Company: PHAT
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0000950170-25-034183
Chunk: 91

Company: Phathom Pharmaceuticals, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 16
Chunk 91
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 credit losses reflects the best estimate of expected credit losses of the accounts receivable portfolio determined on the basis of historical experience, current information, and forecasts of future economic conditions. The Company determines its allowance methodology by pooling receivable balances at the customer level. The Company considers various factors, including its previous loss history, individual credit risk associated to each customer, and the current and future conditions of the general economy. These credit risk factors are monitored on a quarterly basis and updated as necessary. To the extent that any individual debtor is identified whose credit quality has deteriorated, the Company establishes allowances based on the individual risk characteristics of such customer. 

F-9

The Company makes concerted efforts to collect all outstanding balances due from customers; however, account balances are charged off against the allowance when management believes it is probable the receivable will not be recovered. The Company does not have any off-balance-sheet credit exposure related to customers.  As of December 31, 2024, three customers accounted for 81% of the accounts receivable balance, with each of these individual customers ranging from 25% to 31% of the accounts receivable balance. As of December 31, 2023, three customers accounted for 87% of the accounts receivable balance, with each of these individual customers ranging from 28% to 30% of the accounts receivable balance. For the year ended December 31, 2024, three customers accounted for 69% of the product sales, with each of these individual customers ranging from 22% to 25% of the product sales. For the year ended December 31, 2023, three customers accounted for 86% of the product sales, with each of these individual customers ranging from 27% to 30% of the product sales.Inventory The Company capitalizes inventory costs related to products to be sold in the ordinary course of business. The Company makes a determination of capitalizing inventory costs for a product based on, among other factors, status of regulatory approval, information regarding safety, efficacy and expectations relating to commercial sales and recoverability of costs. Inventory consists of bulk active pharmaceutical ingredients that are used to manufacture vonoprazan tablets and finished goods. Inventory related to indications prior to regulatory approval has been included in research and development expense in the period of purchase.The Company states its inventory at the lower of cost or net realizable value. The Company measures inventory cost using actual cost under a first-in, first-out basis. The Company assesses recoverability of inventory each reporting