Protagonist Therapeutics, Inc 10-Q for FY2022 Q3

Protagonist Therapeutics, Inc (PTGX)

10-Q 2022-11-08 For: 2022-09-30

Added on April 07, 2026

About this 10-Q

Protagonist Therapeutics, Inc filed this 10-Q on November 8, 2022, covering the quarter ended September 30, 2022 (FY2022 Q3).

Headline figures

Quarter ended September 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $31.23M; compared with a net loss of $33.8M a year earlier
Diluted EPS: -$0.64; compared with -$0.70 a year earlier

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Delaware		98-0505495
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7707 Gateway Boulevard, Suite 140 Newark, California		94560-1160
(Address of registrant’s principal executive offices)		(Zip code)
(510) 474-0170 (Registrant’s telephone number, including area code


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.00001	PTGX	The Nasdaq Stock Market, LLC



Large accelerated filer	☒	Accelerated filer	☐
		Smaller reporting company	☐
Non-accelerated filer	☐	Emerging growth company	☐

I
		Page

PART I	FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive Loss	3
	Condensed Consolidated Statements of Stockholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	38

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	65
Item 3.	Defaults Upon Senior Securities	65
Item 4.	Mine Safety Disclosure	65
Item 5.	Other Information	65
Item 6.	Exhibits	65
	SIGNATURES	67


	September 30,		December 31,
	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	152,816	$	123,665
Marketable securities		114,621		203,235
Receivable from collaboration partner and contract asset - related party		125		1,566
Research and development tax incentive receivable		—		2,792
Prepaid expenses and other current assets		9,055		9,478
Total current assets		276,617		340,736
Property and equipment, net		1,783		1,798
Restricted cash - noncurrent		225		225
Operating lease right-of-use asset		3,549		4,936
Total assets	$	282,174	$	347,695
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	4,715	$	1,600
Payable to collaboration partner - related party		32		899
Accrued expenses and other payables		29,574		37,716
Deferred revenue - related party		—		1,601
Operating lease liability - current		2,433		2,200
Total current liabilities		36,754		44,016
Operating lease liability - noncurrent		1,804		3,658
Total liabilities		38,558		47,674
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.00001 par value, 10,000,000 shares authorized; no shares issued and outstanding		—		—
Common stock, $0.00001 par value, 90,000,000 shares authorized; 49,198,411 and 47,838,330 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively		—		—
Additional paid-in capital		746,657		709,682
Accumulated other comprehensive loss		(480)		(299)
Accumulated deficit		(502,561)		(409,362)
Total stockholders’ equity		243,616		300,021
Total liabilities and stockholders’ equity	$	282,174	$	347,695


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
License and collaboration revenue - related party	$	—	$	10,286	$	26,581	$	18,740
Operating expenses:
Research and development		25,402		36,956		96,331		87,633
General and administrative		6,901		7,256		25,107		19,936
Total operating expenses		32,303		44,212		121,438		107,569
Loss from operations		(32,303)		(33,926)		(94,857)		(88,829)
Interest income		1,157		122		1,809		321
Other expense, net		(86)		—		(151)		(136)
Net loss	$	(31,232)	$	(33,804)	$	(93,199)	$	(88,644)
Net loss per share, basic and diluted	$	(0.64)	$	(0.70)	$	(1.90)	$	(1.94)
Weighted-average shares used to compute net loss per share, basic and diluted		49,107,639		47,987,184		48,971,329		45,705,782


						Accumulated
				Additional		Other				Total
	Common			Paid-In		Comprehensive		Accumulated		Stockholders'
	Stock			Capital		(Loss) Gain		Deficit		Equity
Three months ended September 30, 2022	Shares	Amount
Balance at June 30, 2022	48,683,931	$	—	$	740,027	$	(720)	$	(471,329)	$	267,978
Issuance of common stock under equity incentive and employee stock purchase plans	114,483		—		680		—		—		680
Issuance of common stock upon exercise of Exchange Warrants	399,997		—		—		—		—		—
Stock-based compensation expense	—		—		5,950		—		—		5,950
Other comprehensive gain	—		—		—		240		—		240
Net loss	—		—		—		—		(31,232)		(31,232)
Balance at September 30, 2022	49,198,411	$	—	$	746,657	$	(480)	$	(502,561)	$	243,616


	Balance at						Balance at
	Beginning of						End of
Nine Months Ended September 30, 2022	Period		Additions		Deductions		Period
Contract assets:
Receivable from collaboration partner - related party	$	1,566	$	25,165	$	(26,606)	$	125
Contract liabilities:
Deferred revenue - related party	$	1,601	$	25,757	$	(27,358)	$	—
Payable to collaboration partner - related party	$	899	$	52	$	(919)	$	32


	Balance at						Balance at
	Beginning of						End of
Nine Months Ended September 30, 2021	Period		Additions		Deductions		Period
Contract assets:
Receivable from collaboration partner - related party	$	2,426	$	5,732	$	(5,520)	$	2,638
Contract liabilities:
Deferred revenue - related party	$	14,477	$	16,715	$	(28,951)	$	2,241
Payable to collaboration partner - related party	$	2,732	$	9,785	$	(11,396)	$	1,121


	September 30, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	39,234	$	—	$	—	$	39,234
Commercial paper		—		98,226		—		98,226
Corporate debt securities		—		6,320		—		6,320
U.S. Treasury and agency securities		—		118,254		—		118,254
Total financial assets	$	39,234	$	222,800	$	—	$	262,034


	December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	39,854	$	—	$	—	$	39,854
Commercial paper		—		157,141		—		157,141
Corporate debt securities		—		75,548		—		75,548
U.S. Treasury and agency securities				40,017		—		40,017
Supranational and sovereign government securities		—		6,010		—		6,010
Total financial assets carried at fair value	$	39,854	$	278,716	$	—	$	318,570


	September 30, 2022
	Amortized		Gross Unrealized
	Cost		Gains		Losses		Fair Value
Money market funds	$	39,234	$	—	$	—	$	39,234
Commercial paper		98,238		—		(12)		98,226
Corporate debt securities		6,328		—		(8)		6,320
U.S. Treasury and agency securities		118,365		15		(126)		118,254
Total cash equivalents and marketable securities	$	262,165	$	15	$	(146)	$	262,034
Classified as:
Cash equivalents							$	147,413
Marketable securities - current								114,621
Total cash equivalents and marketable securities							$	262,034



		Weighted-		Weighted-
		Average		Average
		Exercise		Remaining	Aggregate
	Options	Price Per		Contractual	Intrinsic
	Outstanding	Share		Life (years)	Value (1)
					(in millions)
Balances at December 31, 2021	5,890,540	$	17.66	7.47	$	102.7
Options granted	1,596,600		23.87
Options exercised	(378,272)		8.05
Options forfeited	(667,453)		22.25
Balances at September 30, 2022	6,441,415	$	19.29	7.23	$	2.3
Options exercisable – September 30, 2022	3,784,700	$	16.28	6.12	$	2.1
Options vested and expected to vest – September 30, 2022	6,441,415	$	19.29	7.17	$	2.3


		Weighted
		Average
	Number of	Grant Date
	Shares	Fair Value
Unvested RSUs at December 31, 2021	405,972	$	20.13
Granted	506,450		21.36
Vested	(108,462)		15.83
Forfeited	(109,546)		21.85
Unvested RSUs at September 30, 2022	694,414	$	19.55


	September 30,		December 31,
	2022		2021
Laboratory equipment	$	4,771	$	4,156
Furniture and computer equipment		1,069		1,023
Leasehold improvements		913		877
Total property and equipment		6,753		6,056
Accumulated depreciation		(4,970)		(4,258)
Property and equipment, net	$	1,783	$	1,798


	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2022	2021	2022	2021
Expected term (in years)	5.27 - 6.08	6.02 - 6.08	5.27 - 6.08	5.27- 6.08
Expected volatility	97.7% - 101.7%	87.4% - 88.4%	96.3% - 101.7%	87.4% - 90.2%
Risk-free interest rate	2.70% - 4.01%	0.85% - 1.16%	1.64% - 4.01%	0.11% - 1.16%
Dividend yield	—	—	—	—


	Three Months Ended
	September 30,				Dollar		%
	2022		2021		Change		Change

	(Dollars in thousands)
License and collaboration revenue - related party	$	—	$	10,286	$	(10,286)	(100)
Operating expenses:
Research and development ⁽¹⁾		25,402		36,956		(11,554)	(31)
General and administrative ⁽²⁾		6,901		7,256		(355)	(5)
Total operating expenses		32,303		44,212		(11,909)	(27)
Loss from operations		(32,303)		(33,926)		1,623	(5)
Interest income		1,157		122		1,035	*
Other expense, net		(86)		—		(86)	*
Net loss	$	(31,232)	$	(33,804)	$	2,572	(8)


	Nine Months Ended
	September 30,
Condensed Consolidated Statements of Cash Flows Data:	2022		2021

	(Dollars in thousands)
Cash used in operating activities	$	(76,502)	$	(80,926)
Cash provided by (used in) investing activities	$	87,533	$	(43,727)
Cash provided by financing activities	$	18,285	$	127,750
Stock-based compensation	$	18,690	$	11,371


Exhibit		Incorporation By Reference
Number	Exhibit Description	Form	SEC File No.	Exhibit	Filing Date
3.1	Amended and Restated Certificate of Incorporation	8-K	001-37852	3.1	8/16/2016
3.2	Amended and Restated Bylaws	S-1/A	333-212476	3.2	8/1/2016
31.1+	Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2+	Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1+*	Certification of Chief Executive Officer and Chief Financial Officer, as required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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	PROTAGONIST THERAPEUTICS, INC.


Date: November 8, 2022	By:	/s/ Dinesh V. Patel, Ph.D.
		Dinesh V. Patel, Ph.D.
		President, Chief Executive Officer and Director
		(Principal Executive Officer)

Date: November 8, 2022	By:	/s/ Asif Ali
		Asif Ali
		Executive Vice President, Chief Financial Officer
		(Principal Financial and Accounting Officer)


		/s/ Dinesh V. Patel, Ph.D.
Date: November 8, 2022		Dinesh V. Patel, Ph.D.
		President, Chief Executive Officer (Principal Executive Officer)


		/s/ Asif Ali
Date: November 8, 2022		Asif Ali
		Executive Vice President, Chief Financial Officer (Principal Financial and Accounting Officer)