Thank you. Good morning, and welcome to the Palatin's first quarter fiscal year 2026 call.

I'm Dr. Carl Spana, CEO and President of Palatin.

With me on the call today is Steve Wills, Palatin's Chief Financial Officer and Chief Operating Officer. I'll now turn the call over to Steve, and he'll give the financial update and also include several corporate items as well.

Steve.

Thank you, Carl. Good morning, good afternoon, good evening, everyone.

Regarding out-licensing programs update, in August 2025, we executed a research collaboration, license, and patent assignment agreement with Boehringer Ingelheim for the treatment of retinal diseases, wherein we received an upfront payment of €2 million, or approximately $2.3 million, in August of 2025, and we achieved a €5.5 million, approximately $6.5 million, research milestone in September 2025. In addition, we are eligible to receive up to €12.5 million, or approximately $14.5 million, in additional near-term research milestones, and up to €260 million, or approximately $307 million, in development, regulatory, and commercial milestones, plus tiered royalties on future net sales.

Regarding corporate update, public offering, and NYSE American, on November 12th, 2025, Palatin announced the closing of its upsized $18.2 million underwritten public offering, including the full exercise of the overallotment option, consisting of approximately 2.8 million shares of common stock or pre-funded warrants, together with Series J warrants to purchase up to approximately 2.8 million shares of common stock or pre-funded warrants, and Series K warrants to purchase up to approximately 2.8 million shares of common stock or pre-funded warrants, at a combined public offering price of $6.50 per share of common stock and accompanying Series J and Series K warrants. Each Series J warrant will have an exercise price of $6.50 per share and will be immediately exercisable.

The Series J warrants will expire on the earlier of the 18-month anniversary of the original issuance date or the 31st calendar day following the date that Palatin receives FDA acceptance of an Investigational New Drug for an in-house obesity treatment compound, albeit a long-acting peptide or oral small molecule. Each Series K warrant will have an exercise price of $8 and 12.5 cents per share and be immediately exercisable.

The Series K warrants will expire on the five-year anniversary of the original issuance date. However, and importantly, if a holder's Series J warrants have not been terminated in accordance with their terms prior to the expiration of the FDA exercise period, such holder's Series K warrants will terminate automatically upon the earlier of the 18-month anniversary of the original issuance date of the Series J warrant or the expiration of the FDA exercise period and prior to the five-year anniversary of the issuance of the Series K warrant.

In non-legalspeak, that means if Palatin hits the IND acceptance in say the first half of 2026, which is what we're anticipating, if the warrants are not exercised by the holder, the Series J warrant expires and the Series K warrant expires. Our expectation is that we would receive full exercise of the Series J warrants at that performance criteria.

Moving over to the actual offering, the gross proceeds from the offering, before deducting the underwriting discounts, commissions, and offering expenses, are expected to be approximately $16.9 million. Plus, Palatin may receive additional proceeds of up to $18.2 million upon the cash exercise of the milestone-related Series J warrants that I just referenced.

However, there is no guarantee that such warrants will be exercised, and accordingly, Palatin will receive any proceeds from such exercise. Palatin intends to use the net proceeds from the offering to support the development of its obesity program and for working capital and general corporate purposes.

Regarding NYSE American, we are very pleased with the result here of the offering and some of the other operating activities, but specifically as a result of the closing of the offering, Palatin regained compliance with NYSE American continued listing standards. Effective November 12th, yesterday, 2025, Palatin's common stock resumed trading on the NYSE American under the symbol PTN, which was our old symbol when we were on the NYSE American Exchange.

Moving over to the financial results for the quarter ended September 30th, 2025, regarding revenue, for the quarter ended September 30th, 2025, Palatin recognized approximately $8.8 million in collaboration license revenue compared to zero for the comparable quarter last year. The increase in collaboration license revenue is all related to the Boehringer Ingelheim, the BI agreement, which consisted of the upfront payment and the achievement of a research milestone and certain cost-related reimbursements.

Regarding operating expenses, total operating expenses were $4.2 million for the first quarter ended September 30th, 2025, compared to $7.8 million for the comparable quarter last year. The decrease was mainly related to a decrease in spending on our MCR development programs, melanocortin receptor system-related development programs.

Cash flows: Palatin's net cash used in operations for the quarter ended September 30th, 2025, was $1.6 million compared to net cash used in operations of $7 million for the comparable quarter last year. The decrease in net cash used in operations was mainly due to the recognition of license and contract revenue related to our BI agreement recognized during the quarter.

Now moving over to net income and loss, Palatin reported net income for the quarter ended September 30th, 2025, of $4.7 million compared to a net loss of $7.8 million for the comparable quarter last year. The increase in net income for the quarter ended September 30th, 2025, was, again, mainly due to the revenue recognized pursuant to the BI agreement and partially for the decrease in operating expenses.

Regarding cash position, as of September 30th, 2025, Palatin's cash and cash equivalents were $1.3 million. Yep, a bit low.

Compared to cash and cash equivalents of $2.6 million as of June 30th, 2025. The $1.3 million of cash and cash equivalents as of September 30th, 2025, does not include approximately $6.5 million milestone payment pursuant to our BI agreement for retinal diseases, which was received in October 2025, and importantly, the net proceeds from our underwritten public offering, again, the net proceeds of $16.9 million, which closed on November 12th, 2025.

As a result of the offering net proceeds of $16.9 million and projected operating expenses, the going concern provision has been removed. Palatin currently expects a cash runway beyond the quarter ending December 31st, 2026.

Now I'll turn it back over to Dr. Spana.

Carl.

Thank you, Steve. As we move forward into 2026, our research and development efforts will be focused on the development of highly selective melanocortin 4 receptor agents for the treatment of various forms of syndromic and genetic obesity, such as hypothalamic obesity.

Melanocortin receptor system, especially the melanocortin 4 receptor, is essential in regulating energy balance and food intake and is a well-validated target for obesity treatments. Using our technology and extensive experience in the design and development of melanocortin agonists, we have developed a proprietary portfolio of highly selective melanocortin 4 receptor agonists that includes both orally active small molecules and long-acting peptides.

Our novel selective melanocortin 4 receptor compounds have reduced activity at the melanocortin 1 receptor and therefore a reduced potential to cause skin darkening. Lack of activity at the melanocortin 1 receptor and the once-weekly or oral dosing are significant improvements over current FDA-approved melanocortin treatments for obesity.

PL7737 is our melanocortin 4 receptor selective orally active small molecule. In multiple preclinical obesity models, PL7737 has demonstrated significant reductions in food intake and weight loss.

PL7737 is currently undergoing the various activities required to open up an Investigational New Drug application with the FDA, such as animal toxicity testing and cGMP manufacturing. PL7737 is on track for an IND filing in the first half of calendar 2026, and the initial PL7737 clinical studies will include single ascending and multiple ascending studies in healthy, obese, and hypothalamic patients.

Data is expected in the second half of 2026. Melanocortin 4 receptor extended-duration peptides are highly selective for the melanocortin 4 receptor and have demonstrated pharmacokinetic properties consistent with either once a week or once every two-week dosing.

We expect to initiate IND-enabling studies in the first half of calendar 2026, and first-in-human studies are anticipated in the second half of calendar 2026 as well. In addition to our melanocortin 4 receptor obesity programs, we have multiple programs designed to take advantage of the role that the melanocortin system plays in regulating stress responses and resolution of inflammation.

Based on this approach, we have development candidates for multiple ocular indications, inflammatory bowel diseases, and kidney diseases that we are expecting to out-license. We recently entered into a collaboration agreement with Boehringer Ingelheim for the development of candidates for the treatment of various types of retinal diseases, such as diabetic retinopathy or diabetic macular edema.

As part of the collaboration agreement, we received an upfront payment and are entitled to receive additional development, clinical, and regulatory milestones, as well as royalties on net sales. Our agreement with Boehringer Ingelheim validates the potential of targeting the melanocortin system, and we believe we will be focusing our business development efforts on licensing our other melanocortin receptor system programs.

These include PL9643, a Phase 3 development candidate for dry eye disease; PL8177, a clinical-stage development candidate for ulcerative colitis; and our preclinical candidates for kidney disease. Additional highlights for the quarter include the execution of an $18.2 million equity offering, which Steve talked about, and the resumption of our stock trading on the NYSE American under the PTN ticker symbol.

Thank you for participating in the Palatin first quarter fiscal year 2026 conference call. As a reminder, you can find additional information on our programs on our website.

We will now open the call to questions.

Thank you. Good morning, and congratulations on the considerable progress.

If I could just talk a little bit about the pipeline, could you highlight the ideal target profile for use to treat HO patients for PL7737 as well as the long-acting peptides?

Sure, Scott. Thanks for the question.

We'll focus first on 7737, which is an oral compound. What we'd like to see in that compound is, one, we really want to see a significant diminution of activity at the melanocortin 1 receptor, which we know we have accomplished that.

What we also like to see is in dealing with obesity, what we want to avoid are spikes in exposure and rapid drops in exposure. We want compounds that have, essentially, a very slow absorption and a very flat pharmacokinetic curve.

That's one that would be indicative of once-a-day dosing and one that would allow us to, essentially, keep the patients for a prolonged period of time in the therapeutic window of where the drug is active. We don't see dips, we want that drug to stay for as long as possible where it's active because we know that once we fall out of that range, we see that with other obesity treatments, patients start to eat again.

You really want to keep them up there. That's really what we've accomplished with 7737.

It has a very long half-life in both rat, mouse, and dogs, and we anticipate that will be the same in humans as well. We can therefore keep the dosing to a steady state and allow these patients for a prolonged period of time to stay in that therapeutic window and really maximize efficacy.

That's very similar to what we're trying to accomplish with the long-acting peptides as well. Again, these are absorbed, they very quickly bind to plasma proteins, and they have a very flat, long, extended pharmacokinetic profile.

These are profiles that are ideal for treating obesity patients. We avoid spikes, we don't want a rapid spike of very high Cmax, for example, because that can lead to side effects such as GI side effects, and we want to avoid those, you want to keep it, essentially, steady absorption, slow, steady, and flat.

Those really, I think, are the ideal parameters, and we see that for both our peptides and we see that for the orally active small molecule. We think we really have a very nice profile that's going to be played very well both from a reduction of side effects and increased efficacy.

Okay. Thank you, Carl.

These are next-generation compounds, I know one of the issues was hyperpigmentation. Can you talk about how these next-generation compounds address some of those side effects in that adverse profile?

Sure. The pigmentation or hyperpigmentation is driven through activity at the melanocortin 1 receptor.

We've been in this field for a long time, and we've been able to develop selective agonists for the various receptors. We really understand the structure-function relationships that have allowed us to really drop down that MC1 receptor activity.

We're talking about hundreds to thousand-fold selectivity for 4 over 1 that will really allow us to either dramatically reduce or potentially eliminate the potential for skin darkening. That's how we accomplished it.

Okay. Great.

Thank you for that color. Final question on the HO programs.

There's a big player out there that you will be competing with. How do you see yourself positioned in that landscape?

Like

in any drug market, we believe this is going to be a multi-billion dollar market, and there's going to be room for multiple players. I think it's all going to come down to the quality of the compounds that you bring forward.

I'm not going to comment on their compounds that they have, clearly their first compound that should be approved will be a first generation. We know that it has MC1 activity and it has once-a-day dosing.

They have some other compounds that are further back in development. There's not a lot of information on those, I won't comment on them.

What I will say is the way to be a player in that marketplace is to have the type of compounds that we have in both our long-acting peptide and orally active small molecule, which are reduction of MC1, the elimination of potential hyperpigmentation, and really an efficacy profile and exposure profile that limits the potential for GI side effects and maximizes the potential for activity. Speaking of where we are, we're very confident, very comfortable with our compounds.

We think they have really the excellent properties to be successful, and as we get into the clinic, we're going to prove that.

Okay. Great.

Final question. The BI collaboration brought in a considerable amount of non-dilutive capital.

Do you have any guidance when we may see the next collaboration from some of the other pipeline compounds? Thank you.

Hey Scott, this is Steve. We were extremely pleased with not just the execution of the BI, the Boehringer Ingelheim collaboration, but the actual partnership.

The dating was quite significant before we executed with BI, and since we've executed, it's been fabulous, really great group to work with. Notwithstanding the initial upfront payment of $2.3 million and the $6.5 million for the milestone achievement, we have stated that we anticipate near-term research development milestones of approximately $15 million, and the guidance I can give you that my definition of near-term is within the next 12 months.

Hopefully, that's helpful.

Okay. Great.

Thank you for taking the questions.

Thank you, Scott.

Thank you. It's been a really tremendous quarter for us with the Boehringer Ingelheim collaboration, which took quite an extensive period of time to accomplish, but we're very proud of that and very happy to be working with them.

We think they're going to be a phenomenal partner for our retinal program. The execution of the financing with some very excellent investors, and really the hard work that was done by Steve and others to really get us relisted on the NYSE AMEX and get off the pink sheets was really another great accomplishment.

Really, very pleased with where we are and the opportunity in front of us and have the capital to really execute. We really look forward to keeping you guys informed on our progress and getting out there and meeting with various investors at inter-quarter period.

With that being said, really 20 the rest of 2020 or as we look at 2026 from a calendar perspective, we expect a lot of great things to be going on with Palatin, and really excited here, working hard, and look forward to keeping you updated. Have a great day, be safe, enjoy the holidays.

Thanks.