Good afternoon and welcome to Protagonist Therapeutics Fourth Quarter and Full Year 2020 Earnings Conference Call and Audio Webcast. With that, I would like to hand the conference over to our first speaker, Don Kalkofen, Chief Financial Officer. Thank you, and please go ahead.

Thank you for joining us today. As a reminder, certain matters discussed in today’s conference call and are the answers we maybe given to questions asked may include forward-looking statements that are subject to risks and uncertainties related to the future events and/or financial performance of the company. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors sections of our annual report on Form 10-K for the year ended December 31, 2020 on file with the SEC. A question-and-answer session will follow the formal presentation. And just as a reminder, the call is being recorded.

Thank you, Tom. Good afternoon, everyone and thank you all for joining our conference call to discuss Protagonist Therapeutics’ financial results and corporate highlights for the fourth quarter and full year 2020. Don and I are joined on today’s call by Samuel Saks, our Chief Medical Officer; David Liu, our Chief Scientific Officer; and Suneel Gupta, Chief Development Officer. 2020 was an exceptional and transformative year for Protagonist during which we expanded our clinical pipeline and we now have five different new chemical entities or NCEs that are being advanced in six different clinical studies. And all of these studies are expected to be completed over the next 2 years. As many of you know, each of our clinical assets has been developed through our proprietary technology platform. And currently, we are developing novel therapeutic options across three distinct disease categories: one, various blood disorders influenced by excessive red blood cell production that is accessing erythrocytosis or by excessive iron overload conditions; two, inflammatory bowel disease, or IBD, such as Crohn’s disease and ulcerative colitis; and three, various inflammatory and autoimmune diseases that have already been clinically validated by the interleukin-23 or IL-23 pathway. I would like to start today’s call by reviewing rusfertide previously known as PTG-300. As a reminder, rusfertide is a peptide mimetic of the natural hormone hepcidin, which is a key regulator of iron homeostasis, as it controls the absorption, storage and distribution of iron in the body. Rusfertide was developed to have superior drug like properties, including its potency, half-life solubility, stability and ease of synthesis in comparison to the natural hormone. Our most advanced clinical program with this candidate is in patients with polycythemia vera, also known as PV, a rare and progressive blood disorder affecting about 160,000 patients in the United States alone. In May of 2020, we presented a very small, but robust dataset for 7 patients from our ongoing Phase 2 PV trial and that proved to be a turning point for Protagonist. In December last year, in an oral presentation at the ASH Conference, we shared the data for 18 patients from the same study and we are pleased to see the continuation of the robust clinical responses observed earlier in May. To quickly recap the data, rusfertide appears to be safe, well-tolerated and very effective in managing hematocrit control below 45% across the 18 adult patients evaluated. This tight hematocrit control also led to a dramatic decrease in the need for therapeutic phlebotomy, the most common treatment modality for this condition. Furthermore, we also observed a reversal of iron deficiency in these patients. Iron deficiency is a typical undesired outcome of therapeutic phlebotomy in these patients. While phlebotomy is the current mainstay of PV treatment, many patients are unable to maintain hematocrit levels below 45% as per the NCCN guidelines and this is unfortunately true even for those patients receiving frequent phlebotomies and receiving treatment with cytoreductive agents.

Thank you, Dinesh. Once again, thank you all for joining us this afternoon. Today, we issued our earnings release for year end 2020 and are filing our 10-K, where you could find further details on our most recent financials. On the call today, I would like to review some of the key financial highlights for 2020. Starting with our revenue, we reported license and collaboration revenue for the full year of 2020 of $28.6 million as compared to $0.2 million for the full year of 2019. As you may recall, last year, the company’s 2019 revenue was offset by a one-time cumulative adjustment related to the application of revenue recognition principles, following the amendment of the Janssen Biotech agreement in May of ‘19. This had reduced the 2019 revenue recognition by $9.4 million. The 2020 revenue increase over prior year was also related to recognition of revenue from providing preclinical and clinical development activities under the collaboration agreement with Janssen for both new assets, PN-235 and PN-232 as well as an update to the forecast of the remaining services to be delivered under the collaboration. License and collaboration revenue for the fourth quarter of 2020 was $5.7 million compared to $2.7 million for the same period of 2019.

Thank you, Don. We are very pleased with our progress to-date and we look forward to continue our strong momentum as we move through 2021. We thank our shareholders for their support and the confidence in our work. We thank the investigators who advance our clinical studies and the patients who participate in these studies. Finally, I want to personally thank the Protagonist team. I mean, the challenges that 2020 imposed on the world at large, our employees not only state the course, but instead excel in several functions. Their unwavering focus and dedication is what has made the progress possible that we are describing today. Collectively, as a team, we look forward to even more exciting progress in the months and years ahead.

Thank you. Your first question comes from the line of Yasmeen Rahimi with Piper Sandler.

Hi, team. This is Rachel on for Yasmeen. Thanks very much for taking our questions. So, our first question is can you help us understand how the regulatory pathway could differ between development in low risk versus high risk PV patients who fail on current treatment options? In other words, can you help understand what part of the Phase 3 design is set in stone and which factors remain to be discussed? Thank you.

Well, that’s a very important question and distinction and I would have our CMO, Sam, take a crack at it.

Yes. I would just say that we can’t obviously at this point, articulate definitive guidance on the FDA design. But I can tell you that our Phase 2 study is open to patients, whether they are onsite or reductive or not. And the common theme is patients who require too many phlebotomies. So, while patients are divided into high and low risk categories, patients are divided into those who are receiving cytoreductive agents like hydroxyurea, interferon and those that aren’t. The commonality between all the patients is that they are receiving frequent phlebotomy. I will also ask Suneel Gupta, if he wants to say anything else about the clinical design.

I think you have covered all the important aspects. I think there is nothing.

Yes. I think the short answer is from the Phase 2 study, it seems the drug is very effective in both populations. So, obviously, we want to have as broad a utility as possible. Our theme is basically this is a drug for choice where the current therapy is ineffective.

Thank you. That’s very helpful. And as a follow-up, based on your discussions with the FDA, do you believe that the FDA and the EMA view the regulatory pathway in PV through the same lens? Thank you.

Well, the unknowns are the unknowns. And I think we sound like a broken record that I think it’s still the most meaningful statement. The dialogue is ongoing. And when we have clarity, we will share it with everybody, the whole world and we believe that should happen in the first half of this year.

Of course, the only historical comparison one could make, we can’t talk about again our own discussions. But the only historical comparison one could make would be to Jakafi, which was registered in both the EU and the U.S. And shortly, you may have a comparison of oral peg-interferon, which is available in Europe and is on file in the U.S., not that those are directly relevant to us, but those are the historical comparisons.

Great. Thanks. That’s very helpful. And as our last question, can you tell us what other indications beyond PV and HH for which rusfertide will make mechanism for? Thank you.

Yes. We have been thinking about two general areas, not to get specific here, but just generally and they are kind of self-evident if you think about it, based on the results with PV. One is diseases that are treated with phlebotomy and the other is diseases that are – one of the hallmarks of the disease is erythrocytosis. So obviously, in PV, those patients have erythrocytosis of a particular type and they need phlebotomy. So we are trying to think about both of those as avenues for further development and other indications and there are multiple diseases in each of those categories.

Yes. So, the triangulation of phlebotomy is a therapy, iron overload and excessive erythrocytosis.

Thanks very much for taking our questions.

Sure. Thanks.

Your next question comes from the line of Chris Howerton with Jefferies.

Great. Thanks so much for taking the questions and obviously, congratulations on all the progress across the board. So, maybe as a first question, just as a follow-up to some of that questioning with respect to PV and the regulatory path, if we could focus on the primary endpoint here like what are kind of the key features that you need to come to alignment on with the FDA with respect to the primary endpoint? Is it the specific endpoint that you want to go after? Is it the duration on therapy and follow-up? And I guess, what is your initial view in terms of what are the kind of categories that one needs to satisfy to get a registrational study completed?

Yes. So, I will make a general statement and then Sam will chime in. But the current data we have from the ongoing Phase 2 study leads us to believe and it’s self evident that they have amazing hematocrit control and joined to the hip, but that observation is a drastic reduction in the phlebotomy requirement and that has been sort of the cornerstone in this disease indication. So we are good with whatever the final outcome would be. But Sam?

Yes. I mean, this is a chronic disease. And so we believe that we’ll need data over a reasonable period of time. And as Dinesh said, the hallmark is keeping the hematocrit below 45. That’s what’s in every guideline. That’s what is in every medical textbook. And so 24/7 keeping it before, keeping it under 45 over a significant period of time will be an important aspect of the primary endpoint. How it’s defined? How it’s analyzed? What else could be in there? We’re not ready to say that. But again, from historical present and just from what we know about the disease, it’s clear to us that the backbone of the primary endpoint will involve keeping the Hematocrit below 45.

Okay, alright. That’s very clear. Thank you. And maybe as a second question, if we can maybe shift our focus to PN-943 or the IBD, I think, obviously, there is been recognition and focus of early-stage receptor occupancy data. And I think one of the questions that I’ve received numerous times from investors is, how does this mechanism work from a systemic versus a local or gut-restricted activity? And kind of how does that work? It seems like there is some confusion out there. So it might be helpful if you could compare and contrast local delivery in a gut-restricted manner versus systemic and kind of what you see in terms of the relevance of reset occupancy data? Thank you.

Thanks, Chris. That’s a very important question. It is also one of the most common questions we are receiving in recent days. And I’ll give some general answer to it. And then our CFO, David Liu, will chime in with some more details. The way we look at alpha-4-beta-7 integrin is – obviously, it’s a validated target. It’s one of the most safe and IBD specific target as established by TVO from Takeda. Now there are two types of approaches over here. One is where diction is through systemic exposure. And over there, we have the injectable antibody drugs and orally bioavailable small molecule drugs, the other approach, which Protagonist has undertaken, and in fact Protagonist is the only company in that space is the gut-restricted approach. So now the main action is not in the blood compartment, but rather tackling the target in the GI tissue compartment. So while we are the only presence over here, then the question is, is that a risky proposition, the answer, in our opinion, is no, because, as you know, with our previous first generation drug PTG-100, the already established clinical proof-of-concept in a Phase 2a study in ulcerative – in moderate-to-severe disease ulcerative colitis patients, where we got clinical remission rates of 16%, similar to TVO in a Phase 2a study, and from the biopsy samples, colonic biopsy samples of these patients, we got 44% histologic remission. So yes, ours is a unique approach. And – but we already have the clinical proof-of-concept from the first generation drug. And now we are moving forward with the second-generation drug 943, which is at least threefold more potent by all in vitro, in vivo preclinical and even Phase 1, the receptor occupancy measurements that we have conducted so far between these two drugs. The blood receptor occupancy component, this is where David, you may want to chime in and take over the conversation.

Yes. Thank you, Dinesh. So I think everything that Dinesh mentioned that has been observed for the benefit of our approach in the clinic was presaged by all of the work that we did preclinically. So looking at trafficking, looking at pharmacodynamic responses that were associated with the trafficking with disease outcomes in as well as histological outcomes in preclinical models of colitis, and that was all basically predictive of what we eventually observed in the clinic. With regard to the pharmacodynamic responses, as shown predominantly by receptor occupancy in the blood, we believe that the surrogate of essentially what was initially target high target engagement it locally on the immune cells and residing in the gut. And as those cells are trafficking back out, they can’t reenter because of the very tightly bound 943 to the surface of that cells on the integrins. In addition, we think the high local target engagement engenders a very nice effect on cells that are trying to proliferate and be activated from alpha-4-beta-7 engagement as a co-stimulatory factor. And we can – we have shown that from in vitro studies that we can certainly block that mechanism, so high local target engagement, blocking both trafficking and local activation of the T-cells.

And what I would add, Chris, is that for our gut-restricted approach, we have established, based on our clinical POC data, the efficacious dose in the ulcerative colitis study, that translated to 74% blood receptor occupancy in Phase 1 study in healthy humans. So that is our guideline for the gut-restricted integrin blocker approach. And in a Phase 1 study of 943, we know that we can surpass that 74% number easily at 3x lower doses versus the previous drug. Now for the systemic drugs, 100% RO, blood RO is a goalpost, but we know and we don’t have to get into the details, but the minimal dose at which one can achieve 100% RO is significantly lower than the actual efficacy of dose that have been used for the systemic drugs.

Great. Okay. Well, thank you very much for that color and I appreciate the perspective and thanks.

Your next question comes from the line of Joseph Schwartz with SVB Leerink.

This is on for Joe. Maybe one about indications outside of IBD for your oral IL-23 antagonist, how are you approaching or maybe thinking about the bioavailability differences that might be needed for more systemic indications versus those that are more gut-restricted? And are there any attributes of your new agents, PN-235 or 232 that you designed in or selected for that might lend themselves to a more gut-restricted or more systemic profile? Thanks.

That’s an excellent question, Kelly, really appreciate it. And as you know, we are a peptic technology platform company, and we like to be the pioneers in the advancement of the field of peptidic science. So initially, we went on the journey of discovering peptides that were as potent as antibodies. The next step was that making peptides that are orally stable and gut-restricted. And maybe the ultimate Holy Grail in the field of peptides would be where we could make peptides orally available. So for the IL-23 program in general, our future undertakings, we would not be shying away from targets or approaches that actually require some sort of systemic oral bioavailability. That’s how I would frame it.

Great. Excellent. And thanks for taking our questions.

Your next question comes from the line of Anupam Rama with JPMorgan.

Hey, guys. Thanks so much for taking the question. Just two quick ones for me. First is more of a clarification question on PTG-300 Phase 2. At the conference and then in your press release today, you talked about updates at medical conferences in 2021. So is this a EHA and ASH strategy or and sort of ASH-only type of strategy post enrollment completion midyear? That’s our first question. Second one is one of the questions we’ve been getting a little bit on PTG-300 is in PV – based on the profile that’s emerging post ASH, where does this drug fit in the treatment paradigm based on your market research? Thanks so much.

Sure. Let me – I’m sure Sam will want to elaborate. But very quickly, no, we aren’t going to just wait until the end of the year to present things at the ASH conference. There are significant conferences in mid-year and throughout the year. So it is our full intention to present updates at medical conferences throughout the year.

Yes. Remember, the first part of the study is an open-label Phase 2 study. So since it’s open-label we have no problem with reporting on it and being transparent over time. The second part, which is randomized and blinded, that would require the last person completing the study before we could update that part of the study. With respect to where we see this being used, as we kind of said earlier, we’re not trying to replace any particular therapy. We think that people who have too many phlebotomies have been demonstrated to have two things: One is too much time spent above 45. And we think that’s guideline for reason medically in terms of preventing events. So we think that’s not a good thing to be spending time above 45. And of course, the people have many phlebotomies are the ones who have the highest degree of iron deficiency because obviously, the more phlebotomies you’re doing, the more iron you’re taking out of the body on a regular basis. And those are the patients where we would expect to see if we see a sentiment improvement, obviously, that’s where we would expect to see it the most is in the people who have the highest degree of iron deficiency. So again, it’s not a strategy of saying, don’t use any particular other therapy. If you and your doctor decide any other therapy is useful and important for you that’s great, but what we see in the marketplace is with the existing therapeutics are available, that there are many patients who are on other drugs now too many phlebotomy or on phlebotomy alone and have too many phlebotomy, and those are our patients.

Yes. So Anupam, the way I would phrase it is that essentially, this is a drug – this could be a drug of choice when the current therapy is ineffective. And our Symphony data server basically shows that majority of patients will fall in this category. And if you look at our current Phase 2 study, the data we presented at ASH on 18 patients, it’s like 8 patients are on phlebotomy alone, then 7 patients are on hydroxyurea. We also have 3 patients that are in interferon. And remember, the qualification for getting into our study is in spite of those treatments, they require frequent phlebotomies, at least 3 or more phlebotomies in a 6-month period. So that translates to more than 6 phlebotomies annually and it demonstrates two things. It’s like the current treatments are uneffect. And too many frequent phlebotomies are not a good thing for the patients ultimately. And that is where we would like to see the performance of our drug.

Yes. We presented our Symphony data at ASH. It’s in a poster and ASH that was presented by one of the key opinion leaders and the punch line is where they use cytoreductive or use phlebotomy alone. Many patients are not receiving treatment according to the treatment guidelines.

Understood. Thank you so much for taking my questions.

Absolutely.

Your next question comes from the line of Douglas Tsao with H.C. Wainwright. And you are live.

Hey, Doug.

Hey, guys. I am having a little trouble with my line. So, just in terms of the new IL-23 that has been nominated by Janssen for development. Just curious, at what point should we start to get a sense of what indications that you are thinking about? And obviously, I would presume the horizons might be a little broader than just in IBD just given how – as you alluded to earlier, right, it might not just be sort of got restricted. Obviously, Stelara has pretty wide use.

Yes. Doug, it’s an excellent question. And as you can imagine, over here, this is a partnership with Janssen. So we have to be mindful of the statements we make. But I would just like to phrase it this way. Our collaboration with Janssen is not on IBD. Our collaboration Janssen is on IL-23 receptor antagonist. So wherever the IL-23 pathway, intervention of the IL-23 pathway lids to a medical utility in a particular disease indication, that is where we are theoretically going with the multiple optionalities. And so the idea is like hey, let’s add a few promising candidates in the development bucket, we have at least three as of now. And then the various strategic and clinical options will become more clear down the road as we get more data from the current Phase 1 and Phase 2 studies that we are conducting with these candidates.

And Dinesh, you just sort of went on. So I guess it sounds like what we learn from the Phase 1 in terms of bioavailability, PK profile, etcetera real sort of help determine which of those indications, especially outside of IBD might – which the candidate might be best suited for?

Yes, it will be hard to disagree with your logic.

Okay, thank you so much.

Thanks, Doug.

And with that, this concludes our Q&A section. And I would like to hand it over to Dinesh Patel for closing remarks.

Thank you again everybody for joining us this afternoon. And this formally concludes our fourth quarter 2020 and full year 2020 conference call and webcast. Thank you.

This concludes today’s conference call and you may now disconnect.