PROTAGONIST THERAPEUTICS, INC. Overview
We are a biopharmaceutical company with multiple peptide-based new chemical entities in different stages of development, all derived from the Company's proprietary technology platform. Our clinical programs address two broad categories of diseases; (i) hematology and blood disorders, and (ii) inflammatory and immunomodulatory diseases.
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
REVIVE, a Phase 2 proof of concept ("POC") study in the blood disorder
polycythemia vera ("PV"), in the third quarter of 2019. We initiated a Phase 2
POC study in hereditary hemochromatosis ("HH") in January 2020 , which was
completed during the fourth quarter of 2021. During the first quarter of 2021,
we initiated PACIFIC, another Phase 2 study for rusfertide in up to 20 patients
diagnosed with PV and with routinely elevated hematocrit levels (>48%).
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 . An abstract highlighting
positive preliminary data from our Phase 2 study of rusfertide in HH was orally
presented at The Liver Meeting® 2021, hosted by the American Association for the
Study of Liver Diseases ("AASLD"), which took place virtually in November 2021 .
In December 2021 , two abstracts highlighting positive updated data from our
REVIVE and PACIFIC Phase 2 studies of rusfertide in PV were orally presented at
the American Society of Hematology ("ASH") 2021 Annual Meeting, in addition to
three poster presentations on rusfertide in PV and HH. These results provided
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
specifically decrease and maintain hematocrit levels within the range of
recommended clinical guidelines without causing the iron deficiency that can
occur with frequent phlebotomy.
On September 16, 2021 , the FDA placed a clinical hold on our rusfertide clinical
studies following our submission to the FDA of findings in a 26-week rasH2
transgenic mouse carcinogenicity study. 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 . 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 and enrollment in ongoing clinical trials with
rusfertide resumed in the fourth quarter of 2021.
We enrolled 63 patients in the ongoing REVIVE Phase 2 clinical trial of
rusfertide in PV prior to the clinical hold, and we are currently enrolling
approximately 20 patients to target approximately 50 patients enrolled through
the end of a three-year open label extension. 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
VERIFY, a global Phase 3 clinical trial of rusfertide in PV in the first quarter
of 2022. Patient enrollment into VERIFY is expected to be completed in the first
half of 2023. In addition, we completed our Phase 2 POC study in HH, our second
indication, during the fourth quarter of 2021.
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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
? The EMA granted orphan drug designation for rusfertide for the treatment of PV
in
? The FDA granted Fast Track designation for rusfertide for the treatment of PV
in
? The FDA granted Breakthrough Therapy Designation for rusfertide for the
treatment of PV in
Our alpha-4-beta-7 ("?4?7") antagonist PN-943 and our Interleukin-23 receptor
("IL-23R") antagonist compound 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 a
targeted therapeutic approach for GI and systemic compartments as needed. 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 IDEAL, a 150 patient Phase 2 trial evaluating the safety, tolerability
and efficacy of PN-943 in patients with moderate to severe UC. This trial
includes a 12-week induction period and a 40-week open label extension. Patient
enrollment in IDEAL was completed during the first quarter of 2022, and topline
data from the study, including 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
(JNJ-67864238) and certain related compounds for all indications, including IBD.
PTG-200 was a first-generation 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 independently research and develop collaboration compounds for
multiple indications in the IL-23 pathway and further align our financial
interests.
In October 2020 , we and Janssen announced the selection of two second-generation
IL23-R antagonists for advancement into clinical development, PN-232
(JNJ-75105186) and PN-235 (JNJ-77242113). During the fourth quarter of 2021,
following a pre-specified interim analysis criteria, a portfolio decision was
made by Janssen to stop further development of both PTG-200 and PN-232 favor of
advancing PN-235, based on its superior potency and overall pharmacokinetic and
pharmacodynamic profile. A PN-235 Phase 1 study was completed in Q4 2021.
Janssen initiated FRONTIER 1, a Phase 2b clinical study of PN-235 in
moderate-to-severe plaque psoriasis, in early 2022, and is expected to initiate
a separate Phase 2 study of PN-235 in IBD in the second half of 2022.
During the fourth quarter of 2021, we received a $7.5 million milestone payment
from Janssen triggered by the completion of data collection for PN-235 Phase 1
activities. We expect to earn a $25.0 million milestone in connection with the
dosing of a third patient in the first Phase 2 study of a second-generation
candidate, and a $10.0 million milestone in connection with the dosing of a
third patient in 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 $87.5 million in milestones already
received.
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.
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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 highly
uncertain and difficult to predict, as the response to the pandemic is ongoing
and information continues to evolve. Capital markets and economies worldwide
have been significantly impacted by the COVID-19 pandemic and may be further
impacted in the future. 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 COVID-19 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 our 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 Annual Report on Form
10-K, 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 losses were$125.6 million ,$66.2 million and$77.2 million for the years endedDecember 31, 2021 , 2020 and 2019, respectively. As ofDecember 31, 2021 , we had an accumulated deficit of$409.4 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 and other expenses related to our ongoing operations, product development, and pre-commercialization activities. 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
OnJuly 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, datedMay 26, 2017 , by and between us and Janssen (as amended by the First Amendment thereto, effectiveMay 7, 2019 , the "Original Agreement"). Janssen is a related party to us asJohnson & Johnson Innovation - JJDC, Inc. , a significant stockholder of ours, and Janssen are both subsidiaries of Johnson & Johnson. The Original Agreement became effective onJuly 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 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 the fourth quarter of 2021, we received a$7.5 million milestone payment from Janssen triggered by data collection activities for the first Phase 1 clinical trial of a second-generation compound during the fourth quarter of 2021. See Note 3 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for additional information. 57
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Critical Accounting Polices and Estimates
Our management's discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance withUnited States generally accepted accounting principles. The preparation of these 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 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. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management's judgments and estimates.
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 COVD-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 Annual Report on Form 10-K. 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.
Revenue Recognition
Under Accounting Standards Codification Topic 606, Revenue from Contracts with
Customers ("ASC 606"), we recognize revenue when our customer obtains control of
promised goods or services, in an amount that reflects the consideration which
we expect to receive in exchange for those goods or services. To determine
revenue recognition for arrangements that we determine are within the scope of
ASC 606, we perform the following five steps: (i) identify the contract(s) with
a customer; (ii) identify the performance obligations in the contract; (iii)
determine the transaction price; (iv) allocate the transaction price to the
performance obligations in the contract; and (v) recognize revenue when (or as)
we satisfy a performance obligation. We apply the five-step model to contracts
when it is probable that we will collect the consideration we are entitled to in
exchange for the goods or services we transfer to the customer. At contract
inception, we assess the goods or services promised within each contract,
determine those that are performance obligations, and assess whether each
promised good or service is distinct. We then recognize as revenue the amount of
the transaction price that is allocated to the respective performance
obligations when (or as) the performance obligations are satisfied. We constrain
our estimate of the transaction price up to the amount (the "variable
consideration constraint") that a significant reversal of recognized revenue is
not probable.
Licenses of intellectual property: If a license to our intellectual property is
determined to be distinct from the other performance obligations identified in
an arrangement, we recognize revenue from non-refundable, upfront fees allocated
to the license when the license is transferred to the customer and the customer
is able to use and benefit from the license. For licenses that are bundled with
other promises, we utilize judgment to assess the nature of the combined
performance obligation to determine whether the combined performance obligation
is satisfied over time or at a point in time and, if over time, the appropriate
method of measuring proportional performance for purposes of recognizing revenue
from non-refundable, upfront fees. We evaluate the measure of proportional
performance each reporting period and, if necessary, adjust the measure of
performance and related revenue recognition.
Milestone payments: At the inception of each arrangement or amendment that
includes development, regulatory or commercial milestone payments, we evaluate
whether the milestones are considered probable of being reached and estimate the
amount to be included in the transaction price. ASC 606 suggests two
alternatives to use when estimating the amount of variable consideration: the
expected value method and the most likely amount method. Under the expected
value method, an entity considers the sum of probability-weighted amounts in a
range of possible consideration amounts. Under the most likely amount method, an
entity considers the single most likely amount in a range of possible
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consideration amounts. Whichever method is used, it should be consistently applied throughout the life of the contract; however, it is not necessary for us to use the same approach for all contracts. We expect to use the most likely amount method for development and regulatory milestone payments. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within our control or the control of the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. If there is more than one performance obligation, the transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis. We recognize revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, we re-evaluate the probability or achievement of each such milestone and any related constraint, and if necessary, adjust our estimates of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment.
Any potential milestone payments that we determine are not associated with performance obligations as defined under the contract are excluded from the transaction price and are recognized as the triggering event occurs.
Royalties: For arrangements that include sales-based royalties, including
milestone payments based on the level of sales, and the license is deemed to be
the predominant item to which the royalties relate, we recognize revenue at the
later of (i) when the related sales occur, or (ii) when the performance
obligation to which some or all of the royalty has been allocated has been
satisfied (or partially satisfied).
Upfront payments and fees are recorded as deferred revenue upon receipt or when
due and may require deferral of revenue recognition to a future period until we
perform our obligations under these arrangements. Amounts payable to us are
recorded as accounts receivable when our right to consideration is
unconditional. Amounts payable to us and not yet billed to the collaboration
partner are recorded as contract assets. We do not assess whether a contract has
a significant financing component if the expectation at contract inception is
such that the period between payment by the customer and the transfer of the
promised goods or services to the customer will be one year or less.
Contractual cost sharing payments made to a customer or collaboration partner
are accounted for as a reduction to the transaction price if such payments are
not related to distinct goods or services received from the customer or
collaboration partner.
Contracts may be amended to account for changes in contract specifications and
requirements. Contract modifications exist when the amendment either creates
new, or changes existing, enforceable rights and obligations. When contract
modifications create new performance obligations and the increase in
consideration approximates the standalone selling price for goods and services
related to such new performance obligations as adjusted for specific facts and
circumstances of the contract, the modification is considered to be a separate
contract and revenue is recognized prospectively. If a contract modification is
not accounted for as a separate contract, we account for the promised goods or
services not yet transferred at the date of the contract modification (the
remaining promised goods or services) prospectively, as if it were a termination
of the existing contract and the creation of a new contract, if the remaining
goods or services are distinct from the goods or services transferred on or
before the date of the contract modification. We account for a contract
modification as if it were a part of the existing contract if the remaining
goods or services are not distinct and, therefore, form part of a single
performance obligation that is partially satisfied at the date of the contract
modification. In such case the effect that the contract modification has on the
transaction price, and on the entity's measure of progress toward complete
satisfaction of the performance obligation, is recognized as an adjustment to
revenue (either as an increase in or a reduction of revenue) at the date of the
contract modification (the adjustment to revenue is made on a cumulative
catch-up basis).
The period between when we transfer control of promised goods or services and
when we receive payment is expected to be one year or less, which is consistent
with our historical experience. Upfront payment contract liabilities resulting
from our license and collaboration agreements do not represent a financing
component as the payment is not financing the transfer of goods and services,
and the technology underlying the licenses granted reflects research and
development expenses already incurred by us. As such, we do not adjust our
revenues for the effects of a significant financing component.
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Research and Development Costs
Research and development costs are expensed as incurred, unless there is an alternate future use in other research and development projects or otherwise. Research and development costs include salaries and benefits, stock-based compensation expense, laboratory supplies and facility-related overhead, outside contracted services including clinical trial costs, manufacturing and process development costs for both clinical and pre-clinical materials, research costs, development milestone payments under license and collaboration agreements, and other consulting services. We accrue for estimated costs of research and development activities conducted by third-party service providers, which include the conduct of pre-clinical studies and clinical trials, and contract manufacturing activities. We record the estimated costs of research and development activities based upon the estimated services provided but not yet invoiced and includes these costs in accrued expenses and other payables in the consolidated balance sheets and within research and development expense in the consolidated statements of operations. We accrue for these costs based on factors such as estimates of the work completed and in accordance with agreements established with its third-party service providers. As actual costs become known, we adjust our accrued liabilities. We have not experienced any material differences between accrued liabilities and actual costs incurred. However, the status and timing of actual services performed, number of patients enrolled, the rate of patient enrollment and number and location of sites activated may vary from our estimates, resulting in adjustments to expense in future periods. Changes in these estimates that result in material changes to our accruals could materially affect our results of operations.
Recent Accounting Pronouncements
Information regarding recent accounting pronouncements applicable to us is included in Note 2 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.
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 Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K 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:
Year Ended December 31,
2021 2020 2019
Clinical and development expense - rusfertide
(PTG-300) $ 55,382 $ 32,395 $ 30,325
Clinical and development expense - PN-943 37,655 23,35420,924
Clinical and development expense - PN-235 4,777 317 - Clinical and development expense - PN-232 2,037 - - Clinical and development expense - PTG-200 23 925
9,414
Clinical and development expense - PTG-100 374 540
288
Preclinical and drug discovery research expense 24,943 18,453
4,162
Milestone payment obligation to former collaboration partner 4,000 - - Grants and tax incentives expense reimbursement, net (3,185) (1,478)
(110)
Total research and development expenses$ 126,006 $ 74,506
We expect our research and development expenses will increase as we progress our
product candidates into later stage clinical trials, add to the number of
ongoing clinical trials, advance our discovery research projects into the
pre-clinical stage, continue our early-stage research and prepare for the
commercialization of our product candidates. The process of conducting research,
identifying potential product candidates and conducting pre-clinical 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
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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 supplies. We expect to continue to incur expenses to support our continued operations as a public company, including expenses related to existing and future compliance with rules and regulations of theSEC and those of the national securities exchange on which our securities are traded, insurance expenses, investor relations, 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.
Interest Expense
Interest expense consists of interest recognized on our long-term debt, 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 Year ended
Year Ended December 31, Dollar %
2021 2020 Change Change
(Dollars in thousands)License and collaboration revenue - related party$ 27,357 $ 28,628 $ (1,271) (4) Operating expenses: Research and development (1) 126,006 74,506 51,500 69 General and administrative (2) 27,196 18,638 8,558 46 Total operating expenses 153,202 93,144 60,058 64 Loss from operations (125,845) (64,516) (61,329) 95 Interest income 443 900 (457) (51) Interest expense - (598) 598 (100) Loss on early repayment of debt - (585) 585 (100) Other expense, net (149) (46) (103) 224 Loss before income tax expense (125,551) (64,845) (60,706) 94 Income tax expense - (1,305) 1,305 (100) Net loss$ (125,551) $ (66,150) $ (59,401) 90
(1) Includes
(2) Includes
License and Collaboration Revenue
License and collaboration revenue decreased$1.3 million , or 4%, from$28.6 million for the year endedDecember 31, 2020 to$27.4 million for the year endedDecember 31, 2021 . The decrease in license and collaboration revenue 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 year endedDecember 31, 2021 following the amendment of our collaboration agreement for the development of IL-23R 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 year endedDecember 31, 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 year endedDecember 31, 2020 , coupled with continued performance and delivery of services under the Janssen License and Collaboration Agreement. We have determined that the transaction price of the initial performance obligation under the Restated Janssen License and Collaboration Agreement was$106.5 million as ofDecember 31, 2021 , an increase of$7.9 million from the transaction price of$98.6 million as ofDecember 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$87.5 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$8.2 million of development cost reimbursement receivable from Janssen, partially offset by$7.1 million of net cost reimbursement due to Janssen for services performed. The increase in transaction price fromDecember 31, 2020 toDecember 31, 2021 was due primarily to reductions in both the remaining services to be performed by the Company under the agreement and the Company's remaining shared development costs following 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. 63
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Research and Development Expenses
Year Ended December 31, Dollar %
2021 2020 Change Change
(Dollars in thousands)
Clinical and development expense - rusfertide (PTG-300) $ 55,382 $ 32,395 $ 22,987 71
Clinical and development expense - PN-943 37,655 23,354 14,301 61
Clinical and development expense - PN-235 4,777 317 4,460 1,407
Clinical and development expense - PN-232 2,037 - 2,037 *
Clinical and development expense - PTG-200 23 925 (902) (98)
Clinical and development expense - PTG-100 374 540 (166) (31)
Preclinical and discovery research expense 24,943 18,453 6,490 35
Milestone payment obligation to former collaboration partner 4,000 - 4,000 *
Grants and tax incentives expense reimbursement, net (3,185) (1,478) (1,707) 115
Total research and development expenses $ 126,006 $ 74,506 $ 51,500 69
*Percentage not meaningful
Research and development expenses increased $51.5 million , or 69%, from $74.5
million for the year ended December 31, 2020 to $126.0 million for the year
ended December 31, 2021 . The increase was primarily due to an increase of $23.0
million in rusfertide clinical trial and development costs as clinical trials
have enrolled and progressed, including the ongoing REVIVE and PACIFIC 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 support of the REVIVE and PACIFIC
Phase 2 trials and planned VERIFY global Phase 3 clinical trial of rusfertide in
PV; $14.3 million in PN-943 clinical trial and development costs and contract
manufacturing costs primarily related to the Phase 2 IDEAL trial in UC initiated
during the second quarter of 2020; an increase of $6.5 million in preclinical
and drug discovery research expenses; $4.5 million of clinical trial and
development costs for the Phase 1 PN-235 initiated in December 2020 ; $4.0
million of expenses related to milestone payments and obligations under the
Zealand Agreement for rusfertide pursuant to the resolution of related
arbitration; and $2.0 million of clinical trial and development costs for the
Phase 1 PN-232 study initiated in May 2021 . These increases were partially
offset by a $1.7 million increase in grant and accrued refundable cash tax
incentives and a decrease of $0.9 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 prior to 2021.
We had 92 and 59 full-time equivalent research and development employees at
December 31, 2021 and 2020, respectively. Research and development expenses for
the year ended December 31, 2021 included increases of $4.9 million in
stock-based compensation expense and $5.3 million of other personnel-related
expenses compared to the year ended December 31, 2020 .
General and Administrative Expenses
General and administrative expenses increased$8.6 million , or 46%, from$18.6 million for the year endedDecember 31, 2020 to$27.2 million for the year endedDecember 31, 2021 , primarily due to increases of$5.2 million in personnel-related expenses;$1.6 million in consulting expenses,$0.9 million in market research expenses,$0.5 million in recruiting expenses to support the growth of our business; and$0.3 million increase in insurance expense. The increase in personnel-related expenses was primarily due to an increase of$3.6 million in stock-based compensation expense and$1.6 million in wages and salaries.
We had 26 and 20 full-time equivalent general and administrative employees as of
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Interest Income
Interest income decreased $0.5 million , or 51%, from $0.9 million for the year
ended December 31, 2020 to $0.4 million for the year ended December 31, 2021 .
This decrease was primarily due 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
Loss on Early Repayment of Debt
Loss on early repayment of debt of$0.6 million for the year endedDecember 31, 2020 was comprised of prepayment and final payment fees paid in connection with the early repayment of our term loan inJune 2020 . We had no debt outstanding as ofDecember 31, 2021 . Other Expense, Net
Other expense, net was
Income Tax Expense
Income tax expense decreased$1.3 million , or 100%, from$1.3 million for the year endedDecember 31, 2020 to zero for the year endedDecember 31, 2021 . Our effective income tax rate was 0% for the year endedDecember 31, 2021 as compared to 2.0% for the year endedDecember 31, 2020 . Our effective income tax rate differs from our federal statutory rate of 21% primarily because our losses cannot be benefited due to our full valuation allowance position. During the second quarter of 2020, ourAustralia subsidiary sold beneficial rights to discovery intellectual property to ourU.S. entity, and theU.S. entity reimbursed theAustralia subsidiary for certain direct development costs. Upon completion of the sale, we analyzed tax planning strategies and future income and concluded that a valuation allowance is necessary for ourAustralia subsidiary. Income tax expense for year endedDecember 31, 2020 reflects this sale of intellectual property rights, cost reimbursements and related adjustments to the deferred tax asset, establishing a valuation allowance and certain uncertain tax position liabilities. We maintained a full valuation allowance on our tax position as ofDecember 31, 2021 . 65
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Comparison of the Years ended
Year Ended December 31, Dollar %
2020 2019 Change Change
(Dollars in thousands)
License and collaboration revenue - related party
231$ 28,397 * Operating expenses: Research and development (1) 74,506 65,003 9,503 15 General and administrative (2) 18,638 15,749 2,889 18 Total operating expenses 93,144 80,752 12,392 15 Loss from operations (64,516) (80,521) 16,005 (20) Interest income 900 2,813 (1,913) (68) Interest expense (598) (169) (429) 254
Loss on early repayment of debt (585) - (585) * Other expense, net (46) (1) (45) * Loss before income tax (expense) benefit (64,845) (77,878) 13,033 (17) Income tax (expense) benefit (1,305)
691 (1,996) (289) Net loss$ (66,150) $ (77,187) $ 11,037 (14)
(1) Includes
(2) Includes
*Percentage not meaningful
License and Collaboration Revenue
License and collaboration revenue increased$28.4 million from$0.2 million for the year endedDecember 31, 2019 to$28.6 million for the year endedDecember 31, 2020 . The increase in license and collaboration revenue was primarily due to an update in the amounts forecast for future services remaining to be performed under the Janssen License and Collaboration Agreement, correspondingly increasing our overall cumulative percentage of completion of our performance obligation during year endedDecember 31, 2020 , coupled with continued performance and delivery of services under the ongoing Janssen License and Collaboration Agreement. The increase in license and collaboration revenue for the year endedDecember 31, 2020 also included the impact of a one-time cumulative adjustment related to the application of revenue recognition principles following theMay 2019 amendment of the Janssen License and Collaboration Agreement that reduced 2019 revenue by$9.4 million . The contract modification resulted in an increase in the transaction price and additional deliverables under the initial performance obligation, leading to an overall corresponding decrease in the cumulative percentage of completion of our performance obligation for the Janssen License and Collaboration Agreement during the second quarter of 2019. We determined that the transaction price of the Janssen License and Collaboration Agreement was$98.6 million as ofDecember 31, 2020 , a decrease of$14.3 million from the transaction price of$112.9 million atDecember 31, 2019 . 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 the$50.0 million upfront payment, the$25.0 million payment received upon the effectiveness of the First Amendment, the$5.0 million payment triggered by the successful nomination of a second-generation compound,$17.9 million of reimbursement from Janssen for services performed for PTG-200 Phase 2 and for second-generation compound research costs and other services, and estimated variable consideration consisting of a$7.5 million milestone payment subject to the completion of a Phase 1 study for a second-generation compound, offset by$6.8 million of net cost reimbursement to Janssen for services performed. The decrease in transaction price fromDecember 31, 2019 toDecember 31, 2020 was due primarily to a decrease in the forecast of remaining services to be provided under the initial performance obligation. We re-evaluate the transaction price each reporting period and as uncertain events are resolved or other changes in circumstances occur. 66
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Research and Development Expenses
Year Ended December 31, Dollar %
2020 2019 Change Change
(Dollars in thousands)Clinical and development expense - rusfertide (PTG-300)$ 32,395 $ 30,325 $ 2,070 7 Clinical and development expense - PN-943 23,354 20,924 2,430 12 Clinical and development expense - PN-235 317 - 317 * Clinical and development expense - PTG-200 925 9,414 (8,489) (90) Clinical and development expense - PTG-100 540 288 252 88 Preclinical and drug discovery research expense 18,453 4,162 14,291 343 Grants and tax incentives expense reimbursement, net (1,478) (110) (1,368) * Total research and development expenses$ 74,506
$ 65,003 $ 9,503 15 *Percentage not meaningful Research and development expenses increased$9.5 million , or 15%, from$65.0 million for the year endedDecember 31, 2019 to$74.5 million for the year endedDecember 31, 2020 . The increase included a$14.3 million increase in pre-clinical and discovery research expenses, including pre-clinical costs related to our second-generation research collaboration efforts with Janssen, a$2.4 million increase in PN-943 clinical trial and development expenses following the initiation of the Phase 2 trial in UC in 2020, a$2.1 million increase in rusfertide clinical trial and development expenses, including the ongoing Phase 2 trials in PV and HH, and$0.3 million of Phase 1 clinical trial and development expenses for PN-235. These increases were partially offset by a decrease of$8.5 million for PTG-200 clinical trial and development expenses under the Janssen License and Collaboration Agreement due to timing of deliverables and related cost sharing arrangements, and the impact of a$1.3 million reversal of previously recorded reductions to research and development expenses in connection with the tax incentive fromAustralia in 2019. Research and development expenses for the year endedDecember 31, 2020 included increased personnel costs due to an increase in research and development headcount from 54 full-time equivalent employees atDecember 31, 2019 to 59 full-time equivalent employees atDecember 31, 2020 .
General and Administrative Expenses
General and administrative expenses increased$2.9 million , or 18%, from$15.7 million for the year endedDecember 31, 2019 to$18.6 million for the year endedDecember 31, 2020 primarily due to increases of$1.4 million in compensation-related expenses to support the growth of our operations,$1.3 million in legal expenses and$0.8 million in insurance expense, partially offset by a$0.6 million decrease in other expenses, including accounting fees, market research, recruiting fees and travel expense.
Interest Income
Interest income decreased$1.9 million , or 68%, from$2.8 million for the year endedDecember 31, 2019 to$0.9 million for the year endedDecember 31, 2020 . This decrease was primarily due to the declining 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 increased$0.4 million , or 254%, from$0.2 million for the year endedDecember 31, 2019 to$0.6 million for the year endedDecember 31, 2020 . Interest expense reflects contractual interest, amortization of origination fees and other issuance costs, and accretion of final payment fees on our term loan that funded inOctober 2019 and was repaid in full inJune 2020 . 67 Table of Contents Income Tax Expense Income tax expense increased by$2.0 million , or 289%, from an income tax benefit of$0.7 million for the year endedDecember 31, 2019 to income tax expense of$1.3 million for the year endedDecember 31, 2020 . Our effective income tax rate was (2.0)% for the year endedDecember 31, 2020 as compared to 0.9% for the year endedDecember 31, 2019 . Our effective income tax rate differs from our federal statutory rate of 21% primarily because our losses cannot be benefited due to our full valuation allowance position. During the second quarter of 2020, ourAustralia subsidiary sold beneficial rights to discovery intellectual property to ourU.S. entity, and theU.S. entity reimbursed theAustralia 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 ourAustralia subsidiary. Income tax expense for year endedDecember 31, 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. Income tax benefit for the year endedDecember 31, 2019 included a discrete tax benefit of approximately$1.1 million for the 2017 Australia refundable R&D tax offset.
Liquidity and Capital Resources
Liquidity and Capital Expenditures
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.
InDecember 2020 , we filed an automatic registration statement on Form S-3ASR and an accompanying prospectus (File 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 . InJune 2021 , pursuant to the Form S-3ASR (File 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 inDecember 2023 . InOctober 2019 , we filed a registration statement on Form S-3 (File No. 333-234414) that was declared effective as ofNovember 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 onNovember 27, 2019 (the "2019 Sales Agreement"). InMay 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 endedDecember 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 year endedDecember 31, 2021 . As ofDecember 31, 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 inOctober 2022 . We have received$87.5 million in non-refundable payments from Janssen since the inception of the Janssen License and Collaboration Agreement in 2017 throughDecember 31, 2021 , as follows:
? Upon effectiveness of the agreement, we received a non-refundable, upfront cash
payment of
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Upon effectiveness of the First Amendment, we became eligible to receive a
?
quarter of 2019;
In
? triggered by the successful nomination of a second-generation development
compound, which was received during the first quarter of 2020; and
During the fourth quarter of 2021, we received
? 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. Pursuant to the amended and restated License and Collaboration Agreement with Janssen executedJuly 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:
?
trial for any second-generation product for any indication; and
?
trial for any second-generation product for a second indication.
Capital Requirements
As ofDecember 31, 2021 , we had$326.9 million of cash, cash equivalents and marketable securities and an accumulated deficit of$409.4 million . Our capital expenditures were$1.1 million ,$0.5 million and$1.0 million for the years endedDecember 31, 2021 , 2020 and 2019, 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 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 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;
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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
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, as amended, or other such arrangements 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 IL23-R antagonists upon
regulatory approval or clearance, if any;
the amount and timing of sales and other revenues from our current product
? candidates and any other product candidates we may identify and develop,
including the sales price and the availability of adequate third-party
reimbursement;
? the cash requirements of any future acquisitions or 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 of 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 includes our cash flow data for the periods indicated (in
thousands):
Year Ended December 31 ,Consolidated Statements of Cash Flows Data: 2021 2020
2019
Cash used in operating activities$ (107,865) $ (72,484) $ (41,527) Cash used in investing activities$ (15,860) $ (90,965) $ (53,710) Cash provided by financing activities$ 129,923 $ 247,626 $ 46,036 Stock-based compensation$ 16,395 $ 7,899 $ 8,353 (Decrease) increase in deferred revenue - related party$ (12,876) $ (27,053) $ 33,307 70 Table of Contents
Cash Used in Operating Activities
Cash used in operating activities during the year endedDecember 31, 2021 of$107.9 million consisted primarily of our net loss of$125.6 million , partially offset by certain non-cash items including$16.4 million of stock-based compensation expense. The$35.4 million increase in cash flow used in operating activities during the year endedDecember 31, 2021 , as compared to the year endedDecember 31, 2020 , was primarily due to a$59.4 million increase in our net loss, partially offset by certain non-cash items including an increase of$8.5 million of stock-based compensation expense, and a$14.2 million change in decrease in deferred revenue. Cash used in operating activities for the year endedDecember 31, 2020 of$72.5 million consisted primarily of our net loss of$66.2 million and net changes of$19.0 million in net operating assets and liabilities, partially offset by certain non-cash items including$7.9 million of stock-based compensation expense and a$1.4 million decrease in deferred tax asset. Changes in net operating assets and liabilities included a$27.1 million decrease in deferred revenue, partially offset by a$5.8 million increase in accrued expenses and other payables and a$4.3 decrease in receivable from collaboration partner. The$31.0 million increase in cash flow used in operating activities during the year endedDecember 31, 2020 , as compared to the year endedDecember 31, 2019 , was primarily due to a$60.4 million change in decrease in deferred revenue, partially offset by an$11.0 million decrease in our net loss, a$15.2 million net increase due to changes in other operating assets and liabilities, and a$2.2 million change in decrease in deferred tax asset.
Cash Used in Investing Activities
Cash used in investing activities for the year endedDecember 31, 2021 was$15.9 million , consisting of purchases of marketable securities of$286.6 million and purchases of property and equipment of$1.1 million , partially offset by proceeds from maturities of marketable securities of$271.8 million . The$75.1 million decrease in cash used in investing activities for the year endedDecember 31, 2021 , as compared to the year endedDecember 31, 2020 , was primarily due to an increase of$82.3 million in proceeds from maturities of marketable securities. Purchases of property and equipment were primarily related to purchases of laboratory equipment, furniture and computer equipment. Cash used in investing activities for the year endedDecember 31, 2020 was$91.0 million , consisting of purchases of marketable securities of$280.0 million and purchases of property and equipment of$0.5 million , partially offset by proceeds from maturities of marketable securities of$189.5 million . The$37.3 million increase in cash used in investing activities for the year endedDecember 31, 2020 , as compared to the year endedDecember 31, 2019 , was primarily due to an increase of$113.0 million in purchases of marketable securities, partially offset by an increase of$75.3 million of proceeds from maturities of marketable securities. Purchases of property and equipment were primarily related to purchases of laboratory equipment, furniture and computer equipment.
Cash Provided by Financing Activities
Cash provided by financing activities for the year endedDecember 31, 2021 was$129.9 million , consisting primarily of cash proceeds from our public offerings of common stock of$123.8 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$6.3 million . The$117.7 million decrease in cash provided by financing activities for the year endedDecember 31, 2021 , as compared to the year endedDecember 31, 2020 , was primarily due to an$89.5 million decrease in cash proceeds from our public offerings of common stock, a$42.1 million decrease in cash proceeds from ATM sales, and a$3.5 million decrease in proceeds from the issuance of common stock upon exercise of stock options and purchases of common stock under our employee stock purchase plan. These decreases were partially offset by$10.5 million related to the early repayment of long-term debt in 2020. Cash provided by financing activities for the year endedDecember 31, 2020 was$247.6 million , consisting primarily of cash proceeds from our public offerings of common stock of$213.3 million , cash proceeds from ATM sales of$42.1 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$2.8 million , partially offset by early repayment of long-term debt of$10.5 million . The$201.6 million increase in cash provided by financing activities for the year endedDecember 31, 2020 , as compared to the year endedDecember 31, 2019 , was primarily due to an increase of$213.3 million in cash 71
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proceeds from our public offerings of common stock and a$7.6 million increase in cash proceeds from ATM sales, and a decrease of$9.8 million in proceeds received from the issuance of long-term debt, partially offset by$10.5 million related to the repayment of long-term debt in 2021.
Contractual Obligations and Other Commitments
In the normal course of business, we enter into agreements with contract service providers to assist in the performance of our R&D and clinical and commercial manufacturing activities. Subject to required notice periods and our obligations under binding commitments, we can elect to discontinue the work under these agreements at any time. We expect to enter into additional clinical development, contract research, clinical and commercial manufacturing, supplier and collaborative research agreements in the future, which may require upfront payments and long-term commitments of capital resources. Our contractual obligations include minimum lease payments under our operating lease obligations. OnJuly 2, 2021 , we entered into an amendment to our facility lease agreement dated as ofMarch 2017 , as amended, to lease approximately 15,000 square feet of additional office space inNewark, California . See Note 10 to the consolidated financial statements elsewhere in this Annual Report on Form 10-K for additional information. OnJuly 27, 2021 , we entered into an amended and restated License and Collaboration Agreement with Janssen. The Restated Agreement amends and restates the License and Collaboration Agreement, datedMay 26, 2017 , by and between the Company and Janssen (as amended by the First Amendment thereto, effectiveMay 7, 2019 ). 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. See Note 3 to the consolidated financial statements elsewhere in this Annual Report on Form 10-K for additional information. InJune 2012 , we entered into a Research Collaboration and License Agreement with Zealand Pharma A/S to identify, optimize and develop novel disulfide-rich peptides to discover a hepcidin mimetic. We amended this agreement onFebruary 28, 2014 , at which point Protagonist assumed responsibility for the development program. OnJanuary 23, 2020 , we initiated arbitration proceedings with theInternational Court of Arbitration of theInternational Chamber of Commerce against Zealand Pharma A/S. OnAugust 4, 2021 , we and Zealand agreed to resolve the dispute and reached an Arbitration Resolution Agreement. See Note 7 and Note 11 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for additional information.
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