Protagonist Therapeutics Stock Gains 30% as J&J Reportedly Eyes Deal

Shares of Protagonist Therapeutics PTGX rose 30% on Friday following a report issued by the Wall Street Journal ("WSJ"), as cited in a Yahoo Finance article, which stated that pharma giant J&J JNJ is interested in acquiring the company.

The article stated that both companies are in ongoing discussions, though WSJ could not learn the specific terms and structure of the deal. The report also cautioned that there is no guarantee the discussions will lead to a finalized agreement.

California-based Protagonist Therapeutics is a clinical-stage company developing its pipeline of novel peptides. The most advanced candidate in the company’s pipeline is icotrokinra (JNJ-2113), which is being developed across several immunology diseases in late-stage studies. A regulatory filing is currently under FDA review seeking approval for the drug in the plaque psoriasis indication.

PTGX already has a partnership with J&J. Per the deal terms, the pharma giant holds exclusive worldwide rights to develop icotrokinra in phase II studies and beyond.

Protagonist Therapeutics is also developing another late-stage candidate, rusfertide, for blood disorders in partnership with Takeda Pharmaceuticals. The companies are on track to submit a regulatory filing for the drug in the polycythemia vera indication before this year’s end.

PTGX Share Price Performance

Year to date, the stock has soared 125% compared with the industry’s 7% growth.

What’s Driving J&J’s Reported Interest in PTGX Stock?

The intent behind the rumored deal seems clear — J&J intends to make up for the declining Stelara sales, which lost patent exclusivity earlier this year. Sales of this multi-billion-dollar immunology drug have declined nearly 43% in the second quarter due to generic erosion. This loss negatively impacted growth of J&J’s Innovative Medicine segment by 1170 basis points in the quarter.

Against this backdrop, the Protagonist Therapeutics deal likely represents a strategic fit. Not only does it help J&J add a drug in the immunology space, but it also expands its footprint in the hematology space. This is likely to diversify the company’s revenue growth in the coming years.

J&J is also diversifying into other therapeutic areas. Earlier this year, the pharma giant acquired the neuroscience drugmaker Intra-Cellular Therapies in a deal worth $14.6 billion. Post the acquisition, J&J added Intra-Cellular’s sole-marketed drug Caplyta, which is approved for two indications — schizophrenia and bipolar depression. It also added the investigational drug ITI-1284, which is being developed for generalized anxiety disorder, as well as Alzheimer's disease-related psychosis and agitation across separate mid-stage studies.

Recent M&A Transactions in the Pharma Space

While broader macroeconomic concerns, including Trump-era tariffs and leadership shifts at the FDA, have weighed on deal-making in 2025, Big Pharma continues to pursue strategic assets in key growth areas.

Last month, Pfizer PFE announced a $4.9-billion acquisition of obesity drug developer, Metsera. This marks PFE’s return to the space following the failure of its weight loss pill earlier this year. The transaction, expected to be completed before this year’s end, will add four novel clinical-stage incretin and amylin programs to Pfizer’s pipeline.

In parallel, Roche RHHBY recently signed a deal to acquire clinical-stage biotech 89bio for $3.5 billion. The acquisition will add 89bio’s pegozafermin to RHHBY’s pipeline. The candidate is being evaluated in late-stage studies for metabolic dysfunction-associated steatohepatitis (MASH) indication.

Last week, Novo Nordisk announced plans to acquire Akero Therapeutics for $4.7 billion, plus a potential $6-per-share contingent payment tied to U.S. regulatory approval of Akero Therapeutics’ lead pipeline candidate, efruxifermin. The candidate is being developed across several late-stage studies across pre-cirrhotic and cirrhotic MASH populations.

These transactions highlight Big Pharma's continued interest in small biotechs with promising and innovative assets. Both the Pfizer and Roche deals are expected to close before this year’s end.

Protagonist Therapeutics, Inc. Price

 

 

Protagonist Therapeutics, Inc. price | Protagonist Therapeutics, Inc. Quote

PTGX’s Zacks Rank

Protagonist Therapeutics currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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