CRANBURY, N.J., May 9 /PRNewswire-FirstCall/ -- Palatin Technologies, Inc. announced today financial results for the third quarter ended March 31, 2006. Total revenues in the quarter ended March 31, 2006 were $5.0 million, compared to $2.8 million for the same period in 2005. Palatin reported a net loss of $7.6 million, or ($0.13) per basic and diluted share, for the quarter ended March 31, 2006, compared to a net loss of $3.9 million, or ($0.07) per basic and diluted share, for the same period in 2005.
The increase in the net loss for the quarter ended March 31, 2006 versus the quarter ended March 31, 2005 was primarily attributable to increased development costs related to bremelanotide, a drug under development for the treatment of erectile dysfunction (ED) and female sexual dysfunction (FSD). The Company is currently conducting five clinical studies with bremelanotide that were initiated in the current fiscal year.
PRODUCT REVENUE AND ROYALTIES
In the current period, the Company recorded no royalty revenue related to commercial sales by Mallinckrodt of NeutroSpec, versus $0.5 million in the quarter ended March 31, 2005. There were no product sales in either period. In December 2005, the Company and Mallinckrodt suspended all NeutroSpec sales and marketing activities.
LICENSES, GRANTS AND CONTRACTS
In the quarter ended March 31, 2006, the Company recognized revenue from licenses, grants and contracts of $5.0 million, primarily related to the reimbursement by King Pharmaceuticals, Inc. of bremelanotide costs pursuant to the companies’ collaboration agreement. In the quarter ended March 31, 2005, revenue from licenses, grants and contracts related to bremelanotide was $2.3 million, reflecting lower reimbursable costs incurred by Palatin in the period.
COSTS AND EXPENSES
Total operating expenses for the quarter ended March 31, 2006 were $12.8 million, compared to $6.9 million for the same period in 2005. Development costs directly related to bremelanotide increased by $4.8 million, primarily reflecting costs associated with clinical trials that were initiated in the current fiscal year. Costs of other research and development programs also increased, as did spending for research personnel and facilities.
CASH POSITION
Palatin’s cash, cash equivalents and investments totaled $16.3 million as of March 31, 2006, compared to $18.1 million at June 30, 2005. In April 2006, the Company received $25 million of net proceeds from the sale of common stock and warrants.
Palatin Technologies’ management will discuss the third quarter financial results and provide an update on corporate developments during a conference call and webcast on May 9, 2006 at 10:00 a.m. EDT.
RECENT HIGHLIGHTS -- In February 2006, the Company announced it initiated enrollment in a double-blind, placebo-controlled Phase IIb clinical trial of bremelanotide in patients with FSD. The primary objective of this pilot clinical trial is to evaluate the safety and efficacy of bremelanotide in FSD patients in the “at-home” environment. -- In April 2006, the Company raised $27 million through the sale of 11 million units, consisting of common stock and warrants, in a registered offering. Palatin intends to use the net proceeds from the offering, after deducting offering costs, for general corporate purposes, including the clinical development of its lead product candidate, bremelanotide. -- In May 2006, the Company announced it completed enrollment in two Phase IIb clinical trials of bremelanotide in patients with ED. The primary objective of these two dose-ranging clinical trials is to identify safe and efficacious doses for evaluation in Phase III pivotal trials slated to begin in the first quarter of 2007. Conference Call and Webcast Access Information - Q3-Fiscal Year 2006 Conference Call - Live 5/9/2006 at 10:00 a.m. EDT Domestic Dial-In Number 1-866-550-6338 International Dial-In Number 1-347-284-6930 - Q3-Fiscal Year 2006 Conference Call - Replay 5/9-5/16/2006 Domestic Dial-In Number 1-888-203-1112 International Dial-In Number 1-719-457-0820 Enter Pass Code I.D. 5174046 - Webcast Live and Replay Access http://www.palatin.com About Palatin Technologies
Palatin Technologies, Inc. is a biopharmaceutical company primarily engaged in the development of melanocortin-based therapeutics. The Company’s lead product candidate, bremelanotide, is currently in Phase II clinical trials for both male and female sexual dysfunction. The Company’s internal research and development capabilities, anchored by its proprietary MIDAS(TM) technology, are fueling product development. 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 the Company’s 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. The Company’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(R), 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 March 31, Nine Months Ended March 31, 2006 2005 2006 2005 REVENUES: Royalties $- $465,974 $1,508,862 $1,007,647 Product sales - - - 1,707,825 Licenses, grants and contracts 5,045,025 2,340,869 13,267,079 9,396,719 Total revenues 5,045,025 2,806,843 14,775,941 12,112,191 OPERATING EXPENSES: Cost of product sales - 5,924 2,041,175 226,765 Royalties - 85,282 299,995 244,676 Research and development 10,954,466 4,854,417 29,639,751 16,619,541 General and administrative 1,838,967 1,958,738 5,022,069 5,297,633 Total operating expenses 12,793,433 6,904,361 37,002,990 22,388,615 Loss from operations (7,748,408) (4,097,518) (22,227,049) (10,276,424) OTHER INCOME (EXPENSE): Investment income 155,677 161,169 496,917 440,803 Interest expense (9,375) (3,907) (17,477) (10,946) Total other income, net 146,302 157,262 479,440 429,857 Loss before income taxes (7,602,106) (3,940,256) (21,747,609) (9,846,567) Income tax benefit - - 666,275 580,275 NET LOSS $(7,602,106) $(3,940,256) $(21,081,334) $(9,266,292) Basic and diluted net loss per common share $(0.13) $(0.07) $(0.37) $(0.17) Weighted average number of common shares outstanding used in computing basic and diluted net loss per common share 59,339,220 54,021,372 57,503,198 53,796,392 PALATIN TECHNOLOGIES, INC. Consolidated Balance Sheets (unaudited) March 31, June 30, 2006 2005 ASSETS Current assets: Cash and cash equivalents $13,948,468 $15,720,364 Available for sale investments 2,341,877 2,385,570 Accounts receivable 53,032 5,441,425 Inventories - 1,382,160 Prepaid expenses and other current assets 1,829,200 1,889,269 Total current assets 18,172,577 26,818,788 Property and equipment, net 6,433,157 6,464,324 Restricted cash 475,000 475,000 Other assets 1,131,726 1,408,158 Total assets $26,212,460 $35,166,270 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Capital lease obligations, current portion $84,759 $ 11,269 Accounts payable 4,288,778 4,773,297 Accrued expenses 6,113,641 4,471,276 Deferred revenue, current portion 4,124,649 3,790,828 Total current liabilities 14,611,827 13,046,670 Capital lease obligations, net of current portion 251,914 18,934 Deferred rent, net of current portion 2,828,967 3,001,980 Deferred revenue, net of current portion 7,503,816 9,873,438 Total liabilities 25,196,524 25,941,022 Commitments and contingencies Stockholders’ equity: Preferred stock, $.01 par value, 10,000,000 shares authorized: Series A Convertible; 9,997 and 11,447 shares issued and outstanding as of March 31, 2006 and June 30, 2005, respectively 100 114 Common stock, $.01 par value, 150,000,000 shares authorized, 59,899,844 and 54,236,544 shares issued and outstanding as of March 31, 2006 and June 30, 2005, respectively 599,000 542,365 Additional paid-in capital 153,026,525 140,167,431 Accumulated other comprehensive loss (43,693) - Accumulated deficit (152,565,996) (131,484,662) Total stockholders’ equity 1,015,936 9,225,248 Total liabilities and stockholders’ equity $26,212,460 $35,166,270
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; or John Baldissera, BPC FinancialMarketing, +1-800-368-1217, both for Palatin Technologies
Web site: http://www.palatin.com/
