EPS of $-0.12 increased by 78.6% from previous year
Net income of -2.44M
"This is a signal detection study. So we do not a priori or not a priori going in with, you know, some frequency number. What we are really looking for is a very clear signal. So what we would like to see in the study is that the combined arm is a high percentage of weight loss. And then in addition to that, we are looking at some, you know, other key metrics. For example, the percentage of patients that are achieving either 4, 5, 6, 7, or 8% weight loss in that eight-week period, you know, combined versus tirzepatide alone. Because that is a little bit more important. It is more important a clinical question." - Carl Spana
Palatin Technologies reported a negative quarterly bottom line for QQ2 2025, with a net loss of $2.44 million and no product revenue, consistent with a non-operating, pre-commercial biotech stage transitioning to a value-creation model through pipeline progression and licensing opportunities. Revenue for the quarter was effectively zero as a result of the December 2023 sale of the female sexual dysfunction franchise (CoSette) and the absence of product sales in the current period; however, the company benefited from a $2.5 million gain on the sale by lease (a non-operating item) that tempered operating expenses and cash flow optics. Operating expenses totaled $2.61 million, comprised of $3.43 million in R&D and $1.68 million in SG&A, offset by the $2.5 million lease gain. Net cash used in operations was $4.85 million, with financing activities contributing $3.38 million and investing activities consuming $2.50 million, yielding a net increase in cash of $1.03 million for the period. End-of-period cash stood at $3.42 million, not including $4.3 million of net proceeds from a February 2025 equity offering, which staff indicated would bolster liquidity going forward. On the pipeline, Palatin outlined meaningful near-term catalysts: (1) BMP801 signal-detection data (weight management with brimonidine and risapatide) topline expected later in the current month; (2) IND-enabling activities for two obesity-focused assets (MCR4 receptor selective programs) slated for calendar 2025; (3) OPL8177 Phase 2 topline data expected in Q1 2025 with significant BD dialogue building around out-licensing; and (4) robust diabetic kidney disease (DKD) phase 2 breakout data already reported (71% achieved >30% reduction in urinary protein-to-creatinine ratio and 71% saw improved or stabilized eGFR). Management remains focused on expanding the Latticore/MCR4 program value through strategic partnerships, while reiterating an expected multi-year market opportunity for MCR4-based obesity therapies exceeding $100 billion per year. While the near-term financials remain challenged, the company’s strategic repositioning toward high-value clinical programs and licensing partnerships offers a path toward substantial value creation if key catalysts deliver. Investors should monitor funding runway, IND/phase-transition milestones, partner discussions, and the ability to translate DKD and obesity-readouts into licensing deals.
Key Performance Indicators
Operating Income
-2.61M
QoQ: 66.37% | YoY:60.73%
Net Income
-2.44M
QoQ: 68.78% | YoY:68.86%
EPS
-0.12
QoQ: 69.23% | YoY:78.57%
Revenue Trend
Margin Analysis
Key Insights
QQ2 2025 revenue: 0 (no product sales reported in the quarter) vs. QQ2 2024: 0 (due to CoSette sale) prior periods had small product sales; Q4 2024 revenue was $350k per quarterly data set, suggesting limited product activity historically during the year.
Net income (loss): -$2.442 million for QQ2 2025; EPS -$0.12.
EBITDA: -$2.367 million for QQ2 2025.
Operating loss: -$2.611 million, driven by ongoing R&D and SG&A while non-operating gains offset some costs in prior periods.
R&D intensity: $3.429 million in R&D for QQ2 2025; reflects heavy pipeline investment.
Liquidity and cash flows
Financial Highlights
Revenue and profitability
- QQ2 2025 revenue: 0 (no product sales reported in the quarter) vs. QQ2 2024: 0 (due to CoSette sale) prior periods had small product sales; Q4 2024 revenue was $350k per quarterly data set, suggesting limited product activity historically during the year.
- Net income (loss): -$2.442 million for QQ2 2025; EPS -$0.12.
- EBITDA: -$2.367 million for QQ2 2025.
- Operating loss: -$2.611 million, driven by ongoing R&D and SG&A while non-operating gains offset some costs in prior periods.
- R&D intensity: $3.429 million in R&D for QQ2 2025; reflects heavy pipeline investment.
Liquidity and cash flows
- Cash, cash equivalents at period end: $3.42 million; cash burn from operations: -$4.847 million; net cash provided by financing activities: $3.379 million; net change in cash: +$1.032 million.
- Cash runway gap: With a reported end-of-period cash of $3.42 million and a February 2025 equity offering of ~$4.3 million net proceeds, pro forma liquidity improves to roughly $7.7 million, subject to burn rate and milestone timing.
- Balance sheet health: Total assets $4.31 million; total liabilities $10.69 million; stockholders’ equity negative at -$6.38 million, signaling a recapitalization need if cash burn persists.
Operational and portfolio signals
- Core driver: pipeline focus on MC4R obesity platform with two assets in development (BMP801 co-therapy program and PL8177/OPL8177 oral/peptide approaches) and an ocular/anti-inflammatory/cardiovascular portfolio, all pursuing IND/phase-transition activities in 2025.
- Notable data readouts: DKD Phase 2 breakout results (December 2024) showing 71% with >30% UACR reduction and 71% with improved or stabilized eGFR, underpinning a potential licensing opportunity for this program.
Income Statement
Metric
Value
YoY Change
QoQ Change
Operating Income
-2.61M
60.73%
66.37%
Net Income
-2.44M
68.86%
68.78%
EPS
-0.12
78.57%
69.23%
Key Financial Ratios
currentRatio
0.38
returnOnAssets
-56.7%
returnOnEquity
38.3%
debtEquityRatio
-0.06
operatingCashFlowPerShare
$-0.24
freeCashFlowPerShare
$-0.24
priceToBookRatio
-3.59
priceEarningsRatio
-2.34
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Management remarks and pipeline catalysts:
- Strategy and portfolio focus: Carl Spana emphasizes long-standing work on monoclonal/cortin four receptor (MCR4/McR4) therapeutics for obesity and weight management, with a belief that early obesity pharmacology offers a multiyear market opportunity exceeding $100 billion annually. He highlights Latticore/MCR4 as central to Palatin’s future and anticipates IND-enabling activities in 2025 for two obesity-focused assets and continued advancement of OPL8177 (MCR1 selective) with topline data expected in Q1 2025, followed by intensified business development activity and potential partnerships.
- Clinical readouts and near-term catalysts: Palatin reported ongoing BMP801 signal-detection data in a combination obesity study (brimonidine + risapatide) with topline data expected later in the current month, designed to assess weight-loss signal, weight regain suppression, and other endpoints. Spana notes an emphasis on a clear “signal” rather than fixed percentage thresholds and highlights the potential to blunt weight regain as a key proof point for weight-maintenance therapy.
- Ocular and DKD programs: The company references multi-pronged ocular melanocortin strategy and ongoing partnerships exploring out-licensing and potential business combinations; DKD Phase 2 breakout results (71% >30% UACR reduction; 71% improved or stabilized eGFR) underpin a potential disease-modifying approach and discussions with potential partners for out-licensing.
- Financial and funding posture: The executives reference a cash position of $3.4 million at 12/31/2024 and actively pursuing multiple funding sources for ongoing operating cash needs; the February 2025 equity offering with ~$4.3 million net proceeds is highlighted as a key liquidity event that broadens the company’s funding runway for upcoming catalysts.
This is a signal detection study. So we do not a priori or not a priori going in with, you know, some frequency number. What we are really looking for is a very clear signal. So what we would like to see in the study is that the combined arm is a high percentage of weight loss. And then in addition to that, we are looking at some, you know, other key metrics. For example, the percentage of patients that are achieving either 4, 5, 6, 7, or 8% weight loss in that eight-week period, you know, combined versus tirzepatide alone. Because that is a little bit more important. It is more important a clinical question.
— Carl Spana
We believe that the pharmacological treatment of obesity in the early stages of a multiyear cycle of innovation will have a market value in excess of $100 billion per year. The Latticorn system plays a critical role in regulating stored energy and food intake. We strongly believe that amyloidin four receptor agonists will be an important part of the future of obesity treatment and weight loss management.
— Carl Spana
Forward Guidance
Catalysts and outlook for Palatin are anchored in pipeline progression and licensing activity rather than near-term top-line revenue. Key management guidance includes:
- IND enabling and calendar 2025 milestones for two obesity-focused MC4R programs, with topline data for OPL8177 expected in Q1 2025 and ongoing IND-enabling activities for other obesity assets in 2025. achievability: contingent on successful preclinical/early-phase signals, scalable manufacturing, and regulatory alignment; Palatin signals confidence in timing but remains exposed to typical biotech development risks and capital constraints.
- BMP801 signal-detection study topline later in the current month, intended to establish a weight-loss signal and maintenance potential for brimonidine coadministration with risapatide in generalized obesity; success would provide a proof of concept to support broader obesity strategy and potential partnership discussions.
- Strong DKD signal from Phase 2 breakout data (71% >30% UACR reduction; 71% improved or stabilized eGFR) with ongoing out-licensing discussions; the ability to translate these readouts into a collaborative deal will be a key determinant of near-term revenue generation.
- Overall guidance emphasizes out-licensing opportunities and strategic partnerships as a primary near-term value driver; achievability is tied to data-readouts, regulatory progress, and the timing/terms of potential collaboration agreements. Key factors to monitor include: success/failure of BMP801 topline data, topline Q1 2025 results for OPL8177, ongoing partner engagement levels, and the pace of capital raises or financing arrangements to sustain R&D cadence.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
PTN Focus
0.00%
0.00%
38.30%
-2.34%
FBIO
56.10%
-1.87%
-61.20%
-70.70%
CKPT
-108.27%
-162.76%
42.40%
-2.81%
ATXI
0.00%
0.00%
-1.51%
-13.20%
PIRS
0.00%
0.00%
-19.20%
-87.70%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Palatin operates in a high-risk, high-reward niche within biopharma, where near-term revenue generation is unlikely but potential value creation hinges on pipeline maturation and licensing deals. The QQ2 2025 results underscore a cash burn profile and a fragile balance sheet, yet management has outlined clear catalysts through IND-enabling activities in 2025 for obesity assets, topline data for OPL8177 in Q1 2025, and compelling readouts from the DKD program that could unlock licensing activity. The equity offering in February 2025 strengthens liquidity, but the company remains dependent on external financing to sustain operations through 2025 catalysts. Investors should monitor: (1) whether BMP801 topline data demonstrates a robust weight-loss signal and maintenance potential; (2) the timing and terms of potential out-licensing deals for OPL8177 and other MC4R assets; (3) the DKD readouts and any partner interest that translates into upfronts or milestones; (4) precise capital requirements and any additional funding rounds; and (5) competition-related risks and regulatory progress. In summary, Palatin’s upside rests on successful data readouts and licensing momentum, offset by liquidity and execution risks typical for a pre-commercial biotech. Area of focus for new capital should be channelled toward advancing IND-enabling work and advancing partner negotiations to monetize its obesity/MC4R portfolio.
Key Investment Factors
Growth Potential
Palatin’s growth potential rests on the monetization of its MC4R obesity portfolio (BMP801, OPL8177) and expansion into rare disease indications (hypothalamic obesity, Prader-Willi-like conditions, Bardet-Biedl) with a focus on weight management and disease-modifying therapies. The DKD program also represents a potential licensing catalyst if readouts translate into a compelling clinical and commercial proposition. Management’s assertion of a >$100B/year obesity market provides a directional framework for long-term value creation if IND enables and clinical efficacy are demonstrated.
Profitability Risk
Key risks include: (1) lack of near-term product revenue; (2) high R&D burn with ongoing cash requirements in a capital-constrained environment; (3) reliance on licensing deals with favorable terms to fund development and commercialization; (4) clinical/operational risk inherent in IND-enabling and Phase 2 readouts; (5) competitive landscape from established MC4R programs (e.g., Rhythm’s setmelanotide) and potential regulatory hurdles; (6) potential dilution and equity-market dependence to fuel operations.
Financial Position
Strong near-term liquidity is not established; end Q2 2025 cash was $3.42m with a prior equity offering of $4.3m net proceeds (Feb 2025) that improves the liquidity runway to roughly $7.7m pro forma, assuming no material revenue generation and continued burn. However, negative shareholders’ equity (-$6.38m) and modest current assets ($3.67m) against liabilities ($10.69m) indicate a fragile balance sheet that may require additional financing or partnerships to sustain operations through 2025 catalysts.
SWOT Analysis
Strengths
Strategic pivot toward high-value MC4R obesity assets with IND-enabling activities planned for 2025.
DKD Phase 2 breakout data showing meaningful readouts (71% >30% UACR reduction; 71% improved or stabilized eGFR) that can underpin licensing discussions.
Active business development posture and partnerships with a focus on out-licensing OPL8177 and related assets; management signaling a clear plan for value realization through collaborations.
Weaknesses
No current product revenue; heavy reliance on external funding to sustain R&D activities.
Negative shareholders’ equity and modest liquidity, creating funding risk for ongoing clinical trials.