Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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 June 30, 2024


☐	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 July 31, 2024, there were 58,904,585 shares of the registrant’s Common Stock, par value $0.00001 per share, outstanding.

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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 Income (Loss)	3
	Condensed Consolidated Statements of Stockholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	36

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	60
Item 3.	Defaults Upon Senior Securities	60
Item 4.	Mine Safety Disclosures	60
Item 5.	Other Information	60
Item 6.	Exhibits	61
	SIGNATURES	62

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PART I. – FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

PROTAGONIST THERAPEUTICS, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except share and per share data)


	June 30,		December 31,
	2024		2023
Assets
Current assets:
Cash and cash equivalents	$	355,643	$	186,727
Marketable securities		208,354		154,890
Receivable from collaboration partner		43		10,000
Prepaid expenses and other current assets		6,885		3,960
Total current assets		570,925		355,577
Marketable securities - noncurrent		31,447		—
Property and equipment, net		1,780		1,195
Restricted cash - noncurrent		225		225
Operating lease right-of-use asset		10,252		954
Total assets	$	614,629	$	357,951
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	3,629	$	772
Payable to collaboration partner		—		3
Accrued expenses and other payables		15,175		19,358
Deferred revenue - current		20,124		—
Income taxes payable		2,650		—
Operating lease liability - current		—		1,141
Total current liabilities		41,578		21,274
Deferred revenue - noncurrent		20,756		—
Operating lease liability - noncurrent		10,971		—
Total liabilities		73,305		21,274
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 and 90,000,000 shares authorized as of June 30, 2024 and December 31, 2023, respectively; 58,762,063 and 57,708,613 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively		1		1
Additional paid-in capital		980,558		952,491
Accumulated other comprehensive loss		(249)		(105)
Accumulated deficit		(438,986)		(615,710)
Total stockholders’ equity		541,324		336,677
Total liabilities and stockholders’ equity	$	614,629	$	357,951

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 Operations

(Unaudited)

(In thousands, except share and per share data)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
License and collaboration revenue	$	4,167	$	—	$	259,120	$	—
Operating expenses:
Research and development		33,520		33,182		67,254		60,598
General and administrative		9,440		9,172		24,350		17,777
Total operating expenses		42,960		42,354		91,604		78,375
Income (loss) from operations		(38,793)		(42,354)		167,516		(78,375)
Interest income		7,404		3,913		11,780		6,404
Other income (expense), net		97		(19)		78		(214)
Income (loss) before income tax (expense) benefit		(31,292)		(38,460)		179,374		(72,185)
Income tax expense (benefit)		676		—		(2,650)		—
Net income (loss)	$	(30,616)	$	(38,460)	$	176,724	$	(72,185)
Net income (loss) per share, basic	$	(0.50)	$	(0.68)	$	2.89	$	(1.34)
Net income (loss) per share, diluted	$	(0.50)	$	(0.68)	$	2.77	$	(1.34)
Weighted-average shares used to compute net income (loss) per share, basic		61,305,289		56,775,742		61,080,489		53,691,965
Weighted-average shares used to compute net income (loss) per share, diluted		61,305,289		56,775,742		63,909,633		53,691,965

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 Comprehensive Income (Loss)

(Unaudited)

(In thousands)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Net income (loss)	$	(30,616)	$	(38,460)	$	176,724	$	(72,185)
Other comprehensive income (loss):
Unrealized loss on marketable securities		(20)		(76)		(144)		(33)
Gain on translation of foreign operations		—		—		—		194
Comprehensive income (loss)	$	(30,636)	$	(38,536)	$	176,580	$	(72,024)

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		Income (Loss)		Deficit		Equity
Three months ended June 30, 2024	Shares	Amount
Balance at March 31, 2024	58,600,787	$	1	$	969,042	$	(229)	$	(408,370)	$	560,444
Issuance of common stock under equity incentive and employee stock purchase plans	161,276		—		2,572		—		—		2,572
Stock-based compensation expense	—		—		8,944		—		—		8,944
Other comprehensive income (loss)	—		—		—		(20)		—		(20)
Net income (loss)	—		—		—		—		(30,616)		(30,616)
Balance at June 30, 2024	58,762,063	$	1	$	980,558	$	(249)	$	(438,986)	$	541,324


						Accumulated
				Additional		Other				Total
	Common			Paid-In		Comprehensive		Accumulated		Stockholders’
	Stock			Capital		Income (Loss)		Deficit		Equity
Three months ended June 30, 2023	Shares	Amount
Balance at March 31, 2023	51,440,503	$	1	$	786,768	$	(122)	$	(570,480)	$	216,167
Issuance of common stock pursuant to at-the-market offering, net of issuance costs	5,750,000		—		107,790		—		—		107,790
Issuance of common stock under equity incentive and employee stock purchase plans	329,486		—		973		—		—		973
Shares withheld for net settlement of tax withholding upon vesting of restricted stock units	(25,804)		—		(669)		—		—		(669)
Stock-based compensation expense	—		—		8,343		—		—		8,343
Other comprehensive income (loss)	—		—		—		(76)		—		(76)
Net income (loss)	—		—		—		—		(38,460)		(38,460)
Balance at June 30, 2023	57,494,185	$	1	$	903,205	$	(198)	$	(608,940)	$	294,068

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 (continued)

(Unaudited)

(In thousands, except share data)


						Accumulated
				Additional		Other				Total
	Common			Paid-In		Comprehensive		Accumulated		Stockholders’
	Stock			Capital		Income (Loss)		Deficit		Equity
Six months ended June 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	989,254		—		10,371		—		—		10,371
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	—		—		18,296		—		—		18,296
Other comprehensive income (loss)	—		—		—		(144)		—		(144)
Net income (loss)	—		—		—		—		176,724		176,724
Balance at June 30, 2024	58,762,063	$	1	$	980,558	$	(249)	$	(438,986)	$	541,324


						Accumulated
				Additional		Other				Total
	Common			Paid-In		Comprehensive		Accumulated		Stockholders’
	Stock			Capital		Income (Loss)		Deficit		Equity
Six months ended June 30, 2023	Shares	Amount
Balance at December 31, 2022	49,339,252	$	—	$	752,722	$	(359)	$	(536,755)	$	215,608
Issuance of common stock pursuant to public offering, net of issuance costs	5,750,000		—		107,790		—		—		107,790
Issuance of common stock pursuant to at-the-market offering, net of issuance costs	1,749,199		1		24,301		—		—		24,302
Issuance of common stock under equity incentive and employee stock purchase plans	687,697		—		3,234		—		—		3,234
Shares withheld for net settlement of tax withholding upon vesting of restricted stock units	(31,963)		—		(769)		—		—		(769)
Stock-based compensation expense	—		—		15,927		—		—		15,927
Other comprehensive income (loss)	—		—		—		161		—		161
Net income (loss)	—		—		—		—		(72,185)		(72,185)
Balance at June 30, 2023	57,494,185	$	1	$	903,205	$	(198)	$	(608,940)	$	294,068

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)


	Six Months Ended
	June 30,
	2024		2023
Cash Flows from Operating Activities
Net income (loss)	$	176,724	$	(72,185)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Stock-based compensation		18,296		15,927
Operating lease right-of-use asset amortization		1,235		1,168
Depreciation		477		485
Accretion of discount on marketable securities		(3,277)		(2,215)
Other		—		194
Changes in operating assets and liabilities:
Receivable from collaboration partner		9,957		(29)
Prepaid expenses and other assets		(2,925)		2,211
Accounts payable		2,627		933
Payable to collaboration partner		(3)		(59)
Accrued expenses and other payables		(4,229)		(5,661)
Income taxes payable		2,650		—
Deferred revenue		40,880		—
Operating lease liability		(1,219)		(1,354)
Net cash provided by (used in) operating activities		241,193		(60,585)
Cash Flows from Investing Activities
Purchase of marketable securities		(240,627)		(34,122)
Proceeds from maturities of marketable securities		158,849		69,896
Purchases of property and equipment		(270)		(186)
Net cash (used in) provided by investing activities		(82,048)		35,588
Cash Flows from Financing Activities
Proceeds from issuance of common stock upon exercise of stock options and purchases under employee stock purchase plan		10,371		3,234
Tax withholding payments related to net settlement of restricted stock units		(600)		(769)
Proceeds from public offering of common stock, net of issuance costs		—		107,868
Proceeds from at-the-market offering, net of issuance costs		—		24,302
Net cash provided by financing activities		9,771		134,635
Net increase in cash, cash equivalents and restricted cash		168,916		109,638
Cash, cash equivalents and restricted cash, beginning of period		186,952		125,969
Cash, cash equivalents and restricted cash, end of period	$	355,868	$	235,607
Supplemental Disclosure of Non-Cash Financing and Investing Information:
Right-of-use asset obtained in exchange for lease obligation	$	10,511	$	—
Leasehold improvements obtained under tenant improvement allowance	$	516	$	—
Purchases of property and equipment in accounts payable and accrued liabilities	$	275	$	61
Issuance costs related to common stock offering included in accrued liabilities and other payables	$	—	$	78

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 headquartered in Newark, California. The Company is a biopharmaceutical company with peptide-based new chemical entities rusfertide and JNJ-2113 in advanced stages of clinical development, both derived from the Company’s proprietary technology platform. The Company’s clinical programs fall into two broad categories of diseases: (i) hematology and blood disorders, and (ii) inflammatory and immunomodulatory diseases. The Company has one wholly owned subsidiary, Protagonist Pty Limited (“Protagonist Australia”), located in Brisbane, Queensland, Australia.

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, 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 purposes of allocating and evaluating financial performance.

Liquidity

As of June 30, 2024, the Company had cash, cash equivalents and marketable securities of $595.4 million. The Company has incurred cumulative net losses from inception through June 30, 2024 of $439.0 million. 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 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.

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 June 30, 2024 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 six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 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, 2023 included in the Company’s Annual Report on Form 10-K, filed with the SEC on February 27, 2024.

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.

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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 geopolitical instability, inflationary pressures, high interest rates, a recessionary environment, domestic and global monetary and fiscal policy and other factors. The Company has taken into consideration any known impacts in 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.

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):


	June 30,
	2024		2023
Cash and cash equivalents	$	355,643	$	235,382
Restricted cash - noncurrent		225		225
Total cash reported on condensed consolidated statements of cash flows	$	355,868	$	235,607

Stock-Based Compensation Expense

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

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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.

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

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


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Research and development	$	5,097	$	4,809	$	10,385	$	9,391
General and administrative		3,847		3,534		7,911		6,536
Total stock-based compensation expense	$	8,944	$	8,343	$	18,296	$	15,927

Significant Accounting Policies

Collaborative Arrangements

The Company analyzes its collaborative arrangements to assess whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards, and therefore are within the scope of Accounting Standards Codification Topic 808 - Collaborative Arrangements (“Topic 808”). For collaborative arrangements that contain multiple elements, the Company determines which units of account are deemed to be within the scope of Topic 808 and which units of account are more reflective of a vendor-customer relationship, and therefore are within the scope of Accounting Standards Codification Topic 606 – Revenue from Contracts with Customers (“Topic 606”). For units of account that are accounted for pursuant to Topic 808, an appropriate recognition method is determined and applied consistently, either by analogy to appropriate accounting literature or by applying a reasonable accounting policy election. For collaborative arrangements that are within the scope of Topic 808, the Company evaluates the income statement classification for presentation of amounts due to or owed from other participants associated with multiple units of account in a collaborative arrangement based on the nature of each activity. Payments or reimbursements that are the result of a collaborative relationship instead of a customer relationship, such as co-development and co-commercialization activities, are recorded as increases or decreases to research and development expense or general and administrative expense, as appropriate.

Except as described above, there have been no other material changes to the Company’s significant accounting policies during the six months ended June 30, 2024, 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, 2023.

Recently Adopted Accounting Pronouncements

In August 2020, the FASB issued Accounting Standards Update No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. ASU 2020-06 also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for the Company beginning on January 1, 2024. The Company adopted ASU 2020-06 effective January 1, 2024. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements or related disclosures.

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Recently Issued Accounting Pronouncements Not Yet Adopted as of June 30, 2024

In November 2023, the FASB issued Accounting Standards Update No. 2023-07 Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires public entities to disclose incremental segment information on an annual and interim basis. ASU 2023-07 requires public entities with a single reportable segment to provide all the disclosures required by the amendments in ASU 2023-07 and all existing segment disclosures in Segment Reporting (Topic 280). ASU 2023-07 is effective for the Company for fiscal years beginning on January 1, 2024, and interim periods within fiscal years beginning on January 1, 2025. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements or related disclosures.

In December 2023, the 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 beginning on January 1, 2025. The Company is currently evaluating the impact of the adoption of this guidance on its financial position, results of operations and cash flows.

Note 3. License and Collaboration Agreements

Takeda Collaboration Agreement

In January 2024, the Company entered into a worldwide license and collaboration agreement for the development and commercialization of rusfertide with Takeda Pharmaceuticals USA, Inc. (“Takeda”) (“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 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 program evaluating rusfertide for the treatment of polycythemia vera (“PV”) as well as associated U.S. regulatory activities; (ii) Takeda leads, and is solely responsible for its costs associated with, 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.

The Company became eligible to receive an upfront payment of $300.0 million upon the effectiveness of the Takeda Collaboration Agreement, which was received in April 2024. In addition, the Company is eligible to receive additional worldwide development, regulatory and commercial milestone payments for rusfertide of up to $330.0 million, and tiered royalties from 10% to 17% on net sales of the Licensed Products in the Takeda Territory. The Company and Takeda 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 filing of a New Drug Application (“NDA”) with the U.S. Food and Drug Administration (“FDA”) for rusfertide for polycythemia vera (“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

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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 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 million payment following its exercise of the Full Opt-out Right; and (ii) an additional $200 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 Licensed Products with respect to which the Company has exercised an Opt-out Right.

Upcoming potential development and regulatory milestones under the Takeda Collaboration Agreement include:

●

$25.0 million upon successful achievement of the primary endpoint in the Phase 3 VERIFY clinical trial for rusfertide in PV; and

●

$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).

The Company evaluated the Takeda Collaboration Agreement and concluded that it has elements that are within the scope of Topic 606 and 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 VERIFY Phase 3 clinical trial in PV and to file an NDA with the FDA upon successful completion of the VERIFY trial and associated manufacturing services.

The Company determined that the initial transaction price totaled $300.0 million, comprised of the upfront payment. The Company has excluded any future estimated milestones or royalties from this transaction price to date, all of which are either currently 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 are contingent upon developmental and regulatory milestones that are uncertain and are 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 using discounted cash flows for the expected development and commercialization of rusfertide and includes 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 a point in time.

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 recognized $5.0 million with respect to the period from effective date of the contract through June 30, 2024.

The Company determined that the Takeda Collaboration Agreement met the definition of a collaborative arrangement under Topic 808. Both parties are active participants in directing and carrying out the development of the Licensed Products and both are exposed to the significant risk and rewards related to the commercial success of the

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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 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 appropriate to analogize to 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 expense, respectively.

JNJ License and Collaboration Agreement

On July 27, 2021, the Company entered into an Amended and Restated License and Collaboration Agreement with J&J Innovative Medicines (“JNJ”), formerly Janssen Biotech, Inc., which amended and restated the License and Collaboration Agreement, effective July 13, 2017, by and between the Company and JNJ, as amended by the first amendment, effective May 7, 2019 (together, the “JNJ License and Collaboration Agreement”). During the fourth quarter of 2023, the Company earned a $50.0 million milestone payment in connection with the dosing of a third patient in the ICONIC-TOTAL Phase 3 clinical trial of JNJ-2113 in patients with moderate-to-severe psoriasis and a $10.0 million milestone payment upon the dosing of the third patient in the ANTHEM Phase 2b trial moderately-to-severely active ulcerative colitis (“UC”). The Company has earned a total of $172.5 million in non-refundable payments from JNJ from inception in 2017 through the date of this Quarterly Report.

The JNJ License and Collaboration Agreement relates to the development, manufacture and commercialization of oral IL-23 receptor 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.

Upcoming potential development and regulatory milestones include:

●

$115.0 million upon a Phase 3 clinical trial for a second-generation compound for any indication meeting its primary clinical endpoint;

●

$35.0 million upon the filing of an NDA for a second-generation compound with the FDA;

●

$50.0 million upon FDA approval of an NDA for a second-generation compound; and

●

$15.0 million upon the dosing of the third patient in a Phase 3 clinical trial for a second-generation compound for a second indication.

The Company completed its performance obligation under the JNJ License and Collaboration Agreement as of June 30, 2022. 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%.

Revenue Recognition

For the three months ended June 30, 2024, the Company recognized license and collaboration revenue of $4.2 million related to the Takeda Collaboration Agreement transaction price for development services provided by the Company during the period based on the cost-based input method. For the six months ended June 30, 2024, the Company recognized license and collaboration revenue of $259.1 million related to the Takeda Collaboration Agreement transaction price, including $254.1 million allocated to the rusfertide license delivered to Takeda upon effectiveness of the agreement in March 2024 and $5.0 million for development services provided by the Company during the period based on the cost-based input method.

For the three and six months ended June 30, 2023, no license and collaboration revenue was recognized.

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The remaining unrecognized transaction price amount of $40.9 million related to the Takeda Collaboration Agreement was recorded as deferred revenue on the Company’s condensed consolidated balance sheet as of June 30, 2024 and 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).

For the three months ended June 30, 2024, the Company recognized $4.2 million of revenue that was included in the deferred revenue liability balance at the beginning of the period. For the six months ended June 30, 2024 and the three and six months ended June 30, 2023, the Company did not recognize revenue from any amounts included in the deferred revenue liability balance at the beginning of each 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):


	June 30, 2024
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	110,705	$	—	$	—	$	110,705
Certificates of deposit		—		20,625		—		20,625
U.S. Treasury and agency securities		—		168,176		—		168,176
Commercial paper		—		231,658		—		231,658
Corporate debt securities		—		56,628		—		56,628
Total financial assets	$	110,705	$	477,087	$	—	$	587,792

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	December 31, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	19,212	$	—	$	—	$	19,212
Certificates of deposit		—		13,004		—		13,004
U.S. Treasury and agency securities		—		145,085		—		145,085
Commercial paper		—		130,296		—		130,296
Corporate debt securities		—		7,672		—		7,672
Total financial assets	$	19,212	$	296,057	$	—	$	315,269

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 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):


	June 30, 2024
	Amortized		Gross Unrealized
	Cost		Gains		Losses		Fair Value
Money market funds	$	110,705	$	—	$	—	$	110,705
Certificates of deposit		20,622		7		(4)		20,625
U.S. Treasury and agency securities		168,160		37		(21)		168,176
Commercial paper		231,791		—		(133)		231,658
Corporate debt securities		56,652		10		(34)		56,628
Total cash equivalents and marketable securities	$	587,930	$	54	$	(192)	$	587,792
Classified as:
Cash equivalents							$	347,991
Marketable securities - current								208,354
Marketable securities - noncurrent								31,447
Total cash equivalents and marketable securities							$	587,792


	December 31, 2023
	Amortized		Gross Unrealized
	Cost		Gains		Losses		Fair Value
Money market funds	$	19,212	$	—	$	—	$	19,212
Certificates of deposit		12,998		6		—		13,004
U.S. Treasury and agency securities		145,024		63		(2)		145,085
Commercial paper		130,351		5		(60)		130,296
Corporate debt securities		7,678		—		(6)		7,672
Total cash equivalents and marketable securities	$	315,263	$	74	$	(68)	$	315,269
Classified as:
Cash equivalents							$	160,379
Marketable securities								154,890
Total cash equivalents and marketable securities							$	315,269

All of the Company’s marketable securities are classified as available-for-sale. Marketable securities of $208.4 million and $154.9 million held as of June 30, 2024 and December 31, 2023, respectively, had contractual maturities of

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less than one year. Marketable securities of $31.4 million held as of June 30, 2024 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. There were no material realized gains or realized losses on marketable securities for the periods presented. 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 June 30, 2024.

Note 6. Balance Sheet Components

Prepaid Expenses and Other Current Assets

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


	June 30,		December 31,
	2024		2023
Prepaid clinical and research related expenses	$	2,872	$	649
Prepaid insurance		880		1,410
Prepaid licenses		731		529
Other prepaid expenses		1,075		1,040
Other receivable		1,327		332
Prepaid expenses and other current assets	$	6,885	$	3,960

Property and Equipment, Net

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


	June 30,		December 31,
	2024		2023
Laboratory equipment	$	5,625	$	5,323
Furniture and computer equipment		1,316		1,143
Leasehold improvements		1,536		963
Total property and equipment		8,477		7,429
Accumulated depreciation		(6,697)		(6,234)
Property and equipment, net	$	1,780	$	1,195

Accrued Expenses and Other Payables

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


	June 30,		December 31,
	2024		2023
Accrued clinical and research related expenses	$	8,821	$	11,841
Accrued employee related expenses		5,446		6,786
Accrued professional service fees		796		632
Other		112		99
Total accrued expenses and other payables	$	15,175	$	19,358

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Note 7. Lease

The Company applies Accounting Standards Codification Topic 842 -- Leases to recognize leases with terms of more than 12 months on the balance sheet. The Company has elected to account for each separate lease component and non-lease components as one single component for all lease assets. Leases with terms of 12 months or less are not recorded on the balance sheet, and the related lease expenses are recognized on a straight-line basis over the lease term.

On May 6, 2024, the Company amended its facility lease agreement dated as of March 6, 2017 (the “Amended Lease”) to extend the lease term for its existing office and laboratory space from one to 66 months and lease 17,698 rentable square feet of additional office space, all located in Newark, California. The Company will begin operations in the additional space under the Amended Lease on July 1, 2024. The Amended Lease, which expires in November 2029, provides for an agreed-upon period of rent abatement and a tenant improvement allowance of $1.8 million. No additional security deposit was required pursuant to the Amended Lease, and the Company is responsible for its proportional share of operating expenses and tax obligations. As a result of this amendment, the Company recorded an initial right-of-use asset and related liability of $10.5 million.

Balance sheet information related to the Company’s operating lease consisted of the following (dollars in thousands):


	June 30,		December 31,
Operating Leases:	2024		2023
Operating lease right-of-use asset	$	10,252	$	954

Operating lease liability - current	$	—	$	1,141
Operating lease liability - noncurrent		10,971		—
Total operating lease liabilities	$	10,971	$	1,141

Weighted-average remaining lease term (years)		5.4		0.4
Weighted-average discount rate		5.7%		10.4%

The tenant improvement allowance under the Amended Lease represents a fixed amount that the Company is reasonably certain to use. As such, it is reflected in the determination of the operating lease liability as of the lease commencement date.

Other information related to the Company’s operating lease consisted of the following (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Operating lease cost	$	738	$	584	$	1,321	$	1,167
Short-term rent expense		51		—		51		—
Less: Sublease income		—		(34)		(34)		(79)
Total lease expense	$	789	$	550	$	1,338	$	1,088

Supplemental cash flow information consisted of the following (in thousands):


	Six Months Ended
	June 30,
	2024		2023
Operating cash flow used by operating leases	$	(1,219)	$	(1,354)
New operating lease asset obtained in exchange for operating lease liability	$	10,511	$	—

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Future minimum lease payments required under lease obligations as of June 30, 2024 consisted of the following (in thousands):


Year Ending December 31:	Amount
Remainder of 2024	$	446
2025		1,121
2026		2,785
2027		2,882
2028		2,983
Thereafter		2,825
Total future minimum lease payments		13,042
Less: Imputed interest		(2,071)
Present value of lease liabilities	$	10,971

Note 8. 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 to effect the Amendment, which became effective immediately upon such filing.

Public Offering

In April 2023, the Company completed an underwritten public offering of 5,000,000 shares of its common stock at a public offering price of $20.00 per share and issued an additional 750,000 shares of common stock at a price of $20.00 per share following the underwriters’ exercise of their option to purchase additional shares. Net proceeds, after deducting underwriting commissions and offering costs paid by the Company, were $107.8 million.

ATM Offering

In August 2022, the Company entered into an Open Market Sale Agreement^SM, pursuant to which the Company may offer and sell up to $100.0 million shares of common stock from time to time in “at-the-market” offerings (the “2022 ATM Facility”). There were no sales of the Company’s common stock under the 2022 ATM Facility during the three and six months ended June 30, 2024. During the three months ended March 31, 2023, the Company sold 1,749,199 shares of its common stock under the 2022 ATM Facility for net proceeds of $24.3 million, after deducting issuance costs. There were no sales of the Company’s common stock under the 2022 ATM Facility during the three months ended June 30, 2023.

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”), pursuant to which the Company sold an aggregate of 2,750,000 shares of its common stock at a price of $8.00 per share, for aggregate net proceeds of $21.7 million, after deducting offering expenses payable by the Company. 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. Warrants to purchase 1,375,000 shares of the Company’s common stock had an exercise price of $10.00 per share and Warrants to purchase 1,375,000 shares of the Company’s common stock had an exercise price of $15.00 per share. The common stock and

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Warrants met the criteria for equity classification and the net proceeds from the transaction were recorded as a credit to additional paid-in capital.

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, 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 upon 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. The common stock and Pre-Funded Warrants met the criteria for equity classification and the net proceeds from the transaction were recorded as a credit to additional paid-in capital. In accordance with Accounting Standards Codification Topic 260, Earnings Per Share, outstanding Pre-Funded Warrants are included in the computation of basic net loss per share because the exercise price is negligible, and they are fully vested and exercisable after the original issuance date. During the three and six months ended June 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 June 30, 2024, Pre-Funded Warrants to purchase 2,620,260 shares were outstanding.

Note 9. Income Taxes

The Company recorded an income tax benefit of $0.7 million and income tax expense of $2.7 million for the three and six months ended June 30, 2024, respectively. No income tax provision was recorded for the three and six months ended June 30, 2023. The primary difference in tax expense as compared to the prior year is a result of taxable income for the six months ended June 30, 2024 resulting from the recognition of revenue in connection with the Takeda Collaboration Agreement. The tax provision for the three and six months ended June 30, 2024 was determined using an estimated annual effective tax rate, adjusted for discrete items, if any.

Based on the available objective evidence during the three and six months ended June 30, 2024, the Company believes it is more likely than not that its net deferred tax assets may not be realized. The primary difference between the effective tax rate and the statutory tax rate relates to the Company’s change in valuation allowance.

Note 10. Net Income (Loss) per Share

The computation of basic net income (loss) 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 income (loss) 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 accordance with Accounting Standards Codification Topic 260, Earnings Per Share, 2,620,260 outstanding Pre-Funded Warrants were included in the computation of weighted-average shares of common stock, basic for the three and six months ended June 30, 2024 because the exercise price is negligible, and they are fully vested and exercisable after the original issuance date.

In periods when the Company has net income, the dilutive effect of all potentially outstanding shares is computed using the treasury stock method. 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.

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


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Numerator:
Net income (loss)	$	(30,616)	$	(38,460)	$	176,724	$	(72,185)
Denominator:
Weighted-average shares of common stock, basic		61,305,289		56,775,742		61,080,489		53,691,965
Dilutive effect of common stock equivalents		—		—		2,829,144		—
Weighted-average shares of common stock, dilutive		61,305,289		56,775,742		63,909,633		53,691,965
Net income (loss) per share of common stock
Basic net income (loss) per share of common stock	$	(0.50)	$	(0.68)	$	2.89	$	(1.34)
Diluted net income (loss) per share of common stock	$	(0.50)	$	(0.68)	$	2.77	$	(1.34)

Approximately 9.9 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 June 30, 2024 due to the Company’s net loss for the period. Approximately 3.4 million potentially dilutive shares of common stock (consisting of shares subject to outstanding stock options, RSUs, and under the ESPP) were excluded from the diluted net income per share of common stock computations for the six months ended June 30, 2024 because their effect was anti-dilutive. Approximately 11.7 million potentially dilutive shares of common stock (consisting of shares subject to outstanding stock options, RSUs, PSUs, under the ESPP and warrants) were excluded from the diluted net loss per share of common stock computations for the three and six months ended June 30, 2023 due to the Company’s net loss for these periods.

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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, 2023, included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 27, 2024.

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; ongoing military conflicts, including between Ukraine and Russia and in Israel and surrounding areas; rising tensions between China and Taiwan; developments relating to our competitors and our industry, including competing product candidates and therapies; inflationary pressure and the availability of credit. 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 could differ materially from those anticipated in any forward-looking statements, whether as a result of new information, future developments, changes in assumptions or otherwise. “Protagonist,” the Protagonist logo and other trademarks, service marks and trade names of Protagonist are registered and unregistered marks of Protagonist Therapeutics, Inc. in the United States and other jurisdictions.

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Overview

We are a biopharmaceutical company with peptide-based new chemical entities rusfertide and JNJ-2113 in advanced stages of development, both derived from our proprietary discovery technology platform. Our clinical programs fall into two broad categories of diseases: (i) hematology and blood disorders, and (ii) inflammatory and immunomodulatory (“I&I”) diseases.

Our Product Pipeline

Rusfertide

Rusfertide, our injectable hepcidin mimetic partnered with Takeda Pharmaceuticals USA, Inc. (“Takeda”), is in development for the treatment of polycythemia vera (“PV”). We have initiated VERIFY (ClinicalTrials.gov identifier NCT05210790), a global double-blind, placebo-controlled Phase 3 clinical trial of rusfertide in PV for approximately 250 patients. 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. Enrollment for the VERIFY trial has been completed and we expect to announce top-line data for the trial’s 32-week primary efficacy endpoint in the first quarter of 2025, potentially leading to a New Drug Application (“NDA”) filing in the fourth quarter of 2025. By the end of 2024, we expect to receive the results of our ongoing two-year study evaluating the carcinogenicity potential of rusfertide when administered once weekly to rats.

Our rusfertide Phase 2 clinical trials include the following:

●

REVIVE, a Phase 2 proof of concept (“POC”) trial, was initiated in the fourth quarter of 2019. We completed enrollment of patients in the first quarter of 2022 and 70 patients were enrolled through the end of the randomized withdrawal portion of the trial, which was completed during the first quarter of 2023 and is continuing in an ongoing open-label extension (“OLE”);

●

THRIVE, a Phase 2 long-term extension trial for REVIVE patients on years three through five of treatment; and

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●

PACIFIC, another Phase 2 trial for rusfertide for patients diagnosed with PV and with routinely elevated hematocrit levels (>48%), was initiated during the first quarter of 2021, and the 52-week trial was completed during the second quarter of 2023.

In March 2023, we announced positive topline results from the blinded, placebo-controlled, randomized withdrawal portion of the REVIVE trial. Subjects receiving rusfertide achieved statistically significant improvements versus placebo in the trial’s primary endpoint. The double-blind, placebo-controlled, 12-week randomized withdrawal portion was included as Part 2 of the REVIVE trial to evaluate rusfertide in PV patients with frequent phlebotomy requirements. In the REVIVE trial, subjects were initially enrolled in the 28-week open label dose-titration and efficacy evaluation Part 1 of the trial, followed by 1:1 randomization of 53 subjects to placebo versus rusfertide therapy for a subsequent duration of 12 weeks. More subjects receiving rusfertide during the blinded randomized withdrawal portion of the REVIVE trial were responders compared with placebo (69.2% versus 18.5%, p=0.0003). A trial subject was defined as a responder if the subject completed 12 weeks of double-blind treatment while maintaining hematocrit control without phlebotomy eligibility and without phlebotomy. During the 12 weeks of the blinded randomized withdrawal, 92.3% of subjects on rusfertide (24 out of 26) were not phlebotomized.

Data from the REVIVE trial presented at the European Hematology Association (“EHA”) Congress in June 2023 suggested that rusfertide treatment results in highly statistically significant reduction in the need for therapeutic phlebotomy in phlebotomy-dependent patients, leading to rapid, sustained and durable control of hematocrit levels below 45%. Rusfertide was well tolerated, with localized injection site reactions comprising the majority of adverse events.

Long-term follow up data from the REVIVE trial presented at the American Society of Hematology Annual Meeting in December 2023 showed durable hematocrit control, decreased phlebotomy use, long-term tolerability, and no new safety signals in patients with PV. An analysis of the PACIFIC Phase 2 trial was also presented that indicated rusfertide improves markers of iron deficiency in patients with PV. In addition, data was presented regarding the prevalence of thromboembolic events and secondary cancers in PV patients not treated with rusfertide. In February 2024, the full Phase 2 REVIVE trial results, including efficacy and safety data, were published in the New England Journal of Medicine. Updated long-term results from the REVIVE trial presented at the EHA Congress in June 2024 continued to show a durable positive effect on PV symptomology and other benefits including iron deficiency as well as an encouraging safety profile.

In January 2024, we entered into a worldwide license and collaboration agreement with Takeda for the development and commercialization of rusfertide (the “Takeda Collaboration Agreement”). Under the terms of the agreement, we earned a nonrefundable upfront payment of $300.0 million upon effectiveness of the agreement in March 2024, which we received in April 2024. We are eligible to receive additional worldwide development, regulatory and commercial milestone payments for rusfertide of up to $330 million, inclusive of the following potential upcoming milestones:

●

$25.0 million upon successful achievement of the primary endpoint in the Phase 3 VERIFY trial for rusfertide in PV; and

●

$50.0 million upon U.S. Food and Drug Administration (the “FDA”) approval of NDA for rusfertide in PV (or $75.0 million if we exercise our full right to opt-out of the 50:50 U.S. profit and loss sharing arrangement).

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). See Note 3 to the condensed consolidated financial statements included elsewhere in this Quarterly Report for further details related to the agreement, including our right to opt-out of the 50:50 U.S. profit and loss sharing arrangement.

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JNJ-2113

Our Interleukin-23 receptor (“IL-23R”) antagonist compound JNJ-2113, partnered with J&J Innovative Medicines (“JNJ”), formerly Janssen Biotech, Inc., is an orally delivered investigational 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, JNJ-2113 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.

JNJ has initiated the following JNJ-2113 trials:

●

ICONIC-LEAD (NCT06095115) – A 684-patient randomized, controlled Phase 3 trial to evaluate the safety and efficacy of JNJ-2113 compared with placebo in participants with moderate-to-severe plaque psoriasis, with PASI-90 (90% improvement in skin lesions as measured by the Psoriasis Area and Severity Index (“PASI”)) and Investigator’s Global Assessment (“IGA”) score of 0 (clear) or 1 (almost clear) as co-primary endpoints;

●

ICONIC-TOTAL (NCT06095102) – A 311-patient randomized, controlled Phase 3 trial to evaluate the efficacy and safety of JNJ-2113 compared with placebo for the treatment of plaque psoriasis in participants with at least moderate severity affecting special areas (scalp, genital, and/or palms of the hands and soles of the feet) with overall IGA score of 0 or 1 as the primary endpoint;

●

ICONIC ADVANCE 1 (NCT06143878) – A 774-patient randomized, controlled Phase 3 trial to evaluate the effectiveness of JNJ-2113 in participants with moderate-to-severe plaque psoriasis compared to placebo and Sotyktu (“deucravacitinib”). The trial’s primary co-endpoints are PASI-90 and IGA score of 0 or 1;

●

ICONIC ADVANCE 2 (NCT06220604) – A 543-patient Phase 3 trial similarly designed to ICONIC ADVANCE 1;

●

Pustular/Erythrodermic Psoriasis (NCT06295692) – A 16-patient open label Phase 3 trial to evaluate the effectiveness of JN-2113 in participants with pustular or erythrodermic psoriasis; and

●

ANTHEM-UC (NCT06049017) – A 252-patient Phase 2b randomized, controlled trial to evaluate the safety and effectiveness of JNJ-2113 compared with placebo in participants with moderate-to-severely active ulcerative colitis (“UC”).

All of the trials in the ICONIC program will use the 200 mg q.d. immediate release formulation of JNJ-2113 from the previously completed FRONTIER 1 trial. JNJ initiated FRONTIER 1, a 255-patient Phase 2b clinical trial of JNJ-2113 in moderate-to-severe plaque psoriasis, which was completed in December 2022. FRONTIER 1 was a randomized, multicenter, double-blind, placebo-controlled trial that evaluated three once-daily dosages and two twice-daily dosages of JNJ-2113 taken orally. The primary endpoint of the trial was the proportion of patients achieving PASI-75 (75% improvement in skin lesions as measured by the PASI) at 16 weeks. In July 2023, we announced updated positive topline results from the trial, which were presented by JNJ at the World Congress of Dermatology in Singapore. JNJ-2113 achieved the trial’s primary and secondary efficacy endpoints. A statistically significant greater proportion of patients who received JNJ-2113 achieved PASI-75 as well as PASI-90 and PASI-100 (100% improvement in skin lesions as measured by the PASI) responses compared to placebo at week 16 in all five of the trial’s treatment groups. A clear dose response was observed across an eight-fold dose range. Treatment was well tolerated, with no meaningful difference in frequency of adverse events across treatment groups versus placebo. Other Phase 2 trials of JNJ-2113 include the SUMMIT trial for the treatment of moderate-to-severe plaque psoriasis and FRONTIER 2, a long-term extension study, both of which were completed by JNJ in 2023.

At JNJ’s Enterprise Business Review in December 2023, JNJ highlighted JNJ-2113 as a potential first- and best-in class targeted oral IL-23 peptide antagonist with potential across multiple indications, including plaque

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psoriasis, psoriatic arthritis and inflammatory bowel disease, with potential peak year sales projection of $5.0 billion plus. JNJ IL-23 monoclonal antibody drugs Stelara and Tremfya generated approximately $14.0 billion in revenues in 2023.

In February 2024, the JNJ-2113 Phase 2b FRONTIER 1 trial results in adults living with moderate-to-severe plaque psoriasis were published in the New England Journal of Medicine. In March 2024, data presented at the American Academy of Dermatology 2024 Annual Meeting showed that, in Phase 2b FRONTIER 2, JNJ-2113 maintained high rates of skin clearance through 52 weeks in adults with moderate-to-severe plaque psoriasis.

On July 17, 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 13, 2017, by and between the Company and JNJ, as amended by the first amendment, effective May 7, 2019 (together, the “JNJ License and Collaboration Agreement”). Under the JNJ License and Collaboration Agreement, we earned a $50.0 million milestone payment upon dosing of the third patient in the ICONIC-TOTAL Phase 3 trial in late October 2023, which we received in December 2023. We earned a $10.0 million milestone payment upon the dosing of the third patient in the ANTHEM Phase 2b trial in UC in December 2023, which we received in January 2024. To date, we have earned $172.5 million in nonrefundable payments from JNJ. We are eligible for up to approximately $795.0 million in future development and sales milestone payments, inclusive of the following potential upcoming milestones:

●

$115.0 million milestone payment upon JNJ-2113 meeting the co-primary endpoints in any one of the four ICONIC program Phase 3 trials;

●

$35.0 million milestone payment upon the filing of an NDA for JNJ-2113 with the FDA;

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$50.0 million milestone payment upon approval of the NDA by the FDA; and

●

$15.0 million milestone payment upon the advancement of JNJ-2113 into a Phase 3 trial in a second indication.

We also remain eligible to receive upward tiering royalties on net product sales at percentages ranging from six percent to ten percent, with ten percent 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.

Discovery Platform

Our 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) hematology and blood disorders, ii) I&I diseases and iii) metabolic diseases, including obesity.

We have a pre-clinical stage program to identify an orally active hepcidin mimetic or small molecule ferropotin blocker, 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.

In January 2024, we announced a new oral Interleukin-17 (“IL-17”) peptide antagonist program targeting three IL-17 dimers (IL-17 AA, AF and FF) which may offer potential treatment options for hidradenitis suppurativa, spondyloarthritis, plaque psoriasis and psoriatic arthritis. We expect to nominate a development candidate ready for Investigational New Drug (“IND”) enabling studies by the end of 2024. We recently announced an oral peptide-based program for obesity and expect progression towards a development candidate by mid-2025.

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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 June 30, 2024 of $439.0 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, 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. 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.

Revenue Recognition

Topic 606 requires us to allocate the arrangement consideration on a relative standalone selling price basis for each performance obligation after determining the transaction price of the contract and identifying the performance obligations to which that amount should be allocated. The relative standalone selling price is defined as the price at which an entity would sell a promised good or service separately to a customer. If other observable transactions in which we have sold the same performance obligation separately are not available, we estimate the standalone selling price of each performance obligation. Key assumptions to determine the standalone selling price may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success.

Whenever we determine that goods or services promised in a contract should be accounted for as a combined performance obligation over time, we determine the period over which the performance obligations will be performed and revenue will be recognized. Revenue is recognized using either the proportional performance method or on a straight-line basis if efforts will be expended evenly over time. Costs incurred or labor hours are typically used as the measure of performance. Management’s judgment is required in determining the level of effort required under an arrangement and the period over which we expect to complete our performance obligations. If we determine that the performance obligation is satisfied over time, any upfront payment received is initially recorded as deferred revenue on our consolidated balance sheets.

Certain judgments affect the application of our revenue recognition policy. For example, we record short-term and long-term deferred revenue based on our best estimate of when such revenue will be recognized. Short-term deferred revenue consists of amounts that are expected to be recognized as revenue in the next 12 months, and long-term deferred revenue consists of amounts that we do not expect will be recognized in the next 12 months. This estimate is based on our current operating plan and, if our operating plan should change in the future, we may recognize a different amount of deferred revenue over the next 12-month period.

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There have been no other material changes to our critical accounting policies during the six months ended June 30, 2024, 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, 2023 filed with the SEC on February 27, 2024.

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 Takeda and JNJ. See Note 3 to the condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information.

Research and Development Expenses

Research and development expenses represent costs incurred to conduct research, such as the discovery and development of our product candidates. We recognize all research and development costs as they are incurred, unless there is an alternative future use in other research and development projects or otherwise. Non-refundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when payment has been made. In instances where we enter into agreements with third parties to provide research and development services to us, costs are expensed as services are performed. Amounts due under such arrangements may be either fixed fee or fee for service and may include upfront payments, monthly payments, and payments upon the completion of milestones or the receipt of deliverables.

Research and development expenses consist primarily of the following:

●

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 and non-clinical studies and clinical trials;

●

costs related to production of clinical supplies and non-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 cash tax incentive that are not subject to refund provisions as a reduction of research and development expenses. The research and development tax incentives are recognized when there is reasonable assurance that the incentives will be received, the relevant expenditure has been incurred and the amount of the consideration can be reliably measured. We evaluate our eligibility under the tax incentive 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 taxable credit in the form of a non-cash tax incentive. We recognize the amounts from grants under government programs as a reduction of research and development expenses when the related research costs are incurred.

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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 trials 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 on (i) progressing our rusfertide program into later stage clinical trials and preparing for commercialization and (ii) advancing our pre-clinical and drug discovery research programs, including our expected nomination of a development candidate from our discovery platform for IND-enabling studies by the end of 2024. The process of conducting research, identifying potential product candidates, conducting pre-clinical studies and clinical trials necessary to obtain regulatory approval, and commencing pre-commercialization activities is costly and time intensive. We may never succeed in achieving marketing approval for our product candidates regardless of our costs and efforts. The probability of success of our product candidates may be affected by numerous factors, including pre-clinical data, clinical data, competition, manufacturing capability, our cost of goods to be sold, our ability to receive, and the timing of, regulatory approvals, market conditions, and our ability to successfully commercialize our products if they are approved for marketing. As a result, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will 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 facilities 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 expenses consist of expenses for rent and maintenance of facilities, information technology, depreciation and amortization expense and other administrative supplies. We expect to continue to incur expenses supporting 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 (Expense), Net

Other income (expense), net consists primarily of amounts related to foreign exchange gains and losses and related items.

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Results of Operations

Comparison of the Three Months Ended June 30, 2024 and 2023


	Three Months Ended
	June 30,				Dollar		%
	2024		2023		Change		Change

	(Dollars in thousands)
License and collaboration revenue	$	4,167	$	—	$	4,167	*
Operating expenses:
Research and development ⁽¹⁾		33,520		33,182		338	1
General and administrative ⁽²⁾		9,440		9,172		268	3
Total operating expenses		42,960		42,354		606	1
Loss from operations		(38,793)		(42,354)		3,561	(8)
Interest income		7,404		3,913		3,491	89
Other income (expense), net		97		(19)		116	*
Loss before income tax benefit		(31,292)		(38,460)		7,168	(19)
Income tax benefit		676		—		676	*
Net loss	$	(30,616)	$	(38,460)	$	7,844	(20)

*Percentage not meaningful.

(1)	Includes $5.1 million and $4.8 million of non-cash stock-based compensation expense for the three months ended June 30, 2024 and 2023, respectively.

(2)	Includes $3.8 million and $3.5 million of non-cash stock-based compensation expense for the three months ended June 30, 2024 and 2023, respectively.

License and Collaboration Revenue

License and collaboration revenue increased from $0 for the three months ended June 30, 2023 to $4.2 million for the three months ended June 30, 2024. Revenue for the three months ended June 30, 2024 included $4.2 million of the $300.0 million transaction price for the Takeda Collaboration Agreement allocated to development services provided by us during the period based on the cost-based input method. For the three months ended June 30, 2023, we did not recognize any license and collaboration revenue.

Research and Development Expenses


	Three Months Ended
	June 30,				Dollar		%
	2024		2023		Change		Change

	(Dollars in thousands)
Clinical and development expense — rusfertide	$	23,862	$	27,851	$	(3,989)	(14)
Clinical and development expense — PN-943		(6)		235		(241)	*
Clinical and development expense — other		33		(10)		43	*
Pre-clinical and drug discovery research expense		9,631		5,106		4,525	89
Total research and development expenses	$	33,520	$	33,182	$	338	1

Research and development expenses increased $0.3 million, or 1%, from $33.2 million for the three months ended June 30, 2023 to $33.5 million for the three months ended June 30, 2024. The increase was primarily due to (i) an increase of $4.5 million in pre-clinical and drug discovery research program expense partially offset by (ii) a decrease of $4.0 million in rusfertide clinical and development expense due primarily to decreases in contract manufacturing expenses and (iii) a decrease of $0.2 million in expenses for the PN-943 program as further development work was de-prioritized in 2023. We expect to nominate a development candidate from our discovery platform ready for IND-enabling studies by the end of 2024.

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We had 97 and 81 full-time equivalent research and development employees as of June 30, 2024 and 2023, respectively. Research and development personnel-related expenses for the three months ended June 30, 2024 increased by $1.3 million as compared to the three months ended June 30, 2023, including increases of $1.0 million in personnel-related expenses and $0.3 million in stock-based compensation expense.

General and Administrative Expenses

General and administrative expenses increased $0.3 million, or 3%, from $9.1 million for the three months ended June 30, 2023 to $9.4 million for the three months ended June 30, 2024. This increase was primarily due to a $0.7 million increase in personnel-related expenses and a $0.3 million increase in stock-based compensation expense, partially offset by a $0.7 million decrease in market research, legal and other general expenses.

We had 28 and 25 full-time equivalent general and administrative employees as of June 30, 2024 and 2023, respectively.

Interest Income

Interest income increased $3.5 million, or 89%, from $3.9 million for the three months ended June 30, 2023 to $7.4 million for the three months ended June 30, 2024. This increase was due primarily to higher invested balances, including the $300.0 million upfront payment received under the Takeda Collaboration Agreement in April 2024.

Income Tax Benefit

Income tax benefit was $0.7 million and $0 for the three months ended June 30, 2024 and 2023, respectively. Income tax benefit for the three months ended June 30, 2024 was a result of our net loss position for the period. The effective tax rate was 2.16% and 0% for the three months ended June 30, 2024 and 2023, respectively.

Comparison of the Six Months Ended June 30, 2024 and 2023


	Six Months Ended
	June 30,				Dollar		%
	2024		2023		Change		Change

	(Dollars in thousands)
License and collaboration revenue	$	259,120	$	—	$	259,120	*
Operating expenses:
Research and development ⁽¹⁾		67,254		60,598		6,656	11
General and administrative ⁽²⁾		24,350		17,777		6,573	37
Total operating expenses		91,604		78,375		13,229	17
Income (loss) from operations		167,516		(78,375)		245,891	*
Interest income		11,780		6,404		5,376	84
Other income (expense), net		78		(214)		292	*
Income (loss) before income tax expense		179,374		(72,185)		251,559	*
Income tax expense		(2,650)		—		(2,650)	*
Net income (loss)	$	176,724	$	(72,185)	$	248,909	*

*Percentage not meaningful.

(3)	Includes $10.4 million and $9.4 million of non-cash stock-based compensation expense for the six months ended June 30, 2024 and 2023, respectively.

(4)	Includes $7.9 million and $6.5 million of non-cash stock-based compensation expense for the six months ended June 30, 2024 and 2023, respectively.

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License and Collaboration Revenue

License and collaboration revenue increased from $0 for the six months ended June 30, 2023 to $259.1 million for the six months ended June 30, 2024. The Takeda Collaboration Agreement included a nonrefundable upfront payment of $300.0 million, of which we recognized $255.0 million during the three months ended March 31, 2024. The remaining $45.0 million was recorded as deferred revenue to be recognized over time as the Company satisfies its performance obligation to complete the ongoing Phase 3 VERIFY trial for rusfertide.

License and collaboration revenue for the six months ended June 30, 2024 of $259.1 million included $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 agreement in March 2024, and $5.0 million allocated to development services provided by us during the period based on the cost input method. For the six months ended June 30, 2023, we did not recognize any license and collaboration revenue.

Research and Development Expenses


	Six Months Ended
	June 30,				Dollar		%
	2024		2023		Change		Change

	(Dollars in thousands)
Clinical and development expense — rusfertide	$	48,375	$	49,482	$	(1,107)	(2)
Clinical and development expense — PN-943		93		1,194		(1,101)	(92)
Clinical and development expense — other		84		41		43	105
Preclinical and drug discovery research expense		18,702		9,881		8,821	89
Total research and development expenses	$	67,254	$	60,598	$	6,656	11

Research and development expenses increased $6.7 million, or 11%, from $60.6 million for the six months ended June 30, 2023 to $67.3 million for the six months ended June 30, 2024. The increase was primarily due to (i) an increase of $8.8 million in pre-clinical and drug discovery research program expense partially offset by (ii) a decrease of $1.1 million in rusfertide clinical and development expense due primarily to decreases in contract manufacturing expenses and (iii) a decrease of $1.1 million in expenses for the PN-943 program as further development work was de-prioritized in 2023. We expect to nominate a development candidate from our discovery platform for IND-enabling studies by the end of 2024.

We had 97 and 81 full-time equivalent research and development employees as of June 30, 2024 and 2023, respectively. Research and development personnel-related expenses for the six months ended June 30, 2024 increased by $3.9 million as compared to the six months ended June 30, 2023, including increases of $2.9 million in personnel-related expenses and $1.0 million in stock-based compensation expense.

General and Administrative Expenses

General and administrative expenses increased $6.6 million, or 37%, from $17.8 million for the six months ended June 30, 2023 to $24.4 million for the six months ended June 30, 2024. This increase was primarily due to a $4.6 million increase in advisory and legal fees related to the Takeda Collaboration Agreement, a $1.6 million increase in personnel-related expenses and a $1.4 million increase in stock-based compensation expense, partially offset by a $1.0 million decrease in market research, consulting and outside services and other general expenses.

We had 28 and 25 full-time equivalent general and administrative employees as of June 30, 2024 and 2023, respectively.

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Interest Income

Interest income increased $5.4 million, or 84%, from $6.4 million for the six months ended June 30, 2023 to $11.8 million for the six months ended June 30, 2024. This increase was due primarily to higher invested balances, including the $300.0 million upfront payment received under the Takeda Collaboration Agreement in April 2024.

Income Tax Expense

Income tax expense was $2.7 million and $0 for the six months ended June 30, 2024 and 2023, respectively. Income tax expense for the six months ended June 30, 2024 was a result of taxable income from the recognition of revenue in connection with the Takeda Collaboration Agreement. The effective tax rate was 1.48% and 0% for the six months ended June 30, 2024 and 2023, respectively.

Liquidity and Capital Resources

Sources of Liquidity

We had $595.4 million and $341.6 million in cash, cash equivalents and marketable securities at June 30, 2024 and December 31, 2023, 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.

Proceeds from Sales of Our Common Stock

In April 2023, we completed an underwritten public offering of 5,000,000 shares of our common stock at a public offering price of $20.00 per share and issued an additional 750,000 shares of common stock at a price of $20.00 per share following the underwriters’ exercise of their option to purchase additional shares. Net proceeds, after deducting underwriting commissions and offering costs paid by us, were $107.8 million.

In August 2022, we entered into an Open Market Sale Agreement^SM, pursuant to which we may offer and sell up to $100.0 million shares of our common stock from time to time in “at-the-market” offerings (the “2022 ATM Facility”). There were no sales of our common stock under the 2022 ATM Facility during the three and six months ended June 30, 2024. During the three months ended March 31, 2023, we sold 1,749,199 shares of our common stock under the 2022 ATM Facility for net proceeds of $24.3 million, after deducting issuance costs. There were no sales of our common stock under the 2022 ATM Facility during the three months ended June 30, 2023.

In August 2018, we entered into a Securities Purchase Agreement with certain accredited investors (each, an “Investor” and, collectively, the “Investors”), pursuant to which we sold an aggregate of 2,750,000 shares of our common stock at a price of $8.00 per share, for aggregate net proceeds of $21.7 million, after deducting offering expenses payable by us. In a concurrent private placement, we issued the Investors warrants to purchase an aggregate of 2,750,000 shares of our common stock (each, a “Warrant” and, collectively, the “Warrants”). Each Warrant was exercisable from August 8, 2018 through August 8, 2023. Warrants to purchase 1,375,000 shares of our common stock had an exercise price of $10.00 per share and Warrants to purchase 1,375,000 shares of our common stock had an exercise price of $15.00 per share.

In August 2023, prior to the expiration of the Warrants, we entered into certain agreements with the Investors and their affiliates under which we 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, all outstanding Warrants were exercised for gross proceeds of $34.4 million in exchange for 44,748 shares of our 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 upon 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

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beneficially own more than 9.99% of our common stock, subject to certain exceptions. The common stock and Pre-Funded Warrants were recorded as a credit to additional paid-in capital. In accordance with Accounting Standards Codification Topic 260, Earnings Per Share, outstanding Pre-Funded Warrants are included in the computation of basic net loss per share because the exercise price is negligible, and they are fully vested and exercisable after the original issuance date. During the three and six months ended June 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 June 30, 2024, Pre-Funded Warrants to purchase 2,620,260 were outstanding.

Receipt of Payments Under Collaboration Agreements

In March 2024, we earned a $300.0 million upfront payment from Takeda upon the closing of the Takeda Collaboration Agreement, which we received in April 2024.

Pursuant to the Takeda Collaboration Agreement, we may be eligible to receive clinical development, regulatory and sales milestones, if and when achieved. Upcoming potential development milestones under the Takeda Collaboration Agreement include:

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$25.0 million upon successful achievement of the primary endpoint in the Phase 3 VERIFY trial for rusfertide in PV; and

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$50.0 million upon FDA approval of an NDA for rusfertide in PV (or $75.0 million if we exercise our full right to opt-out of the 50:50 U.S. profit and loss sharing arrangement in exchange for enhanced economics).

Under the JNJ License and Collaboration Agreement, we earned a $50.0 million milestone payment upon the dosing of the third patient in the ICONIC-TOTAL Phase 3 trial in late October 2023, which we received in December 2023. We earned a $10.0 million milestone payment upon the dosing of the third patient in the ANTHEM Phase 2b trial in UC in December 2023, which we received in January 2024. We have earned a total of $172.5 million in non-refundable payments from JNJ from the inception of the JNJ License and Collaboration Agreement in 2017 through June 30, 2024. We have also received payments for services provided under the collaboration agreement, and we may make 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 development and regulatory milestones under the Janssen License and Collaboration Agreement include:

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$115.0 million upon a Phase 3 clinical trial for a second-generation compound for any indication meeting its primary clinical endpoint;

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$35.0 million upon the filing of an NDA for a second-generation compound with the FDA;

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$50.0 million upon FDA approval of an NDA for a second-generation compound; and

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$15.0 million upon the dosing of the third patient in a Phase 3 clinical trial for a second-generation compound for a second indication.

Capital Requirements

As of June 30, 2024, we had $595.4 million of cash, cash equivalents and marketable securities and an accumulated deficit of $439.0 million. Our capital expenditures were $0.3 million and $0.6 million for the six months ended June 30, 2024 and the year ended December 31, 2023, respectively. 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

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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:

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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;

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

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

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

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the selling and marketing costs associated with our current product candidates and any other product candidates we may identify and develop, including the costs and timing of expanding our sales and marketing capabilities;

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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;

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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;

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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;

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

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

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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. As discussed in Part II, Item 1A. “Risk Factors,” we are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by domestic and global monetary and fiscal policy, geopolitical instability, inflationary pressures and high interest rates, among other factors. A future recession or market correction, including those due to significant geopolitical or macroeconomic events, could materially affect our business and our access to credit and financial markets.

Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. Further, our operating plans may change, and we may need additional funds to meet operational needs and capital requirements for clinical trials, other research and development activities and pre-commercialization costs. If we do raise additional capital through public or private equity offerings or convertible debt securities, the ownership interest of our existing stockholders could be diluted, and the terms of these securities could include liquidation or other preferences that could adversely affect our stockholders’ rights. If we raise additional capital through debt financing, we could be subject to covenants limiting or restricting our ability to take

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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. For additional information, see Part II, Item 1A. “Risk Factors” – “Risks Related to our Financial Position and Capital Requirements.”

Cash Flows

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


	Six Months Ended
	June 30,
	2024		2023

Condensed Consolidated Statements of Cash Flows Data:	(Dollars in thousands)
Cash provided by (used) in operating activities	$	241,193	$	(60,585)
Cash (used in) provided by investing activities	$	(82,048)	$	35,588
Cash provided by financing activities	$	9,771	$	134,635
Stock-based compensation	$	18,296	$	15,927

Cash Provided by (Used in) Operating Activities

Cash provided by operating activities for the six months ended June 30, 2024 was $241.2 million and consisted primarily of our net income of $176.7 million, $18.3 million of stock-based compensation and a change of $47.7 million in net operating assets and liabilities. The change in net operating assets and liabilities was driven primarily by a change of $40.9 million in deferred revenue related to the Takeda Collaboration Agreement and a change of $10.0 million in receivable from collaboration partner related to a milestone payment under the Janssen License and Collaboration Agreement, which we received in January 2024. The $301.8 million increase in cash provided by operating activities during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, was primarily due to the receipt of a $300.0 million upfront payment which we earned upon the effectiveness of the Takeda Collaboration Agreement.

Cash (Used in) Provided by Investing Activities

Cash used in investing activities for the six months ended June 30, 2024 was $82.0 million and consisted primarily of purchases of marketable securities of $240.6 million, partially offset by proceeds from maturities of marketable securities of $158.8 million. The $117.6 million increase in cash used in investing activities for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, was primarily related to the investment of a portion of the $300.0 million upfront payment we earned upon the effectiveness of the Takeda Collaboration Agreement.

Cash Provided by Financing Activities

Cash provided by financing activities for the six months ended June 30, 2024 was $9.8 million and consisted primarily of net cash proceeds of $10.4 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 $0.6 million in tax withholding payments related to net settlement of restricted stock units. The $124.9 million decrease in cash provided by financing activities for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, was primarily due to $107.9 million of proceeds received from a public offering of our common stock in April 2023 and a $24.3 million decrease in ATM sales of our common stock, partially offset by a $7.1 million increase in proceeds from the issuance of common stock upon exercise of options and purchases of common stock under the ESPP.

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Contractual Obligations and Other Commitments

Takeda Collaboration Agreement

Under the Takeda Collaboration Agreement, we are responsible for expenditures related to completion of our Phase 3 clinical trial for rusfertide in PV and, if successful, for expenditures related to an NDA filing with the FDA. The timing and actual amounts of these payments may vary from estimates depending on numerous factors, some of which are outside of our control and some of which are contingent upon the success of certain development and regulatory activities. The timing and amount of such payments are not determinable as of the date of this Quarterly Report on Form 10-Q.

Lease Agreement

Our contractual obligations include minimum lease payments under our operating lease obligations. In May 2024, we entered into a third amendment to our facility lease agreement dated as of March 2017 to extend the term for our existing office and laboratory space and lease additional office space in Newark, California. See Note 7 to the condensed consolidated financial statements elsewhere in this report for additional information.

Except as described above, during the six months ended June 30, 2024 there were no other 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, 2023 filed with the SEC on February 27, 2024.

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 $595.4 million and $341.6 million in cash, cash equivalents and marketable securities at June 30, 2024 and December 31, 2023, respectively. Our cash and cash equivalents consist of cash, money market funds, commercial paper and government bonds. Marketable securities consist of certificates of deposit, corporate bonds, commercial paper and government bonds. A portion of our investments may be subject to interest rate risk and could fall 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 $4.7 million, while an immediate 100 basis point decrease in interest rates would decrease our annual interest income by approximately $4.7 million.

Approximately $1.7 million and $0.9 million of our cash balance was located in Australia at June 30, 2024 and December 31, 2023, 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 six months ended June 30, 2024.

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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.

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

We have identified the following risks and uncertainties that may have a material adverse effect on our business, financial condition or results of operations. Investors should carefully consider the risks described below before making an investment decision. Our business faces significant risks and the risks described below may not be the only risks we face. If any of these risks occur, our business, results of operations or financial condition could suffer, and the market price of our common stock could decline.

Summary of Risk Factors

Below is a summary of the principal factors that make an investment in our common stock speculative or risky. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below in these “Risk Factors” and should be carefully considered, together with other information in this Quarterly Report on Form 10-Q and our other filings with the SEC, before making an investment decision regarding our common stock.

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We have no approved products and no historical commercial revenue, which makes it difficult to assess our future prospects and financial results.

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We are heavily dependent on the success of our product candidates in clinical development.

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Clinical development is a lengthy and expensive process with an uncertain outcome, and failure can occur at any stage of clinical development.

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Our product candidates may cause undesirable side effects or have other properties adversely impacting safety that delay or prevent their regulatory approval, restrict their approved labeling, or otherwise limit their commercial opportunity, including being required by an independent data monitoring committee or regulatory authorities to delay or halt or clinical trials, or if such side effects or adverse events are sufficiently severe or prevalent, to suspend or cease altogether further development of our product candidates.

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We have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future.

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We have never generated any revenue from product sales and may never be profitable.

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We may require additional funding.

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Raising additional capital may cause dilution to our existing stockholders.

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We rely on JNJ to continue the development of product candidates subject to our license and collaboration with JNJ, and to successfully commercialize any resulting products, and we rely on Takeda to successfully commercialize any products resulting from our collaboration agreement with Takeda.

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Our existing or future collaborations with third parties may not be successful.

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We rely on third parties to conduct our pre-clinical studies and clinical trials and are subject to risks associated with their businesses and performance of their obligations to us.

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We rely on third-party contract manufacturers to manufacture our drug substance and clinical drug product.

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If we are ultimately unable to obtain regulatory approval for our product candidates in the United States or other jurisdictions, our business will be substantially harmed.

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We have no marketing and sales organization and may not be able to effectively market and sell any products or generate product revenue if any of our product candidates are approved for marketing.

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If we commercialize our product candidates abroad, we will be subject to the risks of doing business outside of the United States.

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We face significant competition from other biotechnology and pharmaceutical companies.

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We may face risks to our business arising from outbreaks of disease, epidemics and pandemics, including risks to our ongoing and planned clinical trials and pre-clinical and discovery research.

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Unstable market and economic conditions, including elevated and sustained inflation, may have serious adverse consequences on our business, financial condition and stock price.

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Our success depends on our ability to attract, retain and motivate qualified executives and other personnel.

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We may experience difficulties in managing the growth of our organization.

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We are subject to risks associated with information technology systems or breaches of data security.

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Any misconduct by our employees, independent contractors, principal investigators, consultants and vendors could have a material adverse effect on our business.

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Our headquarters is located near known earthquake fault zones.

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If we are unable to obtain or protect intellectual property rights related to our product candidates and technologies, we may not be able to compete effectively in our markets.

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We may be involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming and ultimately unsuccessful.

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Patents covering our product candidates could be found invalid or unenforceable.

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Third-party claims of intellectual property infringement may prevent or delay our drug discovery and development efforts.

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

Risks Related to Clinical Development

We are a biopharmaceutical company with no approved products and no historical commercial revenue, which makes it difficult to assess our future prospects and financial results.

We are a biopharmaceutical company with a somewhat limited operating history as a publicly traded company. Biopharmaceutical product development is a highly speculative undertaking and involves a substantial degree of uncertainty. Our operations to date have been limited to developing our technology, undertaking pre-clinical studies and clinical trials of our pipeline candidates and conducting research to identify additional product candidates. We have not yet successfully developed an approved product or generated revenue from product sales or successfully conducted a pivotal registration trial for one of our product candidates. Consequently, the ability to accurately assess our future operating results or business prospects is significantly more limited than if we had a longer operating history or approved products on the market.

We expect that our financial condition and operating results will fluctuate significantly from period to period due to a variety of factors, many of which are beyond our control, including the success of our programs, decisions by regulatory bodies, actions taken by competitors or current or future licensees or collaborative partners, market and macroeconomic conditions and other factors identified in these risk factors. Accordingly, the likelihood of our success must be evaluated in light of many potential challenges and variables associated with a clinical-stage biopharmaceutical company, many of which are outside of our control, and past results, including operating or financial results, should not be relied on as an indication of future results.

We are heavily dependent on the success of our product candidates in clinical development, and if any of these products fail to receive regulatory approval or are not successfully commercialized, our business would be adversely affected.

We currently have no product candidates that are approved for commercial sale, and we may never develop a marketable product. We expect that a substantial portion of our efforts and expenditures over the next few years will be devoted to our current product candidates and the development of other product candidates. We cannot be certain that our product candidates will receive regulatory approval or, if approved, be successfully commercialized. The research, testing, manufacturing, labeling, approval, sale, marketing and distribution of our product candidates will be subject to

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extensive regulation by the FDA and other regulatory authorities in the United States and other countries. In addition, even if approved, our pricing and reimbursement will be subject to further review and discussions with payors. We are not permitted to market any product candidate in the United States until after approval of an NDA from the FDA, or in any foreign countries until approval by corresponding regulatory authorities. We will need to successfully conduct and complete large, extensive clinical trials in the target patient populations to support a potential application for regulatory approval by the FDA or corresponding regulatory authorities. Those trials, such as our ongoing VERIFY Phase 3 trial evaluating rusfertide for the treatment of PV or subsequent late-stage product candidates, may not demonstrate the safety and efficacy of our product candidates to support a marketing approval in the United States or other jurisdictions.

Our product candidates require additional clinical development, regulatory approval and secure sources of commercial manufacturing supply prior to commercialization. We cannot assure you that our clinical trials for our product candidates will be initiated or completed in a timely manner or successfully, or at all. Further we cannot be certain that we plan to advance any other product candidates into clinical trials. Moreover, any delay or setback in the development of any product candidate would be expected to adversely affect our business and cause our stock price to fall. For example, our stock price dropped significantly in September 2021 following the announcement of a full clinical hold imposed by the FDA on our rusfertide clinical studies. Our stock price also dropped significantly in April 2022 following the announcement of our voluntary withdrawal of Breakthrough Therapy Designation for rusfertide and the announcement of topline data from our Phase 2 clinical trial evaluating PN-943 in UC.

Clinical development is a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results. Clinical failure can occur at any stage of clinical development.

Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during the clinical development process. The results of pre-clinical studies and early clinical trials of our product candidates and studies and trials of other products may not be predictive of the results of later-stage clinical trials. Any hypothesis formed from pre-clinical or early clinical observations for any of our product candidates may prove to be incorrect, and the data generated in animal models or observed in limited patient populations may be of limited value and may not be applicable in clinical trials conducted under the controlled conditions required by applicable regulatory requirements.

In addition to our planned pre-clinical studies and clinical trials, we will be required to complete one or more large scale, well-controlled clinical trials to demonstrate substantial evidence of efficacy and safety for each product candidate we intend to commercialize. Further, given the patient populations for which we are developing therapeutics, we expect to have to evaluate long-term exposure to establish the safety of our therapeutics in a chronic-dose setting. We have not yet completed a Phase 3 clinical trial or submitted an NDA. As a result, we have no corporate history or track record of successfully completing these phases of the development cycle. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through pre-clinical studies and initial clinical trials. Clinical trial failures may result from a multitude of factors including, but not limited to, flaws in trial design, dose selection, placebo effect, patient enrollment criteria and failure to demonstrate favorable safety and/or efficacy traits of the product candidate. Based upon negative or inconclusive results, we may decide, or regulators may require us, to conduct additional clinical trials or pre-clinical studies.

We may experience delays in ongoing clinical trials, and we do not know whether planned clinical trials will begin on time, need to be redesigned, enroll patients on time or be completed on schedule, if at all. For example, we initially experienced slower than expected patient enrollment in VERIFY, a global Phase 3 clinical trial of rusfertide in PV. Clinical trials can be delayed for a variety of reasons, including if a clinical trial is modified, suspended or terminated by us. For example, in keeping with our organizational prioritization of rusfertide in PV, plans to initiate trials of rusfertide in other indications have been paused. Clinical trials can also be delayed by the institutional review boards or ethics committees of the institutions in which such clinical trials are being conducted, by a Data Safety Monitoring Board, for such trial or by the FDA or other regulatory authorities. Such authorities may impose a modification, suspension or termination due to a number of factors.

For example, our rusfertide clinical studies were subject to a three-week clinical hold by the FDA beginning in September 2021. The clinical hold was triggered by a non-clinical finding in a 26-week rasH2 transgenic mouse model

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indicating benign and malignant subcutaneous skin tumors. Also, in April 2022, the FDA indicated that it intended to rescind Breakthrough Therapy Designation for rusfertide in PV, and we voluntarily withdrew our request. For additional information, see the risk factor entitled “Our product candidates may cause undesirable side effects or have other properties adversely impacting safety that delay or prevent their regulatory approval, restrict their approved labeling, or otherwise limit their commercial opportunity” below.

In addition, there are a significant number of global clinical trials in hematologic disorders that are currently ongoing, especially in Phases 2 and 3, making it highly competitive and challenging to recruit subjects. Other companies targeting the same patient populations as our clinical trials for such medicines may make it more difficult for us to complete enrollment in our clinical trials. Furthermore, any negative results we may report in clinical trials of our product candidate may make it difficult or impossible to recruit and retain patients in other ongoing or subsequent clinical trials of that same product candidate. Delays or failures in planned patient enrollment or retention may result in increased costs, program delays or both. In addition, we are subject to risks and uncertainties as a result of the ongoing military conflict in Ukraine and Russia. For example, in 2022 we closed down clinical trial sites in Russia and Ukraine at which a limited number of subjects were enrolled in our PN-943 Phase 2 IDEAL trial.

If we experience material delays in the completion of any clinical trial, the reduction in remaining patent term would harm the commercial prospects for that product candidate and our ability to generate product revenue from any of these product candidates will be delayed. Any of these occurrences may harm our business, financial condition and prospects significantly.

If we are unable to discover and develop new product candidates, our business will be adversely affected.

As part of our strategy, we seek to discover and develop new product candidates. Research programs to identify appropriate biological targets, pathways and product candidates require substantial scientific, technical, financial and human resources, whether or not any product candidates are ultimately identified. Our research programs may initially show promise in identifying potential product candidates yet fail to yield product candidates for clinical development for many reasons.

Our proprietary peptide platform may not result in any products of commercial value.

We have developed a proprietary peptide technology platform to enable the identification, testing, design and development of new product candidates. Our peptide platform may not yield additional product candidates that enter clinical development and, ultimately, become commercially valuable. Although we expect to continue to enhance the capabilities of our platform by developing and integrating existing and new research technologies, our enhancement and development efforts may not succeed. As a result, we may not be able to advance our drug discovery capabilities as quickly as we expect or identify as many potential drug candidates as we desire.

If undesirable side effects or adverse events are caused by our product candidates or by other companies’ similar approved drugs or product candidates, then we may elect to, or be required by an independent data monitoring committee or regulatory authorities to, delay or halt our clinical trials. If such side effects or adverse events are sufficiently severe or prevalent, the FDA or comparable foreign regulatory authorities could order us to suspend or cease altogether further development of our product candidates. Even if our product candidates are approved, side effects or adverse events could result in significant delay in or denial of, regulatory approval, restrictive labeling, or potential product liability claims. Moreover, for our product candidates that are in development for indications for which injectable antibody drugs have been approved, clinical trials for those product candidates may need to show a risk/benefit profile that is competitive with those existing products in order to obtain regulatory approval or, if approved, a product label that is favorable for commercialization.

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For example, in September 2021, our clinical studies for rusfertide were placed on a brief full clinical hold by the FDA following a non-clinical finding in a rasH2 transgenic mouse model indicating benign and malignant subcutaneous skin tumors. Any similar findings in human clinical trials may adversely impact regulatory approval, product labeling or commercialization of rusfertide.

We have focused our limited resources to pursue particular product candidates and indications, and consequently, we may fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.

Because we have limited financial and managerial resources, we have historically focused on research programs and product candidates mainly on the development of rusfertide and the product candidates subject to our JNJ collaboration. We have an ongoing commitment to optimize and focus resources toward our rusfertide program in PV. In addition, in keeping with our organizational prioritization of rusfertide in PV, plans to initiate trials of rusfertide in additional disease indications have been paused. As a result, we may forego or delay the pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration partnerships, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.

Risks Related to our Financial Position and Capital Requirements

We have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future. We have never generated any revenue from product sales and may never be profitable.

We have incurred significant annual operating losses each year since inception and may continue to incur operating losses for the foreseeable future. As of June 30, 2024, we had an accumulated deficit of $439.0 million. We expect to continue to incur significant research, development and other expenses related to our ongoing operations and product development. As a result, we expect to continue to incur losses in the future as we continue our development of, and seek regulatory approvals for, our product candidates.

We do not anticipate generating revenue from sales of products for a number of years, if ever, and we have not yet successfully completed registrational or pivotal clinical trials for our product candidates. If any of our product candidates fail in clinical trials or do not gain regulatory approval or fail to achieve market acceptance, we may never become profitable. Revenue we generate from our collaborations with JNJ, Takeda, and any future collaboration arrangements may not be sufficient to sustain our operations. Failure to become and remain profitable may adversely affect the market price of our common stock and our ability to raise capital and continue operations.

We may require additional funding, which may not be available to us on acceptable terms, or at all.

Our operations have consumed substantial amounts of cash since inception. Developing pharmaceutical product candidates, including conducting pre-clinical studies and clinical trials, is expensive. We may require additional future capital in order to complete clinical development and, if we are successful, to commercialize any of our current product candidates. Further, in the event that the JNJ License and Collaboration Agreement or the Takeda Collaboration Agreement is terminated, we may not receive any additional fees or milestone payments under these agreements. Absent the funding support obtained under these agreements, our further development of the collaboration product candidates would require significant additional capital from us, or the establishment of alternative collaborations with third parties, which may not be possible.

As of June 30, 2024, we had cash, cash equivalents and marketable securities of $595.4 million. Based upon our current operating plan and expected expenditures we believe that our existing cash, cash equivalents, and marketable securities will be sufficient to fund our operations for at least the next 12 months. However, we may need to

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have access to additional funds in the future in order to complete clinical development or commercialize our product candidates to a point where our operations generate net cash inflows.

Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our product candidates or technologies.

We have in the past and may in the future seek additional funding through a combination of equity offerings, including the use of the 2022 ATM Facility, debt financings, collaborations and/or licensing arrangements. Additional funding may not be available to us on acceptable terms, or at all. Our ability to raise additional capital may be adversely impacted by adverse economic conditions and market volatility. The incurrence of indebtedness and/or the issuance of certain equity securities could result in fixed payment obligations and could also result in certain additional restrictive covenants, such as limitations on our ability to incur debt and/or issue additional equity, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. In addition, the issuance of additional equity securities by us, or the possibility of such issuance, may cause the market price of our common stock to decline. In the event that we enter into additional collaborations and/or licensing arrangements in order to raise capital, we may be required to accept unfavorable terms, including relinquishing or licensing to a third party on unfavorable terms our rights to our proprietary technology platform or product candidates. To the extent that we raise additional capital through the sale of equity securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder. If we issue common stock or securities convertible into common stock, our common stockholders will experience additional dilution and, as a result, our stock price may decline.

Risks Related to our Reliance on Third Parties

If JNJ does not elect to continue the development of JNJ-2113, or if Takeda does not elect to develop and commercialize rusfertide, our business and business prospects would be adversely affected.

JNJ-2113, the product candidate in development pursuant to our JNJ collaboration, and rusfertide, the product candidate in development pursuant to the Takeda Collaboration Agreement, may prove to have undesirable or unintended side effects or other characteristics adversely affecting its safety, efficacy or cost effectiveness that could prevent or limit its approval for marketing and successful commercial use, or that could delay or prevent the commencement and/or completion of clinical trials.

Under the terms of the JNJ License and Collaboration Agreement, JNJ may terminate the agreement for convenience and without cause on written notice of a certain period. In addition, prior to any termination of the agreement, JNJ will generally have control over the further clinical development of JNJ-2113 and any other licensed compounds. JNJ’s decisions with respect to such development will affect the timing and availability of potential future payments under the agreement, if any. For example, during the fourth quarter of 2021, a decision was made by JNJ to stop further development of both PTG-200 and PN-232 in favor of JNJ-2113.

Under the terms of the Takeda Collaboration Agreement, Takeda may terminate the agreement for convenience in its entirety or as to a major region by providing advance written notice following the earliest of (i) the receipt of Phase 3 data with respect to the VERIFY clinical trial, (ii) the third anniversary of the effective date of the agreement or (iii) the occurrence of certain specified adverse events related to the clinical development of rusfertide.

If the JNJ License and Collaboration Agreement or the Takeda Collaboration Agreement is terminated early, or if JNJ’s or Takeda’s development activities are terminated early or suspended for an extended period of time, or are otherwise unsuccessful, our business and business prospects would be materially and adversely affected.

We may have disagreements with JNJ during the term of the JNJ License and Collaboration Agreement or Takeda under the Takeda License and Collaboration Agreement, and if they are not settled amicably or in the favor of Protagonist, the result may harm our business.

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We are subject to the risk of possible disagreements with JNJ regarding the development of JNJ-2113 or other matters under the JNJ License and Collaboration Agreement and Takeda regarding the development of rusfertide or other matters under the Takeda Collaboration Agreement, such as the interpretation of such agreement or ownership of proprietary rights. Also, because the period of collaborative development under the agreement has ended, JNJ has sole decision-making authority for product candidates resulting from the collaboration, which could lead to disputes with JNJ. Disagreements with JNJ or Takeda could lead to litigation or arbitration, which would be expensive and would be time-consuming for our management and employees.

Our current and future development and commercialization collaboration may not be successful.

Other than our collaboration with JNJ License and Collaboration Agreement and our collaboration with Takeda under the Takeda Collaboration Agreement, we have no active collaborations for any of our product candidates. Our collaborations with JNJ and Takeda and any future collaboration arrangements may not ultimately be successful, which could have a negative impact on our business, results of operations, financial condition and growth prospects. We do not maintain significant rights or control of future development and commercialization activities under our collaboration with JNJ, or in ex-U.S. territories under our collaboration with Takeda. This could lead to potential disputes in the future over the terms of the collaborations and the respective rights of the parties, and these risks and uncertainties could be present with respect to our potential future collaborations as well.

If our strategic collaborations do not result in the successful development and commercialization of product candidates or if one of our collaborators fails to fulfill its obligations under the collaboration agreement or terminates its agreement with us, we may not receive any future milestone, royalty or other payments under the applicable collaboration agreement. In addition, if a collaboration is terminated, it may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates.

We rely on third parties to conduct our pre-clinical studies and clinical trials. If these third parties do not successfully carry out their contractual obligations or do not meet regulatory requirements or expected deadlines, we may not be able to obtain timely regulatory approval for or commercialize our product candidates and our business could be substantially harmed.

We have relied upon and plan to continue to rely upon third-party contract research organizations (“CROs”) to execute, monitor and manage clinical trials and collect data for our pre-clinical studies and clinical programs. We control only certain aspects of their activities. We and our CROs are required to comply with GCPs, which are regulations and guidelines promulgated by the FDA, the EMA and comparable foreign regulatory authorities for all of our product candidates in clinical development. If we or any of our CROs fail to comply with applicable GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA, the EMA or comparable foreign regulatory authorities may not accept the data or require us to perform additional clinical trials before considering our filing for regulatory approval or approving our marketing application. In addition, significant portions of the clinical studies for our product candidates are expected to be conducted outside of the United States, which will make it more difficult for us to monitor CROs and perform visits of our clinical trial sites and will force us to rely heavily on CROs for the proper and timely conduct of our clinical trials and compliance with applicable regulations, including GCPs.

If any of our relationships with these third-party CROs terminate, we may not be able to enter into arrangements with alternative CROs or do so on commercially reasonable terms. If CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates. As a result, our results of operations and the commercial prospects for our product candidates would be harmed, our costs could increase substantially and our ability to generate revenue could be delayed significantly.

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We face a variety of manufacturing risks and rely on third parties to manufacture our drug substance and clinical drug product and we intend to rely on third parties to produce commercial supplies of any approved product candidate.

We rely on contract manufacturers to manufacture and provide product for us that meets applicable regulatory requirements. We do not currently have, nor do we plan to develop, the infrastructure or capability internally to manufacture our drug supplies and we expect to continue to depend on contract manufacturers for the foreseeable future. As we proceed with the development and potential commercialization of our product candidates, we will need to increase the scale at which the drug is manufactured which will require the development of new manufacturing processes to potentially reduce the cost of goods. We will rely on our internal process research and development efforts and those of contract manufacturers to develop the good manufacturing practices (“GMPs”) required for cost-effective, large-scale production. If we and our contract manufacturers are not successful in converting to commercial-scale manufacturing, then our product costs may not be competitive and the development and/or commercialization of our product candidates would be materially and adversely affected. Moreover, our contract manufacturers are the sole source of supply for our clinical product candidates. If we were to experience an unexpected loss of supply for any reason, whether as a result of manufacturing, supply or storage issues, natural disasters, geopolitical conflict, outbreaks of disease, epidemics and pandemics, or otherwise, we could experience delays, disruptions, suspensions or termination of our clinical trial and planned development program, or be required to restart or repeat, any ongoing clinical trials.

We also rely on our contract manufacturers to purchase from third-party suppliers the materials necessary to produce our product candidates for our clinical trials. There are a limited number of suppliers for raw materials that our vendors use to manufacture our drugs and there may be a need to assess alternate suppliers to prevent a possible disruption of the manufacture of the materials necessary to produce our product candidates for our clinical trials, and if approved, for commercial sale. Moreover, we currently do not have any agreements for the commercial production of these raw materials. Although we generally do not begin a clinical trial unless we believe we have a sufficient supply of a product candidate to complete the clinical trial, any significant delay in the supply of a product candidate, or the raw material components thereof, for an ongoing clinical trial due to the need to replace a contract manufacturer or other third-party manufacturer could considerably delay completion of our clinical trials, product testing and potential regulatory approval of our product candidates.

Risks Related to Regulatory Approval

The regulatory approval processes of the FDA and comparable foreign authorities are lengthy and time consuming, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed.

Our business is substantially dependent on our ability to successfully develop, obtain regulatory approval for and then successfully commercialize our product candidates. We are not permitted to market or promote any of our product candidates before we receive regulatory approval from the FDA, the EMA or any other foreign regulatory authority, and we may never receive such regulatory approval for any of our product candidates. The time required to obtain approval by the FDA and comparable foreign authorities is difficult to predict, typically takes many years following the commencement of clinical trials and depends upon numerous factors. Approval policies, regulations and the types and amount of clinical and manufacturing data necessary to gain approval may change during the course of clinical development and may vary among jurisdictions. We have not obtained regulatory approval for any product candidate and it is possible that none of our existing product candidates or any product candidates we have in development or may seek to develop in the future will ever obtain regulatory approval.

Our product candidates could fail to receive regulatory approval for many reasons, including the following:

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the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials, or our interpretation of the data submitted in support of regulatory approval;

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we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate is safe and effective for its proposed indication or that a product candidate’s clinical and other benefits outweigh its safety risks;

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the results of clinical trials may fail to achieve the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval;

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the data collected from pre-clinical studies and clinical trials of our product candidates may not be sufficient to support the submission of an NDA, supplemental NDA, or other regulatory submissions necessary to obtain regulatory approval;

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we or our contractors may not meet the GMP and other applicable requirements for manufacturing processes, procedures, documentation and facilities necessary for approval by the FDA or comparable foreign regulatory authorities; and

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changes to the approval policies or regulations of the FDA or comparable foreign regulatory authorities with respect to our product candidates may result in our clinical data becoming insufficient for approval.

In addition, even if we were to obtain regulatory approval, regulatory authorities may approve our product candidates for fewer or more limited indications than what we requested approval for or may include safety warnings or other restrictions that may negatively impact the commercial viability of our product candidates, including the potential for a favorable price or reimbursement at a level that we would otherwise intend to charge for our products. Likewise, regulatory authorities may grant approval contingent on the performance of costly post-marketing clinical trials or the conduct of an expensive risk-evaluation and mitigation system, which could significantly reduce the potential for commercial success or viability of our product candidates. Any of the foregoing possibilities could materially harm the prospects for our product candidates and business and operations.

We may fail to obtain orphan drug designations from the FDA and/or the EMA for our product candidates, as applicable, and even if we obtain such designations, we may be unable to maintain the benefits associated with orphan drug designation, including the potential for market exclusivity.

Our strategy includes filing for orphan drug designation where available for our product candidates. Rusfertide has received orphan drug designation for the treatment of patients with PV from the FDA and the EMA. Despite this designation, we may be unable to maintain the benefits associated with orphan drug status, including market exclusivity. We may not be the first to obtain regulatory approval of a product candidate for a given orphan-designated indication. In addition, exclusive marketing rights in the United States may be limited if we seek approval for an indication broader than the orphan-designated indication or may be lost if the FDA later determines that the request for designation was materially defective or if we are unable to assure sufficient quantities of the product to meet patient needs. Further, even if we obtain orphan drug designation exclusivity for a product, that exclusivity may not effectively protect the product from competition because different drugs with different active moieties may receive and be approved for the same condition, and only the first applicant to receive approval for a given active ingredient will receive the benefits of marketing exclusivity. Even after an orphan-designated product is approved, the FDA can subsequently approve a later drug with the same active moiety for the same condition if the FDA concludes that the later drug is clinically superior if it is shown to be safer, more effective or makes a major contribution to patient care.

Risks Related to Commercialization of our Product Candidates

We currently have no marketing and sales organization. To the extent any of our product candidates for which we maintain commercial rights is approved for marketing, if we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our product candidates, we may not be able to effectively market and sell any products or generate product revenue.

We currently do not have a marketing or sales organization for the marketing, sales and distribution of pharmaceutical products, and have only a limited number of employees engaged in those activities. In order to

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commercialize or co-commercialize any of our product candidates that receive marketing approval, we will have to build adequate marketing, sales, distribution, managerial and other non-technical capabilities or make arrangements with third parties to perform these services. We may not be successful in doing so. In the event of the successful development of any of our product candidates, we may elect to build a targeted specialty sales force which will be expensive and time-consuming. Any failure or delay in the development of our internal sales, marketing and distribution capabilities would adversely impact the commercialization of these products. As we have done with Takeda with respect to rusfertide, we may choose to partner with third parties that have direct sales forces and established distribution systems, either to augment our own sales force and distribution systems or in lieu of our own sales force and distribution systems. In the case of the JNJ License and Collaboration Agreement or the Takeda Collaboration Agreement, we may elect to exercise our right to co-detail products, which would require us to establish a U.S. sales team. If we are not successful in commercializing our product candidates, either on our own or through collaborations with one or more third parties, our future revenue will be materially and adversely impacted.

Recently enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and affect the prices we may obtain.

In the United States and some foreign jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could, among other things, prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell any product candidates for which we obtain marketing approval. We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare therapies, which could result in reduced demand for us.

Legislative and regulatory proposals have also been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products. We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our product candidates, if any, may be. In addition, increased scrutiny by the U.S. Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-marketing testing and other requirements. See Item 1. “Business – Government Regulation” in our Annual Report on Form 10-K for the year ended December 31, 2023 for additional information.

We currently conduct, and intend to continue to conduct, a substantial portion of the clinical trials for our product candidates outside of the United States. If approved, we may commercialize our product candidates abroad. We will thus be subject to the risks of doing business outside of the United States.

We currently conduct, and intend to continue to conduct, a substantial portion of our clinical trials outside of the United States and, if approved, we intend to also market our product candidates outside of the United States. We are thus subject to risks associated with doing business outside of the United States. Our business and financial results in the future could be adversely affected due to a variety of factors associated with conducting development and marketing of our product candidates, if approved, outside of the United States, including varying medical standards and practices, geopolitical risks, uncertainty around intellectual property protection, and regulatory risks, such as compliance with the Foreign Corrupt Practices Act. If we are unable to anticipate and address these risks properly, our business and financial results will be harmed.

We may fail or elect not to commercialize our product candidates, even if approved.

We cannot be sure that, if our clinical trials for any of our product candidates are successfully completed, we will be able to submit an NDA to the FDA or that any NDA we submit will be approved by the FDA in a timely manner, if at all. After completing clinical trials for a product candidate in humans, a drug dossier is prepared and submitted to the FDA as an NDA, and includes all pre-clinical studies and clinical trial data relevant to the safety and effectiveness of the product at the suggested dose and duration of use for the proposed indication as well as manufacturing information, in order to allow the FDA to review such drug dossier and to consider a product candidate

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for approval for commercialization in the United States. If we are unable to submit an NDA with respect to any of our current product candidates, if any NDA we submit is not approved by the FDA, or we elect not to file an NDA, or if we are unable to obtain any required state and local distribution licenses or similar authorizations, we will be unable to commercialize that product. The FDA can and does reject NDAs and require additional clinical trials, even when product candidates achieve favorable results in Phase 3 clinical trials. Also, we may be subject to pricing pressures from competitive products that could make it difficult or impossible for us to commercialize the product candidate successfully. If we fail to commercialize any of our product candidates, our business, financial condition, results of operations and prospects may be materially and adversely affected.

The commercial success of any current or future product candidate will depend upon the degree of market acceptance by physicians, patients, third-party payors and others in the medical community.

We or our collaboration partners in any potential commercial launch of our product candidates may not be successful in achieving widespread patient or physician awareness or acceptance of such product candidate. Even though we expect that our product candidate will be priced responsibly, if approved, there is no guarantee that it or any other product that we bring to the market directly or through a strategic partner will gain market acceptance by physicians, patients, third-party payors and others in the medical community. The degree of market acceptance of any of our product candidates, if approved for commercial sale, will depend on a number of factors, including but not limited to:

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the safety and efficacy of the product in clinical trials, and potential advantages over competing treatments;

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the publication of unfavorable safety or efficacy data concerning our product by third parties;

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the prevalence and severity of any side effects, including any limitations or warnings contained in a product’s approved labeling;

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the clinical indications for which approval is granted;

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recognition and acceptance of our product candidates over our competitors’ products;

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prevalence of the disease or condition for which the product is approved;

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the cost of treatment, particularly in relation to competing treatments;

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the willingness of the target patient population to try our therapies and of physicians to prescribe these therapies;

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the strength of marketing and distribution support and timing of market introduction of competitive products;

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the extent to which the product is approved for inclusion on formularies of hospitals and managed care organizations;

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publicity concerning our products or competing products and treatments;

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the extent to which third-party payors provide coverage and adequate reimbursement for the product candidate, or any other product candidates we may pursue, if approved;

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our ability to maintain compliance with regulatory requirements; and

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labeling or naming imposed by FDA or other regulatory agencies.

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Even if a product candidate we may develop in the future displays an equivalent or more favorable efficacy and safety profile in pre-clinical and clinical trials, market acceptance of the product candidate will not be fully known until after it is launched and may be negatively affected by a potential poor safety experience and the track record of other product candidates. Our efforts, or those of any strategic licensing or collaboration partner, to educate the medical community and third-party payors on the benefits of our product candidates may require significant resources, may be under-resourced compared to large well-funded pharmaceutical entities and may never be successful. If ay product candidates we may develop in the future are approved but fail to achieve an adequate level of acceptance by physicians, patients, third-party payors and others in the medical community, we will not be able to generate sufficient revenue to become or remain profitable.

Risks Related to our Business and Industry

We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we or our collaboration partners fail to compete effectively.

The biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technological change. We have competitors worldwide, including major multinational pharmaceutical companies, biotechnology companies, specialty pharmaceutical and generic pharmaceutical companies as well as universities and other research institutions.

Many of our competitors have substantially greater financial, technical and other resources, such as larger research and development staff and experienced marketing and manufacturing organizations. As a result, these companies may obtain regulatory approval more rapidly than we are able and may be more effective in selling and marketing their products. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. Competition may increase further as a result of advances in the commercial applicability of newer technologies and greater availability of capital for investment in these industries. Our competitors may succeed in developing, acquiring or licensing, on an exclusive basis, pharmaceutical products that are easier to develop, more effective or less costly than any product candidates that we are currently developing or that we may develop. If approved, our product candidates are expected to face competition from commercially available drugs as well as drugs that are in the development pipelines of our competitors.

Pharmaceutical companies may invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds that could make our product candidates less competitive. In addition, any new product that competes with an approved product must demonstrate advantages in efficacy, convenience, tolerability or safety in order to overcome price competition and to be commercially successful. If our competitors succeed in obtaining FDA, EMA or other regulatory approval or discovering, developing and commercializing drugs before we do, there would be a material adverse impact on the future prospects for our product candidates and business. For example, in November 2021, the FDA approved a Biologics License Application for ropeginterferon alfa-2b for use in treatment for patients with PV in the absence of symptomatic splenomegaly from PharmaEssentia Corporation, the manufacturer of the novel pegylated interferon. We also face competition in certain instances from the existing standards of care, which may be significantly less expensive than our expected drug prices. For example, one widely used treatment for patients is phlebotomy and/or chelation therapy. While patients may not like therapies that involve frequent blood draws, these therapies are inexpensive and may present pricing challenges for us if our drug candidates are successfully developed and approved. See Item 1, “Business – Competition” in our Annual Report on Form 10-K for the year ended December 31, 2023 for additional information.

Outbreaks of disease, epidemics and pandemics have and could continue to adversely impact our business, including our ongoing and planned clinical trials and pre-clinical and discovery research.

We have experienced delays in our existing and planned clinical trials due to worldwide impacts related to the COVID-19 pandemic, and our future results of operations and liquidity could be adversely impacted by direct and indirect impacts of epidemics and pandemics. We have and could in the future experience additional disruptions or increased expenses that may adversely impact our business, including delays or difficulties in enrolling patients in our ongoing clinical trials and our future clinical trials; delays or difficulties in clinical site initiation, including difficulties

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in recruiting clinical site investigators and clinical site staff or maintaining ongoing operations at such sites; and delays in manufacturing and receiving the supplies, materials and services needed to conduct clinical trials and pre-clinical research.

A continued and prolonged public health crisis could have a material negative impact on our business, financial condition, and operating results.

Unstable market and macroeconomic conditions, including elevated and sustained inflation, 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, geopolitical instability, including ongoing military conflicts between Russia and Ukraine and in Israel and surrounding areas, 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. We continue to monitor these events and the potential impact on our business. Although we do not believe that inflation has 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 numerous factors, including macroeconomic and market conditions, domestic and global monetary and fiscal policy, supply chain constraints, and the ongoing conflicts between Russia and Ukraine and in Israel and surrounding areas, and other 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 disruptions 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.

We maintain our cash at financial institutions, often in balances that exceed federally insured limits. The failure of financial institutions could adversely affect our ability to pay our operational expenses or make other payments.

Our cash held in non-interest-bearing and interest-bearing accounts generally exceeds the Federal Deposit Insurance Corporation (the “FDIC”) insurance limits. If such banking institutions were to fail, we could lose all or a portion of those amounts held in excess of such insurance limitations. For example, the FDIC took control of Silicon Valley Bank on March 10, 2023. The Federal Reserve subsequently announced that account holders would be made whole. However, the FDIC may not make all account holders whole in the event of future bank failures. In addition, even if account holders are ultimately made whole with respect to a future bank failure, account holders’ access to their accounts and assets held in their accounts may be substantially delayed. Any material loss that we may experience in the future or inability for a material time period to access our cash and cash equivalents could have an adverse effect on our ability to pay our operational expenses or make other payments, which could adversely affect our business.

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If we fail to comply with state and federal healthcare regulatory laws, we could face substantial penalties, damages, fines, disgorgement, integrity oversight and reporting obligations, exclusion from participation in governmental healthcare programs, and the curtailment of our operations, any of which could adversely affect our business, operations, and financial condition.

Healthcare providers, including physicians, and third-party payors will play a primary role in the recommendation and prescription of any future product candidates we may develop or any product candidates for which we obtain marketing approval. Our arrangements with third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may affect the business or financial arrangements and relationships through which we would market, sell and distribute our products. Even though we do not and will not control referrals of healthcare services or bill directly to Medicare, Medicaid or other third-party payors, federal and state healthcare laws and regulations pertaining to fraud and abuse and patients’ rights are and will be applicable to our business. The laws that may affect our ability to operate include, but are not limited to:

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the federal Anti-Kickback Statute;

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the federal false claims laws, including the False Claims Act;

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the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”);

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HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and their implementing regulations, which also imposes obligations, including mandatory contractual terms, on HIPAA-covered entities, their business associates as well as their covered subcontractors with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

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the federal civil monetary penalties statute;

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the federal Physician Payments Sunshine Act; and

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analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws.

Further, the ACA, among other things, amended the intent requirements of the federal Anti-Kickback Statute and certain criminal statutes governing healthcare fraud. Any violations of these laws, or any action against us for violation of these laws, even if we successfully defend against it, could result in a material adverse effect on our reputation, business, results of operations and financial condition.

We have entered into consulting and scientific advisory board arrangements with physicians and other healthcare providers, including some who could influence the use of our product candidates, if approved. While we have worked to structure our arrangements to comply with applicable laws, because of the complex and far-reaching nature of these laws, regulatory agencies may view these transactions as prohibited arrangements that must be restructured or discontinued, or for which we could be subject to other significant penalties. We could be adversely affected if regulatory agencies interpret our financial relationships with providers who may influence the ordering of and use our product candidates, if approved, to be in violation of applicable laws.

The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform. Federal and state enforcement bodies have continued to increase their scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of significant investigations, prosecutions, convictions and settlements in the healthcare industry. Additionally, as a result of these investigations, healthcare providers and entities may have to agree to additional onerous compliance and reporting requirements as part of a consent decree or corporate integrity agreement. Any such investigation or settlement could significantly increase our costs or otherwise have an adverse effect on our business.

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If our operations are found to be in violation of any of these laws or any other governmental laws and regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, integrity oversight and reporting obligations, exclusion from government funded healthcare programs, such as Medicare and Medicaid, disgorgement, contractual damages, reputational harm, diminished profits and the curtailment or restructuring of our operations. If, and to the extent that, we or our collaboration partners are unable to comply with these regulations, our ability to earn potential royalties from sales of product candidates under our collaboration agreements would be materially and adversely impacted. If any of the physicians or other healthcare providers or entities with whom we expect to do business is found to be not in compliance with applicable laws, they may be subject to significant criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs. The imposition of any of these penalties or other commercial limitations could negatively impact our collaboration arrangements or cause our collaboration partners to terminate the related license and collaboration agreement, either of which would materially and adversely affect our business, financial condition and results of operations.

Our future success depends on our ability to retain our executive officers and to attract, retain and motivate qualified personnel. If we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.

We are highly dependent on our existing senior management team. The loss of the services of any of our executive officers or other key employees and our inability to find suitable replacements would harm our research and development efforts, our collaboration efforts, as well as our business, financial condition and prospects. Our success also depends on our ability to continue to attract, retain and motivate highly skilled and experienced personnel with scientific, medical, regulatory, manufacturing, marketing, sales, general and administrative and management training and skills.

We may not be able to attract or retain qualified personnel in the future due to the intense competition for a limited number of qualified personnel among biopharmaceutical, biotechnology, pharmaceutical and other businesses. Many of the other biopharmaceutical and pharmaceutical companies that we compete against for qualified personnel have greater financial and other resources, different risk profiles and a longer history in the industry than we do. Many are located in areas of the country with lower costs of living. Additionally, the United States has recently experienced historically high levels of inflation and an acute workforce shortage generally, which has created a hyper-competitive wage environment that may increase our operating costs. Any or all of these factors may limit our ability to continue to attract and retain high quality personnel, which could negatively affect our ability to successfully develop and commercialize product candidates and to grow our business and operations as currently contemplated.

We expect to expand the size of our organization in the future, and we may experience difficulties in managing this growth.

As of June 30, 2024, we had 125 full-time equivalent employees, including 97 full-time equivalent employees engaged in research and development. As our development and commercialization plans and strategies develop, we expect to need additional managerial, operational, scientific, sales, marketing, research, development, regulatory, manufacturing, financial and other resources. In addition, as our operations expand, we expect that we will need to manage relationships with strategic collaborators, CROs, contract manufacturers, suppliers, vendors and other third parties. Our future financial performance and our ability to develop and commercialize our product candidates and to compete effectively will depend, in part, on our ability to manage any future growth effectively. We may not be successful in accomplishing these tasks in growing our company, and our failure to accomplish any of them could adversely affect our business and operations.

Significant disruptions of information technology systems or breaches of data security could adversely affect our business.

Our business is increasingly dependent on critical, complex and interdependent information technology systems, including internet-based systems, to support business processes as well as internal and external communications. The size and complexity of our internal computer systems and those of our CROs, contract

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manufacturers, collaboration partners, and other third parties on which we rely may make them potentially vulnerable to breakdown, telecommunications and electrical failures, malicious intrusion such as ransomware and computer viruses that may result in the impairment of key business processes. Our systems are potentially vulnerable to data security breaches, by employees or others, which may expose sensitive data to unauthorized persons. Such data security breaches could lead to the loss of trade secrets or other intellectual property or could lead to the public exposure of personally identifiable information (including sensitive personal information) of our employees, collaborators, clinical trial patients, and others. A malicious intrusion, email compromise or other data security breach or privacy violation that leads to disclosure or modification of or prevents access to patient information, including personally identifiable information or protected health information, could harm our reputation, compel us to comply with federal and/or state breach notification laws, subject us to mandatory corrective action, require us to verify the correctness of database contents and otherwise subject us to liability under laws and regulations that protect personal data, resulting in increased costs or loss of revenue. If we are unable to prevent such data security breaches or privacy violations or implement satisfactory remedial measures, our operations could be disrupted, and we may suffer loss of reputation, financial loss and other regulatory penalties.

If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.

We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. Our operations involve the use of hazardous and flammable materials, including chemicals and biological materials, and produce hazardous waste products. We generally contract with third parties for the disposal of these materials and waste. We cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties.

Our employees, independent contractors, principal investigators, consultants and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have a material adverse effect on our business.

We are exposed to the risk that our employees, independent contractors, principal investigators, consultants or vendors may engage in fraudulent conduct or other illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to us that violates: (i) FDA laws and regulations or those of comparable foreign regulatory authorities, (ii) manufacturing standards, (iii) federal and state data privacy, security, fraud and abuse and other healthcare laws and regulations established and enforced by comparable foreign regulatory authorities, or (iv) laws that require the true, complete and accurate reporting of financial information or data. Additionally, we are subject to the risk that a person or government could allege such fraud or other misconduct, even if none occurred. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and results of operations, including the imposition of significant fines or other sanctions.

If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates.

We may be sued if any product we develop allegedly causes injury or is found to be otherwise unsuitable during product testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability and a breach of warranties. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to stop development or, if approved, limit commercialization of our product candidates.

Our inability to obtain and retain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the development or commercialization of our product

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candidates. We currently carry clinical trial liability insurance for our clinical trials. Although we maintain such insurance, any claim that may be brought against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by our insurance or that is in excess of the limits of our insurance coverage. Our insurance policies also have various exclusions, and we may be subject to a product liability claim for which we have no coverage. We will have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts.

Our headquarters is located near known earthquake fault zones. The occurrence of an earthquake, fire or any other catastrophic event could disrupt our operations or the operations of third parties who provide vital support functions to us, which could have a material adverse effect on our business and financial condition.

We and some of the third-party service providers on which we depend for various support functions are vulnerable to damage from catastrophic events, such as power loss, natural disasters, extreme weather, terrorism, pandemics and similar unforeseen events beyond our control. Our corporate headquarters, including our laboratory facilities, are located in the San Francisco Bay Area, which in the past has experienced severe earthquakes and wildfires. We do not carry earthquake insurance. Earthquakes or other natural disasters could severely disrupt our operations, and have a material adverse effect on our business, results of operations, financial condition and prospects.

The insurance coverage and reimbursement status of newly approved products is uncertain. Failure to obtain or maintain adequate coverage and reimbursement for our product candidates could limit our ability to generate revenue.

The availability and extent of reimbursement by governmental and private payors is essential for most patients to be able to afford medications and therapies. Sales of any of our product candidates that receive marketing approval will depend substantially, both in the United States and internationally, on the extent to which the costs of our product candidates will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed by government health administration authorities, private health coverage insurers and other third-party payors. If reimbursement is not available, or is available only to limited levels, we may not be able to successfully commercialize our product candidates. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain adequate pricing that will allow us to realize a sufficient return on our investment.

There is significant uncertainty related to the insurance coverage and reimbursement of newly approved products as increasingly high barriers are being erected to the entry of new products into the healthcare markets. Coverage and reimbursement can differ significantly from payor to payor. It is difficult to predict what CMS will decide with respect to reimbursement for novel products such as ours since there is no body of established practices and precedents for these new products.

Outside the United States, international operations are generally subject to extensive governmental price controls and other market regulations, and we believe the increasing emphasis on cost-containment initiatives in Europe, Canada and other countries may cause us to price our product candidates on less favorable terms than we currently anticipate. In many countries, particularly the countries of the European Union, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product. To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our product candidates to other available therapies. In general, the prices of products under such systems are substantially lower than in the United States. Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for our product candidates. Accordingly, in markets outside the United States, the reimbursement for our products may be reduced compared with the United States and may be insufficient to generate commercially reasonable revenues and profits.

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Risks Related to our Intellectual Property

If we are unable to obtain or protect intellectual property rights related to our product candidates and technologies, we may not be able to compete effectively in our markets.

We rely upon a combination of patent protection, trade secret protection and confidentiality agreements to protect the intellectual property related to our product candidates and technologies. The strength of patents in the biotechnology and pharmaceutical field involves complex legal and scientific questions and can be uncertain. We may or may not file or prosecute all necessary or desirable patent applications. The patent applications that we own or license may fail to result in issued patents in the United States or in other foreign countries, or they may fail to result in issued patents with claims that cover our product candidates or technologies in the United States or in other foreign countries. Any failure to identify relevant prior art relating to a patent or patent applications can invalidate a patent or prevent a patent from issuing. Even if patents have been issued, third parties may challenge the validity, enforceability or scope thereof, which may result in such patents being narrowed, invalidated or held unenforceable. Furthermore, even if they are unchallenged, our patent and patent applications may not adequately protect our intellectual property, provide exclusivity for our product candidates and technologies, or prevent others from designing around our claims.

If the breadth or strength of protection provided by our patents is challenged, or if they fail to provide meaningful exclusivity for our product candidates, it could prevent us from asserting exclusivity over the covered product and allow generic competition. We cannot offer any assurances about which, if any, of our patent applications will issue, the breadth of any such issued patent, or whether any issued patents will be found invalid and unenforceable or will be threatened by third parties. Any successful opposition or other challenge to our patents or patent applications could significantly diminish the commercial prospects of any products that we develop.

In addition, patents have a limited lifespan. In the United States and in many other countries, the natural expiration of a patent is generally 20 years after it is filed, and once any patents covering a product expire, generic competitors may enter the market. Our granted U.S. patent covering rusfertide expires in 2034 but is eligible for extension of up to five years for a portion of the time spent in development. Although the life of a patent can be increased based on certain delays caused by the U.S. Patent and Trademark Office, this increase can be reduced or eliminated based on certain delays caused by the patent applicant during patent prosecution. If we encounter delays in our clinical trials or in gaining regulatory approval, the period of time during which we could market any of our product candidates under patent protection, if approved, would be reduced.

We may not be able to protect our intellectual property rights throughout the world. Filing, prosecuting and defending patents on all of our product candidates throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States may be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights, including trade secrets, to the same extent as federal and state laws of the United States and many countries limit the enforceability of patents against third parties, including government agencies or government contractors.

Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as in the United States. These products may compete with our products in jurisdictions where we do not have any issued patents and our patent claims or other intellectual property rights may not be effective or sufficient to prevent them from so competing. Also, if our trade secrets are disclosed in a foreign jurisdiction, competitors worldwide could have access to our proprietary information and we may be without satisfactory recourse. Such disclosure could have a material adverse effect on our business.

We also rely on trade secret protection and confidentiality agreements to protect proprietary scientific, business and technical information and know-how that is not or may not be patentable or that we elect not to patent. For example, we primarily rely on trade secrets and confidentiality agreements to protect our peptide therapeutics technology platform. Any disclosure to or misappropriation by third parties of our confidential proprietary information could enable competitors to quickly duplicate or surpass our technological achievements, thus eroding our competitive

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position in our market. If we are unable to protect the confidentiality of our trade secrets and proprietary know-how or if competitors independently develop viable competing products, our business and competitive position may be harmed.

Although we require all of our employees to assign their inventions to us, and endeavor to execute confidentiality agreements with all of our employees, consultants, advisors and any third parties who have access to our proprietary know-how and other confidential information related to such technology, we cannot be certain that we have executed such agreements with all third parties who may have helped to develop our intellectual property or who had access to our proprietary information, nor can be we certain that our agreements will not be breached. If any of the parties to these confidentiality agreements breaches or violates the terms of such agreements, we may not have adequate remedies for any such breach or violation, and we could lose our trade secrets as a result.

Even if we are able to adequately protect our trade secrets and proprietary information, our trade secrets could otherwise become known or could be independently discovered by our competitors. If our trade secrets are not adequately protected so as to protect our market against competitors’ products, others may be able to exploit our proprietary peptide product candidate discovery technologies to identify and develop competing product candidates, and thus our competitive position could be adversely affected, as could our business.

We may be involved in lawsuits and other legal proceedings to protect or enforce our intellectual property, which could be expensive, time consuming and unsuccessful.

Competitors may infringe our issued patents or any patents issued as a result of our pending or future patent applications. To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time-consuming. In addition, in an infringement proceeding, a court may decide that a patent of ours is not valid or is unenforceable or may refuse to stop the other party in such infringement proceeding from using the technology at issue on the grounds that our patents do not cover the technology in question. An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated, held unenforceable or interpreted narrowly, and could put any of our patent applications at risk of not yielding an issued patent. Issued patents and patent applications may be challenged in the courts and in the patent office in the United States and abroad. An adverse determination in any such challenge could prevent the issuance of, reduce the scope of, invalidate or render unenforceable our patent rights, result in the loss of exclusivity, or limit our ability to stop others from using or commercializing our platform technology and products. Any such adverse result or determination could have a material adverse effect on our business, financial condition and results of operations.

Any issued patents covering our product candidates, including any patent that may issue as a result of our pending or future patent applications, could be found invalid or unenforceable if challenged in court in the United States or abroad.

As more groups become engaged in scientific research and product development in fields related to our product candidates, such as hepcidin mimetics or IL-23R, the risk of our patents, or patents that we have in-licensed, being challenged through patent interferences, derivation proceedings, oppositions, re-examinations, litigation or other means will likely increase. An adverse outcome in a patent dispute could have a material adverse effect on our business by:

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causing us to lose patent rights in the relevant jurisdiction(s);

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subjecting our collaboration partners or us to litigation, or otherwise preventing the commercialization of product candidates in the relevant jurisdiction(s); or

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requiring our collaboration partners or us to obtain licenses to the disputed patents, cease using the disputed technology or develop or obtain alternative technologies.

An adverse outcome in a patent dispute could severely harm our collaborations or cause our collaboration partners to terminate their respective agreements.

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Litigation or other legal proceedings relating to intellectual property claims, with or without merit, are unpredictable and generally expensive and time-consuming and, even if resolved in our favor, are likely to divert significant resources from our core business, including distracting our technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the market price of our common stock. We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources and more mature and developed intellectual property portfolios. Accordingly, despite our efforts, we may not be able to prevent third parties from infringing upon or misappropriating or from successfully challenging our intellectual property rights. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace.

Third-party claims of intellectual property infringement may prevent or delay our drug discovery and development efforts.

Our commercial success depends in part on our ability to develop, manufacture, market and sell our drug candidates and use our proprietary technologies without infringing or otherwise violating the patents and proprietary rights of third parties. Numerous third-party U.S. and foreign issued patents and pending patent applications exist in the fields in which we are developing product candidates, and there may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our product candidates and technologies.

Third parties may initiate legal proceedings against us alleging that we are infringing or otherwise violating their patent or other intellectual property rights. Given the vast number of patents in our field of technology, marketing of our product candidates or practice of our technologies could infringe existing patents or patents granted in the future. There may be applications now pending of which we are unaware that may later result in issued patents that may be infringed by the practice of our peptide therapeutics technology platform or the manufacture, use or sale of our product candidates. If any third-party patents were to be held by a court of competent jurisdiction to cover the manufacturing process of any of our product candidates, any molecules formed during the manufacturing process or any final product or formulation itself, the holders of any such patents may be able to block our ability to commercialize such product candidate unless we obtained a license under the applicable patents, or until such patents expire. As our industry expands and more patents are issued, the risk increases that our product candidates or technologies may give rise to claims of infringement of the patent rights of others.

Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to commercialize our product candidates. Even if we are successful in defending against any infringement claims, litigation is expensive and time-consuming and is likely to divert management’s attention and substantial resources from our core business. In the event of a successful claim of infringement against us, we may have to pay substantial damages, limit our uses, pay royalties or redesign our infringing product candidates, which may be impossible or require substantial time and monetary expenditure. We may choose to seek, or may be required to seek, a license from the third-party patent holder and would most likely be required to pay license fees or royalties or both, each of which could be substantial. These licenses may not be available on commercially reasonable terms, however, or at all. Even if we were able to obtain a license, the rights we obtain may be nonexclusive, which would provide our competitors access to the same intellectual property rights upon which we are forced to rely. Furthermore, even in the absence of litigation, we may need to obtain licenses from third parties to advance our research or allow commercialization of our product candidates, and we have done so from time to time. We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. In such an event, we would be unable to further practice our technologies or develop and commercialize any of our product candidates at issue, which could harm our business significantly.

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We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of former or other employers.

Many of our employees and consultants, including our senior management and our scientific founders, have been employed or retained at universities or by other biotechnology or pharmaceutical companies, including potential competitors. Some of our employees and consultants, including each member of our senior management and each of our scientific founders, executed proprietary rights, non-disclosure and non-competition agreements in connection with such previous employment or retention. We may be subject to claims that we or these employees, consultants or independent contractors have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such employee’s or consultant’s former or other employer. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.

We may be subject to claims challenging the inventorship or ownership of our issued patents, any patents issued as a result of our pending or future patent applications and other intellectual property.

We may be subject to claims that former employees, collaborators or other third parties have an ownership interest in our issued patents, any patents issued as a result of our pending or future applications or other intellectual property. We have had in the past, and we may have in the future, ownership disputes arising, for example, from conflicting obligations of consultants or others who are involved in developing our product candidates and technologies. Litigation may be necessary to defend against these and other claims.

In addition, some of our intellectual property rights were generated through the use of U.S. government funding and are therefore subject to certain federal regulations. As a result, the U.S. government may have certain rights to intellectual property embodied in our current or future product candidates pursuant to the Bayh-Dole Act of 1980 and implementing regulations. These U.S. government rights in certain inventions developed under a government-funded program include a non-exclusive, non-transferable, irrevocable worldwide license to use inventions for any governmental purpose. In addition, the U.S. government has the right to require us or our licensors to grant exclusive, partially exclusive, or non-exclusive licenses to any of these inventions to a third party in certain circumstances (also referred to as “march-in rights”).

Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.

Because we expect to rely on third parties in the development and manufacture of our product candidates, we must, at times, share trade secrets with them. We seek to protect our proprietary technology in part by entering into confidentiality agreements and, if applicable, material transfer agreements, consulting agreements or other similar agreements with our advisors, employees, third-party contractors and consultants prior to beginning research or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose our confidential information, including our trade secrets. Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements. Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor’s discovery of our trade secrets or other unauthorized use or disclosure would impair our competitive position and may have an adverse effect on our business and results of operations.

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Intellectual property rights do not necessarily address all potential threats to our business.

The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations and may not adequately protect our business. The following examples are illustrative:

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others may be able to make compounds or formulations that are similar to our product candidates, but that are not covered by the claims of any patents that we own, license or control;

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we or any strategic partners might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own;

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we may not have been the first to file patent applications covering certain of our inventions;

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others may independently develop the same, similar, or alternative technologies without infringing, misappropriating or violating our intellectual property rights;

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it is possible that our pending patent applications will not lead to issued patents;

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issued patents may not provide us with any competitive advantages, or may be narrowed or held invalid or unenforceable, including as a result of legal challenges;

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our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights, and may then use the information learned from such activities to develop competitive products for sale in our major commercial markets;

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we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such trade secrets or know-how; and

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the patents of others may have an adverse effect on our business.

Should any of these events occur, they could have a material adverse impact on our business and financial condition.

Risks Related to Ownership of our Common Stock

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 in the past and is likely to be volatile in the future. From January 1, 2024 through June 30, 2024, the reported sale price of our common stock has fluctuated between $21.43 and $35.96 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, investors may experience losses on their investment in our common stock, including due to the factors discussed in these “Risk Factors” and elsewhere in this Quarterly Report.

Volatility in our share price could subject us to securities class action litigation.

Securities class action litigations have often been brought against companies following a decline in the market price of their securities. If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business.

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We are required to develop and maintain proper and effective internal controls over financial reporting and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and, as a result, the value of our common stock.

We are required, pursuant to Section 404 of the Sarbanes-Oxley Act (“Section 404”), to furnish a report by management on the effectiveness of our internal control over financial reporting. This assessment needs to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. Our independent registered public accounting firm is required to attest to the effectiveness of our internal control over financial reporting.

Maintaining adequate internal controls in place so that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that will need to be evaluated frequently. We currently do not have an internal audit group, and we may need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge and continue the costly and challenging process of compiling the system and processing documentation necessary to perform the evaluation needed to comply with Section 404. We may not complete our continued evaluation, testing and any required remediation in a timely fashion. During our evaluation of our internal control, if we identify one or more material weaknesses in our internal control over financial reporting or fail to remediate any material weaknesses, we will be unable to assert that our internal control over financial reporting is effective. In addition, if we have a material weakness, we will receive an adverse opinion regarding our internal control over financial reporting from our independent registered public accounting firm. Any material weakness or other failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition or results of operations. If we are not able to comply with the requirements of Section 404 or if we or our independent registered public accounting firm are unable to attest to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our stock could decline and we could be subject to sanctions or investigations by Nasdaq, the SEC, or other regulatory authorities, which would require additional financial and management resources.

Our certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our amended and restated certificate of incorporation (“Certificate of Incorporation”) provides that the Court of Chancery of the State of Delaware will be the exclusive forum for certain actions and proceedings. Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims. The choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes, which may discourage such lawsuits. Alternatively, if a court were to find the choice of forum provision contained in our Certificate of Incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions.

Some provisions of our charter documents and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management.

There are provisions in our Certificate of Incorporation and Bylaws, such as the existence of a classified Board and the authorization of “blank-check” preferred stock, that may make it difficult for a third party to acquire, or attempt to acquire, control of our company, even if a change in control was considered favorable by our stockholders. These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board, who are responsible for appointing the members of our management.

Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which prohibit a person who owns 15% or more of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person

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acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner. Any provision in our Certificate of Incorporation, our Bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock.

General Risk Factors

Our ability to use net operating loss carryforwards to offset future taxable income, and our ability to use tax credit carryforwards, may be subject to certain limitations.

Our ability to use our federal and state net operating losses (“NOLs”) to offset potential future taxable income and related income taxes that would otherwise be due is dependent upon our generation of future taxable income, and we cannot predict with certainty when, or whether, we will generate sufficient taxable income to use our NOLs. To the extent that we continue to generate taxable losses, unused losses will carry forward to offset future taxable income, if any, until such unused losses expire.

Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” generally defined as a greater than fifty percentage point change (by value) in its equity ownership by certain stockholders over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards, or NOLs, and other pre-change tax attributes (such as research and development tax credits) to offset its post-change taxable income or tax liability may be limited. We have experienced ownership changes in the past, resulting in annual limitations in our ability to use our NOLs and credits. In addition, we may experience subsequent ownership changes as a result of future equity offerings or other changes in the ownership of our stock, some of which are beyond our control. As a result, the amount of the NOLs and tax credit carryforwards presented in our financial statements could be limited and may expire unused. Any such material limitation or expiration of our NOLs may harm our future operating results by effectively increasing our future tax obligations.

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

On April 22, 2024, Dinesh V. Patel, our Chief Executive Officer and member of our Board, adopted a trading plan intended to satisfy Rule 10b5-1(c) to sell up to 300,000 shares of the Company’s common stock through July 31, 2025, or such earlier date when all transactions under the trading plan are completed, subject to certain conditions. During the fiscal quarter ended June 30, 2024, no other director or Section 16 officer adopted or terminated any Rule

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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 of Protagonist Therapeutics, Inc.	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
10.1+	Third Amendment to Lease dated March 6, 2017 by and between Protagonist Therapeutics, Inc., as Tenant, and BMR-Pacific Research Center, LP as Landlord, dated May 6, 2024
31.1+	Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2+	Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1+*	Certification of Chief Executive Officer and Chief Financial Officer, as required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS+	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH+	Inline XBRL Taxonomy Extension Schema Document
101.CAL+	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF+	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB+	Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE+	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

+ 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: August 6, 2024	By:	/s/ Dinesh V. Patel, Ph.D.
		Dinesh V. Patel, Ph.D.
		President, Chief Executive Officer and Director
		(Principal Executive Officer)

Date: August 6, 2024	By:	/s/ Asif Ali
		Asif Ali
		Executive Vice President, Chief Financial Officer
		(Principal Financial and Accounting Officer)

Exhibit 10.1

THIRD AMENDMENT TO LEASE

THIS THIRD AMENDMENT TO LEASE (this “Amendment”) is entered into as of this 6th day of May, 2024, by and between BMR-PACIFIC RESEARCH CENTER LP, a Delaware limited partnership (“Landlord”), and PROTAGONIST THERAPEUTICS, INC., a Delaware corporation (“Tenant”).

RECITALS

A.WHEREAS, Landlord and Tenant are parties to that certain Lease dated as of March 6, 2017 (the “Original Lease”), as amended by that certain First Amendment to Lease dated as of January 31, 2019, and that certain Second Amendment to Lease dated as of July 2, 2021 (the “Second Amendment”) (collectively, and as the same may have been further amended, amended and restated, supplemented or modified from time to time, the “Existing Lease”), whereby Tenant leases certain premises (the “Existing Premises”) from Landlord at the Project (as defined in the Existing Lease);

B.WHEREAS, the Project contains several buildings, including (without limitation) (i) the building located at 7575 Gateway Boulevard, Newark, California (“Building 3”), (ii) the building located at 7707 Gateway Boulevard, Newark, California (“Building 5”), and (iii) the building located at 7999 Gateway Boulevard, Newark, California (“Building 7”);

C.WHEREAS, the Existing Premises consists of (i) approximately 15,686 square feet of Rentable Area on the first (1^st) floor of Building 5 (as more particularly described on Exhibit A-1 attached hereto, the “Building 5 FL-1 Lab Premises”), (ii) approximately 6,012 square feet of Rentable Area on the first (1^st) floor of Building 5 (as more particularly described on Exhibit A-2 attached hereto, the “Building 5 FL-1 Office Premises”) (with the Building 5 FL-1 Lab Premises and the Building 5 FL-1 Office Premises collectively referred to herein as the “Building 5 FL-1 Premises”), (iii) approximately 21,179 square feet of Rentable Area on the second (2^nd) floor of Building 5 (as more particularly described on Exhibit A-3 attached hereto, the “Building 5 FL-2 Premises”), and (iv) approximately 15,012 square feet of Rentable Area on the first (1^st) floor of Building 7 (as more particularly described on Exhibit A-4 attached hereto, the “Building 7 Premises”);

D.WHEREAS, Landlord desires to lease to Tenant, and Tenant desires to lease from Landlord, that certain space containing approximately 17,698 square feet of Rentable Area on the first (1^st) floor of Building 3 (as more particularly described on Exhibit A-5 attached hereto, the “Building 3 Premises”); and

E.WHEREAS, Landlord and Tenant desire to modify and amend the Existing Lease only in the respects and on the conditions hereinafter stated.

AGREEMENT

NOW, THEREFORE, Landlord and Tenant, in consideration of the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, agree as follows:

1.Definitions. For purposes of this Amendment, capitalized terms shall have the meanings ascribed to them in the Existing Lease unless otherwise defined herein. The Existing Lease, as amended by this Amendment, is referred to collectively herein as the “Lease.” From and after the date hereof, the term “Lease,” as used in the Existing Lease, shall mean the Existing Lease, as amended by this Amendment.

2.Building 3 Premises. Effective as of the Building 3 Premises Term Commencement Date (as defined below), Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Building 3 Premises.

2.1Building 3 Premises Term Commencement Date. The Term with respect to the Building 3 Premises shall commence on the date (the “Building 3 Premises Term Commencement Date”) that is the later of (a) July 1, 2024, and (b) the date that the Building 3 Premises Tenant Improvements (as defined in the Work Letter) are Substantially Complete (as defined in the Work Letter), and shall expire on the date that is 65 months after the Building 3 Premises Term Commencement Date (the “Building 3 Premises Term Expiration Date”).

2.2 Building 3 Premises Early Access Period. During the thirty (30) day period immediately preceding the Building 3 Premises Term Commencement Date (the “Early Access Period”), Landlord shall permit Tenant to access the Building 3 Premises for the sole purpose of installing Tenant’s furniture, fixtures and equipment (including IT systems and equipment) and otherwise preparing the Building 3 Premises for Tenant’s use; provided, however, that Tenant shall not be permitted to access the Building 3 Premises in a manner that delays Landlord’s completion of the Building 3 Premises Tenant Improvements. Tenant’s access of the Building 3 Premises during the Early Access Period shall be subject to all of the terms, conditions and provisions of the Lease; provided, however, Tenant’s obligations with respect to Base Rent, Operating Expenses, the Property Management Fee and utilities, in each case with respect to the Building 3 Premises only, shall not commence until the Building 3 Premises Term Commencement Date. Prior to any entry onto the Building 3 Premises, Tenant shall provide Landlord with evidence reasonably satisfactory to Landlord that all insurance coverages required under the Lease are in effect with respect to the Building 3 Premises.

2.3Condition of Building 3 Premises. Tenant acknowledges that (a) it is fully familiar with the condition of the Building 3 Premises existing as of the date of this Amendment and, notwithstanding anything to the contrary in the Lease, subject to Landlord’s obligation to complete the Building 3 Premises Tenant Improvements in accordance with Section 8 of this Amendment and the Work Letter, agrees to take the same in its condition “as is” as of the Building 3 Premises Term Commencement Date, (b) neither Landlord nor any agent of Landlord has made (and neither Landlord nor any agent of Landlord hereby makes) any representation or warranty of any kind whatsoever, express or implied, regarding the Building 3 Premises, including (without limitation) any representation or warranty with respect to the condition of the Building 3 Premises or with respect to the suitability of the Building 3 Premises for the conduct of Tenant’s business and (c) Landlord shall have no obligation to alter, repair or otherwise prepare the Building 3 Premises for Tenant’s occupancy or to pay for any improvements to the Building 3 Premises, except with respect to the Building 3 Premises Tenant Improvements and the TI Allowance (as defined below).

2.4CASp. The Building 3 Premises have not undergone inspection by a CASp. Even if not required by California law, the Building 3 Premises may be inspected by a CASp to determine whether the Building 3 Premises comply with the ADA, and Landlord may not prohibit a CASp performing such an inspection. If Tenant requests that such an inspection take place, Landlord and Tenant shall agree on the time and manner of the inspection, as well as which party will pay the cost of the inspection and the cost to remedy any defects identified by the CASp. A Certified Access Specialist can inspect the Building 3 Premises and determine whether the Building 3 Premises comply with all of the applicable construction-related accessibility standards under State law. Although State law does not require a Certified Access Specialist inspection of the Building 3 Premises, Landlord may not prohibit Tenant from obtaining a Certified Access Specialist inspection of the Building 3 Premises for the occupancy or potential occupancy of Tenant, if requested by Tenant. Landlord and Tenant shall agree on the arrangements for the time and manner of the Certified Access Specialist inspection, the payment of the fee for the Certified Access Specialist inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the Building 3 Premises.

2.5Base Rent for Building 3 Premises. Commencing as of the Building 3 Premises Term Commencement Date, Base Rent for the Building 3 Premises shall equal $3.00 per square foot of Rentable

Area (of the Building 3 Premises) per month (i.e., $53,094.00 per month). Base Rent for the Building 3 Premises shall be subject to an annual upward adjustment of 3.5% of the then-current Base Rent for the Building 3 Premises. The first such adjustment shall become effective commencing on the first (1^st) annual anniversary of the Building 3 Premises Term Commencement Date, and subsequent adjustments shall become effective on every successive annual anniversary for so long as the Lease continues in effect.

2.6Acknowledgement. Landlord and Tenant shall execute and deliver to one another written acknowledgment of the actual Building 3 Premises Term Commencement Date and Building 3 Premises Term Expiration Date within ten (10) days after Tenant takes occupancy of the Building 3 Premises, in the form attached as Exhibit B hereto. Failure to execute and deliver such acknowledgment, however, shall not affect the Building 3 Premises Term Commencement Date, the Building 3 Premises Term Expiration Date or Landlord’s or Tenant’s liability hereunder. Failure by Tenant to obtain any governmental licensing or similar governmental approval pertaining to Tenant’s operations of its business required for the Permitted Use in the Building 3 Premises shall not serve to extend the Building 3 Premises Term Commencement Date.

3.Building 7 Premises. The Term with respect to the Building 7 Premises shall expire on May 31, 2024, pursuant to the terms, conditions and provisions of the Existing Lease; provided, however, if the Building 3 Premises Term Commencement Date has not occurred on or before May 31, 2024, then the Term of the Lease with respect to the Building 7 Premises shall be automatically extended until, and the Term Expiration Date with respect to the Building 7 Premises shall be automatically amended to mean, the day immediately preceding the Building 3 Premises Term Commencement Date (with the final day of the Term with respect to the Building 7 Premises being referred to herein as the “Building 7 Premises Term Expiration Date”). The period commencing on June 1, 2024 and ending on the Building 7 Premises Term Expiration Date (if any), shall be referred to herein as the “Building 7 Premises Extension Term.”

During the thirty (30) day period immediately following the Building 7 Premises Term Expiration Date (the “Transition Period”), Tenant shall be permitted to access and enter upon the Building 7 Premises. Tenant’s access to, and entry upon, the Building 7 Premises during the Transition Period shall be subject to all of the terms, conditions and provisions of the Lease; provided, however, during the Transition Period (a) Tenant shall have no obligation to pay Base Rent, Operating Expenses, the Property Management Fee or any holdover charges with respect to the Building 7 Premises, and (b) Tenant shall only be permitted to access and enter upon the Building 7 Premises for purposes of removing Tenant’s personal property and completing Tenant’s surrender obligations under the Lease with respect to the Building 7 Premises. In the event that Tenant fails to surrender the Building 7 Premises to Landlord in accordance with all of the terms, conditions and provisions of the Lease on or before the last day of the Transition Period, Tenant shall be in holdover of the Building 7 Premises without Landlord’s consent, and subject to the terms, conditions and provisions of Section 27.2 of the Original Lease.

3.1Condition of Building 7 Premises. Tenant acknowledges that (a) it is in possession of and is fully familiar with the condition of the Building 7 Premises and, notwithstanding anything contained in the Lease to the contrary, agrees to take the same in its condition “as is” as of the first day of the Building 7 Premises Extension Term (if any), and (b) Landlord shall have no obligation to alter, repair or otherwise prepare the Building 7 Premises for Tenant’s continued occupancy or to pay for any improvements to the Building 7 Premises.

3.2Base Rent for Building 7 Premises. Commencing as of the first (1^st) day of the Building 7 Premises Extension Term (if any), Base Rent for the Building 7 Premises shall equal $54,915.09 per month. Base Rent for the Building 7 Premises shall be subject to an annual upward adjustment of 3.5% of the then-current Base Rent for the Building 7 Premises. The first such adjustment (if any) shall become effective commencing on June 1, 2025, and subsequent adjustments shall become effective on every successive annual anniversary (if any) of June 1 during the Building 7 Premises Extension Term.

4.Building 5 FL-1 Premises. The Term of the Lease with respect to the Building 5 FL-1 Premises is hereby extended until, and the Term Expiration Date with respect to the Building 5 FL-1 Premises is hereby amended to mean, the Building 3 Premises Term Expiration Date. The period commencing on June 1, 2024 and ending on the Building 3 Premises Term Expiration Date shall be referred to herein as the “Building 5 FL-1 Premises Extension Term.”

4.1Condition of Building 5 FL-1 Premises. Tenant acknowledges that (a) it is in possession of and is fully familiar with the condition of the Building 5 FL-1 Premises and, notwithstanding anything contained in the Lease to the contrary, subject to Landlord’s obligation to complete the Building 5 FL-1 Lab Premises Tenant Improvements and the Building 5 FL-1 Office Premises Tenant Improvements (as such terms are defined in the Work Letter) in accordance with Section 8 of this Amendment and the Work Letter, agrees to take the same in its condition “as is” as of the first day of the Building 5 FL-1 Premises Extension Term, and (b) Landlord shall have no obligation to alter, repair or otherwise prepare the Building 5 FL-1 Premises for Tenant’s continued occupancy or to pay for any improvements to the Building 5 FL-1 Premises, except with respect to the TI Allowance, the Building 5 FL-1 Lab Premises Tenant Improvements and the Building 5 FL-1 Office Premises Tenant Improvements.

4.2Base Rent for Building 5 FL-1 Premises. Commencing as of June 1, 2024, Base Rent for the Building 5 FL-1 Premises shall equal $3.25 per square foot of Rentable Area (of the Building 5 FL-1 Premises) per month (i.e., $70,518.50 per month). Base Rent for the Building 5 FL-1 Premises shall be subject to an annual upward adjustment of 3.5% of the then-current Base Rent for the Building 5 FL-1 Premises. The first such adjustment shall become effective June 1, 2025, and subsequent adjustments shall become effective on every successive annual anniversary of June 1 for so long as the Lease continues in effect.

4.3Building 5 FL-1 Office Premises (Rent Abatement). Tenant shall not be required to pay Base Rent, Operating Expenses, the Property Management Fee and utilities, in each case with respect to the Building 5 FL-1 Office Premises only, during the period commencing on June 1, 2024 and ending on the date that is the earlier of (a) January 31, 2025, and (b) the date that the Building 5- FL-1 Office Premises Tenant Improvements (as defined in the Work Letter) are Substantially Complete (as defined in the Work Letter).

5.Building 5 FL-2 Premises. The Term of the Lease with respect to the Building 5 FL-2 Premises is hereby extended until, and the Term Expiration Date with respect to the Building 5 FL-2 Premises is hereby amended to mean, the Building 3 Premises Term Expiration Date. The period commencing on June 1, 2024 and ending on the Building 3 Premises Term Expiration Date shall be referred to herein as the “Building 5 FL-2 Premises Extension Term.”

5.1Condition of Building 5 FL-2 Premises. Tenant acknowledges that (a) it is in possession of and is fully familiar with the condition of the Building 5 FL-2 Premises and, notwithstanding anything contained in the Lease to the contrary, subject to Landlord’s obligation to complete the Building 5 FL-2 Premises Tenant Improvements (as defined in the Work Letter) in accordance with Section 8 of this Amendment and the Work Letter, agrees to take the same in its condition “as is” as of the first day of the Building 5 FL-2 Premises Extension Term, and (b) Landlord shall have no obligation to alter, repair or otherwise prepare the Building 5 FL-2 Premises for Tenant’s continued occupancy or to pay for any improvements to the Building 5 FL-2 Premises, except with respect to the TI Allowance and the Building 5 FL-2 Premises Tenant Improvements.

5.2Base Rent for Building 5 FL-2 Premises. Commencing as of June 1, 2024, Base Rent for the Building 5 FL-2 Premises shall equal $4.25 per square foot of Rentable Area (of the Building 5 FL-2 Premises) per month (i.e., $90,010.75 per month). Base Rent for the Building 5 FL-2 Premises shall be subject

to an annual upward adjustment of 3.5% of the then-current Base Rent for the Building 5 FL-2 Premises. The first such adjustment shall become effective June 1, 2025, and subsequent adjustments shall become effective on every successive annual anniversary of June 1 for so long as the Lease continues in effect.

6.Base Rent Abatement. So long as no monetary or material non-monetary Default (beyond any applicable notice and cure period) by Tenant has occurred after the date of this Amendment, Tenant shall not be required to pay Base Rent (with respect to the entire then-current Premises) for the period commencing on January 1, 2025 and ending on May 31, 2025 (such period, the “Free Rent Period”). During the Free Rent Period, Tenant shall continue to be responsible for the payment of all of Tenant’s other Rent obligations under the Lease, including all Additional Rent with respect to the entire then-current Premises (except as otherwise set forth in Section 4.3) such as Operating Expenses, the Property Management Fee (which shall be calculated as if the Free Rent Period was not in effect), and costs of utilities. Upon the occurrence of any monetary or material non-monetary Default (beyond any applicable notice and cure period), the Free Rent Period shall immediately expire, and Tenant shall no longer be entitled to any further abatement of Base Rent pursuant to this Section. In the event of any Default that results in termination of the Lease, then, as part of the recovery to which Landlord is entitled pursuant to the Lease, and in addition to any other rights or remedies to which Landlord may be entitled pursuant to the Lease (including Article 31 of the Original Lease), at law or in equity, Landlord shall be entitled to the immediate recovery, as of the day immediately prior to such termination of the Lease, of the unamortized amount of Base Rent that Tenant would have paid had the Free Rent Period not been in effect.

7.Tenant’s Pro Rata Share. Effective as of the Building 3 Premises Term Commencement Date, (a) the term “Premises,” as used in the Lease, shall mean and refer to the Building 5 FL-1 Premises, the Building 5 FL-2 Premises and the Building 3 Premises, (b) the term “Building” as used in the Lease shall mean Building 5 and/or Building 3, as the context may require, and (c) the chart in Section 2.2 of the Original Lease is hereby deleted in its entirety and replaced with the following:

Definition or Provision	Means the Following
Approximate Rentable Area of Building 5 FL-1 Lab Premises	15,686 square feet
Approximate Rentable Area of Building 5 FL-1 Office Premises	6,012 square feet
Approximate Rentable Area of Building 5 FL-2 Premises	21,179 square feet
Approximate Rentable Area of Building 3 Premises	17,698 square feet
Approximate Rentable Area of Building 5	148,848 square feet
Approximate Rentable Area of Building 3	151,648 square feet
Approximate Rentable Area of North Campus	1,021,681 square feet
Approximate Rentable Area of Project	1,389,517 square feet
Tenant’s Pro Rata Share of Building 5	28.81%
Tenant’s Pro Rata Share of Building 3	11.67%
Tenant’s Pro Rata Share of North Campus	6.27%
Tenant’s Pro Rata Share of Project	4.36%

*Note: The changes to Rentable Area for the Building 5 FL-1 Premises and the Building 5 FL-2 Premises set forth above shall take effect upon June 1, 2024, for all purposes under the Lease.

8.Tenant Improvements. Landlord shall cause the work (the “Tenant Improvements”) described on Exhibit C attached hereto (the “Work Letter”) to be constructed in the Premises pursuant to the Work Letter at a cost to Landlord not to exceed $1,817,250.00 (based upon $30.00 per square foot of Rentable Area (as defined below) of the Building 5 FL-1 Premises, the Building 5 FL-2 Premises and the Building 3 Premises) (the “TI Allowance”).

8.1TI Allowance. The TI Allowance may be applied to the costs of (a) construction, (b) project management by Landlord (which fee shall equal 3% of the hard costs of construction of the Tenant Improvements, including the TI Allowance), (c) commissioning of mechanical, electrical and plumbing systems by a licensed, qualified commissioning agent hired by Landlord, and review of such party’s commissioning report by a licensed, qualified commissioning agent hired by Tenant, (d) space planning, architect, engineering and other related services performed by third parties unaffiliated with Tenant, (e) building permits and other taxes, fees, charges and levies by Governmental Authorities for permits or for inspections of the Tenant Improvements, and (f) costs and expenses for labor, material, equipment and fixtures. In no event shall the TI Allowance be used for (w) payments to Tenant or any affiliates of Tenant, (x) the purchase of any furniture, personal property or other non-building system equipment, (y) costs arising from any Default by Tenant of its obligations under the Lease or (z) costs that are recovered by Tenant from a third party (e.g., insurers, warrantors, or tortfeasors). Landlord shall not have any obligation to fund any unused portion of the TI Allowance after the date that is fifteen (15) months after the Building 3 Premises Term Commencement Date (such date, the “TI Deadline”), after which date Landlord’s obligation to fund any such

costs shall expire. In no event shall any unused TI Allowance entitle Tenant to a credit against Rent payable under the Lease.

8.2Construction. Tenant expressly acknowledges and agrees that Landlord shall be constructing the Tenant Improvements in the Premises during Tenant’s occupancy of the Premises for the Permitted Use. Tenant shall permit Landlord to enter the Premises at all reasonable times after reasonable advance notice under the circumstances (including during business hours) to construct the Tenant Improvements, and Tenant shall otherwise reasonably cooperate with Landlord throughout the construction process to enable Landlord to complete the Tenant Improvements in a timely and efficient manner; provided, however, the time, manner and conditions of Landlord’s access to the Building 5 FL-1 Lab Premises for the purposes of the Building 5 FL-1 Lab Premises Tenant Improvements shall be subject to Tenant’s sole but good faith discretion and prior approval. In constructing the Tenant Improvements, Landlord shall reasonably cooperate with Tenant so as to cause as little interference to Tenant as is reasonably possible; provided, however, notwithstanding anything to the contrary in the Lease, in no event shall Landlord’s construction of the Tenant Improvements in the Premises (a) cause Rent to abate under the Lease, (b) give rise to any claim by Tenant for damages or (c) constitute a forcible or unlawful entry, a detainer or an eviction of Tenant. Tenant acknowledges and agrees that, upon Landlord’s reasonable request, Tenant (not Landlord), at Tenant's sole cost and expense, shall be solely responsible for (aa) moving Tenant's property during Landlord's construction of the Tenant Improvements, (bb) moving Tenant's property back to its desired location after Landlord's completion of the Tenant Improvements and (cc) protecting any Tenant's property in the Premises during Landlord's construction of the Tenant Improvements. In the event that Tenant fails to comply with any of its obligations under this Section and such failure continues after written notice thereof and causes Landlord to incur costs in excess of the Approved Budget with respect to the Tenant Improvements, Tenant shall pay to Landlord as Additional Rent the amount of any such additional costs within thirty (30) days of receiving an invoice from Landlord and supporting documentation therefor. In addition, without limitation of anything contained in Section 28.1 of the Original Lease, Landlord shall not be liable for any damage to property, injury to persons, or damage to Tenant's business caused by the completion of the Tenant Improvements during the Term.

9.Option to Extend. Tenant shall have one (1) option to extend the Term of the Lease pursuant to the terms, conditions and provisions of Exhibit D attached hereto.

10.ROFO. Tenant shall have a right of first offer pursuant to the terms, conditions and provisions of Exhibit E attached hereto.

11.Building Top Sign (Building 5). Subject to the terms, conditions and provisions of this Article 11, Tenant shall be entitled to install, at its sole cost and expense, one (I) building top sign on the exterior facade of Building 5 in a location to be reasonably designated by Landlord (the "Building Top Sign").

11.1

The graphics, materials, size, color, design, lettering, lighting (if any), specifications and exact location of the Building Top Sign on Building 5 (collectively, the "Signage Specifications"), shall be subject to the prior written approval of Landlord, which approval shall not be unreasonably withheld, and shall otherwise comply with Landlord's signage program for the Project. In addition, the Building Top Sign and all Signage Specifications shall be subject to Tenant's receipt of all required permits and approvals required by any Governmental Authorities and any associations having jurisdiction over the Premises, and shall otherwise be subject to a11 Applicable Laws and the CC&Rs. In the event Tenant does not receive the necessary permits and approvals for the Building Top Sign, Tenant's and Landlord's rights and obligations under the remaining provisions of the Lease shall not be

affected.

11.2

All costs associated with the Building Top Sign, including (without limitation) costs of installation, design, construction, permits, maintenance and repair, shall be the sole responsibility of Tenant. Should the Building Top Sign require maintenance or repairs (as determined in Landlord's reasonable judgment), Landlord shall have the right to provide written notice thereof to Tenant and Tenant shall cause such repairs and/or maintenance to be performed within thirty (30) days after receipt of such notice from Landlord at Tenant's sole cost and expense. Should Tenant fail to perform such maintenance and repairs within the period described in the immediately preceding sentence, Landlord shall have the right to cause such work to be performed and to charge Tenant, as Additional Rent, for the cost of such work. Upon the expiration or earlier termination of the Lease, Tenant shall, at Tenant's sole cost and expense, cause the Building Top Sign to be removed from Building 5 and shall cause exterior facade of Building 5 to be restored to the condition existing prior to the placement of the Building Top Sign. If Tenant fails to remove the Building Top Sign and to restore the exterior facade of Building 5 as provided in the immediately preceding sentence within thirty (30) days following the expiration or earlier termination of the Lease, then Landlord may perform such work, and all costs and expenses incurred by Landlord in performing such work shall be reimbursed by Tenant to Landlord within ten (10) days after Tenant's receipt of invoice therefore. The immediately preceding sentence shall survive the expiration or earlier termination of the Lease.

11.3

The rights to the Building Top Sign set forth in this Article 11 shall be personal to Protagonist Therapeutics, Inc., and may not be transferred to any other entity, whether such proposed transfer is separate and apart from the Lease or in connection with a Transfer of the Lease or the Premises. Should Protagonist Therapeutics, Inc. change its name, then the Building Top Sign may be modified, at Tenant's sole cost and expense, to reflect the new name, but only if the new name does not (i) relate to an entity that is of a character, reputation, or associated with a political orientation or a faction, that is inconsistent with the quality of the Project or would otherwise reasonably offend an institutional landlord of a project comparable to the Project, taking into consideration the level and visibility of the Building Top Sign or (ii) cause Landlord to be in default under any lease or license with another tenant of the Project.

12.Broker. Tenant represents and warrants that it has not dealt with any broker or agent in the negotiation for or the obtaining of this Amendment, other than Jones Lang LaSalle (“Broker”), and agrees to reimburse, indemnify, save, defend (at Landlord’s option and with counsel reasonably acceptable to Landlord, at Tenant’s sole cost and expense) and hold harmless the Landlord Indemnitees for, from and against any and all cost or liability for compensation claimed by any such broker or agent, other than Broker, employed or engaged by it or claiming to have been employed or engaged by it. Broker is entitled to a leasing commission in connection with the making of this Amendment, and Landlord shall pay such commission to Broker pursuant to a separate agreement between Landlord and Broker, conditioned and contingent on the full execution and delivery of this Amendment and satisfaction of any other contingencies

set forth in that separate agreement. Landlord agrees to indemnify, save, defend (at Tenant’s option and with counsel reasonably acceptable to Tenant, at Landlord’s sole cost and expense) and hold harmless Tenant for, from and against any and all cost or liability for compensation claimed by any broker or agent employed or engaged by Landlord or claiming to have been employed or engaged by Landlord in connection with this Amendment.

13.No Default. Tenant represents, warrants and covenants that, to the best of Tenant’s knowledge, Landlord and Tenant are not in default of any of their respective obligations under the Existing Lease and no event has occurred that, with the passage of time or the giving of notice (or both) would constitute a default by either Landlord or Tenant thereunder. Landlord represents, warrants and covenants that, to the best of Landlord’s knowledge, Landlord and Tenant are not in default of any of their respective obligations under the Existing Lease and no event has occurred that, with the passage of time or the giving of notice (or both) would constitute a default by either Landlord or Tenant thereunder.

14.Notices. Tenant confirms that, notwithstanding anything in the Lease to the contrary, notices delivered to Tenant pursuant to the Lease should be sent to:

Protagonist Therapeutics, Inc.

7707 Gateway Boulevard, Suite 140

Newark, California 94560

Attn: Chief Financial Officer

Email: [_____________]

Landlord confirms that, notwithstanding anything in the Lease to the contrary, notices delivered to Landlord pursuant to the Lease should be sent to:

BMR-Pacific Research Center LP

4570 Executive Drive, Suite 400

San Diego, California 92121

Attn: Legal Department

Email: legalreview@biomedrealty.com

15.Effect of Amendment. Except as modified by this Amendment, the Existing Lease and all the covenants, agreements, terms, provisions and conditions thereof shall remain in full force and effect and are hereby ratified and affirmed. In the event of any conflict between the terms contained in this Amendment and the Existing Lease, the terms herein contained shall supersede and control the obligations and liabilities of the parties.

16.Successors and Assigns. Each of the covenants, conditions and agreements contained in this Amendment shall inure to the benefit of and shall apply to and be binding upon the parties hereto and their respective heirs, legatees, devisees, executors, administrators and permitted successors and assigns and sublessees. Nothing in this section shall in any way alter the provisions of the Lease restricting assignment or subletting; provided, however, notwithstanding anything in the Existing Lease to the contrary, Tenant shall have the right, without the receipt of Landlord's consent, but on prior written notice to Landlord, to license (each, a “License”) up to an aggregate of fifteen percent (15%) of the Rentable Area of the Premises to individuals or entities (each, a "Business Affiliate"), in each case subject to the following terms, conditions and provisions: (i) Tenant shall have a direct contractual business relationship with such Business Affiliate relating to a primary business of Tenant conducted in the Premises (other than such Business Affiliate's use of the Premises pursuant to the License); (ii) such Business Affiliate shall be of a

character and reputation consistent with the quality of the Building; (iii) such License shall clearly specify that it is only a contract right and that such Business Affiliate is not a subtenant and has no interest in the Premises; (iv) such Business Affiliate's use of the Premises shall be consistent with the Permitted Use; (v) such License shall be for a term that concludes before the expiration or earlier termination of the Lease; (vi) such License shall not require Landlord to recognize or to agree to not disturb any licensee or other occupant of Tenant during the continuance of any Default; and (vii) no demising walls or separate entrances shall be constructed in the Premises to accommodate any such License. No such License shall relieve Tenant from any liability under this Lease.

17.Miscellaneous. This Amendment becomes effective only upon execution and delivery hereof by Landlord and Tenant. The captions of the paragraphs and subparagraphs in this Amendment are inserted and included solely for convenience and shall not be considered or given any effect in construing the provisions hereof. All exhibits hereto are incorporated herein by reference. Submission of this instrument for examination or signature by Tenant does not constitute a reservation of or option for a lease, and shall not be effective as a lease, lease amendment or otherwise until execution by and delivery to both Landlord and Tenant.

18.Authority. Landlord and Tenant each guarantees, warrants and represents that the individual or individuals signing this Amendment have the power, authority and legal capacity to sign this Amendment on behalf of and to bind all entities, corporations, partnerships, limited liability companies, joint venturers or other organizations and entities on whose behalf such individual or individuals have signed. Landlord hereby warrants and represents that, as and to the extent required and applicable, Landlord has secured the consent to this Amendment from any lender holding a mortgage, deed of trust or lease encumbering the Building.

19.Counterparts; Facsimile and PDF Signatures. This Amendment may be executed in one or more counterparts, each of which, when taken together, shall constitute one and the same document. A facsimile or portable document format (PDF) signature on this Amendment shall be equivalent to, and have the same force and effect as, an original signature.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the date and year first above written.

LANDLORD:

BMR-PACIFIC RESEARCH CENTER LP,

a Delaware limited partnership

By: /s/ Dawn Saunders

Name: Dawn Saunders

Title: Vice President, Legal

TENANT:

PROTAGONIST THERAPEUTICS, INC.,

a Delaware corporation

By:/s/ Dinesh V Patel

Name: Dinesh V Patel, PhD

Title: President & CEO

EXHIBIT A-1

BUILDING 5 FL-1 LAB PREMISES

= Building 5 FL-1 Lab Premises

EXHIBIT A-2

BUILDING 5 FL-1 OFFICE PREMISES

= Building 5 FL-1 Office Premises

EXHIBIT A-3

BUILDING 5 FL-2 PREMISES

= Building 5 FL-2 Premises

EXHIBIT A-4

BUILDING 7 PREMISES

= Building 7 Premises

EXHIBIT A-5

BUILDING 3 PREMISES

= Building 3 Premises

EXHIBIT B

ACKNOWLEDGEMENT

This acknowledgement is entered into as of [_______], 20[__], with reference to that certain Third Amendment to Lease (the “Amendment”) dated as of [_______], 20[__], by PROTAGONIST THERAPEUTICS, INC., a Delaware corporation (“Tenant”), and BMR-PACIFIC RESEARCH CENTER LP, a Delaware limited partnership (“Landlord”). All capitalized terms used herein without definition shall have the meanings ascribed to them in the Amendment.

Landlord and Tenant hereby confirm the following:

1.	Tenant accepted possession of the Building 3 Premises for use in accordance with the Permitted Use on [_______], 20[__]. Tenant first occupied the Building 3 Premises for the Permitted Use on [_______], 20[__].

2.	The Building 3 Tenant Improvements are Substantially Complete.

3.	In accordance with the provisions of the Amendment, the Building 3 Premises Term Commencement Date is [_______], 20[__], and the Building 3 Premises Term Expiration Date is [______], 20[__].

IN WITNESS WHEREOF, Tenant and Landlord have executed this Acknowledgment as of the date first written above.

TENANT:

PROTAGONIST THERAPEUTICS, INC.,

a Delaware corporation

By:

Name:

Title:

LANDLORD:

BMR-PACIFIC RESEARCH CENTER LP,

a Delaware limited partnership

By:

Name:

Title:

EXHIBIT C

WORK LETTER

1.General Requirements.

1.1.Authorized Representatives.

(a)Landlord designates, as Landlord’s authorized representative (“Landlord’s Authorized Representative”), (i) Chris Burrus (email: Chris.Burrus@biomedrealty.com) as the person authorized to initial plans, drawings, approvals and to sign change orders pursuant to this Work Letter and (ii) an officer of Landlord as the person authorized to sign any amendments to this Work Letter or the Lease. Tenant shall not be obligated to respond to or act upon any such item until such item has been initialed or signed (as applicable) by the appropriate Landlord’s Authorized Representative. Landlord may change either Landlord’s Authorized Representative upon one (1) business day’s prior written notice to Tenant.

(b)Tenant designates Carena Spivey (email: c.spivey@ptgx-inc.com) (“Tenant’s Authorized Representative”) as the person authorized to initial and sign all plans, drawings, change orders and approvals pursuant to this Work Letter. Landlord shall not be obligated to respond to or act upon any such item until such item has been initialed or signed (as applicable) by Tenant’s Authorized Representative. Tenant may change Tenant’s Authorized Representative upon one (1) business day’s prior written notice to Landlord.

1.2.Schedule. The schedule for design and development of the Tenant Improvements, including the time periods for preparation and review of construction documents, approvals and performance, shall be in accordance with a schedule to be prepared by Landlord and reasonably approved in writing by Tenant (the “Schedule”). The Schedule shall be subject to adjustment as mutually agreed upon in writing by the parties, or as otherwise provided in this Work Letter.

1.3.Landlord’s Architects, Contractors and Consultants. The architect, engineering consultants, design team, general contractor and subcontractors responsible for the construction of the Tenant Improvements shall be selected by Landlord. As of the date of this Amendment, the initial architect (if any) is DGA, and the general contractor is Landmark. In the event that Landlord elects to change the architect or general contractor, it shall notify Tenant of such change.

2.Excess TI Costs. All Tenant Improvements shall be performed by Landlord’s contractor, at Tenant’s sole cost and expense (subject to Landlord’s obligations with respect to any portion of the TI Allowance) and in substantial accordance with the Approved Plans (as defined below), this Amendment and this Work Letter. To the extent that the total projected cost of the Tenant Improvements (as set forth in the Approved Budget) exceeds the TI Allowance (such excess, the “Excess TI Costs”), Tenant shall advance to Landlord any Excess TI Costs within ten (10) days after approval of the Approved Budget, but in any case before Landlord commences the Tenant Improvements. If Landlord is delayed in commencing the Tenant Improvements solely due to Tenant’s failure to timely pay the Excess TI Costs to Landlord, Landlord shall be entitled to a day-for-day extension to achieve Substantial Completion of the Tenant Improvements for the period of such delay. If the actual Excess TI Costs are less than the Excess TI Costs paid by Tenant to Landlord, Landlord shall return such excess to Tenant after Landlord has completed the

final accounting for the Tenant Improvements. If the cost of the Tenant Improvements (as projected by Landlord) is expected to exceed the Approved Budget, then Landlord shall notify Tenant and Tenant and Landlord shall thereafter meet and confer in good faith to reach agreement on the amount of such excess and thereafter Tenant shall deposit any additional Excess TI Costs with Landlord in the same way that Tenant deposited the initial Excess TI Costs. If Tenant fails to pay, or is late in paying, any sum due to Landlord under this Work Letter, then Landlord shall have all of the rights and remedies set forth in Section 31 of the Original Lease for nonpayment of Rent (including the right to interest and the right to assess a late charge), and for purposes of any litigation instituted with regard to such amounts the same shall be considered Rent. All material and equipment furnished by Landlord or its contractors as the Tenant Improvements shall be new or “like new,” and the Tenant Improvements shall be performed in a first-class, workmanlike manner and in accordance with Applicable Laws.

3.Tenant Improvements. The term “Tenant Improvements,” as used in this Amendment, shall mean and refer to all work described in this Work Letter, including the Building 5 FL-1 Lab Premises Tenant Improvements, the Building 5 FL-1 Office Premises Tenant Improvements, the Building 5 FL-2 Premises Tenant Improvements and the Building 3 Premises Tenant Improvements (as such terms are defined below). The term “Approved Plans” as it relates generally to the Tenant Improvements shall mean the Approved Plans described in this Section 3. Landlord shall perform and complete the Tenant Improvements in all respects (a) in substantial conformance with the Approved Plans, (b) otherwise in compliance with this Work Letter and (c) in accordance with the requirements of Landlord’s insurance carriers, and the requirements of Tenant’s insurance carriers (to the extent Tenant provides its insurance carriers’ requirements to Landlord).

3.1.The term “Building 5 FL-1 Lab Premises Tenant Improvements” shall mean and refer to the portion of the Tenant Improvements to be completed in the Building 5 FL-1 Lab Premises only. The term “Approved Plans,” as it relates to the Building 5 FL-1 Lab Premises Tenant Improvements, shall mean and refer to the plans and specifications attached to this Work Letter as Schedule 1 (the “Building 5 FL-1 Lab Premises Approved Plans”). The term “Substantial Completion” or “Substantially Complete,” as it relates to the Building 5 FL-1 Lab Premises Tenant Improvements, means that the Building 5 FL-1 Lab Premises Tenant Improvements are substantially complete in accordance with the Building 5 FL-1 Lab Premises Approved Plans, except for punch list items, which will be conclusively established by delivery of a Certificate of Substantial Completion in the form of the American Institute of Architects document G704, or a substantially similar form, executed by the project architect and the general contractor.

3.2.The term “Building 5 FL-1 Office Premises Tenant Improvements” shall mean and refer to the portion of the Tenant Improvements to be completed in the Building 5 FL-1 Office Premises only. The term “Approved Plans,” as it relates to the Building 5 FL-1 Office Premises Tenant Improvements, shall mean and refer to the plans and specifications attached to this Work Letter as Schedule 2 (the “Building 5 FL-1 Office Premises Approved Plans”). The term “Substantial Completion” or “Substantially Complete” as it relates to the Building 5 FL-1 Office Premises Tenant Improvements, means that the Building 5 FL-1 Office Premises Tenant Improvements are substantially complete in accordance with the Building 5 FL-1 Office Premises Approved Plans, except for punch list items, which will be conclusively established by delivery of a Certificate of Substantial Completion in the form of the American Institute of Architects document G704, or a substantially similar form, executed by the project architect and the general contractor.

3.3.The term “Building 5 FL-2 Premises Tenant Improvements” shall mean and refer to the portion of the Tenant Improvements to be completed in the Building 5 FL-2 Premises only. The term “Approved Plans,” as it relates to the Building 5 FL-2 Premises Tenant Improvements, shall mean and refer to the plans and specifications attached to this Work Letter as Schedule 3 (the “Building 5 FL-2 Premises Approved Plans”). The term “Substantial Completion” or “Substantially Complete” as it relates to the Building 5 FL-2 Premises Tenant Improvements, means that the Building 5 FL-2 Premises Tenant Improvements are substantially complete in accordance with the Building 5 FL-2 Premises Approved Plans, except for punch list items, which will be conclusively established by delivery of a Certificate of Substantial Completion in the form of the American Institute of Architects document G704, or a substantially similar form, executed by the project architect and the general contractor.

3.4.The term “Building 3 Premises Tenant Improvements” shall mean and refer to the portion of the Tenant Improvements to be completed in the Building 3 Premises only. The term “Approved Plans,” as it relates to the Building 3 Premises Tenant Improvements, shall mean and refer to the plans and specifications attached to this Work Letter as Schedule 4 (the “Building 3 Premises Approved Plans”). The term “Substantial Completion” or “Substantially Complete” as it relates to the Building 3 Premises Tenant Improvements, means that the Building 3 Premises Tenant Improvements are substantially complete in accordance with the Building 3 Premises Approved Plans, except for punch list items, which will be conclusively established by delivery of a Certificate of Substantial Completion in the form of the American Institute of Architects document G704, or a substantially similar form, executed by the project architect and the general contractor.

4.Changes to the Tenant Improvements. Any changes to the Approved Plans (each, a “Change”) shall be requested and instituted in accordance with the provisions of this Article 4 and shall be subject to the written approval of the non-requesting party in accordance with this Work Letter.

(a)Change Request. Either Landlord or Tenant may request Changes after Tenant approves the Approved Plans by notifying the other party thereof in writing in substantially the same form as the AIA standard change order form (a “Change Request”), which Change Request shall detail the nature and extent of any requested Changes, including (a) the Change, (b) the party required to perform the Change and (c) any modification of the Approved Plans, Approved Budget and the Schedule, as applicable, necessitated by the Change. If the nature of a Change requires revisions to the Approved Plans, then the requesting party shall be solely responsible for the cost and expense of such revisions and any increases in the cost of the Tenant Improvements as a result of such Change. Change Requests shall be signed by the requesting party’s Authorized Representative.

(b)Approval of Changes. All Change Requests shall be subject to the other party’s prior written approval, which approval shall not be unreasonably withheld, conditioned or delayed. The non-requesting party shall have five (5) business days after receipt of a Change Request to notify the requesting party in writing of the non-requesting party’s decision either to approve or object to the Change Request. The non-requesting party’s failure to respond within such five (5) business day period shall be deemed approval by the non-requesting party if such Change is not objected to within two (2) business days after delivery of a second written notice indicating that non-response shall be deemed approval of such Change Request.

5.Requests for Consent. Except as otherwise provided in this Work Letter, Tenant shall respond to all requests for consents, approvals or directions made by Landlord pursuant to this Work Letter within five (5) business days following Tenant’s receipt of such request. Tenant’s failure to respond within such five (5) business-day period shall be deemed approval by Tenant if such request is not objected to within two (2) business days after delivery of a second written notice indicating that non-response shall be deemed approval of such request.

6.TI Allowance.

6.1Application of TI Allowance. Landlord shall contribute the TI Allowance and any Excess TI Costs advanced by Tenant to Landlord toward the costs and expenses incurred in connection with the performance of the Tenant Improvements, in accordance with this Amendment. If the entire TI Allowance is not applied toward or reserved for the costs of the Tenant Improvements on or before the TI Deadline, then Tenant shall not be entitled to a credit of such unused portion of the TI Allowance.

6.2Approval of Budget for the Tenant Improvements. Notwithstanding anything to the contrary set forth elsewhere in this Work Letter, this Amendment or the Lease, Landlord shall not be permitted or have any obligation to expend any portion of the TI Allowance or proceed with the Tenant Improvements, and Tenant shall not be obligated for the payment of any costs or expenses with respect to the Tenant Improvements, until Landlord and Tenant shall have each approved in writing the budget for the Tenant Improvements (the “Approved Budget”), such approval not to be unreasonably withheld, conditioned or delayed. Tenant shall promptly reimburse Landlord for costs or expenses relating to the Tenant Improvements that exceed the amount of the TI Allowance to the extent not already paid by Tenant to Landlord as part of Excess TI Costs.

7.Punch List. Upon Substantial Completion of the Tenant Improvements, Landlord shall invite Tenant to jointly prepare a punch list with Landlord, and upon any such invitation, Tenant and Landlord shall jointly inspect the Tenant Improvements at a time designated by Landlord and prepare a list of punch list items with respect thereto, provided that no punch list item shall be deemed to delay or affect the occurrence of Substantial Completion. Landlord will use commercially reasonable diligence to promptly close out all punch list items and finalize construction and Tenant will reasonably cooperate with Landlord to provide access to the Premises at reasonable times and reasonable advance notice in connection therewith.

8.Warranties. To the extent assignable, Landlord will assign to Tenant all warranties obtained by Landlord in connection with the Tenant Improvements; provided, however, that, notwithstanding any such assignment, Landlord shall also retain the right to enforce such warranties against the applicable contractor, at Landlord’s sole option.

SCHEDULE 1

BUILDING 5 FL-1 LAB PREMISES APPROVED PLANS

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....................... pjlJ,,.;oiiiil-........ l,,,;C-J--0

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SCHEDULE 2

BUILDING 5 FL-1 OFFICE PREMISES APPROVED PLANS

SCHEDULE 3

BUILDING 5 FL-2 PREMISES APPROVED PLANS

SCHEDULE 4

BUILDING 3 PREMISES APPROVED PLANS

EXHIBIT D

OPTION TO EXTEND

1.Option to Extend Term

. Tenant shall have one (1) option (the “Option”) to extend the Term by sixty (60) months as to the entire Premises (and no less than the entire Premises) upon the following terms and conditions. Any extension of the Term pursuant to the Option shall be on all the same terms and conditions as the Lease, except as follows:

42.1.Base Rent during the Option term shall equal the then-current fair market value for comparable office and laboratory space in the Newark, California, submarket of comparable age, quality, level of finish and proximity to amenities and public transit, and containing the systems and improvements present in the Premises as of the date that Tenant gives Landlord written notice of Tenant’s election to exercise the Option (“FMV”), and shall be further increased on each annual anniversary of the Option term commencement date by a percentage determined as part of FMV. For the avoidance of doubt, comparables of sublease rent shall not be considered in Landlord’s determination of FMV. Tenant may, no earlier than twelve (12) months prior to the date the Term is then scheduled to expire, request Landlord’s estimate of the FMV for the Option term. Landlord shall, within fifteen (15) days after receipt of such request, give Tenant a written proposal of such FMV. If Tenant gives written notice to exercise the Option, such notice shall specify whether Tenant accepts Landlord’s proposed estimate of FMV. If Tenant does not accept the FMV, then the parties shall endeavor to agree upon the FMV, taking into account all relevant factors, including (a) the size of the Premises, (b) the length of the Option term, (c) rent in comparable buildings in the relevant submarket, including concessions offered to new tenants, such as free rent, tenant improvement allowances and moving allowances, (d) Tenant’s creditworthiness and (e) the quality and location of the Building and the Project. In the event that the parties are unable to agree upon the FMV within thirty (30) days after Tenant notifies Landlord that Tenant is exercising the Option, then either party may request that the same be determined as follows: a senior officer of a nationally recognized leasing brokerage firm with local knowledge of the Newark, California laboratory/research and development leasing submarket (the “Baseball Arbitrator”) shall be selected and paid for jointly by Landlord and Tenant. If Landlord and Tenant are unable to agree upon the Baseball Arbitrator, then the same shall be designated by the local chapter of the Judicial Arbitration and Mediation Services or any successor organization thereto (the “JAMS”). The Baseball Arbitrator selected by the parties or designated by JAMS shall (y) have at least ten (10) years’ experience in the leasing of laboratory/research and development space in the Newark, California submarket and (z) not have been employed or retained by either Landlord or Tenant or any affiliate of either for a period of at least ten (10) years prior to appointment pursuant hereto. Each of Landlord and Tenant shall submit to the Baseball Arbitrator and to the other party its determination of the FMV. The Baseball Arbitrator shall grant to Landlord and Tenant a hearing and the right to submit evidence. The Baseball Arbitrator shall determine which of the two (2) FMV determinations more closely represents the actual FMV. The arbitrator may not select any other FMV for the Premises other than one submitted by Landlord or Tenant. The FMV selected by the Baseball Arbitrator shall be binding upon Landlord and Tenant and shall serve as the basis for determination of Base Rent payable for the Option term. If, as of the commencement date of the Option term, the amount of Base Rent payable during the Option term shall not have been determined, then, pending such determination, Tenant shall pay Base Rent equal to the Base Rent payable with respect to the last year of the then-current Term. After the final determination of Base Rent payable for the Option term, the parties shall promptly execute a written amendment to the Lease specifying the amount of Base Rent to be paid during the Option term. Any failure of the parties to execute such amendment shall not affect the validity of the FMV determined pursuant to this Section.

42.2.The Option is not assignable separate and apart from the Lease.

42.3.The Option is conditional upon Tenant giving Landlord written notice of its election to exercise the Option at least nine (9) months prior to the end of the expiration of the then-current Term (the “Exercise Date”); provided, however, if Landlord fails to deliver to Tenant the initial determination of FMV on or before the expiration of the fifteen (15) day period set forth in Section 1.1 above, then the Exercise Date shall be extended by one (1) day for each day after the expiration of such fifteen (15) day period that Landlord fails to deliver to Tenant the initial determination of FMV. Time shall be of the essence as to Tenant’s exercise of the Option. Tenant assumes full responsibility for maintaining a record of the deadlines to exercise the Option. Tenant acknowledges that it would be inequitable to require Landlord to accept any exercise of the Option after the date provided for in this Section.

42.4.Notwithstanding anything contained in this Article to the contrary, Tenant shall not have the right to exercise the Option:

(a)During the time commencing from the date Landlord delivers to Tenant a written notice that Tenant is in monetary or material non-monetary default under any provisions of the Lease and continuing until Tenant has cured the specified default to Landlord’s reasonable satisfaction; or

(b)At any time after any monetary or material non-monetary Default as described in Article 31 of the Original Lease and continuing until Tenant cures any such Default, if such Default is susceptible to being cured; or

(c)In the event that Tenant has defaulted in the performance of its monetary or material non-monetary obligations under the Lease two (2) or more times during the six (6)-month period immediately prior to the date that Tenant intends to exercise the Option and Landlord has delivered written notice of such defaults, whether or not Tenant has cured such defaults.

The period of time within which Tenant may exercise the Option shall not be extended or enlarged by reason of Tenant’s inability to exercise such Option because of the provisions of Section 1.4.

1.5All of Tenant’s rights under the provisions of the Option shall terminate and be of no further force or effect even after Tenant’s due and timely exercise of the Option if, after such exercise, but prior to the commencement date of the new term, (a) Tenant fails to pay to Landlord a monetary obligation of Tenant for a period of twenty (20) days after written notice from Landlord to Tenant, (b) Tenant fails to commence to cure a material default (other than a monetary default) within thirty (30) days after the date Landlord gives notice to Tenant of such default or (c) Tenant has defaulted under the Lease two (2) or more times and a service or late charge under Section 31.1 of the Original Lease has become payable for any such default, whether or not Tenant has cured such defaults.

EXHIBIT E

RIGHT OF FIRST OFFER

1.Right of First Offer. Subject to any other parties’ pre-existing rights with respect to the ROFO Premises (as defined below), Tenant shall have the ongoing right of first offer (“ROFO”) as to (a) any rentable premises on the second (2^nd) floor of Building 5 that is adjacent to the Building 5 FL-2 Premises, and (b) any rentable premises on the first (1^st) floor of Building 3 that is adjacent to the Building 3 Premises (each of (a) and (b), a “ROFO Premises,” and, collectively, the “ROFO Premises”), subject to the terms, conditions and provisions of this Exhibit E. In the event Landlord is seeking a tenant for, and intends to market, or receives an offer for, a ROFO Premises, Landlord shall provide written notice thereof to Tenant (the “Notice of Marketing”), which notice shall specify the particular ROFO Premises that Landlord is marketing (which may include additional space outside of the ROFO Premises) and the terms upon which Landlord intends to market or lease such ROFO Premises. The space described in the Notice of Marketing shall be referred to herein as the “Available ROFO Premises.” To the extent that Landlord renews or extends a then-existing lease with any then-existing tenant or subtenant of any space, or enters into a new lease with such then-existing tenant or subtenant, the affected space shall not be deemed to be ROFO Premises or subject to the terms of this Exhibit E.

1.1Within ten (10) days following its receipt of a Notice of Marketing, Tenant shall advise Landlord in writing whether Tenant elects to lease all (not just a portion) of the Available ROFO Premises on the terms set forth in the Notice of Marketing. If Tenant fails to notify Landlord of Tenant’s election within such ten (10) day period, then Tenant shall be deemed to have elected not to lease the Available ROFO Premises.

1.2If Tenant timely notifies Landlord that Tenant elects to lease all of the Available ROFO Premises on the terms set forth in the Notice of Marketing, then Landlord shall lease the Available ROFO Premises to Tenant upon the terms and conditions set forth in the Notice of Marketing.

1.3If (a) Tenant notifies Landlord that Tenant elects not to lease the Available ROFO Premises, or (b) Tenant fails to notify Landlord of Tenant’s election within the ten (10)-day period described above, then Landlord shall have the right to consummate a lease of the Available ROFO Premises with any other party on any terms that Landlord desires; provided, however, in the event Landlord desires to lease the Available ROFO Premises to another party at a Net Effective Rental Rate (as defined below) that is less than ninety-five percent (95%) of the Net Effective Rental Rate set forth in Notice of Marketing, Landlord will be obligated to offer the Available ROFO Premises to Tenant on such revised terms (the “Revised Terms”) and Tenant will have three (3) business days after receipt of the Revised Terms to respond to Landlord in writing whether Tenant elects to lease the Available ROFO Premises on the Revised Terms. If Tenant timely elects to lease the Available ROFO Premises on the Revised Terms, then Landlord shall lease the Available ROFO Premises to Tenant upon the terms and conditions set forth in the Revised Terms. The term “Net Effective Rental Rate” shall mean the Base Rent rate per square foot of Rentable Area, as adjusted to reflect the value of any Base Rent abatement (amortized on a straight line basis over the life of the applicable term).

1.4Notwithstanding anything in this Article to the contrary, Tenant shall not exercise the ROFO during such period of time commencing from the date Landlord delivers to Tenant a written notice that Tenant is in monetary or material non-monetary default under any provision of the Lease. Any attempted exercise of the ROFO during a period of time in which Tenant is so in monetary or material non-

monetary default following Landlord’s written notice to Tenant that Tenant is in monetary or material non-monetary default shall be void and of no effect. In addition, Tenant shall not be entitled to exercise the ROFO if Landlord has given Tenant two (2) or more notices of monetary or material non-monetary default under the Lease, whether or not the defaults are cured, during the six (6) month period prior to the date on which Tenant seeks to exercise the ROFO.

1.5Notwithstanding anything in the Lease to the contrary, (a) Tenant shall not assign or transfer the ROFO, either separately or in conjunction with an assignment or transfer of Tenant’s interest in the Lease, without Landlord’s prior written consent, which consent Landlord may withhold in its sole and absolute discretion, and (b) the ROFO and all of the rights granted to Tenant under this Exhibit E shall be personal to Protagonist Therapeutics, Inc., and may not be exercised by a subtenant of all or any portion of the Premises or by an assignee of the Lease (other than by an assignee of the Lease that is a Tenant’s Affiliate pursuant to an Exempt Transfer).

1.6If Tenant exercises the ROFO, Landlord does not guarantee that the Available ROFO Premises will be available on the anticipated commencement date for the Lease as to such Premises due to a holdover by the then-existing occupants of the Available ROFO Premises or for any other reason beyond Landlord’s reasonable control.

1.7The ROFO and all of Tenant’s rights and Landlord’s obligations under this Exhibit E shall expire on the date that is sixty-five (65) months after the Building 3 Premises Term Commencement Date, and shall thereafter be of no further force or effect.

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Dinesh V. Patel, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Protagonist Therapeutics, Inc.:

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules13a-15(f) and 15d-15(f)) for the registrant and we have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


		/s/ Dinesh V. Patel, Ph.D.
Date: August 6, 2024		Dinesh V. Patel, Ph.D.
		President, Chief Executive Officer (Principal Executive Officer)

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Asif Ali, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Protagonist Therapeutics, Inc.:

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


		/s/ Asif Ali
Date: August 6, 2024		Asif Ali
		Executive Vice President, Chief Financial Officer (Principal Financial and Accounting Officer)

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 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, Dinesh V. Patel, Chief Executive Officer of Protagonist Therapeutics, Inc. (the “Company”), and Asif Ali, Chief Financial Officer of the Company, each hereby certify that, to the best of his knowledge:

1. The Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2024, to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: August 6, 2024		/s/ Dinesh V. Patel, Ph.D.
		Dinesh V. Patel, Ph.D.
		President, Chief Executive Officer

Date: August 6, 2024		/s/ Asif Ali
		Asif Ali
		Executive Vice President, Chief Financial Officer

This certification accompanies the Form 10-Q to which it relates, and is not deemed to be 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.

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2024	Jul. 31, 2024
Document And Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2024
Document Transition Report	false
Securities Act File Number	001-37852
Entity Registrant Name	PROTAGONIST THERAPEUTICS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	98-0505495
Entity Address, Address Line One	7707 Gateway Boulevard, Suite 140
Entity Address, City or Town	Newark
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94560-1160
City Area Code	510
Local Phone Number	474-0170
Title of 12(b) Security	Common Stock
Trading Symbol	PTGX
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		58,904,585
Entity Central Index Key	0001377121
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Amendment Flag	false

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 355,643	$ 186,727
Marketable securities	208,354	154,890
Receivable from collaboration partner	43	10,000
Prepaid expenses and other current assets	6,885	3,960
Total current assets	570,925	355,577
Marketable securities - noncurrent	31,447
Property and equipment, net	1,780	1,195
Restricted cash - noncurrent	225	225
Operating lease right-of-use asset	10,252	954
Total assets	614,629	357,951
Current liabilities:
Accounts payable	3,629	772
Payable to collaboration partner		3
Accrued expenses and other payables	15,175	19,358
Deferred revenue - current	20,124
Income taxes payable	2,650
Operating lease liability - current		1,141
Total current liabilities	41,578	21,274
Deferred revenue - noncurrent	20,756
Operating lease liability - noncurrent	10,971
Total liabilities	73,305	21,274
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 and 90,000,000 shares authorized as of June 30, 2024 and December 31, 2023, respectively; 58,762,063 and 57,708,613 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively	1	1
Additional paid-in capital	980,558	952,491
Accumulated other comprehensive loss	(249)	(105)
Accumulated deficit	(438,986)	(615,710)
Total stockholders' equity	541,324	336,677
Total liabilities and stockholders' equity	$ 614,629	$ 357,951

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2024	Dec. 31, 2023
Consolidated Balance Sheets
Preferred stock, par value	$ 0.00001	$ 0.00001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.00001	$ 0.00001
Common stock, shares authorized	180,000,000	90,000,000
Common stock, shares issued	58,762,063	57,708,613
Common stock, shares outstanding	58,762,063	57,708,613

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Consolidated Statements of Operations
License and collaboration revenue	$ 4,167		$ 259,120	$ 0
Revenue from Contract with Customer, Product and Service [Extensible Enumeration]	License and Service [Member]	License and Service [Member]	License and Service [Member]	License and Service [Member]
Operating expenses:
Research and development	$ 33,520	$ 33,182	$ 67,254	$ 60,598
General and administrative	9,440	9,172	24,350	17,777
Total operating expenses	42,960	42,354	91,604	78,375
Income (loss) from operations	(38,793)	(42,354)	167,516	(78,375)
Interest income	7,404	3,913	11,780	6,404
Other income (expense), net	97	(19)	78	(214)
Income (loss) before income tax (expense) benefit	(31,292)	(38,460)	179,374	(72,185)
Income tax expense (benefit)	676	0	(2,650)	0
Net income (loss)	$ (30,616)	$ (38,460)	$ 176,724	$ (72,185)
Net income (loss) per share, basic	$ (0.50)	$ (0.68)	$ 2.89	$ (1.34)
Net income (loss) per share, diluted	$ (0.50)	$ (0.68)	$ 2.77	$ (1.34)
Weighted-average shares used to compute net income (loss) per share, basic	61,305,289	56,775,742	61,080,489	53,691,965
Weighted-average shares used to compute net income (loss) per share, diluted	61,305,289	56,775,742	63,909,633	53,691,965

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Consolidated Statements of Comprehensive Loss
Net income (loss)	$ (30,616)	$ (38,460)	$ 176,724	$ (72,185)
Other comprehensive income (loss):
Unrealized loss on marketable securities	(20)	(76)	(144)	(33)
Gain on translation of foreign operations				194
Comprehensive income (loss)	$ (30,636)	$ (38,536)	$ 176,580	$ (72,024)

Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock [Member] At-the-market offering	Common Stock [Member] Public offerings	Common Stock [Member]	Additional Paid-in Capital [Member] At-the-market offering	Additional Paid-in Capital [Member] Public offerings	Additional Paid-in Capital [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]	At-the-market offering	Public offerings	Total
Balance, Beginning at Dec. 31, 2022						$ 752,722	$ (359)	$ (536,755)			$ 215,608
Balance, Beginning (in shares) at Dec. 31, 2022			49,339,252
Balance, Ending at Mar. 31, 2023			$ 1			786,768	(122)	(570,480)			216,167
Balance, Ending (in shares) at Mar. 31, 2023			51,440,503
Balance, Beginning at Dec. 31, 2022						752,722	(359)	(536,755)			215,608
Balance, Beginning (in shares) at Dec. 31, 2022			49,339,252
Increase (Decrease) in Stockholders' Equity
Issuance of common stock, net of issuance costs	$ 1			$ 24,301	$ 107,790				$ 24,302	$ 107,790
Issuance of common stock, net of issuance costs (in shares)	1,749,199	5,750,000
Issuance of common stock under equity incentive and employee stock purchase plans						3,234					3,234
Issuance of common stock under equity incentive and employee stock purchase plans (in shares)			687,697
Shares withheld for net settlement of tax withholding upon vesting of restricted stock units						(769)					(769)
Shares withheld for net settlement of tax withholding upon vesting of restricted stock units (in shares)			(31,963)
Stock-based compensation expense						15,927					15,927
Other comprehensive income (loss)							161				161
Net income (loss)								(72,185)			(72,185)
Balance, Ending at Jun. 30, 2023			$ 1			903,205	(198)	(608,940)			294,068
Balance, Ending (in shares) at Jun. 30, 2023			57,494,185
Balance, Beginning at Mar. 31, 2023			$ 1			786,768	(122)	(570,480)			216,167
Balance, Beginning (in shares) at Mar. 31, 2023			51,440,503
Increase (Decrease) in Stockholders' Equity
Issuance of common stock, net of issuance costs				$ 107,790					$ 107,790
Issuance of common stock, net of issuance costs (in shares)	5,750,000
Issuance of common stock under equity incentive and employee stock purchase plans						973					973
Issuance of common stock under equity incentive and employee stock purchase plans (in shares)			329,486
Shares withheld for net settlement of tax withholding upon vesting of restricted stock units						(669)					(669)
Shares withheld for net settlement of tax withholding upon vesting of restricted stock units (in shares)			(25,804)
Stock-based compensation expense						(8,343)					(8,343)
Other comprehensive income (loss)							(76)				(76)
Net income (loss)								(38,460)			(38,460)
Balance, Ending at Jun. 30, 2023			$ 1			903,205	(198)	(608,940)			294,068
Balance, Ending (in shares) at Jun. 30, 2023			57,494,185
Balance, Beginning at Dec. 31, 2023			$ 1			952,491	(105)	(615,710)			$ 336,677
Balance, Beginning (in shares) at Dec. 31, 2023			57,708,613								57,708,613
Increase (Decrease) in Stockholders' Equity
Issuance of common stock under equity incentive and employee stock purchase plans						10,371					$ 10,371
Issuance of common stock under equity incentive and employee stock purchase plans (in shares)			989,254
Shares withheld for net settlement of tax withholding upon vesting of restricted stock units						(600)					$ (600)
Shares withheld for net settlement of tax withholding upon vesting of restricted stock units (in shares)			(20,793)
Issuance of common stock upon exercise of Pre-Funded Warrants (in shares)			84,989								84,992
Issuance of common stock upon exercise of Pre-Funded Warrants (in shares)			84,989								84,992
Stock-based compensation expense						18,296					$ 18,296
Other comprehensive income (loss)							(144)				(144)
Net income (loss)								176,724			176,724
Balance, Ending at Jun. 30, 2024			$ 1			980,558	(249)	(438,986)			$ 541,324
Balance, Ending (in shares) at Jun. 30, 2024			58,762,063								58,762,063
Balance, Beginning at Mar. 31, 2024			$ 1			969,042	(229)	(408,370)			$ 560,444
Balance, Beginning (in shares) at Mar. 31, 2024			58,600,787
Increase (Decrease) in Stockholders' Equity
Issuance of common stock under equity incentive and employee stock purchase plans						2,572					$ 2,572
Issuance of common stock under equity incentive and employee stock purchase plans (in shares)			161,276
Issuance of common stock upon exercise of Pre-Funded Warrants (in shares)			84,989								84,992
Issuance of common stock upon exercise of Pre-Funded Warrants (in shares)			84,989								84,992
Stock-based compensation expense						8,944					$ 8,944
Other comprehensive income (loss)							(20)				(20)
Net income (loss)								(30,616)			(30,616)
Balance, Ending at Jun. 30, 2024			$ 1			$ 980,558	$ (249)	$ (438,986)			$ 541,324
Balance, Ending (in shares) at Jun. 30, 2024			58,762,063								58,762,063

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash Flows from Operating Activities
Net income (loss)	$ 176,724	$ (72,185)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Stock-based compensation	18,296	15,927
Operating lease right-of-use asset amortization	1,235	1,168
Depreciation	477	485
Accretion of discount on marketable securities	(3,277)	(2,215)
Other		194
Changes in operating assets and liabilities:
Receivable from collaboration partner	9,957	(29)
Prepaid expenses and other assets	(2,925)	2,211
Accounts payable	2,627	933
Payable to collaboration partner	(3)	(59)
Accrued expenses and other payables	(4,229)	(5,661)
Income taxes payable	2,650
Deferred revenue	40,880
Operating lease liability	(1,219)	(1,354)
Net cash provided by (used in) operating activities	241,193	(60,585)
Cash Flows from Investing Activities
Purchase of marketable securities	(240,627)	(34,122)
Proceeds from maturities of marketable securities	158,849	69,896
Purchases of property and equipment	(270)	(186)
Net cash (used in) provided by investing activities	(82,048)	35,588
Cash Flows from Financing Activities
Proceeds from issuance of common stock upon exercise of stock options and purchases under employee stock purchase plan	10,371	3,234
Tax withholding payments related to net settlement of restricted stock units	(600)	(769)
Proceeds from public offering of common stock, net of issuance costs		107,868
Proceeds from at-the-market offering, net of issuance costs		24,302
Net cash provided by financing activities	9,771	134,635
Net increase in cash, cash equivalents and restricted cash	168,916	109,638
Cash, cash equivalents and restricted cash, beginning of period	186,952	125,969
Cash, cash equivalents and restricted cash, end of period	355,868	235,607
Supplemental Disclosure of Non-Cash Financing and Investing Information:
Right-of-use asset obtained in exchange for lease obligation	10,511
Leasehold improvements obtained under tenant improvement allowance	516
Purchases of property and equipment in accounts payable and accrued liabilities	$ 275	61
Issuance costs related to common stock offering included in accrued liabilities and other payables		$ 78

Organization and Description of Business

6 Months Ended

Jun. 30, 2024

Organization and Description of Business

Organization and Description of Business

PROTAGONIST THERAPEUTICS, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1.Organization and Description of Business

Liquidity

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2024

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

Principles of Consolidation

Use of Estimates

Cash as Reported in Condensed Consolidated Statements of Cash Flows

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


	June 30,
	2024		2023
Cash and cash equivalents	$	355,643	$	235,382
Restricted cash - noncurrent		225		225
Total cash reported on condensed consolidated statements of cash flows	$	355,868	$	235,607

Stock-Based Compensation Expense

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

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

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


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Research and development	$	5,097	$	4,809	$	10,385	$	9,391
General and administrative		3,847		3,534		7,911		6,536
Total stock-based compensation expense	$	8,944	$	8,343	$	18,296	$	15,927

Significant Accounting Policies

Collaborative Arrangements

Recently Adopted Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted as of June 30, 2024

License and Collaboration Agreements

6 Months Ended

Jun. 30, 2024

License and Collaboration Agreement..

License and Collaboration Agreements

License and Collaboration Agreements

Note 3. License and Collaboration Agreements

Takeda Collaboration Agreement

Upcoming potential development and regulatory milestones under the Takeda Collaboration Agreement include:

●

$25.0 million upon successful achievement of the primary endpoint in the Phase 3 VERIFY clinical trial for rusfertide in PV; and

●

$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).

JNJ License and Collaboration Agreement

Upcoming potential development and regulatory milestones include:

●

$115.0 million upon a Phase 3 clinical trial for a second-generation compound for any indication meeting its primary clinical endpoint;

●

$35.0 million upon the filing of an NDA for a second-generation compound with the FDA;

●

$50.0 million upon FDA approval of an NDA for a second-generation compound; and

●

$15.0 million upon the dosing of the third patient in a Phase 3 clinical trial for a second-generation compound for a second indication.

Revenue Recognition

For the three and six months ended June 30, 2023, no license and collaboration revenue was recognized.

Fair Value Measurements

6 Months Ended

Jun. 30, 2024

Fair Value Measurements

Fair Value Measurements

Note 4. Fair Value Measurements

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

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


	June 30, 2024
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	110,705	$	—	$	—	$	110,705
Certificates of deposit		—		20,625		—		20,625
U.S. Treasury and agency securities		—		168,176		—		168,176
Commercial paper		—		231,658		—		231,658
Corporate debt securities		—		56,628		—		56,628
Total financial assets	$	110,705	$	477,087	$	—	$	587,792


	December 31, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	19,212	$	—	$	—	$	19,212
Certificates of deposit		—		13,004		—		13,004
U.S. Treasury and agency securities		—		145,085		—		145,085
Commercial paper		—		130,296		—		130,296
Corporate debt securities		—		7,672		—		7,672
Total financial assets	$	19,212	$	296,057	$	—	$	315,269

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.

Cash Equivalents and Marketable Securities

6 Months Ended

Jun. 30, 2024

Cash Equivalents and Marketable Securities

Cash Equivalents and Marketable Securities

Note 5. Cash Equivalents and Marketable Securities

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


	June 30, 2024
	Amortized		Gross Unrealized
	Cost		Gains		Losses		Fair Value
Money market funds	$	110,705	$	—	$	—	$	110,705
Certificates of deposit		20,622		7		(4)		20,625
U.S. Treasury and agency securities		168,160		37		(21)		168,176
Commercial paper		231,791		—		(133)		231,658
Corporate debt securities		56,652		10		(34)		56,628
Total cash equivalents and marketable securities	$	587,930	$	54	$	(192)	$	587,792
Classified as:
Cash equivalents							$	347,991
Marketable securities - current								208,354
Marketable securities - noncurrent								31,447
Total cash equivalents and marketable securities							$	587,792


	December 31, 2023
	Amortized		Gross Unrealized
	Cost		Gains		Losses		Fair Value
Money market funds	$	19,212	$	—	$	—	$	19,212
Certificates of deposit		12,998		6		—		13,004
U.S. Treasury and agency securities		145,024		63		(2)		145,085
Commercial paper		130,351		5		(60)		130,296
Corporate debt securities		7,678		—		(6)		7,672
Total cash equivalents and marketable securities	$	315,263	$	74	$	(68)	$	315,269
Classified as:
Cash equivalents							$	160,379
Marketable securities								154,890
Total cash equivalents and marketable securities							$	315,269

Balance Sheet Components

6 Months Ended

Jun. 30, 2024

Balance Sheet Components

Balance Sheet Components

Note 6. Balance Sheet Components

Prepaid Expenses and Other Current Assets

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


	June 30,		December 31,
	2024		2023
Prepaid clinical and research related expenses	$	2,872	$	649
Prepaid insurance		880		1,410
Prepaid licenses		731		529
Other prepaid expenses		1,075		1,040
Other receivable		1,327		332
Prepaid expenses and other current assets	$	6,885	$	3,960

Property and Equipment, Net

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


	June 30,		December 31,
	2024		2023
Laboratory equipment	$	5,625	$	5,323
Furniture and computer equipment		1,316		1,143
Leasehold improvements		1,536		963
Total property and equipment		8,477		7,429
Accumulated depreciation		(6,697)		(6,234)
Property and equipment, net	$	1,780	$	1,195

Accrued Expenses and Other Payables

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


	June 30,		December 31,
	2024		2023
Accrued clinical and research related expenses	$	8,821	$	11,841
Accrued employee related expenses		5,446		6,786
Accrued professional service fees		796		632
Other		112		99
Total accrued expenses and other payables	$	15,175	$	19,358

Lease

6 Months Ended

Jun. 30, 2024

Lease

Lease

Note 7. Lease

Balance sheet information related to the Company’s operating lease consisted of the following (dollars in thousands):


	June 30,		December 31,
Operating Leases:	2024		2023
Operating lease right-of-use asset	$	10,252	$	954

Operating lease liability - current	$	—	$	1,141
Operating lease liability - noncurrent		10,971		—
Total operating lease liabilities	$	10,971	$	1,141

Weighted-average remaining lease term (years)		5.4		0.4
Weighted-average discount rate		5.7%		10.4%

Other information related to the Company’s operating lease consisted of the following (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Operating lease cost	$	738	$	584	$	1,321	$	1,167
Short-term rent expense		51		—		51		—
Less: Sublease income		—		(34)		(34)		(79)
Total lease expense	$	789	$	550	$	1,338	$	1,088

Supplemental cash flow information consisted of the following (in thousands):


	Six Months Ended
	June 30,
	2024		2023
Operating cash flow used by operating leases	$	(1,219)	$	(1,354)
New operating lease asset obtained in exchange for operating lease liability	$	10,511	$	—

Future minimum lease payments required under lease obligations as of June 30, 2024 consisted of the following (in thousands):


Year Ending December 31:	Amount
Remainder of 2024	$	446
2025		1,121
2026		2,785
2027		2,882
2028		2,983
Thereafter		2,825
Total future minimum lease payments		13,042
Less: Imputed interest		(2,071)
Present value of lease liabilities	$	10,971

Stockholders' Equity

6 Months Ended

Jun. 30, 2024

Stockholders' Equity

Stockholders' Equity

Note 8. Stockholders’ Equity

Shares of Common Stock Authorized for Issuance

Public Offering

ATM Offering

Pre-Funded Warrants

Warrants met the criteria for equity classification and the net proceeds from the transaction were recorded as a credit to additional paid-in capital.

Income Taxes

6 Months Ended

Jun. 30, 2024

Income Taxes

Income Taxes

Note 9. Income Taxes

Net Income (Loss) per Share

6 Months Ended

Jun. 30, 2024

Net Income (Loss) per Share

Net Income (Loss) per Share

Note 10. Net Income (Loss) per Share

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


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Numerator:
Net income (loss)	$	(30,616)	$	(38,460)	$	176,724	$	(72,185)
Denominator:
Weighted-average shares of common stock, basic		61,305,289		56,775,742		61,080,489		53,691,965
Dilutive effect of common stock equivalents		—		—		2,829,144		—
Weighted-average shares of common stock, dilutive		61,305,289		56,775,742		63,909,633		53,691,965
Net income (loss) per share of common stock
Basic net income (loss) per share of common stock	$	(0.50)	$	(0.68)	$	2.89	$	(1.34)
Diluted net income (loss) per share of common stock	$	(0.50)	$	(0.68)	$	2.77	$	(1.34)

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (30,616)	$ (38,460)	$ 176,724	$ (72,185)

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Jun. 30, 2024 shares
Trading Arrangements, by Individual
Material Terms of Trading Arrangement	On April 22, 2024, Dinesh V. Patel, our Chief Executive Officer and member of our Board, adopted a trading plan intended to satisfy Rule 10b5-1(c) to sell up to 300,000 shares of the Company’s common stock through July 31, 2025, or such earlier date when all transactions under the trading plan are completed, subject to certain conditions. During the fiscal quarter ended June 30, 2024, no other 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).
Dinesh V. Patel [Member]
Trading Arrangements, by Individual
Name	Dinesh V. Patel
Title	Chief Executive Officer and member of our Board
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	Apr. 22, 2024
Aggregate Available	300,000

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2024

Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

Principles of Consolidation

Use of Estimates

Cash as Reported in Consolidated Statements of Cash Flows

Cash as Reported in Condensed Consolidated Statements of Cash Flows

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


	June 30,
	2024		2023
Cash and cash equivalents	$	355,643	$	235,382
Restricted cash - noncurrent		225		225
Total cash reported on condensed consolidated statements of cash flows	$	355,868	$	235,607

Stock-based Compensation Expense

Stock-Based Compensation Expense

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

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

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


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Research and development	$	5,097	$	4,809	$	10,385	$	9,391
General and administrative		3,847		3,534		7,911		6,536
Total stock-based compensation expense	$	8,944	$	8,343	$	18,296	$	15,927

Collaborative Arrangements

Recently Adopted Accounting Pronouncement

Recently Adopted Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted as of June 30, 2024

Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2024

Summary of Significant Accounting Policies

Schedule of cash as reported in the condensed consolidated statements of cash flows

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


	June 30,
	2024		2023
Cash and cash equivalents	$	355,643	$	235,382
Restricted cash - noncurrent		225		225
Total cash reported on condensed consolidated statements of cash flows	$	355,868	$	235,607

Schedule of stock-based compensation expense

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


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Research and development	$	5,097	$	4,809	$	10,385	$	9,391
General and administrative		3,847		3,534		7,911		6,536
Total stock-based compensation expense	$	8,944	$	8,343	$	18,296	$	15,927

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2024

Fair Value Measurements

Schedule of fair value of financial assets

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


	June 30, 2024
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	110,705	$	—	$	—	$	110,705
Certificates of deposit		—		20,625		—		20,625
U.S. Treasury and agency securities		—		168,176		—		168,176
Commercial paper		—		231,658		—		231,658
Corporate debt securities		—		56,628		—		56,628
Total financial assets	$	110,705	$	477,087	$	—	$	587,792


	December 31, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	19,212	$	—	$	—	$	19,212
Certificates of deposit		—		13,004		—		13,004
U.S. Treasury and agency securities		—		145,085		—		145,085
Commercial paper		—		130,296		—		130,296
Corporate debt securities		—		7,672		—		7,672
Total financial assets	$	19,212	$	296,057	$	—	$	315,269

Cash Equivalents and Marketable Securities (Tables)

6 Months Ended

Jun. 30, 2024

Cash Equivalents and Marketable Securities

Schedule of cash equivalents and marketable securities

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


	June 30, 2024
	Amortized		Gross Unrealized
	Cost		Gains		Losses		Fair Value
Money market funds	$	110,705	$	—	$	—	$	110,705
Certificates of deposit		20,622		7		(4)		20,625
U.S. Treasury and agency securities		168,160		37		(21)		168,176
Commercial paper		231,791		—		(133)		231,658
Corporate debt securities		56,652		10		(34)		56,628
Total cash equivalents and marketable securities	$	587,930	$	54	$	(192)	$	587,792
Classified as:
Cash equivalents							$	347,991
Marketable securities - current								208,354
Marketable securities - noncurrent								31,447
Total cash equivalents and marketable securities							$	587,792


	December 31, 2023
	Amortized		Gross Unrealized
	Cost		Gains		Losses		Fair Value
Money market funds	$	19,212	$	—	$	—	$	19,212
Certificates of deposit		12,998		6		—		13,004
U.S. Treasury and agency securities		145,024		63		(2)		145,085
Commercial paper		130,351		5		(60)		130,296
Corporate debt securities		7,678		—		(6)		7,672
Total cash equivalents and marketable securities	$	315,263	$	74	$	(68)	$	315,269
Classified as:
Cash equivalents							$	160,379
Marketable securities								154,890
Total cash equivalents and marketable securities							$	315,269

Balance Sheet Components (Tables)

6 Months Ended

Jun. 30, 2024

Balance Sheet Components

Summary of prepaid expenses and other current assets

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


	June 30,		December 31,
	2024		2023
Prepaid clinical and research related expenses	$	2,872	$	649
Prepaid insurance		880		1,410
Prepaid licenses		731		529
Other prepaid expenses		1,075		1,040
Other receivable		1,327		332
Prepaid expenses and other current assets	$	6,885	$	3,960

Summary of property and equipment net

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


	June 30,		December 31,
	2024		2023
Laboratory equipment	$	5,625	$	5,323
Furniture and computer equipment		1,316		1,143
Leasehold improvements		1,536		963
Total property and equipment		8,477		7,429
Accumulated depreciation		(6,697)		(6,234)
Property and equipment, net	$	1,780	$	1,195

Schedule of accrued expenses and other payables

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


	June 30,		December 31,
	2024		2023
Accrued clinical and research related expenses	$	8,821	$	11,841
Accrued employee related expenses		5,446		6,786
Accrued professional service fees		796		632
Other		112		99
Total accrued expenses and other payables	$	15,175	$	19,358

Lease (Tables)

6 Months Ended

Jun. 30, 2024

Lease

Schedule of balance sheet information

Balance sheet information related to the Company’s operating lease consisted of the following (dollars in thousands):


	June 30,		December 31,
Operating Leases:	2024		2023
Operating lease right-of-use asset	$	10,252	$	954

Operating lease liability - current	$	—	$	1,141
Operating lease liability - noncurrent		10,971		—
Total operating lease liabilities	$	10,971	$	1,141

Weighted-average remaining lease term (years)		5.4		0.4
Weighted-average discount rate		5.7%		10.4%

Schedule of lease cost information

Other information related to the Company’s operating lease consisted of the following (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Operating lease cost	$	738	$	584	$	1,321	$	1,167
Short-term rent expense		51		—		51		—
Less: Sublease income		—		(34)		(34)		(79)
Total lease expense	$	789	$	550	$	1,338	$	1,088

Schedule of cash flow information

Supplemental cash flow information consisted of the following (in thousands):


	Six Months Ended
	June 30,
	2024		2023
Operating cash flow used by operating leases	$	(1,219)	$	(1,354)
New operating lease asset obtained in exchange for operating lease liability	$	10,511	$	—

Schedule of minimum lease payments and lease liabilities

Future minimum lease payments required under lease obligations as of June 30, 2024 consisted of the following (in thousands):


Year Ending December 31:	Amount
Remainder of 2024	$	446
2025		1,121
2026		2,785
2027		2,882
2028		2,983
Thereafter		2,825
Total future minimum lease payments		13,042
Less: Imputed interest		(2,071)
Present value of lease liabilities	$	10,971

Net Income (Loss) per Share (Tables)

6 Months Ended

Jun. 30, 2024

Net Income (Loss) per Share

Schedule of computation of the basic and diluted net loss per share attributable to common stockholders

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


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Numerator:
Net income (loss)	$	(30,616)	$	(38,460)	$	176,724	$	(72,185)
Denominator:
Weighted-average shares of common stock, basic		61,305,289		56,775,742		61,080,489		53,691,965
Dilutive effect of common stock equivalents		—		—		2,829,144		—
Weighted-average shares of common stock, dilutive		61,305,289		56,775,742		63,909,633		53,691,965
Net income (loss) per share of common stock
Basic net income (loss) per share of common stock	$	(0.50)	$	(0.68)	$	2.89	$	(1.34)
Diluted net income (loss) per share of common stock	$	(0.50)	$	(0.68)	$	2.77	$	(1.34)

Organization and Description of Business - Liquidity (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2024 USD ($) segment	Dec. 31, 2023 USD ($)
Organization and Description of Business
Number of operating segments \| segment	1
Net losses from operations since inception
Cash, cash equivalents and marketable securities	$ 595,400
Accumulated deficit	$ (438,986)	$ (615,710)

Summary of Significant Accounting Policies - Restricted Cash and Cash and Cash Equivalents (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023	Jun. 30, 2023	Dec. 31, 2022
Aggregate amounts of cash and cash equivalents and the restricted cash
Cash and cash equivalents	$ 355,643	$ 186,727	$ 235,382
Restricted cash - noncurrent	225	225	225
Total cash reported on consolidated statements of cash flows	$ 355,868	$ 186,952	$ 235,607	$ 125,969

Summary of Significant Accounting Policies - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 8,944	$ 8,343	$ 18,296	$ 15,927
Research and Development Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	5,097	4,809	10,385	9,391
General and Administrative Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 3,847	$ 3,534	$ 7,911	$ 6,536

License and Collaboration Agreements (Details) - USD ($)	1 Months Ended				3 Months Ended			6 Months Ended
	Apr. 30, 2024	Mar. 31, 2024	Jan. 31, 2024	Jun. 30, 2022	Jun. 30, 2024	Dec. 31, 2023	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
License and collaboration revenue					$ 4,167,000			$ 259,120,000	$ 0
Revenue from Contract with Customer, Product and Service [Extensible Enumeration]					License And Service		License And Service	License And Service	License And Service
Recognized revenue from deferred revenue contract liability					$ 4,200,000		$ 0	$ 0	$ 0
Contract with customer, deferred revenue contract liability					40,900,000			40,900,000
Janssen \| Restated Agreement \| Iconic Total Phase
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
License and collaboration revenue						$ 50,000,000.0
Janssen \| Restated Agreement \| Anthem Phase Two B Member
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
License and collaboration revenue						$ 10,000,000.0
Janssen \| Restated Agreement \| Minimum [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Percentage of royalties on net product sales				6.00%
Janssen \| Restated Agreement \| Maximum [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Percentage of royalties on net product sales				10.00%
Janssen \| Restated Agreement \| License And Service \| Phase 3 clinical trial for a second-generation compound for any indication
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Upcoming potential development milestones					115,000,000.0			115,000,000.0
Janssen \| Restated Agreement \| License And Service \| Filing of New Drug Application ("NDA") for second-generation compound with the U.S. Food and Drug Administration
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Upcoming potential development milestones					35,000,000.0			35,000,000.0
Janssen \| Restated Agreement \| License And Service \| FDA approval of NDA for second-generation compound
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Upcoming potential development milestones					50,000,000.0			50,000,000.0
Janssen \| Restated Agreement \| License And Service \| Dosing Of Third Patient In Phase 3 Clinical Trial For Second Generation Compound For A Second Indication [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Upcoming potential development milestones					15,000,000.0			15,000,000.0
Janssen \| License and collaboration agreement
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Proceeds from Milestone Payments								172,500,000
Takeda Pharmaceuticals \| License And Service
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Profit (loss) share on U.S. profits and losses	50.00%
Takeda Pharmaceuticals \| Development Services
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Upfront payment			$ 45,900,000
Revenue recognized								5,000,000.0
Takeda Pharmaceuticals \| License and collaboration agreement
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Final transaction price			300,000,000.0
Eligible amount received	$ 300,000,000.0
Revenue recognized		$ 254,100,000			$ 4,200,000			$ 259,100,000
Takeda Pharmaceuticals \| License and collaboration agreement \| Phase Three Clinical Trial For Rusfertide In PV [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Upcoming Potential Development and Regulatory Milestones Payments			25,000,000.0
Takeda Pharmaceuticals \| License and collaboration agreement \| Food And Drug Administration Approval Of New Drug Application For Rusfertide In PV [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Upcoming Potential Development and Regulatory Milestones Payments			50,000,000.0
Takeda Pharmaceuticals \| License and collaboration agreement \| Food And Drug Administration Approval Of New Drug Application For Rusfertide In PV [Member] \| Exercise of Full Opt-out Right [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Upcoming Potential Development and Regulatory Milestones Payments			$ 75,000,000.0
Takeda Pharmaceuticals \| License and collaboration agreement \| Minimum [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Percentage of royalties on ex-U.S. net sales	10.00%		14.00%
Takeda Pharmaceuticals \| License and collaboration agreement \| Maximum [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Collaborative Arrangement Milestone Additional Payment Eligible To Receive			$ 200,000,000
Collaborative arrangement, milestone payment, eligible to receive	$ 330,000,000.0
Percentage of royalties on ex-U.S. net sales	17.00%		29.00%
Takeda Pharmaceuticals \| License and collaboration agreement \| Maximum [Member] \| Exercise of Full Opt-out Right [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Collaborative arrangement, milestone payment, eligible to receive			$ 975,000,000
Takeda Pharmaceuticals \| License and collaboration agreement \| Maximum [Member] \| Exercise of Full Opt-out Right During The Initial Opt-out Period (Member)
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Collaborative arrangement, milestone payment, eligible to receive			200,000,000
Takeda Pharmaceuticals \| License and collaboration agreement \| License and Maintenance
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Upfront payment			$ 254,100,000

Fair Value Measurements (Details) - Fair Value, Recurring [Member] - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	$ 587,792	$ 315,269
Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	110,705	19,212
Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	20,625	13,004
Commercial Paper [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	231,658	130,296
Corporate Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	56,628	7,672
U.S. Treasury and agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	168,176	145,085
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	110,705	19,212
Fair Value, Inputs, Level 1 [Member] \| Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	110,705	19,212
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	477,087	296,057
Fair Value, Inputs, Level 2 [Member] \| Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	20,625	13,004
Fair Value, Inputs, Level 2 [Member] \| Commercial Paper [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	231,658	130,296
Fair Value, Inputs, Level 2 [Member] \| Corporate Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	56,628	7,672
Fair Value, Inputs, Level 2 [Member] \| U.S. Treasury and agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	$ 168,176	$ 145,085

Cash Equivalents and Marketable Securities - Cash Equivalents and Marketable Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Cash Equivalents and Marketable Securities
Total cash equivalents and marketable securities, Amortized Cost	$ 587,930	$ 315,263
Total cash equivalents and marketable securities, Gross Unrealized Gains	54	74
Total cash equivalents and marketable securities, Gross Unrealized Losses	(192)	(68)
Total cash equivalents and marketable securities, Fair Value	587,792	315,269
U.S. Treasury and agency securities
Cash Equivalents and Marketable Securities
Total cash equivalents and marketable securities, Amortized Cost	168,160	145,024
Total cash equivalents and marketable securities, Gross Unrealized Gains	37	63
Total cash equivalents and marketable securities, Gross Unrealized Losses	(21)	(2)
Total cash equivalents and marketable securities, Fair Value	168,176	145,085
Corporate Debt Securities [Member]
Cash Equivalents and Marketable Securities
Total cash equivalents and marketable securities, Amortized Cost	56,652	7,678
Total cash equivalents and marketable securities, Gross Unrealized Gains	10
Total cash equivalents and marketable securities, Gross Unrealized Losses	(34)	(6)
Total cash equivalents and marketable securities, Fair Value	56,628	7,672
Money Market Funds [Member]
Cash Equivalents and Marketable Securities
Total cash equivalents and marketable securities, Amortized Cost	110,705	19,212
Total cash equivalents and marketable securities, Fair Value	110,705	19,212
Certificates of deposit
Cash Equivalents and Marketable Securities
Total cash equivalents and marketable securities, Amortized Cost	20,622	12,998
Total cash equivalents and marketable securities, Gross Unrealized Gains	7	6
Total cash equivalents and marketable securities, Gross Unrealized Losses	(4)
Total cash equivalents and marketable securities, Fair Value	20,625	13,004
Commercial Paper [Member]
Cash Equivalents and Marketable Securities
Total cash equivalents and marketable securities, Amortized Cost	231,791	130,351
Total cash equivalents and marketable securities, Gross Unrealized Gains		5
Total cash equivalents and marketable securities, Gross Unrealized Losses	(133)	(60)
Total cash equivalents and marketable securities, Fair Value	$ 231,658	$ 130,296

Cash Equivalents and Marketable Securities - Classification of Cash Equivalents and Marketable Securities (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 31, 2023
Classified as:
Cash equivalents	$ 347,991	$ 160,379
Marketable securities - current	208,354	154,890
Marketable securities - noncurrent	31,447
Total cash equivalents and marketable securities	$ 587,792	$ 315,269
Contractual maturities
Maximum period of current contractual maturities	1 year	1 year
Minimum period of noncurrent contractual maturities	1 year
Maximum period of Noncurrent contractual maturities	2 years
Realized Gain (loss)	$ 0	$ 0
Credit-related losses to be recognized	$ 0

Balance Sheet Components - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Prepaid Expense and Other Assets, Current [Abstract]
Prepaid clinical and research related expenses	$ 2,872	$ 649
Prepaid insurance	880	1,410
Prepaid licenses	731	529
Other prepaid expenses	1,075	1,040
Other receivable	1,327	332
Prepaid expenses and other current assets	$ 6,885	$ 3,960

Balance Sheet Components - Property and Equipment, Net (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Property and Equipment
Total property and equipment	$ 8,477	$ 7,429
Accumulated depreciation	(6,697)	(6,234)
Property and equipment, net	1,780	1,195
Laboratory equipment
Property and Equipment
Total property and equipment	5,625	5,323
Furniture and computer equipment
Property and Equipment
Total property and equipment	1,316	1,143
Leasehold improvements
Property and Equipment
Total property and equipment	$ 1,536	$ 963

Balance Sheet Components - Accrued Expenses and Other Payables (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Accrued Expenses and Other Payables
Accrued clinical and research related expenses	$ 8,821	$ 11,841
Accrued employee related expenses	5,446	6,786
Accrued professional service fees	796	632
Other	112	99
Total accrued expenses and other payables	$ 15,175	$ 19,358

Lease - Agreement (Details) $ in Thousands	Jun. 30, 2024 USD ($)	May 06, 2024 USD ($) ft²	May 05, 2024	Dec. 31, 2023 USD ($)
Lease
Operating lease, improvement allowance		$ 1,800
Operating lease right-of-use asset	$ 10,252	$ 10,500		$ 954
Second Amendment
Lease
Operating lease, term of contract		66 months	1 year
Area of land \| ft²		17,698

Lease - Supplemental balance sheet information (Details) - USD ($) $ in Thousands	Jun. 30, 2024	May 06, 2024	Dec. 31, 2023
Operating Leases:
Operating lease right-of-use asset	$ 10,252	$ 10,500	$ 954
Operating lease liability - current			1,141
Operating lease liability - noncurrent	10,971
Present value of lease liabilities	$ 10,971		$ 1,141

Lease - Weighted average lease term and discount rate (Details)	Jun. 30, 2024	Dec. 31, 2023
Lease
Weighted-average remaining lease term (years)	5 years 4 months 24 days	4 months 24 days
Weighted-average discount rate	5.70%	10.40%

Lease - Lease cost information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Lease
Operating lease cost	$ 738	$ 584	$ 1,321	$ 1,167
Short-term rent expense	51		51
Less: Sublease income		(34)	(34)	(79)
Total lease expense	$ 789	$ 550	$ 1,338	$ 1,088

Lease - Supplemental cash flow information (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Lease
Operating cash flow used by operating leases	$ (1,219)	$ (1,354)
New operating lease asset obtained in exchange for operating lease liability	$ 10,511

Lease - Future lease payments required under lease obligations (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Minimum lease payments:
Remainder of 2024	$ 446
2025	1,121
2026	2,785
2027	2,882
2028	2,983
Thereafter	2,825
Total future minimum lease payments	13,042
Less: imputed interest	(2,071)
Present value of lease liabilities	$ 10,971	$ 1,141

Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended				3 Months Ended			6 Months Ended
	Aug. 08, 2018	Aug. 31, 2023	Apr. 30, 2023	Aug. 31, 2022	Aug. 31, 2018	Jun. 30, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023	Jun. 20, 2024	Jun. 19, 2024	Dec. 31, 2023
Stock transactions
Common stock, shares authorized						180,000,000			180,000,000		180,000,000	90,000,000	90,000,000
Shares authorized											190,000,000	100,000,000
Warrants issued to purchase common stock, number of shares		2,705,252				2,620,260			2,620,260
Common stock, par value						$ 0.00001			$ 0.00001				$ 0.00001
Exercise Price (per share)		$ 0.001
Proceeds from exercise of Warrants in exchange for issuance of Pre-funded Warrants		$ 34,400
Minimum percentage of common stock held by investors for not exercise of warrants		9.99%
Issuance of common stock upon exercise of Pre-Funded Warrants (in shares)		44,748				84,992			84,992
Number of shares issued upon exercise of warrants		44,748				84,992			84,992
Proceeds from public offering of common stock, net of issuance costs										$ 107,868
2022 Sales Agreement
Stock transactions
Common stock issued (in shares)						0	0	1,749,199	0
Maximum aggregate offering price				$ 100,000
Aggregate net proceeds								$ 24,300
Underwritten public offering
Stock transactions
Net proceeds from sale of common stock			$ 107,800
Common stock issued (in shares)			5,000,000
Common stock issued, price per share			$ 20.00
Over-Allotment Option
Stock transactions
Common stock issued (in shares)			750,000
Common stock issued, price per share			$ 20.00
Common Stock [Member]
Stock transactions
Issuance of common stock upon exercise of Pre-Funded Warrants (in shares)						84,989			84,989
Number of shares issued upon exercise of warrants						84,989			84,989
Investors \| Private Placement [Member]
Stock transactions
Warrants exercisable date	Aug. 08, 2023
Aggregate gross proceeds					$ 21,700
Investors \| Common Stock [Member] \| Private Placement [Member]
Stock transactions
Warrants issued to purchase common stock, number of shares	2,750,000
Common stock issued (in shares)					2,750,000
Common stock issued, price per share					$ 8.00
$10.00 per share \| Common Stock [Member] \| Private Placement [Member]
Stock transactions
Warrants to purchase common stock (in shares)	1,375,000
Exercise Price (per share)	$ 10.00
$15.00 per share \| Common Stock [Member] \| Private Placement [Member]
Stock transactions
Warrants to purchase common stock (in shares)	1,375,000
Exercise Price (per share)	$ 15.00

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Taxes
Provision for income taxes	$ (676)	$ 0	$ 2,650	$ 0

Net Income (Loss) per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Numerator:
Net income (loss)	$ (30,616)	$ (38,460)	$ 176,724	$ (72,185)
Denominator:
Weighted-average shares of common stock, basic	61,305,289	56,775,742	61,080,489	53,691,965
Dilutive effect of common stock equivalents			2,829,144
Weighted-average shares of common stock, dilutive	61,305,289	56,775,742	63,909,633	53,691,965
Basic net income (loss) per share of common stock	$ (0.50)	$ (0.68)	$ 2.89	$ (1.34)
Diluted net income (loss) per share of common stock	$ (0.50)	$ (0.68)	$ 2.77	$ (1.34)
Anti-dilutive securities (in shares)	9,900,000		3,400,000	11,700,000

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