Thank you, good morning, and welcome to the Palatin third quarter fiscal year 2026 call. I'm Dr.

Carl Spana, CEO and President of Palatin. With me on the call today is Stephen Wills, Palatin's Chief Financial Officer and Chief Operating Officer.

Earlier today, we issued a press release reporting Palatin's financial results for the third quarter of fiscal year 2026 and are now providing a corporate update. 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, followed by a question-and-answer session.

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

Thank you, Carl, and hello everyone. I will briefly review our financial results for the fiscal third quarter ended March 31st, 2026.

Beginning with revenue. For the third quarter, we recognized $3.9 million in collaboration and license revenue compared to no revenue in the prior year period.

The increase was primarily related to the revenue recognition of the upfront consideration under the Altanaspack agreement. Turning to operating expenses, total operating expenses for the quarter were $5.5 million compared to $4.8 million in the prior year period, which included a $0.4 million gain on purchase commitment.

The increase was primarily attributable to higher compensation costs and professional fees. Net cash used in operations for the quarter was $4.4 million compared to $5.4 million in the prior year period.

The reduction in cash used in operations was primarily driven by collaboration and license revenue recognized during the quarter. Net loss for the third quarter of fiscal 2026 was $1.4 million or 37 cents per basic and diluted common share, compared to a net loss of $4.8 million or $9.13 per basic and diluted common share for the prior year period.

The improvement in net loss was primarily related to collaboration and license revenue recognized during the quarter. Turning to our balance sheet and liquidity position, as of March 31st, 2026, Palatin had cash and cash equivalents of $10.2 million, in addition to approximately $2.2 million of other receivables, which are expected to be collected during the quarter ending June 30th, 2026.

Based on our current operating and development plans, and our ability to manage the timing of certain operating expenses, we believe our existing cash resources and expected receivables will be sufficient to fund operations through June 30th, 2027. With that, I will turn the call back to Carl.

Carl?

Thank you, Steve. This quarter, Palatin continued to execute on its strategy of advancing our melanocortin 4 receptor agonist therapies for rare obesity disorders with a focus on improving tolerability, usability, and long-term outcomes in chronic treatment settings.

The melanocortin 4 receptor pathway is a clinically and commercially validated target. We strongly believe the next phase of innovation will be defined not just by efficacy, but by improvements in overall treatment profile, particularly tolerability and patient-friendly delivery to support long-term patient adherence.

In this context, our goal is very straightforward: is to develop best-in-class melanocortin 4 receptor agonist for the treatment of rare, syndromic, and genetic obesity disorders. We are uniquely positioned to achieve this with our extensive experience in the design of melanocortin 4 receptor selective agonist along with our recent advances in the understanding of receptor-ligand interactions.

In rare obesity disorders, such as hypothalamic obesity, Prader-Willi syndrome, and Bardet-Biedl syndrome, patients face severe hyperphagia, rapid weight gain, and significant metabolic complications. These are chronic conditions that require lifelong treatment, and current therapeutic options often present challenges for long-term use.

As a result, improving tolerability and usability is critical to achieving meaningful sustained outcomes for patients. Updating our obesity pipeline, our melanocortin 4 receptor agonist peptide program is designed to achieve sustained efficacy with a treatment profile optimized for high selectivity for the melanocortin 4 receptor in once-weekly delivery.

Our once-weekly melanocortin 4 receptor selective peptide agonist remains on track for an initial new drug application submission in the fourth quarter of calendar 2026 and represents our lead clinical asset. In our oral small molecule program, we are advancing next-generation oral melanocortin 4 receptor selective agonist candidates based on data and learnings from earlier compounds, including PL7737, recent data from our research work in medicinal chemistry, and our advancements in understanding detailed receptor-ligand interactions.

In internal preclinical studies, our candidates demonstrate significantly improved melanocortin 4 receptor selectivity with minimal melanocortin 1 receptor activity and increased potency at melanocortin 4 receptor compared to earlier compounds. We believe this improved selectivity and potency will result in lower dosing requirements and a meaningful reduction in the potential elimination of hyperpigmentation.

I want to emphasize the importance of the last point. Hyperpigmentation is a known class effect associated with melanocortin 1 receptor activity and remains a limitation of current therapies.

Our approach is specifically designed to minimize melanocortin 1 receptor off-target interactions, and the selectivity data we have supports this conclusion. Our goal is to develop best-in-class therapies with superior efficacy and long-term patient compliance.

In addition to advancing our obesity programs, we continue to leverage the broader potential of our melanocortin receptor platform through strategic partnerships and business development activities. Our partnership with Boehringer Ingelheim for retinal diseases continues to provide non-dilutive capital, milestone opportunities, and potential long-term royalty participation.

During the second half of calendar 2025, we received upfront and milestone payments totaling €7.5 million or approximately $8.8 million. We also completed the sub-licensing of PL9643 for dry eye disease to Altamira Pack Labs in January of 2026, receiving $3.8 million in upfront consideration while retaining the potential for future payments and royalties.

In addition, our PL8177 ulcerative colitis program remains positioned for potential partnering following positive Phase 2 proof-of-concept results. These transactions reflect our strategy of leveraging the breadth of our melanocortin receptor platform to generate non-dilutive capital and support our pipeline advancements and create multiple potential long-term value drivers for shareholders.

In summary, our peptide program remains on track for an IND submission in the fourth quarter of calendar 2026. Our oral small molecule program is advancing next-generation candidates with improved selectivity and potency toward an IND in the first half of calendar 2027.

We have developed new intellectual property around melanocortin 4 receptor selectivity, and we are continuing to leverage both our vast experience and new data to design melanocortin 4 receptor therapies with improved selectivity and overall better treatment profiles. We believe this strategy positions Palatin to deliver differentiated best-in-class melanocortin 4 receptor agonist therapies for patients with significant unmet medical need.

With that, we will now open the call to questions.

Thank you, and good morning. Just recapping on PL7737, is that molecule now discontinued?

If so, was it due to an issue with PL7737 or did some of the backup compounds present a better profile to take going forward? Thank you.

Thanks for the question, Scott. We're not going to be first to market in this space, we really want to make sure we have best-in-class compounds.

Our parameters for selecting a compound or continuing a compound to go through development into the clinic is pretty stringent. The decision was really multifactorial.

As we were running through the PL7737 development, we came to a point where we felt that the selectivity and the dosing that we wanted to achieve to be best-in-class, we didn't necessarily think that the compound would meet that. In addition to that, we were seeing, since we were funded in November of last year, we were able to really push some of these backup compounds forward, and we started to see compounds that really are verging on almost the elimination of MC1R activity.

Their profiles are just coming out just better than where 7737 is. We had to make a decision on do we continue to put resources into a compound that may not be best-in-class or do we divert those to the peptide, which is really highly selective and once a week and that has a really excellent profile, and then bring along a second-generation compound that really has got a much better profile.

It was a combination of a number of factors that went in. We also have to consider that this is a target that is growing in interest, and there's potential competition, when we are making final decisions to go in the clinic and start spending lots of investor money, we really want to make sure that it's a very stringent decision and that the compounds that we take forward really meet a high degree of selectivity for MC4, have excellent drug-like characteristics, are easier for the patients to use whether it be oral or once weekly.

There were a lot of factors that went into the decision. And 7737 is still extremely valuable to the company.

We've learned a tremendous amount from it. We're still evaluating it and we'll continue to be supportive of everything that we're doing.

Okay. In the next-generation oral small molecule compound, would you expect to have a similar clinical game plan as you did for PL7737 as far as looking at hypothalamic obesity patients as well as Prader-Willi?

Absolutely. It'll follow a similar path.

I think that the peptides and the oral small molecules will each have their place in treating these patients based on patient preferences, efficacy, side effect profiles. I expect that these compounds really won't have any MC1R activity at all.

They're going to be quite clean. I think that's going to be a major advancement.

Again, we have to keep in mind that this is going to be a competitive field and we really want to make sure we're bringing the best that we can deliver based on the experience that we have.

Okay. When you think about the differentiation of your pipeline with compounds on the market and under development, what do you think are the key attributes that separate your pipeline?

Obviously, you've mentioned selectivity and hyperpigmentation. Are there any other aspects that you would highlight?

Sure. That's a key aspect.

I think the technologies that we use for potentially delivering once-a-week injections for peptides can be differentiating as well. I think the understanding that the PK parameters these compounds have to put them in a range where we don't need to go to levels of drug exposure that exceed the therapeutic windows so that we can eliminate or drastically reduce the potential side effects that you can see outside of hyperpigmentation.

In addition to that, in the small molecule program, we're looking for compounds that really limit the brain penetrance so that they don't get into the CNS. There are a number of things that are built into these things that overall will make them better drugs.

This is not atypical, as indications move from first approved drugs. It's generally when you get to that second or third one where you get the better compounds coming through: better drug-like characteristics, better PK parameters, more usability for the patients.

That's what we're aiming for.

Great. Kind of a final question: obviously, your game plan has followed a lot of what we've seen with Rhythm and what they've done.

How would you compare your products to those of Rhythm and how far behind do you consider yourself at this point?

Sure. Currently from an approved standpoint, setmelanotide or IMCIVREE is Rhythm's product.

I think they've done a tremendous job bringing that product forward, expanding its indications and potentially beginning to build new markets for MC4 agonists. That's a first-generation peptide.

It's got limitations with regards to MC1R activity and it's a daily injectable. I know that they have a weekly injectable that's coming behind that.

There's very little data. I can't comment on that.

There's no data available. I think there will be data later in the quarter.

I can't comment on that. They have a small molecule LB melagon.

Again, that's a first-generation compound. Again, we see hyperpigmentation in the clinic.

It's going through some reformulation work and I don't know where that's going to lead. They're going to hopefully get that back in the clinic later in the year.

From my perspective, I think that we're going to deliver better compounds. They're going to be cleaner, they're going to have better drug-like characteristics, going to have better PK parameters, and a chance to be highly competitive and expand and take market share.

That's the goal when bringing best-in-class forward, right, is to have the better compounds. From how far behind are you, depending on the indication, obviously, setmelanotide is approved.

It's approved for HO, it's approved for a number of indications. You can look at our plan to get there.

In that case, we're several years behind. With regards to compounds coming through, I don't know.

Is it a year, a year and a half? I'm not clear.

I know it's a question that investors always ask and there's relevance there. We're not all that far behind and you're trying to come in with a better candidate and a better product.

I think that's the more important part: who's going to have the compounds that really help to solve this issue with better patient compliance and better patient usability, maintaining good efficacy. That's really what you're trying to drive forward.

That's really, at the end of the day, what's going to probably determine this market.

Great. Thank you for taking the questions.

Good morning and thanks for taking the questions. Your oral compound now it's pushed out probably roughly a year compared to 7737.

My question to you is that what do you see any challenges to have that become IND-ready next years? Any specific you can mention without reveal too much on the competitive side?

Sure. Look, whenever you're dealing with orally active small molecules, as we did with 7737, we run a tremendous amount of preclinical studies on these compounds to evaluate not only their efficacy and their selectivity, what have you, but really their druggability, side effect profiles, metabolism, all sorts of other things.

At any point, even though we use state-of-the-art software and what have you to help predict, and obviously, wet chemistry to go through all this stuff, until you get into animals and you get through that process, you're not going to really know what you have and how high you can dose and so on and so forth. I would characterize it as we have a very good handle on what's required.

I think we understand the pharmacophores that we're dealing with very well. They are very druggable and, with regards to their interactions with CYPs and metabolism and so on and so forth.

We have a high degree of confidence that we can deliver a compound. Until we get through the work, I can't tell you what the actual outcome is going to be.

I'm confident that we will do the work. We will get the candidate forward.

We'll go through the process with the candidate. I'm confident that it'll pass and it'll have a great profile.

Until it's done, I can't comment. I don't know.

Fair enough, that's very helpful. Without revealing too much, should I think about this is heading to animal study or it's already in animal study at this

point? We haven't made a final selection, it depends on the candidate.

Some are in animal studies, some are a little further back. A little bit later in the year, we'll make a final selection on the actual candidate that we want to go forward with.

It varies depending on the candidate.

Great. Maybe a last question here is that for the sub-Q weekly peptides, I thought last time we thought that you may start it in the third quarter, but I guess it's slightly more pushed out to fourth.

Was there any issues so you want to resolve? It seems this, like you said, will be the IND-enabling go forward.

No, there's no issues. Listen, we're not manufacturing screws here.

We're doing very complex things. We want to make sure again that we have the right compound.

One of the things that we're seeing is with the funding that we did in the third or fourth quarter of last year, that really allowed us to really accelerate a lot of the work we were doing on the medicinal chemistry side with both the peptides and the small molecules. What we're trying to make sure is, particularly on the peptide side, as the candidate we selected, we want to make sure it was the best we have, right, not something that's really good, but when we find out a month later, we've got something better.

It's really an issue of making sure we've got the right candidate. In a nice way, we are very productive in our understanding of this and of the receptor and receptor-ligand interaction and we've been really pushing the boundaries and understanding how to eliminate the MC1R activity and building that into these compounds.

We really want to make sure we pick the best one. I don't really see much difference.

That peptide program to me is moving along quite nicely. I think we have an excellent candidate, and we're actually now entering in the IND-enabling studies.

I see that moving along and staying on track quite nicely.

Great. Maybe a last question just squeeze in, which is that you mentioned about also you're contemplating the PWS, Prader-Willi syndrome.

At this point, would that be second priority to HO or you feel that you may jump the gun into the PWS even faster or earlier? Thanks.

Yeah.

Again, everything is based on resources. I think that they're equal.

They're both excellent commercial activities. They're both ones where there's an extremely high medical need for innovative treatments.

Given resources, we'd like to move them in parallel.

Great. Thanks a lot and good luck for everything.

Thank you.

Hi team. Thanks for taking our question.

I have a few. One is, is the goal with the new oral compound to eliminate hyperpigmentation entirely or you are trying to reduce the frequency and severity?

Follow-up is that what preclinical species or model is the most predictive for these MC1R-mediated hyperpigmentation? Then on once-weekly injectable, just wondering what are the key IND-enabling studies still remaining before the planned 4Q IND submission?

Thank you.

All right. A lot there.

Let's go through. For the small molecule, what we're seeing is the potential to eliminate activity.

That doesn't mean that when you go in and you start treating chronically that you won't see some small amount, but that's really what the goal is and that's what we're seeing preclinically. Really, a very significant separation between 1 and 4, but until you get into the clinic, you're not going to know.

If you look at a rat, a dog, or mouse, their skin is not really pigmented, you have to look at fur. You look at fur darkening and there are a number of models that you can use for that.

If your compounds have good MC1R activity and they work in these models, you're going to see that translate to humans. We think there's a high degree of predictability and if you're showing lack of efficacy or very large separations between where you see weight loss and then where you see potential for even a small change in pigmentation, that's going to translate to the human condition as well.

With regards to where we are in development, right now, we're beginning the IND-enabling studies. That's going to include a whole bunch of in vitro assays that we were required to do with regards to CYP binding, metabolism, and so on and so forth, as well as getting into the animal work that's will start as well.

We have everything moving and coming together so that we will have the documentation we need to file with the FDA and open up an IND in the fourth quarter of the year.

Great, thank you.

I'd like to thank everyone for their participation on the call. This is an opportunity for us to give you updates and we're quite excited about where we are, where we're going.

I thank the analysts for their questions that allow us opportunities to maybe speak a little beyond what we have in the script and maybe a little more color and context to what we're doing. I think that the advances that we're making are quite significant.

We're generating some very good IP that I think is going to not only support the work that we're doing, but make it a little more difficult for those that are following behind as well. I think we're very well positioned and feel pretty confident about what we're doing and going forward that we're going to deliver some really phenomenal compounds into the clinic.

With that, thank you, guys. Have a great day and we look forward to keeping everybody updated as we continue to make progress on our programs.

Steve?

Thanks, also. Have a great rest of the day.

Take care.