Palatin Technologies Inc. (
F1Q12 Earnings Call
November 15, 2011 11:00 ET
Dr. Carl Spana, Ph.D. – President and Chief Executive Officer
Steve Wills –Executive Vice President, Chief Financial Officer and Chief Operating Officer
Dr. Jeffrey Edelson, M.D. – Chief Medical Officer
David Moskowitz - Roth Capital
Rahul Jasuja - Noble Financial
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Good morning, ladies and gentlemen and welcome to the Palatin Technologies Fiscal First Quarter 2012 Conference Call. As a reminder, this call is being recorded.
Before we begin our remarks, I would like to remind you that statements from Palatin that are not historical facts may be forward-looking statements. These statements are based on assumptions that may or may not prove to be accurate and actual results may differ materially from those anticipated due to a variety of risks and uncertainties discussed in the company’s most recent filings from the Securities and Exchange Commission. Please consider such risks and uncertainties carefully in evaluating these forward-looking statements and Palatin’s prospects.
Now I would like to introduce your host for today’s call, Dr. Carl Spana, President and Chief Executive Officer of Palatin Technologies. Please go ahead, sir.
Dr. Carl Spana
Thank you. Good morning. I’m Carl Spana, President and CEO of Palatin Technologies. With me on the call today is Steve Wills, our Chief Financial and Operating Officer and Executive Vice President and Dr. Jeffrey Edelson, our Chief Medical Officer.
On today’s call we will be providing on our product programs and financial results. To begin, Steve Wills will provide an update on our fiscal first quarter 2012 financial results. Steve.
Thank you, Carl. Good morning, everyone. Regarding the financial update; Palatin’s net loss for the quarter ended September 30, 2011 was $3.4 million or $0.10 per basic and diluted share compared to a net loss of $4.6 million or $0.39 per basic and diluted share for the quarter ended September 30, 2010.
The decrease in net loss for the quarter ended September 30, 2011 compared to the same period last fiscal year is the result of Palatin’s previously announced strategic decision to reduce staffing levels and to focus resources and efforts on clinical trials of bremelanotide for female sexual dysfunction, the pre-clinical development of an inhaled formula of PL-3994 and a new peptide drug candidate for sexual dysfunction.
The decrease in net loss per share was also significantly impacted by the higher number of shares outstanding in the quarter ended September 30, 2011, compared to the same period last fiscal year due to the sale of shares of stock in March of 2011.
Regarding revenue; total revenue for the quarter ended September 30, 2011 was $27,000 compared to $216,000 for the same period in 2010. Revenue for these periods consisted entirely of amounts recognized under our agreements with AstraZeneca.
Regarding costs and expenses for the quarter ended September 30, 2011, total operating expenses were $3.4 million compared to $4.8 million for the same period in 2010. The decrease in operating expenses for the quarter ended September 30, 2011 compared to the comparable quarter in 2010 is the result of our strategic decision to reduce infrastructure costs referenced prior. Regarding our cash position, our cash and cash equivalents were $14.9 million, as of September 30, 2011, compared to $18.9 million, at June 30, 2011. Our current liabilities were $1.7 million, as of September 30, 2011, and $2.8 million, as of June 30, 2011, a reduction of $1.1 million.
We believe, based on our current operating plan, that our cash and cash equivalents will be sufficient to fund our operations for at least calendar year 2012.
Dr. Carl Spana
Thank you, Steve. Now for an update on our plans. Before I give the update, I would just like to draw your attention that earlier in November the company held an Analyst Day in New York City in which we had two invited guest speakers who are experts in the field of female sexual dysfunction. The presentations from that Analyst Day is on the website. For those who would like a little more information, a more detail on FSD and our programs in that area, please go to the website. You might find that those presentations are quite informative.
So to start out the programs, I'll cover obesity and diabetes at melancortin-4 receptor program, which is partnered with AstraZeneca. AstraZeneca continues to progress AZD2820 through a Phase I clinical study. We expect initial data by the end of this calendar year.
The commercial drug candidate AZD2820 is a melancortin receptor for partial agonist, developed by Palatin as part of its collaborative research program with AstraZeneca. The decision to move this program into clinical development was, in part, based on exciting clinical data generated by Palatin as part of our collaboration with AstraZeneca. Results improved principal clinical trials in obese patients with non-commercial compounds that target the melancortin receptor show significant reduction in food intake and weight loss.
We believe that this clinical data, along with earlier work with animal models of obesity, demonstrates the significant role that melancortin pathway plays in regulating food intake and weight in validates melanocortin-4 receptor, as a major target for obesity therapeutics. We believe that therapies that target the melanocortin-4 receptor have potential to demonstrate the safety of ethics we require for approval and dramatically impact the treatment of obesity.
As you can imagine, this program has huge commercial potential and we believe that our partner, AstraZeneca, has the resources and commitment to realize this potential. We are eligible for milestone payment totaling up to $145 million, with up to $85 million, contingent upon development and regulatory milestones and the balance on achievement of sales targets plus mid-single to high-single digit royalties on sales of approved products. AstraZeneca has responsibility for product commercialization, by discovery and all development costs.