March 11, 2025 - The stock of Protagonist Therapeutics (NASDAQ:PTGX) dramatically increased by 45.82% on Monday after it declared successful results from the Phase 2b ANTHEM-UC study of icotrokinra (formerly JNJ-2113).

• Warning! GuruFocus has detected 5 Warning Signs with PTGX.

The joint development project of Protagonist Therapeutics and Johnson & Johnson (NYSE:JNJ) produced Icotrokinra as their first-in-class targeted oral peptide. Icotrokinra is a pill taken orally to treat plaque psoriasis (at moderate to severe), and ulcerative colitis.

Icotrokinra works by blocking the IL-23 receptor selectively and the study achieved a 63.5% clinical response at its highest dose after twelve weeks and the result is only 27% to placebo. The treatment presented a good safety outcome and showed improvement until Week 28.

PTGX stands as an interesting investment material since it successfully turned around in 2024.

After years of loss, PTGX finally flipped its financial performance by printing its first profit of $275 million from $434 million revenue in 2024. That's a 63.36% margin! Thanks to its collaboration on icotrokinra that allowed PTGX to receive a $165 million milestone payment and therefore can boost its financial stability.

All this while PTGX presents a good revenue growth with strong financial cushion but with modest profitability. And Icotrokinra serves a glimpse of hope for better profitability prospect for PTGX that could possibly lift PTGX's overall performance in the future.

In the biotech industry, it is quite common that in the first years the companies often face financial losses for the high cost of initial research and developments including expensive clinical trials. But once a drug is approved, it attracts more investments, and after the drug is commercialized, biotech companies can experience a dramatic financial turnaround with double digit margins.