Protagonist Therapeutics, Inc 10-Q for FY2021 Q3

Protagonist Therapeutics, Inc (PTGX)

10-Q 2021-11-03 For: 2021-09-30

Added on April 07, 2026

About this 10-Q

Protagonist Therapeutics, Inc filed this 10-Q on November 3, 2021, covering the quarter ended September 30, 2021 (FY2021 Q3).

Headline figures

Quarter ended September 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $10.29M; down 21.6% from $13.11M a year earlier
Net loss: $33.8M; compared with a net loss of $7.76M 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		(510) 474-0170
(Address, including zip code, of registrant’s principal executive offices)		(Telephone number, including area code, of registrant’s principal executive offices)


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	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46
Item 4.	Controls and Procedures	46

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	47
Item 1A.	Risk Factors	47
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	73
Item 3.	Defaults Upon Senior Securities	73
Item 4.	Mine Safety Disclosure	73
Item 5.	Other Information	73
Item 6.	Exhibits	73
	SIGNATURES	75


	September 30,		December 31,
	2021		2020
Assets
Current assets:
Cash and cash equivalents	$	120,542	$	117,358
Marketable securities		193,759		188,451
Restricted cash - current		—		10
Receivable from collaboration partner and contract asset - related party		2,638		2,426
Research and development tax incentive receivable		1,871		1,084
Prepaid expenses and other current assets		8,877		6,277
Total current assets		327,687		315,606
Marketable securities - noncurrent		38,169		2,000
Property and equipment, net		1,723		1,462
Restricted cash - noncurrent		225		450
Operating lease right-of-use asset		5,371		4,950
Total assets	$	373,175	$	324,468
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	706	$	3,075
Payable to collaboration partner - related party		1,121		2,732
Accrued expenses and other payables		33,061		18,498
Deferred revenue - related party		2,241		14,477
Operating lease liability - current		2,027		1,459
Total current liabilities		39,156		40,241
Operating lease liability - noncurrent		4,238		4,500
Other liabilities		121		121
Total liabilities		43,515		44,862
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; 47,671,654 and 43,745,465 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively		—		—
Additional paid-in capital		702,319		563,389
Accumulated other comprehensive (loss) gain		(204)		28
Accumulated deficit		(372,455)		(283,811)
Total stockholders’ equity		329,660		279,606
Total liabilities and stockholders’ equity	$	373,175	$	324,468


☒	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,
	2021		2020		2021		2020
License and collaboration revenue - related party	$	10,286	$	13,114	$	18,740	$	22,978
Operating expenses:
Research and development		36,956		15,995		87,633		55,020
General and administrative		7,256		4,891		19,936		13,644
Total operating expenses		44,212		20,886		107,569		68,664
Loss from operations		(33,926)		(7,772)		(88,829)		(45,686)
Interest income		122		87		321		820
Interest expense		—		(19)		—		(471)
Loss on early repayment of debt		—		—		—		(585)
Other expense, net		—		(59)		(136)		(37)
Loss before income tax expense		(33,804)		(7,763)		(88,644)		(45,959)
Income tax expense		—		—		—		(1,305)
Net loss	$	(33,804)	$	(7,763)	$	(88,644)	$	(47,264)
Net loss per share, basic and diluted	$	(0.70)	$	(0.21)	$	(1.94)	$	(1.45)
Weighted-average shares used to compute net loss per share, basic and diluted		47,987,184		37,386,881		45,705,782		32,647,524


						Accumulated
				Additional		Other				Total
	Common			Paid-In		Comprehensive		Accumulated		Stockholders'
	Stock			Capital		(Loss) Gain		Deficit		Equity
Three months ended September 30, 2021	Shares	Amount
Balance at June 30, 2021	47,525,560	$	—	$	696,157	$	(59)	$	(338,651)	$	357,447
Issuance of common stock pursuant to public offering, net of issuance costs			—		6		—		—		6
Issuance of common stock under equity incentive and employee stock purchase plans	146,094		—		1,381		—		—		1,381
Stock-based compensation expense	—		—		4,775		—		—		4,775
Other comprehensive loss	—		—		—		(145)		—		(145)
Net loss	—		—		—		—		(33,804)		(33,804)
Balance at September 30, 2021	47,671,654	$	—	$	702,319	$	(204)	$	(372,455)	$	329,660


	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


	Balance at						Balance at
	Beginning of						End of
Nine Months Ended September 30, 2020	Period		Additions		Deductions		Period
Contract assets:
Receivable from collaboration partner - related party	$	5,955	$	5,284	$	(8,450)	$	2,789
Contract asset - related party	$	800	$	342	$	(1,142)	$	—
Contract liabilities:
Deferred revenue - related party	$	41,530	$	3,500	$	(24,153)	$	20,877
Payable to collaboration partner - related party	$	1,262	$	2,114	$	(1,299)	$	2,077


	September 30, 2021
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	57,077	$	—	$	—	$	57,077
Commercial paper		—		161,312		—		161,312
Corporate debt securities		—		81,392		—		81,392
U.S. Treasury and agency securities		—		42,187		—		42,187
Supranational and sovereign government securities		—		6,028		—		6,028
Total financial assets	$	57,077	$	290,919	$	—	$	347,996


	December 31, 2020
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	27,481	$	—	$	—	$	27,481
Commercial paper		—		65,863		—		65,863
Corporate debt securities		—		27,590		—		27,590
U.S. Treasury and agency securities		—		183,210		—		183,210
Total financial assets	$	27,481	$	276,663	$	—	$	304,144


	September 30, 2021
	Amortized		Gross Unrealized
	Cost		Gains		Losses		Fair Value
Money market funds	$	57,077	$	—	$	—	$	57,077
Commercial paper		161,315		2		(5)		161,312
Corporate debt securities		81,413		1		(22)		81,392
U.S. Treasury and agency securities		42,186		3		(2)		42,187
Supranational and sovereign government securities		6,028		—		—		6,028
Total cash equivalents and marketable securities	$	348,019	$	6	$	(29)	$	347,996
Classified as:
Cash equivalents							$	116,068
Marketable securities - current								193,759
Marketable securities - noncurrent								38,169
Total cash equivalents and marketable securities							$	347,996


	September 30,		December 31,
Operating Leases:	2021		2020
Operating lease right-of-use asset	$	5,371	$	4,950

Operating lease liability - current	$	2,027	$	1,459
Operating lease liability - noncurrent		4,238		4,500
Total operating lease liabilities	$	6,265	$	5,959

Weighted-average remaining lease term (years)		2.7		3.4
Weighted-average discount rate		9.6%		11.0%


	Nine Months Ended September 30,
	2021		2020
Operating lease cost	$	1,378	$	1,331
Less: sublease income		(68)		(22)
Total lease expense	$	1,310	$	1,309


Year Ending December 31:	Amount
Remainder of 2021	$	556
2022		2,660
2023		2,744
2024		1,160
2025		—
Thereafter		—
Total future minimum lease payments		7,120
Less: imputed interest		(855)
Present value of lease liabilities	$	6,265



		Weighted-		Weighted-
		Average		Average
		Exercise		Remaining	Aggregate
	Options	Price Per		Contractual	Intrinsic
	Outstanding	Share		Life (years)	Value (1)
					(in millions)
Balances at December 31, 2020	4,648,120	$	11.87	7.61	$	40.0
Options granted	1,920,540		29.93
Options exercised	(308,125)		9.87
Options forfeited	(176,580)		16.60
Balances at September 30, 2021	6,083,955	$	17.54	7.58	$	27.6
Options exercisable – September 30, 2021	3,121,045	$	12.89	6.29	$	18.7
Options vested and expected to vest – September 30, 2021	6,083,955	$	17.54	7.58	$	27.6


	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2021	2020	2021	2020
Expected term (in years)	6.02 - 6.08	5.27 - 6.08	5.27 - 6.08	5.27- 6.08
Expected volatility	87.4% - 88.4%	84.5% - 85.1%	87.4% - 90.2%	72.1% - 85.1%
Risk-free interest rate	0.85% - 1.16%	0.23% - 0.40%	0.11% - 1.16%	0.23% - 1.44%
Dividend yield	—	—	—	—


		Weighted
		Average
	Number of	Grant Date
	Shares	Fair Value
Unvested RSUs at December 31, 2020	244,545	$	9.31
Granted	302,250		24.40
Vested	(78,165)		10.13
Forfeited	(49,970)		18.86
Unvested RSUs at September 30, 2021	418,660	$	20.07


	Three Months Ended
	September 30,				Dollar		%
	2021		2020		Change		Change

	(Dollars in thousands)
License and collaboration revenue - related party	$	10,286	$	13,114	$	(2,828)	(22)
Operating expenses:
Research and development ⁽¹⁾		36,956		15,995		20,961	131
General and administrative ⁽²⁾		7,256		4,891		2,365	48
Total operating expenses		44,212		20,886		23,326	112
Loss from operations		(33,926)		(7,772)		(26,154)	337
Interest income		122		87		35	40
Interest expense		—		(19)		19	(100)
Other expense, net		—		(59)		59	(100)
Loss before income tax expense		(33,804)		(7,763)		(26,041)	335
Income tax expense		—		—		—	-
Net loss	$	(33,804)	$	(7,763)	$	(26,041)	335


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
10.1+†	Second Amendment to the Exclusive Janssen License and Collaboration Agreement, dated July 27, 2021, by and between Protagonist Therapeutics, Inc. and Janssen Biotech, Inc.
10.2+†	Arbitration Resolution Agreement, dated August 4^th, 2021, by and among Protagonist Therapeutics, Inc. and Zealand Pharma, A/S.
10.3+	Second Amendment to Lease, dated August 10, 2021, by and between Protagonist Therapeutics, Inc., as Tenant, and BMR-Pacific Research Center, LP as Landlord.
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
101.INS+	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH+	Inline XBRL Taxonomy Extension Schema Document
101.CAL+	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF+	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB+	Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE+	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

	PROTAGONIST THERAPEUTICS, INC.


Date: November 3, 2021	By:	/s/ Dinesh V. Patel, Ph.D.
`		Dinesh V. Patel, Ph.D.
		President, Chief Executive Officer and Director
		(Principal Executive Officer)

Date: November 3, 2021	By:	/s/ Don Kalkofen
		Don Kalkofen
		Chief Financial Officer
		(Principal Financial and Accounting Officer)