What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-25 compared with 2025-02-21 · 246 added, 253 removed, 684 unchanged (42% of the section changed)

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Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income (Loss )

Consolidated Statements of Comprehensive (Loss) Income

Consolidated Statements of Stockholders’ Equity

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We have audited the accompanying consolidated balance sheets of Protagonist Therapeutics, Inc.

(the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), stockholders' equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

(the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive (loss) income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S.

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(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Takeda Collaboration Agreement

Description of the Matter

As described in Note 3, the Company entered into a Collaboration and License Agreement with Takeda Pharmaceuticals USA, Inc.

(Takeda), pursuant to which the Company and Takeda will collaborate on the development and commercialization of rusfertide (Takeda Agreement).

As further described in Note 3, the transaction price was allocated at the inception of the agreement to all identified performance obligations based on the relative standalone selling price.

Auditing the Company’s revenue recognition for the Takeda Agreement was complex and required the evaluation of significant judgments made by management, including the determination of the standalone selling price of the license obligation.

The estimated standalone selling price for the performance obligation related to the license of intellectual property reflects management’s assumptions, which includes forecasted revenues, development timelines, discount rates and probabilities of technical and regulatory success.

Changes to these assumptions can have a material effect on the allocation of the transaction price to the performance obligations as well as the amount and timing of revenue recognized.

As described in Note 3, for the year ended December 31, 2025, the Company recognized license and collaboration revenue of $24.7 million related to the Takeda Collaboration Agreement for development services provided by the Company during the period based on the cost-based input method.

Cost-based input method measures progress based on actual costs incurred in relation to total estimated costs to be incurred to satisfy the development services obligation.

Auditing total estimated costs expected to be incurred to satisfy the development services obligation was complex due to the extensive data analysis performed by the Company to determine the total estimated costs to be incurred.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls addressing the risks of material misstatement related to the accounting for the Takeda Agreement.

For example, we tested management’s controls over the identification of performance obligations, the determination of the significant assumptions described above with respect to the estimation of the standalone selling price of the performance obligations related to the licensed compounds, and the accuracy and completeness of underlying data used in estimating the standalone selling price and the transaction price.

Our audit procedures included, among others, obtaining and reading the Takeda Agreement and evaluating the completeness of the performance obligations identified by management.

We also evaluated management’s estimates of the standalone selling price for identified performance obligations.

For example, we evaluated the reasonableness and consistency of significant assumptions used in the determination of standalone selling price.

We also performed a sensitivity analysis to evaluate the impact that changes in the significant assumptions would have on the estimated standalone selling price of performance obligations and the resulting impact on the allocation of transaction price to each performance obligation, as well as revenue recognized during the period.

We involved our valuation professionals to assist in the assessment of certain assumptions used in the determination of the estimated standalone selling price of the license performance obligation.

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls addressing the Company’s estimation of the total costs expected to be incurred to satisfy the development services obligation.

Our audit procedures included, among others, testing accuracy and completeness of the data used by management to estimate the total costs expected to be incurred to satisfy the development services obligation, as well as making inquiries of the Company personnel involved with supervising the development program.

/s/ Ernst & Young LLP

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Accounts payable

Payable to collaboration partner

Accrued expenses and other payables

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no shares issued and outstanding

Common stock, $ 0.00001 par value, 180,000,000 and 90,000,000 shares authorized as of December 31, 2024 and 2023, respectively;

Common stock, $ 0.00001 par value, 180,000,000 shares authorized;

62,577,897 and 61,035,139 shares issued and outstanding as of December 31, 2025 and 2024, respectively

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated other comprehensive income (loss)

Accumulated deficit

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Total operating expenses

Income (loss) from operations

(Loss) income from operations

Interest income

Other income (expense), net

Income (loss) before income tax expense

(Loss) income before income tax expense

Income tax expense

Net income (loss)

Net income (loss) per share, basic

Net income (loss) per share, diluted

Weighted-average shares used to compute net income (loss) per share, basic

Weighted-average shares used to compute net income (loss) per share, diluted

Net (loss) income

Net (loss) income per share, basic

Net (loss) income per share, diluted

Weighted-average shares used to compute net (loss) income per share, basic

Weighted-average shares used to compute net (loss) income per share, diluted

The accompanying notes are an integral part of these consolidated financial statements.

PROTAGONIST THERAPEUTICS, INC.

Consolidated Statements of Comprehensive Income (Loss )

Consolidated Statements of Comprehensive (Loss ) Income

(In thousands)

Year Ended December 31,

Net income (loss)

Other comprehensive income (loss):

Net (loss) income

Other comprehensive income:

Unrealized gain on marketable securities

Gain (loss) on translation of foreign operations

Comprehensive income (loss)

Gain on translation of foreign operations

Comprehensive (loss) income

The accompanying notes are an integral part of these consolidated financial statements.

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Stockholders’

Balance at December 31, 2021

Issuance of common stock pursuant to at-the-market offering, net of issuance costs

Issuance of common stock under equity incentive and employee stock purchase plans

Issuance of common stock upon exercise of Exchange Warrants

Shares withheld for net settlement of tax withholding upon vesting of restricted stock units

Stock-based compensation expense

Issuance costs related to prior period common stock offering

Other comprehensive income (loss)

Net income (loss)

Income (Loss)

Balance at December 31, 2022

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Stock-based compensation expense

Other comprehensive income (loss)

Net income (loss)

Other comprehensive income

Balance at December 31, 2023

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Stock-based compensation expense

Other comprehensive income (loss)

Net income (loss)

Other comprehensive income

Balance at December 31, 2024

Issuance of common stock under equity incentive and employee stock purchase plans

Shares withheld for net settlement of tax withholding upon vesting of restricted stock units

Stock-based compensation expense

Other comprehensive income

Balance at December 31, 2025

The accompanying notes are an integral part of these consolidated financial statements.

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Cash Flows from Operating Activities

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Net (loss) income

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Stock-based compensation

Operating lease right-of-use asset amortization

Non-cash lease expense

Accretion of discount on marketable securities

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Prepaid expenses and other assets

Research and development tax incentive receivable

Accounts payable

Payable to collaboration partner

Accrued expenses and other payables

Payable to collaboration partner

Deferred revenue

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Proceeds from maturities of marketable securities

Proceeds from sale of marketable securities

Purchases of property and equipment

Net cash (used in) provided by investing activities

Net cash used in investing activities

Cash Flows from Financing Activities

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Proceeds from issuance of common stock upon exercise of Warrants

Issuance costs related to prior period common stock offering

Net cash provided by financing activities

Effect of exchange rate changes on cash, cash equivalents and restricted cash

Net (decrease) increase in cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash, beginning of period

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Supplemental Disclosure of Non-Cash Financing and Investing Information:

Right-of-use asset obtained in exchange for lease obligation

Leasehold improvements obtained under tenant improvement allowance

Purchases of property and equipment in accounts payable and accrued liabilities

Right-of-use asset obtained in exchange for lease obligation

The accompanying notes are an integral part of these consolidated financial statements.

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Protagonist Therapeutics, Inc.

(the “Company”) is a discovery through late-stage development biopharmaceutical company focused on peptide therapeutics.

The Company’s clinical programs fall into two broad categories of diseases:

(i) hematology and blood disorders, and (ii) inflammatory and immunomodulatory (“I&I”) diseases.

Two novel peptides derived from the Company’s proprietary discovery technology platform, rusfertide and icotrokinra (formerly known as JNJ-2113), are currently in advanced Phase 3 clinical development.

Rusfertide, an injectable mimetic of the natural hormone hepcidin partnered with Takeda Pharmaceuticals, Inc.

(“Takeda”), is currently in Phase 3 development for treatment of the rare blood disorder polycythemia vera (“PV”).

Icotrokinra is a first-in-class investigational targeted oral peptide that selectively blocks the Interleukin-23 receptor (“IL-23R”), which is licensed to J&J Innovative Medicines (“JNJ”), formerly Janssen Biotech, Inc.

Icotrokinra is an orally delivered drug that is designed to block biological pathways currently targeted by marketed injectable antibody drugs.

Following Icotrokinra’s joint discovery by the Company and JNJ scientists pursuant to their IL-23R collaboration, the Company was primarily responsible for the development of icotrokinra through Phase 1, with JNJ assuming responsibility for development in Phase 2 and beyond.

The Company also has a number of pre-clinical stage oral drug discovery programs to address clinically and commercially validated targets, including IL-17 oral peptide antagonist PN-881, an oral metabolic/obesity peptide program, and an oral hepcidin mimetic/ferroportin blocker program.

(the “Company”) is an integrated discovery and development company with a validated technology platform.

The Company’s programs fall into three broad therapeutic areas:

(i) inflammation and immunology (“I&I”), (ii) hematology and (iii) metabolic diseases.

The Company’s aim is to develop medicines for biologically and commercially validated targets which demonstrate a strong differentiation compared to existing therapies.

Icotyde (icotrokinra) is a first-in-class investigational targeted oral peptide that selectively blocks the Interleukin-23 receptor (“IL-23R”) and is licensed to Janssen Biotech, Inc, a Johnson & Johnson company (“JNJ”).

Following Icotyde’s joint discovery by the Company and JNJ scientists pursuant to their IL-23R collaboration, the Company was primarily responsible for the development of Icotyde through Phase 1, with JNJ assuming responsibility for development in Phase 2 and beyond.

In July 2025, a New Drug Application (“NDA”) was submitted to the U.S.

Food and Drug Administration (“FDA”) by JNJ seeking the first approval of Icotyde for the treatment of adults and pediatric patients 12 years of age or older with moderate-to-severe plaque psoriasis.

In September 2025, JNJ submitted a Marketing Authorisation Application to the European Medicines Agency for first approval of Icotyde in adults and pediatric patients 12 years of age or older with moderate-to-severe plaque psoriasis.

Rusfertide, a first-in-class investigational injectable mimetic of the natural hormone hepcidin, is currently in development for the treatment of the rare blood disorder polycythemia vera (“PV”).

Rusfertide is being co-developed and will be co-commercialized with Takeda Pharmaceuticals, Inc.

(“Takeda”), with the Company remaining primarily responsible for clinical development through NDA filing.

In August 2025, rusfertide was granted Breakthrough Therapy designation by the FDA for the treatment of erythrocytosis in patients with PV.

In December 2025, an NDA was submitted to the FDA by Takeda and the Company seeking the first approval of rusfertide for the treatment of adults with PV.

The Company also has a number of drug discovery and development programs addressing biologically and commercially validated targets, including IL-17 oral peptide antagonist PN-881, obesity triple agonist peptide PN-477, obesity dual agonist peptide PN-458 and oral hepcidin functional mimetic PN-8047.

The Company is headquartered in Newark, California and has one wholly owned subsidiary, Protagonist Pty Limited (“Protagonist Australia”), located in Brisbane, Queensland, Australia.

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The Company’s ultimate success depends upon the outcome of its research and development and collaboration activities.

The Company may incur additional losses in the future as it continues the development of rusfertide through Phase 3 development and a potential NDA filing and invests in its pre-clinical discovery programs and may need to raise additional capital to continue to execute its long-range business plan.

The Company may incur additional losses in the future as it continues to invest in its pre-clinical discovery programs and may need to raise additional capital to continue to execute its long-range business plan.

Since the Company’s initial public offering in August 2016, it has financed its operations primarily through proceeds from offerings of common stock and payments received under license and collaboration agreements.

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The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, accruals for research and development activities, stock-based compensation, income taxes,

marketable securities and leases.

On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, accruals for research and development activities, stock-based compensation, income taxes, marketable securities and leases.

Estimates related to revenue recognition include assumptions used to determine standalone selling price utilized to allocate the transaction price between distinct performance obligations, assumptions used to recognize revenue over time for certain performance obligations for which a cost-based input method is used as the measure of progress and estimates of whether contingent consideration should be included in the transaction price at each reporting period.

Management bases these estimates on historical and anticipated results, trends and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to forecasted amounts and future events.

There has been uncertainty and disruption in the global economy and financial markets due to a number of factors, including geopolitical instability, inflationary pressures, high interest rates, a recessionary environment, domestic and global monetary and fiscal policy, changes in trade policies, including tariffs or other trade restrictions or the threat of such actions, banking and other financial institution instability and other factors.

Actual results may differ materially from these estimates.

There has been uncertainty and disruption in the global economy and financial markets due to a number of factors, including but not limited to geopolitical instability, high interest rates, and changes in trade policies, including tariffs or other trade restrictions or the threat of such actions and retaliatory actions.

The Company’s business may also be impacted by changes or disruptions at the FDA and other government agencies.

The Company has taken into consideration any known impacts in its accounting estimates to date and is not aware of any additional specific events or circumstances that would require any additional updates to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the filing date of this Annual Report on Form 10-K.

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Restricted Cash

Restricted cash consists of cash balances held as security in connection with a letter of credit related to the Company’s facility lease entered into in March 2017, as subsequently amended.

The Company’s letter of credit balance was $ 0.2 million at December 31, 2024, 2023 and 2022 pursuant to the terms of the facility lease.

Restricted cash consists of (i) a cash deposit held as security in connection with a letter of credit related to the Company’s facility lease entered into in March 2017, as subsequently amended, and (ii) a cash deposit held as security in connection with the issuance of a bank guarantee in May 2025 to maintain the active status of the Company’s value-added tax registration.

Cash as Reported in Consolidated Statements of Cash Flows

Cash as reported in the consolidated statements of cash flows includes the aggregate amounts of cash and cash equivalents and the restricted cash as presented on the consolidated balance sheets.

Cash as reported in the consolidated statements of cash flows includes the aggregate amounts of cash and cash equivalents and restricted cash as presented on the consolidated balance sheets.

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

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Unrealized gains and losses are excluded from earnings and are reported as a component of comprehensive income (loss).

Realized gains and losses, if any, on available-for-sale securities are included in interest income.

Realized gains and losses, if any, on available-for-sale securities are included in other income (expense), net.

The cost of securities sold is based on the specific-identification method.

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Credit-related impairments on available-for-sale debt securities are recognized as an allowance for credit losses with a corresponding adjustment to other income (expense), net.

The portion of the impairment that is not credit-related is recorded as a reduction of other comprehensive income (loss), net of applicable taxes.

Pursuant to Accounting Standard Update 2016-13, Financial Instruments - Credit Losses (Topic 326) , the Company has elected to exclude accrued interest from both the fair value and the amortized cost basis of the available-for-sale debt securities for the purposes of identifying and measuring an impairment.

The Company writes off accrued interest as a reduction of interest income when an issuer has defaulted on interest payments due on a security.

The portion of the impairment that is not credit-related is recorded as a reduction of other comprehensive (loss) income, net of applicable taxes.

Property and Equipment

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There have been no such impairments of long-lived assets for any of the periods presented.

Comprehensive Income (Loss)

Comprehensive income (loss) includes net income (loss) as well as other changes in stockholders’ equity that result from transactions and economic events other than those from stockholders.

The Company’s foreign currency translation and unrealized gains and losses on available-for-sale securities represent the only components of other comprehensive income (loss) that are excluded from reported net income (loss) and that are presented in the consolidated statements of comprehensive income (loss).

Comprehensive (Loss) Income

Comprehensive (loss) income includes net (loss) income as well as other changes in stockholders’ equity that result from transactions and economic events other than those from stockholders.

The Company’s unrealized gains and losses on available-for-sale securities and foreign currency translation represent the only components of other comprehensive (loss) income that are excluded from reported net (loss) income and that are presented in the consolidated statements of comprehensive (loss) income.

The Company uses the asset and liability method to account for income taxes in accordance with the authoritative guidance for income taxes.

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Licenses of intellectual property:

If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in an arrangement, the Company recognizes 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, the Company utilizes 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.

If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in an arrangement, the Company recognizes revenue allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license.

The Company evaluates the measure of proportional performance each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

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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 the control of the Company or 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.

Milestone payments that are not within the control of the Company or 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.

The Company recognizes revenue as or when the performance obligations under the contract are satisfied.

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For arrangements that include sales-based royalties, including milestone payments based on the level of sales, where the license is deemed to be the predominant item to which the royalties relate, the Company recognizes 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 the Company performs its obligations under these arrangements.

Upfront or advance 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 the Company performs its obligations under these arrangements.

Amounts payable to the Company are recorded as accounts receivable when the Company’s right to consideration is unconditional.

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The Company does 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.

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The Company accrues for estimated costs of research and development activities conducted by third-party service providers, which include the conduct of pre-clinical and non-clinical studies, clinical trials and contract manufacturing activities.

The Company records 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.

The Company records 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.

The Company accrues for these costs based on various factors such as estimates of the work completed and in accordance with agreements established with its third-party service providers.

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The Company has not experienced any material differences between accrued liabilities and actual costs incurred.

However, the status and timing of actual services performed, the number of patients enrolled, the rate of patient enrollment and the number and location of sites activated may vary from the Company’s estimate and may result in adjustments to research and development expenses in future periods.

However, the status and timing of actual services performed, the number of patients enrolled, the rate of patient

enrollment and the number and location of sites activated may vary from the Company’s estimate and may result in adjustments to research and development expenses in future periods.

Changes in these estimates that result in material changes to the Company’s accruals could materially affect the Company’s results of operations.

Research and Development Tax Incentive

The Company is eligible under the AusIndustry research and development tax incentive program to obtain either a refundable tax offset or a nonrefundable tax offset from the Australian Taxation Office.

The refundable cash offset is available to the Company on the basis of specific criteria with which the Company must comply.

Specifically, the Company must have aggregated annual turnover of less than AUD 20.0 million and cannot be controlled by income tax exempt entities.

The refundable tax offset is recognized as a reduction to research and development expense when the right to receive has been attained and funds are considered to be collectible.

The Company may alternatively be eligible for a nonrefundable tax offset in years when the aggregated annual turnover exceeds AUD 20.0 million.

The Company evaluates its eligibility under tax incentive programs as of each balance sheet date and makes accrual and related adjustments based on the most current and relevant data available.

Unused nonrefundable tax offsets may be carried forward to future years, subject to satisfying specific criteria.

Stock-based Compensation

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

Stock-based compensation expense associated with stock options is based on the estimated grant date fair value using the Black-Scholes valuation model, which requires the use of subjective assumptions related to expected stock price volatility, option term, risk-free interest rate and dividend yield.

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

Stock-based compensation expense associated with stock options is based on the estimated grant date fair value using the Black-Scholes valuation model, which requires the use of assumptions related to expected stock price volatility, option term, risk-free interest rate and dividend yield.

The Company recognizes compensation expense over the vesting period of the awards that are ultimately expected to vest.

Stock-based compensation expense associated with RSUs is based on the fair value of the Company’s common stock on the grant date, which equals the closing market price of the Company’s common stock on the grant date.

Stock-based compensation expense associated with RSUs and PSUs is based on the fair value of the Company’s common stock on the grant date, which equals the closing market price of the Company’s common stock on the grant date.

For RSUs, the Company recognizes compensation expense over the vesting period of the awards that are ultimately expected to vest.

PSUs allow the recipients of such awards to earn fully vested shares of the Company’s common stock upon the achievement of pre-established performance objectives.

Stock-based compensation expense associated with PSUs is based on the fair value of the Company’s common stock on the grant date, which equals the closing market price of the Company’s common stock on the grant date and is recognized when the performance objective is expected to be achieved.

For PSUs, stock-based compensation expense is recognized when the performance objective is expected to be achieved.

The Company evaluates the probability of achieving the performance criteria on a quarterly basis.

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If stock-based awards are granted in contemplation of or shortly before a planned release of material nonpublic information, and such information is expected to result in a material increase in the Company’s share price, the Company considers whether an adjustment to the observable market price is required when estimating fair values.

Net Income (Loss) per Share

The computation of basic net income (loss) per share of common stock is based on the weighted-average number of shares of common stock outstanding during each period.

The computation of diluted net income (loss) per share of

common stock is based on the weighted-average number of shares of common stock outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options, RSUs, PSUs, the Company’s employee stock purchase plan (“ESPP”), and warrants.

Net (Loss) Income per Share

The computation of basic net (loss) income per share of common stock is based on the weighted-average number of shares of common stock outstanding during each period.

The computation of diluted net (loss) income per share of common stock is based on the weighted-average number of shares of common stock outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options, RSUs, PSUs, the Company’s employee stock purchase plan (“ESPP”), and warrants.

In accordance with Accounting Standards Codification Topic 260, Earnings Per Share (“ASC Topic 260”), outstanding Exchange and Pre-Funded Warrants (as defined in Note 10.

Stockholders’ Equity) are included in the computation of weighted-average shares of common stock, basic because the exercise price was negligible, and they were fully vested and exercisable after the original issuance date.

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

In periods in which the Company reports a net loss, all common stock equivalents are deemed anti-dilutive such that basic net loss per share of common stock and diluted net loss per share of common stock are equal.

Recently Adopted Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No.

2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplified accounting for convertible instruments by removing major separation models required under current GAAP.

ASU 2020-06 also removed certain settlement conditions that were required for equity-linked contracts to qualify for the derivative scope exception, and it simplified the diluted earnings per share calculation in certain areas.

ASU 2020-06 is effective for the Company beginning January 1, 2024.

The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements or related disclosures.

In November 2023, the FASB issued Accounting Standards Update No.

2023-07 Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires public entities to disclose incremental segment information on an annual and interim basis.

ASU 2023-07 requires all public entities, including public entities with a single reportable segment, to provide one or more measures of segment profit or loss used by the chief operating decision maker to allocate resources and assess performance.

Additionally, the guidance requires disclosures of significant segment expenses and other segment items as well as incremental qualitative disclosures.

ASU 2023-07 is effective for the Company for fiscal years beginning on January 1, 2024, and interim periods within fiscal years beginning on January 1, 2025.

The Company currently operates as one reportable segment and the impact of the adoption of this standard was limited to certain enhanced disclosures in the consolidated financial statements.

See Note 15 to these consolidated financial statements for disclosures related to the adoption of this guidance.

Recently Issued Accounting Pronouncements Not Yet Adopted as of December 31, 2024

In December 2023, the FASB issued Accounting Standards Update No.

In periods when the Company reports a net loss, all common stock equivalents are deemed anti-dilutive such that basic net loss per share of common stock and diluted net loss per share of common stock are equal.

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

Recently Adopted Accounting Pronouncement

In December 2023, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-09 Income Taxes (Topic 740) – Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires public business entities to disclose specific categories in the income tax rate reconciliation annually and provide additional information for reconciling items that meet a qualitative threshold.

ASU 2023-09 also requires that entities disclose annually additional information about income taxes paid and disaggregated information for certain items.

The standard can be applied prospectively or retrospectively.

ASU 2023-09 is effective for the Company beginning on January 1, 2025.

The Company will adopt this guidance in its 2025 Annual Report on Form 10-K but does not expect the adoption of this guidance to have a material impact on its financial position, results of operations or cashflows.

In November 2024, the FASB issued Accounting Standards Update No.

The Company adopted ASU 2023-09 retrospectively for fiscal years beginning on January 1, 2025.

The impact of the adoption of this standard was limited to certain enhanced disclosures in the consolidated financial statements.

See Note 13 to these consolidated financial statements for disclosures related to the adoption of this guidance.

Recently Issued Accounting Pronouncement Not Yet Adopted as of December 31, 2025

In December 2025, the FASB issued ASU No.

2025-11 Interim Reporting (Topic 270) – Narrow Scope Improvements (“ASU 2025-11”), which clarifies interim disclosure requirements.

ASU 2025-11 also requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

This guidance is effective for the Company for interim reporting periods within annual reporting periods beginning on January 1, 2028.

Early adoption is permitted.

The guidance may be applied either (1) prospectively or (2) retrospectively to any or all prior periods presented in the financial statements.

The Company does not expect the adoption of this guidance to have a material effect on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU No.

2024-03 Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires detailed disclosures about specified categories of expenses (including employee compensation, depreciation, and amortization) included in certain expense captions presented on the face of the income statement.

ASU 2024-03 is effective for the Company or fiscal years beginning on January 1, 2027, and for interim periods within fiscal years beginning on January 1, 2028.

ASU 2024-03 is effective for the Company for fiscal years beginning on January 1, 2027, and for interim periods within fiscal years beginning on January 1, 2028.

Early adoption is permitted.

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License and Collaboration Agreements

JNJ License and Collaboration Agreement

In July 2021, the Company entered into an Amended and Restated License and Collaboration Agreement with JNJ, which amended and restated the License and Collaboration Agreement, effective July 13, 2017, by and between the Company and JNJ, as amended in May 2019 (together, the “JNJ License and Collaboration Agreement”).

The JNJ License and Collaboration Agreement relates to the development, manufacture and commercialization of oral IL-23R antagonist drug candidates and enables JNJ to develop collaboration compounds for multiple indications.

Under the JNJ License and Collaboration Agreement, JNJ is required to use commercially reasonable efforts to develop at least one collaboration compound for at least two indications.

During the fourth quarter of 2023, the Company earned a $ 50.0 million milestone payment in connection with the dosing of the third patient in the ICONIC-TOTAL Phase 3 clinical trial of Icotyde in patients with moderate-to-severe psoriasis and a $ 10.0 million milestone payment upon the dosing of the third patient in the ANTHEM Phase 2b trial moderately-to-severely active ulcerative colitis.

The JNJ License and Collaboration Agreement was amended in November 2024 to:

● increase the milestone payment for a Phase 3 clinical trial of any licensed product for any indication meeting its primary endpoint by $ 50.0 million, from $ 115.0 million to $ 165.0 million;

● eliminate the $ 35.0 million milestone payment previously due for the acceptance of an NDA filing by the FDA for use of a licensed product for any indication;

● eliminate the $ 15.0 million milestone payment previously due for the dosing of the third patient in the first Phase 3 clinical trial of a licensed product for a second indication.

The Company earned the $ 165.0 million milestone payment during the fourth quarter of 2024.

The Company has earned a total of $ 337.5 million in non-refundable payments from JNJ from inception in 2017 through December 31, 2025.

Upcoming potential milestones under the JNJ License and Collaboration Agreement include:

● $ 50.0 million upon FDA approval of an NDA in any indication;

● $ 25.0 million upon the acceptance of an NDA filing by the FDA for a second indication;

● $ 45.0 million upon FDA approval of an NDA for a second indication;

● $ 35.0 million upon the acceptance of an NDA filing by the FDA for a third indication;

● $ 50.0 million upon FDA approval of an NDA for a third indication.

Pursuant to the agreement, the Company is eligible to receive future sales milestone payments and tiered royalties on net product sales at percentages ranging from 6 % to 10 %.

Takeda Collaboration Agreement

In January 2024, the Company entered into the Takeda Collaboration Agreement, which became effective in March 2024.

In January 2024, the Company entered into a worldwide license and collaboration agreement for rusfertide with Takeda, which became effective in March 2024, and was amended in March 2025 (the “Takeda Collaboration Agreement”),

Pursuant to the Takeda Collaboration Agreement, the Company and Takeda are jointly developing and commercializing rusfertide and potentially other specified second-generation injectable hepcidin mimetic compounds (the “Licensed Products”) in the United States (the “Profit-Share Territory”).

Takeda is solely and exclusively responsible for the development and commercialization of the Licensed Products in all other countries (the “Takeda Territory”).

The Company and Takeda share the costs of the development, manufacture and commercialization activities for the Licensed Products in the Profit-Share Territory, provided that (i) the Company leads, and is solely responsible for its costs associated with, completion of the ongoing Phase 3 VERIFY program evaluating rusfertide for the treatment of PV as well as associated U.S.

regulatory activities;

(ii) Takeda leads, and is solely responsible for its costs associated with, pre-commercialization activities related to rusfertide in the Profit-Share Territory;

The Company and Takeda share the costs of the development, manufacture and commercialization activities for the Licensed Products in the Profit-Share Territory, provided that (i) the Company leads, and is solely responsible for its costs associated with, completion of the ongoing Phase 3 VERIFY trial evaluating rusfertide for the treatment of PV;

(ii) Takeda leads, and is solely responsible for its costs associated with, U.S.

regulatory and pre-commercialization activities related to rusfertide in the Profit-Share Territory;

and (iii) Takeda leads commercialization of rusfertide in the Profit-Share Territory, with the Company holding an option to co-detail.

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The Company granted Takeda a non-transferable, sublicensable and, except for certain specified exceptions, exclusive license to certain intellectual property of the Company to exercise its rights and perform its obligations under the Takeda Collaboration Agreement.

In March 2025, the Company and Takeda agreed, pursuant to the provisions of the Takeda Collaboration Agreement, as amended, that Takeda would assume responsibility for leading and implementing the regulatory strategy and associated activities for preparation of the NDA related to rusfertide in PV, which was submitted to the FDA in December 2025.

The Company is primarily responsible for clinical development activities through the NDA filing and remains responsible for conducting ongoing rusfertide long-term extension studies.

The Company received a one-time, non-refundable upfront payment of $ 300.0 million in April 2024.

In March 2025, a $ 25.0 million milestone was deemed probable of achievement following positive topline results from the Phase 3 VERIFY trial of rusfertide in PV and payment was received in September 2025.

In addition, the Company is eligible to receive additional worldwide development, regulatory and commercial milestone payments for rusfertide of up to $ 305.0 million, and tiered royalties from 10 % to 17 % on net sales of the Licensed Products in the Takeda Territory.

The Company and Takeda also share equally in profits and losses ( 50 % to the Company and 50 % to Takeda) for Licensed Products in the Profit-Share Territory.

The Company and Takeda will also share equally in profits and losses ( 50 % to the Company and 50 % to Takeda) for Licensed Products in the Profit-Share Territory.

Takeda will book sales of the Licensed Products globally.

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Following the Company’s exercise of an Opt-out Right, the Company has agreed to transition applicable development and commercial activities to Takeda, and Takeda has agreed to assume sole operational and financial responsibility for such activities in the United States.

The Company expects to exercise the Full Opt-out Right within the 90-day opt-out window beginning 120 days after the NDA filing date in accordance with the agreement.

The Takeda Collaboration Agreement provides for aggregate development, regulatory and commercial milestone payments from Takeda to the Company for rusfertide of up to $ 975.0 million if the Company exercises the Full Opt-out Right.

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If the Company exercises an Opt-out Right, Takeda has agreed to pay the Company royalties of 14 % to 29 % on worldwide net sales of the Licensed Products with respect to which the Company has exercised an Opt-out Right.

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

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

Upcoming potential milestones under the Takeda Collaboration Agreement include:

● $ 50.0 million upon FDA approval of an NDA for rusfertide in PV (or $ 75.0 million if the Company exercises the Full Opt-out Right);

● $ 15.0 million upon first regulatory approval for rusfertide in PV in three European countries, after pricing and reimbursement approval;

● $ 10.0 million upon first regulatory approval for rusfertide in PV in Japan.

The Company evaluated the Takeda Collaboration Agreement and concluded that it has elements that are within the scope of ASC Topic 606 and ASC Topic 808.

As of the effective date of the Takeda Collaboration Agreement, the Company identified two distinct performance obligations:

(i) the rusfertide license delivered upon the effectiveness of the Takeda Collaboration Agreement and (ii) certain development services to be provided prior to the Initial Opt-out Period, including the Company’s responsibilities to complete the VERIFY Phase 3 clinical trial in PV and to file an NDA with the FDA upon successful completion of the VERIFY trial and associated manufacturing services.

The Company determined that the initial transaction price totaled $ 300.0 million, comprised of the upfront payment.

The Company has excluded any future estimated milestones or royalties from this transaction price to date, all of which are either currently constrained or subject to the sales-and usage-based royalty exception.

As part of the Company’s evaluation of this variable consideration constraint, it determined that the potential payments are contingent upon developmental and regulatory milestones that are uncertain and are highly susceptible to factors outside of its control.

(i) the rusfertide license delivered upon the effectiveness of the Takeda Collaboration Agreement and (ii) certain development services to be provided prior to the Initial Opt-out Period, including certain of the Company’s responsibilities to complete the VERIFY Phase 3 clinical trial in PV and associated manufacturing services.

The Company determined that the initial transaction price totaled $ 300.0 million, which was comprised of the upfront payment.

The Company initially excluded any future estimated milestones or royalties from this transaction price, all of which are either constrained or subject to the sales-and usage-based royalty exception.

As part of the Company’s evaluation of this variable consideration constraint, it determined that the potential payments were contingent upon developmental and regulatory milestones that were uncertain and were highly susceptible to factors outside of its control.

The Company allocated $ 254.1 million of the initial transaction price to the license and $ 45.9 million to the development services based upon the relative standalone selling price of each performance obligation.

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The estimate of standalone selling price for the development services was determined based on forecasted costs and expenses over the expected development period.

For the license of rusfertide, the Company determined that Takeda could benefit from the license at the time the license was granted and therefore, the related performance obligation was satisfied at a point in time.

The amount allocated to the license, which represents functional intellectual property that was transferred at a point in time, was satisfied upon transfer of the license to Takeda.

The amount allocated to development services will be recognized over time based on a measure of the Company’s efforts toward satisfying the performance obligation relative to the total expected efforts or inputs to satisfy the performance obligation (e.g., costs incurred compared to total budget).

The Company recognized $ 15.3 million of revenue allocated to development services with respect to the period from the effective date of the contract through December 31, 2024.

The Company determined that the Takeda Collaboration Agreement met the definition of a collaborative arrangement under ASC Topic 808.

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The Company determined that development costs subsequent to the Company Opt-in date are within the scope of ASC Topic 808, which does not provide recognition and measurement guidance.

As such, the Company determined that Accounting Standards Codification Topic 730, “ Research and Development” was appropriate to analogize to based on the cost-sharing provisions of the agreement.

As such, the Company determined that Accounting Standards Codification Topic 730, “ Research and Development” was appropriate analogy based on the cost-sharing

provisions of the agreement.

The Company concluded that payments to or reimbursements from Takeda related to these services will be accounted for as an increase to or reduction of research and development expense, respectively.

JNJ License and Collaboration Agreement

On July 27, 2021, the Company entered into an Amended and Restated License and Collaboration Agreement with JNJ, formerly Janssen Biotech, Inc., which amended and restated the License and Collaboration Agreement, effective July 13, 2017, by and between the Company and JNJ, as amended effective May 7, 2019 and November 14, 2024 (together, the “JNJ License and Collaboration Agreement”).

Prior to January 1, 2023, JNJ was a related party to us as Johnson & Johnson Innovation - JJDC, Inc.

was a significant (greater than 5%) stockholder of the Company, and both companies are subsidiaries of Johnson & Johnson.

The JNJ License and Collaboration Agreement relates to the development, manufacture and commercialization of oral IL-23 receptor antagonist drug candidates and enables JNJ to develop collaboration compounds for multiple indications.

Under the JNJ License and Collaboration Agreement, JNJ is required to use commercially reasonable efforts to develop at least one collaboration compound for at least two indications.

During the fourth quarter of 2023, the Company earned a $ 50.0 million milestone payment in connection with the dosing of the third patient in the ICONIC-TOTAL Phase 3 clinical trial of icotrokinra (formerly JNJ-2113) in patients with moderate-to-severe psoriasis and a $ 10.0 million milestone payment upon the dosing of the third patient in the

ANTHEM Phase 2b trial moderately-to-severely active UC.

The JNJ License and Collaboration Agreement was further amended in November 2024 to:

● increase the milestone payment for a Phase 3 clinical trial of any licensed product for any indication meeting its primary endpoint by $ 50.0 million, from $ 115.0 million to $ 165.0 million;

● eliminate the $ 35.0 million milestone payment previously due for the acceptance of an NDA filing by the FDA for use of a licensed product for any indication;

● eliminate the $ 15.0 million milestone payment previously due for the dosing of the third patient in the first Phase 3 clinical trial of a licensed product for a second indication.

The Company earned the $ 165.0 million milestone payment described above during the fourth quarter of 2024.

The Company has earned a total of $ 337.5 million in non-refundable payments from JNJ from inception in 2017 through December 31, 2024.

Upcoming potential development and regulatory milestones include:

● $ 50.0 million upon FDA approval of an NDA in any indication;

● $ 25.0 million upon the acceptance of an NDA filing by the FDA for a second indication;

● $ 45.0 million upon FDA approval of an NDA for a second indication.

Pursuant to the agreement, the Company is eligible to receive future sales milestone payments and tiered royalties on net product sales at percentages ranging from 6 % to 10 %.

In March 2025, the $ 25.0 million milestone, which was deemed probable of achievement due to the Phase 3 VERIFY trial meeting its primary endpoint, was no longer considered constrained and was added to the initial transaction price for a total transaction price of $ 325.0 million.

The additional $ 25.0 million was then allocated proportionally to each performance obligation under the agreement, resulting in an additional $ 21.3 million allocated to the previously satisfied license performance obligation and an additional $ 3.7 million allocated to the ongoing development services performance obligation under the agreement.

In September 2025, the Company received the $ 25.0 million milestone payment upon completion of the VERIFY clinical study report.

Revenue Recognition

For the year ended December 31, 2025, the Company recognized license and collaboration revenue of $ 46.0 million related to the Takeda Collaboration Agreement, including (i) $ 21.3 million representing a portion of the $ 25.0 million milestone payment that was allocated to the rusfertide license delivery performance obligation under the agreement and (ii) $ 24.7 million for development services provided by the Company during the period based on the cost-based input method.

As of December 31, 2025, the remaining $ 9.6 million in deferred revenue will be recognized through the conclusion of the development services performance obligation.

For the year ended December 31, 2024, the Company recognized $ 434.4 million of license and collaboration revenue.

This was comprised of $ 269.4 million related to the Takeda Collaboration Agreement, including (i) $ 254.1 million allocated to the rusfertide license delivered to Takeda upon the effectiveness of the agreement in March 2024 and (ii) $ 15.3 million for development services provided by the Company during the period based on the cost-based input method, and $ 165.0 million related to the JNJ License and Collaboration Agreement, as described above.

For the year ended December 31, 2023, the Company recognized $ 60.0 million of collaboration revenue related to the JNJ License and Collaboration Agreement , which included a $ 50.0 million milestone payment earned in October 2023 in connection with the dosing of the third patient in the ICONIC-TOTAL Phase 3 trial of icotrokinra in patients with moderate-to-severe psoriasis, and a $ 10.0 million milestone payment earned in December 2023 upon the dosing of the third patient in the ANTHEM Phase 2b trial for patients with UC.

For the year ended December 31, 2022, the Company recognized $ 26.6 million of collaboration revenue related to the JNJ License and Collaboration Agreement, which was primarily related to the transaction price under the Restated Agreement recognized based on proportional performance.

The Company completed its performance obligation under the collaboration as of June 30, 2022.

As of December 31, 2024, the remaining unrecognized transaction price amount of $ 30.6 million related to the Takeda Collaboration Agreement was recorded as deferred revenue on the Company’s consolidated balance sheet to be recognized over time based on the cost-based input method.

For the year ended December 31, 2023, the Company recognized $ 60.0 million of collaboration revenue related to the JNJ License and Collaboration Agreement , which included a $ 50.0 million milestone payment earned in October 2023 in connection with the dosing of the third patient in the ICONIC-TOTAL Phase 3 trial of Icotyde in patients with moderate-to-severe psoriasis, and a $ 10.0 million milestone payment earned in December 2023 upon the dosing of the third patient in the ANTHEM Phase 2b trial for patients with UC.

During the year ended December 31, 2025, the Company recognized $ 22.3 million of revenue that was included in the deferred revenue balance at the beginning of the year.

During the years ended December 31, 2024 and 2023, no revenue was recognized from amounts included in the deferred revenue balance at the beginning of the year.

During the year ended December 31, 2022, the Company recognized revenue of $ 0.9 million from amounts included in the deferred revenue balance at the beginning of the year.

None of the costs to obtain or fulfill the contracts were capitalized.

The remaining unrecognized transaction price amount of $ 30.6 million related to the Takeda Collaboration Agreement was recorded as deferred revenue on the Company’s consolidated balance sheet as of December 31, 2024 and will be recognized over time based on a measure of the Company’s efforts toward satisfying the performance obligation relative to the total expected efforts or inputs to satisfy the performance obligation (e.g.

costs incurred compared to total budget).

Fair Value Measurements

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Marketable securities - current

Marketable securities - noncurrent

Total cash equivalents and marketable securities

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Current marketable securities of $ 439.0 million and $ 321.7 million held as of December 31, 2025 and 2024, respectively, had contractual maturities of less than one year.

Noncurrent marketable securities of $ 140.3 million held as of December 31, 2024 had contractual maturities of at least one year but no more than two years .

Noncurrent marketable securities of $ 78.6 million and $ 140.3 million held as of December 31, 2025 and 2024, respectively, had contractual maturities of at least one year but no more than two years .

The Company does not intend to sell its securities that are in an unrealized loss position, and it is not more likely than not that the Company will be required to sell its securities before recovery of their amortized cost basis, which may be at maturity.

There were no material realized gains or realized losses on marketable securities for the periods presented.

During the year ended December 31, 2025, the Company sold $ 7.0 million of marketable securities and recognized a net realized gain of $ 8.0 thousand.

There were no realized gains or realized losses on marketable securities for the year ended December 31, 2024.

The Company evaluated securities with unrealized losses to determine whether such losses, if any, were due to credit-related factors and determined that there were no credit-related losses to be recognized as of December 31, 2025 and 2024.

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(i) up to $ 2.75 million in future development milestone payments;

(ii) a low single digit royalty on worldwide net sales;

(ii) a 1 % royalty on worldwide net sales;

and (iii) sales milestones for achievement of annual net sales amounts in specified geographies.

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The Amended Lease, which expires in November 2029, provides for an agreed-upon period of rent abatement and a tenant improvement allowance of $ 1.8 million.

As a result of this amendment, the Company recorded an additional right-of-use-asset and the related liability of $ 10.5 million.

As a result of this amendment, the Company recorded an additional right-of-use-asset and the related liability of $ 10.5 million for the year ended December 31, 2024.

The Company provided the landlord with a $ 225,000 letter of credit collateralized by restricted cash as security deposit for the operating lease agreement.

No additional security deposit was required pursuant to the Amended Lease, and the Company is responsible for its proportional share of operating expenses and tax obligations.

No additional security deposit was required pursuant to the Amended Lease.

The Company is responsible for its proportional share of operating expenses and tax obligations.

Balance sheet information related to the Company’s operating lease is as follows for the periods presented (in thousands):

Operating Lease:

Operating Leases:

Operating lease right-of-use asset

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The Company believes that the fair value of these indemnification agreements is minimal and has not accrued any amounts for the obligations.

Zealand License and Collaboration Agreement

In January 2020, the Company initiated arbitration proceedings with the International Court of Arbitration of the International Chamber of Commerce against Zealand related to a collaboration agreement the Company and Zealand

entered into in 2012 and terminated in 2014.

In August 2021, the Company and Zealand agreed to resolve the dispute and reached an Arbitration Resolution Agreement.

Under the Arbitration Resolution Agreement, the Company is obligated to pay Zealand certain milestone and royalty payments for rusfertide.

The potential future payments include (i) up to $ 2.75 million in future development milestone payments, (ii) a 1 % royalty on worldwide net sales, and (iii) sales milestones for achievement of annual net sales amounts in specific geographies.

The Company considered the outcome of these arbitration proceedings as being related to its research and development projects;

therefore, payments or milestone payments were recorded as research and development expenses.

Legal Proceedings

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The Company accrues for the best estimate of a loss within a range;

however, if no estimate in the

range is better than any other, it accrues the minimum amount in the range.

however, if no estimate in the range is better than any other, it accrues the minimum amount in the range.

If the Company determines that a loss is reasonably possible and the loss or range of loss can be estimated, it discloses the possible loss.

The agreement provides for certain post-termination payment obligations to Zealand with respect to compounds related to the collaboration that the Company elects to further develop and meet specified conditions.

In August 2021, the Company and Zealand agreed to resolve the dispute and reached an Arbitration Resolution Agreement.

Under the Arbitration Resolution Agreement, the Company recognized $ 4.0 million in development milestone payments to Zealand in the third quarter of 2021 and is obligated to pay Zealand certain milestone and royalty payments for rusfertide.

The potential future payments include (i) up to $ 2.75 million in future development milestone payments, (ii) a low single digit royalty on worldwide net sales, and (iii) sales milestones for achievement of annual net sales amounts in specific geographies.

The Company considered the outcome of these arbitration proceedings as being related to its research and development projects;

therefore, payments or milestone payments were recorded as research and development expenses.

Stockholders’ Equity

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In April 2023, the Company completed an underwritten public offering of 5,000,000 shares of its common stock at a public offering price of $ 20.00 per share and issued an additional 750,000 shares of common stock at a price of $ 20.00 per share following the underwriters’ exercise of their option to purchase additional shares.

Net proceeds, after deducting underwriting commissions and offering costs paid by the Company, were $ 107.8 million.

Net proceeds, after deducting underwriting commissions and offering costs paid by the Company, were $ 107.8 million for the year ended December 31, 2023.

In August 2022, the Company entered into an Open Market Sale Agreement SM , pursuant to which the Company may offer and sell up to $ 100.0 million shares of its common stock from time to time in “at-the-market” offerings (the “2022 ATM Facility”).

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There were no sales of the Company’s common stock under the 2022 ATM Facility during the years ended December 31, 2025 and 2024.

Exchange Warrants

In December 2018, the Company entered into an exchange agreement (the “Exchange Agreement”) with an investor and its affiliates (the “Exchanging Stockholders”), pursuant to which the Company exchanged an aggregate of 1,000,000 shares of the Company’s common stock, par value $ 0.00001 per share, owned by the Exchanging Stockholders for pre-funded warrants (the “Exchange Warrants”) to purchase an aggregate of 1,000,000 shares of common stock (subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the Exchange Warrants), with an exercise price of $ 0.00001 per share.

The Exchange Warrants expired ten years from the date of issuance.

The Exchange Warrants were exercisable at any time prior to expiration except that the Exchange Warrants could not be exercised by the Exchanging Stockholders if, after giving

effect thereto, the Exchanging Stockholders would beneficially own more than 9.99 % of the Company’s common stock, subject to certain exceptions.

In accordance with Accounting Standards Codification Topic 505, Equity , the Company recorded the retirement of the common stock exchanged as a reduction of common stock shares outstanding and a corresponding debit to additional paid-in-capital at the fair value of the Exchange Warrants on the issuance date.

The Exchange Warrants met the criteria for equity classification and the fair value of the Exchange Warrants was recorded as a credit to additional paid-in capital and was not subject to remeasurement.

The Company determined that the fair value of the Exchange Warrants was substantially similar to the fair value of the retired shares on the issuance date due to the negligible exercise price for the Exchange Warrants.

During the year ended December 31, 2022, the remaining Exchange Warrants to purchase 400,000 shares of the Company’s common stock were net exercised, resulting in the issuance of 399,997 shares of common stock.

As of December 31, 2024, there were no outstanding Exchange Warrants.

Pre-Funded Warrants

In August 2018, the Company entered into a Securities Purchase Agreement with certain accredited investors (each, an “Investor” and, collectively, the “Investors”), pursuant to which the Company sold an aggregate of 2,750,000 shares of its common stock at a price of $ 8.00 per share for aggregate net proceeds of $ 21.7 million, after deducting offering expenses payable by the Company.

In August 2018, the Company entered into a Securities Purchase Agreement with certain accredited investors (each, an “Investor” and, collectively, the “Investors”).

In a concurrent private placement, the Company issued the Investors warrants to purchase an aggregate of 2,750,000 shares of its common stock (each, a “Warrant” and, collectively, the “Warrants”).

Each Warrant was exercisable from August 8, 2018 through August 8, 2023 .

Warrants to purchase 1,375,000 shares of the Company’s common stock had an exercise price of $ 10.00 per share and Warrants to purchase 1,375,000 shares of the Company’s common stock had an exercise price of $ 15.00 per share.

In August 2023, prior to the expiration of the Warrants, the Company entered into certain agreements with the Investors and their affiliates under which the Company agreed to allow the Warrants to be exercised in exchange for pre-funded warrants representing the same number of Warrant Shares underlying the Warrants with an exercise price of $ 0.001 per share (the “Pre-Funded Warrants”).

Subsequent to the execution of the agreements and prior to the expiration of the Warrants, all outstanding Warrants were exercised for gross proceeds of $ 34.4 million in exchange for 44,748 shares of the Company’s common stock and Pre-Funded Warrants to purchase 2,705,252 shares of common stock (subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the Pre-Funded Warrants) with an exercise price of $ 0.001 per share.

The Pre-Funded Warrants will expire upon the day they are exercised in full.

Subsequent to the execution of the agreements and prior to the expiration of the Warrants in August 2023, all

outstanding Warrants were exercised for gross proceeds of $ 34.4 million in exchange for 44,748 shares of the Company’s common stock and Pre-Funded Warrants to purchase 2,705,252 shares of common stock (subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the Pre-Funded Warrants) with an exercise price of $ 0.001 per share.

The Pre-Funded Warrants will expire on the day they are exercised in full.

The Pre-Funded Warrants are exercisable at any time prior to expiration except that the Pre-Funded Warrants cannot be exercised by the Investors if, after giving effect thereto, the Investors would beneficially own more than 9.99 % of the Company’s common stock, subject to certain exceptions.

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

In accordance with ASC Topic 260, outstanding Pre-Funded Warrants are included in the computation of basic net loss per share because the exercise price is negligible, and they are fully vested and exercisable after the original issuance date.

In accordance with ASC Topic 260, “ Earnings Per Share” , outstanding Pre-Funded Warrants are included in the computation of basic net (loss) income per share because the exercise price is negligible, and they are fully vested and exercisable after the original issuance date.

During the year ended December 31, 2024, Pre-Funded Warrants to purchase 1,205,252 shares were net exercised, resulting in the issuance of 1,205,225 shares of common stock.

No Pre-Funded Warrants were exercised during the years ended December 31, 2023 and 2025.

As of December 31, 2025, Pre-Funded Warrants to purchase 1,500,000 shares of common stock remained outstanding.

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Employee stock options generally vest over a period of approximately four years .

Employee RSUs generally vest over a period of approximately three or four years .

Employee RSUs generally vest annually over a period of approximately three or four years .

Non-employee Board director initial stock options generally vest monthly over a period of approximately three years .

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In May 2018, the Company’s Board approved the 2018 Inducement Plan, as subsequently amended.

The 2018 Inducement Plan is a non-stockholder approved stock plan, under which awards options and restricted stock unit awards to persons that were not previously employees or directors of the Company, or following a bona fide period of non-employment, as an inducement material to such persons entering into employment with the Company, within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules.

non-employment, as an inducement material to such persons entering into employment with the Company, within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules.

The 2018 Inducement Plan is administered by the Board or the Compensation Committee of the Board, which determines the types of awards to be granted, including the number of shares subject to the awards, the exercise price and the vesting schedule.

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Dividend yield

In determining the fair value of the options granted, the Company uses the Black-Scholes option-pricing model and assumptions discussed below.

In determining the fair value of the options granted, the Company determines Black-Scholes option-pricing model assumptions as discussed below.

Each of these inputs is subjective and generally requires judgment to determine.

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Expected Volatility — Beginning January 1, 2023, the Company’s expected volatility is estimated based upon the volatility of the Company’s stock price over a period equal to the expected term of the stock option grants.

For the year ended December 31, 2022, the Company’s expected volatility was estimated based upon a mix of 25 % of the average

volatility for comparable publicly traded biopharmaceutical companies over a period equal to the expected term of the stock option grants and 75 % of the volatility of the Company’s stock price since its initial public offering in August 2016.

Risk-Free Interest Rate —The risk-free interest rate is based on the U.S.

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Therefore, the Company used an expected dividend yield of zero.

An RSU is an agreement to issue shares of the Company’s common stock at the time of vesting.

RSUs generally vest annually in equal installments over three or four years on approximately the anniversary of the grant date.

RSUs granted to certain non-executive employees in 2022 vested 100 % on approximately the first anniversary of the grant date.

RSU activity under the Company’s equity incentive plans is set forth below:

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Unvested RSUs at December 31, 2025

For RSUs, the Company recognizes compensation expense over the vesting period of the awards that are ultimately expected to vest.

For the years ended December 31, 2024, 2023 and 2022, the aggregate fair value of RSUs that vested during the year was $ 6.0 million, $ 5.9 million and $ 1.7 million, respectively.

For the years ended December 31, 2025, 2024 and 2023, the aggregate grant-date fair value of RSUs that vested during the year was $ 8.0 million, $ 6.0 million and $ 5.9 million, respectively.

PSU activity under the Company’s equity incentive plans is set forth below:

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Unvested PSUs at December 31, 2025

The terms of the PSUs provide for 100 % of shares to be earned based on the achievement of certain pre-determined performance objectives, subject to the participant’s continued employment.

The PSUs will vest, if at all, upon certification by the Compensation Committee of the Board of the actual achievement of the performance objectives, subject to specified change of control exceptions.

The Company recognizes compensation expense over the vesting period of the awards that are ultimately expected to vest when the achievement of the related performance objective becomes probable.

During the year ended December 31, 2023, the Compensation Committee of the Board certified the actual achievement of performance objectives related to certain PSUs.

As a result, recipients earned a total of 114,000 shares of common stock.

The total fair market value of the PSUs at vest date during the year ended December 31, 2023 was $ 3.0 million.

No PSUs vested during the years ended December 31, 2024 and 2022.

The total fair value of grant date fair value of unvested PSUs outstanding as of December 31, 2024 was $ 1.8 million.

As of December 31, 2024, the achievement of the related performance objectives was deemed not probable and, accordingly, no stock-based compensation expense for unvested PSUs has been recognized as of December 31, 2024.

The terms of the Company’s PSUs provide for 100 % of shares to be earned based on the achievement of certain pre-determined performance objectives, subject to the participant’s continued employment.

The PSUs vest, if at all, upon certification by the Compensation Committee of the Board of the actual achievement of the performance objectives, subject to specified change of control exceptions.

During the year ended December 31, 2025, the Compensation Committee of the Board certified the achievement of performance objectives related to certain PSUs, resulting in the issuance of 75,500 shares of common stock.

The total fair market value of PSUs at vest date during the year ended December 31, 2025 was $ 4.2 million.

No PSUs vested during the year ended December 31, 2024.

During the year ended December 31, 2023, the Compensation Committee of the Board certified the achievement of performance objectives related to certain PSUs, resulting in the issuance of 114,000 shares of common stock.

The total fair value market value of the PSUs at vest date during the year ended December 31, 2023 was $ 3.0 million.

Employee Stock Purchase Plan

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The Company may make contributions to this plan at its discretion.

The Company matched 50 % of each employee’s contribution up to a maximum of $ 4,000 for the years ended December 31, 2024, 2023 and 2022, resulting in recognized expense of approximately $ 0.4 million, $ 0.4 million and $ 0.3 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The Company matched 50 % of each employee’s contribution up to a maximum of $ 5,000 for the years ended December 31, 2025 and $ 4,000 for the years ended December 31 2024 and 2023, resulting in recognized expense of approximately $ 0.5 million, $ 0.4 million and $ 0.4 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The Company adopted ASU 2023-09 retrospectively beginning January 1, 2025.

Summary of Significant Accounting Policies – Recently Adopted Accounting Pronouncements for additional details on the adoption of ASU 2023-09.

The following table presents domestic and foreign components of net loss before income taxes (in thousands):

Year Ended December 31,

Total net income (loss) before taxes

Total net (loss) income before taxes

The federal, state and foreign components of the income tax expense are summarized as follows (in thousands):

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Total income tax expense

The effective tax rate of the provision for income taxes differs from the federal statutory rate as follows:

The effective tax rate for the provision for income taxes differs from the federal statutory rate as follows (in thousands, except percentages):

Year Ended December 31,

Federal statutory income tax rate

State taxes, net of federal benefit

Foreign tax rate difference

Income tax (expense) benefit at statutory federal rate

State and local taxes, net of federal income tax effect (1)

Foreign tax effects

Foreign research and development credit add back

Nontaxable or nondeductible items

Stock-based compensation

Section 162(m) compensation limitation

Change in valuation allowance

Provision for income taxes

The components of the deferred tax assets are as follows (in thousands):

Research and development credit

Orphan drug credit

Change in research and development reserves

Change in unrecognized tax benefits

Other adjustment

Effective tax rate

____________________

(1) State taxes to New Jersey, Michigan and Oregon made up the majority (greater than 50 percent) of the tax effect in this category.

Cash paid for income taxes, net of refunds received, by jurisdiction was as follows (in thousands):

Year Ended December 31,

Total cash paid for income taxes (net of refunds)

The components of the deferred tax assets are follows (in thousands):

Deferred tax assets:

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Stock-based compensation

Deferred revenue

Total deferred tax assets

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Because of the Company’s recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a valuation allowance.

The valuation allowance decreased by approximately $ 50.9 million during the year ended December 31, 2024, and increased by $ 28.1 million and $ 34.2 million during the years ended December 31, 2023 and 2022, respectively.

The valuation allowance increased by approximately $ 51.7 million during the year ended December 31, 2025 and decreased by $ 50.9 million and increased by $ 28.1 million during the years ended December 31, 2024 and 2023, respectively.

Federal and state laws impose substantial restrictions on the utilization of net operating loss and tax credit carryforwards in the event of an ownership change for tax purposes, as defined in Section 382 of the Internal Revenue Code.

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Balance at beginning of year

Increases in balances related to prior periods

Decreases based on tax positions related to prior years

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At December 31, 2025, the Company had unrecognized tax benefits of $ 37.0 million, which are subject to a valuation allowance and would not affect the effective tax rate if recognized.

The Company does not anticipate that the total amount of unrecognized tax benefits will significantly increase or decrease in the next 12 months.

The Company’s policy is to include interest and penalties related to unrecognized tax benefits within the provision for income taxes, as necessary.

Management determined that no accrual for interest or penalties was required as of December 31, 2025, 2024 and 2023.

The Company files income tax returns in the United States federal jurisdiction, the State of California, the State of Florida, and Australia.

The Company files income tax returns in the United States federal jurisdiction, various states and Australia.

The Company is not currently under examination by income tax authorities in federal, state or other jurisdictions.

The Company’s tax returns remain open for examination for all years.

Protagonist Australia had an accumulated deficit at December 31, 2025 and, accordingly, no provision has been provided thereon for any unremitted earnings.

The Company has received orphan drug designation from the FDA for its clinical asset rusfertide (PTG-300) for the treatment of polycythemia vera and beta-thalassemia and may qualify for a related 25 % U.S.

The Company has received orphan drug designation from the FDA for its clinical asset rusfertide for the treatment of PV and beta-thalassemia and may qualify for a related 25 % U.S.

Federal income tax credit on qualifying clinical trial expenditures.

Net Income (Loss) per Share

The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except share and per share data):

Tax Legislation Updates

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, which includes a broad range of tax reform provisions affecting businesses, including extending and modifying certain key Tax Cuts & Jobs Act provisions (both domestic and international).

Key aspects of the bill include:

● Permanently restoring domestic research expensing with optional transition rules;

● Making 100% bonus depreciation permanent while temporarily adding production facilities to eligible bonus depreciation.

● Permanently restoring amortization and depreciation to the calculation of adjusted taxable income under Section 163(j) while shutting down interest capitalization planning;

● Increasing the Foreign-Derived Intangible Income effective rate while changing the deduction allocations and other rules;

● Increasing the Global Intangible Low-Tax Income effective rate while changing the foreign tax credit haircut and expense allocation rules;

● Increasing the effective rate on Base Erosion and Anti-Abuse Tax;

● Phasing out many Inflation Reduction Act energy credits early and imposing new sourcing restrictions;

● Increasing filing thresholds for Forms 1099-K, 1099-NEC, and 1099-MISC.

The Company assessed the impact of the OBBBA on its financial statements and concluded that it did not have a material impact on the Company’s tax provision for the year ended December 31, 2025 due to the Company’s historical losses and full valuation allowance.

Net (Loss) Income per Share

The following table sets forth the computation of basic and diluted net (loss) income per share (in thousands, except share and per share data):

Year Ended December 31,

Net income (loss)

Net (loss) income

Weighted-average shares of common stock, basic

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Weighted-average shares of common stock, dilutive

Net income (loss) per share of common stock

Basic net income (loss) per share of common stock

Diluted net income (loss) per share of common stock

Approximately 2.9 million potentially dilutive shares of common stock (consisting of shares subject to outstanding stock options, RSUs, and under the ESPP) were excluded from the diluted net income per share of common stock computations for the year ended December 31, 2024 because their effect was anti-dilutive.

Approximately 8.7 million and 9.9 million potentially dilutive shares of common stock (consisting of shares subject to outstanding stock options, RSUs, PSUs, warrants and under the ESPP, as applicable) were excluded from the diluted net loss per share of common stock computations for the years ended December 31, 2023 and 2022, respectively, due to the Company’s net losses for these periods.

Net (loss) income per share of common stock

Basic net (loss) income per share of common stock

Diluted net (loss) income per share of common stock

Approximately 9.0 million potentially dilutive shares of common stock (consisting of shares subject to outstanding stock options, RSUs, and under the ESPP) were excluded from the diluted net loss per share of common stock computations for the year ended December 31, 2025 because their effect was anti-dilutive.

Approximately 2.9 million potentially dilutive shares of common stock (consisting of shares subject to outstanding stock options, RSUs, PSUs and under the ESPP) were excluded from the diluted net income per share of common stock computations for the year ended December 31, 2024 because their effect was anti-dilutive.

Approximately 8.7 million potentially dilutive shares of common stock (consisting of shares subject to outstanding stock options, RSUs, PSUs, and under the ESPP) were excluded from the diluted net loss per share of common stock computations for the year ended December 31, 2023 because their effect was anti-dilutive.

Segment Reporting

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Managing and allocating resources on an entity-wide basis enables the CODM to assess the overall level of resources available and how to best deploy these resources across functions and research and development projects based on unmet medical need, scientific data, probability of technical and regulatory successful development, market potential and other considerations, and, as necessary, reallocate resources among our internal research and development portfolio and external opportunities to best support the long-term growth of our business.

The Company’s CODM reviews financial information on an aggregate basis for the purposes of allocating resources and evaluating financial performance, including segment net income (loss), which is also reported on the consolidated statement of operations as consolidated net income (loss).

The Company derives revenues from its collaboration partners, consisting of nonrefundable upfront and milestone payments and cost sharing payments under its license and collaboration agreements.

The Company’s customers are comprised of its two collaboration partners, Takeda and JNJ, formerly Janssen Biotech.

Takeda and JNJ accounted for 62 % and 38 % of the Company’s revenues for the year ended December 31, 2024, respectively.

JNJ accounted for 100 % of the Company’s revenues for the years ended December 31, 2023 and 2022.

The Company’s CODM reviews financial information on an aggregate basis for the purpose of allocating resources and evaluating financial performance, including segment net (loss) income, which is also reported on the consolidated statement of operations as consolidated net (loss) income.

The Company derives revenues from its collaboration partners, consisting of non-refundable upfront and milestone payments and cost sharing payments under its license and collaboration agreements.

The Company’s customers are comprised of its two collaboration partners, JNJ and Takeda.

For the year ended December 31, 2025, Takeda accounted for 100 % of the Company’s revenues.

For the year ended December 31, 2024, Takeda and JNJ accounted for 62 % and 38 % of the Company’s revenues, respectively.

For the year ended December 31, 2023, JNJ accounted for 100 % of the Company’s revenues.

All of the Company’s revenues for the years ended December 31, 2025, 2024 and 2023 were generated in the United States.

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Year Ended December 31,

Discovery department expenses (1)

Development department expenses (1)

General and administrative department expenses (1)

Discovery department expense (1)(2)

Development department expense (1)(2)

General and administrative expenses (1)

Employee wages and benefits - discovery (2)

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Employee wages and benefits - general and administrative

Stock-based compensation

Stock-based compensation expense

Other segment items (3)

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Income tax expense

Segment profit (loss)

Reconciliation of profit (loss)

Segment (loss) profit

Reconciliation of (loss) profit

Adjustments and reconciling items

Consolidated net income (loss)

Consolidated net (loss) income

Other segment information

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Expenditures for long-lived assets

Depreciation expense

(1) Amounts exclude employee wages and benefits, stock-based compensation and expense allocations.

(2) As of April 1, 2025, the information regularly provided to the CODM was changed to reclassify pre-clinical expenses from development expense to discovery expense.

Prior period segment information has been recast to reflect this change.

(3) Other segment items include foreign currency related income (expense) and other miscellaneous income (expense).

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Substantially all of the Company’s long-lived assets are in the United States.

See Note 6 to the consolidated financial statements for depreciation expense for the periods presented.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data