Executive Summary / Key Takeaways

• Proprietary Peptide Platform Driving Innovation: Protagonist Therapeutics leverages its unique peptide engineering technology to develop first-in-class, differentiated therapeutics, establishing a significant competitive moat in challenging disease areas.
• Near-Term Blockbuster Potential with Lead Assets: Icotrokinra (partnered with JNJ) has an NDA filed for psoriasis, and Rusfertide (partnered with Takeda) is on track for an NDA filing in Q4 2025 for polycythemia vera, both demonstrating compelling Phase 3 clinical data.
• Robust Financial Position and Strategic Partnerships: A strong cash, cash equivalents, and marketable securities balance of $673.0 million as of June 30, 2025, provides an anticipated cash runway through at least the end of 2028, significantly de-risking operations and supporting future growth.
• Deep and Diversified Preclinical Pipeline: Emerging candidates like PN-881 (IL-17 antagonist) and PN-477 (obesity triple agonist) showcase the platform's versatility and target large, commercially validated markets, offering substantial long-term value.
• Competitive Edge in Unmet Needs: Protagonist's oral, gut-restricted, and hepcidin mimetic approaches offer distinct advantages over traditional small molecules and injectable biologics, positioning the company to capture significant market share by addressing critical patient needs.

Peptide Innovation: The Foundation of Protagonist Therapeutics

Protagonist Therapeutics, incorporated in 2006, has meticulously built its reputation as a biopharmaceutical company dedicated to the discovery and late-stage development of peptide therapeutics. The company's core strategy centers on addressing unmet medical needs across two broad categories: inflammatory and immunomodulatory diseases, and hematology and blood disorders. This focus is underpinned by a foundational strength: its proprietary peptide engineering technology platform.

This platform enables the creation of novel, structurally constrained peptides designed to overcome the inherent limitations of traditional small molecules and large antibody drugs. These engineered peptides offer distinct advantages, including enhanced potency, improved stability, and the flexibility for various delivery forms such as oral, subcutaneous, intravenous, and rectal administration. For instance, PTG-300 (Rusfertide) was engineered to possess a significantly longer half-life of 21 to 42 hours compared to the natural hormone hepcidin's 5 to 8 hours, a critical factor for its therapeutic utility. Similarly, PN-943, an oral integrin antagonist, demonstrated a threefold increase in potency over its predecessor, PTG-100, achieving a 74% blood receptor occupancy at three times lower doses in human studies. This technological edge creates a substantial barrier to entry for competitors, allowing Protagonist to pursue unique therapeutic opportunities and establish a competitive moat.

The biopharmaceutical industry is currently witnessing a significant shift towards targeted therapies and, notably, oral treatment options, particularly in areas like inflammatory bowel disease (IBD). Protagonist's peptide technology is strategically aligned with these trends, offering the potential for more specific treatments with potentially fewer side effects compared to broader biologics. This differentiation is crucial for a company of Protagonist's scale, enabling it to challenge larger, more diversified players like AbbVie (ABBV) and Johnson & Johnson (JNJ) by offering specialized, high-impact solutions. While larger competitors benefit from extensive commercialization infrastructure and broad portfolios, Protagonist's agility in R&D and its focus on peptide-specific innovations provide a unique pathway to market.

Rusfertide: Redefining Polycythemia Vera Treatment

The journey of Rusfertide, a first-in-class injectable mimetic of the natural hormone hepcidin, exemplifies Protagonist's strategic prowess. Initially receiving Orphan Drug and Fast Track designations for beta-thalassemia, the company strategically pivoted its primary focus to polycythemia vera (PV) in 2020. This decision was driven by robust Phase 2 data, a favorable regulatory pathway, and a significant commercial opportunity in a rare blood disorder affecting approximately 160,000 patients in the United States.

Rusfertide's mechanism of action directly addresses the core pathology of PV by regulating iron homeostasis, thereby controlling erythrocytosis and reducing the need for therapeutic phlebotomy. The pivotal Phase 3 VERIFY trial delivered compelling results, meeting its primary endpoint with 76.9% of rusfertide-treated patients achieving a clinical response (absence of phlebotomy eligibility) compared to just 32.9% in the placebo group (p<0.0001). Furthermore, rusfertide demonstrated statistically significant improvements across all key secondary endpoints. Patients on rusfertide experienced a mean of 0.5 phlebotomies per patient compared to 1.8 for placebo during Weeks 0-32, and 62.6% maintained hematocrit levels below 45% versus 14.4% for placebo. Critically, it was the first investigational therapy to show statistically significant improvements in patient-reported outcomes for fatigue (PROMIS Fatigue SF-8) and symptom burden (Myeloproliferative Neoplasm-Symptom Assessment Form TSS-7), highlighting its potential to significantly enhance patient quality of life. The drug was generally well-tolerated, with no evidence of increased cancer risk at the time of primary analysis.

This strong clinical profile positions rusfertide as a potential game-changer for PV patients, particularly those whose current therapies, such as hydroxyurea, interferon, or even Jakafi, are ineffective or poorly tolerated. As Dr. Ronald Hoffman noted, rusfertide could serve as an ideal treatment for patients requiring frequent phlebotomies, freeing them from burdensome clinic visits and addressing chronic iron deficiency. The co-development and co-commercialization partnership with Takeda Pharmaceuticals (TAK), with Takeda now leading the regulatory strategy, further de-risks the commercialization path. An NDA filing for rusfertide in PV is on track for Q4 2025, with potential upcoming milestones including $50 million upon FDA approval and additional payments for European and Japanese approvals.

Icotrokinra: Oral Innovation in Inflammatory Diseases

Protagonist's collaboration with JNJ (Janssen) on icotrokinra, a first-in-class investigational targeted oral peptide that selectively blocks the Interleukin-23 receptor (IL-23R), underscores the company's ability to leverage its platform for broad therapeutic impact. This partnership, initiated in 2017, has culminated in significant advancements.

In July 2025, JNJ submitted a New Drug Application (NDA) to the U.S. FDA for icotrokinra for the treatment of adults and pediatric patients (12 years of age or older) with moderate-to-severe plaque psoriasis. This submission follows the successful completion of the ICONIC Phase 3 clinical development program, where icotrokinra met all primary and co-primary endpoints across four pivotal trials (ICONIC-LEAD, ICONIC-TOTAL, ICONIC-ADVANCE 1 & 2), demonstrating significant skin clearance and a favorable safety profile. Notably, the ICONIC-ADVANCE trials showed superiority to deucravacitinib, and the ongoing ICONIC-ASCEND trial is a pioneering head-to-head study against the injectable biologic ustekinumab, aiming to demonstrate the superiority of an oral pill.

Beyond psoriasis, icotrokinra has shown promise in ulcerative colitis (UC). Positive topline results from the Phase 2b ANTHEM-UC trial, announced in March 2025, met the primary endpoint of clinical response across all dose groups and demonstrated clinically meaningful differences in key secondary endpoints like clinical and symptomatic remission and endoscopic improvement. Full data from this trial is scheduled for presentation at the 33rd United European Gastroenterology Week (UEGW) on October 7, 2025. This broad utility highlights the potential for icotrokinra to offer a convenient, needle-free, oral therapeutic option in validated inflammatory pathways, directly challenging established injectable biologics and small molecules.

Expanding Horizons: A Robust Preclinical Pipeline

Protagonist's commitment to innovation extends beyond its late-stage assets, with a vibrant preclinical pipeline leveraging its versatile peptide engineering platform. This forward-looking strategy is crucial for sustaining long-term growth and diversifying revenue streams.

In Q4 2024, the company nominated PN-881, a potential best-in-class oral peptide IL-17 antagonist, as a development candidate for immune-mediated skin diseases. This candidate targets three IL-17 dimers (AA, AF, FF), suggesting broad potential across conditions like plaque psoriasis, psoriatic arthritis, hidradenitis suppurativa, and spondyloarthritis. IND-enabling studies are underway, with a Phase 1 study anticipated in Q4 2025. Further expanding into metabolic diseases, Protagonist selected PN-477, an obesity triple agonist peptide, as a development candidate in June 2025. PN-477, targeting GLP-1, GIP, and Glucagon receptors, is designed to offer an optimal combination of total body weight loss, improved gastrointestinal tolerability, and a favorable fat-to-lean mass ratio, with the flexibility of once-daily oral or once-weekly subcutaneous administration. IND-enabling studies are progressing, and Phase 1 clinical studies are expected in Q2 2026. Additionally, a preclinical program for an orally administered hepcidin mimetic or ferroportin inhibitor is advancing, with a development candidate nomination expected in Q4 2025, complementing rusfertide. These programs demonstrate Protagonist's ability to continuously generate novel candidates from its platform, addressing large market opportunities and building future value.

Financial Strength and Outlook

Protagonist's financial health reflects its strategic focus and the success of its collaboration agreements. As of June 30, 2025, the company reported a robust $673.0 million in cash, cash equivalents, and marketable securities. This strong liquidity position is anticipated to fund operations through at least the end of 2028, providing significant financial stability and de-risking its extensive R&D efforts.

The company's revenue profile has been significantly influenced by milestone payments from its partnerships. For the six months ended June 30, 2025, license and collaboration revenue was $33.9 million, primarily from Takeda ($23.4 million from milestone recognition and $10.5 million for development services). This represents a substantial decrease from $259.1 million in the first half of 2024, which included the $300 million upfront payment from Takeda and a $165 million milestone from JNJ. Management explicitly stated that 2025 revenue is expected to be significantly lower than 2024, impacting net income, as it will primarily consist of deferred revenue recognition and additional milestones that are anticipated to be smaller.

Operating expenses continue to reflect the company's investment in its pipeline. Research and development expenses for the six months ended June 30, 2025, increased by 8% to $72.9 million, driven by a 52% increase in preclinical and drug discovery research ($9.8 million) for candidates like PN-881 and PN-477, partially offset by a 8% decrease in rusfertide expenses ($4.1 million) as the VERIFY trial concludes. General and administrative expenses decreased by 8% to $22.3 million in the first half of 2025, primarily due to one-time advisory and legal fees incurred in 2024 related to the Takeda agreement, partially offset by increased stock-based compensation. The company reported a net loss of $46.4 million for the first half of 2025, a shift from the net income of $176.7 million in the prior year, primarily due to the timing of collaboration revenue recognition. The accumulated deficit from inception through June 30, 2025, stands at $386.9 million, and Protagonist expects to incur additional losses as it continues to invest in development and pre-commercialization activities.

Future revenue growth is heavily tied to the successful regulatory approvals and subsequent commercialization of icotrokinra and rusfertide. Significant potential milestones include $50 million upon FDA approval for icotrokinra (any indication) and up to $155 million for subsequent indications. For rusfertide, potential milestones include $50 million upon FDA approval for PV, with additional payments for European and Japanese approvals. Furthermore, if Protagonist exercises its Full Opt-out Right with Takeda, it could receive an additional $400 million in payments plus tiered royalties of 14-29% on worldwide net sales. These potential inflows, coupled with the existing cash reserves, provide a strong financial foundation for Protagonist's ambitious pipeline.

Risks and Challenges

Despite the compelling progress, Protagonist operates within the inherent risks of the biopharmaceutical industry. Regulatory approval for its lead candidates is not guaranteed, and any delays or rejections could significantly impact the company's financial trajectory. The competitive landscape in inflammatory diseases and hematology is intense, with larger players like AbbVie, Johnson & Johnson, Incyte (INCY), and Gilead Sciences (GILD) possessing greater resources for R&D, commercialization, and market penetration. While Protagonist's peptide technology offers differentiation, market acceptance and uptake against established therapies will be critical.

The company also faces broader macroeconomic risks, including ongoing economic uncertainty, geopolitical instability, and high interest rates, which could affect capital markets and its ability to raise additional funding if needed, although its current cash runway is robust. Disruptions at regulatory agencies like the FDA could also impact approval timelines. Furthermore, as a development-stage company, Protagonist's future success relies heavily on the continued execution of its strategic partnerships and the successful advancement of its preclinical programs into clinical development.

Conclusion

Protagonist Therapeutics stands at a pivotal juncture, poised to transition from a development-stage company to one with commercial products. Its proprietary peptide engineering platform has yielded two late-stage assets, rusfertide and icotrokinra, which have demonstrated compelling efficacy and safety in Phase 3 trials and are on the cusp of regulatory approval. These programs, backed by strategic partnerships with Takeda and JNJ, represent a dual blockbuster potential that forms the core of the investment thesis.

The company's robust financial position, with a cash runway extending through 2028, provides a strong foundation to support its ongoing clinical and preclinical efforts. While challenges such as regulatory hurdles and intense competition persist, Protagonist's technological differentiation and strategic focus on unmet needs position it favorably. The expanding preclinical pipeline, particularly in high-value areas like obesity and IL-17 mediated diseases, underscores the long-term growth potential inherent in its innovative platform. For discerning investors, Protagonist Therapeutics offers a compelling narrative of scientific innovation, strategic execution, and significant near-term catalysts, driven by its unique approach to peptide therapeutics.