Q2 2026 Palatin Technologies Inc Earnings Call

February 17, 2026

Speaker #1: Greetings. Welcome to Palatin's second quarter fiscal year 2026 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.

Operator: Greetings. Welcome to Palatin's Q2 fiscal year 2026 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. As a reminder, this conference call is being recorded. 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.

Operator: Greetings. Welcome to Palatin's second quarter fiscal year 2026 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. As a reminder, this conference call is being recorded. 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.

Speaker #1: If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. As a reminder, this conference call is being recorded.

Speaker #1: 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.

Speaker #1: These statements are based on assumptions that may or may not prove to be accurate and that the 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 and evaluating these forward looking statements by Palatin's prospects .

Speaker #1: Now , I would like to turn the call over to our host doctor Carl Spana President and Chief Executive Officer of Palatin . Please go ahead .

Operator: 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.

Speaker #2: Thank you and good morning , everyone . Earlier today , we reported financial results for the second quarter of fiscal year 2026 . And provided a corporate update .

Carl Spana: Thank you, and good morning, everyone. Earlier today, we reported Palatin's financial results for the second quarter of fiscal year 2026 and provided a corporate update. With me on the call today is Steve Wills, Palatin's Chief Financial Officer and Chief Operating Officer. Today, we'll highlight our progress advancing our melanocortin-4 receptor-based obesity pipeline, review recent strategic and financial milestones, and outline our priorities as we move through 2026, before opening the call for questions. First, I will turn the call over to Steve for the financial and operating results. Steve?

Speaker #2: With me on the call today is Stephen Wills, Chief Financial Officer and Chief Operating Officer. Today we will highlight our progress advancing our melanocortin-4 receptor-based obesity pipeline review.

Speaker #2: Strategic recent , strategic and financial milestones , and outline our priorities as we move through 2026 . Before opening the call for questions , first , I will turn the call over to Steve for the financial and operating results .

Speaker #2: Steve, thank you. Carl, hello, and welcome, everyone. I'll walk through our second quarter fiscal 2026 operations and financial results, starting with our recent public offering on November 12, 2025.

Stephen T. Wills: Thank you, Carl. Hello, and welcome, everyone. I'll walk through our Q2 fiscal 2026 operations and financial results. Starting with our recent public offering on 12 November 2025, we closed an upsized $18.2 million underwritten public offering, including the full exercise of the over-allotment option. The offering consisted of approximately 2.8 million shares of common stock or pre-funded warrants in lieu thereof, along with Series J and Series K warrants at a combined public offering price of $6.50 per share and accompanying warrants. Each Series J warrant has an exercise price of $6.50 per share and expires on the earlier of 18 months from issuance or 31 days following FDA acceptance of an IND for an in-house obesity treatment compound.

Steve Wills: Thank you, Carl. Hello, and welcome, everyone. I'll walk through our Q2 fiscal 2026 operations and financial results. Starting with our recent public offering on 12 November 2025, we closed an upsized $18.2 million underwritten public offering, including the full exercise of the over-allotment option. The offering consisted of approximately 2.8 million shares of common stock or pre-funded warrants in lieu thereof, along with Series J and Series K warrants at a combined public offering price of $6.50 per share and accompanying warrants. Each Series J warrant has an exercise price of $6.50 per share and expires on the earlier of 18 months from issuance or 31 days following FDA acceptance of an IND for an in-house obesity treatment compound.

Speaker #2: We closed an upsized 18.2 million underwritten public offering , including the full exercise of the Overallotment option . The offering consisted of approximately 2.8 million shares of common stock or pre-funded warrants , in lieu thereof , along with series J and series K warrants at a combined public offering price of $6.50 per share and accompanying warrants Each series J warrant has an exercise price of $6.50 per share , and expires on the earlier of 18 months from issuance , or 31 days following FDA acceptance of an IND for an in-house obesity treatment compound .

Speaker #2: Each series K warrant has an exercise price of $8.1258 and 12.5 cents per share , and a five year term subject to automatic termination .

Stephen T. Wills: Each Series K warrant has an exercise price of 8.125, $8 and 12.5 cents per share, and a 5-year term, subject to automatic termination if the associated Series J, Series J warrants are not exercised within the FDA exercise period. Gross proceeds from the offering were approximately $18.2 million, with net proceeds of approximately $16.9 million after underwriting discounts and offering expenses. While the company may receive up to an additional $18.2 million upon the exercise of the Series J warrants, there is no assurance that these warrants will be exercised. The net proceeds from the offering are being used to support the advancement of our obesity programs, as well as for working capital and general corporate purposes.

Steve Wills: Each Series K warrant has an exercise price of 8.125, $8 and 12.5 cents per share, and a 5-year term, subject to automatic termination if the associated Series J, Series J warrants are not exercised within the FDA exercise period. Gross proceeds from the offering were approximately $18.2 million, with net proceeds of approximately $16.9 million after underwriting discounts and offering expenses. While the company may receive up to an additional $18.2 million upon the exercise of the Series J warrants, there is no assurance that these warrants will be exercised. The net proceeds from the offering are being used to support the advancement of our obesity programs, as well as for working capital and general corporate purposes.

Speaker #2: If the associated series J series , J warrants are not exercised within the FDA exercise period . Gross proceeds from the offering were approximately 18.2 million , with net proceeds of approximately 16.9 million .

Speaker #2: After underwriting discounts and offering expenses, while the company may receive up to an additional $18.2 million upon the exercise of the Series J warrants, there is no assurance that these warrants will be exercised.

Speaker #2: The net proceeds from the offering are being used to support the advancement of our obesity programs, as well as for working capital and general corporate purposes.

Speaker #2: As a result of the closing of this financing , pallets and regained compliance with NYSE American continued listing standards and effective November 12th , 2025 , our common stock resumed trading on the NYSE .

Stephen T. Wills: As a result of the closing of this financing, Palatin regained compliance with NYSE American continued listing standards, and effective 12 November 2025, our common stock resumed trading on the NYSE American under the symbol PTN. Turning now to the financial results for the second quarter, ended 31 December 2025. Regarding revenue, for the quarter was $116,000, compared to $0 revenue in the comparable period last year. This revenue relates to cost reimbursements under our collaboration agreement with Boehringer Ingelheim. Total operating expenses were $7.4 million for the quarter, compared to $2.6 million in the prior year period. The year-over-year comparison is primarily impacted by the gain on the sale of Vyleesi recorded in the 31 December 2024 quarter, which reduced net operating expenses in that period.

Steve Wills: As a result of the closing of this financing, Palatin regained compliance with NYSE American continued listing standards, and effective 12 November 2025, our common stock resumed trading on the NYSE American under the symbol PTN. Turning now to the financial results for the second quarter, ended 31 December 2025. Regarding revenue, for the quarter was $116,000, compared to $0 revenue in the comparable period last year. This revenue relates to cost reimbursements under our collaboration agreement with Boehringer Ingelheim. Total operating expenses were $7.4 million for the quarter, compared to $2.6 million in the prior year period. The year-over-year comparison is primarily impacted by the gain on the sale of Vyleesi recorded in the 31 December 2024 quarter, which reduced net operating expenses in that period.

Speaker #2: American under the symbol P Turning now to the financial results for the second quarter ended December 31st , 2025 . Regarding revenue for the quarter was 116,000 , compared to zero revenue in the comparable period last year .

Speaker #2: This revenue relates to cost reimbursements under our collaboration agreement with Boehringer Ingelheim. Total operating expenses were $7.4 million for the quarter, compared to $2.6 million in the prior year period.

Speaker #2: The year over year comparison is primarily impacted by the gain on the sale of Vyleesi recorded in the December 31st , 2024 quarter , which reduced net operating expenses in that period .

Speaker #2: In the current quarter, operating expenses increased due to higher investment in our melanocortin-based obesity development programs, as well as increased compensation costs and professional fees.

Stephen T. Wills: In the current quarter, operating expenses increased due to higher investment in our melanocortin-based obesity development programs, as well as increased compensation costs and professional fees. Other income net was approximately $65,000 for the quarter, compared to approximately $169,000 in the prior year period. The decrease reflects lower investment income and foreign currency translation gains, partially offset by lower interest expense. Net cash use in operations was $4.8 million for the quarter, consistent with the same quarter last year. Net loss for the second quarter was $7.3 million, or $2.86 per share, compared to a net loss of $2.4 million, or $5.92 per share in the comparable period last year.

Steve Wills: In the current quarter, operating expenses increased due to higher investment in our melanocortin-based obesity development programs, as well as increased compensation costs and professional fees. Other income net was approximately $65,000 for the quarter, compared to approximately $169,000 in the prior year period. The decrease reflects lower investment income and foreign currency translation gains, partially offset by lower interest expense. Net cash use in operations was $4.8 million for the quarter, consistent with the same quarter last year. Net loss for the second quarter was $7.3 million, or $2.86 per share, compared to a net loss of $2.4 million, or $5.92 per share in the comparable period last year.

Speaker #2: Other income . Net was approximately 65,000 for the quarter , compared to approximately 169,000 in the prior year period . The decrease reflects lower investment income and foreign currency translation gains , partially offset by lower interest expense .

Speaker #2: Net cash used in operations was 4.8 million for the quarter , consistent with the same quarter last year Net loss for the second quarter was 7.3 million , or $2.86 per share , compared to a net loss of 2.4 million , or $5.92 per share , in the comparable period last year .

Speaker #2: This change reflects higher operating expenses associated with advancing our pipeline programs , as well as the absence of the Vyleesi divestiture gain recorded in the prior year Turning to our cash position , as of December 31st , 2025 , we had 14.5 million in cash and cash equivalents compared to 1.3 million at September 30th , 2025 , and 2.6 million at June 30th , 2025 .

Stephen T. Wills: This change reflects higher operating expenses associated with advancing our pipeline programs, as well as the absence of the Vyleesi divestiture gain recorded in the prior year. Turning to our cash position. As of 31 December 2025, we had $14.5 million in cash and cash equivalents, compared to $1.3 million at 30 September 2025, and $2.6 million at 30 June 2025. Based on our current operating plans, we expect our cash runway to extend beyond the quarter ending 31 March 2027. Finally, with respect to our PL9643 sublicensing transaction, in January 2026, we received approximately $3.8 million of upfront consideration in the form of non-cash debt cancellation.

Steve Wills: This change reflects higher operating expenses associated with advancing our pipeline programs, as well as the absence of the Vyleesi divestiture gain recorded in the prior year. Turning to our cash position. As of 31 December 2025, we had $14.5 million in cash and cash equivalents, compared to $1.3 million at 30 September 2025, and $2.6 million at 30 June 2025. Based on our current operating plans, we expect our cash runway to extend beyond the quarter ending 31 March 2027. Finally, with respect to our PL9643 sublicensing transaction, in January 2026, we received approximately $3.8 million of upfront consideration in the form of non-cash debt cancellation.

Speaker #2: Based on our current operating plans , we expect our cash runway to extend beyond the quarter ending March 31st , 2027 . Finally , with respect to our PL 9643 Sublicensing transaction in January 2026 , we received approximately 3.8 million of upfront consideration in the form of non cash debt cancellation .

Speaker #2: This amount is reflected in the current liabilities as of December 31, 2025, and will be recognized as license revenue in the quarter ending March 31, 2026.

Stephen T. Wills: This amount is reflected in the current liabilities as of December 31, 2025, and will be recognized as licensed revenue in the quarter ending March 31, 2026. In summary, the successful completion of our public offering significantly strengthened our balance sheet, restored our NYSE American listing, and provides the capital needed to advance our obesity pipeline, while maintaining operational flexibility. With that, I'll turn the call back to Carl for program updates. Carl?

Steve Wills: This amount is reflected in the current liabilities as of December 31, 2025, and will be recognized as licensed revenue in the quarter ending March 31, 2026. In summary, the successful completion of our public offering significantly strengthened our balance sheet, restored our NYSE American listing, and provides the capital needed to advance our obesity pipeline, while maintaining operational flexibility. With that, I'll turn the call back to Carl for program updates. Carl?

Speaker #2: In summary , the successful completion of our public offering significantly strengthened our balance sheet , restored our NYSE American listing , and provides the capital needed to advance our obesity pipeline while while maintaining operational flexibility With that , I'll turn the call back to Karl for program updates .

Speaker #2: Karl . Thank you . Steve . Paladin continues to execute on its strategy to advance differentiated Melanocortin four receptor based therapeutics with a primary focus on rare , syndromic and genetic obesity disorders .

Carl Spana: Thank you, Steve. Palatin continues to execute on its strategy to advance differentiated melanocortin-4 receptor-based therapeutics, with a primary focus on rare syndromic and genetic obesity disorders. During the quarter, we made meaningful progress advancing our lead obesity programs towards the clinic, strengthening our balance sheet and sharpening our strategic focus, as Steve mentioned, through the sub-licensing of our dry eye disease clinical candidate, PL9643. Turning to the obesity pipeline, we are advancing a portfolio of proprietary melanocortin-4 receptor agonists, initially targeted to rare neuroendocrine obesity disorders, including hypothalamic obesity and Prader-Willi syndrome, areas of significant unmet medical need.

Speaker #2: During the quarter, we made meaningful progress advancing our lead obesity programs toward the clinic, strengthening our balance sheet, and sharpening our strategic focus.

Speaker #2: As Steve mentioned through the sublicensing of our dry eyes Disease clinical candidate PL 90 643 . Turning to the obesity pipeline , we are advancing a portfolio of proprietary melanocortin four receptor agonists .

Speaker #2: Initially targeted to rare or neuroendocrine obesity disorders , including hypothalamic obesity and Prader-Willi syndrome . Areas of significant unmet medical need Our lead oral small molecule MCR four agonists , PL 70 737 , continues to progress through IND , enabling toxicology studies , and we remain on track to submit an IND and initiate a phase one single and multiple ascending dose clinical trial in the first half of calendar year 2026 .

Carl Spana: Our lead oral small molecule MC4R agonist, PL7737, continues to progress through IND-enabling toxicology studies, and we remain on track to submit an IND and initiate a Phase 1 single and multiple ascending dose clinical trial in the first half of calendar year 2026. In parallel, we are advancing our next generation selective melanocortin-4 receptor peptide agonist, which are designed for once-weekly subcutaneous dosing. For this program, we are planning an IND submission in the second half of calendar 2026. As we move these programs forward, our development focus is on delivering differentiated product profiles. Specifically, we are designing our compounds to enhance patient tolerability, including the potential for reduced gastrointestinal side effects, while minimizing off-target effects such as hyperpigmentation. Factors we believe are important for success in the long-term treatment of chronic obesity indications.

Speaker #2: In parallel , we are advancing our next generation selective Melanocortin four receptor peptide agonist , which are designed for once weekly subcutaneous dosing .

Speaker #2: For this program , we are planning an IND submission in the second half of calendar 2026 . As we move these programs forward , our development focus is on delivering differentiated product profiles , specifically , we are designing our compounds to enhance patient tolerability , including the potential for reduced gastrointestinal side effects while minimizing off target effects such as hyperpigmentation .

Speaker #2: Factors . We believe are important for success in the long term treatment of chronic obesity . Indications . Our pre-clinical data supports the potential of targeting Melanocortin four receptor across both rare and select broader obesity indications .

Carl Spana: Our preclinical data supports the potential of targeting melanocortin-4 receptor across both rare and select broader obesity indications. However, our focus will be on rare neuroendocrine disorders. Planned registration clinical studies will enroll patients with hypothalamic obesity and Prader-Willi syndrome. In addition, preclinical and early clinical data support the potential for co-administration of our melanocortin-4 receptor agonist with the GLP-1-based therapeutics such as tirzepatide, providing optionality as obesity treatment paradigms continue to evolve. A couple other things that occurred during the quarter, as Steve had mentioned. In January 2026, we executed the sublicensing of PL9643, a selective melanocortin-1 receptor agonist with positive phase 3 clinical data and dry eye disease to Autanis Biac Labs. This transaction provided-...

Speaker #2: However, our focus will be on rare neuroendocrine disorders. Planned registration and clinical studies will enroll patients with hypothalamic obesity and Prader-Willi syndrome.

Speaker #2: In addition , preclinical and early clinical data support the potential for co-administration of our Melanocortin four receptor agonists with GLP one based therapeutics such as peptide , providing optionality as a BC treatment .

Speaker #2: Paradigms continue to evolve . A couple of other things that occurred during the quarter , as Steve had mentioned in January 2026 , we executed the sublicensing of PL 90 643 , a selective Melanocortin one receptor agonist with positive phase three clinical data in dry eye disease to our labs .

Speaker #2: This transaction provided approximately $3.8 million in upfront consideration and allows us to sharpen our focus on our core BC programs while retaining potential future financial participation through milestones and royalties.

Carl Spana: approximately $3.8 million in upfront consideration, and allows us to sharpen our focus on our core BC programs while retaining potential future financial participation through milestones or royalties. We also significantly strengthened our balance sheet with the completion of a $18.2 million public offering in November, which included the full exercise of the over-allotment. In addition, we successfully regained compliance with the NYSE American listing standards, and our common stock resumed trading under the symbol PTN, restoring market visibility and liquidity. In summary, Palatin enters 2026 with a strengthened financial position, multiple partnerships with near-term milestones, and a focused, differentiated OB-BC pipeline. We believe this positions the company to pursue substantial long-term value creation. With that, I'll turn the call back over to the operator, and we will open the call to questions.

Speaker #2: We also significantly strengthened our balance sheet with the completion of an $18.2 million public offering in November, which included the full exercise of the overallotment.

Speaker #2: In addition, we successfully regained compliance with the New York Stock Exchange American listing standards, and our common stock resumed trading under the symbol PTEN, restoring market visibility and liquidity.

Speaker #2: In summary Paladin enters 2026 with a strengthened financial position . Multiple partnerships with near-term milestones , and a focused , differentiated BC pipeline , we believe this positions the company to pursue substantial , long term value creation With that , I'll turn the call back over to the operator and we open the call to questions .

Speaker #1: Certainly, at this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad.

Operator: Certainly. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Your first question for today is from Scott Henry with Alliance Global Partners.

Speaker #1: A confirmation tone will indicate your line is in the question queue . You may press star two . If you would like to remove your question from the queue for participants using speaker equipment and may be necessary to pick up your handset before pressing the star keys , one moment please .

Speaker #1: While we pull for questions, your first question for today is from Scott Henry with Alliance Global Partners.

Speaker #3: Thank you . Good morning . And a lot of progress . Recently . If we could start with PL 7737 as we get ready for the IND , what preclinical or translational signals give you the greatest confidence in differentiation versus current or emerging mc4-r agonists , particularly around the tolerability angle .

Scott Henry: Thank you. Good morning, and a lot of progress recently. If we could start with PL7737. As we get ready for the IND, what preclinical or, or translational signals give you the greatest confidence in differentiation versus current or emerging MC4R agonists, particularly around the tolerability angle? Thank you.

Speaker #3: Thank you

Speaker #2: Scott , what was the compound ? Is designed . First , we'll talk about hyperpigmentation . It's designed to be more selective for the Melanocortin four receptor than Melanocortin one receptor , which should lead to reduction or substantial reduction in the hyperpigmentation , leading to .

Carl Spana: Oh, Scott, well, the compound is designed. Well, first of all, we'll talk about hyperpigmentation, as it's designed to be more selective for the melanocortin-4 receptor than the melanocortin-1 receptor, which should lead to a reduction or substantial reduction in the hyperpigmentation. Leading to the second part of the first part of your question. Listen, you know, we control potential GI side effects through a variety of mechanisms, not the least of which is the way the product is administered and absorbed. So we slow down the absorption so that we don't get relatively large spikes in the absorption, which can lead to, you know, an increase or enhanced GI side effects.

Speaker #2: The second part or the first part of your question ? We control potential GI side effects through a variety of mechanisms , not the least of which is is the way the product is administered and absorbed So we slow down the absorption so that we don't get relatively large spikes in the absorption , which can lead to an increase or enhanced GI side effects .

Speaker #3: Okay , great . And as we get into the phase one sad mad trial , how are you thinking about patient selection and what endpoint should we be thinking about as far as what we can get out of the clinical , early clinical data ?

Scott Henry: Okay, great. And as we get into the phase 1 SADMAD trial, how are you thinking about patient selection? And what endpoints should we be thinking about, as far as, you know, what we can get out of the clinical, early clinical data? As well, you know, I noticed, you know, Prader-Willi; is that an increased focus in addition to HO, or it just seems like I'm seeing that a little more front and center than in the past? Thank you.

Speaker #3: As well ? I noticed Prader-Willi , is that an increased focus ? In addition to Ho or it just seems like I'm seeing that a little more front and center than in the past .

Speaker #3: Thank you .

Speaker #4: Sure .

Carl Spana: Sure. So for the single-ascending and the multi-ascending dose, those are primarily safety studies. So certainly for the single-ascending dose, what we're looking for is to confirm oral bioavailability, that the product is safe, and to really define a dosing window for 7737. And the same will be for the long-acting peptide when that goes forward as well. In the multi-ascending dose study, those will be carried out for a longer term. So there again, these will be in healthy obese patients, and there, again, of course, safety is always a paramount, you know, primary efficacy or primary result that you're looking for in these types of studies.

Speaker #2: So for for the single ascending and descending dose , those are primarily safety studies . So certainly for the single ascending dose , what we're looking for is , is to confirm oral or oral bioavailability .

Speaker #2: The product is safe . And to really define a dosing window for 7.737 . And it would be the same would be for the long acting peptide .

Speaker #2: When that goes forward as well in the ascending dose study, those would be carried out for a longer term. So there again, these will be in healthy obese patients.

Speaker #2: And there again, of course, safety is always paramount. You know, primary efficacy, or the primary result that you're looking for in these types of studies.

Speaker #2: But with that being said, because these will be healthy obese patients, in the mid part we will be looking for a reduction in their body weight.

Carl Spana: But with that being said, because these will be healthy obese patients in the MAD part, we'll be looking for a reduction in their body weight. We'll be looking for reductions in control of their hyperphagia and other parameters that, you know, that go along with the OB/BC indication or controlling the BC indication. So we do expect that we will get, at least from the MAD part, a pretty clear signal on how well these compounds can work. What's nice about that is, you know, we've seen in our hands that there's very good translatability from smaller studies, you know, smaller efficacy studies, to larger studies with this mechanism.

Speaker #2: We'll be looking for reductions in control of their hyperphagia and other parameters that go along with the OBDC indication, or controlling DBC indication.

Speaker #2: So we do expect that we will get at least from the mad part , a pretty clear signal on on how well these compounds can work .

Speaker #2: What's nice about that is, you know, we've seen in our hands that there's very good translatability from smaller studies, smaller efficacy studies, to larger studies with this mechanism.

Speaker #3: Okay, great. And with regards to Prader-Willi syndrome, is there an increased emphasis there, or has that always just been in the background?

Scott Henry: Okay, great. With regards to Prader-Willi syndrome, is there an increased emphasis there, or has that always just, you know, been in the background?

Speaker #2: It's always been in the background. We've been, you know, we're looking for indications where there are, you know, of course, meet the rare and orphan designation, but in which there are substantial patients.

Carl Spana: It's always been in the background. We've been, you know, we're looking for, you know, indications where there are, you know, of course, meet the rare and orphan designation, but in which there are substantial patients. You know, if we think about some of the more, you know, micro-orphan indications that are genetically based and they let them melanocortin pathway, there are, you know, there are relatively small number of patients there. So of course, they do represent valid markets and valid opportunities for development. However, we know, we are still looking at, you know, some of the larger indications like HO and, and Prader-Willi, where there are, there are substantially more patients.

Speaker #2: You know , if we think about some of the more , you know , micro orphan indications that are genetically based in the leptin and pathway there are there are relatively small number of patients there .

Speaker #2: So, of course, they do represent valid markets and valid opportunities for development. However, we know we are still looking at some of the larger indications like the WHO and Prader-Willi, where there are substantially more patients.

Speaker #3: Okay , great . And then final question on the clinical side with the oral small molecule and the once weekly injection , how do you anticipate positioning those two products between having an oral and an injectable ?

Scott Henry: Okay, great. And then, you know, final question on the clinical side. With the oral small molecule and the once-weekly injection, how do you anticipate positioning those two products between having an oral and an injectable? Do you view it as complementary? Just trying to get an idea of where we should think about each one of those.

Speaker #3: Do you view it as complementary? Just trying to get an idea of where we should think about each one of those.

Speaker #2: I , certainly think they're complementary . Each will have their patient populations that they're better suited for . One would expect that , you know , certainly for the weekly injectable peptide , one might expect to see , you know , a higher level of efficacy for for patients on those and generally we generally tend to see across the board that , you know , we can drive better efficacy with the peptides than we can with the small molecules .

Carl Spana: ... So I certainly think they're complementary. Each will have, you know, their patient populations that they're better suited for. One would expect that, you know, certainly for the weekly injectable peptide, one might expect to see, you know, a higher level of efficacy for patients on those. So in general, we generally tend to see across the board that, you know, we can drive better efficacy with peptides than we can with the small molecules. However, of course, you know, we do need to see, you know, the final decisions, and that will be predicated on what we see in the early studies. But there will be patient populations for each. And patients, you know, in these indications, you know, these are long-term.

Speaker #2: However, of course, we do need to see—you know, the final decisions on that will be predicated on what we see in the early studies.

Speaker #2: But there will be patient populations for each and patients . In these indications . These are long term , you know , they're not like generalized obesity where patients can reach a target goal .

Carl Spana: You know, they're not like generalized obesity, where patients can reach a target goal. In other words, where they can come down a certain amount of weight, they come into a more healthy standpoint, and then want to move on to lower dosing or maintenance. Here, these patients are probably going to be, need to be on long-term, pretty aggressive therapy, because essentially, their conditions are chronic. You know, you know, they don't go away, in that sense. So you know, you'll need both, you'll need both types of options to really manage these patients.

Speaker #2: In other words , where they can come down a certain amount of weight . They come into a more healthy standpoint and then want to move on to lower dosing or , or maintenance .

Speaker #2: Here , these patients are probably going to be need to be on long term , pretty aggressive therapy because essentially their conditions are chronic and , you know , you know they don't they don't go away in essence .

Speaker #2: So you'll need both . You'll need both types of options to really manage these patients

Speaker #3: Okay . Great . Thank you Carl . I guess I'll just give Steve a chance to say something . Steve , with regards to opex in Q2 fiscal Q2 It looks at about 7.4 million .

Scott Henry: Okay. Great. Thank you, Carl. I guess I'll just give Steve a chance to say something. Steve, with regards to OpEx in Q2, fiscal Q2, it looks at about $7.4 million. Was there any kind of one-time noise from the transaction in there? And I'm just trying to get a sense of how we should think about that OpEx number in the March quarter, the fiscal third quarter. Thank you.

Speaker #3: Was there any kind of one time noise from the transaction in there ? And just I'm just trying to get a sense of how we should think about that opex number in the March quarter , the fiscal third quarter .

Speaker #3: Thank you

Speaker #2: Thanks, Scott. Yeah, the, the...

Stephen T. Wills: Thanks, Scott. Yeah, the Q4 2026 had a number of extraordinary or one-time, I think, is the best description. And that amounted to over $2 million just in that quarter that we do not expect going forward. One-time related to we cleaned up some, we cleaned up a number of things that we weren't able to clean up with prior to the, prior to the raise. And we did mention that in the Q that was filed earlier today, that there was a number of, if you will, one-time extraordinary type expenses that we're not gonna see going forward.

Steve Wills: Thanks, Scott. Yeah, the Q4 2026 had a number of extraordinary or one-time, I think, is the best description. And that amounted to over $2 million just in that quarter that we do not expect going forward. One-time related to we cleaned up some, we cleaned up a number of things that we weren't able to clean up with prior to the, prior to the raise. And we did mention that in the Q that was filed earlier today, that there was a number of, if you will, one-time extraordinary type expenses that we're not gonna see going forward.

Speaker #5: The fourth quarter of '26 had a number of extraordinary or one-time items—I think that's the best description—and that amounted to over $2 million.

Speaker #5: Just in that quarter that we do not expect going forward . One times related to we cleaned up some . We cleaned up a number of things that we weren't able to clean up with prior to the prior to the raise .

Speaker #5: And we did mention that in the Q that was filed earlier today that there was a number of , if you will , one time extraordinary type expenses that will not we're not going to see going forward .

Speaker #5: So I would target approximately 2.5 million less in the first quarter of 26 , second quarter of 26 versus the fourth quarter of 2025 , which was a little over seven , I think , or approximately 7.4 million .

Stephen T. Wills: So I would target approximately $2.5 million less in the first quarter of 2026, second quarter of 2026 versus the fourth quarter of 2025, which was a little over $7, I think, or approximately $7.4 million.

Steve Wills: So I would target approximately $2.5 million less in the first quarter of 2026, second quarter of 2026 versus the fourth quarter of 2025, which was a little over $7, I think, or approximately $7.4 million.

Speaker #3: Okay , great . That's perfect . Thank you for the color , Steve . And thank you both for taking the questions

Scott Henry: Okay, great. That's perfect. Thank you for the color, Steve. And thank you both for taking the questions.

Speaker #4: Great

Stephen T. Wills: Great.

Steve Wills: Great.

Speaker #1: Your next question for today is from Yale Jin with Laidlaw and Company.

Operator: Your next question for today is from Yale Jen with the Laidlaw & Company.

Speaker #6: Good morning . And thanks for taking the questions . I'm just going to follow up a little bit on Henry's questions . First , on the safety side , as we know that the in the release syndrome , the current approved drug has some issues on the safety side , and that has , you know , 15 to 20% of discontinuation of patients .

Yale Jen: Good morning, and thanks for taking the questions. I'm just gonna follow up a little bit on Harry's questions. First, on the safety side. As we know that the in the Prader-Willi syndrome, the current approved drug has some issue on the safety side, and there has a, you know, 15 to 20% of discontinuation of patient being treated. So, how would you guys assess that issue and when you're starting your phase one study and then maybe further down the pike?

Speaker #6: In treated . So how would you guys assess that issue ? And when you're starting your , your , your , your your phase one study and then maybe further down the pike

Carl Spana: Well, yes, well, the phase one study, you know, we, we'll get a very good look at what the tolerability and the safety profile for both of the approaches are. And, you know, based on our experience with the melanocortin-4 receptor system, you know, we have a pretty good understanding of, you know, what we expect to see. You know, in general, you will see some GI side effects. We think that those are controllable through the way these things can be administered, so that those are at lower rates. We don't generally see those types of discontinuations with this mechanism. You know, they generally tend to be fairly low with regards to the GI side effects.

Speaker #2: Phase one study, you know, we'll get a very good look at what the tolerability and the safety profile for both of the approaches are.

Speaker #2: And based on our experience with the Melanocortin four receptor system , you know , we have a pretty good understanding of , you know , what we expect to see .

Speaker #2: You know , in general , you will see some GI side effects . We think that those are controllable through the way these things can be administered , so that those are at lower rates .

Speaker #2: We don't generally see the type of those types of discontinuations with this mechanism . You know , the generally tend to be fairly low with regards to the GI side effects .

Carl Spana: In addition, you know, we know we want to avoid the MCR1 as much as possible so that we can, you know, reduce that potential for hyperpigmentation, which many patients don't like. So overall, I think this mechanistically, this approach probably will result in lower numbers of discontinuations in these patient populations, along with delivering pretty really good efficacy. However, with that being said, you know, you have to, you know, we have, we have to get in the clinic, and we have to show that.

Speaker #2: In addition , you know , we know we want to avoid the MCR one as much as possible so that we can reduce that potential for hyperpigmentation , which many patients don't like .

Speaker #2: So overall , I think this mechanistically , this approach probably will result in lower numbers of discontinuations in these patient populations , along with delivering really good efficacy .

Speaker #2: However , with that being said , you have to you have to get in the clinic and we have to show that .

Speaker #6: Sure . And maybe two quick questions here . The first one would be that in terms of the U.S. , you were looking for the Hyperphagia and in your phase one study , maybe probably more likely in phase two study , how you assess the two sort of metrics .

Yale Jen: Sure. And maybe two quick questions here. The first one will be that, in terms of the PWS, you were looking for the hyperphagia, and in your phase 1 study, maybe probably more likely in phase 2 study, how you assess the two sort of metrics, one for hyperphagia, the other is for weight reduction, in your study design, to see a clear, hopefully to see a clear sign that both have it will show an impact in both sides, both aspects?

Speaker #6: One for hyperphagia . The other is for weight reduction . In your study design to see a clear , hopefully to see a clear sign that the both have , it will show in impact in both sides , both aspects .

Speaker #2: Sure. So, I think when we think about it, when you're dealing with what we talked about, phase one, we're really talking about the multicenter study.

Carl Spana: Sure. So I think where we think about it, you know, when you're dealing with the... we talk about phase 1, we're really talking about the multi-single dose study. Obviously, we're not gonna expect to see very much in healthy normals from a single dose other than safety.

Speaker #2: Obviously we're not going to expect to see very much in healthy normals from from a single dose other than safety . When you're dealing with a 14 four week study .

Yale Jen: Right.

Carl Spana: You know, when we're dealing with, say, 14, 4-week study, so a 20-day study, in healthy obese patients, what you're looking for there is, you know, are we seeing consistent target engagement over the, over the full 4 weeks of dosing? Are we seeing consistent, you know, PK parameters and, you know, consistent exposure to the drug? We expect to see that there should be, you know, we know that from other studies we've done, that we would expect to see, a reduction in food intake and a reduction in body mass in these patients....

Speaker #2: So 20 day study in healthy obese patients , which you're looking for , there is , you know , are we seeing consistent target engagement over the over the full four weeks of dosing .

Speaker #2: Are we seeing consistent you know PK parameters and consistent exposure to the drug . We expect to see that there should be we know that from other studies we've done that we would expect to see a reduction in food intake and a reduction in body mass in these patients with , you know , you go along mechanistically , one of the ways that that this product way receptor works , one downstream effect of that is , of course , the control of Hyperphagia that can occur in obese patients and obese patients , whether be normal or whether they have a syndromic abuses such as p.w.s .

Carl Spana: You know, you go more mechanistically, you know, one way that the MC4 receptor works, one downstream effect of that is, of course, the control of hyperphagia that can occur, you know, in obese patients, and obese patients, whether they be normal or they have a syndromic obesity such as PWS. You know, until you get into the PWS patients, I mean, you're not going to really know, you know, how much you control the hyperphagia, right?

Speaker #2: You know , until you get into the patients , I mean , you're not going to really know how much you control the hyperphagia , right ?

Yale Jen: Right.

Speaker #2: However , however , you'll get a very strong signal from the phase one that you're working , aren't on target . How much efficacy you can drive and you know , that should translate into a strong signal in the patients as well .

Carl Spana: However, you'll get a very strong signal from the Phase 1 that, you know, that you're working on target, how much efficacy you can drive, and, you know, that should translate into a strong signal in the PWS patients as well. But until you get there, you're not going to know. I mean, we're gonna have to, you know, you do have to get into the patient, the actual intended patient population itself.

Speaker #2: But until you get there , you're not going to know . I mean , we're gonna have to you have to you have to get into the the actual intended patient population itself .

Speaker #6: Okay . Maybe actually just continue with this one . Is that based on the resources or anticipated resources going forward Pete P.w.s will be something that you may contemplate more aggressively next year .

Yale Jen: Okay, maybe actually just continue with this one, is that based on the resources or anticipated resources going forward, would PWS will be something that you may contemplate more aggressively next year? I mean, in this, later this year or really in the next year?

Speaker #6: I mean, in either later this year or really in the next year.

Speaker #2: So I'm going to you know , the answer is you're correct . But more in the next year . But I'll let Steve kind of walk through how the cash flow plays out over the next 18 months .

Carl Spana: So I'm gonna, you know, the answer is you're correct, but more in the next year. But I'll let Steve give kind of walk through how the cash flow plays out over the next 18 months. Yeah. Thanks, Carl. So we're the initial, as Carl mentioned, the SAD MAD phase 1 studies are the initial, and we're targeting, and we have sufficient cash on hand right now to move forward with both the oral small molecule and the long-acting peptide, again, in the phase 1 SAD MAD. That data will read out for the oral small molecule by year end and in the first half of next year on the long-acting peptide.

Speaker #5: Yeah . Thanks , Carl . So we're the initial as Carl mentioned , the sad mad phase one studies are the initial and we're targeting and we have sufficient cash on hand right now to move forward with both the oral small molecule and the long acting peptide .

Speaker #5: Again , in the phase one . Submit that data will read out for the oral small molecule by by year end . And in the first half of next year on the long acting peptide thereafter , we're going to be moving forward into whether you want to call it a phase two or phase two , a phase two , three .

Carl Spana: Thereafter, we're gonna be moving forward into whether you want to call it a phase 2, a phase 2/3, in specifically just HO patients and PW, you know, Prader-Willi syndrome, patients in both the oral small molecule and the long-acting peptide. But they will not start before mid-2027. Is that helpful?

Speaker #5: In specifically , just how patients and P.W. Prader-Willi syndrome patients in both the oral small molecule and the long acting peptide . But they will not start before mid 2027 .

Speaker #5: Is that helpful ?

Speaker #6: Okay .

Yale Jen: Okay, great. Yes, absolutely. That, that's actually great colors there. Maybe the last question here is, you guys have a study with a combination of GLP-1 beforehand. I understand that obviously that's a very, very crowded space or very highly competitive space, but certainly you have some positive data. So how would you position or in what context do you anticipate that GLP-1 may play a role in your product development or clinical study going forward?

Speaker #4: Great .

Speaker #6: Yes, absolutely. That's actually a great color there. Maybe the last question here is, do you guys have a study with a combination of GLP-1 beforehand?

Speaker #6: I understand that, obviously, that's a very, very crowded space—or a very highly competitive space. But certainly you have some positive data.

Speaker #6: So how would you position or what context do you anticipate that GLP 1st May play a role in your product development or clinical study ?

Speaker #6: Going forward ? And thanks .

Carl Spana: Sure.

Yale Jen: And thanks.

Speaker #2: Yeah . So so again , I think this has been a long we've been doing work in combination of these two mechanisms for for quite a bit of time .

Carl Spana: Yeah. So again, I think, you know, this has been a long study. We've been doing work in combination of these two mechanisms for quite a bit of time, and we've, as you said, we've done clinical trials specifically looking at the interaction. As you see more and more, incretin-based therapies coming into the marketplace, now they're moving from just injectables to oral, you know, you're likely to see clinicians wanting to combine these mechanisms, particularly for patients, you know, for PWS, for example, that may have really very severe hyperphagia, where, you know, they need additional, you know, something additionally more than, let's say, any one mechanism can combine.

Speaker #2: And as you said , we've done clinical trials specifically looking at the interaction as you as you see more and more incretin based therapies coming into the marketplace .

Speaker #2: Now , they're moving from just injectables to oral , you know , it's you're likely to see clinicians wanting to combine these mechanisms , particularly for patients , for U.S.

Speaker #2: , for example , that may have really very severe hyperphagia where they need additional , you know , something additional . Additionally , more than would say any one mechanism can combine .

Speaker #2: So that's why we began to think about, you know, how you combine these mechanisms to make sure that every patient that comes through can really get an optimized therapy?

Carl Spana: So that's why we began to think about, you know, how you combine these mechanisms to make sure that every patient that comes through can really get an optimized therapy. So I think it'd be a little naive to think that, you know, going during a clinical development program, you will focus on a monotherapy approach. Certainly, some of the patients coming into these studies will be on GLP-1s, but I think longer term, it's likely that, you're gonna see combination therapy. So it's just really positioning ourselves for, you could call it lifecycle management or the reality of what's gonna occur in the marketplace when these products get approved.

Speaker #2: So, I think it'd be a little naive to think that, although during the clinical development program you will focus on a monotherapy approach, certainly some of the patients coming into these studies will be on GLP-1.

Speaker #2: But I think the longer term , it's likely that you're going to see combination therapy . So it's just really positioning ourselves for you can call it lifecycle management or the reality of what's going to occur in the marketplace when these products get approved .

Speaker #6: Okay , great . And thanks a lot . Again , congrats with the sufficient , you resources to move forward . Certainly this is a great space to be in .

Yale Jen: Okay, great, and thanks a lot. Again, congrats with sufficient, you know, resources to move forward. Certainly, this is a great space to be in, and congrats on all the progress.

Speaker #6: And congrats on all the progress.

Carl Spana: We have reached the end of the question and answer session, and I will now turn the call over to Dr. Carl Spana for closing remarks. Thank you. I'd like to thank everyone for participating in the Palatin Q2 fiscal 2026 conference call. We're excited to what we're doing here. I think we're, we're in a very good place with really good assets, and we'll be continue to be excited in moving these products forward and really updating you as we continue to make progress in our development. That being said, have a great day, and we look forward to continue to update you on our progress. Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

Operator: We have reached the end of the question and answer session, and I will now turn the call over to Dr. Carl Spana for closing remarks.

Speaker #1: We have reached the end of the question-and-answer session, and I will now turn the call over to Doctor Carl Spana for closing remarks.

Carl Spana: Thank you. I'd like to thank everyone for participating in the Palatin Q2 fiscal 2026 conference call. We're excited to what we're doing here. I think we're, we're in a very good place with really good assets, and we'll be continue to be excited in moving these products forward and really updating you as we continue to make progress in our development. That being said, have a great day, and we look forward to continue to update you on our progress. Thank you.

Speaker #2: Thank you. I'd like to thank everyone for participating in the second quarter fiscal 2026 conference call. We're excited about what we're doing here.

Speaker #2: I think we're in a very good place with really good assets , and we'll continue to be excited in moving these products forward and really updating you as we continue to make progress in our development .

Speaker #2: That being said , have a great day and we look forward to continuing to update you on our progress . Thank you .

Operator: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

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