Q1 2024 Palatin Technologies Inc Earnings Call
Okay.
Greetings welcome to Powertrains first quarter fiscal year 2024 operating results conference call.
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Question and answer session will follow the formal presentation.
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Before we begin our remarks I would like to remind you that statements made by Palatin are not historical facts and may be forward looking statements. These.
These statements are based on assumptions that may or 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.
Evaluating these forward looking statements by Palatin prospects now I would like to turn the call over to our host Dr. Carl <unk>, President and Chief Executive Officer of Palatin. Please go ahead.
Thank you good morning, and welcome to the Palatin first quarter fiscal year 2024 call I'm, Dr. Carl <unk>, 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.
I'll now turn the call over to Steve and he will give the financial and operating update Steve. Thank.
Thank you Carl.
Welcome everyone.
Regarding non financial highlights for our commercial product <unk>, which is approved for premenopausal women for the treatment of H S. D day, which stands for hyperactive <unk> sexual desire disorder.
As we mentioned prior the goal.
This is demonstrated commercial products value in the marketplace with an objective of re licensing their U S, possibly even the global rights to our committed women's health care company.
Hamilton is the licensee of our leasing in China, Fosun pharma reported its first sale in the Henan province of China.
Palatin licensee about Lucy and South Korea, Kwang Dong Pharmaceuticals completed enrollment in its phase III clinical trial evaluating the efficacy and safety of by Lucy and pre menopausal women with H S. D day.
Data is currently anticipated by calendar year end 2023, with the potential regulatory submission in the first half of calendar 2024.
Palatin entered a strategic partnership with ups Scripps health, a leading direct to consumer telemedicine company, providing telemedicine services to pharmaceutical and medical technology companies.
Regarding operations specific to buy leases.
For the fiscal first quarter ended September 32023, gross product sales of $4 6 million increased 11% over the prior quarter and increased 100% over the comparable quarter last year.
Net product revenue of $2 1 million increased 20% over the prior quarter and increased 142% over the comparable quarter last year.
Total prescriptions dispensed increased 14% over the prior quarter and increased 88% over the comparable quarter last year.
Refill rates commercial insurance reimbursement and net revenue per prescription dispense continued with positive and impactful results and trends versus the prior quarter and comparable quarter last year.
<unk> reported its seventh consecutive quarter of double digit growth across all.
All metrics are both significant and so I'm not as significant.
Importantly, polices quarterly net product revenue continues to exceed by Lee see quarterly operating expenses.
Moving over to overall operations.
For the fiscal for the first quarter ended September 30 of 2023 regarding revenue total revenue consists of gross product sales of <unk> net of expenses allowances and accruals and license and contract revenue.
As I mentioned by at least the gross product sales to pharmacy distributors for the quarter ended September 32023 were $4 6 million with net product revenue of $2 1 million this compared to gross product sales of $2 3 million.
Like it was a double and net product revenue of a little under 1 million for the comparable quarter last year gross product sales increased 100%, yeah, that'd be a double and net product revenue increased 142% over the comparable quarter last year.
Regarding operating expenses total operating expenses were $8 2 million for the quarter ended September 30 of 2023 compared to $9 6 million for the comparable quarter last year. The decrease in operating expenses was mainly related to the overall decrease in expenses on our M. C stands for Atlanta, Courtin programs and secondarily to the overall.
The decrease in selling expenses related to <unk> and to a certain extent the reduction in cost of product sold due to the sale of fully reserve IDC inventory.
Regarding cash flows pallet since net cash used in operations for the quarter ended September 32023 was $5 9 million compared to net cash used in operations of $8 6 million for the same period in 2022. The decrease in net cash used in operations is mainly due to a decrease in net loss offset by working capital changes.
Regarding net loss net loss for the quarter ended September 32023 was $5 9 million or 48 cents per basic and diluted common share compared to a net loss of $8 3 million or 86 cents per basic and diluted common share for the same quarter in 2022.
Excuse me I have a little bit of a lingering cough regarding cash position as of September 30th 2023, Pelicans cash cash equivalence and marketable securities were approximately $5 5 million plus $1 3 million of accounts receivables compared to 11 million plus $2 9 million of accounts receivables as of June.
32023.
This $5 5 million of cash cash equivalence and marketable securities as of September 30 of 2023 does not include $4 5 million in net proceeds from the registered direct offering which closed in October 2023.
We believe that existing cash cash equivalents marketable securities and accounts receivables will be sufficient to fund currently anticipated operating expenses and disbursements into the first half of calendar year 2024.
Now I'll turn it back over to Carl.
Hum.
Thank you Steve.
As you know our focus is on establishing them line of court system as a target for safe and effective medicines to treat inflammatory and autoimmune diseases and to develop a pipeline of highly effective drugs with unparalleled safety.
We have three active clinical programs based on the line of Gordon agonist with multiple new programs ready to advance into clinical development pending resources all of these coming from our highly productive research activities.
As we previously reported we have completed patient enrollment in the <unk> license for three <unk>, one phase III study for dry eye disease. As a reminder, pn 940, <unk> is a topically delivered <unk> agonist that works by resolving inflammation on the ocular surface that is across our key causes of dry eye disease.
We will also conduct an interim analysis of the initial 120 patients enrolled the melody, one which showed statistical separation for clinical efficacy across multiple signs and symptoms of dry eye disease importantly, beyond 940, <unk> has excellent ocular safety and tolerability with less patient about the complete randomized treatment, we're working to have the top.
<unk> data by year end, we believe the emerging efficacy and Tolerability profile appeal 9643 is the potential to be a leading treatment for dry eye disease.
Moving on our phase II study evaluating oral <unk> hundred 77.
Selected linerboard, one receptor agonist and I was just glad as patients is on track for an interim assessment of the clinical data in the first quarter of 2024.
Supporting 77 development, our preclinical studies, demonstrating that treatment with <unk> hundred 77, and disease model causes disease colon to improved to a healthy state and work to resolve the pathological inflammation.
Resolving inflammation rather than blocking it provides the possibility of efficacy coupled with safety and treating colitis and inflammatory bowel disease.
Finally, our breakout study, which is a phase II open label study in diabetic patients with kidney disease is on track for topline data in the first part of 2024 as well.
I would like to take a minute to hide.
Late two new clinical studies that we are anticipating starting in the first quarter of calendar 2024.
The first is a phase II study evaluating a novel formulation, combining <unk> and Atlanta Gordon agonist with a phosphodiesterase five inhibitor and these are drugs such as <unk> I'm, sorry, it's such as C Alice and Viagra.
This is an extension of our commercial efforts in sexual dysfunction, approximately 35% of men with retinal dysfunction fail or have an inadequate response to PD five inhibitor treatment represent a large underserved market.
Only treatment options for these failure patients are highly invasive such as penile injections or penile implants.
We have previously conducted clinical trials showing the synergistic effects of combining bema latter tied with the PDE five inhibitor at a treatment for erectile dysfunction.
The second clinical study will evaluate <unk> in Atlanta, and four receptor agonist and obese patients taking <unk> one agonist the <unk> one agonists for things such as those epic.
Or will go over these are drugs that are being used to hear them on the news all the time. These are the drugs out of the current standard of care for treating these patients.
As drug treatment for obesity is now established and growing rapidly. We believe the treatment goal will switch from driving weight loss to overall weight management. This will require a variety of drugs with different mechanisms of action that affect not only weight loss, but importantly weight loss maintenance.
We strongly believe that drugs targeting Atlanta court system will be an important part of the future of obesity.
Treatment and overall weight management.
Our extensive experience in the design and development of linerboard and agonist for treating obesity, including two clinical studies, we are well positioned to be a leader in the development of a lotta Gordon based therapeutics.
Just a few operating highlights before we move onto questions.
So I just want to just reiterate again, we are so pleased with our leasing seven consecutive quarters of double digit growth across all value metrics, notably our net product revenue increased 20% over the previous quarter prescriptions expense of 14% over the prior quarter.
Listen we are also very excited that at least a quarterly net product revenue continues to exceed by at least quarterly operating expenses.
As we stated we're planning to initiate a two new.
Corn programs with phase two clinical studies, starting in the first quarter of calendar 'twenty four with a data readout in 'twenty four as well. The two studies are as we just said one will evaluate the co formulation of <unk> with a PDE five inhibitor in patients with erectile dysfunction that have failed first line therapy. So in other words by Viagra Cialis isn't working.
For them and they need to move on to more aggressive therapy. The second we'll evaluate the addition of the monarch one four agonist <unk> to these patients taking a <unk> one agonist.
Our ocular programs continue to make impressive advances.
Our <unk> one phase III <unk> study, our dry eye study is fully enrolled data coming at the end of the year.
Very excited by the emerging product profile.
PL 9643 highly differentiated from current treatments, we got excellent Tolerability and we think we're going to have broad efficacy across multiple sides of symptoms and I think we've really excited this can become a leading treatment for dry eye disease as well.
Finally beyond 95% or 88, we've talked about in the past, but it is a novel wine accordant agonist for glaucoma.
We're now on track to file an IND sometime around the end of the first half of 2024, and then move on to phase two clinical studies.
I'd like to thank you for listening to the pallet in the first quarter.
Fiscal year 2024 call you can find additional information on our science and clinical programs on our website Www <unk> Com you can also find additional information on <unk> web site or at least your dot com and Stephen I would certainly like to thank you for your support your interest and we will now open up the call to questions.
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One moment, please while we poll for questions.
Yeah.
Your first question for today is coming from Joe pin Janus with H C. Wainwright.
Hey, guys. Thanks, a lot. So first Carl I wanted to ask about the logistics around the news flow for a melody one coming up so when.
When you say top line data in the late this year and final data in the first quarter I guess I wanted to get a sense of what you're expecting to show for the topline data aspect.
Sure.
We'll be focused on the primary endpoints of the study and overall safety so.
There'll be assigning a symptom.
Most likely will be tier from breakup time, if you're recording forcing staining.
Those types of things will be for your assigned and then for your symptom and most likely ocular pain.
And it will be.
Okay, I'm, sorry, you like and that you will be getting like numbers on top line or just more of like you you either met those end points and then we will get them at the top line or where we're actually looking towards numbers that'd be a topline aspect well Stephen I like numbers, So we put numbers out.
There'll be no there'll be numbers, if we hit it we're gonna be it we hit it which I think we will we're going to be we're going to be pushing it promoted it got it got it and then I'm looking at the data you put out recently on the preclinical front regarding the combination of rebel annotate and the G. L. P. One for obesity is exciting and like you said. This is all that we're seeing in the news here.
So I'm, hoping to get a little more color on the.
Clinical and regulatory path for this combination you know what the studies are going to look like initially and you know where do you think you can fit you know as the competitive landscape landscape continues to evolve you know any particular patients you might be targeting and then maybe any additional color when you say about.
The maintenance of the weight loss because as it stands right now these G. L. P ones you know you need to be on them essentially for life. So wanted to get a sense of how BMT might contribute to that.
Let me take a step back just a second cause even more maybe a little more globally and in a sense that.
This is a 20 year process I mean, not enough for us, but I mean weight loss management.
Treatment. This is going to rollout similar to hypertension, you're going to have multiple classes of therapeutics enter into the marketplace each with their own niche and provided their own risk.
Rewarded benefit.
It'll go here now is going to be how do we get most of the patients that are coming in to really reach their weight loss goals and maintain that because we have decided on a pay for this we're not going to get the benefits. If you lose weight over six or 10 months and say you get that 50 pounds off if it comes back on in six months, that's not good right. We pay a lot of money and we don't get the overall long term benefits.
Well those beautiful things that novo's reporting about their work on reducing cardiovascular risk overall mortality of those curves occur because you keep way off its not just the weight loss process itself.
So in that context.
Looking at.
<unk> type of example, which is what the study we're going to be doing in the context of the backdrop of a GOP. One is really there is a first step we have preclinical data. There are there were just some recent case studies reported on the on the use of an Atlanta quarter four agonist added onto <unk>.
There is appetite or will gobi treatment showing that you can.
Really enhance weight loss.
With the two mechanisms together without having to elevate that GOP, one dose and that's an important point because we hear all about these GOP was but we don't really hear about is is really start talking to the patients.
A lot of them are taking because they want to lose weight that I've taken them because they have a great experience on them and so combining mechanisms allows a coalition to have the opportunity to essentially modulate the side effects and making sure that each patient gets the treatment that they need that they reach their goals.
Let's switch to the other side maintenance now probably you guys probably are aware, but we have a collaboration with astrazeneca.
A while back looking at Atlanta, Accordant for weight loss and in particularly weight loss maintenance.
As part of that we actually have pallet compounds that were evaluated in weight loss models.
Very interesting there we were able to show is that in line of Courtney you don't need to give a tremendous amount of Milan accordant to actually maintain weight loss. So if you take an animal that obese you bring them through the weight loss process and now they are in a state where they're at.
Weight loss state.
One of the things that whether it's an animal or human you're fighting is that your body wants to go back right you've got.
You want to consume more calories.
Skeletal muscles don't work as well youre using less calories. So you have to fight that process. It turns out that one accordant mechanism may be very very well suited there we noticed that it was $1 six the dose required to maintain versus cause weight loss. So we think is a very very good opportunity there and that's going to be very key to the overall success of weight managed.
So we think about it more globally and where we can play they're going in multiple pockets, where we can play from being addition to maybe quick one therapy, so that patients reduce more weight without having to go up in dose or have more tolerable effects.
What was maintenance Ah patients that arent tolerating the glib ones are contra indicated so there are a lot of places where <unk> can play.
And I think it's probably one of the best mechanisms because it is one of the first mechanism that we that really evolved or was the genesis of thinking about treating weight loss from a pharmaceutical perspective.
Very helpful color Karl Thanks, a lot.
Okay.
Your next question is coming from Michael Higgins with Ladenburg Thalman.
Hey, good morning. This is behind on behalf of Mike Congrats on the continued progress this quarter on and we're really looking forward to the malady Vietnam just wanted to follow up on Joe's question earlier regarding the maladies eat out so I got that the data in the fourth quarter when they'll have the primary end.
In safety, but could you provide some more.
Want specifics on what can we see the final data read out that's going to be in the first quarter next scale.
Sure.
Look I mean.
There are there are probably 20 different endpoints that we look at in addition to all the safety end points as well.
You get two youll see the full dataset.
As quickly as we can get it done and out that can be.
It's not appropriate for our press release, so that would not have guided publication or presentation.
But or maybe we will have a conference call to go over it.
Also look at any of the sub analyses that we may do on various types of patients.
These are a very data rich studies, so I'm sure we'll be analyzing this data for the next six months.
To see what comes out but in general we will try to get out as quickly as we can the full data set all of the endpoints.
That are they are both the primary key secondaries, and then and then the corresponding secondaries and exploratory endpoints as well.
And then there'll be a variety of signs and symptoms.
Everything from all of the different staining using either foreseen or listened in green that were using or the various symptom endpoints ocular pain dryness stinging and burning.
All those types of standard types of things that are evaluated in dry eye studies. So we will we will try to be as transparent as we can be.
The only caveat I will put there is.
It is reasonable to assume on a positive study that we may be involved in certain discussions and maybe as part of that we may not want to disclose everything.
But otherwise we will try to be as transparent as we can.
Okay, Great and then on by Lucy.
So on out licensing out licensing obviously in the U S. How confident are you that you can complete that's maybe by this spring.
Well.
When we were three consecutive quarters of double digit growth, we were pretty confident at seven that confidence has just enhanced and expanded.
We don't anticipate while we actually we do anticipate eight consecutive quarters of double digit growth but.
We are advancing discussions and we're reasonably confident that we we will transact on <unk>.
In the very near future.
Alright, and then one follow up on the G. L. P. One program could you give us any feedback on the trial design. In particular are you looking for any particular type of obese patients to target such as like those to have a minimum BMI or water fractionator G. L. P.
Sure. So these are patients that will already be on <unk>.
<unk> treatment and most likely if there is appetite so which is the mix the GOP kipp.
You look at the BMI is probably in excess of 35.
So these are going to be a pretty.
Pretty pretty obese patients.
Well, we certainly will genetically profile of patients. So we'll get a full understanding of any mutations they have and the lift in policy pathways.
<unk>.
As well, but we're not stratify on that we're really looking for more general General General obesity, either one of the things that we.
Really looking for is merely the transition of <unk> now for more specialized treatment to specific populations, which studied mutation into the more general obese population.
So this is really just a first look at.
Really confirming the interaction between the two because I think it will be important.
For the group wants to really reach their maximum potential.
Novo need any help from little talented.
But.
Really for them to reach their maximum potential you're going to have to add them you wouldn't have to add other mechanisms to them because not every patient can tolerate you can't laterally patient can move up and the dosing for those treatments.
You talked a lot of patients the side effects that deadening some of the pleasure.
Not just food intake, but are there other things that people do are can be troublesome and a lot of patients do experience the gi side effects, and so being able to minimize those and keep people on so that they really do lose the weight that they need to lose is going to be key.
Okay, I'm going to ask one more and then I'll hop back in the queue with regard to granular on it.
And the breakout Savi is the primary goal to out license this as well or do you see yourselves to have nothing.
Well there with your two objectives one was to.
We believe that as from a autoimmune anti inflammatory type of diseases.
That.
A lot of court system will play a key role there. So this is one that you'll have brought it can be so that we have a UC study with kidneys you have the ocular studies that are going on and it was also to support our licensing I don't see us necessarily moving forward as a kidney company, it's really to support our licensing or continued use.
You might know behind <unk>.
In any of our programs, we have an extensive portfolio of selective.
Compounds through the various model quarter receptors. So this is <unk>.
Using <unk> in many cases, such as it makes sense for obesity and kidney studies for example, as a proof of concept proof of mechanism.
And then if there are opportunities for Bruno appetite itself great.
Trying to pursue those.
Bringing third parties to help us if not it does provide the.
Evidenced three basis for earlier compounds to move into development and also be part of collaborations with larger companies and we're seeing that in other indications where.
We've gotten previous data and now the fact that we have novel compounds with.
Is attracting larger pump companies.
Okay, Great I am going to hop back into queue. Thank you.
As a reminder, if you would like to ask a question. Please press star one.
You do have a follow up question coming from Michael Higgins.
Hum.
He had he had 177 in ulcerative colitis, and you've seen the data in real time, and if so any feedback for us.
Does this imply that study is an open label study so.
I don't like to really speak out of school at it let's just say.
We are optimistic that there will be a signal.
But let's leave it that.
Alright, and then last one from me with regards to the.
This function study.
Can you say what that yes.
While this combination like how many patients in phase two and then.
And it's best to say regarding the number of the factory at times with a single <unk>.
That's all.
Sure So in general.
We would stick with the general guidance on that so you'd like to see that the patient to be a PDE five inhibitor failure.
Should be on a maximum dose of the PDE five inhibitor with correct instructions and then we'll have a we would probably use the the international industry erectile function.
Erectile function sub domain score. So we will look at we would characterize and based on the cutoff.
On that on that domain.
Breaking out the exact numbers, but they are but they are established and well published.
But you've hit on a key thing one of the things that we will.
As the regulatory process.
As we advanced from April.
A study that we're doing now to more of a formal.
Registration study, we will have to reach final consensus with the agency on the exact definition of a failure, but that should be pretty easy to do as I said based on.
Guidance.
That's already out there publications that are already out there using the international indifferent retinal function and making sure that patients have been on a maximal dose with appropriate education.
Okay, great. Thank you so much for all the feedback.
Yeah.
Yes.
We have reached the end of the question and answer session and I will now turn the call over to Karl for closing remarks, great.
Great.
Stephen I would like to thank you.
Participation, obviously, the great questions from our analysts we appreciate their support as well we look forward to keeping you updated obviously Q4 for us big quarter.
As everyone is but we're really.
Looking forward to.
What we're going to deliver over the next couple of quarters. So Stephen I'd like to thank you have a great day.
<unk>.
Happy holidays.
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