Protagonist Therapeutics shares pop on resumption of clinical trials for ulcerative colitis drug

Shares in Protagonist Therapeutics Inc (NASDAQ:PTGX) popped Monday after the company said it would resume clinical  trials for its drug PTG-100 in patients with ulcerative colitis.

By the afternoon, Protagonist shares had soared 57% to US$11.01 in response to the news.

The company called it quits on its Phase 2 PROPEL study for PTG-100 last March due to an unusually high remission rate in the group of patients taking the placebo. But a second reading of the endoscopy results showed they were riddled with errors.

The company now intends to meet with the US Food and Drug Administration during the second half of the year to discuss next steps for PTG-100 and also plans to present related data at an upcoming medical conference.

“The discontinuation of the PROPEL study was an unfortunate consequence of a human error in the endoscopy readouts provided by the contract research organization,” CEO Dinesh Patel, said in a statement.

“Overall, we also view this data as supportive of the concept of GI-restricted, oral targeted therapy approach for the treament of irritable bowl disease.”

A reexamination of the data from the Phase 2b study suggests that the placebo effect was much lower, which means that the treatment benefit of PTG-100 was more advanced.

PTG 100 is a type of antagonist peptide, which is taken orally, and is under evaluation for the treatment of inflammatory bowel diseases.

Read: Protagonist Therapeutics Inc rockets as Janssen backs Crohn’s Disease treatment

Separately, the company also announced Monday that it had recruited investors, including BVF Partners, to buy 2,750,000 shares of stock. The sale will raise proceeds of US$22mln.

The investors also were handed five-year warrants to purchase 1,375,000 shares of common stock at US$10.00 per share and 1,375 shares at US$15.00 per share. The transaction is set to close on Wednesday.

Story by ProactiveInvestors