Protagonist Therapeutics, Inc

Previous wording

This Quarterly Report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact, including statements concerning our plans, objectives, goals, strategies, future events, future revenues or performance, financing needs, expectations, plans or intentions relating to clinical development, product candidates, the regulatory approval process, products and markets, and business trends and other information referred to under the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” are forward-looking statements. These statements are subject to substantial known and unknown risks, uncertainties and other factors that may cause our actual results, outcomes, performance or achievements, or the timing of such results, outcomes, performance or achievements, to be materially different from any results, outcomes, performances or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “assumes,” “believes,” “commitments,” “could,” “estimates,” “expects,” “forecasts,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “targets,” “will,” “would,” “seeks” and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events, are based on assumptions, and are subject to risks, uncertainties and other important factors, including, among other things, the potential for our programs; the timing, initiation, progress and expected results of our clinical trials and research and development programs, including enrollment, data, costs and regulatory submissions and approvals; our cash runway; our ability to advance product candidates into, and successfully complete, non-clinical studies and clinical trials; our eligibility for, and any expected benefits of, any U.S. Food and Drug Administration (“FDA”) programs or special designations; the potential for eventual regulatory approval and commercialization of our product candidates; the commercialization of our product candidates, if approved, which for ICOTYDE and rusfertide depends largely on the efforts of our collaboration partners; our ability and the potential to successfully manufacture and supply our product candidates for clinical trials and for commercial use, if approved; the pricing, coverage, and reimbursement of our product candidates, if approved; our potential receipt of milestone payments and royalties under our collaboration agreements; future operating results; our ability and that of our collaboration partners to generate sales, income or cash flow; our estimates regarding expenses, capital require…

Excerpt shortened here; the source contains the full paragraph.

Current wording

This Quarterly Report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact, including statements concerning our plans, objectives, goals, strategies, future events, future revenues or performance, financing needs, expectations, plans or intentions relating to clinical development, product candidates, the regulatory approval process, products and markets, and business trends and other information referred to under the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” are forward-looking statements. These statements are subject to substantial known and unknown risks, uncertainties and other factors that may cause our actual results, outcomes, performance or achievements, or the timing of such results, outcomes, performance or achievements, to be materially different from any results, outcomes, performances or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “assumes,” “believes,” “commitments,” “could,” “estimates,” “expects,” “forecasts,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “targets,” “will,” “would,” “seeks” and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events, are based on assumptions, and are subject to risks, uncertainties and other important factors, including, among other things, the commercial acceptance and success of ICOTYDE and MIMRYLO, which depends on the efforts of our collaboration partners; the timing and amount of royalty and milestone payments we receive from our ICOTYDE and MIMRYLO collaborations; the results of ICOTYDE and MIMRYLO clinical trials; the potential for our programs; the timing, initiation, progress and expected results of our clinical trials and research and development programs, including enrollment, data, costs and regulatory submissions and approvals; our cash runway; our ability to advance product candidates into, and successfully complete, non-clinical studies and clinical trials; our eligibility for, and any expected benefits of, any U.S. Food and Drug Administration (“FDA”) programs or special designations; the potential for eventual regulatory approval and commercialization of our product candidates; the commercialization of our product candidates, if approved; our ability and the potential to successfully manufacture and supply our product candidates for clinical trials and for commercial use, if approved; the pricing, coverage, and reimbursement of our product candidates, if approved; future operating results; our ability and that of our collaboration p…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

outcomes could differ materially from those anticipated in any forward-looking statements, whether as a result of new information, future developments, changes in assumptions or otherwise. We caution investors that our business and financial performance are subject to substantial risks and uncertainties.

Current wording

assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results or outcomes could differ materially from those anticipated in any forward-looking statements, whether as a result of new information, future developments, changes in assumptions or otherwise. We caution investors that our business and financial performance are subject to substantial risks and uncertainties.

Previous wording

“Protagonist,” the Protagonist logo and other trademarks, service marks and trade names of Protagonist are registered and unregistered marks of Protagonist Therapeutics, Inc. in the United States and other jurisdictions.

Current wording

“Protagonist,” the Protagonist logo and other trademarks, service marks and trade names of Protagonist are registered and unregistered marks of Protagonist Therapeutics, Inc. in the United States and other jurisdictions. Other registered and unregistered trademarks, service marks and trade names are the property of their respective owners.

Previous wording

We are a discovery through late-stage development biopharmaceutical company with a proprietary technology platform that enables de novo discovery of peptide therapeutics. Our development products and discovery programs fall into three broad therapeutic areas: (i) inflammation and immunology (“I&I”), (ii) hematology and (iii) metabolic diseases. Our aim is to develop medicines for biologically and commercially validated targets which demonstrate a strong differentiation compared to existing therapies.

Current wording

We are a biopharmaceutical company built on a proprietary peptide technology platform. Our development products and discovery programs fall into three broad therapeutic areas: (i) inflammation and immunology (“I&I”), (ii) hematology and (iii) metabolic diseases. Our aim is to develop medicines for biologically and commercially validated targets which demonstrate a strong differentiation compared to existing therapies.

Previous wording

ICOTYDE™ (icotrokinra) was approved in the United States in March 2026 for the treatment of moderate-to-severe plaque psoriasis in adults and pediatric patients 12 years of age or older who weigh at least 40 kg and are candidates for systemic therapy or phototherapy. ICOTYDE is the first and only targeted oral peptide that precisely blocks the Interleukin-23 receptor (“IL-23R”), which underpins the inflammatory response in psoriasis and offers potential in other IL-23-mediated diseases. ICOTYDE is licensed to Janssen Biotech, Inc., a Johnson & Johnson company (“JNJ”), under a license and collaboration agreement initially entered into in 2017. Following ICOTYDE’s joint discovery by Protagonist and JNJ scientists, we were primarily responsible for the development of ICOTYDE through Phase 1, with JNJ assuming responsibility for further development and commercialization. In September 2025, JNJ submitted an application to the European Medicines Agency (“EMA”) seeking the first approval of ICOTYDE for the treatment of adults and pediatric patients 12 years of age or older with moderate-to-severe plaque psoriasis. ICOTYDE is in Phase 3 development for additional indications including psoriatic arthritis, ulcerative colitis and Crohn’s disease.

Current wording

ICOTYDE® (icotrokinra) was approved in the United States in March 2026 for the treatment of moderate-to-severe plaque psoriasis in adults and pediatric patients 12 years of age or older who weigh at least 40 kg and are candidates for systemic therapy or phototherapy. ICOTYDE is the first and only targeted oral peptide that precisely blocks the Interleukin-23 receptor (“IL-23R”), which underpins the inflammatory response in psoriasis and offers potential in other IL-23-mediated diseases. ICOTYDE is licensed to Janssen Biotech, Inc., a Johnson & Johnson company (“JNJ”), under a license and collaboration agreement initially entered into in 2017. Following ICOTYDE’s joint discovery by Protagonist and JNJ scientists, we were primarily responsible for the development of ICOTYDE through Phase 1, with JNJ assuming responsibility for further development and commercialization. In September 2026, the European Commission granted approval of JNJ’s marketing application for ICOTYDE for the treatment of adults and pediatric patients 12 years of age and older with moderate-to-severe plaque psoriasis. ICOTYDE has also received regulatory approval in Japan and China. ICOTYDE is in Phase 3 development for additional immune-mediated diseases, including psoriatic arthritis, ulcerative colitis and Crohn’s disease.

Previous wording

Rusfertide is a first-in-class investigational injectable mimetic of the natural hormone hepcidin in development for the treatment of the rare blood disorder polycythemia vera (“PV”). We discovered rusfertide, advanced it into Phase 3 development, and entered into a license and collaboration agreement with Takeda Pharmaceuticals, Inc. (“Takeda”) in January 2024 (the “Takeda Collaboration Agreement”). We remained primarily responsible for clinical development activities through rusfertide’s New Drug Application (“NDA”) filing for the treatment of erythrocytosis in patients with PV, which we and Takeda submitted in December 2025, and Takeda is responsible for further development and commercialization. In March 2026, the FDA accepted the NDA and granted Priority Review status for rusfertide. Rusfertide has also previously received Orphan Drug status, Fast Track designation and, in August 2025, Breakthrough Therapy designation (“BTD”). BTD is a process designed to expedite the development and review of drugs that are intended to treat a serious condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over available therapies. BTD also provides eligibility for priority NDA review, and Orphan Drug status qualifies sponsors for various incentives, including the potential for extended market exclusivity. The NDA for rusfertide is currently under priority review by the FDA, with a Prescription Drug User Fee Act target action date in August 2026. Takeda has disclosed that it expects to launch rusfertide in the second half of 2026, subject to regulatory approval.

Current wording

MIMRYLO™ (rusfertide), a subcutaneously delivered first-in-class hepcidin mimetic, was approved in the United States in August 2026 for the treatment of erythrocytosis in adults with the rare blood disorder polycythemia vera (“PV”). On September 30, 2026, MIMRYLO was also approved in the United Arab Emirates. MIMRYLO, the first and only hepcidin mimetic approved for PV, a blood cancer characterized by the excessive production of red blood cells, demonstrated key efficacy outcomes of response rate and hematocrit control as well as fatigue improvement. We discovered MIMRYLO, advanced it into Phase 3 development, and entered into a license and collaboration agreement with Takeda Pharmaceuticals, Inc. (“Takeda”) in January 2024 (the “Takeda Collaboration Agreement”). We remained primarily responsible for clinical development activities through MIMRYLO’s New Drug Application (“NDA”) filing for the treatment of erythrocytosis in patients with PV, which we and Takeda submitted in December 2025, and Takeda is responsible for further development and commercialization. In September 2026, MIMRYLO was added as a Category 1 treatment option for both low- and high-risk PV in the National Comprehensive Cancer Network’s updated guidelines. MIMRYLO previously received Orphan Drug designation, which qualifies sponsors for various incentives, including the potential for extended market exclusivity.

Previous wording

In October 2025, the first human subject was dosed in our Phase 1 trial of PN-881 (ClinicalTrials.gov identifier NCT07153146) evaluating its safety, tolerability, pharmacokinetics and pharmacodynamics in healthy adults. We believe data from our Phase 1 study supports our decision to advance PN-881 into a comprehensive Phase 2b psoriasis program, with initiation expected in early first quarter 2027.

Current wording

In October 2025, the first human subject was dosed in our Phase 1 trial of PN-881 (ClinicalTrials.gov identifier NCT07153146) evaluating its safety, tolerability, pharmacokinetics and pharmacodynamics in healthy adults. We believe data from our completed Phase 1 study supports our decision to advance PN-881 into a comprehensive Phase 2b psoriasis program, with initiation of a dose range-finding study in patients with plaque psoriasis expected in early first quarter 2027. Phase 1 data are expected to be presented at a future medical meeting.

Previous wording

PN-458. In December 2025, we nominated development candidate PN-458, a potential best-in-class novel dual GLP-1 and GIP receptor agonist peptide, as a development candidate for the treatment of obesity. IND-enabling studies are ongoing, with the initiation of a Phase 1 study for the PN-458 oral formulation anticipated in the second half of 2027.

Current wording

PN-458. In December 2025, we nominated PN-458, a potential best-in-class novel dual GLP-1 and GIP receptor agonist peptide, as a development candidate for the treatment of obesity. IND-enabling studies are ongoing, with the initiation of a Phase 1 study for the PN-458 oral formulation anticipated in the second half of 2027.

Previous wording

PN-8047. In December 2025, we nominated development candidate PN-8047, an orally administered small molecule hepcidin functional mimetic, which we believe may be complementary to the injectable rusfertide for offering the best treatment options for PV. IND-enabling studies for PN-8047 are ongoing, with the initiation of a Phase 1 study anticipated in the first quarter of 2027.

Current wording

PN-8047. In December 2025, we nominated development candidate PN-8047, an orally administered small molecule hepcidin functional mimetic, which we believe may be complementary to the injectable MIMRYLO for offering the best treatment options for PV. IND-enabling studies for PN-8047 are ongoing, with the initiation of a Phase 1 study anticipated in the first quarter of 2027.

Previous wording

We also have pre-clinical stage drug discovery programs addressing biologically and commercially validated targets, includingan oral IL-4R alpha antagonist for the treatment of atopic dermatitis and moderate-to-severe asthma, and amylinR-based oral and subcutaneous mono- and poly-agonists for the treatment of obesity.

Current wording

We also have pre-clinical stage drug discovery programs addressing biologically and commercially validated targets, includingan oral IL-4R alpha antagonist for the treatment of atopic dermatitis and moderate-to-severe asthma, and amylinR-based mono- and poly-agonists for the treatment of obesity.

Previous wording

We ended the second quarter of 2026 with cash, cash equivalents and marketable securities of approximately $849.5 million, as compared to cash, cash equivalents and marketable securities of approximately $646.0 million as of December 31, 2025. For the remainder of 2026 and beyond, we are eligible to receive significant milestone, royalty and other payments from our collaborations with JNJ and Takeda, as described below.

Current wording

We ended the third quarter of 2026 with cash, cash equivalents and marketable securities of approximately $834.6 million, as compared to cash, cash equivalents and marketable securities of approximately $646.0 million as of December 31, 2025. For the remainder of 2026 and beyond, we are eligible to receive significant milestone, royalty and other payments from our collaborations with JNJ and Takeda, as described below.

Previous wording

We and JNJ are parties to a license and collaboration agreement related to the development and commercialization of ICOTYDE. We entered into the agreement in July 2017, and amended it in May 2019, July 2021 and November 2024 (as amended, the “JNJ License and Collaboration Agreement”). Pursuant to the JNJ License and Collaboration Agreement, we were primarily responsible for the discovery, IND-enabling studies, and the initial Phase 1 study for ICOTYDE, and JNJ is primarily responsible for conducting all further development.

Current wording

We and JNJ are parties to a license and collaboration agreement related to the development and commercialization of ICOTYDE. We entered into the agreement in July 2017, and amended it in May 2019, July 2021 and November 2024 (as amended, the “JNJ License and Collaboration Agreement”). Pursuant to the JNJ License and Collaboration Agreement, we were primarily responsible for the discovery, IND-enabling studies, and the initial Phase 1 study for ICOTYDE, and JNJ is responsible for conducting all further development.

Previous wording

In March 2026, we earned a $50.0 million milestone payment upon FDA approval of ICOTYDE for the treatment of moderate-to-severe plaque psoriasis in adults and pediatric patients 12 years of age or older who weigh at least 40 kg and are candidates for systemic therapy or phototherapy. As of June 30, 2026, we have earned a total of $387.5 million in non-refundable upfront and milestone payments from JNJ under the agreement. We are eligible to

Current wording

In March 2026, we earned a $50.0 million milestone payment upon FDA approval of ICOTYDE for the treatment of moderate-to-severe plaque psoriasis in adults and pediatric patients 12 years of age or older who weigh at least 40 kg and are candidates for systemic therapy or phototherapy. As of September 30, 2026, we have earned a total of $387.5 million in non-refundable upfront and milestone payments from JNJ under the agreement. We are eligible to receive up to $580.0 million in future development and sales milestone payments, including the following potential milestones:

Previous wording

We will also receive upward tiered royalties on net worldwide ICOTYDE product sales at percentages ranging from 6% to 10%. Our weighted-average royalty rate on the first $4.0 billion in annual net sales is 7.25%, and the rate on net sales over $4.0 billion is 10%. The ultimate magnitude of our royalty stream, along with the achievement of development and commercial milestones, will depend upon ICOTYDE’s commercial launch success and market trajectory, which depends on the efforts of our collaboration partner, as well as the successful clinical development, regulatory approval, and commercialization of ICOTYDE in the additional indications currently being studied.

Current wording

We are also eligible to receive upward tiered royalties on net worldwide ICOTYDE product sales at percentages ranging from 6% to 10%. Our weighted-average royalty rate on the first $4.0 billion in annual net sales is 7.25%, and the rate on net sales over $4.0 billion is 10%. The ultimate magnitude of our royalty stream, along with the achievement of development and commercial milestones, will depend upon ICOTYDE’s commercial launch success and market trajectory, which depends on the efforts of our collaboration partner, as well as the successful clinical development, regulatory approval, and commercialization of ICOTYDE in the additional indications currently being studied.

Previous wording

In January 2024, we entered into the Takeda Collaboration Agreement related to rusfertide (and specified second-generation injectable hepcidin mimetic compounds developed and commercialized under the agreement that are not currently in development). In December 2025, we and Takeda submitted an NDA to the FDA for rusfertide in PV, which is currently under priority review. We were primarily responsible for the clinical development of rusfertide through NDA filing and remain primarily responsible for the conduct of ongoing rusfertide long-term extension studies. Under the terms of the agreement, we received an upfront payment of $300.0 million in April 2024 and a $25.0 million milestone payment in September 2025 upon completion of the Phase 3 VERIFY clinical trial (NCT05210790) report.

Current wording

In January 2024, we entered into the Takeda Collaboration Agreement related to MIMRYLO (and specified second-generation injectable hepcidin mimetic compounds developed and commercialized under the agreement that are not currently in development). In December 2025, we and Takeda submitted an NDA to the FDA for MIMRYLO in PV, which was approved in August 2026. We were primarily responsible for the clinical development of MIMRYLO through NDA filing and remain primarily responsible for conducting ongoing MIMRYLO long-term extension studies. Under the terms of the agreement, we received an upfront payment of $300.0 million in April 2024 and a $25.0 million milestone payment in September 2025 upon completion of the Phase 3 VERIFY clinical trial (NCT05210790) report.

Previous wording

Effective April 28, 2026, we exercised our right to opt-out of the U.S. profit and loss sharing arrangement (50% to us and 50% to Takeda) under the Takeda Collaboration Agreement. The opt-out election triggered a $200.0 million payment to us, which we received in the second quarter of 2026, and we also became eligible to receive an additional $200.0 million opt-out fee and a separate $75.0 million milestone, both of which are due upon FDA approval of rusfertide. Following the opt-out, Takeda has an exclusive worldwide license to develop and commercialize rusfertide, and we are eligible to receive tiered royalties ranging from 14% to 29% on annual worldwide net sales, with an approximate weighted-average royalty rate of 21% at $1.5 billion in annual net sales and a rate of 29% for incremental annual net sales over $1.5 billion. In addition, under the agreement, we are eligible to receive up to $775.0 million in sales milestones. Upcoming potential development milestones and potential sales milestones under the agreement include the following:

Current wording

Effective April 28, 2026, we exercised our right to opt out of the U.S. profit and loss sharing arrangement (50% to us and 50% to Takeda) under the Takeda Collaboration Agreement. The opt-out election triggered a $200.0 million payment to us, which we received in the second quarter of 2026. In August 2026, we earned an additional $200.0 million opt-out payment and a separate $75.0 million milestone upon FDA approval of MIMRYLO, which were received in October 2026. Following the opt-out, Takeda has an exclusive worldwide license to develop and commercialize MIMRYLO, and we are eligible to receive tiered royalties ranging from 14% to 29% on annual worldwide net sales,

Previous wording

The receipt of future royalties and commercial milestones is contingent upon the relevant products receiving FDA approval and achieving a successful commercial launch, which depends on the efforts of our collaboration partner.

Current wording

The receipt of future royalties and commercial milestones is contingent upon the relevant products achieving a successful commercial launch, which depends on the efforts of our collaboration partner.

Previous wording

We describe the respective risks, uncertainties and assumptions that could affect our business, financial condition or results of operations in Part II, Item 1A. “Risk Factors” herein and in Part 1, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

We describe the respective risks, uncertainties and assumptions that could affect our business, financial condition or results of operations in Part II, Item 1A. “Risk Factors” herein, Part II, Item 1A. “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 and in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.

Previous wording

We have incurred cumulative net losses from inception through June 30, 2026 of $304.0 million. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect to continue to incur significant research and development expenses, and other expenses related to our ongoing operations, clinical development and pre-clinical discovery programs.

Current wording

We have incurred cumulative net losses from inception through September 30, 2026 of $84.0 million. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect to continue to incur significant research and development expenses, and other expenses related to our ongoing operations, clinical development and pre-clinical discovery programs.

Previous wording

There have been no material changes to our critical accounting policies during the three and six months ended June 30, 2026, as compared to those disclosed in*“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates”* in our Annual Report for the year ended December* *31, 2025 filed with the SEC on February 25, 2026.

Current wording

There have been no material changes to our critical accounting policies during the three and nine months ended September 30, 2026, as compared to those disclosed in*“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates”* in our Annual Report for the year ended December* *31, 2025 filed with the SEC on February 25, 2026.

Previous wording

Our license and collaboration revenue is derived from payments we receive from our collaboration partners under the JNJ License and Collaboration Agreement and the Takeda Collaboration Agreement. We expect our revenue to increase significantly in future periods due to the receipt of milestone payments, including payments related to NDA approvals and the exercise of our opt-out right under the Takeda Collaboration Agreement and royalties for sales of ICOTYDE for moderate-to-severe plaque psoriasis, and in other indications if approved. We also expect to receive royalties for rusfertide in PV if NDA approval is received and the product is successfully commercialized. See Note 3 to the condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information.

Current wording

Our license and collaboration revenue is derived from payments we receive from our collaboration partners under the JNJ License and Collaboration Agreement and the Takeda Collaboration Agreement. See Note 3 to the condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information.

Previous wording

payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when payment has been made. In instances where we enter into agreements with third parties to provide research and development services to us, costs are expensed as services are performed. Amounts due under such arrangements may be either fixed fee or fee for service and may include upfront payments, monthly payments, and payments upon the completion of milestones or the receipt of deliverables.

Current wording

Research and development expenses represent costs incurred to conduct research, such as the discovery and development of our product candidates. We recognize all research and development costs as they are incurred unless there is an alternative future use in other research and development projects or otherwise. Non-refundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when payment has been made. In instances where we enter into agreements with third parties to provide research and development services to us, costs are expensed as services are performed. Amounts due under such arrangements may be either fixed fee or fee for service and may include upfront payments, monthly payments, and payments upon the completion of milestones or the receipt of deliverables.

Previous wording

General and administrative expenses consist of personnel costs, allocated costs and other expenses for outside professional services, including legal, human resources, audit and accounting services. Personnel costs consist of salaries, benefits and stock-based compensation. Allocated costs consist of expenses for rent and maintenance of facilities, information technology, depreciation and amortization expense and administrative supplies. We expect to

Current wording

General and administrative expenses consist of personnel costs, allocated costs and other expenses for outside professional services, including legal, human resources, audit and accounting services. Personnel costs consist of salaries, benefits and stock-based compensation. Allocated costs consist of expenses for rent and maintenance of facilities, information technology, depreciation and amortization expense and administrative supplies. We expect to continue to incur expenses to support our continued operations as a public company, including expenses related to compliance with the rules and regulations of the SEC and those of the national securities exchange on which our securities are traded, insurance expenses, investor relations expenses, audit fees, professional services and general overhead and administrative costs.

Previous wording

services provided by us during the period under the Takeda Collaboration Agreement based on the cost-based input method.

Current wording

License and collaboration revenue for the three months ended September 30, 2025 was $4.7 million and was related to the Takeda Collaboration Agreement for development services provided by us during the period based on the cost-based input method.

Previous wording

We had 108 and 100 full-time equivalent research and development headcount as of June 30, 2026 and 2025, respectively. Research and development personnel-related expenses for the three months ended June 30, 2026 increased by $1.9 million as compared to the three months ended June 30, 2025, primarily driven by increases in wages, benefits and stock-based compensation.

Current wording

We had 111 and 99 full-time equivalent research and development headcount as of September 30, 2026 and 2025, respectively. Research and development personnel-related expenses for the three months ended September 30, 2026 increased by $0.6 million as compared to the three months ended September 30, 2025, primarily driven by increases in wages, benefits and stock-based compensation.

Previous wording

We expect research and development expenses to increase significantly in the second half of 2026 compared to the first half of 2026. The increase is expected to be driven primarily by the advancement of PN-881 into a comprehensive Phase 2b psoriasis program, planned investments in clinical manufacturing and related activities, including at-risk expenditures to ensure readiness for other programs as they advance to clinical development (PN-477sc, PN-458, PN-8047), additional pre-clinical discovery programs, and increases in headcount and stock-based compensation expense. The timing and magnitude of these expenses will vary depending on the progress of our programs, including the initiation and pace of clinical trials and related development activities.

Current wording

We expect research and development expenses to increase for the remainder of the year as compared to the prior quarters in 2026. The increase is expected to be driven primarily by the advancement of PN-881 into a comprehensive Phase 2b psoriasis program, planned investments in clinical manufacturing and related activities, including at-risk expenditures to ensure readiness for other programs as they advance to clinical development (PN-477o, PN-458, PN-8047), additional pre-clinical discovery programs, and increases in headcount and stock-based compensation expense. The timing and magnitude of these expenses will vary depending on the progress of our programs, including the initiation and pace of clinical trials and related development activities.

Previous wording

General and administrative expenses increased $2.1 million, or 20%, from $10.6 million for the three months ended June 30, 2025 to $12.6 million for the three months ended June 30, 2026. The increase was primarily due to an increase in personnel-related expenses driven by increases in wages, benefits and stock-based compensation.

Current wording

General and administrative expenses increased $2.6 million, or 23%, from $11.1 million for the three months ended September 30, 2025 to $13.7 million for the three months ended September 30, 2026. The increase was primarily due to an increase in personnel-related expenses driven by increases in wages, benefits and stock-based compensation.

Previous wording

We had 33 and 30 full-time equivalent general and administrative headcount as of June 30, 2026 and 2025, respectively.

Current wording

We had 38 and 29 full-time equivalent general and administrative headcount as of September 30, 2026 and 2025, respectively.

Previous wording

Income tax expense was $2.3 million and $0.2 million for the three months ended June 30, 2026 and 2025, respectively. The increase in income tax expense for the three months ended June 30, 2026 was primarily due to pretax income recorded as compared to a pretax loss for the prior year period. The effective tax rate was 1.4% and 0% for the three months ended June 30, 2026 and 2025, respectively.

Current wording

Income tax expense was $6.6 million and zero for the three months ended September 30, 2026 and 2025, respectively. The increase in income tax expense for the three months ended September 30, 2026 was primarily due to pretax income recorded as compared to a pretax loss for the prior year period. The effective tax rate was 2.9% and 0% for the three months ended September 30, 2026 and 2025, respectively.

Previous wording

License and collaboration revenue for the three months ended June 30, 2025 was $5.5 million, which consisted of (i) $5.0 million for development services provided by us during the period under the Takeda Collaboration Agreement based on the cost-based input method and (ii) $0.5 million related to the proportional recognition of the $25.0 million milestone from Takeda deemed probable of being achieved due to the Phase 3 VERIFY trial meeting its primary endpoint.

Current wording

License and collaboration revenue for the nine months ended September 30, 2025 was $38.6 million and was related to the Takeda Collaboration Agreement, which consisted of (i) $21.3 million representing a portion of the $25.0 million milestone payment received in September 2025 that was allocated to the MIMRYLO license delivery performance obligation under the agreement and (ii) $17.3 million for development services provided by us during the period based on the cost-based input method.

Previous wording

We had 108 and 100 full-time equivalent research and development headcount as of June 30, 2026 and 2025, respectively. Research and development personnel-related expenses for the six months ended June 30, 2026 increased by $2.9 million as compared to the six months ended June 30, 2025, primarily driven by increases in wages, benefits and stock-based compensation.

Current wording

We had 111 and 99 full-time equivalent research and development headcount as of September 30, 2026 and 2025, respectively. Research and development personnel-related expenses for the nine months ended September 30, 2026 increased by $5.4 million as compared to the nine months ended September 30, 2025, primarily driven by increases in wages, benefits and stock-based compensation.

Previous wording

We expect research and development expenses to increase significantly in the second half of 2026 compared to the first half of 2026. The increase is expected to be driven primarily by the advancement of PN-881 into a comprehensive Phase 2b psoriasis program, planned investments in clinical manufacturing and related activities, including at-risk expenditures to ensure readiness for other programs as they advance to clinical development (PN-477sc, PN-458, PN-8047), additional pre-clinical discovery programs, and increases in headcount and stock-based compensation expense. The timing and magnitude of these expenses will vary depending on the progress of our programs, including the initiation and pace of clinical trials and related development activities.

Current wording

We expect research and development expenses to increase for the remainder of the year as compared to the prior quarters in 2026. The increase is expected to be driven primarily by the advancement of PN-881 into a comprehensive Phase 2b psoriasis program, planned investments in clinical manufacturing and related activities, including at-risk expenditures to ensure readiness for other programs as they advance to clinical development (PN-477o, PN-458, PN-8047), additional pre-clinical discovery programs, and increases in headcount and stock-based compensation expense. The timing and magnitude of these expenses will vary depending on the progress of our programs, including the initiation and pace of clinical trials and related development activities.

Previous wording

General and administrative expenses increased $3.6 million, or 16%, from $22.3 million for the six months ended June 30, 2025 to $25.9 million for the six months ended June 30, 2026. The increase was primarily due to an increase in personnel-related expenses, primarily driven by increases in wages, benefits and stock-based compensation.

Current wording

General and administrative expenses increased $6.2 million, or 19%, from $33.4 million for the nine months ended September 30, 2025 to $39.6 million for the nine months ended September 30, 2026. The increase was primarily due to an increase in personnel-related expenses, primarily driven by increases in wages, benefits and stock-based compensation.

Previous wording

We had 33 and 30 full-time equivalent general and administrative headcount as of June 30, 2026 and 2025, respectively.

Current wording

We had 38 and 29 full-time equivalent general and administrative headcount as of September 30, 2026 and 2025, respectively.

Previous wording

Interest income decreased by $1.0 million, or 13%, from $7.4 million for the three months ended June 30, 2025 to $6.4 million for the three months ended June 30, 2026 primarily due to lower yields and lower average investment balance as compared to the prior period.

Current wording

Interest income decreased by $1.5 million, or 7%, from $22.0 million for the nine months ended September 30, 2025 to $20.6 million for the nine months ended September 30, 2026 primarily due to lower average investment balances as compared to the prior year period.

Previous wording

Income tax expense was $0.8 million and $0.2 million for the six months ended June 30, 2026 and 2025, respectively. The increase in income tax expense for the six months ended June 30, 2026 was primarily due to pretax income recorded as compared to a pretax loss for the prior year period. The effective tax rate was 0.5% and 0% for the six months ended June 30, 2026 and 2025, respectively.

Current wording

Income tax expense was $7.3 million and $0.2 million for the nine months ended September 30, 2026 and 2025, respectively. The increase in income tax expense for the nine months ended September 30, 2026 was primarily due to pretax income recorded as compared to a pretax loss for the prior year period. The effective tax rate was 1.9% and 0% for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

We had $849.5 million and $646.0 million in cash, cash equivalents and marketable securities as of June 30, 2026 and December 31, 2025, respectively. Historically, we have funded our operations primarily from receipt of payments under collaboration agreements, as discussed in “Collaboration Agreements” above, and net proceeds from the sale of shares of our common stock.

Current wording

We had $834.6 million and $646.0 million in cash, cash equivalents and marketable securities as of September 30, 2026 and December 31, 2025, respectively. Historically, we have funded our operations primarily from receipt of payments under collaboration agreements, as discussed in “License and Collaboration Agreements” above, and net proceeds from the sale of shares of our common stock.

Previous wording

As of June 30, 2026, we had $849.5 million in cash, cash equivalents and marketable securities and an accumulated deficit of $304.0 million. Our capital expenditures were $0.4 million and $1.6 million for the six months ended June 30, 2026 and the year ended December 31, 2025, respectively. Our primary uses of cash are to fund our operating expenses, including our research and development expenditures and general and administrative costs. We expect that our existing cash, cash equivalents and marketable securities will be sufficient to fund our operations for at least the next twelve months from the date of this Quarterly Report based on current operating plans and financial forecasts.

Current wording

As of September 30, 2026, we had $834.6 million in cash, cash equivalents and marketable securities and an accumulated deficit of $84.0 million. Our capital expenditures were $0.6 million and $1.6 million for the nine months ended September 30, 2026 and the year ended December 31, 2025, respectively. Our primary uses of cash are to fund our costs and operating expenses, including our cost of revenue, research and development expenditures and general and administrative costs. We expect that our existing cash, cash equivalents and marketable securities will be sufficient to fund our operations for at least the next twelve months from the date of this Quarterly Report based on current operating plans and financial forecasts.

Previous wording

We do not currently anticipate a need for additional funding in the near term. However, we may require additional funding in the future to advance our discovery pipeline and to develop, acquire, or in-license other potential product candidates. Our future funding requirements will depend on many factors, including those described in Part II, Item 1A, “Risk Factors” herein and in Part 1, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025. Such additional funding may come from various sources, including raising additional capital, seeking access to debt, and seeking additional collaborative or other arrangements with partners, but such funding may not be available on terms acceptable to us, if at all.

Current wording

We do not currently anticipate a need for additional funding in the near term. However, we may require additional funding in the future to advance our discovery pipeline and to develop, acquire, or in-license other potential product candidates. Our future funding requirements will depend on many factors, including those described in Part II, Item 1A, “Risk Factors” herein, Part II, Item 1A. “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 and in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025. Such additional funding may come from various sources, including raising additional capital, seeking access to debt, and seeking additional collaborative or other arrangements with partners, but such funding may not be available on terms acceptable to us, if at all.

Previous wording

Cash provided by operating activities for the six months ended June 30, 2026 was $170.1 million and consisted primarily of net income of $166.6 million and certain non-cash items, including $28.6 million of stock-based compensation expense, partially offset by a net change of $24.7 million in net operating assets and liabilities. The $73.5 million increase in cash provided by operating activities during the six months ended June 30, 2026, as compared

Current wording

Cash provided by operating activities for the nine months ended September 30, 2026 was $146.9 million and consisted primarily of net income of $386.6 million and certain non-cash items, including $42.9 million of stock-based compensation expense, partially offset by a net change of $282.1 million in net operating assets and liabilities. The $52.2 million increase in cash provided by operating activities during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, was primarily due to a $472.4 million increase in net income related to opt-out and milestone payments earned during the period, a $20.3 million increase in deferred revenue and a $6.9 million increase in income taxes payable, partially offset by a $448.1 million change in receivable from collaboration partner.