Washington Editor

Palatin Technologies Inc. raised $19 million through the sale of 13.4 million shares for the purpose of furthering development projects in infection imaging and male and female sexual dysfunction.

For every four shares purchased, investors also received a five-year warrant to purchase one share of common stock at a 25 percent premium to the purchase price per share in the offering. The premium exercise price (times 25 percent) is $1.77 per share.

Following the offering, Palatin, of Cranbury, N.J., has $25 million in cash and 42 million common shares outstanding (59 million fully diluted shares).

"This is a very successful financing and it gives us the operational freedom to make decisions based on future value rather than on survival," Stephen Wills, Palatin's chief financial officer, told BioWorld Today.

The company raised $11 million through the sale of 9.37 million shares in November and $4.2 million through the sale of 2.6 million shares in August. (See BioWorld Today, Nov. 21, 2002.)

Palatin's stock (AMEX:PTN) closed Monday at $1.80, up 15 cents.

With $25 million and two products moving through the pipeline, Wills said he expects the funds to take the company through 2004. "The worse-case scenario is that the funds would take us through calendar year 2004, but we believe with LeuTech and the partnering of PT 141, it will last a lot longer, if not forever. There are certain scenarios where we may not have to raise money again."

That is, if the product pipeline continues progressing.

Palatin's most advanced candidate, LeuTech, a radiolabeled monoclonal antibody for diagnosing infections, is partnered with Mallinckrodt Inc., a division of Tyco Healthcare.

Wills said the company expects to file an amendment to its biologics license application this quarter and looks forward to approval later this year.

Initially filed in November 1999, Palatin later received a unanimous vote of recommended approval from the Medical Imaging Drugs Advisory Committee for patients whose symptoms neither ruled out appendicitis nor clearly indicated it. (See BioWorld Today, July 11, 2000, and Nov. 24, 1999.)

But the company ran into a problem several months later when the FDA issued a complete review letter requesting additional manufacturing and process data. (See BioWorld Today, Sept. 29, 2000.)

Since that time, Wills said Palatin has conducted development and validation work to satisfy the company as well as the FDA.

Separately, Palatin has four Phase II trials testing LeuTech in fever of unknown origin, inflammatory bowel disease, pulmonary imaging, post-surgical infection and osteomyelitis (infection deep inside a bone). And LeuTech has received special-circumstance approval by the FDA to be used in the event of an anthrax attack.

Meanwhile, in male and female sexual dysfunction, Palatin's lead candidate, PT 141, is poised to enter Phase IIb at-home trials in men with mild to severe erectile dysfunction.

The company will seek a partner for PT 141, Wills said.

Elsewhere in the pipeline, Palatin is working on a backup compound for sexual dysfunction and another for obesity and cachexia.

Investors in this financing were ProQuest LLC, of Princeton, N.J.; Federated Kaufmann Funds, of New York; Albert Fried & Co., of New York; Lurie Investments, of Chicago; Biotechnology Value Fund LP, of San Francisco; and Legg Mason Wood Walker Inc., of Baltimore.