On May 12, 2020 Palatin Technologies, Inc. (NYSE American: PTN), a specialized biopharmaceutical company developing first-in-class medicines based on molecules that modulate the activity of the melanocortin and natriuretic peptide receptor systems, reported results for its third quarter ended March 31, 2020 (Press release, Palatin Technologies, MAY 12, 2020, View Source [SID1234557585]).
Third Quarter Fiscal Year 2020 Financial Highlights
●Net loss of $(5.4) million, compared to $(5.7) million for the comparable quarter of 2019;
●Operating expenses of $5.7 million, compared to $5.8 million for the comparable quarter of 2019;
●Other income was $331,007, compared to $35,648 for the comparable quarter of 2019; and
●As of March 31, 2020, the Company had $88.9 million in cash and cash equivalents, compared to $91.5 million as of December 31, 2019, and no debt.
Recent Business Highlights and Updates
●Implemented multiple measures in response to the COVID-19 pandemic to safeguard the health and well-being of employees, their families, business partners and healthcare providers, while continuing to advance the Company’s programs;
●A Phase 2 clinical study with PL9643 for dry eye disease started in January 2020. Data readout is targeted for the fourth quarter of calendar year 2020;
●A Phase 2 proof-of-concept clinical study with an oral formulation of PL8177 in ulcerative colitis patients is delayed due to the pandemic and is now targeted to start in the first half of calendar year 2021; and
●AMAG has stated that they anticipate finalizing the divestiture of Vyleesi within the next several months.
"The entire Palatin team thanks healthcare workers across the nation for their selfless efforts in the treatment and care of COVID-19 patients, and I would also like to thank all of our employees for their dedication and commitment to ensure the advancement of our development programs and clinical trial patient support," said Carl Spana Ph.D., President and CEO of Palatin. "Although Palatin has experienced limited adverse impact on operations from the pandemic, we are cognizant there may be further disruptions to business activity based on a resurgence of the virus and have taken steps to be as prepared as possible for this potential outcome."
Dr. Spana further commented, "We continue to review AMAG’s process related to the divestiture of Vyleesi and their obligations under our license agreement and are prepared to take appropriate steps to protect our rights and Vyleesi’s significant value."
Programs Overview
Anti-Inflammatory / Autoimmune Programs
A Phase 2 clinical study with PL9643 for dry eye disease started in January 2020, and active patients continue treatment and monthly clinic visits. Enrollment of additional cohorts has been delayed, but we anticipate restarting enrollment in June 2020. Data readout is targeted for the fourth quarter of calendar year 2020.
A Phase 2 proof-of-concept clinical study with an oral formulation of PL8177 in ulcerative colitis patients is now targeted to start in the first half of calendar year 2021, with data readout in the first half of calendar year 2022.
The Company continues its assessment and development work related to the treatment of patients with diabetic retinopathy, with an IND targeted for mid-calendar year 2021.
The Company currently anticipates filing an IND and commencing clinical trials with PL8177 for non-infectious uveitis, for which FDA granted orphan drug designation, in the second half of calendar year 2021.
Hypoactive Sexual Desire Disorder ("HSDD") / Vyleesi (bremelanotide injection)
Due to the early commercial stage of Vyleesi and the sales and marketing strategy of our North American licensee AMAG Pharmaceuticals, Inc., including no charge for the first Vyleesi prescription, AMAG has not generated positive net sales through March 31, 2020. This has resulted in no royalties to Palatin during this period.
Vyleesi is the first as-needed treatment approved for premenopausal women with acquired, generalized HSDD. AMAG launched Vyleesi nationally in September 2019 through select specialty pharmacies with its established women’s health sales force.
In January 2020 AMAG announced that, as a result of a strategic review, it will divest Vyleesi, which it exclusively licensed from Palatin for North America. In May 2020 AMAG stated that it is in negotiations regarding the divestiture of Vyleesi and will provide an update within the next few months.
Palatin continues to closely monitor AMAG’s process related to the divestiture of Vyleesi and AMAG’s obligations under the Vyleesi license agreement. Though sales of Vyleesi have been adversely affected by the COVID-19 pandemic, the Company believes that AMAG’s divestiture process has also adversely impacted Vyleesi sales. Palatin is prepared to take appropriate steps to protect its rights as the Vyleesi licensor and the significant value of the Vyleesi program.
Palatin continues discussions on Vyleesi collaborations for territories outside the currently licensed territories of North America, China, and Korea, and anticipates executing multiple agreements during the second half of calendar year 2020 and calendar year 2021.
Natriuretic Peptide Receptor ("NPR") System Program
PL3994, an NPR-A agonist, will be evaluated in a Phase 2a clinical study in heart failure patients with preserved ejection fraction. The proposed study is a collaboration with two major academic medical centers and is supported by an American Heart Association grant. The study is now anticipated to start patient enrollment in the second half of calendar year 2020.
Genetic Obesity Program
Palatin’s melanocortin receptor 4 (MC4r) peptide PL8905 and orally active small molecule PL9610 are currently under investigation for the treatment of rare genetic metabolic and obesity disorders. These programs are under internal evaluation for orphan designations, potential development, and licensing.
Third Quarter Fiscal Year 2020 Financial Results
Revenue
For the quarters ended March 31, 2020 and 2019, there were no revenues recorded.
Operating Expenses
Total operating expenses for the quarter ended March 31, 2020 were $5.7 million compared to $5.8 million for the comparable quarter of 2019. The decrease in operating expenses was mainly due to the overall reduction in research and development expenses offset by an increase in general and administrative expenses.
Other Income/Expense, net
Total other income, net, was $331,007 for the quarter ended March 31, 2020, compared to total other income, net, of $35,648 for the quarter ended March 31, 2019. The difference is related primarily to the increase in investment income.
Net Loss
Palatin reported a net loss of $(5.4) million, or $(0.02) per basic and diluted share, for the quarter ended March 31, 2020, compared to a net loss of $(5.7) million, or $(0.03) per basic and diluted share, for the same period in 2019.
The difference in financial results between the three months ended March 31, 2020 and 2019 was mainly attributable to the increase in other income, net.
Cash Position
Palatin’s cash and cash equivalents were $88.9 million as of March 31, 2020, compared to $91.5 million at December 31, 2019, and cash, cash equivalents and accounts receivable of $103.8 million at June 30, 2019.
Management believes that existing capital resources will be adequate to fund the Company’s planned operations through at least March 31, 2022.
Conference Call / Webcast
Palatin will host a conference call and audio webcast on May 12, 2020 at 11:00 a.m. Eastern Time to discuss the results of operations for the quarter ended March 31, 2020 in greater detail and provide an update on corporate developments. Individuals interested in listening to the conference call live can dial 1-888-204-4368 (US/Canada) or 1-323-994-2082 (international), conference ID 8845359. The audio webcast and replay can be accessed by logging on to the "Investor/Webcasts" section of Palatin’s website at View Source A telephone and audio webcast replay will be available approximately one hour after the completion of the call. To access the telephone replay, dial 1-888-203-1112 (US/Canada) or 1-719-457-0820 (international), passcode 8845359. The webcast and telephone replay will be available through May 19, 2020.
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