On February 15, 2023 Palatin Technologies, Inc. (NYSE American: PTN), a biopharmaceutical company developing first-in-class medicines based on molecules that modulate the activity of the melanocortin receptor system, reported financial results for its fiscal second quarter ended December 31, 2022 (Press release, Palatin Technologies, FEB 15, 2023, View Source [SID1234627243]).
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"We continue to execute on our strategy that the melanocortin system is an important mechanism for the resolution of inflammation and promotion of tissue repair," said Carl Spana, Ph.D., President and CEO of Palatin. "We currently have three active melanocortin-based clinical programs: our MELODY-1 Phase 3 dry eye disease trial, a Phase 2 ulcerative colitis trial, and a Phase 2 diabetic kidney disease trial, all with data readouts throughout the next five calendar quarters."
Dr. Spana further commented, "We are pleased with Vyleesi’s continued quarter over quarter increases across all value metrics, notably net product sales increased 18% and prescriptions dispensed increased 12% over the prior quarter. We are excited that net product revenue of approximately $1 million for the quarter ended December 31, 2022, exceeded Vyleesi operating expenses."
Business Highlights and Recent Updates
Anti-Inflammatory / Autoimmune Programs
PL9643 melanocortin agonist for the treatment of dry eye disease (DED)
Patient enrollment on track.
Topline data readout currently expected mid-calendar year 2023.
Additional trial information, including inclusion and exclusion criteria, can be found at View Source via the identifier NCT04268069.
PL8177 oral melanocortin agonist for the treatment of ulcerative colitis (UC):
First patient dosed in a Phase 2 oral formulation study of PL8177 in patients with UC in the fourth quarter calendar year 2022.
Inerim assessment is currently expected to occur in the first half of calendar year 2023.
Topline data readout is currently expected in the second half of calendar year 2023.
Additional trial information, including inclusion and exclusion criteria, can be found at View Source via the identifier NCT05466890.
Bremelanotide BREAKOUT study (BMT 701) in patients with diabetic kidney disease:
Enrollment initiated in the Phase 2 study in the first quarter of calendar year 2023.
Complete enrollment targeted for third quarter calendar year 2023.
Topline results currently expected first quarter calendar year 2024.
Additional trial information, including inclusion and exclusion criteria, can be found at View Source via the identifier NCT05709444.
Vyleesi (bremelanotide injection) / Hypoactive Sexual Desire Disorder (HSDD): Goal of the Vyleesi program is to demonstrate commercial product value in the marketplace with an objective of re-licensing the U.S. rights to a committed women’s healthcare company.
For the fiscal second quarter ended December 31, 2022:
Gross product sales were $2.6 million, an increase of 14% over the prior quarter, and an increase of 238% over the comparable quarter last year.
Net product revenue of $1 million increased 18% over the prior quarter and increased 1,323% over the comparable quarter last year.
Total prescriptions dispensed increased 12% over the prior quarter and increased 134% over the comparable quarter last year.
Refill rates, commercial insurance reimbursement, and net revenue per prescription dispensed increased over the prior quarter and comparable quarter last year.
Patients and healthcare providers can learn more about HSDD and Vyleesi at www.vyleesi.com and www.vyleesipro.com.
Other:
The Company participated in the State of New Jersey’s Technology Business Tax Certificate Transfer Program sponsored by The New Jersey Economic Development Authority. The Program enables approved biotechnology companies with unused Net Operating Losses ("NOLs") and unused research and development credits ("R&D credits") to sell these tax benefits to unaffiliated, profitable corporate taxpayers in the State of New Jersey. The Company received final approval in December 2022 for the sale of NOLs and R&D credits that resulted in the receipt of $4,674,999 in January 2023. As a result, the Company recorded an income tax benefit for the three and six months ended December 31, 2022, and a corresponding receivable as of December 31, 2022.
Registered Direct Offering: On October 31, 2022, Palatin entered into a securities purchase agreement with an institutional investor, selling and issuing an aggregate of (i) 1,020,000 shares of Palatin common stock, $0.01 par value per share, (ii) prefunded warrants (the "Pre-Funded Warrants") to purchase up to 798,182 shares of Palatin common stock, and (iii) common warrants (the "Common Warrants") to purchase up to 1,818,182 shares of Palatin common stock. Each share of common stock was offered with one accompanying Common Warrant for a combined offering price of $5.50. Each Pre-Funded Warrant was offered with one accompanying Common Warrant for a combined offering price of $5.4999. The Offering was completed on November 2, 2022 with the Company receiving gross proceeds of $10 million. The Common Warrants have an exercise price of $5.83 per share, are exercisable beginning six months after the date of issuance and will expire five and one-half years from the date of issuance. The Pre-Funded Warrants had an exercise price of $0.0001 per share and subsequent to December 31, 2022, the institutional investor exercised all outstanding Pre-Funded Warrants to purchase 798,182 shares of Palatin’s common stock.
Fiscal Second Quarter Ended December 31, 2022 Financial Results
Revenue
Total revenue consists of gross product sales of Vyleesi, net of allowances and accruals, and license and contract revenue.
Vyleesi gross product sales to pharmacy distributors were $2.6 million, with net product revenue of $1,026,416, compared to gross product sales of $0.8 million and net product revenue of $72,140 for the comparable quarter last year. Gross product sales increased 238% and net product revenue increased 1,323% over the comparable quarter last year.
For the quarter ended December 31, 2021, Palatin recognized $250,000 in license and contract revenue pursuant to its license agreement with Fosun Pharma.
Operating Expenses
Total operating expenses were $6.6 million, compared to $8.8 million for the comparable quarter last year. The decrease in operating expenses was mainly the result of lower spending on our development programs and the gain recognized as a result of amending certain minimum purchase commitments.
Other Income / (Expenses)
Total other expense, net, consists mainly of unrealized foreign currency transaction losses of $693,231 and $234,078, respectively, for the quarters ended December 31, 2022, and 2021.
Cash Flows
Palatin’s net cash used in operations was $8.8 million, compared to net cash used in operations of $6.3 million for the same period last year. The increase in net cash used in operations is mainly due to working capital changes for the quarter ended December 31, 2022.
Net Loss
Palatin’s net loss was $1.4 million, or $(0.13) per basic and diluted common share, compared to a net loss of $8.7 million, or $(0.91) per basic and diluted common share for the comparable period last year.
The decrease in net loss over the comparable quarter last year, was mainly due to the recognition of an income tax benefit of $4.7 million, a decrease in operating expenses of $2.2 million and an increase in net product revenue of Vyleesi.
Cash Position
As of December 31, 2022, Palatin’s cash and cash equivalents were approximately $21.2 million plus $6.5 million of accounts and other receivables, compared to cash and cash equivalents of $21.2 with $2.0 million of accounts receivable as of September 30, 2022, and $29.9 million with $1.8 million of accounts receivable as of June 30, 2022.
Based on its current operating plan, Palatin believes that existing cash and cash equivalents and receivables will be sufficient to fund currently anticipated operating expenses through calendar year 2023.
Conference Call / Webcast
Palatin will host a conference call and audio webcast on February 15, 2023, 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 1-888-506-0062 (US) or 1-973-528-0011 (International), conference ID 928705. 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 one hour after the completion of the call. To access the telephone replay, dial 1-877-481-4010 (US) or 1-919-882-2331 (International), passcode 47637. The webcast and telephone replay will be available through March 1, 2023.
About Melanocortin Receptor Agonists and Inflammation
The melanocortin receptor ("MCr") system has effects on inflammation, immune system responses, metabolism, food intake, and sexual function. There are five melanocortin receptors, MC1r through MC5r. Modulation of these receptors, through use of receptor-specific agonists, which activate receptor function, or receptor-specific antagonists, which block receptor function, can have medically significant pharmacological effects.
Many tissues and immune cells located in the eye (and other places, for example the gut and kidney) express melanocortin receptors, empowering our opportunity to directly activate natural pathways to resolve disease inflammation.