On May 17, 2022 Palatin Technologies, Inc. (NYSE American: PTN), a 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 fiscal third quarter ended March 31, 2022 (Press release, Palatin Technologies, MAY 17, 2022, View Source [SID1234614728]).
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"Patient enrollment is on track for our lead programs, a Phase 3 pivotal study of PL9643 in patients with dry eye disease with topline results currently expected in the second half of calendar year 2022, and a Phase 2 clinical study of PL8177 in patients with ulcerative colitis is expected to start next month with topline results currently expected first quarter calendar 2023," stated Carl Spana, Ph.D., President and CEO of Palatin. "Regarding Vyleesi, our March 31, 2022 quarter reflected increases across all value metrics compared to the prior quarter, including gross product sales, net product revenue, prescriptions dispensed, refill rates, and commercial insurance reimbursement."
Dr. Spana further commented, "Our $15 million preferred stock offering addresses several objectives. It puts us in an excellent position to effect a reverse split of our common stock at our annual meeting of stockholders, which will provide the Company with flexibility to fund future product development and retain and attract talented employees, price our common stock at a price per share reflective of the development stage of Palatin, increase our investor and financing options, and assuming the holders convert to either common stock or debt, coupled with our strong cash position of approximately $38 million at March 31, 2022, provide us with sufficient operating cash runway through at least calendar 2023."
Third Quarter Ended Fiscal Year 2022 Financial Highlights
Net loss for the quarter ended March 31, 2022, was $7.6 million, or $(0.03) per common share, compared to a net loss of $5.7 million, or $(0.02) per common share, for the same period in 2021.
As of March 31, 2022, the Company had cash and investments of $37.7 million, compared to $47.3 million as of December 31, 2021, and $60.1 million as of June 30, 2021, and no debt.
Vyleesi (bremelanotide injection) / Hypoactive Sexual Desire Disorder (HSDD): Gross product sales increased 67%, net product revenue increased 200% and prescriptions increased 20%, over the prior quarter.
Business Highlights and Updates
• Anti-Inflammatory / Autoimmune Programs
° PL9643 melanocortin agonist for the treatment of dry eye disease (DED):
– Pivotal Phase 3 clinical study in DED patients is ongoing. Topline data readout expected in the second half of calendar year 2022.
– NDA submission is targeted for the first half of calendar year 2024.
– Hosted Key Opinion Leader webinar on DED.
– Spotlight Presentation at the Eyecelerator@ASCRS 2022 conference in Washington D.C. covering the role of melanocortins in the treatment of ocular disease and Phase 2 study results with PL9643 for DED conducted.
– Presented posters at the Association for Research in Vision and Ophthalmology (ARVO) 2022 Annual Conference highlighting Palatin’s ocular research and PL9643 Phase 2 clinical data.
° PL8177 melanocortin agonist for the treatment of ulcerative colitis (UC):
– Presented the positive effects of PL8177 at the 2022 Crohn’s and Colitis Congress on treating UC in an animal disease model, including genomic data characterizing the anti-inflammatory effects of melanocortin agonists.
– A Phase 2 oral formulation study of PL8177 in UC is currently scheduled to start in the first half of calendar year 2022. Topline data readout currently expected in the first quarter of calendar year 2023.
• Vyleesi (bremelanotide injection) / Hypoactive Sexual Desire Disorder (HSDD): Goal of the Vyleesi program is to demonstrate product value in the marketplace with an objective of re-licensing the U.S. rights to a committed women’s healthcare company.
° For the quarter ended March 31, 2022:
– Gross product sales increased 67% over the prior quarter, decreased 27% over the comparable quarter in 2021.
– Net product revenue increased 200% over the prior quarter, increased 144% over the comparable quarter in 2021.
– Total prescriptions dispensed increased 20% over the prior quarter, flat compared to the comparable quarter in 2021.
– Refill rates, commercial insurance reimbursement, and net revenue per prescription dispensed increased over the prior quarter and comparable quarter in 2021.
° Patients and healthcare providers can learn more about HSDD and Vyleesi at www.vyleesi.com and www.vyleesipro.com
• Other: On May 11, 2022, Palatin entered into a securities purchase agreement with institutional investors, selling and issuing 8,100,000 shares of Series B Convertible Redeemable Preferred Stock ("Series B Preferred Stock") and 900,000 shares of Series C Convertible Redeemable Preferred Stock ("Series C Preferred Stock"). Each share of Series B Preferred Stock and Series C Preferred Stock had a purchase price of $1.67 and is convertible into Palatin common stock at an initial conversion price of $0.45 per share. The investors in the Series B Preferred Stock and Series C Preferred Stock also received warrants to purchase up to 1,666,667 shares of common stock at an exercise price of $0.50 per share, which expire 48 months following issuance. Total gross proceeds from the offering, before deducting offering expenses, is $15 million.
The Company expects to call a meeting of stockholders to seek approval of, including, but not limited to, an amendment to its certificate of incorporation authorizing a reverse stock split. Holders of the Series B Preferred Stock and Series C Preferred Stock are entitled to vote only on the reverse stock split and any adjournment of the meeting relating to the reverse stock split.
To the extent any shares of Series B Preferred Stock or Series C Preferred Stock are converted to common shares or redeemed for debt, the Company will use such net proceeds from this offering for working capital and general corporate purposes. Additional information regarding the securities described above and the terms of the offering are included in Palatin’s quarter ended March 31, 2022 10Q filing with the United States Securities and Exchange Commission.
Third Fiscal Quarter Ended March 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 for the quarter ended March 31, 2022, amounted to $1.3 million, with net product revenue of $216,097, compared to gross product sales of $1.8 million, with net product revenue of $88,741, for the comparable quarter in 2021. Gross product sales decreased 27% and net product revenue increased 144% over the comparable quarter in 2021.
Operating Expenses
Total operating expenses for the quarter ended March 31, 2022, were $8.0 million, compared to $6.6 million for the comparable quarter in 2021.
The increase in operating expenses was the result of increased research and development expenses primarily related to our ongoing pivotal Phase 3 clinical trial of PL9643 offset by decreased commercial expenses related to Vyleesi.
Other Income / (Expenses)
Total other income, net, consist mainly of unrealized foreign currency gains of $190,719 and $753,750, respectively, for the quarters ended March 31, 2022 and 2021.
Cash Flows
Palatin’s net cash used in operations for the quarter ended March 31, 2022, was $9.5 million, compared to net cash used in operations of $3.5 million for the same period in 2021. The increase in net cash used in operations is mainly due to a $4.3 payment received in March 2021 related to our Termination Agreement with AMAG Pharmaceuticals, offset by increased operating expenses.
Net Loss
Palatin’s net loss for the quarter ended March 31, 2022, was $7.6 million, or $(0.03) per basic and diluted common share compared to a net loss of $5.7 million, or $(0.02) per basic and diluted common share, for the same period in 2021.
The increase in net loss for the quarter ended March 31, 2022 over the quarter ended March 31, 2021, was mainly due to the increase in operating expenses.
Cash Position
As of March 31, 2022, Palatin’s cash and cash equivalents were $37.7 million with $0.8 million of accounts receivable, compared to cash and cash equivalents of $47.3 million with $0.6 million of accounts receivable as of December 31, 2021, and $60.1 million of cash and cash equivalents with $1.6 million of accounts receivable as of June 30, 2021.
Based on its current operating plan, Palatin believes that existing cash and cash equivalents along with the $15 million of proceeds raised from our recent private placement of Preferred Stock, assuming conversion to common stock or debt, will be sufficient to fund currently anticipated operating expenses through at least calendar year 2023.
Conference Call / Webcast
Palatin will host a conference call and audio webcast on May 17, 2022 at 11:00 a.m. Eastern Time to discuss the quarter ended March 31, 2022 results of operations in greater detail and provide an update on corporate developments. Individuals interested in listening to the conference call live can dial 1-800-304-0389 (US/Canada) or 1-313-209-5140 (International), conference ID 1376619. 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 1-888-203-1112 (US/Canada) or 1-719-457-0820 (International), passcode 1376619. The webcast and telephone replay will be available through May 24, 2022.
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.