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; our cash runway; our ability to advance product candidates into, and successfully complete, nonclinical studies and clinical trials; 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; our potential receipt of milestone payments and royalties under our collaboration agreements; future operating results; our ability to generate sales, income or cash flow; our estimates regarding expenses, capital requirements, and needs for additional financing and our ability to obtain additional capital; our ability to retain the continued service of our key executives and to identify, hire, and retain additional qualified professionals, the impact of any future outbreaks of disease, epidemics…

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 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; our cash runway; our ability to advance product candidates into, and successfully complete, nonclinical studies and clinical trials; 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; our potential receipt of milestone payments and royalties under our collaboration agreements; future operating results; our ability to generate sales, income or cash flow; our estimates regarding expenses, capital requirements, and needs for additional financing and our ability to obtain additional capital; our ability to retain the continued service of our key executives and to identify, hire, and retain additional qualified professionals; the impact of any future outbreaks of disease, epidemics…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

We are a late-stage biopharmaceutical company with two peptide-based new chemical entities, rusfertide and JNJ-2113, in advanced Phase 3 stages of development, both of which are derived from our proprietary discovery technology platform. Our clinical programs fall into two broad categories of diseases: (i) hematology and blood disorders, and (ii) inflammatory and immunomodulatory (“I&I”) diseases. We also have a number of pre-clinical stage oral drug discovery programs addressing validated targets, including IL-17, hepcidin mimetic and anti-obesity programs.

Current wording

We are a discovery through late-stage development biopharmaceutical company focused on peptide therapeutics. Our clinical programs fall into two broad categories of diseases: (i) inflammatory and immunomodulatory (“I&I”) diseases, and (ii) hematology and blood disorders. Two novel peptides derived from our proprietary discovery technology platform, icotrokinra (formerly known as JNJ-2113) and rusfertide, are currently in advanced Phase 3 clinical development, with New Drug Application (“NDA”) submissions to the U.S. Food and Drug Administration (“FDA”) potentially in 2025.

Previous wording

Our Interleukin-23 receptor (“IL-23R”) antagonist compound JNJ-2113, partnered with J&J Innovative Medicines (“JNJ”), formerly Janssen Biotech, Inc., is an orally delivered investigational drug that is designed to block biological pathways currently targeted by marketed injectable antibody drugs. Our orally stable peptide approach may offer a targeted therapeutic approach for gastrointestinal and systemic compartments as needed. We believe that, compared to antibody drugs, JNJ-2113 has the potential to provide clinical improvement in an oral medication with increased convenience and compliance and the opportunity for the earlier introduction of targeted oral therapy.

Current wording

Our IL-23R antagonist compound icotrokinra, licensed to JNJ, is an orally delivered drug that is designed to block biological pathways currently targeted by marketed injectable antibody drugs. Our orally stable peptide approach may offer a targeted therapeutic approach for gastrointestinal and systemic compartments as needed. We believe that, compared to antibody drugs, icotrokinra has the potential to provide clinical improvement in an oral medication with increased convenience and compliance and the opportunity for the earlier introduction of targeted oral therapy.

Previous wording

JNJ has initiated the following JNJ-2113 trials:

Current wording

JNJ has initiated the following icotrokinra trials:

Previous wording

On July 17, 2021, we entered into an Amended and Restated License and Collaboration Agreement with JNJ, which amended and restated the License and Collaboration Agreement, effective July 13, 2017, by and between the Company and JNJ, as amended by the first amendment, effective May 7, 2019 (together, the “JNJ License and Collaboration Agreement”). Under the JNJ License and Collaboration Agreement, we earned a $50.0 million milestone payment upon dosing of the third patient in the ICONIC-TOTAL Phase 3 trial in late October 2023, which we received in December 2023. We earned a $10.0 million milestone payment upon the dosing of the third patient in the ANTHEM Phase 2b trial in UC in December 2023, which we received in January 2024. To date, we have earned $172.5 million in non-refundable payments from JNJ. We are eligiblefor up to approximately $795.0 million in future development and sales milestone payments, inclusive of the following potential upcoming milestones:

Current wording

In July 2021, we entered into an Amended and Restated License and Collaboration Agreement with JNJ, which amended and restated the License and Collaboration Agreement, effective July 2017, by and between the Company and JNJ, as amended in May 2019 (together, the “JNJ License and Collaboration Agreement”) for the development and commercialization of icotrokinra. The JNJ License and Collaboration Agreement was further amended in November 2024 to:

Previous wording

We also remain eligible to receive upward tiering royalties on net product sales at percentages ranging from six percent to ten percent, with ten percent applicable for net sales over $4.0 billion. See Note 3 to the condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information.

Current wording

We also remain eligible to receive upward tiering royalties on net product sales at percentages ranging from 6% to 10% with 10% applicable for net sales over $4.0 billion. See Note 3 to the condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information.

Previous wording

In January 2024, we announced a new oral Interleukin-17 (“IL-17”) peptide antagonist program targeting three IL-17 dimers (IL-17 AA, AF and FF) which may offer potential treatment options for hidradenitis suppurativa, spondyloarthritis, plaque psoriasis and psoriatic arthritis. We expect to nominate a development candidate ready for Investigational New Drug (“IND”) enabling studies, or foreign equivalents, by the end of 2024.

Current wording

In the fourth quarter of 2024, we announced the selection of PN-881, a potential best-in-class oral peptide IL-17 antagonist, as a development candidate for the treatment of immune-mediated skin diseases. PN-881 targets three IL-17 dimers (IL-17 AA, AF and FF), which may offer potential treatment options forplaque psoriasis, psoriatic arthritis, hidradenitis suppurativa and spondyloarthritis. Investigational New Drug (“IND”), or foreign equivalent, enabling studies are ongoing, and we expect to initiate a PN-881 Phase 1 study in the fourth quarter of 2025.

Previous wording

Rusfertide, our injectable hepcidin mimetic partnered with Takeda Pharmaceuticals USA, Inc. (“Takeda”), is in development for the treatment of polycythemia vera (“PV”). VERIFY (ClinicalTrials.gov identifier NCT05210790) is a global double-blind, placebo-controlled Phase 3 clinical trial of rusfertide in PV for approximately 250 patients. The trial evaluates the efficacy, symptom burden and safety of once-weekly, subcutaneously self-administered rusfertide in patients with uncontrolled hematocrit who are phlebotomy dependent despite standard of care treatment. The trial enrolled patients across North and South America, Europe, Asia and Australia. Enrollment for the VERIFY trial has been completed, and we expect to announce top-line data for the trial’s 32-week primary efficacy endpoint in the first quarter of 2025, potentially leading to a New Drug Application (“NDA”) filing in the fourth quarter of 2025. By the end of 2024, we expect to receive the results of our ongoing two-year study evaluating the carcinogenicity potential of rusfertide when administered once weekly to rats.

Current wording

Rusfertide is currently in Phase 3 development for the treatment of PV. VERIFY (ClinicalTrials.gov identifier NCT05210790) is a global double-blind, placebo-controlled Phase 3 clinical trial of rusfertide in PV with 293 patients enrolled. The trial evaluates the efficacy, symptom burden and safety of once-weekly, subcutaneously self-administered rusfertide in patients with uncontrolled hematocrit who are phlebotomy dependent despite standard of care treatment. The trial enrolled patients across North and South America, Europe, Asia and Australia. In March 2025, we announced positive top-line data for the trial’s 32-week primary efficacy endpoint, potentially leading to an NDA filing in the fourth quarter of 2025.

Previous wording

In January 2024, we entered into a worldwide license and collaboration agreement with Takeda for the development and commercialization of rusfertide (the “Takeda Collaboration Agreement”). Under the terms of the agreement, we received a one-time, non-refundable upfront payment of $300.0 million in April 2024. We are eligible to receive additional worldwide development, regulatory and commercial milestone payments for rusfertide of up to $330 million, inclusive of the following potential upcoming milestones:

Current wording

In January 2024, we entered into a worldwide license and collaboration agreement for rusfertide with Takeda (the “Takeda Collaboration Agreement”). In March 2025, we and Takeda agreed, pursuant to the provisions of the Takeda Collaboration Agreement, as amended, that Takeda will assume responsibility for leading and implementing the regulatory strategy and associated activities for the preparation of an NDA related to rusfertide in PV, which is expected to be submitted to the FDA. We are primarily responsible for the clinical development of rusfertide through a potential NDA filing. Under the terms of the agreement, we received a one-time, non-refundable upfront payment of $300.0 million in April 2024, and the achievement of a $25.0 million milestone was deemed probable in March 2025 following positive topline results from the Phase 3 VERIFY trial of rusfertide in PV. We are eligible to receive additional worldwide development, regulatory and commercial milestone payments for rusfertide of up to $305.0 million.

Previous wording

We are also eligible to receive tiered royalties from 10% to 17% on ex-U.S. net sales of rusfertide and other specified second-generation injectable hepcidin memetic compounds (the “Licensed Products”). We and Takeda also share equally in profits and losses (50% to us and 50% to Takeda of the Licensed Products in the United States). See Note 3 to the condensed consolidated financial statements included elsewhere in this Quarterly Report for further details related to the agreement, including our right to opt-out of the 50:50 U.S. profit and loss sharing arrangement.

Current wording

We are also eligible to receive tiered royalties from 10% to 17% on ex-U.S. net sales of rusfertide and other specified second-generation injectable hepcidin memetic compounds (the “Licensed Products”). We and Takeda also share equally in profits and losses (50% to us and 50% to Takeda of the Licensed Products in the United States) if approved.

Previous wording

Our clinical assets are all derived from our proprietary discovery platform. Our platform enables us to engineer novel, structurally constrained peptides that are designed to retain key advantages of both orally delivered small molecules and injectable antibody drugs while overcoming many of their limitations as therapeutic agents. Importantly, constrained peptides can be designed to potentially alleviate the fundamental instability inherent in traditional peptides to allow different delivery forms, such as oral, subcutaneous, intravenous, and rectal. Our discovery pipeline has strategically focused on i) hematology and blood disorders, ii) I&I diseases and iii) metabolic diseases, including obesity.

Current wording

Our clinical and pre-clinical assets are all derived from our proprietary discovery platform. Our platform enables us to engineer novel, structurally constrained peptides that are designed to retain key advantages of both orally delivered small molecules and injectable antibody drugs while overcoming many of their limitations as therapeutic agents. Importantly, constrained peptides can be designed to potentially alleviate the fundamental instability inherent in traditional peptides to allow different delivery forms, such as oral, subcutaneous, intravenous, and rectal. Our discovery pipeline has strategically focused on (i) I&I diseases, (ii) hematology and blood disorders and (iii) metabolic diseases, including obesity.

Previous wording

We have a pre-clinical stage program to identify an orally active hepcidin mimetic or small molecule ferropotin blocker, which we believe to be complementary to the injectable rusfertide for offering the best treatment options for PV and other potential erythropoietic and iron imbalance disorders, and we expect progression towards a development candidate during the first half of 2025. We also have an oral peptide-based program for obesity and expect progression towards a development candidate during the first half of 2025.

Current wording

We have a pre-clinical stage program to identify an orally administered hepcidin mimetic or ferroportin inhibitor, which we believe to be complementary to the injectable rusfertide for offering the best treatment options for PV and other potential erythropoietic and iron imbalance disorders, and we expect to nominate a development candidate in the fourth quarter of 2025. We also have an oral peptide-based anti-obesity program focused on validated targets and including mono- and poly-incretin and non-incretin agonists and we expect to nominate a development candidate by the end of the second quarter of 2025.

Previous wording

We have incurred cumulative net losses from inception through September 30, 2024 of $472.2 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, product development, pre-clinical discovery programs and pre-commercialization activities. As a result, we may incur losses in the future as we continue the development of, and seek regulatory approval for, our product candidates.

Current wording

We have incurred cumulative net losses from inception through March 31, 2025 of $352.2 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, product development, pre-clinical discovery programs and pre-commercialization activities. As a result, we may incur losses in the future as we continue the development of, and seek regulatory approval for, our product candidates.

Previous wording

Our management’s discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the unaudited condensed consolidated financial statements, as well as the reported revenue generated, and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, and the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Current wording

Our management’s discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the unaudited condensed consolidated financial statements, as well as the reported revenue generated and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, and the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Previous wording

There have been no other material changes to our critical accounting policies during the nine months ended September 30, 2024, 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, 2023 filed with the SEC on February 27, 2024.

Current wording

There have been no material changes to our critical accounting policies during the three months ended March 31, 2025, 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, 2024 filed with the SEC on February 21, 2025.

Previous wording

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

Previous wording

We recognize the amounts related to our Australian research and development refundable cash tax incentive that are not subject to refund provisions as a reduction of research and development expenses. The research and development tax incentives are recognized when there is reasonable assurance that the incentives will be received, the relevant expenditure has been incurred and the amount of the consideration can be reliably measured. We evaluate our eligibility under the tax incentive program as of each balance sheet date and make accruals and related adjustments based on the most current and relevant data available. We may alternatively be eligible for a taxable credit in the form of a non-cash tax incentive. We recognize the amounts from grants under government programs as a reduction of research and development expenses when the related research costs are incurred.

Current wording

We recognize the amounts related to our Australian research and development refundable tax offset that are not subject to refund provisions as a reduction in research and development expenses. The research and development tax offsets are recognized when there is reasonable assurance that the offset will be received, the relevant expenditure has been incurred, and the amount of the consideration can be reliably measured. We evaluate our eligibility under the tax offset program as of each balance sheet date and make accruals and related adjustments based on the most current and relevant data available. We may alternatively be eligible for a nonrefundable tax offset.

Previous wording

We allocate direct costs and indirect costs incurred to product candidates when they enter clinical development. For product candidates in clinical development, direct costs consist primarily of clinical, pre-clinical, and drug discovery costs, costs of supplying drug substance and drug product for use in clinical and pre-clinical studies, including clinical manufacturing costs, contract research organization fees, and other contracted services pertaining to specific clinical trials and pre-clinical studies. Indirect costs allocated to our product candidates on a program-specific basis include research and development employee salaries, benefits, and stock-based compensation, and indirect overhead and other administrative support costs. Program-specific costs are unallocated when the related expenses are incurred for our early-stage research and drug discovery projects as our internal resources, employees and infrastructure are not tied to any one research or drug discovery project and are typically deployed across multiple projects. As such, we do not provide financial information regarding the costs incurred for early-stage pre-clinical and drug discovery programs on a program-specific basis prior to the clinical development stage.

Current wording

We allocate direct costs and indirect costs incurred to product candidates when they enter clinical development. For product candidates in clinical development, direct costs consist primarily of clinical, pre-clinical, and drug discovery costs, costs of supplying drug substance and drug product for use in clinical and pre-clinical studies, including clinical manufacturing costs, contract research organization fees, and other contracted services pertaining to specific clinical and pre-clinical studies. Indirect costs allocated to our product candidates on a program-specific basis include research and development employee salaries, benefits, and stock-based compensation, and indirect overhead and other administrative support costs. Program-specific costs are unallocated when the related expenses are incurred for our early-stage research and drug discovery projects as our internal resources, employees and infrastructure are not tied to any one research or drug discovery project and are typically deployed across multiple projects. As such, we do not provide financial information regarding the costs incurred for early-stage pre-clinical and drug discovery programs on a program-specific basis prior to the clinical development stage.

Previous wording

We expect our research and development expenses to increase in the near term as compared to the prior year period as we continue to focus our resources on (i) progressing our rusfertide program in later stage clinical trials and preparing for regulatory filings and commercialization and (ii) advancing our pre-clinical and drug discovery research programs, including our expected nomination of a development candidate from our discovery platform for IND-enabling studies, or foreign equivalents, by the end of 2024. The process of conducting research, identifying potential product candidates, conducting pre-clinical studies and clinical trials necessary to obtain regulatory approval, and commencing pre-commercialization activities is costly and time intensive. We may never succeed in achieving marketing approval for our product candidates regardless of our costs and efforts. The probability of success of our product candidates may be affected by numerous factors, including pre-clinical data, clinical data, competition, manufacturing capability, our cost of goods to be sold, our ability to receive, and the timing of, regulatory approvals, market conditions, and our ability to successfully commercialize our products if they are approved for marketing. As a result, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of any of our product candidates. Our research and development programs are subject to change from time to time as we evaluate our priorities and available resources.

Current wording

We expect our research and development expenses to increase in the near term as compared to the prior year period as we continue to focus our resources toward (i) preparing for regulatory filings and commercialization for our rusfertide program and (ii) advancing our pre-clinical and drug discovery research programs, including progressing our recently nominated product development candidate PN-881 through IND-enabling studies, or foreign equivalents. The process of conducting research, identifying potential product candidates, conducting pre-clinical studies and clinical trials necessary to obtain regulatory approval and commencing pre-commercialization activities is costly and time intensive. We may never succeed in achieving marketing approval for our product candidates regardless of our costs and efforts. The probability of success of our product candidates may be affected by numerous factors, including pre-clinical data, clinical data, competition, manufacturing capability, our cost of goods to be sold, our ability to receive, and the timing of, regulatory approvals, market conditions, and our ability to successfully commercialize our products if they are approved for marketing. As a result, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will be able to generate revenue from the commercialization and sale of any of our product candidates. Our research and development programs are subject to change from time to time as we evaluate our priorities and available resources.

Previous wording

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

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, and pre-commercialization expenses, including selling and marketing costs. 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 other 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

Other income (expense), net consists primarily of amounts related to foreign exchange gains and losses and related items.

Current wording

Other income (expense), net consists primarily of amounts related to foreign exchange gains and losses, realized gains and losses on sale of marketable securities and related items.

Previous wording

License and collaboration revenue for the nine months ended September 30, 2024 of $263.8 million included $254.1 million of the $300.0 million upfront cash payment allocated to the delivery of the rusfertide license to Takeda upon effectiveness of the Takeda Collaboration Agreement in March 2024, and $9.7 million allocated to development services provided by us during the period based on the cost input method. For the nine months ended September 30, 2023, we did not recognize any license and collaboration revenue.

Current wording

License and collaboration revenue for the three months ended March 31, 2024 of $255.0 million included $254.1 million of the $300.0 million upfront cash payment allocated to the delivery of the rusfertide license to Takeda upon effectiveness of the Takeda Collaboration Agreement in March 2024, and $0.9 million allocated to development services provided by us during the period based on the cost input method. The remaining $45.0 million was recorded as deferred revenue to be recognized over time as we satisfy our performance obligation to complete the ongoing Phase 3 VERIFY trial for rusfertide.

Previous wording

We had 98 and 84 full-time equivalent research and development employees as of September 30, 2024 and 2023, respectively. Research and development personnel-related expenses for the three months ended September 30, 2024 increased by $3.0 million as compared to the three months ended September 30, 2023, including increases of $1.5 million in personnel-related expenses and $1.5 million in stock-based compensation expense.

Current wording

We had 97 full-time equivalent research and development employees for both the three months ended March 31, 2025 and 2024. Research and development personnel-related expenses for the three months ended March 31, 2025 increased by $2.2 million as compared to the three months ended March 31, 2024, primarily driven by an increase in stock-based compensation expense related to annual refresher awards granted in January 2025 and recognition of expense related to performance stock units (“PSUs”).

Previous wording

We had 28 and 27 full-time equivalent general and administrative employees as of September 30, 2024 and 2023, respectively.

Current wording

We had 27 full-time equivalent general and administrative employees for both the three months ended March 31, 2025 and 2024.

Previous wording

Interest income increased $3.4 million, or 81%, from $4.3 million for the three months ended September 30, 2023 to $7.7 million for the three months ended September 30, 2024. This increase was primarily due to higher invested balances, including the $300.0 million one-time, non-refundable upfront payment received under the Takeda Collaboration Agreement in April 2024.

Current wording

Interest income increased by $3.2 million, or 73%, from $4.4 million for the three months ended March 31, 2024 to $7.6 million for the three months ended March 31, 2025. This increase was primarily due to higher invested balances, including milestone payments received from our collaboration partners.

Previous wording

Income tax expense was $2.2 million and $0 for the nine months ended September 30, 2024 and 2023, respectively. Income tax expense for the nine months ended September 30, 2024 was a result of taxable income from the recognition of revenue in connection with the Takeda Collaboration Agreement. The effective tax rate was 1.53% and 0% for the nine months ended September 30, 2024 and 2023, respectively.

Current wording

Income tax expense was zero and $3.3 million for the three months ended March 31, 2025 and 2024, respectively. Income tax expense for the three months ended March 31, 2024 was a result of taxable income from the recognition of revenue in connection with the Takeda Collaboration Agreement. The effective tax rate was 1.54% for the three months ended March 31, 2024.

Previous wording

We had $583.3 million and $341.6 million in cash, cash equivalents and marketable securities as of September 30, 2024 and December 31, 2023, respectively. Historically, we have funded our operations primarily from net proceeds from the sale of shares of our common stock and the receipt of payments under collaboration agreements.

Current wording

We had $697.9 million and $559.2 million in cash, cash equivalents and marketable securities as of March 31, 2025 and December 31, 2024, respectively. Historically, we have funded our operations primarily from net proceeds from the sale of shares of our common stock and the receipt of payments under collaboration agreements.

Previous wording

Under the JNJ License and Collaboration Agreement, we earned a $50.0 million milestone payment upon the dosing of the third patient in the ICONIC-TOTAL Phase 3 trial in late October 2023, which we received in December 2023. We earned a $10.0 million milestone payment upon the dosing of the third patient in the ANTHEM Phase 2b trial in UC in December 2023, which we received in January 2024. We have earned a total of $172.5 million in non-refundable payments from JNJ from the inception of the JNJ License and Collaboration Agreement in 2017 through September 30, 2024. We have also received payments for services provided under the collaboration agreement, and we may make in-kind payment reimbursements to JNJ for certain costs they have incurred pursuant to the cost sharing terms of the agreement.

Current wording

We earned the $165.0 million milestone payment described above during the fourth quarter of 2024, which we received in January 2025. We have 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 March 31, 2025. We have also received payments for services provided under the collaboration agreement, and we have made in-kind payment reimbursements to JNJ for certain costs they have incurred pursuant to the cost sharing terms of the agreement. Pursuant to the JNJ License and Collaboration Agreement, we may be eligible to receive clinical development, regulatory and sales milestones, if and when achieved.

Previous wording

In March 2024, we earned a $300.0 million one-time, non-refundable upfront payment from Takeda upon the closing of the Takeda Collaboration Agreement, which we received in April 2024.

Current wording

In March 2024, we earned a $300.0 million one-time, non-refundable upfront payment from Takeda upon the closing of the Takeda Collaboration Agreement, which we received in April 2024. In March 2025, the achievement of a $25.0 million milestone was deemed probable based upon positive topline results for the Phase 3 VERIFY trial for rusfertide in PV. This milestone is payable upon the completion of the VERIFY clinical study report. Pursuant to the Takeda Collaboration Agreement, we may be eligible to receive additional clinical development, regulatory and sales milestones, if and when achieved.

Previous wording

As of September 30, 2024, we had $583.3 million in cash, cash equivalents and marketable securities and an accumulated deficit of $472.2 million. Our capital expenditures were $1.0 million and $0.6 million for the nine months ended September 30, 2024 and the year ended December 31, 2023, 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 March 31, 2025, we had $697.9 million in cash, cash equivalents and marketable securities and an accumulated deficit of $352.2 million. Our capital expenditures were $0.5 million and $1.4 million for the three months ended March 31, 2025 and the year ended December 31, 2024, 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.

Previous wording

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. As discussed in Part II, Item 1A. “Risk Factors,” we are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by domestic and global monetary and fiscal policy, geopolitical instability, inflationary pressures and high interest rates, among other factors. A future recession or market correction, including those due to significant geopolitical or macroeconomic events, could materially affect our business and our access to credit and financial markets.

Current wording

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. We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by domestic and global monetary and fiscal policy, changes in trade policies, including tariffs or other restrictions or the threat of such actions, geopolitical instability, inflationary pressures

Previous wording

Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. Further, our operating plans may change, and we may need additional funds to meet operational needs and capital requirements for clinical trials, other research and development activities and pre-commercialization costs. If we do raise additional capital through public or private equity offerings or convertible debt securities, the ownership interest of our existing stockholders could be diluted, and the terms of these securities could include liquidation or other preferences that could adversely affect our stockholders’ rights. If we raise additional capital through debt financing, we could be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to fully estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated product development programs. For additional information, see Part II, Item 1A. “Risk Factors” – “Risks Related to our Financial Position and Capital Requirements.”

Current wording

Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. Further, our operating plans may change, and we may need additional funds to meet operational needs and capital requirements for clinical trials, other research and development activities and pre-commercialization costs. If we do raise additional capital through public or private equity offerings or convertible debt securities, the ownership interest of our existing stockholders could be diluted, and the terms of these securities could include liquidation or other preferences that could adversely affect our stockholders’ rights. If we raise additional capital through debt financing, we could be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to fully estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated product development programs.

Previous wording

Cash provided by operating activities for the nine months ended September 30, 2024 was $213.3 million and consisted primarily of our net income of $143.5 million, $28.5 million of stock-based compensation and a change of $45.1 million in net operating assets and liabilities. The change in net operating assets and liabilities was driven primarily by a change of $36.2 million in deferred revenue related to the Takeda Collaboration Agreement and a change of $10.0 million in receivable from collaboration partner related to a milestone payment under the Janssen License and Collaboration Agreement. The $300.5 million increase in cash provided by operating activities during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, was primarily due to the receipt of a $300.0 million one-time, non-refundable upfront payment related to the Takeda Collaboration Agreement.

Current wording

Cash provided by operating activities for the three months ended March 31, 2025 was $125.4 million and consisted primarily of a net change of $124.7 million in operating assets and liabilities and $13.8 million of stock-based compensation expense, partially offset by a net loss of $11.7 million during the period. The change in net operating assets and liabilities was driven primarily by a $165.0 million milestone payment received under the JNJ License and Collaboration Agreement in January 2025, partially offset by the recognition of a $22.8 million contract asset related to the Takeda Collaboration Agreement, a $5.5 million change in deferred revenue and a $11.8 million change in accrued expenses and other payables. The $152.8 million increase in cash provided by operating activities during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, was primarily due to the receipt of a $165.0 million milestone payment from JNJ in January 2025.

Previous wording

Cash used in investing activities for the nine months ended September 30, 2024 was $290.8 million and consisted primarily of purchases of marketable securities of $507.3 million, partially offset by proceeds from maturities of marketable securities of $217.6 million. The $312.8 million increase in cash used in investing activities for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, was primarily related to the investment of a portion of the proceeds related to the Takeda Collaboration Agreement.

Current wording

Cash used in investing activities for the three months ended March 31, 2025 was $94.4 million and consisted primarily of purchases of marketable securities of $214.0 million and purchases of property and equipment of $0.5 million, partially offset by proceeds from maturities and sales of marketable securities of $120.2 million. The $100.5 million increase in cash used in investing activities for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, was primarily related to investments made with a portion of the proceeds from the $165.0 million milestone payment received from JNJ in January 2025. Purchases of property and equipment were primarily related to laboratory equipment and furniture and fixtures.

Previous wording

Cash provided by financing activities for the nine months ended September 30, 2024 was $21.8 million and consisted of net cash proceeds of $22.4 million from the issuance of common stock upon exercises of stock options and purchases of stock under our employee stock purchase plan (“ESPP”), partially offset by $0.6 million in tax withholding payments related to net settlement of restricted stock units. The $148.1 million decrease in cash provided by financing activities for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, was primarily due to $107.9 million of proceeds received from a public offering of our common

Current wording

Cash provided by financing activities for the three months ended March 31, 2025 was $11.4 million and consisted of net cash proceeds of $11.9 million from the issuance of common stock upon exercises of stock options and purchases of stock under our employee stock purchase plan (“ESPP”), partially offset by $0.5 million in tax withholding payments related to the net settlement of restricted stock units. The $4.2 million increase in cash provided by financing activities for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, was primarily due to a $4.1 million increase in proceeds from the issuance of common stock upon exercise of options and purchases of common stock under the ESPP.

Previous wording

Except as described above, during the nine months ended September 30, 2024 there were no other material changes to our material cash requirements, including commitments for capital expenditures, described underManagement’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 27, 2024.

Current wording

During the three months ended March 31, 2025, there were no material changes to our material cash requirements, including commitments for capital expenditures, described underManagement’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 21, 2025.