On February 11, 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, whose product candidates are targeted, receptor-specific therapeutics for the treatment of diseases with significant unmet medical need and commercial potential, reported results for its second quarter ended December 31, 2019 (Press release, Palatin Technologies, FEB 11, 2020, View Source [SID1234554188]).
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"The June 2019 FDA approval of Vyleesi was meaningful on two fronts," said Carl Spana, Ph.D., President and Chief Executive Officer of Palatin. "For premenopausal women, it provides a safe and effective, as-needed treatment option for those with HSDD. For Palatin, we now have an enhanced cash position of $92 million at December 31, 2019, which puts us in an excellent position to advance our pipeline programs. We have two Phase 2 clinical studies starting in the first half of calendar year 2020: a dry eye disease study with data expected in the fourth quarter of calendar year 2020 and an ulcerative colitis trial with data expected in mid-calendar year 2021."
"AMAG’s planned divestiture of Vyleesi is based on its change in strategy, and is not a result of the Vyleesi launch performance to date," continued Spana. "As the licensor, we maintain certain rights and will take appropriate steps to ensure that the value of Vyleesi remains intact and continues to grow. We will also continue to be opportunistic and flexible as the divestiture process advances, with the objective that the ultimate licensee of the North American rights to Vylessi is committed to the robust commercialization of the product."
Recent Business Highlights
Hypoactive Sexual Desire Disorder (HSDD) / Vyleesi (bremelanotide injection)
On January 9, 2020 AMAG Pharmaceuticals, Inc. ("AMAG") announced that, as a result of a strategic review, it will divest Vyleesi, which it exclusively licensed from Palatin for North America, and another female healthcare product, Intrarosa. AMAG stated that it has received preliminary expressions of interest in these assets.
Under the Vyleesi license agreement, AMAG has a contractual obligation to use commercially reasonable efforts to commercialize Vyleesi. If AMAG materially breaches this obligation and fails to cure such breach, Palatin could potentially have the right to terminate the license agreement and have Vyleesi returned to Palatin. In the event AMAG assigns its Vyleesi license, the assignee must expressly agree to be bound by the Vyleesi license agreement between AMAG and Palatin.
Palatin is advancing discussions on Vyleesi collaborations for territories outside the currently licensed territories of North America, China, and Korea, and anticipates executing multiple agreements during calendar year 2020. Vyleesi is licensed to Fosun Pharma in China and Kwangdong Pharmaceuticals in South Korea. Both companies are advancing Vyleesi through the regulatory process in their respective territories, which includes the conduct of certain clinical studies in those territories prior to filing for market approval.
Vyleesi is the first as-needed treatment approved for premenopausal women with acquired, generalized HSDD. AMAG Pharmaceuticals, Palatin’s North American licensee, launched Vyleesi nationally in September 2019 through select specialty pharmacies with its established women’s health sales force of approximately 125 sales representatives. While AMAG has not yet released prescription numbers for the quarter ended December 31, 2019, AMAG has stated publicly that the "Vyleesi launch is off to a strong start."
Anti-Inflammatory / Autoimmune Programs
Melanocortin agonist products are under development for the treatment of inflammatory and autoimmune diseases such as dry eye, uveitis, diabetic retinopathy and inflammatory bowel diseases (ulcerative colitis).
An investigational new drug application (IND) for PL9643 in dry eye disease was filed with the US Food and Drug Administration (FDA) in December 2019. A Phase 2 clinical study is expected to commence in the first quarter of calendar year 2020, with data readout anticipated in 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 anticipated to start mid-calendar year 2020, with data readout mid-calendar year 2021.
Palatin continues its assessment and development work related to the treatment of patients with diabetic retinopathy and non-infectious uveitis (NIU), an indication which FDA granted orphan drug designation, with the objective of commencing clinical trials in calendar year 2021.
Natriuretic Peptide Receptor (NPR) System Program
Palatin has designed and is developing potential drug candidates that are selective agonists 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).
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 anticipated to start patient enrollment in 2020.
PL3994 has potential utility in the treatment of a number of cardiovascular diseases, including genetic and orphan diseases resulting from a deficiency of endogenous active NPR-A. PL5028, a dual NPR-A and NPR-C agonist in development for cardiovascular diseases, has potential for reducing cardiac hypertrophy and fibrosis, among other indications.
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.
Second Quarter Fiscal Year 2020 Financial Results
Revenue
For the quarter ended December 31, 2019, Palatin recognized as revenue $20,610 in reimbursement of shared Vyleesi costs related to our license agreement with AMAG. There were no revenues recorded in the quarter ended December 31, 2018.
Operating Expenses
Total operating expenses for the quarter ended December 31, 2019 were $5.7 million compared to $5.1 million for the comparable quarter of 2018. The increase in operating expenses was mainly due to the final payment of $625,000 made in connection with the mutually agreed upon termination of our engagement agreement on Vyleesi with Greenhill & Co.
Other Income/Expense, net
Total other income was $397,480 for the quarter ended December 31, 2019 compared to total other income $7,871 for the quarter ended December 31, 2018. The difference is related primarily to the increase in investment income.
Net Loss
Palatin reported a net loss of $(5.2) million, or $(0.02) per basic and diluted share, for the quarter ended December 31, 2019, compared to a net loss of $(5.0) million, or $(0.02) per basic and diluted share, for the same period in 2018.
The difference in financial results between the three months ended December 31, 2019 and 2018 was attributable to the increase in operating expenses of $0.6 million offset by the increase of $0.4 million in other income.
Cash Position
Palatin’s cash, cash equivalents, and accounts receivable total $91.6 million as of December 31, 2019, compared to cash, cash equivalents, and accounts receivable of $103.8 million at June 30, 2019. Current liabilities were $1.4 million as of December 31, 2019, compared to $4.2 million as of June 30, 2019.
Conference Call / Webcast
Palatin will host a conference call and audio webcast on February 11, 2020 at 11:00 a.m. Eastern Time to discuss the results of operations for the quarter ended December 31, 2019 in greater detail and provide an update on corporate developments. Individuals interested in listening to the conference call live can dial 1-800-353-6461 (US/Canada) or 1-334-323-0501 (international), conference ID 7551093. 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 7551093. The webcast and telephone replay will be available through February 18, 2020.