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Gauging Palatin Technologies’ Risk Factors
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Gauging Palatin Technologies’ Risk Factors

Shares of biopharmaceutical company Palatin Technologies (PTN) dropped about 5.9% at end of trade on September 29, after its Q4 performance fell short of analysts’ estimates.

Let’s look at Palatin’s recent financials, as well as what has changed in its key risk factors that investors should know.

Palatin is developing first-in-class medicines to modulate the activity of the melanocortin and natriuretic peptide receptor systems. Its strategy is to develop products, and then enter into marketing collaborations with industry leaders to maximize its products’ commercial potential.

In Q4, Palatin’s net revenue increased 149% and total prescriptions increased 17% year-over-year. Net product revenue in Q4 was $80,504 and license and contract revenue stood at $94,689.

Owing to higher selling, general, and administrative expenses, and recognition of non-cash expenses associated with the termination of a license agreement for the drug Vyleesi, Palatin’s total operating expenses increased to $13.9 million from $7.4 million a year ago.

Net loss per share widened to $0.06 from $0.03 a year ago. This figure was higher than analysts’ estimates by $0.03. (See Palatin stock charts on TipRanks)

On September 29, H.C. Wainwright analyst Joseph Pantginis reiterated a Buy rating on the stock, alongside a price target of $2 implying a potential upside of 354.7%.

Pantginis commented on Vyleesi, “We believe Vyleesi is still an attractive asset to potential partners and Palatin now has the freedom to operate, including finding the best potential partnership possible.”

Risk Factors

According to the new TipRanks Risk Factors tool, Palatin’s main risk category is Finance & Corporate, accounting for 29% of the total 48 risks identified. Since September 24, the company added one key risk factor under the Finance & Corporate risk category.

Palatin noted that to raise additional capital through a public or private equity offering, the company has limited authorized shares available, which limits its ability to raise additional funds.

The company now has about 10% of the authorized 300 million common shares available for issuance, which is not sufficient for future financings that will be required.

Consequently, Palatin may have to raise additional funds through alternate means, such as issuance of preferred stock and licenses, or similar agreements which may be detrimental to existing shareholders.

Compared to a sector average Production risk factor of 11%, Palatin’s is at 15%.

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