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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

Filed by the Registrant  x                              Filed by a Party other than the Registrant  ¨

Check the appropriate box:

PROTHENA CORPORATION PLC

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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Prothena Corporation plc

Directors’ Report and

Financial Statements

Year Ended: 31 December 2012

Registered number: 518146

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Prothena Corporation plc

Directors’ Report and Financial Statements

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Prothena Corporation plc

Directors and Other Information

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Prothena Corporation plc

Directors’ Report

The directors present their annual report and audited financial statements for Prothena Corporation plc (“the Company”) and its subsidiary undertakings (collectively “the group”) for the year ended 31 December 2012.

The directors have elected to prepare the Consolidated Financial Statements in accordance with Section 1 of the Companies (Miscellaneous Provisions) Act 2009 (as amended), which provides that a true and fair view of the state of affairs and profit or loss of the group may be given by preparing the financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), as defined in Section 1(1) of the Companies (Miscellaneous Provisions) Act 2009 (as amended), to the extent that the use of those principles in the preparation of the financial statements does not contravene any provision of the Companies Acts, 1963-2012 or of any regulations made thereunder.

The Company was incorporated in Ireland as a private limited company under the name “Neotope Corporation Limited” on September 26, 2012. The Company was subsequently re-registered as a public limited company and changed the name of the company to “Neotope Corporation plc”. On November 1, 2012, the Company’s shareholders resolved to change the name of the company to “Prothena Corporation plc”, and this was approved by the Irish Registrar of Companies on November 7, 2012.

Principal Activities, Business Review and Future Developments

The Company’s business consists of a substantial portion of Elan Corporation plc’s (“Elan”) former drug discovery business platform, including Neotope Biosciences Limited and Onclave Therapeutics Limited, each former wholly-owned subsidiaries of Elan (which for the period prior to the separation and distribution is referred to herein as the “Prothena Business”). Prior to December 21, 2012, the Prothena Business operated as part of Elan and not as a separate stand-alone entity. After the separation of the Prothena Business from Elan, and the related distribution of its ordinary shares to Elan’s shareholders (which is referred to in this report as the “separation and distribution”), its ordinary shares of USD $0.01 par value, began trading on The NASDAQ Global Market under the symbol “PRTA” on December 21, 2012.

Results and Dividends

The group recorded a loss of $41.4 million for the year ended December 31, 2012 (2011: loss of $29.7 million). The consolidated results of the group are set out on page 13 of the financial statements. The directors do not recommend the payment of a dividend.

Principal Risks and Uncertainties

Risks Relating to the Company’s Financial Position, Its Need for Additional Capital and Its Business

The Company has not generated any significant third party external revenue to date, and anticipates that it will incur losses for the foreseeable future and may never achieve or sustain profitability.

The Company will require additional capital to fund its operations, and if it is unable to obtain such capital, it will be unable to successfully develop and commercialize drug candidates.

The Company’s future success depends on its ability to retain its chief executive officer and to attract, retain, and motivate qualified personnel.

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Directors’ Report (continued)

Risks Relating to the Company’s Financial Position, Its Need for Additional Capital and Its Business (continued)

The Company’s collaborators, prospective collaborators and suppliers may need assurances that its financial resources and stability on a stand-alone basis are sufficient to satisfy their requirements for doing or continuing to do business with the Company.

Risks Related to the Discovery, Development and Regulatory Approval of Drug Candidates

The Company’s success is largely dependent on the success of its research and development programs, which are at an early stage. Its drug candidates are still in the early stages of development and it has only one drug candidate in clinical trials. The Company may not be able to successfully discover, develop, obtain regulatory approval for or commercialize any drug candidates.

If clinical trials for the Company’s drug candidates are prolonged, delayed, suspended or terminated, it may be unable to commercialize its drug candidates on a timely basis, which would require it to incur additional costs and delay its receipt of any revenue from potential product sales.

Even if the Company’s drug candidates receive regulatory approval in the United States, it may never receive approval or commercialize its products outside of the United States.

Both before and after marketing approval, the Company’s drug candidates are or would be subject to ongoing regulatory requirements, and if it fails to comply with these continuing requirements, it could be subject to a variety of sanctions and the sale of any approved products could be suspended.

If side effects are identified during the time the Company’s drug candidates are in development or after they are approved and on the market, it may choose to or be required to perform lengthy additional clinical trials, discontinue development of the affected drug candidate, change the labeling of any such products, or withdraw any such products from the market, any of which would hinder or preclude its ability to generate revenues.

The Company deals with hazardous materials and must comply with environmental laws and regulations, which can be expensive and restrict how it does business.

Risks Related to the Commercialization of the Company’s Drug Candidates

Even if any of the Company’s drug candidates receives regulatory approval, if such approved product does not achieve broad market acceptance, the revenues that it generates from sales of the product will be limited.

If the Company is unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell an approved product, it may be unable to generate product revenue.

If government and third-party payors fail to provide adequate coverage and reimbursement rates for any of the Company’s drug candidates that receive regulatory approval, its revenues and prospects for profitability will be harmed.

The markets for the Company’s drug candidates are subject to intense competition. If it is unable to compete effectively, its drug candidates may be rendered noncompetitive or obsolete.

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Directors’ Report (continued)

Risks Related to the Commercialization of the Company’s Drug Candidates (continued)

If a successful product liability or clinical trial claim or series of claims is brought against the Company for uninsured liabilities or in excess of insured liabilities, it could incur substantial liability.

Risks Related to the Company’s Dependence on Third Parties

The Company relies on third parties to conduct its clinical trials, and those third parties may not perform satisfactorily, including failing to meet established deadlines for the completion of any such clinical trials.

If the Company does not establish strategic collaborations, it may have to alter its research and development plans.

The Company has no manufacturing capacity and depends on third-party manufacturers to produce its pre-clinical and clinical trial drug supplies.

The Company anticipates continued reliance on third-party manufacturers if it is successful in obtaining marketing approval from the FDA and other regulatory agencies for any of its drug candidates.

The Company depends on third-party suppliers for key raw materials used in its manufacturing processes, and the loss of these third-party suppliers or their inability to supply the Company with adequate raw materials could harm its business.

Risks Related to the Company’s Intellectual Property

If the Company is unable to adequately protect the intellectual property relating to its drug candidates, or if it infringes the rights of others, its ability to successfully commercialize its drug candidates will be harmed.

The Company intends to license patent rights from third-party owners. Such licenses may be subject to early termination if it fails to comply with its obligations in its licenses with third parties.

Litigation regarding patents, patent applications and other proprietary rights may be expensive and time consuming. If the Company is involved in such litigation, it could cause delays in bringing drug candidates to market and harm its ability to operate.

The Company may be unable to adequately prevent disclosure of trade secrets and other proprietary information.

The Company may be subject to claims that its employees have wrongfully used or disclosed alleged trade secrets of their former employers.

Risks Relating to the Separation and the Distribution

The Company may not realize some or all of the potential benefits it expects from its separation from Elan.

If the IRS successfully challenges the tax-free treatment of the separation and distribution, our U.S. shareholders may incur substantial U.S. federal income tax liability.

The Company’s ability to operate its business effectively may suffer if it does not establish its own financial, administrative and other support functions in order to operate as a separate, stand-alone company, and the transition services Elan has agreed to provide may not be sufficient for its needs.

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Directors’ Report (continued)

Risks Relating to the Separation and the Distribution (continued)

The Company’s accounting and other management systems and resources may not be adequately prepared to meet the financial reporting and other requirements to which it is subject as a publicly traded company. If it is unable to achieve and maintain effective internal controls, its business, financial position and results of operations could be adversely affected.

The Company’s historical financial information is not necessarily representative of the results it would have achieved as a separate, publicly traded company and may not be a reliable indicator of its future results.

The agreements the Company has entered into with Elan involve conflicts of interest and therefore may have materially disadvantageous terms to the Company.

The Company expects that it will be treated as a passive foreign investment company, which could result in adverse U.S. federal income tax consequences to its U.S. shareholders.

If there is any change to Irish tax law or the anticipated tax treatment of the distribution was challenged by the Revenue Commissioners of Ireland, relevant Irish holders of the Company’s ordinary shares may incur a charge to Irish tax as a result of receiving shares in connection with the distribution.

Relationships between certain of the Company’s executive officers and directors with its principal shareholder could adversely affect its other shareholders and/or present actual, potential or perceived conflicts of interest.

For as long as the Company is an emerging growth company, it will be exempt from certain reporting requirements, including those relating to accounting standards and disclosure about its executive compensation, that apply to other public companies.

Risks Related to the Company’s Ordinary Shares

A trading market may not develop to provide you with adequate liquidity for the Company’s ordinary shares. In addition, the market price of its shares may fluctuate widely.

The Company relies on permitted exemptions from certain SEC and NASDAQ corporate governance standards, which may afford less protection to the holders of its ordinary shares.

The Company does not anticipate paying cash dividends, and accordingly, shareholders must rely on share appreciation for any return on their investment.

Your percentage ownership in Prothena may be diluted in the future.

Future sales of the Company’s ordinary shares could adversely affect the trading price of its ordinary shares.

Irish law differs from the laws in effect in the United States and may afford less protection to holders of the Company’s ordinary shares.

Irish law differs from the laws in effect in the United States with respect to defending unwanted takeover proposals and may give the Company’s board of directors less ability to control negotiations with hostile offerors.

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Directors’ Report (continued)

Going Concern

These Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Consolidated Financial Statements of Prothena are presented in U.S. dollars, which is the functional currency of Prothena, and have been prepared on a going concern basis. The financial information for all periods prior to the separation and distribution were prepared by aggregating financial information from the components of Prothena as described above. All financial information presented after December 20, 2012 was consolidated and includes the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

On this basis the directors consider it is appropriate to prepare the financial statements on a going concern basis. These financial statements do not include any adjustments that would result from the going concern basis of preparation being inappropriate.

Directors, Secretary and Their Interests

The directors who held office at 31 December 2012 had no interests other than those shown below in the shares of the Company.

According to the register of directors’ interests, no rights to subscribe for shares in the company or any group companies was granted to any of the directors or their immediate families, or exercised by them during the financial year.

Political Donations

During the year, the group and the Company did not make any donations disclosable in accordance with

The Electoral Act, 1997.

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Directors’ Report (continued)

Significant Shareholdings

The Company’s business consists of a substantial portion of Elan Corporation, plc’s (“Elan”) former drug discovery business platform, including Neotope Biosciences Limited and Onclave Therapeutics Limited, each former wholly-owned subsidiaries of Elan (which for the period prior to the separation and distribution is refered to herein as the “Prothena Business”). Prior to December 21, 2012, the Prothena Business operated as part of Elan and not as a separate stand-alone entity. After the separation of the Prothena Business from Elan, and the related distribution of its ordinary shares to Elan’s stockholders (which is refer to in this report as the “separation and distribution”), its ordinary shares began trading on The NASDAQ Global Market under the symbol “PRTA” on December 21, 2012.

The principal activity of the Company is an investment holding company.

Research and Development

During the years ended 31 December 2012 and 2011, the Company’s expenditure on research and development (“R&D”) activities amounted to $34.1 million and $24.2 million, respectively.

Subsidiary Undertakings

The Company’s subsidiaries are Neotope Biosciences Limited, Onclave Therapeutics Limited and Prothena Biosciences, Inc.

Financial Risk Management

Foreign Currency Risk

The Company conducts its business primarily in U.S. dollars except for its agreement with its contract manufacturer for clinical supplies, Boehringer Ingelheim. At this time, the Company’s foreign exchange risk is not material.

Interest Rate Sensitivity

The Company’s exposure to interest rate risk is limited to its cash equivalents, which consist of accounts maintained in money market funds. The Company has assessed that there is no material exposure to interest rate risk given the nature of money market funds. In general, money market funds are not subject to market risk because the interest paid on such funds fluctuates with the prevailing interest rate.

In the future, the Company anticipates that its exposure to interest rate risk will primarily be related to its investment portfolio. The Company intends to invest any surplus funds in accordance with a policy approved by its board of directors which will specify the categories, allocations, and ratings of securities it may consider for investment. The primary objectives of the Company’s investment policy will be to preserve principal and maintain proper liquidity to meet its operating requirements. The Company’s investment policy will also specify credit quality standards for its investments and limits the amount of credit exposure to any single issue, issuer or type of investment.

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Directors’ Report (continued)

Financial Risk Management (continued)

Credit Risk

All of the Company’s accounts receivables are due from a single customer (Elan) to whom it provides R&D services. Due to Elan’s substantial financial resources, the Company does not believe that its credit risk is significant.

Accounting Records

The directors believe that they have complied with the requirement of Section 202 of the Companies Act, 1990 with regard to books of account by employing personnel with appropriate expertise and by providing adequate resources to the financial function. The books of account of the Company are maintained in accordance with Section 202(1)(6) of the Companies Act.

Auditor

During the period, KPMG Chartered Accountants were appointed as auditors and in accordance with Section 160(2) of the Companies Act, 1963, will continue in office.

On behalf of the board:

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Statement of Directors’ Responsibilities

The directors are responsible for preparing the directors’ report and Consolidated Financial Statements in accordance with applicable law and regulations.

Company law requires the directors to prepare Consolidated Financial Statements for each financial period which give a true and fair view of the state of affairs of the parent company and group and of the profit or loss of the group for the period then ended. Under that law, the directors have elected to prepare the Consolidated Financial Statements in accordance with Section 1 of the Companies (Miscellaneous Provisions) Act 2009 (as amended), which provides that a true and fair view of the state of affairs and profit or loss may be given by preparing the Consolidated Financial Statements and parent company financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), as defined in Section 1(1) of the Companies (Miscellaneous Provisions) Act 2009 (as amended), to the extent that the use of those principles in the preparation of the financial statements does not contravene any provision of the Companies Acts or of any regulations made thereunder.

In preparing each the Consolidated Financial Statements and the financial statements of the parent company (collectively the ‘financial statements’), the directors are required to:

The directors are responsible for keeping proper books of account that disclose with reasonable accuracy at any time the financial position of the group and the Company and to enable them to ensure that its financial statements comply with the Companies Acts, 1963 to 2012. They are also responsible for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the group’s website. Legislation in the Republic of Ireland governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The directors are also responsible for preparing a directors’ report that complies with the requirements of the Companies Acts, 1963 to 2012.

On behalf of the board:

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Independent Auditor’s Report to the Members of Prothena Corporation plc

We have audited the group and the company financial statements (the ‘‘financial statements’’) of Prothena Corporation plc for the year ended 31 December 2012 which comprise the Consolidated Balance Sheet, the Consolidated Statement of Operations, the Consolidated Statement of Cash Flows, the Consolidated Statement of Shareholders’ equity and parent company Balance Sheet, Statement of Cash Flows, Statement of Shareholders’ Equity and related notes. These financial statements have been prepared under the accounting policies set out therein.

This report is made solely to the Company’s members, as a body, in accordance with Section 193 of the Companies Act, 1990. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective Responsibilities of Directors and Auditors

The statement of directors’ responsibilities on page 9 sets out the directors’ responsibilities for preparing the directors’ report, the group financial statements in accordance with applicable law and Generally Accepted Accounting Principles in the United States (“U.S. GAAP”) as defined in Section 1(1) of the Companies (Miscellaneous Provisions) Act 2009, to the extent that the use of those principles in the financial statements does not contravene any provision of the Companies Acts or of any regulation made thereunder, and for preparing the parent company financial statements in accordance with applicable law and the accounting standards issued by the Accounting Standards Board and promulgated by the Institute of Chartered Accountants in Ireland (Generally Accepted Accounting Practice in Ireland).

Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (United Kingdom and Ireland).

We report to you our opinion as to whether the group financial statements give a true and fair view in accordance with U.S. GAAP to the extent that the use of those principles in the financial statements does not contravene any provision of the Companies Acts, 1963 to 2012 or of any regulations made thereunder, and have been properly prepared in accordance with the Companies Acts, 1963 to 2012, and whether, in addition, the parent company financial statements give a true and fair view in accordance with U.S. GAAP and have been properly prepared in accordance with the Companies Acts, 1963 to 2012.

We also report to you, in our opinion whether: proper books of account have been kept by the Company; whether at the balance sheet date, there exists a financial situation requiring the convening of an extraordinary general meeting of the Company; and whether the information given in the directors’ report is consistent with the financial statements. In addition, we state whether we have obtained all the information and explanations necessary for the purposes of our audit, and whether the parent company balance sheet is in agreement with the books of account.

We also report to you if, in our opinion, any information specified by law regarding directors’ remuneration and directors’ transactions is not disclosed and, where practicable, include such information in our report.

We read the directors’ report and consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the audited financial statements.

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Independent Auditor’s Report to the members of Prothena Corporation plc (continued)

Basis of Audit Opinion

We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the group’s and the Company’s circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.

Opinion

In our opinion:

Other matters

We have obtained all the information and explanations which we consider necessary for the purposes of our audit. In our opinion proper books of account have been kept by the Company. The Company’s Consolidated Balance Sheets is in agreement with the books of account.

In our opinion, the information given in the directors’ report is consistent with the financial statements.

The net assets of the Company, as stated in the Company’s Consolidated Balance Sheets are more than half of the amount of its called-up share capital, and, in our opinion, on that basis there did not exist at 31 December 2012 a financial situation which, under Section 40(1) of the Companies (Amendment) Act, 1983, may require the convening of an extraordinary general meeting of the Company.

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Consolidated Balance Sheets

As of 31 December 2012 and 2011

(in thousands, except par value)

See accompanying notes to Consolidated Financial Statements.

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Consolidated Statements of Operations

For the Years Ended 31 December 2012 and 2011

(in thousands, except par value)

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Consolidated Statements of Cash Flows

For the Years Ended 31 December 2012 and 2011

(in thousands)

See accompanying notes to Consolidated Financial Statements.

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Consolidated Statements of Shareholders’ Equity

For the Years Ended 31 December 2012 and 2011

(in thousands)

See accompanying notes to Consolidated Financial Statements.

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Notes

forming part of the Consolidated Financial Statements

Description of Business

Prothena Corporation plc (“Prothena” or the “Company”) is a newly formed, public limited company incorporated in Ireland. Prothena is a clinical stage biotechnology company focused on the discovery and development of novel antibodies for the potential treatment of a broad range of diseases that involve protein misfolding or cell adhesion. The Company is focused on the discovery and development of potential therapeutic monoclonal antibodies directed specifically to disease causing proteins. These potential therapies have a broad range of indications including AL and AA forms of amyloidosis (NEOD001), Parkinson’s disease and related synucleinopathies (PRX002), and novel cell adhesion targets involved in autoimmune disease and metastatic cancers (PRX003). The Company has initiated a Phase 1 clinical trial for NEOD001 with the first patient dosing in April 2013. The Phase 1 clinical trial of NEOD001 will evaluate safety and tolerability in AL Amyloidosis patients. The Company also plans to initiate Phase 1 clinical trials for PRX002 and PRX003 in 2014 and 2015, respectively. The Company’s strategy is to identify antibody candidates for clinical development by applying its extensive expertise in generating novel therapeutic antibodies and working with collaborators having expertise in specific animal models of disease.

Prothena’s business consists of a substantial portion of Elan’s former drug discovery business platform, including Neotope Biosciences Limited (and its wholly-owned subsidiary Prothena Biosciences, Inc.) and Onclave Therapeutics Limited, each former wholly-owned subsidiaries of Elan (which for the period prior to separation and distribution we refer to herein as the “Prothena Business”). Effective December 20, 2012, the Prothena Business separated from Elan.

Basis of Preparation and Presentation of Financial Information

The Prothena Business has historically operated as part of Elan and not as a separate stand-alone entity. Prior to the separation on December 20, 2012, the Consolidated Financial Statements of Prothena have been prepared on a “carve-out” basis from the Consolidated Financial Statements of Elan to represent the financial position and performance of Prothena as if the Company had existed on a stand-alone basis and as if Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 810, “Consolidation,” had been applied throughout. The accompanying Consolidated Financial Statements prior to December 21, 2012 include only those assets and liabilities that management has determined are specifically identifiable to Prothena and allocations of direct costs and indirect costs attributable to our operations. The indirect costs included in our Consolidated Financial Statements relate to certain centralized support functions that were provided by Elan. All intragroup transactions within the Prothena Business have been eliminated in the Consolidated Financial Statements and are not disclosed.

These Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Consolidated Financial Statements of Prothena are presented in U.S. dollars, which is the functional currency of Prothena, and have been prepared on a going concern basis. The financial information for all periods prior to the separation and distribution were prepared by aggregating financial information from the components of Prothena as described above. All financial information presented after December 20, 2012 was consolidated and includes the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

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Notes (continued)

Basis of Preparation and Presentation of Financial Information

The centralized support functions provided to us by Elan included, but were not limited to, accounting, information technology, taxation, legal, corporate strategy, investor relations, corporate governance and other professional services, employee benefit administration, including equity award and pension services, and cash and treasury management. Centralized support costs allocated to the Prothena business for the years ended December 31, 2012 and 2011 were $7.7 million and $4.0 million, respectively. These costs have been allocated to us for the purposes of preparing the Consolidated Financial Statements based on estimated usage of the resources by us. The estimated usage of the central support resources allocated to us has been determined by estimating our portion of the most appropriate driver of each category of central support costs such as headcount or labor hours, depending on the nature of the costs. We believe that such allocations have been made on a reasonable basis, but may not necessarily be indicative of the costs that would have been incurred if we had operated on a standalone basis.

Elan used a centralized approach to manage substantially all of its liquid resources and to finance its operations and, as a result, no separate cash accounts for Prothena were historically maintained, and debt and liquid resources maintained at the Elan group level are not included in the accompanying Consolidated Financial Statements prior to the separation. Elan has historically funded all of Prothena’s operating and capital resource requirements. The parent company equity balance in the Consolidated Financial Statements constitutes Elan’s investment in Prothena and represents the excess of total liabilities over total assets (or excess of total assets over total liabilities), including the netting of intercompany funding balances between Prothena and Elan. Changes in parent company equity represent Elan’s net investment in Prothena, after giving effect to its net loss, contributions from Elan in the form of share-based compensation to Prothena’s employees and net funding provided by Elan.

Liquidity and Business Risks

As part of the separation and distribution process described above, Elan made a net cash investment in the Prothena Business of $99.0 million. Elan also made a $26.0 million cash payment to Prothena to purchase 18% of the outstanding ordinary shares of Prothena (as calculated immediately following the purchase). As of December 31, 2012, Prothena has $124.9 million in cash and cash equivalents. Management believes that the Company’s cash and cash equivalents at December 31, 2012 will be sufficient to meet the Company’s obligations for at least the next twelve months based on management’s current business plans. If the Company elects to increase its spending on development programs significantly above current long-term plans or enters into potential licenses and other acquisitions of complementary technologies, products or companies, the Company may need additional capital. The Company expects to continue to finance future cash needs that exceed its operating activities primarily through its current cash and cash equivalents, and to the extent necessary, through proceeds from equity or debt financings, loans and collaborative agreements with corporate partners.

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Notes (continued)

Liquidity and Business Risks (continued)

The Company is subject to a number of risks, including: its ability to successfully commercialize its product candidates, if approved; the uncertainty of the Company’s research and development efforts resulting in future successful commercial products; obtaining regulatory approval for new products; significant competition from larger organizations; reliance on the proprietary technology of others; dependence on key personnel; uncertain patent protection; dependence on corporate partners and collaborators; and possible restrictions on reimbursement from governmental agencies and healthcare organizations, as well as other changes in the health care industry.

The Company is dependent on Boehringer Ingelheim to manufacture its clinical supplies of NEOD001, a monoclonal antibody. An inability to obtain product supply could have a material adverse impact on the Company’s business, financial condition and results of operations.

Use of Estimates

The preparation of the Consolidated Financial Statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Because of the uncertainties inherent in such estimates, actual results may differ materially from these estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments held at financial institutions, such as commercial paper, money market funds, and other money market securities with original maturities of three months or less at date of purchase to be cash equivalents.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method based on estimated useful lives as follows:

Impairment of Long-lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require that a long-lived asset be tested for possible impairment, the Company compares the undiscounted cash flows expected to be generated by the asset to the carrying amount of the asset. If the carrying amount of the long-lived asset is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. The Company determines fair value using the income approach based on the present value of expected future cash flows. The Company’s cash flow assumptions consider historical and forecasted revenue and operating costs and other relevant factors.

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Notes (continued)

Revenue

Revenue is recognized when earned and non-refundable, when payment is reasonably assured, and when there is no future obligation with respect to the revenue, in accordance with the terms prescribed in the applicable contract. Advance payments received in excess of amounts earned are classified as deferred revenue until earned. Up-front fees are deferred and amortized to the income statement over the performance period. The performance period is the period over which the Company expects to provide services as determined by the contract provisions.

Research and Development

Research and development costs are expensed as incurred.

Share-based Compensation

To determine the fair value of share-based payment awards, the Company uses a binomial option-pricing model for its stock options and the Black-Scholes option-pricing model for its EEPP awards. The determination of fair value using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables. Share-based compensation expense is recognized on a straight-line basis over the requisite service period for each award. Further, share-based compensation expense recognized in the Consolidated Statements of Operations is based on awards expected to vest and therefore the amount of expense has been reduced for estimated forfeitures. If actual forfeitures differ from estimates at the time of grant they will be revised in subsequent periods. The Company bases its assumptions on historical data when available or when not available, on a peer group of companies. If factors change and different assumptions are employed in determining the fair value of share-based awards, the share-based compensation expense recorded in future periods may differ significantly from what was recorded in the current period (see Note 7 for further information).

Total share-based compensation expense recorded in these Consolidated Financial Statements for the years ended December 31, 2012 and 2011 was allocated to the Company based on awards from Elan equity plans granted to Elan employees who have, directly or indirectly, provided services to the Company.

With respect to Elan options and RSUs held by Elan employees that became employees of Prothena effective upon the separation and distribution:

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Notes (continued)

Share-based Compensation (continued)

However, for Elan employees who are aged 55 or over with at least five years of service and who became employees of the Company, unvested Elan options and RSUs became fully vested and exercisable upon the separation and distribution, with the RSUs (which, by their terms, are settled upon vesting) settled in Elan ordinary shares or Elan ADSs in accordance with their terms, and with Elan options being exercisable for one year following the separation and distribution. Similarly, unvested Elan options and RSUs held by Dr. Schenk, became fully vested and exercisable upon the separation and distribution, with the RSUs (which, by their terms are settled upon vesting) settled in Elan ordinary shares or Elan ADSs in accordance with their terms, and with Elan options being exercisable for two years following the separation and distribution.

The Company will not recognize any expense going forward in relation to the existing Elan equity-based awards as the Company’s employees are not required to provide service after the separation and distribution in order to receive the awards. The share-based compensation expense relating to the changes described above is a non-recurring charge that is directly attributable to Elan as part of the separation and distribution of the Prothena Business, therefore it was not recorded in the Company’s financial statements.

Income Taxes

The operations of the Prothena Business were historically included in Elan’s consolidated U.S. federal and state income tax returns and in tax returns of certain Elan foreign subsidiaries. Income taxes reflected in these financial statements have been calculated as if the business were a separate taxable group for the periods presented and consistent with the asset and liability method prescribed by ASC 740 “Income Taxes,” (“ASC 740”).

Deferred tax assets (“DTAs”) and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using the enacted tax rates projected to be in effect for the year in which the differences are expected to reverse. DTAs are recognized for the expected future tax consequences, for all deductible temporary differences and operating loss carry-forwards. A valuation allowance is required for DTAs if, based on available evidence, it is more likely than not that all or some of the asset will not be realized due to the inability to generate sufficient future taxable income.

Significant estimates are required in determining our provision for income taxes. Some of these estimates are based on management’s interpretations of jurisdiction-specific tax laws or regulations. Various internal and external factors may have favorable or unfavorable effects on the future effective income tax rate of the business. These factors include, but are not limited to, changes in tax laws, regulations and/or rates, changing interpretations of existing tax laws or regulations, changes in estimates of prior years’ items, past and future levels of R&D spending and changes in overall levels of income before taxes.

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Notes (continued)

Income Taxes

The tax benefit from an uncertain tax position is recognized only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. Interest and penalties related to unrecognized tax benefits are accounted for in income tax expense.

Net Loss Per Share

Basic net loss per share is calculated by dividing net loss by the weighted-average number of ordinary shares outstanding during the period. Diluted net loss per share is equal to basic net loss per share as the Company had no potentially dilutive securities outstanding for any of the periods presented. Prior to the separation and distribution, the Company operated as part of Elan and not as a separate entity. As a result, the Company did not have any ordinary shares outstanding prior to December 21, 2012. The calculation of basic and diluted net loss per share assumes that the 14,497,000 shares issued to Elan shareholders in connection with the separation from Elan have been outstanding for all periods presented and that the 3,182,000 shares purchased by Elan upon separation have been outstanding since December 20, 2012.

Net loss per share was determined as follows during the years ended December 31 (in thousands, except per share amounts):

Comprehensive Loss

Comprehensive loss is comprised of net loss and other comprehensive income (loss). The Company has no components of other comprehensive income (loss), and accordingly, net loss equals comprehensive loss for all periods presented.

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Notes (continued)

Segment, Geographical and Customer Concentration

The Company operates in one segment. The Company’s chief operating decision maker (the “CODM”), its Chief Executive Officer, manages the Company’s operations on a consolidated basis for purposes of allocating resources. When evaluating the Company’s financial performance, the CODM reviews all financial information on a consolidated basis. All of the Company’s principal operations and decision-making functions are located in the United States.

The Company’s revenues have been from Ireland for all periods presented, while all of its assets were held in the United States. Revenue recorded in the statements of operations consists of fees earned from the provision of non-clinical research support to Elan, primarily in the areas of safety, toxicology and regulatory. The fees charged to Elan were calculated based on the expenses incurred by the Company in the provision of those R&D services, plus a contractually determined mark-up of those expenses.

Recent Accounting Pronouncements

In May 2011, the FASB issued ASU No. 2011-04, “Fair Value Measurement (“Topic 820”): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”, which results in common fair value measurement and disclosure requirements in U.S. GAAP and IFRS. The amendments change the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. Some of the amendments clarify the FASB’s intent about the application of existing fair value measurement requirements while other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The adoption of ASU 2011-04 impacts the Company’s disclosures but did not have a material impact on its financial position, results of operations or cash flows. This standard was adopted by the Company during the year ended December 31, 2011.

Fair value is the amount at which a financial instrument could be exchanged in an arms-length transaction between informed and willing parties, other than in a forced or liquidation sale. The following financial instruments are not measured at fair value on the Company’s Consolidated Balance Sheet at December 31, 2012, but require disclosure of their fair values: accounts receivable, accounts payable and accrued expenses. The estimated fair value of such instruments at December 31, 2012 approximates their carrying value as reported on the Consolidated Balance Sheet. The fair values of such financial instruments are determined using the income approach based on the present value of estimated future cash flows. There have been no changes in the Company’s valuation technique during the year ended December 31, 2012. The fair value of all of these instruments would be categorized as Level 2 of the fair value hierarchy.

The fair value of financial assets and liabilities is measured under a framework that establishes “levels” which are defined as follows: Level 1 fair value is determined from observable, quoted prices in active markets for identical assets or liabilities. Level 2 fair value is determined from quoted prices for similar items in active markets or quoted prices for identical or similar items in markets that are not active. Level 3 fair value is determined using the entity’s own assumptions about the inputs that market participants would use in pricing an asset or liability. The Company did not have any investment holdings prior to the separation and distribution of the Prothena Business from Elan on December 20, 2012.

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Notes (continued)

The Company’s level 2 securities are valued using third-party pricing sources, which consisted of $103.5 million in money market funds included in cash and cash equivalents at December 31, 2012. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities, prepayment/default projections based on historical data and other observable inputs. The Company validates the prices provided by its third-party pricing services by understanding the models used, obtaining market values from other pricing sources, analyzing pricing data in certain instances and confirming those securities traded in active markets.

There were no other-than-temporary impairments during the years ended December 31, 2012 and 2011.

Property and Equipment

Property and equipment consisted of the following at December 31 (in thousands):

Depreciation expense was $447,000 and $377,000 for the years ended December 31, 2012 and 2011, respectively.

Intangible Assets

Intangible assets consisted of the following at December 31 (in thousands):

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Notes (continued)

Intangible Assets (continued)

Intangible assets are amortized on a straight line basis over their expected life, which we estimate to be four years. Amortization expense was $21,000 and $14,000 for the years ended December 31, 2012 and 2011, respectively. The estimated aggregate amortization expense for 2013, 2014 and 2015 is $21,000, $21,000 and $7,000, respectively.

Other Non-current Assets

Certain employees that provided services to the Prothena Business prior to the separation and distribution participated in Elan’s deferred compensation plans. Other non-current assets at December 31, 2011 are primarily comprised of assets relating to these plans. These plan assets, and the associated obligation to plan participants, were retained by Elan at the time of the separation and distribution.

Other Current Liabilities

Other current liabilities consisted of the following at December 31 (in thousands):

Non-current Liabilities

Non-current liabilities consisted of the following at December 31 (in thousands):

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Notes (continued)

Building Lease

In March 2010, Elan entered into a lease agreement for certain premises within a building in South San Francisco, California with a commencement date in November 2010 and a ten year lease term. The lease, as amended, provides for approximately 36,500 of rentable square feet at a base rent that increases annually. In connection with the separation and distribution, this lease agreement was assigned to Prothena Biosciences, Inc. Rental payments on operating leases are charged to expense on a straight-line basis over the period of the lease.

Future minimum rental commitments under the operating lease were as follows at December 31, 2012 (in thousands):

Rent expense for years ended December 31, 2012 and 2011 was $1,317,000 and $1,530,000, respectively.

Purchase Commitments

The Company had commitments to suppliers for purchases totalling $1,298,000 at December 31, 2012.

Ordinary Shares

At December 31, 2012, the Company had 100,000,000 ordinary shares authorized for issuance with a par value of $0.01 per share and 17,679,182 shares issued and outstanding. Each ordinary share is entitled to one vote and, on a pro rata basis, to dividends when declared and the remaining assets of the Company in the event of a winding up.

Issuance of Ordinary shares

On December 20, 2012, in connection with the separation and distribution, the Company issued 14,496,929 ordinary shares to holders of record of Elan ordinary shares and Elan American Depository Shares. Concurrently, the Company issued 3,182,253 ordinary shares to Elan for cash consideration of $26.0 million.

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Notes (continued)

Euro Deferred Shares

At December 31, 2012, the Company had 10,000 euro deferred shares authorized for issuance with a nominal value of €22 per share, 1,750 shares were issued and no shares are outstanding at December 31, 2012 as the issued shares were redeemed by the Company and cancelled after the distribution on December 20, 2012. The rights and restrictions attaching to the euro deferred shares rank pari passu with the ordinary shares and are treated as a single class in all respects.

The Prothena Corporation plc 2012 Long Term Incentive Plan

The Company’s 2012 Long Term Incentive Plan (“LTIP”) provides for the issuance of common share-based awards, including restricted shares, restricted share units, share options, share appreciation rights and other equity-based awards, to its employees, officers, directors and consultants. Under the plan, the Company is authorized to issue a total of 2,650,000 shares. As of December 31, 2012, the Company has not issued any share-based equity awards to its employees under the Company’s LTIP.

Elan’s Share-based Compensation Awards

Prior to the separation and distribution of the Prothena Business on December 20, 2012, the Company’s employees had received share-based compensation awards under Elan’s equity compensation plans and, therefore, the following disclosures pertain to share-based compensation expense that was allocated to the Prothena Business related to Elan’s share-based equity awards. Elan’s equity award program provided for the issuance of share options, RSUs and other equity awards to its employees, including employees that have directly and indirectly provided service to the Prothena Business. The share-based payment compensation expense recognized in these Consolidated Financial Statements includes all of the share-based payment expenses directly attributable to the Prothena Business and an allocation of indirect expenses that have been deemed attributable to the Prothena Business for all periods presented. The Company will not recognize any expense going forward in relation to the existing Elan equity-based awards as its employees are not required to provide service after the separation and distribution in order to receive the awards.

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Notes (continued)

The following table summarizes share-based compensation expense recognized during the years ended December 31 (in thousands):

Share-based Compensation Expense

Share-based compensation expense is measured and recognized based on estimated grant date fair values. These awards include employee stock options and RSUs, and stock purchases related to Elan’s employee equity purchase plan (“EEPP”). Share-based compensation cost for stock options and ordinary shares issued under Elan’s EEPP is estimated at the grant date based on each option’s fair value as calculated using an option-pricing model. Share-based compensation cost for RSUs is measured based on the closing fair market value of Elan’s ordinary shares on the date of grant. The value of awards expected to vest is recognized as an expense over the requisite service periods. Estimating the fair value of share-based awards as of the grant or vest date using an option-pricing model, such as the binomial model, is affected by Elan’s share price as well as assumptions regarding a number of complex variables. These variables include, but are not limited to, the expected share price volatility over the term of the awards, risk-free interest rates, and actual and projected employee exercise behaviors.

The following table summarizes share-based compensation expense related to award type during the years ended December 31 (in thousands):

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Notes (continued)

Restricted Share Units

Elan granted RSUs to its employees, including employees that have directly and indirectly provided service to the Prothena Business. The RSUs generally vest between one and three years from the grant date and shares are issued to RSU holders as soon as practicable following vesting. The fair value of services received by the Prothena Business in return for the RSUs is measured by reference to the fair value of the underlying shares at grant date. The total fair value expensed over the vesting terms of RSUs that became fully vested was $506,000 and $1,069,000 in 2012 and 2011, respectively.

The non-vested RSUs relating to the employees that provided directly attributable service to the Prothena Business are summarized as follows (in thousands, except fair value amounts):

Stock Options

Stock options are granted at the price equal to the market value at the date of grant and will expire on a date not later than 10 years after their grant. Options generally vest between one and four years from the grant date.

The following table summarizes the number of options outstanding as of December 31 that were held by the employees that provided directly attributable service to the Prothena Business (in thousands):

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Notes (continued)

The total stock options outstanding, vested and expected to vest, and exercisable that are held by the employees that provided directly attributable service to the Prothena Business are summarized as follows: