Palatin Technologies, Inc.

Hello, ladies and gentlemen, and welcome to Palatine's fourth quarter and fiscal year end 2021 operating results conference call. As a reminder, this conference is being recorded. Before we begin our remarks, I'd like to remind you that the statements made by Palatine are not historical facts and may be forward-looking statements. These statements are based on assumptions that may or may not prove to be accurate and that the actual results may differ materially from those anticipated due to the variety of risks and uncertainties discussed in the company's most recent filings with the Security Exchange Commission. Please consider such risks and uncertainties carefully in evaluating these forward-looking statements and Palitin prospects. Now I'd like to turn today's call over to our host, Dr. Carl Spana, President and Chief Executive Officer of Palitin.

Thank you. Good morning and welcome to the Palitin Technologies fourth quarter in fiscal year end 2021 call. I'm Dr. Carl Spana, CEO and President of Palatin. With me on the call today is Steve Wills, Palatin's Executive Vice President, Chief Financial Officer, and Chief Operating Officer. On today's call, we will provide financial and operating updates. I will now turn the call over to Steve to provide the financial updates. Steve.

Thank you. Thank you, Carl, and good morning, everyone. For framing purposes, and as Carl will expand on, Palatin's strategy is to advance a Romana-Corton-based anti-inflammatory, and autoimmune programs with an ocular focus. Regarding Vilisi, which is FDA approved for the treatment of hypoactive sexual desire disorder, or HSDD in premenopausal women, our goal with this program is to demonstrate value in the marketplace by increasing healthcare provider awareness, patient engagement, and market access. with an objective of relicensing the U.S. rights to a committed women's healthcare company. And regarding progress, we are making progress. And this is with a limited and measured investment. For the quarter ended June 30th, 2021, gross product sales increased 28%. Net revenue increased 149%. And total prescriptions increased 17%. Over the quarter ended December 31st, 2020, which is Palatin's first full quarter of IDC operations. Refill rates increased over the quarters ended December 31st, 2020 and March 31st, 2021. Market access and reimbursement coverage also increased over the quarters ended December 31st, 2020 and March 31st, 2021. Regarding revenue and getting into our fourth quarter and fiscal year-ended 2021 financial results. Total net revenues consist of net product revenues of by leasy and license and contract revenue related to by leasy. By leasy gross sales for the quarter and year-ended June 30th, 2021 amounted to $1.2 million and $4.7 million respectively. With net product revenue, net of allowances and accruals of $80,504 and negative $283,286, respectively. Palatin recognized no product revenues for the quarter and year-end of June 30th, 2020, because we didn't get the product back until July of 2020. Palatin did recognize $94,689 in license and contract revenues for the quarter and year-end of June 30th, 2021, and that was related to our license agreement with Kwandong for the Valisi rights to South Korea. And this compared to $117,989 for the year end of June 30th, 2020, related to our license agreement with AMAG Pharmaceuticals. Regarding operating expenses, for the quarter and year end of June 30th, 2021, were $13.9 million and $33.2 million, respectively, compared to $7.4 million and $23.7 million, respectively, for the same period of 2020. I'm going to expand a bit in some of the other areas, but that $13.9 million of operating expenses included approximately $4.5 million of an adjustment related to our termination with the license agreement with AMAG, and that was non-cash and non-recurring. The increase in operating expenses for 2021 was primarily due to the recognition of non-cash expenses on the by leasing license termination agreement, which I just mentioned. and also an increase in the selling general administrative expenses, which primarily were the commercial-related expenses for the VILECI program. Moving over to net loss and cash flows, Palatine's net loss for the quarter, very close to the amount of the operating expenses, less the revenue, was $13.9 million and $33.6 million, or $0.06 and $0.14 per basic diluted common share, respectively. compared to a net loss of $7.3 million and $22.4 million, or $0.03 and $0.10 for basic and diluted common share, respectively, for the same periods in 2020. As I mentioned, just with the operating expenses, the main difference for the quarter was the non-cash, non-recurring adjustment to the Vileci license termination agreement, and also some increases in the selling and G&A, primarily related to the commercial expenditures for Vileci. Cash position, I'm sorry, cash flows rather. Pallison's net cash used in operations for the quarter and year end of June 30th, 2021 was $8.5 million. And the main difference, we know we had the operating expenses of $13.9 million and the net loss very close to that. The reason the net cash used in operations is significantly less of $8.5 million is that for approximately $4.5 million non-cash, non-recurring adjustment related to the Vilesi termination agreement. And we also had $22.6 million of net cash used in operations for the full fiscal year, June 30th, 2021. And this compares with net cash used in operations of $6.1 million and net cash provided by operations of $41.3 million positive cash provided there, respectively, for the same periods in 2020. Moving over to cash position. As of June 30th, 2021, Paliton's cash and cash equivalents were $60.1 million with $1.6 million of accounts receivable compared to cash and cash equivalents of $82.9 million with no accounts receivable as of June 30th, 2020. Based on our current operating plan, we believe that existing cash and cash equivalents will be sufficient to fund currently anticipated operating expenses through the end of calendar 22. Carl's going to go a bit more granular, but this does include the inflection points of data readout for our phase three dry eye disease trial and also data readout on our ulcerative colitis phase two trial in the second half of calendar 22. At this time, I'll turn it back over to Carl. Thank you, Steve.