Palatin cuts workforce

The troubled drug-development company Palatin Technologies has announced that it will cut its workforce in half and discontinue research into new compounds. The news follows of the end of an obesity drug collaboration and licensing deal with AstraZeneca (AZ), which began in 2007 and concluded earlier this year.

Going forward, Palatin intends to focus on its most advanced drug candidates, bremelanotide for sexual dysfunction and PL-3994 for acute severe asthma.

Palatin said its workforce will be reduced from current levels to just 20 employees by the end of this calendar year. The layoffs should generate savings in cash operating expenses of $1.4m per quarter, the company said.

Palatin has also implemented a one-for-ten reverse stock split of its common stock, which was required by the NYSE Amex in order for the company to continue to list its common shares. The reverse split, which became effective September 27, reduced the number of shares of common stock issued and outstanding from approximately 118 million to 12 million.

Palatin plans to submit protocols for a phase II study of bremelanotide for erectile dysfunction (ED) to the US Food and Drug Administration (FDA) before the end of this calendar year, and hopes to begin the trial in the first quarter of 2011. The study will test subcutaneously administered bremelanotide as either monotherapy or a combination therapy with a PDE-5 inhibitor like Viagra (sildenafil citrate) in men whose ED does not respond adequately to a PDE-5 inhibitor alone.

The company is also aiming to begin a phase II trial of subcutaneously administered bremelanotide in female sexual dysfunction in the first half of calendar 2011, pending clearance from the FDA.

An investigational New Drug Application seeking approval to begin a proof-of-concept clinical trial of PL-3994 for acute severe asthma is expected to be submitted to the FDA by the end of 2010. Palatin, which is also developing an inhaled formulation of the drug, said it hopes to begin studies of either or both formulations in the first quarter of 2011 "depending on financial resources."

Palatin noted that it is also still providing some services to AZ and is eligible for milestone payments totaling up to $145m under the deal. Two clinical candidates in Palatin's discovery efforts were selected by AZ under the partnership and are now being developed by the larger firm.