Q1 2022 Palatin Technologies Inc Earnings Call

Yeah.

Hello, Ladies and gentlemen, welcome to <unk> first quarter fiscal year, 2021 and operating results conference call. As a reminder, this conference is being recorded before we beginning a remarks I'd like to remind you that the statements made by Palatin I've not historical facts and maybe forward looking statements. These statements are based on assumptions that may or.

It may not prove to be accurate and that the actual results may differ materially from those anticipated due to the variety of risks and uncertainties discussed in the company's most recent filings with the Securities and Exchange Commission. Please consider such risks and uncertainties carefully in evaluating these forward looking statements and colleges across prospects.

Now I'd like to turn the call today's call over to our host Dr. Carlos <unk>, President and Chief Executive Officer of Palatin.

Thank you and good morning, and welcome to the Tyler Technologies first quarter 2022 call I'm Doctor Cross banner, CEO and President of Palatin with me on the call today is Steve Wills Pallets as executive Vice President Chief Financial Officer, and Chief Operating Officer on today's call, we will provide financial and operating updates I will now.

I'll turn the call over to Steve and he'll provide the financial update Steve.

Thank you Carl and good morning, everyone.

Yeah.

Regarding our research and development infrastructure, we have strengthened our R&D department with key appointments, who have demonstrated a high level of expertise in their field to support the advancement of our development programs.

Regarding by leasing, which is FDA approved for the treatment of puzzle hyperactive <unk> sexual desire disorder, our H S. D D. In pre menopausal women. Our goal with this program is to demonstrate product value in the marketplace with an objective of re licensing the U S rights to a committed women's health care company or entity.

Our measured plan is showing positive trends for the targeted value metrics.

For the quarter ended September 30 of 2021 by lease he gross product sales increased 18%.

Net revenue increased 98%.

Net revenue per prescription dispensed increased 45% despite a 13% decrease in total prescriptions dispensed over the prior quarter ended June 30th 'twenty, One 2021.

Market access reimbursement coverage and repo rates have all increased over the prior quarter ended June 32021.

And also over the successive quarters ended December 31, 2020 and March 31st 2021.

Regarding our overall operating results.

Specifically revenue total net total net revenues consist of gross product sales are by Lucy net of allowances and accruals.

Or at least the gross product sales for the quarter ended September 32021 amounted to one 4 million with net product revenue of 159000 and for a detail compared to gross product sales for the period July 25th which was the date Palatin regained north American rights to <unk> from a bag to September 30 of 2020 of 809.

<unk> thousand 100 with negative negative product revenue for the September 30th 'twenty period of $288560.

Regarding operating expenses total operating expenses for the quarter ended September 32021 were $7 4 million compared to $3 7 million for the comparable quarter of 2020.

Regarding cash flows pelicans net cash used in operations for the quarter ended September 32021 was $6 4 million compared to net cash provided by operations of $3 8 million for the same period in 2020.

Regarding that loss Allison's net loss for the quarter ended September 30 of 2021 was $7 1 million or three cents per basic and diluted common share compared to a net loss of $3 9 million or two cents per basic and diluted common share for the same period in 2020.

The differences to the operating expenses the cash flows and the net loss for the quarter ended quarter ended September 30 of 2021, and 2020 were primarily due to the gain of $1 6 million in the September 30th 20 quarter, which reduced expenses during that quarter recorded.

And specifically due to the vie lease termination agreement with Aimak secondarily to increased commercial expenses related to by leasing.

Regarding cash position as of September 30th 2021, Palatin has cash cash equivalents were $53 4 million with approximately 900000 of accounts receivable compared to cash and cash equivalents of approximately $60 1 million with $1 6 million of accounts receivable as of June 32021.

Based on our current operating plan, we believe that existing cash and cash equivalents will be sufficient to fund currently anticipated operating expenses through calendar year 2022.

To be clear the operating plan does include.

The comprehensive expenses covering palisson significant inflection points of data readout for our phase III dry eye disease trial, and also data readout for our planned ulcerative colitis phase II trial, both in the second half of calendar 2022.

At this time I'll turn the call back over to Carl.

Thank you Steve.

Just a few words on <unk>.

Under <unk> leadership, we continue to make strong progress in the core value metrics that support the commercial value of <unk> with net revenue up 98% and net revenue per prescription up 45% over the June quarter.

Jackie this re licensed <unk> to a committed partner ensuring the continued availability of our <unk> as a treatment option for premenopausal women.

<unk> sexual desire disorder.

We continue to engage with potential partners and in the U S. In other territories and the timing of a potential license is actually dependent on us reaching acceptable terms with the right partner.

Now I will move on across a multitude of inflammatory and autoimmune diseases. There remains a vital medical need for new treatments to provide patients and clinicians with safe and effective options.

Our research and development operations are focused on advancing a new treatment modality.

For patient suffering from pathological inflammation with a primary focus on ophthalmic diseases, such as diabetic retinopathy dry eye uveitis using.

Using our unique understanding and expertise developing drugs that modulate the Atlanta Court system.

Many of the current treatments for inflammatory and autoimmune conditions work by blocking one or more pro inflammatory pathways, which can cause immune suppression and major safety concerns. In addition, many patients efficacy phase overtime.

To advance the treatment of patients with inflammatory and autoimmune diseases. There is a strong need for new mechanisms of actions that can result, an efficacious treatments with better safety.

The <unk> system is one of the body's natural mechanisms for resolving inflammation and restoring the immune system to a normal state and to promote tissue healing. We believe that therapeutics are accurate in Atlanta Court system will be highly differentiated delivering efficacy with a superior safety profile.

We have a multi layered plan that is designed to advance our understanding of how the Atlantic quota system works at a molecular level and to provide the clinical validation of Atlantic Horton based therapeutics. If successful we will have developed a new class of therapeutics for the treatment of inflammatory and autoimmune diseases.

Our research scientists are using the latest genomic proteomic and cell biological technologies to advance our fundamental understanding Palomar adequate system resolve inflammation and promote tissue healing.

Results of these activities are already helping to guide our clinical development programs and we look forward to communicating them through scientific publications and presentations in 2022.

Our clinical development programs are primarily focused on developing <unk> based treatments for ocular indications. However, we are also conducting small proof of concept studies for non ocular indications. These studies are designed to promote the broad utility of the Atlantic quota system is a new target.

Drug development and support our technology licensing efforts.

Of course, our ultimate goal is to develop a new and differentiated therapeutics that provide efficacy and superior safety treatment options for patients.

<unk>.

<unk> system plays a critical role to protect NII from harmful inflammation and we are developing multiple microrna based products for ocular diseases topically delivered to <unk> 94, three is our most advanced Atlantic Horton agonist for treating ocular diseases that affect the tissues that comprise the anterior segment or the front of the eye.

The first indication for <unk> four three as dry eye disease, and we had as we have previously reported positive data from our phase II dry eye disease clinical study.

We had a successful end of phase II meeting with the FDA, where we reached agreement on the key aspects of the Pn 943 Phase III clinical development program. These include patient population endpoints in clinical trial design for the first of two phase III pivotal registration studies.

Firstly on <unk> III phase III dry eye disease study is called <unk>, one and we will evaluate the safety and efficacy of PL 943 versus vehicle control in patients with moderate to severe dry eye disease over a 12 week treatment period.

The study is targeted to enroll 240 patient, but includes an interim data assessment to be conducted by an independent data monitoring committee that will allow us to increase the number of subjects if needed reducing the risk of an underpowered study.

The three co primary in three key secondary endpoints will be comprised of signs and symptoms of dry eye disease, and we are determined based on a detailed analysis of the phase II data.

<unk> will initiate in the fourth quarter of calendar 2021, with an interim data assessment in the first half of calendar 2022, and preliminary data is anticipated in the second half of calendar 2022.

If successful we will initiate the second phase III study.

Dry eye disease called <unk>, two an open label safety study called <unk>. Three is successful <unk> PL 943, dry eye disease studies will provide the safety and efficacy data required to file a new drug application with the FDA.

The emerging profile of <unk> 94, 3% with its rapid therapeutic onset excellent ocular tolerability and safety as a potential distinct advance and dry eye therapy.

The two phase II results are confirmed in the upcoming phase II clinical study, we believe that PL 943 has the potential for substantial penetration into the multibillion dry eye disease market.

We also believe that <unk> 43, and other <unk> agonists will have utility in treating multiple front of the eye diseases and we are planning to initiate a clinical study and a second front of the eye indication in calendar 2022. The indication for this study has not yet been finalized but will be based on our data and research.

Over the past year. We've also made significant advancement in the understanding of the potential of targeting Atlantic worn system for treating back of the eye diseases, such as diabetic retinopathy and macular edema.

Preclinical models of retinal injury diabetic retinopathy treatment with our peptide 96, 504, <unk> agonist improved retina morphology protected against photo receptor cell loss.

And importantly maintained vision.

The Pea on $95 four data supports advancement into clinical development and we are currently working on developing a formulation for sustained release of <unk> 543 that will be administered by <unk> injection, a common technique used to deliver drugs for treating retinopathy.

Current market drug market for the various retinopathy drugs was approximately $20 billion in 2021 and is projected to be $27 billion by the end of 2025.

There remains a large need for new innovative treatments for retinal diseases, and we believe PL 9654, although early in its development as a tremendous potential to positively impact patients with retinal disease and garner a significant part of this very large market.

In parallel with our ocular research and clinical development activities, we have been conducting an extensive communication effort targeting ophthalmologist and optometrist talented scientists and collaborators have made presentations that most of the major medical meetings.

We have been actively publishing our research our presentation, describing the protective effects of <unk> hundred 31, NPL 96, 504 in mouse models of retinopathy.

Presented at the 2021 annual meeting of the American Society of retinal specialists was awarded a top 10 poster designation, our communications efforts or establishing pallets into the community company developing exciting new treatments for ocular diseases.

Moving onto our PL 877, oral formulation for ulcer colitis, we are conducting the activities required to initiate a phase II proof of concept study, which is starting to start patient enrollment in the first half of 2022 with initial data readout in the second half of 2022. This will be our first clinical study designed to evaluate the potential of a selective mine according to <unk>.

<unk> receptor agonist as a treatment for ulcerative colitis study will evaluate the safety and potential efficacy of oral PD L 177.

If the positive results of the study will add to the validation of the <unk> system as a target for innovative drugs as well as support our licensing efforts for <unk> 177.

The market for drugs that target or treat various inflammatory bowel diseases is multibillion dollars and there remains a large need for new safe and effective treatment options to expand and advance the treatment of these patients the emerging safety profile and efficacy profile of <unk> 177, if confirmed will be a potential major advance in the treatment of inflammatory bowel disease.

Particularly in the pediatric population.

But naturally peptide program continues to advance our drug candidate <unk> hundred 94, which is a selective natriuretic peptide receptor a agonist is being evaluated in the phase Iia clinical study in heart disease.

<unk> with preserved ejection fraction. The clinical study is being conducted in cooperation with a major academic center and is supported by grant from the American Heart Association. The study continues to enroll patients and we anticipate preliminary data in early 2022.

You can find additional information on our research and development programs on our website Pelican.

<unk> Dot com.

In closing a little over a year ago with return of <unk>, We were a company with a single female health product and early but very interesting preclinical programs. As we begin calendar 2022, we are a different company advancing a new mechanism for treating a variety of inflammatory and autoimmune diseases based on drugs that modulate the Montana court system with the <unk>.

Focus on ocular diseases, our first actual amount of corn based drug T. Online 643 will start phase III dry eye disease study before calendar year end and we are advancing.

604, because the drug development process as a treatment for retinal diseases.

Both of these innovative drugs have the potential to be significant players and growing multibillion dollar markets.

We are also planning to move a second front of the eye program into clinical studies in 2022.

Foundation for this transformation our unique understanding of the Atlantic Court system and experienced in developing.

And the approval of drugs that modulate the system.

Over the past year, we have put in place the infrastructure scientists and research activities that are advancing our understanding of how the monarch. One system works. The results are already beginning to help guide our clinical programs.

We remain on track to start a phase II proof of concept clinical study with the oral formulation of <unk> hundred 77 <unk> patients.

In the first half of 2022 with mid readout with readout in the second half of 2022.

Under Steve's direction are releasing commercial activities had made significant progress in these changed at the beginning of a positive impact on increasing by Lisa prescriptions and revenue and we are actively engaged in realizing it leads me to a committed partner.

In closing, we look forward to 2022, Steve and I are excited by the tremendous opportunity that we have to advance a portfolio of highly differentiated innovative drugs that will positively impact patients and build shareholder value.

Well, thank you for listening to our call and your continued support.

The call to questions.

<unk>.

Ladies and gentlemen, if you wish to ask a question at this time, please signal by pressing star one on your telephone keypad. Please make sure your demand function on your phone is switched off to allow your signal to reach our equipment.

Now our first question comes from Joe I think.

<unk> from H C. Wainwright. Please go ahead.

Hey, guys. Good morning, Thanks for taking the question.

A couple if you don't mind, so first I know, it's hard to predict but.

With regard to vie Lee C. Can you at least describe I guess the maturity of these discussions and the tenor of the discussions.

Hey, Joe it's Steve.

We're not going to go if you will.

That specific regarding the discussions where we are chatting with multiple companies and there are different levels of those discussions I will tell you. The progress we've made over the last few quarters.

<unk> has been significant and it's frankly made for better better discussions.

It's really no different than when you're when you're doing drug development. There you go through phase one phase III safety and proof of concept and then you move forward.

We're showing those those metrics.

What we highlighted today, where we're quite we're quite pleased with based on our limited investment that we've been able to make this type of progress and to frame that a little bit Joe when we took over in <unk>.

Late July of 2020.

There was less than 5% of the scripts running through with with insured being reimbursed we're now over 40%.

At this point, we actually had negative I'm not stuttering negative.

Net net product revenue, we now have positive net product revenue.

And very importantly, the revenue per participant script.

It has gone up significantly and Thats really the Holy Grail, which is to get your.

If you have a non if you have a model where insurance reimbursement is very very significant which ours is.

Because we have a very very good whack the higher amounts you get in that in that area that frankly, the obviously the higher amounts are going to get for the net revenue. So we've been concentrating on those areas and those areas are absolutely bearing fruit. So again, it's the discussions are are frankly.

Better just because we're able to show that type of activity.

Our metric is not to increase the scripts are we okay with the scripts increased absolutely, but we're not we don't have a sales force we're not spending the types of monies that other other companies.

We're very aware of saying the female healthcare space are spending.

Whether it's DTC digital social media whatever so we're pleased that the metrics that we targeted with our limited investment.

<unk> are starting to show very very positive trends and from.

From a timing standpoint, we've talked about it being done by the end of the year, we've adjusted a little bit of that guidance and that we think it's going to roll into the could very well well into the first half of 'twenty two but that's our objective and it's a timing difference where we're always data driven we're not de driver and we want to make sure we have the right partner.

To go forward and frankly give give by <unk>.

The attention it needs.

Let me pause there is that responsive enough Joe.

I appreciate the color, Steve and I guess my next two questions are somewhat related but it really focuses on your I guess call. It really broadening activities for <unk> platforms and you guys are quite busy so I guess with regard to all of your efforts either for 90 643 or your additional <unk>.

Assets.

How are you with regard to say formulation work for assets in development and manufacturing readiness.

Sure.

Obviously for it for <unk> 43.

Actually we're just getting ready to release drug product to clinical trial sites and the format. There is very simple, it's a little single use.

Plastic local Brookfield.

Dispenser.

After a single dose of the drug so that technology is very well established and certainly we're on track to have validated manufacturing that supports phase III and then as we're doing the phase III will be working to put in place the final commercial for that.

More importantly.

More where you were going with 96.

For 300.

95, <unk> sorry for.

Retinopathy, which we really are I can't tell you how excited we are that product and what it's doing and the way it's performing.

As pre clinically and if we can do that in the clinic is going to be great.

Pretty lucky there, we should be getting the first formulation data coming in soon to take a look at it because the drug is an agonist and we're giving relatively low dosing. So we don't have to load up with drug.

The expectation and what we're seeing so far is that it is going to behave pretty much like the vehicle carriers. So we have we're pretty bullish that as we get into the beginning of the year. We will have we will have a formulation that will begin animal testing and pretty much by mid year, we hope to have that really moving into the preclinical activities safety and so on and so forth to get into patients. So we think that's a pretty.

Low risk, but one that we're really really pushing on.

And then finally oral again.

For PL 877.

Again, a peptide and we're delivering it to the colon in the gastrointestinal track, we're retreating aluminum through oral delivery.

Of that formulation I would characterize it as appropriate for its stage of development and the C. In our.

Manufacturing team is working with vendors to move past the phase II formulation and to have in place.

A much better more robust manufacturing process to support licensing when that data comes in so we're in good shape. There I think overall and the team's working pretty hard on that and as you know we were experienced.

Setting up manufacturing for commercialization with our experience with <unk>.

Yes.

What I'm just going to use one of your comments with 90 654, and what Youre doing there is a little bit of a segue.

For my last point, it's like with regard to being so busy once you develop the formulation for 96, 5% for how quickly do you think you can really move into or want to move into back of the eye disorders based on your current punch list.

Yeah.

It is going to certainly move into early 'twenty three.

Let's just put it this way if we are if we are.

Well situated by mid year mid 'twenty, two which I think we will be we will have it will take about nine months to file an IND.

And of course because of the retinopathy space is very large and is dominated by large players. We will be actively looking to have partnership discussions throughout the development process of $96. Four of course, you never sure Youll get a deal done, but we certainly want to we will continue with that forward because.

Patients with your various retinopathy is really they have no current treatment options with the timely with anti VEGF and they certainly do work in some patients.

They don't treat all patients and it remains a very very strong need. These patients will eventually go blind if they don't get treatment and even those that are on current treatment overtime. The FC does Wayne. So there was a very very strong need.

It's just astounding how large that market is $27 billion by 2025, and that's a large market that we're going for so I am sure at some point, we're going to need some help and we want to make sure that.

We get it we get it in place.

Got it thanks for the color guys.

Yes, Thanks, Joe.

Thank you as there are no further questions in the queue I would like to hand, the call back over to Dr. Carl <unk> for any additional or closing remarks.

Great.

Thank all of you for participating in our fiscal first quarter 2022 call.

Calendar 2022 is a big year for US we've got a lot of clinical readouts.

There are a number of things that we haven't yet disclosed to you that we will be disclosing to you probably on our next call.

That are quite exciting development. So we really are couldn't be more excited here teams are really.

Cranking out and we're going to have a lot of a.

Milestones and accomplishments next year.

That being said.

Enjoy your day, you ended the year festivities and holidays, and we'll talk to you soon.

Thank you. This concludes today's conference call. Thank you for your participation ladies and gentlemen, you may now disconnect.