Phathom Pharmaceuticals, Inc. (PHAT) Earnings Call Transcript & Summary

Good afternoon, and welcome to Phathom Pharmaceuticals Virtual Investor Day. Thank you for joining us. My name is Todd Branning, and I'm Phathom's Chief Financial Officer. We have a very exciting and robust agenda today. As a housekeeping item before we begin the meeting, I want to make you aware that at the end of today's presentations, we will hold a Q&A session with our meeting presenters, including both our key opinion leaders and select members of Phathom's management team. You may submit questions at any time using the text box below your webcast window. We will try our best to answer as many questions as we can during the Q&A portion of the meeting. If you have questions after the meeting concludes, please send them to [email protected]. As a reminder, matters covered in today's presentation, including the accompanying slides, include forward-looking statements. Such statements involve risks and uncertainties that may cause actual results to differ materially. A discussion of these statements and risk factors is available on the safe harbor statement slide as well as under the heading Risk Factors in our SEC filings. All forward-looking statements speak as of the date of this presentation, and we undertake no obligation to update such statements. Now to begin the meeting, I would like to turn the webcast over to Terrie Curran, Phathom's President and Chief Executive Officer. Terrie?

Thank you, Todd, and welcome to Phathom's First Virtual Investor Day. Thanks for joining us. I'm absolutely thrilled to have with me today several members of the senior management team at Phathom: Azmi Nabulsi, who came to us from Takeda has deep gastrointestinal experience; Martin Gilligan joined us from Celgene, where he was fundamental and instrumental to the launch of Otezla and also has extensive launch experience in both primary care and other specialty categories; and Todd Branning, our CFO, who has extensive financial experience, most recently from Amneal. We also have several distinguished KOLs that have joined us today, Dr. Stuart Spechler, Dr. Colin Howden and Dr. Ronnie Fass. Thank you for joining us. I'd now like to talk a little bit about our lead asset at Phathom, a potassium competitive acid blocker. One of the holy grails in the acid [indiscernible] category, the first innovative therapy for acid-related disorders in more than 25 years. We have licensed vonoprazan for the U.S., Europe and Canada from Takeda. This is a largely derisked asset, having been approved in 14 countries across Asia and Latin America, and most recently, in Mexico. It's on the market in Japan, generating revenue of more than $725 million and most recently became the market leader in Japan overtaking Nexium, and has more than 90% of the H. pylori market. Importantly, it continues to grow at more than 17% year-on-year, that's in the sixth year in the marketplace there. The company went public in October of 2019 and raised capital of $209 million. This provides an overview of our promising late-stage opportunities in our pipeline. We have 2 large Phase III programs, specifically in GERD, in the healing of erosive esophagitis and the relief of heartburn, and also the maintenance of healing in erosive esophagitis and the relief of heartburn. And as we reported out most recently, we've completed enrollment for that study, and we expect top line results in the second half of 2021. The second program in H. pylori, we're studying both dual therapies with vonoprazan and amoxicillin as well as triple therapy with the addition of clarithromycin. That program is accelerating, and we expect to read out that -- expect to complete enrollment in January of 2021 and read out the top line results in the second half -- in the Q2 of '21. I'm thrilled to announce today that we will be embarking upon a Phase II program in mid '21 with the treatment of heartburn associated with non-erosive reflux disease, or NERD, a major category within GERD, which the team will talk about a little later in the program. The team has really made great progress for a young company in building a leading biopharma company. I want to address the pipeline that I just discussed. We have received FDA Fast Track and QIDP designation in a combination with certain antibodies with vonoprazan for the H. pylori indication and target NDA submissions in the second half of '21 for the HP and for 2022 for erosive esophagitis. We've also received agreement from the FDA on the proposed initial pediatric study plan. Importantly, the team has made outstanding progress in preparing for the launch. We've assembled an experienced and proven executive management team and recently made key leadership appointments in commercial, medical, market access and finance, and importantly, have established commercial supply from multiple manufacturing sources. We're also well capitalized with $209 million from the proceeds of an IPO. We recently filed our S-3 shelf registration and have initiated an ATM facility in November of 2020. Over the next 2 hours, we had a program that will cover -- Azmi Nabulsi will cover the clinical profile of vonoprazan and the MOA. He'll discuss the Phase III trial design and the planned indication expansion. Dr. Spechler will discuss the GERD classification and prevalence of the disease. Importantly, the impact that it has on the quality of life, asset control and healing. Dr. Howden will discuss H. pylori treatment limitations, and then I'll present potential to deliver a superior therapy. And Dr. Fass will address NERD, the unmet needs in the marketplace and why we believe vonoprazan's profile can address some of that unmet need. Martin will then cover the market opportunity and focus on the commercialization strategy, and then Todd will provide a financial update. With that, I'd like to now hand over to Azmi Nabulsi. Azmi?

Thank you, Terrie. So I'd like to start the story with vonoprazan by describing the mechanism of action. As the story of vonoprazan really comes down to its distinct mechanism of action in relation to PPIs. Although both target proton pumps, they do it differently. A key point to highlight is that the proton pumps are a tricky target because they are constantly switching between active and inactive states in response to stimuli like food. And also, they have a high rate of turnover with new pumps coming online each day. PPIs covalently bind to and inhibit only the active pumps and have a short half-life of 1 to 2 hours. And thus, they are not present to inhibit the new pumps that come online later in the day. As such, PPIs have slow onset, takes about 3 to 5 days for them to start, limited potency, limited duration of action. On the other hand, vonoprazan, a P-CAB, unlike PPIs, it is a competitive enzyme inhibitor and it has been the holy grail for the type of inhibitors sought after for a while now. Hence, unlike PPIs, vonoprazan inhibits both active and inactive pumps, is stable in acid and has long plasma half-life with a very slow dissociation rate. So it can cover the full 24-hour dosing interval, regardless of which state the pumps are in. Because of all of that, vonoprazan produces rapid, potent and durable effects on the pumps. These mechanistic differences are best demonstrated in this head-to-head study that compared vonoprazan to Nexium. This is a big PD study. On day 1, Nexium barely moves the pH above four, while vonoprazan rapidly moved the pH to 7. Now going to look at day 7, on the right-hand side of the slide, Nexium, which is at a steady state at this point, it never gets the pH to 7 and allows the pH to spend a fair amount of the dosing intervals, especially at night, below 4, below pH 4. On the other hand, vonoprazan almost always gets the pH above 4, significant portion actually in the 6 to 7 range. And is 1 to 2 pH points higher at any given time point compared to Nexium. Now to point out, this is a log scale. So vonoprazan translates actually to being 10 to 100x more potent than Nexium in the study. These results are great PK/PD demonstration of how vonoprazan is more rapid, potent and durable than a PPI. Now before moving to the efficacy element, let me make a point or 2 on safety. We are in a very unique situation that at this stage of running Phase III trials, we have significant amount of safety data. We have over 7,000 patients exposed to vonoprazan in the clinical trials and over 25 million patients received vonoprazan in the marketplace. So we have very well-characterized safety profile. Overall, vonoprazan's safety profile is very similar to that of PPIs. Now moving to talk specifically about our program in GERD. As a brief high level background, and Dr. Spechler will speak to this in a lot more detail. But what I want to highlight here that GERD is a very highly prevalent disease and its treatment represents 1 of the largest drug categories. In the U.S. alone, about 6.8 billion doses of PPIs were prescribed last year, and this does not even include OTC. Despite the availability of PPIs and other anti-secretory agents, there is still significant unmet need, as about 30% of patients remain inadequately treated with PPIs. Now GERD patients typically present with GERD-like symptoms and are treated empirically without undergoing endoscopy. And for those patients who undergo endoscopy, typically due to persistent symptoms, they are diagnosed with either having EE, erosive esophagitis, or non-erosive disease, which is NERD. Regardless of which paths the patients undergo, the unmet needs remain high. And we'll go over that in more detail throughout the presentation. To specifically speak of erosive esophagitis, more rapid, more potent and durable healing and symptom relief is needed. And for patients with this disease, we are currently running a registration program to address the unmet needs in both healing and maintenance parts of that disease. Before describing our study -- our review data that we have from Japan, showing how vonoprazan fares in relation to those unmet needs I just described. This is the data from Phase III study that was done in Japan in erosive esophagitis healing, comparing vonoprazan to lansoprazole, which is Prevacid. Vonoprazan was clearly superior to lansoprazole, in particular, the 2 weeks data on the left-hand side of the slide. This data showed that vonoprazan healed patients faster than lansoprazole. Also, on the right-hand side of the slide, higher potency was demonstrated by vonoprazan with a clear differentiation, even further differentiation from lansoprazole in those patients with more severe disease, grades LA C/D. So this study demonstrated the faster onset of effect and the more potent effect of vonoprazan. Now what is even more remarkable are the data from the erosive esophagitis maintenance study. On this slide are the data from Phase III maintenance study done in Japan. This is in patients who have healed lesions and then given continuous therapy to measure how many of them will have their lesions recur while on treatment for 6 months. And as you can see in this study, vonoprazan patients had recurrence rates in the low single digits, while those on lansoprazole had recurrence rates as high as 39% in patients with more severe disease. Such low recurrence rates seen with vonoprazan actually have not been seen with any other agent. This is a testament to the durability of effect that vonoprazan provides. Such data promises significant positive clinical impact and potentially very positive economic impact. Now in a smaller study, done in Japan as well that specifically looked at heartburn symptom relief, vonoprazan compared to lansoprazole in the study as well, showed that it relieves symptoms better and faster than lansoprazole, as it started doing so on the first day versus the 3 to 5 days lansoprazole needed to start showing effect, which is very consistent with other PPIs. Also, PPIs do not adequately control nighttime symptom. And as you can see in this study, vonoprazan did a much better job of controlling nighttime symptoms compared to lansoprazole, as seen on the right-hand side of the slide. Now based on the data I just shared from you from the EE study in healing, the EE study in maintenance and the symptom relief study, you can see vonoprazan ticked every box of what is currently needed in EE treatment, more rapid, more potent and more durable effect on healing as well as 24-hour symptom relief. And this is what we aim to show in our program. So this is -- on this slide is the study that we are currently running. This is our Phase III study, which have completed enrollment, and currently, all patients are into treatment phases of this study. Our study has 2 parts: a healing phase and a maintenance phase. And in this study, we are comparing vonoprazan to lansoprazole, testing for noninferiority at the end of each phase, which is all what we need for approval. But also, we will be testing for superiority at certain key points in the study. And if we achieve those, all of that will be in the label. The study is duressed from a clinical and regulatory perspective, and its design mirrors the studies done in Japan, which I have shared with you a few minutes ago. The study is aimed to give us 3 indications: a healing indication, a maintenance indication as well as heartburn symptom relief indication. And I would like to point out that this study design has been discussed and agreed with the FDA and EMEA. And they both agreed that this study plus the data generated in Japan can be the basis for the NDA. No additional efficacy or safety data were requested. Now let me zoom a little bit deeper into the statistical element of this study. In the healing phase, the primary end point for approval is non-inferiority on healing of EE by week 8. Our study has over 90% power for non-inferiority with a margin of 10%. If the primary end point in this portion of noninferiority is met, we will assess the secondary end point in the order as shown on the slide here. First, we will assess non-inferiority for heartburn relief over the 8 weeks period. And we have a 90% power for that. Then we will move to assess superiority at week 2 in grades LA C/D patients and then superiority on onset of heartburn resolution by day 3. Now on the maintenance portion of the study on the statistical elements of that, the primary end point for approval is non-inferiority on the percentage of patients that maintain healing as assessed by endoscopy at week 24. For this test, the study has over 90% power for non-inferiority at 10% margin. Now if the primary end point of noninferiority is met, then we'll move on to assess the vonoprazan 20 milligram superiority first, and that's over lansoprazole. And we'll assess on healing maintenance for -- first for patients with grade C/D and then for all comers. This then will be followed for non-inferiority test on heartburn relief. If we pass those tests we'll move on to testing the 10-milligram dose in the same order. We have 90% power for all these tests as well. Now with this, I will pause and pass the stage to Dr. Stuart Spechler, who will describe erosive esophagitis and GERD overall in a lot more detail than I did. Dr. Spechler?

Thank you, Azmi. So let's talk a little bit about erosive esophagitis and GERD. Now this slide shows you an endoscopic photograph. This is actually one of the patients in the erosive esophagitis study. And you can see why we call this erosive esophagitis. Those whitish areas that you see at about the 3 o'clock area, the 6 o'clock area, those are erosions. We also call those mucosal breaks. And this is very typical of what we find in patients with bad reflux disease, bad GERD. Now GERD is essentially a plumbing problem, where there's a leaky valve at the end of the esophagus. That valve, called the lower esophageal sphincter, is supposed to remain tightly closed to prevent the reflux of acid and other noxious material in the stomach from coming back into the esophagus. When that -- not just material, the acid from the stomach does come back into the esophagus, as it has in the patient in the slide, it causes the typical symptoms of heartburn, which are heart -- I'm sorry, GERD, which are heartburn, a burning sensation behind the breast bone, and regurgitation, where material actually comes up into the mouth, gastric material actually refluxes all the way back to the mouth. Next slide, please. Now as Azmi just mentioned, this is an extraordinarily common problem in the United States. Survey study suggests that about 20% of adult Americans have bothersome heartburn at least once each week. And as a nation, it's been estimated that we spend over $12 billion each year for the evaluation and treatment of GERD. Now when patients with typical GERD symptoms of heartburn and regurgitation go to see a doctor, they're frequently treated just on a symptomatic basis and usually with proton pump inhibitors. So we don't send everybody for endoscopic evaluation. Patients who either don't respond to the proton pump inhibitors or who get symptoms back after they stopped the proton pump inhibitors, those will have an endoscopy. And the endoscopy will separate these patients into those with erosive esophagitis or those with non-erosive reflux disease. And GERD, by this so-called Montreal definition, is a condition that develops when the reflux of stomach contents into the esophagus causes troublesome symptoms and/or complications. Now what happens when we do an endoscopy on patients with those typical symptoms of heartburn and regurgitation? Well, only about 30% of the time do we see this reflux esophagitis, like you see on the left-hand portion of the slide. Again, that's also called erosive esophagitis or those erosions are also called mucosal breaks. But in the large majorities, 70% of patients with typical GERD symptoms, we don't see esophagitis. We see what appears to be a normal-looking esophagus. And those are patients with non-erosive reflux disease, or NERD, is the acronym. And I think Dr. Fass will be talking a lot more about that in his lecture later today. Now we grade reflux esophagitis using this so-called Los Angeles grading system. And this is what we're using in the erosive esophagitis study. I don't think it's critical that you know all the details of the LA grading system, but just know that it scores patients on the basis of mucosal break size and extent. Either as LA A, where you see on the left-hand panel there, that little mucosal break and LA B, the arrows are pointing to a much longer mucosal break. LA C shows that those mucosal breaks have now extended between folds in the esophagus. And LA D esophagitis, more than 75% of the circumference of the esophagus is involved in mucosal breaks. This slide just emphasizes how common these symptoms are. Now this is another western population. This was a study that was done in Sweden. And it's an interesting study because they sent out questionnaires to random people in the population, asked them if they had GERD symptoms and then invited those people to come in and have an endoscopy. So that's something like you would just be sitting in your home and have open a mail and say, oh, I'm invited for endoscopy. Well, about 20% of the population had weekly GERD symptoms very much in accordance with studies that had been done in this country. And the people who accepted the invitation to come in and have an endoscopy, 15% were found to have erosive esophagitis. Now our study is looking specifically at patients with erosive esophagitis. And if you look at the breakdown of the LA classification of patients with erosive esophagitis, you'll see that roughly 1/3 have LA Grade A esophagitis; 39% LA Grade B; 20% C; and 7% Grade D. Now what happens when you have bad reflux? There's a lot of complications that can develop, okay? The first panel here on the left shows that, that acid that refluxes back up into the esophagus can actually cause an erosion deep enough that we would call it an ulcer. Now that ulcer can heal. And when it does heal, it can sometimes heal with the deposition of scar tissue. Imagine if you had a gash on your hand or something like that, a deep gash can heal with scarring. And if the esophagus scars it can narrow the passage and give patients a lot of difficulty swallowing food. Now that ulcer also can heal with an abnormal lining. So instead of healing with the normal lining of the esophagus, it heals with an abnormal lining that under the microscope looks more like the intestine than the esophagus. That's the third panel that you see there. That's called Barrett's Esophagus, when the esophagus heals with that abnormal lining. And you can see it, it's very clear that there's a difference in the color of the lining of the Esophagus at the end there, with the reddish area representing what we call Barrett's Esophagus. And Barrett's Esophagus is a problem, because it predisposes to cancer, a specific type of cancer of the esophagus called adenocarcinoma, which has been increasing at a very alarming rate for the past several decades. So GERD is not just heartburn, it can be complicated disease. Now for the past 30-plus years, we've used proton pump inhibitors as our first-line treatment for bad reflux esophagitis. You can see that there's 6 available in this country. There's omeprazole, lansoprazole, rabeprazole, pantoprazole, esomeprazole and dexlansoprazole. Again, they were introduced, the first one, omeprazole, in 1989. And there's really been no update. There's -- this is what we use. This is our go to first-line medication for severe GERD, essentially unchanged for the past 30 years. Now many of these are available over-the-counter, some are not. Now you don't always see a complete response of symptoms to patients that you put on proton pump inhibitors. There is a study that was done to compare 2 proton pump inhibitors, esomeprazole and lansoprazole. And you can see that at 4 weeks, more than 37% of patients in both groups still had incomplete GERD symptom relief. You can see that days with heartburn during the first 4 weeks and nights with heartburn. These proton pump inhibitors did not get rid of all of these symptoms. So what are the limitations of the PPIs? Well, we see that there is some endoscopic and symptomatic relapse despite being on maintenance treatment. And the dosages for these different agents, by the way, vary fairly widely. There's incomplete symptom control, I've just shown you. We can have breakthrough of nighttime heartburn. Now as Azmi explained earlier, the PPIs have to be dosed before meals. The reason for that is the PPIs only bind to stomach cells that are actively secreting acid, and that happens during meals. When you're fasting, only about 5% of your proton pumps are active, but when you're eating a meal, about 60% to 70% are active. So they really do require dosing around meals, with the possible exception of dexlansoprazole. They're also metabolized by this enzyme called CYP2C19. It's an enzyme that metabolizes a lot of different drugs. But there's genetic variance in the population, so some people are slow metabolizers, other people are a very rapid metabolizer. If you're a very rapid metabolizer, it means you're getting rid of that proton pump inhibitor very quickly, and it may not be around long enough to control acid very well. And as you've seen, there's data on incomplete erosive esophagitis healing, especially with the more severe grades of erosive esophagitis. The LA Cs and Ds. You've seen this slide already, that vonoprazan demonstrated faster, more potent and more durable asset control than the PPIs. Certainly, that's absolutely the case on day 1. So rapid onset of action is definitely an advantage of this P-CAB over a PPI. And even by day 7, you're still seeing better acid control with vonoprazan than with esomeprazole. This was a study that was done in 20 healthy Japanese men. So in summary, compared to PPIs, vonoprazan seems to exert more rapid and more profound control of stomach acid secretion. It does not have this requirement that it needs to be dosed around meals. It's not subject to the variable metabolism because it's not metabolized primarily by that CYP2C19 enzyme that metabolizes the proton pump inhibitors. And it seems to provide more rapid healing of erosive esophagitis, especially in the more severe grades. Certainly, the studies from Japan certainly suggest that it does. And that there is superior maintenance of healing. And I thank you for your attention.

Thank you. Thank you, Dr. Spechler. And now we'll more shift gears to H. pylori. So let's talk specifically about H. pylori. At a high level, and Dr. Howden will speak to this in a lot more depth. But at the high level, H. pylori is a very prevalent disease. And if left untreated, it can lead to serious sequelaes such as gastric cancer. The challenge with managing H. pylori is that the eradication rates have been declining over time to where it is today around 80%, which is not acceptable. This is mainly due to increased resistance to antibiotics, in particular to clarithromycin. What is needed now is either better antibiotics, but none is in the horizon, or an agent that can improve the efficacy of current antibiotics. And that -- and this is where vonoprazan comes in. Vonoprazan very efficiently and very effectively raises the pH level to above 6. And at that pH level, antibiotics are more potent and H. pylori is more vulnerable. So let's see how this translated in clinical trials. This is the Japan H. pylori Phase III study. vonoprazan triple regimen, which is vonoprazan plus clarithromycin plus amoxicillin, was compared to lansoprazole plus the same antibiotics. Vonoprazan regimen was clearly superior to that of lansoprazole, and it achieved a remarkable eradication rate of over 90%. Also, it's worth noting that vonoprazan helped clarithromycin overcome some of the resistance from H. pylori with even a greater separation from lansoprazole in that subpopulation, as seen on the right-hand side of this slide. Now the question was asked, do we even need clarithromycin? That is would vonoprazan plus amoxicillin alone can be enough? Two smaller Japanese studies were specifically designed to answer the question. In those studies, vonoprazan dual regimen achieved over 90% eradication, thus giving us a very strong proof-of-concept that this regimen can work. Accordingly, vonoprazan has the potential, when you look at the triple regimen, dual regimen data, vonoprazan has the potential not only to achieve over 90% eradication rate but potentially do so with 1 antibiotic. If so, this will be a great step forward in the field. Hence, comes the design of our study. This is our ongoing Phase III study, which Terrie earlier announced that we will complete the recruitment for in January and results would be coming after that. So this study that we're doing has 2 vonoprazan arms, 1 triple and 1 dual regimen. Each is to be compared to vonoprazan triple regimen and will be tested for non-inferiority, which is the end point we need for approval. But we will also test for superiority. And if those are achieved, those will be on the label. This design has been agreed with the FDA and the EMA. And also, they agreed that this study plus the Japan data can be the basis for the NDA. Also, I would like to point out that the FDA has granted us QIDP status, which will give us an additional 5 years of exclusivity on the molecule itself and not just on the indication. Also, we have Fast Track, and we expect priority review for the H. pylori NDA. Now zooming a little bit more on the statistical aspects of this study. As I mentioned, the primary end point for approval is non-inferiority, and it is non-inferiority on the eradication rate of each of the vonoprazan regimens compared to lansoprazole triple therapy in patients who have -- who are not resistant to either clarithromycin or amoxicillin. We have over 90% power for this end point with a 10% non-inferiority margin for testing. If the primary end point of noninferiority is met, we will assess certain key secondary end points for superiority. First, we will assess superiority in patients with clarithromycin resistance. Again, each of the vonoprazan arms against the triple lanso arm. And then we will assess the superiority for all comers. With that, I will pause here and pass the stage to Dr. Colin Howden, who will describe the disease and the unmet need in more details. Dr. Howden?

Thank you, Azmi. Good afternoon, everyone. Thank you for joining us. I'd like to update you and appraise you a little bit about H. pylori infection. So this is probably the most common chronic bacterial infection to afflict mankind. And recent studies in the United States suggest that up to 36%, more than 1 in 3 American adults, have H. pylori infection. Now that's a striking statistic. But to understand it, you need to realize that most H. pylori infections are asymptomatic. It's also interesting to note, I think that most infections are acquired in childhood. So when we see adult patients with the H. pylori infection, they often ask us, how did I catch this? The honest answer is we don't know, but you've probably had it for many, many years. Up to 1/5 of people with H. pylori infection can go on to develop serious disease, which includes peptic ulcer disease and its complications. And also, as Azmi alluded to, gastric cancer. And in fact, the NIH consensus conference over 2 decades ago, and the World Health Organization's International Agency for Research in Cancer have concluded that H. pylori infection is a definite cause of cancer. And in fact, H. pylori is responsible for more gastric cancers worldwide that are the hepatitis B virus, hepatitis B and C viruses is responsible for liver cancer worldwide. Next slide, please. And the evidence for eradication of H. pylori, reducing the risk of gastric cancer is increasing quite dramatically. Summarized on this slide are 2 studies from Choi and colleagues from South Korea, where first -- in the first study, patients with small lesions of gastric cancer were removed endoscopically and then randomized to treatment for H. pylori infection or control. And you can see that treating the H. pylori infection dramatically reduced new lesions of gastric cancer. In the Choi study this year, published in the New England Journal of Medicine, they showed that detecting H. pylori infection in the first degree relatives of gastric cancer patients and treating the infection in those relatives also reduced the lifetime risk of gastric cancer. And most importantly, perhaps for this audience, the Kumar study at the bottom of this slide is a U.S.-based study conducted by researchers at the University of Pennsylvania and studying the VA health care system. And they were able to show that for veterans who were correctly diagnosed with H. pylori infection and who were successfully treated for it, actually had a statistically significant reduction in the incidence of gastric cancer. And I believe that, that is the first time this has been convincingly demonstrated in a U.S. population. Next, please. The trouble is, we're not doing a terribly good job at treating H. pylori infection. A number of studies have shown that the correct patients or correct individuals are not being tested for H. pylori infection. When they are tested and found to be infected, not everyone receives treatment. And sometimes, they don't receive the best treatment. The VA study that I just mentioned from Kumar and colleagues found that the diagnosis of H. pylori infection was made in a lot of veterans who did not subsequently receive treatment for the infection, and that's inexcusable. Also of notice, among those who are treated, only about 20% were retesting. Now the American College of Gastroenterology, the ACG treatment guideline from 2017 has strongly recommended that all patients be retested for H. pylori infection after treatment. And the main reason for that is that our current treatments are simply not that good. So it's important that we try and determine who has been successfully treated and who hasn't. And also in this slide, that there's an additional study from the Cleveland, Ohio area, which essentially shows the same thing. It really -- inadequate performance in testing patients, providing appropriate treatments and providing retesting after treatment. The ACG guideline that was updated in 2017 have already mentioned, there are a number of indications for testing for H. pylori infection. And it should be understood that anyone who tests positive should be offered treatment for the infection. And after treatment, they should be retested to see whether the infection has been cured. The first 4 indications on this slide are well established, and they were present in the 2007 version of this guideline. The ones further down the list are additional reasons to consider testing for H. pylori infection in adults. And the most important one there is dyspepsia, which essentially means a pain or discomfort that's centered in the upper abdomen. That's a very common presentation, both at primary care and at secondary care. And there's increasing evidence that a proportion of patients with dyspepsia will be successfully -- will have successful improvement in their symptoms with eradication of H. pylori. And as I've already mentioned, there's increasing evidence that the eradication of H. pylori from asymptomatic individuals probably reduces their lifetime risk of gastric cancer. Next slide, please. Here are some real-world data from Brown University in Rhode Island, and this looked at their experience with treating patients for H. pylori infection. This was not in the context of a randomized controlled trial. This is what we call real-world data. So patients with H. pylori infection attending 2 medical centers in Providence, Rhode Island, received a variety of treatments at their physician's discretion. The only treatment that achieved an eradication rate of close to 90%, which is what we'd like to be able to achieve, the only one that did that was so-called bismuth-based quadruple therapy. That means giving bismuth, metronidazole, tetracycline and a proton pump inhibitor together for 14 days. And that's an effective regimen, but a very complicated regimen for patients to adhere to. Unfortunately, one of the most frequently used regimens still in the United States is so-called legacy triple therapy, which comprises a proton pump inhibitor, clarithromycin and amoxicillin for 14 days. And you can see that the eradication rate there was below 80% and some other recent studies have shown it to be even lower than that. And this is largely due to the increasing rates of clarithromycin resistance by H. pylori. Next, please. We have remarkably few reliable recent data on H. pylori resistance rates in the U.S. and Europe. But what you see on the slide in front of you is the best currently available data. But first of all, I'd like to draw your attention to the Graham study, which is the third study listed there, and this comes from a recent U.S.-based multi-center, randomized controlled trial and the patients in this study were treatment-naive. They had never received treatment for H. pylori infection before. And you can see that 17% of them harbored H. pylori strains that were resistant to clarithromycin and 44% had strains that were resistant to metronidazole. Above that, the study from Kumar and colleagues is also worth a brief mention. Again, this is from the University of Pennsylvania, and it looks at patients from the Delaware and Philadelphia area who were referred to Penn because of persistent H. pylori infection after unsuccessful treatment. And the numbers are quite alarming, 43% had strains that were resistant to clarithromycin and 69% had strains that were resistant to levofloxacin. Next slide, please. So the life and death of H. pylori. We know that intragastric pH is a key factor in determining effective eradication of H. pylori. Two of the antibiotics that are still frequently used in the treatment of H. pylori infection are amoxicillin and clarithromycin. We know that they are more stable at higher levels of intragastric pH. And also at higher levels of intragastric pH, you've got a more actively replicating population of H. pylori organisms that are more susceptible to attack by antibiotics. And the table at the bottom of the slide looks at the MIC or the minimum inhibitory concentration values for various antibiotics, not all of which are still used in the treatment of H. pylori infection but shows that this is really a function of intragastric pH. And if you look on the third bottom line there for clarithromycin, you can see that just by increasing the intragastric pH from 5.5 to 6, we reduce the MIC by a factor of more than fourfold. So vonoprazan, with its ability to elevate intragastric pH rapidly and to sustain a high intragastric pH, shows a great deal of promise in more effective treatment for H. pylori infection. There are a number of unmet needs and there are a number of problems with the current treatment regimens. The most important that I've already alluded to is the growing resistance to a number of antimicrobials but particularly to clarithromycin. Current regimens are complicated for patients to take. They're difficult for patients to adhere to. We require to prescribe 3 or sometimes 4 different medicines to be taken together for 14 days. That involves the intake of a lot of tablets at different times during the day. And it's not surprising that many patients just aren't able to achieve adequate adherence. There are also a number of adverse effects from current treatment regimens. All antibiotics, of course, can cause some diarrhea. Clarithromycin and metronidazole can cause taste disturbance and nausea. And there's a risk of C. difficile infection with antibiotic use. Next slide, please. So let's look at some data now in which vonoprazan-based regimens were compared with PPI-based regimens in H. pylori infection. So this is a meta-analysis of 3 randomized controlled trials where vonoprazan/amoxicillin/clarithromycin was compared with PPI/amoxicillin/clarithromycin. Note that treatment in these studies was for 7 days. Here in the U.S., treatment would ordinarily be for 14 days. And that is how Phathom's pivotal Phase III trial is being conducted. But if we look at eradication rates by ITT, that's intention-to-treat analysis; or PP, per-protocol analysis, you can see that there were higher eradication rates for the vonoprazan-based triple regimen than the PPI-based triple regimen. And interestingly, on the right-hand side of the slide, you can see that the vonoprazan-based triple regimen in double-blinded randomized controlled trials was associated with fewer adverse events than the PPI-based triple regimens. Azmi has also alluded to the problem of clarithromycin sensitivity or susceptibility. Here is a meta-analysis of 5 different studies, 2 randomized and 3 non-randomized, where vonoprazan triple therapy was compared with PPI-based triple therapy. And we're looking here in terms of eradication rates based on clarithromycin resistance or susceptibility. So on the left-hand side of the slide, you can see the success rates with the different treatments in clarithromycin-susceptible strains. And you can see that the results with vonoprazan were numerically higher than with PPI-based triple therapies. But on the left-hand side of the slide, you can see the results for clarithromycin-resistant strains. And you can see that there is a dramatic difference in success rates between vonoprazan and PPI-based triple regimens, with vonoprazan being almost as successful in clarithromycin-resistant strains as in clarithromycin-susceptible strains. Next slide. As Azmi alluded to, however, we're also quite excited at the prospect of a dual regimen with vonoprazan. And that would include vonoprazan and the high dose of amoxicillin. And we feel that the potent acid inhibition that P-CABs, potassium-competitive acid blockers, including vonoprazan, can achieve may allow for successful treatment with a P-CAB-amoxicillin dual regimen. There are a number of obvious potential advantages to that. First of all, we -- because the regimen would not contain clarithromycin, we don't have to have any concerns about possible clarithromycin resistance. As a clinician, I know that there is a great deal of antibiotic overuse for all indications. If we had a reliable dual regimen, we would be able to reduce the number of antibiotics that we were prescribing. It would be a simpler regimen for patients to take, and it's obviously good antibiotic stewardship. Next slide, please. So here are some data with the vonoprazan-based dual therapies. On the left-hand side of the slide, you can see the vonoprazan dual regimen, that's vonoprazan/amoxicillin, compared with the PPI-based triple regimen of PPI/clarithromycin/amoxicillin. In treatment-naive patients, the dual therapy was superior. And in patients who were treated second line, they were similar, but there was a numerical advantage to vonoprazan dual therapy. And interestingly, on the right-hand side of the slide, a small study from Japan where the vonoprazan dual regimen was compared with the vonoprazan triple regimen, and you can see that the eradication rates were identical. They were 94% in both arms, and that shows a great deal of promise for vonoprazan-based dual therapy. Next slide, please. So in summary, H. pylori infection is highly prevalent throughout the world and here in North America. That recent meta-analysis of prevalence study is suggesting a 36% pooled prevalence rate among U.S. adults. We know that current treatments are suboptimal. Most of the regimens that are prescribed in this country are still dependent on clarithromycin, and clarithromycin resistance rates are increasing in this country and in Europe also. We have very few contemporary reliable data on resistance rates. I've showed you the best data that we can put together on that. And our current regimens are complicated, requiring 3 or 4 different drugs. So with vonoprazan, we have the prospect of simpler, more efficacious-based regimens. The triple therapy, vonoprazan/amoxicillin/clarithromycin, has shown high eradication rates in populations with high levels of clarithromycin resistance. And we also have the very promising possibility of an effective dual regimen comprising vonoprazan and high-dose amoxicillin. So I will end there. I thank you for your attention.

Thank you, Dr. Howden. So before moving to the next section, I just want to remind everyone online to -- since we're going through a lot of data and a lot of information very quickly, we will have time at the end to answer questions. [Operator Instructions] And we will get to those towards the end. Now going back to GERD but specifically to talk about our new program in non-erosive disease, NERD, which we're very excited about. So we've shown this slide before. As I mentioned before, we have a great opportunity to address the unmet medical needs, not only in the erosive esophagitis space but NERD and thus GERD disease state as a whole. In NERD, faster and more durable symptom relief is needed. In addition, there is a need for flexible dosing to manage symptoms on demand for some patients as those patients desire. There is a clear rationale for further expanding our clinical research effort into NERD. For a start, to describe again that there is significant patient need for better symptom relief. And there is a clear need for greater flexibility and convenience in the management of those symptoms. That is why noncontinuous regimens are widely used by U.S. patients. And Dr. Fass will describe the unmet need and the disease in a lot more detail when his presentation comes after mine. Now this is the current state over -- at a high level. And since pharmacological profile of vonoprazan supports the potential for success in meeting those needs, we are initiating our NERD program, starting with a Phase II on-demand study, and also plan to pursue both continuous and on-demand dosing regimens in Phase III. When we look at what's available today for NERD patients, again, Dr. Fass will speak to this more, the treatment options are -- that are available are known to have limitations especially for on-demand use. PPIs, which are mostly heavily used in this space, have slow onset of action, take about 3 to 5 days to start working properly. Hence, they do not offer the patients with dosing flexibility. H2RAs, although they have rapid onset, they do lack durability. So looking at vonoprazan and its characteristics, we believe it has the potential to overcome those limitations on both ends of the spectrum and provide NERD patients with fast durable relief with increased flexibility with respect to dosing regimen, continuous and on demand. So we can have the best of all worlds in one molecule. So back to the slide, which we showed earlier, I just want to illustrate that point. As you see on the left hand -- sorry, this is data that really that illustrates the potential very well. As you can see, vonoprazan rapidly raised the pH to 7 within few hours on day 1 of its administration, which is a very strong indicator of the potential of vonoprazan in this space of fast symptom relief in NERD patients. Now before describing our planned Phase II, I want to point out that we are taking key steps working with our advisers on the call and others, key steps to optimize the design of our studies, Phase II and beyond. As you may know, Takeda ran 2 classical continuous dosing NERD studies in Japan. And although the results were directionally in favor of vonoprazan, they did not achieve statistical significance. Now historically, Japan NERD trials have observed smaller effect size because the patient-reported outcome in symptom-based studies have reported smaller effect size and were not as consistent compared to the U.S. counterparts. We believe these Takeda trials enrolled very heterogenic patient population, not properly selecting for acid-driven disease, and they did not employ optimal heartburn data collection. In our program, we are utilizing the learnings from those studies, and hindsight is very important in this case, and have plans to enhance the probability of success by maximizing steps to enrolling patients who are most likely to have acid-driven disease, excluding those who most likely have functional disease. And we plan to enroll patients in the U.S. only. Essentially, all past continuous-dosing NERD studies in the U.S. were successful, and Dr. Fass will speak to that more. Also, we are increasing the testing sensitivity by utilizing modern e-diary data collection. Now this is -- on this slide is our Phase II study design, and this study we plan to initiate mid-next year. So we're starting with the run-in period. And responders during this run-in period will be randomized into 1 of 3 doses of vonoprazan. Remember, this is a Phase II dose-ranging study. So we run 3 doses of vonoprazan. And also, we'll have a placebo arm. And patients will go through a treatment period of 6 weeks. And then we assess the end point. The primary end point will be the proportion of heartburn episodes with complete relief. This is a very practical end point to how we expect patients to be using the product if it is to become available post the proper clinical trials. In addition, I would point out that in this study, we have a number of secondary end points to further assess speed of onset of symptoms, symptom relief and the durability of relief. Now this study we discussed with the FDA. And we have received advice from the FDA regarding this program. And now we are moving forward with our plans to initiate the phase study (sic) [ Phase II study ], as stated, mid-next year. With that, I will pause and pass the stage to Dr. Ronnie Fass, who will describe the disease state and the unmet need in more details. Dr. Fass?

Hi. Thank you very much, Azmi. So I will cover the topic of the on-demand therapeutic strategy for non-erosive reflux disease. And non-erosive reflux disease is the most common presentation of gastroesophageal reflux disease. Studies have shown that in this country, between 60% to 70% of the patient with gastroesophageal reflux disease, they have non-erosive reflux disease. In fact, in some countries in Asia, non-erosive reflux disease accounts for up to 90% of the patient with gastroesophageal reflux disease. Now how do we define non-erosive reflux disease? These are patients that have typical symptoms of gastroesophageal reflux disease, like heartburn and regurgitation, but they don't have esophageal inflammation in the form of erosive esophagitis, like was discussed by my colleague, Dr. Spechler. These patients experience episodic heartburn and regurgitation. But despite the fact that these are episodic, they do profoundly affect these patients' quality of life especially if these symptoms occur during nighttime. Now because we are not dealing with erosive esophagitis, the focus of our treatment in patient with non-erosive reflux disease is the relief and prevention of symptoms. Thus, on-demand regimen is best suited in this patient population. Now this is a recent study. It's an epidemiological study that looked at the prevalence of gastroesophageal reflux disease in the adult patient population in the United States. The study have shown that 2 out of the 5 adults that participated in this survey, and more than 71,000 of them participated and filled this survey, so 2 out of 5 reported of having GERD-related symptoms at least once during their lifetime. 1 out of 3 reported having GERD symptoms in the past week. But most disconcerting from the results of this study was that 54% of the GERD patients experienced persistent symptoms despite daily PPI use. So the study has 2 important findings. One, the gastroesophageal reflux disease is very common in the United States. And two, that about half of the patients that are taking PPI continue to have persistent symptoms. Now that brings us to a discussion about on-demand therapy. Now patients, when they get treatment, for example, with a PPI for gastroesophageal reflux disease, they're asked by their physician to take it on a daily basis. So this is a physician-driven therapeutic strategy, and it's called continuous therapy because the patients have to take the medication on a daily basis. On-demand therapy, on the other hand, is an example of a noncontinuous therapy. It is patient-driven, meaning the patient decide whenever they need to take their medication and for the duration they desire. The only rule here, of course, is that the patients can take the medication only once a day. Now this is a study that was done in Japan, and this is an on-demand study of vonoprazan versus daily PPI. It's a relatively small study. It included 30 patient with non-erosive reflux disease. Now all these patients were treated with daily PPI. And before they entered the study, all of them in a questionnaire pointed out that they were satisfied or very satisfied with their continuous daily PPI therapy. Then patients were converted to vonoprazan 20 milligram on demand for a period of 8 weeks. At the end of the 8 weeks of treatment, subjects were asked about their preference to remain with the on-demand vonoprazan approach versus converting back to the daily PPI. And as you can see on the left side, the vast majority preferred to stay on vonoprazan on demand, 77%, clearly suggesting that patients are content with such a noncontinuous therapeutic strategy. Now when we go back to the epidemiological study that I just showed you, it's very interesting that one of the important finding was the fact that about 31% of the patients with GERD were using their PPI in a noncontinuous fashion, from 4 to 6 days a week to a few times a month, again clearly supporting the concept that on-demand therapy is highly desired by a subset of patients with gastroesophageal reflux disease. Now why PPIs cannot serve as a good on-demand treatment. Here are 2 studies that are available on the FDA database, and there were 2 independent randomized trials that looked at omeprazole in 2 doses versus placebo in patients with episodic heartburn. The objective of the study was to evaluate the efficacy of omeprazole once a day in an on-demand approach versus placebo, meaning that patients will take the omeprazole on demand but can take only one pill at a time on a daily basis. The primary end point in this study was the percentage of first episodes with sustained complete relief. The design is on the left side. There was a 1-week run-in period with placebo. And then patients were randomized to omeprazole-magnesium 20 milligram, omeprazole-magnesium 10 milligram and placebo, all of them we're giving in an on-demand approach, as I previously described. When you look at the 2 studies, you can find out that there were no differences that were observed among the different arms of the 2 studies, clearly suggesting that PPI on demand, at least in these 2 studies, did not do better than placebo. So what kind of pharmacologic attributes an anti-reflux medication needs in order to be a good on-demand therapy, well, there are 4 of them. The medication has to demonstrate rapid effect, potent acid suppression, durability of the effect and then flexibility of administration. For example, PPIs have to be taken about half an hour before a meal, while for example, vonoprazan is not dependent on a meal, so it's much more flexible. Now the colors represent how much this attribute is being satisfied by the medication, where the more darker the circle, then the more satisfied is the attribute, and when the circle is lighter, then the attribute is less satisfied. And you can see that in all 4 important attributes, vonoprazan leads PPIs. And if you compare vonoprazan to 2 anti-reflux medications that are commonly used as on-demand therapy, like antacids and H2 blockers, vonoprazan also performs better in all 4 attributes as comparison to these 2 anti-reflux medications. For example, antacids, many times, one has to take them multiple times in order to deal with an episodic heartburn in an on-demand approach. And it's primarily because they're not providing potent acid suppression. The same thing is about H2 blockers. Now here is a pharmacodynamic study showing the advantage of P-CABs over PPIs. For PPIs, it takes 5 doses in order to reach maximum effect. And knowing that you're taking a PPI once a day, that means it takes about 5 days for PPIs to reach maximum effect. Now this is not the case when it comes to P-CABs. And you can clearly see that within the first dose, the P-CABs already reached maximum effect, and they reach it relatively rapidly, clearly showing again the advantage of P-CABs over PPIs, which can serve them very well as an on-demand therapeutic strategy. Next slide. So I'd like to summarize here about the potential of vonoprazan for the treatment of non-erosive reflux disease. So currently available options for on-demand treatment of non-erosive reflux disease, as I already mentioned, are antacids and H2 blockers. But they have limited clinical efficacy especially if we remember the discussion about the 4 important attributes for a medication in order to serve as an effective on-demand therapy. On-demand treatment with PPIs is not FDA-approved. But studies have consistently shown, and we've known already for the last 3 decades, that an on-demand approach is an important area of unmet need and that vonoprazan at this point provides a unique opportunity for positioning this medication in an area of an unmet need. The pharmacology of PPIs does not support an adequate on-demand treatment profile, as we discussed. And vonoprazan pharmacology supports potential development as an effective on-demand treatment option for non-erosive reflux disease patients. Thank you very much.

Thank you, Dr. Fass. So on this slide, this is our program, which Terrie has showed earlier. And today, in the R&D portion of today's call, you have heard from Drs. Spechler, Howden and Fass about GERD, both EE and NERD, and about H. pylori. You heard about that -- the current state in managing those diseases and how that current state and related outcome clearly highlight the significant unmet needs, which we are working very hard to bring vonoprazan through the clinical program to address those needs. We described vonoprazan data in our program and the excellent progress we made to date, especially during an exceptionally challenging year worldwide. And we are extremely excited about our progress and about today's announcement of enhancing vonoprazan potential by pursuing non-erosive disease indication as this promises to further advance the field and better meet patients' need and cover the whole spectrum essentially of GERD diseases in addition to H. pylori. With that, I would like to pass the stage to my colleague, Martin Gilligan. Martin is our Chief Commercial Officer, and he will describe the marketplace, the commercial opportunity and the potential for vonoprazan. Martin?

Great. Thank you, Azmi. What I'd like to do over the time together is share with you why we think this is -- these markets are a unique opportunity, there's certainly a big opportunity, and how we plan to realize vonoprazan. So what I would like to start with are just a few numbers. What you're going to see here in the slide is, as you're well aware, we're going to be entering markets that are very large-revenue markets. The H2 antagonists reached over $3 billion of sales in the U.S. at its peak, and the PPIs were at $12.5 billion. But what makes this opportunity so unique is that for 25 years, there's been an innovation drought. There's been nothing that's been developed, no new mechanisms that have been introduced. So what we've heard is that most GERD patients believe that they can get better control over their symptoms. And I think we saw some of that data previously in the last hour. We also know that GERD patients try 2 or more therapies to control their symptoms. So there's switching going on, and there's additions going on. And we also know that from a physician perspective, 2 out of 3 physicians are concerned about the long-term use of PPIs. So as you think about it, the standard of care is something that's 25 years old, and there's a lot of dissatisfaction in the marketplace. So then comes to the year 2015 when Takeda introduced TAKECAB or vonoprazan into Japan, and that's where the treatment of these diseases began to change. And it's our intention to change treatment of these diseases as we enter the U.S. market. So let's talk a little bit about Japan. Our goal is to equal and to exceed the success that Takeda has had in Japan with the introduction of vonoprazan here in the U.S. So we're often asked what's similar between the Japanese market and the U.S. market. Well, both of them are highly genericized markets, that's for certain. We also know that prior to the introduction of vonoprazan in Japan and still currently and definitely in the U.S., there's a lot of dissatisfaction with PPIs. Patients could feel better. There's a lot of switching going on and that H. pylori rates were declining in Japan prior to the introduction of vonoprazan, and they're currently declining below 80% here in the U.S. So when you think about that, the other unique thing is that both markets, in anticipation of this launch, were very excited about the introduction. So what did Takeda achieve? They became the market leader in Japan with revenue with a 38% market share, and that's quite amazing given the high genericized marketplace. They also documented cost-effectiveness of using vonoprazan, and they did all this with a premium branded price, and achieved $725 million in sales last year, very large for Japan. We also know that in Japan, vonoprazan, the majority of the sales are made up of GERD. And it was only 2 years before they achieved an 80% market share in the marketplace specific to H. pylori. So you've heard some of these numbers, and I just want to recap a few of them for you. The first one is on the left regarding H. pylori. 2.5 million patients are treated annually. And I have just mentioned to you the eradication rate has fallen below 80%. In GERD, there's 6.8 billion PPI doses prescribed annually. And that's for everything for PPIs, but the majority of that is in the GERD market. So it's very large. And the dissatisfaction rate, again, with the standard of care is 15% to 45%. So what strikes me here is the quote that says, "People want to get better fast, and they want instant results." And that's the promise that we hope to bring with vonoprazan. We hope to see superior eradication rates, faster healing and superior maintenance. Now I just described to you that the opportunity is very large, but it's also wide open. There's no products in late-stage development in these categories. We also know that other products introduced in the U.S. have been variations of old regimens. And in the U.S., there's no P-CABs in development, but they are in Asia. And what we know about them is that the profile looks very similar to PPIs. They have shorter half-lives or they have a different chemical structure compared to vonoprazan. So what does it mean? It means that we're looking at a promotionally sensitive market with little to no branded competition, which gives us the ability to have a commanding share of voice. And as I said before, it's an innovation-starved market. There's just been nothing going on here for 25 years, no introductions. So how do physicians feel about vonoprazan? As you can imagine, we've been very active this past year talking to physicians about their impressions. I could tell you that I worked on many launches in my career, and never have I seen preference share rates of around 60%. When you present the profile for these indications to physicians, both gastroenterologists and primary care, there is a high desire to use vonoprazan. What's interesting here on the GERD data is it's very similar results for both primary care physicians and gastroenterologists. And that's not so common to see when you introduce a product that covers both the specialty and the primary care area. And then in H. pylori, what you're going to see is that these numbers are actually approaching 70% in terms of preference to prescribe. Those are incredibly high numbers. And the other thing that these respondents picked up on is that they enjoy the flexibility that we could potentially have with a triple therapy and a dual therapy. So it provides not only higher eradication rates but the potential to have different dosing regimens. Now during this year, we've started to do our work, and we started to look at the target audience or the customer base. And what we know, while it's a really large TRx market, we also know that it's a highly concentrated group of prescribers. 20% of the physicians write 70% of the scripts in both H. pylori as well as in GERD. So when you think about that, for H. pylori, that's about 16,000 high-volume writers, and for GERD, it's about 40,000. And we know the overlap is about 30%. So what we think at launch at this current time is that we could launch with about -- in a range of about 90 sales representatives. And then as we look forward to GERD, because of the high overlap in terms of prescribers, we'll then take a look and see what our breadth and depth goals are, determine how much further we need to go higher than that. But we know we'll be able to leverage all of those 90 heads right from the beginning. Now to have a successful launch, you have to have the right people. And it begins with having leaders and experience in our organization. So I am going to take a little bit of time on this slide to virtually introduce you on paper to our leading commercial team. First, we have Joe Jones, who recently joined us, and he's going to be the Vice President of Sales. Joe comes with broad GI experience and most specific -- most recently, excuse me, has been working on LINZESS, both in sales as well as in marketing. So he's going to bring a wealth of experience, category knowledge and also relationships with many gastroenterologists. Christine Fischer has joined us from Regeneron. She's going to lead our insights group. And what's really great about Christine is not only is she able to deliver insights, but she connects the different insights, and we're able to turn them into actions. Beginning in January will be Susan Kim. She's going to be Vice President of Marketing. Susan comes from Amgen via Celgene. And Susan's built a blockbuster. Susan was there to build the launch of OTEZLA, prepare for it, launched OTEZLA and has seen it all the way through to this point. So she's had the ability to conceptualize prior to being in the market all the way through the life cycle and seeing double-digit growth. Susan also has GI experience in her background, and actually, she began her career in health outcomes. Philippe Brudi has joined us as Vice President of Medical Affairs. Philippe has 2 things that are really valuable to us. One, he's worked at very small pharma coming from Liquidia as well as large. And then he's also worked in therapeutic areas that cover both primary care and specialty. And then last, I'll introduce you to Mark Devlin. Mark is our Vice President of Market Access. He's joining us from Allergan. And as you know, Allergan had a very broad portfolio. They certainly have some therapeutic areas that I'm certain represent challenges. Mark brings the experience of negotiating contracts as well as bringing to us relationships within the payer community. So as we speak about the payer community, let me say that we clearly recognize that access is going to be critical to our success. And we have some early insight from the payers, and they recognize the unmet need that you heard from our -- the 3 physicians who joined us today. They're not blind to it. So they do have interest in having discussions to see where vonoprazan would fit. So let's talk about the 3 areas for payers. The first one is we know that this is a large population in need. There's 65 million people with GERD. And of those, we know 50% of them progress in their line of therapy annually. So that means there's a lot of movement in the marketplace. We also know, as I mentioned before, that there's a declining H. pylori eradication rate with the current regimens. These things result in health care system utilization. So what happens when someone fails in their erosive esophagitis or they have a recurrence? That means they have another lesion, which means they're backing up to the treatment phase, which means you're taking up more resources of endoscopy and physician visits as well as more drug utilization. And when there's been a failed eradication cycle, what that means is the patient's being retested yet again and they're being treated over again. So in this area, there is a lot of health care system utilization when there's failed treatments. And as I mentioned already, I think, once or twice is there's lack of alternatives, 25 years with nothing introduced into the marketplace. And what we know is that the majority of patients when we come to market will have already passed through PPIs as their standard of treatment. So what would the drivers be? We know that health plans have objectives to meet unmet needs for all of their patients, all of the lives, the terminology that they use. We know that we'll have clinical -- well, we hope we'll have clinical superiority in it from our clinical trials versus PPIs, lower erosive esophagitis recurrence rates, faster healing and greater eradication rates. You heard from our speakers that we -- our pharmacology delivers a rapid, potent and durable acid control. And bringing in a new mechanism of action when there's been nothing to turn to for all of these years for these patients once they've had a PPI or even before the PPI is different from all the other approaches. So our intention is to deliver this with a potential branded premium price commensurate with the value. So we'll be working on a value proposition that matches the unmet need to what we deliver in our clinical trials. Now as we look at pricing and access, we're looking at various market analogues. But we believe that we can achieve broad access, and we can do it with a branded premium price. If you simply look at Dexilant, which was the last PPI to market with minimal to no differentiation at all, they had very good access, and they currently have a WAC of $9.69 a dose. So we know that the payer market is going to be really critical for us, but we think we're equipped and ready to be prepared for it. So it all begins with opportunity. I'll back up a little bit and talk about that opportunity. And when you ask physicians, why do patients fail H. pylori eradication, we heard 2 things mainly. The first one is the resistance to antibiotics, and that's what Dr. Howden commented on. But we hope to address that, as you saw in our clinical data from Japan, is that we have high eradication rates in all patients and those who are clarithromycin-resistant. So this one key issue that's faced in terms of eradication failures, we hope we address through our clinical profile. The second one is the lack of drug therapy and compliant -- excuse me, the lack of compliance to drug therapy. There's a lot of pills to take in this regimen over a couple of week period, and it can get confusing. And it's our intention to deliver a convenience pack where we really clearly lay out vonoprazan, the antibiotics, when to take them and how to take them together. That's another solve. So what I'd like to share with you is a patient's perspective. This is Lisa. And Lisa will tell you a little bit about her journey. Thank you. [Presentation]

So I had the good fortune of being able to meet Lisa. And I think what you probably heard from her journey is while we all think of this condition as an acute condition, for her, this is actually very chronic. And she's not alone in that. What we've learned in speaking to patients is that most patients contact the physician within a few months of their symptoms. And we know that from Lisa's story is just because they contacted their physician in her case of primary care, it doesn't mean that it's immediately diagnosed and taken care of or eradicated. We also know that about half of the patients found their drug regimen confusing. I already mentioned to you that we plan to offer a convenience pack. And they enter this treatment, as we all would, is that their infection would be eradicated and they would be treated effectively. And once again, we know from Lisa that that's not necessarily the story for everyone. So we hope that we have the potential to deliver a superior eradication rate that solves this condition for so many patients. And then interestingly, we found that about 1/4 of the patients continue to use PPIs. So how would I summarize what we intend to do with H. pylori? Most importantly and for the purpose of the patient, we want to reverse the curve of the declining eradication rates. We also, from a business perspective, want to set a strong launch foundation and ramp for erosive esophagitis. So let's talk about erosive esophagitis. In speaking to physicians, we ask them about their interest in a new product. And specifically, they told us they want something that works quickly, provides durability of response and provides potency. And when you see this quote down here at the bottom, what stands to me is the clinical urgency. We have a clinical urgency, and what we're hoping is that vonoprazan is a puzzle piece that meets the gap in these unmet needs. And you heard about -- you heard Lisa's story for H. pylori. Let's talk about the patient journey for erosive esophagitis. It's a little bit complicated. Their journey looks a little bit different. The first one is when they begin, they typically start over-the-counter drugs before they get to a physician's office. But when they get there, what they want is they want to shed themselves of the OTCs and they want immediate relief, they want immediate healing. And what we hope that vonoprazan can deliver is potential speed of not only symptom relief but also in healing. When they do go to the physician's office, what we know is unlike many categories, they do not request a specific product. So it's our goal to awaken this therapeutic area and drive patients in through DTC when we get later in our life cycle to activate them to ask for vonoprazan. Now for any therapy, what everyone is looking for is something that's efficient and convenient for dosing. And you heard earlier from Dr. Fass is that you really need to take PPIs with food to get the maximum effect to make it effective. And that's not the case with vonoprazan. We hope to offer the flexibility because vonoprazan is not dependent on food to achieve acid supression. And then in their journey, when they reflect back upon it, we ask them their experience. What we tell -- what we hear is that basically, it takes a while to get any relief, up to 3 weeks before they start to see any partial or full symptom relief. Many of them are moving to a BID dosing or what they're doing is they're continuing on with OTCs. And we have the potential for both rapid and improved symptom relief and healing. The journey is the same for both erosive esophagitis and NERD, and both Azmi and Dr. Fass talk to us about NERD. And when we hear about NERD from the physicians, we get equal enthusiasm for the opportunity that vonoprazan brings forth. When we ask them, what we get back is that 60% of their NERD patients are treated long term with the PPI. So we know that this is a market when you enter into the market, you have the opportunity to have an ongoing relationship with patients because it's a long-term commitment. We also know that 39% of the physicians have patients supplement due to OTCs because they're not getting that immediate relief. Again, that dissatisfaction carries over from erosive esophagitis over into NERD. And then what's very exciting in terms of our ability to disrupt this marketplace is when asked, 65% of physicians tell us they'd be interested in a new class of therapy that works fast, provides durability of response and is indicated for an on-demand use. And further, when you ask this group of physicians would they prescribe vonoprazan, we get very high intentions. And here's the opportunity to open up new market segments for us. In NERD, it gave them a reason to use it in new patients. And then they started to think about switches, non or partial PPI responders. And keep in mind that the majority of the patients in the category have already been on PPIs and up to almost half of them are not satisfied. And then there's a lot of patients who have long-term PPI that physicians just don't think are appropriate for that and are interested in vonoprazan on-demand. So I started out by telling you that there was a unique opportunity and a big opportunity. And hopefully, a little bit of that came to light. What we know is the customer see the value or potential value of fast action, superior efficacy and durability. The markets are very large. 115 million patients are adults walking around with H. pylori, 65 million NERD patients. The unmet need is very clear. There's been nothing in this marketplace, and it's been a real drought in terms of introductions of anything exciting in terms of mechanisms. Physicians have a strong preference and desire to use vonoprazan, and we know that, that target base is highly concentrated. There's little activity in the marketplace. And again, it's our goal to awaken it and bring new life. We want -- we plan to have a high and dominating share of voice. The profile is very exciting, as you can see, we heard from our customers already, and we have the opportunity for potential for premium-branded price. So we truly believe we have something that's going to deliver something different for patients, for payers as well as physicians. Thank you. Todd?

Thank you, Martin. I'll provide a brief review of Phathom's financial position. Phathom is a really well-capitalized company with over $200 million of cash on our balance sheet as of the end of September. That's a level of cash that puts us in a really good position to fund the completion of the Phase III clinical trials as well as to support the investments we're making to prepare for commercial readiness and to build out the administrative functions that will support the organization in the coming years. We're also pleased that, last month, we were able to file our initial shelf registration statement including an at-the-market program, which gives us really good flexibility and optionality to fund our company as our needs increase and to further support the build-out of the organization. So in summary, we're exiting 2020 in a really strong financial position, and we have the tools in place to be able to maintain that in 2021 and beyond. So with that, that concludes the prepared content of today's program. We can see questions have been coming in from the website, so we thank you for that. We'll take a moment now to pause to review the queue of questions that have been submitted.

And our first question relates to the ongoing global pandemic. And the question is, how has COVID-19 impacted your clinical development? And what are you doing to prepare for ongoing effects of the pandemic? Terrie and Azmi, would you like to respond to that, please?

Thanks, Todd. We've been highly encouraged by the work that the clinical team has executed during the pandemic. And despite the 3-month pause that we took earlier in the year in response to the society's recommendations to pause elective endoscopy, when we began re-randomization, both with the HP and the EE trial really accelerated. In fact, the team was able to exceed patient enrollment of our PHALCON-EE program with over 1,000 participants enrolled, and we remain very encouraged regarding our ongoing enrollment in the HP trial. In fact, we expect that we will complete enrollment for HP in January of 2021. And this just really underscores a couple of things. Firstly, the outstanding execution and engagement of our clinical team. But secondly, the great unmet need that exists for new treatment option for patients with erosive esophagitis and the commitment and enthusiasm of the collisions that we see that are investigating these compounds. We do not expect to have any impact on -- to the integrity of our studies and look forward to seeing the top line results next year. Like everyone, we continue to monitor the COVID situation closely. And from an operational perspective, we've been scenario planning throughout for 2021, which is really a key -- a critical year for us to continue our engagement with physicians, payers and patients with our medical teams and planning engagements at medical conferences. I have to say that the team has been adapting very well to the virtual world right now. In fact, we just recently ran our first virtual CME, which went really well. It was exceptionally well attended. The positive experience that we're having with DIs and engagement has really been because, as Martin outlined, there just is such a lack of innovation in this space for such a long period of time, and they're really excited that there may be an alternative for them and the patient. Lastly, I'd say that recruitment -- from a recruitment perspective, we've been able to build a phenomenal team in the midst of a pandemic, and we'll continue to do that throughout 2021 with not a negative impact.

Thank you, Terrie. Our next question, and Martin, maybe this is a good one for you because it relates to commercial, is around our plans for establishing commercial infrastructure. So if you could speak to the structure of our sales force and how many reps will we need in the context of our overall commercial infrastructure plan.

Sure. So before I get into the details of the sales force, I think I'll just back up for a minute and talk a little bit about 2020 because, I think, we entered this year thinking it was going to be a very foundational year to get us -- to get all the bricks in place to get ready to move, and we weren't very far into it before we found out we needed to move rather fast. So part of that planning was bringing on the right people, as I mentioned, in the commercial team. So what will happen is in second half of 2021, we'll start to look to build out that sales leadership infrastructure. As I mentioned, that will have probably about 90 -- in the range of 90 representatives who will call and book high-volume gastroenterologists and primary care physicians in these 2 therapeutic areas. What we also see is that in those -- you're probably talking it somewhere around 40 -- 16,000 physicians at launch and that we'll be able to cover them with a good amount of high frequency and it will be the right target base. But that comes later. I think in 2020, what we've also identified is that we've learned a lot. So we've done really robust market research. We started to refine our go-to-market strategy. The -- we've begun our segmentation work. And as I just mentioned about the targets, we've begun the targeting process. The other thing I should comment on in the field that we've done this year with the introduction of Philippe joining us is the build-out of the MSLs or medical scientific liaisons. This is a group that's actively calling on the thought leaders or in the area and having those scientific dialogues. That footprint's set, and we have people in place, and that will continue to grow next year. So that was 2020. You asked about the sales force, so that's about 2021. Just a few other thoughts regarding 2021. It's only December -- or it is December 14, and our heads are already thinking about January. We'll be completing more market research. We need to dig deeper into our potential positioning. The messages and connecting that unmet need that we see in the marketplace to the benefits of vonoprazan delivers. We'll do that with payers, understand more the differences between primary care and GI as well as patients. You can expect to see that we're going to launch a corporate campaign in the first quarter. This will be about introducing Phathom and all the things we're doing here, so the medical community starts to get to know us a little bit better. And then as we finish that, we move on in the year and we approach launch, we'll be looking at an unbranded campaign, and this is where I use the terminology earlier about wakening the therapeutic area. We're going to introduce a campaign that really speaks to the unmet need. It's been very interesting in speaking to customers. When you have the dialogue, they all recognize the unmet need but no one really talks about it because there's been nothing going on for so long, so it's our intention to raise that dialogue up. And I should also comment then on the payer front. What our objective to do is we've hired someone to lead our HR efforts. We've begun some outcomes work this year in terms of understanding the marketplace. We'll do more work next year, some studies coming up. And then that will all be ready to hand something to the account group that we want to build out in 2021, so we can start having those individual conversations with payers. So we accomplished a lot in 2020. 2021, we've already begun 2021. And I hope that I answered your question regarding the sales force structure.

Yes. I think that was good, Martin. Thanks very much. Our next question is around the readout of our Phase III trials and whether there is any -- going to be any read-through from the HP readout, which will be in the second quarter of next year, to the EE readout, which will be in the second half of next year. So perhaps Azmi, that's a good one for you to take.

Yes, I'll do that. So although mechanistically, both disease -- efficacy of vonoprazan, both disease states relies on acid suppression and the pH elevation. They're really different disease states. H. pylori relies on that vonoprazan really improves the efficacy of the antibiotics and it's a shorter duration treatment. Erosive esophagitis, it's healing the lesion. So they're very different in the way they go about the efficacy -- vonoprazan goes about efficacy. So H. pylori is not predictable of erosive esophagitis. That's the short answer.

Okay. Great. Thank you, Azmi, for that. Our next question is around the prevalence of H. pylori and why so many people are -- actually have H. pylori infection but so few are actually treated, and what the screening process is for H pylori. So Azmi, maybe I can direct that one back to you and then ask you to have Colin -- Dr. Howden support with his comments as well, please.

Yes. The disease is primarily now empirically treated. The testing for resistance is not a priori, and that's why the dilemma that exists in the field, and that's what leads to increase in the resistance actually. But I'll pass it to Dr. Howden who can speak more to that.

Okay. Thank you, Azmi. Well, the recent meta-analysis of prevalent studies suggested a pooled rate of 36% among U.S. adults. Now that's higher than I perhaps would have anticipated. But nonetheless, that's what the data show. A majority of those people are probably asymptomatic, and they may or may not have access to health care. We know that the prevalence of the infection varies widely related to socioeconomic status and also to racial and ethnic groups. So a number of socially disadvantaged or economically disadvantaged people in this country have H. pylori infection and don't know about it. As I said, they're likely to be asymptomatic, and those are the people who are probably at the most risk of developing gastric cancer. And as I pointed out in my talk, there's increasing evidence that detecting the infection in these people and successfully treating it is likely to lead to a reduction in the lifetime risk of gastric cancer. So that begs the question why aren't we doing routine screening in this country, and I don't think I can answer that. We're not quite at the stage of offering universal screening or recommending universal screening in this country, although that is done in parts of Asia where there's an even higher incidence of prevalence, I should say, of H. pylori infection and incidence of gastric cancer. So I think the study from Kumar and colleagues at the University of Pennsylvania, is a landmark study that's likely to change opinion in this country, and we may be moving to a more progressive attitude towards screening. But certainly, people would need to realize that the prevalence of the infection is high among adults in this country, particularly among certain racial and ethnic groups.

Yes. One of things, Dr. Howden, just maybe you can comment on more, how if you -- once you identify a patient to symptoms or screening, it's likely that the rest of the family and even maybe the neighborhood that is -- is the infection rate is very high. Can you comment on that as well?

Yes, that's true. One of the biggest risk factors for acquiring H. pylori infection in childhood is having an H. pylori-infected parent, particularly an H. pylori-infected mother. So H. pylori does tend to cluster in households and families. Now at the moment, we don't recommend or practice screening asymptomatic family members for H. pylori infection because we know that once the infection is successfully treated in an adult, even if that adult lives in a household where there's other H. pylori-infected family members, the risk of reinfection is very low. So at the moment, we're not recommending or we're not practicing the testing of family members, but that may change as evidence continues to grow.

Okay. Thank you, Dr. Howden. I think that was really helpful. So I can see we've got several questions dealing with the same topic, so perhaps I'll just try to consolidate them into one question, and that is around how payers might be willing to treat or whether they would be willing to treat but represent differently to PPIs. So Martin, maybe I'll start with you on that, and then perhaps Dr. Spechler can lean in for more of the clinical side of things.

Sure. So I think what might be rooted in that question is what we see in the marketplace before. And I know in many categories, there's a lot of step edits, there's delisting, non access. And I think what we've seen over the past couple of years and the majority of therapeutic areas is there's just been a constant influx of new mechanisms. And even in the GI space, when you look at IBD or you look at rheumatoid arthritis or some other areas, it seems like every 10 to 18 months, there's a new mechanism of action. And then following that new mechanism of action are 1 or 2 molecules within that mechanism of action. And it creates a real reimbursement challenge because what a lot of those companies are doing is they're really splitting hairs to find their differentiation, to find their space to get reimbursement. And this market in vonoprazan just appears to be very differently over 2 decades, and there's no alternatives. It's really just a PPI and nowhere to go beyond there and with no other mechanisms on the horizon. So it just says that here's an area with tremendous unmet need. And as I mentioned before in early feedback from payers is that they recognize that. So it offers a potential solution for increased eradication rates. And for the payer, what that might mean is you have less cycling through for H. pylori cycles. So you have less testing, less office visits, less drug treatment. And then for erosive esophagitis in the broader GERD market, it will -- specifically for erosive esophagitis is when people fail their treatment and they're in maintenance, they're backing all the way up to the treatment phase. And with a compound that could potentially have faster healing and superior maintenance, you're looking at potentially, again, less visits, less endoscopies and less drug treatment. So there's clearly a need and there's also an opportunity in here for the payers. And Dr. Spechler, do you have anything to add?

I agree with what you just said, Martin. And physicians really are starved for something new here. I understand that these -- there are 6 different PPIs and they have differences in dosages and administration and that sort of thing. However, for clinical purposes, they're all considered essentially the same. One doesn't have a clear advantage over another. And this is a drug that you have that, at least in Japan, it's showing some clear clinical advantages. I think physicians will be very anxious to adapt this. And barring any major insurance problems with it, which I wouldn't anticipate, I think it would be adapted very quickly.

Okay. Thank you, Martin and Stuart, for that. So our next question is around the NERD program and the on-demand regimen inside of that. And it's a question around, would patients that would potentially go on to an on-demand treatment regimen be looking to simply avoid chronic use of PPIs? And would this potentially be a first-line or a second-line therapy with the on-demand regimen? So perhaps, Terrie and Martin, I could ask you to speak to that.

Yes. So annotation would have a very broad label for that indication, and so it could be used both as a first line as well as an on-demand therapy. Martin?

Yes. I think I would also add to that is I would imagine there would be 2 groups of patients, one that will be -- start out as continual and then maybe transfer, but then also what we heard in evaluating to move forward is that there's a lot of patients who need just to start out on on-demand. So from our perspective and from a business perspective, it really is going to open up new growth drivers for us. We know already there's a large population that's taking PPIs on demand, and we also know that another growth driver is just the entire NERD population whatsoever. So it's clearly -- it offers different areas for us to exceed both new starts as well as potential, if appropriate, switches.

Okay. We have another question on NERD and just development program. And maybe Azmi, I'll direct this one to you. The question is, why the decision to start with a Phase II program and on demand rather than proceeding directly to the Phase III? So perhaps you could talk about our approach relative to the development program and on demand?

Sure. As we mentioned, none of the PPI is approved in this space, and the FDA has not really cemented their approach to the end point. Now we discussed our program with the FDA, and we wanted to do things. One is fine-tune the end point to be sure that we have something meaningful, measurable in a group use kind of way and above all meaningful to patients. But also, we wanted to do a dose-ranging study. This gives us not only a regulatory path that's based with the FDA because it said they not really gave that approval before to PPIs or P-CABs for sure, but also because that gives us the creativity and the flexibility to design a very efficient Phase III programs to give us, as Terrie mentioned, the broad label we desire for continuous on demand. And that evaluation stage is very prudent to do as we are progressing with our current program overall versus the stress program.

Terrific. Thank you, Azmi, for that. Our next question is actually on the rights we have to commercialize vonoprazan in Europe and our approach in thinking around that. So Terrie, if I could direct that one to you, please.

Sure. Yes. So we do have the right in both Europe as well as Canada, so we're currently finalizing some market research that we're doing in Europe in the core 5 markets to really size the opportunity there. Our best case is that we will most likely partner in Europe, but we really want to have the answer to the question on the side of the opportunity before we move forward with those discussions.

Okay. Thank you for that, Terrie. Our next question is just around the projected costs related to the neuroclinical program and how that would impact cash position of the company. So I'll take that one. So as we've talked about, the first step in the neuro development program will be the Phase II on-demand trial, and we'll begin to incur those costs in 2021. We expect the cost to be, on average, what you would expect to incur on a Phase II trial. So the commencement of that program and the occurrence of those costs in 2021 are going to have a significant impact on our cash position and aren't going to have any impact on our ability to continue to be able to fund the completion of our Phase III clinical programs as well as to further build out and make the investments that we're making in the organization to prepare for commercial readiness. So -- and as a reminder, as I mentioned during my comments, we do have the shelf registration statement as well as the ATM program in place, which would allow us to raise some capital in the event that we need to. So let me take a look here. The next question, perhaps, Martin, I'll push this one to you and any of the KOLs as you deem fit. So in terms of the clinical and the commercial opportunity, can you provide more color around how physicians may practically use the regimen? And how do you think patients will have access to vonoprazan upon launch?

Sure. So I would think from H. pylori, our trials deliver what we've seen in Japan. I would imagine it would be the primary go-to given the high eradication rates the fact that we would be offering a dual or triple therapy options, so it provides more flexibility to the prescriber. And then for the patient, clearly, in a convenience package, it's going to make things a little bit better. And I think if we hit those Phase III trial, I would imagine that the payers would also be very open to that. In terms of the physician experience, and I think that was the base of the question, for erosive esophagitis, again, I mean there's no reason really why not if you have good safety to want faster healing and superior maintenance. So again, we believe in the response back in terms of their intention for preference share to be in the 60%-plus range would tell us that it would quickly become something that they would go to rather fast. I don't know if any of our other speakers have a comment any of the -- I don't know, Ronnie -- Dr. Fass, do you have any comments on that?

I do think that in the case of on-demand therapy, because we don't have any medication at this point that is approved for on-demand, any PPI, I mean, then I see a great opportunity. I mean basically, that will be the sole medication that will be available to people to provide something that is specifically approved for on-demand.

Okay. Thank you, both. Our next question relates to the regulatory exclusivity that we expect for vonoprazan and in particular the QIDP designation we have and what that means in terms of that exclusivity. So Terrie, could I ask you to speak to that?

Sure. So we expect to have at least 10 years of market exclusivity from the day we get HP approval. And so a little color on that, the HP approval would give or grant our qualified infectious disease product designation or QIDP, and that adds 5 years of regulatory exclusivity to our already 5 years of an NCA exclusivity. So that's at least 10 years, and we expect that there's a strong potential for additional 6 months for pediatric exclusivity. So that's 10.5 years from the time we launch.

Okay. Thank you, Terrie, for that. I think maybe we have time for one more question here, and that again relates to our neuro development program. And just one other criteria we'll be examining in the trial program and how those compare to the experience in Japan in setting NERD. So Azmi, could I ask you to answer that one, please?

Sure. As I mentioned, in Japan, they only started continuous therapy. So they have not studied on demand. So demand is very unique program than what was done for vonoprazan and anything else. That's why the novel approach -- it's a very novel approach. So regardless of demand or continuous, the key criteria for us is to include patients who most likely have acid-related disease, and we're working with Dr. Fass to zoom in on the right selection criteria, the data collection and using e-diaries and more modern techniques and zooming in on the right symptomatology for inclusion and follow-up as well as something that's really different. In Japan, they included subjects who are light in their symptoms. Two symptoms over 2 weeks, over a short period of time, we will be more consistent with what was traditionally done in the U.S. So we will select patients with at least 4 episodes over 2 weeks and over a longer period of time. So these were the key elements. Again, I want to emphasize that on-demand is very unique with a very unique end point compared to what was done in Japan. But even for the continuous therapy other than the traditional end point, the patient selection criteria and data collection would be very different than Japan.

Okay. Thank you for that, Azmi. And I would just say on behalf of management, we thank everyone for the questions that you did submit. We hope our answers were sufficient in response to those, and I'll turn it back to Terrie for closing remarks.

Thanks, Todd, and thanks to everybody who participated in the call today. As you've heard, 2021 is a catalyst which is for Phathom, including completing enrollment of our Phase III H. pylori trial, sharing top line results for both Phase III clinical trials as well as initiating our Phase II trial in NERD and the NDA submission of H. pylori. We're really excited at Phathom moving vonoprazan forward, and the team here is really focused on identifying that unmet need and moving vonoprazan forward. Clearly, we have a differentiated MOA and product profile, moving into an innovation subcategory that hasn't had a product -- a new product available for more than 20 years that has the potential to be a blockbuster. Thank you for joining us today, and thank you for your attention.