Phathom Pharmaceuticals Announces Major Restructuring and Cost-Cutting Measures

Phathom Pharmaceuticals, a biopharmaceutical company focused on gastrointestinal diseases, has unveiled a comprehensive restructuring plan aimed at achieving profitability by 2026. The announcement comes in the wake of a significant increase in spending and a growing net loss, which reached over $90 million in the first quarter of 2025.

Executive Departures and Organizational Changes

In a move to streamline operations, Phathom has announced the departure of several key executives. Martin Gilligan, who joined as Chief Commercial Officer in early 2020, will be leaving the company in the coming weeks. The company's Chief Operating Officer and Chief Financial and Business Officer will also be transitioning out of their roles.

Following these departures, Phathom's marketing and market access leaders will report directly to CEO Steve Basta. The company has also appointed Jonathan Bentley, former VP of sales at Intra-Cellular Therapies, as the new head of sales. Bentley will oversee a team comprising approximately 75% of Phathom's workforce.

Cost-Cutting Measures and Strategic Shifts

Phathom's restructuring plan includes several key initiatives designed to reduce expenses and focus resources on high-priority areas:

1. A 6% reduction in overall headcount, potentially affecting around 30 employees based on the company's most recent reported staff count of 452.

2. Significant cuts to direct-to-consumer (DTC) promotion, particularly in broadcast and cable advertising. This represents a sharp reversal from the company's previous strategy, which had emphasized expanded DTC efforts.

3. Suspension or deferral of several clinical development programs, including a pause on the phase 2 trial of Voquezna in eosinophilic esophagitis.

4. Review and reduction of third-party contracts and vendor costs.

These measures are expected to reduce Phathom's full-year operating expenses by $60 million to $70 million.

Financial Performance and Future Outlook

Despite the challenges, Phathom reported some positive financial indicators. Net revenues for the first quarter reached $28.5 million, a substantial increase from $1.9 million in the same period last year. The company's GERD medication, Voquezna, has seen growth in filled prescriptions, exceeding 390,000 as of April 18, 2025.

Phathom's cash position stood at $212.3 million at the end of March. The company believes that its current resources, combined with estimated future product revenues and the new cost-cutting plan, will be sufficient to fund operations and achieve profitability by 2026, without requiring additional equity or debt financing.

CEO Steve Basta emphasized the need for strategic resource allocation in the current economic climate, stating, "In today's challenging public market environment, marked by constrained access to capital and broader macroeconomic headwinds, companies must be more selective and strategic than ever in how they deploy their resources."