Palatin Technologies, Inc.

Hello, ladies and gentlemen. Welcome to Palatin's third quarter fiscal year 2022 operating results conference call. As a reminder, this call is being recorded. Before we begin our remarks, I would like to remind you that 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 Securities 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 Spana, President and Chief Executive Officer of Palatin. Please go ahead.

Thank you. Good morning and welcome to the Palatin Third Quarter Fiscal 2022 Call. I'm Dr. Carl Spana, CEO and President of Palatin. With me on the call today is Steve Wills, Palatine's Executive Vice President, Chief Financial Officer, and Chief Operating Officer. To start the call, Steve will take us through the financials and other corporate updates. Steve.

Thank you, Carl, and good morning, everyone. So regarding the third quarter, ended March 31st, 22 financial results, starting with revenue, total revenue consists of gross product sales of Vilesi, which is Palatine's FDA-approved product for premenopausal women with hypoactive sexual desire disorder. The gross product sales of Vilese, net of allowance and accruals, and license and contract revenue. The Vilese gross product sales, which is to pharmacy distributors, for the quarter ended March 31st, 22, amounted to 1.3 million, with net product revenue of 216,000, compared to gross product sales of 1.8 million, with net product revenue of approximately 89,000 for the comparable quarter of 21. Gross product sales decreased 27% and net product revenue increased 144% over the comparable quarter of 21. Regarding operating expenses, total operating expenses for the quarter ended March 31st, 22 were 8 million compared to 6.6 million for the comparable quarter in 21. The increase in operating expenses was the result of increased research and development expenses primarily related to our ongoing pivotal Phase III clinical trial of PL9643 offset by decreased commercial expenses related to Vilesi. Regarding cash flows, Palleton's net cash used in operations for the quarter ended March 31st, 22, was $9.5 million, compared to net cash used in operations of $3.5 million for the same period in 21. The increase is primarily due to a 4.3 payment received in March 21 related to our termination agreement with AMAG offset by increased operating expenses. Regarding net loss, Palatine's net loss for the quarter ended March 31st, 22, with $7.6 million, or $0.03 per basic and diluted common share, compared to a net loss of $5.7 million, or $0.02 per basic and diluted common share, for the same period in 21. The increase in net loss, as I mentioned above, was mainly due to the increase in the operating expenses. Regarding Palatin's cash position, as of March 31st, 2022, Palatin's cash and cash equivalents were $37.7 million with $0.8 million of accounts receivable compared to cash and cash equivalents of $47.3 million with $0.6 million of accounts receivable as of December 31st, 2021, and $60.1 million of cash and cash equivalents with $1.6 million of accounts receivable as of June 30th, 2021. Based on our current operating plan, we believe that existing cash and cash equivalents, along with the 15 million of net proceeds raised from our recent private placement of preferred stock, assuming conversion to common stock or debt, will be sufficient to fund currently anticipated operating expenses through at least calendar 23. Going into a little more specificity regarding VILECI, for the quarter ended March 31st, 22, Gross product sales increased 67% over the prior quarter, prior quarter being December 31st, 2021. Net product revenue increased 200% over the prior quarter. Total prescriptions dispensed increased 20% over the prior quarter. And refill rates, commercial insurance reimbursement, and net revenue per prescription dispensed increased over the prior quarter and frankly over all the comparable quarters sequentially since we've taken over. I'd like to, before I hand it back to Carl, just cover one additional item, and that was our $15 million preferred offering that we announced last week. On May 11th, 2022, Palatin entered into a securities purchase agreement with institutional investors selling and issuing 8.1 million shares of Series B convertible stock and 900,000 shares of Series C convertible preferred stock. Each share of Series B preferred stock and Series C preferred stock had a purchase price of $1.67 and is convertible into Palatin common stock at an initial conversion price of 45 cents. The investors in the Series B preferred stock and Series C preferred stock also received warrants to purchase up to approximately 1.67 million shares of common stock at an exercise price of 50 cents. That 1.67 million of common, of warrants to purchase the common shares equated to approximately 5% warrant coverage. Total gross proceeds for the offering before deducted offering expenses is 15 million. Palatin expects to call a meeting of stockholders to seek approval of including, but not limited to, an amendment to our Certificate of Incorporation authorizing a reverse stock split. Holders of the Series B preferred stock and Series C preferred stock are entitled to vote only on the reverse stock split and any adjournment of the meeting related to the reverse split. To the extent these shares of the Series B or Series C are converted to common shares or redeemed for debt, which is our expectation, the company will use such net proceeds for working capital and general corporate purposes. I'm just checking my notes. That's it. Let me turn it back over to you, Carl.