What changed in this filing

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Item 1. Financial Statements

2026-05-05 compared with 2025-11-06 · 124 added, 200 removed, 304 unchanged (52% of the section changed)

3 unchanged sentences

(In thousands, except share and per share data)

September 30,

Current assets:

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Accrued expenses and other payables

Income taxes payable

Deferred revenue

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Total current liabilities

Deferred revenue - noncurrent

Operating lease liability - noncurrent

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

62,447,102 and 61,035,139 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

64,227,057 and 62,577,897 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

Additional paid-in capital

Accumulated other comprehensive income (loss)

Accumulated other comprehensive (loss) income

Accumulated deficit

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Three Months Ended

Nine Months Ended

September 30,

License and collaboration revenue

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Total operating expenses

(Loss) income from operations

Loss from operations

Interest income

Other income, net

(Loss) income before income tax benefit (expense)

Income tax benefit (expense)

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

Income (loss) before income tax benefit

Income tax benefit

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

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

PROTAGONIST THERAPEUTICS, INC.

Condensed Consolidated Statements of Comprehensive (Loss ) Income

Condensed Consolidated Statements of Comprehensive Incom e (Loss)

(In thousands)

Three Months Ended

Nine Months Ended

September 30,

Net (loss) income

Net income (loss)

Other comprehensive (loss) income:

Unrealized gain on marketable securities

Comprehensive (loss) income

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

PROTAGONIST THERAPEUTICS, INC.

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands, except share data)

Comprehensive

Stockholders’

(Loss) Income

Three months ended September 30, 2025

Balance at June 30, 2025

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

Stock-based compensation expense

Other comprehensive income

Balance at September 30, 2025

Comprehensive

Stockholders’

(Loss) Income

Three months ended September 30, 2024

Balance at June 30, 2024

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

Stock-based compensation expense

Other comprehensive income

Balance at September 30, 2024

Unrealized (loss) gain on marketable securities

Comprehensive income (loss)

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

PROTAGONIST THERAPEUTICS, INC.

Condensed Consolidated Statements of Stockholders’ Equity

Condensed Consolidated Statements of Stockhold ers’ Equity

(In thousands, except share data)

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(Loss) income

Nine months ended September 30, 2025

Three months ended March 31, 2026

Balance at December 31, 2025

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 September 30, 2025

Other comprehensive loss

Balance at March 31, 2026

Comprehensive

1 unchanged sentence

(Loss) income

Nine months ended September 30, 2024

Three months ended March 31, 2025

Balance at December 31, 2024

1 unchanged sentence

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

Issuance of common stock upon exercise of Pre-Funded Warrants

Stock-based compensation expense

Other comprehensive income

Balance at September 30, 2024

Balance at March 31, 2025

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

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(In thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash Flows from Operating Activities

Net (loss) income

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

Net income (loss)

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

Stock-based compensation

1 unchanged sentence

Accretion of discount on marketable securities

Net realized loss on sale of marketable securities

Changes in operating assets and liabilities:

Receivable from collaboration partner

Contract asset

Prepaid expenses and other assets

1 unchanged sentence

Accrued expenses and other payables

Payable to collaboration partner

Income taxes payable

Deferred revenue

Income taxes payable

Operating lease liability

Net cash provided by operating activities

Net cash (used in) provided by operating activities

Cash Flows from Investing Activities

3 unchanged sentences

Purchases of property and equipment

Net cash used in investing activities

Net cash provided by (used in) investing activities

Cash Flows from Financing Activities

2 unchanged sentences

Net cash provided by financing activities

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

Net increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash, beginning of period

1 unchanged sentence

Supplemental Disclosure of Non-Cash Financing and Investing Information:

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 unaudited condensed 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) inflammatory and immunomodulatory diseases and (ii) hematology and blood disorders.

Two novel peptides derived from the Company’s proprietary discovery technology platform, icotrokinra and rusfertide, are currently in advanced Phase 3 clinical development.

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 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.

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 icotrokinra 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 icotrokinra in adults and pediatric patients 12 years of age or older with moderate-to-severe plaque psoriasis.

(the “Company”) is a discovery through late-stage development biopharmaceutical company with a proprietary peptide technology platform that enables de novo discovery of peptide therapeutics.

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) was approved in the United States in March 2026 for the treatment of moderate-to-severe plaque psoriasis in adults and pediatric patients 12 years of age or older who weigh at least 40kg and are candidates for systemic therapy or phototherapy.

ICOTYDE is the first and only targeted oral peptide that precisely blocks the Interleukin-23 receptor (“IL-23R”) and is licensed to Janssen Biotech, Inc, a Johnson & Johnson company (“JNJ”).

ICOTYDE was jointly discovered by the Company and JNJ scientists, with the Company having primary responsibility for the development of ICOTYDE through Phase 1, and JNJ assuming responsibility for further development and commercialization.

In September 2025, JNJ submitted an application to the European Medicines Agency (“EMA”) seeking the first approval of ICOTYDE for the treatment of adults and pediatric patients 12 years of age and older with moderate-to-severe plaque psoriasis.

ICOTYDE is in Phase 3 development for psoriatic arthritis and ulcerative colitis, and in Phase 2b/3 for Crohn’s disease.

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 a potential NDA filing.

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

Rusfertide is being co-developed with Takeda Pharmaceuticals, Inc.

The Company holds an option to co-commercialize rusfertide in the United States through a 50/50 profit and loss share structure with Takeda or can opt out of this structure.

In August 2025, rusfertide was granted Breakthrough Therapy designation by the U.S.

Food and Drug Administration (the “FDA”) for the treatment of erythrocytosis in patients with PV.

In December 2025, a New Drug Application (“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 NDA was granted priority review by the FDA, with a Prescription Drug User Fee Act target action date in the third quarter of 2026.

The Company also has a number of clinical and pre-clinical 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, oral small molecule hepcidin functional mimetic PN-8047, and IL-4 and amylin programs.

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

Operating Segments

Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the Chief Executive Officer, the Company’s chief operating decision maker (“CODM”), in deciding how to allocate resources and assessing performance.

The Company operates and manages its business as one operating segment.

The Company’s Chief Executive Officer reviews financial information on an aggregate basis for the purpose of allocating and evaluating financial performance.

See Note 10 to these condensed consolidated financial statements for the Company’s interim disclosures related to the adoption of ASU 2023-07 Segment Reporting (Topic 280) Improvements to Reporting Segment Disclosures for interim periods beginning on January 1, 2025.

As of September 30, 2025, the Company had cash, cash equivalents and marketable securities of $ 678.8 million.

The Company has incurred an accumulated deficit of $ 426.3 million from inception through September 30, 2025.

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 rusfertide Phase 3 development activities through 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.

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.

Summary of Significant Accounting Policies

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The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting.

As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted and, accordingly, the condensed consolidated balance sheet as of September 30, 2025 has been derived from the Company’s unaudited consolidated financial statements at that date but does not include all of the information required by GAAP for complete consolidated financial statements.

As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted and, accordingly, the condensed consolidated balance sheet as of March 31, 2026 has been derived from the Company’s unaudited consolidated financial statements at that date but does not include all of the information required by GAAP for complete consolidated financial statements.

These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all adjustments (consisting of normal recurring adjustments) that are necessary for a fair presentation of the Company’s condensed consolidated financial statements.

The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or for any future period.

The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or for any future period.

The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K, filed with the SEC on February 25, 2026.

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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.

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, estimates of whether contingent consideration should be included in the transaction price at each reporting period, and estimates related to royalty revenue recognition.

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.

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.

Our business may also be impacted by changes or disruptions at the FDA and other government agencies.

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 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 to 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 Quarterly Report on Form 10-Q.

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Cash as Reported in Condensed Consolidated Statements of Cash Flows

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

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

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

September 30,

Cash and cash equivalents

1 unchanged sentence

Total cash reported on condensed consolidated statements of cash flows

The increase in restricted cash – noncurrent as of September 30, 2025 was due to a $ 62.0 thousand 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.

Restricted cash as of March 31, 2026 consists of (i) a $ 225 thousand 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 $ 63 thousand 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.

Stock-Based Compensation Expense

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The cumulative effect on current and prior periods of a change in the estimated number of PSUs expected to be earned is recognized as compensation expense or as reduction of previously recognized compensation expense in the period of the revised estimate.

For the nine months ended September 30, 2025, the Company recognized $ 1.8 million of stock-based compensation expense related to 75,500 PSUs that vested during the third quarter of 2025.

No stock-based compensation related to PSUs was recognized for the three months ended March 31, 2026.

The Company recognized $ 1.8 million of stock-based compensation expense related to PSUs for the three months ended March 31, 2025.

The Company recognizes forfeitures of stock-based awards as they occur.

1 unchanged sentence

Three Months Ended

Nine Months Ended

September 30,

Research and development

2 unchanged sentences

Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies during the three and nine months ended September 30, 2025, as compared to those disclosed in Note 2.

There have been no material changes to the Company’s significant accounting policies during the three months ended March 31, 2026, as compared to those disclosed in Note 2.

Summary of Significant Accounting Policies included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Recently Issued Accounting Pronouncements Not Yet Adopted as of September 30, 2025

In December 2023, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update 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.

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

The Company does not expect the adoption of this guidance to have a material impact on its financial position, results of operations or cash flows.

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

Recently Issued Accounting Pronouncements Not Yet Adopted as of March 31, 2026

In December 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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):

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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 2017, by and between the Company and JNJ, as amended in May 2019 (together, the “JNJ License and Collaboration Agreement”).

In November 2024, 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 2017, by and between the Company and JNJ, as amended in May 2019 and July 2021 (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.

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 September 30, 2025.

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

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

During the first quarter of 2026, the Company earned a $ 50.0 million milestone payment upon FDA approval of ICOTYDE for the treatment of moderate-to-severe plaque psoriasis in adults and pediatric patients over 12 years of age or older who weigh at least 40 kg and are candidates for systemic therapy or phototherapy.

The Company has earned a total of $ 387.5 million in non-refundable payments from JNJ under the JNJ License and Collaboration Agreement from inception in 2017 through March 31, 2026.

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

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

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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 addition, the Company remains eligible to receive sales milestones of up to $ 425.0 million.

Takeda Collaboration Agreement

In January 2024, the Company entered into a worldwide license and collaboration agreement for rusfertide with Takeda, as amended March 2025 (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”).

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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 is expected to be submitted to the FDA.

The Company remains primarily responsible for clinical development activities through the NDA filing.

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.

The Company was 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 and a $25.0 million milestone payment 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.

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.

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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In addition to these milestone payments, in the event the Company exercises the Full Opt-out Right during the Initial Opt-out Period, the Company will receive:

(i) a $ 200.0 million payment following its exercise of the Full Opt-out Right;

(i) a $ 200.0 million payment following its exercise of the

Full Opt-out Right;

and (ii) an additional $ 200.0 million payment following FDA approval of the NDA for rusfertide for PV (together, the “Opt-out Payment”).

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 milestones under the Takeda Collaboration Agreement include:

In addition, the Company will also be eligible to receive sales milestones of up to $ 775.0 million, should the Company exercise its Opt-out Right.

Upcoming potential development 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);

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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 Phase 3 VERIFY trial in PV and associated manufacturing services.

(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.

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

Both parties are active participants in directing and carrying out the development of the Licensed Products and both are exposed to significant risks and rewards related to the commercial success of the Products.

If the Company does not exercise an Opt-out Right (“Company Opt-in”), the Company and Takeda would co-detail the Licensed Products in the U.S.

and share in the economic results through a profit-sharing structure.

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 an 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 expenses, respectively.

The Company may from time to time arrange to provide goods or services from vendors to Takeda in order to facilitate Takeda’s rusfertide development efforts.

As there is no performance obligation to provide these goods or services and the Company is acting as an agent, these amounts are recorded as receivable from collaboration partner and payable to vendor until reimbursement is received.

In March 2025, the $ 25.0 million milestone 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 license and an additional $ 3.7 million allocated to the development services 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 three months ended September 30, 2025, the Company recognized license and collaboration revenue of $ 4.7 million related to the Takeda Collaboration Agreement for development services provided by the Company during the period based on the cost-based input method.

For the nine months ended September 30, 2025, the Company recognized license and collaboration revenue of $ 38.6 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) $ 17.3 million for development services provided by the Company during the period based on the cost-based input method.

As of September 30, 2025, the remaining $ 17.0 million in deferred revenue will be recognized through the conclusion of the development services performance obligation.

For the three months ended September 30, 2024, the Company recognized license and collaboration revenue of $ 4.7 million related to the initial Takeda Collaboration Agreement transaction price for development services provided by the Company during the period based on the cost-based input method.

For the nine months ended September 30, 2024, the Company recognized license and collaboration revenue of $ 263.8 million related to the Takeda Collaboration Agreement transaction price, including (i) $ 254.1 million allocated to the rusfertide license delivered to Takeda upon effectiveness of the agreement in March 2024 and (ii) $ 9.7 million for development services provided by the Company during the period based on the cost-based input method.

The remaining unrecognized transaction price amount of $ 36.2 million related to the Takeda Collaboration Agreement was recorded as deferred revenue on the Company’s condensed consolidated balance sheet as of September 30, 2024 to be recognized over time based on the cost-based input method.

For the three and nine months ended September 30, 2025, the Company recognized $ 4.7 million and $ 14.9 million of revenue, respectively, that was included in the deferred revenue liability balance at the beginning of each period.

For the three months ended September 30, 2024, the Company recognized $ 4.7 million of revenue that was

included in the deferred revenue liability balance at the beginning of the period.

For the nine months ended September 30, 2024, the Company did no t recognize revenue from any amounts included in the deferred revenue contract liability balance at the beginning of the period.

For the three months ended March 31, 2026, the Company recognized license and collaboration revenue of $ 56.4 million including (i) a $ 50.0 million milestone payment related to the JNJ License and Collaboration Agreement, which was earned upon FDA approval of ICOTYDE for the treatment of moderate-to-severe plaque psoriasis in March 2026, (ii) $ 3.3 million related to the Takeda Collaboration Agreement for development services provided by the Company during the period using the cost-based input method, and (iii) $ 3.1 million from Takeda for rusfertide clinical supplies.

The remaining $ 6.3 million in deferred revenue as of March 31, 2026 will be recognized through the conclusion of the development services performance obligation.

For the three months ended March 31, 2025, the Company recognized license and collaboration revenue of $ 28.3 million related to the Takeda Collaboration Agreement, including (i) $ 22.8 million related to the proportional recognition of the $ 25.0 milestone deemed probable of being achieved due to the Phase 3 VERIFY trial meeting its primary endpoint and (ii) $ 5.5 million related to the initial transaction price for development services provided by the Company during the period.

Revenue recognition for the $ 25.0 million milestone, which was payable upon completion of the VERIFY clinical study report, was allocated based on the initial standalone selling price of each performance obligation under the agreement.

The remaining $ 2.2 million in revenue related to the milestone is recognized through the conclusion of the development services performance obligation.

The Company recorded a corresponding contract asset of $ 22.8 million on its condensed consolidated balance sheet as of March 31, 2025.

For the three months ended March 31, 2026, the Company recognized $ 3.3 million of revenue that was included in the deferred revenue balance at the beginning of the period.

For the three months ended March 31, 2025, the Company recognized $ 5.5 million of revenue that was included in the deferred revenue balance at the beginning of the period.

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

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The following tables present the fair value of the Company’s financial assets determined using the inputs defined above (in thousands):

September 30, 2025

March 31, 2026

Money market funds

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Treasury and agency securities, including U.S.

active and model-based valuation techniques, for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets.

Treasury bills, commercial paper and corporate debt securities are classified as Level 2 as they were valued based upon quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques, for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets.

The carrying amount of the Company’s remaining financial assets and liabilities, including cash, receivables and payables, approximates their fair value due to their short-term nature.

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Cash equivalents and marketable securities consisted of the following (in thousands):

September 30, 2025

March 31, 2026

Gross Unrealized

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All of the Company’s marketable securities are classified as available-for-sale.

Current marketable securities of $ 462.4 million and $ 321.7 million held as of September 30, 2025 and December 31, 2024, respectively, had contractual maturities of less than one year .

Noncurrent marketable securities of $ 102.7 million and $ 140.3 million held as of September 30, 2025 and December 31, 2024, respectively, had contractual maturities of at least one year but no more than two years .

Current marketable securities of $ 354.1 million and $ 439.0 million held as of March 31, 2026 and December 31, 2025, respectively, had contractual maturities of less than one year .

Noncurrent marketable securities of $ 72.5 million and $ 78.6 million held as of March 31, 2026 and December 31, 2025, 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.

During the nine months ended September 30, 2025, the Company sold $ 7.0 million of marketable securities and recognized a net realized loss of $ 4.0 thousand.

There were no material realized gains or realized losses on marketable securities for the three months ended September 30, 2025 and the three and nine months ended September 30, 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 September 30, 2025 and December 31, 2024.

The Company sold $ 3.4 million and $ 7.0 million of marketable securities and realized a net gain of $ 2.0 thousand and a net loss of $ 5.0 thousand during the three months ended March 31, 2026 and 2025, respectively.

Balance Sheet Components

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Prepaid expenses and other current assets consisted of the following (in thousands):

September 30,

Accrued interest receivable

Prepaid clinical and research related expenses

Prepaid licenses

Prepaid insurance

Other prepaid expenses

Other receivable

Prepaid licenses

Prepaid expenses and other current assets

1 unchanged sentence

Property and equipment, net consisted of the following (in thousands):

September 30,

Laboratory equipment

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Accrued expenses and other payables consisted of the following (in thousands):

September 30,

Accrued clinical and research related expenses

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Stockholders’ Equity

Shares of Common Stock Authorized for Issuance

At the Company’s 2024 Annual Meeting of Stockholders held on June 20, 2024, the Company’s stockholders approved an amendment to the Company’s Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) to increase the number of authorized shares of the Company’s common stock from 90,000,000 to 180,000,000 , which also has the effect of increasing the total number of authorized shares from 100,000,000 to 190,000,000 (the “Amendment”).

On June 21, 2024, the Company filed a Certificate of Amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware, which became effective immediately upon such filing.

Pre-Funded Warrants

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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.

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.

No Pre-Funded Warrants were exercised during the three and nine months ended September 30, 2025.

During the nine months ended September 30, 2024, Pre-Funded Warrants to purchase 84,992 shares were net exercised, resulting in the issuance of 84,989 shares of common stock.

As of September 30, 2025, Pre-Funded Warrants to purchase 1,500,000 shares of common stock remained outstanding.

No income tax expense was recorded by the Company for the three months ended September 30, 2025.

The Company recorded income tax expense of $ 0.2 million for the nine months ended September 30, 2025, which consisted of adjustments to estimated tax payments.

The Company recorded an income tax benefit of $ 0.4 million and income tax expense of $ 2.2 million for the three and nine months ended September 30, 2024, respectively.

The primary difference in income tax expense as compared to the prior year was due to taxable income for the nine months ended September 30, 2024 resulting from the recognition of revenue in connection with the Takeda Collaboration Agreement.

The tax provision for the three and nine months ended September 30, 2024 was determined using an estimated annual effective tax rate, adjusted for discrete items, if any.

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 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.

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

No Pre-Funded Warrants were exercised during the three months ended March 31, 2026 and 2025.

As of March 31, 2026, Pre-Funded Warrants to purchase 1,500,000 shares of common stock remained outstanding.

The Company recorded income tax benefit of $ 1.5 million for the three months ended March 31, 2026.

No income tax expense or benefit was recorded by the Company for the three months ended March 31, 2025.

The tax provision for the three months ended March 31, 2026 was determined using an estimated annual effective tax rate, adjusted for discrete items, if any.

The income tax benefit for the three months ended March 31, 2026 included a discrete item for stock-based compensation expense.

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.

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

The following table reconciles the numerator and denominator used to calculate diluted net (loss) income per share of common stock (in thousands, except share and per share data):

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

Three Months Ended

Nine Months Ended

September 30,

Net (loss) income

Net income (loss)

Weighted-average shares of common stock, basic

1 unchanged sentence

Weighted-average shares of common stock, dilutive

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 9.1 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 computation for the three and nine months ended September 30, 2025 due to the Company’s net losses for these periods.

Approximately 9.2 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 computation for the three months ended September 30, 2024 due to the Company’s net loss for the period.

Approximately 3.2 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 computation for the nine months ended September 30, 2024 because their effect was anti-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 0.2 million potentially dilutive shares of common stock (consisting of shares subject to outstanding stock options, RSUs, PSUs and under the ESPP, as applicable) were excluded from the diluted net income per share of common stock computation for the three months ended March 31, 2026 because their effect was anti-dilutive.

Approximately 9.7 million potentially dilutive shares of common stock (consisting of shares subject to outstanding stock options, RSUs, PSUs, and under the ESPP, as applicable) were excluded from the diluted net loss per share of common stock computation for the three months ended March 31, 2025 due to the Company’s net loss for the period.

Segment Reporting

Operating segments are components of an enterprise for which separate financial information is available and which are evaluated by a company’s CODM in deciding how to allocate resources and to assess performance.

Operating segments are components of an enterprise for which separate financial information is available and which are evaluated by a company’s chief operating decision maker (“CODM”) in deciding how to allocate resources and to assess performance.

The Company operates and manages its business as one operating segment, which primarily focuses on the discovery and development of innovative medicines in areas of unmet medical need.

1 unchanged sentence

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 purpose of allocating resources and evaluating financial performance, including segment net (loss) income, which is also reported on the condensed consolidated statement of operations as consolidated net (loss) income.

Segmen t information is as follows (in thousands):

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

Segment information was as follows (in thousands):

Three Months Ended

Nine Months Ended

September 30,

Discovery department expense (1)(2)

7 unchanged sentences

Interest income

Income tax benefit (expense)

Segment (loss) profit

Reconciliation of (loss) profit

Income tax benefit

Segment profit (loss)

Reconciliation of profit (loss)

Adjustments and reconciling items

Consolidated net (loss) income

Consolidated net income (loss)

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

5 unchanged sentences

The measure of segment assets is reported as total assets on the Company’s condensed consolidated balance sheets for the periods presented.

Subsequent Events

On April 28, 2026, the Company announced that it exercised its right to opt out of the U.S.

profit and loss sharing arrangement ( 50 % to the Company and 50 % to Takeda) under the Takeda Collaboration Agreement.

The opt-out election triggered a $ 200.0 million payment, with an additional $ 200.0 million opt-out fee and a separate $ 75.0 million milestone upon FDA approval of rusfertide.

Following the opt-out, the Company is also eligible to receive up to $ 775 .0 million in sales milestone payments and tiered royalties ranging from 14 % to 29 % on annual net worldwide sales, with an approximate 21 % weighted-average royalty rate at $ 1.5 billion in annual net sales and a 29 % tier applying to incremental annual net sales above $ 1.5 billion.

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-Q

Item 1. Financial Statements