Protagonist Therapeutics(PTGX) - 2024 Q2 - Quarterly Report

Clinical Trials and Drug Development - Rusfertide is in a Phase 3 trial (VERIFY) for polycythemia vera with 250 patients enrolled, expecting top-line data in Q1 2025 and potential NDA filing in Q4 2025[78]. - The Phase 2 REVIVE trial showed rusfertide significantly reduced the need for phlebotomy, with 69.2% of subjects responding compared to 18.5% for placebo (p=0.0003)[81]. - Long-term follow-up from the REVIVE trial indicated durable hematocrit control and no new safety signals in patients with polycythemia vera[83]. - The VERIFY trial for rusfertide has completed enrollment, with results from a two-year carcinogenicity study expected by the end of 2024[78]. - The PACIFIC Phase 2 trial for rusfertide indicated improvements in iron deficiency markers in patients with polycythemia vera[83]. - JNJ-2113, an oral IL-23 receptor antagonist, is undergoing multiple Phase 3 trials for plaque psoriasis, with a peak sales projection exceeding $5 billion[89]. - The Phase 2b FRONTIER 1 trial for JNJ-2113 achieved primary and secondary endpoints, showing significant improvement in skin lesions compared to placebo[87]. - JNJ-2113's potential across multiple indications includes plaque psoriasis, psoriatic arthritis, and inflammatory bowel disease, with significant market potential[89]. Financial Performance and Revenue - Cumulative net losses from inception through June 30, 2024, amounted to $439.0 million, primarily due to research and development costs[95]. - License and collaboration revenue increased from $0 for the three months ended June 30, 2023, to $4.2 million for the three months ended June 30, 2024[111]. - The company earned a $50.0 million milestone payment upon dosing the third patient in the ICONIC-TOTAL Phase 3 trial in late October 2023, received in December 2023[90]. - The company is eligible for up to approximately $795.0 million in future development and sales milestone payments from JNJ[90]. - License and collaboration revenue surged to $259.1 million for the six months ended June 30, 2024, compared to $0 for the same period in 2023, primarily due to the Takeda Collaboration Agreement[118]. - Net income for the six months ended June 30, 2024, was $176.7 million, a significant increase from a net loss of $72.2 million for the same period in 2023[120]. - Cash provided by operating activities for the six months ended June 30, 2024, was $241.2 million, primarily due to a net income of $176.7 million and a $300.0 million upfront payment from Takeda[140]. Research and Development Expenses - Research and development expenses for the three months ended June 30, 2024, were $33.5 million, a slight increase from $33.2 million in the same period of 2023[109]. - Research and development expenses increased by $0.3 million, or 1%, from $33.2 million for the three months ended June 30, 2023, to $33.5 million for the three months ended June 30, 2024[112]. - Total research and development expenses for the six months ended June 30, 2024, were $67.3 million, an increase of $6.7 million, or 11%, compared to $60.6 million for the same period in 2023[120]. - The company anticipates an increase in research and development expenses in the near term as it progresses its rusfertide program and pre-clinical research[106]. - Research and development personnel-related expenses increased by $1.3 million for the three months ended June 30, 2024, compared to the same period in 2023[114]. Cash and Funding - The company had $595.4 million in cash, cash equivalents, and marketable securities as of June 30, 2024, compared to $341.6 million at the end of 2023[125]. - The company expects its existing cash and marketable securities to be sufficient to fund operations for at least the next twelve months[136]. - The company may require additional funding to advance its early discovery pipeline and develop new product candidates[136][138]. - Cash used in investing activities for the six months ended June 30, 2024, was $82.0 million, mainly due to purchases of marketable securities[141]. - An immediate 100 basis point increase in interest rates would increase the company's annual interest income by approximately $4.7 million[146]. Collaborations and Milestones - A collaboration with Takeda for rusfertide includes a $300 million upfront payment and potential milestone payments up to $330 million, with royalties of 10% to 17% on ex-U.S. net sales[84][85]. - The company is eligible for additional milestones under the Takeda Collaboration Agreement, including $25.0 million for achieving the primary endpoint in the Phase 3 VERIFY trial and up to $75.0 million upon FDA approval of rusfertide[132][134]. - The company has received $172.5 million in nonrefundable payments from JNJ to date[90]. - Upcoming potential milestones under the JNJ License and Collaboration Agreement include $115.0 million for a Phase 3 trial and $50.0 million upon FDA approval of a second-generation compound[134].