Greetings. Welcome to Palatin's fourth quarter and fiscal year-end 2026 Operating Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference call is being recorded. Before we begin our remarks, I would like to remind you that statements made by Palatin are not historical facts and may be forward-looking statements. These statements are based on assumptions that may or may not prove to be accurate, and that the actual results may differ materially from those anticipated due to the variety of risks and uncertainties discussed in the company's most recent filings with the Securities and Exchange Commission. Please consider such risks and uncertainties carefully in evaluating these forward-looking statements by Palatin's prospects. Now, I would like to turn the call over to our host, Dr. Carl Spana, President and Chief Executive Officer of Palatin. Please go ahead.

Good morning, everyone, and thank you for joining us. I am Carl Spana, President and Chief Executive Officer of Paladin Technologies. Today, I will discuss our strategic priorities and progress across our development programs. Steve Wills, our Chief Operating Officer and Chief Financial Officer, will then review our fiscal 2026 financial results and liquidity position. We will then conclude with questions. Our principal strategic focus is the development of next-generation, best-in-class Melanocortin-4 receptor or MC4R agonists for treating syndromic and rare obesity disorders. We are initially targeting hypothalamic obesity, Prady-Willis syndrome, and Bardet-Beidel syndrome with potential applicability to other disorders involving the MC4R pathway. MC4R agonism is now clinically and commercially validated in multiple rare and syndromic obesity disorders, establishing a strong foundation for the development of next-generation therapies. Palatin brings more than 25 years of melanocortin research and drug development experience to this opportunity, including the development of FDA-approved remelanotide or Ilesi. While currently available and emerging therapies have demonstrated meaningful efficacy, gastrointestinal adverse events and hyperpigmentation remain important challenges for patients requiring long-term treatment. Clinical studies of the approved MC4R agonists in the rare obesity space and the next generation of best additional MC4R therapies under development have continued to report high levels of nausea and vomiting as well as incidence of hyperpigmentation. Our objective is to develop best-in-class linocutin-4 receptive therapies that deliver comparable or greater efficacy with improved tolerability, little to no hyperpigmentation, and product profiles suitable for lifelong use. We are advancing two complementary peptide series, non-lipidated PL1000 and lipidated PL2000 series. Tested compounds from both series have demonstrated potent MC4R agonism activity without MC1R agonism. Because MC1R agonism activation contributes to pigmentation, these findings support our strategy to minimize or potentially eliminate hyperpigmentation. Both peptide series contribute to our effort to develop a long-acting, once-weekly subcutaneous therapy. In preclinical studies, compounds from both the PL1000 and PL2000 series have produced significant dose-dependent reductions in body weight and food intake in diet-induced obese mice. For our PL1000 lead development candidate, we have established feasibility of once-weekly subcutaneous dosing and are working to optimize a controlled release formulation. Our lead, MC4R, Lipidated Peptide Development Canada, has demonstrated significant reductions in food intake and weight loss with once-weekly subcutaneous dosing and a diet-induced obese mouse model. Preclinical pharmacokinetic data supports the potential for longer-than-once-weekly or less-frequent dosing in humans. We are currently conducting the activities required to file an IND and begin human clinical studies. Our oral small molecule MC4R program provides a third treatment approach, building on learnings from an earlier drug candidate, PL7737, and utilizing multiple approaches including artificial intelligence and machine learning tools. We have identified potential drug candidates with improved potency and MC4R selectivity. Our objective is to develop an oral MC4R agonist capable of delivering comparable or greater efficacy than emerging oral MC4R therapies with improved gastrointestinal tolerability, We are also designing our oral candidates to have limited or avoid MCR1 mediated off-target activity to minimize or eliminate hyperpigmentation. Subject to appropriate funding, we are targeting initiation of a Phase I single ascending dose and multiple ascending dose studies for a lipidated peptide candidate in the first half of calendar 2027 with data targeted for the second half of 2027. and are targeting initiation of the oral phase 1 single and multiple ascending dose studies in the second half of calendar 27 with the initial data expected in the first half of 2028. These studies will evaluate human safety, tolerability, pharmacokinetics, and clinical efficacy. Taken together, our non-lipidated peptide, lipidated peptide, and oral small molecule programs provide three distinct approaches to developing differentiated, selective MC4R agonists for the long-term treatment of patients with syndromic and rare obesity disorders. Each approach is being designed around the same core, best-in-class objective. Meaningful efficacy, improved tolerability, little to no hyperpigmentation, and a dosing profile suitable for lifelong treatment. Beyond our VC programs, our broader melanocortin platform has already generated meaningful strategic collaborations. Under our August 2025 Retinal Disease Research Collaboration and Licensing Agreement, Bergel Ingelheim paid an aggregate of €7.5 million upfront and an initial milestone amassed. The agreement provides for up to €280 million in additional success-based milestones and tiered royalties. We continue to perform Reimburse Research Under the Collaboration. We also sub-license our PL9643 Dry Eye Program to attend SPAC labs earlier this year. Beyond those partnered assets, our PL8177 Ulcerative Colitis Program has positive Phase II proof-of-principle findings. Our Diabetic Neuropathy Program has encouraging open-label Phase II data as well. We are pursuing partnerships with these non-core assets so our internal development effort can remain focused on rare obesity and CR4 therapies. Our priorities are clear. Advance our complementary non-limited and limited selected MC4R agonist drug candidates and oral program for clinical development. Translate preclinical differentiating findings into human clinical evidence and continue creating value through our strategic collaborations and partnerships. Steve will now review our financial results. Steve, over to you.

Thank you, Carl, and good morning, everyone. I will review our fiscal fourth quarter and full year 2026 results, followed by our cash position and liquidity outlook. Unless otherwise noted, comparisons are with the corresponding fiscal year 2025 periods. For the fourth quarter ended June 30, 2026, Palatin recognized $300,000 in collaboration and license revenue compared with no revenue in the prior year quarter. For the full fiscal year, collaboration and license revenue totaled $13.2 million compared with no revenue in fiscal 2025. This included $9.4 million related to our Bengal-Engelheim collaboration and $3.8 million related to the Altena SPAC sublicense. The Altena SPAC revenue was recognized in the form of non-cash debt cancellation. Fourth quarter operating expenses were $4.7 million compared with $2.3 million in the prior year quarter. The prior year quarter included gains associated with Wylisi and Purses commitments affecting comparability. Research and development expense was $2.0 million in each fourth quarter, while general and administrative expense was $2.7 million as compared with $2.6 million a year earlier. For fiscal 2026, Total operating expenses were $21.9 million compared with $17.5 million in fiscal 2025. Research and development expenses decreased to $12.4 million from $14.9 million, primarily attributable to lower expenses related to the timing of certain activities on our NC4R programs. General and administrative expenses increased at $9.5 million from $7.8 million, primarily due to higher professional fees. This will 2025 operating expenses included a $3.1 million gain on the sale by leasing and a $2.1 million gain on purchase commitments. We reported a fourth quarter net loss of $4.4 million compared with $2.2 million in the prior year quarter. For the full fiscal year, net loss decreased to $8.4 million or a loss of $2.96 per basic and diluted common share. compared with a net loss of $17.3 million or a loss of $32.15 per basic and diluted common share in fiscal 2025. The year-over-year improvement in net loss was primarily attributable to collaboration and license revenue and gains related to by leasing and purchase commitments. Net cash used in operating activities was $13.5 million in fiscal 2026. compared with $21.3 million in fiscal 2025. Net cash provided by financing activities was $18.5 million consisting primarily of $16.9 million in net proceeds from common stock and warrant sales and $1.6 million from warrant exercises. Turning to liquidity, we ended June 30, 2026 with $7.5 million in cash and cash equivalents compared with $2.6 million at June 30, 2025. Current liabilities were $1.8 million at fiscal year end. Based on that cash balance and our current operating and development plans, including our ability to reduce or delay certain expenditures within management's control, we do not expect existing cash to be sufficient to fund operations for at least 12 months following issuance of our financial statements. Accordingly, substantial doubt exists about our ability to continue as a going concern. We will require additional financing to continue advancing our development programs and fund operations. We intend to pursue equity financings, collaboration arrangements, and other potential sources of capital, but there can be no assurance that funding will be available when needed or on accessible terms. The timing of planned development milestones remains subject to appropriate funding. Operationally, we are prioritizing our peptide and oral MC4R obesity programs, Thank you, Steve. Our focus is on translating the promising preclinical findings from both non-lipidated and lipidated peptides together with our oral smormology program into clinical evidence.

Thank you for joining us. We are ready to now take your questions. Thank you. Ladies and gentlemen, the floor is now open for questions. If you wish to join the queue to ask a question at this time, please press star 1 on your telephone keypad.

We do ask if listening on speakerphone this morning that you pick up your handset while asking your question to provide optimal sound quality. Once again, please press star 1 on your telephone keypad at this time. If you wish to join queue to ask a question, please hold a moment while we poll for questions. And your first question this morning is coming from Scott Henry from AGP. Scott, your line is live. Please go ahead.

Thank you, and good morning. Carl, I'll start with you. You mentioned the lipidated and non-lipidated peptide approaches. Could you talk a little bit about the advantages and the differences between those two approaches? And, you know, eventually, would you narrow it down to one, or would you keep both going all the way? Thank you.

Thanks, Scott. So the main difference is that in the case of a lipidated peptide approach, It has an aliphatic part of it that actually binds to plasma proteins, so its longevity is built into the molecule, so you don't have to have a polymer formulation. So it's very similar to what you would see with the GLP-1s. When you go to the non-lipidated, that means you're now formulating in erodible polymers that essentially are ejected, and then they erode over a certain period of time, and they slowly release your drug. both can accomplish long-term delivery. Our preference would be for a liquidated approach in that it gives a little more flexibility. You're not dependent on the release characteristics of the polymer. Essentially, it's a single API that's being made. It's not being formulated. It's not as bulky on the injection side. And we believe it's also going to give maximum flexibility for dose titration. So you'll be able to have multiple doses or more easily have multiple doses that can be used and a more titrating fashion, very similar to what's done with the GLP-1s today. So I think it gives the clinician and the patient the most flexibility over the polymer approach. We will run both of those in parallel. Our goal is really to deliver, as we said, a weekly product that has really good efficacy, so high MCL4 selectivity and potency and limited to no hyperpigmentation. Our preference, of course, would be to just follow through on the liquidated and certainly as that goes into the clinic and begins to show efficacy, then we would probably slow down the polymer part. We would most likely advance both of them all the way through into Phase II clinical development. We'd make a decision.

Okay, great. Thank you for that, Culler. I know you've spoken a lot about hyperpigmentation. I did hear a little bit more about improving gastrointestinal tolerability. What are you doing specifically to address that with the MC4R agonistic? Sure.

So there are two approaches. So one, you know, there's going to be the GI side effects are indeed driven by MC4R agonism. One way of reducing that is to essentially not Overdose patients. So when you're going with, for example, the lipidated peptide, it's a lot easier to keep the patient in the intended therapeutic range without going over. So one of the problems you have with these simpler peptides that aren't formulated is that you're injecting a big bolus dose, right, because it's a short-acting drug, so you go way above the therapeutic window for the drug and then you get yourself into higher levels of AE. So one approach is simply by flattening out the absorption of the drug and keeping it in a defined therapeutic window, you'll limit some of the GI side effects and you'll be left with, say, some of the inherent effects that occur by just activating the receptor. Second way of doing it, which is a little more complicated, is to try to develop compounds that inherently don't have any ability to cause nosianemesis. And there are structural elements that we're working on that can lead to that. but, you know, we're not quite there yet. So, right now, the primary way you're going to do it is really by limiting that, essentially, that bolus dosing, you know, keeping it in that flat therapeutic window. That's ideally done with these liquidated peptides. Okay, great.

Final question for you, Carl. Have you given thought to what rare obesity indication you would likely pursue first?

I think the first one will be the hypothalamic obesity indication. There were certain advantages there that patients are relatively easy to identify. They have had a type of cancer that causes damage to the hypothalamus when it's treated, and they're relatively healthy patients that essentially have had a damage to the hypothalamus that can be corrected with an MTR-4 agonist. So that would be the first indication. Prader-Willi syndrome would be also probably done pretty closely if not in parallel. There's a little bit different. You're working on the hyperthasia and trying to reduce some of the obesity as well. And then the third would be the body of Bartle syndrome. So those are the three pretty much in order. But I think the first two, depending on resources, we try to run in parallel, as close to parallel as we can.

Okay, great. Thank you, Carl. A couple questions for Steve. Steve, how should we think about collaboration, license revenue, in fiscal year 2027. Should it be material, significant? Just trying to get a thought relative to what we saw in fiscal 2026.

Well, thanks, Scott. In our mind, achieving any milestone with these collaborations is significant. We do anticipate, just to back up, we have two ongoing collaborations, one in New York with Bernd Engelheim, another in the ocular with . We anticipate and expect to receive a milestone, achieved milestone from Engelheim sometime within the next two to three quarters. is a little further out. but also notwithstanding the existing ongoing collaborations, we do have interest. We have very good interest in some of our other programs, the non-obesity, specifically around our ulcerative colitis and also some other ocular indications and MCR1 autoimmune and anti-inflammatory. It's not to the point where I can say we expect to get something within the next several quarters, but We wouldn't be surprised if someone does pull the trigger on a research or an early stage collaboration in that regard.

Okay, great. Thank you. And then OpEx trends certainly lower in Q4. As you prepare to move things along more aggressively, should we expect OpEx to sequentially increase throughout 2027? Well, for

Initially, yes. For the quarter ended June 30th, and the same thing with the quarter prior to that, you know, certain activities are, you know, they're done sequential. So, based on timing, you're going to fluctuate a bit. But we do anticipate the next several quarters, say the quarter ended 1231 in the first quarter, or frankly, even the first half of 27, to move to increase. It's not going to double. if you will, it's going to be more than likely around what we've done in the first few quarters of calendar 26. But again, we're advancing the program and I know people like, oh, we're investing the money. We couldn't be more pleased with where we are from a differentiating standpoint in the obesity space we're moving forward with.

Okay, great. And final question, when we Think about the balance sheet in funding development. Are we still thinking about those – I believe they were the Series J warrants that were activated, I believe, by an IND acceptance. You know, is that still part of the financing picture? Thank you.

A hundred percent it's part of the funding picture, and that's why we set it up. The November 2025 – financing included a, we call it a short-term warrant, the Series J warrant is correct, and that actually triggers the, and it triggered on either 18 months, the lesser of 18 months, or the IMD filing of one of our internal obesity MCR4 compounds, and if that was exercised at 100%, that would yield approximately $18.5 million, so 100%, that's part of the future funding, and If we hit that trigger, things are going well.

Okay, great. Thank you for the clarity, and thank you, gentlemen, for taking all the questions.

Thank you. Your next question is coming from Yale Jen from Laidlaw & Company. Yale, your line is live. Please go ahead.

Good morning, and thanks for taking the questions. My first question is about the PIA 2010. This is the lift-dated ones that you anticipate to start trial in first half of next year, calendar next year. So what are the remaining IND enabling works remaining before you can start filing and phase one studies? And then I have a follow-up.

Sure. So the main thing remaining is really is just getting the – The initial animal talks were done. So we're in scale up now and those slides are scheduled and getting ready to start. But that's really the main, you know, largest bulk of what we need to get done. You know, there's always a bunch of other, you know, earlier studies or in vitro studies, but a lot of those have been done already. So it's really the getting the animal work done and the reports in.

Was there any manufacturing work that needs to be done, or would that be?

There's always manufacturing. Once you start designing the compound, manufacturing work never stops. So that's going to mean we can manufacture them under CGP conditions now, and we'll be continuing to work on that, improving efficiencies in scale, formulation, so on and so forth. I mean, that never really ever stops. From now on, there's always some type of level of manufacturing work that's going to be ongoing. That's pretty typical for most programs.

Sure. And in terms of lipid data versus non-lipid data, lipid data generally will maybe have a longer half-life, maybe more potent activity, biological activities. When you compare your lipid data versus the earlier non-lipid data, was there any meaningful difference in some of these metrics?

Sure. One of the things that we're seeing is the, let me back up and take a second and kind of talk about lipidated peptides, at least when it comes to monocortins. The ability to get one of these peptides lipidated and maintain good MCR4 selectivity and potency was not a trivial undertaking. That took quite a lot of work. You can't just stick any type of aliphatic tail on one of these peptides and expect it to work. That's not the case. and some of that is going to be the nature of patents that have been filed and are continuing to be filed. So it was really a technological breakthrough to really get good lipidated peptides. One thing that we're seeing is as we look at the pharmacokinetics across multiple species, both rodent and non-rodent, we're seeing very long path-wise. And one of the things that we're optimistic about is that there's a very good probability that these peptides will be and so forth. So, that's something that we're really excited about, and it's something we didn't expect as we went in, but as we're now looking at it and modeling it, it looks like we're going to have really potential for longer term dosing windows, which is quite nice.

Okay, great. That's very helpful. Maybe just one question along this line, which is that If you compare your, I'm sorry, your lipidated 2000 versus, for example, Rhythm's next-gen sort of quickly-administrated drug, do you know whether their compound is lipidated or non-lipidated?

They're using, my understanding of what I tell is that they're using a polymer approach, so they have a polydense or agonist that they've put in a polymer that erodes over about a week and releases the drug. So it's a different approach. They're not using the liquidated approach. They're using the polymer approach.

Okay, great. Maybe just two quick questions here. Talk about the oral drugs in terms of what, I guess, what lesson you have learned from the prior 7737 and what sort of and many more.

So we've now taken multiple approaches. So we had behind 7737, we had multiple scaffolds that were moving forward that had better selectivity, really proposing better selectivity. Those are being optimized now, multiple and parallel. And then with the 7737 series, understanding what about that was potentially problematic. from a drug standpoint, we've been able to fix that. And those analogs are also now being optimized and will be fully evaluated and go forward. So on that front, you know, we did learn a lot and understanding, you know, what it takes to get one of these things, you know, optimized and go forward. And we now have multiple scaffolds, you know, including the 7737 scaffold to go forward. We also learned that DODs can be quite potent. You know, in multiple animal species, we did see really excellent weight loss. So it's nice. It's very clear that if you get it right, you should be able to drive really good efficacy with an MCR4 small molecule.

Do you anticipate to get into the, again, IND and A volume study? to end of the year, or that will be in 2027?

I mean, we're pushing real hard to make a selection of the compound by the end of the year and begin the IND-enabling studies that will put us in the second half of the year in the clinic.

Okay, and maybe the last question here is that just curious, in terms of PWS, obviously a drug that's already approved in current days, so do you feel that ultimately you will use whichever compound you use for the TWS as a mode of therapy or you think that may potentially be a combination because of different mechanisms and actions and thanks for taking the questions.

I think ultimately over time for a lot of these rare syndromic Super HO and Crater Willie it's likely that you'll find a number of patients, we'll move on to combination therapy. I don't believe that it necessarily will be with the currently approved drug of ICAT. I mean, that drug is, it works and is the first approved, and I'll leave it at that, and I'll leave it at that. I think, therefore, agonists can provide probably better tolerability, better safety, better efficacy than what's out there today. And when you combine that with, say, the GLP-1s, there's a potential to drive even better efficacy. So I think it's going to be, you know, a combination of polypharmacy for these patients is going to be certainly very dependent on the initial response that the patient has to MCO4 agonism and if it's needed to move there. What's nice is there is an opportunity to continue to push the therapy envelope by including an additional drug.

Great, and thanks for the update and the best luck forward.

Thank you. Thank you. Your next question is coming from Dev Prasad from Lucid Capital Markets. Dev, your line is live. Please go ahead.

Hi, congrats on the progress and thanks for taking our question. A couple of questions. One is like you mentioned that tested compound from both peptide series are not agonist at MC1R. Can you provide a little bit color on quantification MC4R versus MC1R selectivity margin compared to previous palatine compound. And the next question is on the clinical trial. How are you planning those trials in terms of design? What do you want to learn from phase one for both peptide and oral? Thank you.

Sure. In general, I'm not going to really answer a lot of detail on how we characterize the agonism. In part, this has become a pretty competitive field. There's not just Rhythm and Paladin. There are other companies that are looking at this. One of the reasons why we use 1,000 and 2,000 others is that we're trying to maintain as much competitive advantage for as long as possible so that people can't just troll through patents and start to I mean, what are you?

Blind to Learn from Phase 1.

So obviously the single ascending dose part of Phase 1, that's a single dose, really what you're looking for is is there any overt acute toxicity and then what your tolerability window is and what your dosing window is. When we move into the multiple ascending dose part, these will now move to what are called healthy obese patients. They'll be treated for 28 days, and we intend to learn a tremendous amount from that. We should be able to see efficacy data, so we want to see if the compounds can indeed cause reductions in food intake and weight loss. We'll be looking for long-term tolerability, longer-term safety signals. So when we come out of that MAD study, we'll have a pretty good idea on how well the compounds are going to work when we move into the intended patient population, such as the hypothalamic or pretty woolly or the BVH.

as patients.

One thing about the mechanism is it has very, very good translatability across patient populations with regards to efficacy as well as tolerability and safety.

Great. Thank you so much.

Thank you. This does conclude today's question and answer session. I would now like to pass the floor back to Dr. Carl Spana for closing remarks.

I'd like to thank everyone for your participation in our year-end and first fiscal quarter. We here are extremely excited about the accomplishments that we've had. We've made, I think, some tremendous technical breakthroughs that are leading into, I think, some really best-in-class compounds with strong intellectual property supporting them. We're excited about where we are and where we're going. I mean, this is really a very exciting time for Palatin where we've been able to essentially use, you know, an accumulated experience in this target really to develop some excellent compounds that we believe are going to be best in class. So we look forward to continuing to update you on our progress. Steve and I also will talk to some of you guests throughout the quarter. And with that being said, enjoy your day, and we look forward to keeping you updated. Thank you.

Thank you. This does conclude today's conference call. You may disconnect at this time and have a wonderful day. Thank you once again for your participation.