Protagonist Therapeutics(US:PTGX)2025-08-06 20:22PART I FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited) The company reported a $46.4 million net loss for H1 2025, a shift from $176.7 million net income in H1 2024, driven by lower collaboration revenue and increased R&D expenses Condensed Consolidated Balance Sheets Balance Sheet Items (in thousands) | Balance Sheet Items (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $168,543 | $97,249 | | Marketable securities | $504,415 | $461,916 | | Total current assets | $602,526 | $591,641 | | Total assets | $718,006 | $744,725 | | Liabilities & Equity | | | | Total current liabilities | $35,507 | $47,398 | | Total liabilities | $49,988 | $69,430 | | Total stockholders' equity | $668,018 | $675,295 | - Cash, cash equivalents, and marketable securities increased to $673.0 million as of June 30, 2025, from $559.2 million as of December 31, 202410168 Condensed Consolidated Statements of Operations Statement of Operations (in thousands) | Statement of Operations (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | License and collaboration revenue | $33,867 | $259,120 | | Research and development | $72,929 | $67,254 | | General and administrative | $22,289 | $24,350 | | Total operating expenses | $95,218 | $91,604 | | (Loss) income from operations | ($61,351) | $167,516 | | Net (loss) income | ($46,426) | $176,724 | Per Share Data | Per Share Data | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net (loss) income per share, basic | ($0.73) | $2.89 | | Net (loss) income per share, diluted | ($0.73) | $2.77 | - The significant decrease in revenue and shift from net income to net loss in the first six months of 2025 compared to 2024 is primarily due to the one-time recognition of $254.1 million from the Takeda collaboration upfront payment in March 20241262160 Condensed Consolidated Statements of Cash Flows Cash Flow Data (in thousands) | Cash Flow Data (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $96,583 | $241,193 | | Net cash used in investing activities | ($39,592) | ($82,048) | | Net cash provided by financing activities | $14,368 | $9,771 | | Net increase in cash, cash equivalents and restricted cash | $71,359 | $168,916 | - Cash from operations decreased primarily due to the receipt of a $300.0 million upfront payment from Takeda in 2024, partially offset by a $165.0 million milestone payment from JNJ received in 202521182 Notes to Unaudited Condensed Consolidated Financial Statements - The company's clinical programs focus on inflammatory/immunomodulatory diseases and hematology/blood disorders, with two key assets in Phase 3: icotrokinra (licensed to JNJ) and rusfertide (co-developed with Takeda)22 - Under the Takeda collaboration for rusfertide, Protagonist received a $300.0 million upfront payment in April 2024, and in March 2025, a $25.0 million milestone was deemed probable following positive Phase 3 VERIFY trial results4960 - For the six months ended June 30, 2025, the company recognized $33.9 million in revenue from the Takeda agreement, primarily related to a $25.0 million milestone and ongoing development services61 - Under the JNJ agreement for icotrokinra, the company earned a $165.0 million milestone payment in Q4 2024 (received in January 2025) and has earned a total of $337.5 million from JNJ since 201745 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management highlights significant clinical progress and pipeline expansion, noting a sharp revenue decrease due to a prior year upfront payment, while maintaining strong liquidity Overview and Pipeline Developments - Icotrokinra (IL-23R): JNJ submitted an NDA to the FDA in July 2025 for moderate-to-severe plaque psoriasis based on positive data from the Phase 3 ICONIC program, and the drug also met its primary endpoint in a Phase 2b trial for ulcerative colitis9297101 - Rusfertide (Hepcidin Mimetic): The Phase 3 VERIFY trial for polycythemia vera (PV) met its primary endpoint, with 76.9% of patients achieving a clinical response versus 32.9% for placebo, and an NDA filing is expected in Q4 202593113114 - Pipeline Expansion: The company has advanced new candidates, including PN-881 (oral IL-17 antagonist) for immune-mediated skin diseases and PN-477 (oral/subcutaneous triple agonist) for obesity94110124 Results of Operations Financial Comparison (in thousands) | Financial Comparison (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | License and collaboration revenue | $33,867 | $259,120 | | Research and development expenses | $72,929 | $67,254 | | General and administrative expenses | $22,289 | $24,350 | | Net (loss) income | ($46,426) | $176,724 | - The 87% decrease in revenue for the six months ended June 30, 2025, compared to the prior year, was due to the 2024 period including $254.1 million from the upfront payment for the Takeda collaboration159160 - R&D expenses increased by $5.7 million (8%) year-over-year, driven by a $9.8 million increase in pre-clinical and drug discovery costs for new candidates PN-881 and PN-477, partially offset by a $4.1 million decrease in rusfertide Phase 3 trial expenses162 - G&A expenses decreased by $2.1 million (8%) year-over-year, primarily because the 2024 period included $4.6 million in one-time advisory and legal fees related to the Takeda agreement164 Liquidity and Capital Resources - As of June 30, 2025, the company had $673.0 million in cash, cash equivalents, and marketable securities168 - The company received a $165.0 million milestone payment from JNJ in January 2025 and expects a $25.0 million milestone payment from Takeda upon completion of the VERIFY clinical study report169170 - Management believes that existing cash, cash equivalents, and marketable securities will be sufficient to fund operations for at least the next twelve months175 Cash Flow Summary (in thousands) | Cash Flow Summary (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Cash provided by operating activities | $96,583 | $241,193 | | Cash used in investing activities | ($39,592) | ($82,048) | | Cash provided by financing activities | $14,368 | $9,771 | Item 3. Quantitative and Qualitative Disclosures About Market Risk The company is primarily exposed to interest rate risk on its $673.0 million portfolio of cash, cash equivalents, and marketable securities, where a 100 basis point change would impact annual interest income by approximately $3.7 million - The company's primary market risk is interest rate sensitivity on its investment portfolio, where an immediate 100 basis point change in interest rates would affect annual interest income by approximately $3.7 million187 - Foreign currency risk from Australian operations and inflation risk are not considered material at this time188189 Item 4. Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of the end of the quarter, the company's disclosure controls and procedures were effective192 - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls194 PART II OTHER INFORMATION Item 1. Legal Proceedings The company is not currently a party to any material legal proceedings and is not aware of any pending or threatened legal actions that could have a material adverse effect on its business - The company is not currently involved in any material legal proceedings195 Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes have been made to the risk factors identified in the company's 2024 Annual Report on Form 10-K196 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities and no repurchases of its equity securities during the period - There were no unregistered sales of equity securities or company repurchases of its stock during the quarter197198 Item 5. Other Information During the fiscal quarter ended June 30, 2025, no director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangement or other non-Rule 10b5-1 trading plan - No directors or Section 16 officers adopted or terminated any Rule 10b5-1 or similar trading plans during the quarter201