Protagonist Therapeutics (PTGX) 10-Q 9 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	Apr. 30, 2018
Document And Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q1
Entity Registrant Name	Protagonist Therapeutics, Inc
Entity Central Index Key	1,377,121
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		21,203,892

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) $ in Thousands, $ in Millions	Mar. 31, 2018USD ($)	Dec. 31, 2017USD ($)
Current assets:
Cash and cash equivalents	$ 69,577	$ 106,029
Restricted cash	10	10
Available-for-sale securities	65,383	37,972
Receivable from collaboration partner - related party	2,722	1,816
Research and development tax incentive receivable	1,918	1,347
Prepaid expenses and other current assets	2,621	3,773
Total current assets	142,231	150,947
Property and equipment, net	1,001	879
Restricted cash - noncurrent	450	450
Available-for-sale securities - noncurrent	5,557	11,458
Total assets	149,239	163,734
Current liabilities:
Accounts payable	1,307	1,257
Payable to collaboration partner - related party	379
Accrued expenses and other payables	10,358	9,546
Deferred revenue - related party	21,880	31,752
Total current liabilities	33,924	42,555
Deferred rent - noncurrent	694	547
Total liabilities	34,618	43,102
Commitments and contingencies (Note 8)
Stockholders equity:
Additional paid-in capital	223,904	222,188
Accumulated other comprehensive loss	(72)	(6)
Accumulated deficit	(109,211)	(101,550)
Total stockholders equity	114,621	120,632
Total liabilities and stockholders equity	$ 149,239	$ 163,734

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
Consolidated Balance Sheets
Preferred stock, par value	$ 0.00001	$ 0.00001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.00001	$ 0.00001
Common stock, shares authorized	90,000,000	90,000,000
Common stock, shares issued	21,163,590	21,088,306
Common stock, shares outstanding	21,163,590	21,088,306

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operating expenses:
Research and development	$ 15,368	$ 11,282
General and administrative	3,642	2,991
Total operating expenses	19,010	14,273
Loss from operations	(8,229)	(14,273)
Interest income	568	172
Net loss	$ (7,661)	$ (14,101)
Net loss per share, basic and diluted	$ (0.36)	$ (0.84)
Weighted-average shares used to compute net loss per share, basic and diluted	21,112,393	16,766,218
License and Collaborative Revenue
Condensed Statement of Income Captions [Line Items]
License and collaboration revenue - related party	$ 10,781

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Consolidated Statements of Comprehensive Loss
Net loss	$ (7,661)	$ (14,101)
Other comprehensive loss:
(Loss) gain on translation of foreign operations	(18)	237
Unrealized loss on available-for-sale securities	(48)	(14)
Comprehensive loss	$ (7,727)	$ (13,878)

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (7,661)	$ (14,101)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	1,185	843
Net amortization of premium on available-for-sale securities	120	122
Depreciation and amortization	78	88
Changes in operating assets and liabilities:
Research and development tax incentive receivable	(606)	(102)
Receivable from collaboration partner - related party	(906)
Prepaid expenses and other assets	1,150	1,586
Accounts payable	21	(151)
Payable to collaboration partner - related party	379
Accrued expenses and other payables	974	1,359
Deferred revenue - related party	(9,872)
Net cash used in operating activities	(15,138)	(10,356)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of available-for-sale securities	(25,636)	(8,002)
Proceeds from maturities of available-for-sale securities	4,000	6,800
Purchases of property and equipment, net	(208)	(48)
Net cash used in investing activities	(21,844)	(1,250)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock upon exercise of stock options and purchases under employee stock purchase plan	530	374
Net cash provided by financing activities	530	374
Effect of exchange rate changes on cash, cash equivalents and restricted cash		115
Net decrease in cash, cash equivalents and restricted cash	(36,452)	(11,117)
Cash, cash equivalents and restricted cash, beginning of year	106,489	21,094
Cash, cash equivalents and restricted cash, end of year	70,037	9,977
SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING AND INVESTING INFORMATION:
Purchases of property and equipment in accounts payable	$ 36	$ 118

Organization and Description of

Organization and Description of Business	3 Months Ended
	Mar. 31, 2018
Organization and Description of Business
Organization and Description of Business	Note 1. Organization and Description of Business Protagonist Therapeutics, Inc. (the “Company”) was incorporated in the state of Delaware on August 22, 2006 and is headquartered in Newark, California. The Company is a clinical-stage biopharmaceutical company with a proprietary technology platform that enables the discovery and development of novel constrained peptide-based drug candidates that address significant unmet medical needs. Protagonist Pty Limited (“Protagonist Australia”) is a wholly-owned subsidiary of the Company and is located in Brisbane, Queensland, Australia. Protagonist Australia was incorporated in Australia in September 2001. The Company became the parent of Protagonist Australia pursuant to a transaction in which all of the issued and outstanding capital stock of Protagonist Australia was exchanged for shares of the Company’s common stock and Series A preferred stock. The Company manages its operations as a single operating segment. Liquidity The Company has incurred net losses from operations since inception and has an accumulated deficit of $109.2 million as of March 31, 2018. The Company’s ultimate success depends on the outcome of its research and development activities. The Company expects to incur additional losses in the future and it anticipates the need to raise additional capital to fully implement its business plan. Through March 31, 2018, the Company has financed its operations through private placements of redeemable convertible preferred stock, an initial public offering (“IPO”) of common stock, payments received under a license and collaboration agreement and a follow-on public offering of common stock. In September 2017, the Company filed a registration statement on Form S-3 with the Securities and Exchange Commission (“SEC”) (File No. 333-220314), effective as of October 5, 2017, which permits the offering, issuance, and sale by the Company of up to a maximum aggregate offering price of $200.0 million of its common stock. Up to a maximum of $50.0 million of the maximum aggregate offering price of $200.0 million may be issued and sold pursuant to an at-the-market financing facility under a sales agreement with Cantor Fitzgerald & Co. (the “Sales Agreement”). As of March 31, 2018, the Company has not sold any shares of its common stock pursuant to the Sales Agreement. In October 2017, the Company completed an underwritten public offering of 3,530,000 shares of common stock at a public offering price of $17.00 per share. In November 2017, the Company issued an additional 529,500 shares of its common stock at a price of $17.00 per share following the underwriters’ exercise of their option to purchase additional shares. Net proceeds, after deducting underwriting commissions and offering costs paid by the Company, were $64.5 million. The Company will continue to seek funds through equity or debt financings, collaborative or other arrangements with corporate sources, or through other sources of financing, but there is no assurance that such financing will be available at terms acceptable to the Company, if at all.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2018
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	Note 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted, and accordingly the consolidated balance sheet as of December 31, 2017 has been derived from the audited consolidated financial statements at that date but does not include all of the information required by GAAP for complete consolidated financial statements. These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair statement of the Company’s consolidated financial information. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018 or for any other interim period or for any other future year. The accompanying interim unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10‑K, filed with the SEC on March 7, 2018. Principles of Consolidation The accompanying unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All intercompany transactions and balances have been eliminated upon consolidation. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates related to revenue recognition, accruals for research and development activities, stock-based compensation, and income taxes. Estimates related to revenue recognition include actual costs incurred versus total estimated budgeted cost of the Company’s deliverables, actual costs versus total estimated budget to determine percentage of completion, and application of constraint in the determination of transaction price under its license and collaboration agreement with Janssen Biotech, Inc. (the "Janssen License and Collaboration Agreement"). Management bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to forecasted amounts and future events. Actual results may differ significantly from those estimates. Concentrations of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents and available-for-sale securities. Substantially all of the Company’s cash is held by three financial institutions that management believes are of high credit quality. Such deposits may, at times, exceed federally insured limits. The primary focus of the Company’s investment strategy is to preserve capital and to meet liquidity requirements. The Company’s cash equivalents and available-for-sale securities are managed by external managers within the guidelines of the Company’s investment policy. The Company’s investment policy addresses the level of credit exposure by limiting concentration in any one corporate issuer and establishing a minimum allowable credit rating. To manage its credit risk exposure, the Company maintains its portfolio of cash equivalents and available-for-sale securities in fixed income securities denominated and payable in U.S. dollars. Permissible investments of fixed income securities include obligations of the U.S. government and its agencies, money market instruments including commercial paper and negotiable certificates of deposit, and highly rated corporate debt obligations and money market funds. The Company has not experienced any material credit losses on its investments. Cash Equivalents Cash equivalents that are readily convertible to cash are stated at cost, which approximates fair value. The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Restricted Cash Restricted cash consists of cash balances primarily held as security in connection with a letter of credit related to the Company’s facility lease entered into in March 2017 and the Company’s corporate credit card. Cash as Reported in Consolidated Statements of Cash Flows Cash as reported in the unaudited condensed consolidated statements of cash flows includes the aggregate amounts of cash and cash equivalents and the restricted cash as presented on the consolidated balance sheets. Cash as reported in the unaudited condensed consolidated statements of cash flows consists of (in thousands): March 31, 2018 2017 Cash and cash equivalents $ 69,577 $ 9,517 Restricted cash 10 10 Restricted cash - noncurrent 450 450 Cash balance in consolidated statements of cash flows $ 70,037 $ 9,977 Available-for-Sale Securities All marketable securities have been classified as “available-for-sale” and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. Management determines the appropriate classification of its marketable securities at the time of purchase and reevaluates such designation as of each balance sheet date. Short-term marketable securities have maturities greater than three months but no longer than 365 days as of the balance sheet date. Long-term marketable securities have maturities of 365 days or longer as of the balance sheet date. Unrealized gains and losses are excluded from earnings and are reported as a component of comprehensive loss. Realized gains and losses and declines in fair value judged to be other than temporary, if any, on available-for-sale securities are included in interest income. The cost of securities sold is based on the specific-identification method. Interest on marketable securities is included in interest income. Revenue Recognition Effective July 1, 2017, the Company adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”) using the full retrospective transition method. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company entered into a license and collaboration agreement that became effective upon the resolution of regulatory requirements during the third quarter of 2017 which is within the scope of ASC 606, under which it has licensed certain rights to its PTG‑200 product candidate to a third party and may enter into other such arrangements in the future. The terms of the arrangement include payment to the Company of one or more of the following: non-refundable, up-front license fees, development and regulatory and commercial milestone payments, and royalties on net sales of licensed products. Licenses of intellectual property: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from non-refundable, up-front fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgement to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring proportional performance for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of proportional performance each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Milestone payments: At the inception of each arrangement that includes development, regulatory or commercial milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price. ASC 606 suggests two alternatives to use when estimating the amount of variable consideration: the expected value method and the most likely amount method. Under the expected value method, an entity considers the sum of probability-weighted amounts in a range of possible consideration amounts. Under the most likely amount method, an entity considers the single most likely amount in a range of possible consideration amounts. Whichever method is used, it should be consistently applied throughout the life of the contract; however, it is not necessary for the Company to use the same approach for all contracts. The Company expects to use the most likely amount method for development and regulatory milestone payments. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis. The Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability or achievement of each such milestone and any related constraint, and if necessary, adjusts its estimates of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. To date, the Company has not recognized any milestone payments resulting from its collaboration arrangement. Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue resulting from its collaboration arrangement. Up-front payments and fees are recorded as deferred revenue upon receipt or when due, and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts payable to the Company are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. Research and Development Costs Research and development costs are expensed as incurred, unless there is an alternate future use in other research and development projects or otherwise. Research and development costs include salaries and benefits, stock-based compensation expense, laboratory supplies and facility-related overhead, outside contracted services including clinical trial costs, manufacturing and process development costs for both clinical and preclinical materials, research costs, development milestone payments under license and collaboration agreements, and other consulting services. The Company accrues for estimated costs of research and development activities conducted by third-party service providers, which include the conduct of pre-clinical studies and clinical trials, and contract manufacturing activities. The Company records the estimated costs of research and development activities based upon the estimated services provided but not yet invoiced, and includes these costs in accrued expenses and other payables in the condensed consolidated balance sheets and within research and development expense in the condensed consolidated statements of operations. These costs are a significant component of the Company’s research and development expenses. The Company accrues for these costs based on factors such as estimates of the work completed and in accordance with agreements established with its third-party service providers. The Company makes significant judgments and estimates in determining the accrued liabilities at each balance sheet date. As actual costs become known, the Company adjusts its accrued liabilities. The Company has not experienced any material differences between accrued liabilities and actual costs incurred. However, the status and timing of actual services performed, number of patients enrolled, and the rate of patient enrollment may vary from the Company’s estimates, resulting in adjustments to expense in future periods. Changes in these estimates that result in material changes to the Company’s accruals could materially affect the Company’s results of operations. Research and Development Tax Incentive The Company is eligible under the AusIndustry research and development tax incentive program to obtain a cash amount from the Australian Taxation Office. The tax incentive is available to the Company on the basis of specific criteria with which the Company must comply. Specifically, the Company must have annual turnover of less than AUD 20.0 million and cannot be controlled by income tax exempt entities. The research and development tax incentive is recognized as a reduction to research and development expense when the right to receive has been attained and funds are considered to be collectible. The tax incentive is denominated in Australian dollars and, therefore, the related receivable is remeasured into U.S. dollars as of each reporting date. Net Loss per Share Attributable to Common Stockholders Basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period, without consideration of potentially dilutive securities. The net loss attributable to common stockholders is calculated by adjusting the net loss of the Company for the accretion on the redeemable convertible preferred stock, if applicable. Diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders for all periods presented since the effect of potentially dilutive securities are anti-dilutive given the net loss of the Company. Recently Adopted Accounting Pronouncements In August 2016, the FASB issued ASU No. 2016‑15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which clarifies the classification of certain cash receipts and cash payments in the statements of cash flow to eliminate the diversity in practice related to eight specific cash flow issues. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2017, with early adoption permitted. The Company adopted this guidance effective January 1, 2018. The adoption of this guidance had no effect on the Company’s financial position, results of operations or liquidity. In May 2017, the FASB issued ASU No. 2017‑09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, which provides guidance on the types of changes to the terms and conditions of share-based payment awards to which an entity would be required to apply modification accounting. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions and classification of the awards are the same immediately before and after the modification. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2017, with early adoption permitted. The Company adopted this guidance effective January 1, 2018. The adoption of this guidance had no effect on the Company’s financial position, results of operations or liquidity. Recently Issued Accounting Pronouncements Not Adopted as of March 31, 2018. In February 2016, the FASB issued ASU No. 2016‑02, Leases (Topic 842) . Under the new guidance, (with the exception of short-term leases) at the commencement date, lessees will be required to recognize a lease liability and a right-of-use asset. Lessor accounting is largely unchanged, while lessees will no longer be provided with a source of off-balance sheet financing. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. Lessees (for capital and operating leases) are required to apply the modified retrospective transition method for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective method does not require any transition accounting for leases that did not exist before the earliest comparative period presented. The Company established a cross-functional implementation team to review current lease accounting policies and practices and assess the impact of this guidance on the Company’s consolidated financial statements and disclosures. While the Company is currently reviewing its lease portfolio and evaluating and interpreting the requirements under the new guidance, including available accounting policy elections, it expects that its non-cancellable operating lease commitments will be subject to the new guidance and recognized as right-of-use assets and operating lease liabilities on the Company’s consolidated balance sheets. The Company is currently evaluating the impact of this new guidance on its results of operations and liquidity. In June 2016, the FASB issued ASU No. 2016‑13, Financial Instruments - Credit Losses (Topic 326) , which is intended to provide financial statement users with more useful information about expected credit losses on financial assets held by a reporting entity at each reporting date. The new standard replaces the existing incurred loss impairment methodology with a methodology that requires consideration of a broader range of reasonable and supportable forward-looking information to estimate all expected credit losses. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2019 and early adoption is permitted for fiscal years and interim periods within those years beginning after December 15, 2018. The Company is currently evaluating the impact of this new guidance on its consolidated financial statements and disclosures

Janssen Collaboration Agreement

Janssen Collaboration Agreement	3 Months Ended
	Mar. 31, 2018
Janssen License and Collaboration Agreement
Janssen License and Collaboration Agreement	Note 6. Research Collaboration and License Agreement In October 2013, the Company’s former collaboration partner decided to abandon a collaboration program with the Company and, pursuant to the terms of the agreement between the Company and the former collaboration partner, the Company elected to assume the responsibility for the development and commercialization of the product. Upon the former collaboration partner’s abandonment, it assigned to the Company certain intellectual property arising from the collaboration and also granted the Company an exclusive license to certain background intellectual property rights of the former collaboration partner that relate to the products acquired by the Company. The nomination of PTG‑300 as a development candidate triggered a $250,000 payment from the Company to the former collaboration partner, which the Company recorded as research and development expense during the three months ended March 31, 2016. The initiation of a Phase 1 clinical study for PTG‑300 triggered an additional $250,000 payment obligation from the Company to the former collaboration partner, which the Company recorded as research and development expense during the three months ended June 30, 2017. The Company has the right, but not the obligation, to further develop and commercialize the product and, if the Company successfully develops and commercializes PTG‑300 without a partner, the Company will pay the former collaboration partner up to an additional aggregate of $128.5 million for the achievement of certain development, regulatory and sales milestone events. In addition, the Company will pay the former collaboration partner a low single digit royalty on worldwide net sales of the product until the later of 10 years from the first commercial sale of the product or the expiration of the last patent covering the product.
Janssen License and Collaboration Agreement
Janssen License and Collaboration Agreement
Janssen License and Collaboration Agreement	Note 3. Janssen Collaboration Agreement Agreement Terms On May 26, 2017, the Company and Janssen Biotech, Inc., ("Janssen"), one of the Janssen Pharmaceutical Companies of Johnson & Johnson, entered into an exclusive license and collaboration agreement for the clinical development, manufacture and potential commercialization of PTG‑200 worldwide for the treatment of Crohn’s disease ("CD") and ulcerative colitis ("UC"). Janssen is a related party to the Company as Johnson & Johnson Innovation - JJDC, Inc., a significant stockholder of the Company, and Janssen are both subsidiaries of Johnson & Johnson. PTG‑200 is the Company’s oral Interleukin 23 receptor ("IL‑23R") antagonist drug candidate currently in development. The Janssen License and Collaboration Agreement became effective on July 13, 2017. Upon the effectiveness of the agreement, the Company received a non-refundable, upfront cash payment of $50.0 million from Janssen. Under the Janssen License and Collaboration Agreement, the Company granted to Janssen an exclusive worldwide license to develop, manufacture and commercialize PTG‑200 and related IL‑23R compounds for all indications, including CD and UC. The Company is responsible, at its own expense, for the conduct of the Phase 1 clinical trial for PTG‑200, and Janssen will be responsible for the conduct of a potential Phase 2 clinical trial for PTG‑200 in CD, including filing the Investigational New Drug application (“IND”). All such clinical trials will be conducted in accordance with a mutually agreed upon clinical development plan and budget. Development costs for the Phase 2 clinical trial will be shared between the parties on an 80%/20% basis, with Janssen assuming the larger share. Should Janssen elect to retain its license following completion of the Phase 2 clinical trial, it will be responsible, at its own expense, for the manufacture, continued development of, seeking regulatory approval for, and commercialization of PTG‑200 worldwide. The parties’ development activities under the Janssen License and Collaboration Agreement through the Phase 2 clinical trial will be overseen by a joint governance structure which will have equal representation by both parties unless both parties mutually agree to disband such structure or the Company has provided written notice to Janssen of its intention to disband and no longer participate in such structure. The Company is eligible to receive a $25.0 million payment upon filing of the IND. Following the conclusion of the planned Phase 2a portion of the Phase 2 clinical trial, if Janssen elects to maintain its license rights and continue the development of PTG-200 in the Phase 2b portion of such clinical trial (the “First Opt-in Election”), the Company would be eligible to receive a $125.0 million payment. Following the conclusion of the planned Phase 2b portion of the Phase 2 clinical trial, if Janssen elects again to maintain its license rights (the “Second Opt-in Election”), the Company would be eligible to receive a $200.0 million payment. In addition to the opt-in fees, the Company would be eligible to receive potential development, regulatory and sales milestone payments of up to an aggregate of $590.0 million, and tiered royalties paid as a percentage of Janssen’s worldwide net sales at rates ranging from ten to the mid-teens, with certain customary reductions under certain circumstances. If Janssen does not make either the First Opt-in Election or the Second Opt-in Election, the Janssen License and Collaboration Agreement will terminate. If Janssen does not make the Second Opt-in Election, or if at any time after the Second Opt-in Election, Janssen terminates the Janssen License and Collaboration Agreement, the Company would be obligated to pay Janssen a low single-digit royalty on worldwide net sales of PTG‑200. The Company would also have an option to provide up to 30% of the required U.S. details for PTG‑200 to prescribers, using its own sales force personnel, upon commercial launch in the United States. If such right is exercised by the Company, the Company’s detailing costs would be reimbursed by Janssen at a mutually agreed cost per primary detailing equivalent. The Janssen License and Collaboration Agreement contains customary representations, warranties and covenants by the Company and Janssen and includes an obligation by the Company not to develop or commercialize other compounds which also target IL‑23R outside of the Janssen License and Collaboration Agreement until completion of the Phase 2b portion of the Phase 2 clinical trial. Each of the Company and Janssen is required to indemnify the other party against all losses and expenses related to breaches of its representations, warranties and covenants under the Janssen License and Collaboration Agreement. The Janssen License and Collaboration Agreement remains in effect until the royalty obligations cease following patent and regulatory expiry, unless terminated earlier. Either the Company or Janssen may terminate the Janssen License and Collaboration Agreement for uncured material breach. Janssen retains the right to terminate the Janssen License and Collaboration Agreement for convenience and without cause on written notice of a certain period to the Company. Upon a termination of the Janssen License and Collaboration Agreement, all rights revert back to the Company, and in certain circumstances, if such termination occurs during ongoing clinical trials, Janssen would, if requested, provide certain financial and operational support to the Company for the completion of such trials. Revenue Recognition The Company identified the following material promises under the Janssen License and Collaboration Agreement: (1) the license related to PTG‑200, (2) the performance of development services, including regulatory support, during Phase 1 clinical trial for PTG‑200 through the filing of the IND by Janssen, and (3) compound supply services for Phase 1 and Phase 2 activities. The Company considered that the license has standalone functionality and is capable of being distinct. However, the Company determined that the license is not distinct from the development and compound supply services within the context of the agreement because the development and compound supply services significantly increase the utility of the intellectual property. Specifically, the Company’s development, manufacturing and commercialization license can only provide benefit to Janssen in combination with the Company’s development services in the Phase 1 study. The intellectual property (“IP”) related to the peptide technology platform, which is proprietary to the Company, is the foundation for the development activities related to the treatment for CD. The compound supply services are a necessary and integral part of the development services as they could only be conducted utilizing the outcomes of these services. Given the development services under the Janssen Collaboration Agreement are expected to involve significant further development of the initial IP, the Company has concluded that the development and compound supply services are not distinct from the license, and thus the license, development services and compound supply services are combined into a single performance obligation. The nature of the combined performance obligation is to provide development and compound supply services to Janssen under the arrangement. The Company also evaluated whether the fees related to the First Opt-in Election and Second Opt-in Election are options with material rights. These two options include additional sublicense rights and patent rights transferred to Janssen upon exercising both of these options. The Company concluded that Janssen’s opt in rights are not options with material rights because the $50.0 million upfront payment to the Company was not negotiated to provide incremental discount for the future opt in payments at the end of Phase 2a and Phase 2b. The option to “opt in” provides Janssen with a license for IP that has been improved from the license initially granted for a term in the case of the opt in after completion Phase 2a and then a perpetual license in the case of “opt in” after completion of Phase 2b. Therefore, the First Opt-in Election and Second Opt-in Election options are not considered to be material rights. The option fees will be recognized as revenue when, and if, Janssen exercises its options because the Company has no further performance obligations at that point. For revenue recognition purposes, the Company determined that the duration of the contract began on the effective date of July 13, 2017 and ends upon completion of Phase 2a activities. The contract duration is defined as the period in which parties to the contract have present enforceable rights and obligations. The Company analyzed the impact of Janssen terminating the agreement prior to the completion of Phase 2a and determined that there were significant economic penalties to Janssen for doing so. The Company believes that if Janssen terminates the agreement upon completion of Phase 2a, the forfeiture of the remaining license rights and payment of 50% of the remaining Phase 2 costs is not a significant economic penalty when compared to paying $125.0 million as an opt in license fee to continue the use of the License. Thus, the duration of the contract is limited to the end of Phase 2a. The Company determined that the transaction price of the Janssen License and Collaboration Agreement was $53.9 million as of March 31, 2018 and December 31, 2017. In order to determine the transaction price, the Company evaluated all the payments to be received during the duration of the contract. The Company determined that the $50.0 million upfront payment, the $25.0 million payment payable upon filing of the IND, which is fully constrained as of March 31, 2018 and December 31, 2017, and $3.9 million of estimated variable consideration for cost-sharing payments from Janssen for agreed upon services related to Phase 2 activities constituted consideration to be included in the transaction price, which is to be allocated to the combined performance obligation. The Company will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur. As part of the evaluation for determining that the $25.0 million payment upon filing of the IND is fully constrained as of March 31, 2018, the Company considered several factors, including the stage of development of PTG‑200 and that achievement of the milestone is outside of the Company’s control, and concluded that the filing of the IND is not probable at this time. If and when the filing of the IND becomes probable, the $25.0 million payment will be constrained by contra revenue amounts for payments that the Company expects to make for 20% of the cost of Phase 2 activities to be performed by Janssen. The additional potential development, regulatory and sales milestone payments of up to an aggregate of $590.0 million after the completion of Phase 2a activities that the Company is eligible to receive are outside the contract term and as such have been excluded from the transaction price. Any consideration related to sales-based milestones (including royalties) will be recognized when the related sales occur as they were determined to relate predominantly to the license granted to Janssen and therefore have also been excluded from the transaction price. At the end of each reporting period, the Company will update its assessment of whether an estimate of variable consideration is constrained and update the estimated transaction price accordingly. The Company uses the most likely amount method to estimate variable consideration. Variable consideration for cost-sharing payments related to agreed upon services for Phase 2 activities that the Company performs within the duration of the contract are included in the transaction price at an amount equal to 80% of the estimated budgeted costs for these activities, including primarily internal full-time equivalent effort and third party contract costs. The Company is responsible for 20% of the development costs for the Phase 2 clinical trial. Accordingly, a significant portion of this work is expected to be performed by Janssen. Because the Phase 2 clinical trial activity is related to the license, it is not capable of being distinct. This is because both the Company and Janssen cannot benefit from these activities absent the Phase 1 activities. As the Phase 2 activities for which the Company will share 20% of the cost activities are not capable of being distinct and are not separately identifiable within the context of the contract, they are not a distinct service that Janssen transfers to the Company. Therefore, the consideration payable to Janssen is accounted for as a reduction in the transaction price. The Company and Janssen make quarterly cost-sharing payments to one another in amounts necessary to ensure that each party bears its contractual share of the overall shared costs incurred. The Company accounts for cost-sharing payments from Janssen as increases in license and collaboration revenue in its consolidated statements of operations, while cost-sharing payments to Janssen are accounted for as reductions in license and collaboration revenue, or contra-revenue. Costs incurred by the Company related to agreed upon services for Phase 2 activities under the Janssen License and Collaboration Agreement are recorded as research and development expenses in its consolidated statements of operations. In summary, the license, the development activities for Phase 1 activities and the agreed upon services for Phase 2 activities are combined as one performance obligation that will be performed over the duration of the contract, which is from the effective date of the Janssen License and Collaboration Agreement through to the completion of Phase 2a activities. Since the Company has determined that the combined performance obligation is satisfied over time, ASC 606 requires the Company to select a single revenue recognition method for the performance obligation that faithfully depicts the Company’s performance in transferring control of the services. The guidance allows entities to use two methods to measure its progress toward complete satisfaction of a performance obligation: 1. Output methods — recognize revenue on the basis of direct measurements of the value to the customer of the goods or services transferred to date relative to the remaining goods or services promised under the contract (e.g. surveys of performance completed to date, appraisals of results achieved, milestones reached, time elapsed and units of produced or units delivered); and 2. Input methods — recognize revenue on the basis of the entity’s efforts or inputs to the satisfaction of a performance obligation (e.g., resources consumed, labor hours expended, costs incurred, or time elapsed) relative to the total expected inputs to the satisfaction of that performance obligation. The Company concluded that it will utilize a cost-based input method to measure proportional performance and to calculate the corresponding amount of revenue to recognize. The Company believes this is the best measure of progress because other measures do not reflect how the Company transfers its performance obligation to Janssen. In applying the cost-based input methods of revenue recognition, the Company uses actual costs incurred relative to budgeted costs to fulfill the combined performance obligation. These costs consist primarily of internal full-time equivalent effort and third-party contract costs. Revenue will be recognized based on actual costs incurred as a percentage of total budgeted costs as the Company completes its performance obligations, which the Company believes will be fulfilled within the next 12 months. A cost-based input method of revenue recognition requires management to make estimates of costs to complete the Company’s performance obligations. In making such estimates, significant judgment is required to evaluate assumptions related to cost estimates. The cumulative effect of revisions to estimated costs to complete the Company’s performance obligations will be recorded in the period in which changes are identified and amounts can be reasonably estimated. A significant change in these assumptions and estimates could have a material impact on the timing and amount of revenue recognized in future periods. For the three months ended March 31, 2018, the Company recognized $10.8 million of license and collaboration revenue. This amount included $10.5 million of the transaction price for the Janssen License and Collaboration Agreement recognized based on proportional performance, and $0.3 million, net, for other services related to Phase 2 activities performed by the Company on behalf of Janssen that are not included in the performance obligations identified under the Janssen License and Collaboration Agreement. The following table presents changes in the Company’s contract assets and liabilities during the three months ended March 31, 2018 (in thousands): Balance at Balance at Beginning of End of Three months ended March 31, 2018 Period Additions Deductions Period Contract assets: Receivable from collaboration partner - related party $ 1,816 $ 1,426 $ (520) $ 2,722 Contract liabilities: Deferred revenue - related party $ 31,752 $ 609 $ (10,481) $ 21,880 Payable to collaboration partner - related party $ — $ 379 $ — $ 379 Deferred revenue related to the Janssen License and Collaboration Agreement was $21.9 million and $31.8 million as of March 31, 2018 and December 31, 2017, respectively, and is recognized as the combined performance obligation is satisfied. Receivable from collaboration partner for cost sharing amounts payable from Janssen was $2.7 million and $1.8 million as of March 31, 2018 and December 31, 2017, respectively. As of March 31, 2018, the Company also recorded a $0.4 million payable to collaboration partner for cost sharing amounts payable to Janssen. During the three months ended March 31, 2018, the Company recognized revenue of $10.5 million from amounts included in the contract liability balance at the beginning of the period. No revenue was recognized from the contract asset balance at the beginning of the period or from performance obligations satisfied in previous periods. None of the costs to obtain or fulfill the contract were capitalized.

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2018
Fair Value Measurements
Fair Value Measurements	Note 4. Fair Value Measurements Financial assets and liabilities are recorded at fair value. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows: Level 1 —Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2— Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. Level 3 —Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. In determining fair value, the Company utilizes quoted market prices, broker or dealer quotations, or valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value. The following table presents the fair value of the Company’s financial assets determined using the inputs defined above (in thousands). March 31, 2018 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 68,088 $ — $ — $ 68,088 Corporate bonds — 6,765 — 6,765 Commercial paper — 2,892 — 2,892 Government bonds — 61,283 — 61,283 Total financial assets $ 68,088 $ 70,940 $ — $ 139,028 December 31, 2017 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 48,704 $ — $ — $ 48,704 Corporate bonds — 6,247 — 6,247 Commercial paper — 58,524 — 58,524 Government bonds — 40,303 — 40,303 Total financial assets $ 48,704 $ 105,074 $ — $ 153,778 The Company’s corporate bonds, commercial paper and government bonds are classified as Level 2 as they were valued based upon quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets.

Balance Sheet Components

Balance Sheet Components	3 Months Ended
	Mar. 31, 2018
Balance Sheet Components
Balance Sheet Components	Note 5. Balance Sheet Components Cash Equivalents and Available-for-sale Securities Cash equivalents and available-for-sale securities consisted of the following (in thousands): March 31, 2018 Amortized Gross Unrealized Cost Gains Losses Fair Value Money market funds $ 68,088 $ — $ — $ 68,088 Corporate bonds 6,792 — (27) 6,765 Commercial paper 2,892 — — 2,892 Government bonds 61,436 — (153) 61,283 Total cash equivalents and available-for-sale securities $ $ — $ (180) $ Classified as: Cash equivalents $ 68,088 Available-for-sale securities - current 65,383 Available-for-sale securities - noncurrent 5,557 Total cash equivalents and available-for-sale securities $ 139,028 December 31, 2017 Amortized Gross Unrealized Cost Gains Losses Fair Value Money market funds $ 48,704 $ — $ — $ 48,704 Corporate bonds 6,254 — (7) 6,247 Commercial paper 58,524 — — 58,524 Government bonds 40,428 — (125) 40,303 Total cash equivalents and available-for-sale securities $ 153,910 $ — $ (132) $ 153,778 Classified as: Cash equivalents $ 104,348 Available-for-sale securities - current 37,972 Available-for-sale securities - noncurrent 11,458 Total cash equivalents and available-for-sale securities $ 153,778 All available-for-sale securities - current held as of March 31, 2018 and December 31, 2017 had contractual maturities of less than one year. All available-for-sale securities - noncurrent held as of March 31, 2018 and December 31, 2017 had contractual maturities of at least one year but less than two years. There were no material realized gains or realized losses on available-for-sale securities for the periods presented. Accrued Expenses and Other Payables Accrued expenses and other payables consisted of the following (in thousands): March 31, December 31, 2018 2017 Accrued clinical and research related expenses $ 8,277 $ 6,437 Accrued employee related expenses 1,267 2,718 Accrued professional service fees 486 267 Other 328 124 Accrued expenses and other payables $ 10,358 $ 9,546

Research Collaboration and Lice

Research Collaboration and License Agreement	3 Months Ended
	Mar. 31, 2018
Research Collaboration and License Agreement
Collaboration Agreement	Note 6. Research Collaboration and License Agreement In October 2013, the Company’s former collaboration partner decided to abandon a collaboration program with the Company and, pursuant to the terms of the agreement between the Company and the former collaboration partner, the Company elected to assume the responsibility for the development and commercialization of the product. Upon the former collaboration partner’s abandonment, it assigned to the Company certain intellectual property arising from the collaboration and also granted the Company an exclusive license to certain background intellectual property rights of the former collaboration partner that relate to the products acquired by the Company. The nomination of PTG‑300 as a development candidate triggered a $250,000 payment from the Company to the former collaboration partner, which the Company recorded as research and development expense during the three months ended March 31, 2016. The initiation of a Phase 1 clinical study for PTG‑300 triggered an additional $250,000 payment obligation from the Company to the former collaboration partner, which the Company recorded as research and development expense during the three months ended June 30, 2017. The Company has the right, but not the obligation, to further develop and commercialize the product and, if the Company successfully develops and commercializes PTG‑300 without a partner, the Company will pay the former collaboration partner up to an additional aggregate of $128.5 million for the achievement of certain development, regulatory and sales milestone events. In addition, the Company will pay the former collaboration partner a low single digit royalty on worldwide net sales of the product until the later of 10 years from the first commercial sale of the product or the expiration of the last patent covering the product.

Government Programs

Government Programs	3 Months Ended
	Mar. 31, 2018
Government Programs
Government Programs	Note 7. Government Programs Research and Development Tax Incentive The Company recognized AUD 770,000 ($604,000) and AUD 134,000 ($103,000) as a reduction of research and development expenses for the three months ended March 31, 2018 and 2017, respectively, in connection with the research and development tax incentive from Australia. As of March 31, 2018, and December 31, 2017, the research and development tax incentive receivable was AUD 2.5 million ($1.9 million) and AUD 1.7 million ($1.3 million), respectively. Based on the nature of the amounts received under the Janssen License and Collaboration Agreement, the Company concluded that these amounts should be classified as statutory income for Australian taxation purposes. Accordingly, these amounts should not be included in the calculation of annual turnover for the purposes of determining eligibility for the refundable research and development tax offset. SBIR Grant In May 2017, the Company was awarded a Phase 2 Small Business Innovation Research ("SBIR") Grant from the National Institute of Diabetes and Digestive and Kidney Diseases of the National Institutes of Health ("NIH") in support of research aimed at developing biomarkers that define IL‑23R target engagement by oral peptide antagonists and the effects of that engagement of downstream signaling. The total grant award was $1.3 million and is for the period from May 2017 to April 2019. In July 2016, the Company was awarded a Phase 1 SBIR Grant from the National Institute of Heart and Lung Diseases of the NIH in support of pre-clinical research aimed at discovering and optimizing lead molecules as novel peptide mimetics of the natural hepcidin hormone. The total grant award was $219,000 and was for the period from August 2016 to January 2017. The Company recognizes a reduction to research and development expenses when expenses related to the grants have been incurred and the grant funds become contractually due from NIH. The Company recorded $61,000 as a reduction of research and development expenses for the three months ended March 31, 2018. There was no such reduction recorded for the three months ended March 31, 2017. The Company recorded a receivable for $61,000 and $58,000 as of March 31, 2018 and December 31, 2017, respectively, to reflect the eligible costs incurred under the grants that are contractually due to the Company, and such amounts are included in prepaid expenses and other current assets on the condensed consolidated balance sheets.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies
Commitments and Contingencies	Note 8. Commitments and Contingencies In March 2017, the Company entered into a lease agreement for office and laboratory space located in Newark, California. The Company relocated its operations to the new facility in May 2017. The Company provided the landlord with a $450,000 letter of credit collateralized by restricted cash as security deposit for the lease, which expires in May 2024. The Company is entitled to tenant improvement allowances of approximately $469,000, any unused portion of which expires in December 2018. The Company records tenant improvement allowances as deferred rent when funds are received and associated capital expenditures as leasehold improvements that will be amortized over the shorter of their useful life or the remaining term of the lease. The following table summarizes the Company’s minimum lease payments related to the Newark facility as of March 31, 2018 (in thousands): Year Ending December 31: Amount 2018 (remaining nine months) $ 1,334 2019 1,941 2020 2,000 2021 2,060 2022 2,121 Thereafter 3,106 Total $ 12,562

Equity Plans

Equity Plans	3 Months Ended
	Mar. 31, 2018
Equity Plans
Equity Plans	Note 9. Equity Plans Equity Incentive Plans In July 2016, the Company’s board of directors and stockholders approved the Company’s 2016 Equity Incentive Plan (the “2016 Plan”) to replace the 2007 Stock Option Plan. The 2016 Plan is administered by the board of directors or a committee appointed by the board of directors, which determines the types of awards to be granted, including the number of shares subject to the awards, the exercise price and the vesting schedule. Awards granted under the 2016 Plan expire no later than ten years from the date of grant. As of March 31, 2018, approximately 664,068 shares were available for issuance under the 2016 Plan. Stock Options Stock options generally have an exercise price equal to the fair market value of the Company’s common stock on the grant date. Employee stock options generally vest over a period of four years. Non-employee director initial stock options generally vest over a period of three years, and non-employee director annual refresher stock options generally vest over a period of approximately one year. Non-employee consultant options generally vest over a period of one to four years. Stock option activity under the Company’s equity incentive plans is set forth below: Weighted- Weighted- Average Average Exercise Remaining Aggregate Number of Price Per Contractual Intrinsic Options Share Life (years) Value (in millions) Outstanding at December 31, 2017 2,438,151 $ 11.51 8.26 Granted 629,950 16.91 Exercised (50,507) 4.40 Forfeited (33,072) 20.12 Outstanding at March 31, 2018 2,984,522 $ 12.67 8.52 $ 5.9 Exercisable – March 31, 2018 952,059 $ 9.92 7.81 $ 3.3 Vested and expected to vest – March 31, 2018 2,984,522 $ 12.67 8.52 $ 5.9 (1) The aggregate intrinsic values were calculated as the difference between the exercise price of the options and the closing price of the Company’s common stock on March 31, 2018. The calculation excludes options with an exercise price higher than the closing price of the Company’s common stock on March 31, 2018. During the three months ended March 31, 2018, the estimated weighted-average grant-date fair value of common stock underlying options granted to employees was $10.51 per share. Employee Stock Options Valuation The fair value of employee stock option awards was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions: Three Months Ended March 31, 2018 2017 Expected term (in years) 6.02 - 6.08 6.08 Expected volatility 66.38% - 66.47% 62.5% Risk-free interest rate 2.42% - 2.73% 2.07% Dividend yield — — Restricted Stock Units A restricted stock unit is an agreement to issue shares of the Company’s common stock at the time of vesting. Restricted stock units vest in four equal installments on approximately the first, second, third and fourth anniversaries of the grant date. Restricted stock unit activity under the 2016 Plan is set forth below: Un Weighted- Average Number of Grant Date Shares Fair Value Unvested at December 31, 2017 — — Granted 113,625 $ 16.95 Unvested at March 31, 2018 $ 16.95 Stock-based compensation expense associated with restricted stock units is based on the fair value of our common stock on the grant date, which equals the closing market price of our common stock on the grant date. For restricted stock units, we recognize compensation expense over the vesting period of the awards that are ultimately expected to vest. Employee Stock Purchase Plan The 2016 Employee Stock Purchase Plan (“2016 ESPP”) allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15% of their eligible compensation. At the end of each offering period, eligible employees are able to purchase shares at 85% of the lower of the fair market value of the Company’s common stock at the beginning of the offering period or at the end of each applicable purchase period. As of March 31, 2018, a total of 73,445 shares of common stock have been issued under the 2016 ESPP, and 454,660 shares were available for issuance. Stock-Based Compensation Total stock-based compensation expense was as follows (in thousands): Three Months Ended March 31, 2018 2017 Research and development $ 541 $ 359 General and administrative 644 484 Total stock-based compensation expense $ 1,185 $ 843 As of March 31, 2018, total unrecognized stock-based compensation expense related to stock options was approximately $15.7 million, which the Company expects to recognize over a weighted-average period of approximately 3.19 years.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2018
Income Taxes
Income Taxes	Note 10. Income Taxes On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (“Tax Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. On December 22, 2017, Staff Accounting Bulletin No. 118 was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. For the three months ended March 31, 2018, the Company noted no additional guidance or information that affects the provisional amounts initially recorded at zero for the transition tax and the remeasurement of the deferred tax assets for the year ended December 31, 2017. As a result, the Company recorded no adjustment to the transition tax and the remeasurement of the deferred tax assets. The Company will continue to monitor and analyze any additional guidance and information that may be issued by the federal and state tax authorities. Any subsequent adjustment to these amounts will be recorded to current tax expense in the quarter of 2018 when the analysis is complete. In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income (“GILTI”) provisions of the Tax Act. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. The Company has elected to treat any potential GILTI inclusions as a period cost as it is not projecting any material impact from GILTI inclusions and any deferred taxes related to any inclusion would be immaterial. Effective for the quarter ending March 31, 2018, the Company has not made any measurement-period adjustments related to GILTI.

Net Loss per Share

Net Loss per Share	3 Months Ended
	Mar. 31, 2018
Net Loss per Share
Net Loss per Share	Note 11. Net Loss per Share As the Company had net losses for the three months ended March 31, 2018 and 2017, all potential common shares were determined to be anti-dilutive. The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share data): Three Months Ended March 31, 2018 2017 Numerator: Net loss $ (7,661) $ (14,101) Denominator: Weighted-average shares used to compute net loss per common share, basic and diluted 21,112,393 16,766,218 Net loss per shares, basic and diluted $ (0.36) $ (0.84) The following outstanding shares of potentially dilutive securities have been excluded from diluted net loss per share attributable to common stockholders computations for the three months ended March 31, 2018 and 2017 because their inclusion would be anti-dilutive: Three Months Ended March 31, 2018 2017 Options to purchase common stock 2,984,522 2,306,482 Restricted stock units 113,625 — ESPP shares 24,315 — Total 3,122,462 2,306,482

Summary of Significant Accoun18

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2018
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted, and accordingly the consolidated balance sheet as of December 31, 2017 has been derived from the audited consolidated financial statements at that date but does not include all of the information required by GAAP for complete consolidated financial statements. These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair statement of the Company’s consolidated financial information. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018 or for any other interim period or for any other future year. The accompanying interim unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10‑K, filed with the SEC on March 7, 2018.
Principles of Consolidation	Principles of Consolidation The accompanying unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All intercompany transactions and balances have been eliminated upon consolidation.
Use of Estimates	Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates related to revenue recognition, accruals for research and development activities, stock-based compensation, and income taxes. Estimates related to revenue recognition include actual costs incurred versus total estimated budgeted cost of the Company’s deliverables, actual costs versus total estimated budget to determine percentage of completion, and application of constraint in the determination of transaction price under its license and collaboration agreement with Janssen Biotech, Inc. (the "Janssen License and Collaboration Agreement"). Management bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to forecasted amounts and future events. Actual results may differ significantly from those estimates.
Concentrations of Credit Risk	Concentrations of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents and available-for-sale securities. Substantially all of the Company’s cash is held by three financial institutions that management believes are of high credit quality. Such deposits may, at times, exceed federally insured limits. The primary focus of the Company’s investment strategy is to preserve capital and to meet liquidity requirements. The Company’s cash equivalents and available-for-sale securities are managed by external managers within the guidelines of the Company’s investment policy. The Company’s investment policy addresses the level of credit exposure by limiting concentration in any one corporate issuer and establishing a minimum allowable credit rating. To manage its credit risk exposure, the Company maintains its portfolio of cash equivalents and available-for-sale securities in fixed income securities denominated and payable in U.S. dollars. Permissible investments of fixed income securities include obligations of the U.S. government and its agencies, money market instruments including commercial paper and negotiable certificates of deposit, and highly rated corporate debt obligations and money market funds. The Company has not experienced any material credit losses on its investments.
Cash Equivalents	Cash Equivalents Cash equivalents that are readily convertible to cash are stated at cost, which approximates fair value. The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
Restricted Cash	Restricted Cash Restricted cash consists of cash balances primarily held as security in connection with a letter of credit related to the Company’s facility lease entered into in March 2017 and the Company’s corporate credit card.
Cash as Reported in Consolidated Statements of Cash Flows	Cash as Reported in Consolidated Statements of Cash Flows Cash as reported in the unaudited condensed consolidated statements of cash flows includes the aggregate amounts of cash and cash equivalents and the restricted cash as presented on the consolidated balance sheets. Cash as reported in the unaudited condensed consolidated statements of cash flows consists of (in thousands): March 31, 2018 2017 Cash and cash equivalents $ 69,577 $ 9,517 Restricted cash 10 10 Restricted cash - noncurrent 450 450 Cash balance in consolidated statements of cash flows $ 70,037 $ 9,977
Available-for-Sale Securities	Available-for-Sale Securities All marketable securities have been classified as “available-for-sale” and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. Management determines the appropriate classification of its marketable securities at the time of purchase and reevaluates such designation as of each balance sheet date. Short-term marketable securities have maturities greater than three months but no longer than 365 days as of the balance sheet date. Long-term marketable securities have maturities of 365 days or longer as of the balance sheet date. Unrealized gains and losses are excluded from earnings and are reported as a component of comprehensive loss. Realized gains and losses and declines in fair value judged to be other than temporary, if any, on available-for-sale securities are included in interest income. The cost of securities sold is based on the specific-identification method. Interest on marketable securities is included in interest income.
Revenue Recognition	Revenue Recognition Effective July 1, 2017, the Company adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”) using the full retrospective transition method. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company entered into a license and collaboration agreement that became effective upon the resolution of regulatory requirements during the third quarter of 2017 which is within the scope of ASC 606, under which it has licensed certain rights to its PTG‑200 product candidate to a third party and may enter into other such arrangements in the future. The terms of the arrangement include payment to the Company of one or more of the following: non-refundable, up-front license fees, development and regulatory and commercial milestone payments, and royalties on net sales of licensed products. Licenses of intellectual property: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from non-refundable, up-front fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgement to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring proportional performance for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of proportional performance each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Milestone payments: At the inception of each arrangement that includes development, regulatory or commercial milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price. ASC 606 suggests two alternatives to use when estimating the amount of variable consideration: the expected value method and the most likely amount method. Under the expected value method, an entity considers the sum of probability-weighted amounts in a range of possible consideration amounts. Under the most likely amount method, an entity considers the single most likely amount in a range of possible consideration amounts. Whichever method is used, it should be consistently applied throughout the life of the contract; however, it is not necessary for the Company to use the same approach for all contracts. The Company expects to use the most likely amount method for development and regulatory milestone payments. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis. The Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability or achievement of each such milestone and any related constraint, and if necessary, adjusts its estimates of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. To date, the Company has not recognized any milestone payments resulting from its collaboration arrangement. Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue resulting from its collaboration arrangement. Up-front payments and fees are recorded as deferred revenue upon receipt or when due, and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts payable to the Company are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less.
Research and Development Costs	Research and Development Costs Research and development costs are expensed as incurred, unless there is an alternate future use in other research and development projects or otherwise. Research and development costs include salaries and benefits, stock-based compensation expense, laboratory supplies and facility-related overhead, outside contracted services including clinical trial costs, manufacturing and process development costs for both clinical and preclinical materials, research costs, development milestone payments under license and collaboration agreements, and other consulting services. The Company accrues for estimated costs of research and development activities conducted by third-party service providers, which include the conduct of pre-clinical studies and clinical trials, and contract manufacturing activities. The Company records the estimated costs of research and development activities based upon the estimated services provided but not yet invoiced, and includes these costs in accrued expenses and other payables in the condensed consolidated balance sheets and within research and development expense in the condensed consolidated statements of operations. These costs are a significant component of the Company’s research and development expenses. The Company accrues for these costs based on factors such as estimates of the work completed and in accordance with agreements established with its third-party service providers. The Company makes significant judgments and estimates in determining the accrued liabilities at each balance sheet date. As actual costs become known, the Company adjusts its accrued liabilities. The Company has not experienced any material differences between accrued liabilities and actual costs incurred. However, the status and timing of actual services performed, number of patients enrolled, and the rate of patient enrollment may vary from the Company’s estimates, resulting in adjustments to expense in future periods. Changes in these estimates that result in material changes to the Company’s accruals could materially affect the Company’s results of operations.
Research and Development Tax Incentive	Research and Development Tax Incentive The Company is eligible under the AusIndustry research and development tax incentive program to obtain a cash amount from the Australian Taxation Office. The tax incentive is available to the Company on the basis of specific criteria with which the Company must comply. Specifically, the Company must have annual turnover of less than AUD 20.0 million and cannot be controlled by income tax exempt entities. The research and development tax incentive is recognized as a reduction to research and development expense when the right to receive has been attained and funds are considered to be collectible. The tax incentive is denominated in Australian dollars and, therefore, the related receivable is remeasured into U.S. dollars as of each reporting date.
Net Loss per Share Attributable to Common Stockholders	Net Loss per Share Attributable to Common Stockholders Basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period, without consideration of potentially dilutive securities. The net loss attributable to common stockholders is calculated by adjusting the net loss of the Company for the accretion on the redeemable convertible preferred stock, if applicable. Diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders for all periods presented since the effect of potentially dilutive securities are anti-dilutive given the net loss of the Company.
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Adopted	Recently Adopted Accounting Pronouncements In August 2016, the FASB issued ASU No. 2016‑15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which clarifies the classification of certain cash receipts and cash payments in the statements of cash flow to eliminate the diversity in practice related to eight specific cash flow issues. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2017, with early adoption permitted. The Company adopted this guidance effective January 1, 2018. The adoption of this guidance had no effect on the Company’s financial position, results of operations or liquidity. In May 2017, the FASB issued ASU No. 2017‑09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, which provides guidance on the types of changes to the terms and conditions of share-based payment awards to which an entity would be required to apply modification accounting. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions and classification of the awards are the same immediately before and after the modification. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2017, with early adoption permitted. The Company adopted this guidance effective January 1, 2018. The adoption of this guidance had no effect on the Company’s financial position, results of operations or liquidity. Recently Issued Accounting Pronouncements Not Adopted as of March 31, 2018. In February 2016, the FASB issued ASU No. 2016‑02, Leases (Topic 842) . Under the new guidance, (with the exception of short-term leases) at the commencement date, lessees will be required to recognize a lease liability and a right-of-use asset. Lessor accounting is largely unchanged, while lessees will no longer be provided with a source of off-balance sheet financing. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. Lessees (for capital and operating leases) are required to apply the modified retrospective transition method for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective method does not require any transition accounting for leases that did not exist before the earliest comparative period presented. The Company established a cross-functional implementation team to review current lease accounting policies and practices and assess the impact of this guidance on the Company’s consolidated financial statements and disclosures. While the Company is currently reviewing its lease portfolio and evaluating and interpreting the requirements under the new guidance, including available accounting policy elections, it expects that its non-cancellable operating lease commitments will be subject to the new guidance and recognized as right-of-use assets and operating lease liabilities on the Company’s consolidated balance sheets. The Company is currently evaluating the impact of this new guidance on its results of operations and liquidity.

Summary of Significant Accoun19

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2018
Summary of Significant Accounting Policies
Schedule of cash as reported in the consolidated statements of cash flows	Cash as reported in the unaudited condensed consolidated statements of cash flows consists of (in thousands): March 31, 2018 2017 Cash and cash equivalents $ 69,577 $ 9,517 Restricted cash 10 10 Restricted cash - noncurrent 450 450 Cash balance in consolidated statements of cash flows $ 70,037 $ 9,977

Janssen Collaboration Agreeme20

Janssen Collaboration Agreement (Tables)	3 Months Ended
	Mar. 31, 2018
Janssen Collaboration Agreement
Schedule of changes in contract assets and liabilities	The following table presents changes in the Company’s contract assets and liabilities during the three months ended March 31, 2018 (in thousands): Balance at Balance at Beginning of End of Three months ended March 31, 2018 Period Additions Deductions Period Contract assets: Receivable from collaboration partner - related party $ 1,816 $ 1,426 $ (520) $ 2,722 Contract liabilities: Deferred revenue - related party $ 31,752 $ 609 $ (10,481) $ 21,880 Payable to collaboration partner - related party $ — $ 379 $ — $ 379

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2018
Fair Value Measurements
Schedule of fair value of financial assets	The following table presents the fair value of the Company’s financial assets determined using the inputs defined above (in thousands). March 31, 2018 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 68,088 $ — $ — $ 68,088 Corporate bonds — 6,765 — 6,765 Commercial paper — 2,892 — 2,892 Government bonds — 61,283 — 61,283 Total financial assets $ 68,088 $ 70,940 $ — $ 139,028 December 31, 2017 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 48,704 $ — $ — $ 48,704 Corporate bonds — 6,247 — 6,247 Commercial paper — 58,524 — 58,524 Government bonds — 40,303 — 40,303 Total financial assets $ 48,704 $ 105,074 $ — $ 153,778

Balance Sheet Components (Table

Balance Sheet Components (Tables)	3 Months Ended
	Mar. 31, 2018
Balance Sheet Components
Schedule of cash equivalents and available-for-sale securities	Cash equivalents and available-for-sale securities consisted of the following (in thousands): March 31, 2018 Amortized Gross Unrealized Cost Gains Losses Fair Value Money market funds $ 68,088 $ — $ — $ 68,088 Corporate bonds 6,792 — (27) 6,765 Commercial paper 2,892 — — 2,892 Government bonds 61,436 — (153) 61,283 Total cash equivalents and available-for-sale securities $ $ — $ (180) $ Classified as: Cash equivalents $ 68,088 Available-for-sale securities - current 65,383 Available-for-sale securities - noncurrent 5,557 Total cash equivalents and available-for-sale securities $ 139,028 December 31, 2017 Amortized Gross Unrealized Cost Gains Losses Fair Value Money market funds $ 48,704 $ — $ — $ 48,704 Corporate bonds 6,254 — (7) 6,247 Commercial paper 58,524 — — 58,524 Government bonds 40,428 — (125) 40,303 Total cash equivalents and available-for-sale securities $ 153,910 $ — $ (132) $ 153,778 Classified as: Cash equivalents $ 104,348 Available-for-sale securities - current 37,972 Available-for-sale securities - noncurrent 11,458 Total cash equivalents and available-for-sale securities $ 153,778
Summary of Accrued Expenses and Other Payables	Accrued expenses and other payables consisted of the following (in thousands): March 31, December 31, 2018 2017 Accrued clinical and research related expenses $ 8,277 $ 6,437 Accrued employee related expenses 1,267 2,718 Accrued professional service fees 486 267 Other 328 124 Accrued expenses and other payables $ 10,358 $ 9,546

Commitments and Contingencies (

Commitments and Contingencies (Tables)	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies
Summary of Future Minimum Lease Payments	The following table summarizes the Company’s minimum lease payments related to the Newark facility as of March 31, 2018 (in thousands): Year Ending December 31: Amount 2018 (remaining nine months) $ 1,334 2019 1,941 2020 2,000 2021 2,060 2022 2,121 Thereafter 3,106 Total $ 12,562

Equity Plans (Tables)

Equity Plans (Tables)	3 Months Ended
	Mar. 31, 2018
Schedule of activity under equity incentive plans	Weighted- Weighted- Average Average Exercise Remaining Aggregate Number of Price Per Contractual Intrinsic Options Share Life (years) Value (in millions) Outstanding at December 31, 2017 2,438,151 $ 11.51 8.26 Granted 629,950 16.91 Exercised (50,507) 4.40 Forfeited (33,072) 20.12 Outstanding at March 31, 2018 2,984,522 $ 12.67 8.52 $ 5.9 Exercisable – March 31, 2018 952,059 $ 9.92 7.81 $ 3.3 Vested and expected to vest – March 31, 2018 2,984,522 $ 12.67 8.52 $ 5.9 (1) The aggregate intrinsic values were calculated as the difference between the exercise price of the options and the closing price of the Company’s common stock on March 31, 2018. The calculation excludes options with an exercise price higher than the closing price of the Company’s common stock on March 31, 2018.
Schedule of stock-based compensation expense	Total stock-based compensation expense was as follows (in thousands): Three Months Ended March 31, 2018 2017 Research and development $ 541 $ 359 General and administrative 644 484 Total stock-based compensation expense $ 1,185 $ 843
Director And Employee [Member]
Schedule of valuation assumptions	Three Months Ended March 31, 2018 2017 Expected term (in years) 6.02 - 6.08 6.08 Expected volatility 66.38% - 66.47% 62.5% Risk-free interest rate 2.42% - 2.73% 2.07% Dividend yield — —
2016 Employee Stock Purchase Plan [Member]
Schedule of activity under equity incentive plans	Un Weighted- Average Number of Grant Date Shares Fair Value Unvested at December 31, 2017 — — Granted 113,625 $ 16.95 Unvested at March 31, 2018 $ 16.95

Net Loss per Share (Tables)

Net Loss per Share (Tables)	3 Months Ended
	Mar. 31, 2018
Net Loss per Share
Schedule of computation of the basic and diluted net loss per share attributable to common stockholders	The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share data): Three Months Ended March 31, 2018 2017 Numerator: Net loss $ (7,661) $ (14,101) Denominator: Weighted-average shares used to compute net loss per common share, basic and diluted 21,112,393 16,766,218 Net loss per shares, basic and diluted $ (0.36) $ (0.84)
Schedule of potentially dilutive securities excluded from diluted net loss per share calculations	Three Months Ended March 31, 2018 2017 Options to purchase common stock 2,984,522 2,306,482 Restricted stock units 113,625 — ESPP shares 24,315 — Total 3,122,462 2,306,482

Organization and Description 26

Organization and Description of Business - Liquidity (Details) - USD ($) $ / shares in Units, $ in Thousands	Nov. 30, 2017	Oct. 31, 2017	Sep. 30, 2017	Mar. 31, 2018	Dec. 31, 2017
Net losses from operations since inception
Accumulated deficit				$ (109,211)	$ (101,550)
Stock transactions
Procceds from stock issuance, net of underwriting and offering costs				$ 64,500
Underwriter overallotment option
Stock transactions
Price (in dollars per share)	$ 17
Underwriter overallotment option | Common Stock [Member]
Stock transactions
Stock issued (in shares)	529,500
Follow-on public offering | Common Stock [Member]
Stock transactions
Stock issued (in shares)		3,530,000
Price (in dollars per share)		$ 17
Shelf offering
Stock transactions
Maximum aggregate offering price			$ 200,000
At-the-market offering
Stock transactions
Maximum aggregate offering price			$ 50,000

Summary of Significant Accoun27

Summary of Significant Accounting Policies - Concentrations of Credit Risk (Details)	Mar. 31, 2018Institution
Summary of Significant Accounting Policies
Number of financial institutions at which cash is held	3

Summary of Significant Accoun28

Summary of Significant Accounting Policies - Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2016
Aggregate amounts of cash and cash equivalents and the restricted cash
Cash and cash equivalents	$ 69,577	$ 106,029	$ 9,517
Restricted cash	10	10	10
Restricted cash - noncurrent	450	450	450
Cash balance in consolidated statements of cash flows	$ 70,037	$ 106,489	$ 9,977	$ 21,094

Summary of Significant Accoun29

Summary of Significant Accounting Policies - Research and Development Tax Incentive (Details) $ in Millions	3 Months Ended
	Mar. 31, 2018AUD ($)
Revenue, Practical Expedient [Abstract]
Financing component	true
Maximum [Member] | Australian Taxation Office [Member]
Revenue, Practical Expedient [Abstract]
Revenue for availability of research and development tax incentive	$ 20

Janssen Collaboration Agreeme30

Janssen Collaboration Agreement (Details) - USD ($) $ in Thousands	Jul. 13, 2017	Mar. 31, 2018	Dec. 31, 2018	Dec. 31, 2017
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Transaction price		$ 53,900		$ 53,900
Revenue recognized based on proportional performance		10,500
License and Collaborative Revenue
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
License and collaboration revenue - related party		$ 10,781
Collaborative Arrangement, Product
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Development cost		20.00%
Phase 2 clinical trial | Other services
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
License and collaboration revenue - related party		$ 300
Janssen Biotech, Inc. | Collaborative Arrangement, Product
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Upfront cash payment	$ 50,000
Development cost		80.00%
Estimated variable consideration for cost-sharing payments for agreed upon services			$ 3,900
Janssen Biotech, Inc. | Forecast | Collaborative Arrangement, Product
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Percentage of details provided for PTG-200 to prescribers upon commercial launch			30.00%
Contingent consideration receivable upon filing of the IND			$ 25,000
Janssen Biotech, Inc. | Forecast | First Opt-in Election
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Forfeiture of remaining rights and payment of cost, penalty percentage			50.00%
Future opt-in payment eligible to receive under collaboration arrangement			$ 125,000
Janssen Biotech, Inc. | Forecast | Second Opt-in Election
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Future opt-in revenue eligible to receive			200,000
Potential development, regulatory and sales milestone payments			$ 590,000

Janssen Collaboration Agreeme31

Janssen Collaboration Agreement - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands	Jul. 13, 2017	Mar. 31, 2018
Contract assets:
Balance at beginning of period		$ 1,816
Additions		1,426
Deductions		(520)
Balance at end of period		2,722
Deferred revenue - related party
Balance at beginning of period		31,752
Additions		609
Deductions		(10,481)
Balance at end of period		21,880
Payable to collaboration partner - related party
Additions		379
Balance at End of Period		379
Revenue recognized from contract liability balance at beginning of period		10,500
Revenue recognized from performance obligations in previous periods		0
Janssen Biotech, Inc. | Collaborative Arrangement, Product
Payable to collaboration partner - related party
Upfront cash payment	$ 50,000
Receivable from collaboration partner - related party		$ 400

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	$ 139,028	$ 153,778
Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	68,088	48,704
Corporate Bonds Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	6,765	6,247
Commercial Paper [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	2,892	58,524
Governmental Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	61,283	40,303
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	68,088	48,704
Level 1 [Member] | Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	68,088	48,704
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	70,940	105,074
Level 2 [Member] | Corporate Bonds Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	6,765	6,247
Level 2 [Member] | Commercial Paper [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	2,892	58,524
Level 2 [Member] | Governmental Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	$ 61,283	$ 40,303

Balance Sheet Components - Cash

Balance Sheet Components - Cash Equivalents and Available-for-sale Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Cash Equivalents and Available-for-sale Securities
Total cash equivalents and available-for-sale securities, Amortized Cost	$ 139,208	$ 153,910
Total cash equivalents and available-for-sale securities, Gross Unrealized Losses	(180)	(132)
Total cash equivalents and available-for-sale securities, Fair Value	139,028	153,778
Corporate Bonds Member]
Cash Equivalents and Available-for-sale Securities
Total cash equivalents and available-for-sale securities, Amortized Cost	6,792	6,254
Total cash equivalents and available-for-sale securities, Gross Unrealized Losses	(27)	(7)
Total cash equivalents and available-for-sale securities, Fair Value	6,765	6,247
Governmental Bonds [Member]
Cash Equivalents and Available-for-sale Securities
Total cash equivalents and available-for-sale securities, Amortized Cost	61,436	40,428
Total cash equivalents and available-for-sale securities, Gross Unrealized Losses	(153)	(125)
Total cash equivalents and available-for-sale securities, Fair Value	61,283	40,303
Money Market Funds [Member]
Cash Equivalents and Available-for-sale Securities
Total cash equivalents and available-for-sale securities, Amortized Cost	68,088	48,704
Total cash equivalents and available-for-sale securities, Fair Value	68,088	48,704
Commercial Paper [Member]
Cash Equivalents and Available-for-sale Securities
Total cash equivalents and available-for-sale securities, Amortized Cost	2,892	58,524
Total cash equivalents and available-for-sale securities, Fair Value	$ 2,892	$ 58,524

Balance Sheet Components - Clas

Balance Sheet Components - Classification of Cash Equivalents and Available-for-sale Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Classified as:
Cash equivalents	$ 68,088	$ 104,348
Available-for-sale securities	65,383	37,972
Available-for-sale securities - noncurrent	5,557	11,458
Total cash equivalents and available-for-sale securities	$ 139,028	$ 153,778

Balance Sheet Components - Accr

Balance Sheet Components - Accrued Expenses and Other Payables (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Balance Sheet Components
Accrued clinical and research related expenses	$ 8,277	$ 6,437
Accrued employee related expenses	1,267	2,718
Accrued professional service fees	486	267
Other	328	124
Accrued expenses and other payables	$ 10,358	$ 9,546

Research Collaboration and Li36

Research Collaboration and License Agreement (Details) - Research Collaboration and License Agreement - USD ($)	3 Months Ended
	Mar. 31, 2018	Oct. 31, 2013
Research Collaboration and License Agreement
Term	10 years
PTG-300 [Member]
Research Collaboration and License Agreement
Upfront payment to the former collaboration partner		$ 250,000
Additional payment obligation to the former collaboration partner		$ 250,000
Potential obligation to former collaboration partner for development and commercialization of product	$ 128,500,000

Government Programs (Details)

Government Programs (Details)	May 31, 2017USD ($)	Jul. 31, 2016USD ($)	Mar. 31, 2018AUD ($)	Mar. 31, 2018USD ($)	Mar. 31, 2017AUD ($)	Mar. 31, 2017USD ($)	Mar. 31, 2018USD ($)	Dec. 31, 2017AUD ($)	Dec. 31, 2017USD ($)
Government Programs
Research and development tax incentive receivable			$ 2,500,000				$ 1,918,000	$ 1,700,000	$ 1,347,000
SBIR Grant [Member]
Government Programs
Reduction of research and development expenses related to tax				$ 61,000		$ 0
Research and development grants	$ 1,300,000	$ 219,000
Australian Taxation Office [Member]
Government Programs
Reduction of research and development expenses related to tax			$ 770,000	$ 604,000	$ 134,000	$ 103,000
Overseas Findings [Member] | Australian Taxation Office [Member]
Government Programs
Grants receivable							$ 61,000		$ 58,000

Commitments and Contingencies -

Commitments and Contingencies - Lease Agreement (Details) - Newark, California - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Security deposit		$ 450,000
Tenant improvement allowances	$ 469,000

Commitments and Contingencies39

Commitments and Contingencies - Future Minimum Lease Payments (Details) $ in Thousands	Mar. 31, 2018USD ($)
Leases [Abstract]
2018 (remaining nine months)	$ 1,334
2,019	1,941
2,020	2,000
2,021	2,060
2,022	2,121
Thereafter	3,106
Total	$ 12,562

Equity Plans - Description (Det

Equity Plans - Description (Details) - 2016 Equity Incentive Plan [Member]	3 Months Ended
	Mar. 31, 2018shares
Equity Plans
Number of shares available for issuance	664,068
Stock options - employees, consultants, directors
Equity Plans
Expiration period	10 years
Options to Purchase Common Stock [Member]
Equity Plans
Vesting period	4 years
Non Employee Director Initial Stock Options [Member]
Equity Plans
Vesting period	3 years
Nonemployee Director Annual Refresher Stock Options [Member]
Equity Plans
Vesting period	1 year
Nonemployee Consultant Options [Member] | Minimum [Member]
Equity Plans
Vesting period	1 year
Nonemployee Consultant Options [Member] | Maximum [Member]
Equity Plans
Vesting period	4 years

Equity Plans - Activity (Detail

Equity Plans - Activity (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Number of Options
Number of Options Outstanding, Beginning balance	2,438,151
Number of Options Outstanding, Options granted	629,950
Number of Options Outstanding, Options exercised	(50,507)
Number of Options Outstanding, Options forfeited	(33,072)
Number of Options Outstanding, Ending balance	2,984,522	2,438,151
Number of Options Outstanding, Options exercisable	952,059
Number of Options Outstanding, Options vested and expected to vest	2,984,522
Weighted-Average Exercise Price Per Share
Weighted-Average Exercise Price Per Share, Beginning balance	$ 11.51
Weighted-Average Exercise Price Per Share, Options granted	16.91
Weighted-Average Exercise Price Per Share, Options exercised	4.40
Weighted-Average Exercise Price Per Share, Options forfeited	20.12
Weighted-Average Exercise Price Per Share, Ending balance	12.67	$ 11.51
Weighted-Average Exercise Price Per Share, Options exercisable	9.92
Weighted-Average Exercise Price Per Share, Options vested and expected to vest	$ 12.67
Weighted-Average Remaining Contractual Life (years)
Weighted-Average Remaining Contractual Life (years)	8 years 6 months 7 days
Weighted-Average Remaining Contractual Life (years), Options exercisable	7 years 9 months 22 days
Weighted-Average Remaining Contractual Life (years), Options vested and expected to vest	8 years 6 months 7 days	8 years 3 months 4 days
Aggregate Intrinsic Value
Aggregate Intrinsic Value, Options Outstanding	$ 5.9
Aggregate Intrinsic Value, Options exercisable	3.3
Aggregate Intrinsic Value, Options vested and expected to vest	$ 5.9
Options, weighted-average grant-date fair value	$ 10.51

Equity Plans - Employee Stock O

Equity Plans - Employee Stock Options Valuation Assumptions (Details) - Options to Purchase Common Stock [Member]	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Equity Plans
Expected term		6 years 29 days
Expected volatility		62.50%
Expected volatility, Minimum	66.38%
Expected volatility, Maximum	66.47%
Risk-free interest rate		2.07%
Risk-free interest rate, Minimum	2.42%
Risk-free interest rate, Maximum	2.73%
Minimum [Member]
Equity Plans
Expected term	6 years 7 days
Maximum [Member]
Equity Plans
Expected term	6 years 29 days

Equity Plans - Restricted Stock

Equity Plans - Restricted Stock Units - (Details)	3 Months Ended
	Mar. 31, 2018installment$ / sharesshares
Equity Plans
Restricted stock units vesting, number of equal installments | installment	4
Number of Shares
Number of shares, Granted | shares	113,625
Number of shares, Unvested, Ending balance | shares	113,625
Weighted-Average Grant Date Fair Value
Weighted-Average Grant Date Fair Value, Granted | $ / shares	$ 16.95
Weighted-Average Grant Date Fair Value, Unvested, Ending balance | $ / shares	$ 16.95

Equity Plans - ESPP Description

Equity Plans - ESPP Description and Rights Valuation Assumptions (Details) - 2016 Employee Stock Purchase Plan [Member]	3 Months Ended
	Mar. 31, 2018shares
Equity Plans
Number of shares authorized	73,445
Shares issued in period	454,660
Maximum payroll deduction for share purchases (as a percent)	15.00%
Purchase price of stock (as a percent)	85.00%

Equity Plans - Compensation Exp

Equity Plans - Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 1,185	$ 843
Total unrecognized stock-based compensation costs related to stock options	$ 15,700
Period of unrecognized stock-based compensation costs to be recognized	3 years 2 months 9 days
Research and Development [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 541	359
General and Administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 644	$ 484

Income Taxes - Provision Differ

Income Taxes - Provision Difference from Federal Statutory Rate (Details)	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2018
Effective tax rate of provision for income taxes difference from federal statutory rate
Federal statutory income tax rate (as a percent)	35.00%
Forecast
Effective tax rate of provision for income taxes difference from federal statutory rate
Federal statutory income tax rate (as a percent)		21.00%

Net Loss per Share - Computatio

Net Loss per Share - Computation (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Numerator:
Net loss	$ (7,661)	$ (14,101)
Denominator:
Weighted-average shares used to compute net loss per common share, basic and diluted	21,112,393	16,766,218
Net loss per share, basic and diluted	$ (0.36)	$ (0.84)

Net Loss per Share - Antidiluti

Net Loss per Share - Antidilutive Securities (Details) - shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Potentially dilutive securities have been excluded from diluted net loss per share calculations
Anti-dilutive securities (in shares)	3,122,462	2,306,482
Options to Purchase Common Stock [Member]
Potentially dilutive securities have been excluded from diluted net loss per share calculations
Anti-dilutive securities (in shares)	2,984,522	2,306,482
Restricted stock units
Potentially dilutive securities have been excluded from diluted net loss per share calculations
Anti-dilutive securities (in shares)	113,625
ESPP rights
Potentially dilutive securities have been excluded from diluted net loss per share calculations
Anti-dilutive securities (in shares)	24,315