PTN 10-K & 10-Q changes, risk factors and insider trading
Palatin Technologies Inc. · Nasdaq · Pharmaceutical Preparations · CIK 911216 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “We have limited experience successfully commercializing pharmaceutical products, and our experience with Vyleesi may not be indicative of our ability to successfully develop or commercialize our current or future product candidates.”
New heading “Our business strategy is increasingly focused on the development of our MC4R agonist programs for rare obesity disorders, and these programs are at an early stage of development and may not be successful.”
New heading “We depend on our collaborations and licensing arrangements with third parties, including Boehringer Ingelheim and Altanispac Labs, to successfully develop and commercialize certain of our product candidates, and we may not receive anticipated milestone payments, royalties or other economic benefits from these arrangements.”
New heading “We may not receive the contingent payment retained in connection with our settlement with Cosette relating to Vyleesi.”
New heading “We depend on third-party manufacturers and suppliers for our product candidates, and any inability to obtain adequate supplies of materials or product candidates of acceptable quality on a timely basis could delay or adversely affect our development programs.”
New heading “Cybersecurity incidents, failures of our information technology systems or those of third parties upon which we rely, or unauthorized access to or disclosure of confidential information could disrupt our operations, compromise sensitive information and adversely affect our business.”
New heading “We use artificial intelligence and machine learning technologies in certain of our research and drug discovery activities, and the use of these technologies may not produce the anticipated benefits and could expose us to additional risks.”
New heading “Legislative, regulatory or policy changes could increase the costs of developing or commercializing our product candidates, delay or prevent regulatory approval, or otherwise adversely affect our business.”
New heading “The market price of our common stock has been, and is likely to continue to be, highly volatile, and investors may lose all or a substantial portion of their investment.”
New heading “If we fail to maintain effective internal control over financial reporting and effective disclosure controls and procedures, our ability to produce accurate and timely financial statements or comply with applicable reporting requirements could be impaired, which could adversely affect our business and the market price of our common stock.”
New heading “If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock could be delisted, which could adversely affect the market price and liquidity of our common stock and our ability to raise capital.”
Removed heading “We have a limited operating history upon which to base an investment decision.”
Removed heading “The commercial success of Vyleesi for HSDD is a component of our corporate strategy, but we may not receive significant milestone payments under our purchase agreement with Cosette.”
Removed heading “The commercial success of peptides assigned to Boehringer Ingelheim is a component of our corporate strategy, but we may not receive significant milestone payments under our agreement with Boehringer Ingelheim.”
Removed heading “Production and supply of our product candidates depend on contract manufacturers over whom we have no control, with the risk that we may not have adequate supplies of our product candidates or products.”
Removed heading “We may need to hire additional employees in order to commercialize our product candidates in the future. Any inability to manage future growth could harm our ability to commercialize our product candidates, increase our costs and adversely impact our ability to compete effectively.”
Removed heading “Even if we receive regulatory approval for our products in Europe, we may not be able to secure adequate pricing and reimbursement in Europe for us or any strategic partner to achieve profitability.”
Removed heading “Our internal computer systems, or those of our third-party contractors or consultants, may fail or suffer security breaches, that could result in a material disruption of our product development programs.”
Removed heading “We may use artificial intelligence in our business, and challenges with properly managing its use, as well as uncertainty regarding the legal landscape surrounding the use of artificial intelligence ("AI”) could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations.”
Removed heading “Legislative or regulatory healthcare reforms in the United States may make it more difficult and costly for us to obtain regulatory clearance or approval of any future product candidates and to produce, market and distribute our products after clearance or approval is obtained.”
Removed heading “Our stock price is volatile and may fluctuate in a way that is disproportionate to our operating performance and we expect it to remain volatile, which could limit investors’ ability to sell stock at a profit.”
Removed heading “As a public company in the United States, we are subject to the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”). Our internal control over financial reporting was not effective as of June 30, 2024, and failure to achieve and maintain effective internal control over financial reporting in accordance with Section 404 of Sarbanes-Oxley could have a material adverse effect on our business and share price.”
Removed heading “Our common stock has been suspended from trading on the NYSE American. If we fail to regain compliance with the NYSE American listing standards, our common stock may be delisted from the NYSE American.”
Largest changes
“Ongoing and future geopolitical conflicts and instability, including the continuing conflict between Russia and Ukraine and conflicts and tensions in the Middle East, could adversely affect global economic conditions, financial markets, energy and commodity prices, international trade and supply chains. These conflicts have resulted, and may continue to result, in sanctions, export controls and other governmental actions, disruptions to transportation and energy supplies, increased cybersecurity threats, inflationary pressures and volatility or disruption in the capital markets.”see in full comparison
“Military conflict, such as the ongoing conflicts between Russia and Ukraine and between Israel and Hamas, may disrupt or otherwise adversely impact our operations and those of third parties upon which we rely. Related sanctions, export controls or other actions that have already been initiated or may in the future be initiated by nations including the U.S., the European Union or Russia (e.g., potential cyberattacks, disruption of energy flows, etc.) can adversely affect our business, our contract research organizations, and other third parties with which we conduct business. …”see in full comparison
“If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock could be delisted, which could adversely affect the market price and liquidity of our common stock and our ability to raise capital.”see in full comparison
“In August 2025, we entered into a Research Collaboration, License and Patent Assignment Agreement with Boehringer Ingelheim to research, develop and commercialize first-in-class melanocortin receptor-targeted peptides developed by Palatin for the treatment of retinal diseases, including diabetic retinopathy. …”see in full comparison
“On August 14, 2025, we entered into a Research Collaboration, License and Patent Assignment Agreement (the “Agreement”) with Boehringer Ingelheim to research, develop and commercialize first-in-class melanocortin receptor-targeted peptides developed by Palatin for the treatment of retinal diseases, including diabetic retinopathy. …”see in full comparison
“If our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, exclusion from participation in government health care programs, such as Medicare and Medicaid, imprisonment, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.”see in full comparison
Full comparison: every changed paragraph (186)
Our
management has determined that there is substantial doubt about our ability to continue as a going concern, which maymake hinderit ourmore abilitydifficult
and more expensive for us to obtainraise future financing.capital.
We
expect to incur significant expenses as we continue our development of MC1RMC4R and MCRMC1R products. These expenses, among other things, have
had and will continue to have an adverse effect on our stockholders’ equity, total assets and working capital.
We sold our Vyleesi® rights to Cosette Pharmaceuticals, Inc. in December 2023 and entered into a Release and Settlement Agreement (the “Settlement Agreement”) with Cosette. Under the Settlement Agreement, we retained the right to receive 20% of a $3.0 million milestone payment, or $600,000, upon the first commercial sale of Vyleesi in Korea. The timing of any such commercial sale is uncertain, and we do not expect to receive this milestone payment in the foreseeable future, if at all.
On August 14, 2025, the Company entered into the Boehringer Ingelheim Agreement to research, develop, and commercialize proprietary melanocortin receptor-targeted compounds for the treatment of retinal diseases. Under the terms of the Agreement, BI agreed to pay the Company a non-refundable upfront payment of €2.0 million ($2.3 million USD), and success-based development, regulatory, and commercial milestone payments of up to €280,000,000 (approximately $328,000,000), and tiered royalties on net sales of licensed products, if commercialized. The Company assigned certain patent rights and granted BI a license to related intellectual property (the “Assigned Patents”). The Company will also perform research and development services in collaboration with BI for a period of up to 2.5 years, with all approved costs reimbursed by BI. The Company retains an exclusive, fully paid-up license to PL9643 for the treatment of dry eye disease. During the year ended June 30, 2026, we recognized revenue of €7,500,000 (approximately $8,830,000), consisting of the non-refundable upfront payment and the first research milestone payment. Reimbursements for research and development services are recognized as the services are performed.
On January 8, 2026, the Company entered into a sublicense agreement (the “Altanispac Agreement”) with Altanispac Labs, LLC (“Altanispac”), granting an exclusive license to PL9643, an MC1R agonist for the treatment of dry eye disease. Under the terms of the Altanispac Agreement, Altanispac agreed to pay the Company a non-refundable upfront payment in the form of non-cash debt cancellation, plus future payments based on the sublicensing or the sale of PL9643, and tiered royalties on net sales of licensed products, if commercialized. The Company assigned certain patent rights and granted Altanispac a license to related intellectual property.
We recognized $3,751,122 as license revenue in the Consolidated Statements of Operations for the year ended June 30, 2026. The $3,751,122 of license revenue was received in the form of non-cash debt cancellation.
We sold our Vyleesi product to Cosette in December 2023 and have the potential to receive milestone payments based on sales of Vyleesi by Cosette. However, we do not anticipate receiving significant milestone payments for at least the next year from the issuance of this Annual Report and may never receive significant milestone payments.
On August 14, 2025, we entered into a Research Collaboration, License and Patent Assignment Agreement (the “Agreement”) with Boehringer Ingelheim to research, develop and commercialize first-in-class melanocortin receptor-targeted peptides developed by Palatin for the treatment of retinal diseases, including diabetic retinopathy. Under the terms of the Agreement, Palatin assigned certain patent rights to Boehringer Ingelheim, and Palatin will conduct collaborative research with Boehringer Ingelheim at Boehringer Ingelheim’s expense focused on development during a two-year period, which Boehringer Ingelheim has the right to extend by up to 6 months. Under the terms of the Agreement, Palatin received an upfront payment of €2.0 million ($2.3 million USD), and will receive up to €18.0 million ($21.2 million USD) in near-term research milestone payments, and up to €260 million ($307.0 million USD) in success-based development, regulatory, and commercial milestone payments, plus tiered royalties on net commercial sales of Products. The royalty payments are subject to reduction due to patent expiration, generic competition and payments made under certain licenses for third-party intellectual property. The Agreement will continue, on a product-by-product and country-by-country basis, until the expiration of the applicable royalty term, unless earlier terminated. Boehringer Ingelheim has the right to terminate the Agreement for any reason after a specified notice period. Each party has the right to terminate the Agreement on account of the other party’s bankruptcy or material, uncured breach.
For
the foreseeable future, we will have to fund our operations and capital expenditures from license, royalty and contract revenue under license agreements,
existing cash balances and outside sources of financing, which may not be available on acceptable terms, if at all. We will not have
product revenue from our products in development unless and until we receive approval from the FDA or other equivalent regulatory authorities
outside the United States. We have devoted substantially all of our efforts to research and development, including preclinical and clinical
trials. Because of the numerous risks associated with developing drugs, we are unable to predict the extent of future losses, whether
or when any of our product candidates will become commercially available, or when we will become profitable, if at all.
We
will need additional funding, including funding to complete clinical trials for our product candidates other than Vyleesi,candidates, which may not be available on
acceptable terms, if at all.
WeOur
principal intendstrategic todevelopment focus futureis effortsthe advancement of MC4R agonists for the treatment of obesity, with an emphasis on ourrare bremelanotideneuroendocrine
and combinationother productsMC4R MC1Rpathway productdiseases. candidates,We primarilyare fordeveloping ocularselective MC4R long-acting peptide agonists and oral small-molecule agonists with
potential utility in hypothalamic obesity, Prader-Willi syndrome, Bardet-Biedl syndrome and other rare obesity and orphan indications.
As of June 30, 2025,2026, we had cash and cash equivalents of $2.6$7.5 million, with current liabilities of $8.0$1.8 million. Based on our available
cash and cash equivalents, we have concluded that substantial doubt exists about our ability to continue as a going concern for one year
from the date our consolidated financial statements are issued and we are seeking additional funding to complete development activities
and required clinical trials for our MC1RMC4R product candidates and, if those clinical trials are successful (which we cannot predict),
to complete submission of required regulatory applications to the FDA.
We have limited experience successfully commercializing pharmaceutical products, and our experience with Vyleesi may not be indicative of our ability to successfully develop or commercialize our current or future product candidates.
Our operations have primarily focused on discovering and developing proprietary product candidates, conducting preclinical and clinical studies, obtaining regulatory approvals, and formulating and manufacturing product candidates through third-party contract manufacturers. Although we successfully developed Vyleesi® through Phase 3 clinical trials, obtained FDA approval in collaboration with our then-licensee and achieved commercial sales of Vyleesi, our experience successfully commercializing pharmaceutical products is limited. We sold our rights to Vyleesi to Cosette Pharmaceuticals, Inc. in December 2023, and Vyleesi is currently marketed and sold by Cosette.
We have a limited operating history upon which to base an investment decision.
Our operations are primarily focused on acquiring, developing and securing our proprietary technology, conducting preclinical and clinical studies and formulating and manufacturing, through contract manufacturers, our principal product candidates on a small-scale basis. These operations provide a limited basis for stockholders to assess our ability to commercialize our product candidates.
While we completed Phase 3 clinical trials on Vyleesi for HSDD in premenopausal women, together with AMAG filed an NDA on Vyleesi for HSDD with the FDA, and received approval on Vyleesi from the FDA, we We
have not yet demonstrated our ability to performsuccessfully thedevelop, functionsobtain necessaryregulatory approval for theand successful commercialization ofcommercialize any of our current product
candidates. TheSuccessful successfuldevelopment and commercialization of our current or future product candidatescandidates, either independently or through
collaborators, will require us or our collaborators to perform a variety of functions, including:
Our limited experience performing certain of these activities at commercial scale could adversely affect our ability to successfully develop or commercialize our current or future product candidates.
Our business strategy is increasingly focused on the development of our MC4R agonist programs for rare obesity disorders, and these programs are at an early stage of development and may not be successful.
We are focusing a significant portion of our development activities and financial resources on our next-generation MC4R selective agonist programs for the treatment of obesity, with a primary focus on rare neuroendocrine diseases and MC4R pathway disorders, including hypothalamic obesity, Prader-Willi syndrome and potentially Bardet-Biedl syndrome. Our lead programs include a long-acting peptide MC4R agonist intended for once-weekly subcutaneous administration and a next-generation oral small molecule MC4R agonist. These product candidates are currently in preclinical development and have not been demonstrated to be safe, well tolerated or effective in humans. Preclinical results may not be predictive of results in clinical trials, and we may experience delays or difficulties in candidate selection, IND-enabling studies, regulatory submissions or clinical development.
The commercial opportunity for our MC4R programs will also depend on our ability to develop product candidates that are meaningfully differentiated from approved and investigational therapies. Competing MC4R agonists are approved or in clinical development for certain rare obesity disorders, and additional therapies utilizing MC4R and other mechanisms may be approved before our product candidates reach the market. We are seeking to develop MC4R agonists that provide clinically meaningful efficacy with improved tolerability, reduced off-target effects, including hyperpigmentation, and convenient dosing; however, there can be no assurance that our product candidates will demonstrate these characteristics in clinical trials or provide advantages over existing or future competing therapies.
If our MC4R programs experience significant development or regulatory delays, fail to demonstrate acceptable safety, tolerability or efficacy, fail to achieve meaningful differentiation from competing therapies, or otherwise fail to advance successfully, our business, financial condition, results of operations and prospects could be materially and adversely affected.
We depend on our collaborations and licensing arrangements with third parties, including Boehringer Ingelheim and Altanispac Labs, to successfully develop and commercialize certain of our product candidates, and we may not receive anticipated milestone payments, royalties or other economic benefits from these arrangements.
Our business strategy includes entering into collaborations, licensing arrangements and other strategic transactions under which third parties assume responsibility for, or significantly influence, the further development and commercialization of certain of our product candidates. In August 2025, we entered into the Boehringer Ingelheim Agreement for the research, development and commercialization of certain melanocortin receptor-targeted compounds for the treatment of retinal diseases, including diabetic retinopathy and diabetic macular edema. In January 2026, we entered into a sublicense agreement with Altanispac Labs pursuant to which Altanispac acquired exclusive rights to develop and commercialize PL9643 for dry eye disease.
Under these arrangements, our collaborators control, or are expected to control, significant aspects of the future development, regulatory approval and commercialization of the applicable product candidates. Our collaborators may determine the amount and timing of resources devoted to these programs, experience development or regulatory delays, fail to obtain regulatory approval, encounter manufacturing or commercialization difficulties, change their strategic priorities, pursue competing programs, discontinue development or commercialization activities, or terminate their agreements with us in accordance with their terms. These activities and decisions may be outside our control.
Our agreements provide for potential future payments, including research, development, regulatory and commercial milestone payments and royalties or other payments based on future commercialization. The achievement and timing of these payments are uncertain and depend on numerous factors, including successful research and development activities, clinical trial results, regulatory approvals and commercial performance. Certain milestone payments may not be achieved for many years, if ever, and there can be no assurance that any licensed product candidate will ultimately receive regulatory approval or be successfully commercialized.
If Boehringer Ingelheim, Altanispac or any of our other current or future collaborators fails to successfully develop or commercialize the applicable product candidates, changes its development or commercialization priorities, or terminates or materially reduces its activities under an agreement with us, we may not receive anticipated milestone payments, royalties or other economic benefits. In such circumstances, we may also be required to identify another collaborator or determine whether to reassume development activities, which could require significant time and financial resources and may not be possible on acceptable terms or at all. Any such event could materially and adversely affect our business, financial condition, results of operations and prospects.
We may not receive the contingent payment retained in connection with our settlement with Cosette relating to Vyleesi.
In June 2025, we entered into a Release and Settlement Agreement with Cosette Pharmaceuticals, Inc. relating to Vyleesi®, pursuant to which, among other things, we retained the right to receive 20% of a $3.0 million milestone payment, or $600,000, upon the first commercial sale of Vyleesi in Korea. The timing and likelihood of achieving this milestone are uncertain and depend on activities and events outside of our control. There can be no assurance that the applicable milestone will be achieved or that we will receive any payment related to this milestone.
The commercial success of Vyleesi for HSDD is a component of our corporate strategy, but we may not receive significant milestone payments under our purchase agreement with Cosette.
In December 2023 we sold Vyleesi to Cosette under a purchase agreement providing for contingent, sales-based milestone payments of up to $159 million. We do not know whether or to what extent Cosette will meet milestone payment benchmarks. Our near-term prospects, including our ability to finance our company and generate revenue, will be impacted by the successful commercialization of Vyleesi for HSDD by Cosette, as well as preclinical and clinical results with our future product candidates. The clinical and commercial success of Vyleesi by Cosette and our product candidates will depend on a number of factors, including the following:
If we fail to satisfy any one of these prerequisites to our commercial success, many of which are beyond our control, in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize our product candidates. Accordingly, we cannot assure investors that we will be able to generate sufficient revenue through the sale of any future product candidate to continue our business. In addition to preventing us from executing our current business plan, any delays in our clinical trials or inability to successfully commercialize our products, could impair our reputation in the industry and the investment community and could hinder our ability to fulfill our existing contractual commitments. As a result, our share price would likely decline significantly, and we would have difficulty raising necessary capital for future projects.
The commercial success of peptides assigned to Boehringer Ingelheim is a component of our corporate strategy, but we may not receive significant milestone payments under our agreement with Boehringer Ingelheim.
In August 2025, we entered into a Research Collaboration, License and Patent Assignment Agreement with Boehringer Ingelheim to research, develop and commercialize first-in-class melanocortin receptor-targeted peptides developed by Palatin for the treatment of retinal diseases, including diabetic retinopathy. Under the terms of the Agreement, Palatin assigned certain patent rights to Boehringer Ingelheim (the “Assigned Patents”), and Palatin will conduct collaborative research with Boehringer Ingelheim at Boehringer Ingelheim’s expense, focused on development during a two-year period, which Boehringer Ingelheim has the right to extend by up to 6 months. Under the terms of the agreement, Palatin received an upfront payment of €2.0 million ($2.3 million USD) and will receive, up to €18.0 million ($21.2 million USD) in near-term research milestone payments, and up to €260 million ($307.0 million USD) in success-based development, regulatory, and commercial milestone payments, plus tiered royalties on net commercial sales of Products. The royalty payments are subject to reduction due to patent expiration, generic competition and payments made under certain licenses for third-party intellectual property. The Agreement will continue, on a product-by-product and country-by-country basis, until the expiration of the applicable royalty term, unless earlier terminated. Boehringer Ingelheim has the right to terminate the Agreement for any reason after a specified notice period. Each party has the right to terminate the Agreement on account of the other party’s bankruptcy or material, uncured breach.
The clinical and commercial success of drug products by Boehringer Ingelheim will depend on a number of factors, including the following:
If Boehringer Ingelheim fails to satisfy any one of these prerequisites for commercial success, we could experience significant delays or may not receive any royalties and milestone payments.
OngoingGeopolitical
conflicts militaryand conflictinstability could causedisrupt geopoliticalour instability,operations, increase economic uncertainty,uncertainty and volatility in financial markets volatilitymarkets, and capital markets disruption, which may adversely
affect our revenue,business, financial condition,condition orand results of operations.
Ongoing and future geopolitical conflicts and instability, including the continuing conflict between Russia and Ukraine and conflicts and tensions in the Middle East, could adversely affect global economic conditions, financial markets, energy and commodity prices, international trade and supply chains. These conflicts have resulted, and may continue to result, in sanctions, export controls and other governmental actions, disruptions to transportation and energy supplies, increased cybersecurity threats, inflationary pressures and volatility or disruption in the capital markets.
Although we do not currently have material operations in regions directly affected by these conflicts, geopolitical instability could adversely affect third parties upon which we rely, including contract research organizations, clinical trial sites, manufacturers, suppliers, collaborators and other service providers. Such events could increase the cost or delay the manufacture or transportation of clinical trial materials, disrupt clinical development activities, adversely affect our collaborators’ development programs, or otherwise impair our ability to achieve our operating objectives.
Geopolitical instability and related economic uncertainty may also adversely affect our ability to access the capital markets when needed or increase the cost of obtaining financing. If we are unable to obtain necessary financing on acceptable terms, or if geopolitical events materially disrupt our operations or those of third parties upon which we rely, we may be required to delay, reduce or discontinue development activities, including our clinical development programs, which could materially and adversely affect our business, financial condition, results of operations and prospects.
Military conflict, such as the ongoing conflicts between Russia and Ukraine and between Israel and Hamas, may disrupt or otherwise adversely impact our operations and those of third parties upon which we rely. Related sanctions, export controls or other actions that have already been initiated or may in the future be initiated by nations including the U.S., the European Union or Russia (e.g., potential cyberattacks, disruption of energy flows, etc.) can adversely affect our business, our contract research organizations, and other third parties with which we conduct business. Resulting volatility, disruption, or deterioration in the credit and financial markets may further make any necessary debt or equity financing more difficult and more costly. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our business strategy, financial performance, and stock price and could require us to delay or abandon clinical development plans. In addition, there is a risk that one or more of our current service providers, manufacturers, or other partners may be adversely impacted by deteriorating economic conditions, which could directly affect our ability to attain our operating goals and to accurately forecast and plan our future business activities.
Our
MC1R product candidatescandidates, including our combination products for treatment of obesity and ED and our new products for treatment of obesity, as well as PL9643 for dry eye disease and PL8177 for the treatment of ulcerative colitis, are still in the early stages of development and remain
subject to clinical testing and regulatory approval. If we are unable to successfully develop and test our product candidates, we will
not be successful.
Our
MC1R product candidates, including the combination products bremelanotide and a PDE5i agent and bremelanotide and tirzepatide or another GLP-1 agonist, an extended half-life peptide for treatment of obesity, an orally available small molecule for treatment of obesity, PL9643 for dry eye disease, and PL8177 for the treatment of ulcerative colitis, are at various stages of research and development,
will require regulatory approval, and may never be successfully developed or commercialized. Our product candidates will require significant
further research, development and testing before we can seek regulatory approval to market and sell them. We must demonstrate that our
product candidates are safe and effective for use in patients in order to receive regulatory approval for commercial sale. Preclinical
studies in animals, using various doses and formulations, must be performed before we can begin human clinical trials. Even if we obtain
favorable results in the preclinical studies, the results in humans may be different. Numerous small-scale human clinical trials may be necessary
to obtain initial data on a product candidate’s safety and efficacy in humans before advancing to large scale human clinical trials.
We face the risk that the results of our trials in later phases of clinical trials may be inconsistent with those obtained in earlier
phases. Adverse or inconclusive results could delay the progress of our development programs and may prevent us from filing for regulatory
approval of our product candidates. Additional factors that could inhibit the successful development of our product candidates include:
You
should evaluate us in light of these uncertainties, difficulties and expenses commonly experienced by early stageearly-stage biopharmaceutical companies,
as well as unanticipated problems and additional costs relating to:
If
we identify side effects or if other problems occur in future clinical trials, we may be required to terminate or delay clinical development
of the product candidate. Furthermore, even if any of our product candidates receive marketing approval, as greater numbers of patients
use a drug following its approval, if the incidence of side effects increases or if other problems are observed after approval that were
not seen or anticipated during pre-approval clinical trials, or if the incidence of side effects increase or other problems are observed with Vyleesi,problems, a number
of potentially significant negative consequences could result, including:
Competing
products and technologies may make our proposedproduct productscandidates noncompetitive.less competitive or obsolete and may adversely affect the commercial potential
of our development programs.
The biopharmaceutical industry is highly competitive and characterized by rapidly advancing technologies, evolving standards of care and the introduction of new products and therapeutic approaches. We expect to face significant competition with respect to our product candidates, particularly our MC4R agonist programs for rare obesity disorders, including hypothalamic obesity, Prader-Willi syndrome and Bardet-Biedl syndrome. There are approved therapies for certain of these indications, including an approved MC4R agonist, and additional MC4R agonists and therapies utilizing other mechanisms of action are in clinical development. Certain competing products and product candidates are more advanced in development than our product candidates and may achieve greater market acceptance or obtain regulatory approval before our product candidates.
The commercial potential of our MC4R programs will depend in significant part on our ability to develop product candidates that demonstrate clinically meaningful efficacy, acceptable safety and tolerability, convenient dosing and sufficient differentiation from approved and investigational therapies. We are developing a long-acting peptide MC4R agonist intended for once-weekly administration and a next-generation oral small molecule MC4R agonist, with the objective of achieving meaningful efficacy while improving tolerability and reducing off-target effects, including hyperpigmentation. However, there can be no assurance that our product candidates will demonstrate these characteristics in clinical trials or offer advantages over approved or future competing products.
We also face competition with respect to product candidates and programs that we have licensed or are seeking to out-license or partner. Our collaborators, including Boehringer Ingelheim and Altanispac Labs, operate in highly competitive therapeutic areas, and competing products or technologies could adversely affect their decisions to continue development, the commercial potential of licensed products and our ability to receive milestone payments, royalties or other economic benefits. Competition may also adversely affect our ability to enter into collaborations, licenses or other strategic transactions for our other development programs on favorable terms or at all.
Many of our existing and potential competitors have substantially greater financial, technical, research and development, clinical, regulatory, manufacturing, marketing and commercial resources and experience than we do. Academic institutions, governmental agencies and other public and private research organizations may also develop competing products or technologies independently or through collaborations with pharmaceutical or biotechnology companies. Competitors may develop products that are safer, more effective, better tolerated, more convenient or less expensive than our product candidates, or may obtain regulatory approval and establish market acceptance before we do. If competing products or technologies are successfully developed or commercialized, or if our product candidates fail to demonstrate sufficient differentiation from competing therapies, our product candidates could become less competitive or obsolete, and our business, financial condition, results of operations and prospects could be materially and adversely affected.
There are a number of products approved for use in treating inflammatory diseases and indications, and other products are being developed, including products in clinical trials. The dry eye disease and ocular inflammatory disease markets are highly competitive, with a number of marketed products and products reported to be in late-stage clinical trials. Similarly, the inflammatory bowel disease and ulcerative colitis markets are highly competitive, with a number of marketed products and products reported to be in late-stage clinical trials.
In general, the biopharmaceutical industry is highly competitive. We are likely to encounter significant competition with respect to MC1R product candidates and MCR product candidates. Most of our competitors have substantially greater financial and technological resources than we do. Many of them also have significantly greater experience in research and development, marketing, distribution, and sales than we do. Accordingly, our competitors may succeed in developing, marketing, distributing, and selling products and underlying technologies more rapidly than we can. These competitive products or technologies may be more effective and useful or less costly than Vyleesi or our MC1R product candidates and MCR product candidates. In addition, academic institutions, hospitals, governmental agencies, and other public and private research organizations are also conducting research and may develop competing products or technologies on their own or through strategic alliances or collaborative arrangements.
We depend on third-party manufacturers and suppliers for our product candidates, and any inability to obtain adequate supplies of materials or product candidates of acceptable quality on a timely basis could delay or adversely affect our development programs.
We do not own or operate manufacturing facilities and rely, and expect to continue to rely, on third-party contract manufacturers and suppliers to manufacture active pharmaceutical ingredients, drug substance, drug product and other materials required for our preclinical studies and clinical trials. This includes our next-generation MC4R selective long-acting peptide agonist and oral small molecule agonist programs. We have limited control over the operations of these third parties and are dependent on their ability to manufacture and supply materials in accordance with our specifications, applicable regulatory requirements and our development timelines.
Manufacturing pharmaceutical product candidates is complex and may involve difficulties with process development, formulation, scale-up, technology transfer, analytical testing, stability, quality control and the availability of raw materials and other components. Our third-party manufacturers or suppliers could experience manufacturing failures, quality issues, contamination, equipment failures, shortages of raw materials, capacity constraints, supply chain disruptions or other events that could delay or interrupt the manufacture or delivery of materials required for our development programs. Certain materials, manufacturing processes or services may be available from a limited number of qualified suppliers, and identifying, qualifying and transferring manufacturing activities to an alternative supplier could be costly and time-consuming.
Our third-party manufacturers are required to comply with applicable regulatory requirements, including current good manufacturing practices (“cGMP”), and their facilities may be subject to inspection by the FDA and other regulatory authorities. We have limited ability to control the compliance or performance of our third-party manufacturers beyond our contractual rights and quality oversight. If a manufacturer fails to comply with applicable regulatory requirements or is unable to manufacture our product candidates in accordance with required specifications, regulatory authorities could take enforcement action or require corrective measures, and we could experience delays in preclinical studies, clinical trials, regulatory submissions or potential regulatory approvals.
If we are unable to obtain sufficient quantities of our product candidates or other required materials of acceptable quality and on a timely basis, or if we are required to qualify alternative manufacturers or suppliers, our development programs could be delayed, suspended or discontinued and our business, financial condition, results of operations and prospects could be materially and adversely affected.
Changes in international trade policies, tariffs, import restrictions or other governmental actions affecting pharmaceutical products, active pharmaceutical ingredients, raw materials or other components could also increase our manufacturing costs, limit the availability of materials or disrupt our supply chain.
Production and supply of our product candidates depend on contract manufacturers over whom we have no control, with the risk that we may not have adequate supplies of our product candidates or products.
We do not have the facilities to manufacture our early-stage potential products such as bremelanotide in combination with a PDE5i, bremelanotide in combination with tirzepatide, PL8177, PL9643, PL9654 and other melanocortin receptor agonist compounds for use in preclinical studies and clinical trials. Contract manufacturers must perform these manufacturing activities in a manner that complies with FDA regulations. Our ability to control third-party compliance with FDA requirements is limited to contractual remedies and rights of inspection. The manufacturers of our potential products and their manufacturing facilities will be subject to continual review and periodic inspections by the FDA and other authorities where applicable, and must comply with ongoing regulatory requirements, including FDA regulations concerning GMP. Failure of third-party manufacturers to comply with GMP, medical device QSR, or other FDA requirements may result in enforcement action by the FDA. Failure to conduct their activities in compliance with FDA regulations could delay our development programs or negatively impact our ability to receive FDA approval of our potential products. Establishing relationships with new suppliers, who must be FDA-approved, is a time-consuming and costly process.
IfWe
currently have limited sales, marketing and distribution capabilities, and if we are unable to establish salesappropriate and marketing commercialization
capabilities within our organization or enter into and maintain agreementsarrangements with third parties to market and sellcommercialize our product candidates, we may be unable to generatesuccessfully
commercialize productany revenue.products that receive regulatory approval.
Management's Discussion & Analysis (MD&A)
Removed heading “Forward-Looking Statements”
Removed heading “Revenue Recognition (Prior to the sale of Vyleesi)”
Removed heading “Purchase Commitment Liabilities”
Removed heading “Accrued Expenses”
Removed heading “Stock-Based Compensation”
Largest changes
“Based on our June 30, 2025, cash and cash equivalents and approximately $2,000,000 we received in September 2025 as a result of the Research Collaboration agreement with Boehringer Ingleheim, we have concluded that substantial doubt exists about our ability to continue as a going concern for one year from the date our consolidated financial statements are issued. We are evaluating strategies to obtain additional funding for future operations which include but are not limited to obtaining equity financing, issuing debt, or reducing planned expenses. …”see in full comparison
“Our common stock is listed on The Nasdaq Capital Market, and we must continue to satisfy applicable listing requirements. Failure to maintain compliance with these requirements could result in the delisting of our common stock, adversely affecting its liquidity, market price and our ability to raise additional capital.”see in full comparison
“We will require additional financing to continue advancing our development programs and fund our operations. Although we intend to pursue additional capital through equity financings, collaboration arrangements and other potential sources, there can be no assurance that financing will be available when needed or on acceptable terms. Accordingly, substantial doubt exists about our ability to continue as a going concern.”see in full comparison
“We will need additional funding to complete required clinical trials for our product candidates and development programs and, if those clinical trials are successful (which we cannot predict), to complete submission of required regulatory applications to the FDA. However, uncertain economic conditions may negatively impact our operations, including possible effects on our financial condition, ability to access the capital markets on attractive terms or at all, liquidity, operations, suppliers, industry, and workforce. …”see in full comparison
Full comparison: every changed paragraph (57)
Forward-Looking Statements
Forward-Looking Statements. The following discussion and analysis contains forward-looking statements within the meaning of the federal securities laws. You are urged to carefully review our description and examples of forward-looking statements included earlier in this Annual Report on Form 10-K (this “Annual Report”) immediately prior to Part I, under the heading “Special Note Regarding Forward-Looking Statements.” Forward-looking statements are subject to risk that could cause actual results to differ materially from those expressed in the forward-looking statements. You are urged to carefully review the disclosures we make concerning risks and other factors that may affect our business and operating results, including those made in Part I, Item 1A of this Annual Report, and any of those made in our other reports filed with the SEC. You are cautioned not to place undue reliance on the forward-looking statements included herein, which speak only as of the date of this document. We do not intend, and undertake no obligation, to publish revised forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events.
Introduction
Introduction. Palatin Technologies, Inc. is a biopharmaceutical company developing first-in-class medicines based on molecules that modulate the activity of the melanocortin receptor system. The Company’s product candidates are targeted, receptor-specific therapeutics for the treatment of diseases with significant unmet medical need and commercial potential.
The melanocortin receptor system is involved in the regulation of food intake, metabolism, sexual function, inflammation and immune responses. There are five melanocortin receptors, MC1R through MC5R. Modulation of these receptors through receptor-specific agonists, which activate receptor function, or receptor-specific antagonists, which inhibit receptor function, can produce significant pharmacological effects.
Our
principal productstrategic development activities focus primarilyis onthe useadvancement of MC4R agonists for the treatment of obesity.obesity, Thewith Companyan isemphasis on rare neuroendocrine
and other MC4R pathway diseases. We are developing selective MC4R peptideslong-acting peptide agonists and smalloral moleculesmall-molecule agonists with
potential utility in obesityhypothalamic obesity, Prader-Willi syndrome, Bardet-Biedl syndrome and metabolic-related disorders,other rare MC4R pathway diseases, such as hypothalamic obesity,obesity and orphan indications.
We
are also developing, dependentsubject onto resourcesthe foravailability developmentof activities,resources, MC1Rmelanocortin agonistreceptor products,agonists with potential toutility treatin ocular diseases
and inflammatory and autoimmune diseases, suchincluding asuveitis and inflammatory bowel disease. A product candidate targeting MC1R for the
treatment of dry eye disease, which is also known as keratoconjunctivitis sicca, uveitis,has diabeticbeen retinopathy,licensed to a third party, and inflammatorya bowelfamily disease.of Themelanocortin
receptor Companycompounds believesfor the treatment of retinal diseases has been licensed to Boehringer Ingelheim. We believe that thecertain MC1Rmelanocortin
receptor agonist peptides in development may have broad anti-inflammatory effects and appear to utilizethrough mechanisms engagedinvolved byin the endogenous melanocortin system in
system’s regulation of the immune systemresponses and resolution of inflammatory responses. The Company is also developing, dependent on resources for development activities, peptides and small molecules that are active at more than one melanocortin receptor, with potential utility in obesity and metabolic-related disorders, rare MC4R pathway diseases, such as hypothalamic obesity, and orphan indications.inflammation.
Our
prior commercial product, Vyleesi® (bremelanotide injection), was approved by the U.S. Food and Drug Administration (“FDA”)
in June 2019 for the treatment of hypoactive sexual desire disorder (“HSDD”) in premenopausal women. This productVyleesi was acquiredinitially
licensed byto AMAG Pharmaceuticals, Inc. in January 2017. That license was terminated in July 2020, and the Vyleesi assets were subsequently
sold to Cosette Pharmaceuticals, Inc. (“Cosette”) onin December 19, 2023, and is still marketed by Cosette, with a release and settlement agreement on June 5, 20252023.
Our
significant accounting policies are described in Note 2 to the consolidated financial statements included in this Annual Report. We believe
that our accounting policies and estimates relating to revenue recognition, the carrying value of inventory, purchase commitment liabilities,of, accrued expenses,expenses and stock-based compensation
are the most critical.
Revenue Recognition. For licenses of intellectual property, we assess at contract inception whether the intellectual property is distinct from other performance obligations identified in the arrangement. If the licensing of intellectual property is determined to be distinct, revenue is recognized for non-refundable, upfront license fees when the license is transferred to the customer, and the customer can use and benefit from the license. If the licensing of intellectual property is determined not to be distinct, then the license is bundled with other promises in the arrangement into one performance obligation. We determine if the bundled performance obligation is satisfied over time or at a point in time. If we conclude that the non-refundable, upfront license fees will be recognized over time, we assess the appropriate method of measuring proportional performance.
Research, development and regulatory milestone payments are considered variable consideration subject to constraint and excluded from the transaction price until it is probable that a significant reversal would not occur. At each reporting period, we will assess whether there still is significant uncertainty associated with the variable consideration and revenue relating to the milestones recorded in the period where the significant uncertainty is resolved.
Sales-based royalty and milestone payments resulting from customer contracts solely or predominately for the license of intellectual property will only be recognized upon occurrence of the underlying sale or achievement of the sales milestone in the future and such sales-based royalties and milestone payments will be recognized in the same period earned.
We recognize revenue for research and development services under customer agreements as the services are performed. We record these services as revenue and not as a reduction of research and development expenses as we are the principal in the research and development activities based upon its control of such activities, which are part of our ordinary activities.
Revenue Recognition (Prior to the sale of Vyleesi)
We recognize product revenues in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers. The provisions of ASC Topic 606 require the following steps to determine revenue recognition: (1) Identify the contract(s) with a customer; (2) Identify the performance obligations in the contract; (3) Determine the transaction price; (4) Allocate the transaction price to the performance obligations in the contract; and (5) Recognize revenue when (or as) the entity satisfies a performance obligation.
In accordance with ASC Topic 606, we recognize product revenue when our performance obligation is satisfied by transferring control of the product to a customer. Per our contracts with customers, control of the product is transferred upon the conveyance of title, which occurs when the product is sold to and received by a customer. Trade accounts receivable due to us from contracts with our customers are stated separately in the consolidated balance sheet, net of various allowances as described in the Trade Accounts Receivable policy in Note 2 - Summary of Significant Accounting Policies in the accompanying consolidated financial statements.
Product revenues consisted of sales of Vyleesi in the United States prior to the sale of the Vyleesi product line to Cosette Pharmaceuticals, Inc. (“Cosette”) in December 2023. Prior to the sale of Vyleesi product line, we sold Vyleesi to a specialty pharmacy at the wholesale acquisition cost with payment made within approximately 30 days. In addition to distribution agreements with customers, we had entered into arrangements with healthcare payers that provide for privately negotiated rebates, chargebacks, and discounts with respect to the purchase of our products.
We recorded product revenues net of allowances for direct and indirect fees, discounts, co-pay assistance programs, estimated chargebacks, and rebates. Certain of these allowances represent estimates of the related obligations and, as such, knowledge and judgment are required when estimating the impact of these allowances on gross product sales for a reporting period. If any of our judgments made during a reporting period are not indicative or accurate estimates of our future experience, our results could be materially affected. Product sales are also subject to return rights, which have not been significant to date.
Purchase Commitment Liabilities
Losses on firm commitment contractual obligations are recognized based upon the terms of the respective agreement and similar factors considered for the write-down of inventory, including expected sales requirements as determined by internal sales forecasts.
Accrued Expenses
Accrued Expenses. Third parties perform a significant portion of our development activities. We review the activities performed under all contracts each quarter and accrue expenses and the amount of any reimbursement to be received from our collaborators based upon the estimated amount of work completed considering milestones achieved. Estimating the value or stage of completion of certain services requires judgment based on available information. If we do not identify services performed for us but not billed by the service-provider, or if we underestimate or overestimate the value of services performed as of a given date, reported expenses will be understated or overstated.
Stock-Based Compensation
Stock-Based
Compensation. We expense the fair value of stock options and other equity awards granted to employees and nonemployees for services.
Compensation costs for stock-based awards with time-based vesting are determined using the quoted market price of our common stock on
the grant date or for stock options, the value determined utilizing the Black-Scholes option pricing model, and are recognized on a straight-line
basis, while awards containing a market condition are valued using multifactor Monte Carlo simulations and are recognized over the derived
service period. Compensation costs for awards containing a performance condition are determined using the quoted price of our common
stock on the grant date or for stock options, the value is determined utilizing the Black ScholesBlack-Scholes option pricing model and are recognized
based on the probability of achievement of the performance condition over the service period. The Black-Scholes option pricing model
requires us to make estimates of expected volatility and interest rates, which we estimate based on prior experience and public sources
of information. The expected term of the option used is based upon the simplified method, which represents the average of the vesting
and contractual term. Compensation expense is not adjusted for subsequent changes in the estimates used to calculate fair value or for
actual experience. Forfeitures are recognized as they occur. As the amount and timing of compensation expense to be recorded in future
periods may be affected by the achievement of performance conditions and employee terminations, stock-based compensation may vary significantly
period to period.
Revenue. For the year ended June 30, 2026 (“fiscal 2026”), we recognized $13,185,031 in collaboration and license revenue which consisted of $9,433,909 related to the Boehringer Ingelheim Agreement and $3,751,122 related to the Altanispac Agreement. We did not recognize revenue for the fiscal year ended June 30, 2025 (“fiscal 2025”).
Revenue – We did not recognize product revenue for the fiscal year ended June 30, 2025 (“fiscal 2025”). For the fiscal year ended June 30, 2024 (“fiscal 2024”) we recognized $4,490,090 of product revenue, net of allowances. The decrease in net revenue is a result of the sale of Vyleesi’s worldwide rights to Cosette during fiscal 2024.
Cost of Products Sold – We did not recognize cost of products sold for fiscal 2025. Cost of products sold was $97,637 for fiscal 2024. The decrease in cost of products sold is a result of the sale of Vyleesi’s worldwide rights to Cosette during fiscal 2024.
Research
and Development –Development. Total research and development expenses, including general research and development spending, were $12,368,873 for
fiscal 2026, compared to $14,898,494 for fiscal 2025 compared to $22,400,372 for fiscal 2024.2025. The decrease is a result of lower spending on our MCRMC4R programs.
Research
and development expenses related to our MCRMC4R programs and other preclinical programs were $8,548,616$6,066,487 for fiscal 2025,2026, compared to $15,512,149 $8,548,616
for fiscal 2024.2025. The decrease is primarily related to a decrease in spending on our MCRMC4R programs.
The
amounts of program spending above exclude general research and development spending, which wereamounted to $6,302,386 for fiscal 2026 compared
to $6,349,878 for fiscal 2025, compared to $6,888,233 for fiscal 2024.2025. The decrease in general research and development spending is primarily attributable to decreased compensation
costs.
Cumulative
spending from inception to June 30, 20242026 was approximately $311,900,000$572,400,000 on our Vyleesi program and approximately $250,700,000 on all our otherMC4r programs (which include PL8177,Obesity, PL9643,Vyleesi, Ulcerative
Colitis and Ocular), and other melanocortin receptor agonists and terminated programs). Due to various risk factors described herein
under “Risk Factors,” 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, related net cash inflows
will be generated.
Selling,General
and Administrative. General and Administrative – Selling, general and administrative expenses, which consist of costs related to Vyleesi in addition to compensation and
related costs, were $9,484,446 for fiscal 2026, compared to $7,809,345 for fiscal 2025, compared to $12,270,046 for fiscal 2024.2025. The decreaseincrease is primarily attributable to $1,912,243 of selling expenses related to Vyleesian
increase in fiscalconsulting 2024 and decreased compensation costs.fees.
Gain
on Purchase Commitment -Commitment. Gain on purchase commitments was $2,117,900 for fiscal 2025 as a result of thean Companyamendment amendingto the minimum purchase
commitment that was previously reserved under the Catalent and Ypsomed agreements.
Gain
on Sale of Vyleesi –Vyleesi. For fiscal 2025, we recorded a gain of $3,130,000 on the sale of Vyleesi as a result of the settlement of sales-based
milestone payments and certain purchase commitments. For fiscal 2024, we recorded a gain of $7,781,844 on the sale of Vyleesi. The gain represents the upfront purchase price of $9,500,000 less the cost of net assets transferred to the purchaser.
Other
Income (Expense)–. Total other income (expense), net was $290,393 for fiscal 2026, compared to $152,590 for fiscal 20252025. compared to ($7,239,992) forFor fiscal
2026, 2024.we recognized investment income of $297,119 offset by interest expense of $6,726. For fiscal 2025, we recognized investment income
of $167,665 offset by foreign currency transaction losses of $50 and interest expense of $15,025. For fiscal 2024, we recognized an increase in the fair value of warrant liabilities of $6,962,562, offering expense of $696,912 and interest expense of $17,114 offset by investment income of $376,843 and unrealized foreign currency gain of $59,753.
Effects
of Inflation -Inflation. We do not believe that inflation has had a material impact on our business, revenues or operating results during the
periods presented.
During
fiscal 2025,2026, net cash used in operating activities was $21,306,637$13,533,270 compared to net cash used in operating activities of $31,461,441$21,306,637 in
fiscal 2024.2025. The decrease in cash used in operations in fiscal 20252026 compared with fiscal 20242025 was a result of a lower net loss in fiscal 2024
2026 due to reducedan programincrease expensesin license and acollaboration gainrevenue onfrom the sale of VyleesiBI and aAltanispac gain on purchase commitments.agreements.
During fiscal 2026, net cash used in investing activities was $51,299 related to the purchases of property and equipment. During fiscal 2025, net cash provided by investing activities was $3,130,000 related to proceeds from the sale of Vyleesi.
During fiscal 2025, net cash provided by investing activities was $3,130,000 related to proceeds from the sale of Vyleesi. During fiscal 2024, net cash provided by investing activities was $12,450,364 which consisted of $9,500,000 related to proceeds from the sale of Vyleesi and $2,992,890 for the maturity of marketable securities offset by $42,526 used for the purchases of property and equipment.
During
fiscal 2026, net cash provided by financing activities was $18,512,318 which consisted of proceeds from the sale of common stock and
warrants, net of issuance costs, of $16,910,891 and the exercise of outstanding warrants of $1,620,941 offset by payment of withholding
taxes related to restricted stock units of $19,514. During fiscal 2025, net cash provided by financing activities was $11,213,506 which
consisted of proceeds from the sale of common stock and warrants, net of issuance costs, of $7,960,765 and the exercise of outstanding
warrants of $3,398,237 offset by payment of withholding taxes related to restricted stock units of $99,482, and payment of finance lease
obligations of $46,014. During fiscal 2024, net cash provided by financing activities was $20,548,891 which consisted of proceeds from the sale of common stock and warrants, net of issuance costs, of $14,666,042 and the exercise of outstanding warrants of $6,045,642 offset by payment of withholding taxes related to restricted stock units of $56,401, and payment of finance lease obligations of $106,392.
We
have incurred cumulative negative cash flows from operations since our inception, and have expended, and expect to continue to expend
in the future, substantial funds to complete our planned product development efforts. Continued operations are dependent upon existing
licenses, including royalties and milestones, to complete equity or debt financing activities and enter into additional licensing or
collaboration arrangements. As of June 30, 2025,2026, our cash,cash and cash equivalents and marketable securities were $2,564,265$7,492,014 with current liabilities of $8,010,030.$1,771,973.
Based on our cash and cash equivalents of approximately $7.5 million as of June 30, 2026, and our current operating and development plans, including our ability to reduce or delay certain expenditures within management’s control, we do not expect our existing cash and cash equivalents to be sufficient to fund our operations for at least twelve months following the issuance of these financial statements.
We will require additional financing to continue advancing our development programs and fund our operations. Although we intend to pursue additional capital through equity financings, collaboration arrangements and other potential sources, there can be no assurance that financing will be available when needed or on acceptable terms. Accordingly, substantial doubt exists about our ability to continue as a going concern.
Cash Requirements. Our material cash requirements as of June 30, 2026, primarily consist of research and development expenditures associated with our MC4R programs; compensation and employee benefits; general and administrative expenses; and contractual obligations, including operating lease payments.
Our planned research and development activities include IND-enabling studies, manufacturing of clinical supplies and initiation of a Phase 1 clinical study for our long-acting MC4R peptide program, as well as continued advancement of our oral small-molecule MC4R program. The timing and amount of these expenditures will depend on several factors, including the availability of financing, the results of ongoing preclinical studies, regulatory requirements, manufacturing activities, clinical development decisions and our ability to manage or defer certain expenditures. Accordingly, actual research and development expenditures may differ materially from our current plans.
We also incur costs associated with research and development services performed under our collaboration agreement with Boehringer Ingelheim, for which we are entitled to reimbursement in accordance with the agreement.
We expect to fund our cash requirements through existing cash and cash equivalents, reimbursements under our collaboration agreements and additional financing, including potential equity financings. The timing and availability of additional financing are uncertain, and there can be no assurance that sufficient capital will be available on acceptable terms, or at all. If additional financing is not available when needed, we may be required to delay, reduce or discontinue certain development activities or implement additional cost-reduction measures.
Known Trends and Uncertainties. We currently have no product revenue and do not expect to generate product revenue unless and until one or more of our product candidates receives regulatory approval and is successfully commercialized.
All revenue recognized during fiscal 2026 was derived from our collaboration and licensing arrangements, consisting of $9,433,909 under the Boehringer Ingelheim Agreement and $3,751,122 under the Altanispac Agreement. The revenue recognized under the Altanispac Agreement included non-cash consideration associated with the cancellation of certain obligations. We expect that any revenue recognized in the near term will continue to depend primarily on our collaboration and licensing arrangements.
Boehringer Ingelheim is responsible for advancing the licensed retinal disease program, and Altanispac is responsible for the development and commercialization of PL9643 for dry eye disease. We do not control their development or commercialization decisions or the timing or amount of potential milestone payments or royalties. Accordingly, the timing and amount of future revenue from these arrangements are uncertain and may fluctuate significantly between reporting periods.
Our future operating expenditures will be driven primarily by the advancement of our MC4R development programs. The timing and amount of these expenditures will depend on available capital, preclinical and clinical results, regulatory requirements, manufacturing activities and other development considerations. We may adjust the timing and scope of our development activities in response to these factors.
Our common stock is listed on The Nasdaq Capital Market, and we must continue to satisfy applicable listing requirements. Failure to maintain compliance with these requirements could result in the delisting of our common stock, adversely affecting its liquidity, market price and our ability to raise additional capital.
Based on our June 30, 2025, cash and cash equivalents and approximately $2,000,000 we received in September 2025 as a result of the Research Collaboration agreement with Boehringer Ingleheim, we have concluded that substantial doubt exists about our ability to continue as a going concern for one year from the date our consolidated financial statements are issued. We are evaluating strategies to obtain additional funding for future operations which include but are not limited to obtaining equity financing, issuing debt, or reducing planned expenses. A failure to raise additional funding or to effectively implement cost reductions could harm our business, results of operations, and future prospects. If we are not able to secure adequate additional funding in future periods, we would be forced to make additional reductions in certain expenditures. This may include liquidating assets and suspending or curtailing planned programs. We may also have to delay, reduce the scope of, suspend, or eliminate one or more research and development programs or its commercialization efforts or pursue a strategic transaction. If we are unable to raise capital when needed or enter into a strategic transaction, then we may be required to cease operations, which could cause our stockholders to lose all or part of their investment. Based on our current operating and development plans, we expect that our existing cash and cash equivalents as of the date of this filing will be sufficient to fund currently anticipated operating expenses through the second half of calendar year 2025.
We will need additional funding to complete required clinical trials for our product candidates and development programs and, if those clinical trials are successful (which we cannot predict), to complete submission of required regulatory applications to the FDA. However, uncertain economic conditions may negatively impact our operations, including possible effects on our financial condition, ability to access the capital markets on attractive terms or at all, liquidity, operations, suppliers, industry, and workforce. We will continue to evaluate the impact that these events could have on the operations, financial position, and the results of operations and cash flows during fiscal year 2025 and beyond.
On August 14, 2025, we entered into a Research Collaboration, License and Patent Assignment Boehringer Ingelheim to research, develop and commercialize first-in-class melanocortin receptor-targeted peptides developed by the Company for the treatment of retinal diseases, including diabetic retinopathy.
Under the terms of the Agreement, we received an upfront payment of $2,300,000 (received September 2025) and may receive up to $21,200,000 in near-term research milestone payments and up to $307,000,000 in success-based development, regulatory, and commercial milestone payments, plus tiered royalties on net commercial sales of Products.
On September 22, 2025, we announced the achievement of a research milestone under its collaboration with Boehringer Ingelheim. This milestone triggers a payment to us of approximately $6,500,000 (expected to be received in October 2025).
What changed in the latest 10-Q
Risk Factors
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
Largest changes
During thesee in full comparisonsixnine months endedDecemberMarch 31,2025,2026, net cash used in operating activities was$6,426,227$10,843,290 compared to$11,863,319$17,217,595 for thesixnine months endedDecemberMarch 31,2024.2025. The decrease was primarily related tolicensecollaboration andproducelicense revenue recognized during thesixnine months ended MarchDecember31,2025.2026.
Three andsee in full comparisonSixNine months endedDecemberMarch 31,2025,2026, Compared to the Three andSixNine months endedDecemberMarch 31,20242025:
“On January 8, 2026, we entered into a sublicense agreement (the “Altanispac Agreement”) with Altanispac Labs, LLC (“Altanispac”), exclusively licensing PL9643, an MCR1 agonist for dry eye disease. In partial consideration for the rights to PL9643, the Altanispac Agreement provided for upfront consideration in the form of non-cash debt cancellation of approximately $3,800,000, which is reflected in our current liabilities as of December 31, 2025. We will recognize this $3,800,000 million as license revenue in our Consolidated Statements of Operations for quarter ending March 31, 2026. …”see in full comparison
see in full comparisonDuring the six months ended December 31, 2025, net cash provided by financing activities was $18,350,940 which consisted of proceeds $16,911,453 of proceeds from an equity financing and $1,458,932 of proceeds from the exercise of warrants, offset by $19,444 for payment of withholding taxes related to RSUs. During the six months ended December 31, 2024, net cash provided by financing activities was $3,252,527, which consisted of $3,398,023 of proceeds from the exercise of warrants, offset by $99,482 for payment of withholding taxes related to RSUs and $46,014 for payment of finance lease obligationsWe have incurred cumulative negative cash flows from operations since ourinception,inception and have expended substantial funds to advance ourplannedproduct development efforts. Continued operations are dependent upon our ability to complete equity or debt financing activities and to enter into additional licensing or collaboration arrangements. As ofDecemberMarch 31,2025,2026, our cash and cash equivalents were$14,476,162$10,159,494, other receivables were $2,167,215 and our current liabilities were$6,332,648.$2,536,002.
“During the nine months ended March 31, 2026, net cash provided by financing activities was $18,489,818 which consisted of net proceeds $16,910,891 from an equity financing and $1,598,441 of net proceeds from the exercise of warrants, offset by $19,514 for payment of withholding taxes related to restricted stock units. …”see in full comparison
Research and Development – Research and development expenses weresee in full comparison$4,319,767$3,517,223 and$6,845,533$10,362,756 for the three andsixnine months endedDecemberMarch 31,2025,2026, respectively, compared to$3,429,479$3,755,158 and$9,173,233$12,928,391 for the three andsixnine months endedDecemberMarch 31,2024,2025, respectively. Theincreasedecrease for the three and nine months endedDecemberMarch 31,20252026, compared to the threemonthsandended December 31, 2024 was primarily related to an increase in spending on our MCR programs. The decrease for the sixnine months endedDecemberMarch 31,2025 compared to the six months ended December 31, 20242025, was primarily related to a decrease in spending on our MCR programs.
Full comparison: every changed paragraph (26)
Our
significant accounting policies, which are described in the notes to our consolidated financial statements included in this report and
in our Annual Report on Form 10-K for the year ended June 30, 2025, have not changed during the three and sixnine months ended DecemberMarch 31,
2025.2026. We believe that our accounting policies and estimates relating to the carrying value of inventory, revenue recognition, accrued
expenses, purchase commitment liabilities,
warrants and stock-based compensation are the most critical.
We are a biopharmaceutical company developing first-in-class medicines based on molecules that modulate the activity of the melanocortin receptor systems. Our product candidates are targeted, receptor-specific therapeutics for the treatment of diseases with significant unmet medical need and commercial potential. Our primary focus is the development of novel ‘next generation’ melanocortin-4 receptor (“MC4R”) agonists for treatment of rare neuroendocrine diseases. We are developing MC4R selective long-acting peptide agonists and small molecule agonists with potential utility in obesity and metabolic-related disorders, rare MC4R pathway diseases, such as hypothalamic obesity, Prader-Willi syndrome, Bardet-Biedl syndrome, and other orphan indications.
Our prior commercial product, Vyleesi®, was approved by the U.S. Food and Drug Administration (“FDA”) in June 2019 and was initially marketed in the United States by AMAG Pharmaceuticals, Inc. (“AMAG”) for the treatment of hypoactive sexual desire disorder (“HSDD”) in premenopausal women pursuant to a license agreement for Vyleesi for North America, which was entered into on January 8, 2017 (the “AMAG License Agreement”). The AMAG License Agreement was terminated effective July 24, 2020, and we commenced marketing Vyleesi in North America. Effective December 19, 2023, Cosette Pharmaceuticals, Inc. (“Cosette”) acquired all rights to Vyleesi. As disclosed in Note 6 to the Consolidated Financial Statements, effective June 5, 2025, we entered into a Release and Settlement Agreement with Cosette.
In
August 2025, as disclosed in Note 5 to the Consolidated Financial Statements, we entered into a Research Collaboration, License and Patent
Assignment Agreement (the “BI Agreement”) with Boehringer-Ingelheim International GmbH (“Boehringer Ingelheim”
or “BI”) to research, develop and commercialize
first-in-class melanocortin receptor-targeted peptidescompounds we developed for
the treatment of retinal diseases, including diabetic retinopathy.diseases.
In
January 2026, as disclosed in Note 136 to the Consolidated Financial Statements, we entered into a sublicense agreement (the “Altanispac
Agreement”) with Altanispac
Labs, LLC to exclusively license PL9643, a clinical development MCR1MC1R agonist for the treatment of dry
eye disease.
Our
new productnon-obesity development activities focus on obesity, primarily MC4R agonists for the treatment of rare MC4R pathway diseases, like hypothalamic
obesity (HO) and Prader-Willi syndrome (PWS); and secondarily on ocular, gastroenterology, and renal indications. We are actively engaged
in discussions with
potential partners and licensees that have the financial and operational resources to progress non-obesity products
through development,
approval and commercialization.
The
following chartschart illustrateillustrates the status of our drug development programs. Multiple clinical trials are planned in calendar year 2026programs for
treatment of rare MC4R pathway diseases and next steps, dependent
on resources:
Our strategy is focused on advancing a differentiated portfolio of melanocortin receptor-targeted therapeutics, with an emphasis on MC4R agonists for rare neuroendocrine obesity disorders and other indications with significant unmet medical need. Key elements include:
Key
elements of our business strategy include:
As we continue to advance our development programs and explore commercial opportunities and partners in both U.S. and international markets, we remain attentive to evolving global economic conditions, including uncertainties related to international trade policies, tariffs, and supply chain dynamics. Although these factors have not had a material impact on our operations to date, future changes in trade regulations, tariff structures, or logistical constraints could influence the cost, availability, or timing of materials, services and other components associated with the development of our product candidates and manufacturing capabilities. We continue to monitor these developments closely to maintain operational efficiency and help mitigate potential future impacts.
Three
and SixNine months ended DecemberMarch 31, 2025,2026, Compared to the Three and SixNine months ended DecemberMarch 31, 20242025:
Revenues
– For the three and sixnine months ended DecemberMarch 31, 2025,2026, we recognized $116,036$3,920,675 and $8,963,586$12,884,261 in collaboration and license
revenue compared to $0 for the three and sixnine months ended DecemberMarch 31, 2024.2025. The primary increase in collaboration and license revenue
consists isof $3,751,122 related
to the BIAltanispac Agreement which consisted of an upfront payment, the achievement of a research milestone during the three months ended September
30,March 2025,31, 2026, and FTE$3,751,122 related reimbursements.to the
Altanispac Agreement and $9,133,139 related to the BI Agreement during the nine months ended March 31, 2026.
Research
and Development – Research and development expenses were $4,319,767$3,517,223 and $6,845,533$10,362,756 for the three and sixnine months ended DecemberMarch
31, 2025,2026, respectively, compared to $3,429,479$3,755,158 and $9,173,233$12,928,391 for the three and sixnine months ended DecemberMarch 31, 2024,2025, respectively. The
increasedecrease for the three and nine months ended DecemberMarch 31, 20252026, compared to the three monthsand ended December 31, 2024 was primarily related to an
increase in spending on our MCR programs. The decrease for the sixnine months ended DecemberMarch 31, 2025 compared to the six months ended December
31, 20242025, was primarily
related to a decrease in spending on our MCR programs.
Research
and development expenses related to our MCR programs were $2,290,073$2,012,143 and $3,260,702$5,272,845 for the three and sixnine months ended DecemberMarch 31, 2025,2026,
respectively, compared to $1,888,065$1,853,851 and $5,969,102$7,822,953 for the three and sixnine months ended DecemberMarch 31, 2024,2025, respectively. The increase for
for the three months ended DecemberMarch 31, 20252026, compared to the three months ended DecemberMarch 31, 20242025, was primarily related to an increase
in spending
on our MCR programs. The decrease for the sixnine months ended DecemberMarch 31, 20252026, compared to the sixnine months ended DecemberMarch 31,
2024 2025, was primarily
related to a decrease in spending on our MCR programs.
The
amounts of project spending above exclude general research and development spending which was $2,029,694$1,505,080 and 3,584,8315,089,911 for the three
and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to $1,662,717$1,901,307 and $3,204,131$5,105,438 for the three and sixnine months ended DecemberMarch 31,
31,2025, 2024.respectively. The increasedecrease is primarily attributable to ana increasedecrease in compensation-related expenses.
Cumulative
spending from inception to DecemberMarch 31, 2025,2026, was approximately $311,900,000 on our Vyleesi program and approximately $254,500,000$257,900,000 on all
all our other programs (which include melanocortin receptor agonists, other discovery programs and terminated programs). Due to various risk
risk factors described in our Annual Report on Form 10-K for the year ended June 30, 2025, under “Risk Factors,” including the
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, related net cash inflows will be generated.
General
and Administrative – Selling, generalGeneral and administrative expenses, which consist mainly of compensation and related costs,
were $3,124,817 $1,984,446
and $4,785,548$6,769,994 for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to $1,681,844$1,474,019 and $3,702,775
$5,176,794 for the three
and sixnine months ended DecemberMarch 31, 2024,2025, respectively. The increase is a result of increased compensation costs and professional
fees.
Other
Income (Expense) – For the three and sixnine months ended, DecemberMarch 31, 2026 total other income (expense), net was $148,007 and $229,175,
respectively. For the three and nine months ended March 31, 2025, total other income (expense), net was $64,687 and
$81,168, respectively. For the three$1,757 and six$111,634, months ended, December 31, 2024, total other income (expense), net was $168,841 and $109,877,respectively.
respectively. The decreaseincrease was a result of an increase in investment income, offset by a decrease in investmentinterest incomeexpense and foreign currency translation gain, offset by a decrease
in interest expense.losses.
During
the sixnine months ended DecemberMarch 31, 2025,2026, net cash used in operating activities was $6,426,227$10,843,290 compared to $11,863,319$17,217,595 for the sixnine months
ended DecemberMarch 31, 2024.2025. The decrease was primarily related to licensecollaboration and producelicense revenue recognized during the sixnine months ended
March December
31, 2025.2026.
During
the sixnine months ended DecemberMarch 31, 2025,2026, net cash used in investing activities was $12,816$51,299 which consisted of cash used for the purchase
of property and equipment. During the sixnine months ended DecemberMarch 31, 2024,2025, net cash provided by investing activities was $2,500,000, which
consisted of proceeds from the sale of Vyleesi.
During the nine months ended March 31, 2026, net cash provided by financing activities was $18,489,818 which consisted of net proceeds $16,910,891 from an equity financing and $1,598,441 of net proceeds from the exercise of warrants, offset by $19,514 for payment of withholding taxes related to restricted stock units. During the nine months ended March 31, 2025, net cash provided by financing activities was $7,710,261, which consisted of $3,398,237 of net proceeds from the exercise of warrants and 4,457,520 from the sale of common stock, offset by $99,482 for payment of withholding taxes related to restricted stock units and $46,014 for payment of finance lease obligations.
During
the six months ended December 31, 2025, net cash provided by financing activities was $18,350,940 which consisted of proceeds $16,911,453
of proceeds from an equity financing and $1,458,932 of proceeds from the exercise of warrants, offset by $19,444 for payment of withholding
taxes related to RSUs. During the six months ended December 31, 2024, net cash provided by financing activities was $3,252,527, which
consisted of $3,398,023 of proceeds from the exercise of warrants, offset by $99,482 for payment of withholding taxes related to RSUs
and $46,014 for payment of finance lease obligations We
have incurred cumulative negative cash flows from operations since our inception,inception and have expended substantial funds to advance our
planned product
development efforts. Continued operations are dependent upon our ability to complete equity or debt financing activities
and to enter
into additional licensing or collaboration arrangements. As of DecemberMarch 31, 2025,2026, our cash and cash equivalents were $14,476,162$10,159,494, other
receivables were $2,167,215 and our current liabilities were $6,332,648.$2,536,002.
There have been no material changes outside the ordinary course of business to our contractual obligations and commitments, as disclosed in our Annual Report on Form 10-K for the year ended June 30, 2025.
On
January 8, 2026, we entered into a sublicense agreement (the “Altanispac Agreement”) with Altanispac Labs, LLC (“Altanispac”),
exclusively licensing PL9643, an MCR1 agonist for dry eye disease. In partial consideration for the rights to PL9643, the Altanispac
Agreement provided for upfront consideration in the form of non-cash debt cancellation of approximately $3,800,000, which is reflected
in our current liabilities as of December 31, 2025. We will recognize this $3,800,000 million as license revenue in our Consolidated
Statements of Operations for quarter ending March 31, 2026. There have been no material changes outside the ordinary course of business
to our contractual obligations and commitments, as disclosed in our Annual Report on Form 10-K for the year ended June 30, 2025.
Based
on the Company’sour current operating and development plans, including the Companyability expectsto reduce or delay operating expenses that itsare within management’s
control, we expect that existing cash and cash equivalents as of
the date of this filing will be sufficient to enable itus to fund operations
through the next twelve months following the issuance of the
financial statements.
We will need additional funding to complete required clinical trials for our product candidates and development programs and, if those clinical trials are successful (which we cannot predict), to complete submission of required regulatory applications to the FDA. However, current economic conditions (including current economic uncertainty, high interest rates, rising inflation, tariffs, trade restrictions, and the potential for local and/or global economic recession) may negatively impact our operations, including possible effects on our financial condition, ability to access the capital markets on attractive terms or at all, liquidity, operations, suppliers, industry, and workforce. We will continue to evaluate the impact that these events could have on the operations, financial position, and the results of operations and cash flows during fiscal year 2026 and beyond.
PTN insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-07-15 | Spana Carl |
Shares withheld for tax |
142 | $14.34 | $2.0K |
| 2026-07-15 | Spana Carl |
Shares withheld for tax |
119 | $11.72 | $1.4K |
| 2026-07-15 | Spana Carl |
Shares withheld for tax |
33 | $11.77 | $388 |
| 2026-07-15 | Wills Stephen T |
Shares withheld for tax |
22 | $11.77 | $259 |
| 2026-07-15 | Wills Stephen T |
Shares withheld for tax |
79 | $11.72 | $926 |
| 2026-07-15 | Wills Stephen T |
Shares withheld for tax |
94 | $14.34 | $1.3K |
Well-known investors holding PTN (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 11,091 | $193.2K | — | Sold out |