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H.C. Wainwright Looks Beyond Palatin Technologies (PTN) FQ3 Outcome to FDA’s Big Decision on Bremelanotide

H.C. Wainwright's Joseph Pantginis sees a "compelling" buying opportunity in PTN shares for biotech investors.


Palatin Technologies, Inc. (NYSE:PTN) stock is taking a roughly 8% dive in the market today after posting its third fiscal quarter print for 2018, after revenues slipped 17% year-over-year. Yet, the company’s net loss outperformed expectations. More importantly, as far as one bull is concerned, preparations for the upcoming AdCom look enticing for Hypoactive Sexual Desire Disorder (HSDD) asset bremelanotide.

H.C. Wainwright analyst Joseph Pantginis looks eagerly to next month, when he anticipates the FDA’s decision as to whether it accepts the NDA for the female health drug. In fact, the analyst cheekily notes that AdCom preparations appear “hot and heavy.”

On back of the print and ahead of the committee meeting, the analyst reiterates a Buy rating on PTN Stock with a $5 price target, which implies a close to 307% upside from current levels. (To watch Pantginis’ track record, click here)

For the third fiscal quarter of 2018, PTN reported ($0.00) in EPS against the analyst’s and the Street’s expectations looking for ($0.04). PTN closed out the quarter with cash of $25.7 million, where the biotech player’s management assumes runway through June 30th of next year, at least.

Specifically, Pantginis spotlights the AdCom hitting in the fourth quarter (although no FDA commentary has pinpointed specific timing just yet) as a key event for both Palatin and its partner AMG Pharmaceuticals as well as continuous endeavors to solidify further alliances. The analyst predicts the following “straightforward” questions from the panel: 1) regarding bremelanotide’s intermittent dosing profile, the FDA will likely ask how the drug will be used 2) labeling, on back of two positive Phase 3 trials 3) safety profile commentary. Notably, Pantginis underscores no safety challenges have cropped up from big trial sizes in Phase 2b as well as Phase 3 studies. The drug boasts clinical data Pantginis cheers as robust as well as a compelling safety profile.

“We believe the public comment period around the AdCom should be quite visible in bringing attention to the disorder as well as highlighting the drug’s true differentiation vs. Addyi. Further, we believe AMAG would eventually pursue a Direct to Consumer (DTC) marketing campaign and already has a website to bring attention to the disorder. From a business development standpoint, management reiterated on the call that it remains in discussions with several parties and hopes to deliver one or more additional partnerships in 2H18 for bremelanotide,” asserts the analyst.

Moving ahead, Pantginis writes, “We believe a key value driver for the shares would be an E.U. partnership. The company is currently seeking EMA and CHMP advice as to a Phase 3 protocol, which we expect to be very similar, if not identical to the U.S. Phase 3 program. A potential E.U. partner may be waiting to see final agreement on the protocol before pulling the trigger, but we do project it should happen this year.” Bottom line, this is a drug ticking off all the key boxes in this analyst’s, and there is a clear “disconnect” between valuation and the company’s anticipated drivers when looking at the share price. Pantginis deems this biotech player a glimmering investment opportunity.

Additionally, TipRanks indicates a predominantly bullish consensus backing PTN shares. Out of 3 analysts polled in the last 12 months, all 3 unanimously rate a Buy on Palatin stock. With a monster return potential of 238%, the stock’s consensus target price target stands at $4.16.