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PT

PALATIN TECHNOLOGIES INC (PTN)·Q1 2024 Earnings Summary

Executive Summary

  • Palatin’s Q1 FY2024 (quarter ended Sep 30, 2023) showed continued Vyleesi momentum: net product revenue rose to $2.11M (+20% QoQ; +142% YoY) and gross product sales reached $4.6M (+11% QoQ; +100% YoY), marking the 7th consecutive quarter of double‑digit growth .
  • Net loss narrowed to $5.89M and diluted EPS improved to $(0.48) vs $(0.91) in Q4 FY2023 and $(0.63) in Q3 FY2023, primarily on higher Vyleesi net revenue and lower expenses on melanocortin programs .
  • Cash, cash equivalents and marketable securities were ~$5.5M at quarter‑end (plus $1.3M A/R); with October net financing of $4.5M, management guided runway into 1H CY2024, extending prior guidance through CY2023; this is a potential stock reaction catalyst tied to near‑term topline readouts for PL9643 in DED late Q4 CY2023 and advancing out‑licensing for Vyleesi .
  • Clinical program timelines largely maintained: PL9643 topline late Q4 CY2023; PL8177 UC interim in Q1 CY2024 and topline 1H CY2024; BREAKOUT (kidney) topline 1H CY2024; Phase 2 ED combo and MC4+GLP‑1 obesity expected to start in Q1 CY2024 (ED slightly delayed from late Q4 CY2023) .

What Went Well and What Went Wrong

What Went Well

  • Vyleesi delivered the 7th straight quarter of double‑digit increases; net product revenue (+20% QoQ) and prescriptions (+14% QoQ) outpaced operating expenses for Vyleesi, demonstrating commercial traction and improved unit economics .
  • PL9643 Phase 3 MELODY‑1 enrollment completed (n=570); prior interim analysis in initial 120 patients showed statistical separation across multiple signs and symptoms with excellent safety, supporting potential leadership in DED; topline data expected late Q4 CY2023 .
  • Cash runway extended into 1H CY2024 helped by October financing ($4.5M net proceeds), reducing near‑term financing overhang as multiple readouts approach .

Selected management quotes:

  • “We are so pleased with Vyleesi, 7 consecutive quarters of double‑digit growth… Vyleesi quarterly net product revenue continues to exceed Vyleesi quarterly operating expenses.”
  • “We believe the emerging efficacy and tolerability profile of PL‑9643… can become a leading treatment for dry eye disease.”
  • “We strongly believe that drugs targeting melanocortin system will be an important part of the future of obesity treatment and overall weight management.”

What Went Wrong

  • Cash balance declined to ~$5.5M at quarter‑end from ~$11.0M in Q4 FY2023 and ~$19.6M in Q3 FY2023, reflecting continued cash burn; although runway extends into 1H CY2024 (including financing), liquidity remains tight pending readouts and potential transactions .
  • The Phase 2 ED co‑formulated bremelanotide + PDE5i study start shifted from late Q4 CY2023 to Q1 CY2024 (slight delay), modestly pushing an expected 2024 data cadence .
  • Consensus estimates from S&P Global were unavailable for PTN, limiting external benchmark comparisons for revenue/EPS and contributing to potential uncertainty in market expectations (SPGI mapping unavailable) [GetEstimates error].

Financial Results

MetricQ3 FY2023 (Mar 31, 2023)Q4 FY2023 (Jun 30, 2023)Q1 FY2024 (Sep 30, 2023)
Total Revenues ($USD Millions)$1.196 $1.762 $2.106
Net Loss ($USD Millions)$(7.148) $(10.714) $(5.888)
Diluted EPS ($USD)$(0.63) $(0.91) $(0.48)
Total Operating Expenses ($USD Millions)$8.497 $12.580 $8.215
Cash & Equivalents (+ Marketable Securities) ($USD Millions)$19.6 (cash) ~$11.0 ~$5.5
Vyleesi Gross Product Sales ($USD Millions)$3.4 $4.1 $4.6
Vyleesi Net Product Revenue ($USD Millions)$1.2 $1.8 $2.1

Segment breakdown:

Revenue ComponentQ3 FY2023Q4 FY2023Q1 FY2024
Product Revenue, Net ($USD Millions)$1.196 $1.759 $2.106
License & Contract Revenue ($USD Millions)$0.000 $0.003 $0.000 (not reported)

KPIs (Vyleesi):

KPIQ3 FY2023Q4 FY2023Q1 FY2024
Gross Product Sales ($USD Millions)$3.4 $4.1 $4.6
Net Product Revenue ($USD Millions)$1.2 $1.8 $2.1
Prescriptions Dispensed+27% QoQ (growth rate) +16% QoQ (growth rate) +14% QoQ (growth rate)

Actuals vs Estimates (SPGI):

MetricActual Q1 FY2024SPGI Consensus Q1 FY2024
Revenue ($USD Millions)$2.106 N/A (Unavailable via S&P Global)
Diluted EPS ($USD)$(0.48) N/A (Unavailable via S&P Global)

Note: Consensus estimates for PTN Q1 FY2024 were unavailable via S&P Global due to missing mapping.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
PL9643 (DED) ToplineLate Q4 CY2023Late Q4 CY2023 Late Q4 CY2023 Maintained
PL9643 (DED) Final DataQ1 CY2024Q1 CY2024 Q1 CY2024 Maintained
PL8177 (UC) InterimQ1 CY2024Q1 CY2024 Q1 CY2024 Maintained
PL8177 (UC) Topline1H CY20241H CY2024 1H CY2024 Maintained
BREAKOUT (Kidney) Topline1H CY20241H CY2024 1H CY2024 Maintained
ED: Bremelanotide + PDE5i Phase 2 StartQ1 CY2024Late Q4 CY2023 Q1 CY2024 Lowered/Delayed (slipped ~1Q)
MC4 + GLP‑1 Obesity Phase 2 StartQ1 CY2024Not explicitly guided Q1 CY2024 New
Cash RunwayFunding horizonThrough CY2023 Into 1H CY2024 Raised/Extended
Vyleesi US Out‑LicensingTimingStrategic objective to re‑license Advancing discussions; confident in near‑term transaction Narrative Progressing

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 FY2023, Q4 FY2023)Current Period (Q1 FY2024)Trend
Vyleesi commercial traction5–6 consecutive quarters of double‑digit growth; net revenue exceeded operating expenses 7th consecutive quarter; net revenue continues to exceed operating expenses Strengthening
PL9643 (DED) Phase 3Interim analysis showed statistical separation and excellent safety; enrollment complete Topline expected late Q4 CY2023; positioning as potential leading DED therapy Approaching catalyst
PL8177 (UC)Interim assessment expected 2H CY2023 → updated to Q1 CY2024 Interim assessment Q1 CY2024; topline 1H CY2024 Maintained (timing)
BREAKOUT (Kidney)Enrollment ongoing; topline 1H CY2024 Topline 1H CY2024 Maintained
ED combo (bremelanotide + PDE5i)Phase 2 expected late Q4 CY2023 Phase 2 expected Q1 CY2024; reg/endpoint approach outlined Slight delay
MC4 + GLP‑1 obesityPreclinical synergy; program emerging Phase 2 expected Q1 CY2024; weight loss maintenance rationale emphasized Expanding
International VyleesiFirst sale in Hainan (China); South Korea Phase 3 enrollment complete China sale reiterated; SK Phase 3 data by CY year‑end with potential 1H CY2024 regulatory submission Advancing
Cash runway/financingRunway through CY2023 Runway into 1H CY2024; $4.5M net proceeds in Oct 2023 Improved horizon

Management Commentary

  • Strategic focus: “Establishing the melanocortin system as a target for safe and effective medicines… pipeline of highly effective drugs with unparalleled safety.”
  • PL9643 positioning: “We believe the emerging efficacy and tolerability profile of PL‑9643… can become a leading treatment for dry eye disease.”
  • Obesity strategy: “We strongly believe that drugs targeting melanocortin system will be an important part of the future of obesity treatment and overall weight management.”
  • Vyleesi momentum: “7 consecutive quarters of double‑digit growth… Vyleesi quarterly net product revenue continues to exceed Vyleesi quarterly operating expenses.”
  • Out‑licensing confidence: “We are advancing discussions and… reasonably confident that we will transact on Vyleesi in the very near future.”

Q&A Highlights

  • MELODY‑1 topline disclosure: Focus on primary endpoints and safety; management prefers to “put numbers out” if they hit endpoints, with subsequent fuller dataset disclosure via publication/presentation .
  • GLP‑1 obesity combo path: Initial Phase 2 targeting obese patients (BMI >35) already on tirzepatide/GLP‑1; goal to enhance weight loss without escalating GLP‑1 dose and to support weight loss maintenance based on melanocortin mechanism and prior data (incl. AZ collaboration) .
  • Vyleesi U.S. out‑licensing timing: Management reiterated confidence in near‑term transaction amid 7 quarters of double‑digit growth .
  • BREAKOUT kidney strategy: Study supports out‑licensing and broader melanocortin anti‑inflammatory applicability; potential to bring in third parties for development .
  • ED Phase 2 design/regulatory: Patients to be defined as PDE5i failures (on maximal dose with proper instruction) with erectile function subdomain scores per established guidance; will finalize consensus with FDA for registration definition .
  • PL8177 (UC) read: Open‑label/blinded observations; management is “optimistic that there will be a signal” .

Estimates Context

  • Wall Street consensus (S&P Global) for PTN Q1 FY2024 revenue and EPS was unavailable due to missing CIQ mapping. As a result, external benchmark comparison could not be performed for this quarter (consensus unavailable via S&P Global).
  • Given the absence of consensus, investor focus should center on sequential momentum in Vyleesi, narrowed losses, and near‑term clinical catalysts to gauge potential estimate revisions post‑data readouts .

Key Takeaways for Investors

  • Vyleesi is scaling with improving economics: net product revenue of $2.1M exceeded Vyleesi operating expenses, suggesting continued leverage from direct‑to‑consumer efforts and reimbursement traction .
  • Near‑term catalysts: PL9643 topline DED data late Q4 CY2023; strong interim signals and safety profile increase probability of positive readout that could re‑rate the stock .
  • Clinical pipeline breadth: UC (PL8177) interim in Q1 CY2024 and kidney BREAKOUT topline in 1H CY2024 provide multiple shots on goal beyond DED .
  • Obesity optionality: Phase 2 MC4 + GLP‑1 trial expected Q1 CY2024 positions Palatin in a large market with a differentiated mechanism for enhancing weight loss and maintenance, potentially partnering‑oriented .
  • Liquidity watch: Cash ~$5.5M at quarter‑end with $4.5M net financing in Oct extends runway into 1H CY2024; execution on out‑licensing and positive data will be key to de‑risk financing needs .
  • Transaction potential: Management is “reasonably confident” on near‑term Vyleesi U.S. out‑licensing, which could crystallize value and fund R&D .
  • Risk factors: Small cash base and going‑concern language historically; failure to deliver positive readouts or transact on Vyleesi could pressure liquidity and sentiment .