Phathom Pharmaceuticals Reports -53.45% ROIC Against 15.49% WACC
PHAT•Phathom Pharmaceuticals reported a ROIC of -53.45% compared to its 15.49% WACC, indicating significant capital destruction from R&D spending. Among clinical-stage peers, Arcutis Biotherapeutics leads with a 1.05% ROIC despite remaining below its 12.08% WACC.
1. Capital Efficiency Metrics
Phathom Pharmaceuticals’ latest financials show a Return on Invested Capital (ROIC) of -53.45% against a Weighted Average Cost of Capital (WACC) of 15.49%, highlighting that each dollar invested is currently destroying value rather than generating returns.
2. Peer Benchmarking
Within its clinical-stage biotech peer group, Crinetics Pharmaceuticals posts a -40.83% ROIC and NGM Biopharmaceuticals a -98.49% ROIC, whereas Arcutis Biotherapeutics stands out with a modest positive ROIC of 1.05%, though still below its 12.08% WACC.
3. Value Creation Challenges
The significant negative ROIC reflects heavy upfront R&D spending typical of gastroenterology drug development, suggesting Phathom will need pipeline progress, cost management or strategic partnerships before achieving positive capital returns and shareholder value creation.
