Okay, we'll continue with the next session. Good morning, everyone. I'm Paul Choi, and I cover the biotech sector here at Goldman Sachs. It's my pleasure to have Phathom Pharmaceuticals here for our next session. And Steve Basta, CEO, to my immediate left. Maybe what we'll do is kick it off by letting Steve kind of introduce himself, maybe provide a little bit of background. There have been some changes at Phathom recently, and so maybe we'll start with that.
Perfect. Thank you so much for the invitation to join you and to participate in the conference. It has been a really good couple of days of meetings. It is a pleasure to get a chance to introduce the company to many of the investors that may be dialed in. I joined Phathom a couple of months ago in the context of sort of thinking about how do we accelerate our revenue ramp and really accelerate uptake of what is an extraordinary breakthrough product in the concept of acid-related disorders, and how do we help patients with reflux be substantially more comfortable than they have been in the past. We are in the midst of a launch of VOQUEZNA, which is a transformative product in this space.
We're seeing nice uptake, and there's an opportunity as we focus more on going deeper within the gastroenterology community to be able to drive and accelerate even faster uptake. We'll talk about that through the course of the day today. My own background is 30 years in the life science space, running a series of pharmaceutical and medical device companies in different commercial spaces and bringing renewed energy to the commercial launch.
Okay, great. Thanks, Steve. Maybe we'll start with what's most topical. Obviously, you had a little bit of news this week in regard to the FDA granting your citizen's petition. Now that you have the luxury of being able to do this, can you maybe walk us through, as you thought about what's happened with the FDA and your interactions and the process over the past few months? There was a disclosure after third quarter earnings that you had seemed to come to a loggerhead in terms of how you were thinking about the exclusivity. You filed the citizen's petition, and now it was granted to you just the other day.
I guess in terms of the conversation and discussions, sort of how were you able to convince the FDA after what had been seeming an extended period where you were at odds and disagreeing about how to think about exclusivity there?
Obviously, I've only been with the company for a couple of months. I don't have visibility on all of the past interactions, although all of the characterizations that I've heard in the context of the conversations with the FDA would suggest a very different character of the interactions than you're describing. There's no loggerheads. There was simply an interpretation that the company believed was appropriate, and the FDA took some time to deliberate it and consider carefully what was the right interpretation of the guidelines. What we had proposed to the FDA was that the right exclusivity period for the molecule would apply to distinct rules at FDA. One is the GAIN Act exclusivity period, and two is the umbrella policy. The GAIN Act provides an extra five years of exclusivity on top of the natural five years of exclusivity that comes for an NCE on first approval.
The umbrella policy says the same exclusivity period should apply to the same chemical entity across all indications. This was the first time to our knowledge that the GAIN Act exclusivity period, which is related to an anti-infective use of a product, would be applied to the same product being used in non-anti-infective uses. It was a new policy that the FDA had to consider carefully, and they wanted the time to consider it carefully. We provided them the time. We provided them the forum through the CP to be able to do that evaluation, and they came to exactly the same answer we did, which is that these two rules do both apply. If they both apply, you naturally apply the 10-year extension. I actually would characterize it very differently than you are in that context.
I think it's a time of careful deliberation on the part of the FDA through this process, and they came to exactly the right conclusion.
Great.
We are really pleased with where we came out. The simple answer for all of our investors, past history is sort of past history, and I realized that there was some noise around the communications of the fact that those ongoing discussions were happening. Where we are today is we have a clear exclusivity runway so that we have exclusivity through the 2032 timeline that we had requested.
Great. Let's turn to the commercial piece. The company has expanded commercial coverage quite a bit since the end of 2023. Can you maybe just sort of update us on what progress has been made more recently and just sort of what work needs to be done there? Secondly, where are sort of reauthorization trends, rates trending right now?
In terms of progress on the commercial ramp, we are continuing to see new writers adopting the product. We are continuing to see nice refill momentum. Once a patient starts using VOQUEZNA, they feel better. The simple reason why we've got a successful product and why we've got a successful launch is that patients who are on this drug feel meaningfully better than they do when they're not on this drug. That drives several good phenomena. One, it drives solid refill rates. Two, it drives feedback to the physician who prescribed that reinforces why they should be prescribing this product to more of their patients. That feedback loop, when it happens, when a patient is telling a physician, "Hey, by the way, doc, I feel so much better than I did before," has enormous momentum.
Over time, and this is one of the areas that we are focusing in a bit more, we are putting more and more emphasis on our GI outreach in the coming months. We are just in the midst of making that pivot right now to rebalance the amount of time that we are spending in primary care and the amount of time that we are spending in the GI community. The rationale for that is several-fold. One is I believe GIs will be faster adopters than primary care physicians of a new product that has application to multiple indications in the GI space. Two is they have a population of patients that has a higher need state for a product to reduce pain than does the primary care population.
If a patient is in a primary care office and has gastroesophageal reflux, if they're still in pain, they're often referred to a GI. The percentage of patients in a GI practice with reflux who are still experiencing pain is pretty high. Their patient population has a high need state for the product. Our increasing focus on GI is really around the fact that they've got patients that need this product. They're going to see the benefit by virtue of the patients providing the feedback. When that patient goes back to primary care, that's our pathway to convincing a primary care physician. That patient is going to be referred back to their primary care physician for long-term monitoring.
If they come back with a VOQUEZNA script, they're going to feel really significantly motivated to want to offer that to more of their patients. I think that the path through GI gets us not only GI penetration, but ultimately primary care penetration. As to how the launch has been going, really pleased with the first few quarters. I think there's an opportunity to accelerate the ramp. I think that this increased focus on the GI community over the coming quarters is an opportunity to even accelerate the ramp further.
Okay. Can you remind us, are there any major insurers or clients that remain to adopt or add VOQUEZNA to their list? Also, just in terms of where you are in thinking about potentially expanding Medicare and/or Medicaid coverage, can you just sort of update us on those coverage plans?
Our focus has really been on commercial coverage rather than Medicare or Medicaid. The vast majority of our reimbursed scripts are commercial scripts. We've got north of 80% of commercial-covered lives that have the kind of coverage that we want. Typically, it's a single step edit that a patient needs to have tried and passed through the use of a PPI. Typically, the patient who is getting VOQUEZNA is a patient who's had a PPI, often had a PPI for many years, sometimes tried more than one, but they're still experiencing significant pain from their reflux despite use of a daily PPI. That fits perfectly with the step edit that's required for most of our insurance coverage. Again, we're north of 80% coverage. I don't think we ever anticipate that we're going to get to 100%.
While we continually work on that number, we're in a pretty good place in terms of our broad commercial coverage. The majority of our revenue comes from the commercial-covered patients. We have relatively low coverage within Medicare and Medicaid.
Just on that last point, is it just that as you think about sort of net pricing and the government channel being just sort of relatively unfavorable versus your commercial coverage, is that sort of the primary deterrent?
It's not so much net pricing. It's just most Medicare patients don't end up getting the product very much. One of the things that we have done recently, and this is really around serving several interests. One is making the product accessible for patients. Two is making the product easy for a physician to prescribe. We've introduced through BlinkRx, who is one of our key partners in this process, we've introduced the opportunity for a Medicare patient who doesn't get coverage, because most Medicare claims get denied on this product, they have an opportunity to purchase the product on a cash pay basis. Now, it's at a price point of $50 a month, so we don't make much money on it. The majority of our revenue comes from the reimbursed commercial payments.
We want to enable a patient who's having significant pain to still get access to the product. It's the right thing to do for patients. If a Medicare patient doesn't have coverage, they can still access our product through the cash pay price point. It also enables a physician to have a broader patient base on the product and to not have to think twice when they're prescribing the product. They don't have to think about, is this patient commercial or is this patient Medicare? They can just prescribe the product and the patient can get access to it. If it's commercial, we can potentially get it covered. If it's Medicare and it's not covered, we can give the patient access on a cash pay basis.
Great. As we on the sell side and the investor community sort of track the scripts and as we look at the data, anything you would comment in sort of the trends to date this quarter through May, either in terms of the data that's publicly available or what can you say sort of on sort of the prescriber growth versus the last set of numbers you updated the market with first quarter earnings?
I won't provide anything that's not already publicly available, so we'll just stick to the publicly available information. If you look at the IQV numbers, I think you're seeing a nice uptick in Q2 versus Q1. Q1 was basically flat to Q4 of last year. That is the normal seasonality that you get, all the Q1 pressures, patients with new health plans with new deductibles. All of that transition from Q4 to Q1 is pretty standard in the industry. I know for a number of branded drugs, Q1 was light. In that context, we're now seeing a return to growth in Q2 and certainly pleased with that process. You can see that in the IQV trends. The IQV trends are a really good indicator of the momentum that we're getting in commercial coverage.
Okay, great. Maybe just as you think about, given the sort of limited data set that investors have and thinking about seasonality, is that something you would expect on the forward in future years, just sort of that Q1 pattern? Do you think in your mind going to be typical?
Yeah, I think in future experience, a Q1 softness every year, the magnitude of it is something that could vary from year to year. One of the things that we will be investigating is, is there a difference in primary care versus GI? Is there a way that our growth rate enables us to grow through that process? Whatever we do to try to accelerate growth in Q1, there is still going to be the natural seasonality. There is still going to be the softness. There are still going to be patients who are on new plans, who have new deductibles, who therefore are not receiving as much coverage. That pattern is always going to be there.
Okay, great. As is often the case with new company leadership, leadership often takes a look at the existing strategy, puts some things on pause, accelerates on some other things. I think you've done that to some degree with the marketing strategy. Can you maybe comment on what sort of metrics or impact you're seeing so far and some of the changes you've implemented? Maybe just remind us where you've implemented these changes, whether what aspects of DTC, digital, and so forth, and just sort of what your early assessment of these changes are.
Yeah, so I think that's really helpful. We are clearly shifting. The shift comes from a change in the underlying hypothesis that drives our commercial programs. There had been in our launch a broader belief that a broader population of the PPI scripts could be converted. That led to sort of an equal balancing of GI and primary care opportunities. A gastroenterologist or a primary care physician who wrote an equal number of scripts would get an equal weight in our call patterns. The presumption there was every PPI script could be converted. I bring a different thought process to it, which is our total available market is not all PPI scripts can be converted. It's really the PPI scripts in patients who are still experiencing pain. That's who's going to be motivated.
The patient who's not in pain is going to be adequately served with a generic PPI, they're going to be fine. If you take that different vantage point, what we're trying to do is we're trying to convert PPI patients who are still experiencing significant pain. More of those patients are in gastroenterology communities on a percentage basis. The same two physicians who prescribe the same number of PPI scripts, one's a primary care, one's a GI. The population of patients in the GI office got referred there because they were experiencing significant pain. They complained to their primary care physician that they were having discomfort. They sent them over to get scoped to make sure that there's not some other problem.
The percentage of patients in the GI office who are still experiencing pain is higher than the percentage of patients on PPIs in the primary care office. What that says is you're going to get a better hit rate by spending more time calling on GIs than by calling on primary care physicians. We are shifting that pattern. Now, that doesn't happen overnight. That takes one or two quarters to start to really play out. Because you call on more physicians, you have to call on a physician multiple times to get them to write the first script. You have to call on them multiple times to really get them to go deep, to start getting into the habit of writing every week, writing twice a week, writing three times a week, eventually writing every day. That evolution happens through multiple sales calls.
You're going to see that play out in our growth pattern over the next one or two or three or four quarters. As we go deeper into customers, we're also going to be spending more time going deeper into the customers that have already written. That will turn into fewer new writers potentially every quarter. That may not be as helpful a metric because in fact, we're shifting Salesforce time to go deeper with the physicians that are already writing. There's an opportunity to get physicians who have adopted this product or believe in this product writing every day because they're seeing patients every day who are experiencing significant pain. That tactical execution, particularly of shifting some time to GI versus primary care, reflects that underlying thought that it's really the patients who are still in pain that are our target and where are those patients.
That also gets to the DTC program and what is the return that we're seeing on the DTC program. I think the DTC program, just the broadcast and streaming DTC as opposed to digital, we are getting some returns on the digital activities. On broadcast and streaming, we're not seeing a significant return, partly because what I believe is happening, and there's not enough data yet to verify exactly what the pattern is. What I believe is happening is we are activating patients to go to primary care physicians who are then prescribing a PPI because the average heartburn patient is going to get a PPI first. In fact, that's how our access works is you need to get a PPI first.
Where we have an opportunity to switch patients is those patients that are in more discomfort that are in the GI practice, that's not really DTC sensitive, that's Salesforce promotion sensitive. What we've done in terms of our cost reductions that accelerates our path to profitability is we are reducing spend on those things that are not driving revenue. We are maintaining our spend on those things that are driving revenue, which is namely our Salesforce activity. That's what's really driving our conversions of customers and our growth rate. We are looking at how do we make the Salesforce call patterns even more effective and efficient. That should accelerate revenue despite the fact that we're saving a significant amount of money in OpEx. That should accelerate our path to profitability. We've communicated to the street a very clear expense target for Q4.
If we continue our revenue ramp, we're going to have clear visibility by the end of this year as to the timeline to profitability. We've communicated our expectation is to go profitable in 2026.
Maybe a few follow-ups on that. First, the DTC campaign was out for somewhat of a short time. Maybe do you feel like it just needed a little more time to sink in with the public in terms of receptivity?
No, I think it's too early.
Too early?
I think it's too early. I don't think it's going to work today. I think it will work in one or two or three years. It will work. We were talking earlier about what's that pattern in the GI office. Imagine a patient who's on omeprazole is getting nighttime heartburn, more and more nighttime heartburn. It's eventually getting them to the point where they're waking up at 3:00 A.M., they're in significant discomfort. They go to their primary care physician, doc, I'm still in pain. They've tried omeprazole, maybe they double their dose, they're still having nighttime heartburn, they're sending them over to the GI. That's a patient we should be switching. We should be switching them in the GI practice. They come in for their annual physical next year.
The doc has in their record, you know, you were having a lot of nighttime heartburn. How are you doing these days? Doc, you know what? When you sent me over to that other guy, he put me on VOQUEZNA and I feel amazing. Close that loop over the course of a year or two with primary care physicians hearing back from their patients how fabulous they feel and the softness within the primary care community to convert those physicians to prescribing so that the next time they have somebody come in with nighttime heartburn, they know this is the drug they need to get them because they've heard from their patient. At that point, we get significant receptivity to a DTC program because we send patients into physicians' offices. They've heard from their own patients how fabulous this drug is. That's where we're going to get significant penetration.
We're just too early in the cycle. Where we need to be in this cycle is we need to get deep adoption within the specialty first. From the specialty, those patients are going to be going back to primary care, convincing their primary care physician that this drug is meaningfully different. It feels very different than being on a PPI. That's when the market's going to be receptive to a DTC campaign.
Great. Maybe as a second derivative question to that is with the sort of change in the sales call point strategy, can you maybe comment on what has that done to sort of receptivity of BlinkRx as a potential option for?
We're seeing trends that are very positive in the context of continued adoption of BlinkRx. I think as we spend more time within a specialty office, it's easier with greater depth and penetration within that office to train everybody in the office to be sending the prescriptions to BlinkRx because we actually just have a better pathway through BlinkRx. They will do more rigorous follow-up to make sure that the prior authorization gets completed. They will do more rigorous follow-up with the patient to make sure that the patient gets their refills. It's just a better commercial channel overall to be able to support both the physician and the patient to get access to the product. Where the product isn't covered, BlinkRx has a very efficient system for allowing a patient to get access on a cash pay basis if they're not getting coverage.
If a patient is getting the product covered through insurance, they're getting a $25 copay. If they are not getting coverage, they're having the opportunity to get the product at $50 per prescription on a cash pay basis. It's a win either way for the patient. As a physician realizes that this is a win for their patient, they are sending more of their scripts over. As we spend more time going deep in terms of the relationships with those offices, more and more offices are sending the scripts to BlinkRx. That's exactly where we want them to go. That wins for everybody in the system.
Great. Can you maybe just remind us how many of those are historically, at least in the last quarter, were converted successfully to a covered one? On the forward, how are you thinking about Blink as sort of the steady state mix of your prescription drivers versus sort of regular normal way prescription filling?
Right. When we talk about Blink, there are two different definitions that the investment community and they sometimes get a little bit convoluted. Operationally, when we think about a prescription going to Blink, we think about the prescription going to Blink and sometimes it's covered and sometimes it's cash pay. I know that the way that some of the investment community has been modeling this, they really think about Blink as a proxy for cash pay and think about IQVIA as being the reimbursement scripts and Blink as the cash pay scripts. Yeah, that is true, except that a whole bunch of the IQVIA scripts actually went to Blink.
Or came from BlinkRx.
Or came from BlinkRx. The script originally went to BlinkRx, it got submitted, it got covered. If it gets covered, it goes into the IQVIA numbers. The proxy for our revenue that's really helpful is to look at the IQVIA numbers. On top of that, there's a cash pay portion at BlinkRx, but it doesn't generate that much revenue for us because it's low dollars per script. It doesn't change the dollar revenue numbers significantly. It does change total filled scripts, but the filled scripts that are reported through IQVIA are the ones that are getting covered. Those are the ones that actually contribute more disproportionately to our revenue numbers.
Okay. Great. I want to ask maybe as you think about sort of next steps and monitoring your commercial strategy, when are you going to start to think about what metrics make sense to you in terms of what you've done and sort of think about ROI and just when do you feel like the investment community or in terms of either sales numbers, prescription numbers and so forth will be able to see a tangible change and/or inflection here?
I think that the investment community is going to simply use our TRX numbers as well as our revenue numbers as the key metrics for our ramp. Now, internally, we are going to be looking at a number of things that aren't visible to the outside community regarding our sales call effectiveness, our ability to go deep within prescribers, the number of scripts we're getting per prescriber and sort of working through a number of other metrics that are just operational execution metrics that we're going to be tracking, that we're going to be trying to drive growth and trying to really drive depth. I want to get every gastroenterologist in the country prescribing this product. We've got a significant number of them, but we're expanding our call pattern to basically every GI. They should all be prescribing this product. They all have patients that have this product.
They should be prescribing this product daily. They should be prescribing this product multiple times per day because they're seeing multiple patients a day that need this drug. How do we really go deep within that community and how do we create that depth and those growth patterns within that specialty call point? We're going to be working very tactically at how do we do that. What's going to be meaningful to the investment community? I'm sure what you're going to be tracking is overall script numbers and overall writers. We've already communicated that we think the analyst consensus estimate for this year, which is around $160 million, is sort of a reasonable estimate. We don't actually officially provide guidance, but I think it's helpful to at least give the directional context that, hey, that's a reasonable number for the year.
We're going to keep on working to accelerate the ramp, but I do get that with this tactical repositioning of Salesforce time to go deeper within GIs, that should pay off, but it could take one or two or three quarters to really start to pay off. You may not see it immediately in the call trends, but a quarter out, two quarters out, you're going to start to see some impact. Three quarters out, even more impact because we're going to be getting more and more traction. That's what you should hold us accountable to is, are we going deeper in the GI community? Are we getting penetration in all of GIs? Is this becoming a staple product in the GI community?
We'll be having a conversation about in 2026, 2027, when do we start expanding into primary care more effectively and what do those growth patterns look like to make this a billion-dollar drug? What does that look like to make this thing a really big successful product? We are on a path to do that in a meaningful way.
I want to talk a little bit maybe on a different subject, which is extracting the maximum potential value out of the molecule here over the coming years. We have been following sort of life cycle management plans, but it seems like some of these plans have been put on pause for a little bit. Things like EoE had been discussed as a potential next opportunity or indication for vonoprazan. Can you maybe just update us now that you are in the C-suite, just how you are thinking about potentially reapproaching those life cycle management plans? Is EoE still a focus or should we think about other programs being sort of top of mind with you?
I think EoE is a significant opportunity. It's a significant unmet need state. It's an indication for which the first-line therapy today, even though they're not indicated for the indication, it's a population for which first-line therapy today is PPIs. If mitigating acidity in the stomach is already the first-line therapy and we've got an agent that mitigates acidity in the stomach better, this should become first-line therapy in that population. It clearly would be a market expanding opportunity for us. There are a number of those opportunities. There are a number of other indications as well where there are market expanding opportunities. Now that we've got clarity on the timeline, it reopens the question of which indications and when do we do that trial. Do we do that trial? We had announced in our earnings call that we'd paused it.
One of the factors in pausing it was we had uncertainty about exactly where the CP decision would come out. If we had uncertainty as to whether we had a 2030 exclusivity or 2032 exclusivity, the time available to realize the market expansion opportunity is different in those two scenarios. Now that we have a longer runway, I'm going to be meeting with the team in the coming weeks and reevaluating, do we do that trial? Is that trial the right study? Are there any changes that we would make to it before we start that trial? We'll be providing that guidance in the coming weeks or months to the street as we get to the clarity on that decision. We don't have that decision today, but it is exactly on point as a question that we would reopen.
Okay. Maybe as a follow-up to that in terms of expanding the or extending the regulatory period, one of the considerations also is a pediatric indication. And so sort of what are the, I guess, challenges of doing a pediatric study in this population and just how soon would you make a go or no-go decision on that potentially?
The pediatric extension is actually one of the variables that play in the context of thinking about the EoE trial. One of the things that FDA has asked for with the guidance that they introduced a few years ago is in the context of the pediatric exclusivity six-month extension, they are often now requesting a new indication data, not just data in children in the existing indication. We have to do the studies in GERD in children. That's part of our post-approval requirements. In addition to those studies, extending it to a new indication in EoE is one of the potential opportunities to do that. That's a part of the consideration. The EoE study is what is the path to getting that extension? Will this qualify? How do we work through that process? We're going to be assessing that.
Okay.
Because we absolutely do want to get the six-month extension if we can get it.
Sure. Of course. I want to ask a little bit about the longer-term strategy as well. The company in the past has talked about potentially considerations of an OTC program as well as an authorized generic. What are your views on those two potential strategies and life cycle management options? Is there a preference for one or the other? Just how do you think about going and developing those programs?
So I think an OTC switch for this product eventually happens naturally, but it happens much closer to the loss of exclusivity date. This is seven years out. It's a thing we're going to evaluate and we're going to do that assessment, but there's no urgency to having to figure it out today. We've got enough runway that we've got some time to do some careful, thoughtful planning in that process. Similarly, the concept of an authorized generic, again, I've seen companies do that very late in their exclusivity window. Is that a 2031, 2032, 2033 kind of thing? Maybe. Haven't analyzed it yet. Haven't looked at it. We've got a whole bunch of runway before we think about what that looks like.
Okay. Continuing on the thread of sort of longer-term planning, what is your appetite now that you've come into the company about either working on internal pipeline development outside of vonoprazan or potentially looking externally and getting another asset for extending or adding to the pipeline here?
Right. I think there's three ways to think about expanding our market opportunity within the context of indications. One is new indications for vonoprazan, EoE being a perfect fit for maybe others. Barrett's and others might be possibilities. The second opportunity is thinking about combination products where vonoprazan plus something else might provide meaningful advantage because there are a number of things that work in combination with PPIs and there may be some things, some opportunities that are combinations. We will evaluate those as well. The third, and one that we are actively starting to look at, is in licensing other molecules. Thinking about the fact that we've already invested in building a commercial organization that has the capability to do clinical development, regulatory work in GI, and significant deep clinical and regulatory expertise.
Now with the increased GI commercial focus, we're going to have a sales organization and an MSL team that has relationships with every gastroenterologist in the country. And With the importance of this product to their patient base, really deep relationships in the coming years with every gastroenterologist in the country. That is an enormously powerful base from which to launch new products. There will be, and there already are, products in the GI space where they have good clinical data. In the current VC funding environment, it's hard to raise money to fund clinical programs in some cases. There may be assets that are available. I expect we're going to look at 10 or 20 of them in order to find one or two that are interesting. I don't know exactly what the timing is. I don't know which specific opportunities there will be.
The opportunities are plentiful in terms of products that have meaningful clinical data, meaningful commercial opportunities where it's more cost-effective for us to develop it and it's more cost-effective for us to commercialize it than it would be for a standalone company to do so. That's the opportunity to leverage what we have to build a leading GI franchise that has sustainability beyond 2032, 2033 kind of date.
Okay. Steve, earlier you talked about having visibility into profitability perhaps as early as next year. Following up on that, I just want to ask how you're thinking about your capital needs and capital position over the coming years.
We don't anticipate that we're going to need to raise additional funds. It's possible that we might choose to do so, but we don't anticipate that we're going to need to. The intention of bringing down our operating expenses, and we've communicated that the expectation is to bring OpEx to below $55 million by Q4. The pattern that you're going to see is Q1 obviously had much higher OpEx. Part of that was the DTC program, but part of that was pretty aggressive spend in a number of areas. Q2 will still be high. It'll probably be a little bit lower than Q1, but still pretty high because a lot of the expenses we couldn't turn off during Q2. We just announced May 1. We're in the middle of Q2.
Sure. Not on a dime.
You can't turn things off immediately. It takes one or two or three months to turn some of the activities off. Q2 is still going to be really high. Q3 is going to come down substantially b y Q4, we've committed to being below $55 million. As our revenue ramps, I think most of the analysts have us in the $50-$60 million kind of run rate by Q4. We're not profitable yet by Q4, but obviously the burn gets diminished substantially and it positions us to getting to profitability in 2026. Now, obviously our cash number is going to come down because we're going to burn a bunch in Q2, we'll burn less in Q3, burn even less in Q4. Our expectation is that we can stay north of our deck cutting and not need to raise cash.
It's possible that we get close and we choose to raise a little bit, but we're not going to need to do a financing most likely. That positions us to then be generating positive cash by potentially the second half of 2026 and be in a really good place in terms of our ability to, in the future years by 2027, 2028, be making investments in new clinical programs, in new products, and building out a full GI pipeline, but do so out of operating cash flow rather than out of investor capital.
Okay. Fortunately, we've run over time here, so we'll have to end it on that note.
Thank you.
My thanks to Steve Basta for joining us.
Paul, thanks so much. Real pleasure.