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Palatin Technologies, Inc. Reports Second Fiscal Quarter 2019 Results and Provides Corporate Update

On February 12, 2019 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 for the treatment of diseases with significant unmet medical need and commercial potential, reported results for its second quarter ended December 31, 2018 (Press release, Palatin Technologies, FEB 12, 2019, View Source [SID1234533237]).

Recent Highlights and Program Updates

Female Sexual Dysfunction / Vyleesi (bremelanotide)
●Vyleesi, the trade name for bremelanotide – Under development for Hypoactive Sexual Desire Disorder ("HSDD"):

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The Prescription Drug User Fee Act ("PDUFA") date for completion of FDA review of the Vyleesi New Drug Application ("NDA") was extended three months to June 23, 2019.

The U.S. Food and Drug Administration ("FDA") requested a Phase 1 study in premenopausal volunteers assessing short term daily use of Vyleesi. This study is ongoing and is being conducted by Palatin and AMAG Pharmaceuticals, our exclusive licensee for North America.

Study results are anticipated to be submitted to the FDA prior to the updated PDUFA date.

Palatin is in discussions with potential collaboration partners for certain regions outside of the licensed territories of North America, China and South Korea.

Anti-Inflammatory / Autoimmune Programs
●Melanocortin receptor 1 and 1/5 ("MC1r", "MC1/5r") agonists under development for the treatment of inflammatory and autoimmune diseases such as dry eye, uveitis, diabetic retinopathy and inflammatory bowel diseases:

PL-8177, a selective MC1r peptide agonist:

Completed subcutaneous dosing of human subjects in a Phase 1 single and multiple ascending dose clinical safety study, with no safety or tolerability concerns noted in a press release dated November 8, 2018.

A separate clinical study with oral dosing in human subjects was started during the quarter ended December 31, 2018, with data expected in the first quarter of calendar year 2019.

Program is under internal evaluation for orphan designations.

PL-8331 and PL-9643, dual MC1r and MC5r peptide agonists:

Continuing with preclinical Investigational New Drug ("IND") enabling activities.

Program is under internal evaluation for orphan designations.

Natriuretic Peptide Receptor ("NPR") System Program
●We have designed and are developing potential NPR candidate drugs that are selective for one or more different natriuretic peptide receptors, including natriuretic peptide receptor-A ("NPR-A"), natriuretic peptide receptor B ("NPR-B"), and natriuretic peptide receptor C ("NPR-C"):

PL-3994, an NPR-A agonist that has potential utility in treatment of a number of cardiovascular diseases, including genetic and orphan diseases resulting from a deficiency of endogenous active NPR-A.

Academic collaborations with several institutions ongoing.

PL-5028, a dual NPR-A and NPR-C agonist in development for cardiovascular diseases, including reducing cardiac hypertrophy and fibrosis.

Academic collaborations with several institutions ongoing.

Genetic Obesity Program
●Melanocortin receptor 4 ("MC4r") peptide PL-8905 and orally-active small molecule PL-9610 under development for the treatment of rare genetic metabolic and obesity disorders:

Program is under internal evaluation for orphan designations.

Corporate
●Decreased debt and related liabilities from $7.2 million at June 30, 2018 to $2.8 million at December 31, 2018.

Second Quarter Fiscal 2019 Financial Results
Palatin reported a net loss of $(5.0) million, or $(0.02) per basic and diluted share, for the quarter ended December 31, 2018, compared to net income of $3.0 million, or $0.02 per basic and $0.01 per diluted share, for the same period in 2017.

The difference in financial results between the three months ended December 31, 2018 and 2017 was primarily attributable to the recognition of $10.6 million in license and contract revenue during the 2017 period pursuant to our license agreement with AMAG.

Revenue
There were no revenues recorded in the quarter ended December 31, 2018.

For the quarter ended December 31, 2017, 100% of the revenue Palatin recognized was related to our license agreement with AMAG.

Operating Expenses
Total operating expenses for the quarter ended December 31, 2018 were $5.1 million compared to $7.7 million for the comparable quarter of 2017. The decrease in operating expenses was mainly attributable to the completion of the Vyleesi Phase 3 clinical trial program and ancillary studies necessary to file the NDA in HSDD in March 2018.

Other Income/Expense
Total other income, net was $7,871 for the quarter ended December 31, 2018 compared to total other expenses, net $(0.3) million for the quarter ended December 31, 2017. The difference is related primarily to the decrease in interest expense related to Palatin’s venture debt.

Income Tax
There was no income tax expense, or benefit, recorded in the quarter ended December 31, 2018.

Pursuant to the license agreements with Fosun and Kwangdong, $500,000 and $82,500, respectively, was withheld in accordance with tax withholding requirements in China and the Republic of Korea, respectively, and was recorded as an expense during the fiscal year ended June 30, 2018. For the quarter ended December 31, 2017, Palatin recorded $100,880 in income tax expense related to those withholding amounts utilizing an estimated effective annual income tax rate applied to income for the quarter and the remaining balance of $256,365 was included in prepaid expenses and other current assets at December 31, 2017. Any potential credit to be received by Palatin on its United States tax returns is currently offset by Palatin’s valuation allowance. The $100,880 of income tax expense was offset by a $500,000 tax benefit that Palatin recorded in the quarter ended December 31, 2017 related to the release of a valuation allowance against Palatin’s federal alternative minimum tax credit as a result of the Tax Cuts and Jobs Act signed in December 2017. Accordingly, $500,000 was included in other long-term assets at December 31, 2017.

Cash Position
Palatin’s cash, and cash equivalents were $24.7 million as of December 31, 2018, compared to cash and cash equivalents of $38.0 million at June 30, 2018. Current liabilities were $4.5 million as of December 31, 2018, compared to $10.8 million as of June 30, 2018.

Palatin believes that existing capital resources will be sufficient to fund our planned operations through at least March 31, 2020.

Palatin Drug Discovery Programs
In the conference call and webcast, management will update and discuss next steps in Palatin’s portfolio of drug development programs. These include Palatin’s MC1r and MC1/5r agonist peptides for treatment of anti-inflammatory and autoimmune indications, MC4r peptide and small molecule agonists for the treatment of genetic obesity indications and natriuretic peptide receptor agonist compounds for treatment of cardiovascular and pulmonary indications.

Conference Call / Webcast
Palatin will host a conference call and webcast on February 12, 2019 at 11:00 a.m. Eastern Time to discuss the quarter ended December 31, 2018 results of operations in greater detail and provide an update on corporate developments. Individuals interested in listening to the conference call live can dial 1-877-260-1479 (US/Canada) or 1-334-323-0522 (international), conference ID 4414047. 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 (US/Canada) or 1-719-457-0820 (international), passcode 4414047. The webcast and telephone replay will be available through February 19, 2019.

GWT completes £10m ($14m) series A financing

On February 11, 2019 Greywolf Therapeutics, a drug discovery biotechnology company focused on immuno-oncology, reported it has completed a £10 million ($14 million) series A financing round with leading international healthcare investors Andera Partners and Canaan (Press release, Grey Wolf Therapeutics, FEB 11, 2019, https://www.greywolftherapeutics.com/news/gwt-completes-ps10m-14m-series-a-financing [SID1234650152]).

Greywolf’s novel approach is aimed at directly altering tumour cells, illuminating them for attack and destruction by the immune system. The goal is to exploit this increased tumour visibility in monotherapy and to extend the therapeutic benefit of already approved immunotherapies to many more cancers.

Greywolf is developing small molecule modulators of endoplasmic reticulum aminopeptidases (ERAPs), key proteins in the antigen presentation pathway, to change the neoantigen repertoire in tumours and thereby increase the number and range of neoantigens presented on tumour cells available to engage an immune response.

This unique small molecule immuno-oncology approach builds on the exciting recent advances in cancer immunotherapies that address a key limiting factor for approved treatments, while avoiding the complex and costly personalisation required for other approaches such as neoantigen vaccines.

Greywolf has programs targeting the two homologues of ERAP, ERAP1 and ERAP2, aimed at developing potent and selective modulators, with the lead program being against ERAP1.

Greywolf was co-founded by Peter Joyce, former Project Leader at Vertex Pharmaceuticals, and Tom McCarthy, former President and CEO of Spinifex Pharmaceuticals, and comprises a team of world-leading experts in immuno-oncology, antigen presentation and drug discovery. It is working with the University of Oxford, University of Southampton and has a strategic partnership with Sygnature Discovery, a leading independent provider of drug discovery resources and expertise. Sygnature is also an investor in the Company.

Peter Joyce, Chief Executive Officer of Greyw‍olf Therapeutics, said: "The recent breakthroughs in immunotherapy have fundamentally changed the treatment landscape in oncology, but the fact remains that current approaches only target the minority of tumours that are visible to the immune system, whilst the vast majority of cancers do not respond. There is strong validation for targeting ERAPs to increase tumour visibility and with these funds we are now positioned to build on our existing work and collaborations to deliver a clinical candidate in the coming two to three years."

Tom McCarthy, Executive Chairman of Greywolf Therapeutics, said: "Attracting investors of the calibre of Andera and Canaan is a strong validation of the potential of our approach to broaden the effectiveness of immunotherapy. We believe we have a truly novel approach in targeting tumours themselves, rather than direct regulation of the immune system, and I am excited by the opportunity to work with our investors and talented team on the next steps of Greywolf’s development."

Thierry Hercend, Venture Partner at Andera Partners, said: "Greywolf has identified a highly innovative approach to immuno-oncology and, in Peter and Tom, has founders with very strong scientific and entrepreneurial credentials. With the support of Sygnature, they achieved a significant amount with their seed funding and demonstrated a scientifically rigorous and nimble approach to drug development which we value. I’m confident that with this series A financing, Greywolf will deliver on the full potential of ERAP modulation."

Brent Ahrens, General Partner at Canaan, said: "Greywolf marks Canaan’s first investment in the UK biotechnology sector, and we are excited by the Company’s science and its potential to help the huge numbers of patients yet to receive any benefit from current oncology treatment options."

Raphaël Wisniewski, Partner at Andera, Thierry Hercend, Venture Partner at Andera and Brent Ahrens, General Partner at Canaan have joined Greywolf’s Board of Directors.

NeoTX Therapeutics Announces Immuno-Oncology Clinical Trial Collaboration with AstraZeneca

On February 11, 2019 NeoTX Therapeutics, Ltd reported that it has entered into a clinical collaboration with AstraZeneca Group Plc (NYSE: AZN) global biologics research and development arm, MedImmune, to support Phase 1b/2 studies investigating NeoTX’s naptumomab estafenatox ("naptumomab") in combination with IMFINZI (durvalumab) (Press release, NeoTX, FEB 11, 2019, View Source [SID1234640360]). These studies are expected to begin in 2019. Naptumomab is the lead drug in NeoTX’s novel Selective T cell Redirection ("STR") platform.

Naptumomab’s dual mechanism of action coats the tumor with a target that can be easily identified by T cells and then primes and redirects specific activated T cells that can identify that target, to the tumor.

Durvalumab is a human monoclonal antibody that blocks the immune checkpoint protein, programmed death-ligand (PD-L1), and allows activated T cells to attack tumor cells.

The Phase 1b/2 studies will determine the maximum tolerated dose (MTD) of naptumomab in combination with durvalumab, evaluate the clinical response, safety and tolerability of the combination, as well as test for multiple pharmacodynamic parameters.

Under terms of the agreement, NeoTX and AstraZeneca will collaborate on a non-exclusive basis to evaluate the combination of the two drugs in solid tumors. NeoTX will sponsor the study, while AstraZeneca will supply durvalumab. Up to 195 patients are planned to be enrolled in this multicenter, open-label study.

"We are pleased to work with AstraZeneca addressing the high unmet medical need of patients with tumors for which checkpoint inhibitor therapy has had little success," said Asher Nathan, NeoTX Therapeutics’ Chief Executive Officer. "The safety profile of naptumomab alone and in combination with interferon has been demonstrated in clinical studies in hundreds of patients with solid tumors. Naptumomab can enhance T cell activation and infiltration in tumors and can remodel the immunosuppressive tumor microenvironment. In preclinical models, naptumomab has a synergistic effect with checkpoint inhibitors which could translate into durable responses in patients."

Foresee Pharmaceuticals Enters Exclusive License Agreement with Accord Healthcare

On February 11, 2019 Foresee Pharmaceutical reported an exclusive license agreement for the commercialisation of (6576.TWO) novel FP-001 program (leuprorelin depot), Leuprolide Mesylate Injectable Suspension (LMIS) ready-to-use subcutaneous depot formulations has been granted to Accord Healthcare (Press release, Foresee Pharmaceuticals, FEB 11, 2019, View Source [SID1234554013]).

Under the terms of this partnership, Foresee, a Taiwan and US-based biopharmaceutical company, will receive a combination of upfront, regulatory milestones and sales milestones payments totalling up to 86 million US dollars in addition to a significant share of the product revenue in the territory. Accord Healthcare, a global biopharmaceutical company, will cover all costs of commercialisation in the territory.

The license agreement will cover the global market with the exception of the USA, mainland China, Japan, Taiwan and previously partnered territories, Israel, Turkey and certain Middle East countries.

Dr. Ben Chien, Founder and Executive Chairman of Foresee commented: "We are very pleased to have established this collaboration with Accord, whose established track record of successful registrations and launches of complex oncology and specialty products makes us confident that they will make our FP-001 portfolio a major success in their market. Accord has a remarkable commercial team and infrastructure in place and we are highly confident in their ability to successfully leverage their commercial platform."

James Burt, Executive Vice President, Europe said: "Accord is very committed to bringing complex, added value medicines to market, improving the standard of care and ultimately the lives of patients. This agreement will contribute another key therapy to our already extensive oncology franchise and our comprehensive footprint will ensure that patients and healthcare providers can access this differentiated cancer therapy. We look forward to a mutually beneficial, successful collaboration with Foresee."

3SBio and Verseau Establish Global Clinical Development Collaboration for First-in-class Immuno-Oncology Therapies

On February 11, 2019 3SBio Inc. ("3SBio") (HKEX:1530) and Verseau Therapeutics, Inc. ("Verseau") reported a partnership agreement focused on the development and commercialization of novel monoclonal antibodies in the field of immuno-oncology for a broad range of cancers (Press release, Verseau Therapeutics, FEB 11, 2019, View Source [SID1234542367]). Verseau’s proprietary drug discovery platform generates first-in-class macrophage checkpoint modulators (MCMs) to benefit patients with cancer, immune and inflammatory diseases.

Under the terms of the agreement, 3SBio will receive an exclusive license to develop and commercialize a select number of MCM antibodies for all human oncology indications in Greater China, including mainland China, Taiwan, Hong Kong and Macau ("Territory"). Verseau will be responsible for discovery and optimization of MCM antibodies for each program. 3SBio will fund and conduct antibody development, GMP manufacturing, and commercialization in the Territory. Verseau and 3SBio will be eligible to receive certain milestone payments and royalties on product sales both in the Territory and globally. 3SBio will also purchase $15 million of Verseau Series B preferred stock. Additional financial terms were not disclosed.

"Recent advances in immuno-oncology have produced unprecedented benefit to patients; however, many people with cancer still require more effective treatment options," said Dr. Jing Lou, Chief Executive Officer of 3SBio. "Our collaboration with Verseau provides 3SBio with access to novel and differentiated immune-modulating antibodies that will complement our growing innovative oncology portfolio. We look forward to partnering with the Verseau team."

"3SBio is an ideal partner for Verseau to rapidly advance our novel, first-in-class macrophage checkpoint modulators in immuno-oncology," said Dr. Christine Bunt, Chief Executive Officer and Chairman of the Board of Verseau. "3SBio is a pioneer in China’s biotechnology industry with a fully-integrated R&D, manufacturing and commercial platform."

About Macrophage Checkpoint Modulators

Verseau is broadening the therapeutic potential of immunotherapy by developing macrophage checkpoint modulators (MCMs) that regulate the functional shift to make macrophages more inflammatory or more tolerogenic depending on the disease context. While PD-1 inhibitors have provided great clinical successes, they are only effective in 10-15% of cancer patients. Macrophages demonstrate one of the highest infiltration rates in human tumors (~75%). MCMs cause tumors to turn highly inflammatory and stimulate multiple immune cell types, including T cells. Verseau’s therapies have the potential to significantly expand the number of patients benefitting from immunotherapy, including those unresponsive to PD-1 inhibitor therapies. Through its proprietary all-human translational system Verseau has validated more than two dozen targets amenable to different therapeutic modalities, including monoclonal antibodies (mAbs).