Craig-Hallum bullish on Phathom Pharmaceuticals, initiates with a Buy

As previously reported, Craig-Hallum analyst Chase Knickerbocker initiated coverage of Phathom Pharmaceuticals with a Buy rating and $21 price target. The firm believes Phathom is trading well below fair value, with a differentiated new drug for the largest GI indication, gastroesophageal reflux disorder. While it notes that the drug, vonoprazan, has recently been delivered a CRL for a nitrosamine impurity found in initial commercial batches, Craig-Hallum believes this issue will be corrected, and levels are already below the acceptable limit as determined by FDA. Now Phathom must just prove that nitrosamine levels do not increase over time, which requires stability data that should be in hand today, the firm says.