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Item 1. Business

2022-02-28 compared with 2021-03-10 · 295 added, 268 removed, 380 unchanged (60% of the section changed)

We are a clinical-stage biopharmaceutical company that utilizes a proprietary technology platform to discover and develop novel peptide-based drugs to address significant unmet medical needs and transform existing treatment paradigms for patients.

We have multiple clinical assets derived from this platform in development for multiple indications.

Our clinical programs fall into two broad categories of diseases;

We are a biopharmaceutical company with multiple peptide-based new chemical entities in different stages of development, all derived from the Company's proprietary technology platform.

Our clinical programs address two broad categories of diseases;

(i) hematology and blood disorders, and (ii) inflammatory and immunomodulatory diseases.

Our Product Pipeline

*Subject to Covid-19 related delays

Our most advanced clinical asset, rusfertide (generic name for PTG-300), is an injectable hepcidin mimetic in development for the potential treatment of erythrocytosis, iron overload and other blood disorders.

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Rusfertide mimics the effect of the natural hormone hepcidin, but with greater potency, solubility and stability.

We initiated Phase 2 proof of concept (“POC”) studies in the blood disorders polycythemia vera (“PV”) in the third quarter of 2019 and hereditary hemochromatosis (“HH”) in January 2020.

In December 2020, we presented four posters and one oral presentation relating to rusfertide at the American Society for Hematology’s virtual annual meeting, including updated interim Phase 2 results for rusfertide in PV.

We believe these interim results provide evidence regarding the potential of rusfertide to eliminate the need for phlebotomy by controlling hematocrit levels below 45% on an individual patient basis.

Rusfertide has a unique mechanism of action in the potential treatment of PV, which may enable it to decrease and maintain hematocrit levels within the range of recommended clinical guidelines without causing the iron deficiency that may occur with frequent phlebotomy.

We selected PV as our first indication for potential pivotal study in rusfertide and expect to complete patient enrollment in the ongoing Phase 2 clinical trial by mid-2021.

We are consulting with regulatory authorities in the first half of 2021 to discuss the registrational clinical development plan.

In June 2020, the U.S.

Food and Drug Administration (“FDA”) granted orphan drug designation for rusfertide for the treatment of PV.

In October 2020, the European Medicines Agency granted orphan drug designation for rusfertide for the treatment of PV.

In December 2020, the FDA granted Fast Track designation for rusfertide for the treatment of PV.

In addition, we expect to disclose preliminary data from our Phase 2 POC study in HH, our second indication, in the second half of 2021.

We discontinued development of rusfertide for anemia associated with beta-thalassemia and myelodysplastic syndromes during the first half of 2020.

Our clinical assets PTG-943 and PTG-200 are orally delivered investigational drugs currently in development for inflammatory bowel disease (“IBD”), a gastrointestinal (“GI”) disease consisting primarily of ulcerative colitis (“UC”) and Crohn’s disease (“CD”), that are designed to block biological pathways currently targeted by marketed injectable antibody drugs.

Our orally stable peptide approach may offer targeted delivery to the GI tissue compartment.

We initiated REVIVE, a Phase 2 proof of concept (“POC”) study in the blood disorder polycythemia vera (“PV”), in the third quarter of 2019.

We initiated a Phase 2 POC study in hereditary hemochromatosis (“HH”) in January 2020, which was completed during the fourth quarter of 2021.

During the first quarter of 2021, we initiated PACIFIC, another Phase 2 study for rusfertide in up to 20 patients diagnosed with PV and with routinely elevated hematocrit levels (>48%).

In June 2021, we presented updated Phase 2 data supporting the long-term efficacy of rusfertide in PV during an oral presentation at the European Hematology Association (“EHA”) 2021 Virtual Congress.

A n abstract highlighting positive preliminary data from our Phase 2 study of rusfertide in HH was orally presented at The Liver Meeting® 2021, hosted by the American Association for the Study of Liver Diseases (“AASLD”), which took place virtually in November 2021.

In December 2021, two abstracts highlighting positive updated data from our REVIVE and PACIFIC Phase 2 studies of rusfertide in PV were orally presented at the American Society of Hematology (“ASH”) 2021 Annual Meeting, in addition to three poster presentations on rusfertide in PV and HH.

These results provided evidence regarding the potential of rusfertide for managing hematocrit, reducing thrombotic risk and improving iron deficiency symptoms.

Rusfertide has a unique mechanism of action in the potential treatment of PV, which may enable it to specifically decrease and maintain hematocrit levels within the range of recommended clinical guidelines without causing the iron deficiency that can occur with frequent phlebotomy.

On September 16, 2021, the FDA placed a clinical hold on our rusfertide clinical studies following our submission to the FDA of findings in a 26-week rasH2 transgenic mouse carcinogenicity study.

In October 2021, we submitted a Complete Response to the FDA related to the clinical hold, and the FDA removed the clinical hold on October 8, 2021.

In our Complete Response, we provided the individual patient clinical safety reports the FDA requested for human

cancers observed in rusfertide clinical trials, updated the investigator brochure and patient informed consent forms for ongoing rusfertide trials, proposed new safety and stopping rules in clinical study protocols of our ongoing rusfertide clinical trials, and performed a comprehensive review of our rusfertide safety database.

Dosing of patients and enrollment in ongoing clinical trials with rusfertide resumed in the fourth quarter of 2021.

We enrolled 63 patients in the ongoing REVIVE Phase 2 clinical trial of rusfertide in PV prior to the clinical hold, and we are currently enrolling approximately 20 patients to target approximately 50 patients enrolled through the end of a three-year open label extension (“OLE”).

Based on ongoing end of Phase 2 feedback provided by the FDA’s Division of Nonmalignant Hematology and written comments from the European Medicines Agency (“EMA”), we expect to initiate VERIFY, a global Phase 3 clinical trial of rusfertide in PV in the first quarter of 2022.

Patient enrollment into VERIFY is expected to be completed in the first half of 2023.

In addition, we completed our Phase 2 POC study in HH, our second indication, during the fourth quarter of 2021.

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

● The FDA granted orphan drug designation for rusfertide for the treatment of PV in June 2020;

● The EMA granted orphan drug designation for rusfertide for the treatment of PV in October 2020;

● The FDA granted Fast Track designation for rusfertide for the treatment of PV in December 2020;

● The FDA granted Breakthrough Therapy Designation for rusfertide for the treatment of PV in June 2021.

Our alpha-4-beta-7 (“α4β7”) antagonist PN-943 and our Interleukin-23 receptor (“IL-23R”) antagonist compound PN-235 are orally delivered investigational drugs that are designed to block biological pathways currently targeted by marketed injectable antibody drugs.

Our orally stable peptide approach may offer a targeted therapeutic approach for GI and systemic compartments as needed.

We believe that, compared to antibody drugs, these product candidates have the potential to provide improved safety due to minimal exposure in the blood, increased convenience and compliance due to oral delivery, and the opportunity for the earlier introduction of targeted oral therapy.

As a result, if successfully developed and approved, we believe they may transform the existing treatment paradigm for IBD.

PN-943 is an investigational, orally delivered, gut-restricted alpha-4-beta-7 (“α4β7”) specific integrin antagonist.

We developed PN-943 as a potentially more potent orally delivered, gut-restricted α4β7 backup compound to PTG-100, our first-generation orally delivered gut-restricted α4β7 inhibitor that was being developed for treatment of IBD.

In 2019, we completed a Phase 1 single ascending dose (“SAD”) and multiple ascending dose (“MAD”) clinical study of PN-943 in healthy volunteers to evaluate safety, pharmacokinetics and pharmacodynamics.

The pharmacodynamic results indicated that the administration of PN-943 was well tolerated and showed results of target engagement that were suggestive of higher potency for PN-943 as compared to PTG-100.

PN-943 is an investigational, orally delivered, gut-restricted α4β7 specific integrin antagonist for inflammatory bowel disease (“IBD”).

We submitted a U.S.

Investigational New Drug application (“IND”) with the FDA for PN-943 in December 2019, which took effect in January 2020, and we initiated a Phase 2 POC study in UC in the second quarter of 2020 which is expected to be completed in 2022, subject to delays related to the COVID-19 pandemic.

PTG-200 (also referenced as JNJ-67864238) is an investigational, orally delivered, gut-restricted Interleukin-23 receptor (“IL-23R”) antagonist for the treatment of IBD.

Investigational New Drug (“IND”) application with the FDA for PN-943 in December 2019, which took effect in January 2020.

During the second quarter of 2020 we initiated IDEAL, a 150 patient Phase 2 trial evaluating the safety, tolerability and efficacy of PN-943 in patients with moderate to severe UC.

This trial includes a 12-week induction period and a 40-week open label extension.

Patient enrollment in IDEAL was completed during the first quarter of 2022, and topline data from the study, including the 12-week induction period, is expected in the second quarter of 2022.

In May 2017, we entered into a worldwide license and collaboration agreement with Janssen Biotech, Inc.

(“Janssen”), a Johnson & Johnson company, to co-develop and co-detail PTG-200 and certain related compounds for all indications, including IBD.

The agreement with Janssen was amended in May 2019 to expand the collaboration by supporting efforts towards second-generation IL- 23R antagonists, triggering a $25.0 million milestone payment to us.

In January 2020, as part of the expanded research collaboration, we announced the identification and nomination of an orally delivered IL-23R antagonist peptide as a second-generation development candidate, triggering a $5.0 million milestone payment to us.

Janssen initiated a global Phase 2 POC clinical study for PTG-200 in moderate-to-severe CD in the fourth quarter of 2019.

Due to the uncertain effect on the timing of clinical trials caused by the COVID-19 pandemic, we have suspended guidance on a timeline for completion of the PTG-200 Phase 2 study.

In October 2020, we announced the selection of two second-generation IL-R antagonists for advancement into clinical development, PN-235 (also referenced as JNJ-77242113) and PN-232 (also referenced as JNJ-75105186).

A Phase 1 study was initiated for PN-235 in December 2020 and is expected to be completed in 2021.

PN-232 is in the late preclinical stage and we expect to initiate and complete a Phase 1 study for PN-232 in 2021.

The advancement of three different oral co-development candidates provides us with several strategic options for development in multiple indications.

We are also continuing our joint research efforts to identify additional IL-23R antagonists.

(“Janssen”), a Johnson & Johnson company, to co-develop and co-detail our IL-23R antagonist compounds, including PTG-200 (JNJ-67864238) and certain related compounds for all indications, including IBD.

PTG-200 was a first-generation investigational, orally delivered, IL-23R antagonist for the treatment of IBD.

The agreement with Janssen was amended in May 2019 to expand the collaboration by supporting efforts towards second-generation IL-23R antagonists;

and in July 2021 to, among other things, enable Janssen to independently research and develop collaboration compounds for multiple indications in the IL-23 pathway and further align our financial interests.

In October 2020, we and Janssen announced the selection of two second-generation IL23-R antagonists for advancement into clinical development, PN-232 (JNJ-75105186) and PN-235 (JNJ-77242113).

During the fourth quarter of 2021, following a pre-specified interim analysis criteria, a portfolio decision was made by Janssen to stop further development of both PTG-200 and PN-232 favor of advancing PN-235, based on its superior potency and overall pharmacokinetic and pharmacodynamic profile.

A PN-235 Phase 1 study was completed in Q4 2021.

Janssen initiated FRONTIER 1, a Phase 2b clinical study of PN-235 in moderate-to-severe plaque psoriasis, in early 2022, and is expected to initiate a separate Phase 2 study of PN-235 in IBD in the second half of 2022 .

During the fourth quarter of 2021, we received a $7.5 million milestone payment from Janssen triggered by the completion of data collection for PN-235 Phase 1 activities.

We expect to earn a $25.0 million milestone in connection with the dosing of a third patient in the first Phase 2 study of a second-generation candidate, and a $10.0 million

milestone in connection with the dosing of a third patient in the second Phase 2 study of a second-generation candidate.

We remain eligible for up to approximately $900.0 million in development-related milestone payments, in addition to the $87.5 million in milestones already received.

Our clinical assets are all derived from our proprietary discovery platform.

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Hepcidin is a natural hormone that regulates iron metabolism.

We are developing rusfertide for the treatment of certain disorders characterized by excessive red blood cells, iron overload or imbalance.

We are developing rusfertide for the treatment of certain disorders characterized by excessive red blood cells (“RBCs”), iron overload or imbalance.

In healthy individuals, hepcidin regulates iron levels by limiting release of iron from macrophages and inhibiting iron absorption from the GI tract.

In diseases of excessive red blood cells (“RBCs”), such as PV, the body consumes iron in the production of cells, leading to iron

deficiency which can be exacerbated by phlebotomy.

In diseases of excessive RBCs, such as PV, the body consumes iron in the production of cells, leading to iron deficiency which can be exacerbated by phlebotomy.

In diseases of iron overload, such as HH, there may be insufficient hepcidin to maintain appropriate iron levels.

In other disorders, iron imbalance can benefit from increased levels of hepcidin-like activity to restore proper balance.

Because of stability issues, complexity of synthesis and solubility limitations, direct replacement with native hepcidin is not a practical therapeutic approach.

We developed rusfertide as a more potent, stable, soluble, and more readily manufactured injectable hepcidin mimetic.

Native hepcidin is not a practical therapeutic approach because of stability issues, complexity of synthesis and solubility limitations.

We developed rusfertide as a more potent, stable, and soluble injectable hepcidin mimetic.

Mechanism of Action and Rationale

The molecular target of the hormone hepcidin is the cellular trans-membrane protein ferroportin, which functions as the major export channel for intracellular iron in macrophages, liver hepatocytes, and duodenal enterocytes.

By binding to the extracellular domain of ferroportin, hepcidin redistributes iron by reducing the export of iron from inside the enterocytes and macrophages to the systemic circulation.

As a hepcidin mimetic, rusfertide can downregulate ferroportin and normalize red blood cell production by controlling the supply of iron from the macrophages and other stores to the bone marrow.

In addition, by limiting the release of iron into the blood, rusfertide may inhibit the damage caused by excessive absorption of iron by vital organs such as the liver and heart.

Iron Disorders Overview

The molecular target of the hormone hepcidin is the cellular trans-membrane protein ferroportin, which functions as the major export channel for intracellular iron in splenic macrophages, liver Kupffer cells, hepatocytes, and duodenal enterocytes.

Hepcidin binds to the extracellular domain of ferroportin to block the export of iron from inside these cells to the systemic circulation.

As a hepcidin mimetic, rusfertide also downregulates ferroportin to control the supply of iron to the bone marrow, thereby normalizing RBC production.

In addition, by limiting excessive absorption of dietary iron by enterocytes and rapid sequestration of iron into the macrophages, vital organs can be protected from the accumulation of toxic iron.

Polycythemia Vera (“PV”)

PV is a rare myeloproliferative neoplasm characterized primarily by the overproduction of red blood cells.

PV Overview and Market Opportunity

PV is a rare myeloproliferative neoplasm characterized primarily by the overproduction of RBCs.

PV is typically caused by a form of Janus Kinase 2 (“JAK2”) mutation.

PV is a serious chronic condition as the increased red blood cell count causes the blood to thicken and puts patients at higher risk of cardiovascular and thrombotic events such as heart attack and stroke.

Patients are typically stratified as low or high risk based on age and medical history.

PV is a serious chronic condition as the increased RBC count causes the blood to thicken from increased number of smaller rigid RBCs, putting patients at higher risk of cardiovascular and thrombotic events such as heart attack and stroke.

According to National Comprehensive Cancer Network (“NCCN”) guidelines, age and thrombosis history determine a patient’s risk classification as either low-risk or high-risk.

Regardless of risk categorization, treatment guidelines for PV are consistent:

to control the patient’s hematocrit (red blood cells as a percentage of whole blood) below 45% in order to reduce the risk of further cardiovascular or thrombotic events.

to control the patient’s hematocrit (RBCs as a percentage of whole blood) below 45% in order to reduce the risk of cardiovascular or thrombotic events.

PV may progress to myelofibrosis or leukemia.

Currently patients are typically treated with low dose aspirin and phlebotomy alone or hydroxyurea alone or in combination with phlebotomy.

At later stages, patients may receive interferons or ruxolitinib, marketed as Jakafi®.

Jakafi® is currently the only branded product in the United States for PV and the only FDA-approved treatment for PV in the past 12 years.

Cytoreductive therapies such as hydroxyurea, interferons and ruxolitinib can have challenging side effect profiles as they reduce all cell types, not just red blood cells.

Current treatments are effective in some patients but have limitations.

We believe there are substantial PV patient groups that could benefit from a new non-cytoreductive therapeutic option which focuses on red blood cells.

PV Market Overview

PV is a rare disease affecting approximately 160,000 patients living in the United States, with a similar prevalence in Europe, representing an estimated market opportunity of approximately $1.0 billion to $2.0 billion.

Approximately 14,000 new patients have been diagnosed each year since 2017.

Patients are typically diagnosed between the age of 50 and 70 and median survival is approximately 20 years.

Recent analysis of a large medical claims database, representing approximately 90% of U.S.

lives, indicates that the current treatment paradigm consists primarily of therapeutic phlebotomy, hydroxyurea, or a combination of hydroxyurea and phlebotomy.

The predominant treatment is phlebotomy for both low-risk and high-risk patients, and combination therapy is commonly used to control hematocrit.

According to this database analysis, current therapies do not offer adequate hematocrit control below 45%.

In fact, less than 25% of patients in the data set had all hematocrit test results under 45% as recommended in National Comprehensive Cancer Network (“NCCN”), indicating that as many as 70,000 patients in the United States alone may be at elevated risk of cardiovascular and thrombotic events.

We believe that rusfertide has the potential to provide substantial benefit to patients by providing a tool focused entirely on managing hematocrit in a consistent and predictable manner and dramatically decrease the need for therapeutic phlebotomy.

Currently earlier stage patients are typically treated with low dose aspirin and therapeutic phlebotomy alone or hydroxyurea alone or in combination with phlebotomy.

At later stages, patients may receive interferons, marketed as Besrami® or Pegasus®, or JAK inhibitor ruxolitinib, marketed as Jakafi®.

Cytoreductive therapies such as hydroxyurea, interferons and ruxolitinib can have challenging side effect profiles as they reduce all cell types, not just RBCs.

Current treatments are effective in some patients but have limitations, such as cytopenia and cancer.

We believe there are

substantial PV patient groups that could benefit from a new non-cytoreductive therapeutic option which focuses on RBCs.

PV affects approximately 100,000 patients living in the United States, with a similar prevalence in Europe, representing an estimated market opportunity of approximately $1.0 billion to $2.0 billion.

Approximately 14,000 new patients have been diagnosed with PV annually each year since 2017.

Patients are typically diagnosed between the ages of 50 and 70 and median survival is approximately 20 years.

Analysis of a large medical claims database indicates that the predominant treatment for PV is phlebotomy.

Cytoreductive agents, such as hydroxyurea, are also commonly used to control blood count in PV patients.

Although NCCN guidelines state that hematocrit levels should be maintained below 45% to reduce risk of cardiovascular and thrombotic events, less than 25% of patients in the large medical claims data set had all hematocrit test results under 45%.

This analysis reveals that current therapies do not offer adequate hematocrit control, indicating a significant unmet need in the United States alone where patients may have an elevated risk of cardiovascular and thrombotic events.

We believe that rusfertide has the potential to provide substantial benefit to patients by offering a treatment focused on managing hematocrit in a consistent and predictable manner, dramatically decreasing the need for phlebotomy.

Rusfertide is a non-cytoreductive mimetic of the natural hormone hepcidin, the master regulator of iron homeostasis in the body.

Rusfertide has a unique iron regulatory mechanism which, per early results from our

Phase 2 study in PV, allows for persistent control of hematocrit without causing iron deficiency that is caused by excessive red blood cell production and exacerbated by frequent phlebotomy.

Rusfertide acts by redistributing iron away from the bone marrow where iron is in high demand and essential for red blood cell production, thereby limiting excess red blood cell production in patients with PV while still providing sufficient iron levels to support other normal cellular and organ functions requiring iron.

Hereditary Hemochromatosis (“HH”)

HH is a blood disorder caused by genetic mutations that increase iron uptake from the diet and alter its distribution in the body, leading to iron buildup in the body’s tissues and organs, particularly in the skin, heart, liver, pancreas and joint tissues.

Excess iron in these organs and tissues can be toxic and over time lead to cirrhosis, liver cancer, heart problems, joint pain and diabetes.

Current treatments for HH are limited, the most common being therapeutic phlebotomy, which can be a significant burden to patients.

The treatment goal in HH is to bring ferritin levels into a range of 50-150ng/ml.

There are currently no pharmaceutical interventions for HH, although iron chelators may be used off-label in certain cases.

Rusfertide, if approved, could potentially reduce the need for phlebotomy and offer new solution for management of the disease.

The genetic defects that cause most HH are present in approximately five to seven million patients in the United States and European Union (“EU”).

HH affects approximately one million people in the United States.

In January 2020, we initiated a Phase 2 study of rusfertide in HH.

This study is an open label, multicenter study designed to evaluate the effects of rusfertide in up to 20 adult patients over 24 weeks of treatment.

Guidelines for HH focus on controlling baseline transferrin saturation (“TSAT”) and ferritin to prevent long-term complications.

Given the TSAT reductions from rusfertide observed to date in both healthy volunteers and beta-thalassemia and PV patients, as well as regulation of organ iron content in a mouse model of HH, we believe that a significant reduction in phlebotomy may be possible with rusfertide.

The endpoints of this POC study include change in TSAT and serum iron levels, reductions in phlebotomy requirements and an assessment of participant-reported outcomes.

We expect to report preliminary data from this Phase 2 study in 2021.

Rusfertide’s Clinical Development Program

In 2018, we successfully filed an IND for in the United States and related clinical trial applications outside the United States.

In the first quarter of 2019, we began dosing patients in a global Phase 2 study of rusfertide in beta-thalassemia called TRANSCEND.

Beta-thalassemia is a rare genetic blood disorder that is characterized by impaired red blood cell production.

The study was a single-arm, open label, MAD design that evaluates safety, POC and dose finding in adolescent and adult patients with anemia associated with non-transfusion dependent (“NTD”) or transfusion dependent (“TD”) beta-thalassemia.

NTD patients received 12 weeks treatment with rusfertide in escalating dose cohorts.

The primary efficacy endpoint in NTD patients was a change in hemoglobin from baseline.

TD patients received 16 weeks treatment with rusfertide in escalating dose cohorts.

The primary efficacy endpoint in TD patients was a change in transfusion burden from baseline.

The primary objectives of this study were to evaluate the safety, tolerability and preliminary efficacy of rusfertide and identify an appropriate starting dose and titration regimen for registration studies.

Preliminary results from the Phase 2 study in beta-thalassemia patients showed dose-related drug exposure reductions from TSAT and serum iron levels, with significant reductions at the 40 mg and 80 mg weekly doses and significant and sustained reductions at the 40 mg twice weekly doses.

These early results suggested the potential of finding an appropriate dose of rusfertide for continued development in the treatment of beta-thalassemia.

While we have observed clinical responders in the study based on the pre-specified criteria of reductions in transfusion burden, continued evaluation at higher doses would be required to evaluate the rate and durability of these effects in order to reach definitive conclusions.

We discontinued development of rusfertide for anemia associated with beta-thalassemia and myelodysplastic syndromes, a group of disorders in which blood cells do not mature properly in the bone marrow, during the first half of 2020.

Phase 2 Study of Rusfertide in PV Clinical Design

In the fourth quarter of 2019, we initiated a Phase 2 study of rusfertide in PV designed to evaluate safety and preliminary efficacy in patients requiring phlebotomy (Figure 2).

The Phase 2 study in PV is expected to enroll approximately 50 patients and consists of a 16-week open-label dose finding stage every 4 weeks from 10 mg to 80 mg and a 12-week maintenance period at doses which generate desired hematocrit levels, followed by a 12-week randomized and blinded withdrawal stage.

The study has an open-label extension for up to one year to monitor long term safety and benefits of the drug.

Since high RBC production consumes iron stores, PV can cause iron deficiency, which is often exacerbated by phlebotomy.

Rusfertide has a unique iron regulatory mechanism, which data from our Phase 2 REVIVE study suggests allows for persistent control of hematocrit without causing iron deficiency.

Rusfertide acts by redistributing iron away from the bone marrow, where iron is essential for RBC production, thereby limiting excess RBC production while still providing sufficient iron levels to support other normal cellular and organ functions.

Clinical Development of Rusfertide in PV

In the fourth quarter of 2019, we initiated REVIVE, a Phase 2 study of rusfertide in PV designed to evaluate safety and preliminary efficacy in patients requiring phlebotomy.

The REVIVE study was expected to enroll approximately 60 patients and consisted of a 16-week open-label dose finding stage every 4 weeks from 10 mg to 80 mg and a 12-week maintenance period at doses which generate desired hematocrit levels, followed by a 12-week randomized and blinded withdrawal stage.

The study has an open-label extension for up to three years to monitor long term safety and benefits of the drug.

The endpoints of this clinical POC study include measurement of blood parameters (hematocrit and hemoglobin levels), reductions or delay in phlebotomy requirements, and improvements in quality-of-life symptoms.

These preliminary results from the Phase 2 study of rusfertide in PV demonstrated dramatic decreases in the need for therapeutic phlebotomy in patients with PV, while maintaining control over blood hematocrit levels.

Rusfertide Controlled HCT <45% and Decreased RBC Count in PV Patients

(Interim Data as of November 18, 2020)

Rusfertide Leads to Reversals in Iron Deficiency Markers

(Interim Data as of November 18, 2020)

During the first quarter of 2021, we initiated PACIFIC, a Phase 2 study for rusfertide in up to 20 patients diagnosed with PV and with routinely elevated hematocrit levels (>48%).

Rusfertide dosed twice a week was able to reduce patient mean hematocrit from 53% to below 45% in less than 8 weeks for most patients and within 4-6 weeks for a few patients.

Once the patient’s hematocrit was below 45%, dosing was adjusted and weekly dosing was maintained to control hematocrit without phlebotomy.

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

● The FDA granted orphan drug designation for rusfertide for the treatment of PV in June 2020;

● The EMA granted orphan drug designation for rusfertide for the treatment of PV in October 2020;

● The FDA granted Fast Track designation for rusfertide for the treatment of PV in December 2020;

● The FDA granted Breakthrough Therapy Designation for rusfertide for the treatment of PV in June 2021.

In consultation with the FDA, we implemented new safety monitoring procedures, including cancer surveillance measures (augmented dermatological examinations) and new stopping rules following a prior 21-day clinical hold on the rusfertide clinical development program.

Reenrollment continues with the target of 50 patients completing the full trial.

In December 2021, we presented two oral presentations and two posters relating to rusfertide at the American Society for Hematology’s hybrid annual meeting, including updated interim Phase 2 results for the REVIVE and

PACIFIC studies for rusfertide in PV.

These preliminary results as of September 2021 demonstrated dramatic decreases in the need for therapeutic phlebotomy in patients with PV, while maintaining control over blood hematocrit levels.

• We enrolled 63 patients in the ongoing REVIVE Phase 2 clinical trial of rusfertide in PV prior to the clinical hold and we are currently reenrolling approximately 20 additional patients to target approximately 50 patients enrolled through the end of a three-year open label extension.

Of the 63 PV patients treated with rusfertide, the vast majority were able to eliminate therapeutic phlebotomies and maintain a target hematocrit level of less than 45 percent.

Treatment with rusfertide was also shown to reverse iron deficiency, a serious side effect of regular therapeutic phlebotomies as a treatment for PV (Figure 4).

Early observations suggest a decreased symptom burden over time, including overall burden (MPN-TSS), as well as measurements specific to mental function, fatigue and itching.

Adverse Events (“AE’s”) in Ongoing Rusfertide Phase 2 Study in PV

(Interim Data as of November 18, 2020)

Administration of rusfertide was well tolerated, with injection site reactions and bruise as the only observed adverse events (“AEs”);

no significant adverse events (“SAEs”) were observed (Figure 5).

We selected PV as our first indication for potential pivotal study in rusfertide and expect to complete patient enrollment in the ongoing Phase 2 clinical trial by mid-2021.

We are consulting with regulatory authorities in the first half of 2021 to discuss the registrational clinical development plan.

Rusfertide has received orphan drug designation from the FDA and EU regulatory authorities, and Fast Track designation from the FDA for the treatment of PV.

Fast Track designation is an expedited review to facilitate development of investigational drugs which treat a serious or life-threatening condition and fill an unmet medical need.

During the first quarter of 2021, we initiated a Phase 2 study for rusfertide in up to 20 patients diagnosed with PV and with routinely elevated hematocrit levels (>48%).

Treatment with rusfertide was also shown to reverse iron deficiency, an important side effect of regular therapeutic phlebotomies as a treatment for PV.

Early observations suggest a decreased symptom burden over time, including overall burden (myeloproliferative neoplasm total symptom score), as well as measurements specific to mental function, fatigue and itching.

• Overall, rusfertide therapy resulted in rapid, sustained and durable hematocrit control without clinically meaningful changes in white blood cell and platelet counts.

Subjects have been treated up to 1.5 years with the majority of subjects remaining essentially phlebotomy-free.

Rusfertide demonstrated similar efficacy in all categories of patients, independent of the PV patient risk category or concurrent therapy with hydroxyurea, interferon or ruxolitinib.

Study participation was halted in one patient due to asymptomatic thrombocytosis.

One patient developed myeloproliferative neoplasm blast phase which was deemed not to be related to rusfertide.

• Significant adverse events included syncope, peripheral artery aneurism, gastroenteritis, chest pain, AML, squamous cell carcinoma (skin), melanoma & basal cell carcinoma.

Injection site reaction (“ISRs”) were most common and associated with 28.1% of injections.

All ISRs were transient, and no patient discontinued due to ISR.

• Results from the PACIFIC Phase 2 study in rusfertide for PV patients with high hematocrit levels presented at ASH 2021 demonstrated, post induction, weekly rusfertide treatment rapidly controlled hematocrit levels without the need for therapeutic phlebotomy.

Rusfertide Phase 3 PV Study Design

Based on ongoing end of REVIVE and PACIFIC Phase 2 trials feedback provided by the FDA’s Division of Nonmalignant Hematology and written comments from the EMA, we expect to initiate screening in a global, randomized, double-blind placebo-controlled Phase 3 clinical trial of rusfertide in approximately 250 PV patients in the first quarter of 2022 (Figure 2).

Hereditary Hemochromatosis (“HH”)

HH Overview and Market Opportunity

HH is an inherited blood disorder characterized by excessive absorption of iron due to a deficiency or dysregulation in hepcidin.

Approximately one million people in the United States have high iron Fe (“ HFE”) gene mutations consistent with type 1 HFE-related hemochromatosis, the most common form of HH.

Of these, 10 to 15 percent develop clinical manifestations of iron overload.

Onset of clinical symptoms in HH patients typically occurs between ages 40 and 60, after significant iron accumulation.

If left untreated, iron may accumulate in major organs such as the liver, pancreas, heart, and bones, which may lead to complications including diabetes, cardiomyopathy, and cirrhosis.

To prevent the development of these associated complications, the goal of treatment in HH patients is to reduce the amount of iron in the body.

Per American College of Gastroenterology guidelines, patients with elevated serum ferritin above 200 ng/mL in females and 300 ng/mL in males, along with transferrin saturation (TSAT) above 45%, will require treatment, most commonly phlebotomy.

The initial phase of treatment with phlebotomy, called the induction phase, typically requires weekly phlebotomy until serum ferritin levels decrease to the target range of 50 to 100 ng/ml.

Once serum ferritin has reached its goal level, HH patients transition to the maintenance phase of therapy, in which they typically require phlebotomy 3-4 times per year to maintain normal serum ferritin levels and prevent iron accumulation in the organs.

There is no approved medicine for the treatment of HH.

Most HH patients who require treatment can be adequately managed with phlebotomy, which is effective in removing excess iron and preventing most of the complications associated with iron overload.

There are small sub-populations of patients who require treatment for HH but who are intolerant or resistant to phlebotomy.

HH patients who cannot be managed with phlebotomy are left at an increased risk of iron accumulation and associated complications, therefore, additional treatment options may be needed for these populations.

Clinical Development of Rusfertide in HH

In January 2020, we initiated a Phase 2 study of rusfertide in HH.

This study was an open label, multicenter study designed to evaluate the effects of rusfertide in 16 adult patients over 24 weeks of treatment.

Guidelines for HH focused on controlling baseline transferrin saturation (“TSAT”) and ferritin to prevent long-term complications.

The endpoints of this POC study included change in TSAT and serum iron levels, reductions in phlebotomy requirements and an assessment of participant-reported outcomes.

We completed our Phase 2 POC study in HH during the fourth quarter of 2021.

An abstract highlighting positive preliminary data our Phase 2 study of rusfertide in HH was orally presented at The Liver Meeting® 2021, hosted by the AASLD, which took place virtually in November 2021.

In December 2021, we presented a poster on rusfertide in HH at the ASH 2021 Annual Meeting.

These results from the Phase 2 study of rusfertide in HH demonstrated a significant reduction in the number of phlebotomies, lower serum iron and TSAT levels, and a reduction of liver iron content.

Administration of rusfertide was generally well tolerated in patients with HH, with the most common adverse events being injection site reactions that were mild or moderate.

Based on the data described above, we are exploring clinical studies in HH sub-populations.

Additional studies are required to further characterize the safety, efficacy and long-term outcomes in rusfertide for HH patients.

OVERVIEW OF INFLAMMATORY BOWEL DISEASE

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CD complications may include strictures and fistula, which penetrate all layers of the intestine.

UC is usually diagnosed earlier than CD due to bleeding symptoms.

usually diagnosed earlier than CD due to bleeding symptoms.

Patients with CD may initially present with abdominal pain, fatigue and anorexia, which can be misdiagnosed.

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As many as 70,000 new cases of IBD are diagnosed in the United States each year, and there may be as many as 80,000 children in the United States with IBD.

In 2019, GlobalData estimated that the UC market was approximately $6.7 billion across seven major markets:

United States, France, Germany, Italy, Spain, United Kingdom and Japan.

In 2020, GlobalData estimated that the UC market was approximately $6.8 billion across eight major markets:

United States, Canada, France, Germany, Italy, Spain, United Kingdom and Japan.

This is expected to increase at a compound annual growth rate of approximately 6.0% to $12.3 billion by 2029.

In 2016, GlobalData estimated that the CD market reached approximately $7.3 billion across those same seven major markets and is expected to grow approximately 5.5% per year to $12.4 billion by 2029.

In 2020, GlobalData estimated that the CD market reached approximately $7.4 billion across those same eight major markets and is expected to grow approximately 5.5% per year to $12.6 billion by 2029.

For many years, tumor necrosis factor-alpha (“TNF-α”) antibody drugs were the primary treatment for moderate-to-severe IBD.

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Nonetheless, halting or reversing IBD progression has not yet been achieved with any single agent therapy, and attaining and maintaining long-term remission in most patients remains a significant unmet medical need.

therapeutic classes, 15% to 31% rates of clinical remission represent the current ceiling in patients with moderate-to-severely active disease.

Biosimilar infliximab and other tumor necrosis factor (“TNF”) inhibitors are the first line standard of care in moderate-to-severe IBD.

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Entyvio® demonstrated superior rates of clinical remission and endoscopic improvement compared with Humira®, the market leader in the TNF inhibitor class.

The first formal combination trials in IBD were initiated in the last year, adding new mechanisms such as integrin inhibitors or IL-23 inhibitors to anti-TNFs.

The first formal combination trials in IBD were

initiated in the last year, adding new mechanisms such as integrin inhibitors or IL-23 inhibitors to anti-TNFs.

Most IBD experts now believe that combining treatment classes with additive or synergistic mechanisms of action will be required to attain the disease-modifying effects and lasting remissions in a larger group of patients documented in other areas of immunology, such as psoriasis or rheumatoid arthritis.

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In addition, many clinicians continue to advocate for earlier introduction of targeted therapeutics in mild-to-moderate IBD in order to prevent disease progression and irreversible gastrointestinal damage.

Our orally delivered, GI-restricted, peptide drugs PTG-200, PN-235, PN-232 and PN-943 work on the same specific validated targets as FDA-approved injectable antibodies and have the potential to offer improved safety and compliance and to minimize the risk of immunogenicity associated with antibodies.

We believe that our product candidates, if approved, have the potential to be used more broadly, including treatment of mild-to-moderate IBD.

Orally delivered peptide drugs PN-943 and PN-235 work on the same specific validated targets as FDA-approved injectable antibodies and have the potential to offer improved safety and compliance and to minimize the risk of immunogenicity associated with antibodies.

We believe that these product candidates, if approved, have the potential to be used more broadly, including treatment of mild-to-moderate IBD.

Our IBD Solution:

Orally Delivered, GI-Restricted Peptides as Targeted Therapies

For the IBD targets of interest, the size and nature of our peptides are carefully selected and modified so as to acquire the desired potency and specificity, and also to largely restrict their presence to the GI tissue compartment when administered orally.

These features translate to orally delivered, GI-restricted, selective and potent peptide drug candidates with specific advantages compared to antibody drugs:

Orally Delivered Peptides as Targeted Therapies

These features translate to orally delivered, selective and potent peptide drug candidates with specific advantages compared to antibody drugs:

● Oral administration .

We are developing our peptide therapeutics in a convenient capsule or tablet form intended for oral administration.

We believe oral administration may reduce many of the problems and limitations associated with injections or infusions, including injection site pain and local reactions, inconvenience, anxiety, high rates of immunogenicity and potential safety risks.

We are developing our peptide therapeutics in a convenient capsule or tablet form intended for oral administration, particularly in combination with other oral therapies.

We also believe oral administration may reduce many of the problems and limitations associated with injections or infusions, including injection site pain and local reactions, inconvenience, anxiety, high rates of immunogenicity and potential safety risks.

● Potential for improved safety and tolerability compared to antibody drugs .

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Rapid clearance may be beneficial especially if patients need to discontinue therapy.

In contrast, antibody

drugs, because of their long plasma half-life, may take months to clear from blood circulation, leaving patients exposed to continued or increased safety risk.

In contrast, antibody drugs, because of their long plasma half-life, may take months to clear from blood circulation, leaving patients exposed to continued or increased safety risk.

● The likelihood of much lower immunogenicity of small stable peptides compared to antibody drugs reduces the risk of loss of response.

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This targeted delivery to the site of action may lead to more immediate and significant target engagement at the site of active disease in the GI tissue compartment with the potential for improved efficacy.

● Cost-effective and less complex manufacturing .

Because of their size and stability, we believe that our orally delivered, GI-restricted peptide product candidates can be produced, stored and shipped in a more cost-effective manner than many antibody drugs.

In chronic GI diseases such as IBD, we believe that our orally delivered, GI-restricted peptide product candidates may offer improved delivery, the potential for improved safety and tolerability, and cost efficiencies that may provide an overall benefit to patients, payors, and physicians.

In chronic GI diseases such as IBD, we believe that our orally delivered, peptide product candidates may offer improved delivery and the potential for improved safety and tolerability that may provide an overall benefit to patients, payors, and physicians.

AN ORALLY DELIVERED α4β7 INTEGRIN ANTAGONIST

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We have completed extensive pre-clinical studies of PN-943 in which we established pharmacodynamic target engagement POC, including effects on receptor occupancy, T cell trafficking and mucosal healing in rodents and monkeys.

Pre-clinical data indicated that PN-943 may be a more potent α4β7 integrin antagonist compound than PTG-100 without sacrificing its other positive attributes, such as selectivity and tolerability.

PTG-100 is our first generation α4β7 inhibitor that shares the same α4β7 integrin target as Entyvio® for the treatment of moderate-to-severe UC and CD.

Pre-clinical data indicated that PN-943 may be a more potent α4β7 integrin antagonist compound than PTG-100, our first-generation α4β7 inhibitor, without sacrificing its other positive attributes, such as selectivity and tolerability.

PTG-100 shares the same α4β7 integrin target as Entyvio® for the treatment of moderate-to-severe UC and CD.

We completed extensive pre-clinical studies of PTG-100 in which we established pharmacological POC and completed a Phase 1 clinical trial in Australia in 2016.

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We completed a Phase 1 randomized, double-blind, placebo-controlled clinical trial of PN-943 in normal healthy male volunteers in Australia in 2019.

The Phase 1 SAD and MAD components were conducted with a solution-based liquid formulation.

The Phase 1 single ascending dose (“SAD”) and multiple ascending dose (“MAD”) components were conducted with a solution-based liquid formulation.

In addition to determining the safety and tolerability and pharmacokinetics of PN-943, the SAD and MAD components of the trial evaluated PD-based POC through the assessment of α4β7 receptor occupancy and α4β7 target expression that indicate target engagement on peripheral blood memory T cells similar to what was done in the pre-clinical studies and in the Phase 1 trial with PTG-100.

In the clinical trial, dose escalation proceeded from 100 mg up to 1,400 mg for the SAD portion and 1,000 mg for the MAD portion.

The administration of PN-943 was well-tolerated in the Phase 1 study.

We reported results of the SAD part of the study during the second quarter of 2019 and the MAD part of the study during the third quarter of 2019.

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This is consistent with data from pre-clinical studies and confirmed by this Phase 1 pharmacodynamic data.

We believe this links PN-943 to greater probability of success in a Phase 2 trial based on signs of clinical efficacy of PTG-100 in the Phase 2 PROPEL trial in UC patients.

The administration of PN-943 was well-tolerated.

We believe this links PN-943 to greater

probability of success in a Phase 2 trial based on signs of clinical efficacy of PTG-100 in the Phase 2 PROPEL trial in UC patients.

PN-943 Phase 2 Clinical Trial Overview

PN-943 Phase 2 in UC IDEAL Study Design

We submitted a U.S.

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During the second quarter of 2020, we initiated a global, randomized, double-blind placebo-controlled study called IDEAL evaluating the safety, tolerability and efficacy of PN-943 in approximately 150 patients with moderate-to-severe UC (Figure 3).

This Phase 2 study is expected to be completed in 2022, subject to delays related to the COVID-19 pandemic.

PTG-200, PN-235 & PN-232:

ORALLY DELIVERED IL-23R ANTAGONISTS

PTG-200, an orally delivered, gut-restricted IL-23R specific antagonist for the treatment of IBD, was discovered through our peptide technology platform.

IL-23, a member of the IL-12 family of pro-inflammatory cytokines, is a protein that regulates inflammatory and immune function and plays a key role in the development of IBD.

By blocking IL-23R with PTG-200 in the GI tissue compartment, we hope to improve disease symptoms and reduce bowel wall damage while potentially minimizing the risk of systemic side effects due to its GI-restricted nature.

Patient enrollment in IDEAL was completed during the first quarter of 2022, and topline data from the study, including the 12-week induction period, is expected in the second quarter of 2022.

PN-943 Phase 2 UC Study Design

AN ORALLY DELIVERED IL-23R ANTAGONIST

Janssen License and Collaboration Agreement

We have a worldwide license and collaboration agreement with Janssen to research, develop and co-detail our IL-23 receptor (“IL-23R”) antagonist compounds for all indications, including IBD.

The agreement with Janssen was amended in May 2019 to expand the collaboration by supporting efforts towards second-generation IL-23R antagonists;

Management’s Discussion and Analysis – Overview” and Note 3 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for additional information.

In October 2020, we and Janssen announced the selection of two second-generation IL23-R antagonists for advancement into clinical development, PN-232 and PN-235.

During the fourth quarter of 2021, following a pre-specified interim analysis criteria, a portfolio decision was made by Janssen to stop further development of both PTG-200 and PN-232 in favor of advancing PN-235, based on its superior potency and overall pharmacokinetic and pharmacodynamic profile.

A PN-235 Phase 1 study was completed in Q4 2021.

Janssen is primarily responsible for the conduct of all Phase 2 trials and we were primarily responsible for the conduct of the second-generation Phase 1 studies.

Mechanism of Action and Rationale

IL-23 is a member of the IL-12 family of cytokines with pro-inflammatory and autoimmune properties.

IL-23 is a member of the IL-12 family of cytokines with pro-inflammatory and immune stimulatory properties.

Cytokines are cell signaling proteins that are released by cells and affect the behavior of other cells.

Binding of the IL-23 ligand to the IL-23R receptor leads to an expression of pro-inflammatory cytokines involved in the mucosal autocrine cascade that is an important pathway of many inflammatory diseases, including IBD.

Binding of the IL-23

ligand to the IL-23R receptor leads to an expression of pro-inflammatory cytokines involved in the mucosal autocrine cascade that is an important pathway of many inflammatory diseases, including IBD.

Furthermore, genetic analyses of IBD patients have implicated IL-23R mutations as a risk factor associated with susceptibility to IBD.

The infused antibody drug Stelara® (marketed for psoriasis, psoriatic arthritis, UC and moderate-to-severe CD) is a p40 antagonist antibody that inhibits both the IL-23 and IL-12 pathways.

Next-generation IBD antibody drugs, such as guselkumab, target the p19 subunit of the IL-23 ligand and are specific to the IL-23 pathway, which is believed to be an important driver of local IBD pathology, while not blockading the IL-12 pathway.

The infused antibody drug Stelara® (marketed for psoriasis, psoriatic arthritis, UC and CD) is a p40 antagonist antibody that inhibits both the IL-23 and IL-12 pathways.

Next-generation IBD antibody drugs, such as guselkumab, target the p19 subunit of the IL-23 ligand and are specific inhibitors of the IL-23 pathway, which is believed to be an important driver of local IBD pathology.

IL-12 is believed to be important in immune surveillance against the development of infections and malignancies.

We believe that the orally delivered, GI-restricted nature of PTG-200 may allow PTG-200 to be a potent inhibitor of the IL-23 pathway for the treatment of IBD.

By targeting IL-23R with our orally delivered GI-restricted IL-23R antagonist PTG-200, we believe PTG-200 may restore proper immune function in the GI tissue compartment where there is active disease while minimizing the risk of systemic side effects.

We believe that our orally delivered IL-23R antagonist PN-235 may be a potent inhibitor of the IL-23 pathway for the treatment of IBD and non-IBD indications.

By targeting IL-23R with PN-235, we believe PN-235 may restore proper immune function while minimizing the risk of systemic side effects.

Several key cell types that reside in gut-associated lymphoid tissue (“GALT”), including T cells, innate lymphoid cells, and natural killer cells, increase their expression of IL-23R during the progression of IBD.

Therefore, the high concentrations of PTG-200 in GALT will facilitate access and binding to IL-23R expressed in the same tissue with the potential for concomitant efficacy benefits.

PTG-200’s Phase 1 Clinical Study

Therefore, the high concentrations of PN-235 in GALT will facilitate access and binding to IL-23R expressed in the same tissue with the potential for concomitant efficacy benefits.

First-Generation IL-23R Antagonist PTG-200

PTG-200 was a first-generation investigational, orally delivered, IL-23R antagonist for the treatment of IBD.

We completed a Phase 1 clinical trial of PTG-200 in Australia during the fourth quarter of 2018.

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The pharmacokinetic and pharmacodynamic parameters were consistent with the GI-restricted design of PTG-200.

PTG-200’s Clinical Development Plan

We have a worldwide license and collaboration agreement with Janssen to co-develop and co-detail PTG-200 and any second-generation compounds for all indications, including IBD.

The agreement was amended in May 2019 to expand the collaboration by supporting efforts towards second-generation IL-23R antagonists, triggering a $25.0 million milestone payment to the Company.

In January 2020, we announced the identification and nomination of an orally delivered, gut-restricted IL-23R antagonist peptide as a second-generation development candidate under our license and collaboration agreement with Janssen, advancing the collaboration and triggering a $5.0 million milestone payment to

Management’s Discussion and Analysis – Overview” and Note 3 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for additional information.

Janssen submitted an IND for PTG-200 in CD during the second quarter of 2019, which took effect in July 2019.

Janssen initiated a Phase 2 clinical study of PTG-200 in CD called PRISM in the fourth quarter of 2019.

The global, randomized, double blind, placebo-controlled, Phase 2 study is evaluating the efficacy of oral administration of PTG-200 in 90 patients with moderate-to-severe CD.

The study will assess the effect of twice-daily dosing of PTG-200 on change from baseline in Crohn's Disease Activity Index score at week 12 as the primary endpoint.

The study will also assess change from baseline in simple endoscopic score for CD rates of clinical response and remission, endoscopic response and remission, and patient-reported outcome-2 remission.

Because of the COVID-19 pandemic, we have suspended guidance on a timeline for PTG-200 Phase 2 study completion.

Second Generation IL23-R Antagonists PN-235 and PN-232

The Phase 1 for PN-235 study is designed to determine the safety, tolerability and pharmacokinetics of PN-235 in approximately 100 healthy volunteers.

The study will be conducted in three parts:

a SAD component, an MAD component, and a randomized, crossover solid dose comparison component.

The primary endpoint is safety as measured by number and severity of adverse events.

Secondary outcomes include pharmacokinetics measurements of peak concentration and area under the curve.

We expect results from the Phase 1 study for PN-235 in 2021.

PN-232 is in the late preclinical stage and we expect to initiate and complete a Phase 1 study for PN-232 in 2021.

The advancement of three different oral co-development candidates provides us with several strategic options for development in multiple indications.

We are also continuing our joint research efforts to identify additional IL-23R antagonists.

The global, randomized, double blind, placebo-controlled, Phase 2 study was designed to evaluate the efficacy of oral administration of PTG-200 in 90 patients with moderate-to-severe CD.

This study was discontinued during the fourth quarter of 2021 in favor of focusing on the development of second-generation antagonists.

Second-Generation IL23-R Antagonist PN-235

PN-235, an orally delivered IL-23R specific antagonist for the treatment of IBD and non-IBD indications, was discovered through our peptide technology platform.

IL-23, a member of the IL-12 family of pro-inflammatory cytokines, is a protein that regulates inflammatory and immune function and plays a key role in the development of IBD.

By blocking IL-23R, we hope to improve disease symptoms while potentially minimizing the risk of systemic side effects.

A Phase 1 study was initiated for PN-235 in December 2020.

The Phase 1 for PN-235 study was designed to determine the safety, tolerability and pharmacokinetics of PN-235 in 107 healthy volunteers.

The study was conducted in three parts:

a SAD component, a MAD component, and a randomized, crossover solid dose comparison component.

The primary endpoint was safety as measured by number and severity of adverse events.

Secondary outcomes included pharmacokinetics measurements of peak concentration and area under the curve.

The Phase 1 study was completed in September 2021.

Results of the Phase 1 study demonstrated that administration of PN-235 was well-tolerated.

No serious adverse events or dose-limiting toxicities were observed.

The pharmacokinetic and pharmacodynamic parameters of PN-235 were consistent with those predicted by preclinical studies.

FRONTIER 1, a Phase 2b study in moderate-to-severe plaque psoriasis, was initiated in early 2022, and a Phase 2 study in IBD is expected to initiate in the second half of 2022.

Plaque p soriasis is the most common form of psoriasis, which is recognized as the most prevalent immune-mediated inflammatory disease, involving skin and joints and associated with abnormalities of other systems.

Although the condition is not life-threatening, it is difficult to treat and response rates vary widely.

OUR PEPTIDE TECHNOLOGY PLATFORM

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The platform has been successfully applied to a diverse set of biological targets that has led to several pre-clinical and clinical stage peptide-based new chemical entities, including our clinical stage product candidates, for a variety of clinical indications.

Our platform is comprised of a series of tools and methods, including a combination of molecular design, phage display, stability assays, medicinal chemistry, biomarker, formulations , in vitro biochemical, cell and tissue-based assays, and in vivo pharmacology and pharmacokinetic approaches.

We apply this platform to the discovery and development of constrained peptides to develop new drug candidates.

Our platform is comprised of a series of tools and methods, including a combination of molecular design, phage display, stability assays, medicinal chemistry, surrogate biomarkers, formulations , in vitro biochemical, cell and tissue-based assays, and in vivo pharmacology and pharmacokinetic approaches.

We apply this platform to the discovery and development of constrained peptides as new drug candidates.

The platform is used to develop potential drug candidates (agonists and antagonists):

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For rusfertide, hit discovery and optimization relied exclusively on medicinal and computational chemistry, with no phage display, to develop potent and selective injectable candidates with enhanced stability and exposure in blood.

For injectable products, stability in blood is determined using in vitro assay techniques to identify chemical and biological sites of degradation, which are then optimized while still

maintaining potency and selectivity.

For injectable products, stability in blood is determined using in vitro assay techniques to identify chemical and biological sites of degradation, which are then optimized while still maintaining potency and selectivity.

Conjugation strategies are used to optimize the exposure of the injected peptide.

For PN-943, PTG-200, PN-235 and PN-232, phage display is tightly coupled to medicinal chemistry, structural biology and oral stability techniques to develop potent, selective and orally delivered molecules that are GI-restricted.

Oral stability is profiled in a series of in vitro and ex vivo assays that portray the chemical and metabolic barriers a peptide will encounter as it transits the GI tract.

These metabolically labile spots in the peptides are optimized using medicinal chemistry-based approaches to engineer oral stability whilst maintaining selectivity and potency.

Various in vivo pharmacology tools are then used to quantify peptide exposure in relevant GI organs and tissues.

This data can be used to optimize required GI exposure over the required time frame to achieve in vivo efficacy.

For PN-943 and PN-235, phage display is tightly coupled to medicinal chemistry, structural biology and oral stability techniques to develop potent, selective and orally delivered molecules.

Oral stability is profiled in a series of in vitro and ex vivo assays that portray the chemical and metabolic barriers a peptide will encounter as it transits the GI and systemic compartments as needed.

These metabolically labile spots in the peptides are optimized using medicinal chemistry-based approaches to engineer oral stability while maintaining selectivity and potency.

Various in vivo pharmacology tools are then used to quantify peptide exposure in relevant GI and systemic compartments as needed organs and tissues.

This data can be used to optimize required exposure over the required time frame to achieve in vivo efficacy.

This is complemented by formulation technologies to enhance GI and systemic exposure by exploiting the intrinsic stability of our oral peptides.

Finally, various biomarkers are also developed to correlate exposure with efficacy to guide candidate selection, dose selection and provide preliminary proof-of-concept of target engagement in clinical trials.

Future Applications of our Platform

Discovery and Preclinical Activities

We believe we have built a versatile, well-validated and unique discovery platform.

For example, this peptide technology platform has been used to develop product candidates for diverse target classes including G-protein-coupled receptors, ion channels, transporters, cytokines and their receptors for a variety of therapeutic areas.

In the future we may tackle other GI and blood disorders and expand our delivery techniques to include other organ/tissue systems, such as the lung and eye, which will provide potential opportunities to pursue a wider variety of diseases.

In addition, the gut may communicate with the immune, central nervous, and endocrine systems, providing the potential of our GI-restricted approach to treat metabolic, cancer and cardiovascular diseases.

Lastly, we intend to progress our platform to achieve systemic bioavailability and activity with oral peptides, macrocycles and peptidomimetics, thereby enabling us to address systemic diseases.

An example of this approach is our preclinical stage program to identify an orally active hepcidin mimetic as was recently reported at the American Society for Hematology’s virtual annual meeting in December 2020.

We believe this will be complementary to the injectable rusfertide for offering the best treatment options for polycythemia vera, hereditary hemochromatosis and other potential erythropoietic and iron imbalance disorders.

In the future we may tackle other GI and blood disorders and expand our technology platform to provide potential opportunities to pursue a wider variety of diseases that may include topical and systemic approaches.

As an example, the gut may communicate with the immune, central nervous, and endocrine systems, providing the potential of our GI-restricted approach to treat systemic autoimmune, metabolic, cancer and cardiovascular diseases.

We also intend to progress our platform to achieve systemic bioavailability and activity with oral peptides, macrocycles and peptidomimetics, thereby enabling us to address systemic diseases.

Examples of this approach are our preclinical stage program to identify an orally active hepcidin mimetic, as was reported at the American Society for Hematology’s virtual annual meeting in December 2020, and the discovery and development of PN-235, our IL-23R antagonist in collaboration with Janssen.

We believe the oral hepcidin mimetic will be complementary to the injectable rusfertide for offering the best treatment options for PV, HH and other potential erythropoietic and iron imbalance disorders.

The biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technological change.

While we believe that our product candidates, technology, knowledge and experience provide us with certain competitive advantages, we face competition from established and emerging pharmaceutical and biotechnology companies, academic institutions, governmental agencies and public and private research institutions, among others.

Ruxolitinib, marketed as Jakafi®, was approved in 2014 for the treatment of adults with polycythemia vera who have inadequate response to or are intolerant to HU.

Approximately 5,300 PV patients are treated with Jakafi each year.

Besremi®, a ropeginterferon alfa-2b product indicated for the treatment of adults with polycythemia vera, was approved with a black box warning in November 2021.

Besremi is currently undergoing U.S.

commercial launch with uncertain uptake at the present time.

There are currently no approved orally delivered peptide-based α4β7 or IL-23R products for IBD.

Our principal competition with similar mechanisms of action in the treatment of IBD will come from companies with injectable agents in the anti-integrin class and the anti-IL-23 class that are or will be approved by 2028, including:

● Takeda’s vedolizumab (Entyvio®) IV and SC;

● Abbvie’s risankizumab (Skyrizi®) SC (UC and CD Phase 3)

● Janssen’s guselkumab (Tremfya®) SC (UC and CD);

● Lilly’s mirikizumab (UC and CD).

In addition, orally delivered agents with novel mechanisms of action that are approved for or in development and may be approved for UC and/or CD prior to or shortly after the launch of our product candidates can have significant impact in the competitive environment, including:

● JAK inhibitors:

The pan-JAK tofacitinib (Xeljanz®) is approved in UC;

next-generation selective JAK1/3 inhibitors, including Abbvie’s upadacitinib (Rinvoq®) (UC and CD) and Pfizer’s abrocitinib (Cibinqo®) (UC);

● S1P1 receptor modulators:

Bristol Myers Squibb ozanimod (Zeposia®) is approved in UC.

Second-generation agents including Pfizer’s etrasimod (Phase 3 UC, Phase 2b CD) are in development.

Morphic Therapeutics is developing MORF-057, an oral small molecule targeting α4β7 entering Phase 2 development in UC.

Anti-IL-23 antibodies are also demonstrating positive data in IBD.

Many other agents are in early- stage development in IBD, including injectable anti-TLIA antibodies by Pfizer and Prometheus.

COVID-19 Business Update

We are continuing to closely monitor the impact of the ongoing global COVID-19 pandemic on our business and have taken and continue to take proactive efforts designed to protect the health and safety of our patients, study investigators, clinical research staff and employees, and to maintain business continuity.

Following guidance from federal, state and local authorities, we transitioned to a fully remote working environment for a portion of 2020.

As a result, our laboratories and office locations were closed for approximately two weeks.

Our facility partially re-opened in April 2020 for laboratory personnel and a small number of critical personnel to resume limited operations.

Our laboratory facilities are open for research activities with heightened safety measures designed to minimize occupational exposure and reduce transmission of COVID-19 within our workplace.

Our non-laboratory employees telecommute at least part-time.

We have experienced relatively minor impacts on productivity overall, which were experienced primarily in as our personnel adjusted to working remotely in the early stages of the COVID-19 pandemic.

Enrollment in certain of our clinical studies has been adversely affected by the pandemic.

It is possible the pandemic will have a more significant negative impact on our business in the future, depending on the depth of the effects and the duration of the crisis.

We cannot predict whether these trends will continue or be exacerbated, or when we will return to a normal working model.

For information regarding the current and potential impacts of the effects of the COVID-19 pandemic on our business, see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview” and elsewhere in this Form 10-K.

It is possible the pandemic will have a more significant negative impact on our business in the future, depending on the depth of the effects and the duration of the crisis, including the development and spread of COVID-19 variants.

We cannot predict whether these trends will continue or be exacerbated.

For information regarding the current and potential impacts of the effects of the COVID-19 pandemic on our business, see Item 1A Risk Factors and Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview” elsewhere in this Form 10-K.

Material Agreements

Janssen License and Collaboration Agreement

In May 2017, we and Janssen entered into an exclusive license and collaboration agreement for the clinical development, manufacture and potential commercialization of PTG-200 and certain related compounds worldwide for the treatment of CD and UC (the “Janssen License and Collaboration Agreement”).

The Janssen License and Collaboration Agreement became effective on July 13, 2017 and was subsequently amended effective May 2019 (the “First Amendment”).

The First Amendment expands the original collaboration by supporting efforts towards research and development of second-generation IL-23R antagonists.

During the third quarter of 2017, we received a non-

refundable, upfront cash payment of $50.0 million from Janssen.

During the second quarter of 2019, we received a non-refundable cash payment of $25.0 million upon execution of the First Amendment.

During the first quarter of 2020, we received a milestone payment of $5.0 million triggered by the identification and nomination of a second-generation development candidate.

On July 27, 2021, we entered into an amended and restated License and Collaboration Agreement (“Restated Agreement”) with Janssen.

The Restated Agreement amends and restates the License and Collaboration Agreement, dated May 26, 2017, by and between us and Janssen (as amended by the First Amendment thereto, effective May 7, 2019, the “Original Agreement”).

Janssen is a related party to us as Johnson & Johnson Innovation - JJDC, Inc., a significant stockholder of ours, and Janssen are both subsidiaries of Johnson & Johnson.

The Original Agreement became effective on July 13, 2017.

Upon the effectiveness of the Original Agreement, we received a non-refundable, upfront cash payment of $50.0 million from Janssen.

Upon the effectiveness of the First Amendment in 2019, we received a $25.0 million payment from Janssen in 2019.

We received a $5.0 million payment triggered by the successful nomination of a second-generation IL-23R antagonist development compound during the first quarter of 2020, and we received a $7.5 million payment for completion of data collection activities for the first Phase 1 clinical trial of a second-generation compound during the fourth quarter of 2021.

Management’s Discussion and Analysis – Overview” and Note 3 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for additional information.

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We amended this agreement on February 28, 2014, at which point Protagonist assumed responsibility for the development program.

Legal Proceedings”, “Item 7.

Management’s Discussion and Analysis – Contractual Obligations and Other Commitments” and Note 7 and Note 11 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for additional information.

The biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technological change.

Ruxolitinib, marketed as Jakafi®, is currently the only branded product in the United States approved for PV.

O n June 4, 2020, the FDA accepted a Biologics License Application for ropeginterferon alfa-2b for use in treatment for patients with PV in the absence of symptomatic splenomegaly from PharmaEssentia Corporation, the manufacturer of the novel pegylated interferon.

A decision from the FDA on this application is expected in early 2021.

There are currently no approved orally delivered peptide-based α4β7 or IL-23R products for IBD.

We believe our principal competition in the treatment of IBD will come from companies with injectable agents in the anti-integrin class that are or will be approved by 2028, including:

● Takeda’s vedolizumab (Entyvio®) IV and SC;

● Abbvie’s risankizumab (Skyrizi®) SC (UC and CD Phase 3).

In addition, orally delivered agents with novel mechanisms of action are approved or in development and may be approved for UC and/or CD prior to the launch of our product candidates.

These include JAK inhibitors, pan-JAK tofacitinib (Xeljanz®) approved in UC and next-generation JAK1 inhibitors filgotinib and upadacitinib, as well as S1P inhibitors, ozanimod, amiselmod and etrasimod.

The anti-IL-23 antibodies are also demonstrating positive data in IBD.

Our assets PTG-200, PN-235 and PN-232, if approved, will compete as the only orally delivered IL-23R antagonists.

Intellectual Property

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Our commercial success may depend in part on our ability to obtain and maintain patent and other proprietary protection for commercially important technology, inventions and know-how related to our business;

defend and enforce

defend and enforce our patents;

preserve the confidentiality of our trade secrets;

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patent applications related to our clinical assets.

We possess substantial know-how and trade secrets relating to the development and commercialization of peptide based therapeutic products.

Our proprietary intellectual property, including patent and non-patent intellectual property, is generally directed to, for example, peptide-based therapeutic compositions, methods of using these peptide-based therapeutic compositions to treat or prevent disease, methods of manufacturing peptide-based therapeutic compositions, and other proprietary technologies and processes related to our lead product development candidates.

We possess substantial know-how and trade secrets relating to the discovery, development and commercialization of peptide based therapeutic products.

Our proprietary intellectual property, including patent and non-patent intellectual property, is generally directed to, for example, peptide-based therapeutic compounds and compositions, methods of using these peptide-based therapeutic compounds and compositions to treat or prevent disease, methods of manufacturing peptide-based therapeutic compounds and compositions, and other

proprietary technologies and processes related to our lead product development candidates.

Specific patents and patent applications are directed to compositions of α 4 β7 integrin peptides, IL-23R antagonist peptides, and hepcidin and enkephalin mimetics peptides, as well as methods of synthesizing and using these peptides to treat inflammatory disorders.

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We currently engage CMOs on a “fee for services” basis for our current development and clinical supplies.

We believe there are alternate sources of manufacturing that have been and could be engaged and enabled to satisfy our clinical and commercial requirements, however we cannot guarantee that identifying and establishing alternative relationships with such sources will be successful, cost effective, or completed on a timely basis without significant delay in the development or commercialization of our product candidates.

Government Regulation

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Once the submission is accepted for filing, the FDA begins an in-depth substantive review.

The FDA reviews an NDA to determine, among other things, whether the drug is safe and effective and whether the facility in which it is

manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, quality and purity.

The FDA reviews an NDA to determine, among other things, whether the drug is safe and effective and whether the facility in which it is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, quality and purity.

The FDA may refer an application for a novel drug to an advisory committee.

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Additionally, before approving an NDA, the FDA may inspect one or more clinical trial sites to assure compliance with GCP requirements.

After evaluating the NDA and all related information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing facilities and clinical trial sites, the FDA may issue an approval letter, or, in some cases, a complete response letter.

letter, or, in some cases, a complete response letter.

A complete response letter generally contains a statement of specific conditions that must be met in order to secure final approval of the NDA and may require additional clinical or pre-clinical testing in order for FDA to reconsider the application.

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The FDA may decide to rescind the fast track designation if it determines that the qualifying criteria no longer apply.

Breakthrough Therapy Designation

A sponsor can request designation of a drug candidate as a “breakthrough therapy.” A breakthrough therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.

Drugs designated as breakthrough therapies are also eligible for accelerated approval and priority review.

The FDA must take certain actions, such as holding timely meetings and providing advice, intended to expedite the development and review of an application for approval of a breakthrough therapy.

The FDA may decide to rescind the breakthrough designation if it determines that the qualifying criteria no longer apply.

Orphan Designation

The FDA may grant orphan designation to drugs or biologics intended to treat a rare disease or condition that affects fewer than 200,000 individuals in the United States, or if it affects more than 200,000 individuals in the United States, and there is no reasonable expectation that the cost of developing and marketing the product for this type of disease or condition will be recovered from sales in the United States.

Orphan designation must be requested before submitting an NDA or BLA.

Orphan designation must be requested before

submitting an NDA or BLA.

After the FDA grants orphan designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA.

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After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval.

There also are continuing, annual program user fee requirements for any marketed products, as well as application fees for supplemental applications with clinical data.

There also are continuing, annual program user fee requirements for any marketed products.

The FDA may impose a number of post-approval requirements as a condition of approval of an NDA.

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Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in mandatory revisions to the approved labeling to add new safety information;

imposition of post-market studies or clinical trials to assess new safety

imposition of post-market studies or clinical trials to assess new safety risks;

or imposition of distribution or other restrictions under an REMS program.

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The ACA also increased the Medicaid rebate rate and expanded the rebate program to include Medicaid managed care organizations.

It also contains substantial new

provisions intended to broaden access to health insurance, reduce or constrain the growth of health care spending, enhance remedies against health care fraud and abuse, add new transparency requirements for the health care industry, impose new taxes and fees on pharmaceutical manufacturers, and impose additional health policy reforms, any or all of which may affect our business.

It also contains substantial new provisions intended to broaden access to health insurance, reduce or constrain the growth of health care spending, enhance remedies against health care fraud and abuse, add new transparency requirements for the health care industry, impose new taxes and fees on pharmaceutical manufacturers, and impose additional health policy reforms, any or all of which may affect our business.

There have been executive, judicial and Congressional challenges to certain aspects of the ACA.

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While Congress has not passed comprehensive repeal legislation, several bills affecting the implementation of certain taxes under the ACA have been enacted.

The Tax Cuts and Jobs Act of 2017, or the Tax Act, included a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year.

The Tax Cuts and Jobs Act of 2017, or the Tax Act, included a provision repealing,

effective January 1, 2019, the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year.

Additionally, the 2020 federal spending package permanently eliminated, effective January 1, 2020, the ACA-mandated “Cadillac” tax on high-cost employer-sponsored health coverage and the medical device tax and, effective January 1, 2021, also eliminated the health insurance tax.

Further, the Bipartisan Budget Act of 2018, or the BBA, among other things, amends the ACA, effective January 1, 2019, to close the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole”, and increase from 50% to 70% the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in the Medicare Part D program.

On December 14, 2018, a Texas U.S.

District Court Judge ruled that the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress as part of the Tax Act.

Additionally, on December 18, 2019, the U.S.

Court of Appeals for the 5th Circuit upheld the District Court ruling that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the ACA are invalid as well.

Supreme Court is currently reviewing this case, but it is unclear when a decision will be made.

Although the U.S.

Supreme Court has not yet ruled on the constitutionality of the ACA, on January 28, 2021, President Biden issued an executive order to initiate a special enrollment period from February 15, 2021 through May 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace.

The executive order also instructs certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.

It is unclear how the Supreme Court ruling, other such legislation and the healthcare reform measures of the Biden administration will impact the ACA and our business.

In addition, other legislative changes have been proposed and adopted since the ACA was enacted.

These changes included aggregate reductions to Medicare payments to providers of 2% per fiscal year, which went into effect in April 2013 and, due to subsequent legislative amendments to the statute, including the BBA, will remain in effect through 2030 unless additional action is taken by Congress.

However, COVID-19 relief legislation suspended the 2% Medicare sequester from May 1, 2020 through March 31, 2021.

In January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several types of providers and increased the statute of limitations period in which the government may recover overpayments to providers from three to five years.

New laws may result in additional reductions in Medicare and other health care funding.

These and any other legislation or healthcare reform measures of the Biden administration may impact the ACA and our business.

There may also be further challenges to the ACA, and new laws may also result in additional reductions in Medicare and other health care funding.

Further, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products.

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Further, on November 20, 2020, HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law.

The implementation of the rule has been delayed by the Biden administration from January 1, 2022 to January 1, 2023 in

response to ongoing litigation.

The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a new safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers, the implementation of which have also been delayed pending review by the Biden administration until March 22, 2021.

The implementation of the rule has been delayed by the Biden administration from January 1, 2022 to January 1, 2023 in response to ongoing litigation.

On November 20, 2020, the Centers for Medicare & Medicaid Services (“CMS”) issued an interim final rule implementing President Trump’s Most Favored Nation executive order, which would tie Medicare Part B payments for certain physician-administered drugs to the lowest price paid in other economically advanced countries, effective January 1, 2021.

On December 28, 2020, the United States District Court in Northern California issued a nationwide preliminary injunction against implementation of the interim final rule.

On December 28, 2020, the United States District Court in Northern California issued a nationwide preliminary injunction against implementation of the interim final rule, and in August 2021, the Biden administration issued an interim rule that would rescind the most favored nation drug pricing rule.

At the state level, legislatures have become increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

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We will also be subject to health care regulation and enforcement by the federal government and the states and foreign governments in which we will conduct our business once our products are approved.

The laws that may affect our ability to operate include, but are not limited to, the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act, which governs the conduct of certain electronic health care transactions and protects the security and privacy of protected health information;

The laws that may affect

our ability to operate include, but are not limited to, the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act, which governs the conduct of certain electronic health care transactions and protects the security and privacy of protected health information;

the criminal health care fraud statutes under HIPAA also prohibits persons and entities from knowingly and willfully executing a scheme to defraud any health care benefit program, including private payors, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for health care benefits, items or services;

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The majority of states also have statutes or regulations similar to the aforementioned federal anti-kickback and false claims laws, which apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor.

We may be subject to state laws governing the privacy and security of health

information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

We may be subject to state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

In addition, we may be subject to reporting requirements under state transparency laws, as well as state laws that require pharmaceutical companies to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government that otherwise restricts certain payments that may be made to health care providers and entities.

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The requirements and process governing the conduct of clinical studies, the protection of personal data, product licensing, pricing and reimbursement vary from country to country.

If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.

If we fail to comply with applicable foreign

regulatory requirements, we may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.

Human Capital

As of December 31, 2020, we had 79 full-time equivalent employees, 59 of whom were in research and development, of which one holds an M.D.

As of December 31, 2021, we had 118 full-time equivalent employees, 92 of whom were in research and development, of which four hold an M.D.

and 23 hold Ph.D.

The remaining 20 employees worked in finance, legal, business development, human resources and administrative support, of which three hold a Ph.D.

72 of our full-time equivalent employees are located in the United States and seven are located in Australia.

The remaining 26 employees worked in finance, legal, business development, human resources and administrative support, of which one holds a Ph.D.

104 of our full-time equivalent employees are located in the United States and 14 are located in Australia.

None of our employees are represented by a labor union or covered by a collective bargaining agreement.

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We track and report internally on key talent metrics including workforce demographics, diversity data and the status of open positions.

Attracting, developing and retaining talented employees to support the growth of our business is an integral part of our human capital strategy and critical to our success.

We are committed to equality, inclusion and diversity in the workplace.

As of December 31, 2021, nearly 65% of our workforce identify as members of underrepresented ethnic communities and 51% identify as female.

We strive to interview diverse candidates for our open positions.

Attracting, developing and retaining talented employees to support the growth of our business is an integral part of our human capital strategy and critical to our long-term success.

We continue to seek additions to our staff, although the competition in our industry and in the San Francisco Bay Area where our headquarters is located is significant.

We have a performance development review process in which managers provide regular feedback to assist with the development of our employees, including the use of individual plans to assist with career development.

The principal purpose of our equity incentive and annual bonus programs is to attract, retain and motivate personnel through the granting of stock-based compensation awards and cash-based performance bonus awards.

Safeguarding the health and safety of our employees is our top priority.

As a biopharmaceutical company, we recognize the importance of access to high quality healthcare and as such we cover 100% of our employees’ monthly healthcare premiums.

We offer a package of competitive employee benefits, including 401(k) plan matching contributions and an employee stock purchase plan.

We also invest in the growth and development of our employees through various training and development programs that help build and strengthen our employees’ leadership and professional skills.

Approximately 20% of our employees are promoted each year.

This reflects the quality and readiness of our people to take on new roles, as well as our intentional focus on growing and developing careers, as well as promoting within.

Safeguarding the health and safety of our employees is a top priority.

We are committed to providing a safe working environment for all of our employees.

Our cross-functional safety committee meets regularly to discuss policies and protocols, strategic planning, business continuity and other matters related to the COVID-19 pandemic and its potential impacts on our company, employees and external stakeholders.

In response to the COVID-19 pandemic, we implemented significant changes that we determined were in the best interest of our employees, as well as the communities in which we operate, and which comply with government regulations.

This includes having our non-laboratory employees work remotely at

least part-time, while implementing additional safety measures for laboratory and other employees continuing critical on-site work.

This includes having our non-laboratory employees work remotely at least part-time, while implementing additional safety measures for laboratory and other employees continuing critical on-site work.

To support our employees personally and professionally, we have Employee Assistance Programs to address employee challenges and needs.

Corporate and Other Information

Protagonist Pty Limited (“Protagonist Australia”) was incorporated in Australia in September 2001.

We were incorporated as a Delaware corporation in 2006, under the name Protagonist Therapeutics, Inc., and became the parent of Protagonist Australia pursuant to a transaction in which all of the issued and outstanding capital stock of Protagonist Australia was exchanged for shares of our common stock and Series A preferred stock.

Our principal executive offices are located at 7707 Gateway Boulevard, Suite 140, Newark, California 94560.

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We make available, free of charge on our corporate website, copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements, and all amendments to these reports, as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (“SEC”) pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”).

We also show detail about stock trading by corporate insiders by providing access to SEC Forms 3, 4 and 5.

We also show detail about stock trading by corporate insiders by providing access to SEC Forms 3, 4

This information may also be obtained from the SEC’s on-line database, which is located at www.sec.gov.

Our common stock is traded on the Nasdaq Stock Market under the symbol “PTGX.”

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012.

As such, we are eligible for exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and reduced disclosure obligations regarding executive compensation.

We will remain an emerging growth company until December 31, 2021.

Our common stock is traded on The Nasdaq Stock Market, LLC under the symbol “PTGX.”

Prior to December 31, 2021, we were an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012.

As such, we were eligible for exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and reduced disclosure obligations regarding executive compensation.

As of December 31, 2021, we are no longer an emerging growth company and are no longer exempt from such reporting requirements.

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 1. Business