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Palatin Technologies Inc Reports Operating Results (10-Q)

November 15, 2010 | About:
10qk

10qk

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Palatin Technologies Inc (PTN) filed Quarterly Report for the period ended 2010-09-30.

Palatin Technologies Inc has a market cap of $15.96 million; its shares were traded at around $1.35 with and P/S ratio of 1.13. Palatin Technologies Inc had an annual average earning growth of 10.7% over the past 5 years.PTN is in the portfolios of Jim Simons of Renaissance Technologies LLC, Jean-Marie Eveillard of First Eagle Investment Management, LLC.

Highlight of Business Operations:

The historical amounts of project spending above exclude general research and development spending, which increased to $2.7 million for three months ended September 30, 2010 compared to $2.2 million for three months ended September 30, 2009. The increase is primarily related to the recognition of severance related expenses of $633,000 in the three months ended September 30, 2010 based on our process of reducing staffing levels pursuant to our strategic decision to focus resources and efforts on clinical trials of bremelanotide and PL-3994 and preclinical development of an inhaled formula of PL-3994 and a new peptide drug candidate for sexual dysfunction.

Cumulative spending from inception to September 30, 2010 on our bremelanotide, NeutroSpec (a previously marketed imaging product on which all work is suspended) and other programs (which include PL-3994, other melanocortin receptor agonists, obesity, and other discovery programs) amounts to approximately $134.9 million, $55.5 million and $58.6 million, respectively. Due to various risk factors described in our periodic filings with the SEC, including the difficulty in currently estimating the costs and timing of future Phase 1 clinical trials and larger-scale Phase 2 and Phase 3 clinical trials for any product under development, we cannot predict with reasonable certainty when, if ever, a program will advance to the next stage of development or be successfully completed, or when, if ever, net cash inflows will be generated.

General and Administrative – General and administrative expenses increased to $1.4 million for the three months ended September 30, 2010 compared to $1.2 million for the three months ended September 30, 2009. The increase is primarily related to the recognition of severance related expenses of $115,000 in the three months ended September 30, 2010 based on our process of reducing staffing levels pursuant to our strategic decision to focus

During the three months ended September 30, 2010, we used $4.2 million of cash for our operating activities, compared to $3.0 million used in the three months ended September 30, 2009. Higher net cash outflows from operations in the three months ended September 30, 2010 resulted primarily from lower revenues. Our periodic accounts receivable balances will continue to be highly dependent on the timing of receipts from collaboration partners and the division of development responsibilities between us and our collaboration partners.

During the three months ended September 30, 2010, cash provided by financing activities of $41,000 consisted primarily from the exercise of warrants during the quarter. During the three months ended September 30, 2009, cash provided by financing activities was $2.7 million, consisting of approximately $2.8 million from the sale of equity units in a registered direct offering offset by payments on capital lease obligations.

As of September 30, 2010, our cash and cash equivalents were $1.2 million, our available-for-sale investments were $3.5 million and our accounts receivable were $0.5 million. We believe that these amounts are not sufficient to fund our planned operations for the next twelve months. This raises substantial doubt about our ability to continue as a going concern. We have made the strategic decision to focus resources and efforts on clinical trials for bremelanotide and PL-3994 and preclinical development of an inhaled formulation of PL-3994 and a new peptide drug candidate for sexual dysfunction, and have ceased research and development efforts on new product candidates. As part of this decision, we have implemented reductions in staffing levels, and anticipate having no more than twenty employees by December 31, 2010. We also intend to raise additional capital by December 31, 2010. The accompanying consolidated financial statements have been prepared assuming that we continue as a going concern.

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