PALATIN TECHNOLOGIES INC
For the period ended Sep 30, 2024. Filed Nov 14, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 14, 2024
PTN$6.27+9.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-15.
0001654954-24-006292
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001654954-24-014335
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 42 previous paragraphs and 38 current paragraphs.
22 unchanged; 13 reworded; 2 added; 7 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (2)
Current report
Our new product development activities focus on obesity, including co-administration of bremelanotide with tirzepatide, a GLP-1 agonist for treatment of obesity, which entered Phase 2 in the second quarter of calendar year 2024, and treatment of erectile dysfunction, including a co-formulation of bremelanotide with a phosphodiesterase type 5 inhibitor (“PDE5i”) for treatment of erectile dysfunction in patients that do not respond to PDE5i monotherapy, scheduled to start a pharmacokinetic study in the first quarter of calendar year 2025; and secondarily on ocular indications, including PL9643, an ophthalmic peptide solution for dry eye disease (“DED”), which completed Phase 3 clinical trials and announced top line results from the first Phase 3 clinical trial in the first quarter of calendar year 2024; ulcerative colitis, including PL8177, an oral peptide formulation, which entered Phase 2 ulcerative colitis clinical trials in the third quarter of calendar year 2022; and a proof-of-concept melanocortin agonist clinical trial for diabetic nephropathy, which entered a Phase 2 clinical in the fourth quarter of calendar year 2022. We are actively engaged in discussions with potential partners and licensees that have the financial and operational resources to progress our products for ocular conditions through development, approval and commercialization.
Current report
*Other (Expense) Income –*Total other (expense) income, net was ($58,964) and $902,898 for the three months ended September 30, 2024 and 2023, respectively. For the three months ended September 30, 2024, we recognized foreign currency loss of $131,600 and $5,940 of interest expense offset by investment income of $78,576. For the three months ended September 30, 2023, we recognized an increase in the fair value of warrant liabilities of $682,400, foreign currency gain of $159,750 and investment income of $71,630 offset by $10,882 of interest expense.
Removed paragraphs (7)
Previous report
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Previous report
Our new product development activities focus primarily on MC1r agonists, with potential to treat inflammatory and autoimmune diseases such as dry eye disease, which is also known as keratoconjunctivitis sicca, uveitis, diabetic retinopathy, and inflammatory bowel disease. We believe that the MC1r agonist peptides in development have broad anti-inflammatory effects and appear to utilize mechanisms engaged by the endogenous melanocortin system in regulation of the immune system and resolution of inflammatory responses. We are also developing peptides that are active at more than one melanocortin receptor, and MC4r peptide and small molecule agonists with potential utility in obesity and metabolic-related disorders, including rare disease and orphan indications.
Previous report
Three and Nine Months Ended March 31, 2024, Compared to the Three and Nine Months Ended March 31, 2023:
Previous report
*Cost of Products Sold –*Cost of products sold was $0 and $97,637 for the three and nine months ended March 31, 2024. Cost of products sold was $129,235 and $314,438 for the three and nine months ended March 31, 2023, respectively. The decrease is driven by the sale of Vyleesi’s worldwide rights to Cosette on December 19, 2023.
Previous report
Gain on Sale of Vyleesi – On December 19, 2023, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Cosette pursuant to which Cosette acquired from the Company worldwide rights to Vyleesi. As a result of the transaction, the Company recorded a loss of $25,202 and a gain of $7,798,280 on the sale of Vyleesi for the three and nine months ended March 31, 2024. The gain represents the upfront purchase price of $9,500,000 less the cost of net assets transferred to the purchaser.
Previous report
*Other Income (Expense) -*For the three and nine months ended March 31, 2024, other income (expense) was $782,648 and ($7,331,633), respectively. For the three and nine months ended March 31, 2023, other income (expense) was ($1,368,069) and $2,748,492, respectively. The increase in other income (expense) for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was driven primarily by an increase in the change in fair values of the warrant liability, a gain on foreign currency, and investment income. The decrease in other income (expense) for the nine months ended March 31, 2024 compared to the nine months ended March 31, 2023 was driven primarily by a decrease in the change in fair values of the warrant liability.
Previous report
Income Tax Benefit* –*Income tax benefit for the nine months ended March 31, 2023 was $4,674,999 as a result of the Company’s sale of NOLs and R&D credits.
Reworded paragraphs (13)
Previous wording
Our significant accounting policies, which are described in the notes to our consolidated financial statements included in this report and in our Annual Report on Form 10-K for the year ended June 30, 2023, have not changed during the three and nine months ended March 31, 2024. We believe that our accounting policies and estimates relating to the carrying value of inventory, revenue recognition, accrued expenses, purchase commitment liabilities, warrants and stock-based compensation are the most critical.
Current wording
Our significant accounting policies, which are described in the notes to our consolidated financial statements included in this report and in our Annual Report on Form 10-K for the year ended June 30, 2024, have not changed during the three months ended September 30, 2024. We believe that our accounting policies and estimates relating to the carrying value of inventory, revenue recognition, accrued expenses, purchase commitment liabilities, warrants and stock-based compensation are the most critical.
Previous wording
*Revenues –*For the three and nine months ended March 31, 2024, we recognized $0 and $4,140,090 in product revenue, net of allowances, respectively. For the three and nine months ended March 31, 2023, we recognized $1,195,675 and $3,091,745, in product revenue, net of allowances, respectively. The decrease in net revenue for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was driven by the sale of Vyleesi’s worldwide rights to Cosette on December 19, 2023. The increase in net revenue for the nine months ended March 31, 2024 compared to the nine months ended March 31, 2023 was the result of increased sales volume and reduced product sales allowances as a percentage of gross sales.
Current wording
Three Months Ended September 30, 2024, Compared to the Three Months Ended September 30, 2023:
Previous wording
Research and Development – Research and development expenses were $7,159,686 and $17,728,516 for the three and nine months ended March 31, 2024, respectively, compared to $4,830,327 and $15,224,896 for the three and nine months ended March 31, 2023, respectively. The increase was related to the overall increase in spending on our MCr programs.
Current wording
Research and Development – Research and development expenses were $5,743,754 and $5,014,630 for the three months ended September 30, 2024 and 2023, respectively. The increase for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, was related to the overall increase in spending on our MCr programs.
Previous wording
Research and development expenses related to our Vyleesi, MCr programs and other preclinical programs were $5,487,259 and $12,775,230 for the three and nine months ended March 31, 2024, respectively, compared to $3,261,362 and $10,519,814 for the three and nine months ended March 31, 2023, respectively. The increase was primarily related to an increase in spending on our MCr programs.
Current wording
Research and development expenses related to our MCr programs and other preclinical programs were $4,081,037 and $3,459,587 for the three months ended September 30, 2024 and 2023, respectively. The increase was primarily related to an increase in spending on our MCr programs.
Previous wording
The amounts of project spending above exclude general research and development spending, which was $1,672,427 and $4,953,286 for the three and nine months ended March 31, 2024, respectively compared to $1,568,965 and $4,705,082 for the three and nine months ended March 31, 2023, respectively. The increase is primarily attributable to an increase in compensation related expenses.
Current wording
The amounts of project spending above exclude general research and development spending, which was $1,662,717 and $1,672,427 for the three months ended September 30, 2024 and 2024, respectively. The decrease is primarily attributable to a decrease in compensation-related expenses.
Previous wording
Cumulative spending from inception to March 31, 2024, was approximately $311,900,000 on our Vyleesi program and approximately $229,400,000 on all our other programs (which include PL3994, melanocortin receptor agonists, other discovery programs and terminated programs). Due to various risk factors described in our Annual Report on Form 10-K for the year ended June 30, 2023, under “Risk Factors,” including the difficulty in currently estimating the costs and timing of future Phase 1 clinical trials and larger-scale Phase 2 and Phase 3 clinical trials for any product under development, we cannot predict with reasonable certainty when, if ever, a program will advance to the next stage of development or be successfully completed, or when, if ever, related net cash inflows will be generated.
Current wording
Cumulative spending from inception to September 30, 2024, was approximately $311,900,000 on our Vyleesi program and approximately $239,700,000 on all our other programs (which include PL3994, melanocortin receptor agonists, other discovery programs and terminated programs). Due to various risk factors described in our Annual Report on Form 10-K for the year ended June 30, 2024, under “Risk Factors,” including the difficulty in currently estimating the costs and timing of future Phase 1 clinical trials and larger-scale Phase 2 and Phase 3 clinical trials for any product under development, we cannot predict with reasonable certainty when, if ever, a program will advance to the next stage of development or be successfully completed, or when, if ever, related net cash inflows will be generated.
Previous wording
Selling, General and Administrative – Selling, general and administrative expenses, which consist mainly of compensation and related costs, were $2,033,410 and $8,266,267 for the three and nine months ended March 31, 2024, respectively, compared to $3,537,376 and $10,220,518 for the three and nine months ended March 31, 2023, respectively. The decrease is a result of a decrease in selling expenses relating to Vyleesi.
Current wording
Selling, General and Administrative – Selling, general and administrative expenses, which consist mainly of compensation and related costs, were $2,020,931 and $3,200,244 for the three months ended September 30, 2024 and 2023, respectively. The decrease is a result of the elimination of selling expenses relating to Vyleesi.
Previous wording
During the nine months ended March 31, 2024, net cash used in operating activities was $24,988,985 compared to $19,665,582 for the nine months ended March 31, 2023. The increase in cash used in operations for the nine months ended March 31, 2024, compared to the nine months ended March 31, 2023, was primarily related to an increase in the net loss during the period and working capital changes.
Current wording
During the three months ended September 30, 2024, net cash used in operating activities was $7,016,213 compared to $5,906,393 for the three months ended September 30, 2023. The increase in cash used in operations for the three months ended September 30, 2024, compared to the three months ended September 30, 2023, was primarily related to an increase in the net loss during the period and working capital changes.
Previous wording
During the nine months ended March 31, 2024, net cash provided by investing activities was $12,455,275 compared to net cash used in investing activities of $381,531 for the nine months ended March 31, 2023. The increase was primarily related to proceeds from the sale of Vyleesi and the maturity of marketable securities.
Current wording
During the three months ended September 30, 2023, net cash provided by investing activities was $2,992,890 related to the maturity of marketable securities.
Previous wording
During the nine months ended March 31, 2024, net cash provided by financing activities was $14,558,216, which consisted of proceeds from the sale of common stock of $14,693,779 and proceeds from the exercise of warrants of $103 offset by $56,401 for payment of withholding taxes related to restricted stock units and $79,265 for payment of finance lease obligations. During the nine months ended March 31, 2023, net cash provided by financing activities was $9,740,289, which consisted of proceeds from the sale of common stock of $9,961,462, and proceeds from the exercise of warrants of $78, offset by $146,062 for payment of withholding taxes related to restricted stock units and $75,189 for payment of finance lease obligations.
Current wording
During the three months ended September 30, 2024, net cash used in financing activities was $126,969, which consisted of $99,482 for payment of withholding taxes related to restricted stock units and $27,487 for payment of finance lease obligations. During the three months ended September 30, 2023, net cash provided by financing activities was $448,894, which consisted of proceeds from the sale of common stock of $531,369, offset by $56,401 for payment of withholding taxes related to restricted stock units and $26,074 for payment of finance lease obligations.
Previous wording
We have incurred cumulative negative cash flows from operations since our inception, and have expended substantial funds to complete our planned product development efforts. Continued operations are dependent upon our ability to complete equity or debt financing activities and to enter into additional licensing or collaboration arrangements. As of March 31, 2024, our cash and cash equivalents were $10,014,088, and our current liabilities were $8,532,782.
Current wording
We have incurred cumulative negative cash flows from operations since our inception, and have expended substantial funds to advance our planned product development efforts. Continued operations are dependent upon our ability to complete equity or debt financing activities and to enter into additional licensing or collaboration arrangements. As of September 30, 2024, our cash and cash equivalents were $2,384,214, and our current liabilities were $9,861,717.
Previous wording
Our obligations include short-term lease obligations in an aggregate amount of $444,421 in current liabilities as of March 31, 2024, $262,220 in long-term lease liabilities, inventory purchase commitments in an aggregate amount of $3,312,450 which consists of $2,280,150 in current liabilities as of March 31, 2024, and $1,032,300 in other long-term liabilities.
Current wording
Our obligations include short-term lease obligations in an aggregate amount of $338,047 in current liabilities as of September 30, 2024, $132,447 in long-term lease liabilities, inventory purchase commitments in an aggregate amount of $2,108,050 which consists of $1,001,350 in current liabilities as of September 30, 2024, and $1,106,700 in other long-term liabilities.
Previous wording
As a result of our sale of worldwide rights to Vyleesi pursuant to the Purchase Agreement, we currently do not have a recurring source of revenue. Based on our available cash and cash equivalents as of March 31, 2024, the Company has concluded that substantial doubt exists about our ability to continue as a going concern for one year from the date our consolidated financial statements are issued. We are evaluating strategies to obtain additional funding for future operations which include but are not limited to obtaining equity financing, issuing debt, or reducing planned expenses. A failure to raise additional funding or to effectively implement cost reductions could harm our business, results of operations, and future prospects. If we are not able to secure adequate additional funding in future periods, we would be forced to make additional reductions in certain expenditures. This may include liquidating assets and suspending or curtailing planned programs. We may also have to delay, reduce the scope of, suspend, or eliminate one or more research and development programs or its commercialization efforts or pursue a strategic transaction. If we are unable to raise capital when needed or enter into a strategic transaction, then we may be required to cease operations, which could cause our stockholders to lose all or part of their investment. Based on our current operating and development plans, we expect that our existing cash and cash equivalents as of the date of this filing will be sufficient to enable the Company to fund its operations into the second half of the calendar year 2024.
Current wording
As a result of our sale of worldwide rights to Vyleesi pursuant to the Purchase Agreement, we currently do not have a recurring source of revenue. Based on our available cash and cash equivalents as of September 30, 2024, the Company has concluded that substantial doubt exists about our ability to continue as a going concern for one year from the date our consolidated financial statements are issued. We are evaluating strategies to obtain additional funding for future operations which include but are not limited to obtaining equity financing, issuing debt, or reducing planned expenses. A failure to raise additional funding or to effectively implement cost reductions could harm our business, results of operations, and future prospects. If we are not able to secure adequate additional funding in future periods, we would be forced to make additional reductions in certain expenditures. This may include liquidating assets and suspending or curtailing planned programs. We may also have to delay, reduce the scope of, suspend, or eliminate one or more research and development programs or its commercialization efforts or pursue a strategic transaction. If we are unable to raise capital when needed or enter into a strategic transaction, then we may be required to cease operations, which could cause our stockholders to lose all or part of their investment. Based on our current operating and development plans, we expect that our existing cash and cash equivalents as of the date of this filing will be sufficient to enable the Company to fund its operations into the first half of the calendar year 2025.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
*Revenues –*For the three months ended September 30, 2024 and 2023, we recognized $0 and $2,105,977 in product revenue, net of allowances, respectively. The decrease in net revenue is a result of the sale of Vyleesi’s worldwide rights to Cosette.