Palatin Reports Second Quarter Fiscal Year 2024 Financial Results and Provides Corporate Update
- Palatin Technologies is concentrating on advancing its Melanocortin Receptor System Pipeline with multiple topline data readouts scheduled for 2024.
- The company successfully divested Vyleesi for up to $171 million and completed a Registered Direct Offering, raising $10 million.
- Palatin reported a 64% increase in gross product sales and a 98% increase in net product revenue for Vyleesi for the quarter ended December 31, 2023.
- The company incurred operating expenses of $0.9 million, with a net loss of $7.8 million for the same period.
- Palatin's cash, cash equivalents, and marketable securities were $9.5 million as of December 31, 2023, excluding $9.2 million in net proceeds from the Registered Direct Offering.
- The company believes its current cash reserves will be adequate to cover operating expenses into the second half of calendar year 2024.
- Palatin reported a net loss of $7.8 million for the quarter ended December 31, 2023, compared to a net income of $2.7 million for the same period last year.
- The company recognized a fair value adjustment loss of $8.1 million for the quarter ended December 31, 2023.
- Palatin's net cash used in operations was $10.5 million for the quarter ended December 31, 2023, higher than the $9.7 million used for the same period last year.
Insights
The recent financial results from Palatin Technologies indicate a mixed performance, with a noteworthy 64% increase in gross product sales and 98% increase in net product revenue for Vyleesi over the same quarter last year. This substantial growth in revenue could be interpreted as a positive signal for investors, reflecting an uptrend in product acceptance and market penetration. However, the net loss of $7.8 million compared to net income in the previous year highlights the volatility inherent in the biopharmaceutical sector, particularly for companies like Palatin that are in the stages of developing and commercializing new drugs.
While the gain on the sale of Vyleesi to Cosette Pharmaceuticals has contributed positively to the financials, the loss from the change in fair value of warrant liabilities has had a significant adverse effect. The amendment of warrant terms and the expected reclassification of warrant liabilities to additional paid-in capital could alleviate some concerns regarding financial stability. Investors should monitor the company's cash flow closely, as the reported increase in net cash used in operations and the necessity for financing through equity offerings could dilute current share value.
Palatin's strategic pivot to focus on its melanocortin receptor (MCR) system pipeline is a critical development. The MCR system is a promising target in treating various conditions, including dry eye disease, ulcerative colitis and diabetic kidney disease, which are areas with significant unmet medical needs. The anticipation of topline data from the MELODY-1 pivotal Phase 3 study in Dry Eye Disease (DED) is of particular interest, as positive results could position Palatin as a key player in the DED market.
Furthermore, the initiation of Phase 2 trials for obesity and male sexual dysfunction represents diversification within Palatin's pipeline, potentially mitigating risk and opening additional revenue streams. The company's ability to retain rights to bremelanotide for obesity and male erectile dysfunction post-Vyleesi sale underscores a strategic approach to asset management, preserving future commercial opportunities.
From a market perspective, Palatin's progress in clinical trials and strategic divestitures is likely to influence investor sentiment. The successful completion of the asset sale of Vyleesi and the upcoming clinical trial readouts serve as potential catalysts for stock valuation. The market for treatments in the therapeutic areas targeted by Palatin, such as DED and ulcerative colitis, is competitive but growing and the entry of new, effective treatments can disrupt existing market dynamics.
Investors should consider the implications of clinical trial outcomes on the company's market position. Positive data from the MELODY-1 study and subsequent Phase 2 trials could lead to significant appreciation in stock value, while any setbacks might adversely affect investor confidence. Additionally, the entry into obesity and erectile dysfunction markets could tap into substantial patient populations, offering long-term growth potential contingent on successful trial outcomes and subsequent regulatory approvals.
- Palatin's Focus is Solely on the Development of its Melanocortin Receptor (MCR) System Pipeline
- PL9643 MELODY-1 Pivotal Phase 3 Study in Dry Eye Disease (DED)
– Topline Data Expected in February - Oral PL8177 Phase 2 Clinical Study in Patients with Ulcerative Colitis
– Interim Analysis Expected in 2Q Calendar Year 2024
– Topline Results Expected in 2H Calendar Year 2024 - BMT 701 Phase 2 BREAKOUT study in patients with diabetic kidney disease
– Topline results expected in the second quarter of calendar year 2024 - Obesity: Combination of an MCR4 Agonist + glucagon like peptide-1 (GLP-1)
– Phase 2 Clinical Study Targeted to Start 1Q Calendar Year 2024 - Male Sexual Dysfunction: Bremelanotide Co-Formulated with a PDE5i for the Treatment of ED in Patients that do not Respond to PDE5i Monotherapy
– Phase 2 Clinical Study Targeted to Start 1Q Calendar Year 2024
- PL9643 MELODY-1 Pivotal Phase 3 Study in Dry Eye Disease (DED)
- Vyleesi®
- Completed Asset Sale to Cosette Pharmaceuticals for up to
$171 Million
–$12 Million $159 Million
- Completed Asset Sale to Cosette Pharmaceuticals for up to
- Closed on Gross Proceeds of
$15 Million - Teleconference and Webcast to be held on February 15, 2024, at 11:00 AM ET
"With the planned divestiture of Vyleesi completed, our focus is solely on advancing our robust melanocortin-based development and clinical pipeline," said Carl Spana, Ph.D., President and CEO of Palatin. "We have multiple topline data result readouts in the near future, notably our MELODY-1 pivotal Phase 3 dry eye disease trial, our Phase 2 ulcerative colitis trial and our Phase 2 diabetic kidney disease study.
Dr. Spana further commented, "We are also excited to commence two new clinical trials in the first half of calendar year 2024, with topline data readouts in the second half of calendar year 2024. The first is a Phase 2 clinical study of a MCR4 agonist plus a GLP-1 in obese patients. The second is a Phase 2 clinical study evaluating bremelanotide co-formulated with a PDE5i, for the treatment of erectile dysfunction in patients that do not respond to PDE5i monotherapy."
Fiscal Second Quarter Ended December 31, 2023 Business Highlights and Recent Updates
Anti-Inflammatory / Autoimmune Programs (melanocortin agonists)
- PL9643 MELODY-1 pivotal Phase 3 study for the treatment of dry eye disease (DED)
- Database lock completed (575 patients enrolled)
- Topline data readout expected in February
- Additional trial information, including inclusion and exclusion criteria, can be found at https://clinicaltrials.gov/ via the identifier NCT04268069
- PL8177 Phase 2 oral formulation for the treatment of ulcerative colitis (UC):
- Interim assessment expected in the second quarter of calendar year 2024
- Topline data readout expected in the second half of calendar year 2024
- Additional trial information, including inclusion and exclusion criteria, can be found at https://clinicaltrials.gov/ via the identifier NCT05466890
- Bremelanotide Phase 2 BREAKOUT study (BMT 701) in patients with diabetic kidney disease:
- Topline results expected in the second quarter of calendar year 2024
- Additional trial information, including inclusion and exclusion criteria, can be found at https://clinicaltrials.gov/ via the identifier NCT05709444
Metabolic Program (Obesity):
- Presented positive data with bremelanotide, a melanocortin receptor 4 (MCR4) agonist plus glucagon like peptide-1 (GLP-1) showing increased weight loss and greater glucose control above monotherapy:
- Phase 2 clinical study targeted to start in the first half of calendar year 2024
- Topline data readout expected in the second half calendar year 2024
- Initiation of investigational new drug (IND) enabling activities for a novel MCR4 selective long-acting agonist expected in the second half of calendar 2024.
Sexual Health Program (Male Sexual Dysfunction)
- Initiation of clinical program framework for the evaluation of bremelanotide co-formulated with PDE5 inhibitor (PDE5i), for the treatment of erectile dysfunction (ED) in patients that do not respond to PDE5i monotherapy:
- Phase 2 clinical study in PDE5i non-responder ED patients expected to commence in the first half of calendar year 2024
- Topline data readout expected in the second half of calendar year 2024
Vyleesi® (bremelanotide injection) / Hypoactive Sexual Desire Disorder (HSDD)
- Completed asset sale to Cosette Pharmaceuticals for up to
$171 million $12 million $159 million $15 million $200 million - Palatin retained rights and use of bremelanotide for obesity and male erectile dysfunction indications
Other:
- Registered Direct Offering: On January 30, 2024, Palatin entered into a securities purchase agreement with healthcare-focused institutional investors, selling and issuing an aggregate of 1,831,503 shares of Palatin common stock,
$0.01 $5.46 $5.46 $10 million - Registered Direct Offering: On October 23, 2023, Palatin entered into a securities purchase agreement with an institutional investor, selling and issuing an aggregate of 2,358,491 shares of Palatin common stock,
$0.01 $2.12 $2.12 $5 million
Fiscal Second Quarter Ended December 31, 2023 Financial Results
Revenue
Total revenue consists of gross product sales of Vyleesi, net of allowances and accruals.
Vyleesi gross product sales to pharmacy distributors for the quarter ended December 31, 2023 were
Operating Expenses
Total operating expenses were
Other Income / (Expense)
Total other income / (expense), net, consists mainly of the change in fair value of warrant liabilities, which Palatin has recorded as a liability on the consolidated financial statements, including the revisions of certain prior period amounts to correct a misstatement with respect to classifying warrants as equity instead of a liability. The statement of operations is adjusted each quarter to reflect changes in the fair value of these warrants. For the quarters ended December 31, 2023, and 2022, Palatin recorded a fair value adjustment loss of
Warrant Liabilities
Palatin has assessed the impact of improperly classifying the warrants related to the October 2022 financing within equity, rather than as a warrant liability that is adjusted through charges or credits to the statement of operations to reflect changes in the fair value of the warrants, and determined the impact is not material, quantitatively or qualitatively, to any prior period impacted. Accordingly, the Company will adjust prior periods as those financial statements are presented for comparative purposes in future filings.
On January 24, 2024, the Company and warrant holders amended the terms of the warrants related to the October 2022 and October 2023 financings. As a result, the
Cash Flows
Palatin's net cash used in operations was
Net Loss
Palatin's net loss was
The change to net loss over the comparable quarter last year was due to several factors, including an increase in net product revenue of Vyleesi of
Cash Position
As of December 31, 2023, Palatin's cash, cash equivalents and marketable securities were
The
Conference Call / Webcast
Palatin will host a conference call and audio webcast on February 15, 2024, at 11:00 a.m. Eastern Time to discuss the results of operations in greater detail and provide an update on corporate developments. Individuals interested in listening to the conference call live can dial 1-888-506-0062 (US) or 1-973-528-0011 (International), conference ID 397299. The audio webcast and replay can be accessed by logging on to the "Investor-Webcasts" section of Palatin's website at http://www.palatin.com or by clicking here. A telephone and audio webcast replay will be available one hour after the completion of the call. To access the telephone replay, dial 1-877-481-4010 (US) or 1-919-882-2331 (International), passcode 49945. The webcast and telephone replay will be available through February 29, 2024.
About Melanocortin Receptor Agonists
The melanocortin receptor ("MCR") system has effects on inflammation, immune system responses, metabolism, food intake, and sexual function. There are five melanocortin receptors, MC1R through MC5R. Modulation of these receptors, through use of receptor-specific agonists, which activate receptor function, or receptor-specific antagonists, which block receptor function, can have medically significant pharmacological effects.
Many tissues and immune cells located in the eye (and other places, for example the gut and kidney) express melanocortin receptors, empowering our opportunity to directly activate natural pathways to resolve disease inflammation.
About Palatin
Palatin is a biopharmaceutical company developing first-in-class medicines based on molecules that modulate the activity of the melanocortin receptor systems, with targeted, receptor-specific product candidates for the treatment of diseases with significant unmet medical need and commercial potential. Palatin's strategy is to develop products and then form marketing collaborations with industry leaders to maximize their commercial potential. For additional information regarding Palatin, please visit Palatin's website at www.Palatin.com and follow Palatin on Twitter at @PalatinTech.
Forward-looking Statements
Statements in this press release that are not historical facts, including statements about future expectations of Palatin Technologies, Inc., such as statements about market potential of Vyleesi and other Palatin products in development, clinical trial results, potential actions by regulatory agencies including the FDA, regulatory plans, development programs, proposed indications for product candidates, and market potential for product candidates are "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and as that term is defined in the Private Securities Litigation Reform Act of 1995. Palatin intends that such forward-looking statements be subject to the safe harbors created thereby.
Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause Palatin's actual results to be materially different from its historical results or from any results expressed or implied by such forward-looking statements. Palatin's actual results may differ materially from those discussed in the forward-looking statements for reasons including, but not limited to, results of clinical trials, regulatory actions by the FDA and other regulatory and the need for regulatory approvals, Palatin's ability to fund development of its technology and establish and successfully complete clinical trials, the length of time and cost required to complete clinical trials and submit applications for regulatory approvals, products developed by competing pharmaceutical, biopharmaceutical and biotechnology companies, commercial acceptance of Palatin's products, and other factors discussed in Palatin's periodic filings with the Securities and Exchange Commission. Palatin is not responsible for updating events that occur after the date of this press release.
Palatin Technologies® is a registered trademarks of Palatin Technologies, Inc.
PALATIN TECHNOLOGIES, INC | |||||||
and Subsidiary | |||||||
Consolidated Statements of Operations | |||||||
(unaudited) | |||||||
Three Months Ended December 31, | Six Months Ended December 31, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
REVENUES | |||||||
Product revenue, net | $ 2,034,113 | $ 1,026,416 | $ 4,140,090 | $ 1,896,070 | |||
OPERATING EXPENSES | |||||||
Cost of products sold | 97,637 | 98,707 | 97,637 | 185,203 | |||
Research and development | 5,554,200 | 4,367,538 | 10,568,830 | 10,394,569 | |||
Selling, general and administrative | 3,032,613 | 3,174,344 | 6,232,857 | 6,683,142 | |||
Gain on sale of Vyleesi | (7,823,482) | - | (7,823,482) | - | |||
Gain on purchase commitment | - | (1,027,322) | - | (1,027,322) | |||
Total operating expenses | 860,968 | 6,613,267 | 9,075,842 | 16,235,592 | |||
Income (loss) from operations | 1,173,145 | (5,586,851) | (4,935,752) | (14,339,522) | |||
OTHER INCOME (EXPENSE) | |||||||
Investment income | 62,026 | 186,473 | 133,656 | 274,962 | |||
Foreign currency loss | (306,697) | (693,231) | (146,947) | (274,855) | |||
Interest expense | (1,605) | (5,487) | (12,487) | (15,089) | |||
Offering expenses | (696,912) | (1,115,765) | (696,912) | (1,115,765) | |||
Change in fair value of warrant liabilities | (8,073,991) | 5,247,308 | (7,391,591) | 5,247,308 | |||
Total other (expense) income, net | (9,017,179) | 3,619,298 | (8,114,281) | 4,116,561 | |||
(Loss) Income before income taxes | (7,844,034) | (1,967,553) | (13,050,033) | (10,222,961) | |||
Income tax benefit | - | 4,674,999 | - | 4,674,999 | |||
NET (LOSS) INCOME | $ (7,844,034) | $ 2,707,446 | $ (13,050,033) | $ (5,547,962) | |||
Basic and diluted net (loss) income per common share | $ (0.56) | $ 0.25 | $ (0.99) | $ (0.54) | |||
Weighted average number of common shares | 14,097,757 | 10,802,863 | 13,134,228 | 10,215,616 | |||
PALATIN TECHNOLOGIES, INC | |||
and Subsidiary | |||
Consolidated Balance Sheets | |||
(unaudited) | |||
December 31, 2023 | June 30, 2023 | ||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 9,485,252 | $ 7,989,582 | |
Marketable securities | - | 2,992,890 | |
Accounts receivable | 2,346,163 | 2,915,760 | |
Inventories | - | 526,000 | |
Prepaid expenses and other current assets | 413,954 | 1,897,281 | |
Total current assets | 12,245,369 | 16,321,513 | |
Property and equipment, net | 550,465 | 684,910 | |
Right-of-use assets - operating leases | 702,003 | 876,101 | |
Other assets | 56,916 | 56,916 | |
Total assets | $ 13,554,753 | $ 17,939,440 | |
LIABILITIES AND STOCKHOLDERS' DEFICIENCY | |||
Current liabilities: | |||
Accounts payable | $ 1,593,476 | $ 4,303,527 | |
Accrued expenses | 5,614,247 | 6,511,059 | |
Short-term operating lease liabilities | 363,718 | 354,052 | |
Short-term finance lease liabilities | 99,912 | 106,392 | |
Other current liabilities | 3,528,050 | 3,856,800 | |
Total current liabilities | 11,199,403 | 15,131,830 | |
Long-term operating lease liabilities | 357,744 | 544,323 | |
Long-term finance lease liabilities | - | 46,014 | |
Other long-term liabilities | 1,106,700 | 2,083,200 | |
Warrant liabilities | 11,852,232 | 1,850,544 | |
Total liabilities | 24,516,079 | 19,655,911 | |
Contingently redeemable warrants | 423,100 | 263,400 | |
Stockholders' deficiency: | |||
Preferred stock of | |||
and outstanding designated as follows: | |||
Series A Convertible: authorized 4,030 shares as of December 31, 2023: issued and | |||
and outstanding 4,030 shares as of December 31, 2023 and June 30, 2023 | 40 | 40 | |
Common stock of | |||
issued and outstanding 14,305,137 shares as of December 31, 2023 and 11,656,714 | 143,051 | 116,567 | |
Additional paid-in capital | 413,552,953 | 409,933,959 | |
Accumulated deficit | (425,080,470) | (412,030,437) | |
Total stockholders' deficiency | (11,384,426) | (1,979,871) | |
Total liabilities and stockholders' deficiency | $ 13,554,753 | $ 17,939,440 | |
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SOURCE Palatin Technologies, Inc.
FAQ
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