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Protagonist Therapeutics: A Well-Hedged Biotech With A Potential Blockbuster In Rusfertide


  • Protagonist is a $1.25bn market cap biotech using its peptide-based technology platform to develop a portfolio of assets targeting inflammatory conditions and cancers of the blood.
  • Rusfertide - a hepcidin mimetic - is an exciting opportunity in Polycythemia Vera as a potential alternative to Phlebotomy. P2 trial data has been highly encouraging. The market is >$2bn.
  • A deal with Janssen to develop 3 IBD-targeting assets could be worth ~$1bn in milestones plus royalties on commercial sales. Protagonist also has a wholly-owned IBD asset.
  • The company's current market cap of $1.25bn appears very low given the market opportunities and trial progress, although no pivotal trials have been initiated yet.
  • It's rare to come across a biotech with an asset like Rusfertide that's targeting standard of care status with no direct competitors. If successfully commercialized, share price upside potential is >100% in the next two years.
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Investment Thesis

Protagonist Therapeutics (NASDAQ:PTGX) shares have been bucking the recent biotech bear trend and represent an interesting long-term opportunity for investors looking for signs of growth potential in a falling market.

Protagonist uses a proprietary peptide technology platform to discover product candidates against targets in disease areas with significant unmet medical need. Over the past year, the biotech has seen the value of its shares increase by 259% - 36% in the past month, and 23% in the past week - to reach a price of $29.7 at the time of writing.

Its most advanced candidate PTG-300, or Rusfertide - a Hepcidin Mimetic currently progressing through Phase 2 trials for both Polycythemia Vera ("PV") - a rare form of blood cancer - and Hereditary Hemochromatosis - is chiefly responsible for its recent share price momentum. As a hormone therapy designed to maintain iron homeostasis Rusfertide represents a new treatment paradigm in PV that is viewed as a potential new standard of care, and has been pegged for sales >$2bn.

Prior to Rusfertide's discovery and development Protagonist's shares had been suffering - after management was forced to abandon development of its first Inflammatory Bowel Disease targeting asset PTG-100 in 2018 - falling to lows of $6.5 in march last year, but a partnership agreed with Johnson & Johnson's (JNJ) drug development arm Janssen - potentially worth up to $1bn in milestone payments, plus royalties on commercialised sales - now also appears to be bearing fruit.

The 2 companies are co-developing PTG-200 - an orally delivered, gut-restricted Interleukin-23 receptor (“IL-23R”) antagonist - which is in Phase 2 trials for Crohn's Disease, whilst Janssen has also exercised an option on 2 second generation oral IL-R antagonists targeting IBD - PN-235, which entered a Phase 1 study in Q420, and PN-232 - still at the preclinical stage.

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This article was written by

Edmund Ingham profile picture
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I write about Biotech, Pharma and Healthcare stocks and share investment tips. Find me at my marketplace channel, Haggerston BioHealth - model portfolio + 4 exclusive stock tips every week. I'm on twitter @edmundingham

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in PTGX over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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