13D Filing: James E. Flynn and Proteon Therapeutics Inc (PRTO)

Page 12 of 17

This Amendment No. 3 (this “Amendment”)
to Schedule 13D amends the Schedule 13D (as previously amended, the “Schedule 13D”) filed by (i) Deerfield Mgmt,
L.P. (“Deerfield Mgmt”), (ii) Deerfield Management Company, L.P. (“Deerfield Management”),
(iii) Deerfield Mgmt III, L.P. (“Deerfield Mgmt III”), (iv) Deerfield Special Situations Fund, L.P. (“Deerfield
Special Situations Fund”), (v) Deerfield Partners, L.P. (“Deerfield Partners”), (vi) Deerfield International
Master Fund, L.P. (“Deerfield International Master Fund”), (vii) Deerfield Private Design Fund III, L.P. (“Deerfield
Private Design Fund III”), (viii) Deerfield Private Design Fund IV, L.P. (“Deerfield Private Design Fund IV”),
(ix) Deerfield Mgmt, L.P. (“Deerfield Mgmt IV”) and (x) James E. Flynn (“Flynn” and, collectively
with Deerfield Mgmt, Deerfield Management, Deerfield Mgmt III, Deerfield Special Situations Fund, Deerfield Partners, Deerfield
International Master Fund, Deerfield Private Design Fund III, Deerfield Private Design Fund IV and Deerfield Mgmt IV, the “Reporting
Persons”), with respect to the securities of Proteon Therapeutics, Inc., as amended by Amendment Nos. 1 and 2 to the
Schedule 13D filed on August 4, 2017 and August 22, 2017. Deerfield Special Situations Fund, Deerfield Partners, Deerfield International
Master Fund, Deerfield Private Design Fund III and Deerfield Private Design Fund IV are collectively referred to herein as the
“Funds”.

Capitalized terms used herein but not otherwise
defined herein shall have the meanings ascribed to them in the Schedule 13D.

Item 3.

Source and Amount of Funds or Other Consideration.

Item 3 of the Schedule 13D is hereby
amended by adding the following:

On December 1, 2017, Deerfield Partners
purchased from Deerfield International Master Fund 110,557 shares of Common Stock in a private transaction for an aggregate purchase
price of $193,474.75. Deerfield Partners utilized cash on hand to fund the purchase price for such shares.

Item 5.

Interests in Securities of the Issuer

Items 5(a), (b) (c) and (e) of the Schedule
13D are hereby amended and restated as follows:

(a)

(1) Deerfield Management

Number of shares: 17,306,917

Percentage of shares: 9.985%*

(2) Deerfield Mgmt

Number of shares: 347,100

Percentage of shares: 1.97%*

(3) Deerfield Mgmt III

Number of
Shares: 877,799

Percentage
of Shares: 4.98%*