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$7.23+15.3%Stored close · as of Nov 9, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-15.
0001654954-24-006292
Item 1A. Risk FactorsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001654954-24-014335
Item 1A. Risk FactorsThe 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 143 previous paragraphs and 14 current paragraphs.
2 unchanged; 6 reworded; 5 added; 135 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 22 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 (5)
Current report
Other than set forth below, there have been no material changes to our risk factors disclosed in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended June 30, 2024.
Current report
We are currently not in compliance with the continued listing standards of the NYSE American. If we fail to regain compliance with the NYSE American listing standards, our common stock could be de-listed from the NYSE American.
Current report
Our common stock is listed on the NYSE American, a national securities exchange, under the symbol “PTN”. As a result, we are subject to NYSE American’s listing standards, which generally mandate that we meet certain requirements relating to stockholders’ equity, market capitalization, aggregate market value of publicly held shares and distribution requirements.
Current report
As disclosed in the table below, 54,691 shares of common stock were withheld during the three months ended September 30, 2024, at the direction of the employees and as permitted under the 2011 Stock Incentive Plan in order to pay the minimum amount of tax liability owed by the employees from the vesting of previously issued restricted stock units:
Current report
(1) Consists solely of 54,691 shares that were withheld to satisfy tax withholding amounts due from employees upon the vesting of previously issued restricted stock units.
Removed paragraphs (135)
Previous report
Our management has determined that there is substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing.
Previous report
Our management has determined that there is substantial doubt about our ability to continue as a going concern because of our need to raise significant additional financing to complete clinical trials and development of our product candidates. Because we have not yet generated sufficient revenues from our operations, our ability to continue as a going concern is currently heavily dependent upon our ability to obtain additional financing to sustain our operations. Such financing may take the form of the issuance of common or preferred stock or debt securities or may involve bank financing. Our independent registered public accounting firm has issued their report, which includes an explanatory paragraph for going concern uncertainty on our consolidated financial statements as of and for the year ended June 30, 2023. The existence of a “going concern” conclusion may hinder our ability to obtain additional financing in the future. While we have completed additional financings in October 2023 and January 2024, we have no commitments to obtain any additional financing, and there can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all.
Previous report
We have a history of substantial net losses, including a net loss of $24.0 million for the year ended June 30, 2023. We expect to incur substantial net losses over the next few years, and we may never achieve or maintain profitability.
Previous report
As of June 30, 2023, we had an accumulated deficit of $412,030,437. We had $24,036,741 in net loss for the year ended June 30, 2023, compared to $36,198,299 in net loss for the year ended June 30, 2022. We may not achieve or sustain profitability in future years, depending on numerous factors, including whether and when we enter into license agreements for any of our products under development, regulatory actions by the FDA and other regulatory bodies, the performance of our licensees, and market acceptance of our products.
Previous report
We expect to incur significant expenses as we continue our development of MC1r and MCr products. These expenses, among other things, have had and will continue to have an adverse effect on our stockholders’ equity, total assets and working capital.
Previous report
Until we commenced selling Vyleesi in July 2020 upon termination of our license agreement with AMAG, we had not had any product available for commercial sale since 2005 and we have not received any revenues from the sale of our product candidates. On December 19, 2023 our Vyleesi product was acquired by Cosette Pharmaceuticals, Inc. (“Cosette”). For the foreseeable future, we will have to fund our operations and capital expenditures from license, royalty and contract revenue under license agreements, milestone payments by Cosette based on its sales of Vyleesi, existing cash balances and outside sources of financing, which may not be available on acceptable terms, if at all. We will not have product revenue from our products in development unless and until we receive approval from the FDA or other equivalent regulatory authorities outside the United States. We have devoted substantially all of our efforts to research and development, including preclinical and clinical trials. Because of the numerous risks associated with developing drugs, we are unable to predict the extent of future losses, whether or when any of our product candidates will become commercially available, or when we will become profitable, if at all.
Previous report
We no longer have a recurring source of revenue, and our current ability to generate revenue is largely dependent on Cosette’s achieving certain sales-based milestones.
Previous report
Under the Purchase Agreement, we are entitled to receive milestone payments of up to $159,000,000 (“Milestone Payments”) from Cosette on sales of Vyleesi. Before any of our new product candidates are approved for commercialization, our ability to generate revenue currently depends on Milestone Payments under the Purchase Agreement with Cosette and our ability to develop and license our new products under development. Accordingly, our ability to continue funding our new product development activities and operations may be dependent on Cosette’s ability to successfully market, sell and distribute Vyleesi and to perform its contractual obligations. Milestone Payments from Cosette for sales of Vyleesi may not be sufficient to fully fund our current operations, and there can be no assurance that Milestone Payments will be sufficient to fund our future operations. The amount of Milestone Payments we will receive under the Purchase Agreement is uncertain, and we have no control over the efforts and resources Cosette devotes to the marketing and sale of Vyleesi. If Cosette is unsuccessful and we do not receive sufficient Milestone Payments, we will need to explore other sources of capital to fund our operations.
Previous report
We will need additional funding, including funding to complete clinical trials for our product candidates, which may not be available on acceptable terms, if at all.
Previous report
We intend to focus future efforts on our MC1r product candidates, primarily for ocular indications. As of March 31, 2024, we had cash and cash equivalents of $10,014,088, with current liabilities of $8,532,782. Based on our available cash, cash equivalents and marketable securities, we have 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 and we are seeking additional funding to complete development activities and required clinical trials for our MC1r product candidates and, if those clinical trials are successful (which we cannot predict), to complete submission of required regulatory applications to the FDA.
Previous report
We may raise additional funds through public or private equity or debt financings, collaborative arrangements on our product candidates, or other sources. However, such financing arrangements may not be available on acceptable terms, or at all. To obtain additional funding, we may need to enter into arrangements that require us to develop only certain of our product candidates or relinquish rights to certain technologies, product candidates and/or potential markets.
Previous report
If we are unable to raise sufficient additional funds when needed, we may be required to curtail operations significantly, cease clinical trials and decrease staffing levels. We may seek to license, sell or otherwise dispose of our product candidates, technologies and contractual rights on the best possible terms available. Even if we are able to license, sell or otherwise dispose of our product candidates, technologies and contractual rights, it is likely to be on unfavorable terms and for less value than if we had the financial resources to develop or otherwise advance our product candidates, technologies and contractual rights ourselves.
Previous report
We have a limited operating history upon which to base an investment decision.
Previous report
Our operations are primarily focused on acquiring, developing and securing our proprietary technology, conducting preclinical and clinical studies and formulating and manufacturing, through contract manufacturers, our principal product candidates on a small-scale basis. These operations provide a limited basis for stockholders to assess our ability to commercialize our product candidates.
Previous report
While we completed Phase 3 clinical trials on Vyleesi for hypoactive sexual desire disorder (“HSDD”) in premenopausal women, together with AMAG filed an NDA on Vyleesi for HSDD with the FDA, and received approval on Vyleesi from the FDA, we have not yet demonstrated our ability to perform the functions necessary for the successful commercialization of any of our current product candidates. The successful commercialization of our product candidates will require us to perform a variety of functions, including:
Previous report
If we are unable to obtain regulatory approval of any of our product candidates, to successfully commercialize any products for which we receive regulatory approval or to obtain additional capital, we may not be able to recover our investment in our development efforts.
Previous report
The clinical and commercial success of our product candidates will depend on a number of factors, including the following:
Previous report
If we do not achieve one or more of these factors, many of which are beyond our control, in a timely manner or at all, we could experience significant delays or an inability to obtain regulatory approvals or commercialize our product candidates. Even if regulatory approvals are obtained, we may never be able to successfully commercialize any of our product candidates. Accordingly, we cannot assure our investors that we will be able to generate sufficient revenue through the sale of our product candidates or any future product candidates to continue our business.
Previous report
Raising additional capital may cause dilution to existing stockholders, restrict our operations, or require us to relinquish rights.
Previous report
We will seek the additional capital necessary to fund our operations through public or private equity offerings, collaboration agreements, debt financings, licensing arrangements or combinations of the foregoing. To the extent that we raise additional capital through the sale of equity or convertible debt securities, existing stockholders’ ownership interests will be diluted, and the terms may include liquidation or other preferences that adversely affect their rights as a stockholder. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise additional funds through collaborations and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or product candidates or grant licenses on terms that are not favorable to us.
Previous report
Our ability to finance our company and generate revenue will be impacted by our preclinical and clinical results with our future product candidates.
Previous report
Our near-term prospects, including our ability to finance our Company and generate revenue, will be impacted by preclinical and clinical results with our future product candidates. The clinical and commercial success of our product candidates will depend on a number of factors, including the following:
Previous report
If we fail to satisfy any one of these prerequisites to our commercial success, many of which are beyond our control, in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize our product candidates. In addition to preventing us from executing our current business plan, any delays in our clinical trials, or inability to successfully commercialize our products could impair our reputation in the industry and the investment community and could hinder our ability to fulfill our existing contractual commitments. As a result, our share price would likely decline significantly, and we would have difficulty raising necessary capital for future projects.
Previous report
The commercial success ofVyleesi*** for HSDD is a component of our corporate strategy, but Cosette, which acquired Vyleesi from us, may never successfully commercializeVyleesi for HSDD or obtain approvals in countries other than the United States.***
Previous report
Under our sales agreement with Cosette, we can receive up to $159,000,000 in contingent, sales-based milestone payments. We have no control over the sales strategy that Cosette employs, and cannot predict whether Cosette will meet sales milestones, ranging from annual net sales of $15,000,000 to $200,000,000. We cannot predict whether Cosette will be able successfully manufacture Vyleesi for worldwide markets or will be successful in educating physicians and patients about the benefits, administration and use of Vyleesi for HSDD.
Previous report
Both we and Cosette rely on contract manufacturers to make products, there is uncertainty regarding the contract manufacturer of prefilled autoinjectors that may adversely affect our revenue or results of operation.
Previous report
A facility of Catalent, Inc. located in Brussels, Belgium performs drug formulation and fills autoinjectors for the Vyleesi product and may be used by us to fill other products we are developing for autoinjector administration. On February 5, 2024, Catalent announced that it was being acquired by Novo Holdings, with the closing anticipated towards the end of calendar year 2024. It was also announced that shortly after the closing Novo Holdings intends to sell the Catalent fill-finish site in Brussels, Belgium to Novo Nordisk. This may have an adverse impact on the ability of Cosette to manufacture the Vyleesi product, which in turn can adversely affect sales-base milestone payments. In addition, we planned to use the Catalent facility to manufacture bremelanotide autoinjector devices for use in other applications, and may not be able to find alternative manufacturers at an acceptable cost or at all.
Previous report
The ongoing military conflicts between Russia and Ukraine and Israel and Hamas could cause geopolitical instability, economic uncertainty, financial markets volatility and capital markets disruption, which may adversely affect our revenue, financial condition, or results of operations.
Previous report
The current military conflicts between Russia and Ukraine and Israel and Hamas may disrupt or otherwise adversely impact our operations and those of third parties upon which we rely. Related sanctions, export controls or other actions that have already been initiated or may in the future be initiated by nations including the U.S., the European Union or Russia (e.g., potential cyberattacks, disruption of energy flows, etc.) can adversely affect our business, our contract research organizations, and other third parties with which we conduct business. Resulting volatility, disruption, or deterioration in the credit and financial markets may further make any necessary debt or equity financing more difficult and more costly. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our business strategy, financial performance, and stock price and could require us to delay or abandon clinical development plans. In addition, there is a risk that one or more of our current service providers, manufacturers, or other partners may be adversely impacted by deteriorating economic conditions, which could directly affect our ability to attain our operating goals and to accurately forecast and plan our future business activities.
Previous report
Our product candidates, including PL9643 for dry eye disease and PL8177 for the treatment of ulcerative colitis, are still in the early stages of development and remain subject to clinical testing and regulatory approval. If we are unable to successfully develop and test our product candidates, we will not be successful.
Previous report
Our product candidates, including PL9643 for dry eye disease and PL8177 for the treatment of ulcerative colitis, are at various stages of research and development, will require regulatory approval, and may never be successfully developed or commercialized. Our product candidates will require significant further research, development and testing before we can seek regulatory approval to market and sell them. We must demonstrate that our product candidates are safe and effective for use in patients in order to receive regulatory approval for commercial sale. Preclinical studies in animals, using various doses and formulations, must be performed before we can begin human clinical trials. Even if we obtain favorable results in the preclinical studies, the results in humans may be different. Numerous small-scale human clinical trials may be necessary to obtain initial data on a product candidate’s safety and efficacy in humans before advancing to large scale human clinical trials. We face the risk that the results of our trials in later phases of clinical trials may be inconsistent with those obtained in earlier phases. Adverse or inconclusive results could delay the progress of our development programs and may prevent us from filing for regulatory approval of our product candidates. Additional factors that could inhibit the successful development of our product candidates include:
Previous report
You should evaluate us in light of these uncertainties, difficulties and expenses commonly experienced by early stage biopharmaceutical companies, as well as unanticipated problems and additional costs relating to:
Previous report
If clinical trials for our product candidates are prolonged or delayed, we may be unable to commercialize our product candidates on a timely basis, which would require us to incur additional costs and delay our receipt of any revenue from potential product sales.
Previous report
We may be unable to commercialize our product candidates on a timely basis due to unexpected delays in our human clinical trials. Potential delaying events include:
Previous report
Any of these events or other delaying events, individually or in the aggregate, could delay the commercialization of our product candidates and have a material adverse effect on our business, results of operations and financial condition.
Previous report
We may not be able to secure and maintain relationships with research institutions and other organizations to conduct our clinical trials.
Previous report
We rely on research institutions and other organizations to conduct our clinical trials, and we therefore have limited control over the timing and cost of clinical trials and our ability to recruit subjects. If we are unable to reach agreements with suitable research institutions or organizations on acceptable terms, or if any such agreement is terminated, we may be unable to quickly replace the research institution or organization with another qualified institution or organization on acceptable terms. We may not be able to secure and maintain suitable research institutions or organizations to conduct our clinical trials.
Previous report
Even if our product candidates receive regulatory approval, they may never achieve market acceptance, in which case our business, financial condition and results of operation will be materially adversely affected.
Previous report
Regulatory approval for the marketing and sale of any of our product candidates does not assure the product’s commercial success. Any approved product will compete with other products manufactured and marketed by major pharmaceutical and other biotechnology companies. If any of our product candidates are approved by the FDA and do not achieve adequate market acceptance, our business, financial condition, and results of operations will be materially adversely affected. The degree of market acceptance of any such product will depend on a number of factors, including:
Showing the first 40 of 135 passages. Open the source sections for the rest.
Reworded paragraphs (6)
Previous wording
Palatin received a notice from the staff of NYSE American LLC (the “Exchange”) that Palatin was not in compliance with the Exchange’s continued listing standards under Section 1003(a)(i) and (ii) of the NYSE American Company Guide. Section 1003(a)(i) requires a listed company to have stockholders’ equity $2 million or more if the listed company has reported losses from continuing operations and/or net losses in two of its three most recent fiscal years, and Section 1003(a)(ii) requires a listed company to have stockholders’ equity of $4 million or more if the listed company has reported losses from continuing operations and/or net losses in three of its four most recent fiscal years. Palatin is now subject to the procedures and requirements of Section 1009 of the NYSE American Company Guide. Palatin had until November 9, 2023, to submit a plan (the “Plan”) of actions it has taken or will take to regain compliance with the continued listing standards by April 10, 2025.
Current wording
On October 10, 2023, the Company received a notice from the staff of NYSE American that the Company was not in compliance with the NYSE American’s continued listing standards under Section 1003(a)(i) and (ii) of the NYSE American Company Guide. Section 1003(a)(i) requires a listed company to have stockholders’ equity $2 million or more if the listed company has reported losses from continuing operations and/or net losses in two of its three most recent fiscal years, and Section 1003(a)(ii) requires a listed company to have stockholders’ equity of $4 million or more if the listed company has reported losses from continuing operations and/or net losses in three of its four most recent fiscal years. The Company remains subject to the procedures and requirements of Section 1009 of the Company Guide, and previously submitted a plan (the “Plan”) of actions it has taken or will take to regain compliance with the continued listing standards by April 10, 2025.
Previous wording
Palatin has timely delivered a Plan to the Exchange. The Exchange has accepted the Plan, and Palatin will be able to continue its listing during the Plan period and will be subject to periodic reviews including quarterly monitoring for compliance with the Plan until it has regained compliance.
Current wording
The NYSE American accepted the Plan and granted a Plan period through April 10, 2025 to regain compliance with the continued listing standards, which now includes continued listing standards under Section 1003(a)(iii). The Company will be able to continue its listing during the Plan period and will be subject to periodic reviews including quarterly monitoring for compliance with the Plan until it has regained compliance. If the Company is not in compliance with the continued listing standards by that date or if the Company does not make progress consistent with the Plan during the plan period, the Exchange may commence delisting procedures.
Previous wording
There can be no assurance that Palatin will be able to meet milestones set forth in the Plan between now and April 10, 2025.
Current wording
There can be no assurance that the Company will be able to meet milestones set forth in the Plan between now and April 10, 2025.
Previous wording
Even if we regain compliance with the Exchange’s listing requirements, we cannot give assurance that we will continue to satisfy the continued listing requirements of the Exchange, such as the corporate governance requirements or the minimum closing bid price requirement. The Exchange may take steps to de-list our common stock even if we regain compliance. If the Exchange delists our securities for trading on its exchange, we could face significant material adverse consequences, including:
Current wording
If we fail to regain compliance with the continued listing requirements of the NYSE American, the NYSE American may take steps to de-list our common stock. If the NYSE American de-lists our securities for trading on its exchange, we could face significant material adverse consequences, including:
Previous wording
Such a de-listing would likely have a negative effect on the price of our common stock and would impair our investors’ ability to sell or purchase our common stock when investors wish to do so. In the event of a de-listing, we may take actions to restore our compliance with the Exchange’s listing requirements, but we cannot provide assurance that any such action taken by us would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the Exchange’s minimum bid price requirement or prevent future non-compliance with the Exchange’s listing requirements.
Current wording
Such a de-listing would likely have a negative effect on the price of our common stock and would impair our investors’ ability to sell or purchase our common stock when investors wish to do so.
Previous wording
The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Our common shares are considered to be covered securities because they are listed on the Exchange. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. Further, if we were no longer listed on the Exchange, our common stock would not be covered securities and we would be subject to regulation in each state in which we offer our securities.
Current wording
The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Shares of our common stock are considered to be covered securities because they are listed on the NYSE American. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. Further, if we were no longer listed on the NYSE American, our common stock would not be deemed covered securities and we would be subject to regulation in each state in which we offer our securities.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
On October 4, 2024, the Company received a letter from the staff of NYSE American LLC (the “NYSE American”) stating that the Company’s stockholders’ equity as reported in its Annual Report on Form 10-K for the year ended June 30, 2024 was not in compliance with the NYSE American’s continued listing standards under Section 1003(a)(iii) of the NYSE American Company Guide. Section 1003(a)(iii) requires a listed company to have stockholders’ equity of $6 million or more if the listed company has reported losses from continuing operations and/or net losses in its five most recent fiscal years.