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What changed in PROTHENA CORP PUBLIC LTD CO's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of PROTHENA CORP PUBLIC LTD CO's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+397 added−380 removedSource: 10-K (2024-02-22) vs 10-K (2023-02-28)

Top changes in PROTHENA CORP PUBLIC LTD CO's 2023 10-K

397 paragraphs added · 380 removed · 308 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

102 edited+20 added−7 removed210 unchanged
Biggest changeThe Collaboration Agreement may be terminated (i) by either party on a program-by-program basis if the other party remains in material breach of the Collaboration Agreement following a cure period to remedy the material breach, (ii) by BMS at will on a program-by-program basis or in its entirety, (iii) by either party, in its entirety, upon insolvency of the other party, or (iv) by Prothena, in its entirety, if BMS challenges a patent licensed by Prothena to BMS under the Collaboration Agreement. 11 Under the SSA, BMS is subject to certain transfer and standstill restrictions, including a restriction on acquiring more than 9.9% of the Company’s share capital for a specified period of time following the closing of the subscription of 1,174,536 of the Company’s ordinary shares (Shares), or earlier upon announcement of the intent to consummate a change of control of the Company by the Company or a third party, or expiration or termination of the Collaboration Agreement.
Biggest changeThe Collaboration Agreement may be terminated (i) by either party on a program-by-program basis if the other party remains in material breach of the Collaboration Agreement following a cure period to remedy the material breach, (ii) by BMS at will on a program-by-program basis or in its entirety, (iii) by either party, in its entirety, upon insolvency of the other party, or (iv) by us, in its entirety, if BMS challenges a patent licensed by us to BMS under the Collaboration Agreement.
As a result, decades of our own investigation augmented by the work of others have elucidated that targeting the appropriate epitope, with the optimal binding strength (affinity) in the context of the right clinical design with appropriate endpoints in the right patient population can result in meaningful clinical benefit.
As a result of decades of our own investigation augmented by the work of others have elucidated that targeting the appropriate epitope, with the optimal binding strength (affinity) in the context of the right clinical design with appropriate endpoints in the right patient population, can result in meaningful clinical benefit.
Clinical Development Program for Birtamimab Early Development Birtamimab reacts with a “cryptic” epitope that is exposed on misfolded kappa and lambda light chains that misfold and form amyloid. The epitope is well defined and highly conserved in light chains and exposed from early stages of aggregation throughout amyloid.
Clinical Development Program for Birtamimab Birtamimab reacts with a “cryptic” epitope that is exposed on misfolded kappa and lambda light chains that misfold and form amyloid. The epitope is well defined and highly conserved in light chains and exposed from early stages of aggregation throughout amyloid.
Prasinezumab also delayed time to clinically meaningful worsening of motor progression in prasinezumab-treated patients vs. placebo over 52 weeks as demonstrated by site rating of time to at least a 5-point progression in MDS-UPDRS Part III (pooled dose levels: HR=0.82, 80% CI=0.64 to 0.99, p=0.17; low dose level: HR=0.77, 80% CI=0.63 to 0.96; and high dose level: HR=0.87, CI=0.70 to 1.07).
Prasinezumab also delayed time to clinically meaningful worsening of motor progression in prasinezumab-treated patients vs. 7 placebo over 52 weeks as demonstrated by site rating of time to at least a 5-point progression in MDS-UPDRS Part III (pooled dose levels: HR=0.82, 80% CI=0.64 to 0.99, p=0.17; low dose level: HR=0.77, 80% CI=0.63 to 0.96; and high dose level: HR=0.87, CI=0.70 to 1.07).
During the seven-year exclusivity period, the FDA may not approve any other applications to market the same drug for the same orphan indication, except in limited circumstances, such as demonstration of clinical superiority to the product with orphan exclusivity or if FDA finds that the holder of the orphan drug exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs of patients with the disease or condition for which the drug was designated.
During the seven-year exclusivity period, the FDA may not approve any other applications to market the same drug for the same orphan indication, except in limited circumstances, such as demonstration of clinical superiority to the product with orphan exclusivity or if FDA finds that the holder of the orphan drug exclusivity has not shown 17 that it can assure the availability of sufficient quantities of the orphan drug to meet the needs of patients with the disease or condition for which the drug was designated.
In the PASADENA study, prasinezumab significantly reduced decline in motor function by 35% (pooled dose levels) vs. placebo after one year of treatment on the centrally rated assessment of Movement Disorder Society-Unified Parkinson's Disease Rating Scale (MDS-UPDRS) Part III, a clinical examination of motor function. Motor symptoms associated with Parkinson’s disease include slowness of movement (bradykinesia), tremor, rigidity, and gait.
In PASADENA, prasinezumab significantly reduced decline in motor function by 35% (pooled dose levels) vs. placebo after one year of treatment on the centrally rated assessment of Movement Disorder Society-Unified Parkinson's Disease Rating Scale (MDS-UPDRS) Part III, a clinical examination of motor function. Motor symptoms associated with Parkinson’s disease include slowness of movement (bradykinesia), tremor, rigidity, and gait.
Information about Segment and Geographic Revenue Information about segment and geographic revenue is set forth in Note 2 to the Consolidated Financial Statements included in this report. 20 Available information Our principal executive office is at 77 Sir John Rogerson’s Quay, Block C, Grand Canal Docklands, Dublin 2, D02 VK60, Ireland, and our telephone number at that address is +353-1-236-2500.
Information about Segment and Geographic Revenue Information about segment and geographic revenue is set forth in Note 2 to the Consolidated Financial Statements included in this report. Available information Our principal executive office is at 77 Sir John Rogerson’s Quay, Block C, Grand Canal Docklands, Dublin 2, D02 VK60, Ireland, and our telephone number at that address is +353-1-236-2500.
If BMS exercises the US Rights for a collaboration program, it is obligated to pay Prothena an exercise fee of approximately $80 million per program. Thereafter, BMS would have decision making authority over development activities, and all regulatory, manufacturing and commercialization activities, for antibody products targeting the relevant Collaboration Target (the “Collaboration Products”) in the U.S.
If BMS exercises the US Rights for a collaboration program, it is obligated to pay us an exercise fee of approximately $80 million per program. Thereafter, BMS would have decision making authority over development activities, and all regulatory, manufacturing and commercialization activities, for antibody products targeting the relevant Collaboration Target (the “Collaboration Products”) in the U.S.
Such post-marketing commitments or requirements may include Phase 4 clinical trials and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization. 15 European Union . In the EU, there are several pathways for marketing approval, depending on the type of product for which approval is sought.
Such post-marketing commitments or requirements may include Phase 4 clinical trials and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization. European Union . In the EU, there are several pathways for marketing approval, depending on the type of product for which approval is sought.
Additionally, any significant change in the approved product or in how it is manufactured, including changes in formulation or the site of manufacture, generally require prior FDA approval of a supplemental BLA. The packaging and labeling of all products developed by us are also subject to FDA approval and ongoing regulation and oversight.
Additionally, any significant change in the approved product or in how it is manufactured, including changes in formulation or the site of manufacture, generally 16 require prior FDA approval of a supplemental BLA. The packaging and labeling of all products developed by us are also subject to FDA approval and ongoing regulation and oversight.
Omnibus Budget Reconciliation Act. We may also be subject to the U.S. Physician Payment Sunshine Act (the “Sunshine Act”) which regulates disclosure of payments to healthcare professionals and providers. 16 The U.S. Foreign Corrupt Practices Act (the “FCPA”), the Irish Criminal Justice (Corruption Offences) Act 2018 (the “Irish Corruption Act”) and the U.K.
Omnibus Budget Reconciliation Act. We may also be subject to the U.S. Physician Payment Sunshine Act (the “Sunshine Act”) which regulates disclosure of payments to healthcare professionals and providers. The U.S. Foreign Corrupt Practices Act (the “FCPA”), the Irish Criminal Justice (Corruption Offences) Act 2018 (the “Irish Corruption Act”) and the U.K.
Roche is responsible for the clinical and commercial manufacture and supply of Licensed Products within a defined time period following the effective date of the License Agreement. We have so far earned $135 million of a total $755 million in potential clinical, regulatory and sales milestones.
Roche is responsible for the clinical and commercial 8 manufacture and supply of Licensed Products within a defined time period following the effective date of the License Agreement. We have so far earned $135 million of a total $755 million in potential clinical, regulatory and sales milestones.
The FDA and other comparable regulatory authorities also have the authority to cause the withdrawal of approval of a marketed product or to impose additional labeling or distribution restrictions. The pricing of pharmaceutical and biological products is regulated in many countries and the mechanism of price regulation varies.
The FDA and other comparable regulatory authorities also have the authority to cause the withdrawal of approval of a marketed product or to impose additional labeling or distribution restrictions. 13 The pricing of pharmaceutical and biological products is regulated in many countries and the mechanism of price regulation varies.
University of California License Agreement: Under a License Agreement with The Regents of the University of California, we have exclusively licensed from the University of California its joint ownership interest in certain patents jointly 18 owned with us. Those patents relate to our program targeting Parkinson’s disease and other synucleinopathies (prasinezumab).
University of California License Agreement: Under a License Agreement with The Regents of the University of California, we have exclusively licensed from the University of California its joint ownership interest in certain patents jointly owned with us. Those patents relate to our program targeting Parkinson’s disease and other synucleinopathies (prasinezumab).
The clinical investigation of a pharmaceutical, including a biologic, is generally divided into three phases. Although the phases are usually conducted sequentially, they may overlap or be combined. The three phases of an investigation are as follows: • Phase 1. Phase 1 includes the initial introduction of an investigational product into humans.
The clinical investigation of a pharmaceutical, including a biologic, is generally divided into three phases. Although the phases are usually conducted sequentially, they may overlap or be combined. The three phases of an investigation are as follows: 14 • Phase 1. Phase 1 includes the initial introduction of an investigational product into humans.
Those licenses are worldwide, fully paid, royalty-free, perpetual and irrevocable, and relate to our program targeting α - synuclein. Subsequent to entering into this Agreement, Elan was acquired by Perrigo Company plc. Competition The pharmaceutical industry is highly competitive.
Those licenses are worldwide, fully paid, royalty-free, perpetual and irrevocable, and relate to our program targeting α - synuclein. Subsequent to entering into this Agreement, Elan was acquired by Perrigo Company plc. Competition 19 The pharmaceutical industry is highly competitive.
This results in predominant symptoms of neuropathy (hATTR-PN) and/or cardiomyopathy (hATTR-CM), as well as other disease manifestations. It is estimated that there are approximately 50,000 patients with hATTR worldwide, with approximately 10,000 characterized as hATTR-PN and 40,000 characterized as hATTR-CM.
This results in predominant symptoms of neuropathy (hATTR-PN) 9 and/or cardiomyopathy (hATTR-CM), as well as other disease manifestations. It is estimated that there are approximately 50,000 patients with hATTR worldwide, with approximately 10,000 characterized as hATTR-PN and 40,000 characterized as hATTR-CM.
This differentiated depleter mechanism of action could be developed as a monotherapy 9 approach to ATTR amyloidosis and might also complement existing therapeutic approaches which either stabilize or reduce production of the native TTR tetramer.
This differentiated depleter mechanism of action could be developed as a monotherapy approach to ATTR amyloidosis and might also complement existing therapeutic approaches which either stabilize or reduce production of the native TTR tetramer.
These programs include PRX012, an anti-Aβ antibody designed to be best-in-class and dosed subcutaneously; PRX005, an investigational antibody that specifically targets a key epitope within the microtubule binding region (MTBR) of tau, and a potential best-in-class treatment, which is partnered with BMS; and PRX123, a dual Aβ-tau vaccine for the treatment and prevention of Alzheimer’s disease. 1 Key elements of our strategy to achieve our goal are to: • Concentrate our discovery and development efforts in areas where we have decades of scientific expertise and experience.
These programs include PRX012, an anti-Aβ antibody designed to be best-in-class and dosed subcutaneously; BMS-986446 (formerly PRX005), an investigational antibody that specifically targets a key epitope within the microtubule binding region (MTBR) of tau, and a potential best-in-class treatment, which is partnered with BMS; and PRX123, a dual Aβ-tau vaccine for the treatment and prevention of Alzheimer’s disease. 1 Key elements of our strategy to achieve our goal are to: • Concentrate our discovery and development efforts in areas where we have decades of scientific expertise and experience.
In May 2021, the Company exercised its rights under the terms of License Agreement to receive potential U.S. commercial sales milestone and royalties, in lieu of a U.S. profit and loss share for prasinezumab in 8 Parkinson’s disease.
In May 2021, the Company exercised its rights under the terms of License Agreement to receive potential U.S. commercial sales milestone and royalties, in lieu of a U.S. profit and loss share for prasinezumab in Parkinson’s disease.
Results of the first study, a Phase 1 double-blind, placebo-controlled, single ascending dose trial demonstrated that prasinezumab was safe and well-tolerated in healthy volunteers, meeting the primary objective of the study.
Results of the first trial, a Phase 1 double-blind, placebo-controlled, single ascending dose trial demonstrated that prasinezumab was safe and well-tolerated in healthy volunteers, meeting the primary objective of the trial.
An IND is a request for authorization from the FDA to manufacture and administer an investigational drug or biologic product to 13 humans. The IND includes the proposed protocol(s) and general investigational plan for human studies.
An IND is a request for authorization from the FDA to manufacture and administer an investigational drug or biologic product to humans. The IND includes the proposed protocol(s) and general investigational plan for human studies.
The primary endpoint of the study was the change from baseline in the MDS-UPDRS total score (Parts I, II and III) at 52 weeks in each treatment group vs. the placebo group (pooled dose levels: –14.0%, –1.30, 80% CI=(–3.18, 0.58), p=0.38; low dose level: –21.5%, –2.02, 80% CI=(–4.21, 0.18); and high dose level: –6.6%, –0.62, 80% CI=(–2.82, 1.58)).
The primary endpoint of the trial was the change from baseline in the MDS-UPDRS total score (Parts I, II and III) at 52 weeks in each treatment group vs. the placebo group (pooled dose levels: –14.0%, –1.30, 80% CI=(–3.18, 0.58), p=0.38; low dose level: –21.5%, –2.02, 80% CI=(–4.21, 0.18); and high dose level: –6.6%, –0.62, 80% CI=(–2.82, 1.58)).
Prasinezumab is the first potentially disease-modifying, anti-alpha-synuclein antibody to demonstrate signals of efficacy on multiple pre-specified secondary and exploratory clinical endpoints in patients with early Parkinson’s disease and advance into late-stage development. Phase 1 Studies During 2014, together with Roche, we advanced prasinezumab into clinical development with the initiation of two Phase 1 studies.
Prasinezumab is the first potentially disease-modifying, anti-alpha-synuclein antibody to demonstrate signals of efficacy on multiple pre-specified secondary and exploratory clinical endpoints in patients with early Parkinson’s disease and advance into late-stage development. Phase 1 Clinical Trials During 2014, together with Roche, we advanced prasinezumab into clinical development with the initiation of two Phase 1 clinical trials.
Data from the study also demonstrated rapid, dose- and time-dependent mean reduction in levels of free serum α-synuclein of up to 97% after a single dose, which were statistically significant (p In June 2018, we published results from the Phase 1b multiple ascending dose study of prasinezumab in patients with Parkinson’s disease in JAMA Neurology.
Data from the trial also demonstrated rapid, dose- and time-dependent mean reduction in levels of free serum α-synuclein of up to 97% after a single dose, which were statistically significant (p In June 2018, we published results from the Phase 1b multiple ascending dose trial of prasinezumab in patients with Parkinson’s disease in JAMA Neurology.
On a program-by-program basis, following Prothena’s filing of an investigational new drug application (IND) for the additional two collaboration programs, BMS may elect in its sole discretion to exercise its right to receive an exclusive license to develop and commercialize antibodies targeting the applicable Collaboration Target in the U.S. (the “US Rights”).
On a program-by-program basis, following our filing of an investigational new drug application (IND) for the additional two collaboration programs, BMS may elect in its sole discretion to exercise its right to receive an exclusive license to develop and commercialize antibodies targeting the applicable Collaboration Target in the U.S. (the “US Rights”).
Through our detailed screening process, we attempted to define critical regions of the protein involved in the pathological progression of a particular disease to elucidate key epitopes that are hidden when a protein is normally folded but exposed when a protein misfolds and remains exposed in all of its pathogenic aggregation states, inclusive of deposited amyloid.
Through our detailed screening process, we attempt to define critical regions of the protein involved in the pathological progression of a particular disease to elucidate key epitopes that are hidden when a protein is normally folded but exposed when a protein misfolds and remains exposed in all of its pathogenic aggregation states, inclusive of deposited amyloid.
The Collaboration Agreement became effective on March 20, 2018, which triggered an upfront payment to us of $100 million, as well as a further payment of approximately $50 million to subscribe for 1,174,536 of the Company’s ordinary shares at a price of $42.57 per share, pursuant to a Share Subscription Agreement (the “SSA”) as described further below.
The Collaboration Agreement became effective on March 20, 2018, which triggered an upfront payment to us of $100 million, as well as a further payment of approximately $50 million to subscribe for 1,174,536 of our ordinary shares at a price of $42.57 per share, pursuant to a Share Subscription Agreement (the “SSA”) as described further below.
Patients who were originally randomized to an active dose will continued at that dose level for the additional 52 weeks. In part 2, patients were allowed to use concomitant dopaminergic therapy. Any patient who medically required initiation of dopaminergic therapy during part 1 had their subsequent data censored for the primary endpoint analysis.
Patients who were originally randomized to an active dose will continue at that dose level for the additional 52 weeks. In part 2, patients were allowed to use concomitant dopaminergic therapy. Any patient who medically required initiation of dopaminergic therapy during part 1 had their subsequent data censored for the primary endpoint analysis.
In June 2021, we announced that BMS exercised its option under the global neuroscience research and development collaboration to enter into an exclusive U.S. license for PRX005. BMS paid Prothena $80 million for this option following the execution of a US License Agreement for PRX005 and transfer of the underlying license.
In June 2021, we announced that BMS exercised its option under the global neuroscience research and development collaboration to enter into an exclusive U.S. license for BMS-986446. BMS paid Prothena $80 million for this option following the execution of a US License Agreement for BMS-986446 and transfer of the underlying license.
For obtaining either US Rights or Global Rights for such collaboration program, Prothena will also be eligible to receive tiered royalties on net sales of Collaboration Products ranging from high single digit to high teen percentages, on a weighted average basis depending on the achieving of certain net sales thresholds.
For obtaining either US Rights or Global Rights for such collaboration program, we will also be eligible to receive tiered royalties on net sales of Collaboration Products ranging from high single digit to high teen percentages, on a weighted average basis depending on the achieving of certain net sales thresholds.
In multiple clinical studies, birtamimab has been shown to be generally safe and well tolerated and has been evaluated in 302 patients receiving monthly intravenous infusions (including 294 patients who received the recommended 24 mg/kg dose), for an average of approximately 15 months.
In multiple clinical trials, birtamimab has been shown to be generally safe and well tolerated and has been evaluated in 302 patients receiving monthly intravenous infusions (including 294 patients who received the recommended 24 mg/kg dose), for an average of approximately 15 months.
The License Agreement may be terminated by either party on a patent-by-patent and country-by-country basis if the other party challenges a given patent in a given country. Our rights to co-develop licensed products under the License Agreement will terminate if we commence certain studies for certain types of competitive products.
The License Agreement may be terminated by either party on a patent-by-patent and country-by-country basis if the other party challenges a given patent in a given country. Our rights to co-develop licensed products under the License Agreement will terminate if we commence certain trials for certain types of competitive products.
Three late-stage programs in our pipeline are ongoing, including AFFIRM-AL, a registration-enabling Phase 3 study of birtamimab in Mayo Stage IV patients with AL amyloidosis being conducted under a Special Protocol Assessment (SPA) agreement with FDA with significance level of p ≤ 0.10, a Phase 2b PADOVA study of prasinezumab in patients with early Parkinson’s disease being conducted by Roche, and a Phase 2 study of NNC6019 (formerly PRX004) in patients with ATTR cardiomyopathy being conducted by Novo Nordisk.
Three late-stage programs in our pipeline are ongoing, including AFFIRM-AL, a registration-enabling Phase 3 clinical trial of birtamimab in Mayo Stage IV patients with AL amyloidosis being conducted under a Special Protocol Assessment (SPA) agreement with FDA with significance level of p≤0.10, a Phase 2b PADOVA clinical trial of prasinezumab in patients with early Parkinson’s disease being conducted by Roche, and a Phase 2 clinical trial of NNC6019 (formerly PRX004) in patients with ATTR cardiomyopathy being conducted by Novo Nordisk.
While the study did not meet the primary objective, signals of efficacy on multiple pre-specified secondary and exploratory clinical endpoints, including measures of motor function and biomarkers, were demonstrated in both of the prasinezumab arms when compared to placebo.
While the trial did not meet the primary objective, signals of efficacy on multiple pre-specified secondary and exploratory clinical endpoints, including measures of motor function and biomarkers, were demonstrated in both of the prasinezumab arms when compared to placebo.
Part 2 of the study was a 52-week blinded extension phase in which patients from the placebo arm of the study were re-randomized onto one of two active doses on a 1:1 basis, so that all participants were on active treatment.
Part 2 of the trial was a 52-week blinded extension phase in which patients from the placebo arm of the trial were re-randomized onto one of two active doses on a 1:1 basis, so that all participants were on active treatment.
Results of the second study, a Phase 1b double-blind, placebo-controlled, multiple ascending dose study demonstrated an acceptable safety and tolerability profile at all dose levels tested in patients with Parkinson’s disease, meeting the primary objective of the study.
Results of the second trial, a Phase 1b double-blind, placebo-controlled, multiple ascending dose trial demonstrated an acceptable safety and tolerability profile at all dose levels tested in patients with Parkinson’s disease, meeting the primary objective of the trial.
In March 2022, we announced the FDA clearance of the IND for PRX012 and the initiation of a Phase 1 single ascending dose study to investigate the safety, tolerability, immunogenicity, and pharmacokinetics of PRX012 in both healthy volunteers and patients with Alzheimer’s disease.
In March 2022, we announced the FDA clearance of the IND for PRX012 and the initiation of a Phase 1 single ascending dose trial to investigate the safety, tolerability, immunogenicity, and pharmacokinetics of PRX012 in both healthy volunteers and patients with Alzheimer’s disease.
In addition, administrative remedies can involve requests to recall violative products, the refusal of the government to enter into supply contracts; or the refusal to approve pending applications for product approval until manufacturing or other alleged deficiencies are brought into compliance.
In addition, administrative remedies can involve requests to recall violative products, the refusal of the government to enter into supply contracts; or the refusal to approve pending applications for product approvals until manufacturing or other alleged deficiencies are brought into compliance.
For this reason, the laws and regulations discussed below focus on the requirements applicable to biologic products in the U.S. Government Regulation Governmental authorities, including the FDA, the EMA and comparable regulatory authorities in other countries, regulate the development, testing, use, labeling, manufacturing, storage, record-keeping, reporting, marketing, advertising, promotion, tracking and tracing of pharmaceutical and biological products.
For this reason, the laws and regulations discussed below focus on the requirements applicable to biologic products in the U.S. Government Regulation Governmental authorities, including the FDA, the EMA and comparable regulatory authorities in other countries, regulate the development, testing, use, labeling, manufacturing, storage, recordkeeping, reporting, marketing, advertising, promotion, tracking and tracing of pharmaceutical and biological products.
In preclinical research, antibodies targeting this region of tau were superior in blocking tau uptake and neurotoxicity, which has been associated with efficacy in relevant animal models. In these preclinical models, PRX005 demonstrated significant reduction of intraneuronal tau pathology and progression protection against behavioral deficit in a tau transgenic mouse model and complete blockade of neuronal tau internalization in vitro.
In preclinical research, antibodies targeting this region of tau were superior in blocking tau uptake and neurotoxicity, which has been associated with efficacy in relevant animal models. In these preclinical models, BMS-986446 demonstrated significant reduction of intraneuronal tau pathology and progression protection against behavioral deficit in a tau transgenic mouse model and complete blockade of neuronal tau internalization in vitro.
Our Research and Development Pipeline Our clinical research and development pipeline includes five therapeutic antibody programs in clinical development: birtamimab for the potential treatment of AL amyloidosis; prasinezumab, in collaboration with Roche, for the potential treatment of Parkinson’s disease and other related synucleinopathies; NNC6019, which is being developed by Novo Nordisk, for the potential treatment of ATTR amyloidosis; PRX012 for the potential treatment of Alzheimer’s disease; and PRX005, in collaboration with BMS, for the potential treatment of Alzheimer’s disease.
Our Research and Development Pipeline Our clinical research and development pipeline includes five therapeutic antibody programs currently in clinical development: birtamimab for the potential treatment of AL amyloidosis; prasinezumab, in collaboration with Roche, for the potential treatment of Parkinson’s disease and other related synucleinopathies; NNC6019, which is being developed by Novo Nordisk, for the potential treatment of ATTR amyloidosis; PRX012 for the potential treatment of Alzheimer’s disease; and BMS-986446, in collaboration with BMS, for the potential treatment of Alzheimer’s disease.
The study is designed to further assess the efficacy of prasinezumab by expanding upon the patient population enrolled in PASADENA to include patients with early Parkinson’s disease on stable levodopa therapy.
The trial is designed to further assess the efficacy of prasinezumab by expanding upon the patient population enrolled in PASADENA to include patients with early Parkinson’s disease on stable levodopa therapy.
Our partnered programs include prasinezumab, in collaboration with Roche for the potential treatment of Parkinson’s disease and other related synucleinopathies, and programs that target tau (PRX005), TDP-43, and an undisclosed target (PRX019) in collaboration with Bristol Myers Squibb (BMS) for the potential treatment of Alzheimer’s disease, amyotrophic lateral sclerosis (ALS), and other neurodegenerative diseases.
Our partnered programs include prasinezumab, in collaboration with Roche for the potential treatment of Parkinson’s disease and other related synucleinopathies, and programs that target tau (BMS-986446, formerly PRX005), TDP-43, and an undisclosed target (PRX019) in collaboration with Bristol Myers Squibb (BMS) for the potential treatment of Alzheimer’s disease, amyotrophic lateral sclerosis (ALS), and other neurodegenerative diseases, respectively.
In July 2017, we announced that the first patient had been enrolled in PASADENA, a global Phase 2 study of prasinezumab in patients with early Parkinson’s disease. The start of the Phase 2 PASADENA study triggered a $30.0 million milestone payment from Roche to Prothena, which was earned in the second quarter of 2017.
In July 2017, we announced that the first patient had been enrolled in PASADENA, a global Phase 2 clinical trial of prasinezumab in patients with early Parkinson’s disease. The start of PASADENA triggered a $30.0 million milestone payment from Roche to Prothena, which was earned in the second quarter of 2017.
In May 2021, we announced that the first patient had been enrolled in PADOVA, a global Phase 2b study of prasinezumab in patients with early Parkinson’s disease. The start of the Phase 2b PADOVA study triggered a $60.0 million milestone payment from Roche to Prothena, which was earned in the second quarter of 2021.
In May 2021, we announced that the first patient had been enrolled in PADOVA, a global Phase 2b clinical trial of prasinezumab in patients with early Parkinson’s disease. The start of PADOVA triggered a $60.0 million milestone payment from Roche to Prothena, which was earned in the second quarter of 2021.
PRX005 for the Potential Treatment of Alzheimer’s Disease PRX005 is designed to be a best-in-class anti-tau antibody that specifically binds with high affinity the R1, R2, and R3 repeats within the microtubule binding region (“MTBR”) of tau and targets both 3R and 4R tau isoforms.
BMS-986446 (formerly PRX005) for the Potential Treatment of Alzheimer’s Disease BMS-986446 is designed to be a best-in-class anti-tau antibody that specifically binds with high affinity the R1, R2, and R3 repeats within the microtubule binding region (“MTBR”) of tau and targets both 3R and 4R tau isoforms.
The study was designed with 80% power and a one-sided alpha of 0.10 to detect a 37.5% relative between group reduction from baseline to week 52.
The trial was designed with 80% power and a one-sided alpha of 0.10 to detect a 37.5% relative between group reduction from baseline to week 52.
In June 2021, we announced that BMS exercised its option under the global neuroscience research and development collaboration to enter into an exclusive U.S. license for PRX005. BMS paid Prothena $80.0 million following the execution of a US License Agreement for PRX005 and transfer of the underlying license.
In June 2021, we announced that BMS exercised its option under the global neuroscience research and development collaboration to enter into an exclusive U.S. license for BMS-986446. BMS paid us $80.0 million following the execution of a US License Agreement for BMS-986446 and transfer of the underlying license.
Post-Approval Requirements Any products manufactured or distributed by us or on our behalf pursuant to FDA approvals are subject to continuing regulation by the FDA, including requirements for record-keeping, reporting of adverse events, and submitting product deviation reports to notify the FDA of unanticipated changes in distributed products.
Post-Approval Requirements Any products manufactured or distributed by us or on our behalf pursuant to FDA approvals are subject to continuing regulation by the FDA, including requirements for recordkeeping, reporting of adverse events, and submitting product deviation reports to notify the FDA of unanticipated changes in distributed products.
Prasinezumab was found to be generally safe and well tolerated, with the majority of adverse events reported as mild or moderate and similar across placebo and both treatment arms. 7 In October 2020, we announced that Roche and Prothena will advance prasinezumab into a late-stage Phase 2b study in patients with early Parkinson’s disease.
Prasinezumab was found to be generally safe and well tolerated, with the majority of adverse events reported as mild or moderate and similar across placebo and both treatment arms. In October 2020, we announced that Roche and Prothena will advance prasinezumab into a late-stage Phase 2b clinical trial in patients with early Parkinson’s disease.
Our rights to co-promote licensed products under the License Agreement will terminate if we commence a Phase 3 study for such competitive products.
Our rights to co-promote licensed products under the License Agreement will terminate if we commence a Phase 3 trial for such competitive products.
Confirmatory Phase 3 AFFIRM-AL Study Design under SPA Agreement with the FDA Based on further analyses of data from the VITAL study and multiple in-depth discussions with the FDA, Prothena announced plans on February 1, 2021, to advance birtamimab into the confirmatory Phase 3 AFFIRM-AL study in patients with Mayo Stage IV AL amyloidosis.
Confirmatory Phase 3 AFFIRM-AL Clinical Trial Design under SPA Agreement with the FDA Based on further analyses of data from the VITAL clinical trial and multiple in-depth discussions with the FDA, Prothena announced plans in February 2021, to advance birtamimab into the confirmatory Phase 3 AFFIRM-AL clinical trial in patients with Mayo Stage IV AL amyloidosis.
ATTR Amyloidosis Business Acquired by Novo Nordisk On July 12, 2021, we announced that we and Novo Nordisk entered into a definitive purchase agreement under which Novo Nordisk acquired our clinical stage antibody NNC6019 (formerly PRX004) and broader ATTR amyloidosis business.
ATTR Amyloidosis Business Acquired by Novo Nordisk In July 2021, we announced that we and Novo Nordisk entered into a definitive purchase agreement under which Novo Nordisk acquired our clinical stage antibody NNC6019 (formerly PRX004) and broader ATTR amyloidosis business.
Non-compliance with applicable requirements can result in warning and untitled letters, civil and criminal fines and other judicially imposed sanctions, including product seizures, import restrictions, injunctive actions and criminal prosecutions of both companies and individuals.
Noncompliance with applicable requirements can result in warning and untitled letters, civil and criminal fines and other judicially imposed sanctions, including product seizures, import restrictions, injunctive actions and criminal prosecutions of both companies and individuals.
Results from Part 1 of the PASADENA study were presented in a Top Abstract oral presentation at the International Parkinson and Movement Disorder Society’s MDS Virtual Conference 2020.
Results from Part 1 of the PASADENA clinical trial were presented in a Top Abstract oral presentation at the International Parkinson and Movement Disorder Society’s MDS Virtual Conference 2020.
We completed a Phase 1 study with NNC6019 in patients with hereditary forms of ATTR amyloidosis, in which NNC6019 was demonstrated to be safe and well tolerated.
We completed a Phase 1 clinical trial with NNC6019 in patients with hereditary forms of ATTR amyloidosis, in which NNC6019 was demonstrated to be safe and well tolerated.
After receiving the $80 million payment described above, we have received a total of $230 million pursuant to the collaboration and we are eligible to receive up to an additional $160 million for U.S. rights, up to $165 million for global rights, and up to $1.7 billion for regulatory and commercial milestone payments for a total of up to $2.2 billion plus potential tiered commercial sales royalties across multiple programs.
After receiving the $55 million payment described above, we have received a total of $285 million pursuant to the collaboration and we are eligible to receive up to an additional $160 million for U.S. rights, up to an additional $110 million for global rights, and up to $1.7 billion for regulatory and commercial milestone payments for a total of up to $2.2 billion plus potential tiered commercial sales royalties across multiple programs.
Patients enrolled in the study must not have been on dopaminergic therapy and were not be expected to require dopaminergic therapy for at least 52 weeks.
Patients enrolled in the trial must not have been on dopaminergic therapy and were not expected to require dopaminergic therapy for at least 52 weeks.
Topline data from PADOVA is expected in 2024. 6 Prasinezumab is the first anti-alpha synuclein antibody to advance into late-stage development. In March 2022, results from the analysis of part 2 of the Phase 2 PASADENA study of prasinezumab were presented in an oral presentation by Roche at the International Conference on Alzheimer’s and Parkinson’s Diseases (“AD/PD 2022”).
Prasinezumab is the first anti-alpha synuclein antibody to advance into late-stage development. In March 2022, results from the analysis of part 2 of the Phase 2 PASADENA trial of prasinezumab were presented in an oral presentation by Roche at the International Conference on Alzheimer’s and Parkinson’s Diseases (“AD/PD 2022”).
Catalent Pharma Solutions, LLC (“Catalent”) is our third-party manufacturer of drug product for our Phase 3 (AFFIRM-AL) clinical trial, and this drug product has been demonstrated to be comparable to the drug 19 product produced by BI. We are dependent on Rentschler and Catalent to manufacture clinical supplies for our Phase 3 (AFFIRM-AL) clinical trial.
Catalent Indiana, LLC (“Catalent Indiana”) is our third-party manufacturer of drug product for our Phase 3 (AFFIRM-AL) clinical trial, and this drug product has been demonstrated to be comparable to the drug product produced by BI. We are dependent on Rentschler and Catalent Indiana to manufacture clinical supplies for our Phase 3 (AFFIRM-AL) clinical trial.
PRX005 is designed to 10 be a best-in-class anti-tau, MTBR-specific antibody for the potential treatment of AD and, with the initiation of the Phase 1 study, is the first program to advance to the clinic from this collaboration.
BMS-986446 is designed to be a best-in-class anti-tau, MTBR-specific antibody for the potential treatment of AD and, with the initiation of the Phase 1 clinical trial, is the first program to advance to the clinic from this collaboration.
We have earned approximately $100 million to date, including a $40 million clinical milestone payment that we announced on November 21, 2022. A Phase 2 study of NNC6019 in patients with ATTR cardiomyopathy is being conducted by Novo Nordisk (NCT05442047). Topline data is expected in 2024.
We have earned approximately $100 million to date, including a $40 million clinical milestone payment that we announced in November 2022. A Phase 2 clinical trial of NNC6019 in patients with ATTR cardiomyopathy is being conducted by Novo Nordisk (NCT05442047).
As of December 31, 2022, our patent portfolio included the following families of patents or patent applications that we own or have exclusively licensed from other parties: • Approximately 8 patent families related to AL or AA amyloidosis, including our birtamimab program, including a composition of matter patent anticipated to expire 2029 (subject to potential adjustments in patent term as described below); • Approximately 16 patent families related to Parkinson’s disease and other synucleinopathies, including our prasinezumab program, including a composition of matter patent anticipated to expire in 2032 (subject to potential adjustments in patent term as described below); • Approximately 10 patent families related to passive immunotherapy for Alzheimer's disease, including our PRX005 and PRX012 programs; and • Approximately 17 patent families related to other potential targets of intervention and diseases, including PRX019, and other product candidates including vaccines.
As of December 31, 2023, our patent portfolio included the following families of patents or patent applications that we own or have exclusively licensed from other parties: • Approximately 8 patent families related to AL or AA amyloidosis, including our birtamimab program, including a composition of matter patent anticipated to expire 2029 (subject to potential adjustments in patent term as described below); • Approximately 16 patent families related to passive immunotherapy for Parkinson’s disease and other synucleinopathies, including our prasinezumab program, including a composition of matter patent anticipated to expire in 2032 (subject to potential adjustments in patent term as described below); • Approximately 12 patent families related to passive immunotherapy for Alzheimer's disease, including our PRX005 and PRX012 programs; and • Approximately 24 patent families related to other potential targets of intervention and diseases and other product candidates, including PRX019 and vaccines. 18 The term of individual patents depends upon the legal term of the patents in the countries in which they are obtained.
PRX005 - Catalent is our third-party manufacturer of drug substance and Berkshire Sterile Manufacturing, LLC (“Berkshire”) is our third-party manufacturer for drug product. We are dependent on Catalent and Berkshire to manufacture clinical supplies for our Phase 1 clinical trial and any subsequent clinical trials for PRX005.
PRX012 - Catalent Pharma Solutions, LLC (“Catalent Pharma”) is our third-party manufacturer of drug substance and Berkshire Sterile Manufacturing, LLC (“Berkshire”) is our third-party manufacturer for drug product for our drug candidate PRX012. We are dependent on Catalent Pharma and Berkshire to manufacture clinical supplies for our Phase 1 clinical trials and any subsequent clinical trials for PRX012.
On July 8, 2021, we sold shares of one of our wholly-owned subsidiaries to Novo Nordisk. In connection with the transaction, Novo Nordisk acquired our ATTR amyloidosis business, including our drug candidate NNC6019. We are dependent on Novo Nordisk, and its third party manufacturers if applicable, to manufacture clinical supplies of NNC6019.
In connection with the transaction, Novo Nordisk acquired our ATTR amyloidosis business, including our drug candidate NNC6019. We are dependent on Novo Nordisk, and its third-party manufacturers if applicable, to manufacture clinical supplies of NNC6019.
Additionally, because we enabled remote working arrangements, we have efforts focused on engagement and integration of our existing and new employees.
Additionally, because we have a geographically diverse workforce, including remote working arrangements, we have efforts focused on engagement and integration of our existing and new employees.
The FDA has four expedited program designations for serious conditions - Fast Track, Breakthrough Therapy, Accelerated Approval and Priority Review - to facilitate and expedite development and review of new drugs to address unmet medical needs or provide substantial improvements in the treatment of serious or life-threatening conditions.
The FDA has four expedited program designations for serious conditions - Fast Track, Breakthrough Therapy, Accelerated Approval and Priority Review - to facilitate and expedite development and review of new drugs to address unmet medical needs or provide substantial improvements in the treatment of serious or life-threatening conditions. 15 The Fast Track designation provides pharmaceutical manufacturers with opportunities for frequent interactions with FDA during the product’s development and for a rolling review of the BLA.
Intellectual Property We seek to protect our proprietary technology and other intellectual property that we believe is important to our business, including by seeking, maintaining and defending patents. We also rely on trade secrets and know-how to protect our business.
Intellectual Property We seek to protect our proprietary technology and other intellectual property that we believe is important to our business, including by seeking, maintaining and defending patents. We also rely on trade secrets and know-how to protect our business. We may seek licenses from others as appropriate to enhance or maintain our competitive position.
In addition, BMS will be entitled to request the registration of the Shares on Form S-3ASR or Form S-3 following termination of the transfer restrictions if the Shares cannot be resold without restriction pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended.
Under the SSA, BMS will be entitled to request the registration of our ordinary shares that it purchased on Form S-3ASR or Form S-3 if such shares cannot be resold without restriction pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended.
We may seek licenses from others as appropriate to enhance or maintain our competitive position. 17 Our intellectual property is primarily directed to therapeutic product candidates and related methods for the treatment of diseases that involve protein dysregulation, amyloidosis, or neurodegeneration, and other proprietary technologies and processes related to our lead product development candidates.
Our intellectual property is primarily directed to therapeutic product candidates and related methods for the treatment of diseases that involve protein dysregulation, amyloidosis, or neurodegeneration, and other proprietary technologies and processes related to our lead product development candidates.
New target discovery will focus on areas where we can bring potential new therapies to patients expeditiously through our internal expertise and resources. Existing late discovery-stage or preclinical-stage programs may be partnered or out-licensed.
New target discovery will focus on areas where we can bring potential new therapies to patients expeditiously through our internal expertise and resources. Existing late discovery-stage or preclinical-stage programs may be partnered or out-licensed. Regulation We anticipate that if we commercialize any products, the U.S. market will ultimately be our most important market.
If we fail to discover and develop new products, our business, financial condition and results of operations will be materially and adversely affected. Manufacturing Prasinezumab - Boehringer Ingelheim Biopharmaceuticals GmbH (“BI”) manufactured clinical supplies of our drug candidate prasinezumab for our completed Phase 1a single ascending dose and Phase 1b multiple ascending dose clinical trials.
If we fail to discover and develop new products, our business, financial condition and results of operations will be materially and adversely affected. Manufacturing Birtamimab - Boehringer Ingelheim Biopharmaceuticals GmbH (“BI”) manufactured clinical supplies of our drug candidate birtamimab for our prior Phase 1, Phase 2 (PRONTO) and Phase 3 (VITAL) clinical trials.
AFFIRM-AL is a registration-enabling Phase 3 study that is being conducted with a primary endpoint of all-cause mortality at p AFFIRM-AL is an ongoing global, multi-center, double-blind, placebo-controlled, 2:1 randomized, time-to-event study expected to enroll approximately 150 newly diagnosed, treatment naïve patients with AL amyloidosis categorized as Mayo Stage IV.
AFFIRM-AL is an ongoing global, multi-center, double-blind, placebo-controlled, 2:1 randomized, time-to-event trial expected to enroll approximately 150 newly diagnosed, treatment naïve patients with AL amyloidosis categorized as Mayo Stage IV. It has been designed to evaluate the primary endpoint of all-cause mortality with a significance level of p 0.10.
Birtamimab - BI manufactured clinical supplies of our drug candidate birtamimab for our prior Phase 1, Phase 2 (PRONTO) and Phase 3 (VITAL) clinical trials. Rentschler is our third-party manufacturer of drug substance for our Phase 3 (AFFIRM-AL) clinical trial. Such drug substance manufactured by Rentschler has been demonstrated to be comparable to the drug substance manufactured by BI.
Rentschler Biopharma SE (“Rentschler”) is our third-party manufacturer of drug substance for our Phase 3 (AFFIRM-AL) clinical trial. Such drug substance manufactured by Rentschler has been demonstrated to be comparable to the drug substance manufactured by BI.
TDP-43 and a third undisclosed neurodegenerative target are the focus of our collaboration with BMS. We have also prioritized and selected the lead candidate for our Alzheimer’s disease vaccine program, PRX123. While we are modality agnostic, we have deep expertise in antibody targeting and have developed a diverse pipeline that includes antibody as well as small molecule and vaccine approaches.
TDP-43 is one of the three programs that are the focus of our collaboration with BMS. While we are modality agnostic, we have deep expertise in antibody targeting and have developed a diverse pipeline that includes antibody as well as small molecule and vaccine approaches.
Immunohistochemistry using sera from immunized animals demonstrated an appropriate and balanced immune response with antibodies that react to both Aβ plaques and tau tangles at concentrations expected to be reached in CNS following immunization and resultant titer generation. 12 In March 2022, we delivered an oral presentation at AD/PD 2022 on preclinical data demonstrating that PRX123 generated anti-Aβ and anti-tau antibodies to enable phagocytosis of Aβ and to neutralize tau.
Immunohistochemistry using sera from immunized animals demonstrated an appropriate and balanced immune response with antibodies that react to both Aβ plaques and tau tangles at concentrations expected to be reached in CNS following immunization and resultant titer generation.
Phase 1 Studies In this first-in-human, randomized, placebo controlled, single ascending dose (SAD) study, healthy volunteers (n=19) were enrolled into three PRX005 dose level cohorts (low, medium or high dose) and randomized in a 3:1 drug to placebo ratio. Study participants received a single dose of PRX0005 or placebo intravenously (IV) and were followed for up to two months.
Phase 1 Clinical T rials In this first-in-human, randomized, placebo controlled, single ascending dose (SAD) clinical trial, healthy volunteers (n=19) were enrolled into three BMS-986446 dose level cohorts (low, medium or high dose) and randomized in a 3:1 drug to placebo ratio.
Part 1 was a randomized, double-blind, placebo-controlled, three-arm study and enrolled 316 patients to evaluate the efficacy and safety of prasinezumab in patients over 52 weeks.
PASADENA is a two-part Phase 2 clinical trial in early Parkinson's disease patients that is being conducted by Roche. Part 1 was a randomized, double-blind, placebo-controlled, three-arm trial and enrolled 316 patients to evaluate the efficacy and safety of prasinezumab in patients over 52 weeks.
When possible, depending upon the length of clinical trials and other factors involved in the filing of a BLA or NDA, we expect to apply for patent term extensions for patents covering our product candidates and their methods of use.
When possible, depending upon the length of clinical trials and other factors involved in the filing of a BLA or NDA, we expect to apply for patent term extensions for patents covering our product candidates and their methods of use, however, there is no guarantee that the applicable authorities, including the FDA in the United States, will agree with our assessment of whether such extensions should be granted, and if granted, the length of such extensions.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeEffective January 1, 2022, these reporting obligations extended to include transfers of value made during the previous year to physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified registered nurse anesthetists, and certified nurse midwives; • state laws and regulations that apply to sales or marketing arrangements; apply to healthcare items or services reimbursed by non-governmental third-party payers, including private insurers; require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines; that restrict payments that may be made to healthcare providers; require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and • similar and other laws and regulations in the U.S.
Biggest changeSimilar to the U.S. federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • the U.S. federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, among others, to track and report annually to CMS information related to “payments or other transfers of value” made to U.S.-licensed physicians (defined to include doctors, dentists, optometrists, podiatrists and licensed chiropractors), physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, anesthesiology assistants, certified nurse midwives, and teaching hospitals; as well as tracking and reporting of ownership and investment interests held by the U.S.-licensed physicians (as defined by statute) and their immediate family members; • analogous state laws and regulations that may apply to sales or marketing arrangements and claims for healthcare items or services reimbursed by non-governmental third-party payers, including private insurers, that may be broader in scope than their federal equivalents; state laws and regulations that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state laws and regulations that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or require the disclosure of marketing expenditures and other pricing information; and • similar and other laws and regulations in the U.S.
In addition, our right to co-promote prasinezumab and other Licensed Products will terminate if we commence a Phase 3 study for a competitive product that treats Parkinson’s disease.
In addition, our right to co-promote prasinezumab and other Licensed Products will terminate if we commence a Phase 3 study for a competitive product that treats Parkinson’s disease.
For example: • others may be able to make drug candidates that are similar to ours but that are not covered by the claims of the patents that we own or have exclusively licensed; • we or our licensors or future collaborators might not have been the first to make the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed; • we or our licensors or future collaborators might not have been the first to file patent applications covering certain of our inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our pending patent applications will not lead to issued patents; • issued patents that we own or have exclusively licensed may be held invalid or unenforceable, as a result of legal challenges by our competitors; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may not develop additional proprietary technologies that are patentable; • we cannot predict the scope of protection of any patent issuing based on our patent applications, including whether the patent applications that we own or in-license will result in issued patents with claims that cover our drug candidates or uses thereof in the United States or in other foreign countries; 50 • the claims of any patent issuing based on our patent applications may not provide protection against competitors or any competitive advantages, or may be challenged by third parties; • if enforced, a court may not hold that our patents are valid, enforceable and infringed; • we may need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights which will be costly whether we win or lose; • we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property; • we may fail to adequately protect and police our trademarks and trade secrets; and • the patents of others may have an adverse effect on our business, including if others obtain patents claiming subject matter similar to or improving that covered by our patents and patent applications.
For example: • others may be able to make drug candidates that are similar to ours but that are not covered by the claims of the patents that we own or have exclusively licensed; • we or our licensors or future collaborators might not have been the first to make the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed; • we or our licensors or future collaborators might not have been the first to file patent applications covering certain of our inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our pending patent applications will not lead to issued patents; • issued patents that we own or have exclusively licensed may be held invalid or unenforceable, as a result of legal challenges by our competitors; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may not develop additional proprietary technologies that are patentable; • we cannot predict the scope of protection of any patent issuing based on our patent applications, including whether the patent applications that we own or in-license will result in issued patents with claims that cover our drug candidates or uses thereof in the United States or in other foreign countries; • the claims of any patent issuing based on our patent applications may not provide protection against competitors or any competitive advantages, or may be challenged by third parties; • if enforced, a court may not hold that our patents are valid, enforceable and infringed; • we may need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights which will be costly whether we win or lose; • we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property; • we may fail to adequately protect and police our trademarks and trade secrets; and • the patents of others may have an adverse effect on our business, including if others obtain patents claiming subject matter similar to or improving that covered by our patents and patent applications.
Research, development, commercialization and/or strategic collaborations, including those that we have with Roche and BMS, are subject to numerous risks, which include the following: • collaborators may have significant control or discretion in determining the efforts and resources that they will apply to a collaboration, and might not commit sufficient efforts and resources or might misapply those efforts and resources; • we may have limited influence or control over the approaches to research, development, and/or commercialization of products candidates in the territories in which our collaboration partners lead research, development, and/or commercialization; • collaborators might not pursue research, development, and/or commercialization of collaboration drug candidates or might elect not to continue or renew research, development, and/or commercialization programs based on nonclinical and/or clinical trial results, changes in their strategic focus due to the acquisition of competing products, availability of funding, or other factors, such as a business combination that diverts resources or creates competing priorities; • collaborators might delay, provide insufficient resources to, or modify or stop research or clinical development for collaboration drug candidates or require a new formulation of a drug candidate for clinical testing; 27 • collaborators could develop or acquire products outside of the collaboration that compete directly or indirectly with our drug candidates or require a new formulation of a drug candidate for nonclinical and/or clinical testing; • collaborators with sales, marketing, and distribution rights to one or more drug candidates might not commit sufficient resources to sales, marketing, and distribution or might otherwise fail to successfully commercialize those drug candidates; • collaborators might not properly maintain or defend our intellectual property rights or might use our intellectual property improperly or in a way that jeopardizes our intellectual property or exposes us to potential liability; • collaboration activities might result in the collaborator having intellectual property covering our activities or drug candidates, which could limit our rights or ability to research, develop, and/or commercialize our drug candidates; • collaborators might not be in compliance with laws applicable to their activities under the collaboration, which could impact the collaboration or us; • disputes might arise between us and a collaborator that could cause a delay or termination of the collaboration or result in costly litigation that diverts management attention and resources; and • collaborations might be terminated, which could result in a need for additional capital to pursue further research, development, and/or commercialization of our drug candidates.
Research, development, commercialization and/or strategic collaborations, including those that we have with Roche and BMS, are subject to numerous risks, which include the following: • collaborators may have significant control or discretion in determining the efforts and resources that they will apply to a collaboration, and might not commit sufficient efforts and resources or might misapply those efforts and resources; • we may have limited influence or control over the approaches to research, development, and/or commercialization of products candidates in the territories in which our collaboration partners lead research, development, and/or commercialization; • collaborators might not pursue research, development, and/or commercialization of collaboration drug candidates or might elect not to continue or renew research, development, and/or commercialization programs based on nonclinical and/or clinical trial results, changes in their strategic focus due to the acquisition of competing products, availability of funding, or other factors, such as a business combination that diverts resources or creates competing priorities; • collaborators might delay, provide insufficient resources to, or modify or stop research or clinical development for collaboration drug candidates or require a new formulation of a drug candidate for clinical testing; • collaborators could develop or acquire products outside of the collaboration that compete directly or indirectly with our drug candidates or require a new formulation of a drug candidate for nonclinical and/or clinical testing; • collaborators with sales, marketing, and distribution rights to one or more drug candidates might not commit sufficient resources to sales, marketing, and distribution or might otherwise fail to successfully commercialize those drug candidates; • collaborators might not properly maintain or defend our intellectual property rights or might use our intellectual property improperly or in a way that jeopardizes our intellectual property or exposes us to potential liability; • collaboration activities might result in the collaborator having intellectual property covering our activities or drug candidates, which could limit our rights or ability to research, develop, and/or commercialize our drug candidates; • collaborators might not be in compliance with laws applicable to their activities under the collaboration, which could impact the collaboration or us; • disputes might arise between us and a collaborator that could cause a delay or termination of the collaboration or result in costly litigation that diverts management attention and resources; and • collaborations might be terminated, which could result in a need for additional capital to pursue further research, development, and/or commercialization of our drug candidates.
Disputes may also arise between us and our licensors regarding intellectual property subject to a license agreement, including those relating to: • the scope of rights granted under the license agreement and other interpretation-related issues; • whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the license agreement; • our right to sublicense patent and other rights to third parties under collaborative development relationships; • whether we are complying with our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our drug candidates, and what activities satisfy those diligence obligations; • the priority of invention of patented technology; • the amount and timing of payments owed under license agreements; and 46 • the allocation of ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and by us and our partners.
Disputes may also arise between us and our licensors regarding intellectual property subject to a license agreement, including those relating to: • the scope of rights granted under the license agreement and other interpretation-related issues; • whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the license agreement; • our right to sublicense patent and other rights to third parties under collaborative development relationships; • whether we are complying with our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our drug candidates, and what activities satisfy those diligence obligations; • the priority of invention of patented technology; • the amount and timing of payments owed under license agreements; and • the allocation of ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and by us and our partners.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or not previously observed in clinical trials, or problems with our third-party manufacturers or manufacturing processes, or failure 31 to comply with the regulatory requirements of the FDA, the EMA, or other comparable regulatory authorities could subject us to administrative or judicially imposed sanctions, including: • restrictions on the marketing of our products or their manufacturing processes; • warning letters; • civil or criminal penalties; • fines; • injunctions; • product seizures or detentions; • import or export bans; • voluntary or mandatory product recalls and related publicity requirements; • suspension or withdrawal of regulatory approvals; • total or partial suspension of production; and • refusal to approve pending applications for marketing approval of new products or supplements to approved applications.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or not previously observed in clinical trials, or problems with our third-party manufacturers or manufacturing processes, or failure to comply with the regulatory requirements of the FDA, the EMA, or other comparable regulatory authorities could subject us to administrative or judicially imposed sanctions, including: • restrictions on the marketing of our products or their manufacturing processes; • warning letters; • civil or criminal penalties; • fines; • injunctions; • product seizures or detentions; • import or export bans; • voluntary or mandatory product recalls and related publicity requirements; • suspension or withdrawal of regulatory approvals; • total or partial suspension of production; and • refusal to approve pending applications for marketing approval of new products or supplements to approved applications.
The market price of our ordinary shares may fluctuate widely, depending upon many factors, some of which may be beyond our control, including: • our ability to obtain financing as needed; • progress in and results from our ongoing or future nonclinical research and clinical trials; • the execution of our agreements with third parties, including with Roche, BMS, and Novo Nordisk; • failure or delays in advancing our nonclinical drug candidates or other drug candidates we may develop in the future into clinical trials; • results of clinical trials conducted by others, including on drugs that would compete with our drug candidates; • issues in manufacturing our drug candidates; • regulatory developments or enforcement in the U.S. and other countries; • developments or disputes concerning patents or other proprietary rights; • introduction of technological innovations or new commercial products by our competitors; • changes in estimates or recommendations by securities analysts, if any, who cover our company; • public concern over our drug candidates; • litigation; • future sales of our ordinary shares by us or by existing shareholders; • general market conditions; • changes in the structure of healthcare payment systems; • failure of any of our drug candidates, if approved, to achieve commercial success; • economic and other external factors or other disasters or crises; • period-to-period fluctuations in our financial results; • overall fluctuations in U.S. equity markets; • our quarterly or annual results, or those of other companies in our industry; • announcements by us or our competitors of significant acquisitions or dispositions; • the operating and ordinary share price performance of other comparable companies; • investor perception of our company and the drug development industry; 51 • natural or environmental disasters that investors believe may affect us; • changes in tax laws or regulations applicable to our business or the interpretations of those tax laws and regulations by taxing authorities; or • fluctuations in the budgets of federal, state and local governmental entities around the world.
The market price of our ordinary shares may fluctuate widely, depending upon many factors, some of which may be beyond our control, including: • our ability to obtain financing as needed; • progress in and results from our ongoing or future nonclinical research and clinical trials; • the execution of our agreements with third parties, including with Roche, BMS, and Novo Nordisk; • failure or delays in advancing our nonclinical drug candidates or other drug candidates we may develop in the future into clinical trials; • results of clinical trials conducted by others, including on drugs that would compete with our drug candidates; 52 • issues in manufacturing our drug candidates; • regulatory developments or enforcement in the U.S. and other countries; • developments or disputes concerning patents or other proprietary rights; • introduction of technological innovations or new commercial products by our competitors; • changes in estimates or recommendations by securities analysts, if any, who cover our company; • public concern over our drug candidates; • litigation; • future sales of our ordinary shares by us or by existing shareholders; • general market conditions; • changes in the structure of healthcare payment systems; • failure of any of our drug candidates, if approved, to achieve commercial success; • economic and other external factors or other disasters or crises; • period-to-period fluctuations in our financial results; • overall fluctuations in U.S. equity markets; • our quarterly or annual results, or those of other companies in our industry; • announcements by us or our competitors of significant acquisitions or dispositions; • the operating and ordinary share price performance of other comparable companies; • investor perception of our company and the drug development industry; • natural or environmental disasters that investors believe may affect us; • changes in tax laws or regulations applicable to our business or the interpretations of those tax laws and regulations by taxing authorities; or • fluctuations in the budgets of federal, state and local governmental entities around the world.
In addition, a clinical trial may be delayed, suspended or terminated by us, the FDA, the EMA or other comparable regulatory authorities, the IRBs at the sites where the IRBs are overseeing a trial, or the safety oversight committee overseeing the clinical trial at issue due to a number of factors, including: • failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols; • inspection of the clinical trial operations or trial sites by the FDA, the EMA, or other regulatory authorities resulting in the imposition of a clinical hold on or imposition of additional conditions for the conduct of the trial; • interpretation of data by the FDA, the EMA, or other regulatory authorities; • requirement by the FDA, the EMA, or other regulatory authorities to perform additional studies; • failure to achieve primary or secondary endpoints or other failure to demonstrate efficacy or adequate safety; • unforeseen safety issues; or • lack of adequate funding to continue the clinical trial.
In addition, a clinical trial may be delayed, suspended or terminated by us, the FDA, the EMA or other comparable regulatory authorities, the 29 IRBs for the sites where the IRBs are overseeing a trial, or the safety oversight committee overseeing the clinical trial at issue due to a number of factors, including: • failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols; • inspection of the clinical trial operations or trial sites by the FDA, the EMA, or other regulatory authorities resulting in the imposition of a clinical hold on or imposition of additional conditions for the conduct of the trial; • interpretation of data by the FDA, the EMA, or other regulatory authorities; • requirement by the FDA, the EMA, or other regulatory authorities to perform additional studies; • failure to achieve primary or secondary endpoints or other failure to demonstrate efficacy or adequate safety; • unforeseen safety issues; or • lack of adequate funding to continue the clinical trial.
A number of events, including any of the following, could delay the completion of our ongoing or planned clinical trials and negatively impact our ability to obtain regulatory approval for, and to market and sell, a particular drug candidate: • conditions imposed on us by the FDA, the EMA, or other comparable regulatory authorities regarding the scope or design of our clinical trials; • delays in obtaining, or our inability to obtain, required approvals from institutional review boards (“IRBs”) or other reviewing entities at clinical sites selected for participation in our clinical trials; • insufficient supply or deficient quality of our drug candidates or other materials necessary to conduct our clinical trials; • delays in obtaining regulatory authority authorization for the conduct of our clinical trials; • lower than anticipated enrollment and/or retention rate of subjects in our clinical trials, which can be impacted by a number of factors, including size of patient population, design of trial protocol, trial length, eligibility criteria, perceived risks and benefits of the drug candidate, patient proximity to trial sites, patient referral practices of physicians, availability of other treatments for the relevant disease, and competition from other clinical trials; • slower than expected rates of events in trials with a composite primary endpoint that is event-based; 28 • serious and unexpected drug-related side effects experienced by subjects in clinical trials; or • failure of our third-party contractors and collaborators to meet their contractual obligations to us or otherwise meet their development or other objectives in a timely manner.
A number of events, including any of the following, could delay the completion of our ongoing or planned clinical trials and negatively impact our ability to obtain regulatory approval for, and to market and sell, a particular drug candidate: • conditions imposed on us by the FDA, the EMA, or other comparable regulatory authorities regarding the scope or design of our clinical trials; • delays in obtaining, or our inability to obtain, required approvals from institutional review boards (“IRBs”) or other reviewing entities at clinical sites selected for participation in our clinical trials; • insufficient supply or deficient quality of our drug candidates or other materials necessary to conduct our clinical trials; • delays in obtaining regulatory authority authorization for the conduct of our clinical trials; • lower than anticipated enrollment and/or retention rate of subjects in our clinical trials, which can be impacted by a number of factors, including size of patient population, design of trial protocol, trial length, eligibility criteria, perceived risks and benefits of the drug candidate, patient proximity to trial sites, patient referral practices of physicians, availability of other treatments for the relevant disease, and competition from other clinical trials; • slower than expected rates of events in trials with a primary endpoint that is event-based; • serious and unexpected drug-related side effects experienced by subjects in clinical trials; or • failure of our third-party contractors and collaborators to meet their contractual obligations to us or otherwise meet their development or other objectives in a timely manner.
The degree of market acceptance for any approved drug candidate will depend on a number of factors, including: • the indication and label for the product and the timing of introduction of competitive products; • demonstration of clinical safety and efficacy compared to other products; • prevalence, frequency, and severity of adverse side effects; • availability of coverage and adequate reimbursement from managed care plans and other third-party payers; • convenience and ease of administration; • cost-effectiveness; • other potential advantages of alternative treatment methods; and • the effectiveness of marketing and distribution support of the product.
The degree of market acceptance for any approved drug candidate will depend on a number of factors, including: • the indication and label for the product and the timing of introduction of competitive products; • demonstration of clinical safety and efficacy compared to other products; • prevalence, frequency, and severity of adverse side effects; • availability of coverage and adequate reimbursement from managed care plans and other third-party payers; • convenience and ease of administration; • cost-effectiveness; • other potential advantages of alternative treatment methods; and 33 • the effectiveness of marketing and distribution support of the product.
Our future capital requirements will depend on many factors that are currently unknown to us, including, without limitation: • the timing of progress, results, and costs of our clinical trials, including the Phase 3 clinical trial for birtamimab, the Phase 2 clinical trial for prasinezumab being conducted by Roche, the Phase 2b clinical trial for prasinezumab being conducted by Roche, the Phase 2 clinical trial f or NNC6019 (formerly PRX004) bei ng conducted by Novo Nordisk, the Phase 1 clinical trial for PRX005, and the Phase 1 clinical trial for PRX012; • the timing, initiation, progress, results, and costs of these and our other research, development, and possible commercialization activities; • the results of our research and nonclinical and clinical studies; • the costs of manufacturing our drug candidates for clinical development as well as for future commercialization needs; • if and when appropriate, the costs of preparing for commercialization of our drug candidates; • the costs of preparing, filing, and prosecuting patent applications, and maintaining, enforcing, and defending intellectual property-related claims; • our ability to establish strategic collaborations, licensing, or other arrangements; • the timing, receipt, and amount of any capital investments, cost-sharing contributions or reimbursements, milestone payments, or royalties that we might receive under current or potential future collaborations; • the costs to satisfy our obligations under current and potential future collaborations; and • the timing, receipt, and amount of revenues or royalties, if any, from any approved drug candidates.
Our future capital requirements will depend on many factors that are currently unknown to us, including, without limitation: • the timing of progress, results, and costs of our clinical trials, including the Phase 3 clinical trial for birtamimab, the Phase 2 clinical trial for prasinezumab being conducted by Roche, the Phase 2b clinical trial for prasinezumab being conducted by Roche, the Phase 2 clinical trial f or NNC6019 (formerly PRX004) bei ng conducted by Novo Nordisk, the Phase 1 clinical trial for BMS-986446 (formerly PRX005) being conducted by BMS, and the Phase 1 clinical trials for PRX012; • the timing, initiation, progress, results, and costs of these and our other research, development, and possible commercialization activities; • the results of our research, nonclinical studies, and clinical trials; • the costs of manufacturing our drug candidates for clinical development as well as for future commercialization needs; • if and when appropriate, the costs of preparing for commercialization of our drug candidates; • the costs of preparing, filing, and prosecuting patent applications, and maintaining, enforcing, and defending intellectual property-related claims; • our ability to establish strategic collaborations, licensing, or other arrangements; • the timing, receipt, and amount of any capital investments, cost-sharing contributions or reimbursements, milestone payments, or royalties that we might receive under current or potential future collaborations; • the costs to satisfy our obligations under current and potential future collaborations; and • the timing, receipt, and amount of revenues or royalties, if any, from any approved drug candidates.
If side effects are identified during the time our drug candidates are in development, or, if they are approved by applicable regulatory authorities, after they are on the market, we may choose to or be required to perform lengthy additional clinical trials, discontinue development of the affected drug candidate, change the labeling of any such products, or withdraw any such products from the market, any of which would hinder or preclude our ability to generate revenues.
If side effects are identified during the time our drug candidates are in development, or, if they are approved by applicable regulatory authorities, after they are on the market, we may choose to or be required to perform lengthy additional clinical 32 trials, discontinue development of the affected drug candidate, change the labeling of any such products, or withdraw any such products from the market, any of which would hinder or preclude our ability to generate revenues.
If material, these adjustments could require us to restate previously reported financial results, which could have a negative effect on our stock price. Our ability to receive any significant revenue from prasinezumab will be dependent on Roche’s efforts and may result in lower levels of income than if we marketed or developed our drug candidates entirely on our own.
If material, these adjustments could require us to restate previously reported financial results, which could have a negative effect on our stock price. 34 Our ability to receive any significant revenue from prasinezumab will be dependent on Roche’s efforts and may result in lower levels of income than if we marketed or developed our drug candidates entirely on our own.
Among the provisions of the ACA of importance to the pharmaceutical industry are the following: • an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs; 35 • an increase in the minimum rebates a manufacturer must pay under the U.S.
Among the provisions of the ACA of importance to the pharmaceutical industry are the following: • an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs; • an increase in the minimum rebates a manufacturer must pay under the U.S.
Such approval would require successful technology transfer, comparability and other testing and compliance inspections. Transferring manufacturing to a new manufacturer could therefore interrupt supply, delay our clinical trials and any commercial launch, and/or increase our costs for 41 our drug candidates, any of which could have an adverse effect on our business, financial condition, results of operations, and/or growth prospects.
Such approval would require successful technology transfer, comparability and other testing and compliance inspections. Transferring manufacturing to a new manufacturer could therefore interrupt supply, delay our clinical trials and any commercial launch, and/or increase our costs for our drug candidates, any of which could have an adverse effect on our business, financial condition, results of operations, and/or growth prospects.
Our operations and activities are directly, or indirectly through our service providers and collaborators, subject to numerous healthcare and other laws and regulations, including, without limitation, those relating to anti-bribery, anti-kickback, fraud and abuse, false claims, physician payment transparency, and health information privacy and security, in the U.S., the EU, and other countries and jurisdictions in which we conduct our business.
Our operations and activities are directly, or indirectly through our service providers and collaborators, subject to numerous healthcare and other laws and regulations, including, without limitation, those relating to anti-bribery, anti-kickback, 39 fraud and abuse, false claims, physician payment transparency, and health information privacy and security, in the U.S., the EU, and other countries and jurisdictions in which we conduct our business.
The law is complex and is still being interpreted and implemented by the FDA. Any processes adopted by the FDA to implement the BPCIA could have a material adverse effect on the future commercial prospects for our biologic products. In addition, there has been discussion of whether Congress should reduce the 12-year reference product exclusivity period.
The law is complex and is still being interpreted and implemented by the FDA. Any processes adopted by the FDA to implement the BPCIA could have a material adverse effect on the future commercial prospects for our biologic products. In 38 addition, there has been discussion of whether Congress should reduce the 12-year reference product exclusivity period.
In addition, regardless of merit or eventual outcome, product liability claims may result in: • decreased demand for any approved drug candidates; • impairment of our business reputation; • withdrawal of clinical trial participants; • costs of related litigation; • distraction of management’s attention; 39 • substantial monetary awards to patients or other claimants; • loss of revenues; and • the inability to successfully commercialize any approved drug candidates.
In addition, regardless of merit or eventual outcome, product liability claims may result in: • decreased demand for any approved drug candidates; • impairment of our business reputation; • withdrawal of clinical trial participants; • costs of related litigation; • distraction of management’s attention; • substantial monetary awards to patients or other claimants; • loss of revenues; and • the inability to successfully commercialize any approved drug candidates.
Our drug candidates could fail to receive regulatory approval for many reasons, including the following: • the FDA, the EMA, or comparable regulatory authorities may disagree with the design, implementation, or conduct of our clinical trials; 29 • we may be unable to demonstrate to the satisfaction of the FDA, the EMA, or comparable regulatory authorities that a drug candidate is safe and effective for its proposed indication; • the results of clinical trials may not meet the level of statistical significance required by the FDA, the EMA, or comparable regulatory authorities for approval; • we may be unable to demonstrate that a drug candidate’s clinical and other benefits outweigh its safety risks; • the FDA, the EMA, or comparable regulatory authorities may disagree with our interpretation of data from nonclinical studies or clinical trials; • the data collected from clinical trials of our drug candidates may not be sufficient to support the submission of a an NDA or a BLA to the FDA, a Marketing Authorization Application (“MAA”) to the EMA, or similar applications to comparable regulatory authorities; • the FDA, the EMA, or comparable regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; or • the approval policies or regulations of the FDA, the EMA, or comparable regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
Our drug candidates could fail to receive regulatory approval for many reasons, including the following: • the FDA, the EMA, or comparable regulatory authorities may disagree with the design, implementation, or conduct of our clinical trials; • we may be unable to demonstrate to the satisfaction of the FDA, the EMA, or comparable regulatory authorities that a drug candidate is safe and effective for its proposed indication; • the results of clinical trials may not meet the level of statistical significance required by the FDA, the EMA, or comparable regulatory authorities for approval; • we may be unable to demonstrate that a drug candidate’s clinical and other benefits outweigh its safety risks; • the FDA, the EMA, or comparable regulatory authorities may disagree with our interpretation of data from nonclinical studies or clinical trials; • the data collected from clinical trials of our drug candidates may not be sufficient to support the submission of an NDA or a BLA to the FDA, a Marketing Authorization Application (“MAA”) to the EMA, or similar applications to comparable regulatory authorities; • the FDA, the EMA, or comparable regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; or 30 • the approval policies or regulations of the FDA, the EMA, or comparable regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
Any failure to obtain or maintain patent protection with respect to our drug candidates could have a material adverse effect on our business, financial condition, results of operations, and/or growth prospects. 43 Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products.
Any failure to obtain or maintain patent protection with respect to our drug candidates could have a material adverse effect on our business, financial condition, results of operations, and/or growth prospects. Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products.
Although we have obtained agreement with the FDA on a special protocol assessment (“SPA”) with regard to our Phase 3 AFFIRM-AL trial of birtamimab, an SPA does not guarantee approval of birtamimab or any other particular outcome from regulatory review. On January 27, 2021, the FDA agreed to an SPA for our Phase 3 AFFIRM-AL clinical trial of birtamimab.
Although we have obtained agreement with the FDA on a special protocol assessment (“SPA”) with regard to our Phase 3 AFFIRM-AL clinical trial of birtamimab, a SPA does not guarantee approval of birtamimab or any other particular outcome from regulatory review. On January 27, 2021, the FDA agreed to a SPA for our Phase 3 AFFIRM-AL clinical trial of birtamimab.
Alth ough we believe, based on our current business plans, that our existing cash and cash equivalents will be sufficient to meet our obligations for at least the next twelve months, we anticipate that we will require additional capital in order to continue the research and development, and 21 eventual commercialization, of our drug candidates.
Alth ough we believe, based on our current business plans, that our existing cash and cash equivalents will be sufficient to meet our obligations for at least the next twelve months, we anticipate that we will require additional capital in order to continue the research and development, and eventual commercialization, of our drug candidates.
If an earthquake, other natural disaster, or similar event were to occur and prevent us from using all or a significant portion of those operations or local critical infrastructure, or that otherwise disrupts our operations, it 23 could be difficult or impossible for us to continue our business for a substantial period of time.
If an earthquake, other natural disaster, or similar event were to occur and prevent us from using all or a significant portion of those operations or local critical infrastructure, or that otherwise disrupts our operations, it could be difficult or impossible for us to continue our business for a substantial period of time.
Proceedings involving our patents or patent applications or those of others could result in adverse decisions regarding: • the patentability of our inventions relating to our drug candidates; and/or • the enforceability, validity or scope of protection offered by our patents relating to our drug candidates; and/or • findings that our drug candidates, products, or activities infringe third party patents or other intellectual property rights.
Proceedings involving our patents or patent applications or those of others could result in adverse decisions regarding: • the patentability of our inventions relating to our drug candidates; and/or • the enforceability, validity or scope of protection offered by our patents relating to our drug candidates; and/or 49 • findings that our drug candidates, products, or activities infringe third-party patents or other intellectual property rights.
Therefore, the success of an investment in our ordinary shares will depend upon appreciation in their value and in order to receive any income or realize a return on your investment, you will need to sell your Prothena ordinary shares. There can be no assurance that our ordinary shares will maintain their price or appreciate in value.
Therefore, the success of an investment in our ordinary shares will depend upon appreciation in their value and in order to receive any income or realize a return on your investment, you will need to sell 56 your Prothena ordinary shares. There can be no assurance that our ordinary shares will maintain their price or appreciate in value.
Coverage and reimbursement may not be available for any drug that we or our collaborators commercialize and, even if these are available, the level of reimbursement may not be satisfactory. Third-party payers often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies.
Coverage and reimbursement may not be available for any drug that we or our collaborators commercialize and, even if these are available, the level of reimbursement may not be 35 satisfactory. Third-party payers often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies.
Depending on decisions by Congress, the federal courts, the USPTO and the relevant law-making bodies in other countries, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.
Depending on decisions by Congress, the federal courts, the USPTO and the relevant law-making bodies in other 45 countries, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.
Accordingly, the application of the Irish Takeover Rules may restrict the ability of certain of our shareholders and directors to acquire our ordinary shares. Irish law differs from the laws in effect in the United States with respect to defending unwanted takeover proposals and may give our board of directors less ability to control negotiations with hostile offerors.
Accordingly, the application of the Irish Takeover Rules may restrict the ability of certain of our shareholders and directors to acquire our ordinary shares. 55 Irish law differs from the laws in effect in the United States with respect to defending unwanted takeover proposals and may give our board of directors less ability to control negotiations with hostile offerors.
If we are unable to obtain an exclusive license to any such third-party co-owners’ interest in such patents or patent applications, such co-owners may be able to license their rights to other third parties, including our competitors, and our 47 competitors could market competing products and technology.
If we are unable to obtain an exclusive license to any such third-party co-owners’ interest in such patents or patent applications, such co-owners may be able to license their rights to other third parties, including our competitors, and our competitors could market competing products and technology.
Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. Risks Relating to Our Financial Position, Our Need for Additional Capital, and Our Business We anticipate that we will incur losses for the foreseeable future and we may never sustain profitability.
Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. 21 Risks Relating to Our Financial Position, Our Need for Additional Capital, and Our Business We anticipate that we will incur losses for the foreseeable future and we may never sustain profitability.
If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business.
If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our 46 business.
Likewise, the duties of directors and officers of an Irish company generally are owed to the company only. Shareholders of Irish companies 53 generally do not have a personal right of action against directors or officers of the company and may exercise such rights of action on behalf of the company only in limited circumstances.
Likewise, the duties of directors and officers of an Irish company generally are owed to the company only. Shareholders of Irish companies generally do not have a personal right of action against directors or officers of the company and may exercise such rights of action on behalf of the company only in limited circumstances.
Research, development, and potential commercialization of our drug candidates will require substantial additional cash to fund expenses. Our strategy includes potentially collaborating with additional leading pharmaceutical and biotechnology 40 companies to assist us in furthering research, development, and/or potential commercialization of some of our drug candidates in some or all geographies.
Research, development, and potential commercialization of our drug candidates will require substantial additional cash to fund expenses. Our strategy includes potentially collaborating with additional leading pharmaceutical and biotechnology companies to assist us in furthering research, development, and/or potential commercialization of some of our drug candidates in some or all geographies.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management. Intellectual property rights do not necessarily address all potential threats to our competitive advantage.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management. 51 Intellectual property rights do not necessarily address all potential threats to our competitive advantage.
W e expect to continue to incur substantial losses for the foreseeable future as we: • support the Phase 3 AFFIRM-AL clinical trial for birtamimab, the Phase 1 clinical trial for PRX005, the Phase 1 clinical trial for PRX012, and potential additional clinical trials for these and other programs; • develop and possibly commercialize our drug candidates, including birtamimab, prasinezumab, PRX005, PRX012, and PRX123; • undertake nonclinical development of other drug candidates and initiate clinical trials, if supported by nonclinical data; • pursue our early stage research and seek to identify additional drug candidates; and • potentially acquire rights from third parties to drug candidates or technologies through licenses, acquisitions, or other means.
W e expect to continue to incur substantial losses for the foreseeable future as we: • support the Phase 3 AFFIRM-AL clinical trial for birtamimab, the Phase 1 clinical trials for PRX012, and potential additional clinical trials for these and other programs, including PRX123; • develop and possibly commercialize our drug candidates, including birtamimab, PRX012, and PRX123; • undertake nonclinical development of other drug candidates and initiate clinical trials, if supported by nonclinical data; • pursue our early stage research and seek to identify additional drug candidates; and • potentially acquire rights from third parties to drug candidates or technologies through licenses, acquisitions, or other means.
The FDA may limit the scope of its agreement to an SPA agreement to certain, specific aspects of the clinical trial design. Even if the FDA agrees to the design, execution, and analysis proposed in a protocol reviewed under the SPA process, the FDA may revoke or alter its agreement in certain circumstances.
The FDA may limit the scope of its agreement to a SPA agreement to certain, specific aspects of the clinical trial design. Even if the FDA agrees to the design, execution, and analysis proposed in a protocol reviewed under the SPA process, the FDA may revoke or alter its agreement in certain circumstances.
The key factors affecting the success of any approved product will be its indication, label, efficacy, 36 safety profile, drug interactions, method of administration, pricing, coverage, reimbursement, and level of promotional activity relative to those of competing drugs.
The key factors affecting the success of any approved product will be its indication, label, efficacy, safety profile, drug interactions, method of administration, pricing, coverage, reimbursement, and level of promotional activity relative to those of competing drugs.
Due to evolving legal standards relating to the patentability, validity and enforceability of patents covering pharmaceutical inventions and the scope of claims made under these patents, our ability to obtain, maintain and enforce patents is uncertain and involves complex legal, factual and scientific 42 questions.
Due to evolving legal standards relating to the patentability, validity and enforceability of patents covering pharmaceutical inventions and the scope of claims made under these patents, our ability to obtain, maintain and enforce patents is uncertain and involves complex legal, factual and scientific questions.
Such third-party payers include government health programs such as Medicare, managed care providers, private health insurers, and other organizations. There is significant uncertainty related to the third-party coverage and reimbursement of newly approved drugs.
Such third-party payers include government health programs such as Medicare and Medicaid, managed care providers, private health insurers, and other organizations. There is significant uncertainty related to the third-party coverage and reimbursement of newly approved drugs.
Medicaid Drug Rebate Program to 23.1% and 13.0% of the average manufacturer price for branded and generic drugs, respectively; • expansion of healthcare fraud and abuse laws, including the U.S. False Claims Act and the U.S.
Medicaid Drug Rebate Program to 23.1% and 13.0% of the average manufacturer price for branded and generic drugs, respectively; • expansion of healthcare fraud and abuse laws, including the U.S. False Claims Act (“FCA”) and the U.S.
Consequently, we may not be able to prevent 45 third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions.
Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions.
Our nonclinical studies or clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional nonclinical studies or clinical trials, or to discontinue clinical trials altogether. Furthermore, we have not marketed, distributed, or sold any products.
Our nonclinical studies or clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional nonclinical studies or clinical trials, or to discontinue clinical trials altogether. 27 Furthermore, we have not marketed, distributed, or sold any products.
Although we believe that our safety procedures for the handling and disposing of these materials comply with the standards prescribed by these laws and regulations, we cannot 32 eliminate the risk of accidental contamination or injury from these materials.
Although we believe that our safety procedures for the handling and disposing of these materials comply with the standards prescribed by these laws and regulations, we cannot eliminate the risk of accidental contamination or injury from these materials.
The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation to meet the detailed standards under the rules.
The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing 53 and possible remediation to meet the detailed standards under the rules.
In addition, others 49 may independently discover our trade secrets and proprietary information , and we would have no right to prevent them from using that technology or information to compete with us .
In addition, others may independently discover our trade secrets and proprietary information , and we would have no right to prevent them from using that technology or information to compete with us .
Because of the numerous risks and uncertainties associated with the development and commercialization of our drug candidates, we are unable to estimate the amounts of increased capital outlays and operating expenses associated with completing the development and commercialization of our current drug candidates.
Because of the numerous risks and 22 uncertainties associated with the development and commercialization of our drug candidates, we are unable to estimate the amounts of increased capital outlays and operating expenses associated with completing the development and commercialization of our current drug candidates.
Given the amount of time required for the development, testing, and regulatory review 44 of new drug candidates, patents protecting such candidates might expire before or shortly after such drug candidates are commercialized.
Given the amount of time required for the development, testing, and regulatory review of new drug candidates, patents protecting such candidates might expire before or shortly after such drug candidates are commercialized.
In addition, we 26 currently do not, and may never, have any other drug candidates in clinical trials, and we have not identified drug candidates for many of our research programs.
In addition, we currently do not, and may never, have any other drug candidates in clinical trials, and we have not identified drug candidates for many of our research programs.
These new laws may result in additional reductions in Medicare and other healthcare funding, which could have a material adverse effect on customers for our drugs, if approved, and, accordingly, our financial operations. Since its enactment, there have been judicial, executive, and Congressional challenges to certain aspects of the ACA. The U.S.
These new laws may result in additional reductions in Medicare and other healthcare funding, which could have a material adverse effect on customers for our drugs, if approved, and, accordingly, our financial operations. Since its enactment, there have been judicial, executive, and Congressional challenges to certain aspects of the ACA.
We do not believe we were a PFIC for U.S. federal income tax purposes for our taxable year ended December 31, 2022. However, the application of the PFIC rules is subject to uncertainties in a number of respects, and we cannot assure that the U.S. Internal Revenue Service (the “IRS”) will not take a contrary position.
We do not believe we were a PFIC for U.S. federal income tax purposes for our taxable year ended December 31, 2023. However, the application of the PFIC rules is subject to uncertainties in a number of respects, and we cannot assure that the U.S. Internal Revenue Service (the “IRS”) will not take a contrary position.
Patent litigation is costly and time consuming. We may not 48 have sufficient resources to bring these actions to a successful conclusion.
Patent litigation is costly and time consuming. We may not have sufficient resources to bring these actions to a successful conclusion.
If a third-party manufacturer cannot or fails to perform its contractual commitments, does not have sufficient capacity to meet our nonclinical, clinical or eventual commercial requirements or fails to meet cGMPs, regulations or other standards, we may be required to replace it or qualify an additional third-party manufacturer.
If a third-party manufacturer cannot or fails to perform its contractual commitments, does not have sufficient capacity to meet our nonclinical, clinical or eventual commercial requirements or fails to meet cGMPs, regulations or other standards, we have been, and may be, required to replace it or qualify an additional third-party manufacturer.
In addition, we could incur significant additional costs and delays in identifying and qualifying any new third-party manufacturer, due to the technology transfer to such new manufacturer and because the FDA, the EMA, and other comparable regulatory authorities must approve any new manufacturer prior to manufacturing our drug candidates.
In addition, we have incurred, and could incur, significant additional costs and delays in identifying and qualifying any new third-party manufacturer, due to the technology transfer to such new manufacturer and because the FDA, the EMA, and other comparable regulatory authorities must approve any new manufacturer prior to manufacturing our drug candidates.
The assignment of intellectual property rights may not be self-executing, or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property.
The assignment of intellectual property rights may not be self-executing, or the assignment agreements have been, and may be, breached, and we have been, and may be, forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property.
We cannot predict whether we will encounter problems with the Phase 3 clinical trial for birtamimab, the Phase 2 clinical trial for prasinezumab, the Phase 2b clinical trial for prasinezumab, the Phase 2 clinical trial f or NNC6019, t he Phase 1 clinical trial for PRX005, the Phase 1 clinical trial for PRX012, or any other future clinical trials that will cause us or any regulatory authority to delay, suspend or terminate those clinical trials or delay the analysis of data derived from them.
We cannot predict whether we will encounter problems with the Phase 3 clinical trial for birtamimab, the Phase 2 clinical trial for prasinezumab, the Phase 2b clinical trial for prasinezumab, the Phase 2 clinical trial f or NNC6019, t he Phase 1 clinical trial for BMS-986446, the Phase 1 clinical trials for PRX012, or any other future clinical trials that will cause us or any regulatory authority to delay, suspend or terminate those clinical trials or delay the analysis of data derived from them.
We may license our trademarks and trade names to third parties, such as distributors.
We may license our trademarks and trade names to third 50 parties, such as distributors.
For example, the European Union General Data Protection Regulation (the “EU GDPR”) governs the collection of, and other processing activities involving, personal data (i.e., data which identifies an individual or from which an individual is identifiable) including, clinical trial data, and grants individuals various data protection rights (e.g., the right to erasure of personal data).
For example, in the European Union (“EU”), the EU General Data Protection Regulation (the “EU GDPR”) governs the collection of, and other processing activities involving, personal data (i.e., data which identifies an individual or from which an individual is identifiable), including clinical trial data, and grants individuals various data protection rights (e.g., the right to the erasure of personal data).
We and our partners may be subject to federal, state, and foreign data privacy and security laws and regulations. The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing focus on privacy and data protection issues, which may affect our business and may increase our compliance costs and exposure to liability.
We and our partners are subject to certain federal, state, and foreign data privacy and security laws and regulations. The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing focus on privacy and data protection issues, which may affect our business and may increase our compliance costs and exposure to liability.
If we are able to raise additional capital, we may issue equity or convertible debt instruments, which may severely dilute your ownership interest in us. In addition, we intend to continue to grant option awards to our directors, officers and employees, which would dilute your ownership stake in us.
We may need to raise additional capital in the future. If we are able to raise additional capital, we may issue equity or convertible debt instruments, which may severely dilute your ownership interest in us. In addition, we intend to continue to grant option awards to our directors, officers and employees, which would dilute your ownership stake in us.
Our patents issued as of December 31, 2022, are anticipated to expire on dates ranging from 2023 to 2042, subject to any patent extensions that may be available for such patents. If patents are issued on our patent applications pending as of December 31, 2022, the resulting patents are projected to expire on dates ranging from 2025 to 2042.
Our patents issued as of December 31, 2023, are anticipated to expire on dates ranging from 2024 to 2042, subject to any patent extensions that may be available for such patents. If patents are issued on our patent applications pending as of December 31, 2023, the resulting patents are projected to expire on dates ranging from 2025 to 2044.
If our licensors or any future licensees having rights to file, prosecute, maintain, and defend our patent rights fail to conduct these activities for patents or patent applications covering any of our drug candidates, including due to the impact of the COVID-19 pandemic on our licensors’ business operations, our ability to develop and commercialize those drug candidates may be adversely affected and we may not be able to prevent competitors from making, using, or selling competing products.
If our licensors or any future licensees having rights to file, prosecute, maintain, and defend our patent rights fail to conduct these activities for patents or patent applications covering any of our drug candidates, including due to the impact of geopolitical conflict on our licensors’ business operations, our ability to develop and commercialize those drug candidates may be adversely affected and we may not be able to prevent competitors from making, using, or selling competing products.
Although an inadvertent lapse, including due to the effect of the COVID-19 pandemic on us or our patent maintenance vendors, can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.
Although an inadvertent lapse, including due to the effect of geopolitical conflict on us or our patent maintenance vendors, can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.
If we fail to comply with these obligations , including due to the impact of the COVID-19 pandemic on our business operations or our use of the intellectual property licensed to us in an unauthorized manner, and fail to cure our breach within a specified period of time, the licensor may have the right to terminate the applicable license, in which event we could lose valuable rights and technology that are material to our business , harming our ability to develop, manufacture, and/or commercialize our platform or drug candidates .
If we fail to comply with these obligations , including due to our use of the intellectual property licensed to us in an unauthorized manner, and fail to cure our breach within a specified period of time, the licensor may have the right to terminate the applicable license, in which event we could lose valuable rights and technology that are material to our business , harming our ability to develop, manufacture, and/or commercialize our platform or drug candidates .
We cannot assure that additional funds will be available when we need them on terms that are acceptable to us or at all. If we raise additional funds by issuing equity securities, including pursuant to our December 2021 Distribution Agreement (as discussed below), substantial dilution to existing shareholders would result.
We cannot assure that additional funds will be available when we need them on terms that are acceptable to us or at all. If we raise additional funds by issuing equity securities, including pursuant to our December 2021 Distribution Agreement (as may be amended from time to time, and as discussed below), substantial dilution to existing shareholders would result.
There is no assurance that the results of the Phase 3 clinical trial for birtamimab, the Phase 2 clinical trial for prasinezumab, the Phase 2b clinical trial for prasinezumab, the Phase 2 clinical tr ial for NNC6019, the Ph ase 1 clinical trial for PRX005, and the Phase 1 clinical trial for PRX012 will support further development of these drug candidates.
There is no assurance that the results of the Phase 3 clinical trial for birtamimab, the Phase 2 clinical trial for prasinezumab, the Phase 2b clinical trial for prasinezumab, the Phase 2 clinical tr ial for NNC6019, the Ph ase 1 clinical trial for BMS-986446, and the Phase 1 clinical trials for PRX012 will support further development of these drug candidates.
Under the UK GDPR, companies not established in the UK but who process personal data in relation to the offering of goods or services to individuals in the UK, or to monitor their behavior will be subject to the UK GDPR – the requirements of which are (at this time) largely aligned with those under the EU GDPR and as such, may lead to similar compliance and operational costs with potential fines up to the greater of £17.5 million or 4% of global turnover.
Under the UK GDPR, companies not established in the UK but which process personal data in relation to the offering of goods or services to individuals in the UK, or the monitoring of their behavior will be subject to the UK GDPR – the requirements of which are (at this time) largely aligned with those under the EU GDPR and as such, may lead to similar compliance and operational costs with potential fines up to the greater of £17.5 million or 4% of the noncompliant company’s total annual global turnover.
Despite the implementation of security measures, our internal computer systems, and those of our current and any future CROs and other contractors, consultants, and collaborators, are vulnerable to damage from cyberattacks, “phishing” attacks, ransomware, computer viruses, unauthorized access, natural disasters, terrorism, war, and telecommunication or electrical failures.
Despite the implementation of security measures, our internal computer systems, and those of our current and any future CROs and other contractors, consultants, and collaborators, have been subject to and remain vulnerable to damage from cyberattacks, “phishing” attacks, ransomware, computer viruses, unauthorized access, natural disasters, terrorism, war, and telecommunication or electrical failures.
American Taxpayer Relief Act of 2012, among other things, further reduced Medicare payments to several types of providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
In 2013, the U.S. American Taxpayer Relief Act of 2012, among other things, further reduced Medicare payments to several types of providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
In July 2020, the Court of Justice of the European Union limited how organizations could lawfully transfer personal data from the EEA to the United States by invalidating the EU-US Privacy Shield for purposes of international transfers and imposing further restrictions on the use of standard contractual clauses (“SCCs”) including, a requirement for companies to carry out a transfer privacy impact assessment, which among other things, assesses the laws governing access to personal data in the recipient country and considers whether supplementary measures that provide privacy protections additional to those provided under the SCCs will need to be implemented to ensure an essentially equivalent level of data protection to that afforded in the EEA.
In July 2020, the Court of Justice of the EU limited how organizations could lawfully transfer personal data from the EEA to the United States by invalidating the EU-US Privacy Shield Framework for purposes of international transfers and imposing further restrictions on the use of standard contractual clauses (“EU SCCs”) including, a requirement for companies to carry out a transfer privacy impact assessment (“TIA”), which, among other things, assesses the laws governing access to personal data in the recipient country and considers whether supplementary measures that provide privacy protections additional to those provided under the EU SCCs will need to be implemented to ensure an “essentially equivalent” level of data protection to that afforded in the EEA.
It will also create a new California data protection agency authorized to issue substantive regulations and could result in increased privacy and information security enforcement. The majority of the provisions will go into effect on January 1, 2023, and additional compliance investment and potential business process changes may be required.
It also creates a California data protection agency authorized to issue substantive regulations and could result in increased privacy and information security enforcement. The majority of the provisions went into effect on January 1, 2023, and additional compliance investment and potential business process changes may be required.
Compliance with U.S. and foreign data privacy and security laws, rules, and regulations could require us to take on more onerous obligations in our contracts, require us to engage in costly compliance exercises, restrict our ability to collect, use and disclose data, or in some cases, impact our or our partners’ or suppliers’ ability to operate in certain jurisdictions.
Compliance with U.S. and foreign data privacy and security laws, rules, and regulations have required us, and may require us in the future, to take on more onerous obligations in our contracts, require us to engage in costly compliance exercises, restrict our ability to collect, use and disclose data, or in some cases, impact our or our partners’ or suppliers’ ability to operate in certain jurisdictions.
Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act, and regulations promulgated thereunder), and federal and state consumer protection laws, govern the collection, use, disclosure, and protection of personal information.
Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act, and regulations promulgated thereunder), and federal and state consumer protection laws (including Section 5 of the Federal Trade Commission Act), govern the collection, use, disclosure, and protection of personal information.
During the course of our review and testing of our internal controls, we may identify deficiencies and be unable to remediate them before we must provide the required reports.
During the course of our review and testing of our internal controls, we have identified, and may identify in the future, deficiencies and may be unable to remediate them before we must provide the required reports.
Furthermore, third parties upon which we are materially dependent upon may be vulnerable to natural disasters or similar events. Climate change could have an impact on longer-term natural weather trends.
Furthermore, third parties upon which we are materially dependent upon, including our clinical trial sites, may be vulnerable to natural disasters or similar events. • Climate change could have an impact on longer-term natural weather trends.
We may not generate the cash that is necessary to finance our operations in the foreseeable future. We incurred net income (losses) of $(116.9) million, $67.0 million and $(111.1) million for the years ended December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022, we had an accumulated deficit of $833.0 million.
We may not generate the cash that is necessary to finance our operations in the foreseeable future. We incurred net income (losses) of $(147.0) million, $(116.9) million and $67.0 million for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, we had an accumulated deficit of $(980.0) million.
Our dependence on these third-party suppliers and the challenges we may face in obtaining adequate supplies of raw materials involve several risks, including limited control over pricing, availability, quality, and delivery schedules.
We rely on third-party suppliers for the raw materials required for the production of our drug candidates. Our dependence on these third-party suppliers and the challenges we may face in obtaining adequate supplies of raw materials involve several risks, including limited control over pricing, availability, quality, and delivery schedules.
We will require additional capital to fund our operations, and if we are unable to obtain such capital, we will be unable to successfully develop and commercialize drug candidates. As of December 31, 2022, we had cash and cash equivalents o f $710.4 million.
We will require additional capital to fund our operations, and if we are unable to obtain such capital, we will be unable to successfully develop and commercialize drug candidates. As of December 31, 2023, we had cash and cash equivalents o f $618.8 million .
We are dependent on Catalent to manufacture these clinical supplies. In July 2021, the Company sold the equity interests of a subsidiary that owns and has exclusive licenses to intellectual property rights and other assets pertaining to the investigational humanized monoclonal antibody known as NNC6019 (formerly PRX004), and we might not realize the anticipated benefits of such transaction.
In July 2021, the Company sold the equity interests of a subsidiary that owns and has exclusive licenses to intellectual property rights and other assets pertaining to the investigational humanized monoclonal antibody known as NNC6019 (formerly PRX004), and we might not realize the anticipated benefits of such transaction.
As of December 31, 2022, the number of ordinary shares available for issuance pursuant to outstanding and future equity awards under our equity plans was 12,618,591. If we are unable to maintain effective internal controls, our business could be adversely affected. We are subject to the reporting and other obligations under the U.S.
As of December 31, 2023, the number of ordinary shares available for issuance pursuant to outstanding and future equity awards under our equity plans was 13,477,039. If we are unable to maintain effective internal controls, our business could be adversely affected. We are subject to the reporting and other obligations under the U.S.
As a result, the tax laws in Ireland, the U.S., and other countries in which we do business could change on a prospective or retroactive basis, and any such changes could have an adverse effect on our business, financial condition, results of operations, and/or growth prospects.
As a result of Pillar Two or other policy changes, whether at national or supranational level, the tax laws in Ireland, the U.S., and other countries in which we do business could change on a prospective or retroactive basis, and any such changes could have an adverse effect on our business, financial condition, results of operations, and/or growth prospects.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn South San Francisco, California, we occupy approximately 82,000 square feet of office and laboratory space under a lease which expires in December 2023. 55 In October 2022, we entered into sublease with Arcus Biosciences, Inc. to sublease approximately 31,157 square feet of office and laboratory space located in Brisbane, California.
Biggest changeIn Brisbane, California, we occupy approximately 31,157 square feet of office and laboratory space under a sublease with Arcus Biosciences, Inc. which expires on September 30, 2028, unless terminated earlier. We believe that our facilities are sufficient to meet our current needs.
ITEM 2. PROPERTIES Our corporate registered address and office is in Dublin, Ireland and our U.S. operations are in South San Francisco, California. In Dublin, Ireland, we occupy approximately 700 square feet of office under a lease which expires in July 2023. In May 2022, the Company renewed the lease for another one year term starting August 2022.
ITEM 2. PROPERTIES Our corporate registered address and office is in Dublin, Ireland and our U.S. operations are in Brisbane, California. In Dublin, Ireland, we occupy approximately 920 square feet of office spaces under two leases which expire on July 31, 2024.
Removed
The sublease expires on September 30, 2028, unless terminated earlier. As of the filing date, the term of such sublease has not commenced as we did not have the right to use or control physical access to such new facility. We believe that our facilities are sufficient to meet our current needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS We are not currently a party to any material legal proceedings. We may at times be party to ordinary routine litigation incidental to our business. When appropriate in management’s estimation, we may record reserves in our financial statements for pending legal proceedings. ITEM 4. MINE SAFETY DISCLOSURES Not Applicable. 56 PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS We are not currently a party to any material legal proceedings. We may at times be party to ordinary routine litigation incidental to our business. When appropriate in management’s estimation, we may record reserves in our financial statements for pending legal proceedings. ITEM 4. MINE SAFETY DISCLOSURES Not Applicable. 58 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe Irish Financial Transfers Act, 1992 (the “Transfers Act”) gives power to the Minister for Finance of Ireland to restrict financial transfers between Ireland and other countries and persons.
Biggest changeThe Irish Financial Transfers Act, 1992 (the “Transfers Act”) gives power to the Minister for Finance of Ireland to restrict financial transfers between Ireland and other countries and persons. Financial transfers are broadly defined and include all transfers that would be movements of capital or payments within the meaning of the treaties governing the member states of the European Union.
At present, the Transfers Act prohibits financial transfers involving the late Slobodan Milosevic and associated persons, certain persons indicted by the International Criminal Tribunal for the former Yugoslavia, the late Osama bin Laden, Al-Qaida, the Taliban of Afghanistan, certain persons, entities, and activities in Burma (Myanmar), Belarus, Democratic Republic of Congo, Democratic People’s Republic of Korea (North Korea), Iran, Iraq, Côte d’Ivoire, Lebanon, Liberia, Zimbabwe, Sudan, Somalia, Republic of Guinea, Afghanistan, Egypt, Eritrea, Libya, Syria, Tunisia, Ukraine, Russia, certain known terrorists and terrorist groups, and countries that harbor certain terrorist groups, without the prior permission of the Central Bank of Ireland.
At present, the Transfers Act prohibits financial transfers involving the late Slobodan Milosevic and associated persons, certain persons indicted by the International Criminal Tribunal for the former Yugoslavia, the late Osama bin Laden, Al-Qaida, the Taliban of Afghanistan, certain persons, entities, and activities in Burma (Myanmar), Belarus, Democratic Republic of Congo, Democratic 60 People’s Republic of Korea (North Korea), Iran, Iraq, Côte d’Ivoire, Lebanon, Liberia, Zimbabwe, Sudan, Somalia, Republic of Guinea, Afghanistan, Egypt, Eritrea, Libya, Syria, Tunisia, Ukraine, Russia, certain known terrorists and terrorist groups, and countries that harbor certain terrorist groups, without the prior permission of the Central Bank of Ireland.
Our shareholders should consult their own tax advisers as to whether CAT is creditable or deductible in computing any domestic tax liabilities. Stamp Duty Irish stamp duty may be payable in respect of transfers of our ordinary shares (currently at the rate of 1% of the price paid or the market value of the shares acquired, if greater).
Our shareholders should consult their own tax advisers as to whether CAT is creditable or deductible in computing any domestic tax liabilities. Stamp Duty 61 Irish stamp duty may be payable in respect of transfers of our ordinary shares (currently at the rate of 1% of the price paid or the market value of the shares acquired, if greater).
This is because our ordinary shares are regarded as property situated in Ireland as our share register must be held in Ireland. The person who receives the gift or inheritance has primary liability for CAT. 59 CAT is currently levied at a rate of 33% above certain tax-free thresholds.
This is because our ordinary shares are regarded as property situated in Ireland as our share register must be held in Ireland. The person who receives the gift or inheritance has primary liability for CAT. CAT is currently levied at a rate of 33% above certain tax-free thresholds.
Payment of any Irish stamp duty is generally a legal obligation of the transferee. A transfer of our ordinary shares from a seller who holds shares through DTC to a buyer who holds the acquired shares through DTC should not be subject to Irish stamp duty.
Payment of any Irish stamp duty is generally a legal obligation of the transferee. A transfer of our ordinary shares from a seller who holds shares through DTC to a buyer who holds the acquired shares through DTC will not be subject to Irish stamp duty.
Performance Graph (1) The following graph shows a comparison from December 31, 2017, through December 31, 2022, of cumulative total return on assumed investment of $100.00 in cash in our ordinary shares, the Nasdaq Composite Index and the Nasdaq Biotechnology Index. Such returns are based on historical results and are not intended to suggest future performance.
Performance Graph (1) The following graph shows a comparison from December 31, 2018, through December 31, 2023, of cumulative total return on assumed investment of $100.00 in cash in our ordinary shares, the Nasdaq Composite Index and the Nasdaq Biotechnology Index. Such returns are based on historical results and are not intended to suggest future performance.
Holders There were approximately 5,275 shareholders of record of our ordinary shares as of February 17, 2023. Because many of our shares are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders represented by these record holders.
Holders There were approximately 5,221 shareholders of record of our ordinary shares as of February 15, 2024 . Because many of our shares are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders represented by these record holders.
In addition, dividends or payments on redemption or purchase of shares and payments on a liquidation of an Irish incorporated company would fall within this definition.
The acquisition or disposal of interests in shares issued by an Irish incorporated company and associated payments falls within this definition. In addition, dividends or payments on redemption or purchase of shares and payments on a liquidation of an Irish incorporated company would fall within this definition.
Points on the graph represent the performance as of end of each business day. 57 COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN Among Prothena Corporation plc, the Nasdaq Composite Index, and the Nasdaq Biotechnology Index Cumulative Total Return as of 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 Prothena Corporation plc $100 $ 27 $ 42 $ 32 $ 132 $ 161 Nasdaq Composite Index $100 $ 96 $ 130 $ 187 $ 227 $ 152 Nasdaq Biotechnology Index $100 $ 91 $ 113 $ 142 $ 141 $ 126 (1) The information under the heading “Performance Graph” shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section, and shall not be deemed incorporated by reference into any filing of Prothena Corporation plc under the Securities Act of 1933, as amended.
Points on the graph represent the performance as of end of each business day. 59 COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN Among Prothena Corporation plc, the Nasdaq Composite Index, and the Nasdaq Biotechnology Index Cumulative Total Return as of 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Prothena Corporation plc $100 $ 154 $ 117 $ 480 $ 585 $ 353 Nasdaq Composite Index $100 $ 135 $ 194 $ 236 $ 158 $ 226 Nasdaq Biotechnology Index $100 $ 124 $ 156 $ 155 $ 138 $ 144 (1) The information under the heading “Performance Graph” shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section, and shall not be deemed incorporated by reference into any filing of Prothena Corporation plc under the Securities Act of 1933, as amended.
Removed
Financial transfers are broadly 58 defined and include all transfers that would be movements of capital or payments within the meaning of the treaties governing the member states of the European Union. The acquisition or disposal of interests in shares issued by an Irish incorporated company and associated payments falls within this definition.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeSee Note 7, “Significant Agreements” to our Consolidated Financial Statements regarding the Novo Nordisk Share Purchase Agreement for more information. 66 Cash Flows for the Years Ended December 31, 2022, 2021 and 2020 The following table summarizes, for the periods indicated, selected items in our Consolidated Statements of Cash Flows (in thousands): Year Ended December 31, 2022 2021 2020 Net cash provided by (used in) operating activities $ (108,821) $ 92,605 $ (80,362) Net cash used in investing activities (464) (575) (196) Net cash provided by financing activities 241,457 190,332 215 Net increase (decrease) in cash, cash equivalents and restricted cash $ 132,172 $ 282,362 $ (80,343) Cash Used in Operating Activities Net cash used in operating activities was $108.8 million for the year ended December 31, 2022 , primarily due to the use of $185.5 million for operating expense (adjusted to exclude non-cash charges of approximately $26.9 million) and partially offset by a $40.0 million development milestone payment from Novo Nordisk.
Biggest changeCash Flows The following table summarizes, for the periods indicated, selected items in our Consolidated Statements of Cash Flows (in thousands): Year Ended December 31, 2023 2022 2021 Net cash provided by (used in) operating activities $ (133,906) $ (108,821) $ 92,605 Net cash used in investing activities (2,773) (464) (575) Net cash provided by financing activities 45,103 241,457 190,332 Net increase (decrease) in cash, cash equivalents and restricted cash $ (91,576) $ 132,172 $ 282,362 Cash Used in Operating Activities Net cash used in operating activities was $133.9 million for the year ended December 31, 2023 , which was primarily due to ongoing research and development activities and general and administrative expenses to support those activities for a total of $282.4 million in operating expenses (adjusted to exclude non-cash charges of approximately $33.7 million ) partially offset by $55.0 million in cash from BMS related to the tau global option exercise fee and interest income on investments of $31.0 million .
Our wholly-owned programs include birtamimab for the potential treatment of AL amyloidosis, a portfolio of programs for the potential treatment of Alzheimer’s disease including PRX012, which targets Amyloid beta (Aβ), and PRX123, a novel dual Aβ-tau vaccine.
Our wholly-owned programs include birtamimab for the potential treatment of AL amyloidosis, and a portfolio of programs for the potential treatment of Alzheimer’s disease including PRX012, which targets amyloid beta (Aβ), and PRX123, a novel dual Aβ-tau vaccine.
See Note 7, “Significant Agreements” to our Consolidated Financial Statements regarding the Collaboration Agreement with BMS for more information. Pursuant to the share purchase agreement with Novo Nordisk, we are eligible to receive development and sales milestone payments.
See Note 7, “Significant Agreements” to our Consolidated Financial Statements regarding the Collaboration Agreement with BMS for more 67 information. Pursuant to the share purchase agreement with Novo Nordisk, we are eligible to receive development and sales milestone payments. See Note 7, “Significant Agreements” to our Consolidated Financial Statements regarding the Novo Nordisk Share Purchase Agreement for more information.
Purchase obligations consist of non-cancelable purchase commitments to suppliers. Operating leases represent our future minimum rental commitments under our non-cancelable operating leases. For additional information regarding the timing for our contractual obligations See Note 6, “Commitments and Contingencies” to our Consolidated Financial Statements.
Purchase obligations consist of non-cancelable purchase commitments to suppliers. Operating leases represent our future minimum rental 68 commitments under our non-cancelable operating leases. For additional information regarding the timing for our contractual obligations see Note 6, “Commitments and Contingencies” to our Consolidated Financial Statements.
On July 8, 2021, we sold shares of one of our wholly-owned subsidiaries to Novo Nordisk. In connection with the transaction, Novo Nordisk acquired our ATTR amyloidosis business, including the clinical stage antibody NNC6019 (PRX004). Expenses incurred in 2022 relate to certain close out activities and transition services provided to Novo Nordisk.
(3) On July 8, 2021, we sold shares of one of our wholly-owned subsidiaries to Novo Nordisk. In connection with the transaction, Novo Nordisk acquired our ATTR amyloidosis business, including the clinical stage antibody NNC6019 (PRX004). Expenses incurred in 2023 and 2022 relate to certain close out activities and transition services provided to Novo Nordisk.
Off-Balance Sheet Arrangements At December 31, 2022 , we were not a party to any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.
Off-Balance Sheet Arrangements At December 31, 2023, we were not a party to any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.
At the inception of each arrangement that includes developmental, regulatory or commercial milestone payments, we evaluate whether achieving the milestones is considered probable and estimates the amount to be included in the transaction price using the most likely amount method.
At the inception of each arrangement that includes developmental, regulatory or commercial milestone payments, we evaluate whether achieving the milestones is considered probable and estimates the amount to be included in the transaction price using the most likely amount method, which includes judgment.
We are obligated to make lease payments totaling approximately $14.9 million over the lease term, which expires on September 30, 2028 , unless terminated earlier. Of this obligation, approximately $14.7 million remains outstanding as of December 31, 2022 .
We are obligated to make lease payments totaling approximately $14.9 million over the lease term, which expires on September 30, 2028 , unless terminated earlier. Of this obligation, approximately $14.7 million remains outstanding as of December 31, 2023.
Expenditures in the early discovery stage are not tracked by program and accordingly have been excluded from this cumulative amount. Through May 28, 2021, Prasinezumab costs include payments to Roche for our share of the development expenses incurred by Roche related to prasinezumab programs .
Expenditures in the early discovery stage are not tracked by program and accordingly have been excluded from the applicable cumulative amount. (2) Through May 28, 2021, Prasinezumab costs include payments to Roche for our share of the development expenses incurred by Roche related to prasinezumab programs .
As of December 31, 2022 , $204.2 million of our outstanding cash and cash equivalents related to U.S. operations are considered permanently reinvested. We do not intend to repatriate these funds. However, if these funds were repatriated back to Ireland, we would incur a withholding tax from the dividend distribution.
As of December 31, 2023, $224.3 million of our outstanding cash and cash equivalents related to U.S. operations are considered permanently reinvested. We do not intend to repatriate these funds. However, if these funds were repatriated back to Ireland, we would incur a withholding tax from the dividend distribution.
Our operating expenses were $185.5 million, $128.6 million and $113.6 million for the years ended December 31, 2022, 2021 and 2020, respectively. Our research activities are aimed at developing new drug products. Our development activities involve the translation of our research into potential new drugs.
Our operating expenses were $282.4 million and $185.5 million for the years ended December 31, 2023, and 2022, respectively. Our research activities are aimed at developing new drug products. Our development activities involve the translation of our research into potential new drugs.
As such, expense accruals related to clinical trials and contract manufacturing are recognized based on our estimate of the degree of completion of the events specified in the specific clinical 61 study or trial contract or drug development and manufacturing contract, respectively.
We recognize costs for contract manufacturing based on evaluation of the progress to completion of specific tasks. As such, expense accruals related to clinical trials and contract manufacturing are recognized based on our estimate of the degree of completion of the events specified in the specific clinical study or trial contract or drug development and manufacturing contract, respectively.
Our partnered programs include prasinezumab, in collaboration with Roche for the potential treatment of Parkinson’s disease and other related synucleinopathies, and programs that target tau (PRX005), TDP-43, and an undisclosed target (PRX019) in collaboration with BMS for the potential treatment of Alzheimer’s disease, ALS, and other neurodegenerative diseases.
Our partnered programs include prasinezumab, in collaboration with Roche for the potential treatment of Parkinson’s disease and other related synucleinopathies, and programs that target tau (BMS-986446, formerly PRX005), TDP-43, and an undisclosed target (PRX019) in collaboration with Bristol Myers Squibb (BMS) for the potential treatment of Alzheimer’s disease, amyotrophic lateral sclerosis (ALS), and other neurodegenerative diseases, respectively.
Our R&D expenses primarily consist of personnel costs and related expenses, including share-based compensation and external costs associated with clinical activities and drug development related to our drug programs, including birtamimab, prasinezumab, PRX004 (through July 8, 2021), PRX005, PRX012, PRX123 and preclinical activities related to our discovery programs.
Our R&D expenses primarily consist of personnel costs and related expenses, including share-based compensation and external costs associated with clinical activities and drug development related to our drug programs, including birtamimab, BMS-986446 ( PRX005), PRX012, PRX123 and preclinical activities related to our discovery programs.
Our G&A expenses primarily consist of personnel costs and related expenses, including share-based compensation and professional service expenses. Research and Development Expenses Our R&D expense increased by $53.3 million, or 65%, for the year ended December 31, 2022, compared to the prior year.
Our G&A expenses primarily consist of personnel costs and related expenses, including share-based compensation and consulting expenses. Research and Development Expenses Our R&D expense increased by $85.0 million for the year ended December 31, 2023 , compared to the prior year.
Other income (expense), net for the years ended December 31, 2022, 2021 and 2020, was primarily foreign exchange gains (losses) from transactions with vendors denominated in Euros.
Other income (expense), net for the year ended December 31, 2023, was primarily foreign exchange losses from transactions with vendors denominated in Euros.
(“GAAP”). The preparation of these consolidated financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenues, expenses and related disclosures. We believe the following policies to be critical to the judgments and estimates used in the preparation of our financial statements.
The preparation of these consolidated financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenues, expenses and related disclosures.
Contractual Obligations Our contractual obligations as of December 31, 2022 , consisted of minimum cash payments under operating leases of $21.3 million, purchase obligations of $11.5 million (of which $5.6 million is included in accrued current liabilities), and contractual obligations under license agreements of $0.4 million (of which $29 thousand is included in accrued current 67 liabilities).
Contractual Obligations Our contractual obligations as of December 31, 2023, consisted of minimum cash payments under operating leases of $14.8 million, purchase obligations of $12.4 million (of which $6.3 million is included in current liabilities), and contractual obligations under license agreements of $0.4 million (of which $60,000 is included in current liabilities).
As of December 31, 2022 , we had $710.4 million in cash and cash equivalents.
As of December 31, 2023, we had $618.8 million in cash and cash equivalents.
Our ordinary shares began trading on The Nasdaq Global Market under the symbol “PRTA” on December 21, 2012, and currently trade on The Nasdaq Global Select Market. 60 Critical Accounting Policies and Estimates Management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with the accounting principles generally accepted in the U.S.
Critical Accounting Policies and Estimates Management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with the accounting principles generally accepted in the U.S. (“GAAP”).
The increase for year ended December 31, 2022, was primarily due to higher manufacturing expenses primary related to the birtamimab, PRX019, PRX012, and PRX123 programs, higher personnel expenses, higher clinical trial expenses primarily related to the PRX012 and birtamimab programs and higher R&D consulting and other expenses; offset in part by lower collaboration expenses related to the prasinezumab program with Roche as a result of the cost share opt-out exercised in May 202l and lower manufacturing expense related to the NNC6019 program.
The increase for the year ended December 31, 2023 , was primarily due to higher clinical trial expenses primarily related to the PRX012 and birtamimab programs, higher personnel expenses, and higher R&D consulting and other expenses; offset in part by lower manufacturing expense related primarily to the PRX019 and birtamimab programs.
License and intellectual property revenue for the year ended December 31, 2022 included $40.0 million in milestone payment from Novo Nordisk related to the continued advancement of NNC6019 (formerly PRX004) in a Phase 2 clinical study for the treatment of ATTR cardiomyopathy .
The decrease of $40.0 million was due to the $40.0 million milestone payment from Novo Nordisk related to the continued advancement of NNC6019 (formerly PRX004) in a Phase 2 clinical study for the treatment of ATTR cardiomyopathy in 2022 with no corresponding amount in 2023 .
The tax provisions for all periods presented primarily reflect U.S. federal taxes associated with recurring profits attributable to intercompany services that our U.S. subsidiary performs for the Company.
The tax provisions for all periods presented primarily reflect U.S. federal taxes associated with recurring profits attributable to intercompany services that our U.S. subsidiary performs for the Company. No tax benefit has been recorded related to tax losses recognized in Ireland and any deferred tax assets for those losses are offset by a valuation allowance.
Cash Provided by Financing Activities Net cash provided by financing activities was $241.5 million for the year ended December 31, 2022, primarily from net proceeds from issuances of ordinary shares pursuant to the December 2022 public offering of $172.6 million, net proceeds from issuances of ordinary shares pursuant to the December 2021 Distribution Agreement of $51.0 million, and proceeds from issuances of ordinary shares upon exercises of stock options of $17.8 million .
Cash Provided by Financing Activities Net cash provided by financing activities was $45.1 million for the year ended December 31, 2023, primarily from net proceeds of approximately $20.7 million from the underwriters partial exercise of their 30-day option to purchase additional ordinary shares as part of the December 2022 public offering, proceeds from issuances of ordinary shares upon exercises of stock options of $21.5 million and net proceeds of $2.9 million f rom issuances of ordinary shares pursuant to the December 2021 Distribution Agreement.
The following table sets forth the R&D expenses for our major programs (specifically, any program with successful first dosing in a Phase 1 clinical trial, which were birtamimab, prasinezumab, PRX0 03, NNC6019 , PRX005, PRX012 and other R&D expenses for the years ended December 31, 2022, 2021 and 2020, and the cumulative amounts to date (in thousands): 63 Year Ended December 31, Cumulative to Date 2022 2021 2020 Birtamimab (NEOD001) (1) $ 49,312 $ 30,785 $ 13,113 $ 403,486 PRX002/RG7935 (2) 261 8,181 18,937 106,781 PRX003 (3) 25 52 (209) 59,035 NNC6019 (PRX004) (4) 1,038 3,800 11,354 79,800 PRX005 (5) 14,444 12,617 13,571 47,300 PRX012 (6) 41,990 13,748 5,655 63,003 Other R&D (7) 28,492 13,101 12,463 $ 135,562 $ 82,284 $ 74,884 (1) Cumulative R&D costs to date for birtamimab include the costs incurred from the date when the program was separately tracked in preclinical development.
The following table sets forth the R&D expenses for our major programs (specifically, any active program with successful first dosing in a Phase 1 clinical trial, which were birtamimab, prasinezumab, NNC6019 (PRX004) , BMS-986446 (PRX005), PRX012 and other R&D expenses for the years ended December 31, 2023 and 2022, and the cumulative amounts to date (in thousands): Year Ended December 31, Cumulative to Date (1) 2023 2022 Birtamimab (NEOD001) $ 68,831 $ 49,312 $ 472,317 PRX002/RG7935 (2) 34 261 106,815 NNC6019 (PRX004) (3) 91 1,038 79,891 BMS-986446 (PRX005) 10,063 14,444 57,363 PRX012 102,767 41,990 165,770 Other R&D (4) 38,785 28,517 $ 220,571 $ 135,562 (1) Cumulative R&D costs to date include the costs incurred from the date when the applicable program was separately tracked in preclinical development.
Cash Used in Investing Activities Net cash used in investing activities was $0.5 million, $0.6 million and $0.2 million for the years ended December 31, 2022, 2021 and 2020, respectively. Net cash used in investing activities for the years ended December 31, 2022, 2021 and 2020 was primarily related to purchases of property and equipment.
Cash Used in Investing Activities Net cash used in investing activities was $2.8 million for the year ended December 31, 2023, which primarily consisted of expenditures to purchase property and equipment.
The following is a summary of our contractual obligations as of December 31, 2022 (in thousands): Total 2023 2024 2025 2026 2027 Thereafter Operating leases (1) $ 21,332 $ 6,624 $ 2,707 $ 3,051 $ 3,158 $ 3,269 $ 2,523 Purchase obligations 11,467 11,382 85 — — — — Contractual obligations under license agreements 431 89 64 64 64 60 90 Total $ 33,230 $ 18,095 $ 2,856 $ 3,115 $ 3,222 $ 3,329 $ 2,613 (1) See Note 6, “ Commitments and Contingencies ” to our Consolidated Financial Statements.
The following is a summary of our contractual obligations as of December 31, 2023 (in thousands): Total 2024 2025 2026 2027 2028 Thereafter Operating leases (1) $ 14,835 $ 2,833 $ 3,052 $ 3,158 $ 3,269 $ 2,523 $ — Purchase obligations (2) 12,433 12,397 36 — — — — Contractual obligations under license agreements 398 124 64 60 60 45 45 Total $ 27,666 $ 15,354 $ 3,152 $ 3,218 $ 3,329 $ 2,568 $ 45 (1) See Note 6, “ Commitments and Contingencies ” to our Consolidated Financial Statements.
Assuming no significant change in our business, we expect our 2023 revenue to decline over the prior year as our 2022 revenue was primarily comprised of nonrecurring intellectual property revenue. 62 Operating Expenses Year Ended December 31, Percentage Change 2022 2021 2020 2022/2021 2021/2020 (Dollars in thousands) Research and development $ 135,562 $ 82,284 $ 74,884 65 % 10 % General and administrative 49,900 46,318 38,703 8 % 20 % Total operating expenses $ 185,462 $ 128,602 $ 113,587 44 % 13 % Total operating expenses consist of R&D expenses, general and administrative (“G&A”) expenses.
Assuming no significant change in our business, we expect our 2024 revenue to decline over the prior year as our 2023 revenue was primarily comprised of nonrecurring revenue. 64 Operating Expenses Year Ended December 31, Change 2023 2022 $ % (Dollars in thousands) Research and development $ 220,571 $ 135,562 $ 85,009 63 % General and administrative 61,835 49,900 11,935 24 % Total operating expenses $ 282,406 $ 185,462 $ 96,944 52 % Total operating expenses consist of R&D expenses, general and administrative (“G&A”) expenses.
In June 2021, we entered into a lease agreement for office space in Dublin, Ireland, which commenced in August 2021 and had a term of one year. This lease has an automatic renewal clause, pursuant to which the agreement will be extended automatically for successive periods equal to the current term, unless cancelled by us.
Both of these leases have an automatic renewal clause, pursuant to which the agreement will be extended automatically for successive periods equal to the current term, unless the agreement is cancelled by us. In October 2022, we entered into a noncancelable operating sublease to lease approximately 31,157 square feet of office and laboratory space in Brisbane, California.
For the year ended December 31, 2021, collaboration revenue recognized from BMS was $79.7 million of the total transaction consideration of $104.9 million for the PRX005 US License and US Development Services, se e Note 7, “Significant Agreements” to the Consolidated Financial Statements regarding the Collaboration Agreement with BMS for more information.
Se e Note 7, “Significant Agreements” to the Consolidated Financial Statements regarding the Collaboration Agreement with BMS for more information. License and intellectual property revenue for the year ended December 31, 2023 was $50,000 compared to $40.1 million f or the year ended December 31, 2022.
Revenue Recognition Our collaboration revenue includes revenue recognized for milestone payments and reimbursements under our License Agreement with Roche as well as revenue recognized under our Collaboration Agreement with BMS.
We believe the following policies to be critical to the judgments and estimates used in the preparation of our financial statements. 62 Revenue Recognition Our collaboration revenue includes revenue recognized for milestone payments and reimbursements under our License Agreement with Roche as well as revenue recognized under our Collaboration Agreement with BMS.
The benefit from income taxes increased by $13.6 million for the year ended December 31, 2022 , compared to the same period in the prior year primarily due to an increase in deferred tax asset (DTA) of $10.5 million related to Section 174 R&D Capitalization requirements, which became effective in 2022.
The increase in benefit from income taxes for the year ended December 31, 2023 , compared to the prior year, was primarily due to an increase in defe rred tax assets related to Section 174 R&D Capitalization.
(7) Other R&D is comprised of preclinical development and discovery programs that have not progressed to first patient dosing in a Phase 1 clinical trial.
(4) Other R&D is comprised primarily of preclinical development and discovery programs that have not progressed to first patient dosing in a Phase 1 clinical trial and close out costs for programs that we are no longer advancing. 65 We expect our R&D expenses to be relatively flat in 2024 over the prior year.
In addition to the contractual obligations above, we also expect to have future material cash requirements related to our clinical trials, discovery and pre-clinical programs, human capital and intellectual property. Assuming no significant change in our business, we expect the full year 2023 net cash used in operating and investing activities to be approximately $213 million to $229 million.
(2) Purchase obligations as of the filing date includes additional $2.9 million purchase commitments to our contract manufacturers. In addition to the contractual obligations above, we also expect to have future material cash requirements related to our clinical trials, discovery and pre-clinical programs, human capital and intellectual property.
Results of Operations Comparison of Years Ended December 31, 2022, 2021 and 2020 Revenue Year Ended December 31, Percentage Change 2022 2021 2020 2022/2021 2021/2020 (Dollars in thousands) Collaboration revenue $ 13,855 $ 139,833 $ 564 (90) % 24,693 % Revenue from license and intellectual property 40,050 60,744 289 (34) % 20,919 % Total revenue $ 53,905 $ 200,577 $ 853 (73) % 23,414 % Total revenue was $53.9 million, $200.6 million, and $0.9 million for the years ended December 31, 2022, 2021 and 2020, respectively.
Results of Operations Comparison of Years Ended December 31, 2023 and 2022 Revenue Year Ended December 31, Change 2023 2022 $ % (Dollars in thousands) Collaboration revenue $ 91,320 $ 13,855 $ 77,465 559 % Revenue from license and intellectual property 50 40,050 (40,000) (100) % Total revenue $ 91,370 $ 53,905 $ 37,465 70 % Total revenue was $91.4 million and $53.9 million for the years ended December 31, 2023, and 2022, respectively.
We expect our R&D expenses to increase in 2023 over the prior year, primarily due to anticipated higher personnel costs including share-based compensation and anticipated increase in spending for clinical trials and manufacturing related to our active clinical trials.
General and Administrative Expenses Our G&A expenses increased by $11.9 million, for the year ended December 31, 2023 , compared to the prior year primarily due to higher personnel expense and higher consulting expense. We expect our G&A expenses to increase in 2024 compared to the prior ye ar, primarily related to anticipated higher personnel costs including share-based compensation.
We expect our G&A expenses to increase in 2023 compared to the prior ye ar, primarily related to anticipated higher personnel costs including share-based compensation. 64 Other Income (Expense) Year Ended December 31, Percentage Change 2022 2021 2020 2022/2021 2021/2020 (Dollars in thousands) Interest income $ 6,349 $ 42 $ 1,369 15,017 % (97) % Other income (expense), net (397) (96) (62) 314 % 55 % Total other income (expense), net $ 5,952 $ (54) $ 1,307 nm nm _________________________ nm = not meaningful Interest income increased by $6.3 million, or 15,017%, for the year ended December 31, 2022, compared to the prior year, primarily due to higher interest income from our cash and money market accounts resulting from higher interest rates.
Other Income (Expense) Year Ended December 31, Change 2023 2022 $ % (Dollars in thousands) Interest income $ 31,014 $ 6,349 $ 24,665 388 % Other income (expense), net (458) (397) (61) 15 % Total other income (expense), net $ 30,556 $ 5,952 $ 24,604 413 % Interest income increased by $24.7 million for the year ended December 31, 2023 , compared to the prior year, primarily due to higher interest income from our cash and money market accounts resulting from higher interest rates.
Collaboration revenue includes revenue recognized under our Collaboration Agreement with BMS. For the year ended December 31, 2022, collaboration revenue recognized from BMS was $13.9 million for US Development Services r elated to the Tau/PRX005 program.
Collaboration revenue from BMS was $91.3 million f or the year ended December 31, 2023, compared to $13.9 million for the year ended December 31, 2022.
This increase in working capital during the year ended December 31, 2022, was primarily attributable to a higher cash and cash equivalents balance resulting from net proceeds of approximately $172.6 million from our public offering in December 2022, $51.0 million from our December 2021 Distribution Agreement, $40.0 million development milestone payment from Novo Nordisk, and proceeds from stock option exercises of approximately $17.8 million, partially offset by cash use of $185.5 million for operating expenses (adjusted to exclude non-cash charges).
This decrease in working capital during the year ended December 31, 2023 , was primarily attributable to cash use of $282.4 million for operating expenses (adjusted to exclude non-cash charges) offset in part by $55.0 million in cash from BMS related to the tau global option exercise fee, net proceeds of approximately $20.7 million from the underwriters partial exercise of their 30-day option to purchase additional ordinary shares as part of the December 2022 public offering, interest income on investments of $31.0 million , net proceeds received from stock option exercises of approximately $21.5 million and proceeds of approximately $2.9 million from issuances of ordinary shares pursuant to the December 2021 Distribution Agreement.
For the year ended December 31, 2021, License and intellectual property revenue included $60.7 million in revenue from the sale of intellectual property and related rights to the Company’s ATTR amyloidosis business and pipeline to Novo Nordisk. See Note 7, “Significant Agreements” to the Consolidated Financial Statements regarding the Novo Nordisk Share Purchase Agreement for more information.
See Note 7, “Significant Agreements” to the Consolidated Financial Statements regarding the Novo Nordisk Share Purchase Agreement for more information.
Amounts due may be fixed fee, fee for service, and may include upfront payments, monthly payments, and payments upon the completion of milestones or receipt of deliverables. The information contained in Note 2 to the Consolidated Financial Statements under the heading “Recent Accounting Pronouncements” is hereby incorporated by reference into this Part II, Item 7.
We expect that the level of judgment in estimating research and development expenses may increase over time as we are entering later stage, more extensive, clinical trials. The information contained in Note 2 to the Consolidated Financial Statements under the heading “Recent Accounting Pronouncements” is hereby incorporated by reference into this Part II, Item 7.
Provision for (benefit from) Income Taxes Year Ended December 31, Percentage Change 2022 2021 2020 2022/2021 2021/2020 (Dollars in thousands) Provision for (benefit from) income taxes $ (8,656) $ 4,946 $ (283) nm nm _________________________ nm = not meaningful The provision for (benefit from) income taxes were $(8.7) million , $4.9 million and $(0.3) million for the years ended December 31, 2022, 2021 and 2020, respectively.
Provision for (benefit from) Income Taxes Year Ended December 31, Change 2023 2022 $ % (Dollars in thousands) Provision for (benefit from) income taxes $ (13,452) $ (8,656) $ (4,796) 55 % The benefit from income taxes increased by $4.8 million for the year ended December 31, 2023 , compared to the same period in the prior year.
No tax benefit has been recorded related to tax losses recognized in Ireland and any deferred tax assets for those losses are offset by a valuation allowance. 65 Liquidity and Capital Resources Overview December 31, 2022 2021 (Dollars in thousands) Working capital $ 668,951 $ 551,357 Cash and cash equivalents $ 710,406 $ 579,094 Total assets $ 758,035 $ 609,366 Total liabilities $ 135,993 $ 143,324 Total shareholders’ equity $ 622,042 $ 466,042 Working capital was $669.0 million as of December 31, 2022, an increase of $117.6 million from working capital of $551.4 million as of December 31, 2021.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations” in our 2022 Annual Report on Form 10-K for a discussion of the results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021. 66 Liquidity and Capital Resources Overview December 31, 2023 2022 (Dollars in thousands) Working capital $ 582,391 $ 668,951 Cash and cash equivalents $ 618,830 $ 710,406 Total assets $ 696,382 $ 758,035 Total liabilities $ 135,017 $ 135,993 Total shareholders’ equity $ 561,365 $ 622,042 Working capital was $582.4 million as of December 31, 2023 , a decrease of $86.6 million from working capital of $669.0 million as of December 31, 2022 .
In March 2016, we entered into a noncancelable operating sublease to lease 128,751 square feet of office and laboratory space in South San Francisco, California. We are obligated to make lease payments totaling approximately $39.2 million over the lease term. Of this obligation, approximately $6.5 million remains outstanding as of December 31, 2022 .
We had a noncancelable operating sublease covering 128,751 square feet of office and laboratory space in South San Francisco, California, which expired on December 31, 2023. We also had a sub-sublease covering approximately 46,641 square feet of such space, which terminated in connection with the sublease.
Contracts with Multiple Performance Obligations Our License Agreement with Roche and our Collaboration Agreement with BMS contain multiple performance obligations. We account for the individual performance obligations separately if they are distinct.
Contracts with Multiple Performance Obligations Significant judgment is required to apply the authoritative accounting guidance at the outset of a collaboration arrangement, and over time. Our License Agreement with Roche and our Collaboration Agreement with BMS contain multiple performance obligations.
Removed
We recognize costs for contract manufacturing based on evaluation of the progress to completion of specific tasks. The objective of our accrual policy is to match the recording of the expenses in our Consolidated Financial Statements to the actual services we have received and efforts expended.
Added
Our ordinary shares began trading on The Nasdaq Global Market under the symbol “PRTA” on December 21, 2012, and currently trade on The Nasdaq Global Select Market.
Removed
Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in our Consolidated Financial Statements as prepaid or accrued research and development.
Added
We recognize revenue associated with our collaboration arrangements, which may require us to exercise considerable judgment in estimating revenue to be recognized, including judgments made on day one accounting and judgments associated with the amount of revenue to be recognized over time as performance obligations are satisfied.
Removed
Collaboration revenue also includes milestone payments and reimbursements under our License Agreement with Roche. For the year ended December 31, 2021, collaboration revenue from Roche included a $60.0 million clinical milestone recognized upon first patient dosed in the global Phase 2b for prasinezumab PADOVA study.
Added
In the identification of performance obligations, there is judgment involved in identifying the promised goods or services in the collaboration agreement, determining whether these are distinct in the context of the contract, and determining if these represent a performance obligation to a customer. These determinations are highly subjective and can differ between arrangement based on specific contractual terms.
Removed
For the years ended December 31, 2021 and 2020, collaboration revenue also included reimbursements under our License Agreement with Roche. See Note 7, “Significant Agreements” to the Consolidated Financial Statements regarding the Roche License Agreement for more information.
Added
The identified performance obligations will impact most significantly the timing of revenue recognition, and is a point-in-time assessment performed at the outset of a collaboration arrangement. We account for the individual performance obligations separately if they are distinct.
Removed
For the years ended December 31, 2022, 2021 and 2020, license revenue also included li cense fees recognized under a License Agreement entered into on March 1, 2020, between the Company's wholly owned subsidiary, Prothena Biosciences Limited, and F. Hoffmann-La Roche Ltd. See Note 7, “Significant Agreements” to the Consolidated Financial Statements regarding the Roche License Agreement for more information.
Added
A significant portion of our research and development expenses in the Consolidated Statements of Operations are external costs, which we track on a program-specific basis when the applicable program was separately tracked in preclinical development . These research and development expenses include the conduct of preclinical studies and clinical trials, contract manufacturing activities and consulting services.
Removed
Through May 28, 2021, pursuant to our License Agreement with Roche, we made payments to Roche for our share of the development expenses incurred by Roche related to the prasinezumab program, which is included in our R&D expenses.
Added
The measurement of these research and development cost and/or effort can impact the research and development expenses in the Consolidated Statements of Operations and of prepaid assets and accrued liabilities on the Consolidated Balance Sheets.
Removed
On May 28, 2021, we announced the exercise of our rights under the terms of the ongoing worldwide collaboration with Roche to receive potential U.S. commercial sales milestones and tiered royalties in lieu of a U.S. profit and loss share for prasinezumab in Parkinson’s disease.
Added
The level of judgment required to estimate research and development expenses varies based on 63 the nature of the services being performed and the underlying support obtained.
Removed
For the year ended December 31, 2021, our R&D expense increased by $7.4 million, or 10% , compared to the prior year.
Added
We estimate the amount of work completed through discussions with internal personnel and external service providers as to the progress or stage of completion of the services and the agreed-upon fee to be paid for such services. As actual costs become known, we adjust our accrued estimates.
Removed
The increase for year ended December 31, 2021, was primarily due to higher personnel expenses, higher clinical trial expenses primarily related to the birtamimab and PRX005 programs (offset in part by lower PRX004 clinical trial expense) and higher R&D consulting expenses; offset in part by lower collaboration expenses related to the prasinezumab program with Roche as a result of the cost share opt-out exercised in May 202l and lower manufacturing expenses primary related to the PRX005 and birtamimab programs .
Added
These estimates are based on certain assumptions and inputs that can be challenging to assess, including the evaluation of the status of and costs incurred for manufacturing activities, outsourced research and development programs and project milestones achieved.
Removed
Expenditures in the early discovery stage are not tracked by program and accordingly have been excluded from this cumulative amount. (2) Cumulative R&D costs to date for prasinezumab and related antibodies include the costs incurred from the date when the program was separately tracked in nonclinical development.
Added
Although we do not expect our estimates to be materially different from amounts actually incurred, incomplete or inaccurate data from vendors could impact our understanding of the status and timing of services performed which could result in us reporting expenses that are too high or too low in any particular period.
Removed
For the years ended December 31, 2022, 2021 and 2020, respectively , nil, $0.2 million and $0.6 million of reimbursements from Roche for development services were recorded as part of collaboration revenue. (3) Cumulative R&D costs to date for PRX003 include the costs incurred from the date when the program was separately tracked in nonclinical development.
Added
We do not need to make significant estimates where costs incurred are supported by invoices or reports of costs incurred are obtained from a vendor that is directly performing the underlying services, such as a consultant, contract research organization or contract manufacturing organization.
Removed
Expenditures in the early discovery stage are not tracked by program and accordingly have been excluded from this cumulative amount. Based on the Phase 1b multiple ascending dose study results announced in September 2017, we announced that we will not advance PRX003 into mid-stage clinical development for psoriasis or psoriatic arthritis as previously planned.
Added
In some cases, however, expense is recorded using an underlying assumption of the progress to completion of specific activities. For example, costs may be recognized based on the passage of time for activities that span reporting periods. If the provision of services is not linear then this assumption could impact the amount of expense recognized.
Removed
(4) Cumulative R&D costs to date for NNC6019 (PRX004) include the costs incurred from the date when the program was separately tracked in nonclinical development. Expenditures in the early discovery stage are not tracked by program and accordingly have been excluded from this cumulative amount.
Added
For other activities, such as for certain clinical trials, expense is recorded based on information obtained from vendors as an intermediary to those performing the underlying services, such as contract research organizations. These estimates are inherently more judgmental since the quality and availability of the underlying data may vary.
Removed
(5) Cumulative R&D costs to date for PRX005 include the costs incurred from the date when the program was separately tracked in nonclinical development. Expenditures in the early discovery stage are not tracked by program and accordingly have been excluded from this cumulative amount.
Added
The increase of $77.5 million was primarily due to $72.9 million recognized for the Tau Global License Agreement ($17.9 million of deferred revenue recognized for the Global Right and $55.0 million for the option exercise fee) and $4.7 million under a Supply Agreement .
Removed
(6) Cumulative R&D costs to date for PRX012 include the costs incurred from the date when the program was separately tracked in nonclinical development. Expenditures in the early discovery stage are not tracked by program and accordingly have been excluded from this cumulative amount.
Added
Comparison of the years ended December 31, 2022 and 2021 Refer to “Item 7.
Removed
General and Administrative Expenses Our G&A expenses increased by $3.6 million, or 8%, for the year ended December 31, 2022, compared to the prior year.
Added
Years ended December 31, 2022 and 2021 Refer to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” in our 2022 Annual Report on Form 10-K for a discussion of the cash flows for the years ended December 31, 2022 and 2021.
Removed
The increase for the year ended December 31, 2022, compared to the prior year, was primarily due to higher personnel expense, and higher consulting expense; offset in part by lower legal fees and lower expense for our director and officer insurance premium.
Added
In June 2021, we entered into a lease agreement for office space in Dublin, Ireland, which commenced in August 2021 and had an initial term of one year. In April 2023, the Company renewed the lease for another one year term with a termination date of July 2024.
Removed
For the year ended December 31, 2021, our G&A expenses increased by $7.6 million, or 20%, compared to the prior year. The increase for the year ended December 31, 2021, compared to the prior year, was primarily due to higher personnel expense, higher legal expenses, higher expense for our director and officer insurance premium and higher consulting expense.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInterest Rate Risk Our exposure to interest rate risk is limited to our cash equivalents, which consist of accounts maintained in money market funds. We have assessed that there is no material exposure to interest rate risk given the nature of money market funds.
Biggest changeIf we increase our business activities that require the use of foreign currencies, we may be exposed to losses if the Euro and other such currencies continue to strengthen against the U.S. dollar. Interest Rate Risk Our exposure to interest rate risk is limited to our cash equivalents, which consist of accounts maintained in money market funds.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Foreign Currency Risk Our business is primarily conducted in U.S. dollars except for our agreements with contract manufacturers for drug supplies which are denominated in Euros.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Foreign Currency Risk Our business is primarily conducted in U.S. dollars except for our agreements with contract manufacturers for drug supplies which are primarily denominated in Euros.
Our investment policy also specifies credit quality standards for our investments and limits the amount of credit exposure to any single issue, issuer or type of investment. Credit Risk Financial instruments that potentially subject us to concentration of credit risk consist of cash and cash equivalents and accounts receivable.
Our investment policy also specifies credit quality standards for our investments and limits the amount of credit exposure to any single issue, issuer or type of investment. 69 Credit Risk Financial instruments that potentially subject us to concentration of credit risk consist of cash and cash equivalents and accounts receivable.
We place our cash and cash equivalents with high credit quality financial institutions and pursuant to our investment policy, we limit the amount of credit exposure with any one financial institution. Deposits held with banks may exceed the amount of insurance provided on such deposits. We have not experienced any losses on our deposits of cash and cash equivalents.
We place our cash and cash equivalents with high credit quality financial institutions and pursuant to our investment policy, we limit the amount of credit exposure with any one financial institution. Deposits held with banks have exceeded, and will continue to exceed, federally insured limits on such deposits.
In general, money market funds are not subject to interest rate risk because the interest paid on such funds fluctuates with the prevailing interest rate. Accordingly, our interest income fluctuates with short-term market conditions. 68 In the future, we anticipate that our exposure to interest rate risk will primarily be related to our investment portfolio.
We have assessed that there is no material exposure to interest rate risk given the nature of money market funds. In general, money market funds are not subject to interest rate risk because the interest paid on such funds fluctuates with the prevailing interest rate. Accordingly, our interest income fluctuates with short-term market conditions.
We may invest any surplus funds in accordance with a policy approved by our board of directors which will specify the categories, allocations, and ratings of securities we may consider for investment. The primary objectives of our investment policy are to preserve principal and maintain proper liquidity to meet our operating requirements.
In the future, we anticipate that our exposure to interest rate risk will primarily be related to our investment portfolio. We may invest any surplus funds in accordance with a policy approved by our board of directors which will specify the categories, allocations, and ratings of securities we may consider for investment.
We recorded a loss on foreign currency exchange rate differences of approximately $397,000, $96,000, and $62,000 during the years ended December 31, 2022, 2021 and 2020, respectively. If we increase our business activities that require the use of foreign currencies, we may be exposed to losses if the Euro and other such currencies continue to strengthen against the U.S. dollar.
We recorded a loss on foreign currency exchange rate differences of approximately $458,000 , $397,000, and $96,000 during the years ended December 31, 2023, 2022 and 2021, respectively .
Our credit risk exposure is up to the extent recorded on the Company's Consolidated Balance Sheets. 69
We are exposed to credit risk in the event of a default by the financial institutions holding our cash and cash equivalents. We have not experienced any losses on our deposits of cash and cash equivalents. Our credit risk exposure is up to the extent recorded on the Company's Consolidated Balance Sheets. 70
Added
The primary objectives of our investment policy are to preserve principal and maintain proper liquidity to meet our operating requirements.

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