Thank you and good morning, everyone. Earlier today, we reported Palatin's financial results for the second quarter of fiscal year 2026 and provided a corporate update.

With me on the call today is Steve Wills, Palatin's Chief Financial Officer and Chief Operating Officer. Today, we will highlight our progress advancing our melanocortin 4 receptor-based obesity pipeline, review recent strategic and financial milestones, and outline our priorities as we move through 2026 before opening the call for questions.

First, I will turn the call over to Steve for the financial and operating results. Steve.

Thank you, Carl. Hello, and welcome, everyone.

I'll walk through our second quarter fiscal 2026 operations and financial results. Starting with our recent public offering, on November 12, 2025, we closed an upsized $18.2 million underwritten public offering, including the full exercise of the overallotment option.

The offering consisted of approximately 2.8 million shares of common stock or prefunded warrants in lieu thereof, along with Series J and Series K warrants at a combined public offering price of $6.50 per share and accompanying warrants. Each Series J warrant has an exercise price of $6.50 per share and expires on the earlier of 18 months from issuance or 31 days following FDA acceptance of an IND for an in-house obesity treatment compound.

Each Series K warrant has an exercise price of 8.125, $8.125 per share, and a 5-year term, subject to automatic termination if the associated Series J warrants are not exercised within the FDA exercise period. Gross proceeds from the offering were approximately $18.2 million, with net proceeds of approximately $16.9 million after underwriting discounts and offering expenses.

While the company may receive up to an additional $18.2 million upon the exercise of the Series J warrants, there is no assurance that these warrants will be exercised. The net proceeds from the offering are being used to support the advancement of our obesity programs, as well as for working capital and general corporate purposes.

As a result of the closing of this financing, Palatin regained compliance with NYSE American continued listing standards, and effective November 12, 2025, our common stock resumed trading on the NYSE American under the symbol PTN. Turning now to the financial results for the second quarter ended December 31, 2025.

Regarding revenue, for the quarter was $116,000, compared to zero revenue in the comparable period last year. This revenue relates to cost reimbursements under our collaboration agreement with Boehringer Ingelheim.

Total operating expenses were $7.4 million for the quarter, compared to $2.6 million in the prior year period. The year-over-year comparison is primarily impacted by the gain on the sale of Vyleesi recorded in the December 31, 2024 quarter, which reduced net operating expenses in that period.

In the current quarter, operating expenses increased due to higher investment in our melanocortin-based obesity development programs, as well as increased compensation costs and professional fees. Other income, net, was approximately $65,000 for the quarter, compared to approximately $169,000 in the prior year period.

The decrease reflects lower investment income and foreign currency translation gains, partially offset by lower interest expense. Net cash used in operations was $4.8 million for the quarter, consistent with the same quarter last year.

Net loss for the second quarter was $7.3 million, or $2.86 per share, compared to a net loss of $2.4 million, or $5.92 per share, in the comparable period last year. This change reflects higher operating expenses associated with advancing our pipeline programs, as well as the absence of the Vyleesi divestiture gain recorded in the prior year.

Turning to our cash position, as of December 31, 2025, we had $14.5 million in cash and cash equivalents, compared to $1.3 million at September 30, 2025, and $2.6 million at June 30, 2025. Based on our current operating plans, we expect our cash runway to extend beyond the quarter ending March 31, 2027.

Finally, with respect to our PL9643 sublicensing transaction, in January 2026, we received approximately $3.8 million of upfront consideration in the form of non-cash debt cancellation. This amount is reflected in the current liabilities as of December 31, 2025, and will be recognized as license revenue in the quarter ending March 31, 2026.

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

Carl.

Thank you, Steve. Palatin continues to execute on its strategy to advance differentiated melanocortin 4 receptor-based therapeutics, with a primary focus on rare syndromic and genetic obesity disorders.

During the quarter, we made meaningful progress advancing our lead obesity programs toward the clinic, strengthening our balance sheet, and sharpening our strategic focus, as Steve mentioned, through the sublicensing of our dry eye disease clinical candidate, PL9643. Turning to the obesity pipeline, we are advancing a portfolio of proprietary melanocortin 4 receptor agonists, initially targeted to rare neuroendocrine obesity disorders, including hypothalamic obesity and Prader-Willi syndrome, areas of significant unmet medical need.

Our lead oral small molecule MC4R agonist, PL7737, continues to progress through IND-enabling toxicology studies, and we remain on track to submit an IND and initiate a Phase 1 single and multiple ascending dose clinical trial in the first half of calendar year 2026. In parallel, we are advancing our next-generation selective melanocortin 4 receptor peptide agonists, which are designed for once-weekly subcutaneous dosing.

For this program, we are planning an IND submission in the second half of calendar 2026. As we move these programs forward, our development focus is on delivering differentiated product profiles.

Specifically, we are designing our compounds to enhance patient tolerability, including the potential for reduced gastrointestinal side effects while minimizing off-target effects such as hyperpigmentation, factors we believe are important for success in the long-term treatment of chronic obesity indications. Our preclinical data supports the potential of targeting melanocortin 4 receptor across both rare and select broader obesity indications.

However, our focus will be on rare neuroendocrine disorders. Planned registration clinical studies will enroll patients with hypothalamic obesity and Prader-Willi syndrome.

In addition, preclinical and early clinical data support the potential for co-administration of our melanocortin 4 receptor agonists with GLP-1-based therapeutics such as tirzepatide, providing optionality as obesity treatment paradigms continue to evolve. Couple other things that occurred during the quarter, as Steve had mentioned: in January 2026, we executed the sublicensing of PL9643, a selective melanocortin 1 receptor agonist with positive Phase 3 clinical data in dry eye disease, to Altanis Pharma Labs.

This transaction provided approximately $3.8 million in upfront consideration and allows us to sharpen our focus on our core obesity programs while retaining potential future financial participation through milestones and royalties. We also significantly strengthened our balance sheet with the completion of an $18.2 million public offering in November, which included the full exercise of the overallotment.

In addition, we successfully regained compliance with the New York Stock Exchange American listing standards, and our common stock resumed trading under the symbol PTN, restoring market visibility and liquidity. In summary, Palatin enters 2026 with a strengthened financial position, multiple partnerships with near-term milestones, and a focused, differentiated obesity pipeline.

We believe this positions the company to pursue substantial long-term value creation. With that, I'll turn the call back over to the operator, and we will open the call to questions.

Thank you. Good morning, and a lot of progress recently.

If we could start with PL7737, as we get ready for the IND, what preclinical or translational signals give you the greatest confidence in differentiation versus current or emerging MC4R agonists, particularly around the tolerability angle? Thank you.

Hello, Scott. We'll talk about hyperpigmentation.

It's designed to be more selective for the melanocortin 4 receptor than the melanocortin 1 receptor, which should lead to reduction, or substantial reduction, in the hyperpigmentation, leading to the first part of your question. Listen, we control potential GI side effects through a variety of mechanisms, not the least of which is the way the product is administered and absorbed.

We slow down the absorption so that we don't get relatively large spikes in the absorption, which can lead to an increase or enhanced GI side effects.

Great. As we get into the Phase 1 SAD/MAD trial, how are you thinking about patient selection, and what endpoints should we be thinking about as far as what we can get out of the early clinical data, as well, I noticed Prader-Willi, is that an increased focus in addition to HO, or it just seems like I'm seeing that a little more front and center than in the past?

Thank you.

Sure. A couple things.

For the single ascending and multiple ascending dose, those are primarily safety studies. Certainly for the single ascending dose, what we're looking for is just to confirm oral bioavailability, that the product is safe, and to really define a dosing window for 7737.

We believe the same will be for the long-acting peptide when that goes forward as well. In the multiple ascending dose study, those will be carried out for a longer term.

There again, these will be in healthy obese patients. There, again, of course, safety is always a paramount of primary efficacy or primary result that you're looking for in these types of studies.

With that being said, because these will be healthy obese patients, in the MAD part, we'll be looking for a reduction in their body weight. We'll be looking for reductions in and control of hyperphagia, and other parameters that go along with the obesity indication or controlling the obesity indication.

We do expect that we will get, at least from the MAD part, a pretty clear signal on how well these compounds can work. What's nice about that is we've seen in our hands that there's very good translatability from smaller studies, smaller efficacy studies, to larger studies with this mechanism.

Okay. Great.

With regards to Prader-Willi syndrome, is there an increased emphasis there, or has that always just been in the background?

It's always been in the background. Listen, we're looking for indications where there are, of course, meet the rare and orphan designation, but which there are substantial patients.

If we think about some of the more micro-orphan indications that are genetically based in the leptin-melanocortin pathway, there are relatively small number of patients there. Of course they do represent valid markets and valid opportunities for development.

However, we are still looking at some of the larger indications like HO and Prader-Willi where there are substantially more patients.

Great. Then, final question on the clinical side.

With the oral small molecule and the once-weekly injection, how do you anticipate positioning those two products between having an oral and an injectable? Do you view it as complementary?

Just trying to get an idea of where we should think about each one of those.

I certainly think they're complementary. Each will have their patient populations that they're better suited for.

One would expect that, certainly for the weekly injectable peptide, one might expect to see a higher level of efficacy for patients on those, that in general we generally tend to see across the board that we can drive better efficacy with peptides than we can with the small molecules. However, of course, we do need to see, the final decisions on that will be predicated on what we see in the early studies.

There will be patient populations for each. These indications are long-term, they're not like generalized obesity where patients can reach a target goal, in other words where they can come down a certain amount of weight, they come into a more healthy standpoint, and then want to move on to lower dosing or maintenance.

Here, these patients are probably going to need to be on long-term, pretty aggressive therapy because essentially their conditions are chronic and they don't go away in that essence. You'll need both pairs of options to really manage these patients.

Okay. Great.

Thank you, Carl. I guess I'll just give Steve a chance to say something.

Steve, with regards to OpEx in Q2, fiscal Q2, looks like about $7.4 million. Was there any kind of one-time noise from the transaction in there?

I'm just trying to get a sense of how we should think about that OpEx number in the March quarter, the fiscal third quarter. Thank you.

Thanks, Scott. The fourth quarter of '26 had a number of I don't know if extraordinary or one-time, I think, is the best descriptions, and that amounted to over $2 million just in that quarter that we do not expect going forward.

One-times related to we cleaned up a number of things that we weren't able to clean up prior to the raise. We did mention that in the Q that was filed earlier today that there was a number of, if you will, one-time extraordinary-type expenses that we're not going to see going forward.

I would target approximately $2.5 million less in the first quarter of '26, second quarter of '26 versus the fourth quarter of 2025, which was a little over seven, I think or approximately $7.4 million.

Great. That's perfect.

Thank you for the color, Steve. Thank you both for taking the questions.

Great.

Good morning, and thanks for taking the questions. I'm just going to follow up a little bit on Henry's questions.

First on the safety side, as we know that in the Prader-Willi syndrome, the current approved drug has some issue on the safety side and there has 15% to 20% of discontinuation of patient being treated. How would you guys assess that issue when you starting your Phase 1 study and then maybe further down the pike?

In the Phase 1 study, we'll get a very good look at what the tolerability and the safety profile for both of the approaches are. Based on our experience with the melanocortin 4 receptor system, we have a pretty good understanding of what we expect to see.

In general, you will see some GI side effects. We think that those are controllable through the way these things can be administered so that those are at lower rates.

We don't generally see those types of discontinuations with this mechanism. They generally tend to be fairly low with regards to the GI side effects.

In addition, we know we want to avoid that MCR1 as much as possible so that we can reduce that potential for hyperpigmentation, which many patients don't like. Overall, I think this mechanistically, this approach probably will result in lower numbers of discontinuations in these patient populations, along with delivering really good efficacy.

However, with that being said, you have to get in the clinic and we have to show that.

Sure. Maybe two quick questions here.

The first one would be that in terms of PWS, you were looking for the hyperphagia, and in your Phase 1 study, maybe probably more likely in Phase 2 study, how you assess the two sort of metrics: one for hyperphagia, the other is for weight reduction in your study design to see a clear hopefully to see a clear sign that it will show in impact in both aspects?

Sure. I think the way we think about it, when we talk about Phase 1, we're really talking about the multiple ascending dose study.

Obviously, we're not going to expect to see very much in healthy normals from a single dose other than safety.

Right.

When you're dealing with a say 14 4-week study, a 28-day study in healthy obese patients, what you're looking for there is are we seeing consistent target engagement over the full 4 weeks of dosing, are we seeing consistent PK parameters and consistent exposure to the drug. We expect to see that we know that from other studies we've done that we would expect to see a reduction in food intake and a reduction in body mass in these patients.

You go more mechanistically, one of the ways that melanocortin 4 receptor works, one downstream effect of that is, of course, the control of hyperphagia that can occur in obese patients, an obese patient, whether they be normal or they have syndromic obesity such as PWS. Until you get into the PWS patients, you're not going to really know how much you control the hyperphagia, right?

Right.

However, you'll get a very strong signal from the Phase 1 that you're working on target, how much efficacy you can drive, and that should translate into a strong signal in the PWS patients as well. Until you get there, you're not going to know.

You do have to get into the actual intended patient population itself.

Okay. Maybe actually just continue with this one is that based on the resources, or anticipated resources going forward, PWS would be something that you may contemplate more aggressively next year, in this later this year or really in the next year?

The answer is you're correct, more in the next year, but I'll let Steve kind of walk through how the cash flow plays out over the next 18 months.

Thanks, Carl. We're the initial, as Carl mentioned, the the SAD/MAD Phase 1 studies are are the initial, and we're targeting and we have sufficient cash on hand right now to move forward with both the oral small molecule and the long-acting peptide, again, in the Phase 1 SAD/MAD.

That data will read out for the oral small molecule by year-end and in the first half of next year on the long-acting peptide. Thereafter, we're going to be moving forward into whether you want to call it a Phase 2 or a Phase 2 a Phase 2/3 in specifically just HO patients and PW, Prader-Willi syndrome, patients in both the oral small molecule and the long-acting peptide.

They will not start before mid of of 2027. Is that helpful?

Great. Yes, absolutely.

That's actually great color. Maybe the last question here is you guys have a study with combination of GLP-1 beforehands.

I understand that obviously that's a very, very crowded space, already highly competitive space. Certainly you have some positive data, how would you position or in what context do you anticipate that GLP-1 may play a role in your product development or clinical study going forward?

Thanks.

Again, I think this has been a long thing. We've been doing work in combination of these two mechanisms for quite a bit of time, and, as you said, we've done clinical trials specifically looking at the interaction.

As you see more and more incretin-based therapies coming into the marketplace, now they're moving from just injectables to oral, you're likely to see clinicians wanting to combine these mechanisms, particularly for patients for PWS, for example, that may have really very severe hyperphagia, where they need something additionally more than what say any one mechanism can combine. That's why we began to think about how you combine these mechanisms to make sure that every patient that comes through can really get an optimized therapy.

I think it'd be a little naive to think that, though during a clinical development program, you will focus on a monotherapy approach, certainly some of the patients coming into these studies will be on GLP-1s, but I think longer-term, it's likely that you're going to see combination therapy. It's just really positioning ourselves for, you could call it lifecycle management or the reality of what's going to occur in the marketplace when these products get approved.

Great. Thanks a lot.

Again, congrats with the sufficient resources to move forward. Certainly this is a great space to be in, and congrats on all the progress.

Thank you. I'd like to thank everyone for participating in the Palatin second quarter fiscal 2026 conference call.

We're excited about what we're doing here. I think we're in a very good place with really good assets, and we'll continue to be excited moving these products forward and really updating you as we continue to make progress in our development.

That being said, have a great day, and we look forward to continue to update you on our progress. Thank you.