Issues with the FDA tend to drive a lot of gains and losses alike in healthcare stock. That’s what happened at Phathom Pharmaceuticals (NASDAQ:PHAT) after it announced plans to refile an application for its erosived esophagitis treatment vonoprazan. Investors were abundantly happy about this, sending shares up over 9% in Tuesday afternoon’s trading.
Back in February, the FDA wanted some extra information out of Phathom about the stability of vonoprazan and its related products. As it turns out, vonoprazan might have a certain amount of a “nitrosamine impurity” known as N-nitrosovonoprazan. The FDA, in turn, wants to make sure that the amount of said nitrosamine impurity is either at or below levels that would be considered acceptable for daily use. Phathom, for its part, noted that once the nitronsamine impurity was found, it added new steps to prevent the growth of such a product from taking place, to begin with. That required a “…minor tablet reformulation…” and so, refiling was in order.
That, according to president and CEO Terrie Curran, should pretty much settle the problem and allow vonoprazan to go forward and treat erosive esophagitis effectively. As a result, Phathom expects to launch vonoprazan commercially starting in the fourth quarter of this year, assuming the approvals go through. Which they likely will now that the one issue the FDA had a problem with has been addressed.
There aren’t many analysts offering coverage on Phathom Pharmaceuticals, but they are in total agreement. Phathom stock is considered a Strong Buy, with all five analysts covering it calling it a Buy. Perhaps better yet, Phathom also offers a 195.84% upside potential thanks to its average price target of $23.80 per share.
