Palatin Technologies Completes $30-Million Financing

Palatin Technologies, Inc. recently announced it has closed on a private placement of Series E warrants to purchase 21,917,808 shares of its common stock and Series F warrants to purchase 2,191,781 shares of its common stock. Certain funds managed by QVT Financial LP invested $5 million and another accredited investment fund invested $15 million. The funds paid $0.90 for each Series E warrant and $0.125 for each Series F warrant, resulting in gross proceeds to Palatin of $20 million, with net proceeds, after deducting estimated offering expenses, of approximately $19.8 million.

Palatin also announced the closing of a $10 million venture loan led by Horizon Technology Finance Corporation. The debt facility, which includes an interest-only payment period for the first 18 months, is a 4-year senior secured term loan that bears interest at a floating coupon rate of one-month LIBOR (floor of 0.50%) plus 8.50%. The lenders also received Series G warrants to purchase 549,450 shares of Palatin’s common stock.

“With these financing transactions, we expect to have sufficient funding to complete our pivotal Phase III clinical trials on bremelanotide for female sexual dysfunction and, assuming results are positive, complete required ancillary studies preparatory to filing a regulatory application for approval of bremelanotide by the Food and Drug Administration,” said Stephen T. Wills, Chief Financial Officer and Chief Operating Officer of Palatin. “These transactions should give us sufficient funding to reach important inflection points for bremelanotide and other key product areas.”

Palatin intends to use the proceeds from the financings for general corporate purposes and working capital, including its bremelanotide Phase III clinical trial program for female sexual dysfunction, preclinical, and clinical development of its melanocortin receptor-1and -4 peptide programs, PL-3994 natriuretic peptide advancement, and development of other portfolio products.

The Series E warrants are exercisable at an initial exercise price of $0.01 per share, exercisable immediately upon issuance and expire on the tenth anniversary of the date of issuance. The Series E warrants are subject to limitation on exercise if QVT and its affiliates would beneficially own more than 9.99% (4.99% for the other accredited investment fund holder) of the total number of Palatin’s shares of common stock following such exercise.

The Series F warrants are exercisable at an initial exercise price of $0.91 per share, exercisable immediately upon issuance and expire on the fifth anniversary of the date of issuance. The Series F warrants are subject to the same beneficial ownership limitation as the Series E warrants. The Series G warrants are exercisable at an initial exercise price of $0.91 per share, exercisable immediately upon issuance and expire on the fifth anniversary of the date of issuance.

The securities offered and to be sold by Palatin in the private placement have not been registered under the Securities Act of 1933, as amended, or state securities laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission or an applicable exemption from registration requirements. Palatin has agreed to file a registration statement with the SEC covering the resale of the shares of common stock issuable upon exercise of the Series E, Series F, and Series G warrants.

Palatin Technologies, Inc. is a biopharmaceutical company developing targeted, receptor-specific peptide therapeutics for the treatment of diseases with significant unmet medical need and commercial potential. Palatin’s strategy is to develop products and then form marketing collaborations with industry leaders in order to maximize their commercial potential. For more information, visit www.palatin.com.