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Item 1. Business

2023-03-15 compared with 2022-02-28 · 397 added, 347 removed, 328 unchanged (69% of the section changed)

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;

We are a biopharmaceutical company with peptide-based new chemical entities rusfertide and JNJ-2113 (formerly known as PN-235) in different stages of development, all derived from our proprietary discovery technology platform.

Our clinical programs fall into two broad categories of diseases;

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

Our Product Pipeline

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

Hepcidin is a key hormone in regulating iron equilibrium and is critical to the proper development of red blood cells.

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

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

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

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

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

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.

Data from our rusfertide Phase 2 clinical trials presented at medical conferences in 2021 and 2022 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 the blood disorder polycythemia vera (“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.

Our rusfertide Phase 2 clinical trials include the following:

● REVIVE, a Phase 2 proof of concept (“POC”) trial, was initiated in the fourth quarter of 2019.

We completed enrollment of patients in the first quarter of 2022 with a target of approximately 50 patients to be enrolled through the end of the randomization portion of the trial, which was completed during the first quarter of 2023, and will continue in open label extension.

● PACIFIC, another Phase 2 trial for rusfertide patients diagnosed with PV and with routinely elevated hematocrit levels (>48%), was initiated during the first quarter of 2021 and completion of the 52-week trial is expected during the second quarter of 2023.

At the June 2022 American Society of Clinical Oncology (“ASCO”) Annual Meeting, we presented updated interim results for REVIVE and PACIFIC demonstrating the effects of dosing interruption and resumption.

Rusfertide dosing interruption led to loss of effect, including increased phlebotomy rate and increases in hematocrit and red blood cells.

Rusfertide restart restored therapeutic benefits.

Following the brief clinical hold described below, over 90% of patients in the REVIVE trial provided reconsent and returned to rusfertide treatment after dosing interruption and reinitiation.

At the June 2022 European Hematology Association Congress, we presented interim data as of May 2022 showing that rusfertide treatment interruption reverses hematologic gains and re-initiation of treatment restores therapeutic benefits in patients with PV.

At the December 2022 American Society of Hematology (“ASH”) meeting, we presented data as of October 2022 related to rusfertide, including a subgroup of analyses of the adverse event profile from the REVIVE trial.

These preliminary results indicated that 84% of treatment-emergent adverse events (“TEAEs”) were Grade 2 or below.

16% of patients experienced Grade 3 TEAEs and there were no Grade 4 TEAEs.

On March 15, 2023, we announced positive topline results from the blinded, placebo-controlled, randomized withdrawal portion of the REVIVE trial.

Subjects receiving rusfertide achieved statistically significant improvements versus placebo in the trial’s primary endpoint.

The double-blind, placebo-controlled, 12-week randomized withdrawal portion was included as Part 2 of the REVIVE trial study to evaluate rusfertide in PV patients with frequent phlebotomy requirements.

In the REVIVE trial, subjects were initially enrolled in the 28-week open label dose-titration and efficacy evaluation Part 1 of the study, followed by 1:1 randomization of 53 subjects to placebo versus rusfertide therapy for a subsequent duration of 12 weeks.

More subjects receiving rusfertide during the blinded randomized withdrawal portion of the REVIVE trial were responders compared with placebo (69.2% versus 18.5%, p=0.0003).

A study subject was defined as a responder if the subject completed 12 weeks of double-blind treatment while maintaining hematocrit control without phlebotomy eligibility and without phlebotomy.

During the 12 weeks of the blinded randomized withdrawal, only 2 of 26 subjects on rusfertide were phlebotomized.

VERIFY, a global Phase 3 clinical trial of rusfertide in PV for approximately 250 patients, was initiated in the first quarter of 2022.

Significant efforts have been taken toward the goal of full enrollment and a high degree of interest has been observed from physicians and patient communities.

We expect enrollment completion in the fourth quarter of 2023.

On September 16, 2021, the U.S.

Food and Drug Administration (“FDA”) placed a clinical hold on our then ongoing rusfertide clinical trials 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.

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 trial protocols for 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 orphan drug designation for rusfertide for the treatment of PV in June 2020, and Fast Track designation for rusfertide for the treatment of PV in December 2020.

The EMA granted orphan drug designation for rusfertide for treatment of PV in October 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.

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 (“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 April 2022, we received a letter from the FDA indicating the FDA’s intent to rescind Breakthrough Therapy Designation for rusfertide in PV.

In June 2022, we voluntarily withdrew our Breakthrough Therapy Designation following correspondence with FDA and based on our internal analysis of the relative utility of Breakthrough Therapy Designation for Phase 3 trials and beyond.

The FDA correspondence relating to the Breakthrough Therapy designation does not address the rusfertide Fast Track Designation, which remains active.

In keeping with our organizational prioritization of rusfertide in PV, plans to initiate trials of rusfertide in additional disease indications have been paused.

This decision was influenced in part by the enactment of the Inflation Reduction Act (“IRA”) in the United States and includes previously planned trials of rusfertide in the subset of hereditary hemochromatosis patients with chronic arthropathy.

JNJ-2113 (formerly known as PN-235)

Our partnered Interleukin-23 receptor (“IL-23R”) antagonist compound JNJ-2113 is an orally delivered investigational drug that is designed to block biological pathways currently targeted by marketed injectable antibody drugs.

Our orally stable peptide approach may offer a targeted therapeutic approach for gastrointestinal (“GI”) and systemic compartments as needed.

We believe that, compared to antibody drugs, JNJ-2113 has the potential to provide clinical improvement in an oral medication with increased convenience and compliance and the opportunity for the earlier introduction of targeted oral therapy.

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

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

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

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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.

During the fourth quarter of 2021, following a pre-specified interim analysis criteria, a portfolio decision was made by Janssen to advance second-generation product candidate JNJ-2113 (JNJ-77242113) based on its superior potency and overall pharmacokinetic and pharmacodynamic profile.

A JNJ-2113 Phase 1 trial was completed in the fourth quarter of 2021.

In February 2022, Janssen initiated FRONTIER1, a 255-patient Phase 2b clinical trial of JNJ-2113 in moderate-to-severe plaque psoriasis, which was completed in December 2022.

FRONTIER1 was a randomized, multicenter, double-blind, placebo-controlled study that evaluated three once-daily dosages and two twice-daily dosages of JNJ-2113 taken orally.

The primary endpoint of the study is the proportion of patients achieving PASI-75 (a 75% improvement in skin lesions as measured by the Psoriasis Area and Severity Index) at 16 weeks.

In March 2023, we announced positive topline results from the trial.

JNJ-2113 achieved the study's primary efficacy endpoint, with a statistically significant greater proportion of patients who received JNJ-2113 achieving PASI-75 responses compared to placebo at Week 16 in all five of the study’s treatment groups.

A clear dose response was observed across an eight-fold dose range.

Treatment was well tolerated, with no meaningful difference in frequency of adverse events across treatment groups versus placebo.

It is our expectation that JNJ-2113 will progress into a Phase 3 registrational study in plaque psoriasis on the strength of the FRONTIER1 data.

Advancement of JNJ-2113 into a Phase 3 study and meeting the primary endpoint in that study would qualify us for milestone payments of $50 million and $115 million, respectively.

Data will be presented from various pre-clinical and clinical studies on JNJ-2113 at medical conferences beginning in the second quarter of 2023.

Other Phase 2 studies of JNJ-2113 that Janssen has initiated include the SUMMIT study of JNJ-2113 for the treatment of moderate-to-severe plaque psoriasis expected to be completed in the second quarter of 2023 and FRONTIER2, a long-term extension study.

A Phase 1 trial of an immediate release formulation of JNJ-2113 in healthy Japanese and Chinese adult participants is currently recruiting.

Following the completion of Phase 2 studies of JNJ-2113 in plaque psoriasis, we expect Janssen to initiate a separate Phase 2 trial of JNJ-2113 in a second indication.

Additional indications may include any or all of psoriatic arthritis, UC and CD.

During the fourth quarter of 2021, we received a $7.5 million milestone payment from Janssen triggered by the completion of data collection for JNJ-2113 Phase 1 activities.

In the second quarter of 2022, we received a $25.0 million milestone payment in connection with the dosing of a third patient in FRONTIER1 during the first quarter of 2022.

We will be eligible to receive a $10.0 million milestone payment in connection with the dosing of a third patient in the second Phase 2 trial of a second-generation candidate, a $50 million milestone payment upon dosing of a third patient in a Phase 3 trial for a second-generation compound for any indication, and a $115.0 million milestone payment upon a Phase 3 clinical trial for a second-generation compound for any indication meeting its primary clinical endpoint .

remain eligible for up to approximately $855.0 million in future development and sales milestone payments, in addition to the $112.5 million in nonrefundable payments from Janssen received to date.

We also remain eligible to receive tiered royalties on net product sales at percentages ranging from mid-single digits to ten percent.

PN-943 is a wholly owned, investigational, orally delivered, gut-restricted alpha 4 beta 7 (“α4β7”) specific integrin antagonist for IBD.

During the second quarter of 2020, we initiated IDEAL, a 159 patient Phase 2 trial evaluating the safety, tolerability and efficacy of PN-943 in patients with moderate to severe UC.

Enrollment in IDEAL was completed during the first quarter of 2022.

The trial includes a 12-week induction period, which has been completed, and a 40-week extended treatment period.

With the exception of completing the 40-week extended treatment period for eligible patients in the IDEAL trial, which is expected to be completed in the first quarter of 2023, we do not intend to dedicate further internal resources to clinical development or contract manufacturing activities for our PN-943 clinical program.

Discovery Platform

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

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We continue to use our peptide technology platform to discover product candidates against targets in disease areas with significant unmet medical needs.

For example, we have a pre-clinical stage program to identify an orally active hepcidin mimetic, which we believe will be complementary to the injectable rusfertide for offering the best treatment options for PV, hereditary hemochromatosis and other potential erythropoietic and iron imbalance disorders.

AN INJECTABLE HEPCIDIN MIMETIC

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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 diseases of iron overload, such as hereditary hemochromatosis, 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.

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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.

Current treatments are effective in some patients but have distinct 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.

NCCN guidelines state that hematocrit levels should be maintained below 45% to reduce risk of cardiovascular and thrombotic events.

However, analysis of a large medical claims database indicated that 78% of patients were uncontrolled, with hematocrit test results above 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.

There are approximately 100,000 diagnosed and treated patients living in the United States, with a similar number in Europe, representing an estimated market opportunity of approximately $1.0 billion to $2.0 billion.

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

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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%.

Approximately 60% of PV patients are considered to have moderate treatment burden with treatments including frequent phlebotomy and hydroxyurea.

We believe rusfertide can potentially benefit a broad spectrum of patients both as a monotherapy or in combination across the continuum of care.

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.

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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.

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 (Figure 2).

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.

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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.

Rusfertide Phase 2 PV Study Design

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%).

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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:

We currently have the following designations for rusfertide in PV:

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

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● 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.

Following the brief clinical hold, over 92% of patients in the REVIVE trial provided reconsent and returned to rusfertide treatment after dosing interruption and re-initiation.

We enrolled 63 patients in the ongoing REVIVE Phase 2 clinical trial of rusfertide in PV prior to the clinical hold and we enrolled seven additional patients to target approximately 50 patients to complete the randomized withdrawal part of the study.

The vast majority of patients treated with rusfertide 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, 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.

Preliminary results indicated that rusfertide therapy resulted in rapid, sustained and durable hematocrit control without clinically meaningful changes in white blood cell and platelet counts.

Subjects have been under treatment for a median of 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.

One patient developed acute myelogenous leukemia (“AML”), which was deemed not to be related to

Significant adverse events included syncope, peripheral artery aneurysm, 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 and are transient in nature.

At the June 2022 ASCO Annual Meeting, we presented updated interim results for REVIVE and PACIFIC demonstrating the effects of dosing interruption and resumption.

Rusfertide dosing interruption led to loss of effect, including increased phlebotomy rate and increases in hematocrit and red blood cells.

Rusfertide restart restored therapeutic benefits.

Following the brief clinical hold described above, over 90% of patients in the REVIVE trial provided reconsent and returned to rusfertide treatment after dosing interruption and reinitiation.

At the December 2022 ASH meeting, we presented data as of October 2022 related to rusfertide, including a subgroup of analyses of the adverse event profile from the REVIVE trial.

These preliminary results indicated that 84% of treatment-emergent adverse events (“TEAEs”) were Grade 2 or below.

16% of patients experienced Grade 3 TEAEs and there were no Grade 4 TEAEs.

On March 15, 2023, we announced positive topline results from the blinded, placebo-controlled, randomized withdrawal portion of the REVIVE trial.

Subjects receiving rusfertide achieved statistically significant improvements versus placebo in the trial’s primary endpoint.

More subjects receiving rusfertide during the blinded randomized withdrawal portion of the REVIVE trial were responders compared with placebo (69.2% versus 18.5%, p=0.0003).

A study subject was defined as a responder if the subject completed 12 weeks of double-blind treatment while maintaining hematocrit control without phlebotomy eligibility and without phlebotomy.

During the 12 weeks of the blinded randomized withdrawal, only 2 of 26 subjects on rusfertide were phlebotomized.

In addition, in subjects with moderate or severe Myeloproliferative Neoplasm-Symptom Assessment Form (MPN-SAF) symptom scores at baseline, the change from baseline was statistically significant in fatigue, problems with concentration, inactivity and itching during the 28-week open label Part 1 of the trial.

Meaningful comparison of symptoms assessments in Part 2 are not possible since a majority of subjects randomized to placebo discontinued prior to the 12-week assessment of MPN-SAF symptoms.

Rusfertide continued to be generally well tolerated in the REVIVE trial, with localized injection site reactions comprising the majority of reported adverse events.

No new safety signals were observed in safety data disclosed in connection with the Part 2 efficacy results, relative to the safety data from the REVIVE trial presented at the December 2022 ASH Annual Meeting.

Based on end of Phase 2 feedback provided by the FDA’s Division of Nonmalignant Hematology and written comments from the EMA, we activated sites and initiated patient screening for VERIFY, a global Phase 3 clinical trial of rusfertide in PV for approximately 250 patients, in the first quarter of 2022 (Figure 3).

Significant efforts have been taken toward the goal of full enrollment and a high degree of interest has been observed from physicians and patient communities.

We expect enrollment completion in the fourth quarter of of 2023.

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.

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 is possible with rusfertide.

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

OVERVIEW OF DISEASES DRIVEN BY THE IL-23 PATHWAY:

PSORIASIS AND INFLAMMATORY BOWEL DISEASE

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 local tissue autocrine cascade that is an important pathway of many inflammatory diseases, including psoriasis and IBD.

The injectable 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 antibody drugs, such as Tremfya® and Skyrizi®, target the p19 subunit of the IL-23 ligand and are specific inhibitors of the IL-23 pathway, which is believed to be the critical driver of local tissue pathology.

Tremfya® and Skyrizi® are approved in psoriasis and psoriatic arthritis (“PsA”) and are in Phase 3 clinical trials in UC and CD.

Eli Lilly and Company’s anti-IL-23 antibody mirikizumab has reported positive results from a Phase 3 program in UC.

Psoriasis is a chronic inflammatory disease of the skin that affects 130 million people worldwide and 8 million in the United States, translating to 2-3% of the adult population.

Psoriasis is associated with several comorbid conditions including cardiovascular disease, obesity, and 30% of psoriasis patients develop arthritic complications.

Psoriasis is also associated with significantly decreased quality of life for patients.

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.

Several factors, such as surface area covered and symptom burden, impact whether one’s psoriasis is considered mild, moderate, or severe.

Typically, 3-10% of affected body surface area is considered moderate psoriasis, and more than 10% is considered severe psoriasis.

Global market sales for psoriasis therapies in 2020 was $13.2 billion, with U.S.

market sales of $10.8 billion.

The global market forecast for 2030 anticipates $25.3 billion, with U.S.

market sales of $20.9 billion.

Identification of the IL-23/IL-17 axis as the key pathway driving psoriatic inflammation has led to the development of more effective and safer systemic therapies that inhibit IL-17 (e.g., Taltz®, Cosentyx®) and IL-23 (e.g., Tremfya®,

These biologics have revolutionized the treatment of moderate to severe psoriasis, with superior efficacy and safety compared to conventional oral therapies (e.g., methotrexate, cyclosporin), and first-generation biologics (e.g., anti-TNFs, Stelara®).

The anti-IL-17 and anti-IL-23 classes are associated with Psoriasis Area Skin Index (“PASI”) 75 scores (75% improvement in skin inflammation) in 90% of patients, and complete clearance of the skin (PASI 100) in 30-40% of patients.

The anti-IL-17 class is ineffective in IBD, surprisingly showing overall worsening of disease in Phase 2 studies and is reflected in the product labels.

There is still unmet need for new therapies.

Only 25% of biologic eligible moderate to severe psoriasis patients are treated with a biologic.

The parenteral route of administration for these advanced biologics poses a patient level barrier to entry.

Two oral medicines have been approved in moderate to severe psoriasis.

Otezla® was approved in 2014.

It is the least effective of all drugs approved since 2004 with PASI 75 of approximately 30% but is used widely because of a perceived positive safety profile.

In 2022, the first TYK2 inhibitor, Sotyktu®, was approved.

In Phase 3 studies, it has demonstrated approximately 55% PASI 75 scores.

There is still significant need for safe and effective oral therapies in moderate to severe psoriasis.

Psoriatic Arthritis (“PsA”)

PsA is an inflammatory disease of the peripheral and axial joints that complicates psoriasis in up to 30% of patients.

Among the 8 million patients in the United States with psoriasis in 2022, it is estimated that approximately 1 million patients have PsA.

Many patients with active PsA may have mild psoriasis and many patients with severe psoriasis may have only mild PsA symptoms.

PsA is associated with several chronic conditions.

PsA may present even before skin symptoms in 10% to 15% of patients.

Cardiovascular comorbidities have a higher prevalence in PsA than psoriasis and can impact lifespan and quality of life.

Several new targeted therapies have been approved for use in PsA, with additional therapies in development.

These advances have improved outcomes, including reductions in musculoskeletal symptoms, skin manifestations and radiographic joint damage.

The same drugs approved in psoriasis are also approved in PsA.

One notable exception is that the JAK inhibitors, Xeljanz® and Rinvoq®, are approved in PsA without the respective label in psoriasis.

Inflammatory Bowel Disease (“IBD”)

IBD is a group of chronic autoimmune and inflammatory conditions of the colon and small intestine, consisting primarily of UC and CD.

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

usually diagnosed earlier than CD due to bleeding symptoms.

UC is 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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IBD prevalence is increasing worldwide and is correlated with the adoption of western diets and lifestyle, as well as genetic factors (5 to 20% of affected patients have a first degree relative with the disease).

Market Overview

According to the Crohn’s & Colitis Foundation of America, there are more than 1.6 million IBD patients in the United States alone, an increase of approximately 200,000 patients since 2011.

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Approximately one third of IBD patients do not respond to TNF-α antibody drugs and approximately another 30% to 40% become refractory within the first year of treatment.

Additionally, TNF-α antibody drugs may predispose patients to an increased risk of serious infection and the development of anti-drug antibodies, which over time can cause loss of drug response.

Additionally, TNF-α antibody drugs may predispose patients to an increased risk of serious

infection and the development of anti-drug antibodies, which over time can cause loss of drug response.

More recently, antibody products focused on potentially safer mechanisms of action have been gaining market share.

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Johnson & Johnson global sales of Stelara® (approved for psoriasis, psoriatic arthritis, moderate-to-severe CD and UC) exceeded $9.2 billion in 2021.

Current Standard of Care in IBD

In recent years, treatment of IBD has evolved from a focus on successful symptom management to an emphasis on modifying the underlying disease to achieve long-term remission.

While available treatments exist for moderate-to-severe IBD, there continues to be a significant medical need for novel, efficacious, safe and convenient treatments.

New technologies and outcome measures have been developed to improve staging definitions and assessments of treatment benefit.

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.

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

Anti-TNFs bind to and neutralize a central pro-inflammatory cytokine in the gut via systemic immunosuppression.

As a result, they can be associated with infection and malignancy risk.

Although the magnitude of these risks is relatively low, they are significant for the young IBD population who must continue on lifelong treatment.

In addition, more than 10% of patients treated with anti-TNF agents lose response with each year of treatment.

In 2014, a novel anti-trafficking mechanism launched with vedolizumab, marketed as Entyvio®, which blocks migration of leukocytes into the gut via α4β7 integrins.

This mechanism remains the only true “gut selective” approach in the IBD market today, although formulation technologies can limit systemic exposure from orally delivered agents.

Entyvio® has shown an excellent safety profile, although it requires intravenous administration.

Entyvio® was followed by the launch of ustekinumab, marketed as Stelara®, in CD in 2016, which blocks inflammation produced through the IL-12 and IL-23 pathways, and tofacitinib, marketed as Xeljanz®, an orally delivered pan-Janus kinase (“JAK”) inhibitor approved in UC.

A head-to-head trial called VARSITY comparing the long-term safety and efficacy of an anti-integrin and anti-TNFs has been completed.

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.

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.

We believe the development of new, potent and targeted orally delivered therapies for IBD may offer safer and more effective treatment options, alone or in combination, for moderate-to-severe IBD patients.

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.

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 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 and systemic tissue compartments as needed when administered orally.

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, 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 .

● Oral and GI-restricted delivery minimizes systemic exposure in the blood.

Oral and GI-restricted delivery results in lower drug levels in the blood that may provide the potential for an enhanced safety profile over antibody drugs.

● Peptides can be cleared more quickly from systemic circulation.

Small molecules and peptides below a size threshold can be rapidly cleared from blood circulation by kidney filtration and excretion.

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.

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

We believe that anti-drug antibodies are less likely to be elicited against constrained peptides, due to their small size, lack of epitope density, resistance to proteolysis, oral tolerance, and minimal systemic absorption.

● Potential for localized delivery to site of disease.

We believe oral dosing of GI-restricted peptides results in substantially higher drug concentrations in the diseased GI tissue compartment compared to injectable antibody drugs.

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.

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

PN-943, a second-generation, orally delivered, gut-restricted α4β7 specific integrin antagonist, was discovered through our peptide technology platform and is being developed initially for patients with moderate-to-severe UC.

Α4β7 integrin is considered to be one of the most GI-specific biological targets for IBD due to its binding to MAdCAM-1, an extracellular protein that resides mostly in the GI vasculature.

Like Entyvio®, which is dosed as an infusion and as an injectable antibody drug, PN-943 specifically inhibits α4β7 integrin.

We have leveraged the development and regulatory path of Entyvio® and other approved antibody drugs for IBD to help inform the design of our clinical development studies.

Mechanism of Action and Rationale

Integrins, such as α4β7, are transmembrane proteins that regulate cellular movement into extravascular tissue and play an important role in modulating the inflammatory reaction in the gut.

The α4β7 integrin is expressed on the surface of T cells, immune cells that help defend against foreign and potentially harmful substances that enter the body.

The development of IBD is driven by the migration of α4β7 T cells into the GI tissue compartment and their subsequent activation within the GI tissue compartment.

The entry of α4β7 T cells into the GI tissue compartment is facilitated by the protein-protein interactions between the α4β7 integrin and its corresponding ligand, MAdCAM-1, which is primarily expressed in the GI tissue compartment.

Hence, the binding of α4β7 to MAdCAM-1 can be categorized as a GI-specific interaction and has been identified as an IBD-specific targeted therapeutic approach.

By blocking the binding of α4β7 integrin to MAdCAM-1, PN-943 may prevent trafficking and activation of T cells, thereby reducing the inflammation that leads to the clinical manifestations and long-term implications of UC.

Α4β7 for IBD is targeted by Entyvio®, which has demonstrated safety and efficacy in patients with moderate-to-severe UC and CD.

Since PN-943 targets the same biological pathway as Entyvio®, we utilized similar PD-based POC in our pre-clinical studies and Phase 1 clinical trial to inform and guide our Phase 2 development program.

We sourced these PD biomarker assays from public scientific publications and do not maintain any contractual arrangement providing access to this information with the makers of these marketed products.

PN-943 Pre-Clinical Proof-of-Concept Studies

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, 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.

PN-943’s Phase 1 Clinical Trial Overview

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 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.

The pharmacodynamic results of target engagement were supportive of the three-fold higher potency of PN-943 as compared to PTG-100 and saturation at 1000 mg.

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.

PN-943 Phase 2 Clinical Trial Overview

We submitted a U.S.

IND with the FDA for PN-943 in December 2019, which took effect in January 2020.

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).

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

Three anti-IL-23 mAbs are in Phase 3 studies or beyond in IBD:

Tremfya®, Skyrizi® and Ely Lilly and Company’s mirikizumab.

The development of oral medicine has been an unmet need and priority in IBD.

The pan-JAK inhibitor Xeljanz® was approved in UC but not CD in 2018.

The label contains black box warnings for “an increased risk of serious heart-related events such as heart attack or stroke, cancer, blood clots, and death”.

The more selective JAK1/3 inhibitor Rinvoq® was approved in 2022 for UC and CD.

The label carries the same black box warnings.

The S1P1 modulator class of oral small molecules has also demonstrated efficacy in IBD, with Zeposia® approved in UC (but not CD) in 2021, and etrasimod completing a successful Phase 3 program in UC.

The S1P1 class is associated with immunosuppression, cardiac, pulmonary and ocular toxicities.

The development of new, potent and targeted orally delivered therapies for IBD may offer safer and more effective treatment options, alone or in combination, for moderate-to-severe IBD patients.

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

Given that the most effective agents in IBD induce remission in no more than 30% of patients, there has been much recent interest in combination therapies to break through this “therapeutic ceiling”.

In 2022, Janssen reported results of the VEGA study, the first randomized double bind clinical trial to assess the combination of an anti-TNF (Simponi®) with and anti-IL-23 (Tremfya®) in moderate to severe UC.

In the Phase 2a proof-of-concept trial, investigators found 83.1% of patients in the treatment group achieved a clinical response and 36.6% of patients treated with the combination therapy achieved clinical remission.

The high rates of clinical response and remission are both higher than the response and remission rates of patients treated with guselkumab alone (74.6%;

21.1%) and golimumab alone (61.1%;

Hence, the IL-23 inhibition mechanism is a potentially paradigm shifting combination strategy to improve remission rates in UC.

AN ORALLY DELIVERED IL-23R ANTAGONIST

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See Part II, “Item 7.

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 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.

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 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 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 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.

The Phase 1 study was a randomized, double-blind, placebo-controlled, SAD and MAD-escalation trial in 80 normal healthy volunteers.

The primary endpoint was safety and tolerability.

Secondary endpoints included the identification of the maximally tolerated dose and the evaluation of pharmacokinetic parameters.

Results of the Phase 1 study demonstrated that administration of PTG-200 was well-tolerated.

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

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

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 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.

Janssen is an experienced innovator in therapeutics targeting the IL-23 pathway.

Stelara® is a monoclonal antibody targeting IL-12 and IL-23 through their common p40 subunit is approved in psoriasis, psoriatic arthritis, CD and UC.

Stelara® generated $9.1 billion in sales in 2021.

Tremfya® is a specific IL-23 monoclonal antibody.

It is approved in psoriasis and psoriatic arthritis, with Phase 3 study results in CD and UC expected in 2023.

Tremfya® generated $2.1 billion in sales in 2021.

In both psoriasis and IBD, there is an urgent need for safe and effective oral therapies.

It is notable that Stelara® loses patent exclusivity in 2023 with biosimilar competition expected.

JNJ-2113 (formerly known as PN-235), an orally delivered IL-23R specific antagonist for the potential treatment of psoriasis, psoriatic arthritis and 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.

By blocking IL-23R, we believe JNJ-2113 may improve disease symptoms while potentially minimizing the risk of systemic side effects.

During the fourth quarter of 2021, a portfolio decision was made by Janssen to advance development of our IL-R antagonist JNJ-2113.

For JNJ-2113,

Janssen is primarily responsible for the conduct of all further development, and we were primarily responsible for the discovery, IND-enabling studies and the initial Phase 1 study.

C linical Development of JNJ-2113

A Phase 1 study was initiated for JNJ-2113 in December 2020.

The Phase 1 study for JNJ-2113 was designed to determine the safety, tolerability and pharmacokinetics of JNJ-2113 in 107 healthy volunteers.

The study was conducted in three parts:

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The Phase 1 study was completed in September 2021.

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

Results of the Phase 1 study demonstrated that administration of JNJ-2113 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.

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

The pharmacokinetic and pharmacodynamic parameters of JNJ-2113 were consistent with those predicted by pre-clinical studies.

FRONTIER1, a Phase 2b study in moderate-to-severe plaque psoriasis, was initiated by Janssen in February 2022 and was completed in December 2022.