Palatin Technologies Q2 FY2026 Earnings Call - Capital Raise Restores Listing, Funds MC4R Obesity INDs in 2026

Conference Operator: Greetings. Welcome to Palatin’s second quarter fiscal year 2026 operating results conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference call 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 our host, Dr. Carl Spana, President and Chief Executive Officer of Palatin. Please go ahead.

Steve Wills, Chief Financial Officer and Chief Operating Officer, Palatin Technologies: Thank you, and good morning, everyone. Earlier today, we reported Palatin’s financial results for the second quarter of fiscal year 2026 and providing a corporate update. With me on the call today is Steve Wills, Palatin’s Chief Financial Officer and Chief Operating Officer. Today, we’ll highlight our progress advancing our melanocortin-four receptor-based obesity pipeline, review strategic... recent strategic and financial milestones, and outline our priorities as we move through 2026, before opening the call for questions. First, I will turn the call over to Steve for the financial and operating results. Steve? Thank you, Carl. Hello, and welcome, everyone. I’ll walk through our second quarter fiscal 2026 operations and financial results. Starting with our recent public offering on November 12, 2025, we closed an upsized $18.2 million underwritten public offering, including the full exercise of the over-allotment option.

The offering consisted of approximately 2.8 million shares of common stock or pre-funded warrants in lieu thereof, along with Series J and Series K warrants at a combined public offering price of $6.50 per share and accompanying warrants. Each Series J warrant has an exercise price of $6.50 per share and expires on the earlier of 18 months from issuance or 31 days following FDA acceptance of an IND for an in-house obesity treatment compound. Each Series K warrant has an exercise price of $8.125 per share, and a 5-year term, subject to automatic termination if the associated Series J, Series J warrants are not exercised within the FDA exercise period.

Gross proceeds from the offering were approximately $18.2 million, with net proceeds of approximately $16.9 million after underwriting discounts and offering expenses. While the company may receive up to an additional $18.2 million upon the exercise of the Series J warrants, there is no assurance that these warrants will be exercised. The net proceeds from the offering are being used to support the advancement of our obesity programs, as well as for working capital and general corporate purposes. As a result of the closing of this financing, Palatin regained compliance with NYSE American continued listing standards, and effective November 12, 2025, our common stock resumed trading on the NYSE American under the symbol PTN. Turning now to the financial results for the second quarter, ended December 31, 2025.

Regarding revenue for the quarter was $116,000, compared to $0 revenue in the comparable period last year. This revenue relates to cost reimbursements under our collaboration agreement with Boehringer Ingelheim. Total operating expenses were $7.4 million for the quarter, compared to $2.6 million in the prior year period. The year-over-year comparison is primarily impacted by the gain on the sale by lease recorded in the December 31, 2024 quarter, which reduced net operating expenses in that period. In the current quarter, operating expenses increased due to higher investment in our melanocortin-based obesity development programs, as well as increased compensation costs and professional fees. Other income net was approximately $65,000 for the quarter, compared to approximately $169,000 in the prior year period.

The decrease reflects lower investment income and foreign currency translation gains, partially offset by lower interest expense. Net cash use in operations was $4.8 million for the quarter, consistent with the same quarter last year. Net loss for the second quarter was $7.3 million, or $2.86 per share, compared to a net loss of $2.4 million, or $5.92 per share in the comparable period, last year. This change reflects higher operating expenses associated with advancing our pipeline programs, as well as the absence of the Vyleesi divestiture gain recorded in the prior year. Turning to our cash position.

As of December 31, 2025, we had $14.5 million in cash and cash equivalents, compared to $1.3 million at September 30, 2025, and $2.6 million at June 30, 2025. Based on our current operating plans, we expect our cash runway to extend beyond the quarter ending March 31, 2027. Finally, with respect to our PL9643 sublicensing transaction, in January 2026, we received approximately $3.8 million of upfront consideration in the form of non-cash debt cancellation. This amount is reflected in the current liabilities as of December 31, 2025, and will be recognized as licensed revenue in the quarter ending March 31, 2026.

In summary, the successful completion of our public offering significantly strengthened our balance sheet, restored our NYSE American listing, and provides the capital needed to advance our obesity pipeline, while maintaining operational flexibility. With that, I’ll turn the call back to Carl for program updates. Carl?

Carl Spana, President and Chief Executive Officer, Palatin Technologies: Thank you, Steve. Palatin continues to execute on its strategy to advance differentiated melanocortin-4 receptor-based therapeutics, with a primary focus on rare syndromic and genetic obesity disorders. During the quarter, we made meaningful progress advancing our lead obesity programs toward the clinic, strengthening our balance sheet and sharpening our strategic focus, as Steve mentioned, through the sub-licensing of our dry eye disease clinical candidate, PL9643. Turning to the obesity pipeline, we are advancing a portfolio of proprietary melanocortin-4 receptor agonists, initially targeted to rare neuroendocrine obesity disorders, including hypothalamic obesity and Prader-Willi syndrome, areas of significant unmet medical need.

Our lead oral small molecule MC4R agonist, PL7737, continues to progress through IND-enabling toxicology studies, and we remain on track to submit an IND and initiate a phase 1 single and multiple ascending dose clinical trial in the first half of calendar year 2026. In parallel, we are advancing our next generation selective melanocortin-4 receptor peptide agonists, which are designed for once-weekly subcutaneous dosing. For this program, we are planning an IND submission in the second half of calendar 2026. As we move these programs forward, our development focus is on delivering differentiated product profiles. Specifically, we are designing our compounds to enhance patient tolerability, including the potential for reduced gastrointestinal side effects, while minimizing off-target effects such as hyperpigmentation. Factors we believe are important for success in the long-term treatment of chronic obesity indications.

Our preclinical data supports the potential of targeting melanocortin-4 receptor across both rare and select broader obesity indications. However, our focus will be on rare neuroendocrine disorders. Planned registration clinical studies will enroll patients with hypothalamic obesity and Prader-Willi syndrome. In addition, preclinical and early clinical data support the potential for co-administration of our melanocortin-4 receptor agonist with a GLP-1 based therapeutic, such as tirzepatide, providing optionality as obesity treatment paradigms continue to evolve. A couple other things that occurred during the quarter, as Steve had mentioned. In January 2026, we executed the sub-licensing of PL-9643, a selective melanocortin-1 receptor agonist with positive phase 3 clinical data and dry eye disease to Altanispac Labs.

This transaction provided approximately $3.8 million in upfront consideration and allows us to sharpen our focus on our core obesity programs while retaining potential future financial participation through milestones and royalties. We also significantly strengthened our balance sheet with the completion of a $18.2 million public offering in November, which included the full exercise of the overallotment. In addition, we successfully regained compliance with the NYSE American Listing Standards, and our common stock resumed trading under the symbol PTM, restoring market visibility and liquidity. In summary, Palatin enters 2026 with a strengthened financial position, multiple partnerships with near-term milestones, and a focused, differentiated OPC pipeline. We believe this positions the company to pursue substantial long-term value creation. With that, I’ll turn the call back over to the operator, and we will open the call to questions.

Conference Operator: Certainly. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we poll for questions. Your first question for today is from Scott Henry, with Alliance Global Partners.

Scott Henry, Analyst, Alliance Global Partners: Thank you. Good morning, and a lot of progress recently. If we could start with PL7737. As we get ready for the IND, what preclinical or translational signals give you the greatest confidence in differentiation versus current or emerging MC4R agonists, particularly around the tolerability angle? Thank you.

Carl Spana, President and Chief Executive Officer, Palatin Technologies: Well, Scott, well, the compound is designed. Well, first of all, we’ll talk about hyperpigmentation, as it’s designed to be more selective for the melanocortin-4 receptor than the melanocortin-1 receptor, which should lead to a reduction or substantial reduction in the hyperpigmentation. Leading to the second part of the first part of your question. Listen, you know, we control potential GI side effects through a variety of mechanisms, not the least of which is the way the product is administered and absorbed. So we slow down the absorption so that we don’t get relatively large spikes in the absorption, which can lead to increase or enhanced GI side effects.

Scott Henry, Analyst, Alliance Global Partners: Okay, great. And as we get into the phase one SAD/MAD trial, how are you thinking about patient selection? And what endpoint should we be thinking about, as far as, you know, what we can get out of the clinical, early clinical data? As well, you know, I, I noticed, you know, Prader-Willi, is, is that an increased focus in addition to HO, or it just seems like I’m, I’m seeing that a little more, front and center than in the past? Thank you.

Carl Spana, President and Chief Executive Officer, Palatin Technologies: So for the single ascending and the multiple-ascending dose, those are primarily safety studies. So certainly for the single ascending dose, what we’re looking for is to confirm oral absorption or bioavailability, that the product is safe, and to really define a dosing window for PL7737. And it will be the same for the long-acting peptide when that goes forward as well. In the multiple-ascending dose study, those will be carried out for a longer term. So there again, these will be in healthy obese patients. And there, again, of course, safety is always a paramount, you know, primary efficacy or primary result that you’re looking for in these types of studies.

But with that being said, because these will be healthy obese patients in the MAD part, we’ll be looking for a reduction in their body weight. We’ll be looking for reductions in control of hyperphagia and other parameters that, you know, that go along with the obesity indication or controlling the obesity indication. So we do expect that we will get, at least from the MAD part, a pretty clear signal on how well these compounds can work. What’s nice about that is, you know, you know, we’ve seen in our hands that there’s very good translatability from smaller studies, you know, smaller efficacy studies, to larger studies with this mechanism.

Scott Henry, Analyst, Alliance Global Partners: Okay. Great. And with regards to Prader-Willi syndrome, is there an increased emphasis there, or has that always just, you know, been in the background?

Carl Spana, President and Chief Executive Officer, Palatin Technologies: It’s always been in the background, and, but we’ve been, you know-- we’re looking for, you know, indications where there are, you know, of course, meet the rare in, in orphan designation, but in which there are substantial patients. You know, if we think about some of the more, you know, micro-orphan indications that are genetically based and, and they let them out of pathway, there are, you know, there are relatively small number of patients there. So of course, they do represent valid markets and valid opportunities for development. However, we know, we are still looking at, you know, some of the larger indications like HO and Prader-Willi, where there are substantially more patients.

Scott Henry, Analyst, Alliance Global Partners: Okay, great. And then, you know, final question on the clinical side. With the oral small molecule and the once weekly injection, how do you anticipate positioning those two products between having an oral and an injectable? Do you view it as complementary? Just trying to get an idea of where we should think about each one of those.

Carl Spana, President and Chief Executive Officer, Palatin Technologies: I certainly think they’re complementary. Each will have, you know, their patient populations that they’re better suited for. One would expect that, you know, certainly for the weekly injectable peptide, one might expect to see, you know, a higher level of efficacy for patients on those. In general, we generally tend to see across the board that, you know, we can drive better efficacy with peptides than we can with the small molecules. However, of course, you know, we do need to see, you know, final decisions, and that’ll be predicated on what we see in the early studies. But there will be patient populations for each.

Patients, you know, in these indications, you know, these are long-term, you know, they’re not like generalized obesity, where patients can reach a target goal. In other words, where they can come down a certain amount of weight, they come into a more healthy standpoint and then want to move on to lower dosing or, or maintenance. Here, these patients are probably going to be, need to be on long-term, pretty aggressive therapy, because essentially, their, their conditions are chronic. You know, they don’t, they don’t go away, in that sense. So you know, you’ll need both, you’ll need both types of options to really manage these patients.

Scott Henry, Analyst, Alliance Global Partners: Okay. Great. Thank you, Carl. I guess I’ll just give Steve a chance to say something. Steve, with regards to OpEx in Q2, fiscal Q2, it looks at about $7.4 million. Was there any kind of one-time noise from the transaction in there? And just, I’m just trying to get a sense of how we should think about that OpEx number in the March quarter, the fiscal third quarter. Thank you.

Steve Wills, Chief Financial Officer and Chief Operating Officer, Palatin Technologies: Thanks, Scott. Yeah, the fourth quarter of 2026 had a number of extraordinary or one-time, I think is the best descriptions, and that amounted to over $2 million just in that quarter that we do not expect going forward. One time related to we cleaned up some, we cleaned up a number of things that we weren’t able to clean up with prior to the raise. And we did mention that in the Q that was filed earlier today, that there was a number of, if you will, one-time extraordinary type expenses that we’re not going to see going forward.

I would target approximately $2.5 million less in the first quarter of 2026, second quarter of 2025, versus the fourth quarter of 2025, which was a little over seven, I think, or approximately $7.4 million.

Scott Henry, Analyst, Alliance Global Partners: Okay, great. That’s perfect. Thank you for the color, Steve. And thank you both for taking the questions.

Steve Wills, Chief Financial Officer and Chief Operating Officer, Palatin Technologies: Great.

Conference Operator: Your next question for today is from Yale Jen with the Laidlaw & Company.

Yale Jen, Analyst, Laidlaw & Company: Good morning, and thanks for taking the questions. I’m just gonna follow up a little bit on Harry’s questions. First, on the safety side. As we know that in the Prader-Willi syndrome, the current approved drug has some issue on the safety side, and there has a, you know, 15%-20% of discontinuation of patient being treated. So, how would you guys assess that issue and when you’re starting your phase I study and then maybe further down the pike?

Carl Spana, President and Chief Executive Officer, Palatin Technologies: Well, there’s a phase I study, you know, we will get a very good look at what the tolerability and the safety profile for both of the approaches are. And, you know, based on our experience with the melanocortin-4 receptor system, you know, we have a pretty good understanding of what we expect to see. You know, in general, you will see some GI side effects. We think that those are controllable through the way these things can be administered, so that those are at lower rates. We don’t generally see the type of those types of discontinuations with this mechanism. You know, they generally tend to be fairly low with regards to the GI side effects.

In addition, you know, we know we wanna avoid the MCR one as much as possible so that we can, you know, reduce that potential for hyperpigmentation, which many patients don’t like. So overall, I think this mechanistically, this approach probably will result in lower numbers of discontinuations in these patient populations, along with delivering pretty really good efficacy. However, with that being said, you know, you have to get in the clinic and we have to show that.

Yale Jen, Analyst, Laidlaw & Company: Sure. And maybe, Two quick questions here. The first one will be that, in terms of the PWS, you were looking for the hyperphagia, and, in your phase I study, maybe probably more likely in phase II study, how you assess the two sort of metrics, one for hyperphagia, or the other is for weight reduction, in your study design, to see a clear, hopefully to see a clear sign that, both have, it will show an impact in both sides, both aspects.

Carl Spana, President and Chief Executive Officer, Palatin Technologies: Sure. So I think the way we think about it, you know, when you’re dealing with phase I, we’re really talking about the multi single study. Obviously, we’re not gonna expect to see very much in healthy normals from a single dose other than safety.

Yale Jen, Analyst, Laidlaw & Company: Right.

Carl Spana, President and Chief Executive Officer, Palatin Technologies: You know, when we’re dealing with a, say, 14 4-week study, so a 20-day study, in healthy obese patients, what you’re looking for there is, you know, are we seeing consistent target engagement over the full 4 weeks of dosing? Are we seeing consistent, you know, PK parameters and, you know, consistent exposure to the drug? We expect to see that there should be, you know, we know that from other studies we’ve done, that we would expect to see a reduction in food intake and a reduction in body mass in these patients.

With you go more mechanistically, you know, one way that this product, the melanocortin-4 receptor works, one downstream effect of that is, of course, the control of hyperphagia that can occur, you know, in obese patients, and obese patients, whether they be normal or they have a syndromic obesity, such as PWS. You know, until you get into the PWS patients, I mean, you’re not going to really know, you know, how much you control the hyperphagia, right?

Yale Jen, Analyst, Laidlaw & Company: Right.

Carl Spana, President and Chief Executive Officer, Palatin Technologies: However, you’ll get a very strong signal from the phase I that, you know, that you’re working on target, how much efficacy you can drive, and, you know, that should translate into a strong signal in the PWS patients as well. But until you get there, you’re not gonna know. I mean, we’re gonna have to, you know, you do have to, you know, you do have to get into the patient, the actual intended patient population itself.

Yale Jen, Analyst, Laidlaw & Company: Okay, maybe actually just continue with this one, is that based on the resources or anticipated resources going forward, PWS will be something that you may contemplate more aggressively next year? I mean, later this year or really in the next year.

Carl Spana, President and Chief Executive Officer, Palatin Technologies: So I’m gonna, you know, the answer is you’re correct for more in the next year, but I’ll let Steve kind of walk through how the cash flow plays out over the next 18 months. Yeah. Thanks, Carl. So the initial, as Carl mentioned, the SAD and MAD phase I studies are the initial, and we’re targeting, and we have sufficient cash on hand right now to move forward with both the oral small molecule and the long-acting peptide, again, in the phase I SAD and MAD. That data will read out for the oral small molecule by year-end, and in the first half of next year on the long-acting peptide.

Thereafter, we’re gonna be moving forward into whether you wanna call it a phase II, a phase II, a phase II/III, in specifically just HO patients and PW, you know, Prader-Willi syndrome, patients, in both the oral small molecule and the long-acting peptide. But they will not start before mid-2027. Is that helpful?

Yale Jen, Analyst, Laidlaw & Company: Okay, great. Yes, absolutely. That, that’s actually great callers in there. Maybe the last question here is you guys have a study with a combination of GLP-1 beforehand. I understand that obviously that’s a very, very crowded space or very highly competitive space, but certainly you have some positive data. So how would you position or in what context do you anticipate that GLP-1 may play a role in your product development or clinical study going forward?

Carl Spana, President and Chief Executive Officer, Palatin Technologies: Sure.

Yale Jen, Analyst, Laidlaw & Company: And thanks.

Carl Spana, President and Chief Executive Officer, Palatin Technologies: Yeah, so again, I think, you know, this has been a long thing. We’ve been doing work in combination of these two mechanisms for quite a bit of time, and we’ve, as you said, we’ve done clinical trials specifically looking at the interaction. As you see more and more incretin-based therapies coming into the marketplace, now they’re moving from just injectables to oral, you know, you’re likely to see clinicians wanting to combine these mechanisms, particularly for patients, you know, for PWS, for example, that may have really very severe hyperphagia, where, you know, they need additional something additionally more than, let’s say, any one mechanism can combine.

So that’s why we began to think about, you know, you know, how you combine these mechanisms to make sure that every patient that comes through can really get an optimized therapy. So I think it’d be a little naive to think that, you know, though during a clinical development program, you will focus on a monotherapy approach. Certainly, some of the patients coming into these studies will be on GLP-1s, but I think longer term, it’s, it’s likely that, you, you’re gonna see combination therapy. So it’s just really positioning ourselves for, you could call it lifecycle management or the reality of what’s gonna occur in the marketplace when, when these products get approved.

Yale Jen, Analyst, Laidlaw & Company: Okay, great. And thanks a lot. Again, congrats with sufficient, you know, resources to move forward. Certainly, this is a great space to be in, and congrats on all the progress.

Conference Operator: We have reached the end of the question and answer session, and I will now turn the call over to Dr. Carl Spana for closing remarks.

Carl Spana, President and Chief Executive Officer, Palatin Technologies: Thank you. I’d like to thank everyone for participating in the Palatin second quarter fiscal 2026 conference call. We’re excited to what we’re doing here. I think we’re, we’re in a very good place with really good assets, and we’ll be, continue to be excited in moving these products forward and really updating you as we continue to make, progress, in, in our development. That being said, have a great day, and we look forward to, continue to update you on our progress. Thank you.

Conference Operator: This concludes today’s conference, and you may disconnect your lines at this time. Thank you for your participation.