Goldman Bullish While Needham Sees Overhang On Phathom After Two Rejection Letters
- FDA issued two Complete Response Letters to Phathom Pharmaceuticals Inc's 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.
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