Protagonist Therapeutics(US:PTGX)2025-05-06 21:04Peptide Therapeutics Development - The company is focused on peptide therapeutics, with two novel peptides, icotrokinra and rusfertide, in advanced Phase 3 clinical development, with potential NDA submissions to the FDA in 2025 [91]. - Icotrokinra has shown significant clinical improvement in treating moderate-to-severe plaque psoriasis, with a PASI-90 response rate of 74% at Week 24 compared to 8% in the placebo group (P<0.001) in the ICONIC-LEAD trial [101]. - The Phase 2b Anthem-UC trial of icotrokinra met its primary endpoint of clinical response at Week 12, with a response rate of 63.5% for the highest dose compared to 27.0% for placebo (p<0.001) [102]. - The ICONIC-ASCEND trial will be initiated to demonstrate the superiority of icotrokinra compared to ustekinumab, an injectable biologic [98]. - Rusfertide is in Phase 3 development for the treatment of Polycythemia Vera (PV) with 293 patients enrolled in the VERIFY trial, which has shown a 77% clinical response rate compared to 33% for placebo [109][112]. - The primary endpoint of the VERIFY trial was met with statistical significance (p<0.0001), showing a mean of 0.5 phlebotomies per patient in the rusfertide arm versus 1.8 in the placebo arm [112]. - The company plans additional clinical studies of icotrokinra in ulcerative colitis and Crohn's disease [103]. - PN-881, a potential best-in-class oral peptide IL-17 antagonist, has been selected for development, with a Phase 1 study expected to initiate in Q4 2025 [107]. Financial Performance and Revenue - The company earned a total of $337.5 million in non-refundable payments from JNJ from inception in 2017 through March 31, 2025, and is eligible for up to $630.0 million in future milestone payments [105]. - License and collaboration revenue for the three months ended March 31, 2025, was $28.3 million, a decrease of 89% compared to $255 million in the same period in 2024 [134]. - License and collaboration revenue for Q1 2025 was $28.3 million, including $22.8 million from a milestone related to the Phase 3 VERIFY trial of rusfertide [136]. - For Q1 2024, license and collaboration revenue was $255.0 million, primarily from a $300.0 million upfront payment for the rusfertide license to Takeda [137]. - Cumulative net losses from inception through March 31, 2025, amount to $352.2 million, primarily due to research and development costs [120]. - The company expects revenue in 2025 to decrease significantly compared to 2024, primarily due to lower milestone achievements [140]. Research and Development Expenses - Research and development expenses for the three months ended March 31, 2025, were $35.9 million, an increase of 6% from $33.7 million in 2024 [134]. - Research and development expenses increased by $2.2 million, or 6%, from $33.7 million in Q1 2024 to $35.9 million in Q1 2025, driven by a $5.3 million increase in pre-clinical and drug discovery research expenses [141]. - The company anticipates continued significant research and development expenses as it prepares for regulatory filings and commercialization of rusfertide [130]. Cash and Financing Activities - Cash provided by operating activities for Q1 2025 was $125.4 million, significantly up from a cash used of $27.4 million in Q1 2024, primarily due to a $165.0 million milestone payment received [161]. - As of March 31, 2025, the company had $697.9 million in cash, cash equivalents, and marketable securities, up from $559.2 million at the end of 2024 [147]. - Cash provided by financing activities for Q1 2025 was $11.4 million, a $4.2 million increase compared to Q1 2024, primarily due to a $4.1 million increase in proceeds from stock issuance [163]. - The company had $697.9 million in cash, cash equivalents, and marketable securities as of March 31, 2025, up from $559.2 million at December 31, 2024 [166]. Collaborations and Agreements - Icotrokinra is co-developed with JNJ and Takeda, with the company primarily responsible for clinical development activities [92]. - The JNJ License and Collaboration Agreement was amended to increase milestone payments and eliminate certain previous milestone payments [108]. - The company received a one-time, non-refundable upfront payment of $300 million from Takeda under a collaboration agreement for rusfertide, with potential milestone payments of up to $305 million [111][114]. - Upcoming milestones under the Takeda agreement include tiered royalties of 10% to 17% on ex-U.S. net sales of rusfertide [114][115]. - Upcoming potential milestones under the Takeda Collaboration Agreement include a $50.0 million increase for a Phase 3 clinical trial milestone and various NDA approval milestones for rusfertide and icotrokinra [150][151][152]. Interest Income and Market Risks - Interest income increased by 73% to $7.6 million for the three months ended March 31, 2025, compared to $4.4 million in 2024 [134]. - Interest income rose by $3.2 million, or 73%, from $4.4 million in Q1 2024 to $7.6 million in Q1 2025, attributed to higher invested balances [145]. - An immediate 100 basis point increase in interest rates would increase annual interest income by approximately $3.4 million, while a decrease would have the same negative impact [166]. - The company is exposed to market risks, including interest rate sensitivities and inflation risk affecting labor and clinical trial costs [165]. Operational Insights - Inflation has not had a material adverse effect on the company's operations during Q1 2025 [168]. - There were no material changes to the company's cash requirements or commitments for capital expenditures during Q1 2025 [164]. - The company has not implemented a formal hedging program for foreign currency but may consider it if exposure increases significantly [167]. - The majority of expenses related to Australian operations are denominated in Australian dollars, while other expenses are generally in U.S. dollars [167]. - Approximately $1.3 million of the cash balance was located in Australia as of March 31, 2025, compared to $0.6 million at December 31, 2024 [167].