Protagonist stock surges as PN-881 positions for leadership in IL-17 therapies, says BTIG

On Friday, Protagonist Therapeutics (NASDAQ:PTGX) stock saw its price target increased from $51.00 to $67.00 by BTIG, with the firm maintaining a Neutral rating on the stock. The adjustment comes as the analyst highlights the potential of Protagonist's PN-881, an oral IL-17A/F inhibitor, which has shown comparable potency to bimekizumab in pre-clinical assays.

PN-881's unique specificity could position it favorably in the market as the leading oral IL-17 inhibitor. This analysis follows Eli Lilly (NYSE:LLY)'s acquisition of Dice for approximately $2.4 billion in June 2023, which involved an oral IL-17A inhibitor that had only completed Phase 1 trials at the time of purchase. The analyst suggests that PN-881 could achieve preferential positioning similar to how Bimzelx is expected to surpass Cosentyx in treating IL-17 mediated diseases due to its dual inhibition of IL-17A and F.

The management of Protagonist Therapeutics is preparing for Investigational New Drug (IND)-enabling studies and a three-month toxicity program in the first half of 2025. These steps are intended to facilitate a swift progression to Phase 2 trials after the anticipated successful completion of Phase 1. The company plans to initiate a Phase 1 study in the fourth quarter of 2025.

Following the Phase 1 study, management expects to conduct a 12-week dose-ranging Phase 2 trial in psoriasis to determine the appropriate development path for additional indications. The updated price target to $67 from $51 reflects the potential value of PN-881, considering the precedent set by the Dice acquisition and adjusting for risk by 50%.

In other recent news, Protagonist Therapeutics has made significant strides in its drug development efforts. The company's drug candidate, icotrokinra, demonstrated success in its ICONIC Phase 3 program, meeting primary endpoints for the treatment of moderate-to-severe plaque psoriasis. This success triggered a $165 million milestone payment from Janssen, with the potential for Protagonist to receive up to $630 million in additional development and commercial milestones.

Several analyst firms including H.C. Wainwright, TD Cowen, and Truist Securities have maintained a Buy rating for Protagonist, reflecting confidence in the company's commercial prospects. The ratings followed positive discussions about the company's Phase III trial results and the potential of their drug 2113.

Protagonist Therapeutics has also been making progress on its collaboration with Takeda on the Rusfertide program for polycythemia vera treatment. Furthermore, the company has announced its entry into the obesity treatment market.

In other recent developments, the company saw a board reshuffle with Daniel N. Swisher Jr. stepping down and Sarah A. O'Dowd filling the vacancy on the Audit Committee. Protagonist also welcomed Newman Yeilding, M.D., as its Chief Scientific Advisor. These are the latest developments for Protagonist Therapeutics.

InvestingPro Insights

Protagonist Therapeutics' (NASDAQ:PTGX) recent price target increase aligns with several positive indicators from InvestingPro data. The company's strong financial position is evident from its market cap of $2.48 billion and impressive year-to-date price total return of 81.64%. This performance is further supported by a robust one-year price total return of 147.47%, reflecting investor confidence in the company's potential.

InvestingPro Tips highlight that Protagonist Therapeutics holds more cash than debt on its balance sheet, which is crucial for funding its ongoing research and development efforts, including the promising PN-881 program. Additionally, analysts anticipate sales growth in the current year, which could be driven by the company's advancing pipeline and potential market opportunities for its novel therapies.

The company's P/E ratio of 14.77 suggests a relatively attractive valuation compared to many biotech peers, especially considering the growth potential of its IL-17 inhibitor program. This is further emphasized by the InvestingPro Tip indicating that the stock's valuation implies a strong free cash flow yield.

For investors seeking more comprehensive analysis, InvestingPro offers 12 additional tips for Protagonist Therapeutics, providing a deeper understanding of the company's financial health and market position.

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