Palatin Technologies(PTN) - 2020 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For the quarter ended December 31, 2019, the company recognized revenue of $20,610 from Vyleesi, compared to no revenue in the same quarter of 2018 [9] - Total operating expenses for the quarter were $5.7 million, an increase from $5.1 million in the comparable quarter of 2018, primarily due to a final payment of $625,000 related to the termination of an engagement agreement [10] - Total other income was $397,480 for the quarter, up from $7,871 in the same quarter of 2018, mainly due to increased investment income [11] - Cash, cash equivalents, and accounts receivable were $91.6 million as of December 31, 2019, down from $96.8 million at September 30, 2019 [12] Business Line Data and Key Metrics Changes - The company is advancing discussions for Vyleesi collaborations outside of North America, China, and Korea, with expectations to execute multiple agreements in 2020 [8] - Vyleesi is licensed to Fosun Pharma in China and Kwandong Pharmaceuticals in South Korea, both of which are progressing through the regulatory process [8] Market Data and Key Metrics Changes - The market for dry eye disease treatments represents a substantial commercial opportunity with over $2 billion in annual sales [27] - The company is targeting the melanocortin system to treat ocular diseases, with three active programs in dry eye disease, diabetic retinopathy, and non-infectious uveitis [23] Company Strategy and Development Direction - The company aims to safeguard its rights under the Vyleesi North American license agreement and ensure the value of Vyleesi remains intact during AMAG's divestiture process [36] - The company plans to advance its pipeline programs, including starting the Phase 2 clinical study for PL-9643 in dry eye disease and preparing for Phase 2 studies for PL-8177 in ulcerative colitis [37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the commercial potential of Vyleesi and indicated that they would not allow the product to be under-marketed [53] - The company is prepared to take back Vyleesi if necessary and has a plan to develop its own commercial infrastructure [54][56] Other Important Information - The company has a strong balance sheet with $92 million in cash as of December 31, 2019, which supports the advancement of its pipeline programs [35] Q&A Session Summary Question: Timeframe for locating a new partner for Vyleesi - Management indicated that AMAG hopes to complete the divestiture process by the end of Q1 or early Q2 of the calendar year [40] Question: Stipulations in the contract regarding timing for divestiture - Management clarified that there are no specific timings for divestiture, but it is in AMAG's interest to proceed quickly [47] Question: Update on regulatory milestones for Vyleesi in China and South Korea - Management confirmed that the milestone numbers are accurate, with expectations for regulatory approvals in late 2021 or early 2022 [51] Question: Potential for AMAG to return Vyleesi to the company - Management stated they are prepared to take back Vyleesi if necessary and would prefer to market it themselves rather than re-partner [54][56] Question: Revenue reporting for Vyleesi - Management assured that the revenue reported is accurate and that they expect to reflect royalties in the first quarter [58]