Janssen Collaboration Agreement	6 Months Ended
Janssen Collaboration Agreement	Jun. 30, 2017
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Janssen Collaboration Agreement	Janssen Collaboration Agreement Janssen Collaboration Agreement On May 26, 2017, the Company and Janssen Biotech, Inc., ("Janssen") entered into an exclusive license and collaboration agreement (the "Janssen Collaboration Agreement") for the development, manufacture and commercialization of PTG-200 worldwide for the treatment of Crohn's disease ("CD") and ulcerative colitis ("UC"). PTG-200 is the Company’s oral Interleukin 23 receptor ("IL-23R") antagonist drug candidate currently in pre-clinical development. The Janssen Collaboration Agreement became effective on July 13, 2017. Upon the effectiveness of the agreement, the Company became eligible for a non-refundable, upfront cash payment of $50.0 million from Janssen, which the Company expects to receive during the third quarter of 2017. Under the Janssen 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. All such clinical trials would be conducted in accordance with a mutually agreed upon clinical development plan and budget. Development costs for the Phase 2 clinical trial would 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 would 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 Collaboration Agreement through the Phase 2 clinical trial will be overseen by a joint governance structure which will have equal representation by both parties. 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 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 million payment. In addition to the opt-in fees, the Company is eligible to receive potential development, regulatory and sales milestone payments of up to an aggregate of $615 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 Collaboration Agreement would 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 Collaboration Agreement, the Company would be obligated to pay Janssen a 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. The Janssen 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 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 Collaboration Agreement. The Janssen 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 Collaboration Agreement for uncured material breach. Janssen retains the right to terminate the Janssen Collaboration Agreement for convenience and without cause on written notice of a certain period to the Company. Upon a termination of the Janssen 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. 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 candidate. 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 a research and development expense during the three months ended March 31, 2016. The initiation of a Phase 1 clinical study for PTG-300 during the second quarter of 2017 triggered an additional $250,000 payment obligation from the Company to the former collaboration partner, which the Company recorded as a 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 $28.5 million for the achievement of certain development and regulatory milestone events and up to an additional aggregate of $100.0 million for the achievement of certain 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.