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OFFON

PROTAGONIST THERAPEUTICS, INC.

(PTGX)
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PROTAGONIST THERAPEUTICS, INC MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

11/03/2021 | 04:13pm EST
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 (this "Quarterly Report") on Form 10-Q and with our Audited
Consolidated Financial Statements and related notes thereto for the year ended
December 31, 2020, included in our Annual Report on Form 10-K filed with the
Securities and Exchange Commission ("SEC") on March 10, 2021.

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, and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). These statements involve known and unknown risks, uncertainties and other
factors that may cause our actual results, performance or achievements to be
materially different from any future results, 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," "believes,"
"could," "estimates," "expects," "forecasts," "intends," "may," "plans,"
"potential," "predicts," "projects," "should," "targets," "will," "would," 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. In particular, statements, whether expressed or
implied, concerning, among other things, the potential for our programs, the
timing of our clinical trials, the potential for eventual regulatory approval
and commercialization of our product candidates and our potential receipt of
milestone payments and royalties under our collaboration agreements, the timing
and amount of potential payments that we may be required to make to
collaboration partners; future operating results or the ability to generate
sales, income or cash flow, and the impact of the ongoing COVID-19 pandemic are
forward-looking statements. They involve risks, uncertainties and assumptions
that are beyond our ability to control or predict, including those discussed in
Part II, Item 1A, of this Quarterly Report. While we believe such information
forms a reasonable basis for such statements, such 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, even if new information becomes
available in the future. "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 multiple peptide-based investigational
new chemical entities in different stages of development, all derived from the
Company's proprietary discovery technology platform. Our clinical programs fall
into two broad categories of diseases; (i) hematology and blood disorders, and
(ii) inflammatory and immunomodulatory diseases.

Our Product Pipeline

[[Image Removed: Graphical user interface Description automatically

                        generated with low confidence]]



Our most advanced clinical asset, rusfertide (generic name for PTG-300) is an
injectable hepcidin mimetic in development for the potential treatment of
erythrocytosis, iron overload and other blood disorders. Hepcidin is a key
hormone in regulating iron equilibrium and is critical to the proper development
of red blood cells. Rusfertide mimics the effect of the natural hormone
hepcidin, but with greater potency, solubility and stability. We initiated
Phase 2 proof of concept ("POC") studies in the blood disorders polycythemia
vera ("PV") in the third quarter of 2019 and hereditary hemochromatosis ("HH")
in January 2020. In December 2020, we presented four posters and one oral
presentation relating to rusfertide at the American Society for Hematology's
virtual annual meeting, including updated interim Phase 2 results for rusfertide
in PV. In June 2021, we presented updated Phase 2 data supporting the long-term
efficacy of rusfertide in PV during an oral presentation at the European
Hematology Association ("EHA") 2021 Virtual Congress. We believe these interim
results provide evidence regarding the potential of rusfertide for managing
hematocrit, reducing thrombotic risk and improving iron deficiency symptoms.
Rusfertide has a unique mechanism of action in the potential treatment of PV,
which may enable it to decrease and maintain hematocrit levels within the range
of recommended clinical guidelines without causing the iron deficiency that may
occur with frequent phlebotomy.



On September 16, 2021, the FDA orally informed us that a clinical hold would be
placed on our rusfertide clinical studies. We received formal written notice of
the clinical hold on September 17, 2021.  In October 2021, we submitted a
Complete Response to the FDA related to the clinical hold, and the FDA removed
the clinical hold on October 8, 2021. The clinical hold was imposed following
our submission to the FDA of findings in a 26-week rasH2 transgenic mouse
carcinogenicity study.  In the rasH2 study, benign squamous cell papilloma were
observed in six of 75 male mice and six of 75 female mice treated with doses of
rusfertide ranging from 6.25 mg/kg to 25 mg/kg.  Malignant squamous cell
carcinoma was also observed in one male mouse and one female mouse.  There were
no findings in either the male or female control group.  The rasH2 finding
prompted a re-examination of the four cases of cancer observed across all
rusfertide clinical trials (involving 160 patients) through the date of the
submission of the Complete Response. All cases were initially assessed as
unrelated to rusfertide treatment.  Upon re-examination in light of the rasH2
finding, two of the cases were re-classified as possibly related to rusfertide.
No additional cancer cases, and no other unexpected safety signals, surfaced in
this process.

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In our Complete Response, we provided the individual patient clinical safety
reports the FDA requested for human cancers observed in rusfertide clinical
trials, updated the investigator brochure and patient informed consent forms for
ongoing rusfertide trials, proposed new safety and stopping rules in clinical
study protocols of our ongoing rusfertide clinical trials, and performed a
comprehensive review of our rusfertide safety database. Dosing of patients in
ongoing clinical trials with rusfertide is expected to resume in the fourth
quarter of 2021.



We completed enrollment of 63 patients in the ongoing Phase 2 clinical trial of
rusfertide in PV during the second quarter of 2021. Based on ongoing end of
Phase 2 feedback provided by the FDA's Division of Nonmalignant Hematology and
written comments from the European Medicines Agency ("EMA"), we expect to
initiate a global Phase 3 clinical trial of rusfertide in PV in the first
quarter of 2022. During the first quarter of 2021, we initiated another Phase 2
study for rusfertide in up to 20 patients diagnosed with PV and with routinely
elevated hematocrit levels (>48%). In addition, we completed enrollment for our
Phase 2 POC study in HH, our second indication, in April 2021. An abstract
highlighting preliminary data our Phase 2 study of rusfertide in HH has been
selected for oral presentation at The Liver Meeting® 2021, hosted by
the American Association for the Study of Liver Diseases (AASLD), taking place
virtually in November 2021.


To date we have received the following designations for rusfertide in PV:

? The FDA granted orphan drug designation for rusfertide for the treatment of PV

in June 2020;

? The European Medicines Agency granted orphan drug designation for rusfertide

for the treatment of PV in October 2020;

? The FDA granted Fast Track designation for rusfertide for the treatment of PV

in December 2020; and

? The FDA granted Breakthrough Therapy Designation for rusfertide for the

treatment of PV in June 2021.





Our alpha-4-beta-7 ("?4?7") antagonist PN-943 and our Interleukin-23 receptor
("IL-23R") antagonist compounds, including PN-232 and PN-235, are orally
delivered investigational drugs that are designed to block biological pathways
currently targeted by marketed injectable antibody drugs. Our orally stable
peptide approach may offer targeted delivery to the GI tissue compartment. We
believe that, compared to antibody drugs, these product candidates have the
potential to provide improved safety due to minimal exposure in the blood,
increased convenience and compliance due to oral delivery, and the opportunity
for the earlier introduction of targeted oral therapy.

PN-943 is an investigational, orally delivered, gut-restricted ?4?7 specific
integrin antagonist for inflammatory bowel disease ("IBD"). We submitted a U.S.
Investigational New Drug application with the FDA for PN-943 in December 2019,
which took effect in January 2020. During the second quarter of 2020 we
initiated a 150-patient Phase 2 study evaluating the safety, tolerability and
efficacy of PN-943 in patients with moderate to severe UC. This study includes a
12-week induction period and a 40-week open label extension. Topline data from
the 12-week induction period is expected in the second quarter of 2022.

In May 2017, we entered into a worldwide license and collaboration agreement
with Janssen Biotech, Inc. ("Janssen"), a Johnson & Johnson company, to
co-develop and co-detail our IL-23R antagonist compounds, including PTG-200 and
certain related compounds for all indications, including IBD. PTG-200 was an
investigational, orally delivered, IL-23R antagonist for the treatment of IBD.
The agreement with Janssen was amended in May 2019 to expand the collaboration
by supporting efforts towards second-generation IL-23R antagonists; and in July
2021 to, among other things, enable Janssen to develop collaboration compounds
for multiple indications and further align our financial interests around
potential multiple compound development for multiple indications in the IL-23
pathway.

Following a pre-specified interim analysis criteria, a portfolio decision was
made to stop further development of first generation IL-23R antagonist candidate
PTG-200 (JNJ-67864238), in favor of continued development of two
second-generation candidates PN-235 (JNJ-77242113) and PN-232 (JNJ-75105186)
with superior product profiles. In particular:



? The Phase 1 study of PN-235 is completed, and a Phase 2 study in psoriasis is

anticipated to initiate in early 2022.



 ? The Phase 1 study with PN-232 is under progress with study completion expected
   by mid-2022.


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? Additional development in IBD is expected to initiate in 2022.





In October 2021, we became eligible to receive a $7.5 million milestone payment
from Janssen triggered by the completion of data collection for PN-235 Phase 1
activities. We will earn a $25.0 million milestone in connection with the
initiation of the first Phase 2 study of a second-generation candidate, and a
$10.0 million milestone in connection with the initiation of the second Phase 2
study of a second-generation candidate. We remain eligible for up to
approximately $900.0 million in development-related milestone payments, in
addition to the $87.5M in milestones already earned.

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 in an effort to overcome 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. We continue to use our peptide technology platform to
discover product candidates against targets in disease areas with significant
unmet medical needs.

COVID-19 Business Impact



We are subject to risks and uncertainties as a result of the ongoing
COVID-19 pandemic. We are continuing to closely monitor the impact of the
COVID-19 pandemic on our business and have taken and continue to take proactive
efforts to protect the health and safety of our patients, study investigators,
clinical research staff and employees, and to maintain business continuity. The
extent of the impact of the COVID-19 pandemic on our activities is uncertain and
difficult to predict, as the pandemic and the response to the pandemic continue
to evolve. Capital markets and economies worldwide have been significantly
impacted by the COVID-19 pandemic, and the pandemic has contributed to a global
economic recession. Such economic disruption could have a material adverse
effect on our business. Policymakers around the globe have responded with fiscal
policy actions to support the healthcare industry and economy as a whole. The
magnitude and overall effectiveness of these actions remains uncertain.

The severity of the impact of the COVID-19 pandemic on our activities will
depend on a number of factors, including, but not limited to, the duration and
severity of the pandemic, including the severity of any additional periods of
increases or spikes in the number of cases in the areas we, our suppliers and
our manufacturers operate and areas where our clinical trial sites are located;
the development and spread of COVID-19 variants; the timing, extent,
effectiveness and durability of vaccine programs or other treatments; and new or
continuing travel and other restrictions and public health measures, such as
social distancing, business closures or disruptions. Accordingly, the extent and
severity of the impact on our existing and planned clinical trials,
manufacturing, collaboration activities and operations is uncertain and cannot
be fully predicted. We have experienced delays in our existing and planned
clinical trials due to the worldwide impacts of the pandemic. Our future results
of operations and liquidity could be adversely impacted by further delays in
existing and planned clinical trials and collaboration activities, continued
difficulty in recruiting patients for these clinical trials, delays in
manufacturing and collaboration activities, supply chain disruptions, the
ongoing impact on operating activities and employees, and the ongoing impact of
any initiatives or programs that we may undertake to address financial and
operational challenges. As of the date of issuance of this Quarterly Report on
Form 10-Q, the extent to which the COVID-19 pandemic may materially impact our
future financial condition, liquidity or results of operations is uncertain.

Operations


We have incurred net losses in each year since inception and we do not
anticipate achieving sustained profitability in the foreseeable future. Our net
loss was $33.8 million and $88.6 million for the three and nine months ended
September 30, 2021, respectively. Our net loss was $7.8 million and $47.3
million for the three and nine months ended September 30, 2020, respectively. As
of September 30, 2021, we had an accumulated deficit of $372.5 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, development, commercialization and other expenses
related to our ongoing operations and product

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development, including clinical development activities under our worldwide
license and collaboration agreement with Janssen, and, as a result, we expect to
continue to incur losses in the future as we continue our development of, and
seek regulatory approval for, our product candidates.

Janssen License and Collaboration Agreement


On July 27, 2021, we entered into an amended and restated License and
Collaboration Agreement ("Restated Agreement") with Janssen. The Restated
Agreement amends and restates the License and Collaboration Agreement, dated May
26, 2017, by and between us and Janssen (as amended by the First Amendment
thereto, effective May 7, 2019, the "Original Agreement"). Janssen is a related
party to us as Johnson & Johnson Innovation - JJDC, Inc., a significant
stockholder of ours, and Janssen are both subsidiaries of Johnson & Johnson. The
Original Agreement became effective on July 13, 2017. Upon the effectiveness of
the Original Agreement, we received a non-refundable, upfront cash payment of
$50.0 million from Janssen. Upon the effectiveness of the First Amendment, we
received a $25.0 million payment from Janssen in 2019. We also received a $5.0
million payment triggered by the successful nomination of a second-generation
IL-23R antagonist development compound during the first quarter of 2020. In
October 2021, we became eligible to receive a $7.5 million milestone payment
from Janssen triggered by completion of the data collection for PN-235 Phase 1
activities. Following a pre-established interim analysis criteria, a portfolio
decision was made to discontinue further development of first generation
candidate PTG-200, in favor of further development of two second-generation
candidates PN-235 and PN-232 with superior product profiles.

See Note 3 to the condensed consolidated financial statements included elsewhere in this report for additional information.

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 United States 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, 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. In making estimates and judgments, management employs
critical accounting policies.

Use of Estimates


Due to the ongoing COVID-19 pandemic, there has been uncertainty and disruption
in the global economy and financial markets. We have taken into consideration
any known COVID-19 impacts in our accounting estimates to date and are not aware
of any additional specific events or circumstances that would require any
additional updates to our estimates or judgments or a revision of the carrying
value of our assets or liabilities as of the date of issuance 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.

Stock-Based Compensation


We recognize compensation costs related to stock options accounted for under
Accounting Standards Codification Topic 718 - "Stock Compensation" based on the
estimated fair value of the awards on the date of grant. We estimate the fair
value, and the resulting stock-based compensation expense, using the
Black-Scholes option-pricing model. The estimated fair value of the stock-based
awards is generally recognized over the requisite service period, which is
generally the vesting period of the respective awards.

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The Black-Scholes option-pricing model requires the use of subjective
assumptions which determine the fair value of stock-based awards. Expected
volatility generally requires significant judgement to determine. For the year
ended December 31, 2020, our expected volatility was estimated based upon a mix
of 75% of the average volatility for comparable publicly traded
biopharmaceutical companies over a period equal to the expected term of the
stock option grants and 25% of the volatility of our own stock price since our
initial public offering in August 2016. Beginning January 1, 2021, our expected
volatility is estimated based upon a mix of 50% of the average volatility for
comparable publicly traded biopharmaceutical companies over a period equal to
the expected term of the stock option grants and 50% of the volatility of our
own stock price since our initial public offering in August 2016. These
comparable companies are chosen based on their similar size, stage in the life
cycle, or area of specialty. We will continue to apply this process until a
longer period of historical information regarding the volatility of our own
stock price becomes available.

In February 2021, we granted performance share units ("PSUs) to certain of our
executives. Stock-based compensation expense associated with PSUs is based on
the fair value of our common stock on the grant date, which equals the closing
price of our common stock on the grant date. We recognize compensation expense
over the vesting period of the awards that are ultimately expected to vest when
the achievement of the related performance obligation becomes probable. The
total fair value of the PSUs granted in February 2021 was $2.6 million.

There have been no other material changes in our critical accounting policies
during the three and nine months ended September 30, 2021, 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 on Form 10-K for the year ended December 31, 2020 filed with the SEC on
March 10, 2021.

Components of Our Results of Operations

License and Collaboration Revenue


Our license and collaboration revenue is derived from payments we receive under
the Janssen License and Collaboration Agreement. See Note 3 to the condensed
consolidated financial statements included elsewhere in this 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 study 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, non-clinical, and clinical studies;


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? 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 other supplies.

We recognize the funds from grants under government programs as a reduction of
research and development expenses when the related research costs are incurred.
In addition, we recognize the funds 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 allocate direct costs and indirect costs incurred to product candidates when
they enter clinical development. For product candidates in clinical development,
direct costs consist primarily of clinical, pre-clinical, and drug discovery
costs, costs of supplying drug substance and drug product for use in clinical
and pre-clinical studies, including clinical manufacturing costs, contract
research organization fees, and other contracted services pertaining to specific
clinical and pre-clinical studies. Indirect costs allocated to our product
candidates on a program specific basis include research and development employee
salaries, benefits, and stock-based compensation, and indirect overhead and
other administrative support costs. Program-specific costs are unallocated when
the clinical expenses are incurred for our early-stage research and drug
discovery projects, 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.

The following table summarizes our research and development expenses incurred during the periods indicated:


                                                     Three Months Ended         Nine Months Ended
                                                       September 30,              September 30,
                                                      2021         2020         2021         2020

                                                                (Dollars in thousands)
Clinical and development expense - rusfertide
(PTG-300)                                          $   14,881    $   8,322    $  37,128    $  22,881
Clinical and development expense - PN-943              10,919        3,847       26,394       17,867
Clinical and development expense - PN-235                 567            -        3,799            -
Clinical and development expense - PN-232                 831            -          870            -
Clinical and development expense - PTG-200                 11          183           13        1,108
Clinical and development expense - PTG-100                 88          114          338          307
Preclinical and drug discovery research expense         6,126        3,779       17,371       13,695
Milestone payment obligation to former
collaboration partner                                   4,000            -        4,000            -
Grants and tax incentives expense
reimbursement, net                                      (467)        (250)      (2,280)        (838)
Total research and development expenses            $   36,956    $  15,995 
  $  87,633    $  55,020




We expect our research and development expenses will increase as we progress our
product candidates into later stage clinical trials, expand the number of
ongoing clinical trials, advance development activities under the Janssen
License and Collaboration Agreement, advance our discovery research projects
into the pre-clinical stage and continue our early-stage research. The process
of conducting research, identifying potential product candidates and conducting
pre-clinical and clinical trials necessary to obtain regulatory approval 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 ability to receive, and the timing of, regulatory approvals,
market

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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-commercial
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 supplies. We expect to continue to incur expenses to support
our continued operations, including expenses related to existing and future
compliance with rules and regulations of the SEC and those of the national
securities exchange on which our securities are traded, insurance expenses,
investor relations, 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.

Interest Expense

Interest expense consists of interest recognized on borrowings under our term loan facility, which is comprised of contractual interest, amortization of origination fees and other issuance costs, and accretion of final payment fees.

Loss on Early Repayment of Debt

Loss on early repayment of debt consists of prepayment and final payment fees paid upon the early repayment of our long-term debt.

Other Expense, Net

Other 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 September 30, 2021 and 2020


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

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

(1) Includes $2.6 million and $1.0 million of non-cash stock-based compensation

expense for the three months ended September 30, 2021 and 2020, respectively.

(2) Includes $2.2 million and $0.9 million of non-cash stock-based compensation

expense for the three months ended September 30, 2021 and 2020, respectively.

License and Collaboration Revenue


License and collaboration revenue decreased $2.8 million, or 22%, from $13.1
million for the three months ended September 30, 2020 to $10.3 million for the
three months ended September 30, 2021. We recognized $8.0 million as a
cumulative catch-up amount during the three months ended September 30, 2021,
following the amendment of our collaboration agreement for the development of
IL23R assets with Janssen. This cumulative catch-up was primarily the result of
an acceleration of our cumulative performance completed under our obligation,
following the amendment to the collaboration which reduced the remaining
services that we are responsible to provide We are nearing completion of our
remaining services to be provided to Janssen under the collaboration, in
particular, both the Phase 1 trials in PN-235 & PN-232, which are expected to be
completed in the fourth quarter of 2021 and second quarter 2022, respectively.
Revenue for the prior year's third quarter of 2020 also included an estimate
update for services completed versus remaining services to be performed under
the Janssen collaboration agreement which accelerated revenue recognition.

We have determined that the transaction price of the initial performance
obligation under the Restated Janssen License and Collaboration Agreement was
$105.7 million as of September 30, 2021, an increase of $9.9 million from the
transaction price of $95.8 million as of June 30, 2021 under the Original
Agreement. In order to determine the transaction price, we evaluated all
payments expected to be received during the duration of the contract, net of
development costs reimbursement expected to be payable to Janssen. We determined
that the transaction price includes $80.0 million of nonrefundable payments
received to date, $17.9 million of reimbursement from Janssen for services
performed for IL-23R antagonist compound research costs and other services, and
estimated variable consideration consisting of a $7.5 million milestone payment
subject to the completion of the clinical data collection Phase 1 activities for
PN-235 and $8.4 million of development cost reimbursement receivable from
Janssen, partially offset by $8.1 million of net cost reimbursement due to
Janssen for services performed. The increase in transaction price from June 30,
2021 to September 30, 2021 was primarily due to changes related to the Second
Amendment to the Janssen License and Collaboration Agreement. We re-evaluate the
transaction price each reporting period and as uncertain events are resolved or
other changes in circumstances occur.

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Research and Development Expenses




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

                                                                       (Dollars in thousands)
Clinical and development expense - rusfertide (PTG-300)         $    14,881   $    8,322   $    6,559        79
Clinical and development expense - PN-943                            10,919        3,847        7,072       184
Clinical and development expense - PN-235                               567            -          567         *
Clinical and development expense - PN-232                               831            -          831         *
Clinical and development expense - PTG-200                               11          183        (172)      (94)
Clinical and development expense - PTG-100                               88          114         (26)      (23)
Preclinical and drug discovery research expense                       6,126        3,779        2,347        62
Milestone payment obligation to former collaboration partner          4,000            -        4,000         *
Grants and tax incentives expense reimbursement, net                  (467)        (250)        (217)        87
Total research and development expenses                         $    36,956
  $   15,995   $   20,961       131


*Percentage not meaningful



Research and development expenses increased $21.0 million, or 131%, from $16.0
million for the three months ended September 30, 2020 to $37.0 million for the
three months ended September 30, 2021. The increase was primarily due to an
increase of $7.1 million in PN-943 clinical trial and development costs
following the initiation of the Phase 2 trial in UC in 2020; an increase of $6.6
million in rusfertide clinical trial and development costs, including the
ongoing Phase 2 trials in PV, which began in December 2019 and the first quarter
of 2021, respectively, and HH, which began in early 2020, and clinical and
contract manufacturing activities in preparation for a planned global Phase 3
clinical trial of rusfertide in PV; $4.0 million of expenses related to
milestone payments and obligations under the Zealand Agreement for rusfertide
pursuant to the resolution of related arbitration; an increase of $2.3 million
in preclinical and drug discovery research expenses; $0.8 million of Phase 1
clinical trial and development costs for PN-232; and $0.6 million of Phase 1
clinical trial and development costs for PN-235.



We had 92 and 57 full-time equivalent research and development employees as of
September 30, 2021 and 2020, respectively. Research and development expenses for
the three months ended September 30, 2021 included increases $1.6 million in
stock-based compensation expense and $1.6 million of other personnel related
expenses compared to the three months ended September 30, 2020.



General and Administrative Expenses




General and administrative expenses increased $2.4 million, or 48%, from $4.9
million for the three months ended September 30, 2020 to $7.3 million for the
three months ended September 30, 2021 primarily due to an increase of $1.6
million in personnel expenses, a $1.0 million increase in consulting fees to
support the growth of our business, and a $0.2 million increase in insurance
costs, partially offset by a $0.4 million decrease in legal fees. The increase
in personnel expenses was primarily due to increases of $1.3 million in
stock-based compensation expense and $0.2 million in wages and benefits.



We had 24 and 19 full-time equivalent general and administrative employees as of September 30, 2021 and 2020, respectively.



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Comparison of the Nine Months Ended September 30, 2021 and 2020


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

                                                             (Dollars in thousands)
License and collaboration revenue - related party    $   18,740    $   22,978    $  (4,238)      (18)
Operating expenses:
Research and development (1)                             87,633        55,020        32,613        59
General and administrative (2)                           19,936        13,644         6,292        46
Total operating expenses                                107,569        68,664        38,905        57
Loss from operations                                   (88,829)      (45,686)      (43,143)        94
Interest income                                             321           820         (499)      (61)
Interest expense                                              -         (471)           471     (100)
Loss on early repayment of debt                               -         (585)           585     (100)
Other expense, net                                        (136)          (37)          (99)       268
Loss before income tax expense                         (88,644)      (45,959)      (42,685)        93
Income tax expense                                            -       (1,305)         1,305     (100)
Net loss                                             $ (88,644)    $ (47,264)    $ (41,380)        88

(1) Includes $6.3 million and $3.1 million of non-cash stock-based compensation

expense for the nine months ended September 30, 2021 and 2020, respectively.

(2) Includes $5.1 million and $2.8 million of non-cash stock-based compensation

expense for the nine months ended September 30, 2021 and 2020, respectively.

License and Collaboration Revenue


License and collaboration revenue decreased $4.2 million, or 18%, from $23.0
million for the nine months ended September 30, 2020 to $18.7 million for the
nine months ended September 30, 2021, which was primarily related to a decrease
in services provided under the Janssen License and Collaboration Agreement
recognized based on proportional performance partially offset by an $8.0 million
cumulative catch-up amount recognized during the nine months ended September 30,
2021, following the amendment of our collaboration agreement for the development
of IL23R assets with Janssen. This cumulative catch-up was primarily the result
of an acceleration of our cumulative performance completed under our obligation,
following the amendment to the collaboration which reduced the remaining
services that we are responsible to provide Revenue for the nine months ended
September 30, 2020 included an update in the amounts forecast for future
services remaining to be performed under the Janssen License and Collaboration
Agreement, which correspondingly increased our overall cumulative percentage of
completion of our performance obligation during the third quarter of 2020,
coupled with continued performance and delivery of services under the ongoing
Janssen License and Collaboration Agreement. We are nearing completion of our
remaining services to be provided to Janssen under the collaboration, in
particular, both the Phase 1 trials in PN-235 & PN-232, which are expected to be
completed in the fourth quarter of 2021 and second quarter 2022, respectively.

We have determined that the transaction price of the initial performance
obligation under the Restated Janssen License and Collaboration Agreement was
$105.7 million as of September 30, 2021, an increase of $7.1 million from the
transaction price of $98.6 million as of December 31, 2020 under the Original
Agreement. In order to determine the transaction price, we evaluated all
payments expected to be received during the duration of the contract, net of
development costs reimbursement expected to be payable to Janssen. We determined
that the transaction price includes $80.0 million of nonrefundable payments
received to date, $17.9 million of reimbursement from Janssen for services
performed for IL-23R antagonist compound research costs and other services, and
estimated variable consideration consisting of a $7.5 million milestone payment
subject to the completion of the clinical data collection Phase 1 activities for
PN-235 and $8.4 million of development cost reimbursement receivable from
Janssen, partially offset by $8.1 million of net cost reimbursement due to
Janssen for services performed. The increase in transaction price from December
30, 2020 to September 30, 2021 was due primarily to changes related to the
Second Amendment to the

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Janssen License and Collaboration Agreement. We re-evaluate the transaction price each reporting period and as uncertain events are resolved or other changes in circumstances occur.

Research and Development Expenses


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

                                                                     (Dollars in thousands)
Clinical and development expense - rusfertide (PTG-300)         $   37,128   $ 22,881   $  14,247       62
Clinical and development expense - PN-943                           26,394     17,867       8,527       48
Clinical and development expense - PN-235                            3,799          -       3,799        *
Clinical and development expense - PN-232                              870          -         870        *
Clinical and development expense - PTG-200                              13      1,108     (1,095)     (99)
Clinical and development expense - PTG-100                             338        307          31       10
Preclinical and discovery research expense                          17,371     13,695       3,676       27
Milestone payment obligation to former collaboration partner         4,000          -       4,000        *
Grants and tax incentives expense reimbursement, net               (2,280)      (838)     (1,442)      172
Total research and development expenses                         $   87,633 
 $ 55,020   $  32,613       59


*Percentage not meaningful



Research and development expenses increased $32.6 million, or 59%, from $55.0
million for the nine months ended September 30, 2020 to $87.6 million for the
nine months ended September 30, 2021. The increase was primarily due to an
increase of $14.2 million in rusfertide clinical trial and development costs as
the clinical trials have enrolled and progressed, including the ongoing Phase 2
trials in PV, which began in December 2019 and the first quarter of 2021,
respectively, and HH, which began in early 2020, and clinical and contract
manufacturing activities incurred in 2021 in preparation for the ongoing Phase 2
trials and a planned global Phase 3 clinical trial of rusfertide in PV; $8.5
million in PN-943 clinical trial and development costs following the initiation
of the Phase 2 trial in UC during the second quarter of 2020 and related
contract manufacturing activities incurred in 2021; $4.0 million of expenses
related to milestone payments and obligations under the Zealand Agreement for
rusfertide pursuant to the resolution of related arbitration; $3.8 million of
Phase 1 clinical trial and development costs for PN-235 beginning in December
2020, an increase of $3.7 million in preclinical and drug discovery research
expenses, and $0.9 million of Phase 1 clinical trial and development costs for
PN-232 initiated in May 2021. These increases were partially offset by a $1.4
million increase in grant and accrued refundable cash tax incentives and a
decrease of $1.1 million in PTG-200 clinical trial and development expenses
under the Janssen License and Collaboration Agreement due to our delivery of
substantially all agreed-upon services for the PTG-200 Phase 2 clinical trial.



We had 92 and 57 full-time equivalent research and development employees as of
September 30, 2021 and 2020, respectively. Research and development expenses for
the nine months ended September 30, 2021 included increases of $3.1 million in
stock-based compensation expense and $3.1 million of other personnel-related
expenses compared to the nine months ended September 30, 2020.



General and Administrative Expenses


General and administrative expenses increased $6.3 million, or 46%, from $13.6
million for the nine months ended September 30, 2020 to $19.9 million for the
nine months ended September 30, 2021 primarily due to an increase of $3.5
million in personnel expenses, $1.4 million in consulting expenses, $0.7 million
in market research expenses, and $0.5 million in recruiting expenses to support
the growth of our operations, and a $0.2 million increase in legal fees. The
increase in personnel expenses was primarily due to increases of $2.3 million in
stock-based compensation expense and $1.2 million in wages and salaries.



We had 24 and 19 full-time equivalent general and administrative employees as of September 30, 2021 and 2020, respectively.

                                       40

  Table of Contents



Interest Income



Interest income decreased $0.5 million, or 61%, from $0.8 million for the nine
months ended September 30, 2020 to $0.3 million for the nine months ended
September 30, 2021. This decrease was due primarily to the recent record low
interest rate environment and a change in the mix of marketable securities
compared to the prior year period, despite higher interest-earning asset
balances.



Interest Expense

Interest expense of $0.5 million for the nine months ended September 30, 2020
reflects interest expense on our long-term debt under our term credit facility.
We prepaid our outstanding long-term debt under our term credit facility during
the second quarter of 2020. We executed a payoff letter to release all
obligations under the term credit facility during the third quarter of 2021.

Loss on Early Repayment of Debt

Loss on early repayment of debt of $0.6 million for the nine months ended September 30, 2020 reflects prepayment and final payment fees paid in connection with the early repayment of our term loan in June 2020. We had no debt outstanding as of September 30, 2021.

Other Expense, Net

Other expense, net was $0.1 million for the nine months ended September 30, 2021
compared to zero for the nine months ended September 30, 2020. The change was
due primarily to an increase in foreign exchange losses.

Income Tax Expense


Income tax expense decreased $1.3 million, or 100%, from $1.3 million for the
nine months ended September 30, 2020 to zero for the nine months ended September
30, 2021. Our effective income tax rate was 0% for the nine months ended
September 30, 2021 as compared to 2.8% for the nine months ended September 30,
2020. During the second quarter of 2020, our Australia subsidiary sold
beneficial rights to discovery intellectual property to our U.S. entity, and the
U.S. entity reimbursed the Australia subsidiary for certain direct development
costs. Upon completion of the sale, we analyzed tax planning strategies and
future income and concluded that a valuation allowance is necessary for our
Australia subsidiary. Income tax expense for the nine months ended September 30,
2020 reflects this sale of intellectual property rights, cost reimbursements and
related adjustments to the deferred tax asset, establishing a valuation
allowance and certain uncertain tax position liabilities. We maintained a full
valuation allowance on our tax position as of September 30, 2021.

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Table of Contents

Liquidity and Capital Resources

Sources of Liquidity

Historically, we have funded our operations primarily from net proceeds from the sale of shares of our common stock and payments under collaboration agreements.


In December 2020, we filed an automatic registration statement on Form S-3ASR
and an accompanying prospectus (Registration Statement No. 333-251254), pursuant
to which we completed an underwritten public offering of 4,761,904 shares of
common stock at a public offering price of $21.00 per share and issued an
additional 714,285 shares of our common stock at a price of $21.00 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 $107.6 million. In June 2021, pursuant to Registration
Statement No. 333-251254, we completed an underwritten public offering of
3,046,358 shares of common stock at a public offering price of $37.75 per share
and issued an additional 456,953 shares of common stock at a public offering
price of $37.75 per share following the underwriters' exercise of their option
to purchase additional shares. Net proceeds, after deducting underwriting
commission and offering costs paid by us, were $123.8 million. This Form S-3ASR
expires in December 2023.



In October 2019, we filed a registration statement on Form S-3 (File no.
333-234414) that was declared effective as of November 22, 2019 and permits the
offering, issuance, and sale by us of up to a maximum aggregate offering price
of $250.0 million of our common stock, preferred stock, debt securities and
warrants (the "2019 Form S-3"). Up to a maximum of $75.0 million of the maximum
aggregate offering price of $250.0 million may be issued and sold pursuant to an
ATM financing facility under a sales agreement we entered into on November 27,
2019 (the "2019 Sales Agreement"). In May 2020, we completed an underwritten
public offering of 7,000,000 shares of common stock at a public offering price
of $14.00 per share, and we issued an additional 1,050,000 shares of our common
stock at a price of $14.00 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 $105.3 million.
During the year ended December 31, 2020, we issued 2,483,719 shares under our
ATM facility for net proceeds of $41.9 million. No shares were issued under the
ATM facility during the three and nine months ended September 30, 2021. As of
September 30, 2021, a total of $94.2 million of common stock remained available
for sale under the 2019 Form S-3, $31.9 million of which remained available for
sale under the ATM financing facility. This Form S-3 expires in October 2022.

We have received $80.0 million in non-refundable payments from Janssen since the
inception of the Janssen License and Collaboration Agreement in 2017 through
September 30, 2021, as follows:



? Upon effectiveness of the agreement, we received a non-refundable, upfront cash

payment of $50.0 million from Janssen;

Upon effectiveness of the First Amendment, we became eligible to receive a

? $25.0 million payment from Janssen, which was received during the second

quarter of 2019; and

In December 2019, we became eligible to receive a $5.0 million payment

? triggered by the successful nomination of a second-generation development

compound, which was received during the first quarter of 2020.



In October 2021, we became eligible to receive a $7.5 million milestone payment
from Janssen triggered by completion of the data collection for PN-235 Phase 1
activities.

We also receive payments for services provided under the collaboration agreement
and in-kind reimburses Janssen for certain costs they have incurred based on the
cost sharing terms of the agreement.

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Pursuant to the amended and restated License and Collaboration Agreement with
Janssen executed July 27, 2021 (the "Restated Agreement"), we will be eligible
to receive clinical development, regulatory and sales milestones, if and as
achieved. Upcoming potential development milestones for second-generation
products include:

? $25.0 million for dosing of the third patient in the first Phase 2 clinical

trial for any second-generation product for any indication; and

$10.0 million for dosing of the third patient in the first Phase 2 clinical

? trial for any second-generation product for a second indication (i.e. an

indication different than the indication which triggered the $25.0 million

milestone described directly above).


Capital Requirements



As of September 30, 2021, we had $352.5 million of cash, cash equivalents and
marketable securities and an accumulated deficit of $372.5 million. Our capital
expenditures for nine months ended September 30, 2021 were $0.9 million. Our
capital expenditures for the years ended December 31, 2020 and 2019 were $0.5
million and $1.0 million, respectively. Our primary uses of cash are to fund
operating expenses, primarily our research and development expenditures, general
and administrative costs and pre-commercialization costs. Cash used to fund
operating expenses is impacted by the timing of when we pay these expenses. We
believe, based on our current operating plan and expected expenditures, that our
existing cash, cash equivalents and marketable securities will be sufficient to
meet our anticipated operating and capital expenditure requirements for at least
the next 12 months from the date of this filing. We have based this estimate on
assumptions that may prove to be wrong. We could utilize our available capital
resources sooner than we currently expect if our planned pre-clinical and
clinical trials are successful or expanded, our product candidates enter new and
more advanced stages of clinical development or our newer product clinical
trials or advance beyond the discovery stage. We expect to require additional
financing to advance our product candidates through clinical development and
toward potential regulatory approval and to develop, acquire or in-license other
potential product candidates. Such additional funding may come from raising
additional capital, seeking access to additional debt, and additional
collaborative or other arrangements with corporate sources, but such funding may
not be available at terms acceptable to us, if at all. We anticipate that we
will need to raise substantial additional funding, the requirements of which
will depend on many factors, including:



the progress, timing, scope, results and costs of advancing our clinical trials

? and pre-clinical studies for our product candidates, including the ability to

enroll patients in a timely manner for our clinical trials;

? the costs of and ability to obtain clinical and commercial supplies and any

other product candidates we may identify and develop;

? our ability to successfully commercialize the product candidates we may

identify and develop;

the selling and marketing costs associated with our current product candidates

? and any other product candidates we may identify and develop, including the

cost and timing of expanding our sales and marketing capabilities;

the achievement of development, regulatory and sales milestones resulting in

? payments to us from Janssen under the Janssen License and Collaboration

Agreement or other such arrangements that we may enter into, and the timing of

receipt of such payments, if any;

the timing, receipt and amount of royalties under the Janssen License and

? Collaboration Agreement on worldwide net sales of IL-23 receptor antagonist

   compounds, upon regulatory approval or clearance, if any;


                                       43

  Table of Contents

the amount and timing of sales and other revenues from our current product

? candidates and any other product candidates we may identify and develop,

including the sales price and the availability of adequate third-party

reimbursement;

? the timing, payment and amount of potential milestones and royalties due under

our collaboration agreements;

? the cash requirements of any future acquisitions or discovery of product

candidates;

? the time and cost necessary to respond to technological and market

developments;

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

technologies;

? costs necessary to attract, hire and retain qualified personnel;

? the costs of maintaining, expanding and protecting our intellectual property

portfolio; and

? the costs of ongoing general and administrative activities to support the

growth or our business.

Adequate additional funding may not be available to us on acceptable terms, or
at all. 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 will be diluted, and the terms of these securities may include
liquidation or other preferences that adversely affect our stockholders' rights.
If we raise additional capital through debt financing, we may be subject to
covenants limiting or restricting our ability to take specific actions, such as
incurring additional debt, making capital expenditures or declaring dividends.
Because of the numerous risks and uncertainties associated with the development
and commercialization of our product candidates, we are unable to fully estimate
the amounts of increased capital outlays and operating expenditures associated
with our current and anticipated product development programs.

The following table summarizes our cash flows for the periods indicated (in
thousands):


                                            Nine Months Ended
                                              September 30,
                                            2021          2020

Cash used in operating activities $ (80,926) $ (53,617) Cash used in investing activities (43,727) (16,563) Cash provided by financing activities 127,750 120,645

Cash Flows from Operating Activities


Cash used in operating activities for the nine months ended September 30, 2021
was $80.9 million, consisting of our net loss of $88.6 million and a net change
of $6.9 million in net operating assets and liabilities, partially offset by
$14.6 million in non-cash charges. Non-cash charges were primarily comprised of
$11.4 million of stock-based compensation, $1.4 million of operating lease
right-of-use asset amortization, $1.3 million of net amortization of discount on
marketable securities, and $0.6 million of depreciation. The change in net
operating assets and liabilities was primarily due to a decrease of $12.2
million in deferred revenue related to the Janssen License and Collaboration
Agreement, an increase of $0.2 million in receivable from collaboration partner,
an increase of $0.9 million in research and development tax incentive
receivable, an increase in prepaid expenses and other assets of $2.6 million, a
decrease of $1.5 million in operating lease liability, a decrease of $1.6
million in payable to collaboration partner, a decrease of $2.3 million in
accounts payable and partially offset by an increase of $14.4 million in accrued
expenses and other payables.

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  Table of Contents

Cash used in operating activities for the nine months ended September 30, 2020
was $53.6 million, consisting of our net loss of $47.3 million and a net change
of $16.0 million in net operating assets, partially offset by $9.7 million in
non-cash charges. Non-cash charges were primarily comprised of $5.9 million of
stock-based compensation, a $1.4 million change in net deferred tax asset, $1.3
million of operating lease right-of-use asset amortization, a $0.6 million loss
on early prepayment of long-term debt and $0.6 million of depreciation and
amortization, partially offset by $0.2 million of net accretion of discount on
marketable securities. The change in net operating assets and liabilities was
primarily due to a decrease of $20.7 million in deferred revenue related to the
Janssen License and Collaboration Agreement, a $1.6 million decrease in prepaid
expenses and other assets, a $1.5 million decrease in operating lease liability,
and a $0.5 million increase in Australia research and development incentive
receivable, partially offset by a decrease of $4.0 million in receivable from
collaboration partner, an increase of $3.1 million in accrued expenses and other
payables, an increase of $0.8 million in payable to collaboration partner, and
an increase of $0.2 million in other liability.

Cash Flows from Investing Activities


Cash used in investing activities for the nine months ended September 30, 2021
was $43.7 million, consisting of proceeds from maturities of marketable
securities of $213.1 million, offset by purchases of marketable securities of
$255.9 million and purchases of property and equipment of $0.9 million.

Cash used in investing activities for the nine months ended September 30, 2020
was $16.6 million, consisting of proceeds from maturities of marketable
securities of $131.4 million, partially offset by purchases of marketable
securities of $147.6 million and purchases of property and equipment of $0.3
million.

Cash Flows from Financing Activities


Cash provided by financing activities for the nine months ended September 30,
2021 was $127.8 million, consisting of $124.0 million of cash proceeds from our
public offering of common stock and $3.9 million from the issuance of common
stock upon exercise of stock options and purchases of common stock under our
employee stock purchase plan, partially offset by $0.2 million of tax
withholding payments related to net settlement of restricted stock units.

Cash provided by financing activities for the nine months ended September 30,
2020 was $120.6 million, consisting primarily of cash proceeds from our public
offering of common stock of $105.5 million, cash proceeds from ATM sales of
$23.2 million, and proceeds from the issuance of common stock upon exercise of
stock options and purchases of common stock under our employee stock purchase
plan of $2.5 million, partially offset by early repayment of long-term debt of
$10.5 million.

Contractual Obligations and Other Commitments


Our contractual obligations include minimum lease payments under our operating
lease obligations. On July 2, 2021, we entered into an amendment to our facility
lease agreement dated as of March 2017, as amended, to lease approximately
15,000 square feet of additional office space in Newark, California. See Note 10
to the condensed consolidated financial statements elsewhere in this Quarterly
Report on Form 10-Q for additional information.

Under the Janssen License and Collaboration Agreement, we share with Janssen
certain development, regulatory and compound supply costs. The actual amounts
that we pay Janssen or that Janssen pays us will depend 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. On July 27, 2021,
we entered into an amended and restated License and Collaboration Agreement
("Restated Agreement") with Janssen Biotech, Inc., a Pennsylvania corporation
("Janssen"). The Restated Agreement amends and restates the License and
Collaboration Agreement, dated May 26, 2017, by and between the Company and
Janssen (as amended by the First Amendment thereto, effective May 7, 2019, the
"Original Agreement"). See Note 3 to the condensed consolidated financial
statements elsewhere in the Quarterly Report on Form 10-Q for additional
information.

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  Table of Contents

On January 23, 2020, we initiated arbitration proceedings with the International
Court of Arbitration of the International Chamber of Commerce against Zealand
Pharma related to a collaboration agreement we and Zealand entered into in 2012
and terminated in 2014. The agreement provides for certain post-termination
payment obligations to Zealand with respect to compounds related to the
collaboration that we elect to further develop and meet specified conditions. On
August 4, 2021, we and Zealand agreed to resolve the dispute and reached an
Arbitration Resolution Agreement. See Note 11 to the condensed consolidated
financial statements included elsewhere in this Quarterly Report on Form 10-Q
for additional information.



During the three and nine months ended September 30, 2021, there were no other
material changes to our contractual obligations and commitments 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,
2020 filed with the SEC on March 10, 2021.

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Capitalization 1 636 M 1 636 M -
EV / Sales 2021 58,2x
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Nbr of Employees 116
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Sector and Competitors
1st jan.Capi. (M$)
PROTAGONIST THERAPEUTICS, INC.0.20%1 636
MODERNA, INC.-26.53%75 661
LONZA GROUP AG-15.05%52 427
IQVIA HOLDINGS INC.-14.11%46 293
SEAGEN INC.-15.72%23 824
ICON PUBLIC LIMITED COMPANY-17.86%20 707