JNJ - Protagonist: Rusfertide Has Potential For Patients With Polycythemia Vera

2023-08-09 14:44:26 ET

Summary

• Protagonist Therapeutics, Inc. is progressing with the use of its drug rusfertide for the treatment of polycythemia vera in a phase 3 study.
• The company expects to complete enrollment of the VERIFY study by Q1 2024 and release results in 2024.
• Protagonist Therapeutics has enough cash to fund its operations through the end of 2025 and could earn $200 million in milestone payments.

Protagonist Therapeutics, Inc. ( PTGX ) has been making great progress to advance the use of its drug rusfertide for the treatment of patients with polycythemia vera in the ongoing phase 3 study. Matter of fact, it expects to complete enrollment of its late-stage VERIFY study using this to treat this patient population towards the end of Q1 of 2024. This means, that it is likely on track to release results from this phase 3 study at some point in 2024.

It remains to be seen how well rusfertide does in this trial for these patients, but positive results were released from the phase 2 REVIVE study. The polycythemia vera [PV] market itself is a big opportunity and that's why it is crucial for Protagonist to eventually achieve the primary endpoint in the ongoing phase 3 VERIFY study.

Not only that, but this company is partnered with Johnson & Johnson ( JNJ ), for the advancement of a drug known as JNJ-2113. This particular drug is being advanced in a phase 3 study for the treatment of patients with moderate-to-severe psoriasis and a phase 2b study for the treatment of patients with ulcerative colitis. The thing is that this biotech has plenty of cash to reach through the readout of its phase 3 study as well. It estimates that it has enough cash to fund its operations through the end of 2025. Should JNJ-2113 eventually be successful in the phase 3 study, plus NDA filing/FDA approval, then Protagonist would be entitled to a potential of $200 million in milestone payments.

Rusfertide Has Great Potential For Treatment Of Polycythemia Vera Patients

As I explained above, Protagonist Therapeutics is currently exploring the use of its drug rusfertide for the treatment of patients with polycythemia vera in the ongoing phase 3 VERIFY study. Polycythemia Vera is a type of blood cancer, which causes a person's bone marrow to make too many red blood cells. Why is that bad? Well, that's because it thickens the blood causing a host of major issues, such as blood clots. One major problem is that it is not diagnosed until after the age of 60. There are several symptoms that are associated with this disease and they are as follows:

• Skin itchiness
• Abdominal pain
• Ringing in the ears
• Nose bleeding
• Blurred vision.

There are other types of complications that might arise with this disease such as a stroke or heart attack. In addition, it is also possible that Polycythemia vera patients might be susceptible to obtaining blood cancers such as:

• Myelofibrosis
• Myelodysplastic syndrome
• Acute Myeloid Leukemia.

It is expected that polycythemia vera in the 7 major markets will reach $6.33 billion by 2033 . This is a large market opportunity and if Protagonist is ultimately successful in treating this patient population, then it will be able to tap into it. The main goal for advancing a drug like rusfertide is to improve the treatment paradigm for patients. That is, to get patients away from having to do regular blood withdrawals [phlebotomy]. The reason for this treatment is to reduce a person's overall blood volume and number of excess blood cells.

To advance this program forward, Protagonist Therapeutics had already initiated a phase 3 study known as VERIFY . This study is expected to enroll up to 250 patients with polycythemia vera who are to be given either rusfertide or placebo that is to be added on to each patient's ongoing therapy, such as:

• Phlebotomy only
• Phlebotomy plus stable doses of either of hydroxyurea, interferon and/or ruxolitinib.

The main point of this late-stage study is to see if the drug does a good job at maintaining hematocrit control and improving symptoms of patients with Polycythemia Vera. Before diving into the clinical data, it is important to highlight what hematocrit is. Hematocrit is a percentage of red blood cells [RBCs] found in the blood. Those who have either high or low levels of hematocrit are believed to have a blood disorder. Polycythemia vera patients who have hematocrit levels above 45% are at a greater risk of thrombosis [clotting of the blood]. A key staple of a PV treatment would be its ability to keep hematocrit levels below 45%. As I stated above, phlebotomy alone [sometimes in combination with cytoreductie agents] is standard therapy. However, this type of standard therapy is not that effective in reducing hematocrit levels below 45% and in addition is not well tolerated.

Where Protagonist Therapeutics comes into play not only being a safer treatment option for these PV patients, but provide better control in being able to keep hematocrit levels below 45%. Thus far, this biotech has done a good job in achieving such a feat. Why is that? That's because it has released highly positive results from the phase 2 REVIVE Study . This mid-stage study recruited a total of 53 patients who were randomized 1:1 to receive either rusfertide or placebo for another 12-weeks as part of this double-blind, placebo-controlled portion of this trial. It was noted that about 24 out of 26 patients [92.3%] of patients given rusfertide remained free from phlebotomy [ P =0.0003].

In relation to the primary endpoint of this clinical trial, it was also met . It was shown that treatment with rusfertide led to a higher response rate of 69.2% versus 18.5% with placebo in these polycythemia vera patients. This difference of drug versus placebo with respect to this primary endpoint was achieved with statistical significance, with a p-value of p=0.0003.

It also presented withdrawal results from the phase 2 REVIVE study at the European Hematology Association [EHA] 2023 Congress as well. With this new data, plus prior data shown above, the company decided to enact a follow-on two year extension study. That means that once patients complete the current three-year phase 2 REVIVE study, they will be followed up for another two years, thus enabling the exploration of effects of rusfertide in PV for up to 5 years.

There are two catalysts in play with respect to this program that investors should keep an eye on. The first of which involves the completed recruitment of the phase 3 VERIFY study, which is using rusfertide for the treatment of patients with PV. Enrollment completion of this late-stage study is expected at the end of Q1 of 2024. The second catalyst from there would then be the release of results from this late-stage study, which are likely to be released in 2024 as well.

Financials

According to the 10-Q SEC Filing , Protagonist Therapeutics had cash, cash equivalents and marketable securities of $313.4 million. The reason for the cash on hand is because it was able to raise cash back in April of 2023. That is when it sold a total of 5,000,000 shares of its common stock at a public offering price of $20 per share and then the issuance of 750,000 shares of its common stock at a price of $20 per share. It generated a total of $107.8 million in relation to this particular offering. This doesn't include the potential $200 million in milestone payments it could earn through a successful phase 3 study, NDA filing of rusfertide, and approval of JNJ-2113 for the treatment of patients with psoriasis.

The thing is that should Protagonist need to raise cash, then it can do so with an Open Market Sale Agreement [Sales Agreement] it had made in 2022. That is, whereby it may offer and sell up to $100 million of shares of its common stock from time to time in "at-the-market" offerings. For the three months ending June 30, 2023 it sold no shares of its common stock under this 2022 ATM Facility. However, it just announced on August 9th of 2023, that it received approximately $34.4 million in proceeds from the exercise of warrants to purchase 2.75 million shares of the company's common stock. Thus, with this event happening, it believes that it has enough cash on hand to fund its operations through Q1 of 2026.

Risks To Business

There are several risks that investors should be aware of before investing in Protagonist Therapeutics. The first risk to consider would be with respect to the ongoing phase 3 VERIFY study, which is using rusfertide for the treatment of patients with polycythemia vera. Recruitment of this late-stage study is expected to be completed by end of Q1 of 2024 and then clinical data is likely to follow thereafter in 2024. There is no guarantee that final results from this phase VERIFY study will turn out to be positive, nor that the primary endpoint will be met.

A second risk relates to the advancement of JNJ-2113, which is being advanced for the treatment of patients with psoriasis and ulcerative colitis, in a phase 3 and phase 2b study respectively. There is no assurance that JNJ-2113 will be successful in either one or both of these indications.

Not only that, but it's also quite possible that Johnson & Johnson might decide to terminate the partnership for any reason it deems necessary. Thus, Protagonist would no longer be eligible to earn the up to $200 million milestone payments.

Conclusion

The final conclusion is that Protagonist Therapeutics has made great progress in advancing the use of its drug rusfertide for the treatment of patients with polycythemia vera. It is currently exploring the use of this drug for the treatment of this patient population in the ongoing phase 3 VERIFY study and enrollment completion is expected at the end of Q1 of 2024. From there, the release of results from this late-stage study in 2024 should be another catalyst to look forward to.

Just in case this program doesn't work out it does have the partnership with Johnson & Johnson, which is advancing JNJ-2113 for the treatment of patients with moderate-to-severe plaque psoriasis and ulcerative colitis. With the Protagonist Therapeutics, Inc. advancement of rusfertide for the treatment of patients with PV in the phase 3 VERIFY study, plus the ability to advance the use of JNJ-2113 for two other large market indications, I believe that investors might be able to capitalize on any gains made.

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