Protagonist Therapeutics, Inc. Stock

Back-to-school Conference. My name is Geoff Meacham. I'm the senior biopharma analyst, and my team is with me here, too. We're thrilled today to have Protagonist and CEO, Dinesh Patel. Dinesh, thanks so much for joining us.

It's a real pleasure. I appreciate the invitation.

Yes. As you move into the double digits on market cap, we're thrilled to get you for this more SMID bio type of conference. How does that feel? Getting the credit that you guys have, I think, long deserved for developing ICO, I mean, everything, right?

Yes. No. I mean, as you know, it has been a long steady journey. So it's not like things have happened overnight. So we have been able to process it. We are appreciative of what we have been able to achieve, right? I mean, statistically speaking, I'm like, yes, we got 2 drug approvals this year and a total of 30-plus approvals have happened this year. So the statistics are great. But then in the same press, I'll be like, oh, by the way, it took more than a decade with each drug. So that's the reality. But I'm glad we had a great outcome. And for both the drugs, I mean, it was backed up by amazingly strong Phase III data, right? And with MIMRYLO, the recent approval of the Hepcidin Mimetics such a clean and broad label. So we are very thrilled. Things are going exactly what we anticipated, the way we anticipated, but we are not taking anything for granted. It is biotech. We will always be on our [indiscernible].

Yes. Yes. Well, let's talk a little bit about that on the strategy. So you have 2 partnered commercial assets. The model has always been to develop things in-house and then at some point, maybe in mid-stage, make a call to a partner or not. How do you think about the next, call it, 5-plus years? Do you think there could be a Protagonist sales and marketing team on a wholly owned asset? Are you thinking about that strategy differently now that you have 2 sort of locked in are going to contribute to the P&L for the foreseeable future?

Yes. Definitely, there are some implications and differences from how we were acting and behaving, let's say, a decade ago or even 5 years ago, right? I mean with the 2 drug approvals and partnered with J&J and Takeda, we believe we are going to have a healthy revenue stream and that should be more than enough not to support our own internal R&D pipeline, but also in a mindful way, return some value to shareholders. So as you know, yesterday, after market close, we announced a $300 million share repurchase program. So it's going to be a balancing act, but R&D will always be our top priority. We don't want to be labeled as a royalty play because truly genuinely, we are, first and foremost, an R&D center. We would like to be recognized as a company with special expertise and achievements in the field of peptide therapeutics. And in terms of the strategy, I guess the simplest change is that we can afford to continue to develop assets on our own a little bit longer than what we might have done previously,

let's say, with ICOTYDE, which was partnered with J&J all the way back in 2017 when it was a preclinical asset. Now we may want to hold on at least up to clinical proof of concept, right? So that way, the terms could be better, and it would be a more fair win-win deal for both a pharma partner as well as ourselves. We are big believers of pharma partnerships. We believe in the expert system. They are great at doing certain things. We are good at certain things. So let the experts do what they are good at doing. Having said that, for some of the rare disease indication, niche markets, we wouldn't mind taking those all the way through the finish line. In fact, if you think about it with Rusfertide, the hepcidin mimetic, we were already in Phase III when we did the partnership with Takeda, right?

So over there, the original intent was the simple play, big indications, partner. Small indications develop on your own. But the terms were amazingly good for both parties. So we took that deal. And I'm glad we did it because now it's like giving away the first 2, not actually giving it away, but it's like in return, creating almost a financial independence.

Yes. Yes. And just along that same train of thought, when you think about the line -- the indications to go after, so you mentioned rare could be something that you keep in-house. Talk a little bit about the process at Protagonist to look at new therapeutic areas you're involved in, you have the GGG and oral version of that. Are there disease areas that you think are particularly attractive that maybe could be unmet that change its priority in your pipeline?

So Geoff, I mean, you can correct me if I'm getting carried away. But the way we are looking at things is like peptide therapeutics, peptides are the nice in between space between oral small molecules and injectable antibodies. And we have figured out how to create oral peptides. So now we can have the best of both worlds. In an oral peptide therapeutic, you have the oral component of oral small molecules and you have the amazing potency and safety of -- and specificity of the injectable antibodies. So I think this is like a totally unique stuff. And our ambitious agenda is to truly revolutionize the entire landscape of all chronic medication.

Chronic, meaning patients are unfortunately going to be taking that medication for most or rest of their life. And over there, if you think about it, currently, the field is dominated by injectable antibody drugs, and they have been doing a wonderful job, especially if you look at I&I. So as a first bold step, it's like let's take on all the important I&I targets and offer oral peptide medicine. So ICOTYDE is just the beginning, if you will, right? We are already working on an oral IL-17. We love the Phase 1 data that we got, amazing exposure levels through an oral. The biology is already validated. So we are going forward in a full-fledged comprehensive Phase 2b study in Psoriasis with that asset, PN-881. But can you imagine it's like, I mean, hey, if there are injectable IL-23 blockers like Skyrizi and Tremfya, maybe ICOTYDE is an amazingly great alternative, which captures the potency specificity of the biologics, but has the convenience of once-daily oral pill.

Now do the same thing in IL-17, where maybe Bimzelx is the gold standard, right? Do the same thing in IL-4, where you have Dupi currently dominating the market. So I think in a way, it's about repeat performance, applying the skills set and the knowledge and the know-how that we have acquired over the last 2 decades. We started working on peptides when we had to go out of our way to explain to people what peptides are. Now of course, people are explaining to us what peptides are because everybody knows about peptides, right? So things have changed. But I think our expertise is very unique.

So that's just in the I&I space. In the obesity space, I mean, if you think about it, the market has been dominated by the 2 injectable peptides, right, Wegovy, Zepbound. And now -- but look at the response of the oral Wegovy, -- it's just amazing, and that yet once again demonstrates the preference for an oral. An oral pill doesn't make you feel like you are treating a disease, an injection would. And that psychology is also huge, right? So in the obesity space, we will acknowledge we are late entrants, but then our focus is going to be towards very strong undeniable differentiation. So the first thing we are attempting in a big way is the oral GGG. I mean, retatrutide Phase 3, the injectable from Eli Lilly has great data.

They can truly claim that is the drug that offers maximal weight loss. Just imagine, if our oral idea works, then the impact it could have, right? So that's the mindset that we basically have. And whether it's in the field of metabolic diseases, whether it's in the I&I space or in the rare disease indication. In the rare disease indications, we have been successful with MIMRYLO. It's the first of its kind, right? It has got on a broad and clean label. And we are developing an oral functional mimetic as well now.

Yes. And just along those lines, I would say, for an oral in the obesity space. I mean, Lilly has even said the killer app that kind of keeps them up at night is a 20% weight loss oral, right? No pressure there.

With retatrutide, they were able to achieve 28.5% weight loss, if I can recall the numbers correctly from their clinical data. So I think if an oral triple works the way we envision it to work, 20% should not be an issue.

Yes. Well, before we go into there, let's talk a little bit about ICOTYDE versus your oral IL-17. Is there a natural tension between you guys and J&J on the development here? I mean, I think...

I mean, is there a sibling rivalry? Kind of yes and no because I mean, if you think about it, right, I mean, -- and in a way, the injectables are teaching us everything, so to speak. That's like a preview of what's to come in the oral arena as well, right? So I think the IL-23 blockers will have their uniqueness in the IBD space, right? And the IL-17 blockers are going to have their uniqueness in the more arthritic kind of conditions, whether it's HS or spondyloarthritis or psoriatic arthritis. And in psoriasis , there will be a good overlap. But if you look at the current split between IL-23, IL-17, I think both have almost an equal level of opportunity in the psoriasis space. So I think Yes, it's a healthy tension. Now of course, ICOTYDE is partnered away with J&J. They are doing a fantastic job. We couldn't have asked or hoped for a better partner.

I -- but it's already approved and off to a great start. With the oral IL-17, we are now moving into Phase 2. So it's still early days, comparatively speaking, and it's fully owned by us.

Yes. We'll talk a little bit about ICOTYDE in terms of your interaction with J&J. Did they -- you obviously they're not going to inform you about where they want to go in terms of development just because of your in-house IL-17. But in terms of the technology, the peptide technology, could you take oral IL-17 into areas that maybe are not as well appreciated by investors and maybe some of the more orphan indications across the I&I landscape where ICOTYDE may not go there?

Right. Yes. So I think with the IL-17, the first order of business for us to -- let's make sure that the oral delivery is working. Now we have derisked things as much as possible, right? It's a very proven pathway. Based on the performance of antibodies, we had our own math of like, hey, we should be above the IC90, EC90 levels of the drug. And when administered orally, we overachieved that particular bar or hurdle. And that is why we are going with a full-fledged Phase 2b comprehensive study. Having said that, the PK differences are there between orals and injectables, right? -- with the injectable, right, from day 1, you have a maximal concentration in the bloodstream and then it decays over a period of weeks. Whereas with an oral, it's like every day, there is a resetting, that kind of thing. And one could keep on debating and hypothesizing, but at the end of the day, let's roll the dice in an indication where we can very clearly measure whether the concept is working or not. The concept has worked preclinically. We got beautiful data in the skin or inflammation model.

But now let's see what happens in psoriasis, right? So that's the first indication we are chasing. And as soon as we get an understanding of how well it is working, right? And with psoriasis, the response rates are fortunately very high. So even looking at the blinded data, you can probably come to some very good conclusions. And if we feel good about what we are seeing, then that is where we will be sort of like off to the races, meaning chasing different indications, things like that. And that is where the KOL community will also be very helpful in guiding us.

Dinesh, a following up on that. I mean, you mentioned you going with for psoriasis first for IL-17 and then maybe HS down the line. Maybe talk about your thinking behind it, why psoriasis first and then HS because there is a lot of unmet need in HS first. So why not go after the indication which has the highest unmet need and psoriasis, it seems like you have oral IL-23 is a little bit crowded there. So yes, just your thoughts on that.

The response rates are very high. So there is no confusion or ambiguity around the data, right? So we opted for simplicity and easy interpretation of the data in the first instance because as I said, this is a very novel concept, an oral IL-17. So that was the reason we chose psoriasis. The other important reason is like if you look at all the IL-17 blockers, historically, a psoriasis study will be done first, it gives guidance towards what is the dosing regimen that should be used for a Phase 3 psoriasis study, but also for HS.

And generally, you are going to need higher doses in HS in comparison to psoriasis. So I think it's also more about like what doses to go with in HS and other indications. You will get that guidance as well from the psoriasis study. So I think there are multiple purposes there. But you're absolutely right. There is more unmet need in HS, and that is where the true and big win would be. But psoriasis also, it's like -- it's dominated both by IL-17 and IL-23 blockers.

And maybe talk about the efficacy profile or kind of a safety profile you need to see with IL-17 versus like injectables like to kind of show that your drug could be like competitive versus the oral or the injectable kind of IL-17 drugs?

Yes, it's interesting like -- and we have been through this journey through ICOTYDE, right? And I think at the end of the day, at a practical level, let's say, even if you may be a little bit off the efficacy of the most potent antibody, at a practical level, it becomes a nonissue because if I were to phrase one of the KOLs, they are like, okay, I'm going to tell a patient, hey, here is an oral option. It works through the same mechanism as the antibody. So it's very safe and all that. It might take you a few weeks longer to get to your remission or skin clearance.

What do you think the patient is going to choose, right? So it's one of those things. So we are not hung up on like we have to exactly match the efficacy of the antibody. It's a good thing to have, but it's not a must-have. We could be a little bit off, but just the advantages of the oral overall. And like I said, at a practical level, what it means is like, okay, it may take a few weeks longer, but that is totally overshadowed by the convenience of an oral pill.

Definitely. And then you presented recently like oral data for IL-17, like some IC90 and other levels. Maybe talk about your experience like in terms of ICOTYDE, like the preclinical data you saw and how it kind of translated into clinical kind of data. Is there any read-through from this like oral IL-17 data to what you could see in clinic? I know like there's a lot of variations in what you can see in clinic, but anything that you can kind of like see translatability from that mechanism to this one?

Yes. So there are some rough approximations and assumptions around like what is the exposure level that is needed to combat a particular target. So with IL-23 blockers, our conclusion was like -- and this takes into consideration all the complexities of each particular pathway and what has been truly observed with the antibodies, right? So over there, I think as long as you are above IC50, IC75, the chances of things working out were pretty good. And that is exactly what has happened with HEICO. Now with the IL-17, I would argue the bar is a little bit higher. And that is why we went for IC90 rather than IC50 or 75, right? Now the great news for us is like it doesn't even matter. If you look at the graph that we have shared, it's like we may be technically above IC99 or something like that. So it becomes a nonissue in that regard.

Just with respect to -- I could tie in maybe your J&J relationship. Are you happy with maybe the investments commercially to maximize the value of it? Maybe give us some perspective on your dialogue with them on -- maybe on more on the commercial side.

Yes, we couldn't have asked for a better partner or a better scenario in terms of their efforts towards the commercial launch. I mean watching the DCR commercial for the first time at the semifinals at FIFA. It's a unique ad. It's unbelievable, right? But even the general sentiment and the level of enthusiasm shared by the executive team of J&J whether it is during their earnings call or at conferences, it's amazing, right, for them to be saying this could be the best ever commercial launch exceeding all their expectations in recent history, things like that in their earnings call, which is roughly like 4 months after the approval, kind of sharing numbers like 18,000-plus prescriptions, 11,000-plus patients, 6,000-plus prescribers, and we went back and took the liberty of studying those kind of numbers for other big launches. And these are amazingly high numbers. So I would say, yes.

And in a way that once again, kind of convinces us that pharma partnerships should be an integral component of Protagonist strategy at all times going forward because the things they do, the scale at which they can do, a biotech, at least in my opinion, just cannot achieve that.

And then I promise this wasn't a setup, but when you think about IL-17 and the development, how do you think about if you were to partner down the road, like the economics there, knowing that you could go after maybe different segments across I&I that maybe ICOTYDE doesn't touch or maybe you could have a differentiated profile on top of ICOTYDE or relative to ICOTYDE?

Yes.

The last name Patel is very much associated with the hotel motel business. I have nothing to do with that nor my family. But it's like the first time around you are doing business, it is going to be like, okay, fine, I'll be happy with a 10% cut. And with ICOTYDE, we have 6% to 10% royalty, right? But the next time around, you get a bit more gutsy and you'll be like, you know what, I'll invest as well, and maybe I'll get a better cut, that kind of thing. So the oral IL-17, will we partner it with a pharma? Yes, that is the intention. But we may have more of our skin in the game as well, right? Just because, let's say, we partner, hypothetically speaking, after we have Phase 2 data and before going into Phase 3. It doesn't mean we have to disown it. We can participate in the Phase 3 costs of the study, in expectation of retaining better economics. So I think we may get more aggressive that way in partnerships. But at the end of the day, it's like if we can create a if we can create a structure where it's a fair deal for both parties, then I'm a big believer of pharma expertise on commercialization.

Yes. That makes sense.

You [indiscernible] , on I&I, should we go to rusfertide?

Yes. I wanted to ask about your IL-4 or that you're pursuing. I mean, given like some of the mechanism is driven by IL-13 as well, I just wondering why you pick IL-4 as your target and why not IL-13. And if there is a possibility with your kind of platform, you could target like both IL-4 and IL-13 like Dupixent does.

Yes. I mean that's a great question. Let me just reserve an answer to that question for some time in the future when we actually announce the nomination of a development candidate. But it's -- yes, both of the targets are intertwined in a way, yes.

So let's move to rusfertide and obviously, we leave some room for the GGG. So talk a little bit about the same -- I guess, the same questions on Takeda, right? I mean, so talk about your level of comfort with their investment to make this successful, whether we'll get more launch metrics, more maybe visibility for investors on how that launch is progressing? And maybe how much you're informed of all that?

Yes. So I mean, clearly, there are contractual obligations and all that kind of thing. So we will get informed in a more regular way. But what we share and when with the Street, I think our first order of business will be to cooperate and be in sync what the pharma company wants, right? It's rather than spilling the beans prematurely. Takeda has been an amazing partner. They're truly impressed us with their knowledge and presence in the heme space. As you can imagine, rusfertide, there were discussions with several companies, but we were blown away by the level of preparedness and awareness they had in terms of rusfertide's mechanism of action and those sort of things. And all that has played out very well. I mean we Protagonist were in charge of completing the Phase 3 study, which we did, but we were always keeping them fully informed. And then Takeda was in charge of the regulatory filing, and they kept us totally involved and informed and look at the amazing outcome they have had, right?

I mean we couldn't have asked for a better outcome. It's such a broad and clean label. This is a drug that is now basically approved for all comers in polycythemia Vera as long as they have erythrocytosis. And our real world data suggests that about 78% of the patients who are currently on one medication or the other, they fall in that category.

So this is going to be huge. And Takeda already has experience and presence in the heme space, in the rare disease indications, that kind of thing. And look at the amazing job they did with Entyvio over the last decade, right? So they have a very proven track record. Our experience has been super positive with them. So we truly believe that MIMRYLO is in excellent hands.

Have your modeling or expectations of the PV market and opportunity evolved over time? In other words, when you first did the -- some of the Phase 2 and the Phase 3 work in terms of the TAM and now that you have this in Takeda's hands, do you think that this there's a decent upside kind of driver here in terms of awareness, treated population, that kind of thing.

Yes. I mean, clearly, Takeda is in charge of all the commercial forecast and all that. And the forecast they have had is like $1 billion to $2 billion in peak sales. But what I add in the same breadth is that, that was something even before we got Phase 3 data and look at the Phase 3 data, right? It got selected for preliminary presentation at ASCO and the discussant is calling it practice changing, that sort of thing. And now look at the label. It's amazingly clean label, broad label. So clearly, there is room for optimism. But at the same time, this is also a drug of its own kind. This is a first-in-class. -- hepcidin mimetic. The PV community hasn't had this kind of a drug before, even though erythrocytosis is the core fundamental core component of the whole disease indication, right? So it is going to take -- and Takeda has been very vocal about it, like there will be quote-unquote a learning curve, meaning like bringing the awareness because even physicians are not used to having an erythrocytosis specific agent. So some of that will go on. But at the end of the day, the amazing data, the amazing label, that is all going to come into play.

And if we can take any guidance from the observations that we have made in clinical studies, it is very promising. So for example, in our Phase 2 studies, the patients who opted for open-label extension, we have more than 95% of the patients, 44 out of 46 that have been on the treatment now for more than 3 years and about 90% of them have been on the treatment for more than 4 years. And by the way, this is the first time ever for PV, the label contains symptom improvement, right? The fatigue improvement, that was one of the key secondary endpoint we had that was achieved, and that has been noted in the label as well. Quality of life improvement is a big thing for patients. And this is also a quote-unquote chronic kind of indications, right? The patients, they stay on this journey for about 15 to 20 years on an average.

Yes. I mean it's really exciting kind of treatment for the PV patients. Maybe -- you mentioned broad label like things like that. So maybe based on the physician and payer discussions you've had since approval, maybe how confident are you that the use can expand beyond the frequent phlebotomy patients? And maybe what kind of earliest evidence we can see that could prove that it's going in that direction?

Yes. See, if you think about it, at least in my opinion, PV treatment does not have good options. What are the options? -- phlebotomy, right, or blood letting. And then it's cytoreductives, hydroxyurea. Hydroxyurea is not even approved formally as a drug for PV and still it's being used. But then no other choices are available. And then you have Jakafi, which is mechanism-based, but it is approved and rightfully only towards the end stage of the disease for HU intolerant patients, right? And then you have interferon, which has been around for decades and the onset of action is very slow and there is a lot of baggage with interferon drugs in general.

So this is the first drug ever that is so erythrocytosis specific, erythrocytosis centric, and that is the prevalent cause of the disease. So these are -- in a way, if you think about it, like the current choices are so moderate, modest, inadequate, whatever term you want to use. So I think this is like a breath of fresh air.

And then you also have oral hepcidin molecule, right, that you're developing.

Correct.

Maybe talk about that, like the learnings from developing the injectable hepcidin to how you can kind of transfer that learning to the oral. And then you discussed some preclinical data recently. Maybe talk about that and the kind of broader picture of how that can help develop this molecule further.

So for those of you who have been with Protagonist long enough, we will get this. One of the important learning over here will be we are not going to pursue beta thalassemia as an indication because with rusfertide or MIMRYLO, we did take the scenic route, right? So here, we will go directly in PV as the indication. But the beauty over here also is like, I mean, in a Phase 1 study in healthy volunteers itself, you basically will see the effect on serum iron levels and you will get your early clinical proof of concept. So we could go very directly quickly into a pivotal study. And now the agency is also kind of very receptive towards making some positive changes in terms of the requirements for approval, a single Phase III study could definitely be very appropriate and especially for a rare disease indication. And in a way, we have already been on this path in terms of -- like I said before, we Protagonist were in charge of the Phase 3 study, right? So for rusfertide. So it's like being on the same path, but now with an oral medicine.

Right. Let's move -- switch gears in the last couple of minutes, just to 477 in obesity. Talk a little bit about what we may see in the next, call it, 6 to 12 months in terms of clinical development. You mentioned retatrutide. And what would you view as a successful outcome in early development that gives you a good signal to go into a larger Phase 2?

Yes. So as you know, we are already in a Phase I study right now with the weekly subcu administration. And the oral is, let's say, behind by about 4 months or something like that. Now in a Phase 1 study itself in healthy volunteers with an agent like a GGG, I don't know about success, but if we didn't see any weight loss, I would view that as a failure. It's like, okay, something is off, right, that kind of thing. After that, it will really depend on an individual in terms of how much importance one wants to attach to single-dose administration-based weight loss, that kind of thing, right? So I wouldn't get carried away with that. But at least, we would like to see some effect in there. And then we would like to observe something similar when we administer the drug orally.

And those are the kind of events that are going to unfold next year, right? So we will have a very clear idea about whether this bold oral triple concept is working the way we expect it to work or not. But boy, if it works, it could be practice changing down the road.

Yes. I guess given the size of the market and the -- maybe the competitive landscape, hypercompetitive among the pharmas and big cap biotech, could you partner this maybe earlier in its cycle just to kind of give you the capital to kind of get to an answer quicker? Or how do you consider it?

Yes, I'm really glad you asked that question. So yes, the whole anti-obesity portfolio. And as you know, we have a triple, we have a dual. We are working with amylin as a target as well, maybe polyagonist, that sort of thing because we want to keep that differentiation in mind. So it's a whole portfolio. And right from the get-go, this is a project that will be primed for partnerships sooner rather than later. We have no desire to go into Phase 3 studies on our own in the obesity arena. That truly, truly belongs to big pharma.

Okay. That makes sense. I think we're -- maybe one last question just on that. When you think about the investments to make to get to the next step, does Protagonist have any additional platform investments to make on things like manufacturing, scale up and the like? Or are you still kind of in the -- let's get past proof of concept into maybe a decent-sized Phase 2 and then hand that off to a partner that can move forward?

Yes. I think it will certainly be on a case-by-case basis, right? The place where we are -- we have very good clarity in our own head is the anti-obesity space. That is something we have to partner in a timely fashion. Only big pharma can do justice to such a portfolio. With other things, we'll just have to play it by year. If we have to or want to continue on our own, right, and then we should be in a position to do that. But we still believe that we should be able to fund all of that through the revenue generation from our licensed assets.

Thank you very much Dinesh.

Thank you.

Welcome to the Protagonist Therapeutics conference call.

[Operator Instructions] As a reminder, this call is being recorded today, Monday, August 31, 2026. I'll now turn the call over to Dr. Corey Davis of LifeSci Advisors. Please go ahead.

Thank you, Rob. Hello, everyone, and thanks for joining us on our call today. Joining me from Protagonist are Dr. Dinesh Patel, President and CEO; Asif Ali, CFO; Dr. Arturo Molina, CMO; Dr. Ashok Bhandari, Chief Discovery Officer; and Dr. Samuel Saks, Clinical Development Adviser. On Friday, Protagonist issued a press release announcing the FDA approval of rusfertide, now known as MIMRYLO for the treatment of erythrocytosis in adults with polycythemia vera or PV.

A copy of the release and the slides being used for this call are available on the company's website. As can be seen on this slide, we will be making forward-looking statements on this call. These may include statements relating to the safety and efficacy and the therapeutic and commercial potential of our investigational product candidates.

For further information relating to risks and uncertainties related to our business, please see the periodic reports we have filed with the Securities and Exchange Commission. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, August 31, 2026.

Protagonist undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as may be required by applicable securities law. With that, I'll now turn it over to Dr. Dinesh Patel. Go ahead, Dinesh.

Thank you, Corey, and good morning, everyone. Earlier this year, on March 18, we had announced the U.S. FDA approval for our first drug, the first-in-class IL-23 receptor blocker oral peptide ICOTYDE in partnership with Johnson & Johnson.

Today, a few months later, marks the second major drug approval milestone for Protagonist. We are very pleased to announce that MIMRYLO, which is the new brand name for rusfertide, has received FDA approval for the treatment of erythrocytosis in adults with polycythemia vera or PV.

This is a first-in-class medicine that targets the biology driving red blood cell or RBC overproduction in PV. I would like to congratulate both the Protagonist team and our partner, Takeda Pharmaceuticals on this very successful outcome. As most of you know, PV is a rare blood cancer, where the fundamental treatment goal for patients as per NCCN Guidelines is to lower hematocrit, which is ratio of red blood cell volume to total blood volume and to maintain this hematocrit level below 45%.

While PV is an erythrocytosis-driven blood disease, there has been no erythrocytosis-specific therapy available as a treatment. So it is this unmet need that drove us on the path of discovering and developing MIMRYLO.

So how does MIMRYLO work? And what is its mechanism of action? It is a peptide mimetic of the natural human hormone Hepcidin. Hepcidin is the master regulator of iron homeostasis that controls the absorption, storage and distribution of iron in the body. MIMRYLO mimics the action of endogenous hepcidin to regulate iron availability and thereby help normalize RBC production and maintain hematocrit levels below 45%. This erythrocytosis-specific mechanism is a very different and a more elegant therapeutic strategy compared with the current standards of care, which rely on phlebotomy and cytoreductive therapies to control the consequences of erythrocytosis.

These treatments can be associated with treatment burden and adverse effects and do not specifically target the underlying iron dysregulation that fuels erythrocytosis. MIMRYLO is a first-in-class drug of its kind for PV, a first-in-class medicine, marking a potential shift in the treatment paradigm for PV.

We have high confidence in the long-term commercial potential of MIMRYLO and know that our partner, Takeda, is exceptionally well positioned to maximize the global opportunity for the product. As a reminder, following our recent opt-out election, Takeda is now solely responsible for all aspects of commercialization and ongoing clinical development, and they are the ones best positioned to provide more specific details on these topics.

Before getting into the clinical studies that form the basis of the approval and the broad prescription label, let me first walk you through the discovery and development journey of MIMRYLO since it speaks volumes about the scientific expertise of Protagonist with peptides, the in-house peptide-centric drug development acumen we have accumulated and the future strategic vision for the rest of our peptide-dominant research and development pipeline.

So going to Slide 4, let's start with the historical perspective on MIMRYLO journey from concept through FDA approval and commercialization. MIMRYLO or PTG-300, as it was known during drug discovery and early development, originated from our hepcidin mimetic program more than a decade ago.

Its successful approval provides important validation for Protagonist on at least 2 levels. First, it is a testament to our scientific team's innovative expertise in originating the hypothesis that a Hepcidin Mimetic could lead to a first-in-class medicine for iron dysregulation-related diseases such as PV. Second, it provides powerful validation of our peptide technology platform and our exceptional expertise in the emerging field of peptide therapeutics. Looking at hepcidin through the lens of a medicinal chemist, we recognized early on that the natural hormone hepcidin presented a unique challenge.

It is synthetically complex, unstable, poorly soluble and only moderately potent, making it unsuitable as a drug in its own right. There was a clear need and opportunity for creating a synthetic peptide with superior pharmacokinetic and pharmacodynamic properties in comparison to the natural hormone.

We were able to utilize our peptide chemistry expertise and our proprietary platform on this project. In particular, we applied the technique of scaffold hopping from our platform, which led to the identification of a PTG-300 scaffold, which after further optimization led to the specific peptide PTG-300 now called MIMRYLO.

As a side remark, the peptide platform is now very broad from what it was in those days, encompassing a full range of tools, including, but not limited to, computational vectors libraries, phage libraries, medicinal and peptidomimetic chemistry, formulations and artificial intelligence. And these tools are being judiciously utilized in our new discovery and development programs, which will be highlighted later on in this call.

Getting back to MIMRYLO, the discovery of 300 was followed through with our Phase II REVIVE clinical proof-of-concept study, the Takeda partnership with a successful pivotal Phase III VERIFY readout, the NDA submission last year in December and finally, U.S. FDA approval last week on Friday.

Along the way, rusfertide received Orphan Drug designation, Fast Track designation, breakthrough therapy designation and priority review. The program also achieved broader clinical and scientific validation, including publication of the Phase II REVIVE results in the New England Journal of Medicine and presentation of the Phase III VERIFY results at the 2025 ASCO plenary session.

It has been an incredible journey, and this successful outcome is deeply satisfying for the entire company, especially knowing that PV patients will now have a new treatment option attending to their unmet need of maintaining hematocrit levels and controlling erythrocytosis in a consistent manner.

Let me now turn it over to our Chief Medical Officer, Dr. Arturo Molina, who will review the Phase III VERIFY results and the approved label and the unmet need in PV. Arturo?

Thanks, Dinesh. Let's go to Slide 5. The Phase III VERIFY study was a 32-week double-blind, placebo-controlled study, which enrolled patients receiving current standard of care but requiring excessive phlebotomies because of uncontrolled hematocrit. In the placebo arm, participants continued with their ongoing therapy, whereas in the investigational treatment arm, rusfertide was added to the ongoing therapy. The primary endpoint was clinical response in the rusfertide treatment arm versus the placebo arm during weeks 20 to 32. The study met not only its primary endpoint of clinical response, but also all the 4 key secondary endpoints, including the patient-reported outcomes assessing fatigue and overall symptom burden, specifically the PROMIS Fatigue score and the MFSAF symptom score.

Importantly, improvement in fatigue was measured -- as measured by the PROMIS Fatigue Short Form 8a, is also incorporated into the FDA-approved label. MIMRYLO had a generally well-tolerated safety profile in the study with the most common adverse events being injection site reactions and anemia. These efficacy and safety data from the VERIFY study served as the basis for FDA approval of MIMRYLO.

As mentioned earlier, the Phase III VERIFY studies were presented at the plenary session at ASCO last year. Following the presentation by Dr. Andrew Kuykendall, Dr. Katherine Walsh from Vanderbilt provided her view as a formal independent discussant. She described the study results as practice changing and suggested that rusfertide should become part of standard of care for PV patients. Now let me share some of the highlights from the prescribing information from the approved label on the next slide.

We're very pleased with the broad label received from the FDA approval of MIMRYLO. The label accurately reflects the excellent safety and efficacy results submitted in the rusfertide NDA. In terms of efficacy, MIMRYLO achieved a high response rate of 76.9% during weeks 20 to 32 and maintained hematocrit control and reduced phlebotomy.

Importantly, MIMRYLO improved fatigue in patients with PV as measured by the PROMIS Fatigue Short Form 8a. This is a very important endpoint as it reflects the patient experience with polycythemia vera. Demonstrating an improvement in symptoms in prospective randomized trials of PV has been elusive to date.

And for the first time, an improvement in fatigue has been demonstrated and included in the label as a key efficacy outcome in a Phase III trial in polycythemia vera. We're also very pleased with the safety profile observed in the MIMRYLO clinical development program.

First and foremost, there is no black box warning in the prescription label. Secondly, there are no carcinogenicity signals in the 6-month transgenic mouse study and the 2-year rat carcinogenicity study. Moreover, in the VERIFY study, there were more cancers observed in the placebo arm compared to the rusfertide arm.

Thirdly, the warnings and precaution section includes new or worsening thrombocytosis and injection site reactions. Thrombocytosis was reported in 8% of patients in the MIMRYLO arm. All of these were Grade 1 or 2. Injection site reactions were reported in 56% of patients, the vast majority being Grade 1 or 2 with only 0.7% being Grade 3.

Discontinuations related to adverse events were low. Adverse reactions, which resulted in discontinuation of MIMRYLO, including injection site reactions in 0.7% or 2 patients, thrombocytosis in 0.7% or 2 patients and anemia in 0.4% or 1 patient. So in summary, MIMRYLO has impressive efficacy and safety in a broad and clean label with no black box warning, and we couldn't have asked for a better FDA approval outcome.

Let me now talk about the current treatment landscape and the unmet needs and the potential commercial opportunity for MIMRYLO. Let's go to the next slide. PV affects approximately 155,000 patients in the United States, of whom roughly 78,000 are currently on some form of treatment with a comparable number of patients in Europe.

Current options include phlebotomy, hydroxyurea, BESREMi and interferon and Jakafi, a JAK2 inhibitor. A very consistent observation is that the vast majority of this population, approximately 78%, experienced elevated hematocrit despite current standard of care treatment, and this is seen across all different stages of treatment.

This is worth stressing again, this lack of hematocrit control is observed across all patients throughout the current treatment choices. And these are the types of patients in which the VERIFY study showed a very clear benefit from MIMRYLO. Undisputably, this is clearly a large unmet need for an RBC-specific agent like MIMRYLO and herein lies the strong differentiation in the commercial appeal of MIMRYLO.

The FDA-approved label for MIMRYLO is very broad and allows it to be used as a monotherapy or in combination with any other therapy for PV. MIMRYLO can be expected to be used at each step of the treatment journey. Lastly, I would like to mention that PV is a very slow growing and progressing disease with a median survival of 14 years.

And following diagnosis, patients often require lifelong chronic therapy. The data from our long-term Phase II REVIVE and THRIVE clinical studies have shown excellent persistence. A total of 46 patients who completed the randomized portion of the REVIVE study transitioned to the open-label extension or THRIVE study.

Among these, 96% or 44 out of 46 patients were still on MIMRYLO at 3 years and 89% or 41 out of 46 patients were still on MIMRYLO at 4 years. This speaks to the longer-term patient choice to remain on therapy and how we expect MIMRYLO to be used as a chronic long-term therapy.

In summary, the FDA-approved label for MIMRYLO is very broad, and MIMRYLO can be expected to be used at each step of the treatment journey, both as a monotherapy or in combination with any other therapy for PV. Now we will have our CFO, Asif Ali, cover the partnership economics and the financials.

Thank you, Arturo. Let me start with our strategic partnerships as they are an increasingly important part of how we fund and build the business. Historically, we have relied on a balanced mix of equity raises and partnerships.

Today, however, the strength of our partnership model has reached an entirely new level. To date, we have earned approximately $1.2 billion in upfront, milestones and opt-out payments. We have also substantial future economics arising from each strategic partnership as noted here.

Starting with MIMRYLO, we are eligible for up to $875 million in future milestones and retain a tiered royalty of 14% to 29% on worldwide net sales. Takeda has publicly guided to peak sales potential of $1 billion to $2 billion for MIMRYLO. For ICOTYDE, we have another $580 million in potential milestones.

We retained 6% to 10% in royalties with HSBC estimating a peak sales potential of greater than $10 billion with analyst consensus also in a similar range. So across these partnerships, we retained substantial participation in the commercial success of both MIMRYLO and ICOTYDE.

Now with that as the backdrop, the next slide highlights our current cash position as well as the additional payments triggered by the approval of MIMRYLO and the significant milestone opportunities that we just discussed. As for specifics, we reported cash, cash equivalents and marketable securities of approximately $850 million as of June 30, and approval of MIMRYLO triggered additional payments totaling $275 million, which further strengthens our balance sheet.

Beyond that, we remain eligible for up to an additional $1.5 billion in combined milestones for the 2 products as well as the royalties we mentioned in the previous slide. So to sum up, our strong financial position, together with the potential future cash flows from our partnered assets leads to 3 important outcomes.

First, it gives us the ability to invest aggressively in the next generation of our R&D pipeline assets, which remains our top priority in terms of capital allocation.

Second, this financial strength should provide substantial support for our planned R&D funding requirements, and we do not anticipate the need for an equity-based financing in the foreseeable future. And third, based on our current estimates for future cash flow, we will have the flexibility to consider potential capital returns to shareholders in the form of share buybacks over time. With that, let me turn the call over to Dinesh for some further perspective on our strategic position. Dinesh?

Thanks, Asif, and let's go to the next slide. The successful approval of 2 first-in-class peptide drugs, MIMRYLO and ICOTYDE, coupled with 2 successful pharma partnerships have created a unique combination of ample validation of Protagonist emerging leadership in the field of peptide pharmaceuticals, and it has also created a strong financial base to support our future R&D pipeline.

In a way, we have had a very successful past in the form of approval of ICOTYDE in partnership with J&J, a very secured present with the approval of MIMRYLO in partnership with Takeda and amazing prospects of a much stronger future with a wholly owned pipeline addressing commercial markets valued at over $100 billion. At this stage, let me invite our Chief Discovery Officer, Dr. Ashok Bhandari, to give an overview of our thriving R&D pipeline. Ashok?

Thank you, Dinesh. So unlike MIMRYLO, where we embarked on a totally new hypothesis, our current R&D pipeline is exclusively based on clinically validated biological pathways, thereby derisking our programs and offering higher probability of success compared to the industry norms.

Also, most of our projects are peptide-centric, where we have proven expertise and established proprietary platform. Our pipeline is focused in the area of inflammation and immunology, obesity and hematology. The [ I&I space ] is currently dominated by major blockbuster category injectable antibody drugs. Our long-term vision here is to revolutionize the whole sector by offering an oral peptide therapeutic option, one that is similar in the efficacy and safety to the injectable antibodies, but strongly differentiates itself by offering a convenience of a daily oral pill.

Our first target in the [ I&I space ] was IL-23 pathway, and ICOTYDE is now already leading the race as a first-in-class oral peptide therapy for psoriasis with multiple other potential indications underway. Our next target is IL-17, where the injectable IL-17 antibodies like BIMZELX and Cosentyx have a strong foothold in multiple indications like psoriasis, psoriatic arthritis, hidradenitis suppurativa and spondyloarthritis.

PN-881, our oral IL-17A and IL-17F antagonist recently completed a Phase I clinical study and the encouraging results informed our decision to pursue a comprehensive Phase II psoriasis study, which we expect to initiate in the first quarter of 2027. Our third target is in the IL-4 pathway, where we have a similar aspiration to offer an oral pill for chronic indications like eczema and asthma, where the current treatment options are dominated by injectable antibodies like DUPIXENT. In the obesity space, the peptides tirzepatide and semaglutide are the clear dominant players, although oral Wegovy and oral small molecule Foundayo have started creating oral optionality for patients.

PN-477, our GLP-1, GIP and glucagon triple agonist program is advancing in Phase I with the subcutaneous formulation with the oral Phase I development plan in the first half of 2027. Injectable triple agonist like retatrutide offers the strongest weight loss observed to date.

So the hope here would be that PN-477 could be a once-a-daily oral pill that could provide maximum weight loss. PN-458, our oral GLP-1, GIP dual agonist is currently in IND enabling studies. And we are also advancing Amylin Mono and Poly-Agonists assets through lead optimization. The field of anti-obesity agents is rapidly evolving. And our strategy is to have a broad portfolio of oral incretin and non-incretin agents against well-validated targets that could offer strong differentiation and improvements over current treatment options.

And now moving away from more prevalent indications to our efforts in the rare diseases. PN-8047, our oral Hepcidin Mimetic is expected to enter Phase I in the first quarter of 2027. Building on the deep expertise in the hepcidin pathway that ultimately led us to MIMRYLO. With that, now I will hand it over to Dinesh.

Thanks, Ashok, for that excellent overview of our amazing R&D pipeline. A common and critical feature about most of the R&D programs that Ashok described is that a Phase I clinical study in itself could provide an early clinical POC, thereby providing a steady stream of data readouts early on and allowing us to prioritize these programs in a very time and cash-efficient manner.

Both the I&I and anti-obesity disease areas belong to mega blockbuster category drugs that are best commercialized in our opinion by large pharmaceutical companies. So obviously, Protagonist will have a clear preference to structure strong partnerships at the right time and with the right economic terms for these assets and programs. But unlike where we were a few years ago, we now have the financial resources and in-house development expertise to take our assets much further in development and thereby generate significant higher value in potential partnerships.

On the other hand, in the rare disease category, we may be inclined to consider maintaining an independent path all the way through development and NDA filing. So to conclude then, in summary, today's approval of MIMRYLO represents another defining milestone for Protagonist, our people and our platform.

For the second time this year, an FDA approval has further validated the strength of our platform and our ability to generate differentiated first-in-class medicines addressing unmet needs and with meaningful therapeutic and commercial potential.

We believe this is just the beginning and not the culmination of a new phase of innovation and value creation for Protagonist as a biopharmaceutical company with expertise in peptide therapeutics. I would once again like to congratulate the Protagonist and Takeda teams whose dedication, commitment and collaboration made this important milestone possible.

I want to recognize the investigators, study teams, site staff, caregivers and most importantly, the patients who participated in the MIMRYLO clinical development program. Their contributions were very essential in bringing this important new treatment option to patients with polycythemia vera. And with that, I will now ask the operator to begin our Q&A session. Operator?

[Operator Instructions] And our first question is from the line of Alex Hammond with Wolfe Research.

Congratulations on the approval. So I guess given what appears to be a pretty broad label for patients, how are you thinking about prescriber willingness to adopt this therapy in the frontline setting likely on top of phlebotomy? And I guess, what are you and Takeda's expectations for adoption in treatment-naive patients as well?

Thanks, Alex. Yes, indeed, it has been a great outcome. And -- we are thrilled that it's a very broad label and a clean label. And we expect this to be -- MIMRYLO to be used all across the PV patient population. It's a drug for all comers because the key criteria is erythrocytosis. And as our whole world -- real-world patient data suggests, this is a kind of condition that is prevalent during all stages of treatment and through all levels of progression of the disease. But I'll also have Arturo, our Chief Medical Officer, weigh in and make some comments.

Yes. Thanks, Dinesh. As Dinesh mentioned, there's real-world data that shows that with the currently available treatments, about 78% of patients do not have hematocrit below 45 at any given time that you assess them during the course of their treatment. And there is where the unmet need is really lies.

One very important aspect about our study is that it allowed the principal investigators to employ whatever they thought was the best standard of care for their particular patient. And despite using the standard of care, these patients were requiring very frequent phlebotomies, which are associated with adverse events and iron deficiency. So to answer your question, we believe that MIMRYLO is an add-on treatment, and it can be combined safely with cytoreductive therapy and particularly with phlebotomy as needed.

One of the things I would say is this is a novel unprecedented therapy. So there's always a curve of getting adoption of something that's novel and game-changing like this. But that being said, one of the things we have going in our favor vis-a-vis adoption is the fact that people feel better. And when you're a practicing physician, it doesn't take too many patients being treated who say, "Oh, this really made me feel better, my fatigue, my ability to function, et cetera," for you to want to prescribe it to more patients. So I think that's going to really help the commercial aspect of adoption and having that in the label really aids in helping us with that message.

I mean, as you know, one of the fatigue measurements has made it into the label in the efficacy part of the label. And this is the first time that has ever been -- that it has ever happened for a drug related to PV treatment. We believe that is a big win. And at the end of the day, quality of life matters the most. And this drug clearly has an impact over that. So.

I just want to second that. Right now, the experience with rusfertide is limited to the principal investigators across the world. But when you talk to them and they share the specific stories of their patients, some of whom were unable to work before starting treatment on rusfertide and then go on to not only feel better, but go back to work.

These patients -- these doctors are waiting for the approval so they can put other patients that they have who didn't make it into the study. I think as physicians get experience with the use of MIMRYLO and they see that not only does it achieve the goal of controlling hematocrit below 45%, literally 24/7, but also improving how the patient feels and functions with their polycythemia vera, we anticipate that physicians will want to offer this as part of the standard of care and one of the treatment options that they can jointly decide with the patient on how best to treat their PV.

The next question is from the line of Evan Seigerman with BMO Capital Markets.

This is Conor MacKay on for Evan. I'll offer our congrats on the approval as well. Maybe as a quick follow-up to the last question, appreciating that Takeda is in the driver's seat commercially. We were just wondering if maybe you can speak to your view of the potential uptake trajectory for MIMRYLO.

What do you see as the biggest potential frictions and synergies versus currently approved agents? Are there any low-hanging fruits here? Or is it really all about broad adoption?

Yes. I think, I mean, as you know, Takeda has provided formal guidance in the range of $1 billion to $2 billion peak annual sales for the drug. What I would quickly add is like this is the guidance that was, of course, provided even before we had the Phase III study results, and those results were outstanding and before we got this amazingly broad and clean label. So time will tell.

I would also point out that this is not competitive with other drugs or therapies. The studies that was done with standard of care plus or minus are rusfertide as it was called at the time. So this drug can be used in any patient who has erythrocytosis. And as we know in the literature and from our own work that the vast majority of patients who are on drugs or phlebotomy alone do not have control of their hematocrit.

So we don't see this as competitive. In fact, some of these drugs that were used in our Phase III study have their own toxicities. So doctors may be interested in thinking about other types of combinations in the future.

I mean in a way, well, this is a first-in-class medicine of its type, right? Until now, there has been no erythrocytosis-specific agent for this disease, which is very erythrocytosis-centric. And this condition of uncontrolled hematocrit is there in about 78% of the patients. So it's a major unmet medical need that MIMRYLO could be addressing. So I wouldn't be surprised if the early adoption and eventually the peak potential exceeds our expectations.

I just wanted to add that the other cytoreductive treatments because they affect the white blood cells and platelets have potential to cause leukocytopenia, like low white blood cells and low platelet counts. And with -- if the main problem for a patient is erythrocytosis, now we have a solution that can address the erythrocytosis.

The next question is from the line of Tara Bancroft with TD Cowen.

I also want to offer my congratulations on this really remarkable accomplishment. So I guess the one thing that would be really helpful in clarifying with you guys is on the blood count monitoring. Maybe from a patient perspective, how much time is typically required at these visits in order to do that? How many -- what proportion of patients do you think will require like 2 versus 4 weeks of monitoring?

And how long do you think the monitoring period could possibly take? And I asked that because of the 8 weeks or so stability that you observed in the clinic. So maybe just some more details in general on that would be really helpful.

Yes. The way I would answer it is like it's very much within the norms of whatever requirements are there currently for other agents used for treatment of PV. But maybe, Arturo, you can elaborate a bit further.

Yes. As you mentioned, the monitoring of every 2 to 4 weeks is primarily during the titration period. But what we saw in the study is that patients achieved stable counts within 8 weeks. And then as the patient is being followed through a longer period of time, the frequency of monitoring becomes less and less.

So in our THRIVE study and REVIVE study where patients have been on treatment 2, 3 years, their blood counts are only monitored every 12 weeks. And so this is no different than the way blood counts are monitored for any of the other treatments that are available for polycythemia vera. It fits right with what is the standard of care for these patients.

The other thing that limits us in that regard is this drug has a very quick pharmacodynamic effect so that when you change the dose up or down, you see the effect of that change very quickly. So you don't have to wait weeks and weeks to see what happened. You know at week 1 and week 2 after making a change directionally whether you've made the right change and now for too much, et cetera.

So that's what limits the titration period is getting to the right dose is relatively straightforward because the time to see the effect of a dose change is very limited.

The next question is from the line of Richard Law with Goldman Sachs.

Congrats on the approval from me as well. So given that monitoring and titration period that you required that you guys mentioned, do you anticipate the need to be -- to do this through the buy-and-bill process initially for some time before that can get shifted to patients to do the at-home administration? And if so, like how long do you anticipate that could last?

That's really between the patient and their doctor. Some patients, if you're in the rural area, et cetera, the CBC is the oldest blood test in the world, and it includes both the platelet count, the white count and the hematocrit. So in one simple blood test, which again is probably one of the most common tests known to the laboratory world. You can get all 3 things. So how it's done is between the patient and there's no requirement that it be in the office, let's put it that way.

And in the vast majority of patients on the clinical trials, it was self-administered, especially once the patient had been on it for a couple of months.

Yes. And Richard, it's a good point, like eventually, the idea here is the convenience of a self-administered drug at home.

The next question is from the line of Roger Song with Jefferies.

Congrats for the dual approval within a year, also which has a very clean, great label. So maybe just would be curious to hear about the feedback about the -- particularly the dosing regimen as we already discussed a little bit on the titration period and then weekly dosing and then some adjustment required for those kind of side effects.

So how should we think about the durability and then also the compliance for the MIMRYLO in real world versus the clinical trial, understanding a very low discontinuation during the trial?

Yes. I mean MIMRYLO has garnered wide range of experience through the Phase II REVIVE and THRIVE and the Phase III VERIFY studies, right? And what we can say in broad strokes is that for most of the patients, either a 20 mg or a 40 mg dose will do the trick. And of course, there will be situations where someone may require a very low dose or somebody may require a high dose.

So in the beginning, those things, it takes maybe a few weeks, a few months to settle down. But after that, things are pretty predictable. What we don't want to do is overdose because that would make patient anemic just based on the consequence of excessive pharmacologic, right, that sort of thing.

Yes. And Roger, as a reminder, when we finished up the REVIVE study and patients and the PIs were informed that the study was coming to an end, we were asked if we could find a way to continue treating patients. And that's why we developed the THRIVE study because there was very high demand from the patients who have already been on treatment for 2-plus years who wanted to continue on treatment. I mean I think that speaks volumes.

And remember, Roger, part of that is because perhaps because people are feeling better. I mean, both Arturo and I are trained as hematologists, oncologists, and we don't get to give drugs very often to patients that actually make them feel better. And so if, in fact, you look at some of the patient reported outcomes we saw, perhaps that's part of the explanation for the persistence of this drug.

Real world is never as good as clinical trials, as you point out, but this has a lot of reason to believe that it's going to be -- have a good persistence relative to other treatments that are used in this disorder.

The next question is from the line of Brian Cheng with JPMorgan.

Truly congrats on the approval here. I'm curious if you can just kind of walk us through how you think about the MIMRYLO trajectory in your anticipation. I understand that the end game is really about product adoption. But how should we think about the early wave of adoption? Is that coming from those patients who have tried rux or falling off interferon? Just curious how we can think through that early part of the dynamic. And then second is really about pricing. Have you disclosed the pricing? I don't know if I missed that and also the gross to net for this asset?

Thanks, Brian. I'll answer the second question first. In terms of pricing, that's something that Takeda will share at the right time. And in terms of your first question, I think at some level, it's going to be dictated by the doctor and the patient. But we take great comfort in the fact that the label is very broad and it is very clean.

So it should be a drug for all comers. And as you well know, erythrocytosis is a very strong common undercurrent in all patients who are going through all sort of treatment regimens, right, whether it's Jakafi or BESREMi or hydroxyurea or phlebotomy alone. So I think where it pops up first and that sort of thing, I think it should all play out over a period of few quarters, in my opinion.

And also, Brian, the trials are coming to an end. And so the THRIVE study, we expect for all patients to complete treatment in January of next year. And then in VERIFY, as patients continue to make it through that final part of the study, what I hear from the PIs is that then they will go to commercial supply.

But also as the data was presented at ASCO, we started to get quite a bit of request for expanded access. And so although we didn't have an expanded access program, I think the doctors are now learning more and more. And even as of -- from Friday, I've received e-mails and notes on LinkedIn from doctors who want to know more about MIMRYLO.

I would say 2 things, Brian. One is we would never speak for Takeda in terms of trying to predict what the trajectory is going to be. That's really in their hands. But I would make a couple of relevant points. One is it's a highly targeted audience. So this is -- every launch has its A, B and C doctors, but this MPN treaters are a very targeted audience at the very top of the pyramid.

And the second point I would make is because this population of patients are typically diagnosed in their 50s, they're extremely active on the Internet. And I'm sure you'll find plenty of stuff after we launch here about patient experience on [ theater ].

Great. Maybe just one quick one to -- on just the finance side. You guys talked about the potential -- well, actually reiterating the potential to return capital to shareholders. Do you have a better sense of the trigger point and also whether -- what the allocation is dedicated to the return to capital -- return capital to shareholders?

Yes. We have always maintained that first things first. So one of the first things was rusfertide or MIMRYLO get approved. So that has happened as of last Friday. The second thing was like our top priority is R&D funding. And as Ashok gave an overview, you can see it's an amazing pipeline.

So that's our topmost priority. But yes, we do believe that with the revenues that we expect to flow into the company from 2 partnerships around these 2 products, there should be an opportunity for proper capital allocation, including share buybacks. But Asif, you want to make any further comments?

Yes, only to add to what you just said, I mean we continue to review the size of the buybacks and considering the investment requirements, which is the key capital allocation requirement for us internally. And we have disclosed previously that a potential announcement by year-end. So that by year-end timing is still, in my mind, the likely time line for an announcement.

Yes. But in the same breath, we should also add that Protagonist should really be viewed as an R&D story rather than a share buyback story because it's really the strength and the success and the validation through these 2 drugs and now going for repeat performance and betting on the R&D pipeline. That's where the emphasis should be. The share buyback, I don't want to downplay it, but that's almost like a side show.

The next question is from the line of Kripa Devorakanda with Truist Securities.

This is Alex on for Kripa. And congrats on the approval and the broad label. Questions from us. Are you able to comment on the specific sales thresholds that drive the movement to the royalty tiers? And should we think of the royalty tiers as being the same across global sales? And also for the $275 million approval-related milestones triggered by the approval, how much is expected to be recognized or received in the third quarter versus later periods?

Yes. Thanks for the question. I mean as for the -- we've not disclosed the specific tiers, but we have disclosed that it is a 21% weighted average royalty at $1.5 billion and 29% for annual sales that exceed $1.5 billion that give you -- that should give you a reasonable metric for modeling this out. I'm sorry, what was the second part of your question?

On the approval-related milestones of the $275 million, when will it be recognized in the third quarter or for across later periods?

Yes. And that's something, as you can imagine, is always an interesting complicated accounting answer. So we'll look into that. We do expect to recognize at least a significant proportion of that in Q4 -- or Q3, sorry.

The next question...

$200 million is the opt-out fee, so that's straight forward, but the $75 million is the milestone.

The next question is from the line of Geoff Meacham with Citi.

This is [ Misha ] on for Geoff. Let me add to the congratulations as well. On launch, maybe can you talk about the top like 3 or 4 kind of launch indicators investors should kind of watch over the next 6 months that would tell us commercialization is kind of tracking ahead or in line with expectations? And how prepared do you think are the payers and treatment centers today relative to where they were at the time of NDA submission?

Yes. I think, look, if you look at our first drug ICOTYDE, right, and the details that our partner, J&J is sharing, it's fair to conclude that it will take about 6 to 12 months from launch to get into some sort of a rhythm or a steady state, right? So similar thing can be expected over here.

And as we have mentioned before, those are the specifics that our partners will be sharing down the road. And we will be, of course, collecting the checks, but kind of exclusively focusing on our emerging R&D pipeline.

We're very fortunate that Takeda has been very disclosive about this program. They labeled this as one of their 3 most important launches for the future of their company. And so just like J&J with ICO, we expect for them to do the talking and be wanting to be disclosive given the importance that they've mapped out for this -- to the success of their pipeline.

And then maybe about the payer question on their readiness.

We think Takeda is doing a great job and it's fully ready to launch this thing immediately. This is a novel agent. There's nothing else like it. There's a tremendous unmedical need that makes people feel better. We do not think there'll be tremendous pushback with payers in a...

I mean it's -- as you know, PV is a rare disease by definition. And so that in itself commands some concessions in the review process. We have priority review, and it demands -- it is typical to lean towards premium pricing. That's the whole incentive-based system that is set up for attending to rare diseases. So we believe there should be no exception. And if you look at the pricing of the recent drugs that have been launched in this area, that can give you some rough guidance. But once again, one has to wait for Takeda to share those kind of information.

I would add that with the label being so clean, no black box warning and for the first time, having a key secondary endpoint demonstrating improvement in fatigue and improving how the patient feels and functions. This is a different -- very differentiated compound, definitely differentiated from the other cytoreductive therapies.

Next questions are from the line of Thomas Smith with Leerink Partners.

This is Nat Charoensook on for Tom Smith. Congrats on the approval. So just one question from our end on dosing. What percentage of patients do you expect to get doses above 80 milligram that will require administration across 2 days?

That is extremely, extremely unlikely. The vast, vast majority of patients are all like in the middle range. And we saw that in REVIVE and VERIFY. So it's a very small number, less like 1% or 2% that require more than once a week administration.

That's what makes it so easy to titrate is that the patients cluster so largely in a very narrow range that is not that much higher than the starting dose.

The next question is from the line of Douglas Tsao with H.C. Wainwright.

Congratulations, Dinesh. It's been a great journey. Two questions for me. First, for MIMRYLO, I'm just curious, do you expect that the availability of this to treat erythrocytosis in PV will sort of allow clinicians to sort of broadly optimize treatment with other agents.

And so that will sort of be a real motivation in addition to sort of patients feeling better, just broadly, clinicians will see an opportunity to better treat PV patients.

So it's a great question. And I would say at the end of the day, the physician is going to be the best judge over here in terms of what is in the best interest of the patient. We would like to point out, though, that the approval is for treating erythrocytosis in all type of PV patients irrespective of their stage of disease.

Now -- and clearly, so this drug's job is to control RBC synthesis only, right? And if there are instances, especially in the later stages of the disease, where it's important to manage the WBC and platelet counts, then that is where other treatments become equally important.

Yes. I'd like to add that the most commonly used cytoreductive therapy in the VERIFY study and REVIVE and THRIVE is hydroxyurea. And so these patients were being managed with hydroxyurea and the hematocrit were poorly controlled. And why was that? Probably because if the patients were given more Hydrea, then they could develop neutropenia or anemia or thrombocytopenia, but more likely neutropenia.

And so now you have a situation where MIMRYLO can control the erythrocytosis and if there's a need to treat leukocytosis, then that would be a rationale for adding another cytoreductive therapy. But it's hard to manage these patients with Hydrea if it's causing neutropenia, for example.

We wouldn't be in the business of trying to convince doctors to change anything about what they're doing with the existing therapies. But that being said, doctors and patients are well aware that the existing therapies have dose-related toxicities. So that could be a motivation for seeking an alteration in that dose. But we're not going to be talking about that or promoting that in any way.

But what I see potential for, remember when we mentioned the real-world data shows that about 78% of patients will have elevated hematocrit through the course of their treatment, wouldn't it be great from the patient perspective if those numbers came down a lot. And that's where I think the unmet need is.

I mean the other way to state it is like, look, if the core problem is erythrocytosis. You don't need to use a cytoreductive to control that. You can use an erythrocytosis-specific agent, which is MIMRYLO. And we believe that, that is the most common and dominant aspect of polycythemia vera as a rare blood cancer disease.

Okay. Great. That's very helpful. And Dinesh, obviously, as a company, you've now sort of had success with sort of 2 sort of strategies in terms of drug development with ICOTYDE, you sort of were able to take a proven mechanism and convert it to an oral peptide.

Rusfertide obviously, was sort of a novel mechanism I guess when we look at your pipeline, 881, the IL-4 as well as potentially some -- and the obesity assets, you sort of leaned into the improving the delivery of proven mechanisms approach.

And I'm just curious, is that sort of where most of the focus is going to be? Or do you see an opportunity either as an independent company or potentially partnering with others to target sort of novel or innovative mechanisms as well?

That's a great question, Doug. And what I would say is like Protagonist is still as a mentality of a biotech start-up. We are bubbling with new ideas, new aspirations. So I think it's going to be a combination of both. In today's R&D pipeline, you're right, it is dominated by the true and proven biological pathways. But these are the low-hanging fruits, but with a blockbuster kind of potential, right?

Our aim really is to revolutionize the whole treatment landscape of all sort of chronic diseases. A chronic disease means patients have to take a drug for a long period of time. And if you look at it, almost all chronic indications are dominated largely by injectables. So what we are offering a new peptide as an oral pill the efficacy and safety of the injectable antibodies and the convenience of an oral pill. That is going to be huge and highly differentiated and highly desirable, right, for these patients suffering from chronic diseases.

Having said that, of course, we are scientific creatures. We have a lot of new ideas. And so that is also something that is growing in our R&D engine. And over the course of time, we'll be able to share more information around that kind of novel targets and approaches as well. And fortunately, we have the financial bandwidth to cover all of those kind of approaches and targets.

Our next questions are from the line of Catherine Okoukoni with Citizens.

This is Catherine on for John. I had a question about sort of the initial target market. I know that you guys have said that this is both kind of add-on therapy potentially monotherapy. But as far as the $1 billion to $2 billion peak sales estimate, does that include monotherapy and kind of what portion of naive patients are?

Yes. I would assume it includes all type of patients, polycythemia vera patients. But what I can also point out is like, I mean, this is a market projection by a pharma company, Takeda. This is a projection that was made before the outstanding Phase III results were obtained. And this is a prediction that was made before such a broad and clean label with no black box warning, no carcinogenicity components was issued.

So I think we couldn't have asked for a better outcome, and we will just have to see how things progress in real practice.

And one more thing to add is that we have done analysis looking at all the different subgroups, low risk versus high risk. Older versus younger, gender. And every subgroup benefits from treatment with MIMRYLO. And again, with the clean label in absence of a black box warning, I think this will be a very attractive agent for patients who do not want cytoreductive therapy.

If you look at our Phase III study, the VERIFY study, you'll see that the demographics of who's on cytoreductives and which cytoreductives they are on exactly mirrors what you would see from the overall marketplace, indicating, a, that both cytoreductive and non-cytoreductive patients still have a problem with erythrocytosis in big numbers. But two, that with amongst the different drugs, again, we get the exact same use patterns you do from the overall market.

The next question is from the line of Yun Zhong with Wedbush.

So I wanted to ask about your oral candidate, 8047 for the -- potentially for the same indication of PV. So if Phase I data do support Phase II initiation for PV and can you talk about -- I know it's early, but can you talk about maybe a potential patient or target patient population study design?

And is there any possibility that you can leverage your experience or data from rusfertide to expedite the pathway? And in terms of strategic thinking, does Takeda have the first to negotiate right for the oral compound, please?

Yes. No, I'm glad you noticed the oral hepcidin. But MIMRYLO is already approved. The oral hepcidin -8047, that's at a preclinical stage. And so MIMRYLO is a first-in-class drug of its type. So it's going to have exclusivity in terms of the market for a good number of years, whether it's our drug or something else. And we like that spread out. But in the spirit of like what could come next, as you know, through our other programs, we are big believers of oral peptide drugs.

And so here, we have an oral hepcidin functional mimetic. And you are right that the Phase I will give us a good clue about how the drug is performing by just observing the effect on serum iron levels in healthy volunteers. And then that should get us going towards exploring polycythemia vera as a major indication in a Phase II study.

And we certainly would leverage our learnings from rusfertide. I think that we have a large safety database targeting ferroportin with rusfertide. And given that our MOA would be very similar, except this would be an oral agent, the whole targets already has validation, not just of efficacy but safety. So we think we would be able to leverage that in our discussions with the FDA.

You're right, Takeda does have the right of first negotiation. But of course, that's only if we choose to partner it. And if we choose to partner it, then, of course, with that right, we'll be certain that we get the market price since they'll have to negotiate against others, if you will.

The next question is from the line of Kaveri Pohlman with Clear Street.

On the approval. So the approved formulation allows for self-administration, but are there still plans to bring an autoinjector presentation to the market? And how much additional development work would be required to support that newer formulation and any time line on that?

And the second question is about the VERIFY. You have additional open-label data from VERIFY. Is there any time line for that as well that you plan to report? And are there -- besides this open label, are there any Phase IV study you plan to conduct for or Takeda plans to conduct for rusfertide to collect real-world efficacy and safety data that could also potentially help support the development of 8047.

So thanks, Kaveri. Those are a number of excellent questions. I may ask you to remind us of the questions. But I think the first question, in terms of that, what we believe that the next thing that could come down the pike is an auto-injector for administering the drug, but that is something that Takeda can share in more depth at the appropriate time.

And then as far as publication, yes, the results from VERIFY are under review. Stay tuned.

And last but not least, now long-term data collection and those sort of things. Those are the things that would be good to have and that kind of thing. But I would like to state that there is no formal requirement from the FDA for conducting a Phase IV study, right, Arturo?

That's correct.

Yes.

And there will be more details on that. But again, the label is very clean and the post-marketing requirements are all contained within what we're already doing.

But whether or not Takeda chooses to do additional studies for their own purposes, that's up to them.

And we will also be publishing the final results of the REVIVE study that gives you some of the long-term follow-up that I mentioned.

At this time, there are no further questions. And I'll now turn the call over to Dr. Patel for his closing remarks.

Great. Thank you all again for joining us this morning. The approval of MIMRYLO is a proud and historic moment for Protagonist and an important validation of the science, the proprietary platform and the amazing team that helped each other bringing this medicine from discovery to patients.

With 2 FDA-approved partnered medicines, a strong financial foundation and a wholly owned pipeline advancing across inflammation and immunology, metabolic and hematological diseases, we believe Protagonist is entering an exciting new phase of growth and value creation.

Thank you again for your continued interest in and support of Protagonist. Have a nice day.

Ladies and gentlemen, this concludes today's presentation. Thank you once again for your participation. You may now disconnect.

Let's kick off the next session. It is my pleasure to welcome Protagonist Therapeutics. And with me today is Dinesh Patel, CEO of the company. We have a lot to go through. There's a lot of excitement with the product launches and the pipeline that we're going to hopefully learn more later this year. Before we get to them, I'm going to turn it to you for opening remarks.

Yes. Well, first and foremost, thanks for inviting us. That is something we truly appreciate. And hopefully, they will continue.

But I think Protagonist is at an unusually interesting and positive space right now. If you think about it, we are now a commercial company through our drug ICOTYDE, partnered with J&J. We could be looking forward to potential approval of rusfertide in the third quarter. That's when the PDUFA date is in August. And the Phase III data has been outstanding. So that is partnered with Takeda. And if that gets approved, then I guess we'll be a biotech with 2 approved drugs this year. That's nice statistics.

And then the other thing we like to point out is like -- with the success of these 2 drugs, now we are going for repeat performance. That's what our R&D pipeline is about. And if you think about it, the probability of success in our case, I would like to believe, is significantly higher than whatever the norms are for our industry for multiple reasons, right? Our biology targets are very validated. So that's one level of derisking.

Our success with ICO and rusfertide speaks volumes for validation of our platform and our expertise in the field of peptides, right? So that's what it is sharing as well. So it kind of adds up in a nice way, the derisking. And last but not least, I mean, if you look at the statistics of peptides versus small molecules, peptides have higher success rate in through clinical development and through approval compared to small molecules. So things are lining up for us.

And then last but not least, financially also, there is a very big positive for the company. It's like we have ample cash and assumptions of cash coming in, through the royalty arrangements and milestone arrangements both with J&J and Takeda. So we believe that we won't have a need for a regular equity raise in the foreseeable future. And if at all anything, we would like to reward our shareholders with some share buyback kind of approaches down the road.

Okay. Got it. So you mentioned -- yes, regarding the share buyback, I think you mentioned that back in March. What do you need to achieve for that to occur? Do you see this as like a one-time event? Or do you see this as more or less a recurring event?

Yes. So -- we are waiting for the approval of rusfertide because that will really cement our revenue projections. That's the key gating factor right now. And we are not fond of onetime share buybacks. If we do it, we'll do it the right way, have a steady share buyback program.

I see. Okay. So 5 years from now, how do you see Protagonist as a company? Will you ever consider building a full-side commercial team that can support specialty products? And also what modality and therapeutic areas will you want to expand to or not expand to? I'm thinking about like oncology, CV and things like that.

Yes. Those are great questions. And I remind myself and others that, look, with rusfertide, we were already in Phase III before we did a wonderful partnership with Takeda. So yes, for rare diseases, niche markets, we are big believers of -- therein lies the possibility of taking it all the way through commercial. And maybe with the oral hepcidin, the second gen drug that we have, we may aspire to do something like that. And having said that -- and we have the financial strength to do all that. But we are also very pharma friendly, and we have pro partnership. And we believe that partnership with pharma, it's not just about money.

Much more than money is the expertise and the breadth of expertise and scale and all that, that they bring to the table. So we will be always eyeing for partnerships for bigger indications. So for example, with the obesity one, I have no illusions of doing Phase III studies on my over own there, let me put it in that way. So we take things to clinical POC on our own and then for niche indications and niche products, we can develop it all the way through. But for others, we'll be running.

Okay. More questions to come on those topics. So let's switch gears to ICOTYDE. J&J is saying that ICOTYDE could become one of its most successful drugs in the history and potentially grow now greater than $10 billion peak sales. Given that excitement and the launch progress so far, what is your own base case regarding the peak sales? And I'm assuming that you've done your own market research you're planning for the royalty stream coming in. What have you found in your own research?

Yes. I mean ICP is a great product, right? I mean it's not only the first of its kind. It's the only one of its kind, the oral IL-23 receptor blocker that has been approved. So -- and the early indications regarding the launch are incredibly positive. Like yesterday, there was a fireside chat with J&J and the remarks are incredibly positive. I mean if you think about it, the drug was approved on St. Patrick's Day, March 17. During their first earnings call, which was April 14, they claimed more than 1,000 prescribers. Yesterday, they shared it's more than 4,500 prescribers.

And really, they are getting the market share both from experienced and naive populations and the switch from other orals and injectables to orals, all kind of -- I mean, these are early beginnings, but the launch is incredibly powerful. And if you look at our research analyst estimates that the projections are kind of in the $10 billion, $15 billion sort of range of peak sales.

But I think the data that is really coming out -- it's still early days, but it appears very promising. So I think that is very satisfying. J&J is doing an outstanding job. And this is an outstanding drug with an amazing combination of efficacy, safety and convenience. No other drug has all the 3 attributes. So that works in our favor. Right now, the approval is just for psoriasis and Phase III studies in psoriatic arthritis, UC and Crohn's are ongoing. And so it's value and market share can only increase over time.

And what is your expectation for peak sales?

What I would like to say is like my expectation or whatever number I may have in mind is not that credible. It doesn't have value. I would rather have the real numbers do the talking. And like I said, the research consensus estimates is anywhere from $10 billion to $15 billion. But if you look at Skyrizi, it's going north of $20 billion. And TREMFYA is not that far behind.

But over here, the important thing is like here, there is an opportunity to take the market share from injectables and also create a new market, right? The J&J marketing research suggested that 75-plus percent of those that are on injectable in the I&I space, if a good option was available, then they would switch. And I believe ICO is a great option. And half of the I&I population that is eligible for targeted therapy are not choosing anything because they don't like the current choices, don't like injections and don't like the choices that are available in the oral right? So I think this could be huge beyond our normal expectations. Time will tell.

Right, right. And I remember when we talked about this like back in February, I think you mentioned something that was interesting. You said that you see ICOTYDE besides as the first line for like new patient coming in and a great oral therapy. You see that it could be a switch where -- or maintenance switch, right, where patients on these injectable biologics -- and at some point and then you can switch as a maintenance. I mean do you see that playing out? I know we were -- approved and it was kind of the way to go in terms of what given that it's already in the marketplace and now having conversation with J&J and what ICOTYDE is doing, do you see that becoming more of a real scenario?

I mean human psychology plays a big role. And I would like to believe that with an injectable, just at a psychological level, you're going to feel like a patient, you're being treated for a disease or something like that, right? And for chronic indications, I'm like, yes, why do we want to feel that way?

And oral will give you the feelings of as if you're taking your daily multivitamin or whatever that kind of thing. And the convenience of an oral is just unbeatable. And you're right. I mean, people focus on where is the most efficacy. And I'm like, okay, once the disease is under control, right? And now it has stabilized and it's not going to flare up that kind of thing. The maintenance setting becomes the most critical. And time-wise, I mean, the induction phase is 3 months, 4 months, that kind of thing. The maintenance is the rest of your life, and that is where oral will rule.

Okay. I see. And then -- so I think in order to hit some of those numbers, I mean, a lot has to go right because you're talking about the best drug in potentially in J&J.

The success rate with IL-23 blockers like Stelara, Skyrizi, TREMFYA, it's 100% for psoriasis, psoriatic arthritis, UC and Crohn's.

Sorry?

Right? So there is reason for optimism for ICO.

Right, right. So in the next readout of the PSA, the psoriatic arthritis -- so that disease is becoming more of an IL-17 disease. I think you look at what's going on because they're able to address the joints as well as the skin. What is your expectation in that -- from that Phase III readout in terms of addressing both skin and joints?

So with ICO, I mean, J&J has done multiple Phase III studies, right? The pivotal registrational studies and then head-to-head comparison studies with the TYK2 inhibitor. So they have a wealth of data, and they have done a subpopulation -- psoriatic arthritis subpopulation patients within those psoriasis studies, and that has been presented before. And that data is very positive. And if you look at the translation success rate, that's 100% for IL-23 blockers from psoriasis to psoriatic arthritis. So we are feeling very optimistic about the outcome, obviously.

Okay. And then from a commercial perspective, like just kind of given that the IL-17s are becoming more of a trend, becoming more popular in the standard of care for psoriatic arthritis. How do you see the success, the commercial success in, say, how you compare that for psoriasis versus psoriatic arthritis or an oral IL-23?

I think if you look at the [ I&I pie ] and that kind of thing, it's fair to say that derm conditions like psoriasis, psoriatic arthritis. Out of it, psoriasis is a much bigger piece, psoriatic arthritis is a smaller component. But it kind of is split between IL-23 and IL-17 blockers for now. And then, of course, IL-23s will dominate in IBD and IL-17 will dominate in HS and spondyloarthritis that kind of thing. The nice thing with us is like we are covering both grounds like with PN-881, our oral IL-17, which is fully owned by us. So we are in that space as well.

Okay. Speaking of that, obviously, ICOTYDE as regarded a huge success from the protagonist platform. What do you -- I know -- so ICOTYDE was co-developed by you and J&J. What do you learn from that experience? And specifically, what -- from your platform and from what J&J's contribution was and that you can apply to the IL-17 development?

Yes. I think it's an excellent question. And the way to think about this is like to get to a drug, you have to discover it and you have to develop it, right? There is discovery and there is development. When it comes to discovery, our expertise is in discovering peptides. This is a journey we have started since 2008. So we know that very well. But we'll be the first one to admit that when it comes to discovery, each time it's a new beginning, right?

So the expertise, experience and efforts that go in the discovery part of IL-17 are totally different from IL-23. But once you switch to development and as early as preclinical development, definitely in clinical development, that is where you benefit from the experience of ICO, right?

So for example, the skin inflammation preclinical model, it's the same model for IL-17 evaluation -- IL-17 blocker evaluation that we had for IL-23. And in clinical development, I mean, the inflection point for ICO was the comprehensive Phase II frontier study, right? So -- there are learnings from that. So we benefit from those kind of things. It's like we can apply those learnings to our own PN-881 at the right time.

Right, right. So for ICOTYDE, did J&J help part of the discovery as well, did they help define a structure or look at different attributes or certain things that they have to meet? And was there anything that you can take away from that itself and apply to IL-17 like the binding affinity....

Like I said, the 2 targets are so different from each other that you just have to start from ground zero. And getting back to ICO, I mean, clearly, it has been a joint collaborative effort since 2017 and still going very strong. And we started the program in our shop all the way back in 2013. And if you look at -- yes, so it has been a joint effort. But like I said, with IL-17, it's totally a new ball game at the discovery end. In development, there are learnings that you can benefit from.

I see. Okay. And let's move to rusfertide because I do have more questions on IL-17 later. So let's...

Move to like the rapid fireside.

You guys have -- yes. So you have -- I mean, the PDUFA is coming out in August. You guys are already opted out of commercializing the drug. What is your expectation? I mean you guys have done a lot of work in that space and then that led to the decision to opt out. What is the expectation for you in terms of the potential peak sale based on your own market research?

Yes. I mean -- now the drug belongs to Takeda, and they will be the main spokespeople for this, and they have provided a conservative estimate of $1 billion to $2 billion in peak sales. So I'm not going to add anything further in terms of the guidance component. I think that's the right range to stare at this particular junction. What we are laser-focused on is the PDUFA date, is sometime in August. And let's see how things shake out. Hopefully, the drug gets approved and things will be off to a good start.

Fantastic. Okay. Have you done any health economic analysis during your opt-out like due diligence decision? And what -- anything that you learned that you can share?

Yes. I think with regard to the opt out, it was really a decision from a very different angle, so to speak, right? As you know, there was a $400 million opt-out fee. So I was like if I'm staying opted in, then I'm investing that money back into rusfertide instead I could have a better use of proceeds in our new R&D pipeline with that.

And especially because of the fact that if we opt out, then we get 3x higher milestones, close to $1 billion compared to $300 million plus, but more importantly, 14% to 29% royalty worldwide and the 29% kicks at anything over $1.5 billion. So with that kind of cut on net revenues, you're not leaving that much on the table in comparison to a 50-50 profit loss split. So the economics are very fair to both companies. And that was the main driver.

I see. Okay. And then how do you think it will be used initially in the commercial setting? Is it -- I mean, when you look across -- because you guys study rusfertide on top of the cytoreductive therapy, right? You didn't reduce that. It's really mainly for reducing phlebotomy. So in the beginning, maybe like how do you think this drug will be adapted? Is it going to be more of the, like, inadequately control patients? How many phlebotomy were they -- is there a threshold that you have to get on? Just maybe think about from that potential payer scenario.

Yes, sure. So what we found is like in PV is a very erythrocyte -- excessive erythrocytosis-driven disease, right? Per NCCN guidelines, you need to keep your hematocrit below 45%. And in PV patients, you have it over 45%, that kind of thing. So that's the basic definition of the disease. And we were just shocked that there was no erythrocytosis specific agent ever.

So -- and the classical treatment is phlebotomy. I think it's totally updated. It's very suboptimal based. I would like to make the case that [ phlebotomy ] is such a poor choice that was being made only because no good option was available, right? You are, first of all, with the blood draw, you are making patients very iron deficient that leads to terrible symptoms. And even your iron and blood levels go through a roller coaster ride. So there is so much unknown in the body of a patient.

And you can envision worsening of the [indiscernible] and all kind of things. So it's like, okay, people did what they had to do when nothing else was available, but we intend to change that mindset and approach through rusfertide, erythrocytosis specific agent. And in the clinical studies, if you look at the patient population that we were able to garner, it's very simple. It's like, hey, if you are not controlling your hematocrit and you continue to need excessive phlebotomies, then there is an issue over here. You're dealing with a very ineffective therapy.

And that is what rusfertide has been able to solve, right? So I think the utility is going to be very broad. It hopefully will essentially eliminate the need for a phlebotomy. And this is the first drug where actually a symptom improvements code as an official secondary endpoint in the study, right? That is huge as well. And we believe that is because like phlebotomy, it's -- you're taking iron out of the body. In our case, we are not taking iron out of the body. It just keeps recirculating. We are changing the distribution of the iron in the body.

Right. I see. And then when you think about it from a commercial setting, I mean, how the step edits are being implemented? Would you expect like step edit to hydroxyurea and maybe the interferons? Is there like -- and then have you thought about like -- I know you guys are not involved with the pricing research and decision from that. But I mean, is there like a price point where you feel like that would be the sweet spot where you can perhaps like not have all these stringent step edits to it? And then maybe like -- and then what would that secondary look like?

So there are a couple of questions in there. And one answer I would have is like, hey, EHA is happening this week. We have 4 posters on rusfertide. So if one wants to learn more about rusfertide, pay close attention to those posters. I believe there is a poster on how did the drug perform in the Phase III study, both in the low-risk and the high-risk population because that gives you an idea about like the spectrum of utility or the effectiveness of the drug throughout the whole spectrum of the patients and the treatment paradigm.

And in terms of what impact, if any, has on the cytoreductives or the doses and that kind of thing, I think we are sharing some of that as well, if I recall correctly. So I would say, yes, pay close attention to the EHA posters to learn more about rusfertide. And in terms of pricing and all that, that is really up to Takeda. But if you think about it, I mean, this is a rare disease indication. If you look at Jakafi or the latest entrant....

[indiscernible]...

So yes, [indiscernible] is a rare disease.

I see. Okay. Let's switch gears to IL-17. I know we had touched a little bit on it earlier. But going back to my previous question about ICOTYDE and what you've learned from it. Just looking at IL-17 itself, and you guys have -- obviously have a molecule that you already advanced to clinical development. What is special about this? Because it's not just the oral component because you can have an oral may not work that well. Is there anything unique about this besides being an oral peptide that you believe that you have confidence based on -- we saw that for IO or something that you can...

Look, like I said in terms of the learnings from ICO, in discovery, you start from ground zero with each new target. It is in preclinical and clinical development that you can benefit from some of the learnings.

But getting back to IL-17 as a target, first, I mean, if you look at the antibodies, they have already established the rules, and it's like the extent of inhibition of the target, that requirement is different for IL-23 blockers versus IL-17 blockers. So that's one difference to keep in mind.

The other thing I would add is like with IL-17, with the outstanding performance of BIMZELX, it's pretty clear that you need activity against both A and F isoforms. We believe we are the only or one of the few companies that have been able to kind of have that attribute in an oral peptide. And that is the uniqueness about 881, right? We have both A and F spectrum of activity. And guided by the antibodies, we have a good understanding of what level of target inhibition is needed. So in a way, in Phase I study, the drug exposure levels will allow us to determine if are fulfilling that criteria or not.

Right. And you mentioned BIMZELX, I was also [indiscernible]. Did you run sort of like the side-by-side comparison because other companies do that in the preclinical development where they just kind of run like competing assets out there and see how it performs against different metrics. Have you done that like with BIMZELX or others?

Yes. I mean, preclinically, there is only so much that you can do. And even if you do a lot, it carries very little value, right, at the end of the day. But we have established the preclinical POC in the skin inflammation model in an unequivocal manner. And typically, it's like, hey, if an antibody is available, so the cross-reactivity component plays a role, right? Sometimes you don't have antibodies that will be cross-reacting, let's say, to the rat model or something like that, in which case, then we cannot use. But if a competitor is available, we would definitely be using it.

I see. So you have done those analysis. We just haven't seen it yet. Okay. Got it. And then -- so since I think you mentioned that when you guys have the data available or when the trial completed, the Phase I trial completed, you will not share the data with the public? Is that still the case? Or are you...

And look, we are not trying to be arrogant or stubborn. It's just that we felt that previously, we were very disclosive of all of our preclinical data and some of the [indiscernible] pointed out to us that we were teaching too much to the competition. So then we are like, okay, we have something that is valuable. So let's be a bit secretive and tightlipped about it. That's how we are looking at it.

And again, we are not being arrogant, but it's like -- unlike most biotech companies, and we were in the same shoe a few years ago, but not anymore. It's not as if on the heels of good data, we'll be urging to do an equity financing. In fact, if at all, anything, we are saying we won't have a need for any kind of equity-based financing or money raise in the foreseeable future. So that necessity or need is not there as well.

But having said that, what we are guiding towards is like, look, the Phase I, we will see all the data in Q3, and that is the time when we will be ready to share our decision of the next steps with [indiscernible].

Right. So if the decision is positive then you said you're going to advance to Phase II. Again, we're in the dark. We're not going to see what that data looks like. What can we assume? Should we assume that the data is comparable to BIMZELX for injectable biologics? Or should we assume more like ICOTYDE profile where it may not be as potent as injectable biologic, but it's good enough. Like how should we think about it?

Yes, yes. So there are 3 outcomes: a no-go, in which case, it's like the data we got did not fulfill our requirements or we could be doing a single high-dose proof-of-principle kind of study where it's like, hey, let's -- the data looks good, but let's confirm or we could be going for a full-blown comprehensive Phase II study like the FRONTIER study that was done with ICO, the FRONTIER Phase II study, in which case, you can make a qualitative assumption that we really like the data that we saw, and we are just going for it. And the science, we also learn a lot by talking to the KOLs and all that. And there is a good understanding of the level of target inhibition that is necessary. And so the drug levels will teach us a lot.

Right. Okay. So basically, pay attention to the Phase II design that will...

[indiscernible].

Okay. Got it. And then I think you also mentioned that this is a hot target, and I agree with that. And there's people knocking on your door asking what is this asset. Would you start that partnership exploration before the beginning -- before you kicked off the Phase II? Or like how are you thinking about it?

Yes. There is so much value in engaging with companies early on. That is what we did with rusfertide as well as with our oral IL-23 programs. And so yes, there is no scarcity of interest with IL-17 or other programs in our R&D pipeline. So that's just a healthy dialogue. But at the same time, we are also saying we have all the money that we would ever need to get to clinical POC.

So you wouldn't wave, right? You would...

We are full speed ahead.

Full speed ahead, okay.

[indiscernible] is the most -- currency, yes.

I see. Okay. Let's spend the last couple of minutes on the obesity program. What is your overall development vision in this given sort of the complexity, the hyper-competitiveness, very fast-evolving, price eroding nature of the market. I think we see now price down to $149 per month for some of these direct-to-consumer cash pay programs. I mean, what -- why do you think this market is so attractive?

Well, first of all, I mean, this is an opportunity of unprecedented scale in our sector in its entire history. And this is not a one-drug-fits-all or the first or second drug going away with all the winnings and that kind of thing. The market is still evolving. It is expanding. So there is a lot more to do, and everybody is very busy.

What we focused on is like, as usual, differentiation, differentiation, differentiation. So the first strike is with an oral triple and Retatrutide, the Phase III data is outstanding. So that bodes well. We are the one with an oral GGG, right?

And so we look forward to taking it forward in clinical studies. The clinical studies by themselves are going to be -- even the Phase I studies will be very informative because you enroll patients with higher BMI and you start observing weight loss. Obesity is a big field, but also it's a very cost-conscious fill.

So the cost of goods and all that is something that you factor in right from the beginning. It's almost like a nonscientific target product profile you have to have if you're going to develop drugs in the obesity space, right? So we are very aware of that. But if you think about it, our deep-rooted expertise in peptides and the way now everybody is interested in peptides. A lot of expertise is building COGS and cost of synthesis. The economy of [ scale ] combine altogether. We are mindful of the cost and we can manage it.

Right, right. Yes. So I mean, speaking of the cost, I mean, these Phase III programs are fairly expensive. You have one....

We definitely partner...

Without diabetes and then there's a lot of outcome study you can also do. I mean, is there a point in time that you would take this asset to and then just either stop there and look for a partner? I mean, obviously, you would be exploring partnership all the way. But if you don't have a partner, you would just kind of stop and shelve it. I mean how -- like how are you thinking about this?

So far, we have not had an issue in the history of the company of not having a potential partner. So hopefully, we'll continue with that statistics. And keep in mind, it's not just about one GGG oral drug. We are creating an entire portfolio, both around incretin and non-incretin kind of approaches as well. So we believe we'll be a very attractive value proposition to multiple pharma companies at the proper stage with a whole basket, whole portfolio of very highly differentiated anti-obesity agents.

And have you already started those conversations? Have you already started some of these partnerships?

That has always been interest from multiple parties at any given time in all of our assets.

I see. Okay. So we are unfortunately out of time. It's been a very exciting time indeed for Protagonist, and it's been a pleasure hosting you, Dinesh. I'll turn it to you for final remarks.

Super exciting for me as well. Thanks for inviting us. And look, I think we are a company that has a commercial presence. We are very validated. We have a rapidly expanding R&D pipeline that is very derisked in multiple ways, and we have all the cash in the world to fund our programs and assets up to clinical POC. And pending rusfertide approval by the end of the year, I mean, if that happens, then we certainly look forward to rewarding shareholders with some kind of a share buyback program mechanism.

Fantastic. Thank you again.

Welcome to Protagonist Therapeutics March 18 Conference Call. [Operator Instructions] As a reminder, this call is being recorded today, Wednesday, March 18, 2025.

I will now turn the call over to Dr. Corey Davis of Lifesci Advisors. Please go ahead, sir.

Thank you, Latanya. Hello, everyone, and thanks for joining us this morning. Joining me from Protagonist are Dr. Dinesh Patel, President and CEO; Asif Ali, CFO; and Dr. Samuel Saks, Clinical Development Adviser. Earlier today, Protagonist issued a press release announcing the FDA approval of ICOTYDE for the treatment of moderate to severe plaque psoriasis in adults and pediatric patients, 12 years of age and older who weigh at least 40 kilograms who are candidates for systemic therapy or phototherapy. A copy of this press release is available on the company's website.

As can be seen on this slide, we will be making forward-looking statements on this call. These may include statements relating to the safety and efficacy and the therapeutic and commercial potential of our investigational product candidates. For further information relating to risks and uncertainties related to our business, please see the periodic reports we have filed with the Securities and Exchange Commission. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, March 18, 2026. Protagonist undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as may be required by applicable securities law.

With that, I'll now turn the call over to Dinesh Patel. Go ahead, Dinesh.

Thank you, Corey, and good morning, everyone. Today marks a major milestone for Protagonist. We are very pleased to announce that ICOTYDE has received U.S. FDA approval for the treatment of moderate to severe plaque psoriasis, and we want to congratulate Johnson & Johnson on this great success. What makes ICOTYDE or ICO very unique is that, first and foremost, it is the only oral peptide targeted therapy that works by blocking the IL-23 pathway, and it does so by targeting the IL-23 receptor. This is in sharp contrast to the approved antibodies that are obviously injectables, but unlike ICO that targets the receptor, these antibodies work by targeting the IL-23 ligand. So it is truly a first of its kind IL-23 pathway blocker.

Next slide. Before getting into any details, let me take this opportunity to offer a brief historical perspective on our journey from a concept to FDA approval. ICOTYDE, previously known as PN-235 to use Protagonist initial nomenclature for this peptide during its discovery and preclinical phase, is the ultimate outcome of relentless research and development activities in the IL-23 program that began in our laboratories 13 years ago. And it represents an immensely important validation of our peptide technology platform and our ability to generate innovative medicines. I'm incredibly proud of the Protagonist team for the scientific work, persistence and execution that helped this program from discovery to approval.

I also want to congratulate Johnson & Johnson or J&J on outstanding clinical execution and for maintaining a strong and productive collaboration that has been in place since 2017, and that has helped advance this concept of oral peptides for chronic diseases from discovery through development and now to FDA approval. J&J has been an outstanding partner, and we look forward to our continued partnership with them for years to come.

ICOTYDE is an important new first and only of its kind and best-in-class oral first-line treatment option for patients with plaque psoriasis, delivering the IL-23 pathway blocking injectable biologics like skin clearance that is accompanied with outstanding placebo-like safety, and all of this with the convenience of a needle-free once-daily oral pill. This combination of efficacy, safety and convenience of an oral pill makes icotrokinra a compelling choice and should be a very favorable treatment option for individuals with inflammatory and immunomodulatory-driven chronic diseases like psoriasis.

Turning briefly to the approval itself. The FDA approval decision was supported by a robust body of clinical evidence in a large patient population from a comprehensive Phase III program. Across 4 Phase III studies enrolling approximately 2,500 patients, ICOTYDE met all primary endpoints and demonstrated an extremely favorable safety profile.

Next slide. The breadth of the psoriasis program has led to a very broad label and is based on studies in both adults and adolescents, evaluation in high-impact disease sites, as well as 2 head-to-head studies showing superiority to the active comparator Sotyktu. The results from these studies have been published and presented at medical conferences and are now largely reflected in the FDA-approved label.

Besides today's approval, we are also very encouraged by the ongoing clinical studies to evaluate ICOTYDE in additional indications beyond psoriasis. We see very meaningful potential in these programs and are very optimistic about the outcome since historically speaking, all the 3 major IL-23 pathway blocking injectable antibodies, namely Stelara, Skyrizi and TREMFYA, they have had a successful outcome in all 4 indications, that is psoriasis, psoriatic arthritis, ulcerative colitis and Crohn's disease.

Having said that, we do recognize that these are ongoing studies and the actual data will define the opportunity more precisely over the coming years. Taken together, across the approved psoriasis program and the ongoing studies in additional indications, ICOTYDE is supported by a development effort that exceeds 7,000 patients. We view ICOTYDE as not just a product, but rather as a pipeline in a product, a multi-indication, multibillion-dollar immunology franchise.

Next slide. Now let's move to the financial aspects of the partnership with J&J. This approval has clear economic significance for Protagonist, leading to an immediate $50 million milestone achievement from this approval and now kicking off a royalty-based revenue stream going forward.

Since the initiation of our collaboration with J&J in 2017, Protagonist has now earned a total of $387 million in milestone payments. We still have around $580 million in future potential milestones, and we believe that Protagonist has a very good chance of achieving all of these milestones in the coming years. To break it down further, this $50 million is comprised of $155 million in development milestones summarized in the table on the left and $425 million in sales milestones summarized in the table on the right.

So the $155 million in development milestones, as you can see, are based largely on NDA filings and approvals in additional second and third indications, which should be achievable based on clinical studies currently being pursued in 3 additional indications. With the $425 million in sales milestones, the highest hurdle milestone is based on reaching $5 billion in annual sales, which should be achievable, we believe, in the coming years.

So seldom do we get a chance in our lifelong careers, 40 years to be specific in my case, to say that we could potentially achieve all research, development, regulatory and sales milestones from a pharma licensing and partnership deal. Beyond milestones, we are also eligible for tiered royalties ranging from 6% to 10% on global net sales with a weighted average of 7.25% at $4 billion annual sales and 10% for sales over $4 billion.

Our royalty-based earnout each year will obviously depend on the annual sales and the table at the bottom provides a simple illustration of the actual pretax royalty-based dollars that would be earned at various levels of annual sales exemplified as ranging from $5 billion to $20 billion.

Taken together, these numbers and percentages speak to the win-win nature of the partnership, and it also speaks volumes for the blockbuster category potential of ICOTYDE. This is also a good opportunity for us to clarify Protagonist role going forward in this collaboration. Because J&J is solely responsible for all aspects of the commercialization of ICOTYDE as well as the ongoing clinical trials, they are the best ones positioned to describe specific launch activities and provide guidance on all commercial expectations going forward.

Next slide. From Protagonist standpoint, today's approval highlights the strength of our core expertise in discovering oral peptides and the value of our collaboration model. This is a meaningful scientific achievement and in our view, an important demonstration that rationally designed oral peptides against well-validated clinical targets can deliver highly differentiated therapeutic profiles in large, well-established blockbuster category markets.

The success of ICOTYDE, together with multiple assets now advancing across our R&D pipeline, validates the durability and productivity of our unique peptide technology platform that is geared towards optimizing intrinsic potency, oral stability and oral bioavailability in an oral peptide agent against validated targets previously deemed to be approachable only through injectable biologics. It is evident that our proprietary discovery engine can generate candidates with the potential to move from concept to clinic to approval, and ultimately toward commercial value creation.

Next slide. Now let's turn our attention to the other assets in Protagonist pipeline. In addition to the ICO approval, as shown on the left, we are also expecting FDA approval for our first-in-class hepcidin mimetic, rusfertide for polycythemia vera sometime in the third quarter of this year. In partnership with Takeda Pharmaceuticals, the NDA was filed on December 29 of last year, and we are thrilled to have received priority review earlier this month from the FDA.

If successful, rusfertide's approval would further reinforce the breadth and maturity of our platform. As most of you know, we have a provision to opt out of our co-development and co-commercialization arrangement with Takeda, and we are strongly leaning towards opting out, which will, in turn, qualify us for a $400 million opt-out payment fee and allow us to transition from the current 50-50 profit loss sharing arrangement to an out-licensing deal with enhanced milestones and royalty-based economics. Takeda has been an outstanding partner, and they have a very strong experience and presence in the hematology space, and rusfertide is a high-priority asset for them, which fits nicely in their heme portfolio.

Moving from our late-stage assets, ICOTYDE and rusfertide, let's now shed some light on our new wave of emerging R&D assets, which we commonly refer to as our second act or repeat performance. In the inflammation and immunology or the I&I space, we have PN-881, our first-in-class IL-17 oral peptide antagonist with activity against both A and F isoforms, and it is currently in a comprehensive Phase I study. We expect to complete this study by midyear and we'll share our decision on the next steps with PN-881 in the third quarter.

In the heme space, as a complement and follow-on to rusfertide, we are developing an oral hepcidin functional mimetic PN-8047, which is currently in IND-enabling studies. Incidentally, 8047 is a small molecule and not a peptide. At the core level, we are focused on strong differentiation at Protagonist and are agnostic to the actual chemical nature of our assets.

Besides I&I and hematology, we are extending our peptide expertise to the anti-obesity space, which is currently largely dominated by the injectable peptide, semaglutide and tirzepatide. PN-477 is our oral triple GLP, GIP, GCG agonist, and it is being developed both as a weekly injectable and a once-daily oral agent. We expect Phase I clinical studies to commence in the second half of the year, and it should be feasible to achieve preliminary clinical proof of concept in the Phase I study itself by observing weight loss in healthy volunteers with a higher BMI index.

Finally, we continue to add new programs such as IL-4 in the I&I space and amylin in the obesity space, wherein we believe there is an unmet need and where a strong differentiation could be achieved with our approach. Our 2 late-stage assets and our 2 pharma partnerships have placed Protagonist in a very strong financial position. Based on the cash we have on hand today and with the anticipated future cash generation from the 2 partnered assets, we believe we have the financial resources and organizational experience to fund all of our current R&D programs to clinical proof of concept, and to continue investing in a growing pipeline of new peptide-based and small molecule-based programs in the future.

What makes us so unique, is that we anticipate carrying on all of our R&D activities now and in the foreseeable future without any equity offering based financing and dilution to our shareholders. In fact, with respect to capital allocation, we'll be giving serious consideration to all forms of returning capital to shareholders with tools like share buyback programs, which will lead to more concentrated positions for our shareholders. We'll constantly be striving for maximizing shareholder value through all of our operational, financial and strategic activities.

I would also like to emphasize that we always have been and will continue to remain strong believers in value-creating partnerships with pharmaceutical companies. And certainly, our partnerships with J&J and Takeda serve as great examples of successful win-win collaborations. Keep in mind that our partnership with pharma is not just about bringing non-dilutive cash into the company. A true pharma partner offers the incredible advantage of experience, expertise and ability to scale.

Going forward, we can envision pursuing rare disease indications on our own all the way through FDA approval. But for broader indications, we'll be strongly leaning towards fair pharma partnerships, with more financial participation through clinical development with the anticipation of preserving better economics down the road. We'll continue to pursue win-win structures that align capabilities, maximize value of our science and create meaningful returns to shareholders.

Next slide. So in summary, today's approval of ICOTYDE is a defining moment for our company, our people and our platform. It marks the slow and steady transition of a research program that originated in our laboratories 13 years ago into an approved therapy for patients. And it validates the power of our platform to produce differentiated drug candidates with real therapeutic and commercial relevance.

I would again like to congratulate the teams at Johnson & Johnson and Protagonist whose unwavering commitment allowed us to reach and exceed all of our goals in the IL-23 program, culminating in the approval of ICOTYDE for psoriasis that we are so pleased to announce today. Drug discovery and development requires patience, resilience and collaboration and reaching this point is deeply meaningful for all of us. I also want to recognize the patients, investigators and caregivers who participated and contributed in the comprehensive ICOTYDE clinical program. Everything we do, we do it with the ultimate goal of transforming patient lives. With the approval of ICOTYDE, the pending FDA decision for rusfertide this year, and the financial resources to support the next generation of R&D programs and assets, we are increasingly confident that this is the beginning of a multiyear product-driven growth cycle for Protagonist Therapeutics as a company.

And with that, I will now ask the operator to begin our Q&A session. Operator?

[Operator Instructions] The first question comes from Roger Song with Jefferies.

Huge congrats for the approval, a little bit earlier than we thought, but congrats. And looking at the label, I think it's pretty impressive how clean the safety label language looks like. Notably, this TB test requirement comparing to IL-23 biologics since this is optional. Just curious about your thoughts. I know probably J&J is a better position to comment. But just how you think about this requirement and consideration for TB test because a lot of doctors is talking about it. And then how did you achieve that language, if you have any comments?

Roger, so yes, clearly, we are a few months early in this announcement. And hopefully, that's a good surprise for everybody. And with respect to the label, I think in a way you answered the question, I think J&J is the best party to give any detailed answers. But what I can reflect on is like, hey, even 13 years ago, when we were trying to decide which targets to work on, we, on purpose avoided working on TNF blockers, even though Humira was the dominant product at that time, and very consciously chose IL-23 pathway and the alpha 4 beta 7 integrin pathway because we believe that safety was of paramount importance that could be achieved with this intervention of these pathways. And that has obviously come to fruition today with the approval of ICOTYDE as an IL-23 pathway blocker. Sam?

I would just say, in general, again, not to comment specifically, but in general, we had heard from investors repetitively sort of, I'd say, misinformation that there was going to be various testing requirements with ICO, be it for TB or liver or other aspects. And as you point out, it's really clean with respect to the requirement to do any specific testing. So that is going to be a great thing for the launch.

Excellent. Just a quick follow-up. Now this is J&J going to driving force for the launch and then we're moving on to your own program. AADA 17, just use this as an opportunity, just give us some comments around how you think the learning from ICOTYDE can translate to AADA. And then in terms of the safety and efficacy profile, what's your expectation for -- compared to the biologics?

Yes. I think in our case, the big advantage is that by working on pathways that have already been validated by the biologics, we almost have a cheat sheet in terms of what to expect. And that has turned out to be so true with ICO. And I would say we expect kind of a similar type of behavior and expectation with the IL-17 blocker as well.

Now in terms of the lessons learned or the similarity or differences, I mean, as you know, each target is different. And so in terms of the specific of what a peptide molecule looks like, what ICO looks like versus PN-881, I can assure you that is a day and night difference, totally different entities. So in each instance, you have to start from scratch. Having said that, though, some broad learnings about that, hey, potency is of paramount importance, oral stability is a must, and engineering some permeability to achieve some oral bioavailability and having a slow clearance. And some of the fundamental learnings is something that can be applied all across the board in all of our programs.

One thing to remind you, Roger, is one of the claim to fames of peptides because of their enhanced potency is high specificity. So that's one of the reasons you achieve these kinds of labels is because there's less chance of off-target effects when you have that kind of potency and specificity.

The next question comes from Doug Tsao with H.C. Wainwright.

Dinesh, congratulations. It's been really remarkable journey for the company, and we look forward to seeing you get your second approval not too long in the future, which would be a really great accomplishment. Just maybe as a follow-up along the lines of what Sam just said, do you think given the tolerability profile we've seen and the clean label on that front, does this sort of perhaps provide a road map for some of your other oral programs in terms of what those labels might look at, especially in terms of sort of off-target effects. I mean there might be some side effects that are sort of unavoidable. But does this sort of really highlight a potential clinical advantage beyond just sort of the oralization of these markets, but perhaps sort of a greater tolerability profile as well?

So, I think -- this is an excellent question, and we cannot answer it enough time, I would say. Safety is of paramount importance. And the simple realization is that, hey, with peptides, you have a larger number of binding interactions compared to small molecules. So just logically speaking, you're going to come up with something that is much, much more potent than a small molecule. And with that kind of high level of potency, what also comes along is amazingly high level of specificity, and it minimizes the chances of off-target kind of side effects. So that's a big advantage that we believe should translate all across the board in our approach of oral peptides. That's how we are looking at it.

But as Dinesh pointed out earlier, because these are validated targets, we're not looking to ICO for the toxicity profile, let's say, IL-17 A and F and 881. We're looking to the antibody that covers those targets because that -- that's already a commercial product and treating lots of patients. So we would get surprised, quite frankly, if any of our peptides have any other toxicity besides those that are already known from the validated therapeutics.

Yes. And once again, that is a sharp contrast to what you may expect from small molecules where the real surprising and ugliness may come much later in an advanced clinical study.

And just as a follow-up, Dinesh, I guess what I was sort of -- I think is striking about the label is not just the sort of safety profile versus other small molecules, but even the advantages from a labeling safety standpoint versus -- be it Stelara or even TREMFYA, where ICO looks to compare favorably. So I was just curious if you thought that might be something we should expect or think about as a potential for the IL-17 and other programs?

It's hard for us to comment on any labeling thing in terms of J&J. But as was already pointed out, this is a receptor blocker. So it is completely unique. But J&J did all the direct negotiations with FDA. So we would have no comment on like why the label looks the way it does.

And Doug, to answer your question in a general way, I mean, these are the early innings for oral peptide approaches, right? And as you know, there are 2 very fundamental differences in the pharmacokinetic aspects of the drug with an antibody, which would be an injectable, you are starting with a maximum concentration on day 1 and then it wanes out over a matter of days or weeks, something like that.

With the oral peptide approach, it's a daily ritual of having some level of drug levels in circulation each day. So different kind of titration and dosing. It's almost like theoretically, with an oral peptide approach, you are providing more frequent but moderate level of the drug to the individual. And just in general, the lower the dose, the better. So let's see how it all plays out. But yes, the overall safety profile of ICOTYDE is just outstanding at all levels.

The next question comes from Evan Seigerman with BMO Capital.

Malcolm Hoffman on for Evan. Thinking about the ICONIC-ASCEND data coming up soon, how should we think about the significance of that data set for ICO? ICO has already shown strong strength against oral I&I agents. How do you think about the potential for superiority here and what that could mean for revenue uptake in the future?

Well, the data will be the data, but the intent, obviously, which J&J has articulated, so I'm not saying anything that they haven't already said is they're trying to make this the frontline treatment of choice. And that's the usefulness of that study. How it turns out, even they, I think, would say, let's see the data.

But yes, if you look at the adolescent data and the idea behind like doing a head-to-head comparison with Stelara, basically, ICO has all the makings of being a first-line therapy of choice for patients.

And they were very clever with the deucra or Sotyktu studies in terms of doing things proactively as well. So as Dinesh had said earlier, boy, we could have a better partner.

The next question comes from Jon Wolleben with Citizens.

Just two for me. One simple one. Can you remind us of the patent protection on ICOTYDE? And then also with Skyrizi doing so well, maybe can you compare and contrast your profile versus Skyrizi and what could drive adoption for an oral here?

Yes. Jon, so good points. And we are very pleased with the extent of patent protection we have over here. It's fair to mention in broad strokes that it is extending to 2040 or slightly behind that, right? Now in terms of Skyrizi or any injectables for that matter, TREMFYA could be another comparison. I think -- and J&J has communicated this incredibly well. There are 2 different opportunities over here. What their marketing research suggests is that amongst patients who are already on treatment, which is with the injectables because the IL-23 injectables are the ones that are offering the best combination of efficacy and safety.

Amongst those patients, more than 75% or rather 75% to 90% will be willing to switch to an oral agent if a good option was available. I mean, ICOTYDE's label, in my opinion, clearly makes it a good option. So let's see how that goes. And again, J&J is the one that is doing the heavy lifting over here. But in broad strokes, the first category is like taking market share from the injectables.

But now here is the additional thing, right? An equal number of I&I patients, a few million of those that are actually qualified and eligible for targeted therapy treatment options, they are not choosing any treatment right now because: a, they don't like injections; and b, they don't like the current oral options that are out there. So this will give ICOTYDE and J&J a great opportunity to create a new market for ICO as well. So I would say ICO could be very well positioned both to grab some market share from the existing injectables as well as expand the market and create a new market of its own by becoming an attractive option for patients who are currently on the sidelines.

We will be on the watch. Thanks, Dinesh, and congrats.

The next question comes from Srikripa Devarakonda from Truist Securities.

Congratulations. This came certainly earlier than expected. One question we've been getting from investors. This has been a great partnership between J&J and Protagonist teams. A question is the relative contribution of Protagonist to the optimization journey, and this relates more to how much of the know-how in the optimization of these oral peptides continues to be proprietary to Protagonist. In other words, I think people are -- want to be more comforted around your ability to protect the know-how. And then another question, I think there's a food effect on the label. I was just wondering if you think there could be any sort of impact on longer-term compliance.

Kripa, It was nice to meet you a week or 2 ago. And of course, our lips were sealed at that time, but it's good to come out in the open today. So in terms of the partnerships, as we keep saying, this has been a fantastic partnership, and both parties have benefited immensely. And in terms of know-how and who is good or great at what, I think both groups have utilize their strengths towards uncovering ICO and bringing it where it is today. And of course, as you know, this is a joint co-inventorship with inventors from both camps. So that is as simple as that.

In terms of the know-how and the future utility and things like that, I mean, obviously, I'll speak for Protagonist. As you can see from our expanding R&D pipeline, almost everything we do, except for the exception of the oral Srikripa Devarakonda, that is all peptide-centric, right? We oscillate between injectable peptides like rusfertide or oral peptides, be it for the obesity program or the oral IL-17, and in the future IL-4 and other programs. So our expertise, we have been building and expanding on the core expertise all the way back from 2008. So there is a lot of residual know-how, and that basically is our secret sauce, which allows us to come up with this kind of highly differentiated assets in otherwise what would be a very competitive and crowded field.

One would expect that if J&J -- and if our technology was no longer proprietary to us based on this collaboration, that J&J would have a whole host of oral peptides or peptides in general in their R&D portfolio. I haven't heard anything recently.

Yes. The -- now in terms of the food effect, things like that, it is very simple. You take -- and as you know, this is a one pill, once-daily oral pill. So you take the pill first thing in the morning with an empty stomach and you can take it with water. And you just have to avoid solid food for the first 30 minutes. I don't know of that many people who require solid food in the first 30 minutes after they wake up. So I think compliance should not be an issue.

That's good to know. And congrats again, very exciting.

The next question comes from Etzer Darout with Barclays.

This is Luke on for Etzer. Congrats on this update. Given the success of icotrokinra, are you looking to replicate its PK/PD profile with your oral IL-17? Is there anything that you'd like to see optimize as we think about the healthy volunteer study? And then looking forward to the study initiating in the second half, should we expect the size and scope of the IL-17 study to be similar to the IL-23 trial?

Yes. No, very good question. So I think in terms of what we would expect with our oral IL-17 PN-881. Yes, the overall profile of the peptide is of such nature that, as you know, it is incredibly potent. It is the first of its kind as an oral agent to have activity both against the A and F isoforms. We have made sure that it is very stable. And we definitely have an eye for achieving higher level of absorptions and oral bioavailability. So the -- it is -- and those were the same things that we were able to achieve with icotrokinra, has incredible potency, amazing oral stability and adequate degree of oral exposure. So those are the similarities in the approach with oral peptides.

And our focus with 881 is, of course, going to be on the drug levels that we observe in healthy volunteers, right? What are the levels about the EC50, EC90, those kind of criteria. And that in turn would dictate what kind of Phase II study in psoriasis, we would undertake as a follow-on to the Phase I study. Currently, our guidance is that, hey, we will complete the Phase I studies by the middle of the year, and then we will carefully analyze the data that we have in front of us. And then it is in the third quarter that we will share our decision about our next steps with 881.

Yes. And let me just clarify that IL-17 biology is completely different than IL-23. So our targets that Dinesh just articulated are not based on ICO. They're based on the injectable antibodies that target IL-17 A and F. So that's, again, with validated targets, that's how we define our goalpost, so to speak. With respect to pharmacodynamics and normals, it's not very relevant to IL-17. So we -- again, we know what we think are actionable pharmacokinetic levels. So that study is really aimed at finding the right formulation and dosing instructions to take into a Phase II study for the peptide.

The next question comes from Thomas Smith with Leerink Partners.

Let me add my congrats on this huge milestone. Just a couple from us, please, on your earlier pipeline. First, on the planned expansion into the obesity space. Could you talk about some of the learnings from the ICO oral peptide experience and how you could apply that to your dual and triple agonists? And can you just remind us what you're trying to optimize for with these compounds? Is it greater weight loss, better tolerability, less frequent dosing or maybe some other attribute besides just the oral dosing component? And then second, with respect to the capital return plans to shareholders, can you just expand on your latest thinking there between share buyback or dividend and when you think you'll have more visibility into the timing for that capital return?

Yes. Maybe answering the second question first. In terms of capital return, we have been conveying since the beginning of the year that we have serious intentions of some sort of capital return to shareholders in a meaningful and a programmed way. I'm a big believer of like events actually have to happen rather than assuming they happen before we act on something. So today, until yesterday, ICO would most likely get approved. Well, now it is approved.

So one of the similar things on the financial side is like, hey, in our Takeda co-development, co-commercialization, 50-50 partnership, we are strongly leaning towards opting out. While it must translate into -- we are actually opting out because that is what really would trigger the $400 million influx of opt-out fee into Protagonist war chest. So I think it is really in the second half of the year or more specifically in the third quarter of the year. And hopefully, by that -- I mean, in the fourth quarter of the year. And hopefully, by that time, rusfertide is also approved. So there are milestones associated with that as well. But in the fourth quarter, we'll be able to provide more granularity on what we exactly would opt to do. But as of today, and we have the ability and right to change our mind. But as of today, what comes to mind is share buybacks in a moderated way and a consistent way. That's what comes to mind.

In terms of the obesity space, I would say it's also like what are the learnings from ICO and it is -- what are the attributes we would want to have an anti-obesity agents based on the learnings from ICO. I would also say we also have to keep an eye on the competition that is out there, right? So -- in general, when we choose a disease area to work on, of course, we want to address an unmet need. And I believe in the obesity space, there is a huge unmet need. I mean there is a lot that is going on, but we are just scrapping the surface in my opinion. So the unmet need is there. But at the same time, there are many players there. So the second criteria that is equally important is that along with the unmet need, we should be able to offer something that truly has a high degree of differentiation. And that's where our first act in the space, the oral triple G serves as a great example.

We believe we are the -- definitely the first ones or one of the first ones that are coming up with an oral triple G. And it's not just a mad chase toward maximizing weight loss, also that -- although that will be a key characteristic of an oral triple G. But we have also gone through great troubles to adjust the relative potencies of the GLP versus GIP versus GCG agonism based on which we believe based on the literature data that we are also trying to optimize for other attributes besides maximal weight loss, such as improving GI tolerability and tilting the ratio of weight loss more in the category of fat loss versus -- and preservation of muscle mass loss. So hopefully, that answers the question on the obesity candidate.

The next question comes from Tara Bancroft with TD Cowen.

This is Ikenna on for Tara, sharing our congrats as well. I had a question. Can you tell us about pricing, the rationale and gross to net assumptions that may impact royalty payments?

Yes, that is definitely a J&J question, I would say.

And royalty payments, we can -- can you comment on what the royalty payments are based on?

I mean, yes, the economics we know, obviously, it's 6% to 10% royalty with -- and we've given further guidance that 7.25% is the weighted average at $4 billion and then above $4 billion, it's a 10% royalty rate. But as to your other question, as Dinesh and Sam said, that's pricing and gross to net is not something that we can guide to. That's a J&J question.

I had a quick follow-up, if you don't mind. on its usage, could payers eventually require that therapy requirements with a failure on ICOTYDE before injectables or vice versa? And can you talk about...

That's a J&J question. We are -- so any commercial question, you have to ask J&J. But they're going to be very vocal. They have been talking about this as one of their biggest launches ever, if not biggest. They're very excited and vocal. So you're going to have no lack of information flowing out of J&J on this product.

What you will hear from us is on a quarterly basis, what was the revenue generation from ICOTYDE based on the royalty payment arrangement.

The next question comes from Yun Zhong with Wedbush Securities.

Congratulations on the approval. Maybe a follow-up question on the obesity program. And so you introduced the dual agonist program in addition to the triple G agonist. So I just wanted to -- I understand that you want to build a portfolio for obesity, but any additional comments that you are able to share in terms of maybe your plan positioning when it comes to, for example, resource allocation and suitable patient population? Any comments you're able to share, please?

Yes. So I really like this question. And in a way, if you think about it, this is our admitting the fact that obesity is a rapidly evolving field and nobody has a crystal ball, and ultimately, which will be the most desired target or the combination of targets and poly-agonism, I personally believe that there will be many winners and especially if you keep in mind the comorbidities that are also affiliated with this approach. So in a humble way then what we are doing is like, hey, let's create multiple assets and then -- but with a strong differentiation of having an oral drug as much as possible.

Although, as you know, we are developing both oral as well as subcu form of our agents. And that is also an acknowledgment of like it's like, hey, we don't know what the preferences would be. There could be some instances for some periods of time where an injectable would be a welcome choice. Working on a dual along with the triple is also the same kind of spirit, if you will. It's like triple could be -- we are hoping it will be outstanding. If you look at the Phase III data of retatrutide, the triple agonist from Eli Lilly, the data is very, very impressive. But what if down the road, somehow the dual becomes a more optimal choice. So we don't want to leave anything for chance. And the whole idea, and we will continue in this way. And as you know, we have also acknowledged our presence with the amylin agonist and polyagonist kind of approaches. The whole idea in a way is to create an amazing portfolio of numerous anti-obesity agents over the coming year or 2. And then, of course, that would hopefully be very appealing and be a very high-value proposition to a big pharma who would be a very interested late entrant to the party.

Okay. Great. So the follow-up question on J&J partnership. Does your existing partnership with J&J on ICO provide J&J the first to negotiate right to, for example, IL-17 program and/or obesity programs, please?

It does not. There's no such agreements, no sort of contractual terms that would cover any of that -- our remaining programs.

It's a very clean arrangement. It's confined to the IL-23 program and obesity is certainly of our stretch. But just to clarify, they have no such rights even for the oral IL-17 program.

The next question comes from Richard Law with Goldman Sachs.

This is Jane on for Rich. Congrats on ICO's approval. So I have two questions. First, as you mentioned there is potential for share buyback. So does that predicate on after you can partner more pipeline assets out or the current resources are sufficient? And what condition will allow for the share buyback? And my second question is about the pipeline programs. So are you going to share Phase I data for IL-17? And then when will you explore partnership for the IL-17 and the obesity programs?

Yes. No, I think these are interesting questions, and then we can make some general comments. The share buyback is a decision based on our overall conclusion, and you are pointing it out very nicely. Is it from the revenue that we'll generate from the existing partnerships? Or is it also based on the partnerships we may do in the future because we do keep emphasizing that, yes, we are big believers of joining hands with big pharma. And I would say, yes, it's a combination of both. And what I can also clarify is like we are certainly not compromising on our ability to scale our R&D operations to broaden the discovery efforts in numerous targets, some of which we have announced and some of which are under the hood. So it's a problem of the riches. It's a nice problem to have and the abundance of financial value creation basically lends us to state that we want to return some value back to our shareholders in an efficient way, and that's where the share buybacks come in.

In terms of the IL-17, I think what we have shared and clarified last year is that, hey, we did extensive sharing of preclinical data when we announced our oral IL-17 881 and when we announced our oral triple G anti-obesity agent 477. But going forward, we'll be a bit stingy in terms of sharing the actual data for 2 reasons in a way, and this is with full sincerity and humbleness. One is like now we are at a stage where we don't need to share the data and wow the Street with like, wow, look, here is wonderful data and then next week, do an equity offering. If at all anything, we are clearly saying we are not going to do an equity offering, never say never, but we are not -- we have no plans of an equity offering in the near future. And second, and again, this is with full humbleness. We just don't want to teach too much to the competition. So we'll keep it under reps.

And then could you comment on when will you explore partnership for the IL-17 and obesity programs?

Yes. As you know, partnerships are -- is an activity that is a constant activity. If you look at our J&J partnerships and the Takeda partnerships, I mean, these are dialogues that go on for years, not just with the final party, but multiple parties at any given time. So oral IL-17, I mean you can just assume it's a really hot asset, and there is great demand for it. I can tell you that much. So we do the act of playing the musical chair and continue to have a sincere dialogue with parties. As and when a partnership is inked, well, that is -- that happens when there is a meeting of minds and the checkbooks.

One of the things I would point out is one of the reasons that we're saying that we are going to have excessive cash here, even though we have such a robust pipeline, is these assets validate quickly and cheaply in Phase I and II studies. So in terms of your partnering question, we want to get clinical POC. That's where we think we get adequately -- we get the best deal constructed, and that's going to come relatively quickly for some of these assets.

The next question comes from Geoff Meacham with Citi.

This is Nishant on for Geoff. Going back to Dinesh, your comment on compliance regarding the food effect. I just wanted to get a sense whether -- what kind of rates you have seen in the clinical trials, whether there was any food effect related kind of issues with the patients that they have kind of dropped out and just getting a sense of actual data from clinical trials.

And then on your strategy overall, you have mentioned in the past that for some of the rare disease like oral hepcidin asset, you could go all the way other than partnering. So just getting a sense of your priority in terms of like partnering versus taking assets all the way through, whether that could change for other assets as well.

I want to address this issue about compliance and point out, and you can look this up is J&J has presented long-term data on this compound. It's necessary in psoriasis to present up to 1-year data. And one of the remarkable things about their long-term data is although patients are feeling improvements in itch and pain and things in a matter of 48 weeks. The persistence on the study to week 52 and the maintenance of the effect they saw at week 16 is outstanding. And I would encourage everyone to look at all that data because, obviously, in -- even in a study, if you're taking a drug over a year, you're going to get the compliance that's the compliance. That is very good for them.

First and foremost, taking the drug with an empty stomach first thing in the morning and not having any solid food for 30 minutes, it's not a high -- it's not a hurdle at all in my opinion to compliance. That's number one. And the second thing that I would just reiterate what Sam said, you start seeing or feeling this effect of really from itching and pain in the first few weeks. And that's just human psychology. You feel the drug is working, you're going to continue with the treatment. And this is the most convenient form of treatment that one could ever think of. And as we started talking about in the beginning of the call, the safety, just amazingly clean safety. So when you add all that up, the compliance part in our opinion, is a nonissue.

J&J has also presented in this long-term data, patient satisfaction data. You can see this published at EADV and other places. They've shown that they have data on how people love this product.

Yes. Now in terms of the oral hepcidin, I mean, that's a good question. Now keep in mind that even with rusfertide, we were in Phase III study on our own when we announced the partnership with Takeda, and the original intent was like we will take it forward all the way through approval and commercialization. So I think it's no different for oral hepcidin. The intent is like, yes, this is a rare disease indication, and this is something within our domain. We are fully capable of developing and getting it approved on our own. But at the same time, the whole idea is like what is the best way to maximize value creation with an asset. And if joining hands with a pharma is the answer, then that is what we will do. At the end of the day, our focus, laser-like focus is on maximizing shareholder value.

The next question comes from Brian Cheng with JPMorgan.

Congratulations for the approval. Two from us. So we noticed that there is a head-to-head data against deucra included in your label. Will the label be updated ahead of the commercial launch once you have the ICONIC-ASCEND trial that's testing ICOTYDE head-to-head against Stelara later this year? And then for the PFA trial primary completion in the first half, will we be getting clinical data in the first half this year? Curious if you can give us a better sense of the time line for PFA as well.

So I think, again, Brian, these are questions -- these are great questions, but I would say they are best answered by J&J. And whether it is -- what is the outcome of the ICONIC-ASCEND study, where there is a head-to-head comparison with Stelara. And does that influence the expansion of the label? It's J&J, who will answer that question.

We're laser-focused on two things: how big are the payments? And when are we getting them?

Yes. And psoriatic arthritis, I mean, you are very observant. It's the completion of the enrollment up to the primary endpoint stage in the naive population, that's going to happen by the end of May. Now to what extent -- and when J&J chooses to share what level of data, once again, that will be up to them. Our job will be to fully cooperating with them.

I think as I had mentioned in my call, I mean, if you look at the historical track record of the IL-23 blockers, Skyrizi, Stelara, TREMFYA, that is 100% hit rate, right? All 3 of these drugs have had positive outcome in all the 4 indications, so not just psoriatic arthritis, but also Crohn's and UC. And as you recall, our Phase II UC data is just outstanding. 30% clinical remission is something to write one about. So, so far, we see very good outcome and very good translation, both in the derm space as well as in the IBD space. And we remain optimistic about the outcome of the ongoing clinical studies in the 3 other indications.

And just to touch on your comments earlier about how you think about partnerships in broader indications and you're more focusing on the smaller indications. How active are you today in securing partnerships for assets targeting the broader indications like obesity? Are you actively looking today? Or do you think that you will need to have some clinical data to secure a more fruitful partnership for you?

I think, yes. Great question. These are moving targets. And as I mentioned before, it's always healthy to have a dialogue with pharma companies under a CDA and you get great feedback, and it brings in valuable insights, that sort of thing. It also provides early warnings if there is something that would be concerning, that sort of thing. But I think it's fair to assume like if I were a big pharma representative, I would be definitely interested in touch, but would certainly want to see some sort of clinical data before becoming a big believer of the asset.

So now the advantage is like in the obesity space, just in a Phase I study by enrolling a few healthy volunteers with a higher BMI index, you can actually observe weight loss to some degree. And the smart people can easily make conclusions on the overall effectiveness of the drug at such an early stage as well. So I think we definitely still have some work to do, but chatting with pharma under confidentiality, under a CDA is a norm for Protagonist.

And I would say, Brian, that -- with respect to the targets that are furthest along, IL-17 and obesity, it's not like we have to go knocking. People come knocking on our door. These are very hot targets that a lot of people are interested.

Thank you. There are no further questions. I will turn the call over to Dr. Patel for closing remarks.

Thanks. Thank you again, everybody, for joining us this morning. The approval of ICOTYDE is a proud and historical moment for Protagonist, and we look forward to carrying this momentum forward as we continue advancing our R&D pipeline and preparing for the important milestones ahead. Thank you again for your continued interest in and support of Protagonist.

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.

Hello again, everyone. I'm Etzer Darout, senior biotech analyst at Barclays. It's my pleasure to welcome Protagonist Therapeutics to our fireside. With me today, I have Dinesh Patel, the Chief Executive Officer and President at Protagonist. Dinesh, maybe just to start off, for those maybe less familiar with the story, if you could just provide an overview of Protagonist, and then we'll move into Q&A.

Sounds like a plan. First and foremost, thanks for inviting us. And I have to mention that this does take me down memory lane. Protagonist, we did our IPO back in 2016, and Barclays was one of the bank that helped us achieve that component of going public. So thanks for that as well to Barclays.

So yes, right from the get-go, we have focused on creating innovation through novel peptides. So that's our bread and butter, and we have expertise both for injectable peptides, but also for oral peptides, and we have been able to put it to good use over a period of time. Maybe over a period of time is a bit of an understatement because we have been doing this since 2008 when nobody cared about peptides. It was an unknown entity. Of course, now over the past few years, the landscape has changed, and we are glad that it has changed.

But fast forwarding from 2008 to now, what has then happened is like we have 2 wonderful assets, which showed outstanding Phase III data last year. And on the heels of that, we are assuming, hoping that they get approved this year. So the first drug I'm talking about is icotrokinra or icotyde. This is an oral IL-23 blocker, and this is the first and only. So there is amazing scarcity value as well. And this is a journey that we started with J&J all the way back in 2017 when it was just a preclinical program.

So we have come a long way and now the first indication for which approval will be seek is for psoriasis. And then the drug is also in Phase III studies in all the other 3 indications where IL-23 blockers have had 100% success, right, namely psoriatic arthritis, UC and Crohn's.

The other asset then is rusfertide. This is a weekly injectable metric of the natural hormone hepcidin that is in charge of iron homeostasis. And we felt that, hey, polycythemia vera, that's a disease. It's characterized by excessive red blood cell production, right, excessive erythrocytosis. So it made sense to come up with an erythrocytosis specific agent. And again, there is no such thing that is out there right now.

So we are the first and only over there as well. And that is something unlike the J&J deal, which was partnered at a preclinical stage here, we partnered with Takeda in January of 2024 when we were already in a Phase III setting on our own. It's a rare disease indication, right? So it is something we could take forward further.

Takeda is an amazing partner. They have a focus in the heme space, and we are so glad we have joined hands with them as well. And about a week ago or so, we announced that we received priority review. So that is going to hopefully accelerate the approval by a few months. And so -- and with ICO, the NDA was filed in July of last year. So it would be an amazing coincidence if both drugs get approved, let's say, sometime in the third quarter of this year. So we are looking forward to that.

So that's the outcome of 16, 18 years, whatever you want to call it, or at least 12-plus years of efforts in these programs. And now what we have -- since we believe we are validated, we have proven ourselves multiple times. We are going for the second act like a rapid performance, right? And the next wave of assets is, again, continuing in the I&I space with an oral IL-17 program. The drug is in a Phase I study in healthy volunteers. We also have preclinical studies going on in the IL-4 program. And it's like, hey, if you can create an oral, ico is like whatever you want to call it, it's an oral equivalent to a Skyrizi or TREMFYA big one. So similarly with there be an oral BIMZELX, right? That's the idea with the IL-17.

And then over the last few years, as we all know, the anti-obesity space gets a lot of attention. And chemically speaking, the two approved drugs are injectable peptides. So that was like an invitation for us. It's like, okay, can we create some solid differentiation through oral peptides. And the first thing that we have is an oral GGG. It's the one of its kind. And over there, we will get into clinical studies in the second half of the year, that sort of thing. And we also have an oral GLP/GIP, a dual. We have acknowledged our presence in the amylin agonist program as well. So we want to create a whole portfolio of different assets. And then last but not least, in the heme space, the second act is the oral hepcidin. So that's basically the story in a nutshell.

Great. As you think about the preclinical evaluation of all of these assets, prior to moving them into the clinic. How are you measuring sort of success and then the ability for those assets to translate to the clinic, looking at exposure, particularly it's peptides. And so that presents a challenge in and of itself. So how are you measuring what success looks like prior to going into?

It's a fantastic question, and it's fair to admit that we almost torture ourselves with exhaustive preclinical evaluation. And to your point, it's like, hey, is it going to work as an oral because let's face it, with peptides, you're going to be limited with the oral bioavailability component.

Now we make up for that with just outstanding picomolar-like potency, which also gives us amazing specificity, right? And now advances are being made in terms of enhancing oral bioavailability. But one thing that we do is we go through a lot of preclinical models where our drug will be administered orally. And then we would like to see that preclinical proof of concept being achieved in animal studies when our drug is administered orally. So that's kind of a generic way of describing it. And it's fair to say that we take at least 3 to 4 months longer than what a typical preclinical assessment would look like because we want to make sure that we pick the right candidate.

Yes. Great. And maybe on icotrokinra in psoriasis, we've seen at least one successful superiority study. We also have ICONIC ASCEND comparator, ustekinumab. How do you plan to leverage those, again, studies as you think about initial launch in psoriasis, as you think about the types of physicians that you're going to want to target, how do you ultimately want to leverage those data sets?

I mean these are extremely important questions, but I have to be very upfront about it. J&J is the best entity to be answering these questions. They are the ones doing the heavy lifting. But as you can imagine, they have done some amazing things, right? They -- like you pointed out, went for a head-to-head superiority study with the only approved TYK2 inhibitor deucra. And our data is fantastic. The primary endpoints were achieved. And whether that makes it to the label or not, that's between J&J and the regulatory agency.

They also went ahead and kind of did a subpopulation analysis and presented amazing data in the adolescent population. And as you know, now by the end of the month, they are completing this head-to-head study with their own injectable STELARA. To me, what all that is telling me is like, obviously, they are big believers of icotrokinra or icotyde now. And they could be gearing this towards like first-line therapy, something like that. Right.

Right. Maybe a question on rusfertide but not necessarily on the injectable program. But again, when you think about the potential for an oral hepcidin functional mimetic, how should we think about the positioning relative to rusfertide in terms of cannibalization is always something that people are going to talk about. Could they be complementary? How do you think about an oral agent versus sort of the injectable agent?

Rusfertide is like a kid that is completing college and is pretty soon going to have a job and have his or her income, whereas the oral is like still maybe in junior high or something like that, right, that kind of thing. But jokes apart, it's like there is enough time delta between the 2 drugs and rusfertide is an outstanding drug. It's the first drug of its own kind, erythrocytosis-specific mechanism. Takeda is a fantastic partner. So we don't see any overlap or that kind of -- yes, overlap or one thing taking away the market from the other. If not, I think it's a continuity of dominance first with rusfertide and then hopefully with the oral icotrokinra.

Right. No, that makes sense. We've had questions around the competitive landscape or evolving competitive landscape for rusfertide. People have talked about some upcoming data sets from Silence Therapeutics. Maybe your thoughts around the competitive landscape just broadly in PV and then your thinking around like what that ultimately -- that space evolves to?

Yes. And I mean, in a way, we are flattered that people. Other companies are also embracing the core mechanism of hepcidin, right, as a way to offer treatment in polycythemia vera and whether it is Silence or whether it is Disc Medicine, and these are great companies, and we wish them all the best of luck. What I would say, though, is like let's pick the TREMYA 6 mechanism and other mechanisms of that type. Those are mechanisms whereby you are trying to really enhance the production of endogenous hepcidin. And that could have its pluses, minuses, limitations, things to watch out for, that kind of thing, whereas our approach is very clear. We use hepcidin as a starting point rather than as a drug because I'm a medicinal chemist by training. So for me, hepcidin is a great starting point. And then it's like, okay, what do we fix?

Let's create a mimetic that is a more potent, more stable, has drug-like properties, and that is what we achieved with rusfertide, and it is titration to affect things like that, right? So one of the things to watch out for "longer-acting drugs" would be like keep in mind, this is the biggest side effects that one should be concerned about over here is exaggerated pharmacology, right? Because now you are making the patient anemic and that is not desirable.

So I think with a weekly injectable that we have, we are in a very balanced position, if you will, and we titrate from low to high and then find the balancing act of like which is the right dose, that kind of thing. And measuring whether your drug is continuing to have the effect or not is a very simple blood test. You measure the hematocrit level. So I think we are happy with where we are. And the other component is, of course, we are years ahead of everyone else. So we're going to have for a number of years, right, the Phase II ourselves.

Great. Maybe switch gears to PN-881 or IL-17. You have a healthy volunteer study that we'll get an update on this year. How are we thinking about what success looks like for that study and how that study ultimately helps inform what a Phase II program would look like for an oral IL-17?

Yes. Oral IL-17 and 881, that's like our second act, if you will, right? As my kids have been telling me all my life, anybody can get lucky once. Can you do it again? Whether it's creating another successful company or another asset or we'll have 881. The preclinical data has been outstanding. Like we were talking other -- we went through like a very exhaustive evaluation. And you're asking that great question, what would success look like because we are doing just a Phase I study in healthy volunteers.

Very comprehensive study, though. And the idea would be like we want to get definitive ideas about the dosing regimen, what is the ideal dosing regimen, right? So if we believe the drug is working, then that would enable us to go for a full-fledged Phase II study in psoriasis patients. Now what we are looking for, the antibodies, oral -- I mean, injectable antibodies have taught us a lot, right? It's like what should be the level of target inhibition that you should be achieving that would translate into efficacy.

So what we have done is like based on that, and we have achieved amazing [indiscernible] potency, right, picomolar kind of potency against the target. And another characteristic we have, which is [indiscernible] is we have activity against both A and F isoforms. We don't know of anybody with an oral approach that has that right. So we have made it as full proof of possible.

But getting back to your question, this has given us an understanding of what are the drug levels we need to achieve through oral administration that would give us the confidence at a translational level that, okay, this should lead to efficacy in patients. And so that is what we are striving for in a Phase I study.

Now the other thing to keep in mind is like our peptide, it's almost like 100x smaller in size compared to the big antibodies. And so in theory, one could assume we may have better tissue penetration, skin penetration, that sort of thing. And that could give us an extra advantage in terms of overall efficacy scores down the road. Having said that, we are not counting that in our "mathematical model" of like what are the drug levels we need to achieve based on what the antibodies have taught us in order to feel pretty assured of efficacy.

Right. And one of the questions that we get around the oral IL-17 program is how much of this does Protagonist want to execute on their own versus ultimately finding a partner for a large indication. How are you thinking about business development around oral IL-17? Is this an asset that you can take to the finish line yourself? Or do you ultimately view sort of maybe the same road map as we've seen with...

Another fantastic question, and I'll give a slightly detailed answer. So as you know, with the money we have in the bank and then we have also kind of admitted that we will be most likely opting out, let's say that out of the Takeda thing, which is going to bring an influx of another $400 million and the $75 million upon approval as a milestone payment and another $50 million from J&J, if ICO gets approved, right? And then the revenue streams, we are not even -- and revenues are perennial.

So there is a lot of money, will the company Protagonist have the financial capability to fund its own studies, not just up to clinical POC, but even in Phase III studies, even for larger indications, the answer is yes. Are we going to do that? The answer is no. Here is the reason why. It's not only about money, right? It's look at the amazing strength that a pharma brings to the table, right? It's like ICO, by the end of the day, counting all the 4 indications, it's being evaluated in 7,000-plus patients. What an amazing job, right? Think big. Pharma can do that. As long as we get our cut a fair cut, we will be okay.

So our approach would be, in simple terms, it is like we will take all of our assets to clinical POC. But after that, I'm a big believer of pharma partnerships because of the things I mentioned about. Now we may have a higher participation. With J&J, when we did the deal, it was at a preclinical stage. The arrangement was we discover, we do the preclinical and IND-enabling and Phase I studies. And after that, Phase II and beyond, they take care of it. Now we may say, you know what, no, Phase II, let's do a 50-50 cost sharing. Phase III, let's do a 30-70 cost sharing. So we could get more creative so that we can retain more back-end economics.

But at the end of the day, for big indications, yes, we would love to have a pharma partner. For the niche indications, the rare disease indications like our oral hepcidin, that is where we definitely can have a mindset of like, let's do it alone all the way through the finish line. So it's those kind of things. But the beauty is we envision we'll be doing all these things without -- never say never, but most likely never having to raise money from outside, right? So we are not going to dilute away the shareholders for the foreseeable future.

Right. Great. And maybe with that, we could spend the next few minutes on obesity. Obviously, dominated now by the injectable peptides. You've had an opportunity to see all of the commercial dynamics, what's happening in the clinic with different agents. I guess how are you thinking about how the set of molecules that you're developing, where they can ultimately fit in the treatment paradigm for obesity?

Yes. So look, I think in obesity, it checks all the boxes for us, right? The 2 approved drugs are injectable peptides. So we are like, yes, we can make a difference over here. At a very simplistic level, we look for 2 things when we choose a project. It should be an area where there is significant unmet need. And second is through our approach, we should be able to offer some very strong differentiation.

So over here, clearly, the area is getting very crowded, but I believe that this is an opportunity of a lifetime of unprecedented level for our industry. It could be what AI is for high tech, the whole obesity and comorbidities could be for pharma sector. And we may just be scrapping the surface. This may just be the humble beginnings. And as usual, so many undertakings are there, that kind of stuff. But even then, we said, you know what, and we consulted a lot with the KOLs. And what came at the top of the chart was like, hey, can you create an oral triple? And the answer was, yes, we can do that. So that is what we have chosen, right, an oral triple GLP, GIP, GCG. But in talking to the KOLs, we also gained an understanding of what could be the relative potencies of GLP, GIP, GCG that could be considered optimal. And could that translate into not just better quantity of weight loss, but also better quality of weight loss.

So I'm referring to better tolerability, which could be achieved through better GIP agonism and better lead muscle mass preservation that could be achieved through the GCG component of energy expenditure, that kind of thing. So we have tried to optimize those components also as much as possible. And we believe we are the only or one of the very few oral triples that is out there.

And in talking to the KOLs, it also occurred that, hey, some of the markets with some patients for some periods of time may belong to injectables. So we are developing both a weekly subcu and a daily oral. And the PK characteristics are fantastic. We see drug accumulation. So we do believe that down the road, maybe the weekly subcu could transition to monthly subcu in a maintenance setting. And same way, the daily oral pill could be a weekly oral pill or something like that. So we like what we are seeing. But the other thing is like we're not falling in love with just one asset. We want to create a portfolio of assets over here.

So we have already announced we have a dual, right? And we have already acknowledged our presence with amylin, mono and polyagonist, that kind of thing. We'll create a portfolio of assets. And I think down the road, it will become more clear which could be preferred in which kind of subpopulations and also within -- when you consider the comorbidities, right? So if it is, let's say, NASH/NASH kind of livercentric indications, maybe the GCG component does become important over there. That's where the field is leaning towards.

So I think we are still learning. And we just are taking a very humble approach over here. It's like let's create a portfolio with different kind of characteristics and then let's see where we will land at the end of the day.

Yes. Yes. No, great. And you've talked about potentially achieving maybe early clinical proof of concept with single ascending, multiple ascending dose studies. I guess this is sort of design, right? But is this really based on just what the analog that you've seen in clinical development and being able to assess exposure in an initial -- whether it be 28-day weight loss and then assuming that maybe that would be durable? How long...

Whether it is a 13-week weight loss, that kind of thing. No, exactly. It's like we are observing. We are learning from others, why not, right? Knowledge is free. So -- but that would be the idea. And by the way, that is another general advantage with our approach, like in a Phase I setting, you can get your clinical POC. That is very true in the obesity space. You enroll healthy volunteers with a higher BMI and you will get your readout even with the oral hepcidin, for example, we'll observe the effect on serum iron levels and the related biomarkers, and we will get a good understanding of where we are going.

So I think then if you add up everything that's in our R&D pipeline, the clinical POC is just going to sneak up on us. It can come sooner than what most people may be anticipating.

Great. It looks like we're up on our time. Dinesh, thank you so much for a great discussion. Thank you for our listeners as well for listening in.

Yes. Thank you for the wonderful time. Great questions.

Good morning, everyone. Thanks for joining us for another session at the 44th JPMorgan Healthcare Conference. I'm Brian Cheng. I'm the senior biotech analyst here at the firm. On stage, we have the CEO of Protagonist Therapeutics, Dinesh Patel. I'll now pass the mic to their CEO, Dinesh, for a short presentation, followed by a live audience Q&A.

Dinesh, the stage is yours.

Excellent. Good morning, everybody, and thank you, Brian, for the kind introductions. It's a real privilege for Protagonist to participate at this prestigious conference, and this is for the sixth year in a row now. Just a quick reminder that we will be making forward-looking statements during the presentation and throughout the conference.

So this slide provides an outline of today's talk, and it also highlights how the next 12 to 24 months are going to be a phase of immense growth and value creation at Protagonist, driven by 2 potential blockbuster approvals and launch, multiple clinical readouts, new discovery programs and a very strong cash position, right? Starting on the left then, this could be the year when we could be completing our very long -- decade-long journey from concept to commercialization through 2 specific assets, icotrokinra, partnered with J&J and rusfertide, partnered with Takeda.

And in the middle, we are highlighting our development candidates, all working on validated biological targets, but with highly differentiated assets addressing specific unmet needs and spanning over multiple indications. Also, unlike ICO and rusfertide, these are fully owned by the company. 881 is potentially a best-in-class oral IL-17 antagonist. 477 is a triple agonist that marks our entry into the obesity space. And today, we are very thrilled to announce 2 new development candidates, namely a dual GLP-GIP agonist, 458 that adds to our obesity portfolio and an oral hepcidin functional mimetic, 8047 that could complement rusfertide.

Moving to the right, we have added IL-4 and amylin as new high-priority discovery programs with a long-term perspective of expanding and strengthening our pipeline. Finally, we are very fortunate to have a very strong position, which enables us to not only fund our internal programs, but will also enable us to return meaningful capital to shareholders. So with this outline, now let's go through an overview of these assets and programs, starting with ICO. Icotrokinra highlights one of the most important partnership in Protagonist history, namely with Johnson & Johnson, which started all the way back in 2017.

And it underscores both the strength of Protagonist discovery platform and the value of such strategic partnerships. And ICO, we believe will hopefully set a new standard of care in psoriasis and subsequently in other IL-23 mediated indications. ICO by virtue of being the first and only in-class oral IL-23 pathway blocker in late-stage development, it has 2 big advantages. First-mover advantage and also great scarcity value. So taken collectively together, the 4 indications where IL-23 blockers have historically found success, psoriasis, psoriatic arthritis, UC, Crohn's, these represent a total commercial opportunity north of over $80 billion. And the opportunity for ICO in particular, comes in 2 different ways.

First, taking share of the market from the current drugs and second, creating its own new market. So all the approved IL-23 blockers today, STELARA, SKYRIZI, TREMFYA, these are blockbuster drugs, but these are all injectable antibody drugs. And marketing research data clearly suggests that almost all, 90% of the patients who are on injectable still will happily switch to an oral if a good option was available. The second finding is that from millions of people that are eligible for targeted therapy, more than half of them are not opting for anything for 2 reasons. They don't like injections, and they don't like the options that are currently available in the oral camp. So ICO, through its amazing combination of biologics-like efficacy, stellar safety, convenience of once-daily oral pill, it could benefit from both the existing market and also create a new market of its own.

So collectively, when you put all these facts and figures together, it easily justifies a consensus forecast of $10 billion plus in total market value exceeding over $80 billion. This slide summarizes all the Phase III clinical data from various studies in psoriasis, and we'll keep this high level because this has already been shared before. But in terms of efficacy, you can see that high rates of skin clearance by all different measures are consistently achieved by week 24 and the responses are durable over extended periods. Besides efficacy, we believe equally important is safety. And honestly, it's not that often in our careers that we got a chance to say that, gee, our drug exhibits placebo-like safety.

I guess that says it all. So taken together, ICO delivers what dermatologists and patients have been asking for all along, right, biologics-like efficacy with the convenience of an oral pill and without compromising safety. So these study results form a comprehensive data package that formed the basis of NDA filing last year. Now moving from derm to IBD conditions. Here is a cross-trial comparison of Phase II UC study results of ICO with not just the IL-23 injectables, but also all other approved IBD drugs, including oral small molecules. And with a clinical response of 64%, ICO's efficacy is really at the top of the chart. These study results demonstrate the best-in-class potential for ICO in inflammatory bowel diseases, especially if you add the amazing safety profile of ICO compared to the other choices in the field.

And of course, this has triggered pivotal studies in both UC as well as in Crohn's in the hands of our partner, J&J. So this is a concluding slide for ICO. It provides critical events and time lines, and it highlights the great breadth and momentum of ICO, starting with the potential commercial launch for psoriasis this year, followed by completion of pivotal studies and significant commercial expansion into other indications in the coming years. In terms of near-term catalyst, Phase III ASCEND study and the Phase III biologics naive psoriatic study, they will be completing their primary endpoint phase of the study.

ICO is an incredibly important asset to J&J immunology franchise. And their expertise in this area through STELARA and TREMFYA will be a great asset for commercialization of ICO. And finally, the pronunciation of icotrokinra just got easier. J&J shared the brand name yesterday, it's Icotide, so much easier than icotrokinra, I guess. All right. Now let's talk about our next asset, rusfertide, that is also eyeing an approval launch this year.

Rusfertide, as you recall, is a synthetic peptide mimetic of the natural hormone hepcidin, whose function is to control iron absorption, storage, distribution in the body. And by controlling iron, obviously, it is controlling red blood cell synthesis. So PV as a reminder now, is a rare disease characterized by excessive production of RBCs, and the primary treatment goal as per NCCN guidelines is to maintain hematocrit below 45%. So this provided the rationale to evaluate rusfertide, a very RBC-centric option for PV, and the study results have been outstanding. Rusfertide Phase III VERIFY study results were presented last year at a plenary session at ASCO.

And it was really gratifying to hear an independent discussant describing this as practice changing and recommending it as part of standard of care for PV. The study met not just the primary endpoint of clinical response, but also met all the 4 secondary endpoints, including patient-reported outcomes. The core mechanism here, of course, is rusfertide's ability to control RBC synthesis and offer consistent hematocrit control. So patients on rusfertide treatment arm, they control hematocrit like magic, whereas the patients in placebo arm who are on standard of care, they see a rise in their hematocrit levels.

And after 32 weeks when rusfertide is added to that treatment regimen, hematocrit levels are normalized fairly quickly. So it's really a titration to effect, and it demonstrates rapid onset of action. So rusfertide is showing a lot of promise as a potential first-in-class RBC-centric treatment for PV, and our partner, Takeda, has made a conservative estimate of peak revenue potential of $1 billion to $2 billion for this drug candidate. Now PV is a rare disease, but with pretty high prevalence number, north of 152,000 patients in the U.S. alone. And out of the 78,000 or so patients on treatment, their choices range from phlebotomy to hydroxyurea to interferon to Jakafi in HU-refractory patients.

And polytherapy cycling through different treatments, it's quite a common occurrence for these patients. A very, very consistent observation amongst all these patients is that a vast majority of them, about 78%, they failed to control their hematocrit in a consistent manner. And this is true for all stages of treatment. And this is a clearly large unmet need and RBC-specific unmet need. And then, of course, it could be addressed by an RBC-centric agent like rusfertide, right? And therein lies the strong differentiation and the commercial appeal of rusfertide. So we now have a very comprehensive clinical data package from various studies, which form the basis for the NDA submission last month. And remind you that rusfertide is an orphan drug for a rare disease.

It has Fast Track status, Breakthrough Therapy Designation, all of which should allow for an expedited dialogue with the agencies. And we anticipate potential approval followed by an almost immediate launch by our partner, Takeda, in the second half of the year. I would also point out that Takeda has strong experience and presence in the heme space and rusfertide is a high priority for them, which fits nicely in their heme portfolio. So this now completes our overview of 2 mature and partnered assets, Icotide and rusfertide. And now let's shift gears and talk about the next set of emerging and fully owned assets in our R&D pipeline, starting with 881. PN-881 is potentially a best-in-class oral IL-17 antagonist.

It's almost like a second act for us in the inflammatory and immunomodulatory space, the first act being icotrokinra or Icotide rather. IL-17 is a clinically and commercially validated target with utility in multiple indications. And IL pathway blockers are almost on equal footage with IL-23 blockers in the psoriasis space with a current market share of about $9 billion ballooning to over $17 billion by 2034. And besides psoriasis, they also extend their utility to other indications, right, psoriatic arthritis, HS, spondyloarthritis, things of that nature. Current agents are all injectable antibody drugs. And the best-in-class injectable is BIMZELX or [ bime ] from UCB, whose unique feature is potency against both the A and F isoforms.

So therefore, we embarked on discovering an oral peptide with BIMZELX-like A and F potency, and that is what we achieved in 881. And we have presented extensive preclinical data last year for 881. We finished the IND-enabling studies and commenced a Phase I study in the fourth quarter of last year. It's a pretty comprehensive 5-part phase study in about 150 volunteers comprised of SAD, MAD assessment of various solid dosage formulations and food effect. And the primary endpoint is focused around safety. The secondary endpoint is largely PK-centric, focused on drug exposure levels and identifying the optimal oral dosage formulation.

And we expect study completion by midyear, which in turn would then influence the design and initiation of Phase II study in psoriasis by year-end. Let me now take this opportunity to introduce one of our new development candidate today, 8047. See, Brian, we always save some new announcements for this prestigious conference, an oral hepcidin functional mimetic. So in -- if 881 was a second act to icotrokinra in the I&I space, then similarly 8047 can be viewed as a second act to rusfertide in the heme space. The rationale behind 8047 is pretty straightforward. Rusfertide has already validated the hepcidin pathway as a therapeutic approach for erythrocytosis mediated diseases.

And it's an outstanding drug. It's a weekly subcu injectable. 8047 is an oral option that can nicely complement rusfertide, and it can maximize the total addressable global market of hepcidin mimetics. And I do want to point out that unlike all of our previous candidates so far, which have been peptides, 8047 is a small molecule. We did an extensive comparison of various modalities that is peptidic versus small molecule leads and ultimately settle for a small molecule as the final choice over here. And this is just a summary of the potency of 8047, very similar to rusfertide, both entities are very potent, more stable and have superior drug-like properties in comparison to hepcidin. We have run extensive preclinical studies.

And of course, we are saving this data for presentation at future medical conferences. IND-enabling studies are underway, and we expect Phase I initiation by year-end. A very noteworthy point here is that in healthy volunteers itself, we'll be measuring the effect of iron levels, and we'll be able to establish an early clinical proof of concept. The next phase, obesity, as we know, it's a pharmaceutical opportunity of unprecedented scale. And today, it is largely dominated by 2 products, semaglutide and tirzepatide, and these are both peptides and injectable peptides, right? So this was -- it was only natural for us to apply our expertise in oral peptides and develop highly differentiated assets for this chronic condition.

And with that in mind, we are developing 477 as a novel oral GGG agonist with the objective of maximizing weight loss, offering better quality of weight loss and improving tolerability as well. And oral GGG, we believe, is one of the first-in-class category drug candidates here. And while that's where our focus is, we are also developing a subcu to maximize optionality and flexibility for both the patients and physicians. Also, early preclinical data shows a drug accumulation, which may facilitate the once-daily oral transiting to a once-weekly oral down the road and the once-weekly subcu morphing into a once-monthly dosing down the road. Time will tell. Both oral and subcu form of 477 are currently in IND-enabling studies, and we expect this to enter Phase I studies this year.

And once again, over here, a Phase II study with proper choice of healthy volunteers and proper design of SAD/MAD studies could provide a fairly decent and quick early clinical POC in a Phase I setting itself. Now obesity is a huge opportunity. It's rapidly evolving and changing. And there is going to be a strong need for multiple products to cater to different subpopulations and comorbidities. Therefore, we have always had the mindset of building a whole portfolio. And I'm glad to make 2 new announcements today. Once we -- one, we have identified 458 as a new novel dual GLP-GIP agonist. And tirzepatide, as you know, is the best-performing, best-selling dual agonist, but it's an injectable. So our differentiation is oral, although we are developing both oral and subcu to preserve optionality.

And second, amylin is a very important non-incretin target in the space, and this is a high priority target for us. So now this kind of completes our overview of clinical, preclinical discovery efforts. And now let's talk about the financial strength of the company. So for the financial overview, we intentionally chose this particular image as a backdrop. It's almost as if the individual here is representing Protagonist and proclaiming its financial independence. Okay. So we ended the third quarter of last year with around $679 million, which is sufficient to fund all of our operations at least through the end of 2028. And it is very important to stress, and my CFO, especially wants me to stress and clarify that this cash runway forecast through 2028, it does not include any future milestones, fees or royalty-based income that we would be receiving from our partnered pre-commercial assets, ICO and rusfertide.

And let me offer more granularity, some of it for the first time actually on the potential future revenue generation from these partnered assets. So let's start with the economics around the J&J collaboration with Icotide. We have already received over $300 million to date in the partnership and are eligible for receiving another $600 million in future development and sales milestones. There are over $200 million as development milestones over the coming years based on success around second and third indications. So practically speaking, very achievable. And we have previously guided to a 6% to 10% royalty range. Today, we are offering more clarity. So we'll be kind of averaging around 7.25% in annual revenues up to $4 billion, after which anything over $4 billion is subjected to the 10% rate.

And the royalty-based revenue table below is by no means a sales or revenue forecast by us. It's just an illustration. But an annual sales of $5 billion could lead to $400 million pretax revenue earn out, whereas if this becomes a $20 billion product at peak sales, then you're getting close to the $2 billion ZIP code. And now let's move to the next money tree, rusfertide, which is partnered with Takeda. Here, besides the normal milestones and royalty structure, we have a special provision to the current 50-50 co-development, co-commercialization partnership structure. So 120 days after the NDA filing, and the NDA filing was filed last month. We have a 90-day window wherein Protagonist can decide to opt out of the co-co arrangement, thereby converting into an out-licensing deal at a practical level.

And the economics are very attractive if we opt out, $400 million onetime opt-out fee, 3x higher milestones and 14% to 29% royalties on a worldwide global sales basis. So not surprisingly, we are strongly leaning towards opting out at this stage, which will be sometime in the second or third quarter of the year. Now besides the $400 million opt-out fee, we also expect to earn about $100 million in development milestones centered around regulatory approvals. And the royalty range is 14% to 29%. The weighted average, and this is new information, is around 21% to -- at up to $1.5 billion annual sales. And then the royalty rates progress to 29% for annual sales exceeding $1.5 billion. And as you can see in the illustrative table below, how increasing annual sales of rusfertide can translate into significantly higher revenues.

Now finally, let's cover the sales milestone centered around the 2 products. And typically, sales milestones are stretched out and aspirational at best. But in our case, we believe all of these, which are totaling over $1 billion are potentially achievable over the coming years. So this completes our financial overview. And we have provided not just the regular forecast, but also offered much more clarity today than ever before on potential milestones and royalties from ICO and rusfertide. And once again, these are not counted in our cash runway forecast through 2028. So let's finish the talk with what we started with. Protagonist is -- we are at a great inflection point in -- as a company -- in the growth trajectory as a multibillion market cap biopharmaceutical company.

And we have different catalysts lined up over the next 12 to 24 months, and these range from the commercial launch of 2 different partner products, ICO and rusfertide, thus initiating the second act, both in the I&I and the heme space with oral IL-17 881 and oral hepcidin 8047, respectively, working towards building a portfolio in the obesity space with GGG 477, now also the GG 458 and early-stage amylin agonist. And at last but not least, adding a new very high priority target, namely IL-4 in the I&I space. And finally, having enough cash to not only fund all internal programs to clinical POC, but also returning value to shareholders through opportunistic share buybacks and further down the road, maybe even offer dividends.

And this is just a schematic concluding R&D pipeline slide and commercial pipeline slide, actually highlighting various catalysts and inflection points over the next 12, 24 months. Finally, let me conclude by extending a special thanks to the entire Protagonist team, comprised of employees, advisers, consultants, patients, physicians, caregivers all across the globe for their unwavering support and dedication throughout our journey. And thank you all for your attention. And with this now, we'll be happy to answer any questions. Thank you.

Thank you, Dinesh. I'd like to welcome Protagonist team to come on the stage as well for the Q&A session. For those of you who are in the audience, if you have any questions, please feel free to raise your hand. For those joining us virtually, you can also submit your questions on the portal. Maybe Dinesh, you can introduce who's on stage for those who are joining us on virtual...

So next to Brian is Asif Ali. He's our CFO. After that is Arturo, who's just getting seated, our Chief Medical Officer; and then Sam Saks, our clinical adviser.

Dinesh, thank you so much for joining us here. It's always great to have you. When you look at your portfolio today, I know that you refer each asset as your kids. So a lot of your kids are now grown up, and you're still raising additional kids. So...

We are fertile.

Where do you want to take Protagonist this year? I mean, let's say, we talk again in December and perhaps 5 years down the line, where do you see Protagonist? What do you think Protagonist is going to be known for?

Yes. So I think Protagonist is going to be known for great science, creating highly differentiated assets, whether it's in a new indication or a rare indication or whether it is in a very crowded space, be it obesity. Science ultimately differentiates us from everything and anything that may be out there. So I think that's the mark we would want to leave. And what we are finding out is like you don't have to give up things just because the company is evolving or growing, right? I mean if you look at the typical nature of biotech, I mean, we have seen company after company after companies. They started with discovery and then they get a product, and they have to develop it and they are like, oh, now we have to cut off discovery or that sort of thing.

And in our case, it's just the opposite. If at all anything, we are expanding discovery. I guess the genius is in making sure that you have enough of a cash runway. So we have been able to do that in a skillful manner. And ultimately, I mean, what matters the most is like how do we maximize shareholder value. And in a way, the benchmark is very simple. What is the value of your stock? What is the market cap of your company without further dilution and that kind of thing? And today, we are a $5 billion market cap company, and we aspire to get into the $10 billion, $20 billion category in the very near future.

Today is the first day that we started to see a lot more color in terms of how we think about breaking down the royalty streams coming from Icotide and also rusfertide. How will you want to divide resources among internal R&D pipeline? You also mentioned stock repurchase, potential dividend. How should we think about the division of potential resources?

Yes. So I mean, it's a very dynamic situation, right? And -- but of course, no sacrifices will be made in funding our discovery to clinical POC. After that, even if we have cash to go further, I guess it becomes a matter of practicality. And I mean, today, we can also state that, let's say, if it's a rare disease asset, like the oral hepcidin, over there, we may have the mindset of taking it all the way through approval and commercialization, right? But in the obesity space, I would very much prefer a pharma partner when we are doing, let's say, Phase III studies.

Now it's not just about the money. We have too much money, but it's also like pharma, they bring incredible experience, expertise, their abilities to scale. Look at the wonderful things that J&J is doing with Icotide, right? So -- and it brings a great different form of validation. So those are the attractive features. As you know, we are always pharma friendly. So we'll continue to do that. And then in terms of capital allocation, that kind of comes after we fulfill the first requirement. And currently, the math suggests that we'll be able to do both. So we'll do it in a meaningful manner. But maybe Asif, you could chime in and share additional thoughts.

Yes, happy to. I mean that's -- I think you hit the key messages. It's a balance between capital return to shareholders while also complementing our discovery programs. And you saw the breadth of what our ambition is earlier in the presentation. So it really will be a balance. And as Dinesh said, at any time, it will be dynamic, and it depends on where and what progress we're making in that ambition.

Great. Before we get to the new data, I always appreciate that, but I want to touch on the upcoming data coming from 881. I think one is you had a lot of experience developing ICO. How confident are you in this program? And as we think about the healthy volunteer top line midyear, where do you think investor need to focus on?

Yes. So with 881, we presented extensive preclinical data last year. And that's about as much as you could do in a preclinical setting. And -- but at that time, we also communicated that, hey, going forward, we are going to be a little shy on sharing data right away for multiple reasons. So that's the path we are following now with 881. I guess with 881, the big signal one should wait for is like are we going into a Phase II psoriasis study or not. And that's about as much as we'll be able to share. But maybe Sam, Arturo...

Let me just say that we know the actionable levels from the antibody. So in terms of IC50, IC90, the pharmacokinetics here are very value creating because the target is already painted, and we just have to hit it.

And you all saw the trial design for the Phase I study. It's very comprehensive, and we would be obviously testing different doses that give us the optimal PK, similarly, testing different formulations. So stay tuned.

Yes. And we are, I mean, obviously, planning for success. As I mentioned, it's a very comprehensive Phase I study, and we are taking a leap of faith, evaluating solid dosage formulations, and we will see what the data teaches us by midyear.

The -- maybe switching gears to oral hepcidin. It's definitely a surprise that this is a small molecule. How different could this new molecule behave compared to rusfertide, which is a peptide? And can you also remind me if Takeda has the right -- has the first rights to in-license this program?

Yes. So excellent question. And look, at the end of the day, we concluded that we should be agnostic to whatever modality it be. Sure, our expertise is in peptide therapeutics, but just like anything else, we just have to be open to all different scenarios. And in this case, we did extensive comparison with a peptidic lead and the small molecule lead, and the small molecule won. So that's it. And just a digression. But hey, recently, we had a VP of Chemistry, who was the VP of Chemistry at Dicerna that acquired by [ Novartis ]. Now he -- Dicerna, as you know, is focused on oligos. And so we bring yet another level of expertise. Now I would also share that I have known Charlie Xiao for decades. I hired him in 1993 at Affymax. So we go a long way back.

Any questions from the audience?

Just to follow up the question [indiscernible] Takeda.

Oh, yes, yes, sorry. Yes, yes. So this is a fully owned asset by Protagonist, and Takeda has the right of first negotiation.

Until what period of time do they have that right...

The question is until what period of time until they have the rights.

I don't think it is period sensitive. That's my recollection. And we have had rights of negotiation arrangements previously in other kind of setups. And I think it's an easy thing to give and live with. It doesn't take away anything from your full ownership on the entity.

Just on the obesity front, today, you disclosed 2 additional programs in the obesity side on top of the GGG that you disclosed last year. How do you think about rolling these assets out? Because ultimately, I think earlier today in your remarks, you talked about on the obesity front, this is more -- this is definitely anchored towards partnering with a pharma. How do you envision within the next couple of years, building these 3 assets out so that one or more of these assets will be attractive to attract a partnership?

Yes. I think our mindset is that, look, with obesity, we are just scratching the surface. I mean if you look at the market research data, it's like about 3 million, 4 million patients are being treated out of 300, 400 that may be eligible. So this market would grow by 2 orders of magnitude. And what's the hottest thing today, it could be all very different a few years from now. And we are already seeing that, right? It's like now all of a sudden, amylin is the most shiny object or very long-acting drugs could be the next thing. So you just have to be on your tippy-toes, and we like it that way.

So we are just increasing optionalities, right? Our expertise is oral, but yet we are like in talking to KOLs and all that became apparent like, hey, creating a subcu optionality may not be a bad thing. So now it's the same API, same drug substance. So it hardly matters to us in terms of extra efforts or something. It's so convenient for us to develop both. So we'll keep our eyes and ears open and keep adding different assets to the portfolio.

You have a pipeline of a large-cap pharmaceutical company. And today, you add...

Except for the valuation, the market cap. Yes.

And today, you add dual inhibitors, both oral and subcu on top of amylin, which are all really interesting. How do you think given the size of the company? I mean, clearly, you have a lot of cash and you're going to have more cash. But how do you think about executing on this plan? Because it's quite a pipeline before and you've added substantially to it today.

Yes. We will build the company and have the resources, both financial and operational resources as needed. We are constantly on the lookout for great people, people with the proper skill set. So we look forward to scaling the company, and we are super excited about it.

Maybe just lastly, the last assets that I want to touch on is the IL-4 on your earlier slide. What is the plan for that asset? And how should we think about where that fits into your whole portfolio?

Yes. I mean, as you know, IL-23, IL-17, IL-4, these are probably the 3 hottest targets in the I&I space. And [ dupi ] is like a great role model. It's an injectable. And so that is what we'll be striving for in an oral IL-4 blocker.

Well, that's all the time we have. Thank you so much for joining us.

Okay. Welcome, everybody. I'm Doug Tsao, senior analyst at H.C. Wainwright. We are thrilled to have with us Protagonist Therapeutics, represented by the company's CEO, Dinesh Patel. I've known Protagonist for over a decade now, which makes me feel a little old. But it's been really remarkable to see the company's progress. When I first met Dinesh, the company was pretty much in like Phase I stage with PTG-100. And now the company is on the cusp of getting its first drug approved. So it's been a great -- and not just its first drug, probably its first 2 drugs approved. So with that, you recently received breakthrough designation for rusfertide for polycythemia vera. -- which is sort of the second time you received it. And you had -- previously had breakthrough designation. It was taken away based on some preclinical findings. I guess, from your perspective, is it safe to say the agency feels comfortable both with the profile as well as the efficacy. And I'm just curious what led you to reapply for breakthrough designation?

Yes. No, I mean, look, first and foremost, thank you for inviting us. We never take anything for granted, whether it is invitation at conferences or things in our pipeline, no matter how validated you are. R&D is R&D. You have to be on your tipites all the time. So thank you. Yes. With rusfertide, it has been a great journey, right? It's one of those things where we said we are going to innovate on our own. It's a hepcidin mimetic first of its kind. So in the early beginnings, as you know, we had tried quite a few things, beta thalassemia, HH and then finally, polycythemia vera. And the drug works in HH. In polycythemia vera, there is such a huge unmet need, and that's how our journey started. And then as you learn things, you get more familiar with the drug and you create your development program. So the latest thing is that we got spectacular Phase III results where we met not just the primary endpoint of freedom from phlebotomy for patients, but we also scored very nicely across all 4 secondary endpoints and some of the endpoints were related to patient-reported outcomes, right? In PV, with phlebotomy, especially, you are depleting patients out of iron in their body. So they have fatigue, brain fog, those sort of things. And of course, we got the opportunity to highlight the Phase III data at ASCO as a plenary session where the odds are incredibly low for being selected, right? They chose 5 abstracts out of 5,000-plus submissions. So I think it is the Phase III study results that has really turned the corner in every manner that you can imagine. And so we felt very confident reapplying for the breakthrough designation based on that. I mean if you look at the definition, of breakthrough designation. It is like, hey, your clinical findings are of such nature that they are suggesting a potential of your drug to have an improvement over the current treatment. And our data clearly suggests that this is the first ever erythrocytosis specific agent that will be -- that has the potential for treating erythrocytosis in polycythemia vera patients. So I think that probably is -- it's the new data that sheds new light and showcases the new potential. And at the ASCO plenary, if the discussant who is an independent individual is saying making comments like this could be practice changing. This should be part of standard of care. I think that's how we arrived at the breakthrough designation. And it also shows that the agency is doing its job. It's looking at what the data dictates and then acting accordingly. And now we are privileged. We'll have the privileges of the breakthrough designation basically.

And so presumably, you'll now have priority review, right, a 6-month review. How does that or does it have any effect on your sort of opt-in, opt out decision and timing?

Yes. So with breakthrough designation, I mean, you get expedited reviews and things like that. But we are not going to count our chickens before they hatch. So right now, the guidance is like we are not factoring in the possibility of a priority review kind of component. So it will be like, hey, we expect to file the NDA, we and our partner, Takeda, by the end of the year. So let's say, in December and then a year from now, you could be expecting approval. Now of course, if we get the priority review, that would shorten it by a few months, right?

And you have spoken about it is a $1 billion to $2 billion opportunity in PV. And you noted that you got a lot of feedback from KOLs at ASCO. And obviously, subsequently, I'm sure you're in constant discussion. Has your perception of the market opportunity changed? And has that feedback sort of made you maybe incrementally more bullish?

Yes. So I mean, if you look at the prevalence numbers in the U.S. alone, it is around 150,000-plus patients, right? And about 70% of those, so about 85,000 are actually getting treatment of one kind of the other, and you can find their data in the databases, that kind of thing. What we are finding though is like more than 2/3 of these patients, they have one common problem. They are not controlling hematocrit levels below 45% in a consistent manner with the current standard of care, whatever they may be using. And our drug, as I mentioned, it's a very erythrocytosis specific agent. And if you look at our Phase II study patient population, Phase III study population, that is the common denominator. It's like the standard of care is not working. Hematocrit is not controlled, and these patients could benefit from rusfertide. So in theory, that 2/3 of the population, so to speak, just in the U.S. alone, right? So about 50,000 patients, roughly speaking, that is the target population that could, in theory, be benefiting. And so I'll leave it at that. And Takeda has put out a forecast of $1 billion to $2 billion. We believe we are comfortably at the high end of that spectrum rather than at the low end of the spectrum.

And Dinesh, I mean, I go to the opt-in and opt-out decision that you face. And I'm just curious, is there -- do you see the -- in terms of if you opt in or opt out, right, even if you opt in, you don't necessarily have to build a commercial infrastructure, right? And so really, in some ways, the decision really comes to sort of, a, your sense of the overall market opportunity and whether you would prefer to get some additional cash upfront. How do you has that shifted your sense of -- or how is your thought process evolving in terms of the opt-in and opt out?

Yes. So I think at a practical level, we need to make that decision, let's say, by the middle of next year because the -- that optionality comes into play 4 months after the NDA filing and there is a 90-day period. So let's say, if we do the NDA filing in December, then from April through July is the time frame when we need to make that decision. So we still have ample time to make that decision. But here, I will offer a slightly new perspective on how to think about it. If we opt out, we get $400 million as an opt-out fee, right? And then there are also differences in milestone payments. Milestones are higher if we opt out. The first one being the NDA approval. If we opt out, it's $75 million versus if we are opted in, it's $50 million. So there is a delta of $25 million right there. So $400 million plus $25 million, that's $425 million. So look at it this way. If I stay opted in, it's almost like Protagonist has made an investment of $425 million into rusfertide. So we are like doubling down on rusfertide, so to speak, right? Whereas if we opt out, we are saying we have invested enough in rusfertide the opt-out terms are excellent, right, 14% to 29% royalty worldwide, where 29% is very much within reach. It is within this range of $1 billion to $2 billion guidance we have provided, right? So it's not like a pie in the sky kind of crazy number to qualify for that. 29% is a good number. So I think with opt-out, it's difficult to lose. And with opt-out, we now get this extra $425 million that we could think of doing a couple of things with it, right? Investing in our own R&D, -- as you know, the J&J deal we did on ICO that was all the way back in 2017 when it was a preclinical stage asset. Well, now Protagonist is in a different situation. So we could hold on to our assets for longer time periods, at least up to clinical proof of concept, that kind of thing. And ours is a validated platform and a validated team. So we feel comfortable investing in our own R&D in a deeper and longer way. The other thing would be also looking at external innovation. It's -- we are a technology platform company. There are ways and means of improving and strengthening the platform through things like formulation, AI, those sort of things. And we don't have to be experts in everything, right? We could be inheriting those things from outside as well. And then, of course, opportunities or early-stage assets where I would feel comfortable that my discovery team is saving at least 12 months, if not 18 months on a new program or something like that. So we will look for those opportunities. But we also believe that in spite of doing all that, investing in internal R&D, looking a little bit at external innovation, we'll be left with ample cash if we opt out. And then keeping in mind the royalty streams that come from the 2 pharma companies, both J&J and Takeda. Right now, share buyback on a regular basis, not a onetime thing, also appears to be an attractive and very tax-efficient option. So it will be like do all of that.

And Dinesh, one of the other events -- or actually, one quick on the opt out. So you have noted that it's 4 months after the decision plus 90 days. If you do get priority review, does that get abbreviated? Or could you opt out a potentially.

No, the opt-in opt-out is more to -- the clock starts ticking from the day the NDA is filed.

Okay. So then you have a plan to nominate oral hepcidin by year-end. And there -- a number of different ways that you could go with that. And does progress with that program influence the opt-in opt out? Or are you thinking of opportunities separate from PV? As you noted, you have sort of data in HH and the other areas that you could potentially go with a hepcidin.

I think it's a fantastic question. And I mean, mechanistically, rusfertide and oral hepcidin, they are very related. But in terms of clinical development or in terms of partnership with Takeda, -- those are 2 very independent and separate things. Now we totally fully own oral hepcidin. Takeda will have the right of first negotiation. So that's about as far as the connectivity goes. Now in terms of utility, also you are making a good point. I mean, PV is an obvious one. But there could be other indications where there could be benefit from once-daily oral dosing and moderate concentrations of your drug versus the once-weekly injectable that currently -- that's how rusfertide is being used. So those are the kind of things that we could explore and see if with an oral hepcidin, the clinical utility could go above and beyond PV.

I guess I wanted to turn to ICO, right, because that's one of your other key assets. And how do you see it differentiating from the competition in the IBD space in particular?

Yes. So ICO has been an amazing journey, and I cannot thank J&J enough for what an amazing job that they have done in the clinical development of ICO. As you know, they already filed the NDA. They filed it in July for psoriasis, so touch wood 12 months from July. So next year in July, we will see where we stand. But as you know, IL-23 blockers, I mean, they have a presence both in the derm and IBD space, right? So in psoriasis. Now a couple of things. One is IL-23 is a very proven mechanism that is both efficacious as well as very safe, right? The other thing is we still are the only oral IL-23 blocker that is out there. And if you look at all the things that J&J is doing, for example, let's say, in psoriasis, I'll get to IBD in a minute. The Phase III data is excellent. They have done a head-to-head superiority study with deucra, the TYK2 inhibitor from BMS. Over there, we scored positive. They are planning to do a head-to-head with their own drug, STELARA. The adolescent population data is outstanding. If you add all this up, what it means is like not only is this an only oral IL-23 drug that would find utility that way, but it also is marching towards maybe this is because it's a proven and established mechanism through Skyrizi, TREMFYA, all that, it could be a first-in-line therapy option. That's a huge, huge opportunity. And their own marketing research has suggested that about half -- more than half the I&I patient population that is eligible for targeted therapy, they are not opting for any because they don't like the injectables because they are injectables. Injectables work, but they are injectables. And in oral, honestly, there is a toxicity baggage with the kinase inhibitors, right? You just can't escape from that. So this will be the first option that is both efficacious and safe and oral. So you can also envision new market penetration in the I&I population, including both the derm and IBD conditions. And even those who are on injectables, 75% have expressed interest in switching to oral if a good option is available. And hopefully, that's what our drug is. Now in IBD, actually, if you look at our UC data, it's outstanding. 30% clinical remission at a higher dose, that's about as good as it gets in UC. And this is on a proven mechanism. And based on this data, of course, it's Phase II data, but it's like this could be the best -- one of the best UC drug -- oral drug that could be out there, actually, not just in comparison to oral, even with injectables or through different mechanisms. 30% is high. It's very high. And in a way, this is not just by chance, right? The very first thing we did when we started the program in 2014, we opted for the receptor, not the ligand, which is what the antibodies are targeting. There was a reason the receptor is overexpressed in the GI tissue compartment of IBD patients. So maybe that logic is playing a role. I mean this could be a bigger IBD drug versus a bigger psoriasis drug. Time will tell. And J&J clearly is voting with its feet. They have already announced that they are going in Phase III studies, of course, in UC, but also they're in Crohn's. And target is validated. There is so much familiarity. They know all that one needs to know about IL-23 blockers, things like that. So I think ICO could have an amazing presence in the IBD space.

So I wanted to turn to 477 because the obesity space has become incredibly crowded, both with people trying to develop next-generation incretins, both injectable, oral. You have new approaches like NRLP3 inhibitors. I'm just curious how you see yourself with 477 differentiating from not just what's on the market, but what is potentially coming to market.

Yes. So I'll digress a bit. CW through an amazing party yesterday night, right? Maybe analysts were not allowed, I don't know, but everybody enjoyed it. But if you are such a late entrant to such a huge party, which is the obesity space, think of it as a huge party, then how do you create your presence or how do you get noticed, especially when you enter STING is already performing, that sort of thing. So that's -- yes, we are late entrants in the obesity space, but it's like our key mantra all along has been in whatever we do, there will be one common prominent thing, differentiation. We have to be differentiated in a positive way from anything and everything that is out there. So we went straight to the KOLs in IBD and said, look, we have a platform, amazing platform. We can create anything. Give us a profile. So that's where the GGG came to the top. And in a way, we are the only company that is an oral GGG with this kind of exposure and presence. And if you look into the details, we have also paid careful attention to the relative potency of GLP versus GIP or GCG. We don't have much time, but I encourage people to look at our previous presentations when we announced that clinical candidate, things like that. So we have gone through great pains to create an entity that is just outstanding, very well differentiated. We have done head-to-head comparisons with retatrutide, of course, in a preclinical setting. There are reasons to believe that our drug is as good or actually better in some of these studies in Sino and monkey compared to retatreutide. But once again, I'll use a qualifier. This is preclinical. We don't want to get carried away. But it showcases like what is the level of differentiation that we aim for and especially when we are late entrants, but then it's a huge market opportunity. And that's why we opted both for the oral and subcu, right? It's like -- I don't want to predict the future, if I don't have to, why to take any chances, develop both. Now I believe for majority of the time, majority of the patients will use the oral. But talking to the KOLs, it seemed like if you had the subcu option, that was also desirable in some instances. And the switch with the same chemical entity from injectable to oral will be very convenient.

Do you expect the oral and the injectable to sort of pursue the same indications? Or is there an opportunity to sort of have them or could they potentially sort of diverge in terms of their development path?

Yes. So definitely the same indications and time will tell. This is where the science is still evolving, and we'll have to explore those things clinically, right?

Okay. And just maybe really quickly because we are in theory out of time, but we'll go into stoppage time. I don't know if you're a soccer fan, but just touch on 881 and what you think differentiates that molecule. And we've seen some sort of separation between the IL-23s and the IL-17 sort of overlapped an indication pursuit, but now have sort of gone their different ways. Sort of what is your thinking around where -- the direction you want to take that asset?

Yes. So I think there are 2 kinds of differentiation, and I'll be brief. It seems the IL-23 blockers, clearly, IBD is their domain, very unique to them. And it's psoriasis and psoriatic arthritis where I think there will be the overlap. And I think both IL-23 and IL-17 blockers will have a presence. Now of course, IL-17, their separate domain is HS and spondyloarthritis and things of that nature. But collectively, these 2 category of drugs, I mean, they will dominate the whole I&I space, and we are fortunate to have presence in both. Now with regard to our oral IL-17, once again, the same thing, differentiation, differentiation, differentiation. Compare our peptide to other oral small molecules that have been out there, we are more potent by orders of magnitude. I mean, really hundred-fold, 1,000-fold more potency, that is something to write home about, right? And then also the spectrum of activity, the best-selling drug and the best drug that works to IL-17 mechanism is BIMZELX and its unique feature is that it blocks both A and F isoforms. We believe our peptide is the only one out there in the public domain that has demonstrated blockade against all 3 AFFF isoforms. So that's unique as well. And we will hope that logically speaking, we should expect those kind of things to potentially translate in a clinical setting. Time will tell. Well, 881 is already marching into a clinical study. Our guidance was fourth quarter. So -- but the study has been sketched out there on clinicaltrials.gov and the journey has started.

Okay. Great. Well, with that, I think, unfortunately, we got to wrap up. I think we -- I only got to about half of my questions. So we'll have to save it for another time.

Excellent. Thank you.

Welcome to the second day of the Citi Biopharma Back to School Summit. I'm Geoff Meacham. I'm the senior biopharma analyst and my team is with me here as well. So we're thrilled to have Protagonist with us, and we have Dinesh Patel, CEO and President. So great to see you. Thanks for joining.

So maybe bigger picture, just with respect to the peptide platform, I think a lot of investors are looking for kind of -- I think you guys are valued pretty much on the assets and self, maybe help us with kind of your investments in the platform itself, how you view this as a renewable resource and that's something that I think you'll get greater value for going forward.

Well, first of all, thanks for inviting us. It's a pleasure to be here at this conference. In terms of the platform or in general, what's our distinction, we are focused exclusively on peptide therapeutics. And what we try to do is -- that the platform is pretty versatile, and it's agnostic to disease areas or targets, so in theory, we could be working on anything and everything. But of course, we don't want to get into situations where you win the battle and lose the war, right? So you succeeded scientifically, but there is no good utility for your drug. Those are the situations you want to avoid.

So we, on purpose, right from the get-go, look for a strong differentiation versus anything that is out there in a similar area. And that is why one of the major focus we have had is like, hey, let's work on those biological pathways and targets that have been amply validated by very commercially successful injectable antibody drugs. And if we come up with an oral peptide, that will be a very strong obvious indication and also superior in terms of ultimate utility. With regard to small molecules that will be oral, we will compete in terms of like better potency, better specificity and efficacy, those sort of features and characteristics.

Has the -- we'll get into rusfertide next, but last one on the platform, has the sort of strategy evolved about how you evaluate, how you allocate capital, what disease areas are unmet, what mechanisms are new and yet underserved and you could see some differentiation. I'm just trying to think of the thought process of how things pop out of the platform and how that has maybe changed over time, right?

Yes. So coincidentally, it has landed us in the arena of the heme space and the I&I space, right? And in I&I, I mean, in full admittance, early on, we were just focused on IBD. And over there, then the thesis was like we could create gut-restricted peptides to focus them in the GI tissue compartment that didn't exactly pan out that way, so we had to modify that, and that is one important evolution of the technology platform. We moved from gut restricted to kind of like peptides that are very potent, but also orally bioavailable and that has created a broader spectrum of opportunities that we could go after.

Okay. So let's switch gears to rusfertide. So talk a little bit about the NDA. What are the gating factors to getting that officially filed? Is there any sort of regulatory kind of uncertainty from the current administration that you think could add a little bit of risk to it as it seems to me to be pretty straightforward, but I want to get your view of that?

Yes. No, I mean, look, the macro environment is changing constantly, right? So we have to be mindful of all those things. But for us, I think, fortunately, rusfertide has been on a good trajectory. As you know, the Phase III data is outstandingly positive. And that was presented in the form of a plenary session at ASCO recently. And when a discussion says, and that person has an independent voice. But if they say like, [gee], this is practice-changing and should be part and parcel of standard of care for polycythemia vera, that goes a long way.

More recently, in terms of the regulatory component, as you know, we also got the breakthrough designation based on the Phase III data. So if at all, for us, the regulatory agency has been very favourable and is, we believe, looking at rusfertide very correctly, right? It's a rare disease drug. This is the first drug that is very erythrocytosis specific in the polycythemia arena, so it does address an unmet need, and that all adds up in the form of a breakthrough designation. So our interactions with the agency are very positive and going forward in a smooth and more expedited way.

Okay. That's great. So let's talk a little bit about pre-commercial and your Takeda, your partner, maybe talk a little bit about the collaborations that you have the -- on the PB market. Are you comfortable with maybe the level of investment that they're making? Is there an opportunity for you to impact that, right, with respect to the first, say, 12, 18 months of the launch?

Yes. Our biggest impact comes from the fact that we have kind of owned rusfertide for the longest period of time, right, from its inception all the way to when we were in Phase III studies, so there is just a richness of historical know-how and abundance of knowledge that we have, which is very useful for our partner. Takeda, by the way, they are wonderful partners. So I truly believe we made the right decision by joining hands with them.

And then, of course, we are a Nimbles Biotech, they are a big pharma. So that kind of for a lack of better word, the differences in style and those sort of things, that's just part and parcel of the journey, so to speak but this is a very important drug for them. So they are putting an army of people versus Protagonist having a few number of people. But like I said, they have the richness of resources. We have the richness of the historical know-how and familiarity with the drug. So both parties are bringing something special to the table, so to speak, and it has been a very collaborative spirit.

I wanted to ask about like your joint strategy. The market, you said like could be $1 billion, $2 billion peak sales. So together with Takeda, how are you kind of positioning rusfertide to kind of expand and the treated and diagnosed patients and get those like peak sales numbers?

Yes. So all this starts with increasing awareness of the drug, of the unmet need that it could address in polycythemia vera, right? And it's a continuous journey, beginning with your first clinical study where you engage some investigators, some physicians and you do some marketing research, you get in touch with the advocacy groups, things like that. So that's something that Protagonist has been doing for a number of years now. And one of the best forum of increasing awareness was when they got selected at the plenary session at ASCO, presenting rusfertide as a very erythrocytosis specific drug for potential treatment of polycythemia vera.

That was an eye opener for thousands of people who participated in that session. And then, of course, Takeda brings in its expertise in the heme space, that kind of thing. But for the next 12 months, both parties will continue -- like we will continue to cement and expand upon our relationships with the KOLs, with the investigators, with the practicing physicians. And these are the relationships that we have been able to establish during our journey of Phase II study in the U.S. and the Phase III study that was global across 14 or 17 countries, something like that. All that comes into play. And then, of course, Takeda also brings in the Japan angle as well, as you can imagine. So I think there is a lot of synergy and complementarity in terms of what both parties bring to the table.

And the partnership you have with Takeda, it's -- you still haven't made like opt-in opt-out decision, right? So how do you evaluate the trade-offs between maintaining the 50-50 kind of profit share versus full kind of opt-out rights for the kind of economics in terms of the partnership?

Correct. So when we -- the partnership, it was very important for us to retain as many choices as possible, and this is one of those wonderful choices. As you know, the opt out is very incentivizing with a $400 million opt-out fee. And even the NDA approval milestone has a $25 million difference between whether we opt out or stay opted in. So actually, it's like a $425 million money back, so to speak. One way to look at it is like the opt-out is kind of more front-end loaded, whereas the opt-in would be more back-end loaded.

And of course, if it's a $1 billion drug, then it's an easy decision. You just opt out. If it's a $5 billion drug, you stay opted in, that kind of thing. The truth may be somewhere in between. The good news is we have at least about 9 to 12 months to make that decision, right? The decision kicks in 4 months after the NDA filing and the NDA filing is projected towards the end of the year.

What would be the…

And sorry, one more way to look at it is like with that $425 million, if I opt out, then that's the cash that we have. We have 14% to 29% royalty and the 29% number, it's not like very far-fetched. The current guidance of $1 billion to $2 billion within that spectrum, we can achieve the 29%. So the royalty numbers are very, very rich.

And one way we look at it is like do we want to invest that $425 million on top of all the investments we have already made in rusfertide. That will be the opt-in or as a company, do we find some other use and utility that -- for that $425 million, for example, investing in our other R&D programs down the road, right? That's another way to look at it. But the good news is we have time on our side. We don't have to make that decision now.

And just on that, I'm assuming that the factors that go into that decision have to do with maybe duration of therapy, persistent rates, awareness, size of population. Is that kind of the context for how you're thinking about -- do you have like internal metrics on some of these things? And if you beat those metrics in the first 12 months, then you're more likely to opt in. And if you don't, it's -- is that the right way to think about it?

Yes. So whatever guess work we have to do, we have to do between now and the middle of next year because that will be the junction when we'll have to make that decision, right? So all those things are in play. But like I said, a simple way to look at it is like if we opt out, then we get this extra $425 million next year. And like I said, the royalty rates of 14% to 29%, where the 29% is kind of very achievable. I mean that's a high number, right? 29% of clean cut of the revenues, that's about as good as it gets.

If you opt out and you choose the $425 million, have you -- do you already -- have you pre-identified investments outside of obesity, for example, that you could maybe speed up? I'm just trying to think of like the reinvestments in the platform that you could maybe accelerate with that, otherwise you wouldn't be able to?

Yes. So we definitely are spending money and resources on expanding the technology platform, introducing new features into it, features geared more towards oral bioavailability, better exposure, things like that, formulation-centric things and also you cannot escape AI, right, when you are working towards optimizing a technology platform. So all those things are in play. But in all honesty, those are not big money sinkers, right? They take time rather than a lot of money.

So I think the value proposition is also going to be like early on what we would do if you look at our J&J deal, that was inked all the way back in 2017 when we just had a preclinical asset in the oral IL-23 program, whereas the Takeda deal was inked last year when we were in a Phase III study.

So it's only natural now that with the flurry of new targets and projects that we are working on and with the strong cash position that we have and even more cash coming into the future -- near future, we would feel obligated to at least take our assets towards clinical POC and then look for some inflection point or an optimal time period when we may want to join hands with the pharma because pharma partnering, it's not just about getting some money from the breadth of experience and expertise that they bring and the scale at which they can do things is unmatchable.

Look at what, for example, J&J has done with icotrokinra in terms of the spectrum of studies they have done and the aggressiveness with which they have conducted all these studies.

Maybe one last question before we can move to icotrokinra. Do you place any strategic value on like keeping some commercial control on rusfertide in your opt-in, opt-out decision? Is there any like thought process behind that decision?

Yes. No, I think that's a great question. And in all honesty, the answer is like at this stage, we don't see that much attractiveness in retaining the, “the commercial rights” or the opportunity to build our own commercial infrastructure. Because keep in mind, we can stay opted in even without building the commercial infrastructure, we can just participate with our checkbook.

The other thing is, if you look at our pipeline, we don't necessarily have any late-stage heme assets that could be bundled up in a commercial setting. Now those sort of things could change down the road, but that's a matter of number of years from now -- rather than now.

So maybe move to icotrokinra. The NDA has filed by J&J. So how do you assess kind of the next steps with icotrokinra approval and then the market penetration in [indiscernible], we have already oral available in the market, so how do you like think the launch or approval could go in psoriasis?

Yes. So I mean, as you know, IL-23 blockers, their claim to fame is like every IL-23 blocker that is out there has had positive results in not just psoriasis, but also psoriatic arthritis, ulcerative colitis and Crohn's disease, right, whether it is Stelara or Skyrizi or [indiscernible]. Now of course, those are all injectables. This is the oral one. And if you look at J&J's guidance, clearly, this drug is being evaluated in all 4 indications.

So psoriasis, we already have the data behind us. The NDA is filed. Psoriatic arthritis, the Phase III studies are ongoing. Just a few weeks ago, the guideline towards completion of the Phase III study was October of last year. Now it is May -- I mean, October of next year. Now it is May of next year. And by the way, this is a very common trend, like every clinical study with ICO, the enrolment has been completed significantly ahead of the initial projected timeline.

It speaks volumes for the J&J clinical team in terms of their execution. And I think it also speaks very favourably for ICO and its appeal to both the investigators as well as the patients that are participating in the study. And as you know, our Phase II UC data has been a stellar, and J&J has already committed to Phase III initiation, both in UC as well as in Crohn's. So in Crohn's, they are going directly into patients with a Phase III study. And by the way, we shared the Phase II UC results, just top line results a few months ago. But what we can comfortably say is like, hey, stay tuned for more detailed presentation at upcoming medical conferences.

There's a lot of indications that you mentioned. There's a lot more to come and the mechanism, I think, supports that. What's the level of analysis or internal investments on peripheral indications? I think if you look at a lot of the I&I drugs today, they've added some of these more orphan sort of more rare -- I mean, atopic derm used to be -- deemed to be a rare disease, and now it's obviously a pretty well addressed. Same thing with HS. So what's that -- how much does that play a role in kind of the longer-term NPV of the product?

Yes. No, I think that's a great question. My reading is that with IL-23 blockers, you probably will be focused on this big 4 indications, psoriasis, psoriatic arthritis, UC and Crohn's. And it's with the IL-17 blockers that you're going to go after not just psoriasis, but also HS and spondyloarthritis and those sort of things, right?

I mean if you look at Cosentyx or Bimzelx, those are wonderful injectable antibody drug examples of how they are making a difference in those other indications. And that is where, as you know, we have our own PN-881. It's the only oral IL-17 blocker that has activity both against the A as well as F isoforms. And the Bimzelx data reaffirms that it's critical to have the F activity as well. And I believe 881, our guidance is that it goes into Phase I studies in the fourth quarter of this year.

Clearly, J&J has given peak sales projections in just the core indications. But what's Protagonist role in your dialogue with J&J to kind of inform the market view? Are you guys comfortable with that? Is there meaningful upside to that? Is there optionality? Just trying to get a sense for the range of royalties going forward that -- what could be the delta?

Yes. So the royalties span from 6% to 10%, where the -- and it's staggered royalties from 6% moving on to 10% and the 10% kicks in, in my opinion, at a low bar of $4 billion plus. I mean if you look at the forecast for Skyrizi and Tremfya, Skyrizi is around $20 billion. Tremfya itself is around $10 billion already in terms of guidance. And by the way, J&J in one of their earnings call, not the most recent one, but before that, the consensus estimate for sales of icotrokinra for 2027 was around $700 million, and they guided it towards $1.4 billion. They said it would be twice that.

So they are quite optimistic about the drug. And if history is any guidance, then such a one and only oral IL-23 blocker could be a game changer in this space. And keep in mind that the marketing research that was done has provided a lot of good evidence. So for example, more than half of the patients, I&I patients that are eligible for targeted therapy right now are not seeking any treatment because they just don't like the current options.

So this is where ICO, which is an oral drug. And for a chronic indication, oral is the most preferred option, right? ICO could very well go after patients who are on the sidelines right now that are currently not treated by Bimzelx or Skyrizi or Stelara or anything, right? And even those who are on treatment, the marketing research results showed that 75% of them will be willing to switch to an oral if a good option was available. So ICO is really a much bigger story in our opinion than just being like the only oral IL-23 blocker, right?

If you look at what J&J is doing, they have already done a head-to-head study with [Deucra], the TYK2 inhibitor, right, and shown superiority. They already published adolescent data where ICO’s data is just phenomenal. They have already announced a head-to-head comparison study with Stelara. And all this is, if you think about it, taking us towards like ICO could be a very earlier option in the treatment paradigm. It could be an option as a first-line therapy, right?

An adolescent would definitely prefer an oral versus injectables, that sort of thing. So I think getting ICO earlier in the treatment option paradigm, being an oral -- being a very attractive feature for chronic conditions that we are talking about over here, going after a very significant patient population that is currently on the sidelines, not seeking any treatment, add all that up, and this is like, oh my God, this is a huge drug or a drug with a huge potential.

Yes. And by the way, we had a Noubar from Flagship yesterday talk about the value of partnerships and how now a lot of investors want wholly owned assets, but he was like, look, share the risk and benefit from the commercial leverage that you get with a pharma partner. And you guys are doing that. So I guess that's a bigger picture question, and we can get to obesity in a second.

But do you think about the value of partnerships any differently now that you have sort of 2 amazing partnerships and good commercial plans in place. Do you think about we want to bias slightly more towards wholly owned going forward? Or is it the same kind of analysis process that you've always had?

No, we are still grounded. We haven't developed an attitude. But jokes aside, pharma partnerships are incredibly valuable, as I said before, not just for the financing component. If at all anything, we don't need the money, right? We are cash rich. But the other things they bring to the table, like validation and the amazing resources and expertise and the skill set, I mean, the way J&J has done justice to ICO, I doubt it if a small biotech company like Protagonist would have been able to do that. So that is the value proposition there.

Having said that, though, just continue to talk specifically about J&J and ICO. We did that deal in 2017 when it was a preclinical stage program. But those days were different and as you know, now we are in a very different situation. So certainly, one significant change we are envisioning is like we will not partner that early. We can afford to hold on to things at least up to clinical proof of concept, if not further, and then seek for better terms, better ownership, all of those kind of things and better optionality. It's like down the road, we can co-share the risks and the rewards that will be more favourable to Protagonist and its shareholders in the long run.

Maybe one last question on ICO before moving to obesity. So you mentioned J&J is very optimistic with 2027, like $1.4 billion peak sales. Sotyktu launched by Bristol, of course, your potency and efficacy and profile is much better than Sotyktu had -- initially had some struggles getting to like sales were like slow and progressive. What gives you confidence in like being able to capture a larger share of the market from -- of course, now you have 2 competitors in the overall market as well.

And how do you see the market after the drug is launched, could really ramp up fast and you don't have to like use free drugs and other kind of ways to…

So I think there are 2 things, right? One is like -- and look, I'm a scientist and a chemist by training. But if you look at Sotyktu, in general, Sotyktu, these are JAK inhibitors, and we know the history with JAK inhibitors. There is always this “safety concerns,” right? So that is probably quite dominant. And it's a new mechanism, so to speak, in the treatment paradigm, whereas IL-23, the combination of efficacy and safety is unmatched.

And this is a path that has been travelled before quite extensively, but via injectables, right? So Skyrizi and Tremfya and even Stelara, which is an IL-12/23 blocker. So that familiarity and the historical track record, amazing track record of both efficacy and safety of IL-23 blockers. So here, you just are changing the route of administration, if you will. It's an oral. It's more convenient and more attractive. And so far, everything has matched very well, right? Whatever an injectable IL-23 has been able to do, we have been able to show that, both in psoriasis as well as in ulcerative colitis as well.

In fact, if you look at the UC data, I mean, 30% clinical remission at the highest dose, that's about as good as it gets. So yes, there is nothing but a very positive sentiment for this drug all along.

And then moving on to obesity, you recently disclosed 477, some preclinical data and your strategy that you're going to go with oral and injectable. So maybe like considering like recent data from companies like Lilly and others, how do you position -- you think your drug could be positioned versus like other drugs and in terms of like GI profile and efficacy-wise, like where do you see the profile is moving forward for your drug to achieve good market share?

No, I think that's a great set of questions. And look, I mean, when we made the decision to work in the obesity space, it really required a change in the mindset. If you think about it, rusfertide is our drug for rare disease polycythemia vera, right? So it's a drug for, let's say, a few thousand patients. Then ICO, the oral IL-23, it's a drug for a few hundred thousand patients. But now in obesity, you're talking about millions or hundreds of millions of patients. So it's just at a totally different scale.

The second thing is like we are kind of late entrants in the obesity space. So for us, the very first thing that we started talking about, right, today, differentiation, what is the differentiation? We start talking to the KOLs and there are 2 things that rise to the top. Number 1 was like, hey, can you come up with an oral triple-G? That will be the most favourable. The second in queue according to the KOLs was a dual GLP amyloid. So we decided to focus on the triple-G, and we succeeded in achieving all the efficacy that we needed and the differentiation we needed with the oral triple-G.

Now -- and if you look at our preclinical data, it's just outstanding and very, very promising. We have done multiple studies doing head-to-head comparison, of course, in a preclinical setting in [indiscernible] and in dogs with retatrutide and our drug shows amazing profile.

In terms of the -- inserting some more desirable features, what we have done is like -- and the science is quite deep and extensive and still evolving. But at the end of the day, the general feeling is like, hey, you need the GLP activity for weight loss. With GIP, you will get weight loss as well as you can create some moderation of the GI side effects. it's the GCG component that is more related to metabolic energy expenditure. So that is where you will hopefully inherit the feature of like maximizing fat mass loss and reducing the muscle mass loss.

And then you also pay attention to the relative ratios of GLP versus GIP versus GCG. And our platform would allow us to come up with any kind of relative potencies we wanted. So the selection of that we have made of GLP versus GIP versus GCG, it takes into account all of these factors. So we created -- we believe we have created really a good oral triple-G.

Now the final thing was like should it be only an oral? If you have an oral, you can definitely have a subcu, right? That's a no-brainer. And in talking to the KOLs and all that kind of thing and looking at even some of the drama that occurs with the Eli Lilly and the Novo drugs in terms of supply and those sort of things. And I said, why should I take the risk of predicting the future with absolute correctness when I don't have to. It's simple. Let me develop both an oral and an injectable. So that's the decision we have made. And I'm pretty sure that for majority of patients for majority of the time, oral will be the choice, but I can also envision conditions and situations and scenarios where some portion of the population for some period of time may want an injectable. And this is such a huge, huge market that we didn't want to leave anything at the table. So that's why we are developing both a subcu as well as an oral.

Just on that note, when you think about the latest -- there's a lot of assets that are oral and as well as injectable. Is there some consideration as you move to Phase I studies just to run a much larger Phase I trial just to derisk the program and sort of find out early. I mean, the...

Absolutely.

Okay. So GGG, I think, historically has had tolerability issues, but great efficacy, but you sort of want to know early...

And who knows what it will be with an oral GGG, right? And then once again, it's like an oral and a subcu, and that will be another measure of what may be more favourable, that sort of thing. But I think you're absolutely right. See, one of the advantage that we have with our approach of working with discovering and innovating very unique peptides. That's our differentiation. That's our expertise.

But we don't take the biology risk. We work on validated targets. So the advantage of that is like very early on in a clinical study or even in a preclinical setting, we start developing a very good understanding of the potential future performance of the drug. So you're absolutely right. In Phase I studies, right, it's like -- if you look at how obesity agents are -- anti-obesity agents are being evaluated these days in a 4-week Phase I study in healthy volunteers, let's say, with a BMI index over 29, you will get some understanding of the relative performance of your drug in that shorter time period. So that's -- so whether it's PN-881 or the anti-obesity agent PN-477 or our oral hepcidin, which is still a preclinical stage asset, although we intend to nominate a development candidate sometime this year. In all of those examples, you will learn a lot in Phase I studies. And all those studies will be initiating and unfolding starting from the fourth quarter of this year to throughout next year, 2026.

Okay. Well, with that, we're out of time. So Dinesh, thank you so much. Yes. Great dialogue. Appreciate the time.

Excellent. Thank you.