Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2021 | May 13, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | PALATIN TECHNOLOGIES INC | |
Entity Central Index Key | 0000911216 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | DE | |
Entity File Number | 001-15543 | |
Entity Common Stock, Shares Outstanding | 230,049,691 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2021 | Jun. 30, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 68,641,312 | $ 82,852,270 |
Accounts receivable | 1,869,120 | 0 |
Inventories | 6,114,718 | 0 |
Prepaid expenses and other current assets | 2,760,242 | 738,216 |
Total current assets | 79,385,392 | 83,590,486 |
Property and equipment, net | 107,376 | 140,216 |
Right-of-use assets | 1,322,326 | 1,266,132 |
Other assets | 56,916 | 56,916 |
Total assets | 80,872,010 | 85,053,750 |
Current liabilities: | ||
Accounts payable | 864,012 | 715,672 |
Accrued expenses | 5,197,759 | 2,899,097 |
Short-term operating lease liabilities | 347,070 | 312,784 |
Other current liabilities | 3,628,000 | 0 |
Total current liabilities | 10,036,841 | 3,927,553 |
Long-term operating lease liabilities | 986,175 | 953,348 |
Other long-term liabilities | 6,972,832 | 0 |
Total liabilities | 17,995,848 | 4,880,901 |
Stockholders' equity: | ||
Preferred stock of $0.01 par value - authorized 10,000,000 shares; shares issued and outstanding designated as follows: Series A Convertible: authorized 264,000 shares: issued and outstanding 4,030 shares as of March 31, 2020 and June 30, 2020 | 40 | 40 |
Common stock of $0.01 par value - authorized 300,000,000 shares: issued and outstanding 230,049,691 shares as of March 31, 2021 and 229,258,400 shares as of June 30, 2020 | 2,300,497 | 2,292,584 |
Additional paid-in capital | 398,436,738 | 396,079,127 |
Accumulated deficit | (337,861,113) | (318,198,902) |
Total stockholders' equity | 62,876,162 | 80,172,849 |
Total liabilities and stockholders' equity | $ 80,872,010 | $ 85,053,750 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2021 | Jun. 30, 2020 |
Preferred stock, par value | $ .01 | $ .01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value | $ .01 | $ .01 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 230,049,691 | 229,258,400 |
Common stock, shares outstanding | 230,049,691 | 229,258,400 |
Series A Convertible Preferred Stock | ||
Preferred stock, shares authorized | 264,000 | 264,000 |
Preferred stock, shares issued | 4,030 | 4,030 |
Preferred stock, shares outstanding | 4,030 | 4,030 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
REVENUES: | ||||
Revenues | $ 88,741 | $ 0 | $ (363,790) | $ 117,989 |
OPERATING EXPENSES: | ||||
Cost of products sold | 55,440 | 0 | 110,040 | 0 |
Research and development | 2,509,490 | 3,641,250 | 9,444,759 | 10,026,363 |
Selling, general and administrative | 4,010,055 | 2,072,032 | 11,386,574 | 6,308,567 |
Gain on license termination agreement | 0 | 0 | (1,623,795) | 0 |
Total operating expenses | 6,574,985 | 5,713,282 | 19,317,578 | 16,334,930 |
Loss from operations | (6,486,244) | (5,713,282) | (19,681,368) | (16,216,941) |
OTHER (EXPENSE) INCOME: | ||||
Investment income | 2,834 | 331,285 | 19,769 | 1,101,921 |
Foreign currency loss | 753,750 | 0 | 8,748 | 0 |
Interest expense | 0 | (278) | (9,360) | (11,831) |
Total other (expense) income, net | 756,584 | 331,007 | 19,157 | 1,090,090 |
Net loss | $ (5,729,660) | $ (5,382,275) | $ (19,662,211) | $ (15,126,851) |
Basic and diluted net loss per common share | $ (0.02) | $ (0.02) | $ (0.08) | $ (0.06) |
Weighted average number of common shares outstanding used in computing basic and diluted net loss per common share | 236,832,283 | 235,322,087 | 236,525,514 | 234,449,813 |
Product Revenue | ||||
REVENUES: | ||||
Revenues | $ 88,741 | $ 0 | $ (363,790) | $ 0 |
License and Contract | ||||
REVENUES: | ||||
Revenues | $ 0 | $ 0 | $ 0 | $ 117,989 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Beginning balance, shares at Jun. 30, 2019 | 4,030 | 226,815,363 | |||
Beginning balance at Jun. 30, 2019 | $ 40 | $ 2,268,154 | $ 394,053,929 | $ (295,772,879) | $ 100,549,244 |
Stock-based compensation, shares | 589,617 | ||||
Stock-based compensation | $ 5,896 | 2,328,901 | 2,334,797 | ||
Withholding taxes related to restricted stock units, shares | (87,179) | ||||
Withholding taxes related to restricted stock units | $ (872) | (103,364) | (104,236) | ||
Sale of common stock, net of costs, shares | 1,895,934 | ||||
Sale of common stock, net of costs | $ 18,959 | 1,562,539 | 1,581,498 | ||
Warrant repurchases | (2,547,466) | (2,547,466) | |||
Net loss | (15,126,851) | (15,126,851) | |||
Ending balance, shares at Mar. 31, 2020 | 4,030 | 229,240,596 | |||
Ending balance at Mar. 31, 2020 | $ 40 | $ 2,292,406 | 395,294,270 | (310,899,730) | 86,686,986 |
Beginning balance, shares at Dec. 31, 2019 | 4,030 | 229,174,754 | |||
Beginning balance at Dec. 31, 2019 | $ 40 | $ 2,291,748 | 394,592,802 | (305,517,455) | 91,367,135 |
Stock-based compensation, shares | 65,842 | ||||
Stock-based compensation | $ 658 | 701,468 | 702,126 | ||
Net loss | (5,382,275) | (5,382,275) | |||
Ending balance, shares at Mar. 31, 2020 | 4,030 | 229,240,596 | |||
Ending balance at Mar. 31, 2020 | $ 40 | $ 2,292,406 | 395,294,270 | (310,899,730) | 86,686,986 |
Beginning balance, shares at Jun. 30, 2020 | 4,030 | 229,258,400 | |||
Beginning balance at Jun. 30, 2020 | $ 40 | $ 2,292,584 | 396,079,127 | (318,198,902) | 80,172,849 |
Stock-based compensation, shares | 958,090 | ||||
Stock-based compensation | $ 9,581 | 2,449,581 | 2,459,162 | ||
Withholding taxes related to restricted stock units, shares | (166,799) | ||||
Withholding taxes related to restricted stock units | $ (1,668) | (91,970) | (93,638) | ||
Net loss | (19,662,211) | (19,662,211) | |||
Ending balance, shares at Mar. 31, 2021 | 4,030 | 230,049,691 | |||
Ending balance at Mar. 31, 2021 | $ 40 | $ 2,300,497 | 398,436,738 | (337,861,113) | 62,876,162 |
Beginning balance, shares at Dec. 31, 2020 | 4,030 | 230,034,307 | |||
Beginning balance at Dec. 31, 2020 | $ 40 | $ 2,300,343 | 397,666,196 | (332,131,453) | 67,835,126 |
Stock-based compensation, shares | 21,875 | ||||
Stock-based compensation | $ 219 | 775,086 | 775,305 | ||
Withholding taxes related to restricted stock units, shares | (6,491) | ||||
Withholding taxes related to restricted stock units | $ (65) | (4,544) | (4,609) | ||
Net loss | (5,729,660) | (5,729,660) | |||
Ending balance, shares at Mar. 31, 2021 | 4,030 | 230,049,691 | |||
Ending balance at Mar. 31, 2021 | $ 40 | $ 2,300,497 | $ 398,436,738 | $ (337,861,113) | $ 62,876,162 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (19,662,211) | $ (15,126,851) |
Adjustments to reconcile net loss to net cash (used in)/provided by operating activities: | ||
Depreciation and amortization | 38,561 | 50,759 |
Cash received in excess of gain on termination agreement | 14,676,205 | 0 |
Non-cash interest expense | 0 | 438 |
Decrease in right-of-use asset | 240,580 | 220,078 |
Unrealized foreign currency transaction losses | (8,748) | 0 |
Stock-based compensation | 2,459,162 | 2,334,797 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,869,120) | 60,265,970 |
Prepaid expenses and other assets | (2,022,026) | (38,154) |
Inventories | (296,923) | 0 |
Accounts payable | 148,340 | 1,107,377 |
Accrued expenses | (1,338) | (1,191,455) |
Operating lease liability | (229,661) | (220,078) |
Other liabilities | (7,584,420) | 0 |
Net cash (used in) provided by operating activities | (14,111,599) | 47,402,881 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (5,721) | (62,880) |
Net cash used in investing activities | (5,721) | (62,880) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payment of withholding taxes related to restricted stock units | (93,638) | (104,236) |
Payments on notes payable obligations | 0 | (832,851) |
Warrant repurchases | 0 | (2,547,466) |
Proceeds from the sale of common stock, net of costs | 0 | 1,581,498 |
Net cash used in financing activities | (93,638) | (1,903,055) |
Net (decrease) increase in cash and cash equivalents | (14,210,958) | 45,436,946 |
Cash and cash equivalents, beginning of period | 82,852,270 | 43,510,422 |
Cash and cash equivalents, end of period | 68,641,312 | 88,947,368 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for interest | $ 9,360 | $ 8,132 |
ORGANIZATION
ORGANIZATION | 9 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | Nature of Business Melanocortin Receptor System. The Company’s lead product, Vyleesi®, was approved by the U.S. Food and Drug Administration (“FDA”) in June 2019 and was being marketed in North America by AMAG Pharmaceuticals, Inc. (“AMAG”) for the treatment of hypoactive sexual desire disorder (“HSDD”) in premenopausal women pursuant to a license agreement between them for Vyleesi for North America, which was entered into on January 8, 2017 (the “AMAG License Agreement”). As disclosed in Note 5, the AMAG License Agreement was terminated effective July 24, 2020, and the Company is now marketing Vyleesi in North America. The Company’s new product development activities focus primarily on MC1r agonists, with potential to treat inflammatory and autoimmune diseases such as dry eye disease, which is also known as keratoconjunctivitis sicca, uveitis, diabetic retinopathy, and inflammatory bowel disease. The Company believes that the MC1r agonist peptides in development have broad anti-inflammatory effects and appear to utilize mechanisms engaged by the endogenous melanocortin system in regulation of the immune system and resolution of inflammatory responses. The Company is also developing peptides that are active at more than one melanocortin receptor, and MC4r peptide and small molecule agonists with potential utility in obesity and metabolic-related disorders, including rare disease and orphan indications. Natriuretic Peptide Receptor System Business Risks and Liquidity – As of March 31, 2021, the Company’s cash and cash equivalents were $68,641,312 and current liabilities were $10,036,841. Management intends to utilize existing capital resources for general corporate purposes and working capital, including establishing marketing and distribution capabilities for Vyleesi in the United States and preclinical and clinical development of the Company’s MC1r and MC4r peptide programs and natriuretic peptide program, and development of other portfolio products. Management believes that the Company’s cash and cash equivalents as of March 31, 2021 will be sufficient to fund its current operating plans through at least twelve months from the date of issuance of these consolidated financial statements. The Company will need additional funding to complete required clinical trials for its other product candidates and, assuming those clinical trials are successful, as to which there can be no assurance, to complete submission of required applications to the FDA. If the Company is unable to obtain approval or otherwise advance in the FDA approval process, the Company’s ability to sustain its operations could be materially adversely affected. The Company may seek the additional capital necessary to fund its operations through public or private equity offerings, collaboration agreements, debt financings or licensing arrangements. Additional capital that is required by the Company may not be available on reasonable terms, or at all. In March 2020, the World Health Organization declared COVID-19, a disease caused by a novel strain of coronavirus, a pandemic. The Company has taken steps to ensure the safety and well-being of its employees and clinical trial patients to comply with guidance from federal, state, and local authorities, while working to ensure the sustainability of its business operations as this unprecedented situation continues to evolve. In mid-March 2020, the Company transitioned to a company-wide work from home policy. Business-critical activities continue to be subject to heightened precautions to ensure safety of employees. The Company continues to assess its policies, business continuity plans, and employee support. The Company continues to evaluate the impact of COVID-19 on the healthcare system and work with contract research organizations supporting its clinical, research, and development programs to mitigate risk to patients and its business and community partners, taking into account regulatory, institutional, and government guidance and policies. The Company will receive a royalty on sales of Vyleesi by our licensees. We have licensed third parties to sell Vyleesi in China and Korea. The COVID-19 coronavirus could adversely impact the time required to obtain regulatory approvals to sell Vyleesi in China and Korea, which would delay when the Company receives royalty income from sales in those countries. The Company cannot be certain what the overall impact of the COVID-19 pandemic, including resurgence of cases in the United States, will be on its business and it has the potential to materially adversely affect its business, financial condition and results of operations and cashflows during fiscal 2021 and beyond. Concentrations – |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnote disclosures required to be presented for complete financial statements. In the opinion of management, these consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) considered necessary for fair presentation. The results of operations for the three and nine months ended March 31, 2021 may not necessarily be indicative of the results of operations expected for the full year. The accompanying unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2020, filed with the Securities and Exchange Commission (“SEC”), which includes consolidated financial statements as of June 30, 2020 and 2019 and for each of the fiscal years in the three-year period ended June 30, 2020. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Principles of Consolidation Use of Estimates Cash and Cash Equivalents Fair Value of Financial Instruments Credit Risk Inventories On a quarterly basis, the Company reviews inventory levels to determine whether any obsolete, expired, or excess inventory exists. If any inventory is expected to expire prior to being sold, has a cost basis in excess of its net realizable value, is in excess of expected sales requirements as determined by internal sales forecasts, or fails to meet commercial sale specifications, the inventory is written-down through a charge to cost of products sold. Once packaged, inventory has a shelf-life ranging from three to five years. Property and Equipment Impairment of Long-Lived Assets Leases The Company extended its lease for existing laboratory space through October 31, 2023 and during the three months ended March 31, 2021 recorded an additional $296,774 in ROU assets and lease obligations. The Company also has operating leases for office space, which expires on June 30, 2025, copier equipment that expire on October 15, 2021, and phone equipment that expire on June 30, 2023. Revenue Recognition Revenue from product sales is recognized when control is transferred to the customer, which generally occurs at the point in time when the goods are shipped. In instances when the Company performs shipping and handling activities, these are considered fulfillment activities, and accordingly, the costs are accrued when the related revenue is recognized. The Company records product revenues net of allowances for direct and indirect fees, discounts, estimated chargebacks and rebates. Product sales are also subject to return rights, which have not been significant to date. Gross product sales were offset by product sales allowances for the three and nine months ended March 31, 2021 as follows: Three Months Ended March 31, 2021 Nine Months Ended March 31, 2021 Gross product sales $ 1,780,020 $ 3,533,070 Provision for product sales allowances and accruals (1,691,279 ) (3,896,860 ) Net sales $ 88,741 $ (363,790 ) For licenses of intellectual property, the Company assesses at contract inception whether the intellectual property is distinct from other performance obligations identified in the arrangement. If the licensing of intellectual property is determined to be distinct, revenue is recognized for nonrefundable, upfront license fees when the license is transferred to the customer and the customer can use and benefit from the license. If the licensing of intellectual property is determined not to be distinct, then the license is bundled with other promises in the arrangement into one performance obligation. The Company needs to determine if the bundled performance obligation is satisfied over time or at a point in time. If the Company concludes that the nonrefundable, upfront license fees will be recognized over time, the Company will need to assess the appropriate method of measuring proportional performance. Regulatory milestone payments are excluded from the transaction price due to the inability to estimate the probability of reversal. Revenue relating to achievement of these milestones is recognized in the period in which the milestone is achieved. Sales-based royalty and milestone payments resulting from customer contracts solely or predominately for the license of intellectual property will only be recognized upon occurrence of the underlying sale or achievement of the sales milestone in the future and such sales-based royalties and milestone payments will be recognized in the same period earned. The Company recognizes revenue for reimbursements of research and development costs under collaboration agreements as the services are performed. The Company records these reimbursements as revenue and not as a reduction of research and development expenses as the Company is the principal in the research and development activities based upon its control of such activities, which is considered part of its ordinary activities. Development milestone payments are generally due 30 business days after the milestone is achieved. Sales milestone payments are generally due 45 business days after the calendar year in which the sales milestone is achieved. Royalty payments are generally due on a quarterly basis 20 business days after being invoiced. Research and Development Costs Accrued Expenses – Stock-Based Compensation – Income Taxes Net Loss per Common Share - Earnings per Share For the three and nine months ended March 31, 2021 and 2020, no additional common shares were added to the computation of diluted EPS because to do so would have been anti-dilutive. The potential number of common shares excluded from diluted EPS during the three and nine months ended March 31, 2021 and 2020 was 37,336,040 and 33,166,477, respectively. Included in the weighted average common shares used in computing basic and diluted net loss per common share are 6,776,750 and 6,079,250 vested restricted stock units that had not been issued as of March 31, 2021 and 2020, respectively, due to a provision in the restricted stock unit agreements to delay delivery. Translation of foreign currencies |
NEW AND RECENTLY ADOPTED ACCOUN
NEW AND RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Mar. 31, 2021 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
NEW AND RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS | In August 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-06, Debt (Topic 470) and Derivatives and Hedging (Topic 815): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606. This update provides clarification on the interaction between Revenue Recognition (Topic 606) and Collaborative Arrangements (Topic 808), including the alignment of unit of account guidance between the two topics . The guidance is effective for public entities for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years, with early adoption permitted. The guidance was applicable to the Company beginning July 1, 2020. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments, |
AGREEMENT WITH AMAG
AGREEMENT WITH AMAG | 9 Months Ended |
Mar. 31, 2021 | |
Fair value of restricted stock units granted, amortized over 24 month vesting period | |
AGREEMENT WITH AMAG | On January 8, 2017, the Company entered into the AMAG License Agreement pursuant to which the Company granted AMAG (i) an exclusive license in all countries of North America (the “Territory”), with the right to grant sub-licenses, to research, develop, and commercialize products containing Vyleesi (each a “Product”, and collectively, “Products”), (ii) a non-exclusive license in the Territory, with the right to grant sub-licenses, to manufacture the Products, and (iii) a non-exclusive license in all countries outside the Territory, with the right to grant sub-licenses, to research, develop, and manufacture (but not commercialize) the Products. Following the satisfaction of certain conditions to closing, the AMAG License Agreement became effective on February 2, 2017, and AMAG paid the Company $60,000,000 as a one-time initial payment. Under the AMAG License Agreement, AMAG reimbursed the Company $25,000,000 for reasonable, documented, direct out-of-pocket expenses incurred by the Company following February 2, 2017, in connection with development and regulatory activities necessary to file a New Drug Application (“NDA”) for Vyleesi for HSDD in the United States. The Company determined there was no stand-alone value for the license, and that the license and the reimbursable direct out-of-pocket expenses, pursuant to the terms of the AMAG License Agreement, represented a combined unit of accounting which totaled $85,000,000. The Company recognized revenue of the combined unit of accounting over the arrangement using the input-based proportional method as the Company completed its development obligations. During the nine months ended March 31, 2020, license and contract revenue included additional billings for AMAG related Vyleesi costs of $117,989. On June 4, 2018, the FDA accepted the Vyleesi NDA for filing. The FDA’s acceptance triggered a $20,000,000 milestone payment to Palatin from AMAG. As a result, the Company recognized $20,000,000 in revenue related to regulatory milestones in fiscal 2018. On June 21, 2019, the FDA granted approval of Vyleesi for use in the United States. The FDA’s approval triggered a $60,000,000 milestone payment to Palatin from AMAG. As a result, the Company recognized $60,000,000 in revenue related to regulatory milestones in fiscal 2019. Effective July 24, 2020, the Company entered into a termination agreement (the “Termination Agreement”) with AMAG terminating the AMAG License Agreement. Under the terms of the Termination Agreement, the Company has regained all development and commercialization rights for Vyleesi in the Territory. AMAG made a $12,000,000 payment to the Company at closing of the Termination Agreement and a $4,300,000 payment to the Company on March 31, 2021. The Company recorded a liability related to estimated losses on inventory purchase commitments of $18,194,000 as well as accrued expenses for an inventory production run obligation assumed of $2,300,000. As a result, the Company recorded a net gain for the Termination Agreement of $1,623,795. The Company has assumed all Vyleesi manufacturing agreements, and AMAG transferred information, data, and assets related exclusively to Vyleesi to the Company, including existing inventory with a fair value of $5,817,795. Under the Termination Agreement, AMAG provided certain transitional services to the Company for a period to ensure continued patient access to Vyleesi during the transition back to the Company. The Company is reimbursing AMAG for the agreed upon costs of the transition services. |
MANUFACTURING SUPPLY AGREEMENTS
MANUFACTURING SUPPLY AGREEMENTS FOR VYLEESI | 9 Months Ended |
Mar. 31, 2021 | |
Manufacturing Supply Agreements For Vyleesi | |
MANUFACTURING SUPPLY AGREEMENTS FOR VYLEESI | Pursuant to the Termination Agreement, the Company assumed Vyleesi manufacturing contracts with Catalent Belgium S.A. (“Catalent”), a subsidiary of Catalent Pharma Solutions, Inc., to manufacture drug product and prefilled syringes and assemble prefilled syringes into an auto-injector device (the “Catalent Agreement”), Ypsomed AG (“Ypsomed”), to manufacture the auto-injector device (the “Ypsomed Agreement”), and Lonza Ltd. (“Lonza”), to manufacture the active pharmaceutical ingredient peptide (the “Lonza Agreement”). On September 29, 2020, the Company and Catalent entered into an agreement to terminate the Catalent Agreement (the “Catalent Termination Agreement”) in consideration for a one-time payment of six million euros (€6,000,000) which was paid in October 2020 and accrued as part of the estimated losses on inventory purchase commitments assumed as part of the Termination Agreement as discussed in Note 5. The Company and Catalent then entered into a new Vyleesi manufacturing agreement (the “New Catalent Agreement”) which includes reduced minimum annual purchase requirements (see Note 13) as compared to the original Catalent Agreement and modification of other financial terms. The New Catalent Agreement provides that Catalent will provide manufacturing and supply services to Palatin related to production of Vyleesi, including that Catalent will supply specified minimums of Palatin’s requirements for Vyleesi during the term of the New Catalent Agreement through August 21, 2025, unless earlier terminated in accordance with the terms of the New Catalent Agreement. The initial term of the New Catalent Agreement will be automatically extended for one 24-month period unless either party notifies the other of its desire to terminate as of the end of the initial term. The New Catalent Agreement also includes customary terms and conditions relating to forecasting and minimum commitments, ordering, delivery, inspection and acceptance, and termination, among other matters. The term of the Lonza Agreement is through December 31, 2022. There are specified minimum purchase requirements under the Lonza Agreement, and under specified circumstances, termination fees may be payable upon termination of the Lonza Agreement by the Company (see Note 13). The initial term of the Ypsomed Agreement is through December 31, 2025, with automatic renewal for successive one-year periods unless either party terminates the Ypsomed Agreement by ten months’ written notice prior to the expiration of the Ypsomed Agreement or any automatic renewal period. There are specified minimum purchase requirements under the Ypsomed Agreement, and under specified circumstances, termination fees may be payable upon termination of the Ypsomed Agreement by the Company (see Note 13). |
AGREEMENT WITH FOSUN
AGREEMENT WITH FOSUN | 9 Months Ended |
Mar. 31, 2021 | |
Document And Entity Information | |
AGREEMENT WITH FOSUN | On September 6, 2017, the Company entered into a license agreement with Fosun (“Fosun License Agreement”) for exclusive rights to commercialize Vyleesi in China. Under the terms of the agreement, the Company received $4,500,000 in October 2017, which consisted of an upfront payment of $5,000,000 less $500,000 that was withheld in accordance with tax withholding requirements in China and recorded as an expense during the year ended June 30, 2018. The Company will receive a $7,500,000 milestone payment when regulatory approval in China is obtained, provided that a commercial supply agreement for Vyleesi has been entered into. Palatin has the potential to receive up to $92,500,000 in additional sales related milestone payments and high single-digit to low double-digit royalties on net sales in the licensed territory. All development, regulatory, sales, marketing, and commercial activities and associated costs in the licensed territory will be the sole responsibility of Fosun. |
AGREEMENT WITH KWANGDONG
AGREEMENT WITH KWANGDONG | 9 Months Ended |
Mar. 31, 2021 | |
Notes Payable Details | |
AGREEMENT WITH KWANGDONG | On November 21, 2017, the Company entered into a license agreement with Kwangdong (“Kwangdong License Agreement”) for exclusive rights to commercialize Vyleesi in Korea. Under the terms of the agreement, the Company received $417,500 in December 2017, consisting of an upfront payment of $500,000, less $82,500, which was withheld in accordance with tax withholding requirements in Korea and recorded as an expense during the year ended June 30, 2018. The Company will receive a $3,000,000 milestone payment based on the first commercial sale in Korea. Palatin has the potential to receive up to $37,500,000 in additional sales related milestone payments and mid-single-digit to low double-digit royalties on net sales in the licensed territory. All development, regulatory, sales, marketing, and commercial activities and associated costs in the licensed territory will be the sole responsibility of Kwangdong. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 9 Months Ended |
Mar. 31, 2021 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | Prepaid expenses March 31, June 30, 2021 2020 Clinical / regulatory costs $ 313,761 $ 43,625 Insurance premiums 39,377 84,741 Vyleesi contractual advances 1,200,000 - Other 1,207,104 609,850 $ 2,760,242 $ 738,216 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | The fair value of cash equivalents is classified using a hierarchy prioritized based on inputs. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on management’s own assumptions used to measure assets and liabilities at fair value. A financial asset’s or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The following table provides the assets carried at fair value: Carrying Value Quoted prices in active markets (Level 1) Other quoted/observable inputs (Level 2) Significant unobservable inputs (Level 3) March 31, 2021: Money Market Account $ 68,452,269 $ 68,452,269 $ - $ - June 30, 2020: Money Market Account $ 82,406,697 $ 82,406,697 $ - $ - |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | Accrued expenses March 31, June 30, 2021 2020 Clinical / regulatory costs $ 325,546 $ 1,722,729 Other research related expenses 854,176 586,185 Professional services 60,047 217,662 Inventory purchases 2,300,000 - Selling expenses 1,542,475 - Other 115,515 372,521 $ 5,197,759 $ 2,899,097 |
NOTES PAYABLE
NOTES PAYABLE | 9 Months Ended |
Mar. 31, 2021 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | On July 2, 2015, the Company closed on a $10,000,000 venture loan led by Horizon Technology Finance Corporation (“Horizon”). The debt facility was a four-year senior secured term loan that bore interest at a floating coupon rate of one-month LIBOR (floor of 0.50%) plus 8.50% and provided for interest-only payments for the first eighteen months followed by monthly payments of principal of $333,333 plus accrued interest through August 1, 2019. The lenders also received five-year immediately exercisable Series G warrants to purchase 549,450 shares of the Company’s common stock exercisable at an exercise price of $0.91 per share. The Company recorded a debt discount of $305,196 equal to the fair value of these warrants at issuance, which were amortized to interest expense over the term of the related debt. This debt discount was offset against the note payable balance and was included in additional paid-in capital on the Company’s balance sheet. In addition, a final incremental payment of $500,000 was due on August 1, 2019. This final incremental payment was accreted to interest expense over the term of the related debt and was included in other current liabilities on the consolidated balance sheet. The Company incurred $146,115 of costs in connection with the loan agreement. These costs were capitalized as deferred financing costs and were offset against the note payable balance. These debt issuance costs were amortized to interest expense over the term of the related debt. During the nine months ended March 31, 2020, the loan matured, and on July 31, 2019, the Company made the final incremental payment of $500,000. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | As a result of the Termination Agreement and subsequent activity, the Company has certain supply agreements with manufacturers and suppliers, including the New Catalent Agreement, Lonza Agreement, and Ypsomed Agreement. The Company is required to make certain payments for the manufacture and supply of Vyleesi. The following table summarizes the contractual obligations under the New Catalent Agreement, Lonza Agreement, and Ypsomed. Agreement as of March 31, 2021: Total Current 1-3 Years 4-5 Years Inventory purchase commitments $ 11,072,000 $ 3,628,000 $ 6,484,000 $ 960,000 As of March 31, 2021, the Company has $3,628,000 and $6,972,832 accrued within other current and long-term liabilities, respectively, in the consolidated balance sheet related to estimated losses for firm commitment contractual obligations under these agreements. Losses on these firm commitment contractual obligations are recognized based upon the terms of the respective agreement and similar factors considered for the write-down of inventory, including expected sales requirements as determined by internal sales forecasts. The commitment contractual obligation amounts above are denominated in Swiss Francs and Euros and have been translated using period end exchange rates. The Company may experience a negative impact on future earnings and equity solely as a result of future foreign currency exchange rate fluctuations. The Company is subject to numerous contingencies, such as product liability, arising in the ordinary course of business. Loss contingency provisions are recorded for probable losses when management is able to reasonably estimate the loss. Any outcome upon settlement that deviates from the Company’s best estimate may result in additional expense or in a reduction in expense in a future accounting period. The Company records legal expenses associated with such contingencies as incurred. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Mar. 31, 2021 | |
Stockholders' equity: | |
STOCKHOLDERS' EQUITY | Financing Transactions – Proceeds raised under the 2019 Equity Distribution Agreement are as follows: Nine Months Ended March 31, 2021 Nine Months Ended March 31, 2020 Cumulative from inception Shares Proceeds Shares Proceeds Shares Proceeds Gross proceeds - $ - 1,895,934 $ 1,723,194 9,460,509 $ 12,330,242 Fees - - - (51,696 ) - (369,908 ) Expenses - - - (90,000 ) - (90,000 ) Net proceeds - $ - 1,895,934 $ 1,581,498 9,460,509 $ 11,870,334 Stock Purchase Warrants During the nine months ended March 31, 2020, the Company entered into several warrant termination agreements to repurchase and cancel the following previously issued Series F, Series H, and Series J warrants for the following aggregate buyback prices: Nine months ended March 31, 2020 Warrants Buyback price Series F Warrants 297,352 $ 62,712 Series H Warrants 1,466,432 577,373 Series J Warrants 4,774,889 1,907,381 6,538,673 $ 2,547,466 During the nine months ended March 31, 2020, the Company issued 26,861 shares of common stock upon the cashless exercise provisions of 666,666 Series D warrants at an exercise price of $0.75 per share. Stock Options – A summary of stock option activity is as follows: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Term in Years Aggregate Intrinsic Value Outstanding - June 30, 2020 19,902,450 $ 0.76 7.4 $ 380,514 Granted 409,500 0.69 Forfeited (487,126 ) 0.75 Exercised - - Expired (14,000 ) 1.70 Outstanding - March 31, 2021 19,810,824 $ 0.76 6.7 $ 1,631,093 Exercisable at March 31, 2021 11,517,324 $ 0.78 5.2 $ 873,610 Expected to vest at March 31, 2021 8,293,500 $ 0.74 8.6 $ 757,483 Stock options granted to the Company’s executive officers and employees generally vest over a 48-month period, while stock options granted to its non-employee directors vest over a 12-month period. Included in the options outstanding above are 1,994,500 and 188,084 performance-based options granted in June 2020 to executive officers and employees, respectively. The performance-based options vest on performance criteria relating to advancement of MC1r programs, including initiation of clinical trials and licensing of Vyleesi in additional countries or regions. Also included in the table above are 1,075,000 and 117,500 performance-based options granted in December 2017 to executive officers and employees, respectively, which were eligible to vest during a performance period ended on December 31, 2020, if and upon either i) as to 100% of the target number of shares upon achievement of a closing price for the Company’s common stock equal to or greater than $1.50 per share for 20 consecutive trading days, which is considered a market condition; or ii) as to thirty percent (30%) of the target number of shares, upon the acceptance for filing by the FDA of an NDA for Vyleesi for HSDD in premenopausal women during the performance period, which is considered a performance condition; iii) as to fifty percent (50%) of the target number of shares, upon the approval by the FDA of an NDA for Vyleesi for HSDD in premenopausal women during the performance period, which is also considered a performance condition; iv) as to twenty percent (20%) of the target number of shares, upon entry into a licensing agreement during the performance period for the commercialization of Vyleesi for FSD in at least two of the following geographic areas (a) four or more countries in Europe, (b) Japan, (c) two or more countries in Central and/or South America, (d) two or more countries in Asia, excluding Japan and China, and (e) Australia, which is also considered a performance condition. The fair value of these options was $602,760. The Company amortized the fair value over the derived service period of 1.1 years or upon the attainment of the performance condition. Pursuant to the FDA acceptance of the NDA filing of Vyleesi, 30% of the target number of options vested in June 2018 and 50% of the target number of options vested in June 2019 upon FDA approval of Vyleesi. During the three months ended December 31, 2020, the performance period ended for the remaining performance-based stock options. As a result, 240,000 unearned stock options were forfeited and added back to the Company’s 2011 Stock Incentive Plan (“2011 Stock Plan”) and available for future grant. Restricted Stock Units – A summary of restricted stock unit activity is as follows: RSUs Outstanding at July 1, 2020 12,965,570 Granted - Forfeited (411,068 ) Vested (958,090 ) Outstanding at March 31, 2021 11,596,412 Included in outstanding restricted stock units in the table above are 6,776,750 vested shares that have not been issued as of March 31, 2021 due to a provision in the restricted stock unit agreements to delay delivery. Time-based restricted stock units granted to the Company’s executive officers, employees, and non-employee directors generally vest over 48 months, 48 months, and 12 months, respectively. In June 2020, the Company granted 1,203,500 performance-based restricted stock units to its executive officers and 113,484 performance-based restricted stock units to other employees which vest during a performance period ending June 24, 2024. The performance-based restricted stock units vest on performance criteria relating to advancement of MC1r programs, including initiation of clinical trials and licensing of Vyleesi in additional countries or regions. In June 2019, the Company granted 438,000 performance-based restricted stock units to its executive officers and 182,725 performance-based restricted stock units to other employees which vest during a performance period ending June 24, 2023. The performance-based restricted stock units vest on performance criteria relating to advancement of MC1r programs, including initiation of clinical trials and licensing of Vyleesi in additional countries or regions. In December 2017, the Company granted 1,075,000 performance-based restricted stock units to its executive officers and 670,000 performance-based restricted stock units to other employees which were eligible to vest during a performance period, ended on December 31, 2020, if and upon either i) as to 100% of the target number of shares upon achievement of a closing price for the Company’s common stock equal to or greater than $1.50 per share for 20 consecutive trading days, which is considered a market condition; or ii) as to thirty percent (30%) of the target number of shares, upon the acceptance for filing by the FDA of an NDA for Vyleesi for HSDD in premenopausal women during the performance period, which is considered a performance condition; iii) as to fifty percent (50%) of the target number of shares, upon the approval by the FDA of an NDA for Vyleesi for HSDD in premenopausal women during the performance period, which is also considered a performance condition; iv) as to twenty percent (20%) of the target number of shares, upon entry into a licensing agreement during the performance period for the commercialization of Vyleesi for FSD in at least two of the following geographic areas (a) four or more countries in Europe, (b) Japan, (c) two or more countries in Central and/or South America, (d) two or more countries in Asia, excluding Japan and China, and (e) Australia, which is also considered a performance condition. The fair value of these awards was $913,750 and $569,500, respectively. The Company amortized the fair value over the derived service period of 1.1 years or upon the attainment of the performance condition. Pursuant to the FDA acceptance of the NDA filing for Vyleesi, 30% of the target number of shares vested in June 2018. Pursuant to the FDA approval of Vyleesi, 50% of the target number of shares vested in June 2019. During the three months ended December 31, 2020, the performance period ended for the remaining performance based restricted stock units. As a result, 319,500 unearned restricted stock units were forfeited and added back to the 2011 Stock Plan and available for future grant. |
ORGANIZATION (Policies)
ORGANIZATION (Policies) | 9 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | Palatin Technologies, Inc. (“Palatin” or the “Company”) is a specialized biopharmaceutical company developing first-in-class medicines based on molecules that modulate the activity of the melanocortin and natriuretic peptide receptor systems. The Company’s product candidates are targeted, receptor-specific therapeutics for the treatment of diseases with significant unmet medical need and commercial potential. Melanocortin Receptor System. The Company’s lead product, Vyleesi®, was approved by the U.S. Food and Drug Administration (“FDA”) in June 2019 and was being marketed in North America by AMAG Pharmaceuticals, Inc. (“AMAG”) for the treatment of hypoactive sexual desire disorder (“HSDD”) in premenopausal women pursuant to a license agreement between them for Vyleesi for North America, which was entered into on January 8, 2017 (the “AMAG License Agreement”). As disclosed in Note 5, the AMAG License Agreement was terminated effective July 24, 2020, and the Company is now marketing Vyleesi in North America. The Company’s new product development activities focus primarily on MC1r agonists, with potential to treat inflammatory and autoimmune diseases such as dry eye disease, which is also known as keratoconjunctivitis sicca, uveitis, diabetic retinopathy, and inflammatory bowel disease. The Company believes that the MC1r agonist peptides in development have broad anti-inflammatory effects and appear to utilize mechanisms engaged by the endogenous melanocortin system in regulation of the immune system and resolution of inflammatory responses. The Company is also developing peptides that are active at more than one melanocortin receptor, and MC4r peptide and small molecule agonists with potential utility in obesity and metabolic-related disorders, including rare disease and orphan indications. Natriuretic Peptide Receptor System |
Business Risks and Liquidity | Since inception, the Company has generally incurred negative cash flows from operations, and has expended, and expects to continue to expend, substantial funds to develop the capability to market and distribute Vyleesi in the United States and complete its planned product development efforts. As shown in the accompanying consolidated financial statements, the Company had an accumulated deficit as of March 31, 2021 of $337,861,113 and a net loss for the three and nine months ended March 31, 2021 of $5,729,660 and $19,662,211, respectively, and the Company anticipates incurring significant expenses in the future as a result of spending on developing marketing and distribution capabilities for Vyleesi in the United States and spending on its development programs, and will require substantial additional financing or revenues to continue to fund its planned developmental activities. To achieve sustained profitability, if ever, the Company, alone or with others, must successfully develop and commercialize its technologies and proposed products, conduct successful preclinical studies and clinical trials, obtain required regulatory approvals, and successfully manufacture and market such technologies and proposed products. The time required to reach sustained profitability is highly uncertain, and the Company may never be able to achieve profitability on a sustained basis, if at all. As of March 31, 2021, the Company’s cash and cash equivalents were $68,641,312 and current liabilities were $10,036,841. Management intends to utilize existing capital resources for general corporate purposes and working capital, including establishing marketing and distribution capabilities for Vyleesi in the United States and preclinical and clinical development of the Company’s MC1r and MC4r peptide programs and natriuretic peptide program, and development of other portfolio products. Management believes that the Company’s cash and cash equivalents as of March 31, 2021 will be sufficient to fund its current operating plans through at least twelve months from the date of issuance of these consolidated financial statements. The Company will need additional funding to complete required clinical trials for its other product candidates and, assuming those clinical trials are successful, as to which there can be no assurance, to complete submission of required applications to the FDA. If the Company is unable to obtain approval or otherwise advance in the FDA approval process, the Company’s ability to sustain its operations could be materially adversely affected. The Company may seek the additional capital necessary to fund its operations through public or private equity offerings, collaboration agreements, debt financings or licensing arrangements. Additional capital that is required by the Company may not be available on reasonable terms, or at all. In March 2020, the World Health Organization declared COVID-19, a disease caused by a novel strain of coronavirus, a pandemic. The Company has taken steps to ensure the safety and well-being of its employees and clinical trial patients to comply with guidance from federal, state, and local authorities, while working to ensure the sustainability of its business operations as this unprecedented situation continues to evolve. In mid-March 2020, the Company transitioned to a company-wide work from home policy. Business-critical activities continue to be subject to heightened precautions to ensure safety of employees. The Company continues to assess its policies, business continuity plans, and employee support. The Company continues to evaluate the impact of COVID-19 on the healthcare system and work with contract research organizations supporting its clinical, research, and development programs to mitigate risk to patients and its business and community partners, taking into account regulatory, institutional, and government guidance and policies. The Company will receive a royalty on sales of Vyleesi by our licensees. We have licensed third parties to sell Vyleesi in China and Korea. The COVID-19 coronavirus could adversely impact the time required to obtain regulatory approvals to sell Vyleesi in China and Korea, which would delay when the Company receives royalty income from sales in those countries. The Company cannot be certain what the overall impact of the COVID-19 pandemic, including resurgence of cases in the United States, will be on its business and it has the potential to materially adversely affect its business, financial condition and results of operations and cashflows during fiscal 2021 and beyond. |
Concentrations | Concentrations in the Company’s assets and operations subject it to certain related risks. Financial instruments that subject the Company to concentrations of credit risk primarily consist of cash, cash equivalents, and accounts receivable. The Company’s cash and cash equivalents are primarily invested in one money market account sponsored by a large financial institution. For the nine months ended March 31, 2021, the Company recorded a gain of $1,623,795 related to the termination of the AMAG License Agreement. For the nine months ended March 31, 2020, the Company reported $117,989 in revenue related to the AMAG License Agreement. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | The consolidated financial statements include the accounts of Palatin and its wholly-owned inactive subsidiary. All intercompany accounts and transactions have been eliminated in consolidation |
Use of Estimates | The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and cash equivalents include cash on hand, cash in banks, and all highly liquid investments with a purchased maturity of less than three months. Cash equivalents consist of $68,452,269 and $82,406,697 in a money market account at March 31, 2021 and June 30, 2020, respectively. |
Fair Value of Financial Instruments | The Company’s financial instruments consist primarily of cash equivalents, accounts receivable, and accounts payable. Management believes that the carrying values of cash equivalents, accounts receivable, and accounts payable are representative of their respective fair values based on the short-term nature of these instruments. |
Credit Risk | Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, and accounts receivable. Total cash and cash equivalent balances have exceeded balances insured by the Federal Depository Insurance Company. Currently accounts receivable are due exclusively from AMAG. |
Inventories | Inventory is stated at the lower of cost or net realizable value, with cost being determined on a first-in, first-out basis. On a quarterly basis, the Company reviews inventory levels to determine whether any obsolete, expired, or excess inventory exists. If any inventory is expected to expire prior to being sold, has a cost basis in excess of its net realizable value, is in excess of expected sales requirements as determined by internal sales forecasts, or fails to meet commercial sale specifications, the inventory is written-down through a charge to cost of products sold. Once packaged, inventory has a shelf-life ranging from three to five years. |
Property and Equipment | Property and equipment consists of office and laboratory equipment, office furniture and leasehold improvements and includes assets acquired under finance leases. Property and equipment are recorded at cost. Depreciation is recognized using the straight-line method over the estimated useful lives of the related assets, generally five years for laboratory and computer equipment, seven years for office furniture and equipment, and the lesser of the term of the lease or the useful life for leasehold improvements. Amortization of assets acquired under finance leases is included in depreciation expense. Maintenance and repairs are expensed as incurred while expenditures that extend the useful life of an asset are capitalized. Accumulated depreciation and amortization was $2,491,405 and $2,452,845 as of March 31, 2021 and June 30, 2020, respectively. |
Impairment of Long-Lived Assets | The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. To determine recoverability of a long-lived asset, management evaluates whether the estimated future undiscounted net cash flows from the asset are less than its carrying amount. If impairment is indicated, the long-lived asset would be written down to fair value. Fair value is determined by an evaluation of available price information at which assets could be bought or sold, including quoted market prices, if available, or the present value of the estimated future cash flows based on reasonable and supportable assumptions. |
Leases | At lease inception, the Company determines whether an arrangement is or contains a lease. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities, and noncurrent operating lease liabilities in the consolidated financial statements. ROU assets represent the Company’s right to use leased assets over the term of the lease. Lease liabilities represent the Company’s contractual obligation to make lease payments over the lease term. For operating leases, ROU assets and lease liabilities are recognized at the commencement date. The lease liability is measured as the present value of the lease payments over the lease term. The Company uses the rate implicit in the lease if it is determinable. When the rate implicit in the lease is not determinable, the Company uses an estimate based on a hypothetical rate provided by a third party as the Company currently does not have issued debt. Operating ROU assets are calculated as the present value of the remaining lease payments plus unamortized initial direct costs plus any prepayments less any unamortized lease incentives received. Lease terms may include renewal or extension options to the extent they are reasonably certain to be exercised. The assessment of whether renewal or extension options are reasonably certain to be exercised is made at lease commencement. Factors considered in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of any leasehold improvements, the value of renewal rates compared to market rates, and the presence of factors that would cause incremental costs to the Company if the option were not exercised. Lease expense is recognized on a straight-line basis over the lease term. The Company has elected not to recognize an ROU asset and obligation for leases with an initial term of twelve months or less. The expense associated with short term leases is included in general and administrative expense in the statement of operations. To the extent a lease arrangement includes both lease and non-lease components, the Company has elected to account for the components as a single lease component. The Company extended its lease for existing laboratory space through October 31, 2023 and during the three months ended March 31, 2021 recorded an additional $296,774 in ROU assets and lease obligations. The Company also has operating leases for office space, which expires on June 30, 2025, copier equipment that expire on October 15, 2021, and phone equipment that expire on June 30, 2023. |
Revenue Recognition | The Company principally sells Vyleesi to specialty pharmacies and payment is currently made within approximately 30 days. The specialty pharmacies subsequently resell the products to healthcare providers and patients. In addition to distribution agreements with customers, the Company enters into arrangements with healthcare providers and payers that provide for privately negotiated rebates, chargebacks, and discounts with respect to the purchase of the Company’s products. Revenue from product sales is recognized when control is transferred to the customer, which generally occurs at the point in time when the goods are shipped. In instances when the Company performs shipping and handling activities, these are considered fulfillment activities, and accordingly, the costs are accrued when the related revenue is recognized. The Company records product revenues net of allowances for direct and indirect fees, discounts, estimated chargebacks and rebates. Product sales are also subject to return rights, which have not been significant to date. Gross product sales were offset by product sales allowances for the three and nine months ended March 31, 2021 as follows: Three Months Ended March 31, 2021 Nine Months Ended March 31, 2021 Gross product sales $ 1,780,020 $ 3,533,070 Provision for product sales allowances and accruals (1,691,279 ) (3,896,860 ) Net sales $ 88,741 $ (363,790 ) For licenses of intellectual property, the Company assesses at contract inception whether the intellectual property is distinct from other performance obligations identified in the arrangement. If the licensing of intellectual property is determined to be distinct, revenue is recognized for nonrefundable, upfront license fees when the license is transferred to the customer and the customer can use and benefit from the license. If the licensing of intellectual property is determined not to be distinct, then the license is bundled with other promises in the arrangement into one performance obligation. The Company needs to determine if the bundled performance obligation is satisfied over time or at a point in time. If the Company concludes that the nonrefundable, upfront license fees will be recognized over time, the Company will need to assess the appropriate method of measuring proportional performance. Regulatory milestone payments are excluded from the transaction price due to the inability to estimate the probability of reversal. Revenue relating to achievement of these milestones is recognized in the period in which the milestone is achieved. Sales-based royalty and milestone payments resulting from customer contracts solely or predominately for the license of intellectual property will only be recognized upon occurrence of the underlying sale or achievement of the sales milestone in the future and such sales-based royalties and milestone payments will be recognized in the same period earned. The Company recognizes revenue for reimbursements of research and development costs under collaboration agreements as the services are performed. The Company records these reimbursements as revenue and not as a reduction of research and development expenses as the Company is the principal in the research and development activities based upon its control of such activities, which is considered part of its ordinary activities. Development milestone payments are generally due 30 business days after the milestone is achieved. Sales milestone payments are generally due 45 business days after the calendar year in which the sales milestone is achieved. Royalty payments are generally due on a quarterly basis 20 business days after being invoiced. |
Research and Development Costs | The costs of research and development activities are charged to expense as incurred, including the cost of equipment for which there is no alternative future use. |
Accrued Expenses | Third parties perform a significant portion of the Company’s development activities. The Company reviews the activities performed under all contracts each quarter and accrues expenses and the amount of any reimbursement to be received from its collaborators based upon the estimated amount of work completed. Estimating the value or stage of completion of certain services requires judgment based on available information. If the Company does not identify services performed for it but not billed by the service-provider, or if it underestimates or overestimates the value of services performed as of a given date, reported expenses will be understated or overstated. |
Stock-Based Compensation | The Company charges to expense the fair value of stock options and other equity awards granted. Compensation costs for stock-based awards with time-based vesting are determined using the quoted market price of the Company’s common stock on the date of grant or for stock options, the value determined utilizing the Black-Scholes option pricing model, and are recognized on a straight-line basis, while awards containing a market condition are valued using multifactor Monte Carlo simulations. Compensation costs for awards containing a performance condition are determined using the quoted price of the Company’s common stock on the date of grant or for stock options, the value determined utilizing the Black Scholes option pricing model and are recognized based on the probability of achievement of the performance condition over the service period. Forfeitures are recognized as they occur. |
Income Taxes | The Company and its subsidiary file consolidated federal and separate-company state income tax returns. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences or operating loss and tax credit carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. The Company has recorded and continues to maintain a full valuation allowance against its deferred tax assets based on the history of losses incurred and lack of experience projecting future product revenue and sales-based royalty and milestone payments. |
Net Loss per Common Share | Basic and diluted loss per common share (“EPS”) are calculated in accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260, Earnings per Share For the three and nine months ended March 31, 2021 and 2020, no additional common shares were added to the computation of diluted EPS because to do so would have been anti-dilutive. The potential number of common shares excluded from diluted EPS during the three and nine months ended March 31, 2021 and 2020 was 37,336,040 and 33,166,477, respectively. Included in the weighted average common shares used in computing basic and diluted net loss per common share are 6,776,750 and 6,079,250 vested restricted stock units that had not been issued as of March 31, 2021 and 2020, respectively, due to a provision in the restricted stock unit agreements to delay delivery. |
Translation of Foreign Currencies | Transactions denominated in currencies other than the Company’s functional currency (US Dollar) are recorded based on exchange rates at the time such transactions arise. Subsequent changes in exchange rates result in transaction gains and losses, which are reflected in the consolidated statements of operations as unrealized (based on the applicable period-end exchange rate) or realized upon settlement of the transactions. |
Disclosure - SUMMARY OF SIGNIFI
Disclosure - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of gross product sales | Three Months Ended March 31, 2021 Nine Months Ended March 31, 2021 Gross product sales $ 1,780,020 $ 3,533,070 Provision for product sales allowances and accruals (1,691,279 ) (3,896,860 ) Net sales $ 88,741 $ (363,790 ) |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 9 Months Ended |
Mar. 31, 2021 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Schedule of prepaid expenses and other current assets | March 31, June 30, 2021 2020 Clinical / regulatory costs $ 313,761 $ 43,625 Insurance premiums 39,377 84,741 Vyleesi contractual advances 1,200,000 - Other 1,207,104 609,850 $ 2,760,242 $ 738,216 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets at fair value | Carrying Value Quoted prices in active markets (Level 1) Other quoted/observable inputs (Level 2) Significant unobservable inputs (Level 3) March 31, 2021: Money Market Account $ 68,452,269 $ 68,452,269 $ - $ - June 30, 2020: Money Market Account $ 82,406,697 $ 82,406,697 $ - $ - |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 9 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | March 31, June 30, 2021 2020 Clinical / regulatory costs $ 325,546 $ 1,722,729 Other research related expenses 854,176 586,185 Professional services 60,047 217,662 Inventory purchases 2,300,000 - Selling expenses 1,542,475 - Other 115,515 372,521 $ 5,197,759 $ 2,899,097 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of inventory purchase commitments | Total Current 1-3 Years 4-5 Years Inventory purchase commitments $ 11,072,000 $ 3,628,000 $ 6,484,000 $ 960,000 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Mar. 31, 2021 | |
Stockholders' equity: | |
Schedule of equity distribution agreement | Nine Months Ended March 31, 2021 Nine Months Ended March 31, 2020 Cumulative from inception Shares Proceeds Shares Proceeds Shares Proceeds Gross proceeds - $ - 1,895,934 $ 1,723,194 9,460,509 $ 12,330,242 Fees - - - (51,696 ) - (369,908 ) Expenses - - - (90,000 ) - (90,000 ) Net proceeds - $ - 1,895,934 $ 1,581,498 9,460,509 $ 11,870,334 |
Schedule of warrant buybacks | Nine months ended March 31, 2020 Warrants Buyback price Series F Warrants 297,352 $ 62,712 Series H Warrants 1,466,432 577,373 Series J Warrants 4,774,889 1,907,381 6,538,673 $ 2,547,466 |
Schedule of option activity | Number of Shares Weighted Average Exercise Price Weighted Average Remaining Term in Years Aggregate Intrinsic Value Outstanding - June 30, 2020 19,902,450 $ 0.76 7.4 $ 380,514 Granted 409,500 0.69 Forfeited (487,126 ) 0.75 Exercised - - Expired (14,000 ) 1.70 Outstanding - March 31, 2021 19,810,824 $ 0.76 6.7 $ 1,631,093 Exercisable at March 31, 2021 11,517,324 $ 0.78 5.2 $ 873,610 Expected to vest at March 31, 2021 8,293,500 $ 0.74 8.6 $ 757,483 |
Schedule of restricted stock unit activity | RSUs Outstanding at July 1, 2020 12,965,570 Granted - Forfeited (411,068 ) Vested (958,090 ) Outstanding at March 31, 2021 11,596,412 |
ORGANIZATION (Details Narrative
ORGANIZATION (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accumulated deficit | $ 337,861,113 | $ 337,861,113 | $ 318,198,902 | |||
Net (loss) income | (5,729,660) | $ (5,382,275) | (19,662,211) | $ (15,126,851) | ||
Cash and cash equivalents | 68,641,312 | 88,947,368 | 68,641,312 | 88,947,368 | 82,852,270 | $ 43,510,422 |
Current liabilities | 10,036,841 | 10,036,841 | 3,927,553 | |||
Gain on license termination agreement | 0 | 0 | 1,623,795 | 0 | ||
Due from AMAG | $ 4,300,000 | |||||
Net sales | 88,741 | 0 | (363,790) | 117,989 | ||
License and Contract | ||||||
Net sales | $ 0 | $ 0 | $ 0 | $ 117,989 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Net sales | $ 88,741 | $ 0 | $ (363,790) | $ 117,989 |
Product Revenue | ||||
Gross product sales | 1,780,020 | 3,533,070 | ||
Provision for product sales allowances and accruals | (1,691,279) | (3,896,860) | ||
Net sales | $ 88,741 | $ 0 | $ (363,790) | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Jun. 30, 2020 | |
Accounting Policies [Abstract] | |||||
Cash equivalents | $ 68,452,269 | $ 68,452,269 | $ 82,406,697 | ||
Accumulated depreciation and amortization | $ 2,491,405 | $ 2,491,405 | $ 2,452,845 | ||
Potential number of common shares excluded from diluted EPS | 37,336,040 | 33,166,477 | 37,336,040 | 33,166,477 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Mar. 31, 2021 | Jun. 30, 2020 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Clinical/regulatory costs | $ 313,761 | $ 43,625 |
Insurance premiums | 39,377 | 84,741 |
Vyleesi contractual advances | 1,200,000 | 0 |
Other | 1,207,104 | 609,850 |
Total prepaid expenses and other current assets | $ 2,760,242 | $ 738,216 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | Mar. 31, 2021 | Jun. 30, 2020 |
Money market account | $ 68,452,269 | $ 82,406,697 |
Level 1 | ||
Money market account | 68,452,269 | 82,406,697 |
Level 2 | ||
Money market account | 0 | 0 |
Level 3 | ||
Money market account | $ 0 | $ 0 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) | Mar. 31, 2021 | Jun. 30, 2020 |
Payables and Accruals [Abstract] | ||
Clinical/regulatory costs | $ 325,546 | $ 1,722,729 |
Other research related expenses | 854,176 | 586,185 |
Professional services | 60,047 | 217,662 |
Inventory purchases | 2,300,000 | 0 |
Selling expenses | 1,542,475 | 0 |
Other | 115,515 | 372,521 |
Accrued expenses | $ 5,197,759 | $ 2,899,097 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) | Mar. 31, 2021USD ($) |
Inventory purchase commitments | $ 11,072,000 |
Current | |
Inventory purchase commitments | 3,628,000 |
1 - 3 Years | |
Inventory purchase commitments | 6,484,000 |
4 - 5 Years | |
Inventory purchase commitments | $ 960,000 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) | 9 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Gross proceeds, shares | 0 | 1,895,934 |
Gross proceeds, amount | $ 0 | $ 1,723,194 |
Fees, shares | 0 | 0 |
Fees, amount | $ 0 | $ (51,696) |
Expenses, shares | 0 | 0 |
Expenses, amount | $ 0 | $ (90,000) |
Net proceeds, shares | 0 | 1,895,934 |
Net proceeds, amount | $ 0 | $ 1,581,498 |
Cumulative from Inception | ||
Gross proceeds, shares | 9,460,509 | |
Gross proceeds, amount | $ 12,330,242 | |
Fees, shares | 0 | |
Fees, amount | $ (369,908) | |
Expenses, shares | 0 | |
Expenses, amount | $ (90,000) | |
Net proceeds, shares | 9,460,509 | |
Net proceeds, amount | $ 11,870,334 |
STOCKHOLDERS' EQUITY (Details 1
STOCKHOLDERS' EQUITY (Details 1) | 9 Months Ended |
Mar. 31, 2020USD ($)shares | |
Warrants | shares | 6,538,673 |
Buyback price | $ | $ 2,547,466 |
Series F Warrants | |
Warrants | shares | 297,352 |
Buyback price | $ | $ 62,712 |
Series H Warrants | |
Warrants | shares | 1,466,432 |
Buyback price | $ | $ 577,373 |
Series J Warrants | |
Warrants | shares | 4,774,889 |
Buyback price | $ | $ 1,907,381 |
STOCKHOLDERS' EQUITY (Details 2
STOCKHOLDERS' EQUITY (Details 2) | 9 Months Ended |
Mar. 31, 2021USD ($)$ / sharesshares | |
Stockholders' equity: | |
Number of options outstanding, beginning | shares | 19,902,450 |
Number of options granted | shares | 409,500 |
Number of options forfeited | shares | (487,126) |
Number of options exercised | shares | 0 |
Number of options expired | shares | (14,000) |
Number of options outstanding, ending | shares | 19,810,824 |
Number of options exercisable | shares | 11,517,324 |
Number of options expected to vest | shares | 8,293,500 |
Weighted average exercise price outstanding, beginning | $ / shares | $ 0.76 |
Weighted average exercise price granted | $ / shares | 0.69 |
Weighted average exercise price forfeited | $ / shares | 0.75 |
Weighted average exercise price exercised | $ / shares | 0 |
Weighted average exercise price expired | $ / shares | 1.70 |
Weighted average exercise price outstanding, ending | $ / shares | 0.76 |
Weighted average exercise price exercisable | $ / shares | 0.78 |
Weighted average exercise price options expected to vest | $ / shares | $ 0.74 |
Weighted average remaining term in years options outstanding at beginning of year | 7 years 4 months 24 days |
Weighted average remaining term in years options outstanding at end of year | 6 years 8 months 12 days |
Weighted average remaining term in years options exercisable at end of year | 5 years 2 months 12 days |
Weighted average remaining term in years options expected to vest | 8 years 7 months 6 days |
Aggregate intrinsic value options outstanding, beginning | $ | $ 380,514 |
Aggregate intrinsic value options outstanding, ending | $ | 1,631,093 |
Aggregate intrinsic value options exercisable | $ | 873,610 |
Aggregate intrinsic value options expected to vest | $ | $ 757,483 |
STOCKHOLDERS' EQUITY (Details 3
STOCKHOLDERS' EQUITY (Details 3) | 9 Months Ended |
Mar. 31, 2021shares | |
Stockholders' equity: | |
Number of RSUs outstanding, beginning | 12,965,570 |
Number of RSUs granted | 0 |
Number of RSUs forfeited | (411,068) |
Number of RSUs vested | (958,090) |
Number of RSUs outstanding, ending | 11,596,412 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Stockholders' equity: | ||||
Stock based compensation, options | $ 453,439 | $ 348,880 | $ 1,409,224 | $ 1,027,604 |
Stock based compensation, restricted stock units | $ 321,866 | $ 353,246 | $ 1,049,938 | $ 1,307,193 |