Protagonist Therapeutics, Inc 10-Q for FY2022 Q2

Protagonist Therapeutics, Inc (PTGX)

10-Q 2022-08-04 For: 2022-06-30

Added on April 07, 2026

About this 10-Q

Protagonist Therapeutics, Inc filed this 10-Q on August 4, 2022, covering the quarter ended June 30, 2022 (FY2022 Q2).

Headline figures

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

Revenue: $859K; down 62.1% from $2.27M a year earlier
Net loss: $41.04M; compared with a net loss of $30.84M a year earlier
Diluted EPS: -$0.84; compared with -$0.69 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	37

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	64
Item 3.	Defaults Upon Senior Securities	64
Item 4.	Mine Safety Disclosure	64
Item 5.	Other Information	64
Item 6.	Exhibits	64
	SIGNATURES	66


	June 30,		December 31,
	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	120,237	$	123,665
Marketable securities		171,653		203,235
Receivable from collaboration partner and contract asset - related party		43		1,566
Research and development tax incentive receivable		2,648		2,792
Prepaid expenses and other current assets		9,721		9,478
Total current assets		304,302		340,736
Property and equipment, net		1,962		1,798
Restricted cash - noncurrent		225		225
Operating lease right-of-use asset		4,023		4,936
Total assets	$	310,512	$	347,695
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,412	$	1,600
Payable to collaboration partner - related party		80		899
Accrued expenses and other payables		36,244		37,716
Deferred revenue - related party		—		1,601
Operating lease liability - current		2,352		2,200
Total current liabilities		40,088		44,016
Operating lease liability - noncurrent		2,446		3,658
Total liabilities		42,534		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; 48,683,931 and 47,838,330 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively		—		—
Additional paid-in capital		740,027		709,682
Accumulated other comprehensive loss		(720)		(299)
Accumulated deficit		(471,329)		(409,362)
Total stockholders’ equity		267,978		300,021
Total liabilities and stockholders’ equity	$	310,512	$	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				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
License and collaboration revenue - related party	$	859	$	2,265	$	26,581	$	8,454
Operating expenses:
Research and development		34,611		26,432		70,929		50,677
General and administrative		7,691		6,715		18,206		12,680
Total operating expenses		42,302		33,147		89,135		63,357
Loss from operations		(41,443)		(30,882)		(62,554)		(54,903)
Interest income		484		97		652		199
Other expense, net		(78)		(57)		(65)		(136)
Net loss	$	(41,037)	$	(30,842)	$	(61,967)	$	(54,840)
Net loss per share, basic and diluted	$	(0.84)	$	(0.69)	$	(1.27)	$	(1.23)
Weighted-average shares used to compute net loss per share, basic and diluted		49,049,902		44,864,637		48,902,047		44,546,172


						Accumulated
				Additional		Other				Total
	Common			Paid-In		Comprehensive		Accumulated		Stockholders'
	Stock			Capital		(Loss) Gain		Deficit		Equity
Three months ended June 30, 2022	Shares	Amount
Balance at March 31, 2022	48,552,102	$	—	$	732,542	$	(472)	$	(430,292)	$	301,778
Issuance of common stock under equity incentive and employee stock purchase plans	131,829		—		655		—		—		655
Stock-based compensation expense	—		—		6,805		—		—		6,805
Issuance costs related to prior period common stock offering	—		—		25		—		—		25
Other comprehensive loss	—		—		—		(248)		—		(248)
Net loss	—		—		—		—		(41,037)		(41,037)
Balance at June 30, 2022	48,683,931	$	—	$	740,027	$	(720)	$	(471,329)	$	267,978


	Balance at						Balance at
	Beginning of						End of
Six Months Ended June 30, 2022	Period		Additions		Deductions		Period
Contract assets:
Receivable from collaboration partner - related party	$	1,566	$	25,165	$	(26,688)	$	43
Contract liabilities:
Deferred revenue - related party	$	1,601	$	25,757	$	(27,358)	$	—
Payable to collaboration partner - related party	$	899	$	30	$	(849)	$	80


	Balance at						Balance at
	Beginning of						End of
Six Months Ended June 30, 2021	Period		Additions		Deductions		Period
Contract assets:
Receivable from collaboration partner - related party	$	2,426	$	4,651	$	—	$	7,077
Contract liabilities:
Deferred revenue - related party	$	14,477	$	3,924	$	(16,392)	$	2,009
Payable to collaboration partner - related party	$	2,732	$	8,664	$	—	$	11,396


	June 30, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	38,082	$	—	$	—	$	38,082
Commercial paper		—		136,054		—		136,054
Corporate debt securities		—		16,493		—		16,493
U.S. Treasury and agency securities		—		94,505		—		94,505
Total financial assets	$	38,082	$	247,052	$	—	$	285,134


	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


	June 30, 2022
	Amortized		Gross Unrealized
	Cost		Gains		Losses		Fair Value
Money market funds	$	38,082	$	—	$	—	$	38,082
Commercial paper		136,089		—		(35)		136,054
Corporate debt securities		16,540		—		(47)		16,493
U.S. Treasury and agency securities		94,873		—		(368)		94,505
Total cash equivalents and marketable securities	$	285,584	$	—	$	(450)	$	285,134
Classified as:
Cash equivalents							$	113,481
Marketable securities - current								171,653
Total cash equivalents and marketable securities							$	285,134



		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	1,444,600		25.47
Options exercised	(297,317)		8.71
Options forfeited	(212,702)		23.42
Balances at June 30, 2022	6,825,121	$	19.53	7.31	$	1.7
Options exercisable – June 30, 2022	3,660,098	$	15.36	6.05	$	1.6
Options vested and expected to vest – June 30, 2022	6,825,121	$	19.53	7.31	$	1.7


		Weighted
		Average
	Number of	Grant Date
	Shares	Fair Value
Unvested RSUs at December 31, 2021	405,972	$	20.13
Granted	495,250		21.65
Vested	(104,712)		14.73
Forfeited	(30,420)		25.17
Unvested RSUs at June 30, 2022	766,090	$	19.88


	June 30,		December 31,
	2022		2021
Laboratory equipment	$	4,659	$	4,156
Furniture and computer equipment		1,141		1,023
Leasehold improvements		898		877
Total property and equipment		6,698		6,056
Accumulated depreciation		(4,736)		(4,258)
Property and equipment, net	$	1,962	$	1,798


	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2022	2021	2022	2021
Expected term (in years)	5.50 - 6.08	5.27 - 6.08	5.27 - 6.08	5.27- 6.08
Expected volatility	96.3% - 99.9%	88.0% - 88.8%	96.3% - 99.9%	88.0% - 90.2%
Risk-free interest rate	2.71% - 2.93%	0.85% - 1.11%	1.64% - 2.93%	0.11% - 1.11%
Dividend yield	—	—	—	—


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

	(Dollars in thousands)
License and collaboration revenue - related party	$	859	$	2,265	$	(1,406)	(62)
Operating expenses:
Research and development ⁽¹⁾		34,611		26,432		8,179	31
General and administrative ⁽²⁾		7,691		6,715		976	15
Total operating expenses		42,302		33,147		9,155	28
Loss from operations		(41,443)		(30,882)		(10,561)	34
Interest income		484		97		387	399
Other expense, net		(78)		(57)		(21)	37
Net loss	$	(41,037)	$	(30,842)	$	(10,195)	33


	Six Months Ended
	June 30,
Condensed Consolidated Statements of Cash Flows Data:	2022		2021

	(Dollars in thousands)
Cash used in operating activities	$	(51,301)	$	(52,456)
Cash provided by investing activities	$	30,258	$	980
Cash provided by financing activities	$	17,605	$	126,369
Stock-based compensation	$	12,740	$	6,596


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: August 4, 2022	By:	/s/ Dinesh V. Patel, Ph.D.
		Dinesh V. Patel, Ph.D.
		President, Chief Executive Officer and Director
		(Principal Executive Officer)

Date: August 4, 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: August 4, 2022		Dinesh V. Patel, Ph.D.
		President, Chief Executive Officer (Principal Executive Officer)


		/s/ Asif Ali
Date: August 4, 2022		Asif Ali
		Executive Vice President, Chief Financial Officer (Principal Financial and Accounting Officer)