Protagonist Therapeutics(PTGX) - 2025 Q3 - Quarterly Report

Drug Development and Clinical Trials - The company is focused on peptide therapeutics, with two novel peptides, icotrokinra and rusfertide, in advanced Phase 3 clinical development, and one New Drug Application (NDA) submitted to the FDA in July 2025[93] - Icotrokinra achieved a clinical response rate of 63.5% at Week 12 compared to 27% for placebo (p<0.001), with 30.2% of patients demonstrating clinical remission versus 11.1% for placebo[111] - Rusfertide is in Phase 3 development for polycythemia vera and received Breakthrough Therapy designation from the FDA in August 2025[95] - The ICONIC clinical development program for icotrokinra includes four pivotal Phase 3 trials, all meeting primary and co-primary endpoints for moderate-to-severe plaque psoriasis[99] - In the ANTHEM-UC trial, icotrokinra demonstrated clinically meaningful outcomes at Week 28, with 31.7% of patients achieving clinical remission[109] - The VERIFY Phase 3 trial of rusfertide for Polycythemia Vera (PV) enrolled 293 patients, achieving a clinical response in 76.9% of patients treated with rusfertide compared to 32.9% in the placebo group (p<0.0001)[119] - Rusfertide demonstrated a mean reduction in phlebotomies to 0.5 per patient in the treatment group versus 1.8 in the placebo group during Weeks 0-32 (p<0.0001)[120] - The company plans to submit a second NDA by the end of 2025 for rusfertide[95] - PN-881, a potential treatment for immune-mediated skin diseases, was selected as a development candidate, with Phase 1 trials expected to inform future studies[115][116] - The company anticipates initiating Phase 1 clinical studies for PN-477, a GLP-1/GIP/GCG receptor triple agonist, by mid-2026[136] Financial Performance and Revenue - The company has earned a total of $337.5 million in non-refundable payments from Janssen Biotech, with eligibility for up to $630.0 million in future milestone payments[111] - License and collaboration revenue for the three months ended September 30, 2025 was $4.7 million, a slight increase of 1% from $4.7 million in the same period of 2024[158] - License and collaboration revenue for the nine months ended September 30, 2025 was $38.6 million, a significant decrease of 85% from $263.8 million in the same period of 2024[168] - Total operating expenses for the nine months ended September 30, 2025 were $146.4 million, an increase of 6% from $137.7 million in the same period of 2024[168] - Net loss for the nine months ended September 30, 2025 was $85.8 million, compared to a net income of $143.5 million in the same period of 2024[168] - The company expects research and development expenses to increase in the near term as it focuses on regulatory filings and advancing pre-clinical and drug discovery programs[151] Research and Development Expenses - Research and development expenses increased by $4.0 million, or 11%, from $36.0 million for the three months ended September 30, 2024 to $40.0 million for the same period in 2025[162] - Pre-clinical and drug discovery research expenses rose by $8.8 million, or 92%, primarily due to costs related to new product development candidates PN-881 and PN-477[162] - Research and development expenses increased by $9.7 million, or 9%, from $103.2 million for the nine months ended September 30, 2024 to $112.9 million for the nine months ended September 30, 2025[174] - Pre-clinical and drug discovery research expenses rose by $18.6 million, contributing to the overall increase in R&D expenses, while rusfertide expenses decreased by $8.9 million due to the completion of the Phase 3 VERIFY trial[174] Cash Flow and Financial Position - Cash provided by operating activities for the nine months ended September 30, 2025 was $94.6 million, a decrease of $118.7 million compared to the same period in 2024, mainly due to the absence of a $300.0 million upfront payment received in 2024[193] - Cash used in investing activities for the nine months ended September 30, 2025 was $98.1 million, a decrease of $192.6 million compared to the same period in 2024, primarily due to investments made with proceeds from the $300.0 million upfront payment received from Takeda[194] - As of September 30, 2025, the company had $678.8 million in cash, cash equivalents, and marketable securities, an increase from $559.2 million as of December 31, 2024[180] - The company expects existing cash, cash equivalents, and marketable securities to be sufficient to fund operations for at least the next twelve months based on current operating plans and financial forecasts[187] Collaborations and Agreements - The company received a one-time upfront payment of $300 million from Takeda under the collaboration agreement for rusfertide[128] - The company is eligible for up to $305 million in additional milestone payments related to rusfertide under the Takeda Collaboration Agreement[128] - Upcoming potential milestones under the Takeda Collaboration Agreement include a $50.0 million milestone payment upon approval of an NDA for icotrokinra in any indication[184] - The company received a total of $337.5 million in non-refundable payments from JNJ from the inception of the JNJ License and Collaboration Agreement in 2017 through September 30, 2025[181] Economic and Regulatory Environment - The company is evaluating the potential impact of new U.S. corporate tax legislation on its consolidated financial statements[140] - An immediate 100 basis point increase in interest rates would increase annual interest income by approximately $3.7 million[199] - Inflation has not had a material adverse effect on the company's operations during the three and nine months ended September 30, 2025[201] - The company has experienced increased costs related to labor and research and development contracts due to inflation fluctuations[201]