tells us is that we've got a a super strong campaign that's really motivating patients to go in and ask physicians for Rhopressa. A matter of fact, we've seen fifty five percent increase in the number of physicians who have received requests. And as I said earlier about three out of four will grant based solely on that request. So, it's told us that the combination of the sales reps that are creating demand the growth in primary care prescribers that have now passed cumulatively, GI and patients going in that it's the right time to invest in DTC. We know it's reaching the intended audience. We know that it's motivating them to take action. And what we're doing is we're monitoring things such as impact on TRxs, as I mentioned before, request rates and those fill rates. So it's definitely the right time. We've got a great campaign coming up that will really be an evolution and creatively take it to the next level.

And Annabelle, as it relates to the cash runway question, certainly a balance between investment in DTC and as Martin said, we continue to see some really good early signals on the effectiveness of those campaigns. But we also signaled we'll pause midyear and really do a deep dive in ROI to make sure it's the best use of our resources. And then I guess tangential to that is the guidance we provided for OpEx for 2025 of $360,000,000 to $390,000,000 certainly includes good sized investment from a DTC perspective.

Great. Thank you.

Our next question comes from Christine Kliska with Cantor Fitzgerald.

Good morning. Can you please speak to some of the early metrics you're seeing on refill trends and usage for NERDS specifically now that you have a few more months of sales under your belt?

And how you might also anticipate that moving forward as more awareness is out there? Sure. Happy to take that, Christine.

So first, let me take the refill and then I'll address the part about nonerosa because definitely it's connected. It's still very early I often have to remind myself that we're only seven months into the launch of non erosive. But we are absolutely right where we should be in this stage of launch. I had given some specifics earlier in my comments about our refills. But when we look at that, we'll compare that to other small molecule chronic medication refills and we're right where we need to be in terms of tracking to that. And the other thing that makes us feel really good is, we believe we're tracking to the persistency and it's in line with PPIs. We always said prior to launch that the PPIs what we know they're total days of therapy on an annual basis are 140 to 160. Days a year. And given the information I shared previously, we're tracking directly towards that. Now contributing to that is the combination of both erosive and non erosive. I'm happy to share is that we're seeing consistent refill rates amongst the ten milligram and the twenty milligram. The ten milligram can be used and is used for maintenance, but we know that there was a significant increase and ten milligram is growing even faster than twenty milligram because of the nonerosive.

So we see the two going hand in hand and we're actually getting feedback from physicians that tell us that their patients are doing so well that they're continuing. So I think I answered everything, the refills as well as how it's tied to non erosive.

Thank you. Our next question comes from Umer Raffat with Evercore.

Hi, good morning. This is Tien Tsong on for Umer.

Thank you so much for I think just want to focus on the new patient starts number. If you look at the NBRx data, it's kind of stabilized around 20 every week since I think October. And with the new consumer campaign what should we expect going to this year in 2025? And on that point, how important is the 80%?

Yes. So again, this is Martin. I'll take think I'll do those in order. The first one regarding the NBRx, we are definitely seeing an increase in new patient starts and what we're able to see are not only new patients going through retailacuvia, but also patients who are going through, BLINCRx. So the combination of that tells us that there's definitely an increase in growing new patients who are starting on VOQUESNA. I will just refer back to as Molly was referring to earlier, as was every brand, it's not unique to VOQUESNA, there is some softness during Q1. But we feel that new patients are coming on board And one of the drivers, as I mentioned earlier and you put into your question was regarding the DTC and the consumer driving that. So we believe it's a combination of a couple things that are increasing the new patients or NBRxs. It's a combination of new primary care doctors who are starting to adopt seeing increase in number of physicians on a weekly basis We're also seeing physicians do repeat prescribing on more patients and then lastly the consumer going in and asking for Vroquesna. I might have I'm not sure if I answered everything.

I might have missed the specifics of your blank question.

The importance of BLINK.

Yes. Oh, the importance of BLINK. So, I would say Blink remains very important for us. We brought Blink on board specifically to make sure that we're supporting patients. It's been a very good experience. And it's very much focused on our commercial patients and what the intent is to get commercial patients on Boquesna as the physician intended. We also see that when a patient goes to BLINKRx, they're more likely to have increased refill. So overall, it's been a great partnership and physicians have been adopting it widely.

Thank you so much. Our next question comes from Paul Choi with Goldman Sachs.

Hi. Thank you. Good morning and thanks for taking our question.

I want to ask about the ODT formulation that you're developing and just with regard to the IP strategy.

Would you initially seek the pediatric extension that that would come with that potentially first or would you likely see the formulation patent issued first there. Just any clarity on sort of the sequencing of how that would be developed would be helpful. And then my second question is, Molly's earlier comment on the roughly 57% gross to net Can you maybe just remind us which channels are being included in that calculation? Is that excluding free drug? Any other specific channels just helping us understand that? Relative to your guidance range of 55% to 65% would be helpful. Yes, Paul. I'll take the I'll take the patent question. They're independent of each other.

So the ODT has broader applicability than just pediatric because it can be used in the OE, on demand. As well as as pediatric, but also for OTC as well. So they will be running in parallel.

So I see a scenario where we obtain the patent for that formulation before [indiscernible] And hi, Paul. As it relates to gross to net, I mean, your question on which channel. So it's important to remember essentially what gross to net does is takes gross revenue to net revenue So So for anything that goes through retail slash IQVIA, it's at the, the WACC price.

Which is now a little over $680 a bottle.

Versus the Blink channel, which has a WAC price of $50 So it's important if you use those two dynamics, you can actually get pretty close to that 57% that we reported. So I would say that's the most important element of calculating gross to net for Free so a lot of the samples and so forth do not go through. That's more of a marketing expense So the lion's share of what you're seeing gross to net is really the rebating as well as the wholesaler discounts.

Okay.

Thanks for that. If I could just ask a quick follow-up for the ODT, what that in your best estimate would sort of potentially take the IP out to?

Well, I mean, it will be full protection. That will be in twenty years or so.

Again, I cannot be so specific because we're working on this matter for now. But it will be a full protection for the formulation for different aspects the multiple aspects of the formulation.

Okay, great. Thank you. Our next question comes from Matthew Caulfield with H. C. Wainwright.

Hey, good morning guys and thanks for the update.

Just quickly from our end, for those new prescriptions, would you say any greater potential resistance comes from prescriber acceptance of the novel mechanism itself or any remaining initial coverage pushback at this stage?

Thanks again. Interesting question, Matt. No, I think and even resistance, I'm not sure we get resistance at all to Boquesna. I mean they're really welcoming the new mechanism. They recognize immediately that it's different than a PPI and that it has a definitely a place in therapy. I think what you see is with as we bring on more primary care physicians, what you see over time is they first need to get a couple patients started to have their first experience. And then what we hear from the physicians is they start repeating back to us the story And the stories that we're hearing are really tied to two things is and it's all rooted in the rapid potent durable profile. Is that, how quickly it worked and that it actually lasted the full twenty four hours and the patients are having a real life changing experience during the night to last through night without any heartburn or disruption.

That's helpful. Thank you.

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