Executive Summary / Key Takeaways

• Prothena Corporation plc (PRTA) is a late-stage clinical biotechnology company focused on developing therapies for devastating neurodegenerative and rare peripheral amyloid diseases, leveraging deep scientific expertise in protein dysregulation.
• The company is strategically realigning its pipeline and operations following the discontinuation of its birtamimab program in May 2025 and a subsequent 63% workforce reduction, aiming to optimize resource allocation for its remaining wholly-owned and partnered assets.
• Key wholly-owned assets, PRX012 and PRX123, target Alzheimer's disease with differentiated approaches, including a once-monthly subcutaneous anti-Abeta antibody and a dual Abeta-tau vaccine, respectively, both holding potential for significant market opportunities.
• Prothena benefits from robust partnerships with Roche (RHHBY), Bristol Myers Squibb (BMS), and Novo Nordisk (NVO), which are advancing several programs, including prasinezumab for Parkinson's disease (entering Phase 3) and coramitug for ATTR amyloidosis (entering Phase 3).
• Despite a significant net loss of $222.50 million for the nine months ended September 30, 2025, and a decrease in cash and cash equivalents to $330.80 million, management believes its current cash position is sufficient for at least the next twelve months, with future capital needs expected to be met through existing collaborations and potential financings.

Unlocking Value Through Precision Biology in Protein Dysregulation

Prothena Corporation plc (NASDAQ:PRTA) stands at a pivotal juncture, driven by its mission to develop transformative therapies for diseases rooted in protein dysregulation. The company's strategic approach combines a deep scientific heritage with a diversified portfolio of wholly-owned and partnered programs, aiming to bring innovative medicines to patients suffering from neurodegenerative and rare peripheral amyloid diseases. This strategy allows Prothena to leverage external resources and expertise from major pharmaceutical partners while retaining significant upside potential for its proprietary assets.

The biotechnology industry, particularly in neurodegenerative diseases, is characterized by intense competition and high R&D costs. Larger pharmaceutical companies like Biogen (BIIB), Eli Lilly (LLY), and Roche possess extensive resources, broad portfolios, and established commercial infrastructures. Prothena, while smaller in scale, distinguishes itself through a focused, agile approach to innovation, particularly in its proprietary antibody platforms. This specialization allows Prothena to target specific disease mechanisms with potentially greater efficiency, contrasting with the broader, more diversified strategies of its larger rivals.

Technological Edge: Precision Targeting in Neurodegeneration and Amyloidosis

Prothena's core competitive advantage lies in its biology-directed discovery engine, which focuses on empirically mapping epitopes and designing molecules that optimally target pathogenic proteins. This expertise is evident across its pipeline, offering tangible benefits over existing or competing approaches.

In Alzheimer's disease, Prothena's wholly-owned PRX012 program is an anti-amyloid beta antibody designed for once-monthly subcutaneous administration. This technology aims to alleviate treatment burden and improve patient access, a critical differentiator in a market currently dominated by intravenous therapies. Preclinical data for PRX012 demonstrated "superior binding of nearly 20 fold higher affinity and avidity to Abeta 405 when compared to lecanemab, and substantially more extensive clearance of pyroglutamate Abeta than plaque of Alzheimer's disease tissue donanemab." This high binding potency and avidity are crucial for achieving effective amyloid plaque clearance at potentially lower doses, thereby enabling a convenient subcutaneous delivery. The strategic intent behind PRX012 is to establish it as a foundational anti-Abeta treatment, differentiating on both efficacy and safety endpoints through smaller fluctuations in brain antibody concentration compared to first-generation treatments.

The company's partnered BMS-986446 program, an anti-tau antibody with Bristol Myers Squibb, exemplifies another technological differentiator. This antibody specifically targets multiple domains of the microtubule binding region (MTBR) of tau. Research indicates that "targeting specific regions within the MTBR resulted in more consistent and robust reduction in the pathogenic uptake of tau into neurons and the downstream neurotoxic effects." This precision targeting addresses a key pathological hallmark of Alzheimer's disease, with MTBR fragments in cerebrospinal fluid closely tracking with tau PET and dementia stages.

Furthermore, in ATTR amyloidosis, Prothena's partnered coramitug (formerly PRX004) with Novo Nordisk offers a "depleter mechanism of action that is designed to target and remove the resident protein." This contrasts with current therapeutic approaches that primarily focus on reducing new protein production or stabilizing native TTR. Coramitug's design allows it to "uniquely interact with only nonfunctional forms of this protein," addressing existing amyloid deposits that cause organ dysfunction. This technological approach is particularly relevant for patients with advanced disease where significant amyloid has already accumulated.

Strategic Realignment and Pipeline Evolution

Prothena's journey has included both successes and setbacks, leading to a strategic realignment. In May 2025, the company announced the discontinuation of birtamimab development for AL amyloidosis, as the Phase 3 AFFIRM-AL clinical trial did not meet its primary or secondary endpoints. This outcome, while disappointing, prompted a decisive corporate restructuring in June 2025, including an approximate 63% reduction in workforce, to substantially reduce operating costs and focus resources on its remaining promising programs.

Despite the setback with birtamimab, Prothena's diversified pipeline continues to advance with significant momentum through its strategic partnerships. Roche, Prothena's partner for prasinezumab, announced in June 2025 its plan to advance the alpha-synuclein targeting antibody into Phase 3 development for early-stage Parkinson's disease. The Phase 3 PARAISO clinical trial is expected to initiate by the end of 2025, building on Phase 2b PADOVA study data that suggested clinical benefit and provided the first biomarker evidence of prasinezumab impacting underlying disease biology. This represents a critical step towards addressing Parkinson's, a disease affecting an estimated 10 million people globally, where current treatments are largely symptomatic.

In the Alzheimer's space, the partnered BMS-986446 received FDA Fast Track designation in October 2025, underscoring its potential to address an unmet medical need. Bristol Myers Squibb initiated the Phase 2 TargetTau-1 clinical trial in Q1 2024, evaluating the antibody's efficacy and safety in approximately 310 participants with early Alzheimer's disease, with results expected in 2027. Additionally, the PRX019 program, also partnered with BMS, saw a Global License Agreement in May 2024, triggering an $80 million option exercise fee. Prothena initiated a Phase 1 clinical trial for PRX019 in November 2024, further expanding its neurodegenerative pipeline.

Novo Nordisk, Prothena's partner for coramitug, initiated the Phase 3 CLEOPATTRA clinical trial in September 2025 for ATTR cardiomyopathy, a condition affecting 400,000 to 1.4 million patients. Results from a Phase 2 clinical trial of coramitug are also anticipated in November 2025, providing further insights into this promising depleter mechanism.

Financial Performance and Outlook

Prothena's financial performance for the nine months ended September 30, 2025, reflects the company's R&D-intensive nature and recent strategic shifts. Total revenue significantly decreased to $9.66 million from $133.03 million in the prior year period, primarily due to the timing of collaboration revenue recognition, which in 2025 was related to the partial performance of the PRX019 Phase 1 Clinical Trial Obligation. In contrast, the prior year included substantial revenue from the PRX019 Global License Agreement and the expiration of material rights for the TDP-43 Collaboration Target.

Operating expenses were impacted by the restructuring. Research and development expenses decreased by 30% to $120.27 million for the nine months ended September 30, 2025, compared to $172.35 million in the same period of 2024, largely due to lower clinical trial expenses from the PRX012 wind down and reduced personnel, manufacturing, and consulting costs.

General and administrative expenses also saw a decrease, primarily from lower personnel costs. Restructuring costs amounted to $33.09 million for the nine months ended September 30, 2025, reflecting employee termination benefits and contract termination costs associated with the birtamimab discontinuation.

The company reported a net loss of $222.50 million for the nine months ended September 30, 2025, a substantial increase from $64.35 million in the comparable 2024 period. This was partly driven by an income tax expense increase due to a valuation allowance for federal deferred tax assets.

As of September 30, 2025, Prothena held $330.80 million in cash and cash equivalents. While this represents a decrease from $472.2 million at the end of 2024, management believes this cash position is sufficient to fund operations for at least the next twelve months.

The company anticipates financing future capital needs through existing collaboration payments and potential equity or debt financings, acknowledging that such financings may be dilutive. For the full year 2025, Prothena expects net cash used in operating and investing activities to be between $168 million and $175 million, with an estimated year-end cash position of approximately $301 million. The estimated full-year net loss is projected to be between $197 million and $205 million, including $41 million of non-cash share-based compensation expense.

Risks and Competitive Positioning

Investing in Prothena carries inherent risks, including the uncertainty of clinical trial outcomes, regulatory approvals, and market acceptance for its drug candidates. The company's reliance on third parties for clinical trials and manufacturing introduces operational risks, as does its dependence on collaboration partners for funding and development. Intellectual property protection remains a critical factor, with the potential for costly litigation or challenges to patent rights. Furthermore, broader macroeconomic factors, geopolitical conflicts, and cybersecurity threats could impact operations and financial performance.

In the competitive landscape, Prothena's specialized focus on protein dysregulation offers a distinct advantage in developing highly targeted therapies. However, its smaller scale compared to industry giants like Eli Lilly and Biogen means it faces challenges in commercialization and market penetration. While Prothena's partnerships provide access to significant resources and global reach, they also introduce risks related to partner commitment and strategic alignment. The company's ability to capitalize on its technological differentiators, such as PRX012's superior binding affinity and subcutaneous delivery, will be crucial for carving out market share against established and emerging competitors.

Conclusion

Prothena Corporation plc is navigating a dynamic biotechnology landscape, marked by both significant pipeline advancements and strategic adjustments. The discontinuation of birtamimab and subsequent restructuring underscore the inherent risks in drug development but also highlight management's commitment to focusing resources on its most promising assets. With a robust pipeline of wholly-owned and partnered programs targeting critical unmet needs in Alzheimer's, Parkinson's, and ATTR amyloidosis, Prothena is poised for multiple clinical catalysts in the coming years. The company's deep scientific expertise and differentiated technological approaches, particularly in precision antibody design and convenient administration, form the bedrock of its long-term investment thesis. While financial performance reflects ongoing R&D investments and recent strategic shifts, Prothena's strong cash position and strategic partnerships provide a foundation for advancing its mission and potentially delivering significant value to patients and shareholders as it strives to become a fully integrated commercial biotechnology company.