Palatin layoffs continue

[Guest]

I am not sure how many people are employed at Palatin?

We should however use the data that shows jobs are leaving our town in our COAH rebuttal.

Cuts come as biotech ends work on key drug

Wednesday, May 14, 2008

BY JEFF MAY

Newhouse News Service

Palatin Technologies yesterday said it was cutting its staff 30 percent and abandoning efforts to turn its lead drug into a successor to Viagra.

Just a year ago, the Cranbury biotech was part of a wave of companies that seemed on the cusp of creating a better-tolerated alternative to male impotence drugs currently on the market, including Viagra, Cialis and Levitra. Palatin's bremelanotide, a nasal spray that works through the central nervous system, had shown promise in early clinical trials as a treatment for both male and female sexual dysfunction.

That promise eroded last summer, after federal regulators raised questions about spikes in blood pressure from the drug. Palatin's partner, King Pharmaceuticals, dropped plans to further develop the compound in September, and the biotech began a lengthy "strategic review" of its prospects.

Palatin already had instituted a round of job cuts after King bowed out last fall. The latest layoffs bring the company's work force down to 45 people, a contraction that will save approximately $3 million a year, Palatin said in a filing with the Securities and Exchange Commission. It will take a $400,000 charge in the current quarter for severance costs, plus a $90,000 non-cash charge related to the restructuring.

A year ago, shares of Palatin were routinely trading above $2. Yesterday, they fell 14.3 percent, to close at 24 cents.

Chief Executive Carl Spana said Palatin was dropping development of bremelanotide as a sexual dysfunction drug entirely, but would refashion it as a treatment for shock due to blood loss.

Besides bremelanotide, the company is developing therapies for diabetes-related obesity in partnership with AstraZeneca, a collaboration that produced virtually all of Palatin's revenue in the third quarter, which ended March 30.

The biotech also is working on another drug to treat acute congestive heart failure and high blood pressure, plus a compound called PL-6983 that is designed to treat sexual dysfunction without bremelanotide's blood pressure problems.

"I think we have a very exciting portfolio of products," Spana said on a conference call with analysts.

In addition to announcing the job cuts, the company also reported its third-quarter results. Its loss narrowed to $5.1 million, or 6 cents a share, compared with $6.7 million a year ago, or 9 cents a share, primarily due to lower development costs for bremelanotide. Sales fell to $747,000, from $3.1 million a year ago, which largely represented King's contributions to drug-development costs.

Palatin said it had $17.6 million in cash on hand as of March 30, or enough money to fund operations for a little more than a year.

"We will continue to aggressively pursue corporate collaborations for all our compounds," Spana said.