Prothena Stock Tumbles 36.8% Year Over Year: What Lies Ahead?

Core Viewpoint - Prothena Corporation (PRTA) has experienced a significant decline in share price, dropping 36.8% over the past year, primarily due to setbacks in its pipeline, particularly the failure of its candidate birtamimab in a late-stage study [1][6]. Financial Performance - The company has reported inconsistent earnings over the last four quarters, with losses widening due to increased research and development expenses and the impact of pipeline setbacks, including the discontinuation of birtamimab [2]. - Prothena's earnings have missed estimates in each of the last four quarters, with an average negative surprise of 26.72% [2]. Pipeline Setbacks - In May 2025, Prothena announced the discontinuation of birtamimab after the AFFIRM-AL study failed to meet its primary endpoint, removing a near-term value driver [3]. - The termination of birtamimab has significantly reduced near-term catalysts for the stock and shifted the company's strategic focus toward earlier-stage assets like PRX012, which are several years away from potential commercialization [4]. Workforce and Cost Management - In June, Prothena announced a 63% workforce reduction to streamline operating costs while ensuring continued support for its wholly owned programs and partnered program obligations [7]. Partnered Programs Progress - Prothena's pipeline progress is largely driven by partnered assets rather than wholly owned programs [8]. - Partner Novo Nordisk is evaluating coramitug in the phase III CLEOPATTRA program for ATTR cardiomyopathy, which could earn Prothena up to $1.23 billion in development and sales milestones [9]. - Roche has initiated the phase III PARAISO study on prasinezumab for early-stage Parkinson's disease, indicating ongoing commitment to this collaboration [10]. Collaboration Agreements - Prothena has a worldwide collaboration agreement with Roche, having received $135 million to date, with potential for up to $620 million in additional milestone payments and royalties on future sales [11]. - Bristol Myers Squibb is conducting a phase II study for its anti-tau antibody BMS-986446 in Alzheimer's disease, with primary completion expected in 2027 [12]. Ongoing Development - Prothena has initiated an early-stage first-in-human study on PRX019, with completion expected in 2026 [14].