Palatin Technologies Reports Second Quarter Results

PRINCETON, NJ (February 15, 2002) - Palatin Technologies Inc (AMEX:PTN) today announced results for its second quarter ended December 31, 2001. Palatin also announced plans to hold a teleconference on Wednesday, February 20th at 10:00 AM EST. Management will discuss the 2nd quarter financial results as well as the current status of the company, its products and its programs. Information on accessing the teleconference/webcast follows.

Palatin reported revenues for the second quarter of fiscal year 2002 of $41,667, with a net loss of $3.8 million or $0.31 loss per share. In the second quarter of fiscal year 2001, revenues totaled $706,460 and the net loss was $1.8 million or $0.17 loss per share.

The increase in net loss for the second quarter ended December 31, 2001, was primarily attributable to increases in operating expenses related to ongoing clinical trials of PT-141, costs associated with the planned move to the new facility, and increased costs associated with the Company's MIDAS and LeuTech development efforts.

According to Stephen T. Wills, chief financial officer of Palatin, the net cash used in operating activities for the six and three months ended December 31, 2001 totaled $6.4 million and $3.8 million, respectively. The balance sheet reflected cash and cash equivalents of approximately $15 million as of December 31, 2001.

Palatin Technologies, Inc. is a development-stage biopharmaceutical company. The company is currently conducting clinical investigations with its lead drug, PT-141, for the treatment of erectile dysfunction, and is developing additional therapeutic compounds discovered using its enabling peptide platform technology, MIDAS™. Additionally, Palatin is developing a product for infection imaging, LeuTech®, based on a proprietary radiolabeled monoclonal antibody. For further information visit the Palatin web site at www.palatin.com.

Statements about the Company’s future expectations, including development and regulatory plans, and all other statements in this release other than historical facts, are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and as that term is defined in the Private Securities Litigation Reform Act of 1995. The Company intends that such forward-looking statements be subject to the safe harbors created thereby.

Palatin’s actual results may differ materially from its historical results of operations and those discussed in the forward-looking statements for various reasons, including, but not limited to the Company’s ability to carry out its business plan, successful development and commercial acceptance of its products, ability to fund development of technology, the risk that products may not result from development activities, protection of its intellectual property, ability to establish and successfully complete clinical trials for product approval, need for regulatory approvals, dependence on it partners for development of certain projects, and other factors discussed in the Company’s periodic filings with the Securities and Exchange Commission. The Company is not responsible for updating the events contained herein after the date on this press release.

                       PALATIN TECHNOLOGIES, INC.
                   (A Development Stage Enterprise)
                      Consolidated Balance Sheets
                              (unaudited)
                                           December 31,    June 30,
                                               2001          2001
                                         -------------  -------------
ASSETS
Current assets:  
Cash and cash equivalents                $  15,023,906  $  11,456,424  
Prepaid expenses and other                     535,493        204,731
                                         -------------  -------------      
Total current assets                        15,559,399     11,661,155
Property and equipment, net                  1,071,529      1,924,962
Restricted cash                                613,075        613,075
Other                                          189,479         45,017
                                         -------------  -------------
                                         $  17,433,482  $  14,244,209
                                         =============  =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                       $   1,990,979  $   1,129,660
  Accrued expenses                             285,630        397,119
  Accrued compensation                         227,086        607,286
  Deferred license revenue                     111,110        166,666
                                         -------------  -------------
      Total current liabilities              2,614,805      2,300,731
                                         -------------  -------------
Deferred license revenue                             -         27,778
                                         -------------  -------------
Commitments and contingencies
Stockholders' equity: 
Preferred stock of $.01 par value -  authorized 10,000,000 shares;
    Series A Convertible; 29,317 issued
     and outstanding as of December 31,
     2001 and June 30, 2001,
     respectively;                                 293            293
    Series C Convertible; 700,000
     shares issued and outstanding as
     of December 31, 2001 and June 30,
     2001 respectively;                          7,000          7,000
  Common stock of $.01 par value –
    authorized 75,000,000 shares;
    Issued and outstanding 16,106,389
     and 11,199,658 shares as of
     December 31, 2001 and June 30,
     2001, respectively;                       161,063        111,997
  Additional paid-in capital                76,142,485     65,981,568
  Deferred compensation                       (49,543)       (80,119)
  Unrealized loss on investments                 (554)             -
  Deficit accumulated during
   development stage                      (61,442,067)   (54,105,039)
                                         -------------  -------------
      Total stockholders' equity            14,818,677     11,915,700
                                         -------------  -------------
                                         $  17,433,482  $  14,244,209
                                         =============  =============

                       PALATIN TECHNOLOGIES, INC.
                   (A Development Stage Enterprise)
                 Consolidated Statements of Operations
                              (unaudited)
                              Three Months             Six Months
                            Ended Dec. 31,          Ended Dec. 31,
                           2001        2000        2001        2000
                      ----------- ----------- ----------- -----------
REVENUES:
  Grants and
   contracts          $         - $   664,793 $         - $ 1,519,874
  License fees             41,667      41,667      83,334      83,334
  Other                         -           -           -           -
                      ----------- ----------- ----------- -----------
    Total revenues         41,667     706,460      83,334   1,603,208
                      ----------- ----------- ----------- -----------
OPERATING EXPENSES:
  Research and
   development          3,040,151   2,249,522   4,931,397   4,705,118
   General and
   administrative       1,015,263     843,473   1,915,161   1,550,049
  Loss on impairment
   of assets                    -           -     916,518           -
  Net intangibles
   write down                   -           -           -           -
                      ----------- ----------- ----------- -----------
    Total
     Operating
     expenses           4,055,414   3,092,995   7,763,076   6,255,167
                      ----------- ----------- ----------- -----------
OTHER INCOME
 (EXPENSES):
  Interest income          79,974     279,195     182,060     366,487
   Interest expense          (678)     (1,349)     (1,356)     (3,629)
  Merger costs                  -           -           -           -
                      ----------- ----------- ----------- -----------
    Total other
     Income
     (expenses)            79,296     277,846     108,704     362,858
                      ----------- ----------- ----------- -----------
    Loss before
     income taxes and
     cumulative
     effect of
     accounting
     change            (3,934,451) (2,108,689) (7,499,038) (4,289,101)
  Income tax benefit      162,010     325,152     162,010     325,152
                      ----------- ----------- ----------- -----------
    Loss before
     Cumulative
     effect of         (3,772,441) (1,783,537) (7,337,028) (3,963,949)
     accounting
     change
  Cumulative effect
   of accounting
   change                       -           -           -    (361,111)
                      ----------- ----------- ----------- -----------
NET LOSS               (3,772,441) (1,783,537) (7,337,028) (4,325,060)
PREFERRED
 STOCK
 DIVIDEND                (285,725)          -    (285,725)          -
                      ----------- ----------- ----------- -----------
NET LOSS
 ATTRIBUTABLE
 TO COMMON
 STOCKHOLDERS         $(4,058,166)$(1,783,537)$(7,622,753)$(4,325,060)
                      =========== =========== =========== ===========
Basic and diluted net
 loss per common share:
  Basic and diluted
   net loss before
   cumulative effect
   of accounting
   change              $    (0.31) $    (0.17) $    (0.63) $    (0.43)
 Cumulative effect of
  accounting change    $    (0.00) $    (0.00) $    (0.00) $    (0.04)
                      ----------- ----------- ----------- -----------
  Basic and diluted
   net loss            $    (0.31) $    (0.17) $    (0.63) $    (0.47)
                      =========== =========== =========== ===========
Weighted average
 number of common
 shares outstanding
 used in computing
 basic and diluted
 net loss per common
 share                 13,013,547  10,366,170  12,106,579   9,210,971
                      =========== =========== =========== ===========


                                             Inception
                                       (January 28, 1986)
                                             Through
                                        ----------------
REVENUES:
  Grants and
   contracts                            $     9,543,165
  License fees                                1,984,297
  Other                                         318,917
                                       ------------------
    Total revenues                           11,846,379
                                       ------------------
OPERATING EXPENSES:
  Research and
   development                               47,787,685
  General and
   Administrative                            24,292,276
  Loss on impairment
   of assets                                    916,518
  Net intangibles
   write down                                   259,334
                                       ------------------
    Total
     operating
     expenses                                73,255,813
                                       ------------------

OTHER INCOME
 (EXPENSES):
  Interest income                             2,323,624
   Interest expense                          (1,957,309)
  Merger costs                                 (525,000)
                                       ------------------
    Total other
     Income
     (expenses)                                (158,684)
                                       ------------------
    Loss before
     income taxes and
     cumulative
     effect of
     accounting
     change                                 (61,568,118)
  Income tax benefit                            487,162
                                       ------------------
    Loss before
     Cumulative
     effect of                              (61,080,956)
     accounting
     change
  Cumulative effect
   of accounting
   change                                      (361,111)
                                       ------------------
NET LOSS                                    (61,442,067)
PREFERRED STOCK DIVIDEND                     (3,407,250)
                                       ------------------
NET LOSS ATTRIBUTABLE TO COMMON
 STOCKHOLDERS                           $   (64,849,317)
                                       ==================