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Item 7. Management’s Discussion and Analysis

2026-02-26 compared with 2025-03-06 · 386 added, 266 removed, 1015 unchanged (39% of the section changed)

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Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” or in other parts of this annual report.

We are a biopharmaceutical company focused on developing and commercializing novel treatments for gastrointestinal, or GI, diseases.

Our approved products, VOQUEZNA®, VOQUEZNA® TRIPLE PAK® and VOQUEZNA® DUAL PAK®, contain vonoprazan, an oral small molecule potassium-competitive acid blocker, or PCAB.

PCABs are a novel class of medicines that block acid secretion in the stomach.

Vonoprazan is the first gastric anti-secretory agent from a novel class approved in the United States, Europe, or Canada in over 30 years, and has shown rapid, potent, and durable anti-secretory effects.

Vonoprazan has also demonstrated clinical benefits over the current standard of care as a single agent in the treatment of erosive gastroesophageal reflux disease, or Erosive GERD, and in combination with antibiotics for the treatment of Helicobacter pylori , or H.

pylori , infection.

Takeda Pharmaceutical Company Limited, or Takeda, developed vonoprazan and has received marketing approval in numerous countries in Asia and Latin America as well as Russia.

Vonoprazan generated peak net sales of approximately $850 million and continues to achieve volume growth during its tenth full year on the market since its approval in 2014.

In May 2019, we in-licensed the U.S., European, and Canadian rights to vonoprazan from Takeda.

In May 2022, the U.S.

Food and Drug Administration, or FDA, approved the NDAs for vonoprazan triple therapy, under the brand name VOQUEZNA TRIPLE PAK, and vonoprazan dual therapy, under the brand name VOQUEZNA DUAL PAK.

Subsequently, on November 1, 2023, the FDA approved vonoprazan, under the brand name VOQUEZNA, as a treatment for adults for the healing of all grades of Erosive GERD, maintenance of healing of all grades of Erosive GERD, and relief of heartburn associated with Erosive GERD, as well as in combination with amoxicillin, with or without clarithromycin, for the treatment of H.

pylori infection in adults.

We initiated commercial launch for VOQUEZNA for both the Erosive GERD and H.

pylori indications, and VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK for treatment of H.

pylori infection in the fourth quarter of 2023.

In September 2023, we submitted an NDA seeking approval of vonoprazan as a once-daily treatment for heartburn symptoms associated with Non-Erosive GERD in adults.

On July 17, 2024, the FDA approved VOQUEZNA 10 mg tablets for the relief of heartburn associated with Non-Erosive GERD, the largest category of GERD.

We are independently commercializing VOQUEZNA, VOQUEZNA TRIPLE PAK, and VOQUEZNA DUAL PAK in the United States.

Our commercial launch continues to build momentum and early launch data shows strong physician and patient demand.

As of February 21, 2025, over 300,000 prescriptions for VOQUEZNA tablets, VOQUEZNA Triple Pak, and VOQUEZNA Dual Pak have been filled since launch.

These prescriptions were written by more than 20,000 prescribers.

In addition, due to increasing commercial demand, we continue to make progress in securing broad commercial coverage for VOQUEZNA with over 120 million, or over 80%, of total U.S.

commercial lives with access to VOQUEZNA tablets.

We continue to evaluate potential commercial partnerships for vonoprazan in Europe and Canada, expand development of vonoprazan into other indications, dosing regimens and alternative formulations and packaging, and evaluate the in-license or acquisition of additional clinical or commercial stage product candidates for the treatment of GI diseases in a capital efficient manner.

In May 2021, the FDA granted qualified infectious disease product, or QIDP, designations for VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK and we thereby received an extension of five years of new chemical entity, or NCE, exclusivity based on the vonoprazan component in the applicable NDAs.

We believe the extended NCE exclusivity should apply to any other approved or future products containing vonoprazan we develop and for which we obtain FDA approval.

In December 2024, we submitted a citizen petition requesting that FDA update the Orange Book listings to reflect the same ten-year period of NCE exclusivity for VOQUEZNA as reflected on the VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK Orange Book listings.

We commenced our operations in 2018 and have devoted substantially all of our resources to date to organizing and staffing our company, business planning, raising capital, in-licensing our initial and approved product candidate, vonoprazan, meeting with regulatory authorities, managing our clinical trials of vonoprazan, preparing for commercialization of our initial products containing vonoprazan, commercially launching our approved products, and providing other selling, general and administrative support for our

We are a commercial-stage biopharmaceutical company focused on commercializing and developing novel treatments for gastrointestinal, or GI, diseases.

Our approved products, VOQUEZNA®, VOQUEZNA® DUAL PAK® and VOQUEZNA® TRIPLE PAK®, contain vonoprazan, an oral small molecule potassium-competitive acid blocker, or PCAB.

PCABs are a novel class of molecules that block acid secretion in the stomach.

VOQUEZNA is the only PCAB currently approved for marketing and sale in the United States.

We began U.S.

commercialization of VOQUEZNA for the treatment of erosive gastroesophageal reflux disease, or Erosive GERD, and Helicobacter pylori, or H.

pylori , infection, and VOQUEZNA DUAL PAK and VOQUEZNA TRIPLE PAK for the treatment of H.

pylori infection, in November 2023.

Food and Drug Administration, or FDA, approved VOQUEZNA for the relief of heartburn associated with Non-Erosive GERD, the largest category of GERD, in July 2024.

Vonoprazan was originally developed by Takeda Pharmaceutical Company Limited, or Takeda, and is marketed in multiple countries outside the United States.

We licensed U.S., European and Canadian rights to vonoprazan from Takeda in 2019.

We are independently commercializing VOQUEZNA, VOQUEZNA DUAL PAK and VOQUEZNA TRIPLE PAK in the United States.

During the year ended December 31, 2025, we generated increased revenues from sales of our VOQUEZNA products compared to the prior year, reflecting continued execution of our U.S.

commercial strategy.

The majority of our 2025 revenue was derived from sales of VOQUEZNA.

During this period, we also experienced growth in prescription volume and prescriber adoption, with most prescriptions written for GERD indications.

As of February 13, 2026, over 1.1 million prescriptions for VOQUEZNA, VOQUEZNA DUAL PAK and VOQUEZNA TRIPLE PAK have been filled since launch.

We continue to have broad commercial coverage for VOQUEZNA, with access for over 120 million, or over 80%, of U.S.

commercial lives.

Our commercial efforts are supported by a targeted sales force and continued focus on prescriber engagement and payer access.

In May 2021, the FDA granted qualified infectious disease product, or QIDP, designation to VOQUEZNA DUAL PAK and VOQUEZNA TRIPLE PAK, resulting in an extension of the five-year new chemical entity, or NCE, exclusivity by an additional five years.

In December 2024, we submitted a citizen petition requesting that the FDA update the Orange Book listing for VOQUEZNA to reflect the same ten-year period of NCE exclusivity applicable to VOQUEZNA DUAL PAK and VOQUEZNA TRIPLE PAK.

In June 2025, the FDA granted the petition and updated the Orange Book listing for VOQUEZNA to reflect the ten-year period of NCE exclusivity for vonoprazan.

As a result, all three VOQUEZNA products now have NCE exclusivity extending through May 3, 2032.

In the fourth quarter of 2025, we initiated a Phase 2 clinical trial evaluating vonoprazan in the treatment of adults with eosinophilic esophagitis, or EoE.

While our current focus is on continued U.S.

commercialization of VOQUEZNA products for GERD and H.

pylori , we are also selectively pursuing life-cycle management opportunities for vonoprazan.

We may also explore the potential for vonoprazan in Europe and Canada, as well as opportunities to in-license or acquire additional clinical or commercial-stage product candidates for GI diseases.

We commenced our operations in 2018 and have devoted substantially all of our resources to date to organizing and staffing our company, business planning, raising capital, in-licensing vonoprazan, meeting with regulatory authorities, managing our clinical trials of vonoprazan, preparing for commercialization of our products containing vonoprazan, commercially launching our approved products in the U.S., and providing other selling, general and administrative support for our operations.

Our operations to date have been funded primarily through commercial bank debt, our revenue interest financing debt and various equity offerings, including our at-the-market offerings.

From our inception through December 31, 2025, we sold 34,737,032 shares of our common stock and 2,608,922 pre-funded warrants, generating net proceeds of approximately $543.3 million, after deducting underwriting discounts, commissions and offering costs.

In January 2026, we sold 6,875,000 shares of our common stock, or our January 2026 Offering, at a price of $16.00 per share and pre-funded warrants to purchase 1,250,078 shares of our common stock at a price of $15.999 per pre-funded warrant for total gross proceeds of $130.0 million or $122.2 million of net proceeds after deducting underwriting discounts, commissions and offering costs.

As of December 31, 2025, we had cash and cash equivalents of $130.0 million.

Based on our current operating plan, we believe that our existing cash and cash equivalents together with the drawdown of the remaining $100 million under our Loan and Security Agreement, as amended, or the Loan Agreement, with Hercules Capital, Inc.

or Hercules, together with anticipated product revenues, are sufficient to fund operations for at least the next twelve months and we believe will be sufficient to enable us to reach cashflow positivity .

Based on our current operating plan, we believe that our existing cash and cash equivalents together with anticipated product revenues and the $122.2 million of net proceeds from our January 2026 offering, are sufficient to fund operations for at least the next twelve months and will be sufficient to enable us to reach operating profitability beginning in the third quarter of 2026 , excluding stock-based compensation .

We have based these estimates on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

Our operating plans and other demands on our cash resources may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity or debt financings or other capital sources, including potentially collaborations, licenses and other similar arrangements.

In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.

Attempting to secure additional financing may divert our management from our day-to-day activities, which may adversely affect our ability to commercialize VOQUEZNA, develop vonoprazan for additional indications or formulations or develop or any future product candidates.

Since inception, we have incurred significant operating losses.

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As of December 31, 2025, we had an accumulated deficit of $1.5 billion.

We expect to continue to incur operating losses for the foreseeable future.

It could be several years, if ever, before VOQUEZNA, VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK or other product candidates, if approved, generate significant revenues to offset these operating losses.

As a result, we are uncertain when or if we will achieve profitability and, if so, whether we will be able to sustain it.

Despite our plans and expectations, we could continue to incur operating losses for the foreseeable future.

If we do not achieve our goals, it could be several years, if ever, before our current products or potential future product candidates, if successfully developed and approved, generate significant revenues to offset these operating losses.

As a result, we are uncertain if we will achieve profitability on our current expected timeline, if at all, and, if so, whether we will be able to sustain it.

The net losses we incur may fluctuate significantly from quarter to quarter and year to year.

We have generated limited revenue to date, until such time as we can generate significant revenue from sales of our approved products containing vonoprazan, we expect to finance our cash needs through equity offerings, our Loan Agreement, our Revenue Interest Financing Agreement, additional debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements.

However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all, and this risk could be exacerbated by the impact of ongoing conflicts throughout the world and global economic conditions.

While we have generated revenue to date, until such time as we can generate significant revenue from sales of our approved products containing vonoprazan, we also expect to finance our cash needs through equity offerings, additional debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements.

However, we may be unable to raise additional funds or enter into such other arrangements when and if needed on favorable terms or at all, and this risk could be exacerbated by the impact of ongoing conflicts throughout the world and global economic conditions.

Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Restructuring

In May 2025, we implemented a cost reduction and organizational restructuring plan to reduce cash burn and focus resources on commercial execution.

In connection with the restructuring, our workforce was reduced by 26 employees, or approximately 6%, including certain leadership changes all designed to right-size the organization.

During the year ended December 31, 2025, total restructuring charges incurred were $9.2 million consisting of one-time termination benefits to affected employees for severance, non-cash stock-based compensation costs, healthcare benefits and outplacement assistance.

As of December 31, 2025, approximately $0.5 million of restructuring related accruals remain on our balance sheet.

License Agreement with Takeda

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During the term of the Takeda License, we and our affiliates are not permitted to commercialize any pharmaceutical product, other than vonoprazan, that treats acid-related disorders, except for certain generic and OTC competing products in specified circumstances.

We will be responsible at our cost for the development, manufacture and commercialization of vonoprazan products.

We are responsible at our cost for the development, manufacture and commercialization of vonoprazan products.

We are required to use commercially reasonable efforts to develop and commercialize the vonoprazan products in our licensed territory.

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We are responsible, at our cost, for preparing, filing, prosecuting, and maintaining patents on inventions made solely by us in connection with vonoprazan, subject to input from Takeda.

We paid Takeda upfront consideration consisting of a cash fee of $25 million, 1,084,000 shares of our common stock, a warrant to purchase 7,588,000 shares of our common stock at an exercise price of $0.00004613 per share, or the Takeda Warrant, and issued Takeda a right to receive an additional common stock warrant, or the Takeda Warrant Right, if Takeda’s fully-diluted ownership of the Company represented less than a certain specified percentage of the fully-diluted capitalization, including shares issuable upon conversion of then outstanding convertible promissory notes, calculated immediately prior to the closing of our IPO.

issuable upon conversion of then outstanding convertible promissory notes, calculated immediately prior to the closing of our IPO.

The Takeda Warrant Right expired without effect since no fair value had been allocated to it upon completion of our IPO, and no additional warrant was issued.

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Royalties will be payable, on a product-by-product and country-by-country basis from the first commercial sale of such product in such country, until the latest of expiration of the licensed patents covering the applicable product, expiration of regulatory exclusivity in such country, or 15 years following first commercial sale in such country.

We currently pay royalties to Takeda on sales of VOQUEZNA tablets, VOQUEZNA DUAL PAK and VOQUEZNA TRIPLE PAK in the U.S.

During the years ended December 31, 2025 and 2024, we recorded $17.5 million and $5.5 million, respectively, of royalty expense under the Takeda License, of which $5.8 million is included within accrued expenses as of December 31, 2025.

Components of Results of Operations

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Cost of revenue includes the cost of producing and distributing inventories that are related to product sales.

This also includes royalties payable to Takeda, pursuant to the Takeda License Agreement (Refer to Note 3 for further details).

This also includes royalties payable to Takeda, pursuant to the Takeda License Agreement (Refer to Note 3 Commitments and Contingencies for further details).

In addition, shipping and handling costs for product sales are recorded as incurred.

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• Personnel related expenses :

salaries, payroll taxes, and employee benefits;

salaries, payroll taxes, employee benefits, and restructuring expenses in 2025;

• Chemistry manufacturing and controls, or CMC, expenses:

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• Stock-based compensation expenses :

stock-based compensation expense recognized for those individuals involved in research and development efforts.

stock-based compensation expense recognized for those individuals involved in research and development efforts including for any restructuring expenses in 2025.

The following table summarizes our research and development expenses for the years ended December 31, 2025 and 2024 (in thousands):

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Total research and development expenses

We plan to invest in our research and development expenses for the foreseeable future as we continue the development of vonoprazan.

We plan to invest in our research and development expenses for the foreseeable future as we continue the development of vonoprazan and potentially in the future also develop additional product candidates.

We cannot determine with certainty the timing of initiation, the duration or the completion costs of current or future clinical trials and nonclinical studies of vonoprazan or any future product candidates due to the inherently unpredictable nature of clinical and preclinical development.

Clinical and preclinical development timelines, the probability of success and development

costs can differ materially from expectations.

In addition, we cannot forecast which product candidates may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.

Clinical and preclinical development timelines, the probability of success, actual results and development costs can differ materially from expectations.

In addition, we cannot forecast which product candidates, if any, may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.

Selling, General and Administrative

Selling, general and administrative expenses consist of salaries and employee-related costs, including stock-based compensation, for personnel in commercial, executive, finance, accounting, legal, human resources and other administrative functions, legal fees relating to intellectual property and corporate matters, and professional fees for accounting and consulting services.

We anticipate that our selling, general and administrative expenses will increase in the future to support our commercialization activities and research and development activities.

We also anticipate increased expenses related to audit, legal, regulatory, and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums, and investor relations costs associated with operating as a public company.

Selling, general and administrative expenses consist of salaries and employee-related costs, including stock-based compensation, for personnel in commercial, executive, finance, accounting, legal, human resources and other administrative functions, restructuring expenses in 2025, legal fees relating to intellectual property and corporate matters, and professional fees for accounting and consulting services.

Interest Income

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Loan Agreement with Hercules

From September 17, 2021 through December 13, 2023, interest expense under the Loan Agreement consisted of (i) cash interest at a variable annual rate equal to the greater of (a) 5.50% and (b) the Prime Rate (as reported in the Wall Street Journal) plus 2.25% or the Interest Rate, (ii) payment-in-kind interest at a per annum rate of interest equal to 3.35%, and (iii) amortization of the Loan Agreement debt discount recorded in connection with the fair value of warrants issued to the lenders, the debt issuance costs incurred, and the obligation to make a final payment.

Beginning on December 14, 2023, interest expense under the Loan Agreement consists of (i) cash interest at a variable annual rate equal to the greater of (a) 9.85% and (b) the Prime Rate (as reported in the Wall Street Journal) plus 1.35% and provided that the cash interest rate shall be capped at 10.35% and upon Company achieving the certain milestones, the cash interest shall be decreased by 0.35%, (ii) payment-in-kind interest at a per annum rate of interest equal to 2.15%, and (iii) amortization of the Loan Agreement debt discount recorded in connection with the fair value of warrants issued to the lenders, the debt issuance costs incurred, and the obligation to make a final payment.

Interest expense under the Loan Agreement consists of (i) cash interest at a variable annual rate equal to the greater of (a) 9.85% and (b) the Prime Rate (as reported in the Wall Street Journal) plus 1.35% and provided that the cash interest rate shall be capped at 10.35% and upon us achieving the certain milestones, the cash interest shall be decreased by 0.35%, (ii) payment-in-kind interest at a per annum rate of interest equal to 2.15%, and (iii) amortization of the Loan Agreement debt discount recorded in connection with the fair value of warrants issued to the lenders, the debt issuance costs incurred, and the obligation to make a final payment.

Results of Operations

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Loss from operations

Other income (expense):

Other (expense) income:

Interest income

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Cost of revenue was $22.6 million and $8.0 million for the years ended December 31, 2025 and 2024, respectively.

In periods prior to receiving FDA approval for VOQUEZNA, we recognized inventory and related costs associated with the manufacture of VOQUEZNA as research and development expense and as such, the cost of revenue and related gross profits are not necessarily indicative of future costs of revenue and gross profit.

Therefore, the manufacturing costs related to the inventory purchased before FDA approval were already expensed in a prior period and are therefore excluded from the cost of revenue for the year ended December 31, 2024.

These previously expensed costs were not material.

The increase of $14.6 million was due to the increase in revenues for the year ended December 31, 2025 as well as an increase in Takeda royalty payments.

Research and Development Expenses.

Research and development expenses were $32.8 million and $34.1 million for the years ended December 31, 2025 and 2024, respectively.

The decrease of $15.8 million consisted of reductions of $5.8 million related to lower stock-based compensation expense, $5.0 million of regulatory and clinical study related expenses due to the wrapping up of our PHALCON-NERD-301 Phase 3 daily dosing study, $4.3 million of lower CMC costs, and $0.7 million related to lower consulting, professional and other costs.

The decrease of $1.3 million consists of $2.6 million of lower CMC costs, clinical and regulatory costs, and lower project and consulting costs, partially offset by $1.3 million related to higher stock-based compensation expense due to restructuring charges.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses were $279.7 million and $290.7 million for the years ended December 31, 2025 and 2024, respectively.

The increase of $172.8 million was due to increases of $109.4 million in commercial expenses related to the launch of VOQUEZNA product in late 2023, which includes $48.1 million of external project spend and $61.3 million in advertising and promotional expenses in support of our commercial launch of VOQUEZNA products, $55.5 million increase in personnel-related expenses primarily due to the hiring of the sales force in late 2023 and in early 2024, and an increase of $7.9 million in professional services and other consulting costs.

The decrease of $11.0 million was due to decreases of $19.1 million of commercial related promotional expenses in support of launching VOQUEZNA and a decrease of $0.2 million in consulting expenses, partially offset by an increase of $8.3 million in personnel-related expenses primarily due to $7.3 million of restructuring charges.

Other Income (Expense).

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Other expense of $56.9 million for the year ended December 31, 2024 consisted of $72.0 million of interest expense under the Loan Agreement and Revenue Interest Financing Agreement, partially offset by $15.1 million of interest income related to cash held in money market funds.

Interest expense increased due to a higher debt balance under the Loan Agreement as well as a higher liability related to our Revenue Interest Financing Agreement versus the prior period, partially offset by higher interest income due to higher rates and our increased cash position.

Liquidity and Capital Resources

We have incurred net losses and negative cash flows from operations since our inception and anticipate we will continue to incur net losses for the foreseeable future.

As of December 31, 2024, we had cash and cash equivalents of $297.3 million.

We have incurred net losses and negative cash flows from operations since our inception and while we expect to continue to incur a net loss in the near term, we anticipate achieving operating profitability beginning in the third quarter of 2026, excluding stock-based compensation.

As of December 31, 2025, we had cash and cash equivalents of $130.0 million and received $122.2 million of net proceeds from our January 2026 offering.

Loan Agreement with Hercules

On September 17, 2021, or the Closing Date, we entered into the Loan Agreement with Hercules (in such capacity, the Agent or Hercules), as administrative agent and collateral agent and as a lender and the other financial institutions that from time to time become parties to the Loan Agreement as lenders (collectively, the Lenders).

The Loan Agreement provides for term loans in an aggregate principal amount of up to $200 million, or the Term Loan, under multiple tranches.

The tranches consist of (i) a first tranche consisting of term loans in an aggregate principal amount of $100 million, all of which was funded on the Closing Date, or the First Advance, (ii) a second tranche consisting of up to an additional $50 million, (iii) a third and fourth tranches consisting of an additional total $50 million, which became available to us in May 2022.

We’ve entered into several amendments to the Loan Agreement which are described below, most recently in February 2026.

The Loan Agreement originally provided for term loans in an aggregate principal amount of up to $200 million, or the Term Loan, under multiple tranches.

The tranches consisted of (i) a first tranche consisting of term loans in an aggregate principal amount of $100 million, all of which was funded on the Closing Date, or the First Advance, (ii) a second tranche consisting of up to an additional $50 million, (iii) a third and fourth tranches consisting of an additional total $50 million, which became available to us in May 2022.

On September 27, 2022, we entered into an amendment to the Loan Agreement, or the Second Loan Amendment, pursuant to which the date the second tranche of funding of $50 million will remain available to us has been moved until May 15, 2023, rather than December 15, 2022.

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These fees have been recorded as debt discount and are being amortized to interest expense using the effective interest method over the remaining term of the Term Loan.

On December 14, 2023, we entered into a Fourth Amendment to Loan and Security Agreement, or the Fourth Loan Amendment, with the lenders, which, among other things, (i) increases the aggregate principal amount of the term loans from $200 million to $300 million;

(ii) provides for the possibility of accessing the $200 million commitment through five additional tranches referred to as tranches 2 through 6, which are available subject to certain milestones and conditions:

On December 14, 2023, we entered into a Fourth Amendment to Loan and Security Agreement, or the Fourth Loan Amendment, with the lenders, which, among other things, (i) increased the aggregate principal amount of the term loans from $200 million to $300 million;

(ii) provided for the possibility of accessing the $200 million commitment through five additional tranches referred to as tranches 2 through 6, which are available subject to certain milestones and conditions:

(a) Tranche 2:

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$25 million available through December 15, 2024, (d) Tranche 5:

$50 million available, subject to the achievement of a specified revenue milestone, through June 30, 2025, and (e) Tranche 6:

$50 million available, subject to the achievement of a specified revenue milestone, through December 31, 2025;

(iii) extends the interest only period and the maturity date from October 2026 to December 2027, (iv) reduces the cash interest rate from 10.75% (floating annual rate equal to the greater of (a) 5.50% and (b) the Prime Rate (as reported in the Wall Street Journal) plus 2.25% to 9.85% (floating rate based on the greater of (a) 9.85% or (b) US WSJ Prime + 1.35%), provided that the cash interest rate shall be capped at 10.35% and upon us achieving the certain milestones, the cash interest shall be decreased by 0.35%, and (v) decreases the payment-in-kind interest rate from 3.35% per annum to 2.15% per annum.

$50 million available, subject to the achievement of a specified revenue milestone, through June 30, 2025 and which we did not draw down, and (e) Tranche 6:

$50 million available, subject to the achievement of a specified revenue milestone, through December 31, 2025 and which we did not draw down;

(iii) extended the interest only period and the maturity date from October 2026 to December 2027, (iv) reduced the cash interest rate from 10.75% (floating annual rate equal to the greater of (a) 5.50% and (b) the Prime Rate (as reported in the Wall Street Journal) plus 2.25% to 9.85% (floating rate based on the greater of (a) 9.85% or (b) US WSJ Prime + 1.35%), provided that the cash interest rate shall be capped at 10.35% and upon us achieving the certain milestones, the cash interest shall be decreased by 0.35%, and (v) decreased the payment-in-kind interest rate from 3.35% per annum to 2.15% per annum.

In connection with the Fourth Loan Amendment, an amendment fee of $250,000 was paid to the Agent and was recorded as a debt discount and being amortized to interest expense using the effective interest method over the remaining term of the Term Loan.

On March 15, 2024, we drew down the remaining $10 million available under the Second Tranche.

On June 14, 2024, we drew down the $25 million available under the Third Tranche.

Additionally, on December 14, 2024, we drew down the $25 million available under the Fourth Tranche.

The Term Loan will mature on December 1, 2027, or the Maturity Date.

The Term Loan bears (i) cash interest at a variable annual rate equal to the greater of (a) 9.85% and (b) the Prime Rate (as reported in the Wall Street Journal) plus 1.35%, or the Interest Rate, and (ii) payment-in-kind interest at a per annum rate of interest equal to 2.15%.

We may make payments of interest

only through the Maturity Date.

As amended through the Fourth Amendment, the Term Loan had a maturity date of December 1, 2027.

As of December 31, 2025, the Term Loan bore (i) cash interest at a variable annual rate equal to the greater of (a) 9.85% and (b) the Prime Rate (as reported in the Wall Street Journal) plus 1.35%, or the Interest Rate, and (ii) payment-in-kind interest at a per annum rate of interest

equal to 2.15%.

We may make payments of interest only through the maturity date of the Term Loan.

After the interest-only period, the principal balance and related interest will be required to be repaid in full on the maturity date.

In addition, we are obligated to pay a final payment fee of 7.50% of the original principal amount of amounts actually advanced under the Term Loan, or each a Term Loan Advance and together, the Term Loan Advances.

In addition, under the Fourth Amendment, we were obligated to pay a final payment fee of 7.50% of the original principal amount of amounts actually advanced under the Term Loan, or each Term Loan Advance and together, the Term Loan Advances.

In connection with the Fourth Loan Amendment, the final payment fee was amended to be $1 million plus 3.00% of any future tranche drawdowns under the agreement, due upon final maturity.

Additionally, the initial final payment fee for the first term Loan advance was amended to become payable on October 1, 2026.

As of December 31, 2024, the aggregate $11.5 million of final payment fees includes the first Term Loan Advance of $7.5 million, $2.5 million for the second Term Loan Advance, $0.8 million for the third Term Loan Advance, and $0.7 million for the fourth Term Loan Advance have been recorded within other long-term liabilities.

Additionally, the initial final payment fee of $7.5 million for the first Term Loan Advance was amended to become payable on October 1, 2026, and has been recorded within other current liabilities as of December 31, 2025.

The remaining aggregate $4.0 million of final payment fees includes $2.5 million for the second Term Loan Advance, $0.8 million for the third Term Loan Advance, and $0.7 million for the fourth Term Loan Advance and have been recorded within other long-term liabilities as of December 31, 2025.

Under the Fourth Loan Amendment, we may elect to prepay all or a portion of the Term Loan Advances prior to maturity, subject to a prepayment fee of up to 1.25% of the then outstanding principal balance of the Term Loan Advances being prepaid when such prepayment occurs prior to October 1, 2026, or 0.50% if such prepayment occurs on or after October 1, 2026.

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The Loan Agreement contains customary closing fees, prepayment fees and provisions, events of default, and representations, warranties and covenants, including financial covenants.

The financial covenants under the Fourth Loan Amendment include (i) a minimum cash covenant and (ii) a performance covenant as follows:

The financial covenants under the Fourth Loan Amendment included (i) a minimum cash covenant and (ii) a performance covenant as follows:

(i) Minimum cash covenant - We must maintain a minimum cash balance of 20% of the outstanding principal balance at all times.

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Trailing three months net product revenue of at least (x) 30% of agreed upon projected net revenues for periods in the calendar year 2024 and 25% for all periods thereafter or (y) $120 million.

Upon the occurrence of an event of default, subject to any specified cure periods, all amounts owed by us may be declared immediately due and payable by Hercules, as collateral agent.

As of December 31, 2025, we were in compliance with all applicable covenants under the Loan Agreement.

On February 25, 2026, or the Fifth Amendment Closing Date, we entered into the Fifth Amendment to the Loan and Security Agreement, or the Fifth Loan Amendment, with the lenders, which, among other things, (i) provides for a new term loan tranche of $175 million, the proceeds of which, along with cash on our balance sheet, were used to repay in full the existing secured obligations outstanding under the Loan Agreement, including principal, capitalized payment-in-kind interest, existing final fee payments, and any applicable prepayment fees, (ii) provides for an additional loan tranche of up to $25 million which shall be available to us at the lenders’ discretion, (iii) extends the maturity date from December 1, 2027 to February 1, 2029, subject to further extension to December 1, 2030 upon the achievement of a specified revenue milestone and subject to a certain pro forma liquidity test;

(iv) extends the interest only period from October 2026 to December 2027, thereafter, monthly payment of interest and 2.5% of the original principal amount advanced through the maturity date, with any remaining payments to be repaid in full on the maturity date, (v) changes the cash interest rate to 9.85% (floating rate based on the greater of (a) US WSJ Prime + 3.10% or (b) 9.85%, (vi) eliminates the payment-in-kind interest rate of 2.15% per annum, (vii) amends the prepayment charge, which is a percentage of the principal amount actually advanced under the Term Loans under the Fifth Loan Amendment, or each a Term Loan Advance and together, the Term Loan Advances, as follows:

(a) if the Term Loan Advances are prepaid after the Fifth Amendment Closing Date but prior to the twelfth month anniversary of the Fifth Amendment Closing Date, 2.50%;

(b) if the Term Loan Advances are prepaid on or after the twelfth month anniversary of the Fifth Amendment Closing Date but prior to the twenty-fourth month anniversary of the Fifth Amendment Closing Date, 2.00%;

(c) if the Term Loan Advances are prepaid on or after the twenty-fourth month anniversary of the Fifth Amendment Closing Date but prior to the thirty-sixth month anniversary of the Fifth Amendment Closing Date, 1.50%;

(d) thereafter, 1.00%;

and (viii) provides for a new final payment fee which is as a percentage of the Term Loan Advances so prepaid, as follows:

(a) if the Term Loan Advances are repaid prior to September 2027, 1.25%;

(b) if the Term Loan Advances are repaid after September 1, 2027 but on or prior to February 1, 2029, 2.00%;

after February 1, 2029 but on or prior to January 1, 2030, 3.00%, and (d) if the Term Loan Advances are repaid after January 1, 2030, 3.50%.

In addition, the financial covenants under the Fifth Loan Amendment include (i) a minimum cash covenant and (ii) a performance covenant, as follows:

Minimum cash covenant - We must maintain a minimum cash balance of 20% of the outstanding principal balance at all times, which will decrease to 15% of the outstanding principal amount upon us reporting and maintaining $75 million of trailing three months net product revenue.

Performance covenant - Beginning on the Fifth Amendment Closing Date and all times there after we must satisfy any one of the following:

Market capitalization exceeding $900 million;

Minimum cash balance of 50% of the outstanding principal amount of term loans, which will decrease to 40% upon achieving $65 million of trailing three months nets product revenue, and to 30% upon achieving $85 million, of trailing three months net product revenue;

Trailing three months net product revenue equal to 75% of projected revenue in 2026 and 70% of projected revenue in 2027 and beyond, tested on a quarterly basis.

In connection with the Fifth Loan Amendment, the existing final fee payments under the Loan and Security Agreement in the aggregate amount of $11.5 million were fully paid to Agent and a facility fee of $1.8 million was also paid to the Agent.

Upon the occurrence of an event of default, subject to any specified cure periods, all amounts owed by us may be declared immediately due and payable by Hercules, as collateral agent.

As collateral for the obligations, we granted Hercules a senior security interest in all of our right, title, and interest in, to and under substantially all of our property, inclusive of intellectual property.

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In connection with the entry into the Fourth Amendment, we eliminated the warrant agreement for all future tranches.

The Warrant issued with the initial tranche was not modified as part of this amendment.

The Warrant issued with the initial tranche was not modified as part of these amendments.

The exercise price and terms of the outstanding Warrant remain unchanged.

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Revenue Interest Financing Agreement

On May 3, 2022, we entered into a Revenue Interest Financing Agreement, or the Revenue Interest Financing Agreement, with entities managed or advised by NovaQuest Capital Management, or NQ, Sagard Holdings Manager LP, or Sagard, and Hercules, together with NQ and Sagard, or the Initial Investors, pursuant to which we could receive up to $260 million in funding from the Initial Investors.

On May 3, 2022, we entered into a Revenue Interest Financing Agreement, or the Revenue Interest Financing Agreement, with entities managed or advised by NovaQuest Capital Management, or NQ, Sagard Holdings Manager LP, or Sagard, and Hercules, together with NQ and Sagard, or the Initial Investors, pursuant to which we had the right to receive up to $260 million in funding from the Initial Investors.

Under the terms of the Revenue Interest Financing Agreement, we received $100 million at the initial closing and received an additional $160 million upon FDA approval of vonoprazan for treatment of Erosive GERD in the fourth quarter of 2023.

Additionally, on October 31, 2022, we entered into a Joinder and Waiver Agreement with the Initial Investors and CO Finance LVS XXXVII LLC, or the Additional Investor, and Hercules in its capacity as administrative agent and collateral agent for itself and the lenders under that certain Loan Agreement, or the Joinder Agreement, in respect of the Revenue Interest Financing Agreement.

Under the terms of the Joinder Agreement, we received $15 million in additional funding upon FDA approval of vonoprazan for Erosive GERD, or Approval Additional Funding, in the fourth quarter of 2023 and provides for $25 million in additional funding for achievement of a sales milestone, or Milestone Additional Funding, and, together with the Approval Additional Funding, or the Additional Investor Funding.

additional funding for achievement of a sales milestone, or Milestone Additional Funding, and, together with the Approval Additional Funding, or the Additional Investor Funding.

The Initial Investors waived their right of first offer for any Additional Investor Funding.

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If the investors have not received aggregate payments of at least 100% of the Investment Amount by December 31, 2028, and at least 200% of the Investment Amount by December 31, 2037, each a Minimum Amount, then we will be obligated to make a cash payment to the investors in an amount sufficient to gross the investors up to the applicable Minimum Amount.

Upon the occurrence of an event of default taking place prior to April 1, 2025, between April 1, 2025 and April 1, 2028, and after April 1, 2028, we are obligated to pay 1.30 times Investment Amount, 1.65 times Investment Amount, and 2.0 times investment amount, respectively, less any amounts we previously paid pursuant to the agreement.

Upon the occurrence of an event of default taking place between April 1, 2025 and April 1, 2028, or after April 1, 2028, we are obligated to pay 1.30 times Investment Amount, 1.65 times Investment Amount, and 2.0 times investment amount, respectively, less any amounts we previously paid pursuant to the agreement.

Additionally, under the terms of Revenue Interest Financing Agreement, we are subject to a minimum cash covenant of at least (a) beginning on the date that the Hercules Loan Agreement is terminated and each day thereafter until September 30, 2026, $30 million, and (b) beginning on October 1, 2026 and on each day thereafter until September 30, 2029, a certain percentage of the minimum cash reference amount defined as the difference between the Investment Amount and the amount of all royalty payments received by the Investors as of each such date as follows:

(i) 50% from October 1, 2026 to September 30, 2027 (ii) 75% from October 1, 2027 to September 30, 2028, and (iii) 100% from October 1, 2028 to September 30, 2029.

As of December 31, 2025, we are in compliance with all applicable covenants under the Revenue Interest Financing Agreement.

At-the-Market-Offerings

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The Sales Agreement may be terminated by the Sales Agent or us at any time.

For the year ended December 31, 2023, we sold 1,514,219 shares for net proceeds of approximately $14.1 million after deducting $0.4 million of issuance costs.

No shares were sold during the year ended December 31, 2024.

No shares were sold under the Sales Agreement during the years ended December 31, 2025 and 2024.

As of December 31, 2025, all of the available $150 million under the 2023 ATM Offering remains available.

Underwritten Public Offerings

On May 23, 2023, we completed an underwritten public offering, in which we sold 12,793,750 shares of our common stock, which included the exercise in full by the underwriters of their option to purchase 1,668,750 shares, at a price of $11.75 per share for total gross proceeds of $150.3 million.

The net purchase price after deducting underwriting discounts and commissions was $11.08 per share, which generated net proceeds of $141.8 million.

We incurred an additional $0.4 million of offering expenses in connection with this public offering.

On January 9, 2026, we sold 6,875,000 shares of common stock at a price of $16.00 per share and pre-funded warrants to purchase 1,250,078 shares of common stock at a price of $15.999 per pre-funded warrant for total gross proceeds of $130.0 million, before deducting underwriting discounts, commissions and offering costs.

The net purchase price after deducting the underwriting discounts and commissions and other offering expenses, was $15.04 per share or net proceeds of $122.2 million.

On August 20, 2024, we completed an underwritten public offering, in which we sold 8,695,652 shares of our common stock at a price of $11.50 per share and pre-funded warrants to purchase 2,608,922 shares of our common stock at a price of $11.499 per pre-funded warrant for total gross proceeds of $130.0 million.

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Funding Requirements

Based on our current operating plan, we believe that our existing cash and cash equivalents together with the drawdown of the remaining $100 million under our Loan Agreement with Hercules together with anticipated product revenues, are sufficient to fund operations for at least the next twelve months and we believe will be sufficient to enable us to reach cashflow positivity.

However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties and actual results could vary materially.

We have based this estimate on assumptions that may prove to be inaccurate, and we could deplete our capital resources sooner than we expect and not reach cashflow positivity based on the amount and timing of product sales and operating expenses, among other factors.

Additionally, the process of testing product candidates in clinical trials is costly, and the timing of progress and expenses in these trials is uncertain.

However, our forecast of the period of time through which our financial resources may be adequate to support our operations is a forward-looking statement that involves risks and uncertainties and actual results could vary materially.

We have based this estimate on assumptions that may prove to be inaccurate, and we could deplete our capital resources sooner than we expect based on the amount and timing of product sales and operating expenses, among other factors.

Additionally, the process of testing product candidates in clinical trials is costly, and the timing of progress and expenses in ongoing and future trials is uncertain.

Our future capital requirements will depend on many factors, including:

• our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payers and adequate market share and revenue for any approved products;

• patients’ willingness to pay out-of-pocket for any approved products in the absence of coverage and/or adequate reimbursement from third-party payers;

• our ability to achieve and maintain market acceptance, market share, coverage, reimbursement and revenues from sales of VOQUEZNA in its approved GERD indications, and patients’ willingness to pay out-of-pocket in the absence of coverage and/or adequate reimbursement from third-party payers;

• the costs of sales and marketing activities in support of the continued commercial launch of VOQUEZNA, VOQUEZNA DUAL PAK and VOQUEZNA TRIPLE PAK, or any future product candidates we may choose to pursue, if successfully developed and approved;

• the costs, timing and availability of manufacturing for vonoprazan as well as the costs of manufacturing for any potential product candidates we may pursue in the future;

• the initiation, type, number, scope, results, costs and timing of our clinical trials of vonoprazan, and preclinical studies or clinical trials of other potential product candidates we may choose to pursue in the future, including feedback received from regulatory authorities;

• the costs and timing of manufacturing for vonoprazan or any future product candidates, including commercial scale manufacturing for any approved product candidates;

• the costs, timing and outcome of regulatory review of future vonoprazan applications or such applications for any future product candidates;

• the costs of obtaining, maintaining and enforcing our patents and other intellectual property rights;

• our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal controls over financial reporting;

• the costs associated with hiring additional personnel and consultants as our business grows;

• the costs of obtaining, maintaining and enforcing our patents and other intellectual property rights, and the success of our enforcement efforts;

• the timing of market introduction, profile and impact of competitive products;

• the costs associated with hiring additional personnel and consultants as our business grows and enhancing our operational systems;

• the timing and amount of the milestone or other payments we must make to Takeda and any future licensors;

• the costs and timing of establishing or securing sales and marketing capabilities for vonoprazan or any future product candidate;

• the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements;

• costs associated with any products or technologies that we may in-license or acquire.

Until such time, if ever, as we can generate substantial product revenues to support our cost structure, we expect to finance our cash needs through equity offerings, the Loan Agreement, the Revenue Interest Financing Agreement, debt financings, or other capital sources, including potential collaborations, licenses and other similar arrangements.

• the timing and impact of our obligations under our Loan and Security Agreement with Hercules Capital, Inc., and our Revenue Interest Financing Agreement;

• the costs associated with building a portfolio of product candidates through the acquisition or in-license of additional product candidates or technologies, including the terms and timing of establishing and maintaining future collaborations, licenses and other similar arrangement and the costs associated with development of any products or technologies that we may in-license or acquire.

Until such time, if ever, as we can generate substantial product revenues to support our cost structure, we expect to also finance our cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.

Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock.

If we are unable to raise additional funds through equity or debt

financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.

Including our existing cash and cash equivalents, we believe that we have sufficient working capital on hand to fund operations such that there is no substantial doubt as to our ability to continue as a going concern at the date the financial statements were issued.

There can be no assurance that we will be successful in acquiring additional funding, that our projections of future working capital needs will prove accurate, or that any additional funding would be sufficient to continue operations in future years.

common stock.

If we are unable to raise additional funds through equity or debt financings when and if needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.

There can be no assurance that we will be successful in acquiring additional funding, that our projections of future revenues or working capital needs will prove accurate, or that any additional funding would be sufficient to continue operations in future years.

The following table sets forth a summary of the net cash flow activity for each of the periods indicated (in thousands):

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Financing activities

Net (decrease) increase in cash

Net decrease in cash

Operating Activities

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The net cash used in operating activities for the year ended December 31, 2025 was due to approximately $154.4 million spent on ongoing research and development and selling, general and administrative activities and a $12.4 million net change in operating assets and liabilities.

The net change in operating assets and liabilities primarily related to a $35.7 million increase in accounts payable and accrued expenses (including interest, operating lease assets and liabilities), and a $51.0 million increase in accounts receivable, inventory, and prepaid assets and other current assets in support of our growth and continued launch of our commercial products.

The net change in operating assets and liabilities is related to a $34.4 million increase in accounts payable and accrued expenses (including interest, operating lease assets and liabilities), a $5.5 million decrease in prepaid assets and other current assets, and a $52.3 million increase in accounts receivable, inventory, and other long-term assets.

The net cash used in operating activities for the year ended December 31, 2024 was due to approximately $251.5 million spent on ongoing research and development and selling, general and administrative activities and a $15.3 million net change in operating assets and liabilities.

The net change in operating assets and liabilities primarily related to a $6.9 million increase in accounts payable and accrued expenses (including interest, operating lease assets and liabilities, and clinical trial expenses), and a $20.5 million increase in prepaid assets and other current assets, accounts receivable, inventory, and other long-term assets, in support of our growth and commercial operations.

Investing Activities

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Financing Activities

Net cash used in financing activities for the year ended December 31, 2025 was $0.3 million primarily related to $1.9 million payments of employee tax obligations related to vesting of PSUs and RSUs offset by $1.6 million of proceeds from the issuance of common stock from exercise of stock options.

Net cash provided by financing activities for the year ended December 31, 2024 was $182.8 million, primarily related to $59.4 million of net proceeds from the issuance of debt under our Loan Agreement, $121.8 million of net proceeds from issuance of common stock and pre-funded warrants in connection with the underwritten public offering completed in August 2024, and $1.6 million of proceeds from the exercise of stock options.

Net cash provided by financing activities for the year ended December 31, 2023 was $367.6 million, primarily due to $172.7 million of net proceeds from the Revenue Interest Financing Agreement, $155.6 million due to the proceeds from the sale of our common stock, and $39.3 million from the issuance of debt under our Loan Agreement.

Contractual Obligations and Commitments

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The supply agreement commits us to a minimum purchase obligation of approximately $3.2 million during the first 24-month period following the launch of the final product.

We have incurred $0.3 million of expenses under the agreement during each of the years ended December 31, 2024 and 2023.

As of December 31, 2024, €1.8 million, or approximately $1.9 million, remains of the minimum purchase obligation.

We have incurred $1.7 million and $0.3 million of expenses under the agreement during each of the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2025, €1.2 million, or approximately $1.4 million, remains of the minimum purchase obligation and for which we have recorded within accrued expenses on the balance sheet and within our statement of operations and comprehensive loss during the year ended December 31, 2025.

Additionally, on May 3, 2022, we entered into a Revenue Interest Financing Agreement, or the Revenue Interest Financing Agreement, with entities managed or advised by NovaQuest Capital Management, or NQ, Sagard Holdings Manager LP, or Sagard, and Hercules Capital, Inc.

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The investors’ right to receive royalties on net sales will terminate when the investors have aggregate payments equal to 200% of the Investment Amount less any royalties already paid.

During the years ended December 31, 2024 and 2023 we made $2.6 million and no royalty payments, respectively, under the Revenue Interest Financing Agreement.

During the years ended December 31, 2025 and 2024 we incurred $14.8 million and $2.6 million, respectively, of royalty payments under the Revenue Interest Financing Agreement.

We enter into contracts in the normal course of business for our contract research services, contract manufacturing services, professional services and other services and products for operating purposes.

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The reserves are classified as reductions to accounts receivable, net if payable to a customer or accrued expenses if payable to a third-party or related to product returns.

Where appropriate, we utilize the expected value method to determine the appropriate amount for estimates of variable consideration based on factors such as current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns.

The amount of variable consideration that is included in the transaction price may be

constrained and is included in net product revenues only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period.

Where appropriate, we utilize the expected value method to determine the appropriate amount for estimates of variable consideration based on factors

such as current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns.

The amount of variable consideration that is included in the transaction price may be constrained and is included in net product revenues only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period.

Actual amounts of consideration ultimately received may differ from our estimates.

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Claims by third-party payors for rebates, chargebacks and discounts frequently are submitted to us significantly after the related sales, potentially resulting in adjustments in the period in which the new information becomes known.

We will adjust our estimates based on new information, including information regarding actual rebates, chargebacks and discounts for our products, as it becomes available.

We will adjust our estimates based on new information, including information regarding actual rebates, chargebacks, co-pay assistance and discounts for our products, as it becomes available.

Revenue Interest Financing Liability

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Smaller Reporting Company Status

We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act.

We are currently a smaller reporting company as defined in Rule 12b-2 of the Exchange Act.

We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as (i) our voting and non-voting common stock held by non-affiliates is less than $250 million measured on the last business day of our second fiscal quarter or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700 million measured on the last business day of our second fiscal quarter.

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Oth er Information

available to the Company at the lenders’ discretion, (iii) extends the maturity date from December 1, 2027 to February 1, 2029, subject to further extension to December 1, 2030 upon the achievement of a specified revenue milestone and subject to a certain pro forma liquidity test;

(a) if the Term Loan Advances are prepaid after the Fifth Amendment Closing Date but prior to the twelfth month anniversary of the Fifth Amendment Closing Date, 2.50%;

(d) thereafter, 1.00%;

and (viii) provides for a new final payment fee which is as a percentage of the Term Loan Advances so prepaid, as follows:

(a) if the Term Loan Advances are repaid prior to September 2027, 1.25%;

(b) if the Term Loan Advances are repaid after September 1, 2027 but on or prior to February 1, 2029, 2.00%;

(c) if the Term Loan Advances are repaid after February 1, 2029 but on or prior to January 1, 2030, 3.00%, and (d) if the Term Loan Advances are repaid after January 1, 2030, 3.50%.

In addition, the financial covenants under the Fifth Loan Amendment include (i) a minimum cash covenant and (ii) a performance covenant, as follows:

Minimum cash covenant - We must maintain a minimum cash balance of 20% of the outstanding principal balance at all times, which will decrease to 15% of the outstanding principal amount upon the Company reporting and maintaining $75 million of trailing three months net product revenue.

Performance covenant - Beginning on the Fifth Amendment Closing Date and all times there after we must satisfy any one of the following:

Market capitalization exceeding $900 million;

Trailing three months net product revenue equal to 75% of projected revenue in 2026 and 70% of projected revenue in 2027 and beyond, tested on a quarterly basis.

Director and Officer Trading Arrangements:

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We tested the industry data used in the calculation of the estimated returns rate by inspecting industry publications.

We compared actual returns received to date with the Company's estimated return rate.

In addition, we tested the Company’s analysis of inventory held at various stages in the distribution channel.

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Iselin, New Jersey

March 6, 2025

February 26, 2026

PHATHOM PHARMACEUTICALS, INC.

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Current portion of revenue interest financing liability

Other current liabilities

Total current liabilities

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401(k) matching contribution

Vesting of restricted stock units

Vesting of restricted stock units and performance stock units, net of employee tax obligations

Stock-based compensation

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Issuance of common stock from exercises of stock options

Issuance of common stock and pre-funded warrants in connection with the underwritten public offering, net

Balance at December 31, 2025

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401(k) matching contribution

Vesting of restricted shares, performance stock units, and restricted stock units

Vesting of restricted stock units

Stock-based compensation

ESPP shares issued

Issuance of common stock under ATM facility

Issuance of common stock from exercises of stock options

Issuance of common stock in connection with underwritten public offering, net

Issuance of common stock from exercise of stock options

Issuance of common stock and pre-funded warrants in connection with the underwritten public offering, net

Balance at December 31, 2024

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Stock-based compensation

Issuance of PIK interest debt

Accrued interest on revenue interest financing liability

Accrued payment-in-kind interest on debt

Accrued interest on revenue interest financing liability, net of payments

Amortization of debt discount

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Net proceeds from underwritten public offering

Net proceeds from revenue interest financing transaction

Net proceeds from issuance of common stock under ATM facility

Net cash provided by financing activities

Net (decrease) increase in cash and cash equivalents and restricted cash

Payment of employee tax obligations related to vesting of PSUs and RSUs

Net cash (used in) provided by financing activities

Net decrease in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash – beginning of period

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Phathom Pharmaceuticals, Inc., or the Company or Phathom, was incorporated in the state of Delaware in January 2018.

The Company is a biopharmaceutical company focused on developing and commercializing novel treatments for gastrointestinal diseases.

The Company is a commercial-stage biopharmaceutical company focused on commercializing and developing novel treatments for gastrointestinal, or GI, diseases.

The Company’s financial statements are prepared in accordance with U.S.

generally accepted accounting principles, or GAAP.

On October 27, 2023, the U.S.

Food and Drug Administration, or FDA, approved the prior approval supplements to the Company's new drug applications, or NDAs, for VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK.

In May 2022, the U.S.

Food and Drug Administration, or FDA, approved the Company's new drug applications, or NDAs for vonoprazan triple therapy, under the brand name VOQUEZNA TRIPLE PAK, and vonoprazan dual therapy, under the brand name VOQUEZNA DUAL PAK.

On October 27, 2023, the FDA approved the prior approval supplements to the Company's NDAs, for VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK.

Additionally, on November 1, 2023, the FDA approved the Company's NDA for VOQUEZNA tablets.

The Company initiated commercial launch for VOQUEZNA for both the Erosive GERD and H.

The Company initiated commercial launch for VOQUEZNA in the U.S.

for both the Erosive GERD and H.

pylori indications, and VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK for treatment of H.

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Liquidity and Capital Resources

From inception to December 31, 2024, the Company has devoted substantially all of its efforts to organizing and staffing the Company, business planning, raising capital, in-licensing its initial and approved product candidate, vonoprazan, meeting with regulatory authorities, managing the clinical trials of vonoprazan, preparing for commercialization of its initial products containing vonoprazan, commercially launching its approved products, and providing other selling, general and administrative support for these operations.

The Company has a limited operating history, has generated limited revenue to date, and the sales and income potential of its business is unproven.

The Company has incurred net losses and negative cash flows from operating activities since its inception and expects to continue to incur additional net losses in the future.

From inception to December 31, 2025, the Company has devoted substantially all of its efforts to organizing and staffing the Company, business planning, raising capital, in-licensing its initial and approved product candidate, vonoprazan, meeting with regulatory authorities, managing the clinical trials of vonoprazan, preparing for commercialization of its initial products containing vonoprazan, commercially launching its approved products in the U.S., and providing other selling, general and administrative support for these operations.

The Company has a limited operating history as a commercial company, has generated limited product revenue to date, and the sales and income potential of its business remains uncertain.

The Company has incurred net losses and negative cash flows from operating activities since its inception and despite the Company's plans and expectations, could continue to incur additional net losses in the future.

The Company has funded its operations primarily through commercial bank debt, the revenue interest financing debt and various equity offerings, including the Company's at-the-market, or ATM, offerings.

In August 2024, the Company closed an underwritten public offering of 8,695,652 shares of its common stock and 2,608,922 pre-funded warrants for net proceeds of approximately $ 121.8 million (see Note 7 for additional information).

From inception through December 31, 2025 , the Company sold 34,737,032 shares of common stock and 2,608,922 pre-funded warrants, generating net proceeds of approximately $ 543.3 million, after deducting underwriting discounts, commissions and offering costs .

In January 2026, the Company sold 6,875,000 shares of common stock at a price of $ 16.00 per share and pre-funded warrants to purchase 1,250,078 shares of common stock at a price of $ 15.999 per pre-funded warrant for total gross proceeds of $ 130.0 million or $ 122.2 million of net proceeds after deducting underwriting discounts, commissions and offering costs.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities in accordance with GAAP.

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The preparation of the Company’s financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying notes.

The most significant estimates in the Company’s financial statements relate to accruals for net product revenues and the valuation for the revenue interest financing liability.

The most significant estimates in the Company’s financial statements

relate to accruals for net product revenues and the valuation for the revenue interest financing liability.

In addition, management’s assessment of the Company’s ability to continue as a going concern involves the estimation of the amount and timing of future cash inflows and outflows.

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Customer creditworthiness is monitored and collateral is not required.

The allowance for credit losses reflects the best estimate of expected credit losses of the accounts receivable portfolio determined on the basis of historical experience, current information, and forecasts of future economic conditions.

The allowance for credit losses

reflects the best estimate of expected credit losses of the accounts receivable portfolio determined on the basis of historical experience, current information, and forecasts of future economic conditions.

The Company determines its allowance methodology by pooling receivable balances at the customer level.

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The Company assesses recoverability of inventory each reporting period to determine any write-down to net realizable value resulting from excess or obsolete inventories.

During the year ended December 31, 2024, the Company recorded approximately $ 0.8 million of charges for inventory not expected to be sold prior to its expiration date.

No inventory adjustments or charges were recorded during the year ended December 31, 2023.

During the years ended December 31, 2025 and 2024, the Company recorded approximately $ 0.3 million and $ 0.8 million, respectively, of charges for inventory not expected to be sold prior to its expiration date.

Property and Equipment, Net

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A lease is accounted for as a finance lease if it meets one of the following five criteria:

the lease has a purchase option that is reasonably certain of being exercised, the

present value of the future cash flows is substantially all of the fair market value of the underlying asset, the lease term is for a significant portion of the remaining economic life of the underlying asset, the title to the underlying asset transfers at the end of the lease term, or if the underlying asset is of such a specialized nature that it is expected to have no alternative uses to the lessor at the end of the term.

the lease has a purchase option that is reasonably certain of being exercised, the present value of the future cash flows is substantially all of the fair market value of the underlying asset, the lease term is for a significant portion of the remaining economic life of the underlying asset, the title to the underlying asset transfers at the end of the lease term, or if the underlying asset is of such a specialized nature that it is expected to have no alternative uses to the lessor at the end of the term.

Leases that do not meet the finance lease criteria are accounted for as an operating lease.

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In accordance with ASC 606, the Company recognizes net product revenues from sales when the customers obtain control of the Company’s products, which typically occurs upon delivery to the customer.

Revenues from product sales are recorded at the net sales price, or transaction price, which includes estimates of variable consideration that result from (a) invoice discounts for prompt payment and distribution service fees, (b) government and private payor rebates, chargebacks, discounts and fees, (c) product returns and (d) costs of co-pay assistance programs for patients, as well

as other incentives for certain indirect customers.

Reserves are established for the estimates of variable consideration based on the amounts earned or to be claimed on the related sales.

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Distribution Service Fees:

The Company engages with wholesalers to distribute its products to end customers.

The Company engages with wholesalers and specialty pharmacies to distribute its products to end customers.

The Company pays the wholesalers a fee for services such as:

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The Company estimates the amount of distribution services fees to be paid to the customers based on a contractually fixed percentage of wholesaler acquisition costs and are calculated at the time of sale based on the purchase amount and the transaction price is adjusted with the amount of such estimate at the time of sale to the customer.

Estimated distribution service fees are recorded within accounts receivable, net on the balance sheets.

Estimated distribution service fees are recorded within accounts receivable or accrued expenses, net on the balance sheets.

Prompt Pay Discounts:

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Estimated chargebacks are recorded within accounts receivable, net on the balance sheets.

Co-pay Assistance:

The Company provides for financial assistance to qualified patients, assisting them with prescription drug co-payments required by insurance.

The Company uses third-party administers for the co-payment program for pharmacy benefit claims.

The calculation of the accrual for copay is based on an estimate of claims and the cost per claim that the Company expects to receive associated with actual sales and inventory that exists in the distribution channel at period end.

Estimated co-pay assistance accruals are recorded within accrued expenses on the balance sheets.

Administration Fees:

The Company engages with Pharmacy Benefit Managers, or PBMs, to administer prescription-drug plans for people with third-party insurance through a self-insured employer, health insurance plan, labor union or government plan.

The Company pays PBMs “administrative fees” for their role in providing utilization data, administering rebates, and administering claims payments.

Company pays PBMs “administrative fees” for their role in providing utilization data, administering rebates, and administering claims payments.

The Company estimates the amount of administration fees to be paid to PBMs and adjusts the transaction price with the amount of such estimate at the time of sale to the customer.

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Estimated rebates are recorded as accrued expenses on the balance sheets.

Coverage Gap:

The Medicare Part D coverage gap, also called the donut hole, is a period of consumer payment for prescription medication costs which lies between the initial coverage limit and the catastrophic-coverage threshold, when the patient is a member of a Medicare Part D prescription-drug program administered by the Centers for Medicare & Medicaid Services.

The Company estimates the percentage of goods sold under Coverage Gap and adjusts the transaction price for such discount at the time of sale to the customer.

Estimated coverage gap accruals are recorded as accrued expenses on the balance sheets.

Manufacturer Discount Program:

The Medicare Part D coverage gap, previously referred to as the donut hole, was redesigned and replaced beginning on January 1, 2025 as part of The Inflation Reduction Act, or IRA, of 2022.

This included the creation of a new manufacturer discount program, or MDP, in place of the prior coverage gap discount program.

Prior to the IRA enactment, the Company estimated the percentage of goods sold under coverage gap and adjusted the transaction price for such discount at the time of sale to the customer.

Beginning January 1, 2025, the calculation of the accrual under the MDP program is based on an estimate of prescriptions covered by Medicare and the estimated manufacturer portion of our obligation under the Part D redesign.

Estimated accruals are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a liability.

Estimated MDP accruals are recorded as accrued expenses on the balance sheets.

The Company makes significant estimates and judgments that materially affect its recognition of net product revenue.

Claims by third-party payors for rebates, chargebacks and discounts frequently are submitted to the Company significantly after the related sales, potentially resulting in adjustments in the period in which the new information becomes known.

The Company will adjust its estimates based on new information, including information regarding actual rebates, chargebacks, co-pays and discounts for its products, as it becomes available.

The Company will adjust its estimates based on new information, including information regarding actual rebates, chargebacks, co-pay assistance and discounts for its products, as it becomes available.

Cost of Revenue

Cost of revenue includes the cost of producing and distributing inventories that are related to product sales.

This also includes royalties payable to Takeda Pharmaceutical Company Limited, or Takeda, pursuant to the Takeda License Agreement (Refer to Note 3 for further details).

This also includes royalties payable to Takeda Pharmaceutical Company Limited, or Takeda, pursuant to the Takeda License Agreement (Refer to Note 3 Commitments and Contingencies for further details).

In addition, shipping and handling costs for product sales are recorded as incurred.

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The Company has entered into various research and development contracts with clinical research organizations, clinical manufacturing organizations and other companies.

Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and payments made in advance of or after performance are reflected in the accompanying balance sheets as prepaid expenses or accrued liabilities, respectively.

Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and payments made in advance of or after performance are

reflected in the accompanying balance sheets as prepaid expenses or accrued liabilities, respectively.

The Company records accruals for estimated costs incurred for ongoing research and development activities.

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Advertising and marketing costs are expensed as incurred.

Advertising and marketing costs for the year ended December 31, 2024 was approximately $ 61.3 million, and are included in selling, general and administrative expenses.

Advertising and marketing costs were not material for the year ended December 31, 2023 .

Advertising and marketing costs for each of the years ended December 31, 2025 and 2024 was approximately $ 61.3 million and are included in selling, general and administrative expenses.

Stock-Based Compensation

Stock-based compensation expense represents the cost of the grant date fair value of equity awards recognized over the requisite service period of the awards (generally the vesting period) on a straight-line basis with forfeitures recognized as they occur.

The fair value of stock options are determined by using the Black-Scholes option-pricing model.

The fair value of performance awards with a market condition is estimated at the date of grant using a Monte Carlo Simulation model.

The Black-Scholes and Monte Carlo Simulation valuation models incorporate assumptions as to stock price volatility, the expected life of options or awards, a risk-free interest rate and dividend yield.

The fair value of restricted stock, including performance awards, without a market condition is estimated using the current market price of our common stock on the date of grant.

The Company also maintains an employee stock purchase program, or ESPP, under which it may issue shares.

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The Company valued the pre-funded warrants at issuance, concluding that their sales price approximated their fair value, and allocated the net proceeds from the offering proportionately to the common shares and pre-funded warrants.

See Note 7 for further discussion related to the offering.

See Note 7 Stockholders' Equity for further discussion related to the offering.

Net Loss Per Share

Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding and pre-funded warrants for the period, without consideration for other potentially dilutive securities.

For the year ended December 31, 2024, basic shares outstanding includes the weighted average effect of the Company’s outstanding pre-funded warrants, the exercise of which requires little or no consideration for the delivery of shares of common stock.

For the years ended December 31, 2024 and 2023 , the Company had no weighted-average unvested shares and 34,503 , respectively, to exclude from the weighted-average number of common shares outstanding.

For the years ended December 31, 2025 and 2024, basic shares outstanding includes the weighted average effect of the Company’s outstanding pre-funded warrants, the exercise of which requires little or no consideration for the delivery of shares of common stock.

For the years ended December 31, 2025 and 2024 , the Company had no weighted-average unvested shares to exclude from the weighted-average number of common shares outstanding.

Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and dilutive common stock equivalents outstanding for the period determined using the treasury-stock and if-converted methods.

Dilutive common stock equivalents are comprised of unvested common stock, options and warrants.

For the periods presented, there is no difference in the number of shares used to calculate basic and diluted shares

outstanding as inclusion of the potentially dilutive securities (warrants, stock options, and restricted stock units) would be antidilutive .

For the periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding as inclusion of the potentially dilutive securities (warrants, stock options, and restricted stock units) would be antidilutive .

Recently Adopted Accounting Standards

In November 2023, the FASB issued ASU 2023-07 – Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures, which improves segment disclosure requirements, primarily through enhanced disclosure requirements for significant segment expenses.

The improved disclosure requirements apply to all public entities that are required to report segment information, including those with only one reportable segment.

The Company adopted the guidance in the fiscal year beginning January 1, 2024 using a retrospective method.

See Note 10 for further detail.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09 – Income Taxes (Topic 740) – Improvements to Income Tax Disclosures, which improves income tax disclosures primarily relating to the rate reconciliation and income taxes paid information.

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For public business entities, the guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company intends to adopt the guidance in the fiscal year beginning January 1, 2025.

The Company is currently evaluating the effect of adopting this pronouncement on our financial statements and disclosures.

The Company prospectively adopted this guidance, which did not have an impact on the Company's financial statements, although it did result in expanded income tax-related disclosures, which are included in Note 9 Income Taxes to the financial statements.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03 - Disaggregation of Income Statement Expenses, which requires more detailed disclosures about specified categories of expenses (including employee compensation, depreciation, and amortization) included in certain expense captions presented on the face of the income statement.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, may be applied prospectively or retrospectively, and allows for early adoption.

This standard is not expected to have an impact on any amounts recognized in our financial statements, but will result in more detailed disclosures addressing the categorization of expenses.

Balance Sheet Details

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Total accrued expenses

Inventory consist of the following (in thousands):

Inventory consists of the following (in thousands):

Finished goods

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In December 2020, the Company entered into a supply agreement with Sandoz pursuant to which Sandoz will supply commercial quantities of amoxicillin capsules and clarithromycin tablets, package these antibiotics with vonoprazan, and provide in finished convenience packs.

The supply agreement commits the Company to a minimum purchase obligation of € 2.9 million, or approximately $ 3.2 million, in the first 24-month period following the launch of the final product.

The Company incurred $ 0.3 million of expenses under the agreement during each of the years ended December 31, 2024 and 2023.

As of December 31, 2024 , € 1.8 million, or approximately $ 1.9 million, remains of the minimum purchase obligation.

The supply agreement commits the Company to a minimum p urchase obligation of € 2.9 million, or approximately $ 3.2 million, in the first 24-month period following the launch of the final product.

The Company incurred $ 1.7 million and $ 0.3 million of expenses under the agreement during each of the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2025 , approximately € 1.2 million, or approximately $ 1.4 million, of the minimum purchase obligation remains and for which the Company has recorded within accrued expenses on the balance sheet and within the Company’s statement of operations and comprehensive loss during the year ended December 31, 2025.

The Company had previously been informed by Sandoz that there could be a disruption in the supply of clarithromycin tablets, a component of the VOQUEZNA TRIPLE PAK, which could lead to a disruption in supply of the VOQUEZNA TRIPLE PAKs.

Given more recent communications, however, the Company does not currently anticipate any near-term disruptions.

The Company plans to continue to actively monitor the situation to determine if a supply disruption may arise in the future.

The VOQUEZNA TRIPLE PAK represented approximately 1 % of our total revenue for 2025.

While the Company has not experienced any commercial disruption to date, any disruption for such supply would result in our inability to continue to commercialize the VOQUEZNA TRIPLE PAK.

The VOQUEZNA bottles and the VOQUEZNA DUAL PAKs are not impacted, as they do not include clarithromycin.

Contingencies

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Lease Commitments

As of December 31, 2024, the Company had operating leases for office space in both Buffalo Grove, Illinois and Florham Park, New Jersey, with weighted average remaining lease terms of 0.3 years and 0.7 years, re spectively.

As of December 31, 2025, the Company had operating leases for office space in both Buffalo Grove, Illinois and Florham Park, New Jersey, with weighted average remaining lease terms of 4.5 years and 5.2 years, respectively.

In September 2025, the Company entered into amendments to its lease agreements for the New Jersey office space to extend the terms of the leases through February 2031.

All operating leases contain an option to extend the term for one additional five year period , which was not considered in the determination of the right-of-use asset or lease liability as the Company did not consider it reasonably certain that it would exercise such options.

The total rent expense for each of the years ended December 31, 2024 and 2023 was approximately $ 1.1 million.

Total short-term lease costs relating to leased vehicles was approximately $ 8.8 million for the year ended December 31, 2024, and was not material for the year ended December 31, 2023.

The total rent expense for the years ended December 31, 2025 and 2024 was approximately $ 1.0 million and $ 1.1 million, respectively.

Total short-term lease costs relating to leased vehicles was approximately $ 6.9 million and $ 8.8 million for the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2025, the future minimum annual lease payments under the operating leases were as follows (in thousands):

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Weighted-average incremental borrowing rate

Operating cash flows for the years ended December 31, 2024 and 2023 included cash payments for operating leases of $ 1.0 million and $ 1.1 million, respectively, of which $ 0.1 million as of December 31, 2024 and 2023 were prepaid lease payments.

Operating cash flows for the years ended December 31, 2025 and 2024 included cash payments for operating leases of $ 0.7 million and $ 1.0 million, respectively, of which $ 0.1 million as of December 31, 2024 were prepaid lease payments.

Total debt consists of the following (in thousands):

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On September 17, 2021, or the Closing Date, the Company entered into a Loan and Security Agreement, or, the Loan Agreement, with Hercules Capital, Inc., in its capacity as administrative agent and collateral agent and as a lender, or, in such capacity, the Agent or Hercules, and the other financial institutions that from time to time become parties to the Loan Agreement as lenders, or, collectively, the Lenders.

The Company has entered into several amendments to the Loan Agreement which are described below, and in Note 12 Subsequent Events.

Note 12 Subsequent Events describes the Fifth Amendment to the Loan and Security Agreement which the Company entered into on February 25, 2026 and which amends certain of the provisions of the Loan Agreement described below which is as of December 31, 2025.

The Loan Agreement provides for term loans in an aggregate principal amount of up to $ 200 million, or the Term Loan, under multiple tranches.

The tranches consist of (i) a first tranche consisting of term loans in an aggregate principal amount of $ 100 million, all of which was funded on the Closing Date, or the First Advance, (ii) a second tranche consisting of up to an additional $ 50 million, (iii) a third and fourth tranches consisting of an additional total $ 50 million, which became available in May 2022.

On September 27, 2022, the Company entered into an amendment to the Loan Agreement, or the Second Loan Amendment, pursuant to which the date the second tranche of funding of $ 50 million was available to the Company and has been moved until May 15, 2023, rather than December 15, 2022.

On September 27, 2022, the Company entered into an amendment to the Loan Agreement, or the Second Loan Amendment, pursuant to which the date the second tranche of funding of $ 50 million was to remain available to the Company, was moved to May 15, 2023, rather than December 15, 2022.

On May 9, 2023, the Company entered into the Third Amendment to Loan and Security Agreement, or the Third Loan Amendment, with the lenders, pursuant to which, among other things, (i) the second tranche availability was extended from through May 15, 2023, to through December 15, 2023, and became available on October 1, 2023, (ii) the third tranche availability was extended from through September 30, 2023, to through December 15, 2023, and became available on October 1, 2023, (iii) the effective date of the performance covenants was amended to provide an option to extend the covenant trigger date to May 15, 2024, subject to the achievement of the FDA approval of vonoprazan for Erosive GERD or the EE Milestone, prior to February 15, 2024, and (iv) the warrant agreement with Hercules was amended as described below.

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These fees have been recorded as debt discount and are being amortized to interest expense using the effective interest method over the remaining term of the Term Loan.

On December 14, 2023, the Company entered into a Fourth Amendment to Loan and Security Agreement, or the Fourth Loan Amendment, with the lenders, which, among other things, (i) increases the aggregate principal amount of the term loans from $ 200 million to $ 300 million;

(ii) provides for the possibility of accessing the remaining $ 200 million commitment through five tranches referred to as the second through sixth tranches, which are available subject to certain milestones and conditions:

On December 14, 2023, the Company entered into a Fourth Amendment to Loan and Security Agreement, or the Fourth Loan Amendment, with the lenders, which, among other things, (i) increased the aggregate principal amount of the term loans from $ 200 million to $ 300 million;

(ii) provided for the possibility of accessing the remaining $ 200 million commitment through five tranches referred to as the second through sixth tranches, which are available subject to certain milestones and conditions:

(a) Second Tranche:

$ 50 million, $ 40 million of which was funded on December 14, 2023, available through March 15, 2024, (b) Third Tranche:

$ 25 million available through June 15, 2024, (c) Fourth Tranche:

$ 25 million available through December 15, 2024, (d) Fifth Tranche:

$ 50 million available, subject to the achievement of a specified revenue milestone, or the Fifth Tranche milestone, through June 30, 2025, and (e) Sixth Tranche:

$ 50 million available, subject to the achievement of a specific revenue milestone, or the Sixth Tranche milestone, through December 31, 2025;

(iii) extends the interest only period and the maturity date from October 2026 to December 2027, (iv) reduces the cash interest rate from 10.75 % (floating annual rate equal to the greater of (a) 5.50 % and (b) the Prime Rate (as reported in the Wall Street Journal) plus 2.25 % to 9.85 % (floating rate based on the greater of (a) 9.85 % or (b) US WSJ Prime + 1.35 %), provided that the cash interest rate shall be capped at 10.35 % and upon the Company achieving the Sixth Tranche milestone, the cash interest floating rated shall be decreased by 0.35 % to 9.50 %, and (v) decreases the payment-in-kind interest rate from 3.35 % per annum to 2.15 % per annum.

$ 50 million, $ 40 million of which was funded on December 14, 2023, and the remaining $ 10 million of which was funded on March 15, 2024, (b) Third Tranche:

$ 25 million which was funded on June 14, 2024, (c) Fourth Tranche:

$ 25 million which was funded on December 15, 2024, (d) Fifth Tranche:

$ 50 million which was available, subject to the achievement of a specified revenue milestone, or the Fifth Tranche milestone, through June 30, 2025 and which the Company did not draw down, and (e) Sixth Tranche:

$ 50 million available, subject to the achievement of a specific revenue milestone, or the Sixth Tranche milestone, through December 31, 2025 and which the Company did not draw down;

(iii) extended the interest only period and the maturity date from October 2026 to December 2027, (iv) reduced the cash interest rate from 10.75 % (floating annual rate equal to the greater of (a) 5.50 % and (b) the Prime Rate (as reported in the Wall Street Journal) plus 2.25 % to 9.85 % (floating rate based on the greater of (a) 9.85 % or (b) US WSJ Prime + 1.35 %), provided that the cash interest rate shall be capped at 10.35 % and upon the Company achieving the Sixth Tranche milestone, the cash interest floating rate shall be decreased by 0.35 % to 9.50 %, and (v) decreased the payment-in-kind interest rate from 3.35 % per annum to 2.15 % per annum.

In connection with the Fourth Loan Amendment, an amendment fee of $ 250,000 was paid to the Agent and was recorded as a debt discount and is being amortized to interest expense using the effective interest method over the remaining term of the Term Loan.

On March 15, 2024, the Company drew down on the remaining $ 10 million available under the Second Tranche.

On June 14, 2024, the Company drew down the $ 25 million available under the Third Tranche.

In addition, on December 14, 2024, the Company drew down the $ 25 million available under the Fourth Tranche.

T he Term Loan will mature on December 1, 2027 , or the Maturity Date.

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After the interest-only period, the principal balance and related interest will be required to be repaid in full on the Maturity Date.

In addition, the Company is obligated to pay a final payment fee of 7.50 % of the original principal amount of amounts actually advanced under the Term Loan, or each a Term Loan Advance and together, the Term Loan Advances.

In addition, the Company is obligated to pay a final payment fee of 7.50 % of the original principal amount of amounts actually advanced under the Term Loan, or each Term Loan Advance and together, the Term Loan Advances.

In connection with the Fourth Loan Amendment, the final payment fee was amended to be $ 1 million plus 3.00 % of any future tranche drawdowns under the agreement, due upon final maturity.

Additionally, the initial final payment fee for the first Term Loan Advance was amended to become payable on October 1, 2026.

As of December 31, 2024 , the aggregate $ 11.5 million of final payment fees includes the first Term Loan Advance of $ 7.5 million, $ 2.5 million for the second Term Loan Advance, $ 0.8 million for the third Term Loan Advance, and $ 0.7 million for the fourth Term Loan Advance have been recorded within other long-term liabilities.

Additionally, the initial final payment fee of $ 7.5 million for the first Term Loan Advance was amended to become payable on October 1, 2026, and has been recorded within other current liabilities as of December 31, 2025.

The remaining aggregate $ 4.0 million of final payment fees includes $ 2.5 million for the second Term Loan Advance, $ 0.8 million for the third Term Loan Advance, and $ 0.7 million for the fourth Term Loan Advance and have been recorded within other long-term liabilities as of December 31, 2025.

Under the Fourth Loan Amendment the Company may elect to prepay all or a portion of the Term Loan Advances prior to maturity, subject to a prepayment fee of up to 1.25 % of the then outstanding principal balance of the Term Loan Advances being prepaid when such prepayment occurs prior to October 1, 2026, or 0.50 % if such prepayment occurs on or after October 1, 2026.

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As of December 31, 2025, the Company was in compliance with all applicable covenants under the Loan Agreement.

In connection with the entry into the Loan Agreement, the Company issued to Hercules a warrant, or the Warrant, to purchase a number of shares of the Company’s common stock equal to 2.5 % of the aggregate amount of the Term Loan advances funded, and will issue to Hercules additional warrants when future Term Loan advances are funded.

On the Closing Date, the Company issued a Warrant for 74,782 shares of common stock.

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Year ending December 31:

2026 (final payment fee on first term loan advance)

Total principal and interest payments

payment-in-kind and final payment fee

payment-in-kind and remaining final payment fees

Total term loan borrowings

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Revenue Interest Financing Liability

On May 3, 2022, the Company entered into a Revenue Interest Financing Agreement with Initial Investors NQ, Sagard, and Hercules pursuant to which the Company will receive up to $ 260 million in funding from the Initial Investors.

On May 3, 2022, the Company entered into a Revenue Interest Financing Agreement with Initial Investors NovaQuest Capital Management, or NQ, Sagard Holdings Manager LP, or Sagard, and Hercules pursuant to which the Company had the right to receive up to $ 260 million in funding from the Initial Investors.

Under the terms of the Revenue Interest Financing Agreement, the Company received $ 100 million at the initial closing and received an additional $ 160 million upon FDA approval of VOQUEZNA for treatment of Erosive GERD during the fourth quarter of 2023.

Additionally, on October 31, 2022, the Company entered into a Joinder Agreement with the Initial Investors and CO Finance LVS XXXVII LLC, or the Additional Investor, and Hercules, together as the in vestors.

Under the terms of the Joinder Agreement, the Company received $ 15 million in additional funding upon FDA approval of vonoprazan for Erosive GERD, or Approval Additional Funding, during the fourth quarter of 2023, and provides for $ 25 million in additional funding for achievement of a sales milestone, or Milestone Additional Funding, and, together with the Approval Additional Funding, or the Additional Investor Funding.

Under the terms of the Joinder Agreement, the Company received $ 15 million in additional funding upon FDA approval of vonoprazan for Erosive GERD, or Approval Additional Funding, during the fourth quarter of 2023, and provided for $ 25 million in additional funding for achievement of a sales milestone, or Milestone Additional Funding, and, together with the Approval Additional Funding, or the Additional Investor Funding.

The Initial Investors waived their rights of first offer regarding the Additional Investor Funding and the Additional Investor and joined the Revenue Interest Financing Agreement to extend commitments for the Additional Investor Funding.

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If the investors have not received aggregate payments of at least 100 % of the Investment Amount by December 31, 2028, and at least 200 % of the Investment Amount by December 31, 2037, each a Minimum Amount, then the Company will be obligated to make a cash payment to the investors in an amount sufficient to gross the investors up to the applicable Minimum Amount.

Upon the occurrence of an event of default taking place prior to April 1, 2025, between April 1, 2025 and April 1, 2028, and after April 1, 2028, the Company is obligated to pay 1.30 times Investment Amount, 1.65 times Investment Amount, and 2.0 times investment amount, respectively, less any amounts the Company previously paid pursuant to the agreement.

During the year ended December 31, 2023 , the Company received gross proceeds of $ 175.0 million before deducting transaction costs of $ 2.3 million, which resulted in net proceeds of $ 172.7 million.

Upon the occurrence of an event of default taking place between April 1, 2025 and April 1, 2028, or after April 1, 2028, the Company is obligated to pay 1.30 times Investment Amount, 1.65 times Investment Amount, and 2.0 times investment amount, respectively, less any amounts the Company previously paid pursuant to the agreement.

Additionally, under the terms of Revenue Interest Financing Agreement, the Company is subject to a minimum cash covenant of at least (a) beginning on the date that the Hercules Loan Agreement is terminated and each day thereafter until September 30, 2026, $ 30 million, and (b) beginning on October 1, 2026 and on each day thereafter until September 30, 2029, a certain percentage of the minimum cash reference amount defined as the difference between the Investment Amount and the amount of all royalty payments received by the Investors as of each such date as follows:

(i) 50 % from October 1, 2026 to September 30, 2027 (ii) 75 % from October 1, 2027 to September 30, 2028, and (iii) 100 % from October 1, 2028 to September 30, 2029.

As of December 31, 2025, the Company was in compliance with all applicable covenants under the Revenue Interest Financing Agreement.

The Company has evaluated the terms of the Revenue Interest Financing Agreement and concluded that the features of the Investment Amount are similar to those of a debt instrument.

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Stockholders’ Equity

In March 2019, the founders granted the Company a repurchase right for the 3,373,408 shares of common stock originally purchased in 2018.

The Company has the right, but not the obligation, to repurchase unvested shares in the event the founder’s relationship with the Company is terminated, subject to certain limitations, at the original purchase price of the stock.

The repurchase right lapsed for 843,352 shares in March 2019 and the repurchase right for the remaining 2,530,056 shares lapses in equal monthly amounts over the following 48-month period ended March 2023 .

The fair value of the founder shares at the date the repurchase right was granted was recognized as stock-based compensation expense on a straight-line basis over the vesting period.

As of December 31, 2024 and 2023 , no shares of common stock were subject to repurchase by the Company.

The amount of recognized and unrecognized stock-based compensation related to the founder stock was immaterial for all periods presented.

Underwritten Public Offerings

In May 2023, the Company sold 12,793,750 shares of its common stock, which included the exercise in full by the underwriters of their option to purchase 1,668,750 shares, at a price of $ 11.75 per share for total gross proceeds of $ 150.3 million.

The net purchase price after deducting underwriting discounts and commissions was $ 11.08 per share, which generated net proceeds of $ 141.8 million.

The Company incurred an additional $ 0.4 million of offering expenses in connection with this public offering.

In August 2024, the Company sold 8,695,652 shares of common stock at a price of $ 11.50 per share and pre-funded warrants to purchase 2,608,922 shares of common stock at a price of $ 11.499 per pre-funded warrant for total gross proceeds of $ 130.0 million.

The net purchase price after deducting the underwriting discounts and commissions and other offering expenses, was $ 10.77 per share, which generated net proceeds of $ 121.8 million.

Certain affiliates of Frazier Life Sciences IX, L.P.

(collectively, "Frazier"), a significant stockholder and Dr.

James Topper, who currently serves on the Company's Board of Directors, shares voting

and investment power of the securities held by Frazier.

Certain affiliates of Frazier Life Sciences IX, L.P., or collectively, Frazier, a significant stockholder and Dr.

James Topper, who currently serves on the Company's Board of Directors, share voting and investment power of the securities held by Frazier.

Frazier participated in the offering by purchasing pre-funded warrants on the same terms as all other investors at a purchase price of $ 11.499 , which represents the per share public offering price for the common stock less the $ 0.001 per share exercise price for each pre-funded warrant.

Each pre-funded warrant became exercisable upon issuance and will not expire until exercised in full.

Each pre-funded warrant became exercisable

upon issuance and will not expire until exercised in full.

The pre-funded warrants may not be exercised if the aggregate number of ordinary shares beneficially owned by the holders thereof immediately following such exercise would exceed a specified beneficial ownership limitation.

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The Sales Agreement may be terminated by the Sales Agent or the Company at any time.

For the year ended December 31, 2023 , the Company sold 1,514,219 shares for net proceeds of approximately $ 14.1 million after deducting $ 0.4 million of issuance costs.

No shares were sold during the year ended December 31, 2024.

No shares were sold under the Sales Agreement during the years ended December 31, 2025 and 2024.

As of December 31, 2025, all of the available $ 150 million under the 2023 ATM Offering remains available.

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Common stock warrants including pre-funded warrants

Stock options and restricted stock units outstanding

Stock options, performance stock units and restricted stock units outstanding

Shares available for issuance under the 2019 Incentive Plan

Shares available for issuance under the ESPP Plan

Shares available for issuance under the Inducement Plan

Balance at December 31, 2025

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Equity Incentive Plan

The Company’s 2019 Equity Incentive Plan, or the Existing Incentive Plan, provided for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, and other stock awards to eligible recipients, including employees, directors or consultants of the Company.

The Company had 2,231,739 shares of common stock authorized for issuance under the Existing Incentive Plan, of which, 1,400,528 stock options and 16,260 restricted stock awards were granted in 2019.

As a result of the adoption of the 2019 Incentive Award Plan, or the 2019 Plan, in October 2019, no further shares are available for issuance under the Existing Incentive Plan.

The Company’s 2019 Equity Incentive Plan, or the Prior Incentive Plan, provided for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, and other stock awards to eligible recipients, including employees, directors or consultants of the Company.

The Company had 2,231,739 shares of common stock authorized for issuance under the Prior Incentive Plan, of which, 1,400,528 stock options and 16,260 restricted stock awards were granted in 2019.

As a result of the adoption of the 2019 Incentive Award Plan, or the 2019 Plan, in October 2019, no further awards may be available for issuance under the Prior Incentive Plan.

2019 Incentive Award Plan

In October 2019, the Board of Directors adopted, and the Company’s stockholders approved, the 2019 Plan, which became effective in connection with the IPO.

Under the 2019 Plan, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units and other awards to individuals who are then employees, officers, non-employee directors or consultants of the Company or its subsidiaries.

The number of shares initially available for issuance will be increased by (i) the number of shares subject to stock options or similar awards granted under the Existing Incentive Plan that expire or otherwise terminate without having been exercised in full after the effective date of the 2019 Plan and unvested shares issued pursuant to awards granted under the Existing Incentive Plan that are forfeited to or repurchased by the Company after the effective date of the 2019 Plan, with the maximum number of shares to be added to the 2019 Plan pursuant to clause (i) above or equal to 1,416,788 shares, and (ii) an annual increase on January 1 of each calendar year beginning in 2020 and ending in 2029, equal to the lesser of (a) 5 % of the shares of common stock outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as determined by the Board of Directors.

On July 14, 2023, the Company completed a voluntary, one-time stock option exchange program, or the Option Exchange, pursuant to which eligible employees were able to exchange certain outstanding stock options granted under the 2019 Plan for a lesser amount of new restricted stock units, or RSUs, issued under the 2019 Plan.

Participants in the Option Exchange received one RSU for every two shares of Phathom common stock underlying the eligible options surrendered.

This exchange ratio was applied on a grant by grant basis.

The Option Exchange resulted in 2,406,622 options being exchanged for 1,203,341 RSUs.

The Company is recognizing an additional $ 2.2 million of incremental expense related to the Option Excha nge to be recognized over a three-year vesting period.

As of December 31, 2024, 1,578,888 shares remain available for issuance, which reflects 3,194,437 stock options and RSUs awards granted, and 762,646 of awards cancelled or forfeited, during the year ended December 31, 2024 as well as an annual increase of 2,898,503 shares authorized on January 1, 2024.

Under the 2019 Plan, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units, or RSUs, performance stock units, or PSUs, and other awards to individuals who are then employees, officers, non-employee directors or consultants of the Company or its subsidiaries.

The number of shares initially available for issuance will be increased by (i) the number of shares subject to stock options or similar awards granted under the Prior Incentive Plan that expire or otherwise terminate without having been exercised in full after the effective date of the 2019 Plan and unvested shares issued pursuant to awards granted under the Prior Incentive Plan that are forfeited to or repurchased by the Company after the effective date of the 2019 Plan, with the maximum number of shares to be added to the 2019 Plan pursuant to clause (i) above or equal to 1,416,788 shares, and (ii) an annual increase on January 1 of each calendar year beginning in 2020 and ending in 2029, equal to the lesser of (a) 5 % of the shares of common stock outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as determined by the Board of Directors.

As of December 31, 2025, 1,617,376 shares remain available for issuance, which reflects 5,889,882 stock options, PSUs and RSUs awards granted, and 2,502,457 of awards cancelled or forfeited, during the year ended December 31, 2025 as well as an annual increase of 3,425,913 shares authorized on January 1, 2025.

2025 Employment Inducement Incentive Award Plan

On March 30, 2025, the Board of Directors adopted the 2025 Employment Inducement Incentive Award Plan, or the Inducement Plan, and reserved 2,500,000 shares of the Company’s common stock for issuance pursuant to equity awards granted under the Inducement Plan to individuals not previously employees or non-employee directors of the Company (or following such individuals’ bona fide period of non-employment with the Company) as an inducement to join the Company.

The Inducement Plan provides for the grant of equity-based awards, including nonstatutory stock options, RSUs, restricted stock, stock appreciation rights, performance shares and PSUs, and its terms are substantially similar to the Company’s 2019 Plan, but with such other terms and conditions intended to comply with the Nasdaq inducement award exception or to comply with the Nasdaq acquisition and merger exception.

During the year ended December 31, 2025 , the Company granted 2,082,266 stock options, RSUs and PSUs under the Inducement Plan.

As of December 31, 2025 , 417,734 shares remain available for issuance.

Performance-Based Units

During 2020, the Company granted the initial performance-based units, or PSUs, whereby vesting depended upon the approval by the FDA of vonoprazan for H.

pylori and then, or concurrent with, Erosive GERD.

The PSU milestones were achieved upon FDA approval of vonoprazan for H.

pylori and Erosive GERD during the fourth quarter of 2023.

As a result, stock- based compensation cost of $ 19.3 million was recognized within the statements of operations and comprehensive loss during the year ended December 31, 2023 .

No stock- based compensation cost was recognized within the statements of operations and comprehensive loss during the year ended December 31, 2024 .

No PSUs were outstanding as of December 31, 2024 and 2023.

In 2025, the Board of Directors approved the grant of PSUs, whereby vesting depends on certain revenue performance milestones each year and over the next three years and stock price hurdle PSUs granted pursuant to the Inducement Plan.

The Company estimates the likelihood of achievement of performance milestones for all PSU awards at the end of each reporting period.

To the extent those awards or portions thereof are considered probable of being achieved, such awards or portions thereof are expensed over the performance period .

Recognition of stock-based compensation expense relating to the stock price hurdle PSU commenced on the date of grant and the expense is recognized ratably over the requisite service period of the award.

The stock price hurdle PSUs are considered a market condition under FASB ASC Topic 718 Compensation – Stock Compensation and is estimated on the grant date using Monte Carlo simulations.

The key assumptions used in determining this valuation included an expected volatility of 86.84 %, a dividend yield of zero, a risk-free interest rate of 3.67 %, and an expected term of 3.75 years.

The following table summarizes all PSU activity during the year ended December 31, 2025:

Average Grant

Date Fair Value

Unvested balance at January 1, 2025

Unvested balance at December 31, 2025

For performance milestone PSUs, stock-based compensation expense is recorded based on the market price of the Company's common stock on the grant date and is recognized if and when the achievement of such performance milestones are determined to be probable by the Company.

During the year ended December 31, 2025 , a revenue performance milestone was considered probable, and the Company recognized stock-based compensation expense related to the probable vesting of PSUs.

In addition, during 2025 stock price hurdle milestones were achieved.

The fair value of the PSUs that vested was $ 1.7 million at the vesting date.

The Company recognized $ 3.3 million of stock-based compensation expense related to all PSU awards during the year ended December 31, 2025.

As of December 31, 2025, there was approximat ely $ 2.5 million of related unrecognized stock-based compensation expense related to PSUs, which is expected to be recognized over a weighted-average period of approximately 2.0 years.

Restricted Stock Units

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Stock-Based Compensation Expense

Stock-based compensation expense recognized for all equity awards, including founder stock, has been reported in the statements of operations and comprehensive loss as follows (in thousands):

Stock-based compensation expense recognized for all equity awards has been reported in the statements of operations and comprehensive loss for the years ended December 31, 2025 and 2024 as follows (in thousands):

Research and development expense

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The Company records its best estimate of chargebacks, sales discounts and other reserves to which customers are likely expected to be entitled to as contra accounts receivable charges, and within accrued expenses if payable to a third-party or related to product returns on the balance sheets.

During the years ended December 31, 2024 and 2023, the

Company recognized $ 55.3 million and $ 0.7 million, respectively, of net product revenues related to sales of VOQUEZNA, VOQUEZNA DUAL PAK and VOQUEZNA TRIPLE PAK.

The following table provides a summary of the Company's revenue allowances and related accruals for the year ended December 31, 2024 which have been deducting in arriving at product revenues, net (in thousands):

Customer Credits, Discounts and Allowance

During the years ended December 31, 2025 and 2024, the Company recognized $ 175.1 million and $ 55.3 million, respectively, of net product revenues related to sales of VOQUEZNA, VOQUEZNA DUAL PAK and VOQUEZNA TRIPLE PAK.

The following table provides a summary of the Company's revenue allowances an d related accruals for the year ended December 31, 2025 which have been deducting in arriving at product revenues, net (in thousands):

Customer Credits, Discounts and Allowances

Rebates, Returns and Co-Pay Assistance

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Balance as of December 31, 2025

For the years ended December 31, 2025 and 2024, the pre-tax net loss from operations by jurisdiction is as follows (in thousands):

For the years ended December 31, 2025 and 2024 , the Company did no t record a provision for income taxes due to a full valuation against its deferred taxes.

A reconciliation between the provision for income taxes and income taxes computed using the U.S.

federal statutory corporate tax rate is as follows (in thousands):

federal statutory corporate tax rate for the year ended December 31, 2025 is as follows (in thousands):

Year Ended December 31, 2025

Tax computed at federal statutory rate

State tax, net of federal income tax effect (1)

Non-taxable or nondeductible items:

Permanent items

Stock-based compensation

Change in valuation allowance

Federal research and development credit

Changes in unrecognized tax benefits

Provision (benefit) for income taxes

(1) The states that contributed to the majority (greater than 50%) of the tax effect in this category are Arizona, California, Massachusetts, New York, and Tennessee for the year ended December 31, 2025.

A reconciliation between the provision for income taxes and income taxes computed using the U.S.

federal statutory corporate tax rate for the year ended December 31, 2024 is as follows (in thousands):

Year Ended December 31, 2024

Income taxes computed at the statutory rate

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Accordingly, the Company has provided a full valuation allowance for its deferred tax assets as of December 31, 2025 and 2024.

As of December 31, 2024 and 2023 , the Company had federal net operating loss carryforwards of approximately $ 863.2 million and $ 554.7 million, respectively, which are carried over indefinitely.

On July 4, 2025, the One Big Beautiful Bill Act, or OBBBA, was enacted into law.

The new tax law contains several key provisions affecting corporations including but are not limited to expensing of domestic specified research or experimental expenditures and one hundred percent bonus depreciation on eligible property after January 19, 2025.

In accordance with Accounting Standards Codification (ASC) 740, Income Taxes, the Company is required to recognize the effect of the tax law changes in the period of enactment, such as remeasuring the estimated U.S.

deferred tax assets and liabilities.

Because of a full valuation allowance, there is no net impact to deferred tax assets and liabilities for the year ended December 31, 2025.

The Company will continue to apply OBBBA tax law changes as required or elected in future years.

As of December 31, 2025 and 2024 , the Company had federal net operating loss carryforwards of approximately $ 1.0 billion and $ 863.2 million, respectively, which are carried over indefinitely.

As of December 31, 2025 , the Company had approximately $ 387.1 million of state net operating loss carryforwards that begins to expire in 2033 .

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Beginning balance

Increases related to prior year tax positions

Decreases related to prior year tax positions

Increases related to current year tax positions

1 unchanged sentence

As of December 31, 2025 and 2024 , the Company has gross unrecognized tax benefits of $ 3.7 million and $ 3.5 million, respectively, none of which would affect the effective tax rate due to a full valuation allowance.

The Company does not anticipate any significant changes in its unrecognized tax benefits over the next 12 months.

The Company's policy is to recognize the interest expense and/or penalties related to income tax matters as a component of income tax expense.

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Segment net loss

Restructuring

In May 2025, the Company implemented a cost reduction and organizational restructuring plan to reduce cash burn and focus resources on commercial execution.

In connection with the restructuring, the Company's workforce was reduced by 26 employees, or approximately 6 %, including certain leadership changes all designed to right-size the organization.

During the year ended December 31, 2025, total restructuring charges incurred were $ 9.2 million consisting of one-time termination benefits to affected employees for severance, non-cash stock-based compensation c osts, healthcare benefits and outplacement assistance.

The costs are included in research and development and selling, general, and administrative expenses on the Company’s statements of operations and comprehensive loss for the year ended December 31, 2025.

The following table summarizes activity related to the restructuring accrual during the year ended December 31, 2025 (in thousands):

Restructuring expenses incurred

Non-cash expenses

Balance as of December 31, 2025

Subsequent Events

In January 2026, the Company sold 6,875,000 shares of common stock at a price of $ 16.00 per share and pre-funded warrants to purchase 1,250,078 shares of common stock at a price of $ 15.999 per pre-funded warrant, which represents the per share price for the common stock less the $ 0.001 per share exercise price for each such pre-funded warrant.

The Company received gross proceeds of $ 130 million, before deducting underwriting discounts and commissions.

The net purchase price after deducting the underwriting discounts and commissions and other offering expenses, was $ 15.04 per share or net proceeds of $ 122.2 million.

On February 25, 2026, or the Fifth Amendment Closing Date, the Company entered into the Fifth Amendment to the Loan and Security Agreement, or the Fifth Loan Amendment, with the lenders, which, among other things, (i) provides for a new term loan tranche of $ 175 million, the proceeds of which, along with cash on our balance sheet, were used to repay in full the existing secured obligations outstanding under the Loan Agreement, including principal, capitalized payment-in-kind interest, existing final fee payments, and any applicable prepayment fees, (ii) provides for an additional loan tranche of up to $ 25 million which shall be available to the Company in the lenders’ discretion, (iii) extends the maturity date from December 1, 2027 to February 1, 2029, subject to further extension to December 1, 2030 upon the achievement of a specified revenue milestone and subject to a certain pro forma liquidity test;

(iv) extends the interest only period from October 2026 to December 2027, thereafter, monthly payment of interest and 2.5 % of the original principal amount advanced through the maturity date, with any remaining payments to be repaid in full on the maturity date, (v) changes the cash interest rate to 9.85 % (floating rate based on the greater of (a) US WSJ Prime + 3.10 % or (b) 9.85 %, (vi) eliminates the payment-in-kind interest rate of 2.15 % per annum, (vii) amends the prepayment charge, which is a percentage of the principal amount actually advanced under the Term Loans under the Fifth Loan Amendment, or each a Term Loan Advance and together, the Term Loan Advances, as follows:

(a) if the Term Loan Advances are prepaid after the Fifth Amendment Closing Date but prior to the twelfth month anniversary of the Fifth Amendment Closing Date, 2.50 %;

(d) thereafter, 1.00 %;

and (viii) provides for a new final payment fee which is as a percentage of the Term Loan Advances so prepaid, as follows:

(a) if the Term Loan Advances are repaid prior to September 2027, 1.25 %;

(b) if the Term Loan Advances are repaid after September 1, 2027 but on or prior to February 1, 2029, 2.00 %;

(c) if the Term Loan Advances are repaid after February 1, 2029 but on or prior to January 1, 2030, 3.00 %, and (d) if the Term Loan Advances are repaid after January 1, 2030, 3.50 %.

In addition, the financial covenants under the Fifth Loan Amendment include (i) a minimum cash covenant and (ii) a performance covenant, as follows:

Minimum cash covenant - The Company must maintain a minimum cash balance of 20 % of the outstanding principal balance at all times, which will decrease to 15 % of the outstanding principal amount upon the Company reporting and maintaining $ 75 million of trailing three months net product revenue.

Performance covenant - Beginning on the Fifth Amendment Closing Date and all times there after the Company must satisfy any one of the following:

Market capitalization exceeding $ 900 million;

Minimum cash balance of 50 % of the outstanding principal amount of term loans, which will decrease to 40 % upon achieving $ 65 million of trailing three months nets product revenue, and to 30 % upon achieving $ 85 million, of trailing three months net product revenue;

Trailing three months net product revenue equal to 75 % of projected revenue in 2026 and 70 % of projected revenue in 2027 and beyond, tested on a quarterly basis.

In connection with the Fifth Loan Amendment, the existing final fee payments under the Loan and Security Agreement in the aggregate amount of $ 11.5 million were fully paid to Agent and a facility fee of $ 1.8 million was also paid to the Agent.

EXHIBIT INDEX

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Warrant to purchase stock issued to WestRiver Innovation Lending Fund VIII, L.P., dated May 14, 2019

Note Purchase Agreement, dated May 7, 2019, by and among the Registrant and the other parties party thereto, as amended

Warrant to purchase stock issued to Hercules Capital, dated September 17, 2021

3 unchanged sentences

Form of Pre-Funded Warrant to purchase common stock

Phathom Pharmaceuticals, Inc.

39 unchanged sentences

Phathom Pharmaceuticals, Inc.

2025 Employment Inducement Incentive Award Plan and related forms of stock option, restricted stock unit and performance stock unit agreements thereunder

Employment Letter Agreement, dated March 31, 2025, by and between Steven Basta and the Registrant

Separation Agreement, dated April 2, 2025, by and between Terrie Curran and the Registrant

Separation Agreement and Release of Claims, dated May 18, 2025, by and between Azmi Nabulsi, M.D., M.P.H.

and the Registrant

Separation Agreement and Release of Claims, dated May 20, 2025, by and between Molly Henderson and the Registrant

Employment Letter Agreement, dated June 4, 2025, by and between Anne Marie Cook and the Registrant

Employment Letter Agreement, dated September 29, 2025, by and between Sanjeev Narula and the Registrant

Fifth Amendment to the Loan and Security Agreement, dated February 25, 2026, by and among Hercules Capital and the Registrant

Phathom Pharmaceuticals, Inc.

Insider Trading Compliance Policy and Procedures

Consent of Independent Registered Public Accounting Firm

Power of Attorney

Certification of Chief Executive Officer of Phathom Pharmaceuticals, Inc., as required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended

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PHATHOM PHARMACEUTICALS, INC.

/s/ Terrie Curran

Terrie Curran

/s/ Steven Basta

Chief Executive Officer

March 6, 2025

February 26, 2026

Pursuant to the requirements of the Securities Exchange Act of 1934, this annual report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Terrie Curran

Terrie Curran

/s/ Steven Basta

President, Chief Executive Officer and

Director (Principal Executive Officer)

March 6, 2025

/s/ Molly Henderson

Molly Henderson

February 26, 2026

/s/ Sanjeev Narula

Sanjeev Narula

Chief Financial and Business Officer

(Principal Financial and Accounting Officer)

March 6, 2025

(Principal Financial Officer)

February 26, 2026

/s/ Michael F.

February 26, 2026

/s/ Frank Karbe

February 26, 2026

/s/ Heidi Kunz

February 26, 2026

/s/ Asit Parikh

Asit Parikh, M.D., Ph.D.

March 6, 2025

February 26, 2026

/s/ Ted Schroeder

Ted Schroeder

February 26, 2026

/s/ Mark Stenhouse

Mark Stenhouse

March 6, 2025

February 26, 2026

/s/ James Topper

James Topper, M.D., Ph.D.

March 6, 2025

/s/ Terrie Curran

Terrie Curran, Attorney-in-fact

February 26, 2026

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis