Palatin Technologies reports net loss of $12.1 million for fourth quarter 2015

Palatin Technologies, Inc. (NYSE MKT: PTN), a biopharmaceutical company developing targeted, receptor-specific peptide therapeutics for the treatment of diseases with significant unmet medical need and commercial potential, today announced results for its fourth quarter and fiscal year ended June 30, 2015.

Fiscal Year Ended June 30, 2015 and Recent Highlights

• Bremelanotide development for Female Sexual Dysfunction (FSD):
  • Palatin initiated Protocols 301 and 302 of its Phase 3 reconnect study in the United States and Canada for the treatment of FSD in December 2014 and January 2015, respectively. Further information on the trial protocols can be found at clinicaltrials.gov.
    • The two Phase 3 studies are progressing as planned and meeting target objectives.
    • Enrollment is greater than 50% to date and is expected to be completed in the fourth quarter of calendar year 2015.
    • Top-line data is expected to be available in the third quarter of calendar year 2016.
    • The clinical trials are designed to randomize approximately 1100 women (~550 per trial) to evaluate the efficacy and safety of subcutaneous bremelanotide in premenopausal women with hypoactive sexual desire disorder as an on-demand, as-needed treatment. For further information visit reconnectstudy.com.

• Business Development
  • FSD Program
    • August 2014, Palatin entered into a license agreement with Gedeon Richter (Richter) to co-develop and commercialize bremelanotide for FSD in the European Union, other European countries and additional selected countries. Palatin received €7.5 million ($9.8 million) in total upfront payments from Richter, and a milestone payment of €2.5 million ($3.1 million) upon the initiation of its Phase 3 clinical trial program in the United States.
    • September 2015, Palatin entered into a termination agreement pursuant to which Palatin and Richter agreed to mutually and amicably terminate the license agreement. In connection with this termination, all rights and licenses to co-develop and commercialize bremelanotide for FSD indications held by Richter have terminated and reverted back to Palatin. Neither we nor Gedeon Richter have any future material obligations under the license agreement. There are no payment or reimbursement obligations as a result of the license agreement termination.
    • Palatin now has the global rights to bremelanotide for FSD, providing the Company and its business development efforts with additional options and flexibility.
    • Palatin is actively engaged in licensing and collaboration discussions with multiple companies for both global and regional commercial rights to bremelanotide.
  • Natriuretic Peptide Program for Heart Failure (HF)
    • Palatin is advancing its lead compound, PL-3994, towards a Phase 2A multiple dose study in HF patients.
    • The Company is actively engaged in licensing and collaboration discussions with multiple companies for both global and regional rights.
  • MC1r Anti-Inflammatory Program
    • Palatin is advancing its lead compound, PL-8177, towards a Phase 1 clinical trial.
    • The Company is actively engaged in licensing and collaboration discussions with multiple companies for both global and regional rights.
  • MC4r Agonist Program for Obesity/Diabetes
    • The research collaboration and license agreement dated January 2007 with AstraZeneca (AZ) expired because AZ ceased developing a compound covered by the agreement. All rights and licenses that we granted to AZ were returned to Palatin upon expiration of the agreement.
    • Palatin is advancing its lead compound, PL-8905, towards a Phase 1 clinical trial.
    • The Company is actively engaged in licensing and collaboration discussions with multiple companies for both global and regional rights.
       
• Financing Transactions
  • July 2015, Palatin closed on $30 million of debt and equity financing consisting of:
    • $10 million venture loan, which includes an interest-only payment period for the first eighteen months of a four year secured term loan.
    • $20 million private placement of Series E warrants to purchase 21,917,808 shares of common stock and Series F warrants to purchase 2,191,781 shares of common stock.
  • December 2014, Palatin closed on $30 million of debt and equity financing consisting of:
    • $10 million venture loan, which includes an interest-only payment period for the first eighteen months of a four year secured term loan.
    • $20 million private placement of 2,050,000 shares of common stock and Series warrants to purchase 24,919,325 shares of common stock.

• Intellectual Property - Palatin obtained patents during the year:
  • U.S. Patent 8,828,926 issued September 9, 2014, claiming uses of Palatin's PL-3994 natriuretic peptide receptor product candidate for treatment of acute asthma and chronic obstructive pulmonary disease.
  • U.S. Patent 8,846,601 issued September 30, 2014, claiming melanocortin receptor 4 specific peptides with potential utility for treatment of obesity, metabolic syndrome, diabetes and sexual dysfunction.
  • U.S. Patent 8,877,890 issued November 2014, claiming melanocortin receptor-1 cyclic peptides with potential application in treatment of inflammatory and dermatologic disease indications.
  • U.S. Patent 8,933,194 issued January 13, 2015, claiming linear melanocortin receptor 1 specific peptides
     
• In December 2014, Palatin received $0.5 million in net proceeds from the sale of New Jersey State net operating loss carryforwards.

Fourth Quarter and Fiscal Year Ended 2015 Results

Palatin reported a net loss of $12.1 million, or $(0.09) per basic and diluted share, for the quarter ended June 30, 2015, compared to a net loss of $4.3 million, or $(0.04) per basic and diluted share, for the same period in 2014.

The increase in net loss for the quarter ended June 30, 2015 compared to the net loss for the quarter ended June 30, 2014 was the result of an increase in operating expenses primarily related to our bremelanotide for FSD Phase 3 development program.

For the year ended June 30, 2015, Palatin reported a net loss of $17.7 million, or $(0.15) per basic and diluted share compared to a net loss of $13.9 million, or $(0.13) per basic and diluted share for the year ended June 30, 2014.

The increase in net loss for the year ended June 30, 2015, compared to the net loss for the year ended June 30, 2014 was mainly attributable to the development costs for the initiation and progression of the Phase 3 clinical trials of bremelanotide for FSD.

Revenue

For the year ended June 30, 2015, Palatin recognized $12.9 million of license and contract revenue under the agreement with Gedeon Richter. There were no revenues recorded in the quarter ended June 30, 2015 or in the year ended June 30, 2014.

Operating Expenses

Operating expenses for the quarter ended June 30, 2015 were $11.8 million, compared to $4.3 million for the comparable quarter of 2014. For the year ended June 30, 2015, Palatin incurred $30.2 million of operating expenses, compared to $15.8 million for the year ended June 30, 2014.

The increase in operating expenses for the year and quarter ended June 30, 2015 was primarily the result of higher period costs related to Phase 3 clinical trial program costs for bremelanotide for the treatment of FSD.

Cash Position

Palatin's cash and cash equivalents were $27.3 million as of June 30, 2015 compared to cash and cash equivalents of $12.2 million at June 30, 2014. Current liabilities were $7.4 million as of June 30, 2015, compared to $1.8 million, net of $1.0 million of deferred income, as of June 30, 2014.

Palatin believes that its existing capital resources, together with approximately $29.7 million received from the July 2015 financings will be adequate to fund planned operations through the quarter ending September 30, 2016. Assuming the Phase 3 clinical trials of bremeloanotide for FSD are successful, as to which there can be no assurance, the Company will need additional funding to complete submission of required regulatory applications to the FDA for bremelanotide for FSD.