Q3 2021 Palatin Technologies Inc Earnings Call
Good day, ladies and gentlemen, and welcome to the Palatin and third quarter fiscal year 2021 operating results conference call. As a reminder, this call is being recorded before we begin our remarks I would like to remind you that the statements made by Palatin are not.
And historical facts and maybe forward looking statements. These statements are based on assumptions that may or may not prove to be accurate and the result actual results may differ materially from those anticipated due to a variety of risks and uncertainties discussed and the company's most recent filings with the security Exchange Commission. Please.
Please consider such risks and uncertainties carefully and evaluating these forward looking statements and palatin and prospects now.
I would like to turn the call over to your host Dr. Carl <unk>, President and Chief Executive Officer of Palatin. Please go ahead Sir.
Thank you good morning, and welcome to the power technologies third quarter fiscal year, 2020, one call and Dr. Carl Spanish CEO and President of Palatin with me on the call today is Steve Wills, <unk> Executive Vice President and Chief Financial Officer, and Chief operating Officer on.
<unk> call, we will provide financial and operating updates.
I will now turn the call over to Steve and he'll provide financial updates as well as an update on the exciting and significant progress we are making with <unk> Steve.
Thank you Carl and good.
Everyone.
Regarding our third quarter 2021 financial results, which is Palatin quarter ended March 31 21.
Total net revenue consisting of net product revenue of <unk> was 88000 and $741.
No revenue reported for the third quarter of 2020.
But at least the gross sales amounted to $1 $780020 with net product revenue again of $88741 net of allowances and accruals compared to grow sales for the quarter ended December 31, 2020 of $943950 with net product.
Revenue of negative 163971 net of allowances and accruals.
Total operating expenses were $6 6 million compared to $5 million for the same period and 2020.
The increase was mainly due to commercial expenses related to RBC.
<unk> net loss was $5 $7 million on <unk> per share compared to a net loss of $5 4 million or <unk> <unk> per share for the comparable quarter of 2020.
As of March 31, 2021, Palatin had $68 6 million and cash and cash equivalents and $1 9 million and accounts receivable compared to $82 9 million and cash and cash equivalents and no accounts receivable as of June 32020 Palatin.
Palatin has no outstanding debt.
Yeah.
Regarding <unk>, our FDA approved product for high proactive sexual desire disorder, our HST day for the quarter ended March 31, 2020 over the prior quarter ended December 31, 2020 gross product sales increased 89% net.
Net revenue increased 154% and prescriptions increased 24%.
Very significant numbers.
For the quarter.
Geo targeted marketing efforts are expected to drive health care provider and consumer engagement.
The current digital campaign and applications reached thousands of health care providers and millions of premenopausal women monthly and has resulted in increased website, and telemedicine and traffic and conversions and.
We continue to focus on expanding access and reimbursement coverage. We estimate by Lucy has achieved approximately 75% of commercially insured lives and approximately 50% of commercial formulary coverage, including two of the three major pharmacy benefit managers and numerous regional plans.
Prescription increases and expanding access and reimbursement coverage have resulted in more favorable gross to net adjustments and positive quarterly net product revenue for the first time.
I'll now turn the call back over to Carl Carl.
Thank you Steve.
We continue to conduct our operations under the conditions imposed by the ongoing COVID-19 pandemic to date, we believe that the adjustments. We have made have allowed us to continue to advance our preclinical clinical and commercial programs, while maintaining the safety of our employees patients and health care providers and partners as you heard on Steve's presentation, we have made substantial progress and correcting and enhancing the Alicia.
And infrastructure and putting in place and excellent and motivated commercial team changes and they put in place and improve the patient experience patient access relationship with prescribers and the profitability of OTC results from the quarter demonstrate.
And there are positive effects on prescriptions and revenue we and.
Now on a strong position to demonstrate the potential value of <unk> and a cost effective manner and obtain our ultimate objective the re license or at least to a committed partner ensuring the continued availability of <unk> as a treatment option for premenopausal women with <unk>.
And we're hyperactive <unk> sexual desire disorder, and a return on our investment.
During the quarter, we updated our website and logo to reflect our transition to a focus on the development of therapeutics that target the ability of the monarch board and system to resolve it turned out inflammation and reduced fibrosis, using our extensive technology and experience and the biology, and chemistry and development of therapeutics and interact with the bodies on a court system. We are building a portfolio of therapeutics that we.
Believe we will have significant potential and treating diseases that affect the.
Gaslog vessel system and kidney.
Monaco and system plays a critical role in protecting the eye from harmful inflammation and we are developing multiple products for ocular diseases.
We delivered <unk> 43 is on <unk> agonist for treating ocular diseases that affect the tissues that comprise the anterior segment of the eye.
The first indication for <unk> four three as dry eye disease, and we have previously reported positive data on our phase II dry eye disease clinical study.
We are pleased to have been selected to present the detailed data at a podium session at the association for research and vision and ophthalmology.
2021 annual meeting in May.
The presentation was well received by the ophthalmology community, we are asking advancing topical peel and $96 three into a phase III study and <unk>.
Moderate to severe dry eye disease patients, which is scheduled to begin in the second half of calendar 2021 to support. This program. We are scheduled and the phase two meeting with the FDA to discuss the details of the phase III program.
The emerging profile of <unk> with its rapid therapeutic onset excellent ocular tolerability profile as it provides a distinct advantage and dry eye therapy and the results confirmed and the upcoming phase III clinical study, we believe the appeal and nine 643 as the potential for substantial penetration into the multibillion dollar dry eye disease market.
And the past quarter. We also continued to advance our preclinical programs for retinal and corneal diseases or data on various preclinical models and retinal disease was also presented at the ARVO at Argos poster.
And your interest in learning more about our ocular programs you can visit our new website, where you will find both of the ARVO presentations. And addition, we are hosting a key opinion leader presentation on May 21, which is focus on our ocular programs feel 1943 clinical data design of the PMI index for three phase three clinical study and the role of the Atlanta Court and system and ocular diseases.
Moving on to our 877 oral formulation for ulcerative colitis, we are conducting activities required to initiate a phase II proof of concept study, which is targeted to start patient enrollment and the second half of 2021 with potential data readout. In 2022. This will be our first clinical study designed to evaluate the potential of a selective <unk> receptor <unk>.
<unk> as a treatment for ulcerative colitis. This study will evaluate the safety and potential efficacy of oilfield and <unk> hundred 77, and if positive the results of the study will support our efforts to license or appeal 877.
Finally based on our research work on and Thats really peptide system, our drug candidate <unk> hundred 99, four which is a selective natriuretic peptide receptor a agonist is being evaluated and a phase Iia clinical study and heart disease patients with preserved ejection fraction studies and cooperation with two major academic medical centers and is supported by grants and the American Heart Association study.
Two enrolled patients and we anticipate preliminary data in early 2022.
You can find additional information on our programs on our new website at Www Dot Palatin and Dot com.
During the past quarter, we continued to make significant progress across all our programs and our healthy cash position will allow us to emerge from the pandemic and a strong position.
Under <unk> direction, our Elisa commercial activities and made significant progress. These changes are beginning to have a positive impact on increasing the OTC prescriptions and revenue per piece.
And on <unk> III, a topical treatment for dry eye disease. We are conducting activities required to begin a phase III study second half of the calendar. This calendar year and this includes preparing for and end of phase II meeting with the FDA we.
We had two presentations at the association for research and vision Ophthalmology 2021 annual meeting one covering the details of the <unk> license for three phase II clinical trial results and dry eye disease, and the preclinical data concerning on the line of cord and agonists retinal diseases.
We continue to build out on an adequate and base ocular therapeutics.
<unk> and anticipate initiating a clinical development program for a second ocular indications starting in the second half of 2021.
Remain on track to start a phase II proof of concept clinical study with an oral formulation of PL, 877% and ulcerative colitis patients, which is targeted to start and the second half of calendar 2021.
Finally, we are hosting a key opinion leader webinar on May 21, 2021 on the linerboard and agonist for treating ocular indications. The primary focus on <unk> on line 643, and our data from our recently completed phase two clinical trial for dry eye disease, and introducing our growing portfolio of Atlantic word agonist to treat the harmful effects on inflammation and AI.
As we look forward to the rest of 2021, we have a strong pipeline of novel clinical candidates and we'll remain focused on their advancement and closings, Steve and I would like to thank the Palatin and team and all of our partners for their continued dedication to the advancement of our programs. We will now open the call to questions.
Thank you, ladies and gentlemen, if you'd like to ask a question you may do so by pressing star one on your telephone keypad. Please make sure to mute function on your phone is turned off so the signal it can be read by our equipment again. Please press star one to ask a question, we'll pause for just a moment and hello, everyone and an opportunity to signal for questions.
We will take our first question from John Newman with Canaccord. Please go ahead.
Hey, guys. Thanks for taking my question just.
I just had a question on whether you see seems like you guys have been making some changes here that has.
Certainly been moving things and the right direction.
Just curious as to what we should expect for the rest of the year.
Just in terms of.
Continued efforts that Youre, making and I'm also curious if you believe that.
So to coming on to COVID-19.
You might have a positive tailwind there as well and I'm not sure. If this is a product where face to face interaction with the physician is.
As required but just wanted to ask about that thanks.
Alright, Thanks, John This is Steve.
The.
I can't give you my nostradamus predictions for the rest of the year, but we hope the the $3 31.
<unk> will be duplicated as we go forward.
Regarding the.
Pandemic.
I mean, I think I think face to face I think is always better.
Palatin just like most other companies do and doing the best we can with the limited face to face we are now experiencing some face to face.
Contact, but the vast majority and continues to be the.
The zoom or the the video the video streaming so we would anticipate that.
As the market opens up more because of the.
The pandemic and a little bit better for people and the access on the face to face being later that we'll also see some some greater uptake and our and our.
Prescription and a prescription sales.
And.
I think you have you've seen more favorable gross to net adjustment is that something that you would expect would continue to improve as we go forward.
Absolutely and that's I mean that was one of them.
The items that Carl and I targeted very early on notwithstanding increasing prescriptions per.
Alison and generates the most significant amount of net revenue on a per script basis based on the higher insurance coverage. So we've worked hard to increase our covered lives are formulary coverage and what that results and is we're going to have a a more favorable gross to net.
Our strategy right now is to continue the co pay program. So patients. The first dose is $0 out of pocket and any subsequent dose is no more than $99 out of pocket now that doesn't mean, we can't collect the insurance. So we've done as I mentioned, I think a pretty pretty good job of increasing the coverage on that.
Area, but we've also improved on the processes.
We've switched.
Switched out one of our specialty pharmacies and fuel were working pretty close with the pharmacies to make sure the processes as streamlined and as efficient as possible for both the health care provider and also for the patient.
Yes.
Okay great.
Also wondered if you could give us an update on <unk>.
Partnership activities here and I know that you guys have been working really hard on getting the prescriptions to good point, but also curious if you can talk to us a bit about.
Potential for.
Our partner here for revenue see thanks.
Thanks, John.
No question.
And Thats Palace and strategy, that's call and Steve strategy, which is to re licensed the product and the U S and also to expand.
Collaborations throughout throughout the other regions.
Those discussions slash negotiations are advancing and they're ongoing.
And I feel very comfortable that our first quarter results are going to.
<unk> assessed with those discussions because we're showing we're shown very significant progress we're showing that.
The brand has has value and.
Our investment is limited so our our strategy is to find a committed partner and the female health care space debt that has the type of infrastructure that you can either put behind this product as a standalone product or you want and added on to other existing products that you have so we think the first quarter results are very important.
Regarding those negotiations, but they are they are advancing.
Okay, great. Thank you.
Yeah.
We will take our next question from Joe and Dan.
With H C. Wainwright. Please go ahead.
Hey, guys. Good morning, Thanks for taking the question.
Wanted to focus on the evolution of 90 643, because now you have the opportunity for a second potential commercial product and and I know, we will be getting more details at the end of the week on the clinical program, but I first wanted to just see if you could talk about a little more about the and points of the planned phase III study.
Versus the phase II trial that read out in December 2020, and what kind of adjustments that you made but what I wanted to do here is really tie it to the business development or potential business development around this asset because as you know going to and the phase two meetings with the FDA and looking to start a phase III.
By the end of the year potential partner might want to have a say on the design of the program or conduct of the program. So I just wanted to combine those two thanks.
Sure.
Thanks, Jeff.
And this is Karl speaking a couple of things. So just as a for those that may be listening that don't know the dry eye disease.
<unk> very well regular environment, one strategy for us for showing efficacy is to just speak about other signs and symptoms. So there are symptoms of dry eye disease, such as scratchy eyes dry eyes.
Painful burning those are all symptoms and and the others are signs, which are more indicative of the underlying inflammation or damage and that may be occurring to the tissues of the eye and on that.
Surface of the cornea and conjunctival.
Where have you.
And so.
The strategy is showing improvement and assign and a symptom.
That forms the basis for approval of the product.
There is no.
So with that being said, we will be looking at multiple signs and symptoms and the phase II program and.
And I don't want to go too much into the details because I think we have some great people on and on a call on coming up on Friday that were really walk you through the data how that was translated into the design of the phase II trial. The design that we're using which is a little bit innovative and.
And how.
And how that's going to play out, but suffice it to say, we'll be looking at signs and symptoms and again.
And some that were pulled from the phase II data so the ones that debt coming out of the phase II data, where we have the strongest results in.
Moderate severe patient population, which is the one that we're looking at.
We the ones that will be the basis of both the primary and key secondary endpoints, so there'll be things such as improvement and ocular pain.
Injectable staining and <unk>.
Corneal fluorescein staining. These are the types of things that we showed very strong results on.
And the phase II study and there'll be the basis of the phase III, but how theyre going to be structured analyzed.
I think I likelihood.
Little suspense for the end of the week, because I think we have some really great guys that can walk you through and I think we've designed a very very innovative program that reduces our risk as we go forward into phase III and we're quite excited about it so I'll leave it there on that subject with regards to.
Licensing and what have you.
And.
Yes.
Joe we've learned a lot through by VC and low.
We're not necessarily in a great hurry to license this asset and the ocular assets as we come through and we have the capital to go through into this into into the clinical study the phase II clinical study. So although we're getting interest and we're starting to obviously engage with potential partners.
I think that the things that we're doing from the feedback we're getting are the types of things that theyre comfortable with so I don't think there'll be there will be much of a change and the design of the trial had we bring and if we bring a partnership in and we want to make sure that.
It gets a broad viewing we don't want to talk to on part of course with total and partner if they offer us a lot of money that's a different story, but we do want to.
Make sure that we've got a good partnership and.
We get true value for what we think is a really and ask.
That really <unk>.
<unk> to show positive results here.
And we'll be really impactful on the treatment of dry eye disease as well as other.
And on the front of the eye.
I mean I don't think this is good this price is limited to one indication.
No absolutely that's fair, thanks, a lot and looking forward to Friday.
Yes, I think we've got great great set of people come and talk to you and.
We're excited by it.
Yes.
We'll take our next question from Michael Higgins with Ladenburg Thalmann. Please go ahead.
Alright, thanks, guys. It sounds like Youre sitting on a lot of the comments on 90 643 for the KOL event. So I'll hold my office will then does seem do you want to discuss it and further detail guidance. So I appreciate it thanks Bill.
Okay. Okay.
Thank you ladies and gentlemen, this will conclude today's question and answer session. At this time I'd like turn the conference back to Dr. Spanish and Michael Higgins for any additional or closing remarks.
I think he minutes he will okay Mike.
And Michael that you have to make any remarks.
And thank you guys for the call and insightful questions.
Continue to make a lot of progress here and we're very excited about where we're going and our future direction not just in the ocular space, but in others.
And although the near term as ocular don't forget about the assets and on <unk> and there are some other things that we'll be looking at as well for.
And for those that are.
On the call know or listen to it.
I think you can find and invitations to the west to the webinar on Friday on the website.
Please sign up and we've got really some of the best and.
And the world debt or we're working with and there'll be presenting the data.
The trial design, and where we're going and really the role of Mount a court system and the.
And ocular inflammation, so quite a lot to learn and I think quite an exciting time for us. So thank you.
Be safe and we look forward to Friday's call and then also continue to update you on our progress. Thanks.
Ladies and gentlemen. This concludes today's conference. We appreciate your participation you may now disconnect.
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