CRANBURY, N.J., Feb. 9 /PRNewswire-FirstCall/ -- Palatin Technologies, Inc. announced today financial results for the second quarter ended December 31, 2005. Total revenues in the quarter ended December 31, 2005 were $4.6 million, compared to $4.8 million for the same period in 2004. Palatin reported a net loss of $7.4 million, or ($0.13) per basic and diluted share, for the quarter ended December 31, 2005, compared to a net loss of $2.3 million, or ($0.04) per basic and diluted share, for the same period in 2004. At December 31, 2005, the Company had cash and investments totaling $19.1 million.
The increase in the net loss for the quarter ended December 31, 2005 versus the quarter ended December 31, 2004 was primarily attributable to increased research and development costs related to bremelanotide (formerly PT-141), a drug under development for the treatment of erectile dysfunction (ED) and female sexual dysfunction (FSD), and inventory write-downs associated with the suspension of sales and marketing activities related to NeutroSpec(R), a radiopharmaceutical imaging agent previously approved in the United States for the diagnosis of equivocal appendicitis. In addition, the quarter ended December 31, 2004 included product sales of $1.3 million on shipments of NeutroSpec by the Company to Tyco Healthcare Mallinckrodt, the Company’s strategic collaboration partner. There were no such shipments in the current period.
“We are proceeding as planned to advance the commercial development program for bremelanotide (formerly PT-141), with two ED and two FSD clinical trials currently ongoing, and expanding pre-clinical activities for our other product candidates,” said Stephen T. Wills, chief financial officer of Palatin. “Additionally we are reviewing the relationship between NeutroSpec and the reported serious adverse events, as well as plans for other indications, most notably being osteomyelitis, in preparation for an FDA Advisory Panel meeting later this year.”
PRODUCT REVENUE AND ROYALTIES
For the quarter ended December 31, 2005, royalty revenue on Mallinckrodt’s commercial sales of NeutroSpec amounted to $0.6 million, compared to $0.2 million in the quarter ended December 31, 2004. In the current period, the Company recorded no product sales revenue from shipments of NeutroSpec to Mallinckrodt, versus $1.3 million in the quarter ended December 31, 2004.
LICENSE, GRANTS AND CONTRACTS
In the quarter ended December 31, 2005, revenue from licenses, grants and contracts was $4.0 million, consisting of $3.9 million related to bremelanotide pursuant to the Company’s collaboration agreement with King Pharmaceuticals, and $0.1 million from Mallinckrodt related to NeutroSpec. In the quarter ended December 31, 2004, revenue from licenses, grants and contracts was $3.3 million, all related to bremelanotide.
COSTS AND EXPENSES
Total operating expenses for the quarter ended December 31, 2005 were $12.9 million, compared to $7.8 million for the same period in 2004. Included in the current period was $2.0 million of NeutroSpec inventory write-downs related to the Company’s decision in December 2005 to suspend sales and marketing activities. In addition, development costs related to bremelanotide increased by $1.6 million, reflecting costs associated with clinical trials that were initiated in the current fiscal year. Other research and development costs, including expenses of the Company’s MIDAS(TM) programs, also increased.
CASH POSITION
Palatin’s cash and investments totaled $19.1 million as of December 31, 2005, compared to $18.1 million at June 30, 2005. In September 2005, the Company received $10.0 million from the sale of common stock and warrants to King, pursuant to its collaboration agreement.
Palatin Technologies’ management will discuss the second quarter financial results and provide an update on corporate developments during a Teleconference/Webcast on February 9, 2006 at 10:00 a.m. EST.
Teleconference & Webcast Access Information - Q2-Fiscal Year 2006 Conference Call - Live 2/9/2006 at 10:00 a.m. EST Domestic Dial-In Number 1-800-289-0572 International Dial-In Number 1-913-981-5543 - Q2-Fiscal Year 2006 Conference Call - Replay 2/9-2/16/2006 Domestic Dial-In Number 1-888-203-1112 International Dial-In Number 1-719-457-0820 Enter Pass Code I.D. 9373654 - Webcast Live and Replay Access http://www.palatin.com About Palatin Technologies, Inc.
Palatin Technologies, Inc. is a biopharmaceutical company primarily engaged in the development of melanocortin-based therapeutics. The Company’s internal research and development programs, anchored by its proprietary MIDAS(TM) technology, have provided product candidates for the treatment of sexual dysfunction, obesity, congestive heart failure, cachexia and diagnosis of sites of infection. Palatin’s strategy is to develop products and then form marketing collaborations with industry leaders in order to maximize their commercial potential. To date, the Company has formed partnerships with Tyco Healthcare Mallinckrodt and King Pharmaceuticals. For additional information regarding Palatin, please visit Palatin Technologies’ website at http://www.palatin.com.
Forward-looking Statements
Statements about the Company’s future expectations, including statements about its development programs, proposed indications for its product candidates, pre-clinical activities and regulatory plans, and all other statements in this document other than historical facts, 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. The Company intends that such forward-looking statements be subject to the safe harbors created thereby. Palatin’s actual results may differ materially from those discussed in the forward-looking statements for various reasons, including, but not limited to the Company’s ability to fund development of its technology, ability to establish and successfully complete clinical trials and pre- clinical studies and the results of those trials and studies, dependence on its partners for certain development activities, need for regulatory approvals and commercial acceptance of its products, ability to recommence marketing and gain commercial acceptance of NeutroSpec and ability to protect its intellectual property, and other factors discussed in the Company’s periodic filings with the Securities and Exchange Commission. The Company is not responsible for updating for events that occur after the date on this press release.
PALATIN TECHNOLOGIES, INC. Consolidated Statements of Operations (unaudited) Three Months Ended Six Months Ended December 31, December 31, 2005 2004 2005 2004 REVENUES: Royalties $593,347 $214,359 $1,508,862 $541,673 Product sales - 1,291,500 - 1,707,825 Licenses, grants and contracts 3,993,791 3,307,870 8,222,054 7,055,850 Total revenues 4,587,138 4,813,729 9,730,916 9,305,348 OPERATING EXPENSES: Cost of product sales 2,041,175 132,779 2,041,175 220,841 Royalties 116,666 87,512 299,995 159,394 Research and development 9,319,917 6,116,359 18,685,285 11,765,124 General and administrative 1,430,569 1,506,232 3,183,102 3,338,895 Total operating expenses 12,908,327 7,842,882 24,209,557 15,484,254 Loss from operations (8,321,189) (3,029,153) (14,478,641) (6,178,906) OTHER INCOME (EXPENSE): Investment income 217,018 167,346 341,240 279,634 Interest expense (5,676) (4,981) (8,102) (7,039) Total other income, net 211,342 162,365 333,138 272,595 Loss before income taxes (8,109,847) (2,866,788) (14,145,503) (5,906,311) Income tax benefit 666,275 580,275 666,275 580,275 NET LOSS $(7,443,572) $(2,286,513) $(13,479,228) $(5,326,036) Basic and diluted net loss per common share $(0.13) $(0.04) $(0.24) $(0.10) Weighted average number of common shares outstanding 58,869,492 53,997,547 56,605,144 53,686,347
Palatin Technologies, Inc.
CONTACT: For Palatin Technologies: Stephen T. Wills, CPA, MST, EVP-Operations / Chief Financial Officer, +1-609-495-2200, info@palatin.com; orFor Institutional Investors and Media: Carney Duntsch, Burns McClellan,+1-212-213-0006, cduntsch@burnsmc.com
Web site: http://www.palatin.com//
