Palatin Technologies, Inc. (
Q4 2010 Earnings Call
February 24, 2011 11:00 am ET
Carl Spana – President and Chief Executive Officer
Stephen T. Wills – Chief Financial Officer and Executive Vice President – Operations
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Good morning, ladies and gentlemen, and welcome to the Palatin Technologies Second Quarter Fiscal Year 2011 Conference Call. All participants are in a listen-only mode.
Due to certain disclosure restrictions surrounding Palatin's announcement this morning of its pricing of a public offering of its common stock and warrants, there will not be a question-and-answer session at the end of the company's remarks. As a reminder, this conference call is being recorded.
Before we begin our remarks, I would you like to remind you that statements made by 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 could differ materially from those anticipated due to a 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 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. Go ahead, sir.
Thank you. Good morning. I'm Carl Spana, President and CEO of Palatin Technologies. With me on the phone today is Steve Wills, our Executive Vice President of Operations and Chief Financial Officer, and Dr. Jeffrey Edelson, our Chief Medical Officer.
Earlier today the company announced the pricing of a public offering of our common stock and warrants. This financing is truly transformational for Palatin, allowing us to concentrate on advancing our programs and not to be concerned with doing small capital raises several times per year.
Due to certain disclosure restrictions surrounding our financial announcement this morning, there will not be a question-and-answer session at the end of our remarks. It is our intention to have an investor and analyst conference in the near future, after this quiet period has passed, to go over our programs and plans in more detail.
Steve Wills today will provide an update on our fiscal second quarter financial results and I will then cover an update on the status of our key programs. Steve?
Stephen T. Wills
Thank you, Carl. Good morning, everyone. Regarding the financial update, Palatin's net loss for the quarter ended December 31, 2010 was $1.1 million or $0.09 per basic and diluted share, compared to net income of $4.5 million or $0.42 per basic and diluted share for the quarter ended December 31, 2009.
The net loss for the quarter ended December 31, 2010, compared to net income for the same period last fiscal year, was primarily due to a decrease in revenue recognized under Palatin's research collaboration and license and clinical trial agreements with AstraZeneca, as a result of the successful completion of the research collaboration portion of the agreement in January 2010.
Revenues for the quarter ended December 31, 2010 were $1.0 million, consisting of $847,000 in grant revenue received under the Patient Protection and Affordable Care Act of 2010 and $195,000 in contract revenue pursuant to our agreement with AstraZeneca.
Revenues for the quarter ended December 31, 2009 consisted solely of $7.3 million related to AstraZeneca. The difference was that we recognized outstanding AstraZeneca related deferred revenues in the 2009 quarter.
For the quarter ended December 31, 2010, total operating expenses were $2.9 million, compared to $3.8 million for the comparable quarter of 2009. The decrease in operating expenses for the quarter was primarily related to our previously disclosed realignment of resources and reduction in staffing levels. At December 31, 2010 Palatin's cash, cash equivalents and investments totaled $3.7 million, compared to $8.9 million at June 30, 2010.
Regarding this morning's pricing announcement, we announced today the pricing of our underwritten public offering of 23 million units consisting of 23 million shares of our common stock, Series A warrants to purchase 2 million shares of our common stock and Series B warrants to purchase 21 million shares of our common stock at a price to the public of $1 per unit. We expect that the gross proceeds will be $23 million and the net proceeds of the offering to be approximately $21.1 million, after deducting underwriting discounts and commissions and other estimated offering expenses.
The offering is expected to close on or about March 1, 2011, which I believe is next Tuesday, subject to the satisfaction of customary closing conditions. We intend to use the proceeds from this offering for general corporate purposes and working capital, including our clinical trial programs with bremelanotide for female sexual disfunction and secondarily, for our PL-3994 development programs of asthma and a development program for new peptides for sexual disfunction.
With $21.1 million from this financing and based on our current program and inside expense projections, we anticipate being able to fund our operations through December 31, 2012.
Thank you, Steve. Now, for an update on our programs. Regarding our sexual disfunction program, we are focusing our development efforts on the female disfunction indication. We believe that female disfunction represents an area of medical need and a substantial commercial opportunity.
We submitted a protocol and held a meeting with the FDA on initiation of an at-home Phase II clinical trial of subcutaneously administered bremelanotide for premenopausal women with female disfunction. At that meeting, we reached agreement with the FDA on the protocol and clinical trial design.