Palatin Technologies Inc Reports Operating Results (10-Q)
Palatin Technologies, Inc is a development-stage medical technology companyinvolved in developing and commercializing products and technologies fordiagnostic imaging, cancer therapy and ethical drug development These developments are based on its proprietary monoclonal antibody radiolabeling and enabling peptide platform technologies. Palatin Technologies Inc has a market cap of $31.8 million; its shares were traded at around $0.33 with and P/S ratio of 2.8. Highlight of Business Operations: Revenue for the three months ended September 30, 2009 and 2008 consisted of $1.0 million and $0.3 million, respectively, related to our research services performed during those periods, and $2.7 million and $0.4 million, respectively, of revenue related to AstraZeneca's up-front license fee. The increase in revenue relating to AstraZeneca's up-front license fee is related to revision of the period during which we may perform research services for purposes of revenue recognition. Currently, the research services obligation under our agreement with AstraZeneca expires in January 2010. There were no substantive development activities on our NeutroSpec program during the three months ended September 30, 2009 and 2008, and we do not anticipate any substantive development activities on the NeutroSpec program in the fiscal year ending June 30, 2010, though the agreement with Mallinckrodt has not been terminated. Future contract revenue from AstraZeneca and Mallinckrodt, in the form of reimbursement of shared development costs or the recognition of deferred license fees, will fluctuate based on development activities in our obesity and NeutroSpec programs. We may also earn contract revenue based on the attainment of development milestones.
Cumulative spending from inception to September 30, 2009 on our bremelanotide, NeutroSpec and other programs (which includes PL-3994, PL-6983, obesity, and other discovery programs) amounts to approximately $127.6 million, $55.5 million and $52.8 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.
During the three months ended September 30, 2009, we used $3.0 million of cash for our operating activities, compared to $4.6 million used in the three months ended September 30, 2008. Lower cash outflows from operations in the three months ended September 30, 2009 resulted primarily from lower operating expenses. 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, 2009, cash provided by investing activities of $0.1 million consisted solely of the sale of supplies. During the three months ended September 30, 2008, cash used in investing activities consisted of $4,000 for the purchase of equipment.
During the three months ended September 30, 2009, cash provided by financing activities was $2.7 million, consisting of payments on capital lease obligations offset by net proceeds of approximately $2.8 million from the sale of 9,484,848 units in a registered direct offering. Each unit consisted of one share of common stock and a five-year warrant to purchase 0.35 shares of common stock at an exercise price of $0.33 per share.
As of September 30, 2009, our cash and cash equivalents were $4.2 million, our available-for-sale investments were $3.5 million and our accounts receivable were $3.2 million (including $2.5 million referenced above). We believe that these amounts, together with the additional receipts from the September 2009 amendment to our AstraZeneca agreement and other income, are adequate to fund operations through at least September 30, 2010. We will need additional funds to continue development of bremelanotide, PL-3994 and PL-6983, as well as our early stage research and discovery programs, and to fund operations after that date.
Read the The complete ReportPTN is in the portfolios of Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC, Kenneth Fisher of Fisher Asset Management, LLC.