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PROSPECTUS SUPPLEMENT
To
Prospectus dated August 18, 2015
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Filed
pursuant to Rule 424(b)(5)
Registration
File No. 333-206047
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PALATIN TECHNOLOGIES, INC.
25,384,616
Series A Units
Consisting
of One Share of Common Stock and One Series J Warrant to Purchase
0.5 of a Share of Common Stock
We are offering
25,384,616 Series A units (the “Series A Units”), with each
Series A Unit consisting of (i) one share of common stock and (ii)
one Series J Warrant to purchase 0.5 of a share of common stock
(the “Series J
Warrants”).
The Series A Units
will not be issued or certificated. The shares of common stock and
Series J Warrants will all be issued separately and are immediately separable. This
prospectus supplement also relates to the offering of the shares of
common stock issuable upon exercise of Series J
Warrants.
Each Series J
Warrant will be exercisable at any time on or after the issuance
date until the five-year anniversary of the issuance date. Each
Series J Warrant will be exercisable at a price of $0.80 per share
of our common stock, subject to adjustment.
For a more detailed
description of our common stock and Series J Warrants, see the
section entitled “Description of the Securities We are
Offering” beginning on page S-10 of this prospectus
supplement.
Our common stock is
quoted on the NYSE MKT under the symbol “PTN.” On
November 29, 2016, the closing price of the common stock was $0.82.
We do not intend to list the Series J Warrants to be sold in this
offering on any securities exchange.
Investing
in our securities involves a high degree of risk. You should
purchase these Series A Units only if you can afford a complete
loss of your investment. See “Risk Factors” beginning
on page S-5 of this prospectus supplement.
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Per
Series A Unit
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Maximum
Offering Amount
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Public
offering price
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$0.65000
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$16,500,000
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Underwriting
discount and commissions (1)
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$0.03575
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$907,500
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Proceeds
to us, before expenses
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$0.61425
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$15,592,500
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(1)
We have also agreed to reimburse the underwriters for fees and
expenses incurred by them in connection with this offering. See
“Underwriting” beginning on page S-12 of this
prospectus supplement for more information regarding underwriting
discounts and commissions and expense reimbursement.
The
underwriters expect to deliver the securities offered hereby on or
about December 6, 2016.
Sole Bookrunner
Canaccord Genuity
Lead Manager
Roth Capital Partners
Co-Manager
Chardan Capital Markets
The
date of this prospectus supplement is December 1,
2016
TABLE
OF CONTENTS
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Prospectus Supplement
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Page
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Prospectus
Supplement Summary
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S-1
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Risk
Factors
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S-5
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Cautionary
Note Concerning Forward-Looking Statements
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S-6
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Use of
Proceeds
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S-8
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Dilution
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S-9
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Description
of the Securities We are Offering
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S-10
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Underwriting
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S-12
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Legal
Matters
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S-14
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Experts
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S-14
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Where
You Can Find More Information
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S-14
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Incorporation
of Information by Reference
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S-15
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Prospectus
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Page
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Prospectus
Summary
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2
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Risk
Factors
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5
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Note
Concerning Forward-Looking Statements
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6
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Incorporation
of Information by Reference
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7
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Where
You Can Find More Information
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8
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Use of
Proceeds
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8
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Market
Price of and Dividends on Common Equity and Related Stockholder
Matters
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8
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Description
of Securities
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9
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Anti-Takeover
Effects of Provisions of Delaware Law and Our Charter
Documents
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15
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Plan of
Distribution
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16
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Legal
Matters
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17
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Experts
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17
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You should rely only on the information contained in this
prospectus supplement, the accompanying prospectus or information
incorporated by reference herein. We have not authorized anyone
else to provide you with different information. You should not
assume that the information in this prospectus supplement or the
accompanying prospectus is accurate as of any date other than the
date on the front of those documents or that any document
incorporated by reference is accurate as of any date other than its
filing date. You should not consider this prospectus supplement or
the accompanying prospectus to be an offer or solicitation relating
to the securities in any jurisdiction in which such an offer or
solicitation relating to the securities is not authorized.
Furthermore, you should not consider this prospectus supplement or
the accompanying prospectus to be an offer or solicitation relating
to the securities if the person making the offer or solicitation is
not qualified to do so, or if it is unlawful for you to receive
such an offer or solicitation.
This
prospectus supplement is part of a registration statement that we
have filed with the Securities and Exchange Commission (the
“SEC”)
utilizing a “shelf” registration process. Under this
shelf registration process, we are offering to sell units
consisting of common stock and warrants to purchase our common
stock, which we refer herein collectively as the securities, using
this prospectus supplement and the accompanying prospectus. In this
prospectus supplement, we provide you with specific information
about the securities that we are selling in this offering. Both
this prospectus supplement and the accompanying prospectus include
important information about us, our securities being offered and
other information you should know before investing. This prospectus
supplement also adds updates and changes information contained in
the accompanying prospectus. You should read both this prospectus
supplement and the accompanying prospectus as well as additional
information described under “Incorporation of Information by
Reference” elsewhere in this prospectus supplement and in the
accompanying prospectus before investing in our securities. To the
extent there is a conflict between the information contained in
this prospectus supplement, on the one hand, and the information
contained in any document incorporated by reference filed with the
SEC before the date of this prospectus supplement, on the other
hand, you should rely on the information in this prospectus
supplement.
Unless
we have indicated otherwise or the context otherwise requires
references in the prospectus supplement and the accompanying
prospectus to “Palatin,” the “Company,” “we,” “us” and “our” or similar terms are to
Palatin Technologies, Inc. and its subsidiary.
This
prospectus supplement, the accompanying prospectus and the
documents incorporated by reference herein contain market data and
industry statistics and forecasts that are based on independent
industry publications and other publicly available information.
Although we believe that these sources are reliable, we do not
guarantee the accuracy or completeness of this information and we
have not independently verified this information. Although we are
not aware of any misstatements regarding the market and industry
data presented or incorporated by reference in this prospectus,
these estimates involve risks and uncertainties and are subject to
change based on various factors, including those discussed under
the heading “Risk Factors” and any related free writing
prospectus. Accordingly, investors should not place undue reliance
on this information.
PROSPECTUS
SUPPLEMENT SUMMARY
This summary highlights certain information appearing elsewhere in
this prospectus supplement and in the accompanying prospectus and
in the documents we incorporate by reference. This summary is not
complete and does not contain all of the information you should
consider prior to investing. After you read this summary, you
should read and consider carefully the more detailed information
and financial statements and related notes that we include in
and/or incorporate by reference into this prospectus supplement and
the accompanying prospectus, especially the section entitled
“Risk Factors.” If you invest in our securities, you
are assuming a high degree of risk.
Overview
We are
a biopharmaceutical company developing targeted,
receptorspecific peptide therapeutics for the treatment of
diseases with significant unmet medical need and commercial
potential. Our programs are based on molecules that modulate the
activity of the melanocortin and natriuretic peptide receptor
systems. Our primary product in clinical development is
bremelanotide for the treatment of premenopausal women with
hypoactive sexual desire disorder, or HSDD, which is a type of
female sexual dysfunction, or FSD, defined as low desire with
associated distress. In addition, we have drug candidates or
development programs for obesity, erectile dysfunction,
cardiovascular diseases, pulmonary diseases, inflammatory diseases
and dermatologic diseases.
The
following drug development programs are actively under
development:
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Bremelanotide, an
as-needed subcutaneous injectable peptide melanocortin receptor
agonist, for treatment of HSDD in premenopausal women.
Bremelanotide, which is a melanocortin agonist, is a synthetic
peptide analog of the naturally occurring hormone alphaMSH
(melanocytestimulating hormone). In two primary Phase 3
clinical studies of bremelanotide for HSDD in premenopausal women,
bremelanotide met the pre-specified co-primary efficacy endpoints
of improvement in desire and decrease in distress associated with
low sexual desire as measured using validated patient-reported
outcome instruments.
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Melanocortin
receptor4, 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, HSDD, erectile dysfunction, or ED,
obesity and diabetes.
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PL3994, a
natriuretic peptide receptorA, or NPRA, agonist, for
treatment of cardiovascular and pulmonary indications. PL3994
is our lead natriuretic peptide receptor product candidate, and is
a synthetic mimetic of the neuropeptide hormone atrial natriuretic
peptide, or ANP. PL3994 is in development for treatment of
heart failure, acute exacerbations of asthma and refractory
hypertension. and
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Melanocortin
receptor1, 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 PL8177, as a clinical trial
candidate.
The
following chart illustrates the status of our drug development
programs.
S-1
We are
developing subcutaneously administered bremelanotide for the
treatment of HSDD in premenopausal women. HSDD is characterized by
a decrease in sexual desire with significant personal distress or
interpersonal difficulty as a result of the lack of desire.
Bremelanotide is a melanocortin agonist with a mechanism of action
involving activation of endogenous neuronal pathways regulating
sexual arousal and desire responses.
We
initiated patient screening in our Phase 3 clinical study program
of bremelanotide for the treatment of HSDD in premenopausal women,
called the RECONNECT STUDY, in the fourth quarter of calendar 2014,
completed patient enrollment in the fourth quarter of calendar
2015, and completed the last patient visits in the double blind, or
efficacy, portion of the studies in the third quarter of calendar
2016. There are two Phase 3 clinical trials, Study 301 and Study
302, in the RECONNECT STUDY. The co-primary endpoints for the Phase
3 clinical trials were the Female Sexual Function Index: Desire
Domain (FSFI-D) and Item 13 of the Female Sexual Distress
Scale-Desires/Arousal/Orgasm (FSDS-DAO). For women taking
bremelanotide compared to placebo, the FSFI-D showed statistically
significant improvement in measures of desire in the context of
overall sexual functioning in both Phase 3 studies, Study 301:
(mean change of 0.54 vs. 0.24, median change of 0.60 vs. 0.00,
p=0.0002) and Study 302: (mean change of 0.63 vs. 0.21, median
change of 0.60 vs. 0.00, p<0.0001). The FSDS-DAO Item 13 showed
statistically significant decreases in measures of distress related
to low sexual desire both Phase 3 studies, Study 301: (mean change
of -0.74 vs. -0.35, median change of -1.0 vs. 0.0, p<0.0001) and
Study 302: (mean change of -0.71 vs. -0.41, median change of -1.0
vs. 0.0, p=0.0057). The openlabel safety extension portion of
the RECONNECT STUDY is continuing. We cannot assure you that a
complete review of the Phase 3 efficacy data will support approval
of bremelanotide for HSDD or that the U.S. Food and Drug
Administration, or FDA, will approve a new drug application, or
NDA, for bremelanotide.
We have
worldwide rights for bremelanotide for HSDD and all other
indications. We are in active discussions with potential partners
for U.S. marketing and commercialization rights for bremelanotide
for HSDD. We may not be able to enter into suitable agreements with
potential partners on acceptable terms, if at all.
Hypoactive sexual
desire disorder, either with or without arousal difficulties, is
the largest single category of FSD. Female sexual dysfunction is a
multifactorial condition that has anatomical, physiological,
medical, psychological and social components, and is defined as
persistent or recurring problems during one or more of the stages
of sexual response with associated distress. HSDD has a significant
impact on a patient’s self-image, relationships and general
well-being. The 2006 PRESIDE (Prevalence of Female Sexual Problems
Associated with Distress and Determinants of Treatment Seeking)
study, a cross-sectional, population-based survey of 31,581 female
adult respondents in the United States published in 2008 in the
journal Obstetrics &
Gynecology, found that approximately 22% of women reported a
sexual problem and 11% were women distress by their sexual problem.
Based on over 60 million premenopausal women in the United States
according to the U.S. Census, the presenting market size of
premenopausal women with primary HSDD is approximately 8 million
women. Based on a third party study, the estimated total annual
U.S. sales, assuming two FDA approved treatments on the market, is
anticipated to be about $1.3 billion by 2020. Market analysts
estimate a global market of over $2 billion annually. Our
forecasted U.S. annual sales of bremelanotide at peak sales is
estimated at $500 million.
S-2
Our
Strategy
Key
elements of our business strategy include:
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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
HSDD and our other product candidates.
At
September 30, 2016, we had an accumulated deficit of approximately
$356.5 million. We expect to incur substantial operating losses in
future periods. We do not expect to generate significant product
revenue, sales-based milestones or royalties until we successfully
complete development and obtain marketing approval for our product
candidates, either alone or in collaborations with third parties,
which we expect will take a number of years. In order to
commercialize our product candidates, we need to complete clinical
development and to comply with comprehensive regulatory
requirements.
We
believe that our existing capital resources, together with the
proceeds of this offering, will be adequate to fund our planned
operations through the quarter ending March 31, 2017. Following
this offering we will need additional funding to complete
additional required studies and trials and for submission of
required regulatory applications to the FDA for bremelanotide for
HSDD. We will also need additional funding to complete required
clinical trials for our other product candidates and, assuming
those clinical trials are successful, as to which there can be no
assurance, to complete submission of required regulatory
applications to the FDA. It is possible that we will not achieve
the progress that we expect with respect to bremelanotide for HSDD
because the actual costs and timing of clinical development
activities are difficult to predict and are subject to substantial
risks and delays. Accordingly, we will be required to obtain
further funding through public or private equity offerings, debt
financings, collaborations and licensing arrangements or other
sources. Financing may not be available to us in the necessary
timeframe, in the amounts that we need, on terms acceptable to us,
or at all. Our failure to raise capital as and when needed would
have a negative impact on our financial condition and our ability
to pursue our business strategy.
Corporate Information
Our
corporate offices are located at 4B Cedar Brook Drive, Cedar Brook
Corporate Center, Cranbury, NJ 08512. Our telephone number is (609)
495-2200. Our internet address is www.palatin.com. The information
on our website is not incorporated by reference into this
prospectus supplement and should not be considered to be part of
this prospectus supplement. Our website address is included in this
prospectus supplement as an inactive textual reference
only.
S-3
The
Offering
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Series A Units
offered by us
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25,384,616 Series A
Units, with each Series A Unit consisting of (i) one share of
common stock and (ii) one Series J Warrant to purchase 0.5 of a
share of common stock.
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Offering
price
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$0.65 per Series A
Unit
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Common stock to be
outstanding after this offering (1)
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133,423,837 shares
(assuming none of the Series J Warrants issued in the offering are
exercised).
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Warrants offered by
us
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25,384,616 Series J
Warrants to purchase up to 12,692,310 shares of common stock. Each
Series J Warrant will be exercisable at a price of $0.80 per share
of our common stock, subject to adjustment. Each Series J Warrant
will be exercisable at any time on or after the issuance date until
the five-year anniversary of the date of issuance.
This prospectus
supplement also relates to the offering of the shares of our common
stock issuable upon exercise of the Series J Warrants.
There is no
established public trading market for the Series J Warrants and we
do not expect a market to develop. We do not intend to apply for a
listing of the Series J Warrants on any national securities
exchange. Without an active market, the liquidity of the Series J
Warrants will be limited.
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Use of
proceeds
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We
intend to use the proceeds from this offering for continued
analysis of our Phase 3 efficacy trials of bremelanotide, the open
label safety extension portion of our Phase 3 trials of
bremelanotide, other clinical and nonclinical studies with
bremelanotide required by the FDA, and preparation of an NDA for
bremelanotide for HSDD, and secondarily for clinical and
preclinical development of our other product candidates and
programs and working capital and general corporate purposes. See
the section of this prospectus supplement entitled “Use of
Proceeds” for a more complete description of the intended use
of the net proceeds from this offering.
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NYSE MKT
symbol
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“PTN”
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Risk
factors
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You should read the
section of this prospectus supplement entitled “Risk
Factors”, including the information incorporated by
reference, and the other information included in this prospectus
supplement for a discussion of factors that you should consider
before deciding to invest in our securities.
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(1) The
number of shares of our common stock to be outstanding after this
offering is based on 108,039,221 shares outstanding as of November
30, 2016.
Unless
otherwise indicated, all information in this prospectus supplement,
including the number of shares of our common stock to be
outstanding after this offering set forth above, excludes the
following:
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60,592 shares of
common stock reserved as of November 30, 2016 for issuance upon any
conversion of our Series A Convertible Preferred Stock outstanding
as of November 30, 2016;
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6,382,520 shares of
common stock issuable upon the exercise of stock options at a
weighted-average exercise price of $0.96 per share outstanding as
of November 30, 2016;
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3,559,768 shares of
common stock issuable upon the vesting of outstanding restricted
stock units as of November 30, 2016 which vest on dates between
December 8, 2016 and September 7, 2020, subject to the fulfillment
of service or performance conditions, and some of which are subject
to delivery restrictions;
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96,526,047 shares
of common stock issuable upon the exercise of warrants (other than
the Series J Warrants) at a weighted-exercise exercise price of
$0.33 per share outstanding as of November 30, 2016;
and
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12,692,310 shares
of common stock issuable upon exercise of the Series J
Warrants.
S-4
RISK
FACTORS
You should carefully consider the risks described below and
discussed under the section entitled “Risk Factors” in
Part I, Item 1A of our Annual Report on Form 10-K for the fiscal
year ended June 30, 2016, and under the section entitled
“Risk Factors” in Part II, Item 1A of our Quarterly
Report on Form 10-Q for the quarter ended September 30, 2016, both
of which are incorporated by reference in this prospectus
supplement and the accompanying prospectus in their entirety,
together with other information in this prospectus supplement, the
accompanying prospectus and the documents incorporated by reference
before deciding to invest in our securities. These risks should be
considered in conjunction with any other information included or
incorporated by reference herein, including in conjunction with
forward-looking statements made herein. See the section of this
prospectus supplement entitled “Where You Can Find More
Information.” If any of the following risks actually occur,
they could materially adversely affect our business, financial
condition, operating results or prospects.
Risks
Related to this Offering
Substantial future sales of our shares of common stock in the
public market, or the perception that these sales could occur,
could cause the price of our common stock to decline.
Additional sales of
our common stock in the public market after this offering, or the
perception that these sales could occur, could cause the market
price of our common stock to decline. Upon completion of this
offering, we will have 133,423,837 shares of our common stock outstanding.
All shares of common stock sold in this offering will be freely
transferable without restriction or additional registration under
the U.S. Securities Act of 1933, as amended, or the Securities Act.
The shares of common stock held by our executive officers and
directors will be available for sale upon expiration of a lock-up
period, which we expect will expire 30 days after the date of this
prospectus. The remaining shares of common stock will be available
for sale after this offering since they are not subject to
contractual and legal restrictions on resale. Any or all of these
shares may be released prior to expiration of the lock-up period at
the discretion of the underwriters for this offering. To the extent
shares are released before the expiration of the lock-up period and
these shares are sold into the market, the market price of our
common stock could decline.
As a new investor, you will experience immediate and substantial
dilution as a result of this offering.
As of
September 30, 2016, we had a negative net book value (deficit) of
approximately ($21.8) million, or ($0.23) per share of common
stock, assuming the conversion of all then convertible preferred
stock (but excluding the exercise of any outstanding warrants or
options, including warrants exercisable at $0.01 per share). The
public offering price of the Series A Units offered pursuant to
this prospectus supplement is substantially higher than the net
book value per share of our common stock. Therefore, you will incur
immediate and substantial dilution in the pro forma net book value
per share. See the section of this prospectus supplement entitled
“Dilution” for a more detailed discussion of the
dilution you will incur in this offering. Furthermore, we expect
that we will seek to raise additional capital from time to time in
the future. Such financings may involve the issuance of equity
and/or securities convertible into or exercisable or exchangeable
for our equity securities. We also expect to continue to utilize
equity-based compensation. To the extent the warrants and options
are exercised or we issue common stock, preferred stock, or
securities such as warrants that are convertible into, exercisable
or exchangeable for, our common stock or preferred stock in the
future, you may experience further dilution.
Our
management will have broad discretion over the use of our net
proceeds from this offering, and you will be relying on the
judgment of our management regarding the application of these
proceeds. Our management might not apply our net proceeds in ways
that ultimately increase the value of your investment and we might
not be able to yield a significant return, if any, on any
investment of these net proceeds. Our failure to apply these funds
effectively could have a material adverse effect on our business,
delay the development of our products and cause the price of our
common stock to decline.
There is no public market for the Series J Warrants being offered
by us in this offering.
There
is no established public trading market for the Series J Warrants
being offered in this offering, and we do not expect a market to
develop. In addition, we do not intend to apply to list the Series
J Warrants on any national securities exchange or automated
quotation system, including the NYSE MKT. Without an active market,
the liquidity of the Series J Warrants will be
limited.
Holders of our Series J Warrants will have no rights as a common
stockholder until such holders exercise their Series J Warrants and
acquire our common stock.
Until
holders of Series J Warrants acquire shares of our common stock
upon exercise of the Series J Warrants, holders of Series J
Warrants will have no rights with respect to the shares of our
common stock underlying such Series J Warrants. Upon exercise of
the Series J Warrants, the holders thereof will be entitled to
exercise the rights of a common stockholder only as to matters for
which the record date occurs after the exercise date.
S-5
CAUTIONARY
NOTE CONCERNING FORWARD-LOOKING STATEMENTS
This
prospectus supplement and the accompanying prospectus, including
the information that we incorporate by reference, contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 that involve substantial
risks and uncertainties. All statements other than statements of
historical facts contained in this prospectus, including statements
regarding our future financial condition, business strategy and
plans and objectives of management for future operations, are
forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as
“believe,” “will,” “may,”
“estimate,” “continue,”
“anticipate,” “intend,”
“should,” “plan,” “expect,”
“predict,” “could,”
“potentially” or the negative of these terms or other
similar expressions. We have based these forward-looking statements
largely on our current expectations and projections about future
events and financial trends that we believe may affect our
financial condition, results of operations, business strategy and
financial needs. These forward-looking statements include, but are
not limited to, statements concerning the following:
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estimates of our
expenses, future revenue, capital requirements;
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our ability to
obtain additional financing on terms acceptable to us, or at
all;
●
our ability to
advance product candidates into, and successfully complete,
clinical trials;
●
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;
●
our expectations
regarding the results and the timing of results in our Phase 3
clinical trials of bremelanotide for hypoactive sexual desire
disorder or HSDD;
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our expectation
regarding the timing of our regulatory submissions for approval of
bremelanotide for HSDD in the United States and
Europe;
●
the potential for
commercialization of bremelanotide for HSDD and other product
candidates, if approved, by us;
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our expectations
regarding the potential market size and market acceptance for
bremelanotide for HSDD 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;
●
the ability of our
third-party collaborators to timely carry out their duties under
their agreements with us;
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the ability of our
contract manufacturers to perform their manufacturing activities
for us in compliance with applicable regulations;
●
our ability to
recognize the potential value of our licensing arrangements with
third parties;
●
the potential to
achieve revenues from the sale of our product
candidates;
●
our ability to
obtain adequate reimbursement from Medicare, Medicaid, private
insurers and other healthcare payers;
●
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;
S-6
●
the impact of
fluctuations in foreign exchange rates;
●
the impact of
legislative or regulatory healthcare reforms in the United
States;
●
our ability to
adapt to changes in global economic conditions; and
●
our ability to
remain listed on the NYSE MKT.
These
forward-looking statements are subject to a number of risks,
uncertainties and assumptions described under the section titled
“Risk Factors” and elsewhere in this prospectus
supplement. We also operate in a very competitive and rapidly
changing environment. New risks emerge from time to time and it is
not possible for our management to predict all risks, nor can we
assess the impact of all factors on our business or the extent to
which any factor, or combination of factors, may cause actual
results to differ materially from those contained in, or implied
by, any forward-looking statements. In light of these risks,
uncertainties and assumptions, the forward-looking events and
circumstances described in this prospectus may not occur and actual
results could differ materially and adversely from those
anticipated or implied in the forward-looking statements contained
or incorporated by reference in this prospectus.
You
should not rely upon forward-looking statements as predictions of
future events. Although we believe that the expectations reflected
in the forward-looking statements are reasonable, we cannot
guarantee that the future results, levels of activity, performance,
events, circumstances or achievements reflected in the
forward-looking statements will ever be achieved or occur. Except
as required by law, we undertake no obligation to update publicly
any forward-looking statements for any reason after the date of
this prospectus to conform these statements to actual results or to
changes in our expectations.
You
should read this prospectus, together with the information
incorporated herein by reference as described under the section
entitled “Incorporation of Information by Reference,”
and the documents that we reference in this prospectus and have
filed with the Securities and Exchange Commission, or SEC, as
exhibits to the registration statement on Form S-3, of which this
prospectus is a part, with the understanding that our actual future
results, levels of activity, performance and achievements may be
materially different from what we expect. We qualify all of our
forward-looking statements by these cautionary
statements.
All
forward-looking statements attributable to us, or to persons acting
on our behalf, are expressly qualified in their entirety by these
cautionary statements.
S-7
USE
OF PROCEEDS
We
estimate that the net proceeds from the sale of Series A Units in
this offering will be approximately $15.4 million,
after deducting the estimated underwriting discounts and
commissions and estimated offering expenses of approximately
$220,000 payable by us.
We
intend to use the net proceeds to us from this offering primarily
for continued analysis of our Phase 3 efficacy clinical trials for
our primary product candidate, bremelanotide, which is used for
HSDD, for the open label safety extension of our Phase 3 clinical
trials, for other clinical and nonclinical studies with
bremelanotide required by the FDA, to analyze clinical trial and
preclinical data, and for preparation of an NDA for bremelanotide
for HSDD, and secondarily for preclinical and clinical development
of our other product candidates and programs, including PL-3994 and
MC1r and MC4r programs. The remainder of the net proceeds will be
allocated for working capital and other general corporate purposes.
Pending use of the net proceeds as described above, we intend to
invest the net proceeds in short-term, interest-bearing,
investment-grade securities.
The
amounts actually expended for each purpose and the timing of these
expenditures may vary significantly depending upon numerous
factors, including the results of the Phase 3 clinical trials of
bremelanotide for HSDD. Expenditures will also depend upon the
availability of additional financing, whether we are able to enter
into an agreement with a development and marketing partner for
bremelanotide for HSDD in the United States, or PL-3994, MC1r or
MC4r in the United States or elsewhere, and if so, the terms and
conditions of such agreement, and other factors. As of the date of
this prospectus supplement, we cannot specify with certainty all of
the particular uses for the net proceeds to us from this offering.
Accordingly, our management will retain broad discretion as to the
allocation of the net proceeds from this offering.
We
expect that the proceeds from this offering will not be sufficient
for us to complete the open label safety extension of our Phase 3
clinical trials, all other clinical and nonclinical studies with
bremelanotide required by the FDA, to complete and submit an NDA
for submission to FDA for approval of bremelanotide for HSDD or to
complete necessary steps for commercial scale manufacturing and
marketing of bremelanotide, or to obtain approval of any of our
other product candidates by the FDA, and we will need significant
additional funds in the future. It is also possible that we will
not achieve the progress that we expect with respect to results of
or submission of an NDA for bremelanotide for HSDD because the
actual results, costs and timing of clinical development activities
are difficult to predict and are subject to substantial risks and
delays. See the sections entitled “Risk Factors” and
“Management’s Discussion and Analysis of Financial
Condition and Results of Operation” in this prospectus
supplement and the documents incorporated by reference
herein.
S-8
DILUTION
A
purchaser of our securities in this offering will be diluted
immediately to the extent of the difference between the public
offering price per Series A Unit and the as adjusted net book value
per share of our common stock upon closing of this offering. Our
historical net book value (deficit) as of September 30, 2016, was
approximately ($21.8) million, or ($0.23) per share of
outstanding common stock, based on shares of common stock
outstanding as of September 30, 2016, assuming the conversion of
all then convertible preferred stock (but excluding the exercise of
any outstanding warrants or options, including warrants exercisable
at $0.01 per share). Net book value per share of our common stock
is determined at any date by subtracting total liabilities from the
amount of total assets, and dividing this amount by the number of
shares of common stock deemed to be outstanding as of that
date.
After
giving effect to the sale of 25,384,616 Series A Units at the
public offering price of $0.65 per Series A Unit and excluding the
proceeds, if any, from the exercise of the Series J Warrants issued
pursuant to this offering, our as adjusted net book value (deficit)
as of September 30, 2016 would have been approximately $6.4
million, or approximately $0.05 per share of outstanding common
stock. This amount represents an immediate increase in net book
value of $0.18 per share of our common stock to our existing
stockholders and an immediate dilution of $0.60 per share of our
common stock to new investors purchasing securities in this
offering, as illustrated in the following table:
|
Public offering
price per Series A Unit
|
|
$0.6500
|
|
Historical
net book value per share as of September 30, 2016
|
$(0.23)
|
|
|
As
adjusted increase in net book value per share attributable to new
investors in this offering
|
$0.18
|
|
|
As adjusted net
book value per share of our common stock after this
offering
|
|
$(0.0500)
|
|
Dilution of as
adjusted net book value per share to new investors
|
|
0.6000
|
The
foregoing table does not take into account further dilution to new
investors that could occur upon the exercise of outstanding
options, restricted stock units and warrants having a per share
exercise price less than the per Series A Unit offering price to
the public in this offering.
The
foregoing table is based on 92,806,710 shares of our common stock
outstanding as of September 30, 2016 and assumes the conversion of
all then convertible preferred stock and excludes:
●
6,405,020 shares
issuable on the exercise of stock options, at exercise prices
ranging from $0.49 to $24.90 per share;
●
3,559,768 shares
issuable under restricted stock units which vest on dates between
December 8, 2016 and September 7, 2020, subject to the fulfillment
of service or performance conditions and some of which are subject
to delivery restrictions; and
●
112,001,047 shares
issuable on the exercise of warrants at exercise prices ranging
from $0.01 to $1.00 per share.
S-9
DESCRIPTION
OF THE SECURITIES WE ARE OFFERING
The
offering consists of 25,384,616 Series A Units consisting of one share
of common stock and one Series J Warrant to purchase 0.5 of a share
of common stock at a price of $0.80 per share of common
stock.
Common Stock
Our
authorized capital stock consists of:
●
300,000,000 shares
of common stock, par value $0.01 per share, and
●
10,000,000 shares
of preferred stock, par value $0.01 per share, of which 9,736,000
shares are undesignated.
As of
November 30, 2016, we had outstanding:
●
108,039,221 shares
of our common stock;
●
4,030 shares of
Series A Convertible Preferred Stock, convertible into 60,592
shares of common stock, subject to adjustment, for no further
consideration;
●
stock options to
purchase 6,382,520 shares of common stock at exercise prices
ranging from $0.49 to $19.80 per share;
●
restricted stock
units representing 3,559,768 shares of common stock which vest on
dates between December 8, 2016 and September 7, 2020, subject to
the fulfillment of service or performance conditions, and some of
which are subject to delivery restrictions; and
●
warrants to
purchase 96,526,047 shares of common stock issuable on the exercise
of warrants at exercise prices ranging from $0.01 to $1.00 per
share.
Holders
of our common stock are entitled to one vote per share for the
election of directors and on all other matters that require
stockholder approval. Holders of shares of common stock do not have
any cumulative voting rights. Subject to any preferential rights of
any outstanding preferred stock, in the event of our liquidation,
dissolution or winding up, holders of our common stock are entitled
to share ratably in the assets remaining after payment of
liabilities and the liquidation preferences of any outstanding
preferred stock. See “Preferred Stock” and
“Series A Convertible Preferred Stock,” in the
accompanying prospectus. Our common stock does not carry any
redemption rights or any preemptive or preferential rights enabling
a holder to subscribe for, or receive shares of, any class of our
common stock or any other securities convertible into shares of any
class of our common stock. Holders of our common stock have the
right to participate ratably in dividend distributions. Our
outstanding Series A Preferred Stock, consisting of 4,030 shares on
November 30, 2016, provides that we may not pay a dividend or make
any distribution to holders of any class of stock unless we first
pay a special dividend or distribution of $100 per share to the
holders of the Series A Preferred Stock.
Series J Warrants
The
material terms and provisions of the Series J Warrants being
offered under this prospectus supplement and the accompanying
prospectus are summarized below. Certain capitalized terms used in
this section are defined in the form of Series J Warrant. The
following summary is subject to, and qualified in its entirety by
reference to, the forms of Series J Warrant, which will be issued
under this offering and will be filed with the SEC as an exhibit to
a report on Form 8-K. We do not intend to apply for listing of the
Series J Warrants on any securities exchange.
The
Series J Warrants will have an exercise price of $0.80 per share,
subject to adjustment. They will be exercisable, in whole or in
part, at any time from the date of grant through the date that is
the five-year anniversary of the date of grant. The holder will not
have the right to exercise any portion of the Series J Warrant if
the holder, together with its affiliates, would, subject to certain
limited exceptions, beneficially own in excess of either 4.99% or
9.99%, at the election of the holder on initial issuance, of our
common stock outstanding immediately after the exercise. If, at the
time of exercise of a warrant, there is no effective registration
statement registering, or the prospectus contained therein is not
available for the issuance of, the shares of common stock issuable
upon exercise of the warrant or the prospectus contained in the
registration statement is not available for the issuance of the
shares of common stock issuable upon exercise of the warrant, the
holder may only exercise the warrant, in whole or in part, on a
cashless basis.
S-10
The
exercise price of the Series J Warrants is subject to adjustment in
the event of a reclassification or merger, subdivision or
combination of shares, stock dividends, and other
distributions.
●
Stock Dividends and Splits. If the
Company, at any time from and after the issuance date and while the
Series J Warrant is outstanding: (i) subdivides (by any stock
split, stock dividend, recapitalization or otherwise) one or more
classes of its outstanding shares of common stock into a greater
number of shares, the exercise price in effect immediately prior to
such subdivision will be proportionately reduced and the number of
shares issuable upon exercise of the Series J Warrant will be
proportionately increased, or (ii) combines (by combination,
reverse stock split or otherwise) one or more classes of its
outstanding shares of common stock into a smaller number of shares,
the exercise price in effect immediately prior to such combination
will be proportionately increased and the number of shares issuable
upon exercise will be proportionately decreased.
●
Par Value. The Series J Warrant limits
the Company’s ability to subdivide (by any stock split, stock
dividend, recapitalization or otherwise) one or more classes of its
outstanding shares of common stock into a greater number of shares
if it would cause the exercise price of the Series J Warrants to be
less than the par value of the common stock.
●
Rights Upon Distribution of Assets. If
the Company declares or makes any dividend or other distributions
of its assets (or rights to acquire its assets) to any or all
holders of shares of its common stock (a “Distribution”), at any time after
the issuance date, then the holder will be entitled to participate
in such Distribution to the same extent that the holder would have
participated if the holder had held the number of shares of common
stock acquirable upon complete exercise of the Series J Warrant
(without regard to any limitations on exercise of the Series J
Warrant) immediately before the date of which a record is taken for
such Distribution, or, if no such record is taken, the date as of
which the record holders of shares of Common Stock are to be
determined for the participation in such Distribution.
●
Purchase Rights. In addition to any
adjustments described above, if at any time after the issuance date
and prior to the expiration date the Company grants, issues or
sells any rights, warrants or options to subscribe for or purchase
shares of common stock or other stock or securities, directly or
indirectly convertible into, or exercisable or exchangeable for,
shares of common stock, or rights to purchase stock, warrants,
securities or other property pro rata to the record holders of any
class of shares of common stock (the “Purchase Rights”), then the
holder will be entitled to acquire, upon the terms applicable to
such Purchase Rights, the aggregate Purchase Rights which the
holder could have acquired if the holder had held the number of
shares of common stock acquirable upon complete exercise of the
Series J Warrant (without regard to any limitations on exercise of
the Series J Warrant) immediately before the date on which a record
is taken for the grant, issuance or sale of such Purchase Rights,
or, if no such record is taken, the date as of which the record
holders of shares of common stock are to be determined for the
grant, issue or sale of such Purchase Rights.
Upon
each adjustment in the exercise described above, the number of
shares of common stock purchasable under the Series J Warrant will
be adjusted, to the nearest whole share, to the product obtained by
multiplying the number of Shares purchasable immediately prior to
such adjustment in the exercise price by a fraction, the numerator
of which shall be the exercise price immediately prior to such
adjustment and the denominator of which shall be the exercise price
immediately thereafter.
S-11
UNDERWRITING
We are
offering the Series A Units described in this prospectus supplement
through Canaccord Genuity Inc. as sole bookrunner of this offering
and as representative of the underwriters. We have agreed to sell
to the underwriters, and the underwriters have agreed to purchase
from us, the number of Series A Units listed next to their names in
the following table:
|
Underwriters
|
Number of
Series
A
Units
|
|
Canaccord Genuity
Inc.
|
13,961,539
|
|
Roth Capital
Partners, LLC
|
8,884,616
|
|
Chardan Capital
Markets, LLC
|
2,538,461
|
|
|
|
|
Total
|
25,384,616
|
Each
underwriter is committed to purchase all the Series A Units offered
by us if it purchases any Series A Units.
Each
underwriter proposes to offer the Series A Units directly to the
public at the Series A Unit public offering price set forth on the
cover page of this prospectus. After the offering, these figures
may be changed by the underwriters.
|
|
Per
Series A Unit
|
Maximum
Offering Amount
|
|
Public
offering price
|
$0.65000
|
$16,500,000
|
|
Underwriting
discount and commissions
|
$0.03575
|
$907,500
|
|
Proceeds
to us, before expenses
|
$0.61425
|
$15,592,500
|
We
estimate that the total fees and expenses payable by us, excluding
underwriting discount, will be approximately $220,000, which
includes $50,000 that we have agreed to reimburse the underwriters
for the fees and expenses incurred by them in connection with the
offering.
We have
agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act, or to contribute to
payments that the underwriters may be required to make in respect
of those liabilities.
We, our
directors and our Chief Executive Officer and Chief Financial
Officer are subject to lock–up agreements that, subject to
certain exceptions, prohibit us and them from offering,
pledging, selling, contracting to sell, selling any option or
contracting to purchase, purchasing any option or contracting to
sell, granting any option, right or warrant to purchase, or
otherwise transferring or disposing of, directly or indirectly, any
of our shares of common stock or any of our securities convertible
into or exercisable or exchangeable for our common stock, or
publicly disclosing the intention to make any offer, sale, pledge
or disposition, or entering into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of
ownership of our common stock or such other of our securities,
whether any such transaction described above is to be settled by
delivery of our common stock or such other of our securities, in
cash or otherwise or make any demand for or exercise any right with
respect to the registration of any shares of our common stock or
any security convertible into or exercisable or exchangeable for
our common stock without the prior written consent of Canaccord
Genuity Inc. These restrictions will be in effect for a period of
30 days after the date of this prospectus supplement.
S-12
The
lock–up agreements do not prohibit us from issuing shares
upon the exercise or conversion of securities outstanding on the
date of this prospectus supplement. The lock–up provisions do
not prevent us from selling securities to the underwriters pursuant
to the underwriting agreement, or from granting options to acquire
securities under our existing stock option plans or issuing shares
upon the exercise or conversion of securities outstanding on the
date of this prospectus supplement.
Our
common stock is listed on the NYSE MKT under the symbol
“PTN.” We do not intend to list the Series J Warrants
to be sold in this offering on any securities
exchange.
In
order to facilitate the offering of the Series A Units, the
underwriters may engage in transactions that stabilize, maintain or
otherwise affect the price of our common stock. Specifically, the
underwriters may sell more Series A Units than they are obligated
to purchase under the underwriting agreement, creating a short
position. The underwriters must close out any short position by
purchasing shares of common stock in the open market. A short
position may be created if the underwriters are concerned that
there may be downward pressure on the price of the common stock in
the open market after pricing that could adversely affect investors
who purchased in this offering. As an additional means of
facilitating this offering, the underwriters may bid for, and
purchase, shares of our common stock in the open market to
stabilize the price of the common stock. These activities may raise
or maintain the market price of our common stock above independent
market levels or prevent or slow a decline in the market price of
our common stock. The underwriters are not required to engage in
these activities, and may end any of these activities at any
time.
This
prospectus supplement and the accompanying prospectus in electronic
format may be made available on the web sites maintained by the
underwriters and the underwriters may distribute prospectuses and
prospectus supplements electronically.
From
time to time in the ordinary course of its businesses, the
underwriters and certain of their affiliates have engaged, and may
in the future engage, in commercial banking or investment banking
transactions with us and our affiliates for which they have
received, or in the future may receive, customary
fees.
S-13
LEGAL
MATTERS
The validity of the issuance of the
securities offered by this prospectus supplement and the
accompanying prospectus will be passed upon for us by Thompson Hine
LLP, New York, New York. Goodwin Procter LLP, New York,
New York, is acting as counsel for the underwriters in connection
with various matters related to the securities offered
hereby.
EXPERTS
The
consolidated financial statements of Palatin Technologies, Inc. as
of June 30, 2016 and 2015, and for each of the years in the
three-year period ended June 30, 2016, have been incorporated by
reference in this prospectus and in the registration statement in
reliance upon the report of KPMG LLP, independent registered public
accounting firm, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and
auditing.
WHERE
YOU CAN FIND MORE INFORMATION
This
prospectus supplement and accompanying prospectus constitute a part
of a registration statement on Form S-3 that we filed with the SEC
under the Securities Act of 1933, as amended. We refer you to this
registration statement for further information about us and the
securities offered hereby.
We file
annual, quarterly and special reports and other information with
the SEC (Commission File Number 001-15543). These filings contain
important information that does not appear in this prospectus. For
further information about us, you may read and copy any reports,
statements and other information filed by us at the SEC’s
Public Reference Room at 100 F Street, N.E., Washington, D.C.
20549-0102. You may obtain further information on the operation of
the Public Reference Room by calling the SEC at 1-800-SEC-0330. Our
SEC filings are also available on the SEC Internet site at
http://www.sec.gov, which contains periodic reports and other
information regarding issuers that file electronically. You can
find information about Palatin, including our period reports and
other information that we file electronically, on our website at
http://www.palatin.com. The reference to our website is an inactive
textual reference only. Information found on our website is not
part of this prospectus. You may also request a copy of any of our
periodic reports filed with the SEC by writing or telephoning us at
the following address:
Stephen
T. Wills
Chief
Financial Officer
Palatin
Technologies, Inc.
4B
Cedar Brook Drive
Cranbury,
New Jersey 08512
Telephone
(609) 495-2200
S-14
INCORPORATION
OF INFORMATION BY REFERENCE
We
incorporate into this prospectus supplement information contained
in documents which we file with the SEC. We are disclosing
important information to you by referring you to those documents.
The information which we incorporate by reference is an important
part of this prospectus supplement, and certain information that we
file later with the SEC will automatically update and supersede
this information. We incorporate by reference the documents listed
below, and any future filings we make with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934.
●
The Company’s
Annual Report on Form 10-K for the fiscal year ended June 30, 2016,
filed with the SEC on September 19, 2016;
●
The Company’s
Current Reports on Form 8-K, filed with the SEC on August 2, 2016
and November 2, 2016;
●
The Company’s
Quarterly Report on Form 10-Q for the quarter ended September 30,
2016, filed with the SEC on November 14, 2016; and
●
The description of
our common stock contained in our registration statement on Form
8-A, filed with the SEC on December 13, 1999, File No. 001-15543,
including any amendment or report filed for the purpose of updating
such description.
This
prospectus supplement may contain information that updates,
modifies or is contrary to information in one or more of the
documents incorporated by reference in this prospectus supplement.
To the extent that any statements contained in a document
incorporated by reference are modified or superseded by any
statements contained in this prospectus supplement, such statements
shall not be deemed incorporated in this prospectus supplement
except as so modified or superseded. Reports we file with the SEC
after the date of this prospectus supplement may also contain
information that updates, modifies or is contrary to information in
this prospectus supplement or in documents incorporated by
reference in this prospectus supplement. Investors should review
these reports as they may disclose a change in our business,
prospectus, financial condition or other affairs after the date of
this prospectus supplement.
You may
obtain a free copy of any or all of the information incorporated by
reference by writing or calling us. Please direct your request
to:
Stephen
T. Wills
Chief
Financial Officer
Palatin
Technologies, Inc.
4B
Cedar Brook Drive
Cranbury,
New Jersey 08512
Telephone
(609) 495-2200
S-15
|
PROSPECTUS
|
|
Filed pursuant to
Rule 424(b)(3)
Registration No.
333-206047
|
PALATIN
TECHNOLOGIES, INC.
4B Cedar Brook
Drive
Cranbury, New
Jersey 08512
(609)
495-2200
Common
Stock
Preferred
Stock
Debt
Securities
Warrants
Units
We may offer under
this prospectus from time to time, at prices and on terms to be
determined by market conditions at the time we make the offer, up
to an aggregate of $100,000,000 of our:
●
common stock, par
value $0.01 per share;
●
preferred stock,
par value $0.01 per share;
●
debt
securities;
●
warrants to
purchase common or preferred stock, or debt securities;
or
●
any combination of
the above, separately or as units.
This prospectus may
not be used to sell our securities unless accompanied by a
prospectus supplement. The prospectus supplement will provide
specific terms of the securities offered, will describe the
specific manner in which we will offer these securities, and may
also supplement, update or amend information contained in this
prospectus. Before you invest in our securities, you should
carefully read both this prospectus and the prospectus supplement
related to the offering of the securities.
Our common stock is
listed on the NYSE MKT under the symbol “PTN.” On
August 17, 2015, the closing price of our common stock as reported
on the NYSE MKT was $1.04 per share. None of the other
securities that we may offer under this prospectus are currently
publicly traded.
As of July 30,
2015, the aggregate market value of our outstanding common shares
held by non-affiliates was approximately $54,208,590, which was
calculated based on 57,128,433 common shares outstanding as of that
date, of which 55,885,145 common shares were held by
non-affiliates, and a price per share of $0.97, which was the
closing price of our common stock as reported on the NYSE MKT on
such date. Pursuant to General Instruction I.B.6 of Form S-3, as
long as the aggregate market value of our common shares held by
non-affiliates remains below $75.0 million, we will not, during any
12 calendar month period, sell the securities in a public primary
offering with a value exceeding more than one-third of the
aggregate market value of our common shares held by non-affiliates.
We have not offered any securities pursuant to General Instruction
I.B.6 of Form S-3 during the 12 calendar months prior to, and
including, the date of this prospectus.
Investing
in our securities involves a high degree of risk. You should
purchase these securities only if you can afford a complete loss of
your investment. See “Risk Factors” beginning on page 5
of this prospectus, as well as any prospectus supplement and under
similar sections in documents we incorporate by reference into this
prospectus.
Neither
the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.
If we sell
securities through agents or underwriters, we will include their
names and the fees, commissions and discounts they will receive, as
well as the net proceeds to us, in the applicable prospectus
supplement. The underwriters, if any, may over-allot a portion of
the securities.
TABLE OF CONTENTS
|
|
Page
|
|
|
|
|
Prospectus
Summary
|
2
|
|
|
|
|
Risk
Factors
|
5
|
|
|
|
|
Note Concerning
Forward-Looking Statements
|
6
|
|
|
|
|
Incorporation of
Information by Reference
|
7
|
|
|
|
|
Where You Can Find
More Information
|
8
|
|
|
|
|
Use of
Proceeds
|
8
|
|
|
|
|
Dilution
|
8
|
|
|
|
|
Market Price of and
Dividends on Common Equity and Related Stockholder
Matters
|
8
|
|
|
|
|
Description of
Securities
|
9
|
|
|
|
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Anti-Takeover
Effects of Provisions of Delaware Law and Our Charter
Documents
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Plan of
Distribution
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16
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Legal
Matters
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17
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Experts
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17
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1
PROSPECTUS SUMMARY
This summary highlights certain information appearing elsewhere in
this prospectus and in the information incorporated by reference.
This summary is not complete and does not contain all of the
information you should consider prior to investing in our
securities. After you read this summary, you should read and
consider carefully the more detailed information and financial
statements and related notes that we include in this prospectus or
incorporate by reference, especially the section entitled
“Risk Factors.” If you invest in our securities, you
are assuming a high degree of risk.
Unless we have indicated otherwise or the context otherwise
requires, references in the prospectus to “Palatin,”
the “Company,” “we,” “us” and
“our” or similar terms refer to the operations of
Palatin Technologies, Inc. and its subsidiary.
Overview
We are a biopharmaceutical
company developing targeted, receptor-specific peptide therapeutics
for the treatment of diseases with significant unmet medical need
and commercial potential. Our programs are based on molecules that
modulate the activity of the melanocortin and natriuretic peptide
receptor systems. Our primary product in clinical development is a
combination drug-device product for the delivery of bremelanotide
for the treatment of female sexual dysfunction, or FSD. In
addition, we have drug candidates or development programs for
obesity, erectile dysfunction, cardiovascular diseases, pulmonary
diseases, inflammatory diseases and dermatologic
diseases.
The following drug
development programs are actively under development:
●
Bremelanotide, an
on-demand subcutaneous injectable peptide melanocortin receptor
agonist, for treatment of FSD in premenopausal women.
Bremelanotide, which is a melanocortin agonist (a compound which
binds to a cell receptor and activates a response), 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 arousal response. Bremelanotide started Phase 3
clinical trials in the last quarter of calendar
2014;
●
Melanocortin
receptor-4, or MC4r, compounds for treatment of obesity and
diabetes in collaboration with AstraZeneca pursuant to our research
collaboration and license agreement. 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,
obesity and diabetes;
●
PL-3994, a peptide
mimetic 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 ANP. PL-3994 is in
development for treatment of heart failure, acute exacerbations of
asthma and refractory hypertension; and
●
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.
2
The following chart
shows the status of our drug development programs.
Our
Strategy
Key elements of our
business strategy include:
●
Using our
technology and expertise to develop and commercialize products in
our active drug development programs;
●
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;
●
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
●
Completing
development and seeking regulatory approval of bremelanotide for
FSD and our other product candidates.
Risks
Related to Our Business
Our business is subject to
numerous risks and uncertainties, including those incorporated by
reference in the section of this prospectus entitled “Risk
Factors,” which you should read carefully before deciding to
invest in our securities. These risks include, among others, the
following:
●
We have incurred
substantial losses since our inception and we anticipate that we
will continue to incur losses for the foreseeable future. We expect
to incur additional losses as we continue our development of
bremelanotide for FSD, PL-3994 and other product candidates and,
unless and until we receive regulatory approval under applicable
regulatory requirements, we cannot sell our products and will not
have product revenues from them;
●
We are
substantially dependent on the clinical and commercial success of
our product candidates, primarily our lead product candidate,
bremelanotide for FSD, for which we are have initiated Phase 3
clinical trials;
●
We may be unable to
obtain regulatory approval for bremelanotide for FSD or future
product candidates under applicable regulatory requirements. The
denial or delay of any such approval would delay commercialization
and have a material adverse effect on our potential to generate
revenue, our business and our results of
operations;
●
Even if
bremelanotide for FSD or our other product candidates receive
regulatory approval, they may fail to achieve the level of market
acceptance needed for us to have commercial success. Our product
candidates, if approved, will face significant competition and our
failure to effectively compete may prevent us from achieving
significant market penetration and expansion;
3
●
We will require
substantial additional funding to achieve our goals, and a failure
to obtain this necessary capital when needed on acceptable terms,
or at all, could force us to delay, limit, reduce or terminate our
product development, other operations or commercialization
efforts;
●
We have limited
control over development activities in Europe for our lead product
candidate, bremelanotide for FSD, including regulatory approvals,
and no direct control over commercialization efforts due to an
agreement with Gedeon Richter Plc, or Gedeon Richter. If Gedeon
Richter fails in obtaining regulatory approval or market acceptance
of bremelanotide for FSD in Europe, we may be unable to generate
any revenue or business for bremelanotide for FSD in
Europe;
●
If our efforts to
protect our intellectual property related to bremelanotide for FSD
or any future product candidates are not adequate, we may not be
able to compete effectively in our market; and
●
We rely on a small
management team and staff as well as various contractors and
consultants to provide critical services to us, including services
related to our clinical programs for bremelanotide and PL-3994 and
our preclinical programs for MC1r and MC4r peptide drug
candidates. Such programs could be adversely affected if we lose
the services of existing key personnel.
Corporate
Information
We were incorporated under
the laws of the State of Delaware on November 21, 1986 and
commenced operations in the biopharmaceutical area in 1996. Our
corporate offices are located at 4B Cedar Brook Drive, Cranbury,
New Jersey 08512 and our telephone number is (609) 495-2200. Our
internet address is www.palatin.com. The information on
our website is not incorporated by reference into this prospectus
and should not be considered to be part of this prospectus. Our
website address is included in this prospectus as an inactive
textual reference only.
“Palatin
Technologies, Inc.” and the Palatin logo are our trademarks.
All other trademarks and service marks appearing in this prospectus
are the property of their respective owners.
The Offering
This prospectus is
part of a registration statement on Form S-3 that we filed with the
Securities and Exchange Commission (SEC) utilizing a
“shelf” registration process. Under this process, we
may sell any combination of the securities described in this
prospectus in one or more offerings up to a total dollar amount of
$100.0 million. This prospectus provides you with a general
description of the securities we may offer. Each time we offer to
sell securities under this prospectus, we will provide a prospectus
supplement containing specific information about the terms of that
offering. The prospectus supplement may also add, update or change
information contained in this prospectus. To the extent that any
information we provide in a prospectus supplement is inconsistent
with information in this prospectus, the information in the
prospectus supplement will modify or supersede this prospectus. You
should read both this prospectus and any prospectus supplement
together with the additional information described under the
headings “Incorporation of Information by Reference”
and “Where You Can Find More Information.”
You should rely
only on the information contained or incorporated by reference in
this prospectus and in any prospectus supplement. We have not
authorized anyone to provide you with different information. We are
not offering the securities in any jurisdiction where the offering
is prohibited. You should not assume that the information in this
prospectus, any prospectus supplement or any document incorporated
by reference is truthful or complete at any date other than the
date mentioned on the cover page of those documents.
4
RISK FACTORS
Investing in our
securities involves risks which you should consider carefully. We
have set forth below risk factors related specifically to this
offering. For risks related to our business operations, see
“Risk Factors” in our quarterly report on Form 10-Q for
the quarter ended March 31, 2015, and all subsequent reports that
we file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). We have incorporated those reports by
reference into this prospectus. See “Incorporation of
Information by Reference” and “Where You Can Find More
Information” below.
Risks Related To The
Offering
We expect to sell additional equity securities, which will cause
dilution.
We expect to sell
more equity securities in the future to obtain operating funds. We
may sell these securities at a discount to the market price. Any
future sales of equity will dilute the holdings of existing
stockholders, possibly reducing the value of their
investment.
Investors in this offering may
suffer immediate dilution.
As of March 31,
2015, and after giving effect to the net proceeds of our 2015
private offering and our 2015 venture loan, we had a pro forma net
book value of $44.1 million which yields a net book value of $1.05
per share of common stock, assuming the conversion of all then
convertible preferred stock and no exercise of any warrants or
options. If you pay more than the net tangible book value per share
for stock in this offering, you will suffer immediate
dilution.
As of August 17, 2015 there were 132,241,213 shares of common stock
underlying outstanding convertible preferred stock, options,
restricted stock units and warrants. Stockholders may experience
dilution from the conversion of preferred stock, exercise of
outstanding options and warrants and vesting of restricted stock
units.
As of August 17, 2015,
holders of our outstanding dilutive securities had the right to
acquire the following amounts of underlying common
stock:
●
70,622 shares
issuable on the conversion of immediately convertible Series A
Convertible preferred stock, subject to adjustment, for no further
consideration;
●
5,080,956 shares
issuable on the exercise of stock options, at exercise prices
ranging from $0.60 to $24.90 per share;
●
1,028,017 shares
issuable under restricted stock units which vest on dates between
June 11, 2016 and June 11, 2019, subject to the fulfillment of
service conditions; and
●
126,061,618 shares
issuable on the exercise of warrants at exercise prices ranging
from $0.01 to $1.00 per share, which includes warrants issued in
our 2015 private offering for 21,917,808 shares issuable at an
exercise price of $0.01 per share and for 2,191,781 shares issuable
at an exercise price of $0.91 per share, and warrants issued in
connection with our 2015 venture loan for 549,450 shares issuable
at an exercise price of $0.91 per share.
If the holders
convert, exercise or receive these securities, or similar dilutive
securities we may issue in the future, stockholders may experience
dilution in the net tangible book value of their common stock. In
addition, the sale or availability for sale of the underlying
shares in the marketplace could depress our stock price. We have
registered or agreed to register for resale substantially all of
the underlying shares listed above. Holders of registered
underlying shares could resell the shares immediately upon
issuance, which could result in significant downward pressure on
our stock price and could also negatively impact our ability to
raise equity capital.
We will have broad discretion over
the use of the proceeds of this offering and you may not realize a
return.
We will have
considerable discretion in the application of the net proceeds of
this offering. We have not determined the amount of net proceeds
that we will apply to various corporate purposes, including
potential acquisitions. We may use the net proceeds for purposes
that do not yield a significant return, if any, for our
stockholders.
5
This prospectus,
and the information that we incorporate by reference, contain
forward-looking statements, within the meaning of Section 27A
of the Securities Act of 1933, as amended (the “Securities
Act”) and Section 21E of the Exchange Act, that involve
substantial risk and uncertainties. All statements other than
statements of historical facts contained in this prospectus,
including statements regarding our future financial condition,
business strategy and plans and objectives of management for future
operations, are forward-looking statements. In some cases, you can
identify forward-looking statements by terminology such as
‘‘believe,’’
‘‘will,’’ ‘‘may,’’
‘‘estimate,’’
‘‘continue,’’
‘‘anticipate,’’
‘‘intend,’’
‘‘should,’’
‘‘plan,’’
‘‘expect,’’
‘‘predict,’’
‘‘could,’’
‘‘potentially’’ or the negative of these
terms or other similar expressions. We have based these
forward-looking statements largely on our current expectations and
projections about future events and financial trends that we
believe may affect our financial condition, results of operations,
business strategy and financial needs. These forward-looking
statements include, but are not limited to, statements concerning
the following:
●
estimates of our
expenses, future revenue, capital requirements;
●
our ability to
obtain additional financing on terms acceptable to us, or at
all;
●
our limited
operating history upon which to base an investment
decision;
●
our ability to
advance product candidates into, and successfully complete,
clinical trials;
●
the initiation,
timing, progress and results of future preclinical studies and
clinical trials, and our research and development
programs;
●
the timing or
likelihood of regulatory filings and approvals;
●
our expectations
regarding the results and the timing of results in our Phase 3
clinical trials of bremelanotide for FSD;
●
our expectation
regarding the timing of our regulatory submissions for approval of
bremelanotide for FSD in the United States and
Europe;
●
the potential for
commercialization of bremelanotide for FSD and other product
candidates, if approved, by us;
●
our expectations
regarding the potential market size and market acceptance for
bremelanotide for FSD and our other product candidates, if approved
for commercial use;
●
our ability to
compete with other products and technologies similar to our product
candidates;
●
the ability of our
third-party collaborators to timely carry out their duties under
their agreements with us;
●
the ability of our
contract manufacturers to perform their manufacturing activities
for us in compliance with applicable
regulations;
●
our ability to
recognize the potential value of our licensing arrangements with
third parties;
●
the potential to
achieve revenues from the sale of our product
candidates;
●
our ability to
obtain adequate reimbursement from Medicare, Medicaid, private
insurers and other healthcare payers;
●
our ability to
maintain product liability insurance at a reasonable cost or in
sufficient amounts, if at all;
●
the retention of
key management, employees and third-party
contractors;
●
the scope of
protection we are able to establish and maintain for intellectual
property rights covering our product candidates and
technology;
●
our compliance with
federal and state laws and regulations;
●
the timing and
costs associated with obtaining regulatory approval for our product
candidates;
●
the impact of
legislative or regulatory healthcare reforms in the United
States;
●
our ability to
adapt to changes in global economic conditions;
and
●
our ability to
remain listed on the NYSE MKT.
These
forward-looking statements involve known and unknown risks,
uncertainties and other factors that could cause our actual results
to be materially different from our historical results or from any
results expressed or implied by forward-looking statements. Our
future operating results are subject to risks and uncertainties and
are dependent upon many factors, including, without limitation, the
risks identified under the caption “Risk Factors,” and
in our other SEC filings. The statements we make in this prospectus
are as of the date of this prospectus.
6
Although we believe that the
expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity,
performance or achievements. Except as may be required by law, we
do not intend to update any of the forward-looking statements for
any reason after the date of this prospectus to conform such
statements to actual results or if new information becomes
available.
All forward-looking
statements attributable to us, or to persons acting on our behalf,
are expressly qualified in their entirety by these cautionary
statements.
You should read this
prospectus, together with the information incorporated herein by
reference as described under the section entitled
“Incorporation of Information by Reference,” and the
documents that we reference in this prospectus and have filed with
the SEC as exhibits to the registration statement on Form S-3, of
which this prospectus is a part, with the understanding that our
actual future results, levels of activity, performance and
achievements may be materially different from what we expect. We
qualify all of our forward-looking statements by these cautionary
statements.
We incorporate into this prospectus information
contained in documents which we file with the SEC. We are
disclosing important information to you by referring you to those
documents. The information which we incorporate by reference is an
important part of this prospectus, and certain information that we
file later with the SEC will automatically update and supersede
this information. We incorporate by reference the documents listed
below:
●
annual report on
Form 10-K for the fiscal year ended June 30, 2014, filed with the
SEC on September 12, 2014;
●
current report on
Form 8-K, filed with the SEC on September 3,
2014;
●
amended annual
report on Form 10-K/A for the fiscal year ended June 30, 2014,
filed with the SEC on October 9, 2014;
●
quarterly report on
Form 10-Q for the quarter ended September 30, 2014, filed with the
SEC on November 14, 2014;
●
current report on
Form 8-K, filed with the SEC on December 30,
2014;
●
quarterly report on
Form 10-Q for the quarter ended December 31, 2014, filed with the
SEC on February 12, 2015;
●
quarterly report on
Form 10-Q for the quarter ended March 31, 2015, filed with the SEC
on May 12, 2015;
●
current report on
Form 8-K, filed with the SEC on June 11, 2015,
●
current report on
Form 8-K, filed with the SEC on July 7, 2015,
and
●
the description of
our common stock contained in our registration statement on Form
8-A filed with the SEC on December 13, 1999, including any
amendment or report for the purpose of updating such
description.
We also incorporate
by reference any documents that we subsequently file with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior
to the termination of the offering.
7
You may obtain a
free copy of any or all of the information incorporated by
reference by writing or calling us. Please direct your request
to:
|
|
Stephen T.
Wills
Executive Vice
President, Chief Financial Officer and Chief Operating
Officer
Palatin
Technologies, Inc.
4B Cedar Brook
Drive
Cranbury, New
Jersey 08512
Telephone: (609)
495-2200
Fax: (609)
495-2201
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WHERE YOU CAN FIND MORE
INFORMATION
We file annual,
quarterly and current reports, proxy statements, registration
statements and other information with the SEC. You may read and
copy any materials we file at the SEC’s Public Reference Room
at 100 F St. NE, Washington, DC 20549. You may obtain information
on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The SEC maintains an Internet site that contains
reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC. The
address of that website is http://www.sec.gov. You can find
information about Palatin on our website at http://www.palatin.com.
Information found on our website is not part of this prospectus or
any prospectus supplement, and investors should not rely on any
such information in deciding whether to invest in our
securities.
Unless we state
otherwise in a prospectus supplement, we intend to use the net
proceeds from the sale of securities under this prospectus for
general corporate purposes, including capital expenditures. From
time to time, we evaluate the possibility of acquiring businesses,
products and technologies, and we may use a portion of the proceeds
as consideration for acquisitions. Until we use net proceeds for
these purposes, we may invest them in interest-bearing
securities.
DILUTION
We may set forth in a
prospectus supplement the following information regarding any
material dilution of the equity interests of purchasers of
securities in an offering under this prospectus:
●
The net tangible
book value per share of our equity securities before and after the
offering;
●
The amount of the
increase in such net tangible book value per share attributable to
the cash payments made by the purchasers in the offering;
and
●
the amount of the
immediate dilution from the public offering price which will be
absorbed by such purchasers.
MARKET PRICE OF AND DIVIDENDS ON COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
The table below
provides, for the fiscal quarters indicated, the reported high and
low sales prices for our common stock on the NYSE MKT since July 1,
2013.
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FISCAL YEAR ENDED
JUNE 30, 2014
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HIGH
|
LOW
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Fourth Quarter
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$1.43
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$0.97
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Third Quarter
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1.50
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0.73
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Second Quarter
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0.83
|
0.56
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First Quarter
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0.76
|
0.59
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FISCAL YEAR ENDED
JUNE 30, 2015
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HIGH
|
LOW
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Fourth Quarter
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$1.58
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$0.85
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Third Quarter
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1.34
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0.65
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Second Quarter
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0.93
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0.59
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First Quarter
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1.28
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0.82
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8
Our common stock
has been listed on NYSE MKT under the symbol “PTN”
since December 21, 1999. It previously traded on The Nasdaq
SmallCap Market under the symbol “PLTN.”
Holders of common stock. On August 17,
2015, we had approximately 104 record holders of common stock and
the closing sales price of our common stock as reported on the NYSE
MKT was $1.04 per share.
Dividends and dividend policy. We have
never declared or paid any dividends. We currently intend to retain
earnings, if any, for use in our business. We do not anticipate
paying dividends in the foreseeable future.
Dividend restrictions. Our outstanding
Series A Preferred Stock, consisting of 4,697 shares on July 31,
2015, provides that we may not pay a dividend or make any
distribution to holders of any class of stock unless we first pay a
special dividend or distribution of $100 per share to the holders
of the Series A Preferred Stock.
General
The following description of
our capital stock is intended as a summary only and is qualified in
its entirety by reference to our amended and restated certificate
of incorporation and bylaws, which are filed as exhibits to the
registration statement of which this prospectus forms a part. Our
authorized capital stock consists of:
●
300,000,000 shares
of common stock, par value $0.01 per share, and
●
10,000,000 shares
of preferred stock, par value $0.01 per share, of which 9,736,000
shares are undesignated.
As of August 17,
2015, we had outstanding:
●
57,128,433 shares
of our common stock;
●
4,697 shares of
Series A Convertible Preferred Stock, convertible into 70,622
shares of common stock, subject to adjustment, for no further
consideration;
●
stock options to
purchase 5,080,956 shares of common stock at exercise prices
ranging from $0.60 to $24.90 per share;
●
restricted stock
units representing 1,028,017 shares of common stock which vest on
dates between June 11, 2016 and June 11, 2019, subject to the
fulfillment of service conditions; and
●
warrants to
purchase 126,061,618 shares of common stock issuable on the
exercise of warrants at exercise prices ranging from $0.01 to $1.00
per share.
Common
Stock
We have the
authority to issue 300,000,000 shares of common stock, par value
$0.01 per share. As of August 17, 2015, there were 57,128,433
shares of our common stock outstanding, and a maximum of
132,241,213 shares of common stock were issuable on conversion of
outstanding convertible preferred stock, exercise of outstanding
options and warrants, and vesting of performance-based stock
grants.
Holders of our
common stock are entitled to one vote per share for the election of
directors and on all other matters that require stockholder
approval. Holders of shares of common stock do not have any
cumulative voting rights. Subject to any preferential rights of any
outstanding preferred stock, in the event of our liquidation,
dissolution or winding up, holders of our common stock are entitled
to share ratably in the assets remaining after payment of
liabilities and the liquidation preferences of any outstanding
preferred stock. See “Preferred Stock” and
“Series A Convertible Preferred Stock,” below. Our
common stock does not carry any redemption rights or any preemptive
or preferential rights enabling a holder to subscribe for, or
receive shares of, any class of our common stock or any other
securities convertible into shares of any class of our common
stock. Holders of our common stock have the right to participate
ratably in dividend distributions. Our outstanding Series A
Preferred Stock, consisting of 4,697 shares on July 31, 2015,
provides that we may not pay a dividend or make any distribution to
holders of any class of stock unless we first pay a special
dividend or distribution of $100 per share to the holders of the
Series A Preferred Stock.
9
Market
Information
Our common stock is listed
on the NYSE MKT under the symbol “PTN.” On August 17,
2015, the closing price of the common stock was $1.04 per share. We
do not have any other class of securities listed for
trading.
Transfer
Agent and Registrar
The transfer agent for our
common stock and our Series A and Series B warrants is American
Stock Transfer & Trust Company, located at 6201 15th Avenue, Brooklyn,
New York 11219. Their telephone number is (800)
937-5449.
Preferred
Stock
We have the authority to
issue 10,000,000 shares of preferred stock. As of August 17, 2015,
264,000 shares of our preferred stock were designated as a single
class, Series A Convertible Preferred Stock, of which 4,697 shares
were outstanding (see “Series A Convertible Preferred
Stock” below). The description of preferred stock provisions
set forth below is not complete and is subject to and qualified in
its entirety by reference to our amended and restated certificate
of incorporation and the certificate of designations relating to
the Series A Convertible Preferred Stock.
The board of directors has
the right, without the consent of holders of common stock, to
designate and issue one or more series of preferred stock, which
may be convertible into common stock at a ratio determined by the
board. A series of preferred stock may bear rights superior to
common stock as to voting, dividends, redemption, distributions in
liquidation, dissolution, or winding up, and other relative rights
and preferences. The board may set the following terms of any
series preferred stock (which will be specified in the applicable
prospectus supplement):
●
the number of
shares constituting the series and the distinctive designation of
the series;
●
dividend rates,
whether dividends are cumulative, and, if so, from what date and
the relative rights of priority of payment of
dividends;
●
voting rights and
the terms of the voting rights;
●
conversion
privileges and the terms and conditions of conversion, including
provision for adjustment of the conversion
rate;
●
redemption rights
and the terms and conditions of redemption, including the date or
dates upon or after which shares may be redeemable, and the amount
per share payable in case of redemption, which may vary under
different conditions and at different redemption
dates;
●
sinking fund
provisions for the redemption or purchase of
shares;
●
rights in the event
of voluntary or involuntary liquidation, dissolution or winding up
of the corporation, and the relative rights of priority of payment;
and
●
any other relative
powers, preferences, rights, privileges, qualifications,
limitations and restrictions of the series.
Dividends on outstanding
shares of preferred stock will be paid or declared and set apart
for payment before any dividends may be paid or declared and set
apart for payment on the common stock with respect to the same
dividend period.
If upon any voluntary or
involuntary liquidation, dissolution or winding up of the
corporation, the assets available for distribution to holders of
preferred stock are insufficient to pay the full preferential
amount to which the holders are entitled, then the available assets
will be distributed ratably among the shares of all series of
preferred stock in accordance with the respective preferential
amounts (including unpaid cumulative dividends, if any) payable
with respect to each series.
10
Holders of preferred stock
will not be entitled to preemptive rights to purchase or subscribe
for any shares of any class of capital stock of the corporation.
The preferred stock will, when issued, be fully paid and
non-assessable. The rights of the holders of preferred stock will
be subordinate to those of our general creditors.
Series
A Convertible Preferred Stock
The board of directors
established a series of 264,000 shares of preferred stock,
designated Series A Convertible Preferred Stock, par value $0.01
per share (the “Series A”). We issued 137,780 shares of
Series A in 1997, of which 4,697 shares remain outstanding as of
August 17, 2015, the rest having been converted into common stock.
The Series A has the following rights and preferences.
Optional conversion. Each share of
Series A is convertible at any time, at the option of the holder,
into the number of shares of common stock equal to $100 divided by
the conversion price, as defined in the Series A certificate of
designations. The current conversion price is $6.65, so each share
of Series A is currently convertible into approximately 15 shares
of common stock.
Mandatory conversion. We may, at our
option, cause the conversion of the Series A, in whole or in part,
on a pro rata basis, into common stock, if the closing bid price of
the common stock has exceeded 200% of the conversion price for at
least 20 trading days in any 30 consecutive trading day period,
ending three days prior to the date of mandatory
conversion.
Price protection provisions. The
conversion price decreases if we sell common stock (or equivalents)
for a price per share less than the conversion price or less than
the market price of the common stock. The conversion price is also
subject to adjustment upon the occurrence of a merger,
reorganization, consolidation, reclassification, stock dividend or
stock split which results in an increase or decrease in the number
of shares of common stock outstanding.
Dividend and distribution preference.
We may not pay a dividend or make any distribution to holders of
any other capital stock unless and until we first pay a special
dividend or distribution of $100 per share to the holders of Series
A.
Liquidation preference. Upon (i)
liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary, (ii) sale or other disposition of all or
substantially all of the assets of the Company, or (iii) any
consolidation, merger, combination, reorganization or other
transaction in which Palatin is not the surviving entity or in
which the shares of common stock constituting in excess of 50% of
the voting power of the Company are exchanged for or changed into
other stock or securities, cash and/or any other property, after
payment or provision for payment of the debts and other liabilities
of the Company, the holders of Series A will be entitled to
receive, pro rata and in preference to the holders of any other
capital stock, an amount per share equal to $100 plus accrued but
unpaid dividends, if any.
Voting rights. Each holder of Series A
has the number of votes equal to the number of shares of common
stock issuable upon conversion of the holder’s Series A at
the record date for determination of the stockholders entitled to
vote or, if no record date is established, at the date a vote is
taken. Except as provided above or as required by applicable law,
the holders of the Series A are entitled to vote together with the
holders of the common stock and not as a separate
class.
Debt Securities
As of the date of
this prospectus, we have no debt securities issued and outstanding.
The following description, together with the additional information
we include in any applicable prospectus supplement, summarizes the
material terms and provisions of the debt securities that we may
offer under this prospectus. While the terms we have summarized
below will apply generally to any future debt securities we may
offer, we will describe the particular terms of any debt securities
that we may offer in more detail in the applicable prospectus
supplement. The terms of any debt securities we offer under a
prospectus supplement may differ from the terms we describe
below.
11
We will issue notes
under an indenture, which we will enter into with the trustee named
in the indenture. Any indenture will be qualified under the Trust
Indenture Act of 1939. You should read the summary below, the
applicable prospectus supplement and the provisions of the
applicable indenture and any related security documents, if any, in
their entirety before investing in our debt
securities.
We will describe in
each prospectus supplement the following terms relating to a series
of debt securities:
●
the
title;
●
the principal
amount being offered, and if a series, the total amount authorized
and the total amount outstanding;
●
any limit on the
amount that may be issued;
●
whether or not we
will issue the series of debt securities in global form, and if so,
the terms and who the depository will be;
●
the maturity
date;
●
the principal
amount due at maturity, and whether the debt securities will be
issued with an original issue discount;
●
whether and under
what circumstances, if any, we will pay additional amounts on any
debt securities held by a person who is not a United States person
for tax purposes, and whether we can redeem the debt securities if
we have to pay such additional amounts;
●
the annual interest
rate, which may be fixed or variable, or the method for determining
the rate and the date interest will begin to accrue, the dates
interest will be payable and the regular record dates for interest
payment dates or the method for determining such
dates;
●
whether or not the
debt securities will be secured or unsecured, and the terms of any
secured debt;
●
the terms of the
subordination of any series of subordinated
debt;
●
the place where
payments will be payable;
●
restrictions on
transfer, sale or other assignment, if any;
●
our right, if any,
to defer payment of interest and the maximum length of any such
deferral period;
●
the date, if any,
after which the conditions upon which, and the price at which, we
may, at our option, redeem the series of debt securities pursuant
to any optional or provisional redemption provisions and the terms
of those redemptions provisions;
●
the date, if any,
on which, and the price at which we are obligated, pursuant to any
mandatory sinking fund or analogous fund provisions or otherwise,
to redeem, or at the holder’s option to purchase, the series
of debt securities and the currency or currency unit in which the
debt securities are payable;
●
whether the
indenture will restrict our ability to pay dividends, or will
require us to maintain any asset ratios or
reserves;
●
whether we will be
restricted from incurring any additional indebtedness, issuing
additional securities, or entering into a merger, consolidation or
sale of our business;
●
a discussion of any
material or special United States federal income tax considerations
applicable to the debt securities;
●
information
describing any book-entry features;
●
provisions for a
sinking fund purchase or other analogous fund, if
any;
●
any provisions for
payment of additional amounts for taxes and any provision for
redemption, if we must pay such additional amount with respect to
any debt security;
●
whether the debt
securities are to be offered at a price such that they will be
deemed to be offered at an “original issue discount” as
defined in paragraph (a) of Section 1273 of the Internal Revenue
Code;
12
●
the denominations
in which we will issue the series of debt securities, if other than
denominations of $1,000 and any integral multiple
thereof;
●
the terms on which
a series of debt securities may be convertible into or exchangeable
for our common stock, any other of our securities or securities of
a third party, and whether conversion or exchange is mandatory, at
the option of the holder or at our option;
●
events of
default;
●
whether we and/or
the debenture trustee may change an indenture without the consent
of any holders;
●
the form of debt
security and how it may be exchanged and
transferred;
●
descriptions of the
debenture trustee and paying agent, and the method of payments;
and
●
any other specific
terms, preferences, rights or limitations of, or restrictions on,
the debt securities, including any additional events of default or
covenants provided with respect to the debt securities, and any
terms which may be required by us or advisable under applicable
laws or regulations.
Specific indentures
will contain additional important terms and provisions and will be
incorporated by reference as an exhibit to the registration
statement that includes this prospectus, or as an exhibit to a
report filed under the Exchange Act, incorporated by reference in
this prospectus.
Warrants
As of August 17,
2015, warrants for the purchase of 126,061,618 shares of our common
stock were outstanding, exercisable at a weighted average exercise
price of $0.22. The outstanding warrants expire on various dates
from February 23, 2016 through July 2, 2025. Of the
outstanding warrants, 99,328,719 are exercisable at an exercise
price of $0.01 per share
The following
description, together with the additional information we may
include in any applicable prospectus supplement, summarizes the
material terms and provisions of the warrants that we may offer
under this prospectus and the related warrant agreements and
warrant certificates. While the terms summarized below will apply
generally to any warrants that we may offer, we will describe the
particular terms of any series of warrants in more detail in the
applicable prospectus supplement. The terms of any warrants offered
under a prospectus supplement may differ from the terms described
below. Specific warrant agreements will contain additional
important terms and provisions and will be incorporated by
reference as exhibits to the registration statement that includes
this prospectus, or as exhibits to a report filed under the
Exchange Act, incorporated by reference in this
prospectus.
General. We will describe in the
applicable prospectus supplement the terms of the series of
warrants, including:
●
the title of
warrants;
●
the offering price
and aggregate number of warrants offered;
●
the currency for
which the warrants may be purchased;
●
if applicable, the
designation and terms of the securities with which the warrants are
issued and the number of warrants issued with each such security or
each principal amount of such security;
●
if applicable, the
date on and after which the warrants and the related securities
will be separately transferable;
●
in the case of
warrants to purchase common stock or preferred stock, the number of
shares of common stock or preferred stock, as the case may be,
purchasable upon the exercise of one warrant and the price at which
these shares may be purchased upon exercise;
●
in the case of
warrants to purchase debt securities, the principal amount of debt
securities purchasable upon exercise of one warrant and the price
at which, and currency in which, this principal amount of debt
securities may be purchased upon exercise;
13
●
the effect of any
merger, consolidation, sale or other disposition of our business on
the warrant agreement and the warrants;
●
the terms of any
rights to redeem or call the warrants;
●
any provisions for
changes to or adjustments in the exercise price or number of
securities issuable upon exercise of the
warrants;
●
the dates on which
the right to exercise the warrants will commence and
expire;
●
the manner in which
the warrant agreement and warrants may be
modified;
●
federal income tax
consequences of holding or exercising the
warrants;
●
information
relating to book-entry procedures, if any;
●
the terms of the
securities issuable upon exercise of the warrants;
and
●
any other specific
terms, preferences, rights or limitations of or restrictions on the
warrants.
Before exercising
their warrants, holders of warrants will not have any of the rights
of holders of the securities purchasable upon such exercise,
including:
●
in the case of
warrants to purchase debt securities, the right to receive payments
of principal of, or premium, if any, or interest on, the debt
securities purchasable upon exercise or to enforce covenants in the
applicable indenture; or
●
in the case of
warrants to purchase common stock or preferred stock, the right to
receive dividends, if any, or, payments upon our liquidation,
dissolution or winding up or to exercise voting rights, if
any.
Exercise of Warrants. Each warrant will
entitle the holder to purchase the securities that we specify in
the applicable prospectus supplement at the exercise price that we
describe in the applicable prospectus supplement. Unless we
otherwise specify in the applicable prospectus supplement, holders
of the warrants may exercise the warrants at any time up to 5:00
P.M. New York time on the expiration date that we set forth in the
applicable prospectus supplement. After the close of business on
the expiration date, unexercised warrants will become
void.
Holders of the
warrants may exercise the warrants by delivering the warrant
certificate representing the warrants to be exercised together with
specified information, and paying the required amount to the
warrant agent in immediately available funds, as provided in the
applicable prospectus supplement. We will set forth on the reverse
side of the warrant certificate and/or in the applicable prospectus
supplement the information that the holder of the warrant will be
required to deliver to the warrant agent.
Upon receipt of the
required payment and the warrant certificate properly completed and
duly executed at the corporate trust office of the warrant agent or
any other office indicated in the applicable prospectus supplement,
we will issue and deliver the securities purchasable upon such
exercise. If fewer than all of the warrants represented by the
warrant certificate are exercised, then we will issue a new warrant
certificate for the remaining amount of warrants. If we so indicate
in the applicable prospectus supplement, holders of the warrants
may surrender securities as all or part of the exercise price for
the warrants (cashless exercise).
We will describe in
the applicable prospectus supplement exercise procedures for
warrants in a book-entry form, if any.
Enforceability of Rights by Holders of
Warrants. Each warrant agent will act solely as our agent
under the applicable warrant agreement and will not assume any
obligation or relationship of agency or trust with any holder of
any warrant. A single bank or trust company may act as warrant
agent for more than one issue of warrants. A warrant agent will
have no duty or responsibility in case of any default by us under
the applicable warrant agreement or warrant, including any duty or
responsibility to initiate any proceedings at law or otherwise, or
to make any demand upon us. Any holder of a warrant may, without
the consent of the related warrant agent or the holder of any other
warrant, enforce by appropriate legal action its right to exercise,
and receive the securities purchasable upon exercise of, its
warrants.
14
AND OUR CHARTER DOCUMENTS
Amended and Restated Certificate of
Incorporation
Our amended and
restated certificate of incorporation authorizes the issuance of up
to 10,000,000 shares of preferred stock, par value $.01 per share,
of which 264,000 shares are currently designated as Series A
Convertible Preferred Stock. The board of directors has the
authority, without further approval of the stockholders, to issue
and determine the rights and preferences of other series of
preferred stock, except as limited by the certificate of
designation for the Series A. The board could issue one or more
series of preferred stock with voting, conversion, dividend,
liquidation, or other rights which would adversely affect the
voting power and ownership interest of holders of common stock.
This authority may have the effect of deterring hostile takeovers,
delaying or preventing a change in control, and discouraging bids
for our common stock at a premium over the market
price.
Section 203 of the Delaware General Corporation
Law
We are subject to
Section 203 of the Delaware General Corporation Law, which, subject
to certain exceptions, prohibits a Delaware corporation from
engaging in any business combination with any interested
stockholder for a period of three years following the time that
such stockholder became an interested stockholder,
unless:
●
prior to such time,
the board of directors approved either the business combination or
the transaction that resulted in the stockholder becoming an
interested holder;
●
upon consummation
of the transaction that resulted in the stockholder becoming an
interested stockholder, the interested stockholder owned at least
85% of the voting stock of the corporation outstanding at the time
the transaction commenced, excluding for purposes of determining
the number of shares outstanding those shares owned (a) by persons
who are directors and also officers and (b) by employee stock plans
in which employee participants do not have the right to determine
confidentially whether shares held subject to the plan will be
tendered in a tender or exchange offer; or
●
at or subsequent to
such time, the business combination is approved by the board of
directors and authorized at an annual or special meeting of
stockholders, and not by written consent, by the affirmative vote
of at least two thirds of the outstanding voting stock which is not
owned by the interested stockholder.
In general, Section
203 defines “business combination” to include the
following:
●
any merger or
consolidation involving the corporation and the interested
stockholder;
●
any sale, transfer,
pledge or other disposition of 10% or more of the assets of the
corporation involving the interested
stockholder;
●
subject to certain
exceptions, any transaction that results in the issuance or
transfer by the corporation of any stock of the corporation to the
interested stockholder;
●
any transaction
involving the corporation that has the effect of increasing the
proportionate share of the stock or any class or series of the
corporation beneficially owned by the interested stockholder;
or
●
the receipt by the
interested stockholder of the benefit of any loans, advances,
guarantees, pledges or other financial benefits provided by or
through the corporation.
In general, Section
203 defines “interested stockholder” as an entity or
person beneficially owning 15% or more of the outstanding voting
stock of the corporation and any entity or person affiliated with
or controlling or controlled by such entity or person.
15
Indemnification and Limitation of
Liability
Our amended and
restated certificate of incorporation and bylaws require us to
indemnify our directors, officers, employees and agents against the
costs (including fines, judgments and attorney fees) from
involvement in legal proceedings arising from their position or
service, provided that the person seeking indemnification
acted:
●
in good
faith;
●
in a manner he or
she reasonably believed to be in, or not opposed to, the best
interests of the corporation; and,
●
with respect to any
criminal action or proceeding, had no reasonable cause to believe
his or her conduct was unlawful.
The amended and
restated certificate of incorporation and bylaws allow us to buy
indemnification insurance for this purpose.
Our certificate of
incorporation provides that, to the fullest extent permissible
under Delaware law, no director shall be personally liable to the
corporation or its stockholders for monetary damages for breach of
a fiduciary duty as a director. However, this provision does not
eliminate the duty of care, and in appropriate circumstances,
equitable remedies such as injunctive or other forms of
non-monetary relief that will remain available under Delaware law.
In addition, each director will continue to be subject to liability
for (a) breach of the director’s duty of loyalty to us or our
stockholders, (b) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (c)
violating Section 174 of the Delaware General Corporation Law, or
(d) any transaction from which the director derived an improper
personal benefit. The provision also does not affect a
director’s responsibilities under any other law, such as the
federal securities laws or state or federal environmental laws.
PLAN OF DISTRIBUTION
We may sell
securities under this prospectus in public offerings:
●through one or more
underwriters or dealers;
●through other
agents;
●directly to
investors; or
●through a
combination of any of these methods.
We may price the
securities we sell under this prospectus:
●at a fixed public
offering price or prices, which we may change from time to
time;
●at market prices
prevailing at the times of sale;
●at prices
calculated by a formula based on prevailing market
prices;
●at negotiated
prices; or
●in a combination of
any of the above pricing methods.
If we use
underwriters for an offering, they will acquire securities for
their own account and may resell them from time to time in one or
more transactions at a fixed public offering price or at varying
prices determined at the time of sale. The obligations of the
underwriters to purchase the securities will be subject to the
conditions set forth in the applicable underwriting agreement. We
may offer the securities to the public through underwriting
syndicates represented by managing underwriters or by underwriters
without a syndicate. Subject to certain conditions, the
underwriters will be obligated to purchase all the securities of
the series offered by the prospectus supplement. The public
offering price and any discounts or concessions allowed or
re-allowed or paid to dealers may change from time to time. Only
underwriters named in a prospectus supplement are underwriters of
the securities offered by that prospectus supplement.
16
We may offer our
securities in “at the market” offerings, with the
meaning of Rule 415(a)(4) of the Securities Act, into an existing
trading market on terms described in the applicable prospectus
supplement. Underwriters and dealers may participate in any
“at the market” offering.
We may also sell
securities directly or through agents. We will name any agent
involved in an offering and we will describe any commissions we
will pay the agent in the prospectus supplement. Unless the
prospectus supplement states otherwise, our agents will act on a
best-efforts basis.
We may authorize
agents or underwriters to solicit offers by certain types of
institutional investors to purchase securities from us at the
public offering price set forth in the prospectus supplement
pursuant to delayed delivery contracts providing for payment and
delivery on a specified date in the future. We will describe the
conditions of these contracts and the commissions we must pay for
solicitation of these contracts in the prospectus
supplement.
We may provide
agents and underwriters with indemnification against certain civil
liabilities, including liabilities under the Securities Act, or
contribution with respect to payments that the agents or
underwriters may make with respect to such liabilities.
Underwriters or agents may engage in transactions with us, or
perform services for us, in the ordinary course of business. We may
also use underwriters or agents with whom we have a material
relationship. We will describe the nature of any such relationship
in the prospectus supplement.
An underwriter may
engage in overallotment, stabilizing transactions, short covering
transactions and penalty bids in accordance with Regulation M under
the Exchange Act . Overallotment involves sales in excess of the
offering size, which create a short position. Stabilizing
transactions permit bids to purchase the underlying security so
long as the stabilizing bids do not exceed a specified maximum.
Short covering transactions involve purchases of the securities in
the open market after the distribution is completed to cover short
positions. Penalty bids permit the underwriter to reclaim a selling
concession from a dealer when the securities originally sold by the
dealer are purchased in a covering transaction to cover short
positions. These activities may cause the price of our securities
to be higher than it would otherwise be on the open market. The
underwriter may discontinue any of these activities at any
time.
All securities we
offer, other than common stock, will be new issues of securities,
with no established trading market. Underwriters may make a market
in these securities, but will not be obligated to do so and may
discontinue market making at any time without notice. We cannot
guarantee the liquidity of the trading markets for any
securities.
LEGAL MATTERS
Unless otherwise
specified in the applicable prospectus supplement, the validity of
the securities covered by this prospectus will be passed upon for
us by Thompson Hine LLP, New York, New York. In addition, counsel that will be named in the
applicable prospectus supplement will pass upon the validity of any
securities offered under the applicable prospectus supplement for
any underwriters or agents.
EXPERTS
The consolidated
financial statements of Palatin Technologies, Inc. as of June 30,
2013 and 2014, and for each of the years in the three-year period
ended June 30, 2014, have been incorporated by reference herein and
in the registration statement in reliance upon the report of KPMG
LLP, independent registered public accounting firm, incorporated by
reference herein, and upon the authority of said firm as experts in
accounting and auditing.
17
This prospectus is
part of a registration statement we filed with the SEC. You should
rely only on the information or representations contained in (or
incorporated by reference in) this prospectus and any accompanying
prospectus supplement. We have not authorized anyone to provide
information other than that provided in this prospectus and any
accompanying prospectus supplement. We are not making an offer of
these securities in any jurisdiction where the offer is not
permitted. You should assume that the information in this
prospectus or any accompanying prospectus supplement, as well as
information we have previously filed with the SEC and incorporated
by reference herein, is accurate as of the date on the front of
those documents only. Our business, financial condition, results of
operations, and prospects may have changed since those dates, is
accurate as of any date other than the date on the front of the
document.
$100,000,000
PALATIN
TECHNOLOGIES, INC.
PROSPECTUS
August 18,
2015
18
PALATIN TECHNOLOGIES, INC.
25,384,616
Series A Units
Consisting
of One Share of Common Stock and One Series J Warrant to Purchase
0.5 of a Share of Common Stock
PROSPECTUS SUPPLEMENT
Sole Bookrunner
Canaccord Genuity
Lead Manager
Roth Capital Partners
Co-Manager
Chardan Capital Markets
December
1, 2016