Delaware
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95-4078884
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer Identification No.)
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4B Cedar Brook Drive
Cranbury, New Jersey
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08512
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer o | Accelerated filer o |
Non-accelerated filer o | Smaller reporting company þ |
(Do not check if a smaller reporting company) |
Page
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PART I – FINANCIAL INFORMATION
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4 | |
4
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5
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6
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7
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8
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17
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20
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20
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PART II – OTHER INFORMATION
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21
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21
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39
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39
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39
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39
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40
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41
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estimates of our expenses, future revenue, capital requirements;
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●
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our ability to obtain additional financing on terms acceptable to us, or at all;
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●
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our ability to advance product candidates into, and successfully complete, clinical trials;
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the initiation, timing, progress and results of future preclinical studies and clinical trials, and our research and development programs;
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the timing or likelihood of regulatory filings and approvals;
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our expectations regarding the results and the timing of results in our Phase 3 clinical trials of bremelanotide for female sexual dysfunction, or FSD;
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our expectation regarding the timing of our regulatory submissions for approval of bremelanotide for FSD in the United States and Europe;
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●
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the potential for commercialization of bremelanotide for FSD and other product candidates, if approved, by us;
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●
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our expectations regarding the potential market size and market acceptance for bremelanotide for FSD and our other product candidates, if approved for commercial use;
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our ability to compete with other products and technologies similar to our product candidates;
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●
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the ability of our third-party collaborators to timely carry out their duties under their agreements with us;
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●
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the ability of our contract manufacturers to perform their manufacturing activities for us in compliance with applicable regulations;
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our ability to recognize the potential value of our licensing arrangements with third parties;
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the potential to achieve revenues from the sale of our product candidates;
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●
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our ability to obtain adequate reimbursement from Medicare, Medicaid, private insurers and other healthcare payers;
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our ability to maintain product liability insurance at a reasonable cost or in sufficient amounts, if at all;
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the retention of key management, employees and third-party contractors;
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the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology;
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our compliance with federal and state laws and regulations;
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the timing and costs associated with obtaining regulatory approval for our product candidates;
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the impact of fluctuations in foreign exchange rates;
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●
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the impact of legislative or regulatory healthcare reforms in the United States;
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●
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our ability to adapt to changes in global economic conditions; and
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●
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our ability to remain listed on the NYSE MKT.
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December 31,
2015
|
June 30,
2015
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|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 31,990,606 | $ | 27,299,268 | ||||
Available-for-sale investments
|
1,377,633 | - | ||||||
Prepaid expenses and other current assets
|
1,716,058 | 1,896,747 | ||||||
Total current assets
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35,084,297 | 29,196,015 | ||||||
Property and equipment, net
|
118,660 | 123,158 | ||||||
Other assets
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191,074 | 155,279 | ||||||
Total assets
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$ | 35,394,031 | $ | 29,474,452 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 2,376,279 | $ | 1,106,484 | ||||
Accrued expenses
|
5,646,697 | 6,223,483 | ||||||
Notes payable, net of discount
|
1,909,821 | - | ||||||
Capital lease obligations
|
26,636 | 25,871 | ||||||
Total current liabilities
|
9,959,433 | 7,355,838 | ||||||
Notes payable, net of discount, net of current portion
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17,665,725 | 9,781,086 | ||||||
Capital lease obligations
|
28,236 | 41,749 | ||||||
Other non-current liabilities
|
265,217 | 91,304 | ||||||
Total liabilities
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27,918,611 | 17,269,977 | ||||||
Stockholders’ equity:
|
||||||||
Preferred stock of $0.01 par value – authorized 10,000,000 shares;
|
||||||||
Series A Convertible; issued and outstanding 4,030 shares as of December 31, 2015 and 4,697 shares as of June 30, 2015, respectively
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40 | 47 | ||||||
Common stock of $0.01 par value – authorized 300,000,000 shares;
|
||||||||
issued and outstanding 68,030,008 shares as of December 31, 2015 and 57,128,433 shares as of June 30, 2015, respectively
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680,300 | 571,284 | ||||||
Additional paid-in capital
|
324,163,388 | 303,332,460 | ||||||
Accumulated other comprehensive loss
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(9,389 | ) | - | |||||
Accumulated deficit
|
(317,358,919 | ) | (291,699,316 | ) | ||||
Total stockholders’ equity
|
7,475,420 | 12,204,475 | ||||||
Total liabilities and stockholders’ equity
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$ | 35,394,031 | $ | 29,474,452 |
Three Months Ended December 31,
|
Six Months Ended December 31,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
REVENUES:
|
||||||||||||||||
License revenue
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$ | - | $ | 8,019,415 | $ | - | $ | 12,951,730 | ||||||||
OPERATING EXPENSES:
|
||||||||||||||||
Research and development
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11,272,307 | 4,273,571 | 21,870,021 | 7,197,537 | ||||||||||||
General and administrative
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1,356,117 | 1,423,206 | 2,556,054 | 2,537,667 | ||||||||||||
Total operating expenses
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12,628,424 | 5,696,777 | 24,426,075 | 9,735,204 | ||||||||||||
(Loss) income from operations
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(12,628,424 | ) | 2,322,638 | (24,426,075 | ) | 3,216,526 | ||||||||||
OTHER INCOME (EXPENSE):
|
||||||||||||||||
Interest income
|
8,234 | 6,199 | 23,974 | 9,998 | ||||||||||||
Interest expense
|
(629,494 | ) | (31,857 | ) | (1,257,502 | ) | (33,587 | ) | ||||||||
Foreign exchange transaction loss
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- | (51,700 | ) | - | (152,983 | ) | ||||||||||
Total other income (expense), net
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(621,260 | ) | (77,358 | ) | (1,233,528 | ) | (176,572 | ) | ||||||||
(Loss) income before income taxes
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(13,249,684 | ) | 2,245,280 | (25,659,603 | ) | 3,039,954 | ||||||||||
Income tax benefit
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- | 531,508 | - | 531,508 | ||||||||||||
NET (LOSS) INCOME
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(13,249,684 | ) | 2,776,788 | (25,659,603 | ) | 3,571,462 | ||||||||||
Basic net (loss) income per common share
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$ | (0.08 | ) | $ | 0.03 | $ | (0.16 | ) | $ | 0.03 | ||||||
Diluted net (loss) income per common share
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$ | (0.08 | ) | $ | 0.03 | $ | (0.16 | ) | $ | 0.03 | ||||||
Weighted average number of common shares outstanding used in computing basic net (loss) income per common share
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156,358,586 | 109,314,460 | 156,268,094 | 108,134,179 | ||||||||||||
Weighted average number of common shares outstanding used in computing diluted net (loss) income per common share
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156,358,586 | 109,815,718 | 156,268,094 | 108,888,313 |
Three Months Ended December 31,
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Six Months Ended December 31,
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|||||||||||||||
2015
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2014
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2015
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2014
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|||||||||||||
Net (loss) income
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$ | (13,249,684 | ) | $ | 2,776,788 | $ | (25,659,603 | ) | $ | 3,571,462 | ||||||
Other comprehensive (loss) income:
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||||||||||||||||
Unrealized (loss) on available-for-sale investments
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(9,389 | ) | - | (9,389 | ) | - | ||||||||||
Total comprehensive (loss) income
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$ | (13,259,073 | ) | $ | 2,776,788 | $ | (25,668,992 | ) | $ | 3,571,462 |
Six Months Ended December 31,
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||||||||
2015
|
2014
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
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||||||||
Net (loss) income
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$ | (25,659,603 | ) | $ | 3,571,462 | |||
Adjustments to reconcile net (loss) income to net cash
|
||||||||
(used in) provided by operating activities:
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||||||||
Depreciation and amortization
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22,193 | 55,185 | ||||||
Non-cash interest expense
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161,478 | 8,486 | ||||||
Stock-based compensation
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800,748 | 512,390 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
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- | (3,035,400 | ) | |||||
Prepaid expenses and other assets
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229,186 | (1,255,646 | ) | |||||
Accounts payable
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1,269,795 | 1,152,758 | ||||||
Accrued expenses
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(445,111 | ) | 1,412,699 | |||||
Deferred revenue
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- | (1,000,000 | ) | |||||
Other non-current liabilities
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173,913 | - | ||||||
Net cash (used in) provided by operating activities
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(23,447,401 | ) | 1,421,934 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchases of investments
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(1,387,022 | ) | - | |||||
Purchases of property and equipment
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(17,695 | ) | - | |||||
Net cash used in investing activities
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(1,404,717 | ) | - | |||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Payments on capital lease obligations
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(12,748 | ) | - | |||||
Payment of withholding taxes related to restricted
|
||||||||
stock units
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(131,959 | ) | (122,067 | ) | ||||
Proceeds from the sale of warrants, net of costs
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19,834,278 | 19,348,000 | ||||||
Proceeds from the issuance of notes payable and warrants
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10,000,000 | 10,000,000 | ||||||
Payment of debt issuance costs
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(146,115 | ) | (138,000 | ) | ||||
Net cash provided by financing activities
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29,543,456 | 29,087,933 | ||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS
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4,691,338 | 30,509,867 | ||||||
CASH AND CASH EQUIVALENTS, beginning of period
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27,299,268 | 12,184,605 | ||||||
CASH AND CASH EQUIVALENTS, end of period
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$ | 31,990,606 | $ | 42,694,472 | ||||
SUPPLEMENTAL CASH FLOW INFORMATION:
|
||||||||
Cash paid for interest
|
$ | 922,111 | $ | 2,601 | ||||
Issuance of warrants in connection with debt financing
|
305,196 | 267,820 | ||||||
Unrealized loss on available-for-sale investments
|
9,389 | - | ||||||
Interest accrued on long-term debt
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- | 22,500 | ||||||
Equipment acquired under capital lease
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- | 80,000 | ||||||
Non-cash equity financing costs in accounts payable
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- | 490,000 | ||||||
Non-cash equity financing costs in accrued expenses
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- | 285,000 | ||||||
Non-cash debt financing costs in accounts payable
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- | 10,000 | ||||||
Non-cash debt financing costs in accrued expenses
|
- | 60,000 |
Three Months Ended December 31,
|
Six Months Ended December 31,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Numerator:
|
||||||||||||||||
Net (loss) income
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$ | (13,249,684 | ) | $ | 2,776,788 | $ | (25,659,603 | ) | $ | 3,571,462 | ||||||
Denominator:
|
||||||||||||||||
Weighted average common shares outstanding - Basic
|
156,358,586 | 109,314,460 | 156,268,094 | 108,134,179 | ||||||||||||
Effect of dilutive shares:
|
||||||||||||||||
Common stock equivalents arising from stock options and warrants
|
- | 346,867 | - | 560,572 | ||||||||||||
Restricted stock units
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- | 154,391 | - | 193,562 | ||||||||||||
Weighted average common shares outstanding - Diluted
|
156,358,586 | 109,815,718 | 156,268,094 | 108,888,313 | ||||||||||||
Net (loss) income per common share:
|
||||||||||||||||
Basic
|
$ | (0.08 | ) | $ | 0.03 | $ | (0.16 | ) | $ | 0.03 | ||||||
Diluted
|
$ | (0.08 | ) | $ | 0.03 | $ | (0.16 | ) | $ | 0.03 | ||||||
December 31,
2015
|
June 30,
2015
|
|||||||
Clinical study costs
|
$ | 1,369,904 | $ | 1,641,605 | ||||
Deferred financing costs
|
121,320 | 72,823 | ||||||
Other
|
224,834 | 182,319 | ||||||
$ | 1,716,058 | $ | 1,896,747 |
December 31,
2015
|
||||
Cost
|
$ | 1,387,022 | ||
Gross unrealized loss
|
(9,389 | ) | ||
Fair value
|
$ | 1,377,633 |
Carrying Value
|
Quoted prices in
active markets
(Level 1)
|
Other quoted/observable inputs (Level 2)
|
Significant unobservable inputs
(Level 3)
|
|||||||||||||
December 31, 2015:
|
|
|
|
|||||||||||||
Corporate debt securities
|
$ | 1,377,633 | $ | 1,377,633 | $ | - | $ | - | ||||||||
Money market account
|
31,811,576 | 31,811,576 | - | - | ||||||||||||
TOTAL
|
$ | 33,189,209 | $ | 33,189,209 | $ | - | $ | - | ||||||||
June 30, 2015:
|
||||||||||||||||
Money market account
|
$ | 26,946,378 | $ | 26,946,378 | $ | - | $ | - | ||||||||
December 31,
2015
|
June 30,
2015
|
|||||||
Clinical study costs
|
$ | 5,185,991 | $ | 5,594,839 | ||||
Other research related expenses
|
340,067 | 176,105 | ||||||
Professional services
|
98,617 | 201,831 | ||||||
Other
|
22,022 | 250,708 | ||||||
$ | 5,646,697 | $ | 6,223,483 |
December 31,
2015
|
June 30,
2015
|
|||||||
Notes payable under venture loan
|
$ | 20,000,000 | $ | 10,000,000 | ||||
Unamortized related debt discount
|
(424,454 | ) | (218,914 | ) | ||||
Notes payable
|
$ | 19,575,546 | $ | 9,781,086 | ||||
Less: current portion
|
1,909,821 | - | ||||||
Long-term portion
|
$ | 17,665,725 | $ | 9,781,086 |
●
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Bremelanotide, an on-demand subcutaneous injectable peptide melanocortin receptor agonist, for treatment of FSD in premenopausal women. Bremelanotide, which is a melanocortin agonist, is a synthetic peptide analog of the naturally occurring hormone alpha-MSH (melanocyte-stimulating hormone). The novel mechanism of action involves activating endogenous melanocortin hormone pathways involved in sexual response. Bremelanotide is in Phase 3 clinical trials. Patient enrollment was completed in the fourth quarter of calendar 2015, and last patient out and topline results are projected for the third quarter of calendar 2016;
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●
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Melanocortin receptor-4, or MC4r, compounds for treatment of obesity and diabetes. Results of our studies involving MC4r peptides suggest that certain of these peptides may have significant commercial potential for treatment of conditions responsive to MC4r activation, including FSD, erectile dysfunction or ED, obesity and diabetes;
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●
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PL-3994, a natriuretic peptide receptor-A, or NPR-A, agonist, for treatment of cardiovascular and pulmonary indications. PL-3994 is our lead natriuretic peptide receptor product candidate, and is a synthetic mimetic of the neuropeptide hormone atrial natriuretic peptide, or ANP. PL-3994 is in development for treatment of heart failure, acute exacerbations of asthma and refractory hypertension; and
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●
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Melanocortin receptor-1, or MC1r, agonist peptides for treatment of inflammatory and dermatologic disease indications. Our MC1r peptide drug candidates are highly specific, with substantially greater binding and efficacy at MC1r than at other melanocortin receptors. We have selected one of our MC1r peptide drug candidates, designated PL-8177, as a clinical trial candidate.
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Using our technology and expertise to develop and commercialize products in our active drug development programs;
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Entering into strategic alliances and partnerships with pharmaceutical companies to facilitate the development, manufacture, marketing, sale and distribution of product candidates that we are developing;
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Partially funding our product development programs with the cash flow generated from research collaboration and license agreements and any potential future agreements with third parties; and
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Completing development and seeking regulatory approval of bremelanotide for FSD and our other product candidates.
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the development and testing of products in animals and humans;
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product approval or clearance;
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regulatory compliance;
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●
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good manufacturing practices, or GMP compliance;
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●
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intellectual property rights;
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●
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product introduction;
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●
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marketing, sales and competition; and
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obtaining sufficient capital.
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continuing to conduct preclinical development and clinical trials;
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participating in regulatory approval processes;
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formulating and manufacturing products, or having third parties formulate and manufacture products;
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post-approval monitoring and surveillance of our products;
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conducting sales and marketing activities, either alone or with a partner; and
|
●
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obtaining additional capital.
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●
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the ability to raise additional capital on acceptable terms, or at all;
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●
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timely completion of our clinical trials, which may be significantly slower or cost more than we currently anticipate and will depend substantially upon the performance of third-party contractors;
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●
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whether we are required by the FDA or similar foreign regulatory agencies to conduct additional clinical trials beyond those planned to support the approval and commercialization of our product candidates or any future product candidates;
|
●
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acceptance of our proposed indications and primary endpoint assessments relating to the proposed indications of our product candidates by the FDA and similar foreign regulatory authorities;
|
●
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our ability to demonstrate to the satisfaction of the FDA and similar foreign regulatory authorities, the safety and efficacy of our product candidates or any future product candidates;
|
●
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the prevalence, duration and severity of potential side effects experienced with our product candidates or future approved products, if any;
|
●
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the timely receipt of necessary marketing approvals from the FDA and similar foreign regulatory authorities;
|
●
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achieving and maintaining, and, where applicable, ensuring that our third-party contractors achieve and maintain, compliance with our contractual obligations and with all regulatory requirements applicable to our product candidates or any future product candidates or approved products, if any;
|
●
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the ability of third parties with whom we contract to manufacture clinical trial and commercial supplies of our product candidates or any future product candidates, remain in good standing with regulatory agencies and develop, validate and maintain commercially viable manufacturing processes that are compliant with GMP;
|
●
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a continued acceptable safety profile and efficacy during clinical development and following approval of our product candidates or any future product candidates;
|
●
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our ability to successfully commercialize our product candidates or any future product candidates in the United States and internationally, if approved for marketing, sale and distribution in such countries and territories, whether alone or in collaboration with others;
|
●
|
acceptance by physicians and patients of the benefits, safety and efficacy of our product candidates or any future product candidates, if approved, including relative to alternative and competing treatments;
|
●
|
our and our partners’ ability to establish and enforce intellectual property rights in and to our product candidates or any future product candidates;
|
●
|
our and our partners’ ability to avoid third-party patent interference or intellectual property infringement claims; and
|
●
|
our ability to in-license or acquire additional product candidates or commercial-stage products that we believe can be successfully developed and commercialized.
|
●
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the results of our Phase 3 clinical trials for bremelanotide for FSD;
|
●
|
the timing of, and the costs involved in, obtaining regulatory approvals for bremelanotide for FSD and our other product candidates;
|
●
|
the number and characteristics of any additional product candidates we develop or acquire;
|
●
|
the scope, progress, results and costs of researching and developing bremelanotide for FSD, PL-3994 or any future product candidates, and conducting preclinical and clinical trials;
|
●
|
the cost of commercialization activities if bremelanotide for FSD, PL-3994 or any future product candidates are approved for sale, including marketing, sales and distribution costs;
|
●
|
the cost of manufacturing bremelanotide for FSD, PL-3994 or any future product candidates and any products we successfully commercialize and maintaining our related facilities;
|
●
|
our ability to establish and maintain strategic collaborations, licensing or other arrangements and the terms and timing of such arrangements;
|
●
|
the degree and rate of market acceptance of any future approved products;
|
●
|
the emergence, approval, availability, perceived advantages, relative cost, relative safety and relative efficacy of alternative and competing products or treatments;
|
●
|
any product liability or other lawsuits related to our products;
|
●
|
the expenses needed to attract and retain skilled personnel;
|
●
|
the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims, including litigation costs and the outcome of such litigation; and
|
●
|
the timing, receipt and amount of sales of, or royalties on, future approved products, if any.
|
●
|
timely completion of, or need to conduct additional, clinical trials, including our Phase 3 clinical trials in the United States for bremelanotide for FSD, which may be significantly slower or cost more than we currently anticipate and will depend substantially upon the accurate and satisfactory performance of third-party contractors;
|
●
|
our ability to demonstrate to the satisfaction of the FDA the safety and efficacy of bremelanotide for FSD or any future product candidates through clinical trials;
|
●
|
whether we are required by the FDA or other similar foreign regulatory agencies to conduct additional clinical trials to support the approval of bremelanotide for FSD or any future product candidates;
|
●
|
the acceptance of parameters for regulatory approval, including our proposed indication, primary endpoint assessment and primary endpoint measurement, relating to our lead indications of bremelanotide for FSD;
|
●
|
our success in educating physicians and patients about the benefits, administration and use of bremelanotide for FSD or any future product candidates, if approved;
|
●
|
the prevalence and severity of adverse events experienced with bremelanotide for FSD or any future product candidates or approved products;
|
●
|
the adequacy and regulatory compliance of the autoinjector device, supplied by an unaffiliated third party, to be used as part of our bremelanotide combination product;
|
●
|
the timely receipt of necessary marketing approvals from the FDA and similar foreign regulatory authorities;
|
●
|
our ability to raise additional capital on acceptable terms to achieve our goals;
|
●
|
achieving and maintaining compliance with all regulatory requirements applicable to bremelanotide for FSD or any future product candidates or approved products;
|
●
|
the availability, perceived advantages, relative cost, relative safety and relative efficacy of alternative and competing treatments;
|
●
|
the effectiveness of our own or our future potential strategic collaborators’ marketing, sales and distribution strategy and operations;
|
●
|
our ability to manufacture clinical trial supplies of bremelanotide for FSD or any future product candidates and to develop, validate and maintain a commercially viable manufacturing process that is compliant with current GMP;
|
●
|
our ability to successfully commercialize bremelanotide for FSD or any future product candidates, if approved for marketing and sale, whether alone or in collaboration with others;
|
●
|
our ability to enforce our intellectual property rights in and to bremelanotide for FSD or any future product candidates;
|
●
|
our ability to avoid third-party patent interference or intellectual property infringement claims;
|
●
|
acceptance of bremelanotide for FSD or any future product candidates, if approved, as safe and effective by patients and the medical community; and
|
●
|
a continued acceptable safety profile and efficacy of bremelanotide for FSD or any future product candidates following approval.
|
●
|
lack of effectiveness of any product candidate during clinical trials or the failure of our product candidates to meet specified endpoints;
|
●
|
failure to design appropriate clinical trial protocols;
|
●
|
uncertainty regarding proper dosing;
|
●
|
inability to develop or obtain a supplier for an autoinjector device that meets the FDA’s medical device requirements;
|
●
|
insufficient data to support regulatory approval;
|
●
|
inability or unwillingness of medical investigators to follow our clinical protocols;
|
●
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inability to add a sufficient number of clinical trial sites; or
|
●
|
the availability of sufficient capital to sustain operations and clinical trials.
|
●
|
product approval or clearance;
|
●
|
regulatory compliance;
|
●
|
good manufacturing practices;
|
●
|
intellectual property rights;
|
●
|
product introduction; and
|
●
|
marketing and competition.
|
●
|
discovery of serious or unexpected toxicities or side effects experienced by study participants or other safety issues;
|
●
|
slower than expected rates of subject recruitment and enrollment rates in clinical trials resulting from numerous factors, including the prevalence of other companies’ clinical trials for their product candidates for the same indication, or clinical trials for indications for which patients do not as commonly seek treatment;
|
●
|
difficulty in retaining subjects who have initiated a clinical trial but may withdraw at any time due to adverse side effects from the therapy, insufficient efficacy, fatigue with the clinical trial process or for any other reason;
|
●
|
difficulty in obtaining institutional review board, or IRB, approval for studies to be conducted at each site;
|
●
|
delays in manufacturing or obtaining, or inability to manufacture or obtain, sufficient quantities of materials for use in clinical trials;
|
●
|
inadequacy of or changes in our manufacturing process or the product formulation or method of delivery;
|
●
|
changes in applicable laws, regulations and regulatory policies;
|
●
|
delays or failure in reaching agreement on acceptable terms in clinical trial contracts or protocols with prospective contract research organizations, or CROs, clinical trial sites and other third-party contractors;
|
●
|
failure of our CROs or other third-party contractors to comply with contractual and regulatory requirements or to perform their services in a timely or acceptable manner;
|
●
|
failure by us, our employees, our CROs or their employees or any partner with which we may collaborate or their employees to comply with applicable FDA or other regulatory requirements relating to the conduct of clinical trials or the handling, storage, security and recordkeeping for drug, medical device and biologic products;
|
●
|
delays in the scheduling and performance by the FDA of required inspections of us, our CROs, our suppliers, or our clinical trial sites, and violations of law or regulations by discovered in the course of FDA inspections;
|
●
|
scheduling conflicts with participating clinicians and clinical institutions; or
|
●
|
difficulty in maintaining contact with subjects during or after treatment, which may result in incomplete data.
|
●
|
perceptions by members of the healthcare community, including physicians, about its safety and effectiveness;
|
●
|
cost-effectiveness relative to competing products and technologies;
|
●
|
availability of reimbursement for our products from third-party payers such as health insurers, health maintenance organizations and government programs such as Medicare and Medicaid; and
|
●
|
advantages over alternative treatment methods.
|
●
|
regulatory authorities may withdraw their approval of the product;
|
●
|
we may be required to reformulate such products or change the way the product is manufactured;
|
●
|
we may become the target of lawsuits, including class action suits; and
|
●
|
our reputation in the market place may suffer resulting in a significant drop in the sales of such products.
|
●
|
reliance on the third party for regulatory compliance and quality assurance;
|
●
|
the possible breach of the manufacturing agreement by the third party because of factors beyond our control;
|
●
|
the possible termination or non-renewal of the agreement by the third party, based on its own business priorities, at a time that is costly or inconvenient for us; and
|
●
|
drug product supplies not meeting the requisite requirements for clinical trial use.
|
●
|
the federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from soliciting, receiving, offering or providing remuneration, directly or indirectly, in return for or to induce either the referral of an individual for, or the purchase order or recommendation of, any item or services for which payment may be made under a federal health care program such as the Medicare and Medicaid programs;
|
●
|
federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payors that are false or fraudulent;
|
●
|
the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes that prohibit executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters;
|
●
|
HIPPA, as amended by the Health Information Technology and Clinical Health Act, or HITECH, and its implementing regulations, which imposes certain requirements relating to the privacy, security, and transmission of individually identifiable health information;
|
●
|
The federal physician sunshine requirements under the Affordable Care Act, which require manufacturers of drugs, devices, biologics, and medical supplies to report annually to the U.S. Department of Health and Human Services information related to payments and other transfers of value to physicians, other healthcare providers, and teaching hospitals, and ownership and investment interests held by physicians and other healthcare providers and their immediate family members and applicable group purchasing organizations; and
|
●
|
state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws that may apply to items or services reimbursed by any third-party payor, including commercial insurers, state laws that require pharmaceutical companies to comply with the pharmaceutical industry's voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
|
●
|
restrictions on the products or manufacturing process;
|
●
|
warning letters;
|
●
|
civil or criminal penalties;
|
●
|
fines;
|
●
|
injunctions;
|
●
|
imposition of a Corporate Integrity Agreement requiring heightened monitoring of our compliance functions, overseen by outside monitors, and enhanced reporting requirements to, and oversight by, the FDA and other government agencies;
|
●
|
product seizures or detentions and related publicity requirements;
|
●
|
suspension or withdrawal of regulatory approvals;
|
●
|
regulators or IRBs may not authorize us or any potential future collaborators to commence a clinical trial or conduct a clinical trial at a prospective trial site;
|
●
|
total or partial suspension of production; and
|
●
|
refusal to approve pending applications for marketing approval of new product candidates.
|
●
|
completion of non-clinical tests including preclinical laboratory and formulation studies and animal testing and toxicology;
|
●
|
submission to the FDA of an investigational new drug, or IND, application, which must become effective before clinical trials may begin, and which may be placed on “clinical hold” by the FDA, meaning the trial may not commence, or must be suspended or terminated prior to completion;
|
●
|
performance of adequate and well-controlled Phase 1, 2 and 3 human clinical trials to establish the safety and efficacy of the drug for each proposed indication, and potentially post-approval or Phase 4 studies to further define the drug’s efficacy and safety, generally or in specific patient populations;
|
●
|
submission to the FDA of a new drug application, or NDA, that must be accompanied by a substantial “user fee” payment;
|
●
|
FDA review and approval of the NDA before any commercial marketing or sale; and
|
●
|
compliance with post-approval commitments and requirements.
|
●
|
require changes to manufacturing methods;
|
●
|
require recall, replacement or discontinuance of one or more of our products;
|
●
|
require additional recordkeeping;
|
●
|
limit or restrict our ability to engage in certain types of marketing or promotional activities;
|
●
|
alter or eliminate the scope or terms of any currently available regulatory exclusivities; and
|
●
|
restrict or eliminate our ability to settle any patent litigation we may bring against potential generic competitors.
|
●
|
the degree and range of protection any patents will afford us against competitors, including whether third parties will find ways to invalidate or otherwise circumvent our patents;
|
●
|
if and when patents will be issued;
|
●
|
whether or not others will obtain patents claiming aspects similar to those covered by our patents and patent applications; and
|
●
|
whether we will need to initiate litigation or administrative proceedings, which may be costly whether we win or lose.
|
●
|
obtain licenses, which may not be available on commercially reasonable terms, if at all;
|
●
|
redesign our products or processes to avoid infringement;
|
●
|
stop using the subject matter claimed in the patents held by others;
|
●
|
pay damages; or
|
●
|
defend litigation or administrative proceedings, which may be costly whether we win or lose, and which could result in a substantial diversion of our management resources.
|
●
|
publicity regarding actual or potential clinical results relating to products under development by our competitors or us;
|
●
|
delay or failure in initiating, completing or analyzing preclinical or clinical trials or unsatisfactory designs or results of these trials;
|
●
|
interim decisions by regulatory agencies, including the FDA, as to clinical trial designs, acceptable safety profiles and the benefit/risk ratio of products under development;
|
●
|
achievement or rejection of regulatory approvals by our competitors or by us;
|
●
|
announcements of technological innovations or new commercial products by our competitors or by us;
|
●
|
developments concerning proprietary rights, including patents;
|
●
|
developments concerning our collaborations;
|
●
|
regulatory developments in the United States and foreign countries;
|
●
|
economic or other crises and other external factors;
|
●
|
period-to-period fluctuations in our revenue and other results of operations;
|
●
|
changes in the structure of healthcare payment systems or other actions that affect the effective reimbursement rates for treatment regimens containing our products;
|
●
|
changes in financial estimates and recommendations by securities analysts following our business or our industry;
|
●
|
sales of our common stock (or the perception that such sales could occur); and
|
●
|
the other factors described in this “Risk Factors” section.
|
●
|
60,592 shares issuable on the conversion of immediately convertible Series A Convertible preferred stock, subject to adjustment, for no further consideration;
|
●
|
5,156,640 shares issuable on the exercise of stock options, at exercise prices ranging from $0.60 to $24.90 per share;
|
●
|
3,064,442 shares issuable under restricted stock units which vest on dates between June 11, 2016 and January 11, 2020, subject to the fulfillment of service conditions; and
|
●
|
115,061,618 shares issuable on the exercise of warrants at exercise prices ranging from $0.01 to $1.00 per share.
|
●
|
a limited availability of market quotations for our securities;
|
●
|
reduced liquidity with respect to our securities;
|
●
|
a determination that our shares of common stock are “penny stock” which will require brokers trading in our shares of common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our shares of common stock;
|
●
|
a limited amount of news and analyst coverage for our company; and
|
●
|
a decreased ability to issue additional securities or obtain additional financing in the future.
|
Period
|
Total Number of Shares Purchased (1)
|
Weighted Average Price Paid per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
Maximum
Number of Shares that May Yet be Purchased Under Announced Plans or Programs
|
||||||||||||
October 1-31, 2015
|
356 | $ | 0.79 | - | - | |||||||||||
November 1-30, 2015
|
- | - | - | - | ||||||||||||
December 1-31, 2015
|
- | - | - | - | ||||||||||||
Total
|
356 | $ | 0.79 | - | - |
Exhibit Number
|
Description
|
Filed Herewith
|
Form
|
Filing Date
|
SEC File No.
|
|||||
Amended form of Restricted Share Unit Agreement under the 2011 Stock Incentive Plan.
|
X
|
|||||||||
Amended form of Performance-Based Restricted Share Unit Agreement under the 2011 Stock Incentive Plan.
|
X
|
|||||||||
Amended form of Restricted Share Unit Agreement for non-employee Directors under the 2011 Stock Incentive Plan.
|
X
|
|||||||||
Certification of Chief Executive Officer.
|
X
|
|||||||||
Certification of Chief Financial Officer.
|
X
|
|||||||||
Certification of principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
X
|
|||||||||
Certification of principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
X
|
|||||||||
101.INS
|
XBRL Instance Document.
|
X
|
||||||||
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
X
|
||||||||
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
X
|
||||||||
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
X
|
||||||||
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
X
|
||||||||
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
X
|
Palatin Technologies, Inc.
|
|||
(Registrant)
|
|||
/s/ Carl Spana
|
|||
Date: February 12, 2016
|
Carl Spana, Ph.D.
President and
Chief Executive Officer (Principal
Executive Officer)
|
||
/s/ Stephen T. Wills
|
|||
Date: February 12, 2016
|
Stephen T. Wills, CPA, MST
Executive Vice President, Chief Financial Officer and Chief Operating Officer
(Principal Financial and Accounting Officer)
|
Exhibit Number
|
Description
|
Filed Herewith
|
Form
|
Filing Date
|
SEC File No.
|
|||||
Amended form of Restricted Share Unit Agreement under the 2011 Stock Incentive Plan.
|
X
|
|||||||||
Amended form of Performance-Based Restricted Share Unit Agreement under the 2011 Stock Incentive Plan.
|
X
|
|||||||||
Amended form of Restricted Share Unit Agreement for non-employee Directors under the 2011 Stock Incentive Plan.
|
X
|
|||||||||
Certification of Chief Executive Officer.
|
X
|
|||||||||
Certification of Chief Financial Officer.
|
X
|
|||||||||
Certification of principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
X
|
|||||||||
Certification of principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
X
|
|||||||||
101.INS
|
XBRL Instance Document.
|
X
|
||||||||
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
X
|
||||||||
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
X
|
||||||||
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
X
|
||||||||
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
X
|
||||||||
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
X
|
|
Performance Period:
|
The period beginning on the Date of Grant and ending on [
Ÿ
]
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Palatin Technologies, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Carl Spana
|
|
Carl Spana, President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Palatin Technologies, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Stephen T. Wills
|
|
Stephen T. Wills, Executive Vice President, Chief Financial Officer and Chief Operating Officer
|
/s/ Carl Spana
|
|
Carl Spana, President and Chief Executive Officer (Principal Executive Officer)
|
|
/s/ Stephen T. Wills
|
|
Stephen T. Wills, Executive Vice President, Chief Financial Officer and Chief Operating Officer (Principal Financial Officer)
|