Palatin Technologies, Inc.

And welcome to Palatine's fourth quarter and fiscal year end 2023 operating results conference call. At this time, all participants are in a listen only mode. A 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 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 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 our host, Dr. Carl Spanner, President and Chief Executive Officer of Palatin. Please go ahead.

Thank you. Good morning, and welcome to the Palatin fourth quarter in fiscal year end 2023 call. I'm Dr. Carl Spanner, CEO and President of Palatin. With me on the call today is Steve Wiltz, Palatine's Executive Vice President, Chief Financial Officer, and Chief Operating Officer. I'll now turn the call over to Steve, and he will give financial and operating updates.

Thank you, Carl, and good morning and good afternoon, everyone. Starting with Vyleesi, as a reminder, Vyleesi is our FDA-approved commercial product for premenopausal women with hypoactive sexual desire disorder, or HSDD. The goal of the VILECI program is to demonstrate commercial product value in the marketplace. With six consecutive quarters of double-digit growth that we're going to talk about shortly, I think we're doing that. But the objective is to relicense the U.S. rights to a committed women's healthcare company, and that process is advancing rapidly. When I say nicely, we do expect that there will be a transaction that we will strongly consider later this year. More about that as we move forward. Specifically, for the fiscal fourth quarter ended June 30, 2023, Vilesi gross product sales amounted to $4.1 million. This was an increase of 20% over the prior quarter and an increase of 78% over the comparable quarter last year. Net product revenue of $1.8 million increased 47% over the prior quarter and increased 128% over the comparable quarter last year. Total prescriptions dispensed increased 16% over the prior quarter and increased 92% over the comparable quarter last year. All the value metrics are are moving in a positive direction. Refill rates, commercial insurance reimbursement, and net revenue per prescription dispense continued with impactful results and trends versus the prior quarter and comparable quarter last year. Regarding Vilisi licensees outside the U.S., Fosun Pharma, Palatin's licensee of Vilisi in China, reported its first sale in the Hanian province of China. Guangdong Pharmaceuticals, Pseudocles, Palatin's licensee of Bileci in South Korea, completed enrollment in its Phase III clinical trial, evaluating the efficacy and safety of Bileci in premenopausal women with HSDD. And data from this trial is currently anticipated by calendar year end, with a potential regulatory submission in the first half of calendar year 2024. On an additional distribution front, Palatin entered into a strategic partnership with Upscript Health, a leading direct-to-consumer telemedicine company, providing telemedicine services to pharmaceutical and medical technology companies. And we anticipate the reach for Vilisi, from an awareness standpoint, will be increasing over the coming quarters. Moving over to the financial update. For the fourth quarter, and I will also highlight certain fiscal year ended, June 30th, 2023 results. Regarding revenue, total revenue consists of gross product sales of Vileci, which is net of expenses, allowances, and accruals, and license and contract revenue. Vileci gross product sales to pharmacy distributors for the quarter ended June 30th, 2023, as I mentioned, was 4.1 million with net product revenue of 1.8 million. And this compared to gross product sales of $2.3 million and net product revenue of $0.8 million for the comparable quarter last year. Gross product sales increased 78% and net product revenue increased 128% over the comparable quarter last year. Moving to operating expenses. Total operating expenses were $12.6 million for the fourth quarter and the June 30, 2023, compared to $13.9 million for the comparable quarter last year. The decrease in operating expenses was mainly the result of the recognition of expenses during the fiscal year, June 30, 2022, in connection with the sale and issuance of our Series B and Series C redeemable convertible preferred stock, and secondarily, to lower spending on our marketing efforts during fiscal 2023. I do want to expand a comment in that regarding this $12.6 million, again, for the fourth quarter of June, fourth quarter ended June 30, 2023, this $12.6 million of operating expenses, this is actually greater than what we, if you will, had projected internally. And the reason being, we advance our programs, primarily our Phase III dry eye disease trial, which we did report on recently, hit full enrollment, that full enrollment did trigger a milestone, which triggered an expense and a payment. But I do want to note that 12.6 million expenses, operating expenses for the June 30th quarter, going forward over the next several quarters, that number, those operating expenses, will be significantly less than $12.6 million. Again, we advanced the programs. We hit some milestones. You're going to have some greater expenses. There's always going to be some timing issues in that regard. Let me move over to the cash flows. Net cash used in operations for the quarter end of June 30th, 2023 was $9.6 million compared to net cash used in operations of $7.7 million for the same period in 2022. Again, same reason as I just addressed above. We had some greater expenses due to the advancement of the programs, which is a positive thing, hitting some milestones that hit in the June 30th quarter. Palatine's net cash used in operations for the fiscal year end of June 30th, for the full fiscal year, was $28.4 million compared to net cash used in operations of $29.9 million for the same period in 2022. The decrease in net cash used in operations, which is not a significant amount, was frankly due to a number of items, including different spending levels for Vilesi, but also we did recognize some net operating losses to the state of New Jersey that generated over $4 million of non-dilutive financing. Finishing up on the financials with the net loss and the cash position, Palatine's net loss for the quarter, fiscal year ended June 3, 2023, was $10.7 million. Again, that was for the quarter, and $27.7 million for the year, respectively, compared to a net loss of $12.8 million and $36.2 million respectively for the same periods in 2022. Regarding our cash position, as of June 30th, 2023, Paliton's cash, cash equivalents, and marketable securities were approximately $11 million plus $2.9 million of accounts receivable. Those accounts receivables, 100% good. All those funds have been received in the July-August timeframe. And this compared to cash and cash equivalents of $19.6 million with 1.7 million of accounts receivables as of March 31st, 2023. You might say, hey, those accounts receivables went up a little bit. Well, we're selling more, all good. And based on our current operating plan, we believe that existing cash, cash equivalents and marketable securities and receivables will be sufficient to fund currently anticipated operating expenses through calendar year 2023. Of note, I do want to highlight that Palatine's audited financial statements for the year ended June 30th, 2023, to be included in the annual report on Form 10-K, does include an audit report from our independent registered public accounting firm, KPMG, that contains a going concern explanatory paragraph, which we have had for quite some time. With that said, I'm going to turn it back over to Carl to talk a bit more granular about our exciting development and commercial programs.