Palatin Technologies, Inc.

Greetings. Welcome to Palatine's second quarter fiscal year 2023 operating results conference call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference 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 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 of Palatin. Please go ahead.

Thank you. Good morning, and welcome to the Palatin's second quarter fiscal 2023 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. I'll now turn the call over to Steve, and he will give the financial and operating update. Steve?

Thank you, Carl, and good morning, everyone. Carl will provide detail on our development programs a bit later on. Starting with Bylesi, which is our commercial product approved for hypoactive sexual desire disorder in premenopausal women, the goal of the Bylesi program is to demonstrate commercial product value in the marketplace, which we are doing. with an objective of relicensing the U.S. rights to a committed women's healthcare company. For the fiscal second quarter ended December 31st, 2022, gross product sales were $2.6 million, an increase of 14% over the prior quarter and an increase of 238% over the comparable quarter last year. Net product revenue of $1 million increased 18% over the prior quarter and increased 1,323% over the comparable quarter last year. We are pleased, actually very pleased, that net product revenue exceeded by leasing operating expenses for the quarter. Total prescriptions dispensed increased 12% over the prior quarter and increased 134% over the comparable quarter last year. Refill rates, commercial insurance reimbursement, and net revenue per prescription dispensed increased over the prior quarter and comparable quarter last year. Regarding our recent registered direct offering, on October 31, 2022, Palatin entered into a securities purchase agreement with an institutional investor selling and issuing an aggregate of approximately 1 million shares of Palatin common stock, pre-funded warrants to purchase approximately 0.8 million shares of Palatin common stock and common warrants to purchase up to approximately 1.8 million shares of Palatin common stock. Each share of common stock and pre-funded warrant was offered with one accompanying common warrant for a combined offering price of approximately $5.50. The common warrants have an exercise price of $5.83 per share and will expire five and one half years from the date of issuance. The offering was completed on November 2nd, 2022, with Palatin receiving gross proceeds of $10 million. Subsequent to December 31st, 2022, the institutional investor exercised all outstanding pre-funded warrants to purchase approximately 0.8 million shares of Palatin's common stock. Next item, Palatin participated in the State of New Jersey's Technology Business Tax Certificate Transfer Program. This program enables approved biotech companies with unused net operating losses, NOLs, and unused research and development credits to sell these tax benefits to unaffiliated, profitable corporate taxpayers in the State of New Jersey. Palatin received final approval in December 2022 for the sale of the NOLs and R&D credits And this resulted in the receipt of approximately 4.7 million in January of 2023. Accordingly, Palatin recorded the income tax benefit for the three and six months ended December 31st, 2022, and a corresponding receivable as of December 31st, 2022. Again, all the funds were received early January, 2023. Regarding specific financial results for the second quarter ended December 31st, 2022, revenue Total revenue consists of gross product sales of Vilesi, net of allowances and accruals, and license and contract revenue. As noted prior, Vilesi gross product sales were $2.6 million, with net product revenue of $1,026,000, compared to gross product sales of $0.8 million and net product revenue of $72,000 for the comparable quarter last year. Again, gross product sales increased 238%. and net product revenue increased 1,323% over the comparable quarter last year. For the quarter ended December 31st, 2021, Palatin recognized $250,000 in license and contract revenue pursuant to our license agreement with Fosun Pharma. Regarding operating expenses, total operating expenses were $6.6 million compared to $8.8 million for the comparable quarter last year. The decrease in operating expenses was mainly the result of lower spending on our development programs and the gain recognized as a result of amending certain minimum purchase commitments with third-party vendors. Net loss, Paliton's net loss was 1.4 million or 13 cents per basic and diluted common share compared to a net loss of 8.7 million or 91 cents per basic and diluted common share for the comparable period last year. The decrease in net loss over the comparable quarter last year was mainly due to the recognition of the income tax benefit I referenced prior of $4.7 million, again, the sale of New Jersey NOLs, and a decrease in operating expenses of approximately $2.2 million, and an increase in net product revenue from by leasing. Cash position, as of December 31st, 2022, Peloton's cash and cash equivalents were approximately $21.2 million, plus $6.5 million of accounts and other receivables compared to cash and cash equivalents of $21.2 million with $2 million of accounts receivable as of September 30, 2022, and $29.9 million with $1.8 million of accounts receivable as of June 30, 2022. Based on our current operating plan, we believe that existing cash and cash equivalents and receivables will be sufficient to fund currently anticipated operating expenses through calendar year 2023. Now I'll turn the call back over to Carl.