Palatin Technologies Inc (PTN) 2011 Q1 法說會逐字稿

Good morning, ladies and gentlemen. And welcome to the Palatin Technologies first quarter fiscal year 2011 conference call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions for the question-and-answer session will be given 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 the 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. Please 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 he'll provide us with a financial update and Dr. Jeffrey Edelson who has just joined us recently as our Chief Medical Officer. This past September Palatin announced a strategic restructuring in which our primary focus would be to advance our phase two clinical drug candidates forward. As part of this restructuring we began a process of closing down our research and discovery activities and putting in place the human resources needed to advance our clinical development programs. These activities are now almost completed.

Earlier today we announced that Dr. Jeffrey Edelson has joined Palatin as our Chief Medical Officer. I would like to welcome Dr. Edelson to the Palatin management team and look forward to working together with him to advance our programs. Dr. Edelson has 15 plus years of clinical development in regulatory experience in a variety of senior positions in the pharmaceutical and biotechnology industries. He most recently held the position of Executive Vice President of Research and Development and Chief Medical Officer of Ikano Therapeutics, a speciality pharmaceutical company. Prior to that, he was a Vice President and Therapeutic Area Head of Novel Therapeutics for Johnson and Johnson Pharmaceutical Research and Development. He's also the principal of, I'm going to get this wrong, Aequanimitas Consulting, and Adjunct Associate Professor of Medicine at the University of Pennsylvania. He brings a wealth of experience in clinical areas such as pulmonology, critical car and cardiovascular medicine. Dr. Edelson will be responsible for our clinical and regulatory activities. Later in the call, Dr. Edelson will give an update on our clinical programs.

Before we move forward, I would like to address one further item. As a result of our decision to research and discovery activities Dr. Trevor Hallam, our Executive Vice President of Research and Development, has resigned effective December 31, 2010. During his years with Palatin Dr. Hallam drew on his considerable expertise in pharmaceutical research, discovery and development to make significant contributions to the advancement of our research and development efforts and our product pipeline. We are grateful for Dr. Hallam's efforts and we wish him well in his future endeavors.

Before turning the call over to Steve Wills, I'll provide a brief overview of our programs. Bremelanotide, our experimental treatment for both female sexual dysfunction and erectile dysfunction, we have conducted three clinical trials in premenopausal women and middle aged men which are our target demographics. The goals of these studies were to characterize the effects of subcutaneous bremelanotide on blood pressure and to show a reproducible plasma exposure level. I'm happy to report that the results of these studies have provided us with the date required to move both of these exciting programs forward.

For PL-3994, our natriuretic receptor a-agnonist, we have generated very exciting pre-clinical data showing potent bronchodilator activity. We have discussed this data with the FDA and are ready to file a new IND to support phase two clinical studies in asthmatic patients. As a reminder we have already conducted two phase one studies under an open IND for cardiovascular uses. In addition we have made a good start on attracting potential corporate partners to this program.

For MCR-4 obesity and diabetes program which is part of AstraZeneca, we achieved several important milestones. We have demonstrated human clinical proof of principle, that validates the melanocortin-4 receptor as a target for treating obesity. We also successfully completed our joint research program transferring lead compounds, back up compounds, and assays to AstraZeneca. This program, now under the direction of AstraZeneca, is moving towards clinical trials early next year.

Our discovery and research activities have provided us with multiple back up compounds for melanocortin-4 receptor and natriuretic receptor clinical programs. In addition, we now have novel components in both of these areas, ready to move forward into new development for new indications. With that I'm going to turn it over to Steve Wills who will give us a financial update and then Dr. Edelson will give us a little bit of an update on our clinical programs. Steve.

Thank you, Carl. Good morning, everyone. And I, too, would like to welcome Jeff Edelson to the Palatin team. Regarding the financial update, Palatin's net loss for the quarter ended September 30, 2010, was $4.6 million or $0.39 per basic and diluted share, compared to a net loss of $37,000 or $0.00 per basic and diluted share for the quarter ended September 30, 2009. The increase in net loss for the quarter ended September 30, 2010, compared to the same period last fiscal year was primarily attributable 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 agreements. In essence, the difference was that we recognized outstanding AstraZeneca related deferred revenue in the 9/30/09 quarter.

Revenues for the quarter ended September 30, 2010, were $216,000, compared to $3.7 million for the same period in 2009. Again, same factor. The difference was the recognition of the AstraZeneca related deferred revenue in the 9/30/09 quarter. As of September 30, 2010, Palatin's cash , cash equivalents and investments totaled $4.7 million compared to $8.9 million at June 30, 2010. This cash figure, cash, cash equivalents and investments as of September 30, 2010, does not include a few other items. In October, and actually we received it in November, we received $847,000 related to grants under the Patient Protection and Affordable Care Act. And also, we had an outstanding accounts receivable from AstraZeneca of approximately $528,000 that was received in the first week of October. Again, these amounts were not included as of September 30, or in the figure of $4.7 million that I just reported on.

Regarding costs and expenses, total operating expenses for the quarter ended September 30, 2010, were $4.8 million, compared to $3.8 million for the comparable quarter of 2009. The increase in operating expenses for the quarter was primarily due to Palatin's recognition of severance related expenses of approximately $750,000 in the three months ended September 30, 2010, pursuant to our previously disclosed realignment of resources in late

Thank you, Steve. Right now I'm going to turn the call over to Dr. Edelson who will walk you through some of our programs.

Thanks, Carl. I very much enjoyed working with Carl, Steve and the team over the past few months as a clinical advisor. And want to add my deep appreciation to Trevor Hallam, Executive Vice President of R&D, for his help, support and guidance over this period. I'm very excited to join this team and believe this is an exciting time for the Company as it initiates a series of interesting clinical programs. This Company has a great team and innovative portfolio that addresses significant human health concerns. I look forward to helping move these programs forward in the clinic.

Regarding bremelanotide and our sexual dysfunction program, there have been approximately 2,000 patients studied in the program so far, including approximately 200 with the subcutaneous root of administration. These include three recently completed trials that have evaluated the safety, tolerability and pharmacokinetics of our subcutaneous BMT formulation. Data from these studies supports the further development of BMT as a treatment both for female sexual dysfunction and male erectile dysfunction. For our female sexual dysfunction program, we're focusing our development efforts on premenopausal females with female sexual arousal disorder. Intriguing data from our proof of concept intranasal study, 053, showed an efficacy signal. We're currently preparing to conduct a phase two ambulatory at home dose ranging study to evaluate the safety and efficacy of subcutaneous BMT in the segment. We anticipate that if the safety and efficacy results from this study are positive, they will support the transition of a subcue BMT program into phase three clinical trials for this indication. We have requested a meeting with the division of reproductive and neurology drug products to discuss next steps and plan initiation of this study in the first half of 2011.

With respect to erectile dysfunction indication, we are focusing our develop efforts on patients nonresponsive to PDE 5 inhibitors. Palatin is planning to study the safety and efficacy of dosing subcue bremelanotide alone or in combination with an oral dose of a PDE 5 inhibitor such as sildenafil in patients unresponsive to PDE 5s. The aim of this study is to optimize the relative doses of BMT alone, for a potential monotherapy, and the optimal combination of doses of BMT and sildenafil, for potential adjunct therapy in this population. With this number of variables we believe that the quickest and most cost effective route to determine the optimal dose combinations for definitive at home phase two B studies would be to conduct dose evaluation in the clinic using rigid scan methodology to measure erectogenesis as an efficacy signal. We've agreed with the agency that we do not need an interim meeting but should submit the results of our recently completed phase one study in 45 to 65-year-old men together with our proposed phase two protocol.

Turning to Palatin 3994, an atrial natriuretic peptide receptor agonist. 3994 is a natriuretic peptide receptor agonist in development as a treatment for acute severe asthmatics presenting to the emergency room unresponsive to beta 2 agonists. This beta 2 unresponsiveness may relate to the overuse of beta 2 agents that render the airways unable to adequately dilate. Published data, both preclinical as well as clinical studies with infused and inhaled endogenous natriuretic peptides have shown good bronchodilatory activity. Furthermore the mechanism is independent of known mechanisms driven by beta agonists or other approved bronchodilators. Palatin 3994 has been evaluated in two phase one safety studies and has been the subject of a series of preclinical pharmacology studies both in Guinea Pigs and human airways study ex vivo. These studies confirm significant bronchodilator effects of 3994 and suggested suitability for phase two dosing studies in asthmatic patients. We've had helpful interactions with the division of respiratory and allergy drug products concerning our pre-IND documentation and proposed protocol synopsis. We are now preparing a new IND for 3994 for pulmonary indications and anticipate starting clinical studies in early 2011.

Thank you, Jeff. We restructured Palatin to focus its resources on its exciting clinical development candidates. We have three clinical programs that address areas of unmet medical need with large market potential and a fourth about to enter the clinic with our partner AstraZeneca. These programs are now well positions to generate substantial value for our shareholders and we are committed to obtaining the resources required to advance these programs forward.

Following the milestones we look forward to achieving as we advance forward. Bremelanotide phase two B studies in premenopausal women with female sexual arousal disorder. Bremelanotide phase two studies in men with sexual dysfunction that are nonresponsive to PDE 5 inhibitors. For AstraZeneca, melanocortin-4 obesity and diabetes program, we are about to transition into clinical studies under the direction of AstraZeneca. With PL 3994, completion of our phase two principle studies in asthmatic patients and the finalization of our nebulized, or inhaled formulation, and moving that into clinical development. We are also targeting to have a collaboration for 3994, based on pulmonary program as well as additional collaborations on our other melanocortin receptor and natriuretic receptor opportunities and intellectual property.

I think we have a very exciting list of deliverables and we'll be working hard here. Once again we would like to welcome Dr. Jeff Edelson to the team. I think he brings a lot of experience and really bolsters our clinical and regulatory efforts which is where, as you can see is the focus of the Company. So with that being said, I'm going to end the first quarter fiscal 2011 quarterly conference call. We'll open it up to questions, if there are any. And as always, I look forward to talking to you guys either on the phone or in person as we do our investor relations rounds throughout the quarter. Take it easy and have a great day. I think this is the part where the operator is supposed to come on and take us into the Q&A section.

Yes. The question-and-answer session will be conducted electronically. (Operator Instructions)

We'll pause for just a moment to assemble the queue.

And it looks like there are no questions. At this time I would like to turn the call back over to Dr. Carl Spana.

Once again thank you for participating in the Palatin first quarter fiscal 2011 quarterly conference call. Have a good day and the call is now ended.

This concludes today's conference call. We thank you for your participation.