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Palatin Technologies, Inc. Reports Second Quarter Fiscal Year 2011 Results

CRANBURY, N.J., Feb. 15, 2011 /PRNewswire/ — Palatin Technologies, Inc. (NYSE Amex: PTN) a biopharmaceutical company dedicated to the development of peptide mimetic and small molecule agonist compounds with a focus on melanocortin and natriuretic peptide receptor systems, today announced results for its second quarter ended December 31, 2010.  Palatin reported a net loss of $1.1 million, or $(0.09) per basic and diluted share, for the quarter ended December 31, 2010, compared to net income of $4.5 million, or $0.42 per basic and diluted share, for the same period in 2009.  

The net loss for the quarter ended December 31, 2010, compared to net income for 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 collaboration agreements with AstraZeneca AB (AstraZeneca) as a result of the successful completion of the research collaboration portion of the agreements.

REVENUE

Revenues for the quarter ended December 31, 2010 were $1.0 million, consisting of $846,768 in grant revenue received under the Patient Protection and Affordable Care Act of 2010 and $195,408 in contract revenue pursuant to the collaboration agreement with AstraZeneca. For the quarter ended December 31, 2009, Palatin recognized $7.3 million of contract revenue under its collaboration agreement with AstraZeneca.

COSTS AND EXPENSES

Total operating expenses for the quarter ended December 31, 2010 were $2.9 million compared to $3.8 million for the comparable quarter of 2009.  The net decrease in operating expenses for the quarter was primarily due to Palatin’s previously disclosed realignment of resources and reduction in staffing levels.

CASH POSITION / GOING CONCERN

Palatin’s cash, cash equivalents and investments were $3.7 million as of December 31, 2010, compared to $8.9 million at June 30, 2010, with current liabilities of $2.0 million as of December 31, 2010 compared to $2.4 million as of June 30, 2010.  Palatin’s Quarterly Report on Form 10-Q, filed on February 14, 2011, contains going concern disclosures, as did Palatin’s Annual Report on Form 10-K filed on September 27, 2010.

CONFERENCE CALL / WEBCAST

Later this week Palatin will announce the time and date of a conference call and webcast to discuss its second quarter of fiscal year 2011 financial results.

About Palatin Technologies, Inc.

Palatin Technologies, Inc. is a biopharmaceutical company focused on discovering and developing targeted, receptor-specific small molecule and peptide therapeutics.  Palatin’s strategy is to develop products and then form marketing collaborations with industry leaders in order to maximize their commercial potential.  For additional information regarding Palatin, please visit Palatin Technologies’ website at http://www.palatin.com.

Forward-looking Statements

Statements about future expectations of Palatin Technologies, Inc., including statements about its development programs, proposed indications for its product candidates, pre-clinical activities, marketing collaborations, and all other statements in this document 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. Palatin intends that such forward-looking statements be subject to the safe harbors created thereby. Palatin’s actual results may differ materially from those discussed in the forward-looking statements for various reasons, including, but not limited to Palatin’s ability to fund development of its technology, ability to establish and successfully complete clinical trials and pre-clinical studies and the results of those trials and studies, dependence on its partners for certain development activities, need for regulatory approvals and commercial acceptance of its products, ability to protect its intellectual property, and other factors discussed in Palatin’s periodic filings with the Securities and Exchange Commission. Palatin is not responsible for updating for events that occur after the date of this press release.

PALATIN TECHNOLOGIES, INC.

and Subsidiary


Consolidated Statements of Operations

(unaudited)




Three Months Ended December 31,

Six Months Ended December 31,



2010


2009


2010


2009

REVENUES:









    License and contract


$         195,408


$     7,283,299


$         411,555


$    10,945,918

    Grant


846,768



846,768


         Total revenues


1,042,176


7,283,299


1,258,323


10,945,918










OPERATING EXPENSES:









    Research and development


1,984,440


2,712,871


5,437,202


5,382,435

    General and administrative


889,476


1,134,963


2,271,252


2,288,694

         Total operating expenses


2,873,916


3,847,834


7,708,454


7,671,129










     Income (loss) from operations


(1,831,740)


3,435,465


(6,450,131)


3,274,789










OTHER INCOME (EXPENSE):









    Investment income


32,987


70,317


53,362


103,629

    Interest expense


(1,329)


(2,315)


(3,633)


(7,016)

    Gain on sale of securities


60,389



60,389


    Gain on sale of supplies and equipment


1,800



1,800


95,000

         Total other income, net


93,847


68,002


111,918


191,613










Income (loss) before income taxes


(1,737,893)


3,503,467


(6,338,213)


3,466,402

Income tax benefit


637,391


998,408


637,391


998,408










NET INCOME (LOSS)


$    (1,100,502)


$      4,501,875


$    (5,700,822)


$      4,464,810










Basic net income (loss) per common share


$             (0.09)


$               0.42


$             (0.48)


$               0.42










Diluted net income (loss) per common share


$             (0.09)


$               0.42


$             (0.48)


$               0.42










Weighted average number of common shares outstanding used in computing basic net income (loss) per common share


11,839,309


9,616,954


11,785,470


9,373,788

Weighted average number of common shares outstanding used in computing diluted net income (loss) per common share


11,839,309


9,664,507


11,785,470


9,417,662


PALATIN TECHNOLOGIES, INC.

and Subsidiary


Consolidated Balance Sheets

(unaudited)




December 31,

2010


June 30,

2010

ASSETS





Current assets:





 Cash and cash equivalents


$          1,731,615


$          5,405,430

 Available-for-sale investments


1,952,666


3,462,189

 Accounts receivable



2,879

 Prepaid expenses and other current assets


245,024


393,313

     Total current assets


3,929,305


9,263,811






Property and equipment, net


1,794,970


2,388,365

Restricted cash


475,000


475,000

Other assets


270,581


261,701

     Total assets


$          6,469,856


$        12,388,877






LIABILITIES AND STOCKHOLDERS’ EQUITY





Current liabilities:





 Capital lease obligations


$               20,708


$               19,670

 Accounts payable


502,125


155,795

 Accrued compensation


564,887


 Unearned revenue


132,090


 Accrued expenses


823,984


2,219,466

     Total current liabilities


2,043,794


2,394,931






Capital lease obligations


3,663


14,284

Deferred rent


391,314


661,389

     Total liabilities


2,438,771


3,070,604
















Stockholders’ equity:





 Preferred stock of $.01 par value – authorized 10,000,000 shares;





   Series A Convertible; issued and outstanding 4,997 shares as of December 31, 2010 and June 30, 2010, respectively


50


50

 Common stock of $.01 par value – authorized 40,000,000 shares; issued and outstanding 11,854,028 and 11,702,818 shares as of December 31, 2010 and June 30, 2010, respectively


118,540


117,028

 Additional paid-in capital


218,718,757


218,236,723

 Accumulated other comprehensive income


68,738


138,650

 Accumulated deficit


(214,875,000)


(209,174,178)

     Total stockholders’ equity


4,031,085


9,318,273

     Total liabilities and stockholders’ equity


$          6,469,856


$        12,388,877


SOURCE Palatin Technologies, Inc.

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