Palatin Technologies, Inc. Price & Performance (PTN)

Thank you, Carl, and welcome everyone. Regarding our financial results, starting with revenue, Pursuant to the completion of the sale of Vyleesi's worldwide rights for female sexual dysfunction to Cosette Pharmaceuticals, for up to 171,000,000 in December of twenty twenty three, Palatin did not record any product sales to pharmacy distributors for the second quarter ended 12/31/2024. For the second quarter ended 12/31/2023, gross product sales were $4,300,000 and net product revenue was $2,000,000 total operating expenses were $2,600,000 net of a $2,500,000 gain on the sale by leaseee the second quarter ended 12/31/2024, compared to $900,000 net of a $7,800,000 gain on the sale by leaseee for the comparable quarter in 2023. The increase was mainly the result of the decrease in gain on the sale of YLEC TUKOSET for the second quarter ended December 31, 2024. Regarding other income and expense, total other income expense net consists mainly of foreign currency transaction gains and losses and the change in fair value of warrant liabilities. Which Palatin had recorded as a liability on the consolidated financial statement. For the quarter ended 12/31/2023, Palatin recorded a fair value adjustment loss of $8,100,000 and offering expenses of 700,000.0 Regarding cash flows, Palatin's net cash used in operation for the quarter ended December 31, 2024 was $4,800,000 compared to net cash used in operations of $10,500,000 for the same period in 2023.

Decrease in net cash used in operations is mainly due to the decrease on the gain on the sale by leaseee during the period and secondarily to working capital changes. Regarding net loss, Palatin's net loss for the quarter ended 12/31/2024 was $2,400,000 compared to a net loss of $7,800,000 for the same period in 2023. The decrease in net loss the twenty twenty four quarter over the quarter ended driven primarily by the change in fair values of the warrant liability and the elimination of iLeasing net product revenue and selling expenses offset by the decrease on the gain of the sale by lessee. Regarding cash position, [indiscernible] As of 12/31/2024, Palatin's cash and cash equivalents were $3,400,000 compared to cash and cash equivalents of $2,400,000 at 09/30/2024 and 9,500,000.0 as of 06/30/2024. This $3,400,000 of cash and cash equivalents as of 12/31/2024, does not include the 4,300,000.0 of net proceeds that we raised in an equity offering which closed in February 2025. [indiscernible] Active we are actively engaged with multiple potential funding sources for future operating cash requirements.

I'll now turn the call back over to Carl. Thank you, Steve. I'll now go over some of the operating highlights for the quarter. Joining with our Phase two signal detection study BNP-eight zero one, evaluating the safety and efficacy of the coadministration of the melanocortin-four receptor agonist brimonidine with tirzepatide, a GLP-one, GIP-one dual agonist, This is being done in patients with generalized obesity This study has been completed and the database has been locked. Top line data from the study will be available later The study was designed to evaluate two primary research questions. Does coadministration result in increased weight loss, can treatment with melanoclonal four receptor agonists be used for weight loss maintenance by blunting the weight regain seen post incretin treatment. In addition to safety, the study's primary endpoint is percent weight loss of the combined treatment compared to placebo control at the end of the treatment. A variety of secondary endpoints such as SATIETY, and preservation of lean body mass were also evaluated.

Our obesity and weight loss management portfolio includes both long acting monoclonal four receptor selective peptide agonist and the orally active monoclon-four receptor selective small molecule PL We are on track to move both programs into IND enabling activities in clinical melanocortin four receptor compounds have reduced activity at the melanocortin one receptor and therefore have reduced potential to cause skin darkening.

The lack of MCR1 activity once weekly dosing or oral dosing, represents significant improvements over current FDA approved melanocortin treatments.

You can find additional information on our clinical trial at clinicaltrials.gov our website has recent presentations on our novel next generation Linacortin-four receptor compounds.

For OPL-eight thousand one hundred and seventy seven, orally selective melanocortin one receptor treatment for ulcerative colitis the Phase two study remains on track release of top line data in the first quarter of calendar twenty twenty five. In anticipation of the data, there has been a significant increase in business development discussions with potential partners which is in line with our current strategy to out license this exciting program.

In December of twenty twenty four, we we released the top line data from our Phase two breakout study evaluating brimonatide as a treatment for patients with diabetic kidney disease. Results from the study are the seventy one percent of the patients in the study achieved a greater than thirty percent reduction the urinary protein to creatinine ratio and seventy one percent of the patients had an improved or stabilized estimated pulmonary filtration rate. The results validate the modulated melanocortin system could potentially be a new therapeutic strategy and possibly and possibly disease modifying treatment. Option for people living with progressive kidney disease. The detailed results of the breakout study Based on the successful outcome of the study, we have initiated discussions with potential partners for out licensing this program which is in line with our current strategy.

We previously announced that we are taking a multi pronged approach to realizing the value of our ocular melanocortin program. In support of this, we are actively engaged in discussions with larger potential strategic partners for out licensing investors interested in funding further development and with peer companies concerning potential business combinations. Before moving on to take questions, would like to comment on our strategy. Are focusing our research and development efforts on omelanocortin-four receptor BC assets. We believe that the pharmacological treatment of obesity in the early stages of a multiyear cycle of innovation will have a market value in excess of $100,000,000,000 per year. The Laticorne system plays a critical role in regulating stored energy and food intake, which strongly believe that amyloidin four receptor agonists will be an important part of the future of obesity treatment and weight loss management.

Has a longstanding research effort develop monocortin therapeutics that selectively activate linocortin four receptor as treatments for obesity and weight loss maintenance. With our extensive experience and the design and development of Lignacort and Agnes for treating obesity, including two clinical studies previously completed [indiscernible] well positioned to be a leader in the development of monoclonal antibodies for weight loss, and importantly, weight loss maintenance. You for your time. Will now open the call to questions.

First question today is coming from Joel Pantginis from H. C. Wainwright. Joe, your line is live.

Hey, guys. Good morning. Good afternoon. I wanted to focus on the upcoming obesity data. I know you can't say much right now after the database locks. But first, I wanted to just discuss the benchmark and you can correct me if my numbers are wrong. If you look at the tirzepatide data alone, after eight weeks, we're looking at about a 6% weight loss and maybe around 4% for placebo adjusted. So with that benchmark in mind, what would you consider a win for your study with regard to weight loss at eight weeks? And, whether it's the same or not, what would you consider to be enough percentage weight loss to move the program forward? Good.

Well, that's a good question, but maybe we think about it slightly differently. So the answer to your question is, this is a signal detection study. So we don't a priori or not a priori going in with some preconceived number, right? What we're really looking for is a very clear signal. So what we'd like to see in the study is that the combined arm is a higher percentage of weight loss And then in addition to that, we're looking at some other key metrics. For example, the percentage of patients that are achieving either four, five, six, seven or 8% weight loss in that eight week period, combined versus just appetite alone because that's a little bit more important. It's more important a clinical question, right? If you put somebody on this, how many of them are going to get 5% weight which is really clinically meaningful and the FDA level of approval. So that's one message we're looking at.

The second way of looking at it also is tirzepatide is going as if you think about things in four week increments, Tesapritide monotherapy is going to probably have its maximal effect in the first four weeks.

It's going to start to slow down as you go forward from there. So can we reverse that slowdown, right? We see more patients losing more weight over the second four weeks say versus the first four weeks when we compare the coadministration versus the mild mild therapy arm. So those are the three things that we're looking for. We are looking for increase in the absolute weight on a percentage basis. There's no number for magical number. What I mean by that is is not an optimized study. This is a very low dose of remelanotide So we're not optimized for necessarily to see some big jump. But I think we are certainly dosing high enough to get a nice clear signal. Other point that I do want to bring up though, is really, we talk about combination versus the monotherapy arm, but let's think about the brimonidine alone arm versus the placebo arm.

I expect [indiscernible] they will have weight loss in their first treatment period on tirzepatide. They should regain weight. And we'd really like to see if this low dose can blunt that weight regain. So really speaking to the concept of weight loss maintenance. So those are kind of the three major concepts that we're looking for signal on.

No, I understand totally about how you're looking at it and it makes sense. I guess the reason for my question is when you look at I guess, the analyst's viewpoint and automatically comparing right or wrong having comparing against the benchmark. So I think that's what's driving the what would be expected to be a win from a percentage standpoint, but I understand your approaches here and it makes sense. I guess when you look forward for the program, are there additional indications you might consider beyond sort of the broader weight loss community, any sort of orphan indications that you might consider from MCR4 standpoint?

Sure. Certainly. Listen, is a, I think, a growing opportunity to think about the use of syndromic diseases. There are a number of mutation in the leptomylalanocortin system. There's Prader Willi syndrome, there's Bardet Bartle. And these are things that were this is not unknown. Mean, Rhythm is out there. They have their products and melanin type folks in there. Hypothyroidism is a very key one because that's probably the largest market opportunity. And it's one where we think our new compounds coming through will be very competitive. And that gives us a in a nice way, there's two of us in monoclonal four receptor agonism in looking at that orphan rare space when you go to the general obesity side, although I believe this is the best mechanism, we're going to get moved into a bunch of other mechanisms that are out there. So I think we'll be focusing likely to be focusing in that rare space. Now it makes sense and good luck for the upcoming data. Thanks a lot for the details. Thank you. There were no other questions at this time. I would now like to hand the call back to Doctor. Carl Spannar for closing remarks.

So, good. Thank you, Joe. Thank you for your questions. Everybody, thank you for your time. Steve and I are are always grateful that you give us your time and you take meetings with us, learn about the company. Like you have a great day. It's going to be an exciting quarter for us.

And we're really looking forward to it. It's actually going to be exciting 2025 for us.

So we really can be more excited than what we're doing here as look forward to reporting our results out So from Steve and I, thank you everybody. And have a great day and great quarter. Thank you. [indiscernible] [indiscernible]