What happened?

Shares of Protagonist Therapeutics (NASDAQ:PTGX) -- a clinical-stage biopharmaceutical company -- are up by 111.6% as of 12:34 p.m. EDT on Friday. Protagonist Therapeutics released its fiscal first-quarter earnings report after the market closed on Thursday, and the company announced some exciting news regarding one of its most promising pipeline candidates, PTG-300.  

So what

In its quarterly update, Protagonist Therapeutics announced that it had chosen polycythemia vera -- a rare type of blood cancer that leads to an abnormal level of red blood cells -- as the first indication for which to run a pivotal study for PTG-300.

The company made this decision based on a Phase 2 study, the results of which Protagonist Therapeutics also revealed in a separate press release yesterday. During the study, six polycythemia vera patients treated with PTG-300 for up to 28 weeks experienced controlled levels of hematocrit, which refers to the percentage of red blood cells in the blood.

A man standing on a ladder drawing an upward-trending graph on a chalkboard

Image source: Getty Images.

The treatment also eliminated the need for phlebotomy -- a treatment for polycythemia vera that consists in removing blood from the patient's vein -- for these six patients. Protagonist Therapeutics plans on focusing its efforts and its resources on the upcoming pivotal study for PTG-300.

The company announced its decision to postpone a Phase 2 study for PN-943 -- a potential treatment for ulcerative colitis -- as a result of the ongoing COVID-19 pandemic. This move will also help Protagonist Therapeutics reduce its expenses.

Now what

Protagonist Therapeutics argues that there is a significant unmet need for polycythemia vera. The company estimates that the indication currently offers a market opportunity between $1 billion and $2 billion in the U.S. and Europe. In other words, if PG-300 is approved for the treatment of polycythemia vera, Protagonist Therapeutics and its shareholders could be handsomely rewarded. However, given that the pharma company has yet to even start this pivotal study for PG-300, perhaps investors should temper their expectations.