Q3 2025 Palatin Technologies Inc Earnings Call
Greetings.
Greetings welcome to Allison's third quarter fiscal year 2025 operating results conference call.
Operator: Welcome to Palatin's third quarter fiscal year 2025 operating results conference call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.
At this time all participants are in a listen only mode.
A question and answer session will follow the formal presentation.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad as a reminder, this conference call is being recorded.
Operator: As a reminder, this conference call is being 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 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 in evaluating these forward-looking statements by Palatin's prospects.
Four we begin our remarks I would like to remind you that statements made by Palatin are not historical facts and maybe forward looking statements. 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.
Speaker Change: Please consider such risks and uncertainties carefully in evaluating these forward looking statements by Palatin as 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.
Carl Spana: Now I would like to turn the call over to our host, Dr. Carl Spana, President and Chief Executive Officer of Palatin. Please go ahead. Thank you. Good morning and welcome to the Palatin third quarter fiscal year 2025 call. I'm Dr. Carl Spana, CEO and President of Palatin.
Speaker Change: Thank you good morning, and welcome to the <unk> third quarter fiscal year, 2025 call and Dr. Carl <unk>, CEO and President of Palatin with me on the call today is Steve Wills houses Chief Financial Officer, Chief operating and Chief Operating Officer, I will now turn the call over to Steve and he will give the financial update.
Stephen Wills: With me on the call today is Steve Wills, Palatin's Chief Financial Officer and Chief Operating Officer. I'll now turn the call over to Steve and he'll give the financial update. Thank you, Carl. Good morning, good afternoon, everyone.
Steve Wills: Thank you Carl.
Speaker Change: Good morning, good afternoon, everyone.
Stephen Wills: Regarding non-program corporate updates On May 7th, 2025, Palatin received notice from NYSE Regulation that it had suspended trading of the company's common stock on the NYSE American Stock Exchange and determined to commence proceedings to delist Palatin's common stock as a result of its termination, that the company is no longer suitable for listing pursuant to Section 1003F5 of the Trading of the company's common stock on the NYSE American was suspended on May 7th, 2025, and began trading on the OTC Pink market on May 8th, 2025. Palatin exercised our right to review of NYSE regulations determination to delist Palatin's common stock.
Speaker Change: Regarding non program corporate update on <unk>.
Speaker Change: May 7th 2025, pallets and received notice from NYSE regulation that it had suspended trading of the company's common stock on the NYSE American stock exchange and determined to commence proceedings to day less pallets.
Palatin is common stock as a result of its determination that the company is no longer suitable for listing pursuant to section 1003.
Speaker Change: Five of the NYSE American Company guide due to the lower selling price of the company's common stock.
Speaker Change: Trading of the company's common stock on.
Speaker Change: On the NYSE American was suspended on May seven 2025 and began trading on the OTC pink market on May eight 2025.
Pallets and exercised our right to review I've NYSE regulations determination to delist Palatin common stock.
Stephen Wills: We are disappointed and do not agree with the NYSE's decision and are assessing all available options.
Speaker Change: We are disappointed and do not agree with the Nyse's decision and are assessing all available options.
Stephen Wills: Moving over to our fiscal third quarter, ended March 31st, 2025 financial results.
Speaker Change: Moving over to our fiscal third quarter ended March 31, 2025 financial results.
Stephen Wills: Regarding revenue, pursuant to the completion of the sale of Ilesi's worldwide rights for female sexual dysfunction to Cassette Pharmaceuticals for up to $171 million in December 2023, Palatin did not record any product sales to pharmacy distributors for the quarter ended March 31, 2025, and March 31, 2024. Regarding operating expenses, total operating expenses were $4.8 million, net of $0.4 million gain on a purchase commitment for the quarter ended March 31, 2025, compared to $9.2 million for the comparable quarter last year. The decrease was mainly the result of the decrease, lower spending related to our MCR programs for the quarter ended March 31, 2025.
Speaker Change: Regarding revenue pursuant to the completion of the sale of <unk> worldwide rights for female sexual dysfunction to cassette pharmaceuticals for up to $171 million in December 2023, Palatin did not record any product sales to pharmacy distributors for the quarter ended March 31, 2025 and March 30 <unk>.
Speaker Change: <unk> 2024.
Speaker Change: Regarding operating expenses total operating expenses were $4 8 million net of 0.4 million gain on our purchase commitments for the quarter ended March 31, 2025, compared to $9 2 million for the comparable quarter last year. The decrease was mainly the result of the decrease lower spending.
<unk> related to our MCR programs for the quarter ended March 31 2025.
Stephen Wills: Regarding cash flows, Palatin's net cash used in operations for the quarter ended March 31, 2025, was $5.4 million, compared to net cash used in operations of $8.6 million for the same period in 2024. The decrease in net cash used in operations is mainly due to the decrease in net loss during the period and secondarily to working capital changes. Regarding net loss, Palatin's net loss for the quarter ended March 31st, 2025, was $4.8 million. compared to a net loss of $8.4 million. for the same period in 2024. As referenced above, the decrease in the net loss for the quarter ended March 31st, 2025.
Speaker Change: Regarding cash flows pallet since net cash used in operations for the quarter ended March 31, 2025 was $5 4 million compared to net cash used in operations of $8 6 million for the same period in 2020 for the decrease in net cash used in operations is mainly due to the decrease in net loss during the period.
Speaker Change: And secondarily to working capital changes.
Speaker Change: Regarding net loss pallets as that loss for the quarter ended March 31, 2025 was $4 8 million.
Speaker Change: Compared to a net loss of $8 4 million.
Speaker Change: For the same period in 2024.
Speaker Change: As referenced above the decrease in the net loss for the quarter ended March 31, 2025 over the quarter ended March 31st 2024 was driven primarily by the decrease in operating expenses for the quarter ended March 31 2025.
Stephen Wills: Over the quarter ended March 31st, 2024, which was driven primarily by the decrease in operating expenses for the quarter ended March 31st, 2024.
Stephen Wills: Regarding cash position, as of March 31st, 2025, Palatin's cash and cash equivalents were $2.5 million compared to cash and cash equivalents of $9.5 million at June 30th, 2024. The $2.5 million of cash and cash equivalents as of March 31, 2025, does not include approximately $3.5 million of net proceeds received in April and May 2025 from Palatin's ATM facility and the recent equity offer.
Speaker Change: Regarding cash position as of March 31, 2025, Palisson as cash and cash equivalents were $2 5 million compared to cash and cash equivalents of $9 5 million at June 32024 the.
Speaker Change: The $2 5 million of cash and cash equivalents as of March 30 is twice as of March 31, 2025 does not include approximately $3 5 million of net proceeds received in April and May 2025 from Palatin is ATM facility and the recent equity offering.
Stephen Wills: We are actively engaged with multiple potential funding sources, including business development initiatives for future operating cash requirements.
Speaker Change: We are actively engaged with multiple potential funding sources, including business development initiatives for future operating cash requirements.
Carl Spana: We turn the call back over to Carl.
Carl: Let me turn the call back over to Carl.
Carl Spana: Thank you, Steve. I'll now go over the operating update for the quarter. Updates for melanocortin-4 receptor obesity programs are as follows. For our Phase 2 study, BMT-801, evaluating the safety and efficacy of the co-administration of the melanocortin-4 receptor agonist, remelanotide, with terceptotide, a GLP-1-GIP dual agonist in patients with generalized obesity, we reported positive top-line data for the study. The study successfully answered the research questions, does co-administration result in increased weight loss? And can treatment with anilonicortin-4 receptor agonist be used as a treatment for weight loss maintenance by blunting the weight regain seen post-treatment therapy? The primary efficacy endpoint was weight loss of the combined treatment compared to placebo control at the end of eight weeks of treatment.
Speaker Change: Thank you Steve.
Carl: I'll now go over the operating update for the quarter.
Carl: <unk> four receptor obesity programs are as follows.
Carl: Our phase II study at BMT 801, evaluating the safety and efficacy of the co administration of the <unk> four receptor agonist <unk> side.
Carl: <unk> <unk> <unk> dual agonist in patients with generalized obesity, we reported positive topline data for the study.
Carl: The study successfully answered the research questions does co administration result, an increased weight loss and can treat within line of quarter four receptor agonists be used.
Treatment for weight loss maintenance.
Carl: Blessing, the weight regain seen posting treatment therapy.
Carl: The primary efficacy endpoint was weight loss of the combined treatment compared to placebo control at the end of eight weeks of treatment.
Carl Spana: Patients on the combined therapy had a weight reduction of 4.4% versus 1.6% for the placebo arm. The P value here was highly significant. Importantly, 19% of patients on the combined treatment had a weight reduction of greater than 7% compared to 0% for patients on placebo and the trisepatide alone arm. Concerning a weight loss maintenance effect, low dose of remelanotide prevented the rapid weight regain following tozepazide treatment.
Carl: Patients onto the combined therapy had a weight reduction of four 4% versus one 6% for the placebo arm. The P value here was highly significant importantly, 19% of patients on the combined treatment had a weight reduction of greater than 7% compared to zero percent for patients on placebo.
Carl: And then just appetite alone Arps.
Concerning a waitlist maintenance effect low dose of <unk> prevented the web rapid weight regain following <unk> treatment.
Carl Spana: So a very positive study. As we move forward, our obesity and weight loss management portfolio includes both novel long-acting melanocortin 4 reselective peptide agonist and the orally active melanocortin 4 receptor selective small molecule agonist PL7737. During the quarter, we were notified by the FDA that they granted orphan drug status to PL7737 for treating patients with obesity due to leptin receptor deficiency. Pending financing, PL7737 is on track for an initial new drug application submission in phase one, single ascending dose and multiple ascending dose studies in the first quarter of 2026. Our novel next-generation selective melanocortin 4-receptor compounds have reduced activity at the melanocortin 1 receptor and therefore a reduced potential to cause skin darkening.
Carl: So very positive study for us.
Carl: As we move forward, our BCD and weight loss management portfolio includes both novel long acting Atlanta, where we slept selected peptide agonist and the orally active <unk> four receptor selective small molecule agonist P. L. 700, 787 during the quarter, we were notified by the FDA that they granted orphan drug status to <unk> 770 <unk>.
Carl: <unk> for treating patients with obesity due to leptin receptor deficiency.
Carl: Any financing deal 700, 737 is on track for it.
Carl: An initial new drug application submission and phase one single ascending dose and multiple ascending dose studies in the first quarter of 2026.
Carl: Our novel next generation selective monoclonal for receptor compounds have reduced activity at quarter, one receptor and therefore reduced potential to cause skin darkening proactive MCR one activity once weekly oral dosing represent significant improvements over current FDA approved linerboard treatments.
Carl Spana: The lack of MCR-1 activity, the once-weekly oral dosing represents significant improvements over current FDA-approved melanocortin treatments.
Carl Spana: You can find additional information on a clinical trial at clinicaltrials.gov and on our website.
Carl: Can find additional information on our clinical trial and clinical trials dot Gov and on our website.
Carl Spana: During the quarter, we also reported positive top line data for a phase two study evaluating our oral PL8177, a selective melanocortin-1 receptor agonist for treating ulcerative colitis. The study evaluated PL8177 versus placebo for 8 weeks in moderate ulcerative colitis patients. Clinical remission was achieved for 33% of PL8177 treated patients versus 0% for placebo. Clinical response was achieved for 78% of PLA177 patients, compared to 33% for placebo. Again, highly significant. The symptomatic remission was achieved for 56% of patients on PLA-177 versus 33% for placebo. This exciting data has resulted in a significant increase in business development discussions with potential partners, which is in line with our current strategy to out-license this program.
Carl: During the quarter. We also reported positive top line data for our phase II study evaluating our oral pill. A 177 is selective <unk> one receptor agonist for treating ulcerative colitis study evaluated <unk> 877 versus placebo for eight weeks and moderate ulcerative colitis patients.
Carl: Clinical remission was achieved for 33% appeal 877 treated patients versus zero percent for placebo.
Carl: Clinical response was achieved for 78% appeal at one 7% of patients compared to 33% from placebo again highly significant.
Carl: This is the magic remission was achieved for 56% of the patients on appeal at 177% versus 32% for placebo.
Carl: The exciting data has resulted in a significant increase in business development discussions with potential partners, which is in line with our current strategy to out license. This program.
Carl Spana: During the quarter, we also reported additional data for the PL 9643, Melody 1, phase 3 study in dry eye disease patients. The data from a responder analysis that compared placebo to PL 9643 demonstrated that for six of the 13 symptom endpoints, a significantly higher percentage of patients had a complete symptom clearing, i.e. they were cured. This, again, was highly significant. This level of symptom clearing has not been achieved by any FDA-approved treatment for dry eye disease. Clearing was seen as early as two weeks and continued to improve over the 12 weeks of the study.
Carl: During the quarter, we also reported additional data for the.
Carl: 943, <unk>, one phase III study in dry eye disease patients the data from a responder analysis that comparative placebo to pay out 94, three demonstrated that for six of the 13 symptom endpoints a significantly higher percentages of patients had a complete symptom clearing I E. They were cured.
Carl: This again was highly significant this level of symptom clearing has not been achieved by any FDA approved treatment for dry eye disease clearing was seen as early as two weeks and continue to improve over the 12 weeks of the study.
Carl Spana: We are actively engaged in potential corporate partners for this program as one of our earlier ocular programs, and we anticipate one or more transactions closing in the second half of calendar 25.
Carl: We are actively engaged in potential corporate partners for this program as one as one of our early ocular programs and we anticipate one or more transactions closing in the second half of calendar 'twenty five for.
Carl Spana: Before moving on to take questions, I would like to comment on our strategy. We are focused on our research and development efforts on our melanocortin 4-receptor obesity assets. We believe the pharmacological treatment of obesity is in the early stages of a multi-year cycle of innovation and will have a market value at excess of $100 billion per year. The melanocortin system plays a critically important role in regulating stored energy and food intake, and we strongly believe that melanocortin 4-receptor agonists will be an important part of the future of obesity treatment and weight loss management.
Carl: Before moving on to take questions I would like to comment on our strategy. We are focused on our research and development efforts and our <unk> four receptor obesity assets. We believe the pharmacological treatment of obesity in the early stages, the multiyear cycle of innovation and we will have a market value in excess of $100 billion per year.
Carl: A lot of coding system plays a critically important role in regulating stored energy and food intake and we strongly believe like one four receptor agonist will be an important part of the future of obesity treatment and weight loss management.
Carl Spana: We'll now take the question. Thank you for participation, and we'll now open the line. Thank you.
Carl: Well now take the questions.
Thank you for your participation and we'll now open the line for questions.
Carl: Thank you the floor is now open for questions. If you wish to join the queue to ask a question at this time. Please press star one on your telephone keypad, we do ask if listing on speakerphone today that you pick up your handset while asking your question to provide optimal sound quality. Once again, you May press star one on your telephone.
Operator: The floor is now open for questions. If you wish to join the queue to ask a question at this time, please press star one on your telephone keypad. We do ask if listening on speakerphone today that you pick up your handset while asking your question to provide optimal sound quality. Once again, you may press star one on your telephone keypad at this time.
Operator: If you wish to join queue to ask a question, please hold a moment while we pull for questions.
Carl: <unk> had at this time, if you wish to join the queue to ask a question. Please hold a moment, while we poll for questions.
Scott Henry: For more information visit www.fema.gov And we have a question from Scott Henry from Alliance Global Partners. Scott, your line is live. Please go ahead. Thank you and good morning.
Speaker Change: And we have a question from Scott Henry from Alliance Global Partners. Scott. Your line is live. Please go ahead.
Scott Henry: Thank you and good morning, a couple of questions on the obesity program.
Carl Spana: A couple questions on the obesity program. First, I know that a low dose of remelanatide, or BMT, was used in this study. The question is, do you believe a higher dose would increase the weight loss, putting it in the ranges of Wachovia or Zepp-Bound? Sure, thanks, Scott, for the question. Yes, we actually have a publication out on that. We actually looked at higher doses of bremelanotide in an earlier study, and where we were looking to optimize, it's a short-acting compound, so they were on multiple doses per day so that patients would be in an optimal dose range while they had access to food.
Speaker Change: Yes.
Speaker Change: First I know that a low dose of <unk>.
Speaker Change: Grandmother, Ana tied or BMT.
Speaker Change: As used in this study.
Speaker Change: The question is do you believe a higher dose would increase the weight loss, putting it in the ranges Oh, we'll go V or is that.
Speaker Change: Sure. Thanks, Scott for the question, Yes, we actually have a publication out on that we actually looked at higher doses of <unk>.
Speaker Change: In our earlier study and where we are looking to optimize so short I think compound. So they were a multiple doses per day, so that the patients would be an optimal dose range.
Speaker Change: They had access to food and the weight loss there really is comparable to what you would see with single agent <unk> does appetite Scott is a multiple mechanism drug and it's a little bit better than then we'll go.
Carl Spana: And the weight loss there really is comparable to what you would see with the single-agent Wigovi. Tesepatide, Scott, is a multiple-mechanism drug, and it's a little bit better than Wigovi, but with regards to the single-mechanism drugs like Wigovi, a good MCR-4 agonist like bremelanotide are the ones that we're working on. They will have highly competitive weight loss. Okay, great. Thank you for that color.
Speaker Change: With regards to the single mechanism drugs like with Obi, a good idea of where Ags <unk> hydro one that we're working on they will have highly competitive weight loss.
Speaker Change: Okay, great. Thank you for that color.
Carl Spana: And then with the GLPs, the rebound weight regain is kind of a common issue. Do you think we may see this idea of weight maintenance in the future, even potentially getting into the label? Could that be more of a focus in these next generations? Absolutely. The new compounds coming through are going to be evaluated as weight loss maintenance. There are studies that are going on right now doing that with the GLP-1s. But, you know, you're going to need newer mechanisms to really address that on a long-term basis. You know, right now, we don't have any evidence that patients that have once they've lost weight can effectively come off of treatment and maintain that weight.
Speaker Change: And then with the G L P.
Speaker Change: The rebound weight regain is is kind of a common issue.
Speaker Change: Do you think we may see this idea of weight maintenance.
Speaker Change: The future, even potentially getting into the label.
Speaker Change: Could that be more of a focus.
Speaker Change: In these next generations.
Speaker Change: Absolutely.
Speaker Change: Compounds coming through or are going to be evaluated as well. It was maintenance. There are studies that are going on right now doing that with the GOP ones.
Speaker Change: But.
Speaker Change: You're going to need newer mechanisms to really address that on a long term basis.
Speaker Change: But right now we don't have any evidence that patient set of what they've lost weight.
Speaker Change: Can't effectively come off of treatment and maintain that weight.
Carl Spana: Right now, the strategy is they're going to need to be on long-term weight loss maintenance, you know, how the dosing works out, what agents are going to be used, you know, that's going to be worked out in clinical trials. But, you know, melanoclon-4 agonists are really ideally suited for that. It's probably dysfunctions in the hypothalamic MCR leptin pathways that actually are leading to that weight regain, and this really begins to address that directly. Okay, great.
Speaker Change: Right now the strat.
Speaker Change: Suggest they're going to need to be a long term weight loss maintenance.
Speaker Change: How the dosing works out with agents are going to be used you know that's going to be worked out in clinical trials.
Speaker Change: But Michael we're agonists are really ideally suited for that it's probably dysfunction in that.
Speaker Change: Dominic MCR leptin pathways that actually are leading to that weight regain and this really begins to address that directly.
Speaker Change: Okay, great and the final question.
Carl Spana: And the final question, just on the next generation of MC4Rs, if you could just talk about the benefits that will separate them from the first generation. I know pigmentation was an issue. I don't know if that's going to be one of the things that may be different, but if you could just talk about what your expectations are for that next generation. Thank you. Sure. Thanks. You know, both pre-melanotide and there's another one, crucetmelanotide, they're what I would consider first-generation compounds. They are good. They work well, but they are short-term dosing, so you need one or more doses per day.
Speaker Change: Just on on the next generation of EMC or ours.
Speaker Change: If you could just talk about the benefits that we will separate them from the first generation I know pigmentation was an issue I don't know if thats going to be one of the things that may be different but could you just talk about what you know what your expectations are for that next generation. Thank you.
Speaker Change: Sure. Thanks.
Speaker Change: Both <unk> and then there's another one or two a set amount of time, there what I would consider first generation compounds. They are good they work well, but they are they are short term dosing. So you need multiple you are the one or more doses per day. They do have the pigmentation that you pointed out.
Carl Spana: They do have the pigmentation that you pointed out. They're not ideal treatments or as competitive in, say, a general market as current treatments. So what we're looking to do here is really eliminate that MCR1 activity so we don't get the skin darkening. I think we've been able to do that quite successfully. In addition to that, you know, if we're dealing with a peptide which wouldn't be orally active, we certainly want that to be once a week, which is very patient-friendly, or with 7737, which is a small molecule, we want that it's a once-a-day oral, has a very nice extended half-life, so we can really get the steady state.
Speaker Change: They are not ideal treatments or as competitive in say a general market as youll car treatment. So what we're looking to do here is really eliminate that MCR. One activity. So we don't give <unk> I think we've been able to do that quite successfully.
Speaker Change: In addition to that we're dealing with a peptide which wouldn't be orally active we certainly want that to be once a week, which is a very patient friendly or with 737, which is a small molecule. We want that it's a once a day oral has a very nice extended half life. So we can really get to steady state and that's really our goal with these things when compared to what's out there.
Carl Spana: And that's really a goal with these things. You know, compared to what's out there on the melanocortin side, when you deal with short-acting compounds, you know, it's very hard to maintain a steady state. And in obesity, you really want to get that steady state, and we can achieve that with both the long-acting peptide or the oral small molecule that we're bringing forward. So there really are improvements over what's out there.
Speaker Change: In accordance side and when you deal with short acting compounds. It's.
Speaker Change: It's very hard to maintain a steady state and obesity, you really want to get that steady state and we can achieve that with both the long acting peptide or the or the oral small molecule that we're bringing forward. So they really are improvements over what's out there today.
Scott Henry: Okay, thank you for that, Collar, and thank you for taking the questions.
Speaker Change: Okay. Yeah. Thank you for that color and thank you for taking my questions.
Scott Henry: Thank you Scott.
Speaker Change: Thank you.
Carl Spana: This does conclude our question and answer session for today.
Speaker Change: This does conclude our question and answer session for today I would now like to pass the floor back to management for closing remarks.
Carl Spana: I would now like to pass the floor back to management for closing remarks. Stephen and I would like to thank everyone for participating in our third quarter Fiscal Year 2025 call. We look forward to keeping you updated on our progress.
Stephen I would like to thank everyone for participating in our third quarter fiscal year 2025 call. We look forward to keep you updated on our progress I think it was from an operating standpoint. It was a phenomenal quarter for US we did have a little difficulty with NYSE, but I think that's going to be transitory, we're going to work to address that as quickly as we can.
Carl Spana: I think it was, you know, from an operating standpoint, it was a phenomenal quarter for us. You know, we did have a little difficulty with the NYSC, but I think that's going to be transitory. We're going to work to address that as quickly as we can. So thank you and have a great day. Thank you.
Speaker Change: So thank you and have a great day.
Speaker Change: Yes.
Speaker Change: Thank you. This does conclude today's conference call. You may disconnect at this time and have a wonderful day. Thank you for your participation.
Operator: This does conclude today's conference call. You may disconnect at this time and have a wonderful day. Thank you for your participation. Thank you, Carl. Steve, have a good day.
Carl: Thank you Carl so you'd have a good day.
Operator: I'm going to disconnect lines at this time.
Speaker Change: Connect line at this time.
Unnamed Speaker: talk about pigment.
Speaker Change: How about I hope pigments.