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Protagonist CEO Dinesh Patel has a big decision to make. It could be worth as much as $400 million—and much more later on.
The submission of a new drug application for rare blood cancer therapy rusfertide by partner Takeda at the end of December triggered a three-month countdown for Protagonist to decide whether to opt in or out on 50-50 co-development. If Protagonist opts out, the company would be eligible for $400 million in opt-out payments, larger milestone payments and 14%–29% tiered royalties on worldwide sales.
“Now the clock is ticking,” Patel toldBioSpaceon the sidelines of the J.P. Morgan Healthcare Conference in San Francisco on Wednesday.
Opting out would also allow Protagonist to leave the development and commercial process to Takeda, clearing the way for an increased focus on the biotech’s wholly owned pipeline.
“What we have started expressing is we are strongly leaning towards opting out,” Patel said. “And the reason for that is like the economics around opting out are just amazing.”
That’s because rusfertide aced its clinical program. The drug is being developed for polycythemia vera, a type of rare and incurable cancer that causes the bone marrow to produce too many red blood cells. Patients are currently treated by removing blood from the body to manage elevated hemocrit levels—a procedure that can cause fatigue, visual disturbances and other complications.
In the Phase III VERIFY trial thatread out last year, rusfertide reduced the need for blood withdrawals and lowered hemocrit levels as compared to placebo. The secondary endpoints, which looked at symptoms and treatment improvements, were also met.
“All of a sudden it’s like, oh, this could be a big drug,” Patel said.
The results put the 29% royalty in sight, Patel said. If the trial had not been so successful, opting in would have been a better option with lower potential royalties expected. But now, for any sales beyond $1.5 billion, Protagonist will receive 29% royalties. Meanwhile, Takeda will be doing the API sourcing, manufacturing, erecting the sales force to drive prescriptions and setting up direct-to-consumer engagement.
“Without lifting a finger, I’m getting such a big share,” Patel said.
The FDA has granted priority review for rusfertide, and a decision is expected in the next few months or by August, according to Patel.
Rusfertide is not Protagonist’s only partnership—or its only new drug application before the FDA. The company is also working with Johnson & Johnson on icotrokinra, an IL-23 receptor blocker under development for multiple immunology and inflammatory diseases. The drug has been heralded as a “new standard of treatment” in plaque psoriasis after Phase III results werereleased in March 2025.
The NDA was filed in July last year, with a decision expected in the middle of the year. Meanwhile, J&J—and Takeda—are working hard to launch Protagonist’s therapies right away. “That’s a very nice setup,” Patel said.
J&J was rumored to be interested in acquiring Protagonist over the fall. A deal has yet to materialize, and Patel declined to comment.
But he did say that Protagonist has no interest in becoming a commercial company. The focus will remain on developing new treatments, including a handful of oral obesity assets that will go up against Novo Nordisk and Eli Lilly.
The partnership structure the team has built means Protagonist has a solid financial outlook, with milestones to support along the way.
“We are laser-focused on the future,” Patel said. “All the nuggets we have in the next wave of R&D.”