NEW YORK (TheStreet) -- Palatin Technologies (PTN - Get Report) shares are up 4.12% to $1.01 in afternoon trading on Thursday after the Food and Drug Administration approved the first drug to treat low sexual desire in women on Tuesday.

The FDA said that the drug, Addyi, will only be available through certified and specially trained health care professionals and pharmacies due to its safety issues. 

"This is the biggest breakthrough in women's sexual health since the advent of 'the Pill' for contraception. "It validates (and) legitimizes female sexuality as an important component of health," The National Consumers League said in a statement, according to Reuters.

Joe Pantginis, an analysts at Roth Capital, published a report on Friday saying that a positive ruling on the drug would reduce the regulatory hurdles Palatin would have to go through to get its own treatment candidate, bremelanotide, approved.

TheStreet Ratings team rates PALATIN TECHNOLOGIES INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate PALATIN TECHNOLOGIES INC (PTN) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Biotechnology industry. The net income has significantly decreased by 504.8% when compared to the same quarter one year ago, falling from -$1.51 million to -$9.15 million.
  • Net operating cash flow has significantly decreased to -$5.31 million or 255.11% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The gross profit margin for PALATIN TECHNOLOGIES INC is currently extremely low, coming in at 0.00%. PTN has continued with the weak profit margin when compared to the same quarter of last year.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, PALATIN TECHNOLOGIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • After a year of stock price fluctuations, the net result is that PTN's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • You can view the full analysis from the report here: PTN Ratings Report