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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended September 30, 2025


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

For the transition period from to

Commission File No. 001-37852

PROTAGONIST THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

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)

Securities registered pursuant to Section 12(b) of the Act:


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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 29, 2025, there were 62,515,666 shares of the registrant’s Common Stock, par value $0.00001 per share, outstanding.

Table of Contents

PROTAGONIST THERAPEUTICS, INC.

FORM 10-Q

TABLE OF CONTENTS

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) Income	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	20
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	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	40
	SIGNATURES	42

Table of Contents

PART I. – FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

PROTAGONIST THERAPEUTICS, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except share and per share data)


	September 30,		December 31,
	2025		2024
Assets
Current assets:
Cash and cash equivalents	$	113,713	$	97,249
Marketable securities		462,404		321,664
Receivable from collaboration partner		583		165,000
Prepaid expenses and other current assets		9,724		7,728
Total current assets		586,424		591,641
Marketable securities - noncurrent		102,703		140,252
Property and equipment, net		4,100		3,190
Restricted cash - noncurrent		287		225
Operating lease right-of-use asset		8,174		9,417
Total assets	$	701,688	$	744,725
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	5,646	$	1,615
Accrued expenses and other payables		22,868		23,693
Income taxes payable		—		2,689
Deferred revenue		14,200		18,891
Operating lease liability		2,228		510
Total current liabilities		44,942		47,398
Deferred revenue - noncurrent		2,788		11,676
Operating lease liability - noncurrent		8,521		10,356
Total liabilities		56,251		69,430
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, 180,000,000 shares authorized; 62,447,102 and 61,035,139 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively		1		1
Additional paid-in capital		1,071,198		1,015,898
Accumulated other comprehensive income (loss)		525		(82)
Accumulated deficit		(426,287)		(340,522)
Total stockholders’ equity		645,437		675,295
Total liabilities and stockholders’ equity	$	701,688	$	744,725

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

PROTAGONIST THERAPEUTICS, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except share and per share data)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024
License and collaboration revenue	$	4,712	$	4,675	$	38,579	$	263,795
Operating expenses:
Research and development		40,003		35,970		112,932		103,224
General and administrative		11,130		10,158		33,419		34,508
Total operating expenses		51,133		46,128		146,351		137,732
(Loss) income from operations		(46,421)		(41,453)		(107,772)		126,063
Interest income		7,049		7,682		22,028		19,462
Other income, net		33		141		151		219
(Loss) income before income tax benefit (expense)		(39,339)		(33,630)		(85,593)		145,744
Income tax benefit (expense)		—		420		(172)		(2,230)
Net (loss) income	$	(39,339)	$	(33,210)	$	(85,765)	$	143,514
Net (loss) income per share, basic	$	(0.62)	$	(0.54)	$	(1.35)	$	2.34
Net (loss) income per share, diluted	$	(0.62)	$	(0.54)	$	(1.35)	$	2.22
Weighted-average shares used to compute net (loss) income per share, basic		63,772,332		61,767,934		63,418,522		61,311,310
Weighted-average shares used to compute net (loss) income per share, diluted		63,772,332		61,767,934		63,418,522		64,611,941

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

PROTAGONIST THERAPEUTICS, INC.

Condensed Consolidated Statements of Comprehensive (Loss) Income

(Unaudited)

(In thousands)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024
Net (loss) income	$	(39,339)	$	(33,210)	$	(85,765)	$	143,514
Other comprehensive (loss) income:
Unrealized gain on marketable securities		540		1,585		607		1,441
Comprehensive (loss) income	$	(38,799)	$	(31,625)	$	(85,158)	$	144,955

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

PROTAGONIST THERAPEUTICS, INC.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(In thousands, except share data)


						Accumulated
				Additional		Other				Total
	Common			Paid-In		Comprehensive		Accumulated		Stockholders’
	Stock			Capital		(Loss) Income		Deficit		Equity
Three months ended September 30, 2025	Shares	Amount
Balance at June 30, 2025	62,107,572	$	1	$	1,054,980	$	(15)	$	(386,948)	$	668,018
Issuance of common stock under equity incentive and employee stock purchase plans	339,530		—		5,659		—		—		5,659
Stock-based compensation expense	—		—		10,559		—		—		10,559
Other comprehensive income	—		—		—		540		—		540
Net loss	—		—		—		—		(39,339)		(39,339)
Balance at September 30, 2025	62,447,102	$	1	$	1,071,198	$	525	$	(426,287)	$	645,437


						Accumulated
				Additional		Other				Total
	Common			Paid-In		Comprehensive		Accumulated		Stockholders’
	Stock			Capital		(Loss) Income		Deficit		Equity
Three months ended September 30, 2024	Shares	Amount
Balance at June 30, 2024	58,762,063	$	1	$	980,558	$	(249)	$	(438,986)	$	541,324
Issuance of common stock under equity incentive and employee stock purchase plans	759,840		—		12,051		—		—		12,051
Stock-based compensation expense	—		—		10,165		—		—		10,165
Other comprehensive income	—		—		—		1,585		—		1,585
Net loss	—		—		—		—		(33,210)		(33,210)
Balance at September 30, 2024	59,521,903	$	1	$	1,002,774	$	1,336	$	(472,196)	$	531,915

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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PROTAGONIST THERAPEUTICS, INC.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(In thousands, except share data)


						Accumulated
				Additional		Other				Total
	Common			Paid-In		Comprehensive		Accumulated		Stockholders’
	Stock			Capital		(Loss) Income		Deficit		Equity
Nine months ended September 30, 2025	Shares	Amount
Balance at December 31, 2024	61,035,139	$	1	$	1,015,898	$	(82)	$	(340,522)	$	675,295
Issuance of common stock under equity incentive and employee stock purchase plans	1,424,599		—		20,506		—		—		20,506
Shares withheld for net settlement of tax withholding upon vesting of restricted stock units	(12,636)		—		(479)		—		—		(479)
Stock-based compensation expense	—		—		35,273		—		—		35,273
Other comprehensive income	—		—		—		607		—		607
Net loss	—		—		—		—		(85,765)		(85,765)
Balance at September 30, 2025	62,447,102	$	1	$	1,071,198	$	525	$	(426,287)	$	645,437


						Accumulated
				Additional		Other				Total
	Common			Paid-In		Comprehensive		Accumulated		Stockholders’
	Stock			Capital		(Loss) Income		Deficit		Equity
Nine months ended September 30, 2024	Shares	Amount
Balance at December 31, 2023	57,708,613	$	1	$	952,491	$	(105)	$	(615,710)	$	336,677
Issuance of common stock under equity incentive and employee stock purchase plans	1,749,094		—		22,422		—		—		22,422
Shares withheld for net settlement of tax withholding upon vesting of restricted stock units	(20,793)		—		(600)		—		—		(600)
Issuance of common stock upon exercise of Pre-Funded Warrants	84,989		—		—		—		—		—
Stock-based compensation expense	—		—		28,461		—		—		28,461
Other comprehensive income	—		—		—		1,441		—		1,441
Net income	—		—		—		—		143,514		143,514
Balance at September 30, 2024	59,521,903	$	1	$	1,002,774	$	1,336	$	(472,196)	$	531,915

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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PROTAGONIST THERAPEUTICS, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)


	Nine Months Ended
	September 30,
	2025		2024
Cash Flows from Operating Activities
Net (loss) income	$	(85,765)	$	143,514
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Stock-based compensation		35,273		28,461
Non-cash lease expense		1,243		1,651
Depreciation		904		708
Accretion of discount on marketable securities		(5,887)		(6,115)
Net realized loss on sale of marketable securities		4		—
Changes in operating assets and liabilities:
Receivable from collaboration partner		164,417		10,000
Prepaid expenses and other assets		(1,995)		(4,088)
Accounts payable		4,030		2,272
Accrued expenses and other payables		(833)		1,061
Payable to collaboration partner		—		(3)
Income taxes payable		(2,689)		1,049
Deferred revenue		(13,579)		36,205
Operating lease liability		(477)		(1,385)
Net cash provided by operating activities		94,646		213,330
Cash Flows from Investing Activities
Purchase of marketable securities		(442,311)		(507,293)
Proceeds from maturities of marketable securities		338,607		217,580
Proceeds from sale of marketable securities		7,003		—
Purchases of property and equipment		(1,446)		(1,045)
Net cash used in investing activities		(98,147)		(290,758)
Cash Flows from Financing Activities
Proceeds from issuance of common stock upon exercise of stock options and purchases under employee stock purchase plan		20,506		22,422
Tax withholding payments related to net settlement of restricted stock units		(479)		(600)
Net cash provided by financing activities		20,027		21,822
Net increase (decrease) in cash, cash equivalents and restricted cash		16,526		(55,606)
Cash, cash equivalents and restricted cash, beginning of period		97,474		186,952
Cash, cash equivalents and restricted cash, end of period	$	114,000	$	131,346
Supplemental Disclosure of Non-Cash Financing and Investing Information:
Leasehold improvements obtained under tenant improvement allowance	$	360	$	613
Purchases of property and equipment in accounts payable and accrued liabilities	$	8	$	325
Right-of-use asset obtained in exchange for lease obligation	$	—	$	10,511

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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PROTAGONIST THERAPEUTICS, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1.Organization and Description of Business

Protagonist Therapeutics, Inc. (the “Company”) is a discovery through late-stage development biopharmaceutical company focused on peptide therapeutics. The Company’s clinical programs fall into two broad categories of diseases: (i) inflammatory and immunomodulatory diseases and (ii) hematology and blood disorders. Two novel peptides derived from the Company’s proprietary discovery technology platform, icotrokinra and rusfertide, are currently in advanced Phase 3 clinical development.

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 the Company and JNJ scientists pursuant to their IL-23R collaboration, the Company was primarily responsible for the development of icotrokinra through Phase 1, with JNJ assuming responsibility for development in Phase 2 and beyond. In July 2025, a New Drug Application (“NDA”) was submitted to the U.S. Food and Drug Administration (“FDA”) 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 to the European Medicines Agency 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 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 through a potential NDA filing. In August 2025, rusfertide was granted Breakthrough Therapy designation by the FDA for the treatment of erythrocytosis in patients with PV.

The Company also has a number of drug discovery and development programs addressing biologically and commercially validated targets, including IL-17 oral peptide antagonist PN-881, obesity triple agonist peptide PN-477, and oral hepcidin.

The Company is headquartered in Newark, California and has one wholly owned subsidiary, Protagonist Pty Limited (“Protagonist Australia”), located in Brisbane, Queensland, Australia.

Operating Segments

Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the Chief Executive Officer, the Company’s chief operating decision maker (“CODM”), in deciding how to allocate resources and assessing performance. The Company operates and manages its business as one operating segment. The Company’s Chief Executive Officer reviews financial information on an aggregate basis for the purpose of allocating and evaluating financial performance. See Note 10 to these condensed consolidated financial statements for the Company’s interim disclosures related to the adoption of ASU 2023-07 Segment Reporting (Topic 280) Improvements to Reporting Segment Disclosures for interim periods beginning on January 1, 2025.

Liquidity

As of September 30, 2025, the Company had cash, cash equivalents and marketable securities of $678.8 million. The Company has incurred an accumulated deficit of $426.3 million from inception through September 30, 2025. The Company’s ultimate success depends upon the outcome of its research and development and collaboration activities. The Company may incur additional losses in the future as it continues rusfertide Phase 3 development activities through a potential NDA filing and invests in its pre-clinical discovery programs and may need to raise additional capital to continue to execute its long-range business plan. Since the Company’s initial public offering in August 2016, it has financed its operations primarily through proceeds from offerings of common stock and payments received under license and collaboration agreements.

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Note 2. Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted and, accordingly, the condensed consolidated balance sheet as of September 30, 2025 has been derived from the Company’s unaudited consolidated financial statements at that date but does not include all of the information required by GAAP for complete consolidated financial statements. These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all adjustments (consisting of normal recurring adjustments) that are necessary for a fair presentation of the Company’s condensed consolidated financial statements. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or for any future period.

The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K, filed with the SEC on February 21, 2025.

Principles of Consolidation

The accompanying unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany transactions and balances have been eliminated upon consolidation.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, accruals for research and development activities, stock-based compensation, income taxes, marketable securities and leases. Estimates related to revenue recognition include assumptions used to determine standalone selling price utilized to allocate the transaction price between distinct performance obligations, assumptions used to recognize revenue over time for certain performance obligations for which a cost-based input method is used as the measure of progress and estimates of whether contingent consideration should be included in the transaction price at each reporting period. Management bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to forecasted amounts and future events. Actual results may differ materially from these estimates.

There has been 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. Our business may also be impacted by changes or disruptions at the FDA and other government agencies. The Company has taken into consideration any known impacts to its accounting estimates to date and is not aware of any additional specific events or circumstances that would require any additional updates to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the filing date of this Quarterly Report on Form 10-Q. These estimates may change as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions.

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Cash as Reported in Condensed Consolidated Statements of Cash Flows

Cash as reported in the condensed consolidated statements of cash flows includes the aggregate amounts of cash and cash equivalents and the restricted cash as presented on the condensed consolidated balance sheets.

Cash as reported in the condensed consolidated statements of cash flows consisted of (in thousands):


	September 30,
	2025		2024
Cash and cash equivalents	$	113,713	$	131,121
Restricted cash - noncurrent		287		225
Total cash reported on condensed consolidated statements of cash flows	$	114,000	$	131,346

The increase in restricted cash – noncurrent as of September 30, 2025 was due to a $62.0 thousand deposit held as security in connection with the issuance of a bank guarantee in May 2025 to maintain the active status of the Company’s value-added tax registration.

Stock-Based Compensation Expense

The Company has granted stock options, restricted stock units (“RSUs”) and performance stock units (“PSUs”).

Stock-based compensation expense associated with stock options is based on the estimated grant date fair value using the Black-Scholes valuation model, which requires the use of assumptions related to expected stock price volatility, option term, risk-free interest rate and dividend yield. The Company recognizes compensation expense over the vesting period of the awards that are ultimately expected to vest.

Stock-based compensation expense associated with RSUs is based on the fair value of the Company’s common stock on the grant date, which equals the closing market price of the Company’s common stock on the grant date. For RSUs, the Company recognizes compensation expense over the vesting period of the awards that are ultimately expected to vest.

PSUs allow the recipients of such awards to earn fully vested shares of the Company’s common stock upon the achievement of pre-established performance objectives. Stock-based compensation expense associated with PSUs is based on the fair value of the Company’s common stock on the grant date, which equals the closing market price of the Company’s common stock on the grant date and is recognized when the performance objective is expected to be achieved. The Company evaluates the probability of achieving the performance criteria on a quarterly basis. The cumulative effect on current and prior periods of a change in the estimated number of PSUs expected to be earned is recognized as compensation expense or as reduction of previously recognized compensation expense in the period of the revised estimate. For the nine months ended September 30, 2025, the Company recognized $1.8 million of stock-based compensation expense related to 75,500 PSUs that vested during the third quarter of 2025.

The Company recognizes forfeitures of stock-based awards as they occur.

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Total stock-based compensation expense was as follows (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024
Research and development	$	6,019	$	5,212	$	20,301	$	15,597
General and administrative		4,540		4,953		14,972		12,864
Total stock-based compensation expense	$	10,559	$	10,165	$	35,273	$	28,461

Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies during the three and nine months ended September 30, 2025, as compared to those disclosed in Note 2. Summary of Significant Accounting Policies included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Recently Issued Accounting Pronouncements Not Yet Adopted as of September 30, 2025

In December 2023, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update No. 2023-09 Income Taxes (Topic 740) – Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires public business entities to disclose specific categories in the income tax rate reconciliation annually and provide additional information for reconciling items that meet a qualitative threshold. ASU 2023-09 also requires that entities disclose annually additional information about income taxes paid and disaggregated information for certain items. ASU 2023-09 is effective for the Company for fiscal years beginning on January 1, 2025. The Company does not expect the adoption of this guidance to have a material impact on its financial position, results of operations or cash flows.

In November 2024, the FASB issued Accounting Standards Update No. 2024-03 Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires detailed disclosures about specified categories of expenses (including employee compensation, depreciation, and amortization) included in certain expense captions presented on the face of the income statement. In January 2025, the FASB issued an update to ASU 2024-03 clarifying that all public business entities should initially adopt the disclosure requirements in the first annual reporting period beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. ASU 2024-03 is effective for the Company for fiscal years beginning on January 1, 2027, and for interim periods beginning on January 1, 2028. Early adoption is permitted. The guidance may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of ASU 2024-03 or (2) retrospectively to all prior periods presented in the financial statements. The Company does not expect the adoption of this guidance to have a material effect on its consolidated financial statements and continues to evaluate disclosure presentation alternatives.

Note 3. License and Collaboration Agreements

JNJ License and Collaboration Agreement

In July 2021, the Company 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”). The JNJ License and Collaboration Agreement relates to the development, manufacture and commercialization of oral IL-23R antagonist drug candidates and enables JNJ to develop collaboration compounds for multiple indications. Under the JNJ License and Collaboration Agreement, JNJ is required to use commercially reasonable efforts to develop at least one collaboration compound for at least two indications.

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

●

Increase the milestone payment for a Phase 3 clinical trial of any licensed product for any indication meeting its primary endpoint by $50.0 million, from $115.0 million to $165.0 million;

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●

Eliminate the $35.0 million milestone payment previously due for the acceptance of an NDA filing by the FDA for use of a licensed product for any indication; and

●

Eliminate the $15.0 million milestone payment previously due for the dosing of the third patient in the first Phase 3 clinical trial of a licensed product for a second indication.

The Company earned the $165.0 million milestone payment described above during the fourth quarter of 2024. The Company has earned a total of $337.5 million in non-refundable payments from JNJ from inception in 2017 through September 30, 2025.

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

●

$50.0 million upon FDA approval of an NDA in any indication;

●

$25.0 million upon the acceptance of an NDA filing by the FDA for a second indication;

●

$45.0 million upon FDA approval of an NDA for a second indication;

●

$35.0 million upon the acceptance of an NDA filing by the FDA for a third indication; and

●

$50.0 million upon FDA approval of an NDA for a third indication.

Pursuant to the agreement, the Company is eligible to receive future sales milestone payments and tiered royalties on net product sales at percentages ranging from 6% to 10%.

Takeda Collaboration Agreement

In January 2024, the Company entered into a worldwide license and collaboration agreement for rusfertide with Takeda, as amended March 2025 (the “Takeda Collaboration Agreement”), which became effective in March 2024.

Pursuant to the Takeda Collaboration Agreement, the Company and Takeda are jointly developing and commercializing rusfertide and potentially other specified second-generation injectable hepcidin mimetic compounds (the “Licensed Products”) in the United States (the “Profit-Share Territory”). Takeda is solely and exclusively responsible for the development and commercialization of the Licensed Products in all other countries (the “Takeda Territory”). The Company and Takeda share the costs of the development, manufacture and commercialization activities for the Licensed Products in the Profit-Share Territory, provided that (i) the Company leads, and is solely responsible for its costs associated with, completion of the ongoing Phase 3 VERIFY trial evaluating rusfertide for the treatment of PV; (ii) Takeda leads, and is solely responsible for its costs associated with, U.S. regulatory and pre-commercialization activities related to rusfertide in the Profit-Share Territory; and (iii) Takeda leads commercialization of rusfertide in the Profit-Share Territory, with the Company holding an option to co-detail. Takeda is solely responsible for all costs for the development, manufacture and commercialization of the Licensed Products in the Takeda Territory. The Company granted Takeda a non-transferable, sublicensable and, except for certain specified exceptions, exclusive license to certain intellectual property of the Company to exercise its rights and perform its obligations under the Takeda Collaboration Agreement. In March 2025, the Company 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 preparation of the NDA related to rusfertide in PV, which is expected to be submitted to the FDA. The Company remains primarily responsible for clinical development activities through the NDA filing.

The Company received a one-time, non-refundable upfront payment of $300.0 million in April 2024. In March 2025, a $25.0 million milestone was deemed probable of achievement following positive topline results from the Phase 3 VERIFY trial of rusfertide in PV, and payment was received in September 2025. In addition, the Company is eligible to receive additional worldwide development, regulatory and commercial milestone payments for rusfertide of up to $305.0 million, and tiered royalties from 10% to 17% on net sales of the Licensed Products in the Takeda Territory. The

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Company and Takeda will also share equally in profits and losses (50% to the Company and 50% to Takeda) for Licensed Products in the Profit-Share Territory. Takeda will book sales of the Licensed Products globally.

The Company has the right to opt-out entirely of profit- and loss-sharing in the Profit-Share Territory for rusfertide and all other Licensed Products (the “Full Opt-out Right”) (i) during the 90-day period beginning 120 days after the filing of an NDA with the FDA for rusfertide for PV (the “Initial Opt-out Period”); and (ii) for convenience without receipt of the Opt-out Payment (as defined below) (generally following the Initial Opt-out Period). In addition, if the Company does not exercise the Full Opt-out Right, the Company may opt-out of any Licensed Product other than rusfertide on a Licensed Product-by-Licensed Product basis (each, a “Partial Opt-out Right” and either the Full Opt-out Right or a Partial Opt-out right being an “Opt-out Right”). Following the Company’s exercise of an Opt-out Right, the Company has agreed to transition applicable development and commercial activities to Takeda, and Takeda has agreed to assume sole operational and financial responsibility for such activities in the United States.

The Takeda Collaboration Agreement provides for aggregate development, regulatory and commercial milestone payments from Takeda to the Company for rusfertide of up to $975.0 million if the Company exercises the Full Opt-out Right. In addition to these milestone payments, in the event the Company exercises the Full Opt-out Right during the Initial Opt-out Period, the Company will receive: (i) a $200.0 million payment following its exercise of the Full Opt-out Right; and (ii) an additional $200.0 million payment following FDA approval of the NDA for rusfertide for PV (together, the “Opt-out Payment”). If the Company exercises an Opt-out Right, Takeda has agreed to pay the Company royalties of 14% to 29% on worldwide net sales of the Licensed Products with respect to which the Company has exercised an Opt-out Right.

Upcoming potential milestones under the Takeda Collaboration Agreement include:

●

$50.0 million upon FDA approval of an NDA for rusfertide in PV (or $75.0 million if the Company exercises the Full Opt-out Right);

●

$15.0 million upon first regulatory approval for rusfertide in PV in three European countries, after pricing and reimbursement approval; and

●

$10.0 million upon first regulatory approval for rusfertide in PV in Japan.

The Company evaluated the Takeda Collaboration Agreement and concluded that it has elements that are within the scope of ASC Topic 606 and ASC Topic 808. As of the effective date of the Takeda Collaboration Agreement, the Company identified two distinct performance obligations: (i) the rusfertide license delivered upon the effectiveness of the Takeda Collaboration Agreement and (ii) certain development services to be provided prior to the Initial Opt-out Period, including the Company’s responsibilities to complete the Phase 3 VERIFY trial in PV and associated manufacturing services.

The Company determined that the initial transaction price totaled $300.0 million, which was comprised of the upfront payment. The Company initially excluded any future estimated milestones or royalties from this transaction price, all of which were either constrained or subject to the sales-and usage-based royalty exception. As part of the Company’s evaluation of this variable consideration constraint, it determined that the potential payments were contingent upon developmental and regulatory milestones that were uncertain and were highly susceptible to factors outside of its control. The Company allocated $254.1 million of the initial transaction price to the license and $45.9 million to the development services based upon the relative standalone selling price of each performance obligation. The estimate of standalone selling price for the license was determined based on discounted cash flows for the expected development and commercialization of rusfertide and included assumptions for forecasted revenues, development timelines and expenses, discount rates, and probabilities of technical and regulatory success. The estimate of standalone selling price for the development services was determined based on forecasted costs and expenses over the expected development period. For the license of rusfertide, the Company determined that Takeda could benefit from the license at the time the license was granted and therefore, the related performance obligation was satisfied at that point in time.

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The amount allocated to the license, which represents functional intellectual property that was transferred at a point in time, was satisfied upon transfer of the license to Takeda. The amount allocated to development services will be recognized over time based on a measure of the Company’s efforts toward satisfying the performance obligation relative to the total expected efforts or inputs to satisfy the performance obligation (e.g., costs incurred compared to total budget).

The Company determined that the Takeda Collaboration Agreement met the definition of a collaborative arrangement under ASC Topic 808. Both parties are active participants in directing and carrying out the development of the Licensed Products and both are exposed to significant risks and rewards related to the commercial success of the Products. If the Company does not exercise an Opt-out Right (“Company Opt-in”), the Company and Takeda would co-detail the Licensed Products in the U.S. and share in the economic results through a profit-sharing structure. The Company determined that development costs subsequent to the Company Opt-in date are within the scope of ASC Topic 808, which does not provide recognition and measurement guidance. As such, the Company determined that Accounting Standards Codification Topic 730, “Research and Development,” was an appropriate analogy based on the cost-sharing provisions of the agreement. The Company concluded that payments to or reimbursements from Takeda related to these services will be accounted for as an increase to or reduction of research and development expenses, respectively.

The Company may from time to time arrange to provide goods or services from vendors to Takeda in order to facilitate Takeda’s rusfertide development efforts. As there is no performance obligation to provide these goods or services and the Company is acting as an agent, these amounts are recorded as receivable from collaboration partner and payable to vendor until reimbursement is received.

In March 2025, the $25.0 million milestone was deemed probable of achievement due to the Phase 3 VERIFY trial meeting its primary endpoint, was no longer considered constrained and was added to the initial transaction price for a total transaction price of $325.0 million. The additional $25.0 million was then allocated proportionally to each performance obligation under the agreement, resulting in an additional $21.3 million allocated to the license and an additional $3.7 million allocated to the development services under the agreement. In September 2025, the Company received the $25.0 million milestone payment upon completion of the VERIFY clinical study report.

Revenue Recognition

For the three months ended September 30, 2025, the Company recognized license and collaboration revenue of $4.7 million related to the Takeda Collaboration Agreement for development services provided by the Company during the period based on the cost-based input method. For the nine months ended September 30, 2025, the Company recognized license and collaboration revenue of $38.6 million related to the Takeda Collaboration Agreement, including (i) $21.3 million representing a portion of the $25.0 million milestone payment that was allocated to the rusfertide license delivery performance obligation under the agreement and (ii) $17.3 million for development services provided by the Company 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.

For the three months ended September 30, 2024, the Company recognized license and collaboration revenue of $4.7 million related to the initial Takeda Collaboration Agreement transaction price for development services provided by the Company during the period based on the cost-based input method. For the nine months ended September 30, 2024, the Company recognized license and collaboration revenue of $263.8 million related to the Takeda Collaboration Agreement transaction price, including (i) $254.1 million allocated to the rusfertide license delivered to Takeda upon effectiveness of the agreement in March 2024 and (ii) $9.7 million for development services provided by the Company during the period based on the cost-based input method. The remaining unrecognized transaction price amount of $36.2 million related to the Takeda Collaboration Agreement was recorded as deferred revenue on the Company’s condensed consolidated balance sheet as of September 30, 2024 to be recognized over time based on the cost-based input method.

For the three and nine months ended September 30, 2025, the Company recognized $4.7 million and $14.9 million of revenue, respectively, that was included in the deferred revenue liability balance at the beginning of each period. For the three months ended September 30, 2024, the Company recognized $4.7 million of revenue that was

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included in the deferred revenue liability balance at the beginning of the period. For the nine months ended September 30, 2024, the Company did not recognize revenue from any amounts included in the deferred revenue contract liability balance at the beginning of the period. None of the costs to obtain or fulfill the contracts were capitalized.

Note 4. Fair Value Measurements

Financial assets and liabilities are recorded at fair value. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows:

Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2—Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3—Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

In determining fair value, the Company utilizes quoted market prices, broker or dealer quotations, or valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value.

The following tables present the fair value of the Company’s financial assets determined using the inputs defined above (in thousands):


	September 30, 2025
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	41,552	$	—	$	—	$	41,552
Certificates of deposit		—		17,912		—		17,912
U.S. Treasury and agency securities		—		378,914		—		378,914
Commercial paper		—		77,108		—		77,108
Corporate debt securities		—		145,695		—		145,695
Total financial assets	$	41,552	$	619,629	$	—	$	661,181


	December 31, 2024
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	19,563	$	—	$	—	$	19,563
Certificates of deposit		—		15,835		—		15,835
U.S. Treasury and agency securities		—		299,217		—		299,217
Commercial paper		—		110,832		—		110,832
Corporate debt securities		—		102,705		—		102,705
Total financial assets	$	19,563	$	528,589	$	—	$	548,152

The Company’s certificates of deposit, U.S. Treasury and agency securities, including U.S. Treasury bills, commercial paper and corporate debt securities are classified as Level 2 as they were valued based upon quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not

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active and model-based valuation techniques, for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets.

The carrying amount of the Company’s remaining financial assets and liabilities, including cash, receivables and payables, approximates their fair value due to their short-term nature.

Note 5. Cash Equivalents and Marketable Securities

Cash equivalents and marketable securities consisted of the following (in thousands):


	September 30, 2025
	Amortized		Gross Unrealized
	Cost		Gains		Losses		Fair Value
Money market funds	$	41,552	$	—	$	—	$	41,552
Certificates of deposit		17,906		6		—		17,912
U.S. Treasury and agency securities		378,360		598		(44)		378,914
Commercial paper		77,116		2		(10)		77,108
Corporate debt securities		145,581		119		(5)		145,695
Total cash equivalents and marketable securities	$	660,515	$	725	$	(59)	$	661,181
Classified as:
Cash equivalents							$	96,074
Marketable securities - current								462,404
Marketable securities - noncurrent								102,703
Total cash equivalents and marketable securities							$	661,181


	December 31, 2024
	Amortized		Gross Unrealized
	Cost		Gains		Losses		Fair Value
Money market funds	$	19,563	$	—	$	—	$	19,563
Certificates of deposit		15,820		22		(7)		15,835
U.S. Treasury and agency securities		299,211		429		(423)		299,217
Commercial paper		110,815		28		(11)		110,832
Corporate debt securities		102,714		103		(112)		102,705
Total cash equivalents and marketable securities	$	548,123	$	582	$	(553)	$	548,152
Classified as:
Cash equivalents							$	86,236
Marketable securities - current								321,664
Marketable securities - noncurrent								140,252
Total cash equivalents and marketable securities							$	548,152

All of the Company’s marketable securities are classified as available-for-sale. Current marketable securities of $462.4 million and $321.7 million held as of September 30, 2025 and December 31, 2024, respectively, had contractual maturities of less than one year. Noncurrent marketable securities of $102.7 million and $140.3 million held as of September 30, 2025 and December 31, 2024, respectively, had contractual maturities of at least one year but no more than two years. The Company does not intend to sell its securities that are in an unrealized loss position, and it is not more likely than not that the Company will be required to sell its securities before recovery of their amortized cost basis, which may be at maturity.

During the nine months ended September 30, 2025, the Company sold $7.0 million of marketable securities and recognized a net realized loss of $4.0 thousand. There were no material realized gains or realized losses on marketable securities for the three months ended September 30, 2025 and the three and nine months ended September 30, 2024. The Company evaluated securities with unrealized losses to determine whether such losses, if any, were due to credit-related factors and determined that there were no credit-related losses to be recognized as of September 30, 2025 and December 31, 2024.

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Note 6. Balance Sheet Components

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):


	September 30,		December 31,
	2025		2024
Accrued interest receivable	$	4,551	$	3,242
Prepaid clinical and research related expenses		3,552		1,830
Prepaid licenses		514		600
Prepaid insurance		174		1,159
Other prepaid expenses		742		649
Other receivable		191		248
Prepaid expenses and other current assets	$	9,724	$	7,728

Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):


	September 30,		December 31,
	2025		2024
Laboratory equipment	$	7,646	$	6,354
Furniture and computer equipment		1,481		1,447
Leasehold improvements		2,912		2,424
Total property and equipment		12,039		10,225
Accumulated depreciation		(7,939)		(7,035)
Property and equipment, net	$	4,100	$	3,190

Accrued Expenses and Other Payables

Accrued expenses and other payables consisted of the following (in thousands):


	September 30,		December 31,
	2025		2024
Accrued clinical and research related expenses	$	13,503	$	11,923
Accrued employee related expenses		7,529		11,078
Accrued professional service fees		1,646		618
Other		190		74
Total accrued expenses and other payables	$	22,868	$	23,693

Note 7. Stockholders’ Equity

Shares of Common Stock Authorized for Issuance

At the Company’s 2024 Annual Meeting of Stockholders held on June 20, 2024, the Company’s stockholders approved an amendment to the Company’s Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) to increase the number of authorized shares of the Company’s common stock from 90,000,000 to 180,000,000, which also has the effect of increasing the total number of authorized shares from 100,000,000 to 190,000,000 (the “Amendment”). On June 21, 2024, the Company filed a Certificate of Amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware, which became effective immediately upon such filing.

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Pre-Funded Warrants

In August 2018, the Company entered into a Securities Purchase Agreement with certain accredited investors (each, an “Investor” and, collectively, the “Investors”). In a concurrent private placement, the Company issued the Investors warrants to purchase an aggregate of 2,750,000 shares of its common stock (each, a “Warrant” and, collectively, the “Warrants”). Each Warrant was exercisable from August 8, 2018 through August 8, 2023. In August 2023, prior to the expiration of the Warrants, the Company entered into certain agreements with the Investors and their affiliates under which the Company agreed to allow the Warrants to be exercised in exchange for pre-funded warrants representing the same number of Warrant Shares underlying the Warrants with an exercise price of $0.001 per share (the “Pre-Funded Warrants”). Subsequent to the execution of the agreements and prior to the expiration of the Warrants in August 2023, all outstanding Warrants were exercised for gross proceeds of $34.4 million in exchange for 44,748 shares of the Company’s common stock and Pre-Funded Warrants to purchase 2,705,252 shares of common stock (subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the Pre-Funded Warrants) with an exercise price of $0.001 per share. The Pre-Funded Warrants will expire on the day they are exercised in full. The Pre-Funded Warrants are exercisable at any time prior to expiration except that the Pre-Funded Warrants cannot be exercised by the Investors if, after giving effect thereto, the Investors would beneficially own more than 9.99% of the Company’s common stock, subject to certain exceptions. In accordance with ASC Topic 260, “Earnings Per Share”, outstanding Pre-Funded Warrants are included in the computation of basic net (loss) income per share because the exercise price is negligible, and they are fully vested and exercisable after the original issuance date. No Pre-Funded Warrants were exercised during the three and nine months ended September 30, 2025. During the nine months ended September 30, 2024, Pre-Funded Warrants to purchase 84,992 shares were net exercised, resulting in the issuance of 84,989 shares of common stock. As of September 30, 2025, Pre-Funded Warrants to purchase 1,500,000 shares of common stock remained outstanding.

Note 8. Income Taxes

No income tax expense was recorded by the Company for the three months ended September 30, 2025. The Company recorded income tax expense of $0.2 million for the nine months ended September 30, 2025, which consisted of adjustments to estimated tax payments. The Company recorded an income tax benefit of $0.4 million and income tax expense of $2.2 million for the three and nine months ended September 30, 2024, respectively. The primary difference in income tax expense as compared to the prior year was due to taxable income for the nine months ended September 30, 2024 resulting from the recognition of revenue in connection with the Takeda Collaboration Agreement. The tax provision for the three and nine months ended September 30, 2024 was determined using an estimated annual effective tax rate, adjusted for discrete items, if any.

Note 9. Net (Loss) Income per Share

The computation of basic net (loss) income per share of common stock is based on the weighted-average number of shares of common stock outstanding during each period. The computation of diluted net (loss) income per share of common stock is based on the weighted-average number of shares of common stock outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options, RSUs, PSUs, the Company’s employee stock purchase plan (“ESPP”), and warrants.

In periods in which the Company reports a net loss, all common stock equivalents are deemed anti-dilutive such that basic net loss per share of common stock and diluted net loss per share of common stock are equal. In periods when the Company has net income, the dilutive effect of all potentially outstanding shares is computed using the treasury stock method.

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The following table reconciles the numerator and denominator used to calculate diluted net (loss) income per share of common stock (in thousands, except share and per share data):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024
Numerator:
Net (loss) income	$	(39,339)	$	(33,210)	$	(85,765)	$	143,514
Denominator:
Weighted-average shares of common stock, basic		63,772,332		61,767,934		63,418,522		61,311,310
Dilutive effect of common stock equivalents		—		—		—		3,300,631
Weighted-average shares of common stock, dilutive		63,772,332		61,767,934		63,418,522		64,611,941
Net (loss) income per share of common stock
Basic net (loss) income per share of common stock	$	(0.62)	$	(0.54)	$	(1.35)	$	2.34
Diluted net (loss) income per share of common stock	$	(0.62)	$	(0.54)	$	(1.35)	$	2.22

Approximately 9.1 million potentially dilutive shares of common stock (consisting of shares subject to outstanding stock options, RSUs, PSUs, and under the ESPP) were excluded from the diluted net loss per share of common stock computation for the three and nine months ended September 30, 2025 due to the Company’s net losses for these periods. Approximately 9.2 million potentially dilutive shares of common stock (consisting of shares subject to outstanding stock options, RSUs, PSUs, and under the ESPP) were excluded from the diluted net loss per share of common stock computation for the three months ended September 30, 2024 due to the Company’s net loss for the period. Approximately 3.2 million potentially dilutive shares of common stock (consisting of shares subject to outstanding stock options, RSUs, PSUs, and under the ESPP) were excluded from the diluted net income per share of common stock computation for the nine months ended September 30, 2024 because their effect was anti-dilutive.

Note 10. Segment Reporting

Operating segments are components of an enterprise for which separate financial information is available and which are evaluated by a company’s CODM in deciding how to allocate resources and to assess performance.

The Company operates and manages its business as one operating segment, which primarily focuses on the discovery and development of innovative medicines in areas of unmet medical need. The Company’s Chief Executive Officer serves as the Company’s CODM and manages and allocates resources to the operations of the Company on an entity-wide basis. Managing and allocating resources on an entity-wide basis enables the CODM to assess the overall level of resources available and how to best deploy these resources across functions and research and development projects based on unmet medical need, scientific data, probability of technical and regulatory successful development, market potential and other considerations, and, as necessary, reallocate resources among our internal research and development portfolio and external opportunities to best support the long-term growth of our business. The Company’s CODM reviews financial information on an aggregate basis for the purpose of allocating resources and evaluating financial performance, including segment net (loss) income, which is also reported on the condensed consolidated statement of operations as consolidated net (loss) income.

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Segment information is as follows (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024

Revenue	$	4,712	$	4,675	$	38,579	$	263,795
Less:
Discovery department expense ⁽¹⁾⁽²⁾		(4,014)		(4,266)		(12,712)		(10,759)
Development department expense⁽¹⁾⁽²⁾		(18,893)		(16,419)		(47,302)		(45,845)
General and administrative expenses ⁽¹⁾		(6,077)		(4,824)		(17,502)		(19,798)
Employee wages and benefits - discovery ⁽²⁾		(2,434)		(1,794)		(6,949)		(5,471)
Employee wages and benefits - development ⁽²⁾		(5,264)		(5,280)		(15,406)		(16,926)
Employee wages and benefits - general and administrative		(3,892)		(3,380)		(11,207)		(10,472)
Stock-based compensation expense		(10,559)		(10,165)		(35,273)		(28,461)
Other segment items ⁽³⁾		33		141		151		219
Interest income		7,049		7,682		22,028		19,462
Income tax benefit (expense)		—		420		(172)		(2,230)
Segment (loss) profit	$	(39,339)	$	(33,210)	$	(85,765)	$	143,514
Reconciliation of (loss) profit
Adjustments and reconciling items	$	—	$	—	$	—	$	—
Consolidated net (loss) income	$	(39,339)	$	(33,210)	$	(85,765)	$	143,514

⁽¹⁾Amounts exclude employee wages and benefits, stock-based compensation and expense allocations.

⁽²⁾ As of April 1, 2025, the information regularly provided to the CODM was changed to reclassify pre-clinical expenses from development expense to discovery expense. Prior period segment information has been recast to reflect this change.

⁽³⁾Other segment items include foreign currency related income (expense) and other miscellaneous income (expense).

The accounting policies of the Company’s operating segment are the same as those described in Note 2. Summary of Significant Accounting Policies. The measure of segment assets is reported as total assets on the Company’s condensed consolidated balance sheets for the periods presented.

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ITEM 2.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.

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“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 addressing biologically 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:

●

Results from the Phase 3 ICONIC-LEAD trial, presented as a late-breaking abstract at the 2025 American Academy of Dermatology Annual Meeting in March 2025, showed that icotrokinra successfully met the co-primary endpoints of Investigator's Global Assessment (“IGA”) score of 0/1 (clear or almost clear skin) and Psoriasis Area and Severity Index (“PASI”) 90 (90% improvement in skin lesions as measured by PASI) compared to placebo at Week 16.

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●

A subgroup analysis of ICONIC-LEAD, presented at the 2025 World Congress of Pediatric Dermatology in April 2025, which demonstrated that pediatric patients treated with once daily icotrokinra achieved higher rates of clear or almost clear skin at Week 16 compared to patients receiving placebo, with no new safety signals identified.

●

Data from the Phase 3 ICONIC-TOTAL trial, presented at the 2025 Society for Investigative Dermatology (“SID”) Annual Meeting in May 2025, which highlighted the potential of icotrokinra as a treatment for patients with difficult-to-treat scalp and genital psoriasis.

●

Results from the Phase 3 ICONIC-ADVANCE 1 and ICONIC-ADVANCE 2 trials that further reinforced the overall efficacy profile of icotrokinra, which met co-primary endpoints of IGA 0/1 and PASI 90 versus placebo at Week 16. Icotrokinra also met all key secondary endpoints at Weeks 16 and 24 that measured superiority to deucravacitinib in patients with moderate-to-severe plaque psoriasis. Comprehensive results are being prepared for presentation at a future medical meeting.

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.

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

●

ICONIC-PsA1 (NCT06807424) – A 540-patient randomized, controlled Phase 3 trial to evaluate the efficacy and safety of icotrokinra compared with placebo in biologic-naive patients with active psoriatic arthritis;

●

ICONIC-PsA2 (NCT06807424) – A 750-patient randomized, controlled Phase 3 trial to evaluate the efficacy and safety of icotrokinra compared with placebo in biologic-experienced patients with active psoriatic arthritis; and

●

ICONIC-ASCEND (NCT06934226) – A 675-patient randomized, controlled Phase 3 trial to evaluate the effectiveness of icotrokinra in patients with moderate-to-severe plaque psoriasis compared to placebo and ustekinumab, an injectable biologic. ICONIC-ASCEND is the first-ever head-to-head study seeking to demonstrate the superiority of an oral pill compared to an injectable biologic, representing an important step forward in psoriasis research.

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.

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

●

All three doses of once-daily icotrokinra met the primary endpoint of clinical response at Week 12.

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●A response rate of 63.5% for patients treated with the highest dose of icotrokinra was achieved at Week 12 versus 27.0% for placebo (p<0.001).

●30.2% of patients treated with the highest dose of icotrokinra demonstrated clinical remission at Week 12 versus 11.1% of patients who received placebo (p<0.001).

●Clinical remission and response rates continued to improve through Week 28.

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.

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

●

ICONIC-UC (NCT07196748) – An 882-patient randomized, controlled, open-label Phase 3 trial in adolescents to evaluate the efficacy and safety of induction and maintenance therapy with icotrokinra in moderately-to-severely active UC; and

●

ICONIC-CD (NCT07196722) – A 1,092-patient randomized, controlled Phase 2b/3 trial to evaluate the efficacy and safety of icotrokinra in moderately-to-severely active Crohn’s disease.

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

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:

●

increase the milestone payment for a Phase 3 clinical trial of any licensed product for any indication meeting its primary endpoint by $50.0 million from $115.0 million to $165.0 million;

●

eliminate the $35.0 million milestone payment previously due for the acceptance of an NDA filing by the FDA for a licensed product for any indication; and

●

eliminate the $15.0 million milestone payment previously due for the dosing of the third patient in the first Phase 3 clinical trial of a licensed product for a second indication.

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:

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

●

$50.0 million upon approval of an NDA for icotrokinra in any indication;

●

$25.0 million upon acceptance of an NDA for icotrokinra in a second indication;

●

$45.0 million upon approval of an NDA for icotrokinra in a second indication;

●

$35.0 million upon acceptance of an NDA for icotrokinra in a third indication; and

●

$50.0 million upon approval of an NDA for icotrokinra in a third indication.

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

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.

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.

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:

●

The mean number of phlebotomies was 0.5 phlebotomies per patient for those treated with rusfertide plus the current standard of care compared to 1.8 phlebotomies per patient for those treated with placebo plus the

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current standard of care during Weeks 0-32 (p<0.0001). Only 27% of patients treated with rusfertide plus the current standard of care required phlebotomy between Weeks 0-32, compared to 78% of patients who received placebo plus the current standard of care. The mean number of phlebotomies during Weeks 0-32 in the rusfertide arm was reduced across subgroups, including risk status and use of concurrent cytoreductive therapy, versus the placebo arm.

●

62.6% of patients treated with rusfertide plus the current standard of care maintained hematocrit levels below 45% versus 14.4% of patients treated with placebo plus the current standard of care (p<0.0001).

●

Rusfertide also showed statistically significant improvements in mean change from baseline to Week 32 in PROMIS Fatigue SF-8, a questionnaire that measures patient-reported fatigue symptoms and their impact on daily life (p<0.03), and the Myeloproliferative Neoplasm-Symptom Assessment Form TSS-7, a questionnaire used to evaluate the severity of symptoms in patients with myeloproliferative neoplasm (p<0.03). Rusfertide is the first investigational therapy to prospectively demonstrate a statistically significant improvement in these patient-reported outcomes of fatigue and symptom burden in patients with PV.

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.

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.

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.

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:

●

$50.0 million upon FDA approval of an NDA for rusfertide in PV (or $75.0 million if we exercise our Full Opt-out Right);

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$15.0 million upon first regulatory approval for rusfertide in PV in three European countries, after pricing and reimbursement approval; and

●

$10.0 million upon first regulatory approval for rusfertide in PV in Japan.

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.

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.

Discovery Platform

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.

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

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.

Risks and Uncertainties

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

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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:

●

expenses incurred under agreements with clinical trial sites that conduct research and development activities on our behalf;

●

employee-related expenses, which include salaries, benefits and stock-based compensation;

●

laboratory vendor expenses related to the preparation and conduct of pre-clinical studies and clinical trials;

●

costs related to production of clinical supplies and pre-clinical materials, including fees paid to contract manufacturers;

●

license fees and milestone payments under license and collaboration agreements; and

●

facilities and other allocated expenses, which include expenses for rent and maintenance of facilities, information technology, depreciation and amortization expense and administrative and other supplies.

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

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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.

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


	Three Months Ended
	September 30,				Dollar		%
	2025		2024		Change		Change

	(Dollars in thousands)
License and collaboration revenue	$	4,712	$	4,675	$	37	1
Operating expenses:
Research and development ⁽¹⁾		40,003		35,970		4,033	11
General and administrative ⁽²⁾		11,130		10,158		972	10
Total operating expenses		51,133		46,128		5,005	11
Loss from operations		(46,421)		(41,453)		(4,968)	12
Interest income		7,049		7,682		(633)	(8)
Other income, net		33		141		(108)	(77)
Loss before income tax benefit		(39,339)		(33,630)		(5,709)	17
Income tax benefit		—		420		(420)	(100)
Net loss	$	(39,339)	$	(33,210)	$	(6,129)	18

*Percentage not meaningful.

(1)	Includes $6.0 million and $5.2 million of non-cash stock-based compensation expense for the three months ended September 30, 2025 and 2024, respectively.

(2)	Includes $4.6 million and $5.0 million of non-cash stock-based compensation expense for the three months ended September 30, 2025 and 2024, respectively.

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License and Collaboration Revenue

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


	Three Months Ended
	September 30,				Dollar		%
	2025		2024		Change		Change

	(Dollars in thousands)
Clinical and development expense — rusfertide	$	21,525	$	26,317	$	(4,792)	(18)
Clinical and development expense — other		46		70		(24)	(34)
Pre-clinical and drug discovery research expense		18,432		9,583		8,849	92
Total research and development expenses	$	40,003	$	35,970	$	4,033	11

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.

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.

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.

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

Interest Income

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.

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.

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


	Nine Months Ended
	September 30,				Dollar		%
	2025		2024		Change		Change

	(Dollars in thousands)
Revenue:
License and collaboration revenue	$	38,579	$	263,795	$	(225,216)	(85)
Operating expenses:
Research and development ⁽¹⁾		112,932		103,224		9,708	9
General and administrative ⁽²⁾		33,419		34,508		(1,089)	(3)
Total operating expenses		146,351		137,732		8,619	6
(Loss) income from operations		(107,772)		126,063		(233,835)	(185)
Interest income		22,028		19,462		2,566	13
Other income, net		151		219		(68)	(31)
(Loss) income before income tax expense		(85,593)		145,744		(231,337)	(159)
Income tax expense		172		2,230		(2,058)	(92)
Net (loss) income	$	(85,765)	$	143,514	$	(229,279)	(160)

(1)	Includes $20.3 million and $15.6 million of non-cash stock-based compensation expense for the nine months ended September 30, 2025 and 2024, respectively.

(2)	Includes $15.0 million and $12.9 million of non-cash stock-based compensation expense for the nine months ended September 30, 2025 and 2024, respectively.

License and Collaboration Revenue

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.

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


	Nine Months Ended
	September 30,				Dollar		%
	2025		2024		Change		Change

	(Dollars in thousands)
Clinical and development expense — rusfertide	$	65,800	$	74,692	$	(8,892)	(12)
Clinical and development expense — other		200		247		(47)	(19)
Pre-clinical and drug discovery research expense		46,932		28,285		18,647	66
Total research and development expenses	$	112,932	$	103,224	$	9,708	9

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.

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”).

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.

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

Interest Income

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.

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

Sources of Liquidity

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:

●

increase the milestone payment for a Phase 3 clinical trial of any licensed product for any indication meeting its primary endpoint by $50.0 million, from $115.0 million to $165.0 million;

●

eliminate the $35.0 million milestone payment previously due for the acceptance of an NDA filing by the FDA for use of licensed product for any indication; and

●

eliminate the $15.0 million milestone payment previously due for the dosing of the third patient in the first Phase 3 clinical trial of a licensed product for a second indication.

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:

●

$50.0 million upon approval of an NDA for icotrokinra in any indication;

●

$25.0 million upon acceptance of an NDA for icotrokinra in a second indication;

●

$45.0 million upon approval of an NDA for icotrokinra in a second indication;

●

$35.0 million upon acceptance of an NDA for icotrokinra in a third indication; and

●

$50.0 million upon approval of an NDA for icotrokinra in a third indication.

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:

●

$50.0 million upon FDA approval of an NDA for rusfertide in PV (or $75.0 million if we exercise our Full Opt-out Right);

●

$15.0 million upon first regulatory approval for rusfertide in PV in three European countries, after pricing and reimbursement approval; and

●

$10.0 million upon first regulatory approval for rusfertide in PV in Japan.

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Capital Requirements

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.

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:

●

the progress, timing, scope, results and costs of advancing our clinical trials for our product candidates, including the ability to enroll patients in a timely manner for our clinical trials;

●

the costs of and our ability to obtain clinical supplies for our current product candidates and any other product candidates we may identify and develop;

●

our ability to successfully commercialize our current product candidates with our collaboration partners and any other product candidates we may identify and develop;

●

the success of our existing or future collaborations with third parties;

●

the selling and marketing costs associated with rusfertide, which is being co-developed and co-commercialized with Takeda under the Takeda Collaboration Agreement, and any other product candidates we may identify and develop, including the costs and timing of expanding our sales and marketing capabilities;

●

the achievement of development, regulatory and sales milestones resulting in payments to us from JNJ under the JNJ License and Collaboration Agreement, Takeda under the Takeda Collaboration Agreement, or other such arrangements that we may enter into, and the timing of receipt of such payments, if any;

●

the timing, receipt and amount of royalties from JNJ under the JNJ License and Collaboration Agreement or Takeda under the Takeda Collaboration Agreement upon regulatory approval or clearance, if any;

●

the amount and timing of sales and other revenues from our current product candidates and any other product candidates we may identify and develop, including the sales price and the availability of adequate third-party reimbursement;

●

the cash requirements of any future acquisitions or discoveries of product candidates;

●

the time and costs necessary to respond to technological and market developments; and

●

the extent to which we may acquire or in-license other product candidates and technologies.

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.

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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:


	Nine Months Ended
	September 30,
	2025		2024

Condensed Consolidated Statements of Cash Flows Data:	(Dollars in thousands)
Cash provided by operating activities	$	94,646	$	213,330
Cash used in investing activities	$	(98,147)	$	(290,758)
Cash provided by financing activities	$	20,027	$	21,822
Stock-based compensation	$	35,273	$	28,461
Change in deferred revenue	$	(13,579)	$	36,205

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

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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.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate sensitivities related to our interest-earning investments and inflation risk affecting labor costs and clinical trial costs.

Interest Rate Fluctuation Risk

We had $678.8 million and $559.2 million in cash, cash equivalents and marketable securities at September 30, 2025 and December 31, 2024, respectively. Our cash and cash equivalents consist of cash, money market funds, certificate of deposit and commercial paper. Marketable securities consist of government and agency bonds, commercial paper and corporate bonds. A portion of our investments may be subject to interest rate risk and could decline in value if market interest rates increase. Based on our interest rate sensitivity analysis, an immediate 100 basis point increase in interest rates would increase our annual interest income by approximately $3.7 million, while an immediate 100 basis point decrease in interest rates would decrease our annual interest income by approximately $3.7 million.

Approximately $2.2 million and $0.6 million of our cash balance was located in Australia at September 30, 2025 and December 31, 2024, respectively. Our expenses, except those related to our Australian operations, are generally denominated in U.S. dollars. For our operations in Australia, the majority of our expenses are denominated in Australian dollars. To date, we have not had a formal hedging program with respect to foreign currency, but we may do so in the future if our exposure to foreign currency becomes more significant. A 10% increase or decrease in current exchange rates would not have a material effect on the results of our operations.

Inflation Fluctuation Risk

Inflation generally affects us by increasing our costs, such as the cost of labor and research and development contract costs. We do not believe inflation has had a material adverse effect on the results of our operations during the three and nine months ended September 30, 2025.

ITEM 4.CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Management, under the supervision and with the participation of our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective at the reasonable assurance level.

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Limitations on Effectiveness of Controls and Procedures and Internal Control over Financial Reporting

In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

From time to time, we may become subject to litigation and claims arising in the ordinary course of business. We are not currently a party to any material legal proceedings, and we are not aware of any pending or threatened legal proceeding against us that we believe could have a material adverse effect on our business, operating results, financial condition or cash flows.

ITEM 1A.RISK FACTORS

Our business, results of operations and financial conditions are subject to various risks. These risks are described elsewhere in this Quarterly Report on Form 10-Q and in our other filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2024. Other than the risk factors disclosed in this Item 1A below, there have been no material changes from the risk factors identified in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Disruptions at the FDA and other government agencies could negatively affect the review of our regulatory submissions, which could negatively impact our business.

The ability of the FDA to review and approve regulatory submissions can be affected by a variety of factors, including statutory, regulatory and policy changes, inadequate government budget funding levels or a reduction in the FDA’s workforce and its ability to hire and retain key personnel, disruptions caused by government shutdowns, public health crises, the FDA’s ability to accept the payment of user fees, and other events that may otherwise affect the FDA’s ability to perform routine functions. There have been mass layoffs of federal employees since the start of the current presidential administration in January 2025, the full impact of which is unclear at this time. Such disruptions, including disruptions arising from the ongoing shutdown of the U.S. federal government that commenced in October 2025, could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business. In addition, the presidential administration has made and is expected to continue to make changes in the leadership of various U.S. federal regulatory agencies and changes to U.S. federal government policy that have led to, in some cases, legal challenges and uncertainty around the funding, functioning and policy priorities of the U.S. federal regulatory agencies, including the FDA.

We are unable to predict the extent to which the presidential administration may impose or seek to impose leadership or policy changes at the FDA or changes to rules and policies impacting our business and operations. It is unclear how these executive actions or other potential actions by the federal government will impact the FDA or other regulatory authorities that oversee our business. Government proposals to reduce or eliminate budgetary deficits may include reduced allocations to the FDA and other related government agencies. These budgetary pressures may reduce the FDA’s ability to perform its responsibilities, which could result in delays in our clinical trial timelines. If a

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significant reduction in the FDA’s workforce occurs, the FDA’s budget is significantly reduced or the current government shutdown is prolonged, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions or take other actions critical to the development or approval of our product candidates, which could have a material adverse effect on our business.

Unstable market and macroeconomic conditions, including elevated and sustained inflation and changes in tariffs or trade policy, may have serious adverse consequences on our business, financial condition and stock price.

As has been widely reported, we are currently operating in a period of macroeconomic uncertainty and capital markets disruption, which has been significantly impacted by domestic and global monetary and fiscal policy, trade regulations, including changes in trade policies, tariffs or other trade restrictions or the threat of such actions, geopolitical instability, including ongoing military conflicts between Russia and Ukraine and in the Middle East, rising tensions between China and Taiwan, and high interest rates. In particular, the conflict in Ukraine has exacerbated market disruptions, including significant volatility in commodity prices, as well as supply chain interruptions, and has contributed to record inflation globally. The U.S. Federal Reserve and other central banks may be unable to contain inflation through more restrictive monetary policy and inflation may increase or continue for a prolonged period of time. Inflationary factors, such as increases in the cost of clinical supplies, interest rates, overhead costs and transportation costs may adversely affect our operating results. In addition, in September 2025, the United States announced the imposition of up to 100% tariffs on imported branded or patented pharmaceuticals, subject to certain exceptions. There remains substantial uncertainty as to when such tariffs may go into effect and whether such tariffs would apply to the importation of active pharmaceutical ingredients or bulk drug products that are intended for use in clinical trials and, more generally, about the duration of existing tariffs, tariff levels, implementation of announced tariffs, litigation challenging tariffs and whether additional tariffs or retaliatory actions may be imposed, modified or suspended. Although we do not believe that the macroeconomic factors discussed above have had a material impact on our financial position or results of operations to date, our financial position or results of operations may be adversely affected in the future due to these factors, and such factors may lead to increases in the cost of manufacturing our product candidates and delays in initiating trials. In addition, global credit and financial markets have experienced extreme volatility and disruption in the past several years and the foregoing factors have led to and may continue to cause diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, uncertainty about economic stability and increased inflation.

There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. A future recession or market correction or other significant geopolitical events could materially affect our business and the value of our common stock. Our general business strategy may be adversely affected by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions. If the current equity and credit markets deteriorate, or do not improve, it may make any necessary debt or equity financing more difficult, more costly, and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to delay or abandon clinical development plans. In addition, there is a risk that one or more of our current service providers, manufacturers and other partners may not survive these difficult economic times, which could directly affect our ability to attain our operating goals.

Our stock price has been and will likely continue to be volatile and may decline regardless of our operating performance.

Our stock price has fluctuated upwards and downwards in the past and is likely to be volatile in the future. For example, from January 1, 2025 through September 30, 2025, the reported sale price of our common stock has fluctuated between $33.70 and $68.26 per share. The stock market in general and the market for biotechnology companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, payouts under, as well as the incentive value, of our stock-based compensation arrangements for employees can fluctuate and investors may experience losses on their investment in our common stock, including due to the factors discussed in the “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2024.

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ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Recent Sales of Unregistered Securities

None.

Repurchases of Shares or of Company Equity Securities

None.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.OTHER INFORMATION

(c)

Trading Plans

During the fiscal quarter ended September 30, 2025, no director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (in each case as defined in Item 408(a) of Regulation S-K).

ITEM 6.EXHIBITS

EXHIBIT INDEX


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	Certificate of Amendment to the Amended and Restated Certificate of Incorporation	8-K	001-37852	3.1	6/26/2024
3.3	Amended and Restated Bylaws	S-1/A	333-212476	3.2b	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
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

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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

+ Filed herewith.

* This certification attached as Exhibit 32.1 that accompanies this Quarterly Report on Form 10-Q is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Protagonist Therapeutics, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of the Form 10-Q, irrespective of any general incorporation language contained in such filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	PROTAGONIST THERAPEUTICS, INC.


Date: November 6, 2025	By:	/s/ Dinesh V. Patel, Ph.D.
		Dinesh V. Patel, Ph.D.
		President, Chief Executive Officer and Director
		(Principal Executive Officer)

Date: November 6, 2025	By:	/s/ Asif Ali
		Asif Ali
		Executive Vice President, Chief Financial Officer
		(Principal Financial and Accounting Officer)

Protagonist Therapeutics, Inc 10-Q