Protagonist Therapeutics(PTGX) - 2019 Q1 - Quarterly Report

Financial Performance - The net loss for the three months ended March 31, 2019, was $14.1 million, compared to $7.7 million for the same period in 2018, resulting in an accumulated deficit of $154.6 million as of March 31, 2019[123]. - The company has incurred net losses since inception and does not anticipate achieving sustained profitability in the near term[123]. - License and collaboration revenue decreased by $9.2 million, or 86%, from $10.8 million in Q1 2018 to $1.6 million in Q1 2019, primarily due to nearing the end of revenue recognition from a $50 million upfront payment received from Janssen[142]. - Total research and development expenses decreased by $2.9 million, or 19%, from $15.4 million in Q1 2018 to $12.4 million in Q1 2019, mainly due to a reduction in PTG-100 clinical trial expenses[144]. - General and administrative expenses increased by $0.1 million, or 3%, from $3.6 million in Q1 2018 to $3.8 million in Q1 2019, driven by higher personnel costs[146]. - Interest income increased by $0.2 million, or 28%, from $0.6 million in Q1 2018 to $0.7 million in Q1 2019, attributed to a rising interest rate environment[147]. - Cash used in operating activities for Q1 2019 was $16.7 million, compared to $15.1 million in Q1 2018, reflecting an increase in net loss and changes in operating assets[159][160]. - The company reported a net loss of $14.1 million for Q1 2019, which included non-cash charges of $2.7 million[159]. - The company had $112.5 million in cash, cash equivalents, and available-for-sale securities as of March 31, 2019, down from $128.9 million at the end of 2018[169]. - The effective income tax rate for Q1 2019 was (1.3%), primarily due to foreign income tax, with no income tax expense recorded in Q1 2018[148]. - The company has no outstanding debt as of March 31, 2019, which limits financial risk[169]. Research and Development - PTG-300, the most advanced clinical product candidate, is under development for beta-thalassemia and has received orphan drug designation and Fast Track designation from the FDA[115]. - A global Phase 2 study of PTG-300 began in Q1 2019, with top-line results expected in the second half of 2019[115]. - PTG-200, an oral gut-restricted IL-23R antagonist, is being co-developed with Janssen, with an IND filing anticipated in Q2 2019[117][118]. - PN-943, a backup compound to PTG-100, is currently in a Phase 1 clinical trial, with top-line results expected in Q2 2019[119][120]. - The company replaced PTG-100 with PN-943 based on preclinical data suggesting greater potency[119][133]. - The proprietary discovery platform enables the engineering of novel peptides for various therapeutic applications[121]. - The company expects research and development expenses to increase as product candidates progress, particularly under the Janssen License and Collaboration Agreement[135]. - The company anticipates needing to raise additional capital to advance product candidates through clinical development and to fund operations in the foreseeable future[154]. Collaboration and Agreements - The Janssen License and Collaboration Agreement includes a $50 million upfront payment and a potential $25 million payment upon IND filing for PTG-200[124][125]. - The transaction price of the Janssen License and Collaboration Agreement was $60.6 million as of March 31, 2019, a slight decrease from $60.7 million at the end of 2018[143]. Cash and Investments - As of March 31, 2019, the company had $112.5 million in cash, cash equivalents, and available-for-sale securities, with an accumulated deficit of $154.6 million[149]. - Approximately $1.7 million of the cash balance was located in Australia, with expenses primarily denominated in U.S. dollars[170]. - Cash provided by investing activities for Q1 2019 was $4.1 million, primarily from maturities of available-for-sale securities totaling $26.0 million, offset by purchases of $21.7 million[162]. - Cash provided by financing activities for Q1 2019 was $0.4 million, similar to $0.5 million in Q1 2018, from stock option exercises and employee stock purchases[164][165]. - The company has $107.3 million of common stock remaining available for sale under a registration statement, with $48.8 million available under an at-the-market financing facility[150]. Other Information - There were no material changes to contractual obligations and commitments during Q1 2019[166]. - The company has not entered into any off-balance sheet arrangements as defined under SEC rules[167]. - A 10% change in current exchange rates would not have a material effect on the company's results of operations[170].