Palatin Technologies, Inc. (AMEX:PTN) Q3 2023 Earnings Call Transcript
Palatin Technologies, Inc. (AMEX:PTN) Q3 2023 Earnings Call Transcript May 16, 2023
Palatin Technologies, Inc. misses on earnings expectations. Reported EPS is $-0.75 EPS, expectations were $-0.39.
Operator: Greetings. Welcome to Palatin’s Third Quarter Fiscal Year 2023 Operating Results Conference Call. [Operator Instructions] 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 Dr. Carl Spana, President and Chief Executive Officer of Palatin. Please go ahead.
Carl Spana: Thank you. Good morning and welcome to the Palatin third 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 will now turn the call over to Steve, and he will give the financial and operating update. Steve?
Steve Wills: Thank you, Carl. Hello, everyone. Regarding financial highlights, I’ll start with Vyleesi. Vyleesi is our FDA-approved commercial product for pre-menopausal women with hypoactive sexual desire disorder, or HSDD. The goal of the Vyleesi program is to demonstrate commercial product value in the marketplace with an objective of licensing the U.S. rights to a committed women’s health care company. For the third quarter ended March 31, 2023, gross product sales were $3.4 million, an increase of 31% over the prior quarter and an increase of 165% over the comparable quarter last year. Net product revenue of $1.2 million increased 16% over the prior quarter and increased 453% over the comparable quarter last year. Total prescriptions dispensed increased 27% over the prior quarter and increased 147% over the comparable quarter last year.
We have achieved 5 consecutive quarters of double-digit growth. Refill rates, commercial insurance reimbursement and net revenue per prescription dispensed continued with positive and impactful results and trends versus the prior quarter and comparable quarter last year. We are particularly pleased that Vyleesi’s quarterly net product revenue exceeds Vyleesi’s quarterly operating expenses. Yes, that means we are not losing any money on Vyleesi. Also, we were issued a patent titled Use of Bremelanotide in Patients with Controlled Hypertension with a term through April 29, 2041. Regarding other, Palatin did receive $4.7 million in January 2023 from the State of New Jersey’s Technology Business Tax Certificate Transfer program sponsored by the New Jersey Economic Development Authority.
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Moving over to the actual financial operating results for the third quarter ended March 31, 2023. Regarding revenue, total revenue consists of gross product sales of Vyleesi, net of allowances and accruals and license and contract revenue. I covered the fee revenue, Vyleesi revenue numbers prior. Regarding operating expenses, total operating expenses were $8.5 million compared to $8 million for the comparable quarter last year. The increase in operating expenses was mainly the result of higher spending on our marketing efforts of Vyleesi. Regarding cash flows, Palatin’s net cash used in operations was $1.4 million compared to net cash used in operations of $9.5 million for the same period last year. The decrease in net cash used in operations is mainly due to the company’s receipt of proceeds from the State of New Jersey NOL, stands for net operating losses; and working capital changes for the quarter ended March 31, 2023.
Regarding net loss, Palatin’s net loss was $7.1 million or $0.63 per basic and diluted common share compared to a net loss of $7.6 million or $0.80 per basic and diluted common share for the comparable quarter last year. The decrease in net loss over the comparable quarter last year was mainly due to an increase in net product revenue of Vyleesi of $1 million, offset by an increase in operating expenses of approximately $500,000. Regarding Palatin’s cash position, as of March 31, 2023, cash and cash equivalents were approximately $19.6 million, plus approximately $1.7 million of accounts receivable. This was compared to cash and cash equivalents of $21.2 million with $6.5 million of accounts and other receivables as of December 31, 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.
Carl Spana: Thank you, Steve. At Palatin, we were focused on establishing the melanocortin system as a target for safe inspective medicines to treat inflammatory and autoimmune diseases and to develop a pipeline of highly effective drugs with unparalleled safety. Through research in our laboratory, and in collaboration with academic thought leaders, we continue to advance our understanding of the melanocortin system to identify opportunities for novel innovative therapeutics. Our research efforts are helping us to design better clinical trials and becoming a key support for our business development activities. We have three active clinical programs based on melanocortin agonists developed from our research. In addition, we have two new ocular programs ready, pending resources to begin the activities required to start clinical studies.
We are actively enrolling patients in the following clinical trials: MELODY-1, a Phase 3 study in dry eye disease; a Phase 2 study evaluating oral PL8177, a selective melanocortin-1 receptor agonist in ulcerative colitis patients; and breakout, a Phase 2 study in diabetic patients with kidney disease. We anticipate all three clinical studies will have data readouts in calendar 2023. Moving on to some of the highlights for the third quarter, Vyleesi continues to show impressive growth, as Steve mentioned, five quarters of double-digit increases in all key metrics, and we anticipate this growth will continue. We continue to make significant progress in establishing the melanocortin system as an innovative target for therapeutics to treat a variety of inflammatory diseases.
And as I said, we are enrolling patients in three clinical studies. Our ocular programs continue to make some impressive advances this quarter. We are very excited by the emerging product profile for PL9643, our melanocortin-based therapeutic for dry eye disease. PL9643 is highly differentiated from current treatments with excellent ocular tolerability and broad efficacy that we believe will make PL943 the leading treatment for dry eye disease. We presented data from the analysis of the leading population of the PL9643 MELODY-1 Phase 3 trial at the Annual Meeting of the Association for Research in Vision and Ophthalmology. PL9643 demonstrated broad efficacy with statistical separation across multiple signs and symptoms of dry eye disease and an excellent ocular tolerability and safety profile with no ocular adverse events.
This analysis was important, allowing us to confidently set the primary sign and symptom endpoints, ordering of secondary endpoints, analysis methods and sample size for the double-blind segment of the MELODY-1 Phase 3 trial. We also hosted a key opinion leader event for investors where the very exciting data for MELODY-1 Phase 3 trial was presented. If you’ve missed this event, a link for the replay can be found on our website. We also presented data at ARVO on PL9588 on melanocortin-based treatment for glaucoma. In preclinical rapid studies, PL9588 showed competitive effects on intraocular pressure with a single topical dose lowering intraocular pressure with a magnitude similar to or greater than the positive controls with latanoprost and timolol with the effect lasting up to 24 hours.
This important program is now ready to advance into pre-IND activities on the way to clinical trials. Our non-ocular melanocortin programs also made significant advances with multiple presentations at scientific meetings and publications and peer-reviewed journals as well as continuing to enroll patients in Phase 2 trials. Our expertise in the melanocortin system and our innovative clinical programs are supporting our business development activities. Discussions with potential partners for our programs, has increased and we remain optimistic that we will enter into one or more partnerships to advance our programs. I’d like to thank you for listening to the Palatin third quarter fiscal 2023 conference call. You can find additional information on our science and clinical programs on our website, www.palatin.com.
You can also find additional information on Vyleesi at the vyleesi.com website. Steve and I would like to thank you, and we will now open the call to questions.
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