Newark, California-based biopharmaceutical company Protagonist Therapeutics (NASDAQ: PTGX) announced the public offering of 7 million shares of common stock. The shares will be offered at a price of $14.00 per share, so the gross proceeds are expected to be $98 million. The size of the secondary equity issuance represents a 2 million share increase over the company’s original offering of 5 million shares.
Underwriters have been granted a 30-day option to purchase as many as 1.05 million additional shares at the public offering price. Protagonist filed a shelf registration statement with the Securities and Exchange Commission (SEC) back on October 31, 2019. A shelf registration filing allows a company to delay the sale of securities and make multiple offerings based on the same registration.
First quarter results highlight blood cancer trial results
The news of the secondary offering came on the heels of last week’s first quarter financial report. License and collaboration revenue increased 125% from $1.6 million a year ago to $3.6 million. Protagonist recorded a net loss of $20.1 million which widened from a $14.1 million loss in Q1 of 2019 due to higher research and development (R&D) and general and administrative (G&A) expenses. The company noted that is has enough capital to fund operations through the middle of 2022 after exiting the quarter with $117.5 million in cash and marketable securities.
On the same day, Protagonist announced the initial results of its phase 2 trial of Hepcidin Mimetic PTG-300 for the treatment of polycythemia vera, an uncommon form of blood cancer. The treatment demonstrated a positive clinical response and provided clinically meaningful dose-related control of hematocrit values in all six patients. The patients received individualized doses ranging from 10mg to 80mg for a period of up to 28 weeks. The company is hoping to expand the trail to approximately 50 patients and the results will be presented at an upcoming medical conference later this quarter.
What will the funds be used for?
Protagonist will use the proceeds from the stock offering to advance the development of its product pipeline. The company uses a proprietary technology platform to discover and develop peptide-based therapeutics to address unmet medical needs. It has three therapies that have reached the clinical stage.
In addition to its blood cancer treatment, it has an oral treatment for inflammatory bowel disease in Crohn’s disease patients. It has another inflammatory bowel disease candidate for patients with ulcerative colitis through a collaboration with Philadelphia-based biotechnology company Janssen Biotech. The company estimates that its three clinical assets combined have the potential to become a multi-billion portfolio.
Protagonist’s latest stock offering is expected to close on or about May 14th subject to customary closing conditions. The market responded favorably to the announcement by bidding Protagonist shares higher by 9.4% on May 12th. The small cap biotechnology stock has climbed 127% since the start of the year. Protagonist is scheduled to report second quarter financial performance and provide a business update on August 5th.