Palatin Technologies, Inc. Common Stock 2026 Q4 Earnings Call

Please go ahead. Good morning, everyone, and thank you for joining us.

I am Carl Spana, President and Chief Executive Officer of Palatin Technologies. Today, I will discuss our strategic priorities and progress across our development programs. Steve Wills, our Chief Operating Officer and Chief Financial Officer, will then review our fiscal 2026 financial results and liquidity position. We'll then conclude with questions. Our principal strategic focus is the development of next-generation, best-in-class melanocortin-4 receptor, or MC4R, agonists for treating syndromic and rare obesity disorders. We are initially targeting hypothalamic obesity, Prader-Willi syndrome, and Bardet-Biedl syndrome, with potential applicability to other disorders involving the MC4R pathway. MC4R agonism is now clinically and commercially validated in multiple rare and syndromic obesity disorders, establishing a strong foundation for the development of next-generation therapies.

Palatin brings more than 25 years of melanocortin research and drug development experience to this opportunity, including the development of FDA-approved bremelanotide, or Vyleesi. While currently available and emerging therapies have demonstrated meaningful efficacy, gastrointestinal adverse events and hyperpigmentation remain important challenges for patients requiring long-term treatment. Clinical studies of the approved MC4R agonist in the rare obesity space and the next-generation investigational MC4R therapies under development have continued to report high levels of nausea and vomiting, as well as incidents of hyperpigmentation. Our objective is to develop best-in-class melanocortin-4 receptor therapies that deliver comparable or greater efficacy with improved tolerability, little to no hyperpigmentation, and product profiles suitable for lifelong use. We are advancing two complementary peptide series, non-lipidated PL1000 and lipidated PL2000 series. Tested compounds from both series have demonstrated potent MC4R agonism activity without MC1R agonism.

Because MC1R agonism activation contributes to pigmentation, these findings support our strategy to minimize or potentially eliminate hyperpigmentation. Both peptide series contribute to our effort to develop a long-acting, once-weekly subcutaneous therapy. In preclinical studies, compounds from both the PL1000 and PL2000 series have produced significant dose-dependent reductions in body weight and food intake in diet-induced obese mice. For our PL1000 lead development candidate, we have established feasibility of once-weekly subcutaneous dosing and are working to optimize a controlled-release formulation. Our lead MC4R lipidated peptide development candidate has demonstrated significant reductions in food intake and weight loss with once-weekly subcutaneous dosing in a diet-induced obese mouse model. Preclinical pharmacokinetic data supports the potential for longer than once-weekly or less frequent dosing in humans. We are currently conducting the activities required to file an IND and begin human clinical studies. Our oral small molecule MC4R program provides a third treatment approach.

Building on learnings from an earlier drug candidate, PL7737, and utilizing multiple approaches, including artificial intelligence and machine learning tools, we have identified potential drug candidates with improved potency and MC4R selectivity. Our objective is to develop an oral MC4R agonist capable of delivering comparable or greater efficacy than emerging oral MC4R therapies with improved gastrointestinal tolerability. We are also designing our oral candidates to have limited or avoid MCR1-mediated off-target activity to minimize or eliminate hyperpigmentation. Subject to appropriate funding, we are targeting initiation of a phase I single ascending dose and multiple ascending dose studies for our lipidated peptide candidate in the first half of calendar 2027, with data targeted for the second half of 2027.

We are targeting initiation of the oral phase I single ascending dose and multiple ascending dose studies in the second half of calendar 2027, with initial data expected in the first half of 2028. These studies will evaluate human safety, tolerability, pharmacokinetics, and clinical efficacy. Taken together, our non-lipidated peptide, lipidated peptide, and oral small molecule programs provide three distinct approaches to developing differentiated, selective MC4R agonists for the long-term treatment of patients with syndromic and rare obesity disorders. Each approach is being designed around the same core best-in-class objective: meaningful efficacy, improved tolerability, little to no hyperpigmentation, and a dosing profile suitable for lifelong treatment. Beyond our obesity programs, our broader melanocortin platform has already generated meaningful strategic collaborations. Under our August 2025 retinal disease research collaboration and license agreement, Boehringer Ingelheim paid an aggregate of €7.5 million upfront and initial milestone amounts.

The agreement provides for up to €280 million in additional success-based milestones and tiered royalties. We continue to perform reimbursed research under the collaboration. We also sub-licensed our PL9643 dry eye program to Altanispac Labs earlier this year. Beyond those partnered assets, our PL8177 ulcerative colitis program has positive phase II proof of principle findings, and our diabetic nephropathy program has encouraging open label phase II data as well. We are pursuing partnerships with these non-core assets so our internal development effort can remain focused on rare obesity MC4R therapies. Our priorities are clear. Advance our complementary non-lipidated and lipidated selective MC4R agonist drug candidates and oral program to a clinical development, translate preclinical differentiating findings into human clinical evidence, and continue creating value through our strategic collaborations and partnerships. Steve will now review our financial results.

Steve, over to you. Thank you, Carl, and good morning, everyone.

I will review our fiscal fourth quarter and full year 2026 results, followed by our cash position and liquidity outlook. Unless otherwise noted, comparisons are with the corresponding fiscal year 2025 periods. For the fourth quarter ended June 30th, 2026, Palatin recognized $300,000 in collaboration and licensed revenue, compared with no revenue in the prior year quarter. For the full fiscal year, collaboration and license revenue totaled $13.2 million, compared with no revenue in fiscal 2025. This included $9.4 million related to our Boehringer Ingelheim collaboration and $3.8 million related to the Altanispac sub-license. The Altanispac revenue was recognized in the form of non-cash debt cancellation. Fourth quarter operating expenses were $4.7 million, compared with $2.3 million in the prior year quarter.

The prior year quarter included gains associated with Vyleesi and purchase commitments affecting comparability. Research and development expense was $2.0 million in each fourth quarter, while general and administrative expense was $2.7 million as compared with $2.6 million a year earlier. For fiscal 2026, total operating expenses were $21.9 million, compared with $17.5 million in fiscal 2025. Research and development expenses decreased to $12.4 million from $14.9 million, primarily attributable to lower expenses related to the timing of certain activities on our MC4R programs. General and administrative expenses increased to $9.5 million from $7.8 million, primarily due to higher professional fees. Fiscal 2025 operating expenses included a $3.1 million gain on the sale of Vyleesi and a $2.1 million gain on purchase commitments.

We reported a fourth quarter net loss of $4.4 million, compared with $2.2 million in the prior year quarter. For the full fiscal year, net loss decreased to $8.4 million or a loss of $2.96 per basic and diluted common share, compared with a net loss of $17.3 million or a loss of $32.15 per basic and diluted common share in fiscal 2025. The year-over-year improvement in net loss was primarily attributable to collaboration and license revenue and gains related to Vyleesi and purchase commitments. Net cash used in operating activities was $13.5 million in fiscal 2026, compared with $21.3 million in fiscal 2025.

Net cash provided by financing activities was $18.5 million, consisting primarily of $16.9 million in net proceeds from common stock and warrant sales and $1.6 million from warrant exercises. Turning to liquidity, we ended June 30th, 2026, with $7.5 million in cash and cash equivalents, compared with $2.6 million at June 30th, 2025. Current liabilities were $1.8 million at fiscal year-end. Based on that cash balance and our current operating and development plans, including our ability to reduce or delay certain expenditures within management's control, we do not expect existing cash to be sufficient to fund operations for at least 12 months following issuance of our financial statements. Accordingly, substantial doubt exists about our ability to continue as a going concern. We will require additional financing to continue advancing our development programs and fund operations.