Protagonist Therapeutics Inc
For the period ended Dec 31, 2024. Filed Feb 21, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 21, 2025
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Protagonist Therapeutics, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Protagonist Therapeutics, Inc. (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), stockholders' equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 21, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
| | | |
|---|---|---|
| | | Takeda Collaboration Agreement |
| Description of the Matter | | As described in Note 3, the Company entered into a Collaboration and License Agreement with Takeda Pharmaceuticals USA, Inc. (Takeda), pursuant to which the Company and Takeda will collaborate on the development and commercialization of rusfertide (Takeda Agreement). As further described in Note 3, the transaction price was allocated at the inception of the agreement to all identified performance obligations based on the relative standalone selling price.Auditing the Company’s revenue recognition for the Takeda Agreement was complex and required the evaluation of significant judgments made by management, including the determination of the standalone selling price of the license obligation. The estimated standalone selling price for the performance obligation related to the license of intellectual property reflects management’s assumptions, which includes forecasted revenues, development timelines, discount rates and probabilities of technical and regulatory success. Changes to these assumptions can have a material effect on the allocation of the transaction price to the performance obligations as well as the amount and timing of revenue recognized. |
| How We Addressed the Matter in Our Audit | | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls addressing the risks of material misstatement related to the accounting for the Takeda Agreement. For example, we tested management’s controls over the identification of performance obligations, the determination of the significant assumptions described above with respect to the estimation of the standalone selling price of the performance obligations related to the licensed compounds, and the accuracy and completeness of underlying data used in estimating the standalone selling price and the transaction price.Our audit procedures included, among others, obtaining and reading the Takeda Agreement and evaluating the completeness of the performance obligations identified by management. We also evaluated management’s estimates of the standalone selling price for identified performance obligations. For example, we evaluated the reasonableness and consistency of significant assumptions used in the determination of standalone selling price. We also performed a sensitivity analysis to evaluate the impact that changes in the significant assumptions would have on the estimated standalone selling price of performance obligations and the resulting impact on the allocation of transaction price to each performance obligation, as well as revenue recognized during the period. We involved our valuation professionals to assist in the assessment of certain assumptions used in the determination of the estimated standalone selling price of the license performance obligation. |
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2020.
San Mateo, California
February 21, 2025
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.