Prothena Reports Fourth Quarter and Full Year 2021 Financial Results, and Provides Financial Guidance and Business Highlights

Prothena Reports Fourth Quarter and Full Year 2021 Financial Results, and Provides Financial Guidance and Business Highlights
Prothena Corporation plc (NASDAQ:PRTA), a late-stage clinical biotechnology company with a robust pipeline of investigational therapeutics built on protein dysregulation expertise, today reported financial results for the fourth quarter and full year 2021. In addition, the Company provided 2022 financial guidance and an update on business highlights.

“Prothena made meaningful progress in multiple therapeutic indications across our portfolio in 2021 with the advancement of three clinical stage programs. We announced the initiation of the confirmatory Phase 3 AFFIRM-AL study of birtamimab, Phase 2b PADOVA study of prasinezumab, and Phase 1 study of PRX005. Additionally, we presented positive preclinical findings for our anti-Aβ PRX012 and our dual Aβ/tau vaccine at AAIC in June last year,” said Gene Kinney, Ph.D., President and Chief Executive Officer of Prothena. “In 2021, we also received $200 million from strategic partnerships with leading pharmaceutical companies and bolstered our cash position with $175 million raised through equity offerings. In 2022, we look forward to multiple scientific congresses starting with the presentation of additional preclinical data at AD/PD in March. Our strong capital position funds Prothena through multiple value-creating milestones as we transition into a fully integrated commercial company.”

2021 Business Highlights and Upcoming Milestones

Neurodegenerative Diseases Portfolio

Alzheimer’s Disease (AD)

PRX012, a potential best-in-class treatment for AD, is an investigational monoclonal antibody targeting a key epitope at the N-terminus of amyloid beta (Aβ) with high binding potency

Presented preclinical results at the Alzheimer’s Association International Conference® in 2021 (AAIC®) demonstrating that PRX012 significantly cleared both pyroglutamate-modified and -unmodified Aβ plaque in post-mortem brain tissue of late-stage AD patients
Investigational New Drug (IND) application filing expected 1Q 2022

PRX005, a potential best-in-class treatment for AD, is an investigational antibody that specifically targets a key epitope within the microtubule binding region (MTBR) of tau, a protein implicated in diseases including AD, frontotemporal dementia (FTD), progressive supranuclear palsy (PSP), chronic traumatic encephalopathy (CTE), and other tauopathies. PRX005 is part of the global neuroscience research and development collaboration with Bristol Myers Squibb

Received $80 million option payment from Bristol Myers Squibb for execution of U.S. license agreement in 2021
Phase 1 study initiated in 2021
Topline Phase 1 data expected in 2022

Dual Aβ/tau vaccine, a potential first-in-class treatment and prevention for AD, is a dual-target vaccine targeting key epitopes within the Aβ and tau proteins to promote amyloid clearance and blockade of pathogenic tau

AAIC® presentation in 2021 showcased preclinical data demonstrating that Prothena’s dual Aβ/tau vaccine generated appropriate and balanced antibody titers promoting both phagocytosis of Aβ plaque and blockade of tau transmission in vitro
Presentation of preclinical data at the International Conference on Alzheimer’s and Parkinson’s Diseases (AD/PD) expected in March 2022
IND filing expected in 2023

Parkinson’s Disease (PD)

Prasinezumab, a potential first-in-class treatment for PD, is a humanized monoclonal antibody designed to target key epitopes within the C-terminus of alpha-synuclein and is the focus of the worldwide collaboration with Roche

Earned $60 million clinical milestone payment in 2021 upon dosing of the first patient in the global Phase 2b PADOVA study for prasinezumab (NCT#04777331)
Presentation of additional data by Roche at AD/PD expected in March 2022
Phase 2b PADOVA study results expected in 2024

Rare Peripheral Amyloid Diseases Portfolio

AL Amyloidosis (AL)

Birtamimab, a potential best-in-class amyloid depleter treatment for AL, is an investigational humanized monoclonal antibody designed to directly neutralize soluble toxic aggregates and promote clearance of amyloid that causes organ dysfunction and failure

Reached Special Protocol Assessment (SPA) agreement with FDA at p≤0.10 and initiated confirmatory Phase 3 AFFIRM-AL study of birtamimab in Mayo Stage IV patients with AL amyloidosis in 2021 (NCT#04973137)
Confirmatory Phase 3 AFFIRM-AL study results expected in 2024

ATTR Amyloidosis (ATTR)

PRX004, a potential first-in-class treatment for ATTR, is a humanized monoclonal antibody designed to deplete the pathogenic, non-native forms of the TTR protein, and is being developed by Novo Nordisk for the treatment of ATTR cardiomyopathy

Announced Novo Nordisk acquisition of ATTR business for a total aggregate of up to $1.23 billion and Prothena received $60 million up front payment in 2021
Novo Nordisk expected to initiate a Phase 2 trial in 1H 2022 with PRX004 for the treatment of ATTR cardiomyopathy

2021 Organizational Highlights

Sanjiv Patel, MBBS, MA, MBA, appointed to the Board of Directors
Hideki Garren, M.D., Ph.D., appointed to Chief Medical Officer
Tran Nguyen, Chief Financial Officer, appointed to the additional, newly created role of Chief Strategy Officer
Brandon Smith promoted from Chief Business Officer to Chief Operating Officer

Upcoming Investor Conference

Members of the senior management team will present and participate in investor meetings at the following upcoming investor conference:

Oppenheimer 32nd Annual Healthcare Conference, March 15, 2022, at 1:20 PM ET

Fourth Quarter and Full Year of 2021 Financial Results

For the fourth quarter and full year of 2021, Prothena reported a net loss of $33.2 million and net income of $67.0 million, respectively, as compared to a net loss of $30.7 million and $111.1 million for the fourth quarter and full year of 2020, respectively. Net loss per share for the fourth quarter of 2021 was $0.71 and net income per share on a diluted basis for the full year of 2021 was $1.38, as compared to net loss per share of $0.77 and $2.78 for the fourth quarter and full year of 2020, respectively.

Prothena reported total revenue of $1.2 million and $200.6 million for the fourth quarter and full year of 2021, respectively. Revenue for the fourth quarter of 2021 related to $1.2 million from Bristol Myers Squibb. Revenue for the full year of 2021, included $79.7 million from Bristol Myers Squibb for PRX005 U.S. License and U.S. Development Services and $60.7 million from the sale of the intellectual property and related rights to the Company’s ATTR amyloidosis business and pipeline to Novo Nordisk. In addition, the full year revenue included $60.0 million in clinical milestone payment from Roche related to the global Phase 2b PADOVA study for prasinezumab and a nominal amount of license revenue from Roche. This compares to total revenue of $0.4 million and $0.9 million for the fourth quarter and full year of 2020, primarily from collaboration revenue from Roche.

Research and development (R&D) expenses totaled $22.1 million and $82.3 million for the fourth quarter and full year of 2021, respectively, as compared to $20.8 million and $74.9 million for the fourth quarter and full year of 2020, respectively. The increase in R&D expense for the fourth quarter and full year of 2021 compared to the same periods in the prior year 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); 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 2021 and lower manufacturing costs primarily related to PRX005 and birtamimab programs (offset in part by higher PRX012 preclinical expense). R&D expenses included non-cash share-based compensation expense of $2.9 million and $9.5 million for the fourth quarter and full year of 2021, respectively, as compared to $2.1 million and $8.2 million for the fourth quarter and full year of 2020, respectively.

General and administrative (G&A) expenses totaled $12.2 million and $46.3 million for the fourth quarter and full year of 2021, respectively, as compared to $9.9 million and $38.7 million for the fourth quarter and full year of 2020, respectively. The increase in G&A expenses for the fourth quarter and full year of 2021 compared to the same periods in the prior year was primarily related to higher personnel expenses, legal expenses, consulting and expense for our director and officer insurance premium. G&A expenses included non-cash share-based compensation expense of $4.0 million and $15.1 million for the fourth quarter and full year of 2021, respectively, as compared to $3.2 million and $13.8 million for the fourth quarter and full year of 2020, respectively.

Total non-cash share-based compensation expense was $6.9 million and $24.7 million for the fourth quarter and full year of 2021, respectively, as compared to $5.2 million and $22.0 million for the fourth quarter and full year of 2020.

As of December 31, 2021, Prothena had $580.4 million in cash, cash equivalents and restricted cash, and no debt. This includes net proceeds raised of $175 million raised through equity offerings and a total of $200 million in payments from partners Bristol Myers Squibb, Novo Nordisk and Roche.As of February 11, 2022, Prothena had approximately [46.7 million] ordinary shares outstanding.

2022 Financial Guidance

The Company expects the full year 2022 net cash used in operating and investing activities to be $120 to $132 million, which includes an expected $40 million clinical milestone payment from Novo Nordisk, and expects to end the year with approximately $454 million in cash, cash equivalents and restricted cash (midpoint). The estimated full year 2022 net cash used in operating and investing activities is primarily driven by an estimated net loss of $154 to $170 million, which includes an estimated $32 million of non-cash share-based compensation expense.

Conference Call Details

Prothena management will discuss these results and its 2022 financial guidance during a live audio conference call today, Thursday, February 17, 2022, at 4:30 PM ET. The conference call will be made available on the Company's website at www.prothena.com under the Investors tab in the Events and Presentations section. Following the live audio webcast, a replay will be available on the Company's website for at least 90 days.

To access the call via dial-in, please dial (888) 440-6385 (U.S. and Canada toll free) or +00 1 646 960-0180 (international) five minutes prior to the start time and refer to conference ID number 92750. A replay of the call will be available until March 3, 2022, via dial-in at (800) 770-2030 (U.S. toll free) or +00 1 647 362-9199 (international), Conference ID Number 92750.

About Prothena

Prothena Corporation plc is a late-stage clinical company with a robust pipeline of novel investigational therapeutics built on protein dysregulation expertise with the potential to change the course of devastating neurodegenerative and rare peripheral amyloid diseases. Fueled by its deep scientific expertise built over decades of research, Prothena is advancing a pipeline of therapeutic candidates for a number of indications and novel targets for which its ability to integrate scientific insights around neurological dysfunction and the biology of misfolded proteins can be leveraged. Prothena’s pipeline includes both wholly-owned and partnered programs being developed for the potential treatment of diseases including AL amyloidosis, ATTR amyloidosis, Alzheimer’s disease, Parkinson’s disease and a number of other neurodegenerative diseases. For more information, please visit the Company’s website at www.prothena.com and follow the Company on Twitter @ProthenaCorp.

Forward-looking Statements

This press release contains forward-looking statements. These statements relate to, among other things, the sufficiency of our cash position to fund advancement of a broad pipeline; the continued advancement of our discovery, preclinical, and clinical pipeline, and expected milestones in 2022 and beyond; our goal to continue building a biology-directed discovery engine targeting protein dysregulation and to change the Alzheimer’s disease treatment paradigm; the treatment potential, designs, proposed mechanisms of action, and potential administration of birtamimab, prasinezumab, PRX004, PRX005, PRX012, and our dual Aβ/tau vaccine; plans for future clinical studies of birtamimab, prasinezumab, PRX004, PRX005, PRX012, and our dual Aβ/tau vaccine; the expected timing of reporting data from clinical studies of birtamimab, prasinezumab, and PRX005, and preclinical studies of PRX012 and our dual Aβ/tau vaccine; our anticipated net cash burn from operating and investing activities for 2022 and expected cash balance at the end of 2022; and our estimated net loss and non-cash share-based compensation expense for 2022. These statements are based on estimates, projections and assumptions that may prove not to be accurate, and actual results could differ materially from those anticipated due to known and unknown risks, uncertainties and other factors, including but not limited to those described in the “Risk Factors” sections of our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (SEC) on November 4, 2021, discussions of potential risks, uncertainties, and other important factors in our subsequent filings with the SEC, and our Annual Report on Form 10-K to be filed with the SEC for our fiscal year 2021. We undertake no obligation to update publicly any forward-looking statements contained in this press release as a result of new information, future events, or changes in our expectations.

PROTHENA CORPORATION PLCCONSOLIDATED STATEMENTS OF OPERATIONS(unaudited - amounts in thousands except per share data)

	Three Months Ended December 31,						Year EndedDecember 31,
		2021			2020			2021			2020
Collaboration revenue	$	1,172		$	121		$	139,833		$	564
Revenue from license and intellectual property		—			239			60,744			289
Total revenue		1,172			360			200,577			853
Operating expenses:
Research and development		22,058			20,760			82,284			74,884
General and administrative		12,206			9,908			46,318			38,703
Total operating expenses		34,264			30,668			128,602			113,587
Income (loss) from operations		(33,092	)		(30,308	)		71,975			(112,734	)
Other income (expense), net		(4	)		(55	)		(54	)		1,307
Income (loss) before income taxes		(33,096	)		(30,363	)		71,921			(111,427	)
Provision for (benefit from) income taxes		83			353			4,946			(283	)
Net income (loss)	$	(33,179	)	$	(30,716	)	$	66,975		$	(111,144	)
Basic net income (loss) per ordinary share	$	(0.71	)	$	(0.77	)	$	1.51		$	(2.78	)
Diluted net income (loss) per ordinary share	$	(0.71	)	$	(0.77	)	$	1.38		$	(2.78	)
Shares used to compute basic net income (loss) per share		46,618			39,921			44,228			39,915
Shares used to compute diluted net income (loss) per share		46,618			39,921			48,464			39,915

PROTHENA CORPORATION PLCCONSOLIDATED BALANCE SHEETS(unaudited - amounts in thousands)

	December 31,
		2021		2020
Assets
Cash and cash equivalents	$	579,094	$	295,380
Accounts receivable		—		15
Prepaid expenses and other current assets		5,715		2,537
Restricted cash, current		—		1,352
Total current assets		584,809		299,284
Property and equipment, net		2,012		2,551
Operating lease right-of-use assets		12,123		17,811
Restricted cash, non-current		1,352		1,352
Other non-current assets		9,070		11,977
Total non-current assets		24,557		33,691
Total assets	$	609,366	$	332,975
Liabilities and Shareholders’ Equity
Accrued research and development		6,351		9,044
Deferred revenue, current		7,657		—
Lease liability, current		5,940		5,512
Other current liabilities		13,504		11,292
Total current liabilities		33,452		25,848
Deferred revenue, non current		102,933		110,242
Lease liability, non-current		6,386		12,326
Other non-current liabilities		553		553
Total non-current liabilities		109,872		123,121
Total liabilities		143,324		148,969
Total shareholders’ equity		466,042		184,006
Total liabilities and shareholders’ equity	$	609,366	$	332,975