Palatin Technologies, Inc.

Hello, ladies and gentlemen. Welcome to Palatin's second quarter fiscal year 2022 operating results conference call. As a reminder, this conference is being recorded. Before we begin our remarks, I would like to remind you that the statements made by Palatin 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 Securities and Exchange Commission. Please consider such risks and uncertainties careful in evaluating these forward-looking statements by Palatin's prospects. Now I'd like to turn the call over to our host, Dr. Carl Spanich, President and Chief Executive Officer of Palatin. Please go ahead.

Thank you. Good morning and welcome to the Paliton Technologies second quarter fiscal 2022 call. I'm Dr. Carl Spana, CEO and President of Paliton. With me on the call today is Steve Wills, Paliton's Executive Vice President, Chief Financial Officer, and Chief Operating Officer.

Steve. Thank you, Carl. Good morning. Good afternoon, everyone. Regarding Paliton's second fiscal quarter ended December 31st, 2021, financial results are as follows. Total revenue consists of gross product sales of Vileci, net of allowances and accruals, and license and contract revenue. As a reminder, Vileci is our commercial product for the treatment of premenopausal women with hypoactive sexual desire disorder. Vileci gross product sales to pharmacy distributors for the quarter ended December 31st, 2021 amounted to $800,000 approximately, with net product revenue of approximately $72,000. compared to gross product sales of approximately $900,000 with negative net product revenue of approximately $164,000 for the comparable quarter in 2020. Regarding Vilesi, for the quarter ended December 31st, 2021, gross product sales decreased 18% and net product revenue increased 144% over the comparable quarter in 2020. The gross product sales decreased 46%, and net product revenue decreased 55% over the prior quarter ended September 30, 2021. This decrease, importantly, was primarily a result of pharmacy distributors minimizing their end-of-year inventory levels. Total prescriptions dispensed were flat compared to the same period in 2020, and the prior quarter ended September 30, 2021. Commercial insurance reimbursement and net revenue per prescription dispensed increased significantly over the comparable quarter in 2020, and the prior quarter ended September 30th, 2021. Also, for the quarter ended December 31st, 2021, Palatine recognized $250,000 in license and contract revenue pursuant to its license agreement with Fosun Pharma. There were no license revenues recognized during the comparable quarter in 2020. Moving over to operating expenses, Total operating expenses for the quarter ended December 31, 2021, were $8.8 million compared to $9.1 million for the comparable quarter in 2020. The decrease in operating expenses was the result of decreased commercial expenses related to Vilesi offset by increased research and development expenses, primarily related to the advancement of PL-9643 into a pivotal Phase III clinical trial for patients suffering from dry eye disease. Regarding cash flows, Palatine's net cash used in operations for the quarter ended December 31st, 2021 was $6.3 million compared to net cash used in operations of $14.4 million for the same period in 2020. The decrease is mainly due to a one-time negotiated payment of approximately $7 million in the quarter ended December 31st, 2020. This was related to inventory purchase commitments of Vilesi that Palatin assumed as part of our termination agreement with AMAG Pharmaceuticals, but it also included $16.3 million of payments by AMAG to Palatin. Regarding net loss, Palatin's net loss for the quarter ended December 31st, 2021 was 8.7 million or 4 cents per basic and diluted common share compared to a net loss of 10 million or approximately 4 cents per basic and diluted common share for the same period in 2020. Regarding cash position, as of December 31st, 2021, Palatin's cash and cash equivalents were $47.3 million with approximately $600,000 of accounts receivable compared to cash and cash equivalents of $53.4 million and $900,000 of accounts receivable as of September 30th, 2021. Based on our current operating plan, Palatin believes that existing cash and cash equivalents will be sufficient to fund currently anticipated operating expenses through at least March 31st, 2023. Now I'm going to turn the call back over to Carl.