Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our Unaudited Condensed Consolidated Financial Statements and related notes included in Part I, Item 1 of this quarterly report on Form 10-Q (the "Quarterly Report") and with our Audited Consolidated Financial Statements and related notes thereto for the year ended December 31, 2024, included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on February 21, 2025.

Forward-Looking Statements

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 and pandemics; changes in the U.S. Food and Drug Administration (the "FDA"), and other government agencies; ongoing military conflicts, including between Ukraine and Russia and in the Middle East; rising tensions between China and Taiwan; developments relating to our competitors and our industry, including competing product candidates and therapies; uncertainty and disruption in the global economy and financial markets due to a number of factors, including but not limited to geopolitical instability, high interest rates, and changes in trade policies, including tariffs or other trade restrictions or the threat of such actions and retaliatory actions; a prolonged shutdown of the U.S. federal government; and other factors. Forward-looking statements involve risks, uncertainties and assumptions that are beyond our ability to control or predict, including those risks, uncertainties and assumptions discussed in Part II, Item 1A, of this Quarterly Report. These statements are based on information available to us as of the date of this Quarterly Report and, while we believe such information provides a reasonable basis for these statements, the information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. Given these risks, uncertainties and other important factors, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our estimates and assumptions only as of the date of this Quarterly Report. Except as required by law, we 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.

"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.

Overview

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 and rusfertide, are currently in advanced Phase 3 clinical development with one New Drug Application ("NDA") submitted to the FDA in July 2025 and a second NDA filing expected by the end of 2025.

Icotrokinra is a first-in-class investigational targeted oral peptide that selectively blocks the Interleukin-23 receptor ("IL-23R") and is licensed to Janssen Biotech, Inc., a Johnson & Johnson company ("JNJ"), Following icotrokinra's joint discovery by us and JNJ scientists pursuant to our IL-23R collaboration, we were primarily responsible for the development of icotrokinra through Phase 1, with JNJ assuming responsibility for development in Phase 2 and beyond. In July 2025, an NDA was submitted by JNJ seeking the first approval of icotrokinra for the treatment of adults and pediatric patients 12 years of age or older with moderate-to-severe plaque psoriasis. In September 2025, JNJ submitted a Marketing Authorisation Application ("MAA") to the European Medicines Agency ("EMA") for first approval of icotrokinra in adults and pediatric patients 12 years of age or older with moderate-to-severe plaque psoriasis.

Rusfertide, a first-in-class investigational injectable mimetic of the natural hormone hepcidin, is currently in Phase 3 development for the treatment of the rare blood disorder polycythemia vera ("PV"). Rusfertide is being co-developed and will be co-commercialized with Takeda Pharmaceuticals, Inc. ("Takeda"), with the Company remaining primarily responsible for clinical development activities through a potential NDA filing by the end of 2025. In August 2025, rusfertide was granted Breakthrough Therapy designation by the FDA for the treatment of erythrocytosis in patients with PV.

We also have a number of drug discovery and development programs addressingbiologically and commercially validated targets, including IL-17 oral peptide antagonist PN-881, obesity triple agonist peptide PN-477, and oral hepcidin. In October 2025, the first human subject was dosed in our Phase 1 PN-881 clinical trial.

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Our Product Pipeline and Expected Key Milestones

Icotrokinra

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.

ICONIC Program

JNJ's NDA submission to the FDA and MAA submission to the EMA in the third quarter of 2025 included data from four pivotal Phase 3 trials conducted as part of the ICONIC clinical development program, including ICONIC-LEAD (ClinicalTrials.gov identifier NCT06095115), ICONIC-TOTAL (NCT06095102), ICONIC-ADVANCE 1 (NCT06143878) and ICONIC-ADVANCE 2 (NCT06220604). Treatment with icotrokinra met all primary and co-primary endpoints across the development program among adults and pediatric patients 12 years of age and older with moderate-to-severe plaque psoriasis, demonstrating significant skin clearance and a favorable safety profile in a once-daily pill. Results from the ICONIC-ADVANCE 1 & 2 trials show icotrokinra achieved co-primary endpoints and showed superiority to deucravacitinib in moderate-to-severe plaque psoriasis. Across all studies, pooled safety data showed a similar proportion of patients experienced adverse events between icotrokinra (49.1%) and placebo (51.9%) groups, with no new safety signals identified to date.

Data submitted to the FDA as part of the NDA included:

In September 2025, new data from the ICONIC-ADVANCE 1 and 2 trials was presented at the 2025 European Academy of Dermatology and Venereology ("EADV") Congress. Additionally, new long-term 52-week data from the ICONIC-LEAD trial was presented as a late-breaking abstract at EADV. In October 2025, new long-term 52-week data from the ICONIC-TOTAL trial was presented at the 2025 Fall Clinical Dermatology Conference. The data show icotrokinra demonstrated high and durable rates of site-specific psoriasis clearance affecting high-impact and difficult-to-treat areas of the body. In November 2025, publications of ICONIC-LEAD data through Week 24 and ICONIC-TOTAL data through Week 16 were published in the New England Journal of Medicine and the NEJM Evidence, respectively.

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Ongoing Phase 3 clinical trials in the ICONIC program include the following:

ANTHEM-UC

In March 2025, we announced positive topline results from the ANTHEM-UC (NCT06049017) trial, a 252-patient randomized, controlled Phase 2b trial of icotrokinra in adults with moderately-to-severely active ulcerative colitis. The trial, conducted by JNJ, met its primary endpoint of clinical response in all icotrokinra dose groups evaluated. Additionally, the trial demonstrated clinically meaningful differences versus placebo in key secondary endpoints of clinical remission, symptomatic remission and endoscopic improvement at Week 12.

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Key findings from the ANTHEM-UC trial are summarized below:

Icotrokinra was well tolerated with the proportions of participants reporting one or more adverse events being similar between the icotrokinra dose groups and the placebo group.

At Week 12, patients treated with 400 mg of icotrokinra once daily achieved a clinical response rate of 63.5% versus 27% for placebo (p<0.001), while patients treated with 200 mg and 100 mg of icotrokinra once daily achieved 58.1% and 54.7% response rates, respectively. Across multiple secondary endpoints, in the 400 mg icotrokinra group, significantly greater proportions of patients achieved clinical remission, symptomatic remission, and endoscopic improvement at Week 12 compared to placebo. Both the 200 mg and 100 mg once-daily dosing groups also showed meaningful improvements in these secondary endpoints relative to placebo. All icotrokinra doses demonstrated higher rates of symptomatic remission compared to placebo as early as Week 4.

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Based on results from the ANTHEM-UC trial, the following clinical trials have been initiated:

In October 2025, Week 28 results from the ANTHEM-UC trial were announced at United European Gastroenterology Week ("UEGW") 2025. Icotrokinra demonstrated clinically meaningful outcomes at Week 28 with 31.7% of patients achieving clinical remission and 38.1% showing endoscopic improvement versus placebo. In addition, Week 12 results from the ANTHEM-UC trial were also announced at UEGW 2025.

JNJ License and Collaboration Agreement

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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:

We earned the $165.0 million milestone payment described above during the fourth quarter of 2024. We have earned a total of $337.5 million in non-refundable payments from JNJ from inception in 2017 through September 30, 2025. We are eligible to receive up to $630.0 million in future development and sales milestone payments, inclusive of the following potential upcoming milestones:

Upcoming potential milestones under the JNJ License and Collaboration Agreement include:

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.

PN-881

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 for plaque psoriasis, psoriatic arthritis,hidradenitis suppurativa and spondyloarthritis. Pre-clinical data for PN-881 was presented at the SID Annual Meeting in May 2025 and the EADV Annual Congress in September 2025.

In October 2025, the first human subject was dosed in our Phase 1 trial (NCT07153146) of PN-881 evaluating its safety, tolerability, pharmacokinetics and pharmacodynamics in healthy adults. Results of the PN-881 Phase 1 study are expected to inform the design and dosing in a subsequent dose-ranging psoriasis trial. Rapid expansion into other IL-17 mediated diseases is expected based on results observed in psoriasis studies.

Rusfertide

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Rusfertide is currently in Phase 3 development for the treatment of PV. VERIFY (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.

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In March 2025, we announced positive top-line data for the trial's 32-week primary efficacy endpoint, potentially leading to an NDA filing by the end of 2025. In June 2025, an abstract titled "Results From VERIFY, a Phase 3, Double-Blind, Placebo (PBO)-Controlled Study of Rusfertide for Treatment of Polycythemia Vera" was presented at the Plenary Session at the 2025 American Society of Clinical Oncology Annual Meeting.

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The VERIFY study met its primary endpoint, which was the proportion of patients achieving a clinical response, defined as the absence of phlebotomy eligibility during study Weeks 20-32. Study results demonstrated that 76.9% of patients treated with rusfertide plus the current standard of care achieved a clinical response, compared to 32.9% in the placebo plus the current standard of care group (p<0.0001). The response observed in the rusfertide arm was consistent across subgroups, regardless of risk status or type of concurrent cytoreductive therapy.

In addition, all key secondary endpoints met statistical significance in favor of the rusfertide arm compared to the placebo arm in the VERIFY study, as follows:

Rusfertide was generally well tolerated. The majority of adverse events were low grade and non-serious, and no serious adverse events considered related to rusfertide were reported. There was no evidence of increased risk of cancer in patients treated with rusfertide plus the current standard of care compared to patients treated with placebo plus the current standard of care at the time of the primary analysis. Cancer events were reported in one patient in the rusfertide arm (0.7%) and in seven patients in the placebo arm (4.8%). The most common treatment-emergent adverse events were localized injection site reactions (55.9%), anemia (15.9%) and fatigue (15.2%).

THRIVE (NCT06033586), our Phase 2 long-term open-label extension trial for REVIVE Phase 2 trial patients on years three through five of treatment, remains ongoing.

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In August 2025, the FDA granted Breakthrough Therapy designation to rusfertide for the treatment of erythrocytosis in patients with PV. Rusfertide had previously received Orphan Drug and Fast Track designations from the FDA in 2020. Breakthrough Therapy designation is a process designed to expedite the development and review of drugs that are intended to treat serious conditions where preliminary clinical evidence indicates potential for substantial improvement over existing therapies.

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Clinical data on rusfertide in PV, including data from the VERIFY trial, are the focus of four presentations planned at the 67^th Annual American Society of Hematology ("ASH") Annual Meeting in December 2025. This includes an oral presentation of the durability of response and safety results through Week 52 from the VERIFY trial.

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Takeda Collaboration Agreement

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 would 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 by the end of 2025. 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 a $25.0 million milestone payment in September 2025 upon completion of the VERIFY clinical study report. We are eligible to receive additional worldwide development, regulatory and commercial milestone payments for rusfertide of up to $305.0 million.

Upcoming potential milestones under the Takeda Collaboration Agreement include:

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.

If we exercise our right to opt-out of the profit and loss sharing arrangement, we will receive royalties of 14% to 29% on annual worldwide net sales. In addition, we will be eligible for up to an aggregate of $975.0 million in development, regulatory and commercial milestone payments, and $400.0 million in payments for exercising the opt-out right.

See Note 3 to the condensed consolidated financial statements included elsewhere in this Quarterly Report for further details related to the agreement, including our opt-out right.

PN-477

In June 2025, we announced the selection of PN-477, a potential best-in-class glucagon-like peptide-1 ("GLP-1"), glucose-dependent insulinotropic peptide ("GIP") and glucagon ("GCG") receptor triple agonist peptide with oral and subcutaneous routes of administration, as a development candidate for the treatment of obesity. The triple agonist PN-477 is designed to offer an optimal combination of total body weight loss, improved gastrointestinal tolerability and fat to lean mass ratio, with the dosing convenience of a once-daily oral agent and the added optionality of a once-weekly subcutaneous administration.

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PN-477 has completed extensive pre-clinical evaluation, including oral and metabolic stability, potency, pharmacokinetics and pharmacodynamics studies, and has demonstrated effects in preclinical models of obesity and glycemic control. PN-477 has shown potent in vitro activity in activating the GLP-1, GIP, and GCG receptors. PN-477 also demonstrated robust preclinical proof-of-concept in various animal studies, including the diet induced obesity preclinical mouse model, normal dogs, and cynomolgus monkeys. Overall, we believe PN-477 has the right balance of potency, oral and in-vivo stability, and pharmacokinetic properties to enable parallel development both as a once-daily oral and once-weekly injectable treatment options. IND-enabling studies of PN-477 are underway and the initiation of Phase 1 clinical studies in PN-477(subcutaneous) and PN-477(oral) are anticipated by mid-2026 and in the second half of 2026, respectively.

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Discovery Platform

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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.

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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 by the end of 2025.

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Tax Legislation

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On July 4, 2025, the One Big Beautiful Bill Act, which includes comprehensive U.S. corporate tax legislation, was enacted. The legislation includes the extension and modification of provisions originally introduced under the Tax Cuts and Jobs Act of 2017 and the introduction of new provisions. Key provisions include the restoration of bonus depreciation allowances, changes to the limitations on deductibility of business interest expense, and the reintroduction of immediate expensing of U.S. research and development costs. The impact of tax law changes on current and deferred taxes is reported in continuing operations in the interim period that includes the enactment date. We are currently evaluating the potential impact, if any, of the new legislation on our consolidated financial statements.

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Risks and Uncertainties

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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.

Operations

We have incurred cumulative net losses from inception through September 30, 2025 of $426.3 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.

Critical Accounting Polices and Estimates

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.

There have been no material changes to our critical accounting policies during the nine months ended September 30, 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.

Components of Our Results of Operations

License and Collaboration Revenue

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.

Research and Development Expenses

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.

Research and development expenses consist primarily of the following:

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 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.

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.

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 candidates PN-881 and PN-477 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.

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General and Administrative Expenses

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 expenses 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.

Interest Income

Interest income consists of interest earned on our cash, cash equivalents and marketable securities, which is comprised of contractual interest, premium amortization and discount accretion.

Other Income, Net

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

Results of Operations

Comparison of the Three Months Ended September 30, 2025 and 2024

*Percentage not meaningful.

License and Collaboration Revenue

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License and collaboration revenue was $4.7 million for the three months ended September 30, 2025 and 2024 and was comprised of development services provided by us to Takeda during these periods based on the cost-based input method.

We do not have any commercialized products, and our revenue is derived from licensing and collaboration agreements. Revenue from licensing and collaboration agreements, by its very nature, is highly variable and dependent upon factors such as the timing of when regulatory and sales milestones are achieved, if at all, and the accounting for any upfront payments and performance obligations associated with any existing or new agreements.

Research and Development Expenses

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Research and development expenses increased $4.0 million, or 11%, from $36.0 million for the three months ended September 30, 2024 to $40.0 million for the three months ended September 30, 2025. The increase was primarily due to an increase of $8.8 million in pre-clinical and drug discovery research program expenses, including costs related to recently nominated development candidates PN-881, our IL-17 oral peptide antagonist, and PN-477, our obesity triple agonist peptide, partially offset by a decrease of $4.8 million in rusfertide expenses due to primary completion of our Phase 3 VERIFY trial during the first quarter of 2025.

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We had 99 and 98 full-time equivalent research and development employees as of September 30, 2025 and 2024, respectively. Research and development personnel-related expenses for the three months ended September 30, 2025 increased by $1.4 million as compared to the three months ended September 30, 2024 and included increases of $0.8 million in stock-based compensation expense and $0.6 million in other personnel-related expenses.

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General and Administrative Expenses

General and administrative expenses increased $1.0 million, or 10%, from $10.2 million for the three months ended September 30, 2024 to $11.1 million for the three months ended September 30, 2025. This increase was primarily due to increases in professional services expenses.

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We had 29 and 28 full-time equivalent general and administrative employees as of September 30, 2025 and 2024, respectively.

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Interest Income

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Interest income decreased by $0.6 million, or 8%, from $7.7 million for the three months ended September 30, 2024 to $7.1 million for the three months ended September 30, 2025. This decrease was primarily due to lower invested balances in the current year period.

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Income Tax Benefit

No income tax was recognized for the three months ended September 30, 2025. Income tax benefit was $0.4 million for the three months ended September 30, 2024 and was a result of our net loss position for the period. The effective tax rate was 1.25% for the three months ended September 30, 2024.

Comparison of the Nine Months Ended September 30, 2025 and 2024

License and Collaboration Revenue

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License and collaboration revenue for the nine months ended September 30, 2025 of $38.6 million related to the Takeda Collaboration Agreement and was comprised of (i) $21.3 million representing a portion of the $25.0 million milestone payment received in September 2025 that was allocated to the rusfertide 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. As of September 30, 2025, the remaining $17.0 million in deferred revenue will be recognized through the conclusion of the development services performance obligation.

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License and collaboration revenue for the nine months ended September 30, 2024 of $263.8 million included (i) $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 (ii) $9.7 million allocated to development services provided by us during the period based on the cost-based input method. The remaining $36.2 million was recorded as deferred revenue as of September 30, 2024 to be recognized over time as we satisfy our performance obligation to complete the ongoing Phase 3 VERIFY trial.

Our revenue for the year ended December 31, 2024 was significantly higher than in prior years due to the partial recognition of an upfront payment of $300.0 million upon execution of the Takeda Collaboration Agreement and the achievement of a $165.0 million milestone pursuant to the terms of the amended JNJ License and Collaboration Agreement. Our revenue for the year ended December 31, 2025 is expected to be comprised of (i) proportional recognition of the $30.6 million recorded in deferred revenue as of December 31, 2024 and (ii) the recognition of additional milestones achieved during the year, which are expected to be substantially lower than in 2024. Accordingly, revenue in 2025 is expected to reduce significantly, which will also impact our net income.

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Research and Development Expenses

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Research and development expenses increased $9.7 million, or 9%, from $103.2 million for the nine months ended September 30, 2024 to $112.9 million for the nine months ended September 30, 2025. The increase was primarily due to an increase of $18.6 million in pre-clinical and drug discovery research program expenses, including costs related to our recently nominated development candidates PN-881, our IL-17 oral peptide antagonist, and PN-477, our obesity triple agonist peptide, partially offset by a decrease of $8.9 million in rusfertide expenses due to primary completion of our Phase 3 VERIFY trial during the first quarter of 2025.

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We had 99 and 98 full-time equivalent research and development employees as of September 30, 2025 and 2024, respectively. Research and development personnel-related expenses for the nine months ended September 30, 2025 increased by $4.6 million as compared to the nine months ended September 30, 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").

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General and Administrative Expenses

General and administrative expenses decreased $1.1 million, or 3%, from $34.5 million for the nine months ended September 30, 2024 to $33.4 million for the nine months ended September 30, 2025. This decrease was primarily due to $4.6 million in one-time advisory and legal fees incurred during the nine months ended September 30, 2024 related to the Takeda Collaboration Agreement, partially offset by a $2.1 million increase in stock-based compensation expense related to annual refresher awards granted in January 2025 and recognition of expense related to PSUs and an increase of $2.0 million in professional services expenses.

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We had 29 and 28 full-time equivalent general and administrative employees as of September 30, 2025 and 2024, respectively.

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Interest Income

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Interest income increased by $2.6 million, or 13%, from $19.5 million for the nine months ended September 30, 2024 to $22.0 million for the nine months ended September 30, 2025. This increase was primarily due to higher invested balances, including milestone payments received from our collaboration partners.

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Income Tax Expense

Income tax expense was $0.2 million and $2.2 million for the nine months ended September 30, 2025 and 2024, respectively. Income tax expense for the nine months ended September 30, 2025 consisted of adjustments to estimated taxes paid during the period. 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 1.53% for the nine months ended September 30, 2024.

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Liquidity and Capital Resources

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Sources of Liquidity

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We had $678.8 million and $559.2 million in cash, cash equivalents and marketable securities as of September 30, 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.

Receipt of Payments Under Collaboration Agreements

The JNJ License and Collaboration Agreement was amended in November 2024 to:

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 September 30, 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.

Upcoming potential milestones under the JNJ License and Collaboration Agreement include:

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 and payment was received in September 2025. Pursuant to the Takeda Collaboration Agreement, we may be eligible to receive additional clinical development, regulatory and sales milestones, if and when achieved.

Upcoming potential milestones under the Takeda Collaboration Agreement include:

Capital Requirements

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As of September 30, 2025, we had $678.8 million in cash, cash equivalents and marketable securities and an accumulated deficit of $426.3 million. Our capital expenditures were $1.4 million for both the nine months ended September 30, 2025 and the year ended December 31, 2024. 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.

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We may require additional funding to advance our early discovery pipeline and to develop, acquire, or in-license other potential product candidates. Our future funding requirements will depend on many factors, including:

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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 geopolitical instability, high interest rates, and changes in trade policies, including tariffs or other restrictions or the threat of such actions and retaliatory actions, 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.

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.

Cash Flows

The following table summarizes our cash flows for the periods indicated:

Cash Provided by Operating Activities

Cash provided by operating activities for the nine months ended September 30, 2025 was $94.6 million and consisted primarily of a net change of $148.9 million in operating assets and liabilities and $35.3 million of stock-based compensation expense, partially offset by a net loss of $85.8 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, partially offset by a $13.6 million change in deferred revenue and a $2.7 million change in income taxes payable. The $118.7 million decrease in cash provided by operating activities during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, was primarily due to the receipt of a $300.0 million upfront payment upon the effectiveness of the Takeda Collaboration Agreement in 2024, partially offset by receipt of the $165.0 million milestone payment from JNJ and the $25.0 million milestone payment from Takeda in 2025.

Cash Used in Investing Activities

Cash used in investing activities for the nine months ended September 30, 2025 was $98.1 million and consisted primarily of purchases of marketable securities of $442.3 million and purchases of property and equipment of $1.4 million, partially offset by proceeds from maturities and sales of marketable securities of $345.6 million. The $192.6 million decrease in cash used in investing activities for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, was primarily related to investments made with a portion of the proceeds from the $300.0 million upfront payment received from Takeda in April 2024. Purchases of property and equipment were primarily related to laboratory equipment and furniture and fixtures.

Cash Provided by Financing Activities

Cash provided by financing activities for the nine months ended September 30, 2025 was $20.0 million and consisted of net cash proceeds of $20.5 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 $1.8 million decrease in cash provided by financing activities for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, was primarily due to a $1.9 million decrease in proceeds from the issuance of common stock upon exercise of options and purchases of common stock under the ESPP.

Contractual Obligations and Other Commitments

During the nine months ended September 30, 2025, there were no material changes to our material cash requirements, including commitments for capital expenditures, described under Management'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.

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