Palatin Technologies, Inc.

Hello, ladies and gentlemen, and welcome to Palatin's first quarter fiscal year 2023 operating results conference call. As a reminder, this conference call 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 recent filings with the Securities and Exchange Commission. Please consider such risks and uncertainties carefully in evaluating these forward-looking statements by Palatin's prospects. Now, I would like to turn the call over to your host, Dr. Carl Spana, President and Chief Executive Officer at Palatin. Please go ahead.

Thank you. Good morning, and welcome to the Paliton first quarter fiscal 2023 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. I'll now turn the call over to Steve, and he will give the financial and operating reasons. Thank you, Carl.

Good morning, good afternoon, and welcome, everyone. Starting with certain business highlights and recent updates, regarding Vilisi, which is FDA approved for hypoactive sexual desire disorder. The goal of the Vilisi program is to demonstrate commercial product value in the marketplace with an objective of relicensing the U.S. rights to a committed women's healthcare company. For the fiscal first quarter ended September 30th, 22, gross product sales were 2.3 million for the quarter ended September 30th, 22, and also the June 30th quarter, with an increase of 64% over the comparable quarter in 2021. Net product revenue increased 13% over the prior quarter with an increase of 445% over the comparable quarter in 2021. Total prescriptions dispensed increased 17% over the prior quarter and increased 108% compared to the comparable quarter in 2021. Refill rates commercial insurance reimbursement, and net revenue per prescription dispensed increased over the prior quarter and comparable quarter in 2021. A few other items. On October 31st, 2022, Palatin entered into a securities purchase agreement with a certain institutional investor selling and issuing an aggregate of 1,020,000 shares of our common stock. and pre-funded warrants to purchase up to 798,182 shares of Palatin common stock. And in addition, common warrants to purchase up to 1,818,182 shares of Palatin common stock. Each share of common stock was offered with one accompanying common warrant for a combined offering price of $5.50. The offering was completed on November 2nd, 2022. Gross proceeds amounted to $10 million, with net proceeds of approximately $9.1 million. Regarding our reverse stock split, the Board of Directors approved the implementation of a one-for-25 reverse stock split on August 30, 2022. The reverse split reduced the number of shares at Palatine's common stock outstanding from approximately 232 million shares to approximately 9.3 million shares, but did not change the authorized number of shares of common stock, which remained at 300 million shares. Moving over to the fiscal first quarter ended September 30th financial results. Regarding revenue, total revenue consists of gross product sales of Vilesi, net of allowances and accruals. Vilesi gross product sales to pharmacy distributors for the quarter ended September 30th, 2022 was 2.3 million with net product revenue of a little under $900,000 compared to gross product sales of 1.4 million with net product revenue of approximately $160,000 for the comparable quarter in 2021. Gross product sales increased 64 percent, and net product revenue increased 445 percent over the comparable quarter in 2021. Regarding operating expenses, total operating expenses for the quarter ended September 30, 2022 were $9.6 million, compared to $7.4 million for the comparable quarter in 2021. 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 PL 9643 and Phase II clinical trial of oral PL 8177, offset by decreased commercial expenses related to Wylisi. Regarding other income and expenses, total other income net consists mainly of unrealized foreign currency transaction gains of approximately $400,000 for the quarter ended September 30, 2022, compared to approximately $107,000 for the comparable quarter in 2021. Regarding net loss, Palatine's net loss for the quarter ended September 30, 2022 was $8.3 million compared to a net loss of $7.1 million for the same period in 2021. The increase in net loss for the quarter ended September 30, 2022 over the quarter ended September 30, 2021 was mainly due to the increase in operating expenses offset by an increase in net product revenue of ILECE. Regarding cash position, as of September 30, 2022, Peloton's cash and cash equivalents were $21.2 million with approximately $2 million of accounts receivable compared to cash and cash equivalents of $29.9 million with approximately $1.8 million of accounts receivable as of June 30, 2022. The $21.1 million of cash and cash equivalents as of September 30, 2022 does not include approximately $9.1 million of net proceeds from the registered direct offering, which closed in November of 22, and does not include the $15 million private placement of redeemable convertible preferred stock. This $15 million is being held in an escrow account pending the investors' election to redeem the shares for cash or in notes or convert the shares to common stock. At this stage, Palatine currently expects and operating cash runway through calendar 2023. I'll now turn the call back over to Carl.