Why Protagonist Therapeutics Is Getting a Second Chance

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Protagonist Therapeutics Inc. (NASDAQ: PTGX) shares saw a solid gain on Monday after the firm announced positive results from its midstage trial in patients with ulcerative colitis. This comes after some controversy within the study earlier this year.

Specifically, this was the Phase 2 PROPEL study of oral alpha-4-beta-7 integrin antagonist PTG-100 for patients with ulcerative colitis. Ultimately, no safety concerns were noted with PTG-100. The data from blinded endoscopy rereads and a comprehensive data review provide signals of clinical efficacy and support further development of PTG-100.

In March 2018, Protagonist announced discontinuation of the study following a planned interim analysis conducted by an independent data monitoring committee. The interim data revealed an unusually high placebo rate of clinical remission (24%, about four times higher than historical norms for similar ulcerative colitis studies) that led to a futility decision and discontinuation of the trial.

A reread of the endoscopies by the contract research organization’s (CRO’s) subcontractor and a subsequent fully blinded reread of the endoscopies by an independent third party, Robarts Clinical Trials, confirmed that a subset of the initial endoscopy reads provided by the CRO were in error. If the reread of endoscopy results had been utilized for the interim futility analysis, the trial would have continued.

Dinesh V. Patel, Ph.D., Protagonist president and CEO, commented:

The discontinuation of the PROPEL study was an unfortunate consequence of a human error in the endoscopy readouts provided by the CRO. Based upon an established, safe, and specific mechanism for IBD [inflammatory bowel disease], PTG-100 offers compelling, patient-focused differentiation by virtue of being an oral drug. We look forward to meeting with the FDA during the second half of 2018 to discuss next steps and plan to present the PROPEL data at a future medical conference. Overall, we also view this data as supportive of the concept of GI-restricted, oral targeted therapy approach for the treatment of IBD. In addition, the most recent financing of $22 million enables us to continue further development of PTG-100.

Shares of Protagonist were last seen up about 15% at $8.11, with a consensus analyst price target of $11.63 and a 52-week trading range of $5.50 to $23.97.