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Palatin Technologies Inc Reports Operating Results (10-Q)

February 16, 2010 | About:
10qk

10qk

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Palatin Technologies Inc (PTN) filed Quarterly Report for the period ended 2009-12-31.

Palatin Technologies Inc has a market cap of $27.89 million; its shares were traded at around $0.29 with and P/S ratio of 2.46. PTN is in the portfolios of Kenneth Fisher of Fisher Asset Management, LLC, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC.

Highlight of Business Operations:

Revenue – For the three and six months ended December 31, 2009, we recognized $7.3 million and $10.9 million, respectively, in revenue pursuant to our license agreement with AstraZeneca, compared to $1.2 million and $2.0 million, respectively, for three and six months ended December 31, 2008.

Revenue for the three and six months ended December 31, 2009 consisted of $1.1 million and $2.0 million, respectively, related to our research services performed during those periods, and $6.2 million and $8.9 million, respectively, of revenue related to AstraZeneca s license fees. Revenue for the three and six months ended December 31, 2008 consisted of $0.8 million and $1.1 million, respectively, related to our research services performed during those periods, and $0.4 million and $0.9 million, respectively, of revenue related to AstraZeneca s license fees. The increase in revenue relating to AstraZeneca s license fees is related primarily to revision of the period during which we may perform research services for purposes of revenue recognition and secondarily to the receipt of additional license fees. The research services obligation under our agreement with AstraZeneca expired in January 2010. There were no substantive development activities on our NeutroSpec program during the three and six months ended December 31, 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.

Research and Development – Research and development expenses decreased to $2.7 million for the three months ended December 31, 2009 from $2.8 million for the three months ended December 31, 2008. Research and development expenses decreased to $5.4 million for the six months ended December 31, 2009 from $6.5 million for the six months ended December 31, 2008. The decrease is the result of the restructuring of our clinical-stage product portfolio and development programs.

Research and development expenses related to our bremelanotide, PL-3994, PL-6983, obesity, NeutroSpec and other preclinical programs were $0.6 million and $1.1 million, respectively, for the three and six months ended December 31, 2009 compared to $0.6 million and $1.7 million, respectively, for the three and six months ended December 31, 2008. Spending to date has been primarily related to the identification and optimization of lead compounds, and secondarily to a study of the effects of melanocortin receptor-specific compounds on food intake, obesity and other metabolic parameters and preclinical studies and a Phase 1 trial with subcutaneously administered bremelanotide. The amount of such spending and the nature of future development activities are dependent on a number of factors, including primarily the availability of funds to support future development activities, success of our clinical trials and preclinical and discovery programs, and our ability to progress compounds in addition to bremelanotide and PL-3994 into human clinical trials.

The historical amounts of project spending above exclude general research and development spending, which decreased to $2.1 million and $4.3 million, respectively, for three and six months ended December 31, 2009 compared to $2.2 million and $4.8 million, respectively, for three and six months ended December 31, 2008. The decrease is primarily related to management s refinement of operations and expense control.

As of December 31, 2009, our cash and cash equivalents were $3.9 million, our available-for-sale investments were $3.4 million and our accounts receivable were $1.9 million. 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.

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