Janssen Biotech and Protagonist Therapeutics inked a potentially $990 million global co-development and commercialization deal for Protagonist's oral peptide interleukin-23 receptor (IL-23R) antagonist PTG-200 for treating inflammatory bowel disease (IBD), and for all other potential indications. The drug is projected to start in Phase I clinical development during the latter half of 2017.

The PTG-200 agreement builds on Johnson & Johnson Innovation’s (JJDC) investment in Protagonist’s $14 million Series B fundraising round in 2013. Protagonist claims PTG-200 will complement Janssen’s existing IBD portfolio. The latter's intravenously administered human monoclonal antibody Stelara® (ustekinumab), which targets IL-12 and IL-23, was approved by in September last year for use in previously treated adults with Crohn’s disease. EC approval of ustekinumab followed in November.

Under terms of the deal for PTG-200, Protagonist will receive $50 million upfront and could earn another $940 million from Janssen in development, regulatory, and sales milestones, plus additional double-digit sales royalties. Janssen and Protagonist will jointly develop PTG-200 through to Phase II proof-of-concept in Crohn’s disease, with Janssen shouldering all subsequent development and commericalization of the drug. Significant developent milestones will relate to Phase IIa/IIb devleopment of the drug in Crohn’s disease, if Janssen elects to retain its license. Protagonist retains the right to co-detail the drug in the U.S.

“As evidenced by PTG-200, we believe our technology platform is validated in its ability to generate potential first-in-class oral peptides as the next generation of targeted therapy drugs for IBD,” stated David Y. Liu, Ph.D., Protagonist’s CSO and head of R&D. “The funding provided by this transaction enables us to advance our platform and clinical pipeline of innovative peptide drugs, including our lead oral peptide alpha-4-beta-7 integrin antagonist, PTG-100, which is currently in a Phase IIb clinical trial as a potential treatment for ulcerative colitis,” added Dinesh V. Patel, Ph.D., president and CEO at the Newark, CA-based firm.

Just a week ago, Protagonist won a Phase II Small Business Innovation Research (SBIR) grant worth up to $1.34 million from the National Institutes of Health’s (NIH) Diabetes and Digestive and Kidney Diseases (NIDDK), to support the development of biomarkers for IL-23R antagonist activity.

Earlier this month, the firm started a Phase I study evaluating its injectable hepcidin mimetic peptide PTG-300, which is in development as potential treatment for patients with chronic iron overload in rare diseases, incuding beta-thalassemia.