• Revenue: No product sales recorded for Q3 FY2024 due to the sale of Vyleesi rights; previous year Q3 revenue was $1.2 million.

• Operating Expenses: $9.2 million for Q3 FY2024, up from $8.5 million in Q3 FY2023.

• Net Loss: $8.4 million or $0.53 per share for Q3 FY2024, compared to $8.7 million or $0.76 per share for Q3 FY2023.

• Cash Position: $10 million in cash, cash equivalents, and marketable securities as of March 31, 2024.

• Net Cash Used in Operations: $8.6 million for Q3 FY2024, increased from $1.4 million in Q3 FY2023.

• Other Income/Expense: Net gain of $0.4 million from fair value adjustment of warrant liabilities for Q3 FY2024; previous year recorded a loss of $1.5 million.

• Warning! GuruFocus has detected 2 Warning Signs with PTN.

Release Date: May 15, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Palatin Technologies Inc reported positive Phase 3 MELODY-1 results for PL9643 in treating dry eye disease, highlighting excellent ocular tolerability and rapid onset of efficacy.

• The company has a growing portfolio of Melanocortin based therapeutics with three clinical programs underway and plans to initiate two new clinical programs by mid-2024.

• Palatin Technologies Inc has successfully resolved previous issues with the classification of warrants, cleaning up financial statements and eliminating related liabilities.

• The company's cash position is stable, with sufficient funds to support anticipated operating expenses well into the second half of calendar year 2024.

• Palatin Technologies Inc is planning to initiate a Phase 2 obesity clinical study and a Phase 2 study for erectile dysfunction, targeting large underserved markets with innovative Melanocortin receptor agonist treatments.

Negative Points

• Palatin Technologies Inc did not record any product sales to pharmacy distributors for the quarter, following the sale of Vyleesi's worldwide rights.

• Net loss for the quarter was $8.4 million, although this was a slight improvement from the previous year's net loss of $8.7 million.

• Operating expenses increased to $9.2 million from $8.5 million in the comparable quarter last year, primarily due to increased spending on Melanocortin receptor programs.

• Net cash used in operations significantly increased to $8.6 million from $1.4 million in the same period last year, mainly due to changes in working capital.

• The company faces ongoing challenges in advancing its clinical programs, with multiple clinical data milestones and study initiations needed before potential NDA submissions.

Q & A Highlights

Q: What are the key financial highlights from Palatin Technologies' fiscal third quarter? A: Stephen Wills, CFO, reported that Palatin did not record any product sales due to the sale of Vyleesi's worldwide rights. Operating expenses increased to $9.2 million, primarily due to increased spending on Melanocortin receptor programs. The net loss was $8.4 million, or $0.53 per common share, with a slight improvement from the previous year's $8.7 million, or $0.76 per common share. The cash position was reported at $10 million.

Q: Can you discuss the progress and future plans for the PL9643 dry eye disease program? A: Carl Spana, CEO, highlighted the positive Phase 3 MELODY-1 results, noting PL9643's excellent ocular tolerability and rapid efficacy onset. Plans are underway to initiate additional clinical studies to support a new drug application, with enrollment expected in the second half of 2024.

Q: What are the upcoming clinical trials and their focus? A: Spana mentioned initiating two new clinical programs in 2024. These include a Phase 2 obesity study evaluating the co-administration of bremelanotide with tirzepatide, and a Phase 2 study in erectile dysfunction, assessing bremelanotide with a PDE5 inhibitor. Both studies aim to address large markets with new therapeutic options.

Q: What were the learnings from the MELODY-1 trial and how will they influence future studies? A: Spana explained that the MELODY-1 trial provided significant data influencing future trials, MELODY-2 and MELODY-3, to support drug profile, safety, and efficacy. The focus will be on maintaining broad efficacy across multiple symptoms and ensuring regulatory endpoints are met with precision.

Q: What specific issues will be addressed in the upcoming Type C meeting with the FDA? A: The Type C meeting will focus on technical aspects of the upcoming trials, ensuring the study design and endpoints meet FDA standards. Spana expects the meeting to provide guidance on manufacturing and other regulatory details to support the NDA submission.

Q: How does Palatin plan to differentiate its product in the dry eye disease market? A: Spana emphasized PL9643's unique position due to its rapid onset of efficacy, broad symptom relief, and exceptional ocular tolerability. The upcoming studies aim to further substantiate these benefits and support a strong NDA submission.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.