On November 6, 2019 Perrigo Company plc (NYSE; TASE: PRGO), a leading global provider of "Quality, Affordable Self-Care ProductsTM", reported financial results for the third quarter ended September 28, 2019 (Press release, Perrigo Company, NOV 6, 2019, View Source [SID1234550404]).

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President and CEO Murray S. Kessler commented, "Our transformation to a consumer self-care company gained significant momentum during the third quarter as a number of our strategic initiatives began to take effect. Through both organic and inorganic growth, our global consumer net sales increased more than 3% and our adjusted net sales increased nearly 10% versus the prior year, excluding exited businesses and currency, helping Perrigo deliver its fourth consecutive quarter of meeting or exceeding adjusted EPS expectations."

Kessler continued, "While we are still in the early stages of our transformation, announced at our Investor Day in May, our organization is energized by the progress that has been made this year, and we are confident in our ability to recapture the Perrigo Advantage."

Key Financial Highlights

GAAP ("reported") consolidated net sales of $1.2 billion in the third quarter increased 5.1% versus the third quarter 2018.
Worldwide Consumer reported net sales were $961 million for the third quarter, up 3.3% versus the third quarter 2018. Excluding exited businesses and currency from the prior year comparison, Worldwide Consumer adjusted net sales increased 9.5%.
Third quarter 2019 reported diluted earnings per share ("EPS") was $0.67, as compared to a loss of $0.49 per diluted share in the third quarter 2018.
Adjusted diluted EPS was $1.04 per diluted share versus $1.09 a year ago. Refer to Table I at the end of this press release for a complete description of non-GAAP adjustments to diluted EPS, which includes $0.11 per share for the voluntary global recall of ranitidine.
The Company expects 2019 reported diluted EPS to be in the range of $2.01 – $2.21 per share. The Company is raising its 2019 adjusted diluted EPS range to $3.85 – $4.05 from $3.75 – $4.05.
Third Quarter Reporting Segments Updated to Include Ranir

The Company has finalized operational reporting lines where the U.S. operations of Ranir will be included in the Consumer Self-Care Americas ("CSCA") segment and Ranir’s non-U.S. operations will be included in the Consumer Self-Care International ("CSCI") segment. These businesses will comprise the newly formed ‘oral self-care category’ in each segment. This update is reflected in this quarter’s financial statements and had no impact on the Company’s historical consolidated results of operations.

Refer to Tables I – V at the end of this press release for a reconciliation of non-GAAP adjustments to the current year and prior year periods and additional non-GAAP information. The Company’s reported results are included in the attached Condensed Consolidated Statements of Operations, Balance Sheets and Statements of Cash Flows.

Consolidated Third Quarter 2019 Results Versus Third Quarter 2018

Reported consolidated net sales increased 5.1% to $1.2 billion. Adjusted net sales increased 10.2% compared to last year, when exited businesses are excluded from the prior year comparison and currency rates are kept constant. This increase was driven by the addition of Ranir, new product sales of $52 million and increased demand for existing products. Discontinued products were $9 million.

Reported net income was $92 million, or $0.67 per diluted share, versus a loss of $68 million, or a loss of $0.49 per diluted share, in the prior period. Excluding certain charges as outlined in Table I, third quarter 2019 adjusted net income was $142 million, or $1.04 per diluted share versus $150 million, or $1.09 per diluted share, for the same period last year. The adjusted diluted EPS was lower due primarily to a one- time tax-depreciation benefit in the prior year of $0.05 per diluted share.

Worldwide Consumer Self-Care Third Quarter 2019 Results Versus Third Quarter 2018

Worldwide Consumer reported net sales for the third quarter of 2019 were $961 million, an increase of 3.3%. Adjusted net sales of $968 million were 9.5% higher, excluding exited businesses and unfavorable currency movements from the prior year comparison.

Third quarter reported gross profit margin was 35.5%. Adjusted gross profit margin of 40.4% was 40 basis points lower as favorable product mix was more than offset by the addition of Ranir oral self-care products, which have a lower gross margin profile than the existing portfolio.

Reported operating margin was 3.6%. Adjusted operating margin was 15.8%, or 40 basis points lower due primarily to gross margin flow-through.

CSCA Third Quarter 2019 Results Versus Third Quarter 2018

Consumer Self-Care Americas reported net sales of $613 million increased 2.9%. Excluding $28 million from exited businesses and currency changes from the prior year comparison, CSCA adjusted net sales increased 9.1% to $619 million, which included the addition of $54 million of net sales from the acquisition of Ranir.

Sales growth was driven primarily by 1) the acquisition of Ranir, 2) increased consumer demand for store brand allergy products, 3) higher sales in the smoking cessation category, and 4) new product sales of $6 million in the quarter.

This sales growth was partially offset by 1) purposefully exited businesses, 2) lower infant formula contract pack sales, and 3) lower net sales in the segments Mexican business.

Third quarter reported gross profit margin was 30.2%. Adjusted gross profit margin of 34.0% was 40 basis points higher due primarily to favorable OTC product mix.

Reported operating margin was 13.3%. Adjusted operating margin was flat at 19.8%, as gross margin flow-through and lower administration expenses were offset by operational inefficiencies and increased investments to drive innovation.

CSCI Third Quarter 2019 Results Versus Third Quarter 2018

Consumer Self-Care International reported net sales increased 4.0% to $348 million. Excluding unfavorable currency movements of $19 million, from the prior year comparison, adjusted net sales were higher by 10.1%. Excluding currency and Ranir, CSCI organic adjusted net sales grew 3.3%.

This sales growth was due primarily to 1) strong new product sales of $28 million driven by the launch of XLS Forte 5, a next generation weight loss product, and new products in the Phytosun naturals portfolio, 2) $23 million of net sales from Ranir, and 3) higher net sales in the cough/cold/allergy/sinus category.

Reported gross margin was 45.0%. Adjusted gross margin of 51.9% declined 190 basis points due primarily to the addition of Ranir oral self-care products, which have a relatively lower gross margin than the overall portfolio.

Reported operating margin was 3.8% while the adjusted operating margin was 18.2%.

Prescription Pharmaceuticals ("RX") Third Quarter 2019 Results Versus Third Quarter 2018

RX reported net sales increased 13.6% to $230 million due primarily to higher volumes of existing products and new product sales of $18 million. Discontinued products were $6 million.

Reported gross margin was 31.0% and adjusted gross margin was 40.9%. The 720 basis point decline in adjusted gross margin was due primarily to pricing pressure, higher cost of goods and adverse product mix.

Reported operating margin was 8.5% and adjusted operating margin was 24.0%.

Outlook

The Company expects 2019 reported diluted EPS to be in the range of $2.01 – $2.21 per share. With strong performance in the Worldwide Consumer businesses, the Company raised its 2019 adjusted diluted EPS guidance to $3.85 – $4.05 from $3.75 – $4.05.

On November 6, 2019 Alpine Immune Sciences, Inc. (NASDAQ:ALPN), a leading clinical-stage immunotherapy company focused on developing innovative treatments for cancer, autoimmune/inflammatory, and other diseases, reported an abstract has been accepted for an oral presentation highlighting the company’s lead autoimmune/inflammatory program ALPN-101 at the 61stAmerican Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting and Exposition to be held December 7-10, 2019 in Orlando, FL (Press release, Alpine Immune Sciences, NOV 6, 2019, View Source [SID1234550436]).

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The Company will present on its upcoming Phase 1/2 BALANCE study of ALPN-101 in steroid-resistant or steroid-refractory acute Graft-versus-Host Disease (GvHD). ALPN-101 is a first-in-class, dual inhibitor of the CD28 and ICOS costimulatory pathways with strong preclinical and translational rationale in GvHD.

Last year, preclinical data on ALPN-101 was included in an oral presentation at the 60th ASH (Free ASH Whitepaper) Annual Meeting, highlighting the novel role ICOS ligand (ICOS-L) plays in acute GvHD and extending what is currently understood about the CD28/B7 protein family in disease pathogenesis. Since then, Alpine has been conducting a first-in-human, randomized, placebo-controlled single- and multiple-ascending dose Phase I study in adult healthy volunteers. "This year’s presentation will discuss the translational and therapeutic potential of ALPN-101 based on our learnings to date," indicated Stanford Peng, M.D. Ph.D., President and Head of Research and Development at Alpine.

61st ASH (Free ASH Whitepaper) Annual Meeting Oral Presentation

Title: An Open Label Study of ALPN-101, a First-in-Class Dual CD28/ICOS Antagonist, in Subjects with Steroid-Resistant or Steroid-Refractory Acute Graft Versus Host Disease (aGvHD)
Presenter: Dr. Jan Hillson, Senior Vice President, Clinical Development, Alpine
Session Name: 802. Chemical Biology and Experimental Therapeutics: Novel Compounds and Mechanisms of Action (9:30 – 11:15 AM ET)
Oral Presentation Date and Time: Sunday, December 8, 2019: 11:00 AM ET
Location: OCCC, W414AB
About Graft Versus Host Disease (GvHD)

Graft versus host disease (GvHD) is the most common life-threatening complication of a hematopoietic cell transplant. It occurs when donor cells see recipient cells as different and attack them. Acute GvHD typically occurs within the early weeks and months after transplant, usually involving the skin, liver and gastrointestinal tract. Despite extensive studies of many different therapies in GvHD, corticosteroids remain its primary treatment.

About ALPN-101

ALPN-101 is a novel Fc fusion protein of a human inducible T cell costimulator ligand (ICOSL) variant immunoglobulin domain (vIgD), and a first-in-class therapeutic designed to inhibit simultaneously the CD28 and ICOS inflammation pathways. CD28 and ICOS are closely related costimulatory molecules with partially overlapping roles in T cell activation likely connected to multiple autoimmune and inflammatory diseases. In preclinical models of graft versus host disease, inflammatory arthritis, connective tissue disease and multiple sclerosis, ALPN-101 demonstrates efficacy superior to blockade of the CD28 and/or ICOS pathways alone.

On November 6, 2019 Constellation Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company using its expertise in epigenetics to discover and develop novel therapeutics, reported its third-quarter and nine-month 2019 financial results (Press release, Constellation Pharmaceuticals, NOV 6, 2019, View Source [SID1234550453]).

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"Our clinical programs continued to advance during the third quarter," said Jigar Raythatha, president and chief executive officer of Constellation Pharmaceuticals. "We are particularly pleased with new MANIFEST data on CPI-0610 in myelofibrosis published today in abstracts by the American Society of Hematology (ASH) (Free ASH Whitepaper). The data in the abstracts show signs of encouraging clinical activity in both JAK-inhibitor-naïve patients and ruxolitinib-refractory or -intolerant patients. Based on this activity, we have expanded the MANIFEST trial in first-line patients and in second-line transfusion-dependent patients to look more closely at these signals of activity. We plan to provide a further update on CPI-0610 in oral and poster presentations and at an investor event at the ASH (Free ASH Whitepaper) meeting on December 9. Additionally, we have begun planning for a randomized Phase 3 clinical trial for CPI-0610 in JAK-inhibitor-naïve patients that we expect to begin in 2020."

Program Updates

CPI-0610

Two abstracts with preliminary data from the MANIFEST clinical trial from 59 enrolled patients as of June 27, 2019, the data cutoff date, were published today in association with ASH (Free ASH Whitepaper). The following are highlights from the abstracts:

In Arm 3, in which we are evaluating CPI-0610 in combination with ruxolitinib in a first-line setting in JAK-inhibitor-naïve patients, all four evaluable patients experienced at least a 35% spleen volume reduction and at least a 50% reduction in total symptom score, which are the primary endpoints for these patients.
In Arms 1 and 2, in which we are evaluating CPI-0610 in combination with ruxolitinib and as a monotherapy in a second-line setting in ruxolitinib-resistant or -intolerant patients, additional preliminary data showed continuing signs of activity across a broad range of parameters, including spleen volume reduction, patient-reported symptom improvement, hemoglobin increases, conversion to transfusion independence in transfusion-dependent patients, and bone marrow fibrosis score improvement, consistent with preliminary data presented at ASCO (Free ASCO Whitepaper) and EHA (Free EHA Whitepaper) in June.
In Arms 1 and 2, conversions to transfusion independence increased from two as of April 17, 2019, to four as of June 27, 2019. Data from 12 additional patients are being monitored for possible additional conversions.
CPI-0610 was generally well-tolerated, both as a monotherapy or in combination with ruxolitinib. One ruxolitinib-resistant or -intolerant patient discontinued due to serious adverse event(s), which were reported as unlikely related to CPI-0610. No JAK-inhibitor-naïve patients discontinued due to adverse events. Please review the abstracts here for more details.
The Company will present updates of clinical data from MANIFEST in oral and poster presentations at the ASH (Free ASH Whitepaper) annual meeting on December 9 and will also host an investor meeting. Please read here for additional information.
We expanded Arm 3 of MANIFEST for JAK-inhibitor-naïve patients from 43 to up to approximately 100 patients. We expanded Cohort 2A for TD ruxolitinib-refractory or -intolerant patients being treated with CPI-0610 + ruxolitinib, and we may expand Cohort 1A for TD ruxolitinib-refractory or -intolerant patients being treated with CPI-0610 monotherapy, from 16 to up to approximately 60 patients in each cohort.
We have started planning for a potential pivotal trial with CPI-0610 for MF in the first-line setting, and we expect the trial to begin in 2020.
CPI-1205

Constellation provided a program update on CPI-1205:

Enrollment in the Phase 2 portion of ProSTAR is nearly complete.
An endpoint accepted by regulatory authorities for pivotal clinical trials in prostate cancer is radiographic progression-free survival (rPFS). In addition, we learned from a study presented by the Kim Chi lab at the 2018 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) annual meeting that median responses to second-line therapy generally last only a few months.
Data from the Phase 1b portion of ProSTAR provided preliminary evidence of deep and durable effects of CPI-1205 in certain metastatic castration-resistant prostate cancer patients. We are shifting our focus in this study to durability of clinical activity with CPI-1205.
We are gathering data on time to progression (TTP) of CPI-1205 in ProSTAR, a metric that may serve as a surrogate for rPFS and may guide future development of the compound. Determining TTP will require additional time for the data set to mature, and we expect to report these data from ProSTAR in mid-2020. Plans for any potential Phase 3 program for CPI-1205 will depend on our assessment of the Phase 2 data.
CPI-0209

Enrollment of patients in a Phase 1/2 clinical trial of CPI-0209 continues according to plan. Dosing began in September 2019.
CPI-0209 is a second-generation and potentially best-in-class EZH2 inhibitor that has been designed to achieve comprehensive target coverage through extended on-target residence time. The compound has demonstrated more robust anti-tumor activity compared to first-generation EZH2 inhibitors in preclinical models of multiple cancer types. We believe that CPI-0209 may enable us to address additional patient populations beyond those that we are targeting with CPI-1205 or that have been targeted by other EZH2 inhibitors.
Third Quarter 2019 Financial Results

Cash, cash equivalents, and marketable securities as of September 30, 2019, were $89.1 million, a decline of 22.3% compared to December 31, 2018, primarily due to operating expenses. On October 3, 2019, the Company raised gross proceeds of $65 million in a private placement of its stock.
Research and development (R&D) expenses increased 27.6% year over year to $16.2 million in the third quarter of 2019 mainly due to increased clinical trial expenses.
General and administrative (G&A) expenses grew 30.7% year over year to $4.8 million in the third quarter of 2019, primarily due to building out the organization of the company.
The net loss increased 32.7% year over year to $21.1 million for the third quarter of 2019, mainly due to increased R&D and G&A expenses. The net loss per share attributable to common shareholders increased 1.2% to $0.82 per share due to the increased net loss, offset in part by an increase in shares outstanding as a result of the initial public offering in 2018 and conversion of preferred stock to common stock.
Nine Month 2019 Financial Results

Research and development (R&D) expenses increased 48.9% year over year to $47.9 million in the first nine months of 2019, mainly due to increased clinical trial expenses.
General and administrative (G&A) expenses grew 66.8% year over year to $14.1 million in the first nine months of 2019, primarily due to building out the organization of the company.
The net loss increased 53.4% year over year to $61.3 million for the first nine months of 2019, mainly due to increased R&D and G&A expenses. The net loss per share attributable to common shareholders decreased 56.3% to $2.38 per share due to an increase in shares outstanding as a result of the initial public offering in 2018 and conversion of preferred stock to common stock.
Financial Guidance

Constellation expects that its cash, cash equivalents, and marketable securities as of September 30, 2019, plus the $65 million of proceeds from a private placement completed on October 3, 2019, will enable the Company to fund planned operating expenses and capital expenditure requirements into the first half of 2021.

On November 6, 2019 Horizon Therapeutics plc (Nasdaq: HZNP) reported its third-quarter 2019 financial results and raised the midpoint of its full-year 2019 adjusted EBITDA guidance (Press release, Horizon Pharma, NOV 6, 2019, View Source [SID1234550470]).

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"Our third-quarter performance underscores the strength of our commercial and R&D organizations," said Timothy Walbert, chairman, president and chief executive officer, Horizon. "We generated record quarterly net sales in our orphan and rheumatology segment – including a record quarter for net sales of KRYSTEXXA, our medicine for uncontrolled gout – and the U.S. FDA also granted Priority Review of our BLA for teprotumumab, our biologic candidate for the treatment of active thyroid eye disease. We made great progress on all fronts during the quarter, including our market education activities related to teprotumumab, and remain excited about the prospect of being able to address the significant unmet need for patients living with active thyroid eye disease."

Financial Highlights

Third-Quarter and Recent Company Highlights

Granted Priority Review of Teprotumumab BLA: In September, the Company announced the U.S. Food and Drug Administration (FDA) accepted the Biologics License Application (BLA) for its investigational medicine teprotumumab for the treatment of active TED and granted it Priority Review designation, with a March 8, 2020, Prescription Drug User Fee Act (PDUFA) date. If approved, teprotumumab would be the first and only approved treatment for active TED.

Presented Additional Teprotumumab Phase 3 Data: The Company recently presented additional data from the Phase 3 OPTIC confirmatory clinical trial showing that teprotumumab provided significant benefit on several devastating effects of active TED compared with placebo, including diplopia (double vision), quality of life (QoL) and clinical activity score (CAS). At Week 24, 68 percent of teprotumumab patients had a change from baseline of at least 1 grade in diplopia, compared to 29 percent of placebo patients (p=0.001). On the Graves’ Ophthalmopathy Quality of Life (GO-QoL) scale, a change of 6 points is considered clinically significant, and teprotumumab patients had a mean change of 13.79 compared to 4.43 for placebo patients (p<0.001). At Week 24, 59 percent of teprotumumab patients achieved a CAS value of 0 or 1 compared to 21 percent of placebo patients (p<0.001). These data were presented during the American Society of Ophthalmic Plastic and Reconstructive Surgery (ASOPRS) 50th Anniversary 2019 Fall Scientific Symposium in San Francisco, and build upon data presented earlier in the year that demonstrated the significant benefit of teprotumumab on proptosis.

Announced Teprotumumab Expanded Access Program (EAP): In August, the Company announced an EAP for teprotumumab while the FDA reviews the BLA. The EAP provides access to teprotumumab for patients with active TED who meet protocol criteria, who may have otherwise progressed to the inactive stage of the debilitating disease before the BLA review process is completed.

Initiated PROTECT Trial Evaluating KRYSTEXXA to Improve Management of Uncontrolled Gout for Adults with a Kidney Transplant: In October, the Company initiated its open-label PROTECT clinical trial evaluating the use of KRYSTEXXA in adults with uncontrolled gout who have undergone a kidney transplant. The objective of the trial is to demonstrate that KRYSTEXXA provides effective disease control without burdening the kidneys. The randomized multicenter open-label trial is expected to enroll 20 adults with uncontrolled gout who have received a kidney transplant.

Further Improved the Company’s Capital Structure: In July, the Company issued $600 million of 5.5 percent Senior Notes due 2027 and used the proceeds together with cash on hand to repay $625 million of its outstanding debt. These actions reduced interest expense and extended the maturity of the debt, furthering the Company’s strategy to improve its capital structure. The Company has reduced its gross debt by $575 million in the year-to-date period ended Sept. 30, 2019.

Intellectual Property Update: In October, the Federal Circuit Court of Appeals issued a decision in favor of the Company regarding an appeal of the 2017 decision by the United States District Court for the District of New Jersey upholding the validity of a PENNSAID 2% patent that expires in 2027.

Gender and Ethnicity Pay Equity Demonstrated; Received Best Medium Workplace Award: A recent study conducted by Aon, a leading compensation consulting firm, showed that Horizon demonstrates both gender and ethnicity pay equity, ranking in the top five of the roughly 100 companies Aon has studied in this regard, and in line with the value the Company places on diversity. In addition, the Company was selected to FORTUNE Magazine’s 2019 "Best Medium Workplaces" list for the fourth consecutive year, ranking eighth out of 100 other medium sized companies.

Appointed Sue Mahony to the Board of Directors: In August, the Company appointed Sue Mahony, Ph.D., MBA, to its board of directors. Dr. Mahony brings more than 30 years of diverse industry experience to the board, including an 18-year tenure at Eli Lilly and Company, where she served in a variety of global and domestic leadership roles of increasing responsibility, including helping oversee the development of an innovative pipeline. Before Lilly, Dr. Mahony spent five years at Bristol-Myers Squibb Company.

Named Andy Pasternak Executive Vice President, Chief Business Officer: In August, the Company named Andy Pasternak executive vice president, chief business officer, effective Nov. 1. Pasternak leads business development, mergers and acquisitions, corporate strategy, commercial development and portfolio management.

Research and Development Programs

Orphan Disease Candidate and Program:

Teprotumumab: Teprotumumab is a fully human monoclonal antibody insulin-like growth factor-1 receptor (IGF-1R) inhibitor candidate for the treatment of active TED. TED is a serious, progressive, vision-threatening autoimmune disease in which the muscles and fatty tissue behind the eye become inflamed and expand, which can lead to proptosis (eye bulging) and diplopia (double vision) and impact activities of daily living and quality of life. The development program for teprotumumab in TED includes positive results from the confirmatory Phase 3 OPTIC clinical trial, announced in February 2019, as well as positive Phase 2 results published in The New England Journal of Medicine in May 2017. The OPTIC study met its primary endpoint of a ³2 mm reduction in proptosis (p<0.001), the main cause of morbidity in TED, with 82.9 percent of patients treated with teprotumumab demonstrating a significant improvement in proptosis compared to 9.5 percent of placebo patients. In addition, all secondary endpoints were met (p£0.001), and the safety profile was consistent with the Phase 2 study.

Rheumatology Pipeline Candidates and Programs:

KRYSTEXXA MIRROR Immunomodulation Trial: The Company is evaluating the use of methotrexate to increase the response rate with KRYSTEXXA. This evaluation was initiated through the small open-label MIRROR pilot study, followed by the larger MIRROR registrational clinical trial. Methotrexate is the immunomodulator most used by rheumatologists, and has been shown to reduce anti-drug antibody formation to biologic therapies when used in conjunction with these therapies. The MIRROR registrational trial commenced in June.

On November 6, 2019 Protagonist Therapeutics, Inc. (Nasdaq:PTGX) reported its financial results for the third quarter ended September 30, 2019, and provided a corporate update (Press release, Protagonist, NOV 6, 2019, View Source [SID1234550486]).

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"The progress of our three clinical candidates shows the strength and versatility of the Protagonist peptide engineering platform," commented Dinesh V. Patel, Ph.D., Protagonist President and Chief Executive Officer. "These maturing assets reflect our steady transition toward becoming a fully integrated company. In addition to the ongoing Phase 2 study in beta-thalassemia, we continue to explore the full potential of the hepcidin mimetic PTG-300 as one product with multiple clinical applications. We recently dosed the first patient in a Phase 2 open-label study for the potential treatment of polycythemia vera. We are on track to initiate a Phase 2 study with PTG-300 in hereditary hemochromatosis, and we expect an investigator sponsored study in myelodysplastic syndrome to begin in early 2020. In the portfolio of inflammatory bowel disease product candidates comprised of oral gut-restricted peptides, we plan to begin a Phase 2 study with the alpha-4-beta-7 integrin antagonist PN-943 in patients with ulcerative colitis in the second quarter of 2020, on the basis of a completed Phase 1 study. We also recently dosed the first patient in a Phase 2 study of oral interleukin-23 receptor antagonist PTG-200, partnered with Janssen Biotech, with results from this study expected in 2021. Finally, we continue to maintain a strong financial position, with available cash, investments and access to an established debt facility to support the development of pipeline assets through year-end 2021."

Product Development and Corporate Update:

PTG-300

·Preliminary Phase 2 results from the ongoing study of PTG-300 for the treatment of beta-thalassemia are expected in the fourth quarter of 2019.

·An abstract relating to pre-clinical studies of hepcidin mimetic PTG-300 has been accepted for presentation at the American Society for Hematology (ASH) (Free ASH Whitepaper) Annual meeting, taking place Dec. 7-10 in Orlando, Fla.

·The Company is planning to initiate a Phase 2 study in patients with hereditary hemochromatosis, a third indication of development for PTG-300, by early 2020.

· An investigator-sponsored study of PTG-300 in patients with myelodysplastic syndromes, which represents a fourth potential indication for PTG-300, is expected to begin in early 2020.

PTG-943

· Protagonist announced results from the multiple ascending dose (MAD) part of the Phase 1 study of PN-943 with two weeks of daily administration, demonstrating sustained target engagement and additional confirmation of superior target engagement as compared with the first generation oral alpha-4-beta-7 integrin antagonist PTG-100.

· Clinical data from the Phase 1 study of oral alpha-4-beta-7 integrin antagonist PN-943 were presented at the American College of Gastroenterology (ACG) Annual Scientific Meeting.

·The Company plans to initiate a Phase 2 study of PN-943 for the treatment of ulcerative colitis in the second quarter of 2020.

PTG-200 (JNJ-67864238)

·Data from the Phase 1 study of PTG-200, an oral peptide IL-23 receptor antagonist partnered with Janssen Biotech, were recently presented at the United European Gastroenterology Week conference and the American College of Gastroenterology (ACG) Annual Scientific Meeting.

·The first patient has been dosed in a Phase 2 study of PTG-200 (also referenced as JNJ-67864238) in patients with moderate to severe Crohn’s disease. Protagonist Therapeutics and Janssen Biotech are jointly conducting the development of PTG-200 through completion of Phase 2 clinical proof of concept in the treatment of Crohn’s disease.

Financing

·During the third quarter of 2019, the Company issued 1.9 million shares through its at-the-market (ATM) program and raised $23.9 million, at an average price of $12.44 per share.

·The Company recently announced it has entered into a four-year debt facility with MidCap Financial and Silicon Valley Bank providing access to an aggregate principal amount up to $50 million to support the ongoing Protagonist clinical development programs and related general corporate purposes.

Financial Results

Protagonist reported a net loss of $16.4 million and $59.7 million, respectively, for the third quarter and first nine months of 2019, as compared to a net loss of $8.7 million and $25.1 million, respectively, for the same periods of 2018. The increase in net loss for the third quarter of 2019 as compared to the prior year period was driven primarily by increased research and development (R&D) costs related to advancing its products in various clinical trials. The increase in net loss for the first nine months of 2019 as compared to the prior year period was driven primarily by the previously reported application of revenue accounting principles following the May 2019 Amendment to the Janssen collaboration agreement where the Company re-assessed overall timelines as well as re-estimated completed and remaining services, including a cumulative one-time adjustment of $9.4 million reported in the second quarter of 2019, and an increase in R&D costs related to advancing its products is various clinical trials. The net loss for the third quarter and first nine months of 2019 includes non-cash stock-based compensation of $2.2 million and $6.2 million, respectively, as compared to $2.0 million and $4.8 million, respectively, for the same periods of 2018.

R&D expenses for the third quarter and first nine months of 2019 were $17.3 million and $49.1 million, respectively, as compared to $12.1 million and $45.2 million, respectively, for the same periods of 2018. The increases in R&D expenses were primarily due to increased clinical development costs related to PTG-300 and PN-943, offset by lower cost related to pre-clinical and discovery expenses and other clinical development expenses.

General and administrative (G&A) expenses for the third quarter and first nine months of 2019 were $4.0 million and $11.6 million, respectively, as compared to $3.4 million and $10.2 million, respectively, for the same periods of 2018. The increases in G&A expenses were primarily due to increases in salaries and employee-related expenses driven by an increase in headcount and professional services expenses to support growth in operations.

Protagonist ended the third quarter with $137.7 million in cash, cash equivalents and marketable securities, and $10 million of the debt facility was funded at closing in October 2019. The Company expects cash, cash equivalents and marketable securities, and access to its debt facility will be sufficient to fund its planned operating and capital expenditures through year-end 2021.