Protagonist Therapeutics(PTGX) - 2024 Q3 - Quarterly Report

Drug Development - The company has two peptide-based new chemical entities, rusfertide and JNJ-2113, in advanced Phase 3 stages of development[86]. - Rusfertide is in a global Phase 3 trial (VERIFY) for polycythemia vera with approximately 250 patients, and top-line data is expected in Q1 2025[87]. - In the REVIVE trial, rusfertide showed a responder rate of 69.2% compared to 18.5% for placebo (p=0.0003) in maintaining hematocrit control without phlebotomy[90]. - JNJ-2113 is being evaluated in multiple Phase 3 trials for moderate-to-severe plaque psoriasis, with topline results expected in Q4 2024 and Q1 2025[96][97]. - JNJ-2113 Phase 2b FRONTIER trials demonstrated promising efficacy and safety for moderate-to-severe plaque psoriasis, maintaining high skin clearance rates through 52 weeks[101]. - The company expects to file a New Drug Application (NDA) for rusfertide in Q4 2025 following the VERIFY trial results[87]. - The ongoing two-year carcinogenicity study for rusfertide is expected to yield results by the end of 2024[87]. - The company expects to nominate a development candidate for a new oral IL-17 peptide antagonist program by the end of 2024[105]. - The company expects to nominate a development candidate from its discovery platform for IND-enabling studies by the end of 2024[130]. Financial Performance - The company incurred cumulative net losses of $472.2 million from inception through September 30, 2024, primarily due to research and development costs[108]. - The net loss for the three months ended September 30, 2024, was $33.21 million, a slight improvement from a net loss of $34.11 million in the previous year[125]. - License and collaboration revenue for the three months ended September 30, 2024, was $4.675 million, a significant increase compared to the previous period[125]. - License and collaboration revenue increased from $0 for the nine months ended September 30, 2023 to $263.8 million for the nine months ended September 30, 2024, primarily due to the Takeda Collaboration Agreement[139]. - Research and development expenses increased by 17% to $35.97 million for the three months ended September 30, 2024, compared to $30.66 million in the same period last year[125]. - Research and development expenses increased by $12.0 million, or 13%, from $91.3 million for the nine months ended September 30, 2023 to $103.2 million for the nine months ended September 30, 2024[141]. - General and administrative expenses rose by 33% to $10.16 million for the three months ended September 30, 2024, compared to $7.66 million in the prior year[125]. - General and administrative expenses increased by $9.1 million, or 36%, from $25.4 million for the nine months ended September 30, 2023 to $34.5 million for the nine months ended September 30, 2024[143]. - Interest income increased by 81% to $7.68 million for the three months ended September 30, 2024, compared to $4.25 million in the same period last year[125]. - Interest income increased by $8.8 million, or 83%, from $10.6 million for the nine months ended September 30, 2023 to $19.5 million for the nine months ended September 30, 2024, primarily due to higher invested balances[147]. - The effective tax rate was 1.53% for the nine months ended September 30, 2024, compared to 0% for the same period in 2023[148]. Collaboration and Milestones - The company received a one-time upfront payment of $300 million from Takeda for the rusfertide collaboration, with potential milestone payments of up to $330 million[93]. - The company shares profits and losses equally with Takeda for rusfertide in the U.S. market[94]. - The company received a $50 million milestone payment from JNJ upon dosing the third patient in the ICONIC-TOTAL Phase 3 trial in late October 2023, totaling $172.5 million in non-refundable payments earned to date[102]. - Future milestone payments from JNJ could reach approximately $795 million, including $115 million for meeting co-primary endpoints in ICONIC Phase 3 trials and $35 million upon NDA filing with the FDA[102]. - Upcoming potential milestones under the Takeda Collaboration Agreement include $25.0 million for achieving primary endpoints in the Phase 3 VERIFY trial and $50.0 million upon FDA approval of rusfertide[156]. - A milestone payment of $50.0 million was earned upon dosing the third patient in the ICONIC-TOTAL Phase 3 trial in October 2023, with total non-refundable payments from JNJ amounting to $172.5 million since 2017[157]. Cash and Funding - The company had $583.3 million in cash, cash equivalents, and marketable securities as of September 30, 2024, compared to $341.6 million as of December 31, 2023[149]. - Cash provided by operating activities for the nine months ended September 30, 2024 was $213.3 million, primarily due to a net income of $143.5 million and a $300.0 million payment from Takeda[164]. - Cash used in investing activities for the nine months ended September 30, 2024 was $290.8 million, mainly from purchases of marketable securities totaling $507.3 million[165]. - Cash provided by financing activities for the nine months ended September 30, 2024 was $21.8 million, a decrease of $148.1 million compared to the same period in 2023[166]. - The company may require additional funding to advance its early discovery pipeline and develop new product candidates, depending on various factors including clinical trial progress and commercialization success[160]. - An immediate 100 basis point increase in interest rates would increase the company's annual interest income by approximately $3.4 million[173].