On November 13, 2017 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, reported results for its first quarter ended September 30, 2017 (Press release, Palatin Technologies, NOV 13, 2017, View Source [SID1234521971]).
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Recent Highlights
● Bremelanotide – Under development for Hypoactive Sexual Desire Disorder ("HSDD"):
– Entered into a collaboration and license agreement with Shanghai Fosun Pharmaceutical Industrial Development Co. Ltd. ("Fosun"), a subsidiary of Shanghai Fosun Pharmaceutical (Group) Co., Ltd in September 2017 for exclusive rights to develop and commercialize bremelanotide in the territories of mainland China, Taiwan, Hong Kong S.A.R. and Macau S.A.R.
● Received $4,500,000 in October 2017, consisting of an upfront payment of $5,000,000 less $500,000 which was withheld in accordance with tax withholding requirements in China.
– Working closely with AMAG Pharmaceuticals, Inc. ("AMAG") on completing the tasks and activities necessary to file a New Drug Application ("NDA") with the Food and Drug Administration ("FDA").
– Target NDA filing with the FDA for early calendar year 2018.
– U.S. Patent 7,700,592 issued July 11, 2017, on methods of treating female sexual dysfunction and HSDD with bremelanotide. The patent will expire in November 2033.
First Quarter Fiscal Year 2018 Financial Results
Palatin reported net income of $10.6 million, or $0.05 per basic and diluted share, for the quarter ended September 30, 2017, compared to a net loss of $(13.1) million, or $(0.08) per basic and diluted share, for the same period in 2016.
The difference in financial results between the three months ended September 30, 2017 and 2016 was primarily attributable to the recognition of $26.9 million in license and contract revenue during the 2017 period pursuant to our license agreement with AMAG and our license agreement with Fosun.
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Revenue
For the quarter ended September 30, 2017, Palatin recognized $21.9 million in license and contract revenue related to our license agreement with AMAG and $5.0 million in license revenue related to our license agreement with Fosun.
There were no revenues recorded in the quarter ended September 30, 2016.
Operating Expenses
Total operating expenses for the quarter ended September 30, 2017 were $15.7 million compared to $12.4 million for the comparable quarter of 2016. The increase in operating expenses was mainly attributable to the continued progress of the development of bremelanotide for HSDD.
Other Income/Expense
Total other expense, net was $0.4 million for the quarter ended September 30, 2017 compared to $0.6 million for the quarter ended September 30, 2016. Total other expense, net for both periods consisted primarily of interest expense related to Palatin’s venture debt.
Income Tax
Pursuant to the license agreement with Fosun, $500,000 was withheld in accordance with tax withholding requirements in China and will be recorded as an expense during the fiscal year ending June 30, 2018. For the quarter ended September 30, 2017, Palatin incurred $225,255 in income tax expense utilizing an estimated effective annual income tax rate applied to income for the quarter and the remaining balance of $274,745 was included in prepaid expenses and other current assets at September 30, 2017. Any potential credit to be received by Palatin on its United States tax returns is currently offset by Palatin’s valuation allowance.
Cash Position
Palatin’s cash, cash equivalents, accounts receivable and investments were $49.3 million as of September 30, 2017, compared to cash, cash equivalents, accounts receivable and investments of $55.6 million at June 30, 2017. Current liabilities were $19.3 million, net of deferred revenue of $20.2 million, as of September 30, 2017, compared to $19.9 million, net of deferred revenue of $35.1 million, as of June 30, 2017.
Palatin believes that existing capital resources will be sufficient to fund our planned operations through at least the 2018 calendar year.
Conference Call / Webcast
Palatin will host a conference call and webcast on November 13, 2017 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 1-888-394-8218 (domestic) or 1-323-701-0225 (international), conference ID 2622306. The webcast and replay can be accessed by logging on to the "Investor/Webcasts" section of Palatin’s website at View Source A telephone and webcast replay will be available approximately one hour after the completion of the call. To access the telephone replay, dial 1-888-203-1112 (domestic) or 1-719-457-0820 (international), passcode 2622306. The webcast and telephone replay will be available through November 18, 2017.