Palatin Technologies Inc: Form 10-K for the period ended Jun 30, 2026

Our Business Overview

Palatin™ is a biopharmaceutical company developing first-in-class medicines based on molecules that modulate the activity of the melanocortin receptor (“MCR”) system. Our product candidates are targeted, receptor-specific therapeutics for the treatment of diseases with significant unmet medical need and commercial potential. Palatin’s strategy is to develop products and then form marketing collaborations with industry leaders to maximize product commercial potential.

The MCR system has effects on inflammation and immune system response, food intake, metabolism, and sexual function. There are five melanocortin receptors, MC1R through MC5R. Modulation of these receptors, through use of receptor-specific agonists, which activate receptor function, or receptor-specific antagonists, which block receptor function, can have significant pharmacological effects. We believe that our MC1R agonist peptides have broad anti-inflammatory effects and utilize mechanisms engaged by the endogenous melanocortin system in regulation of the immune system and resolution of inflammatory responses. We are also developing peptides that are active at more than one melanocortin receptor and small molecule MCR agonists.

Our product development activities focus primarily on use of MC4R agonists for treatment of obesity. The Company is developing MC4R peptides and small molecule agonists with potential utility in obesity and metabolic-related disorders, rare MC4R pathway diseases, such as hypothalamic obesity, and orphan indications. The Company is also developing, dependent on resources for development activities, peptides and small molecules that are active at more than one melanocortin receptor, with potential utility in obesity and metabolic-related disorders, rare MC4R pathway diseases, such as hypothalamic obesity, and orphan indications

We are also developing, dependent on resources for development activities, MC1R agonist products, 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.

Our new product development strategy focuses on development of MC4R selective agonists with improved pharmacokinetic properties. This includes a modified MC4R peptide with an extended drug half-life and minimal blood pressure effects and an MC4R selective oral small molecule.

Activities in inflammation disease indications focus primarily on development of MCR peptides for ocular conditions, and in the gut and kidney. Utilizing peptides which are agonists at MC1R, and in some instances agonists at additional melanocortin receptors, we are developing products to treat inflammatory and autoimmune diseases such as dry eye disease, uveitis, diabetic retinopathy, and inflammatory bowel disease. We are actively engaged in discussions with potential partners and licensees that have the financial and operational resources to progress our products through development, approval and commercialization.

Our U.S. Food and Drug Administration (“FDA”) approved melanocortin receptor agonist, Vyleesi, an “as needed” therapy used in anticipation of sexual activity and self-administered in the thigh or abdomen via a single-use subcutaneous auto-injector by premenopausal women with hypoactive sexual desire disorder (“HSDD”), was acquired by Cosette in December 2023. Vyleesi is the first FDA-approved melanocortin agent and the first and only FDA-approved as-needed treatment for premenopausal women with HSDD.

Our program for treatment of retinal diseases culminated in an agreement with Boehringer Ingelheim International GmbH (“Boehringer Ingelheim”), which in August 2025 acquired certain Palatin patent applications to first-in-class melanocortin receptor-targeted compounds developed by Palatin. We retain rights to PL9643, which successfully completed an initial Phase 3 clinical trial for dry eye disease, and was licensed to Altanispac Labs, LLC in January 2026.

Our Business Strategy. Key elements of our business strategy include:

• Advancing our MC4R selective long-acting peptide and oral small molecule agonist programs for the treatment of obesity, with a primary focus on rare neuroendocrine diseases and other MC4R pathway disorders with significant unmet medical need;
• Leveraging our expertise in the melanocortin receptor system and our portfolio of MCR compounds to identify and develop differentiated product candidates addressing significant unmet medical needs;
• Entering into strategic collaborations, licensing arrangements and other partnerships with pharmaceutical and biotechnology companies and academic institutions to facilitate and accelerate the research, development, manufacture and commercialization of our product candidates;
• Utilizing payments received under existing and future collaboration and license agreements, including upfront payments, research funding, milestone payments and royalties, together with other available financial resources, to partially fund our product development programs; and
• Advancing selected product candidates through preclinical and clinical development and, where appropriate, seeking regulatory approval independently or in collaboration with strategic partners.

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Pipeline Overview

The following chart illustrates the status of our drug development programs. Planned development activities, timelines and milestones are subject to the availability of appropriate funding.

Melanocortin Receptor Programs

Our Current Product Development Strategy. Our product development activities focus primarily on use of MC4R agonists for treatment of obesity. Our principal strategic development focus is the advancement of MC4R agonists for the treatment of obesity, with an emphasis on rare neuroendocrine and other MC4R pathway diseases. We are developing selective MC4R long-acting peptide agonists and oral small molecule agonists with potential utility in hypothalamic obesity, Prader-Willi syndrome, Bardet-Biedl syndrome and other rare obesity and orphan indications.

The Company is also developing, subject to the availability of resources, melanocortin receptor agonists with potential utility in ocular diseases and inflammatory and autoimmune diseases, including uveitis and inflammatory bowel disease. A product candidate targeting MC1R for the treatment of dry eye disease, also known as keratoconjunctivitis sicca, has been licensed to a third party, and a family of melanocortin receptor compounds for the treatment of retinal diseases has been licensed to Boehringer Ingelheim. The Company believes that certain melanocortin receptor agonist peptides in development may have anti-inflammatory effects through mechanisms involved in the endogenous melanocortin system’s regulation of immune responses and resolution of inflammation.

We are also designing and developing potent and highly selective MC1R agonist peptides and agonist peptides specific for more than one melanocortin receptor for treatment of a variety of inflammatory and autoimmune indications. We believe that our agonist peptides regulate certain inflammatory cytokines, and modulate the activities of immune cells, such as monocytes and T cells, to reduce immune response, and may utilize mechanisms engaged by the endogenous melanocortin system in regulation of the immune system and resolution of inflammatory responses.

Long-acting Peptide MC4R Agonists. We are advancing a next-generation, MC4R selective long-acting peptide agonist, with plans to initiate a Phase 1 clinical study in the first half of calendar year 2027. The product candidate is being developed as a once-weekly subcutaneous injectable for the treatment of obesity, with a primary focus on rare neuroendocrine diseases, including hypothalamic obesity, Prader-Willi syndrome and potentially Bardet-Biedl syndrome.

Oral Small Molecule MC4R Agonists. We are advancing lead candidate selection and optimization activities for a next-generation, MC4R selective oral small molecule agonist, incorporating data and program learnings from PL7737 and our broader MC4R small molecule development program. We plan to advance a selected product candidate into IND-enabling activities in the first half of calendar year 2027 and initiate a Phase 1 clinical study in the second half of calendar year 2027. The program is focused on developing an orally administered MC4R agonist for the treatment of obesity, with a primary focus on rare neuroendocrine diseases and other MC4R pathway disorders.

Partnered and Out-Licensing Development Programs. In addition to our internally focused MC4R obesity development programs, our strategy includes entering into collaborations, licensing arrangements and other strategic transactions to advance and maximize the value of certain product candidates and programs. We have entered into collaboration and licensing arrangements with Boehringer Ingelheim for certain MCR compounds for the treatment of retinal diseases and with Altanispac Labs for PL9643 for the treatment of dry eye disease. We are also seeking development and commercialization partners or other strategic transactions for certain other product candidates and programs, including bremelanotide or an MC4R agonist as an adjunct to GLP-1-based obesity therapies, PL8177 for inflammatory bowel diseases and our MCR agonist program for diabetic nephropathy.

Retinal Disease Collaboration with Boehringer Ingelheim. In August 2025, we entered into a research collaboration, license and patent assignment agreement (the “Boehringer Ingelheim Agreement”) with Boehringer Ingelheim International GmbH (BI) for the development of melanocortin receptor agonists for the treatment of retinal diseases, including diabetic retinopathy and diabetic macular edema. Under the terms of the Agreement, BI agreed to pay Palatin a non-refundable upfront payment, success-based development, regulatory, and commercial milestone payments of up to €280,000,000 (approximately $328,000,000), and tiered royalties on net sales of licensed products, if commercialized. BI is responsible for advancing the licensed retinal disease program, with Palatin providing research and development support during the research collaboration period. We received a €2.0 million ($2.3 million) upfront payment in August 2025 and subsequently received a €5.5 million ($6.5 million) on achieving a research milestone in September 2025. Under our BI agreement, we retained rights to PL9643 for dry eye disease, which we have subsequently sublicensed to Altanispac Labs.

PL9643 for Dry Eye Disease. PL9643 is a peptide melanocortin agonist active at multiple melanocortin receptors, including MC1R and MC5R, that we developed for the treatment of dry eye disease, also known as keratoconjunctivitis sicca. We completed the Phase 3 MELODY-1 clinical trial in 575 patients with moderate-to-severe dry eye disease. PL9643 achieved statistical significance for the co-primary symptom endpoint of pain (p<0.025), and subsequent responder analyses demonstrated statistically significant complete symptom resolution compared with vehicle for 6 of 13 symptom endpoints. PL9643 was well tolerated in the study. In January 2026, we entered into a sublicense agreement with Altanispac Labs pursuant to which Altanispac acquired exclusive rights to develop and commercialize PL9643 for dry eye disease. Under the agreement, we received $3.8 million in upfront consideration and are eligible to receive additional payments, including payments related to future development, commercialization or disposition of the asset, as applicable, and royalties on net sales. Altanispac is responsible for the future development and commercialization of PL9643 for dry eye disease. The remaining Phase 3 development program is expected to include the MELODY-2 and MELODY-3 studies.

Bremelanotide Co-administration with Tirzepatide to Treat Obesity. We completed a Phase 2 proof-of-concept clinical trial evaluating the safety, tolerability and efficacy of co-administration of bremelanotide, an MC4R agonist, with tirzepatide, a GLP-1/GIP receptor agonist, in patients with obesity. Topline results reported in the first quarter of calendar year 2025 demonstrated that the study met its primary endpoint, with patients receiving co-administration achieving a 4.4% reduction in body weight compared with 1.6% for placebo during the eight-week treatment period (p<0.0001). Low-dose bremelanotide also prevented weight regain following discontinuation of tirzepatide, and no additional safety or tolerability issues were observed with the combination. We do not currently intend to independently fund additional clinical development of this program and are evaluating potential out-licensing, development, and commercialization partnerships.

Oral PL8177 for Inflammatory Bowel Diseases. PL8177 is a selective MC1R agonist peptide that has been evaluated for inflammatory bowel diseases, including ulcerative colitis. We developed a polymer-encapsulated, delayed-release oral formulation designed to deliver PL8177 to the intestinal wall and completed clinical studies evaluating the formulation, including a Phase 2 proof-of-concept study in patients with ulcerative colitis. Positive topline results from the Phase 2 study were reported in the first quarter of calendar year 2025 and support the potential therapeutic utility of the program. We do not currently intend to independently fund further clinical development of PL8177 and are pursuing out-licensing, development and commercialization partnerships or other strategic opportunities for the program.

Diabetic Nephropathy. We completed a Phase 2 open-label proof-of-concept study evaluating an MCR agonist in patients with diabetic nephropathy, with positive topline results reported in the fourth quarter of calendar year 2024. Based on clinical results and the potential therapeutic role of melanocortin receptor agonism in diabetic kidney disease, we are pursuing out-licensing, development and commercialization partnerships or other strategic opportunities for this program and do not currently intend to independently fund further clinical development.

Our Drug Discovery and Development Technology

We use an integrated drug design and development approach to discover and optimize proprietary peptide, peptide mimetic and small molecule compounds that modulate the melanocortin receptor system. Our approach integrates rational and computer-aided drug design, medicinal chemistry, structure-activity relationship analyses, experimental pharmacology, and artificial intelligence (“AI”) and machine learning (“ML”)-based computational modeling. We utilize both internal capabilities and external collaborators with specialized AI and ML expertise to analyze our proprietary compound and pharmacology data and assist in the identification, design and optimization of potential product candidates.

Our extensive experience developing melanocortin receptor agonists, together with data generated from our library of proprietary MCR compounds and our preclinical and clinical development programs, has enhanced our understanding of the structural and pharmacological factors that influence potency, activity and selectivity among the five melanocortin receptor subtypes. We use these capabilities and accumulated data to optimize compounds for receptor selectivity, pharmacokinetic and pharmacodynamic properties, route and frequency of administration, and other characteristics relevant to the intended therapeutic application, with the objective of developing product candidates with differentiated efficacy, safety, tolerability and dosing profiles.

Competition

General. The biopharmaceutical industry is highly competitive and characterized by extensive research and development activities, rapidly advancing technologies, evolving standards of care and the introduction of new products and therapeutic approaches. Our product candidates, if successfully developed and approved, will compete with approved therapies and product candidates under development by pharmaceutical and biotechnology companies, many of which have substantially greater financial, technical, research and development, manufacturing, regulatory, commercial and personnel resources than we do. Our ability to compete successfully will depend on, among other factors, the efficacy, safety and tolerability, convenience and frequency of administration, durability of treatment effect, regulatory approval, pricing and reimbursement, intellectual property protection and commercial availability of our product candidates relative to competing therapies.

Competitors may develop products that are more effective, safer, better tolerated, more convenient or less expensive than our product candidates, or may obtain regulatory approval or establish significant market acceptance before we are able to do so. We cannot predict the timing or extent of competitive developments, and products or technologies developed by others could render our product candidates or technologies obsolete or noncompetitive.

MC4R Agonists for Rare Obesity Disorders. Our principal internally funded development programs are focused on MC4R selective agonists for obesity, with a primary focus on rare neuroendocrine diseases and MC4R pathway disorders, including hypothalamic obesity (“HO”), Prader-Willi syndrome (“PWS”) and Bardet-Biedl syndrome (“BBS”). We are developing both a long-acting peptide MC4R agonist intended for once-weekly subcutaneous administration and a next-generation oral small molecule MC4R agonist.

Our most direct competitor in rare MC4R pathway diseases is Rhythm Pharmaceuticals, Inc. Rhythm markets IMCIVREE® (setmelanotide), an MC4R agonist approved in the United States for chronic weight management in certain patients with monogenic or syndromic obesity due to POMC, PCSK1 or LEPR deficiency and BBS, and for the treatment of acquired HO in adults and pediatric patients four years of age and older. Rhythm is also developing next-generation MC4R agonists, including bivamelagon, an oral small molecule MC4R agonist, and RM-718, a once-weekly injectable MC4R agonist. Bivamelagon and RM-718 are being evaluated in clinical development for rare MC4R pathway diseases, including HO, and RM-718 is also being evaluated in PWS.

In March 2025, the FDA approved VYKAT XR® (diazoxide choline extended-release tablets) for the treatment of hyperphagia in adults and pediatric patients four years of age and older with PWS. VYKAT XR does not act through the MC4R pathway but represents an approved therapeutic alternative for patients with PWS and could compete with any MC4R agonist we may develop for that indication. Other companies are also developing therapies utilizing mechanisms other than MC4R agonism for rare obesity disorders and hyperphagia.

The broader obesity market has undergone substantial development, particularly with the introduction and widespread use of GLP-1 and related incretin-based therapies, including semaglutide and tirzepatide. Although these products are principally developed and marketed for general obesity and metabolic disease and do not directly address the underlying MC4R pathway dysfunction associated with many of the rare obesity disorders that are the primary focus of our programs, they may be used in some patients with these disorders and could compete with our product candidates. Numerous large pharmaceutical and biotechnology companies continue to develop additional obesity therapies, including oral therapies, combination products and agents utilizing novel mechanisms of action.

We believe that important competitive factors for MC4R agonists intended for chronic treatment of rare obesity disorders will include efficacy in reducing body weight and hyperphagia, safety and tolerability, frequency and route of administration and the incidence and severity of adverse effects, including gastrointestinal adverse events and hyperpigmentation associated with off-target melanocortin receptor activity. Our product candidates are designed to provide selective MC4R activation with the objective of achieving clinically meaningful efficacy while improving tolerability and reducing off-target effects relative to currently available therapies. However, our MC4R product candidates are at an earlier stage of development than approved and clinical-stage competing products, and there can be no assurance that they will demonstrate comparable or superior efficacy, safety, tolerability or convenience.

Bremelanotide in Combination with Incretin-Based Obesity Therapies. We have completed a Phase 2 proof-of-concept study evaluating bremelanotide in combination with tirzepatide, a dual GIP and GLP-1 receptor agonist, for the treatment of obesity. The market for obesity therapies is highly competitive and includes approved and investigational GLP-1, GIP/GLP-1 and other incretin-based therapies, as well as numerous combination approaches under development by large pharmaceutical and biotechnology companies. We do not currently intend to independently fund further clinical development of this program and are seeking potential out-licensing, partnering or other strategic opportunities. The availability and continued development of highly effective obesity therapies could affect our ability to enter into such an arrangement on favorable terms or at all.

Partnered Ocular Programs. We have licensed certain MCR compounds for the treatment of retinal diseases, including diabetic retinopathy and diabetic macular edema, to Boehringer Ingelheim and have sublicensed PL9643 for dry eye disease to Altanispac Labs. These indications are highly competitive and include numerous approved and investigational therapies utilizing a variety of mechanisms of action. The commercial potential of these programs will depend in significant part on the ability of our collaborators to successfully develop differentiated products that compete with existing and future therapies. Competition may also affect the willingness of our collaborators to continue development; the resources they devote to the programs and our ability to receive potential milestone payments and royalties.

PL8177 and Other MCR Programs. PL8177, an oral MC1R agonist, has been evaluated in a Phase 2 proof-of-concept study for ulcerative colitis. Ulcerative colitis is a highly competitive therapeutic area with numerous approved therapies, including biologics, small molecules and immunomodulatory agents, as well as numerous additional products in clinical development. We are pursuing out-licensing, development and commercialization partnerships or other strategic opportunities for PL8177 and certain other MCR programs, including our diabetic nephropathy program. The availability of established therapies and competing product candidates could adversely affect our ability to enter into transactions for these programs on favorable terms or to realize value from them.

Patents and Proprietary Information

Patent Protection. Our success will depend in substantial part on our ability to obtain, defend and enforce patents, maintain trade secrets and operate without infringing upon the proprietary rights of others, both in the United States and abroad. We own a number of issued United States patents and have pending United States patent applications, many with issued or pending counterpart patents in selected foreign countries. We seek patent protection for our technologies and products in the United States and those foreign countries where we believe patent protection is commercially important.

We have filed patent applications under the Patent Cooperation Treaty claiming PL9643 and other peptides in development for ocular and inflammatory disease indications and have entered national stage prosecution in the United States, European Patent Office, Eurasian Patent Office, and broadly throughout the world. On August 14, 2025, pursuant to the Boehringer Ingelhiem Agreement we assigned this patent to Boehringer Ingelheim, and received an irrevocable, royalty-free license for PL9643. If one or more patents are granted, the patents will have a presumptive term until 2041. Until one or more product candidates covered by a claim of one of these patent applications are developed for commercialization, which may never occur, we cannot evaluate the duration of any potential patent term extension under the Hatch-Waxman Amendments.

We own five issued patents in the United States, and issued patents in Australia, Belgium, Brazil, Canada, China, France, Germany, Ireland, Israel, Japan, Korea, Mexico, New Zealand, Russia, South Africa, Sweden, Switzerland and the United Kingdom claiming highly selective MC1R agonist peptides, including for treatment of inflammation-related diseases and disorders and related indications. The presumptive term of the issued patents and pending patent applications is until 2030. Until one or more product candidates covered by a claim of one of these patent applications are developed for commercialization, which may never occur, we cannot evaluate the duration of any potential patent term extension under the Hatch-Waxman Amendments.

We have additional issued United States patents on melanocortin receptor-specific peptides and small molecules, including patents on an alternative class of melanocortin receptor-specific peptides for treatment of sexual dysfunction and other indications.

In the event that a third party has also filed a patent application relating to an invention we claimed in a patent application, we may be required to participate in an interference proceeding adjudicated by the United States Patent and Trademark Office (“USPTO”) to determine priority of invention. The possibility of an interference proceeding could result in substantial uncertainties and cost, even if the eventual outcome is favorable to us. An adverse outcome could result in the loss of patent protection for the subject of the interference, subjecting us to significant liabilities to third parties, the need to obtain licenses from third parties at undetermined cost, or requiring us to cease using the technology. Additionally, the claims of our issued patents may be narrowed or invalidated by administrative proceedings, such as interference or derivation, inter partes review, post grant review or reexamination proceedings before the USPTO.

Future Patent Infringement. We do not know for certain that our commercial activities will not infringe upon patents or patent applications of third parties, some of which may not even have been issued. Although we are not aware of any valid United States patents which are infringed by our product candidates, we cannot exclude the possibility that such patents might exist or arise in the future. We may be unable to avoid infringement of any such patents and may have to seek a license, defend an infringement action, or challenge the validity of such patents in court. Patent litigation is costly and time consuming. If such patents are valid and we do not obtain a license under any such patents, or we are found liable for infringement, we may be liable for significant monetary damages, may encounter significant delays in bringing products to market, or may be precluded from participating in the manufacture, use or sale of products or methods of treatment covered by such patents.

Proprietary Information. We rely on proprietary information, such as trade secrets and know-how, which is not patented. We have taken steps to protect our unpatented trade secrets and know-how, in part with confidentiality and intellectual property agreements with our employees, consultants and certain contractors. If our employees, scientific consultants, collaborators or licensees develop inventions or processes independently that may be applicable to our product candidates, disputes may arise about the ownership of proprietary rights to those inventions and processes. Such inventions and processes will not necessarily become our property but may remain the property of those persons or their employers. Protracted and costly litigation could be necessary to enforce and determine the scope of our proprietary rights.

If trade secrets are breached, our recourse will be solely against the person who caused the secrecy breach. This might not be an adequate remedy to us because third parties other than the person who causes the breach will be free to use the information without accountability to us. This is an inherent limitation of the law of trade secret protection.

U.S. Governmental Regulation of Pharmaceutical Products

General. Our research, development, manufacture and potential commercialization of pharmaceutical products are subject to extensive regulation in the United States and other countries. In the United States, our product candidates are regulated principally by the U.S. Food and Drug Administration (“FDA”) under the Federal Food, Drug, and Cosmetic Act (“FFDCA”) and related laws and regulations. These requirements govern, among other things, research, development, preclinical and clinical testing, manufacturing, quality control, safety, efficacy, labeling, packaging, storage, recordkeeping, reporting, advertising, promotion, distribution and import and export of pharmaceutical products.

Before a new drug may generally be marketed in the United States, the FDA regulatory process typically includes:

• completion of preclinical laboratory and animal studies and formulation and manufacturing development;
• submission to the FDA of an Investigational New Drug application (“IND”), which must become effective before clinical trials may commence;
• completion of adequate and well-controlled clinical trials to establish the safety and efficacy of the product candidate for its intended use;
• development and validation of manufacturing processes and controls;
• submission to the FDA of a New Drug Application (“NDA”);
• satisfactory completion of FDA inspections, as applicable, of manufacturing facilities and clinical trial sites; and
• FDA review and approval of the NDA, including the proposed prescribing information and labeling.

The research, development and regulatory approval process requires substantial time, effort and financial resources, and regulatory approval may not be obtained on a timely basis or at all.

Preclinical Development and Investigational New Drug Applications. Preclinical development generally includes laboratory evaluations of a product candidate’s pharmacology, composition, formulation, impurities and stability, as well as animal studies to assess pharmacology and potential toxicity. Certain preclinical safety studies must be conducted in accordance with applicable Good Laboratory Practice requirements. The results of preclinical studies, together with manufacturing information, analytical data, clinical protocols and other required information, are submitted to the FDA as part of an IND.

An IND generally becomes effective 30 days after receipt by the FDA unless the FDA places the proposed clinical trial on clinical hold. The FDA may impose a clinical hold before or during a clinical trial if, among other reasons, it determines that subjects may be exposed to unreasonable or significant risks or that the IND does not contain sufficient information to assess such risks. If the FDA imposes a clinical hold, the sponsor must address the FDA’s concerns before the affected clinical trial may begin or resume. Positive results from preclinical studies do not necessarily predict successful results in clinical trials.

Clinical Trials. Clinical trials involve administration of an investigational product to human subjects under the supervision of qualified investigators. Clinical trials must be conducted under protocols submitted to the FDA as part of an IND and in compliance with applicable requirements, including Good Clinical Practice requirements and requirements relating to informed consent and institutional review board (“IRB”) oversight. An IRB generally must review and approve each clinical trial before it begins at a clinical site and must monitor the trial until completion.

Clinical development is generally conducted in phases that may overlap or be combined. Phase 1 clinical trials generally evaluate safety, tolerability, pharmacokinetics and pharmacodynamics and may be conducted in healthy volunteers or patients. Phase 2 clinical trials generally evaluate preliminary efficacy, dose response and safety in patients with the targeted disease or condition. Phase 3 clinical trials generally involve larger patient populations and are designed to provide substantial evidence of effectiveness and additional safety information necessary to evaluate the overall benefit-risk relationship of the product candidate and support regulatory approval. The number, size and design of clinical trials required for approval vary depending on the product candidate, indication, patient population and other factors.

Sponsors of certain clinical trials are also required to register and disclose specified information and results on ClinicalTrials.gov in accordance with applicable federal requirements.

Success in preclinical studies or early-stage clinical trials does not assure success in later-stage clinical trials. Results may be subject to differing interpretations, and the FDA may require additional preclinical studies, clinical trials or analyses before permitting further development or granting regulatory approval.

New Drug Applications and FDA Review. If clinical trials are successful, the results of preclinical studies and clinical trials, together with detailed information regarding the product’s chemistry, manufacture, controls, proposed labeling and other required information, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications. The FDA may refuse to file an NDA that it determines is incomplete and has substantial discretion in the review and approval process. The FDA may determine that the data submitted do not establish that a product candidate is safe and effective for its proposed use, request additional information or analyses, or require additional preclinical studies or clinical trials.

Before approving an NDA, the FDA may inspect facilities involved in manufacturing the product and clinical sites involved in generating data supporting the application. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with applicable requirements and that the NDA provides sufficient evidence that the product is safe and effective for its intended use.

If the FDA approves an NDA, it may impose limitations on the approved indications or patient populations, require warnings or precautions in the labeling, require postmarketing studies or clinical trials, or impose a Risk Evaluation and Mitigation Strategy (“REMS”) or other restrictions.

Manufacturing Regulation. Manufacturers of pharmaceutical products for clinical trials and commercial use must comply with applicable current Good Manufacturing Practice (“cGMP”) requirements. These requirements govern manufacturing processes and controls, quality systems, testing, recordkeeping and other activities intended to ensure that pharmaceutical products meet applicable standards of identity, strength, quality and purity.

Manufacturing facilities may be subject to inspection by the FDA and other regulatory authorities. Failure by us or our third-party manufacturers to comply with applicable cGMP or other regulatory requirements could result in regulatory or enforcement action, including delays or refusal of regulatory approval, clinical holds, suspension of manufacturing, product recalls or seizures, import restrictions, warning letters, fines, injunctions or civil or criminal penalties.

Postmarketing Regulation. Any pharmaceutical product that receives FDA approval remains subject to continuing regulation, including requirements relating to manufacturing and quality control, recordkeeping and reporting, adverse-event reporting, labeling, advertising and promotion, product distribution and postmarketing surveillance.

The FDA may require postmarketing studies or clinical trials to evaluate known or potential safety risks and may require labeling changes, restrictions on distribution or use, or other measures based on newly identified safety or efficacy information. The FDA’s Sentinel System also provides an electronic system for monitoring the safety of FDA-regulated medical products.

The FDA regulates the advertising and promotion of prescription drug products and generally prohibits promotion of a product for uses that have not been approved by the FDA. Failure to comply with applicable requirements may result in regulatory or enforcement action, including warning or untitled letters, restrictions on marketing or manufacturing, product recalls or seizures, suspension or withdrawal of approvals, refusal to approve pending applications or supplements, fines, injunctions or civil or criminal penalties.

We, our collaborators, licensees and third-party manufacturers may be unable to comply with applicable regulatory requirements. The discovery of previously unknown problems with an approved product, manufacturing facility or manufacturing process, or failure to comply with applicable regulatory requirements, could result in restrictions on the product or its manufacture or commercialization and could materially adversely affect our business.

Healthcare Laws and Regulation. In addition to FDA regulation, our operations may be subject to federal, state and foreign healthcare laws and regulations, including the federal Anti-Kickback Statute, federal and state false claims laws, healthcare fraud laws, transparency and reporting requirements, and privacy and data security laws. These laws may apply to our clinical development activities, interactions with healthcare professionals and organizations, relationships with collaborators and other third parties and, if any of our product candidates receive regulatory approval, commercialization activities. Failure to comply with applicable healthcare laws and regulations could result in significant civil, criminal or administrative penalties, damages, fines, exclusion from participation in government healthcare programs, additional reporting or compliance obligations, reputational harm or restrictions on our operations.

Orphan Drug Designation and Exclusivity. Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug or biological product intended to treat a rare disease or condition, generally defined as a disease or condition affecting fewer than 200,000 individuals in the United States. Orphan drug designation may provide certain development incentives, including tax credits for certain qualified clinical testing, exemption from certain FDA user fees and, if the designated product subsequently receives FDA approval for the designated disease or condition and applicable requirements are satisfied, the potential for seven years of orphan drug exclusivity.

Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process and does not assure that the product will receive marketing approval. Orphan drug exclusivity generally prevents the FDA, for seven years following approval, from approving another application for the same drug for the same rare disease or condition, subject to certain exceptions. Orphan drug exclusivity does not prevent the FDA from approving a different drug for the same disease or condition or the same drug for a different disease or condition.

We may seek orphan drug designation for product candidates targeting rare diseases or conditions when we believe the applicable requirements are satisfied. However, there can be no assurance that the FDA will grant orphan drug designation for any product candidate for which we seek such designation, that a designated product candidate will receive regulatory approval, or that we will ultimately obtain or maintain orphan drug exclusivity.

Pediatric Drug Development and Pediatric Exclusivity. Our product candidates may be developed for diseases and conditions that affect pediatric patients. The Pediatric Research Equity Act (“PREA”) authorizes the FDA to require sponsors of certain applications for new active ingredients, indications, dosage forms, dosing regimens or routes of administration to conduct studies to assess the safety and effectiveness of the product for relevant pediatric populations and to support appropriate pediatric labeling. The FDA may grant deferrals or waivers of certain pediatric study requirements under specified circumstances.

Separately, under the Best Pharmaceuticals for Children Act (“BPCA”), the FDA may issue a Written Request for pediatric studies. If a sponsor conducts and submits studies that satisfy the terms of the Written Request and applicable statutory requirements, the sponsor may qualify for an additional six months of pediatric exclusivity. Pediatric exclusivity does not provide a separate six-year or six-month period of exclusivity standing alone; rather, it generally extends by six months certain existing patent protection and regulatory exclusivity applicable to the active moiety.

Pediatric clinical trials involve additional considerations relating to study design, informed consent and assent, appropriate formulations, enrollment and the ethical conduct of research involving children. These requirements may increase the time, complexity and cost of developing products intended for pediatric populations.

Rare Pediatric Disease Priority Review Voucher Program. Federal law also provides incentives for development of certain products for rare pediatric diseases through the Rare Pediatric Disease Priority Review Voucher (“PRV”) program. A sponsor of an eligible product that receives FDA approval for a qualifying rare pediatric disease may, if applicable statutory requirements are satisfied, receive a PRV that may be used to obtain priority review of a subsequent marketing application or may be transferred or sold to another party. Rare pediatric disease designation itself does not assure that a product will qualify for or receive a PRV.

In February 2026, the Rare Pediatric Disease PRV program was extended, but under current law the FDA may not award a rare pediatric disease PRV after September 30, 2029. Accordingly, there can be no assurance that any of our current or future product candidates will qualify for or receive a PRV before expiration of the program or that the program will be further extended.

Generic Competition

Orange Book Listing. Upon approval of an NDA, certain patents that claim the approved drug substance, drug product or approved methods of use must be submitted to the FDA for listing in the FDA’s publication Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the “Orange Book.” The Orange Book also identifies certain periods of regulatory exclusivity applicable to approved drug products.

An applicant seeking approval of a generic version of an approved drug generally submits an abbreviated new drug application (“ANDA”) and may rely on the FDA’s prior determination of safety and effectiveness for the reference listed drug rather than independently demonstrating safety and effectiveness through clinical trials. An ANDA applicant generally must demonstrate that its proposed product is bioequivalent to the reference listed drug and must make certain certifications concerning patents listed in the Orange Book for that product.

Regulatory Exclusivity. Certain drug products may be eligible for periods of regulatory exclusivity that can delay FDA approval of certain competing applications. For example, a drug containing a new chemical entity may generally receive five years of regulatory exclusivity, subject to certain exceptions, and certain changes to an approved drug, such as a new indication supported by new clinical investigations essential to approval, may qualify for three years of exclusivity applicable to the approved change. Regulatory exclusivity is separate from, and may run concurrently with, patent protection.

Depending on the characteristics of a product candidate and the indication for which it is approved, additional forms of regulatory exclusivity may also be available, including orphan drug exclusivity and pediatric exclusivity.

Section 505(b)(2) NDAs. Section 505(b)(2) of the FFDCA provides an alternative NDA pathway that permits an applicant to rely, in part, on data not developed by or for the applicant and for which the applicant does not have a right of reference, including published literature or the FDA’s prior findings of safety and effectiveness for an approved drug. This pathway may be available for certain new formulations, dosage forms, routes of administration or uses of previously approved drugs. The FDA may nevertheless require additional preclinical or clinical studies to support approval.

A 505(b)(2) applicant generally must make patent certifications with respect to applicable patents listed in the Orange Book for a referenced product, and approval may be delayed by applicable patent protection, regulatory exclusivity or patent litigation.

Changing Legal and Regulatory Landscape. The laws, regulations, policies and guidance governing the development, approval, manufacture, marketing, reimbursement and commercialization of pharmaceutical products are subject to change. Congress, federal and state agencies, including the FDA, and courts may enact, promulgate, revise or reinterpret laws, regulations, policies and guidance in ways that could materially affect our product development activities, regulatory approval pathways, intellectual property protections, commercialization strategies or the economics of our product candidates. We cannot predict the nature, timing or impact of future legislative, regulatory or judicial developments.

Third-Party Reimbursements

Successful commercialization of any of our product candidates that receive regulatory approval will depend in part on the availability and adequacy of pricing, coverage and reimbursement from governmental healthcare programs, private health insurers and other third-party payers. Third-party payers increasingly seek to control healthcare costs by limiting coverage, establishing restrictive eligibility criteria, requiring prior authorization or step therapy, negotiating discounts or rebates and otherwise limiting reimbursement for pharmaceutical products.

Coverage and reimbursement decisions are generally made independently by individual payers and may depend on, among other factors, the approved indication, clinical effectiveness and safety, medical necessity, comparative benefits relative to alternative treatments and cost. Obtaining and maintaining favorable coverage and reimbursement can be time-consuming and uncertain, and there can be no assurance that adequate reimbursement will be available for any product we or our collaborators may commercialize.

Manufacturing and Marketing

We do not own or operate facilities for the manufacture of our product candidates and currently rely, and expect to continue to rely, on third-party contract manufacturers and suppliers for active pharmaceutical ingredients, drug substance, drug product and other materials used in our preclinical and clinical development activities. Our current development programs include both peptide and small molecule product candidates, including our next-generation MC4R selective long-acting peptide agonist and oral small molecule agonist programs.

The manufacture of pharmaceutical products involves complex processes and may present difficulties associated with process development, formulation, scale-up, purification, analytical testing, stability, quality control and availability of raw materials and other components. As our product candidates advance through development, manufacturing processes will need to be developed and scaled to produce sufficient quantities meeting applicable quality and regulatory requirements for clinical trials and, if approved, commercial use.

Manufacturers of drug substance and drug product for clinical and commercial use must comply with applicable current Good Manufacturing Practice (“cGMP”) requirements and may be subject to inspection by the FDA and other regulatory authorities. Failure by a manufacturer or supplier to comply with applicable regulatory requirements, manufacture product meeting required specifications or supply sufficient quantities on a timely basis could delay our development programs or regulatory approvals.

If any of our product candidates receive regulatory approval, we may commercialize such products directly, through licensing, co-promotion, distribution or other arrangements with third parties, or through a combination of these approaches. We currently have limited internal sales, marketing and distribution capabilities and would need to establish or expand such capabilities or enter into arrangements with third parties to successfully commercialize an approved product.

Product Liability and Insurance

Our business is subject to product liability risks inherent in the development, clinical testing, manufacture and potential commercialization of pharmaceutical products. We maintain product liability and clinical trial insurance that we believe is appropriate for our current activities. However, our insurance coverage may not be sufficient to cover all liabilities that we may incur, and adequate insurance coverage may not be available in the future at an acceptable cost or in sufficient amounts. As our product candidates advance through clinical development and potential commercialization, we may need to obtain additional or increased insurance coverage.

Compliance with Environmental Laws

Our operations are subject to applicable federal, state and local environmental, health and safety laws and regulations, including requirements relating to the use, handling, storage and disposal of hazardous materials and wastes. Our operations are primarily focused on the research and development of pharmaceutical product candidates, and a significant portion of our research and development activities is conducted by third parties, including contract research organizations, contract manufacturers, academic institutions and other research organizations.

We do not currently expect compliance with applicable environmental, health and safety laws and regulations to have a material effect on our capital expenditures, financial condition or competitive position. However, environmental laws and regulations may change, and we could become subject to additional requirements, liabilities or remediation obligations. Any failure to comply with applicable environmental, health and safety requirements, or the imposition of significant new requirements or liabilities, could result in fines, penalties, remediation costs or other expenses and could adversely affect our business and financial condition.

Employees

As of September 25, 2026, we employed 25 full-time employees, of whom 16 were engaged primarily in research and development activities and nine were engaged primarily in administration and management. We had no part-time employees. Competition for qualified personnel in the biopharmaceutical industry is significant, and our continued success depends in part on our ability to attract, retain and motivate skilled and experienced personnel. None of our employees are represented by a labor union or covered by a collective bargaining agreement. Our employees are subject to confidentiality and intellectual property agreements. We consider our relations with our employees to be good.

We also rely on contractors, consultants, scientific advisors, academic institutions and other third-party organizations to support our research and development programs and other activities. These third parties provide services and expertise in areas including drug discovery and design, artificial intelligence and machine learning-based computational modeling, medicinal chemistry, manufacturing, preclinical testing and evaluation, clinical development and management, regulatory strategy and other specialized functions. We generally enter into agreements with these third parties that contain confidentiality provisions and provisions addressing the ownership or assignment of intellectual property developed in connection with their work for us.

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 executive offices are located at 301 Carnegie Center Drive, Suite 304, Princeton, New Jersey 08540 and our telephone number is (609) 495-2200. Our research laboratory is located at 11 Deer Park Drive, Suite 204, Monmouth Junction, New Jersey 08852. We maintain an Internet site at www.palatin.com (http://www.palatin.com), where among other things, we make available free of charge on and through this website our Forms 3, 4 and 5, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) and Section 16 of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Our website and the information contained in it or connected to it are not incorporated into this Annual Report. The reference to our website is an inactive textual reference only.

The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC (www.sec.gov (http://www.sec.gov)).

Risks Related to Our Financial Results and Need for Financing

Our management has determined that there is substantial doubt about our ability to continue as a going concern, which make it more difficult and more expensive for us to raise capital.

Our management has determined that there is substantial doubt about our ability to continue as a going concern because of our need to raise significant additional financing to complete clinical trials and development of our product candidates. Because we have not yet generated sufficient revenues from our operations, our ability to continue as a going concern is currently heavily dependent upon our ability to obtain additional financing to sustain our operations. Such financing may take the form of the issuance of common or preferred stock or debt securities or may involve bank financing. Our independent registered public accounting firm has issued their report, which includes an explanatory paragraph for going concern uncertainty on our consolidated financial statements as of and for the year ended June 30, 2026. The existence of a “going concern” conclusion may hinder our ability to obtain additional financing in the future. Currently, we have no commitments to obtain any additional financing, and there can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all.

We have a history of substantial net losses, including a net loss of $8.4 million for the year ended June 30, 2026. We expect to incur substantial net losses over the next few years, and we may never achieve or maintain profitability.

As of June 30, 2026, we had an accumulated deficit of $467.5 million. We had $8.4 million in net loss for the year ended June 30, 2026, compared to $17.3 million in net loss for the year ended June 30, 2025. We may not achieve or sustain profitability in future years, depending on numerous factors, including whether and when development and product commercialization milestones are met, whether and when we enter into license agreements for any of our products under development, regulatory actions by the FDA and other regulatory bodies, the performance of our licensees, and market acceptance of our products.

We expect to incur significant expenses as we continue our development of MC4R and MC1R products. These expenses, among other things, have had and will continue to have an adverse effect on our stockholders’ equity, total assets and working capital.

We sold our Vyleesi® rights to Cosette Pharmaceuticals, Inc. in December 2023 and entered into a Release and Settlement Agreement (the “Settlement Agreement”) with Cosette. Under the Settlement Agreement, we retained the right to receive 20% of a $3.0 million milestone payment, or $600,000, upon the first commercial sale of Vyleesi in Korea. The timing of any such commercial sale is uncertain, and we do not expect to receive this milestone payment in the foreseeable future, if at all.

On August 14, 2025, the Company entered into the Boehringer Ingelheim Agreement to research, develop, and commercialize proprietary melanocortin receptor-targeted compounds for the treatment of retinal diseases. Under the terms of the Agreement, BI agreed to pay the Company a non-refundable upfront payment of €2.0 million ($2.3 million USD), and success-based development, regulatory, and commercial milestone payments of up to €280,000,000 (approximately $328,000,000), and tiered royalties on net sales of licensed products, if commercialized. The Company assigned certain patent rights and granted BI a license to related intellectual property (the “Assigned Patents”). The Company will also perform research and development services in collaboration with BI for a period of up to 2.5 years, with all approved costs reimbursed by BI. The Company retains an exclusive, fully paid-up license to PL9643 for the treatment of dry eye disease. During the year ended June 30, 2026, we recognized revenue of €7,500,000 (approximately $8,830,000), consisting of the non-refundable upfront payment and the first research milestone payment. Reimbursements for research and development services are recognized as the services are performed.

On January 8, 2026, the Company entered into a sublicense agreement (the “Altanispac Agreement”) with Altanispac Labs, LLC (“Altanispac”), granting an exclusive license to PL9643, an MC1R agonist for the treatment of dry eye disease. Under the terms of the Altanispac Agreement, Altanispac agreed to pay the Company a non-refundable upfront payment in the form of non-cash debt cancellation, plus future payments based on the sublicensing or the sale of PL9643, and tiered royalties on net sales of licensed products, if commercialized. The Company assigned certain patent rights and granted Altanispac a license to related intellectual property.

We recognized $3,751,122 as license revenue in the Consolidated Statements of Operations for the year ended June 30, 2026. The $3,751,122 of license revenue was received in the form of non-cash debt cancellation.

For the foreseeable future, we will have to fund our operations and capital expenditures from contract revenue under license agreements, existing cash balances and outside sources of financing, which may not be available on acceptable terms, if at all. We will not have product revenue from our products in development unless and until we receive approval from the FDA or other equivalent regulatory authorities outside the United States. We have devoted substantially all of our efforts to research and development, including preclinical and clinical trials. Because of the numerous risks associated with developing drugs, we are unable to predict the extent of future losses, whether or when any of our product candidates will become commercially available, or when we will become profitable, if at all.

We will need additional funding, including funding to complete clinical trials for our product candidates, which may not be available on acceptable terms, if at all.

Our principal strategic development focus is the advancement of MC4R agonists for the treatment of obesity, with an emphasis on rare neuroendocrine and other MC4R pathway diseases. We are developing selective MC4R long-acting peptide agonists and oral small-molecule agonists with potential utility in hypothalamic obesity, Prader-Willi syndrome, Bardet-Biedl syndrome and other rare obesity and orphan indications. As of June 30, 2026, we had cash and cash equivalents of $7.5 million, with current liabilities of $1.8 million. Based on our available cash and cash equivalents, we have concluded that substantial doubt exists about our ability to continue as a going concern for one year from the date our consolidated financial statements are issued and we are seeking additional funding to complete development activities and required clinical trials for our MC4R product candidates and, if those clinical trials are successful (which we cannot predict), to complete submission of required regulatory applications to the FDA.

We may raise additional funds through public or private equity or debt financings, collaborative arrangements on our product candidates, or other sources. However, such financing arrangements may not be available on acceptable terms, or at all. To obtain additional funding, we may need to enter into arrangements that require us to develop only certain of our product candidates or relinquish rights to certain technologies, product candidates and/or potential markets.

If we are unable to raise sufficient additional funds when needed, we may be required to curtail operations significantly, cease clinical trials and decrease staffing levels. We may seek to license, sell or otherwise dispose of our product candidates, technologies and contractual rights on the best possible terms available. Even if we are able to license, sell or otherwise dispose of our product candidates, technologies and contractual rights, it is likely to be on unfavorable terms and for less value than if we had the financial resources to develop or otherwise advance our product candidates, technologies and contractual rights ourselves.

Our future capital requirements depend on many factors, including:

• the expense and timing of obtaining regulatory approvals for our other product candidates;
• the number and characteristics of any additional product candidates we develop or acquire;
• the scope, progress, results and costs of researching and developing our future product candidates, and conducting preclinical and clinical trials;
• the cost of commercialization activities if any future product candidates are approved for sale, including marketing, sales and distribution costs;
• the cost of manufacturing any future product candidates and any products we successfully commercialize;
• our ability to establish and maintain strategic collaborations, licensing or other arrangements and the terms and timing of such arrangements;
• the degree and rate of market acceptance of any future approved products;
• the emergence, approval, availability, perceived advantages, relative cost, relative safety and relative efficacy of alternative and competing products or treatments;
• any product liability or other lawsuits related to our products;
• the expenses needed to attract and retain skilled personnel;
• the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims, including litigation costs and the outcome of such litigation; and
• the timing, receipt and amount of sales of, or royalties on, future approved products, if any.

We have limited experience successfully commercializing pharmaceutical products, and our experience with Vyleesi may not be indicative of our ability to successfully develop or commercialize our current or future product candidates.

Our operations have primarily focused on discovering and developing proprietary product candidates, conducting preclinical and clinical studies, obtaining regulatory approvals, and formulating and manufacturing product candidates through third-party contract manufacturers. Although we successfully developed Vyleesi® through Phase 3 clinical trials, obtained FDA approval in collaboration with our then-licensee and achieved commercial sales of Vyleesi, our experience successfully commercializing pharmaceutical products is limited. We sold our rights to Vyleesi to Cosette Pharmaceuticals, Inc. in December 2023, and Vyleesi is currently marketed and sold by Cosette.

We have not demonstrated our ability to successfully develop, obtain regulatory approval for and commercialize any of our current product candidates. Successful development and commercialization of our current or future product candidates, either independently or through collaborators, will require us or our collaborators to perform a variety of functions, including:

• conducting preclinical development and clinical trials;
• obtaining and maintaining regulatory approvals;
• formulating and manufacturing products, or engaging third parties to formulate and manufacture products;
• conducting post-approval monitoring and surveillance;
• establishing or utilizing sales, marketing and distribution capabilities, either independently or through collaborators; and
• obtaining sufficient capital or other financial resources to fund development and commercialization activities.

Our limited experience performing certain of these activities at commercial scale could adversely affect our ability to successfully develop or commercialize our current or future product candidates.

If we are unable to obtain regulatory approval of any of our product candidates, to successfully commercialize any products for which we receive regulatory approval or to obtain additional capital, we may not be able to recover our investment in our development efforts.

The clinical and commercial success of our product candidates will depend on a number of factors, including the following:

• the ability to raise additional capital on acceptable terms, or at all;
• timely completion of our clinical trials, which may be significantly slower or cost more than we currently anticipate and will depend substantially upon the performance of third-party contractors;
• whether we are required by the FDA or similar foreign regulatory agencies to conduct additional clinical trials beyond those planned to support the approval and commercialization of our product candidates or any future product candidates;
• acceptance of our proposed indications and primary endpoint assessments relating to the proposed indications of our product candidates by the FDA and similar foreign regulatory authorities;
• our ability to demonstrate to the satisfaction of the FDA and similar foreign regulatory authorities, the safety and efficacy of our product candidates or any future product candidates;
• the prevalence, duration and severity of potential side effects experienced with our product candidates or future approved products, if any;
• the timely receipt of necessary marketing approvals from the FDA and similar foreign regulatory authorities;
• achieving and maintaining, and, where applicable, ensuring that our third-party contractors achieve and maintain compliance with our contractual obligations and with all regulatory requirements applicable to our product candidates or any future product candidates or approved products, if any;
• the ability of third parties with whom we contract to manufacture clinical trial and commercial supplies of our product candidates or any future product candidates, remain in good standing with regulatory agencies and develop, validate and maintain commercially viable manufacturing processes that are compliant with the FDA’s current GMP regulations;
• a continued acceptable safety profile and efficacy during clinical development and following approval of our product candidates or any future product candidates;
• our ability to successfully commercialize our product candidates or any future product candidates in the United States and internationally, if approved for marketing, sale and distribution in such countries and territories, whether alone or in collaboration with others;
• acceptance by physicians and patients of the benefits, safety and efficacy of our product candidates or any future product candidates, if approved, including relative to alternative and competing treatments;
• our and our partners’ ability to establish and enforce intellectual property rights in and to our product candidates or any future product candidates;
• our and our partners’ ability to avoid third-party patent interference or intellectual property infringement claims; and
• our ability to develop, in-license or acquire additional product candidates or commercial-stage products that we believe can be successfully developed and commercialized.

If we do not achieve one or more of these factors, many of which are beyond our control, in a timely manner or at all, we could experience significant delays or an inability to obtain regulatory approvals or commercialize our product candidates. Even if regulatory approvals are obtained, we may never be able to successfully commercialize any of our product candidates. Accordingly, we cannot assure our investors that we will be able to generate sufficient revenue through the sale of our product candidates or any future product candidates to continue our business.

Raising additional capital may cause dilution to existing stockholders, restrict our operations, or require us to relinquish rights.

We will seek the additional capital necessary to fund our operations through public or private equity offerings, collaboration agreements, debt financings, licensing arrangements or combinations of the foregoing. To the extent that we raise additional capital through the sale of equity or convertible debt securities, existing stockholders’ ownership interests will be diluted, and the terms may include liquidation or other preferences that adversely affect their rights as a stockholder. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise additional funds through collaborations and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or product candidates or grant licenses on terms that are not favorable to us.

Risks Related to Our Business, Strategy, and Industry

Our business strategy is increasingly focused on the development of our MC4R agonist programs for rare obesity disorders, and these programs are at an early stage of development and may not be successful.

We are focusing a significant portion of our development activities and financial resources on our next-generation MC4R selective agonist programs for the treatment of obesity, with a primary focus on rare neuroendocrine diseases and MC4R pathway disorders, including hypothalamic obesity, Prader-Willi syndrome and potentially Bardet-Biedl syndrome. Our lead programs include a long-acting peptide MC4R agonist intended for once-weekly subcutaneous administration and a next-generation oral small molecule MC4R agonist. These product candidates are currently in preclinical development and have not been demonstrated to be safe, well tolerated or effective in humans. Preclinical results may not be predictive of results in clinical trials, and we may experience delays or difficulties in candidate selection, IND-enabling studies, regulatory submissions or clinical development.

The commercial opportunity for our MC4R programs will also depend on our ability to develop product candidates that are meaningfully differentiated from approved and investigational therapies. Competing MC4R agonists are approved or in clinical development for certain rare obesity disorders, and additional therapies utilizing MC4R and other mechanisms may be approved before our product candidates reach the market. We are seeking to develop MC4R agonists that provide clinically meaningful efficacy with improved tolerability, reduced off-target effects, including hyperpigmentation, and convenient dosing; however, there can be no assurance that our product candidates will demonstrate these characteristics in clinical trials or provide advantages over existing or future competing therapies.

If our MC4R programs experience significant development or regulatory delays, fail to demonstrate acceptable safety, tolerability or efficacy, fail to achieve meaningful differentiation from competing therapies, or otherwise fail to advance successfully, our business, financial condition, results of operations and prospects could be materially and adversely affected.

We depend on our collaborations and licensing arrangements with third parties, including Boehringer Ingelheim and Altanispac Labs, to successfully develop and commercialize certain of our product candidates, and we may not receive anticipated milestone payments, royalties or other economic benefits from these arrangements.

Our business strategy includes entering into collaborations, licensing arrangements and other strategic transactions under which third parties assume responsibility for, or significantly influence, the further development and commercialization of certain of our product candidates. In August 2025, we entered into the Boehringer Ingelheim Agreement for the research, development and commercialization of certain melanocortin receptor-targeted compounds for the treatment of retinal diseases, including diabetic retinopathy and diabetic macular edema. In January 2026, we entered into a sublicense agreement with Altanispac Labs pursuant to which Altanispac acquired exclusive rights to develop and commercialize PL9643 for dry eye disease.

Under these arrangements, our collaborators control, or are expected to control, significant aspects of the future development, regulatory approval and commercialization of the applicable product candidates. Our collaborators may determine the amount and timing of resources devoted to these programs, experience development or regulatory delays, fail to obtain regulatory approval, encounter manufacturing or commercialization difficulties, change their strategic priorities, pursue competing programs, discontinue development or commercialization activities, or terminate their agreements with us in accordance with their terms. These activities and decisions may be outside our control.

Our agreements provide for potential future payments, including research, development, regulatory and commercial milestone payments and royalties or other payments based on future commercialization. The achievement and timing of these payments are uncertain and depend on numerous factors, including successful research and development activities, clinical trial results, regulatory approvals and commercial performance. Certain milestone payments may not be achieved for many years, if ever, and there can be no assurance that any licensed product candidate will ultimately receive regulatory approval or be successfully commercialized.

If Boehringer Ingelheim, Altanispac or any of our other current or future collaborators fails to successfully develop or commercialize the applicable product candidates, changes its development or commercialization priorities, or terminates or materially reduces its activities under an agreement with us, we may not receive anticipated milestone payments, royalties or other economic benefits. In such circumstances, we may also be required to identify another collaborator or determine whether to reassume development activities, which could require significant time and financial resources and may not be possible on acceptable terms or at all. Any such event could materially and adversely affect our business, financial condition, results of operations and prospects.

We may not receive the contingent payment retained in connection with our settlement with Cosette relating to Vyleesi.

In June 2025, we entered into a Release and Settlement Agreement with Cosette Pharmaceuticals, Inc. relating to Vyleesi®, pursuant to which, among other things, we retained the right to receive 20% of a $3.0 million milestone payment, or $600,000, upon the first commercial sale of Vyleesi in Korea. The timing and likelihood of achieving this milestone are uncertain and depend on activities and events outside of our control. There can be no assurance that the applicable milestone will be achieved or that we will receive any payment related to this milestone.

Geopolitical conflicts and instability could disrupt our operations, increase economic uncertainty and volatility in financial markets, and adversely affect our business, financial condition and results of operations.

Ongoing and future geopolitical conflicts and instability, including the continuing conflict between Russia and Ukraine and conflicts and tensions in the Middle East, could adversely affect global economic conditions, financial markets, energy and commodity prices, international trade and supply chains. These conflicts have resulted, and may continue to result, in sanctions, export controls and other governmental actions, disruptions to transportation and energy supplies, increased cybersecurity threats, inflationary pressures and volatility or disruption in the capital markets.

Although we do not currently have material operations in regions directly affected by these conflicts, geopolitical instability could adversely affect third parties upon which we rely, including contract research organizations, clinical trial sites, manufacturers, suppliers, collaborators and other service providers. Such events could increase the cost or delay the manufacture or transportation of clinical trial materials, disrupt clinical development activities, adversely affect our collaborators’ development programs, or otherwise impair our ability to achieve our operating objectives.

Geopolitical instability and related economic uncertainty may also adversely affect our ability to access the capital markets when needed or increase the cost of obtaining financing. If we are unable to obtain necessary financing on acceptable terms, or if geopolitical events materially disrupt our operations or those of third parties upon which we rely, we may be required to delay, reduce or discontinue development activities, including our clinical development programs, which could materially and adversely affect our business, financial condition, results of operations and prospects.

Our MC1R product candidates, including PL8177 for the treatment of ulcerative colitis, are still in the early stages of development and remain subject to clinical testing and regulatory approval. If we are unable to successfully develop and test our product candidates, we will not be successful.

Our MC1R product candidates, including PL8177 for the treatment of ulcerative colitis, are at various stages of research and development, will require regulatory approval, and may never be successfully developed or commercialized. Our product candidates will require significant further research, development and testing before we can seek regulatory approval to market and sell them. We must demonstrate that our product candidates are safe and effective for use in patients in order to receive regulatory approval for commercial sale. Preclinical studies in animals, using various doses and formulations, must be performed before we can begin human clinical trials. Even if we obtain favorable results in preclinical studies, the results in humans may be different. Numerous small-scale human clinical trials may be necessary to obtain initial data on a product candidate’s safety and efficacy in humans before advancing to large scale human clinical trials. We face the risk that the results of our trials in later phases of clinical trials may be inconsistent with those obtained in earlier phases. Adverse or inconclusive results could delay the progress of our development programs and may prevent us from filing for regulatory approval of our product candidates. Additional factors that could inhibit the successful development of our product candidates include:

• lack of effectiveness of any product candidate during clinical trials or the failure of our product candidates to meet specified endpoints;
• failure to design appropriate clinical trial protocols;
• uncertainty regarding proper dosing;
• for injectable products, inability to develop or obtain a supplier for a suitable autoinjector device that meets the FDA’s medical device requirements;
• insufficient data to support regulatory approval;
• inability or unwillingness of medical investigators to follow our clinical protocols;
• inability to add a sufficient number of clinical trial sites; or
• the availability of sufficient capital to sustain operations and clinical trials.

You should evaluate us in light of these uncertainties, difficulties and expenses commonly experienced by early-stage biopharmaceutical companies, as well as unanticipated problems and additional costs relating to:

• product approval or clearance;
• regulatory compliance;
• good manufacturing practices;
• intellectual property rights;
• product introduction; and
• marketing and competition.

If clinical trials for our product candidates are prolonged or delayed, we may be unable to commercialize our product candidates on a timely basis, which would require us to incur additional costs and delay our receipt of any revenue from potential product sales.

We may be unable to commercialize our product candidates on a timely basis due to unexpected delays in our human clinical trials. Potential delaying events include:

• discovery of serious or unexpected toxicities or side effects experienced by study participants or other safety issues;
• slower than expected rates of subject recruitment and enrollment rates in clinical trials resulting from numerous factors, including the prevalence of other companies’ clinical trials for their product candidates for the same indication, or clinical trials for indications for which patients do not as commonly seek treatment;
• difficulty in retaining subjects who have initiated a clinical trial but may withdraw at any time due to adverse side effects from the therapy, insufficient efficacy, fatigue with the clinical trial process or for any other reason;
• difficulty in obtaining IRB approval for studies to be conducted at each site;
• delays in manufacturing or obtaining, or inability to manufacture or obtain, sufficient quantities of materials for use in clinical trials;
• inadequacy of or changes in our manufacturing process or the product formulation or method of delivery;
• changes in applicable laws, regulations and regulatory policies;
• delays or failure in reaching agreement on acceptable terms in clinical trial contracts or protocols with prospective contract research organizations (“CROs”), clinical trial sites and other third-party contractors;
• failure of our CROs or other third-party contractors to comply with contractual and regulatory requirements or to perform their services in a timely or acceptable manner;
• failure by us, our employees, our CROs or their employees or any partner with which we may collaborate or their employees to comply with applicable FDA or other regulatory requirements relating to the conduct of clinical trials or the handling, storage, security and recordkeeping for drug, medical device and biologic products;
• delays in the scheduling and performance by the FDA of required inspections of us, our CROs, our suppliers, or our clinical trial sites, and violations of law or regulations discovered in the course of FDA inspections;
• scheduling conflicts with participating clinicians and clinical institutions; or
• difficulty in maintaining contact with subjects during or after treatment, which may result in incomplete data.

Any of these events or other delaying events, individually or in the aggregate, could delay the commercialization of our product candidates and have a material adverse effect on our business, results of operations and financial condition.

We may not be able to secure and maintain relationships with research institutions and other organizations to conduct our clinical trials.

We rely on research institutions and other organizations to conduct our clinical trials, and we therefore have limited control over the timing and cost of clinical trials and our ability to recruit subjects. If we are unable to reach agreements with suitable research institutions or organizations on acceptable terms, or if any such agreement is terminated, we may be unable to quickly replace the research institution or organization with another qualified institution or organization on acceptable terms. We may not be able to secure and maintain suitable research institutions or organizations to conduct our clinical trials.

Even if our product candidates receive regulatory approval, they may never achieve market acceptance, in which case our business, financial condition and results of operations will be materially adversely affected.

Regulatory approval for the marketing and sale of any of our product candidates does not assure the product’s commercial success. Any approved product will compete with other products manufactured and marketed by major pharmaceutical and other biotechnology companies. If any of our product candidates are approved by the FDA and do not achieve adequate market acceptance, our business, financial condition, and results of operations will be materially adversely affected. The degree of market acceptance of any such product will depend on a number of factors, including:

• perceptions by members of the healthcare community, including physicians, about the safety and effectiveness of any such product;
• cost-effectiveness relative to competing products and technologies;
• availability of reimbursement for our products from third-party payers such as health insurers, HMOs and government programs such as Medicare and Medicaid; and
• advantages over alternative treatment methods.

Even if our product candidates receive regulatory approval in the United States, we may never receive approval or commercialize our products outside of the United States.

In order to market any products outside of the United States, we must establish and comply with numerous and varying regulatory requirements of other countries regarding safety and efficacy. Approval procedures vary among countries and can involve additional product testing and additional administrative review periods. The time required to obtain approval in other countries might differ from that required to obtain FDA approval. The regulatory approval process in other countries may include all of the risks detailed above regarding FDA approval in the United States as well as other risks. Regulatory approval in one country does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country may have a negative effect on the regulatory process in others. Failure to obtain regulatory approval in other countries or any delay or setbacks in obtaining such approval would impair our ability to develop foreign markets for our product candidates and may have a material adverse effect on our results of operations and financial condition.

If side effects emerge that can be linked to any of our product candidates (either while they are in development or after they are approved and on the market), we may be required to perform lengthy additional clinical trials, change the labeling of any such products, or withdraw such products from the market, any of which would hinder or preclude our ability to generate revenues.

If we identify side effects or if other problems occur in future clinical trials, we may be required to terminate or delay clinical development of the product candidate. Furthermore, even if any of our product candidates receive marketing approval, as greater numbers of patients use a drug following its approval, if the incidence of side effects increases or if other problems are observed after approval that were not seen or anticipated during pre-approval clinical trials, or if the incidence of side effects increase or other problems, a number of potentially significant negative consequences could result, including:

• regulatory authorities may withdraw their approval of the product;
• we may be required to reformulate such products or change the way the product is manufactured;
• we may become the target of lawsuits, including class action suits; and
• our reputation in the marketplace may suffer resulting in a significant drop in the sales of such products.

Any of these events could substantially increase the costs and expenses of developing, commercializing, and marketing any such product candidates or could harm or prevent sales of any approved products.

We may not be able to keep up with the rapid technological change in the biotechnology and pharmaceutical industries, which could make any future approved products obsolete and reduce our revenue.

Biotechnology and related pharmaceutical technologies have undergone and continue to be subject to rapid and significant change. Our future will depend in large part on our ability to maintain a competitive position with respect to these technologies. Our competitors may render our technologies obsolete by advances in existing technological approaches or the development of new or different approaches, potentially eliminating the advantages in our drug discovery process that we believe we derive from our research approach and proprietary technologies. In addition, any future products that we develop, including our clinical product candidates, may become obsolete before we recover expenses incurred in developing those products, which may require that we raise additional funds to continue our operations.

Competing products and technologies may make our product candidates less competitive or obsolete and may adversely affect the commercial potential of our development programs.

The biopharmaceutical industry is highly competitive and characterized by rapidly advancing technologies, evolving standards of care and the introduction of new products and therapeutic approaches. We expect to face significant competition with respect to our product candidates, particularly our MC4R agonist programs for rare obesity disorders, including hypothalamic obesity, Prader-Willi syndrome and Bardet-Biedl syndrome. There are approved therapies for certain of these indications, including an approved MC4R agonist, and additional MC4R agonists and therapies utilizing other mechanisms of action are in clinical development. Certain competing products and product candidates are more advanced in development than our product candidates and may achieve greater market acceptance or obtain regulatory approval before our product candidates.

The commercial potential of our MC4R programs will depend in significant part on our ability to develop product candidates that demonstrate clinically meaningful efficacy, acceptable safety and tolerability, convenient dosing and sufficient differentiation from approved and investigational therapies. We are developing a long-acting peptide MC4R agonist intended for once-weekly administration and a next-generation oral small molecule MC4R agonist, with the objective of achieving meaningful efficacy while improving tolerability and reducing off-target effects, including hyperpigmentation. However, there can be no assurance that our product candidates will demonstrate these characteristics in clinical trials or offer advantages over approved or future competing products.

We also face competition with respect to product candidates and programs that we have licensed or are seeking to out-license or partner. Our collaborators, including Boehringer Ingelheim and Altanispac Labs, operate in highly competitive therapeutic areas, and competing products or technologies could adversely affect their decisions to continue development, the commercial potential of licensed products and our ability to receive milestone payments, royalties or other economic benefits. Competition may also adversely affect our ability to enter into collaborations, licenses or other strategic transactions for our other development programs on favorable terms or at all.

Many of our existing and potential competitors have substantially greater financial, technical, research and development, clinical, regulatory, manufacturing, marketing and commercial resources and experience than we do. Academic institutions, governmental agencies and other public and private research organizations may also develop competing products or technologies independently or through collaborations with pharmaceutical or biotechnology companies. Competitors may develop products that are safer, more effective, better tolerated, more convenient or less expensive than our product candidates, or may obtain regulatory approval and establish market acceptance before we do. If competing products or technologies are successfully developed or commercialized, or if our product candidates fail to demonstrate sufficient differentiation from competing therapies, our product candidates could become less competitive or obsolete, and our business, financial condition, results of operations and prospects could be materially and adversely affected.

We rely on third parties over whom we have no control to conduct preclinical studies, clinical trials and other research for our product candidates and their failure to timely perform their obligations could significantly harm our product development.

We have limited research and development staff. We rely on third parties and independent contractors, such as researchers at CROs and universities, in certain areas that are particularly relevant to our research and product development plans. We engage such researchers to conduct our preclinical studies, clinical trials and associated tests. These outside contractors are not our employees and may terminate their engagements with us at any time. In addition, we have limited control over the resources that these contractors devote to our programs, and they may not assign as great a priority to our programs or pursue them as diligently as we would if we were undertaking such programs ourselves. There is also competition for these relationships, and we may not be able to maintain our relationships with our contractors on acceptable terms. If our third-party contractors do not carry out their duties under their agreements with us, fail to meet expected deadlines or fail to comply with appropriate standards for preclinical or clinical research, our ability to develop our product candidates and obtain regulatory approval on a timely basis, if at all, may be materially adversely affected.

We depend on third-party manufacturers and suppliers for our product candidates, and any inability to obtain adequate supplies of materials or product candidates of acceptable quality on a timely basis could delay or adversely affect our development programs.

We do not own or operate manufacturing facilities and rely, and expect to continue to rely, on third-party contract manufacturers and suppliers to manufacture active pharmaceutical ingredients, drug substance, drug product and other materials required for our preclinical studies and clinical trials. This includes our next-generation MC4R selective long-acting peptide agonist and oral small molecule agonist programs. We have limited control over the operations of these third parties and are dependent on their ability to manufacture and supply materials in accordance with our specifications, applicable regulatory requirements and our development timelines.

Manufacturing pharmaceutical product candidates is complex and may involve difficulties with process development, formulation, scale-up, technology transfer, analytical testing, stability, quality control and the availability of raw materials and other components. Our third-party manufacturers or suppliers could experience manufacturing failures, quality issues, contamination, equipment failures, shortages of raw materials, capacity constraints, supply chain disruptions or other events that could delay or interrupt the manufacture or delivery of materials required for our development programs. Certain materials, manufacturing processes or services may be available from a limited number of qualified suppliers, and identifying, qualifying and transferring manufacturing activities to an alternative supplier could be costly and time-consuming.

Our third-party manufacturers are required to comply with applicable regulatory requirements, including current good manufacturing practices (“cGMP”), and their facilities may be subject to inspection by the FDA and other regulatory authorities. We have limited ability to control the compliance or performance of our third-party manufacturers beyond our contractual rights and quality oversight. If a manufacturer fails to comply with applicable regulatory requirements or is unable to manufacture our product candidates in accordance with required specifications, regulatory authorities could take enforcement action or require corrective measures, and we could experience delays in preclinical studies, clinical trials, regulatory submissions or potential regulatory approvals.

If we are unable to obtain sufficient quantities of our product candidates or other required materials of acceptable quality and on a timely basis, or if we are required to qualify alternative manufacturers or suppliers, our development programs could be delayed, suspended or discontinued and our business, financial condition, results of operations and prospects could be materially and adversely affected.

Changes in international trade policies, tariffs, import restrictions or other governmental actions affecting pharmaceutical products, active pharmaceutical ingredients, raw materials or other components could also increase our manufacturing costs, limit the availability of materials or disrupt our supply chain.

We currently have limited sales, marketing and distribution capabilities, and if we are unable to establish appropriate commercialization capabilities or enter into arrangements with third parties to commercialize our product candidates, we may be unable to successfully commercialize any products that receive regulatory approval.

We currently have limited internal sales, marketing and distribution capabilities and do not maintain a commercial organization capable of independently commercializing our product candidates. If any of our product candidates receive regulatory approval, including product candidates arising from our MC4R agonist programs, we will need to determine the appropriate commercialization strategy, which may include establishing or expanding internal sales, marketing and distribution capabilities, entering into licensing, co-promotion, distribution or other commercialization arrangements with third parties, or a combination of these approaches.

Establishing an internal commercial organization would require significant financial and management resources and the recruitment and retention of personnel with appropriate sales, marketing, market access, distribution and other commercial expertise. Competition for qualified personnel in the biopharmaceutical industry is significant, and we may be unable to recruit, retain and effectively manage the personnel necessary to successfully commercialize our products. Developing these capabilities could also divert management attention and financial resources from our research and development activities.

Alternatively, we may rely on pharmaceutical companies or other third parties to commercialize some or all of our product candidates. We may be unable to identify appropriate partners or enter into commercialization arrangements on acceptable terms or at all, and any such arrangements could result in our receiving a smaller portion of the economic benefits from a product than if we commercialized it independently. We would also have less control over the timing, resources and strategies employed in commercialization, and the success of the applicable product would depend substantially on the efforts and capabilities of our commercialization partner.

If we are unable to establish appropriate commercialization capabilities, either independently or through arrangements with third parties, or if our commercialization partners fail to successfully market, sell and distribute an approved product, we may not realize the anticipated commercial value of our product candidates, which could materially and adversely affect our business, financial condition, results of operations and prospects.

Our ability to successfully commercialize any approved product candidates will depend in part on obtaining adequate pricing, coverage and reimbursement from governmental authorities, private health insurers and other third-party payers, which may be difficult to obtain or maintain.

The commercial success of any of our product candidates that receive regulatory approval will depend substantially on the extent to which patients have access to such products and the costs of such products are covered and adequately reimbursed by governmental healthcare programs, private health insurers and other third-party payers. Obtaining and maintaining adequate pricing, coverage and reimbursement can be time-consuming and uncertain, and there can be no assurance that coverage will be available or that reimbursement levels will be sufficient to support successful commercialization.

Third-party payers increasingly seek to control healthcare costs by limiting coverage, imposing prior authorization requirements, establishing restrictive eligibility criteria, requiring step therapy or use of alternative treatments, negotiating price discounts or rebates, and challenging the prices charged for pharmaceutical products. These considerations may be particularly important for our MC4R agonist programs targeting rare obesity disorders, for which approved or investigational therapies may be available and the potential cost of chronic or lifelong treatment may be significant. Payers may require evidence demonstrating meaningful clinical benefit, durability of treatment effect or advantages in safety, tolerability, dosing convenience or other characteristics compared with existing therapies before providing favorable coverage and reimbursement.

Outside the United States, pharmaceutical pricing, coverage and reimbursement are subject to governmental regulation and vary significantly among countries. In the European Union, although certain aspects of health technology assessment have become subject to increased coordination at the European Union level, pricing and reimbursement decisions generally remain the responsibility of individual Member States and may involve health technology assessments, comparative effectiveness evaluations, price negotiations, reference pricing, budget impact assessments and other cost-containment measures. As a result, obtaining regulatory approval for a product in the European Union does not assure that we or our commercialization partners will obtain an acceptable price or reimbursement for that product in any particular Member State, and pricing and reimbursement decisions may delay or limit commercial availability following regulatory approval. If we or our collaborators are unable to obtain adequate pricing and reimbursement, the commercial potential of an approved product could be materially adversely affected.

Healthcare laws, reimbursement policies and cost-containment measures may change in ways that adversely affect the pricing or reimbursement of our products. If we or our current or future collaborators are unable to obtain or maintain adequate pricing, coverage and reimbursement for an approved product, or if coverage is subject to significant restrictions, the market acceptance and commercial potential of that product could be materially reduced, which could materially and adversely affect our business, financial condition, results of operations and prospects.

Our ability to successfully commercialize our products in development will depend, in significant part, on the extent to which we or our marketing partners can obtain reimbursement for our products and also reimbursement at appropriate levels for the cost of our products. Obtaining reimbursement from governmental payers, insurance companies, HMOs and other third-party payers of healthcare costs is a time-consuming and expensive process.

We may be subject to product liability claims arising from the testing, manufacture or commercialization of our product candidates or products, which could result in substantial liabilities and adversely affect our business.

The development, clinical testing, manufacture and commercialization of pharmaceutical products involve an inherent risk of product liability claims. We may be subject to claims arising from the use of our product candidates in clinical trials and, if any of our product candidates receive regulatory approval, from their commercial use. Product liability claims could also arise from manufacturing defects, unexpected adverse events, misuse of a product or other risks associated with pharmaceutical products. Regardless of merit, such claims could result in substantial costs, divert management’s attention, damage our reputation, delay or terminate clinical trials, or limit or prevent the commercialization of our product candidates.

We maintain product liability and clinical trial insurance that we believe is appropriate for our current activities. However, our insurance coverage may not be sufficient to cover all liabilities that we may incur, and we may be unable to maintain or obtain additional coverage in the future at an acceptable cost or in sufficient amounts. As our product candidates advance through clinical development or if we commercialize products in the future, we may need to increase our insurance coverage, which could result in additional expense.

Certain of our agreements with collaborators, licensees, manufacturers and other third parties may provide for indemnification with respect to specified liabilities. However, any such indemnification may be limited, unavailable or insufficient to satisfy claims against us, and the applicable third party may lack sufficient financial resources to satisfy its indemnification obligations. If we are required to pay substantial amounts in connection with product liability claims that are not covered by insurance or indemnification, our business, financial condition, results of operations and prospects could be materially and adversely affected.

Cybersecurity incidents, failures of our information technology systems or those of third parties upon which we rely, or unauthorized access to or disclosure of confidential information could disrupt our operations, compromise sensitive information and adversely affect our business.

We rely extensively on information technology systems, cloud-based services and other digital infrastructure to conduct our business and to collect, store, process and transmit confidential, proprietary and sensitive information. We also depend on the information systems of third parties, including contract research organizations, contract manufacturers, consultants, collaborators, licensees and other service providers. In addition, we utilize external providers with artificial intelligence (“AI”) and machine learning (“ML”) capabilities in connection with certain of our research and drug discovery activities. Our increasing reliance on third-party systems and digital technologies may increase our exposure to cybersecurity and data security risks.

Our systems and those of third parties upon which we rely may be vulnerable to cybersecurity incidents, including ransomware, malware, phishing and other social engineering attacks, denial-of-service attacks, unauthorized access, credential theft, exploitation of software vulnerabilities and other malicious activities, as well as failures resulting from human error, equipment or software failures, natural disasters, power or telecommunications outages, geopolitical conflicts or other events. Cybersecurity threats continue to evolve and may become increasingly sophisticated, including through the use of AI and other emerging technologies, which may make such threats more difficult to detect, prevent or mitigate.

A cybersecurity incident or information technology failure could disrupt our operations or those of third parties upon which we rely; result in the loss, corruption or unauthorized disclosure of clinical, preclinical, regulatory, financial or other data; compromise trade secrets, intellectual property or other confidential information; delay our research and development programs or regulatory submissions; or result in significant costs associated with investigation, remediation, restoration of systems and data, litigation or regulatory proceedings. Unauthorized access to confidential information provided to or maintained by third-party service providers, including information used in AI- or ML-based modeling and drug discovery activities, could also result in the loss or unauthorized use of proprietary information or intellectual property.

Although we implement security measures designed to protect our information systems and confidential information and seek to require appropriate protections from third parties, these measures may not prevent all cybersecurity incidents, and we may not discover an incident promptly or accurately assess its scope or impact. Our insurance coverage may also be insufficient to cover losses arising from cybersecurity incidents. Any material cybersecurity incident, information technology failure or loss or unauthorized disclosure of confidential information could materially and adversely affect our business, financial condition, results of operations and prospects.

We use artificial intelligence and machine learning technologies in certain of our research and drug discovery activities, and the use of these technologies may not produce the anticipated benefits and could expose us to additional risks.

We utilize external providers with artificial intelligence (“AI”) and machine learning (“ML”) capabilities in connection with certain of our research and drug discovery activities, including the analysis of proprietary compound and pharmacology data and the identification, design and optimization of potential product candidates. We expect that our use of AI and ML technologies may increase as we continue to develop our product candidate portfolio. However, AI- and ML-based technologies are rapidly evolving, and there can be no assurance that their use will improve the efficiency, accuracy or success of our research and development activities or result in the identification or development of successful product candidates.

AI and ML models depend on the quality, quantity and appropriateness of the data and methodologies used to develop, train and operate them, and their outputs may be inaccurate, incomplete, biased or otherwise unreliable. Results generated or assisted by AI or ML models may not be reproducible or predictive of results obtained in preclinical studies, clinical trials or other development activities. If we rely on inaccurate or misleading outputs, we could make incorrect research or development decisions, expend resources on product candidates that ultimately prove unsuccessful, or fail to identify potentially promising product candidates.

Our use of external AI and ML providers may require us to provide or permit access to proprietary data, confidential information or intellectual property. Although we seek to protect such information through contractual, technical and other safeguards, these measures may not prevent unauthorized access, use or disclosure. We may also be subject to disputes concerning ownership or rights in data, models, inventions or other intellectual property developed or generated through the use of AI or ML technologies, and third-party AI or ML technologies may incorporate data or intellectual property for which sufficient rights have not been obtained.

The legal and regulatory frameworks applicable to AI and ML technologies are rapidly evolving in the United States and other jurisdictions and may impose additional requirements relating to transparency, data protection, intellectual property, validation, cybersecurity or the use of AI in pharmaceutical research and development. Compliance with new or evolving requirements could increase our costs, restrict our use of certain technologies or require changes to our research and development practices. Any failure of AI or ML technologies to perform as anticipated, loss or unauthorized disclosure of proprietary information, intellectual property disputes, cybersecurity incidents, or failure to comply with applicable legal or regulatory requirements could adversely affect our research and development activities, competitive position, business, financial condition and results of operations.

We may be subject to claims that our employees, consultants, collaborators or other third parties with whom we work have wrongfully used or disclosed confidential information, trade secrets or other intellectual property of third parties.

We employ or engage individuals, consultants, contractors and other service providers who may have previously worked for or provided services to universities, biotechnology or pharmaceutical companies, including our competitors or potential competitors. We also collaborate with academic institutions, research organizations and other third parties and utilize external providers with specialized capabilities, including artificial intelligence and machine learning technologies, in certain of our research and drug discovery activities. Although we seek to ensure that persons and organizations working with us do not improperly use or disclose confidential information, trade secrets or other proprietary information belonging to others, we may be subject to claims that we or persons or entities associated with us have inadvertently or otherwise used, disclosed or incorporated such information into our research, technology or product development activities.

Litigation or other proceedings may be necessary to defend against these claims, and we may not be successful. If we fail to defend ourselves against such claims, we could be required to pay monetary damages, obtain licenses on unfavorable terms, cease using certain information or technology, modify or discontinue research or development activities, or lose valuable intellectual property rights or personnel. We could also become subject to disputes concerning the ownership of inventions or other intellectual property developed through collaborations or other third-party relationships. Even if we are successful in defending against such claims, litigation or other proceedings could result in substantial costs, divert management and scientific resources and adversely affect our business, financial condition, results of operations and prospects.

We are subject to healthcare laws and regulations, including fraud and abuse, false claims, transparency, and data privacy and security laws, and failure to comply with these laws could result in substantial penalties and adversely affect our business.

Our current and future operations may be subject, directly or indirectly, to various federal, state and foreign healthcare laws and regulations, including fraud and abuse, false claims, transparency, privacy and data security requirements. These laws may apply to our clinical development activities, interactions with healthcare professionals and organizations, relationships with collaborators and other third parties and, if any of our product candidates receive regulatory approval, our commercialization activities.

The laws and regulations that may affect our operations include, among others:

• the federal Anti-Kickback Statute, which generally prohibits knowingly and willfully offering, paying, soliciting or receiving remuneration to induce or reward referrals for, or purchases, orders or recommendations of, items or services reimbursable under federal healthcare programs;
• federal civil and criminal false claims laws, including the federal False Claims Act, and civil monetary penalty laws, which prohibit, among other things, knowingly presenting, or causing to be presented, false or fraudulent claims for payment to the federal government;
• the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended, and its implementing regulations, which impose criminal and civil liability for certain healthcare fraud activities and establish requirements relating to the privacy, security and transmission of certain individually identifiable health information;
• federal transparency requirements, including the Physician Payments Sunshine Act and implementing Open Payments regulations, which require certain manufacturers to report specified payments and other transfers of value to physicians and certain other healthcare professionals and teaching hospitals, as well as certain ownership and investment interests; and
• analogous state and foreign laws and regulations, including state anti-kickback and false claims laws, pharmaceutical marketing and transparency requirements, privacy, data protection and security laws, some of which may apply more broadly than their federal counterparts and may impose differing or additional requirements.

The scope and enforcement of these laws and regulations continue to evolve, and applicable requirements may differ among jurisdictions. Certain laws may apply to arrangements even if the applicable activities do not involve products reimbursed by a federal healthcare program. In addition, relationships with healthcare professionals, clinical investigators, consultants, collaborators, contract research organizations and other third parties may subject us to additional compliance obligations or risks.

Efforts to ensure that our business arrangements and activities comply with applicable healthcare laws and regulations may involve substantial costs. Because these laws are complex and their application may be uncertain, governmental authorities could determine that our activities or arrangements do not comply with applicable requirements despite our compliance efforts. If our operations or arrangements are found to violate applicable healthcare laws or regulations, we could be subject to significant civil, criminal or administrative penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs, additional reporting or compliance obligations, contractual damages, reputational harm or restrictions on our operations. Any such event could materially and adversely affect our business, financial condition, results of operations and prospects.

We are highly dependent on our management team, scientific and technical personnel and third-party contractors, consultants and collaborators, and the loss of their services or our inability to attract and retain qualified personnel could materially and adversely affect our business.

We operate with a relatively small number of employees and rely extensively on our management team, scientific and technical personnel and third-party contractors, consultants, scientific advisors and collaborators to conduct our business and advance our development programs. Our ability to execute our business strategy, including the development of our next-generation MC4R selective long-acting peptide and oral small molecule agonist programs, depends substantially on the continued service and performance of key members of our management and scientific teams who possess significant experience, technical expertise and institutional knowledge.

The loss of one or more key employees or other personnel could result in the loss of important scientific, technical, operational or business knowledge and could delay our research, development, regulatory or other activities, particularly because our limited internal staffing may make it difficult to replace such expertise promptly. As our product candidates advance through development, we may also need to recruit additional personnel or engage additional contractors and consultants with expertise in areas such as clinical development, regulatory affairs, manufacturing, quality assurance and other functions.

Competition for qualified personnel and specialized contractors and consultants in the biopharmaceutical industry is significant, and we may be unable to attract, retain or motivate individuals with the qualifications and experience necessary to execute our business strategy. We also depend on our ability to establish and maintain productive relationships with contract research organizations, contract manufacturers, consultants, scientific advisors, academic institutions, collaborators and other third parties. These third parties may terminate their relationships with us, become unavailable, experience personnel changes or fail to perform their obligations in accordance with our expectations or applicable timelines.

If we are unable to retain key personnel, recruit additional qualified personnel when needed, or maintain effective relationships with the contractors, consultants, collaborators and other third parties upon whom we rely, our development programs could be delayed or adversely affected, and our business, financial condition, results of operations and prospects could be materially and adversely affected.

Risks Related to Government Regulation

Both before and after regulatory approval, our product candidates are subject to extensive and continuing regulatory requirements, and failure to comply with these requirements could delay development, prevent or limit commercialization, or result in significant penalties.

Our product candidates and our research, development, clinical testing, manufacturing and other activities are subject to extensive regulation by the FDA and other regulatory authorities in the United States and comparable authorities in other countries. Regulatory requirements govern, among other things, preclinical and clinical testing, manufacturing, quality control, labeling, packaging, storage, recordkeeping, reporting, advertising, promotion and distribution. We and the third parties upon whom we rely, including contract research organizations, clinical investigators and contract manufacturers, are required to comply with applicable regulatory requirements throughout the development process and, if any of our product candidates receive regulatory approval, following approval.

Failure to comply with applicable regulatory requirements could result in regulatory or enforcement actions, including:

• delays in or suspension of preclinical or clinical development;
• clinical holds or termination of clinical trials;
• refusal by regulatory authorities or institutional review boards to authorize or continue clinical trials;
• warning or untitled letters;
• restrictions on manufacturing, distribution, marketing or use of a product;
• fines, civil or criminal penalties or injunctions;
• product seizures, detentions or recalls;
• suspension or withdrawal of regulatory approvals;
• total or partial suspension of manufacturing; or
• refusal to approve pending regulatory applications or supplements.

Regulatory requirements, policies and interpretations may change during the development of our product candidates, and regulatory authorities have substantial discretion in applying applicable requirements. Such changes or differing interpretations could require us to modify our development programs, conduct additional preclinical studies or clinical trials, change manufacturing processes or controls, or provide additional data or analyses, any of which could result in significant additional costs or delays.

If any of our product candidates receive regulatory approval, the approval may be limited to specified indications, patient populations, doses or conditions of use and may be subject to significant labeling restrictions, postmarketing requirements or commitments, additional clinical studies or a Risk Evaluation and Mitigation Strategy (“REMS”). An approved product would also remain subject to continuing regulatory requirements relating to manufacturing, quality control, adverse-event reporting, labeling, advertising, promotion, recordkeeping and other matters. Regulatory authorities may impose additional requirements or take enforcement action if safety, efficacy, manufacturing or compliance issues arise following approval.

Regulatory approval by the FDA does not assure approval by regulatory authorities in other countries, and approval by a regulatory authority in one jurisdiction does not assure approval in another jurisdiction. Regulatory requirements and review processes vary among jurisdictions and may require additional studies, data or other information. Failure to obtain or maintain required regulatory approvals, or significant delays in doing so, could prevent or delay the development or commercialization of our product candidates and materially and adversely affect our business, financial condition, results of operations and prospects.

The regulatory approval process is lengthy, expensive and uncertain, and may prevent us from obtaining the approvals that we require.

Government authorities in the United States and other countries extensively regulate the research, development, testing, manufacture, quality, safety, efficacy, labeling, storage, recordkeeping, advertising, promotion, marketing and distribution of pharmaceutical products. In the United States, our product candidates are subject to regulation by the FDA. Before a new drug may generally be marketed in the United States, the regulatory process typically requires, among other things:

• completion of preclinical laboratory and animal studies and formulation and manufacturing development;
• submission to the FDA of an Investigational New Drug application (“IND”), which must become effective before clinical trials may begin;
• completion of adequate and well-controlled clinical trials to establish the safety and efficacy of the product candidate for its intended use;
• submission to the FDA of a New Drug Application (“NDA”);
• satisfactory completion of FDA inspections, as applicable, of manufacturing facilities and clinical trial sites; and
• FDA review and approval of the NDA.

The development and regulatory approval process is lengthy, expensive and uncertain and may take many years. The FDA may delay, limit or deny approval of a product candidate for numerous reasons, including if the FDA determines that the product candidate is not sufficiently safe or effective, clinical trial results are insufficient or inconclusive, the manufacturing processes or facilities do not meet applicable requirements, or additional preclinical studies, clinical trials, analyses or other information are required. The FDA may also place a clinical trial on hold, require changes to trial design or endpoints, request additional patient enrollment or require additional safety monitoring.

Success in preclinical studies or early-stage clinical trials does not assure success in later-stage clinical trials or regulatory approval. Data obtained from preclinical studies and clinical trials may be subject to differing interpretations, and results observed in preclinical models may not be replicated in humans. In addition, delays in enrollment, manufacturing, availability of clinical trial materials, regulatory review or other aspects of development could increase our costs and delay or prevent regulatory approval.

If a product candidate receives regulatory approval, the approval may be limited to particular indications, patient populations, doses or conditions of use and may be subject to labeling restrictions, postmarketing requirements or commitments, additional clinical trials, a Risk Evaluation and Mitigation Strategy or other conditions. The FDA also has broad postmarketing regulatory and enforcement authority and may require labeling changes, restrict the use or distribution of an approved product, require a product recall, suspend or withdraw an approval or take other enforcement action if safety, efficacy, manufacturing or compliance issues arise.

Outside the United States, our ability or the ability of our collaborators or licensees to market product candidates will depend on obtaining required authorizations from applicable regulatory authorities. Foreign regulatory requirements and approval processes vary among jurisdictions and may differ from those of the FDA. Approval by the FDA does not assure approval by regulatory authorities outside the United States, and approval in one foreign jurisdiction does not assure approval in another. Failure or delay in obtaining required regulatory approvals could materially and adversely affect our business, financial condition, results of operations and prospects.

Legislative, regulatory or policy changes could increase the costs of developing or commercializing our product candidates, delay or prevent regulatory approval, or otherwise adversely affect our business.

The laws, regulations, policies and guidance governing the development, approval, manufacture, pricing, reimbursement and commercialization of pharmaceutical products are subject to change. Congress, federal and state agencies, including the FDA and the Centers for Medicare & Medicaid Services (“CMS”), courts and other governmental authorities may enact, promulgate, revise or reinterpret laws, regulations, policies or guidance in ways that materially affect our business.

Changes in applicable laws, regulations or policies could, among other things, require additional preclinical or clinical studies, alter clinical trial or regulatory approval requirements, require changes to manufacturing methods or facilities, impose additional recordkeeping, reporting or postmarketing requirements, restrict promotional or commercialization activities, alter available regulatory or intellectual property protections or exclusivities, or increase the time and costs required to develop, manufacture or commercialize our product candidates. Regulatory authorities may also adopt new approaches intended to accelerate or modernize drug development, but there can be no assurance that our product candidates will qualify for or benefit from such programs. FDA, for example, is currently pursuing initiatives intended to modernize both early- and late-stage clinical development.

Changes in laws, regulations, policies or their interpretation could require substantial expenditures, delay our development programs or regulatory submissions, restrict our ability to commercialize an approved product or otherwise materially and adversely affect our business, financial condition, results of operations and prospects.

Changes in healthcare laws, drug pricing, reimbursement policies and other healthcare reforms could adversely affect our business and the commercial potential of our product candidates

The United States healthcare industry is subject to significant governmental regulation and continues to experience substantial legislative and policy changes intended to control healthcare expenditures, reduce prescription drug prices and modify coverage and reimbursement practices. These initiatives, and future healthcare reform measures, could affect the prices that may be charged for pharmaceutical products, the availability and amount of reimbursement, patient access to therapies and the commercial potential of any product candidates that we or our collaborators may successfully develop.

The Inflation Reduction Act of 2022 established, among other provisions, a Medicare Drug Price Negotiation Program under which CMS negotiates maximum fair prices for certain high-expenditure, single-source drugs covered under Medicare. CMS continues to implement and revise requirements under the program, including for future price applicability years. Future legislation, regulatory actions or judicial decisions could modify these or other drug-pricing and reimbursement requirements.

The federal government has also pursued additional initiatives intended to reduce prescription drug prices, including policies seeking to align prices paid in the United States with prices available in other developed countries, commonly referred to as most-favored-nation pricing, and initiatives facilitating direct-to-consumer access to discounted pharmaceutical products. The current administration has entered into voluntary most-favored-nation pricing arrangements with a number of pharmaceutical manufacturers and has indicated that it may pursue additional measures relating to drug pricing.

Federal and state governments may adopt additional measures affecting pharmaceutical pricing and reimbursement, including price controls, rebates, discounts, transparency requirements, restrictions on patient access, changes in government healthcare program reimbursement, international reference pricing or other cost-containment measures. Private payers may similarly impose restrictive coverage criteria, prior authorization requirements, step therapy, formulary restrictions, discounts or rebates.

Healthcare reform measures and increased governmental and private payer scrutiny of pharmaceutical pricing could limit the prices we or our collaborators may obtain for approved products, reduce coverage or reimbursement, increase our costs or reduce the commercial potential of our product candidates. We cannot predict the nature, timing or impact of future healthcare legislation, regulations, executive actions or policies. Any such measures could materially and adversely affect our business, financial condition, results of operations and prospects.

For more information regarding government healthcare reform, see “U.S. Governmental Regulation of Pharmaceutical Products” in Part I, Item 1 of this Annual Report.

Risks Related to Our Intellectual Property

If we fail to adequately protect or enforce our intellectual property rights or secure rights to patents of others, the value of our intellectual property rights would diminish.

Our success, competitive position and future revenues will depend in part on our ability and the abilities of our licensors to obtain and maintain patent protection for our products, methods, processes, and other technologies, to preserve our trade secrets, to prevent third parties from infringing on our proprietary rights and to operate without infringing the proprietary rights of third parties. We cannot predict:

• the degree and range of protection any patents will afford us against competitors, including whether third parties will find ways to invalidate or otherwise circumvent our patents;
• if and when patents will be issued;
• whether or not others will obtain patents claiming aspects similar to those covered by our patents and patent applications; and
• whether we will need to initiate litigation or administrative proceedings, which may be costly whether we win or lose.

If our products, methods, processes, and other technologies infringe the proprietary rights of other parties we could incur substantial costs and we may have to:

• obtain licenses, which may not be available on commercially reasonable terms, if at all;
• redesign our products or processes to avoid infringement;
• stop using the subject matter claimed in the patents held by others;
• pay damages; or
• defend litigation or administrative proceedings, which may be costly, whether we win or lose, and which could result in a substantial diversion of our management resources.

We may become involved in lawsuits to protect or enforce our patents or other intellectual property or the patents of our licensors, which could be expensive and time-consuming.

Competitors may infringe our intellectual property, including our patents or the patents of our licensors. As a result, we may be required to file infringement claims to stop third-party infringement or unauthorized use. This can be expensive, particularly for a company of our size, and time-consuming. In addition, in an infringement proceeding, a court may decide that a patent of ours is not valid or is unenforceable or may refuse to stop the other party from using the technology at issue on the grounds that our patent claims do not cover its technology or that the factors necessary to grant an injunction against an infringer are not satisfied.

An adverse determination of any litigation or other proceedings could put one or more of our patents at risk of being invalidated or interpreted narrowly and could put our patent applications at risk of not issuing.

Interference, derivation, or other proceedings brought at USPTO may be necessary to determine the priority or patentability of inventions with respect to our patent applications or those of our licensors or collaborators. Litigation or USPTO proceedings brought by us may fail or may be invoked against us by third parties. Even if we are successful, domestic, or foreign litigation or USPTO or foreign patent office proceedings may result in substantial costs and distraction to our management. We may not be able, alone or with our licensors or collaborators, to prevent misappropriation of our proprietary rights, particularly in countries where the laws may not protect such rights as fully as in the United States.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation or other proceedings, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation or proceedings. In addition, during the course of this kind of litigation or proceedings, there could be public announcements of the results of hearings, motions or other interim proceedings or developments or public access to related documents. If investors perceive these results to be negative, the market price for our common stock could be significantly harmed.

If we infringe or are alleged to infringe intellectual property rights of third parties, our business could be harmed.

Our research, development and commercialization activities may infringe or otherwise violate or be claimed to infringe or otherwise violate patents owned or controlled by other parties. There may also be patent applications that have been filed but not published that, when issued as patents, could be asserted against us. These third parties could bring claims against us that would cause us to incur substantial expenses and, if successful against us, could cause us to pay substantial damages. Further, if a patent infringement suit were brought against us, we could be forced to stop or delay research, development, manufacturing or sales of the product or product candidate that is the subject of the suit.

As a result of patent infringement claims, or to avoid potential claims, we may choose or be required to seek licenses from third parties. These licenses may not be available on acceptable terms, or at all. Even if we are able to obtain a license, the license would likely obligate us to pay license fees, royalties or both, and the rights granted to us might be nonexclusive, which could result in our competitors gaining access to the same intellectual property. Ultimately, we could be prevented from commercializing a product or be forced to cease some aspect of our business operations, if, as a result of actual or threatened patent infringement claims, we are unable to enter into licenses on acceptable terms, if at all.

There has been substantial litigation and other proceedings regarding patent and other intellectual property rights in the pharmaceutical industry. In addition to infringement claims against us, we may become a party to other patent litigation and other proceedings, including interference, derivation or post-grant proceedings declared or granted by the USPTO and similar proceedings in foreign countries, regarding intellectual property rights with respect to our current or future products. The cost to us of any patent litigation or other proceeding, even if resolved in our favor, could be substantial. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their substantially greater financial resources. Patent litigation and other proceedings may also absorb significant management time. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could impair our ability to compete in the marketplace. The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition, or results of operations.

Our patent applications and the enforcement or defense of our issued patents may be impacted by the application of or changes in U.S. and foreign standards.

The standards that the USPTO and foreign patent offices use to grant patents are not always applied predictably or uniformly and can change. Consequently, our pending patent applications may not be allowed and, if allowed, may not contain the type and extent of patent claims that will be adequate to conduct our business as planned. Additionally, any issued patents we currently own or obtain in the future may have a shorter patent term than expected or may not contain claims that will permit us to stop competitors from using our technology or similar technology or from copying our product candidates. Similarly, the standards that courts use to interpret patents are not always applied predictably or uniformly and may evolve, particularly as new technologies develop. In addition, changes to patent laws in the United States or other countries may be applied retroactively to affect the validation enforceability, or term of our patent. For example, the U.S. Supreme Court has recently modified some legal standards applied by the USPTO in examination of U.S. patent applications, which may decrease the likelihood that we will be able to obtain patents and may increase the likelihood of challenges to patents we obtain or license. In addition, changes to the U.S. patent system have come into force under the Leahy-Smith America Invents Act, or the Leahy-Smith Act, which was signed into law in September 2011. The Leahy-Smith Act included significant changes to U.S. patent law. These include provisions that affect the way patent applications are prosecuted and also affect patent litigation. Under the Leahy-Smith Act, the United States transitioned in March 2013 to a “first to file” system in which the first inventor to file a patent application will be entitled to the patent. Third parties are allowed to submit prior art before the issuance of a patent by the USPTO, and may become involved in opposition, derivation, reexamination, inter partes review or interference proceedings challenging our patent rights or the patent rights of others. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, which could adversely affect our competitive position.

While we cannot predict with certainty the impact the Leahy-Smith Act or any potential future changes to the U.S. or foreign patent systems will have on the operation of our business, the Leahy-Smith Act and such future changes could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, results of operations, financial condition and cash flows and future prospects.

We may not be able to protect our intellectual property rights throughout the world.

Filing, prosecuting, and defending patents for product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States and in some cases may even force us to grant a compulsory license to competitors or other third parties. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our products, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, particularly those relating to biopharmaceuticals, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

In addition, our ability to protect and enforce our intellectual property rights may be adversely affected by unforeseen changes in domestic and foreign intellectual property laws.

If we are unable to keep our trade secrets confidential, our technologies and other proprietary information may be used by others to compete against us.

In addition to our reliance on patents, we attempt to protect our proprietary technologies and processes by relying on trade secret laws and agreements with our employees and other persons who have access to our proprietary information. These agreements and arrangements may not provide meaningful protection for our proprietary technologies and processes in the event of unauthorized use or disclosure of such information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, our competitors may independently develop substantially equivalent technologies and processes or gain access to our trade secrets or technology, either of which could materially or adversely affect our competitive position.

Risks Related to the Ownership of Our Common Stock

The market price of our common stock has been, and is likely to continue to be, highly volatile, and investors may lose all or a substantial portion of their investment.

The market price of our common stock has experienced significant volatility and may continue to fluctuate substantially in response to numerous factors, many of which are beyond our control. As a result, investors may be unable to sell their shares at or above the price at which they purchased them. Factors that may affect the market price of our common stock include, among others:

• results, timing or delays relating to our research, preclinical studies, clinical trials and product development programs, including candidate selection, IND-enabling activities and regulatory submissions;
• results of preclinical studies or clinical trials of products being developed by our competitors and other developments affecting the competitive landscape for our product candidates;
• regulatory developments, including interactions with the FDA and other regulatory authorities and the receipt, delay, limitation or denial of regulatory approvals;
• announcements regarding our product candidates, research programs, technological developments or intellectual property;
• developments relating to our collaborations, licensing arrangements and other strategic transactions, including the achievement or failure to achieve research, development, regulatory or commercial milestones, receipt or nonreceipt of milestone payments, royalties or other payments, or the modification or termination of such arrangements;
• our ability to obtain financing when needed and the terms of any equity, debt or other financing transactions;
• issuances or sales of our common stock or securities convertible into or exercisable for our common stock, or the perception that such issuances or sales may occur;
• actual or anticipated fluctuations in our revenues, operating expenses, cash resources, cash requirements or other financial results;
• developments concerning our patents, proprietary rights or those of our competitors;
• announcements of acquisitions, collaborations, licensing transactions or other strategic transactions by us, our collaborators or our competitors;
• changes in laws, regulations, healthcare policies, pharmaceutical pricing, coverage or reimbursement;
• changes in estimates, recommendations or coverage by securities analysts, or the absence of analyst coverage;
• changes in our listing status or compliance with the continued listing requirements of the securities exchange on which our common stock is traded;
• trading volume, liquidity and other market conditions affecting our common stock;
• general economic, political, geopolitical and financial market conditions, including conditions affecting the biotechnology industry; and
• the other factors described in this “Risk Factors” section.

Many of these factors are beyond our control. Because we are a biopharmaceutical company with product candidates in development, our operating results and market valuation may be particularly sensitive to announcements concerning our development programs, regulatory matters, financing activities and competitive developments. Our results may also fluctuate significantly from period to period, including as a result of the timing and recognition of payments under collaboration and licensing arrangements, and period-to-period comparisons may not be indicative of future performance.

For the 12-month period ended June 30, 2026, the market price of our common stock was highly volatile, ranging from a high of $31.00 per share to a low of $5.00 per share. The stock market generally, and the market for biotechnology and other life sciences companies in particular, has experienced significant price and trading-volume fluctuations that have often been unrelated or disproportionate to the operating performance of individual companies. Broad market and industry factors, as well as changes in investor sentiment toward biotechnology companies, could materially reduce the market price of our common stock regardless of our operating performance. The market price of our common stock may therefore continue to be highly volatile, and investors could lose all or a substantial portion of their investment.

If we fail to maintain effective internal control over financial reporting and effective disclosure controls and procedures, our ability to produce accurate and timely financial statements or comply with applicable reporting requirements could be impaired, which could adversely affect our business and the market price of our common stock.

As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) and applicable rules and regulations of the SEC and the securities exchange on which our common stock is listed. These requirements include maintaining effective disclosure controls and procedures and internal control over financial reporting. Designing, implementing, maintaining and evaluating these controls requires significant management attention and financial and other resources.

Our internal control over financial reporting may not prevent or detect all errors or misstatements on a timely basis, and we may identify deficiencies in our internal controls in the future. If we identify a material weakness or are otherwise unable to maintain effective internal control over financial reporting or disclosure controls and procedures, we may be unable to prepare accurate financial statements or file our periodic reports with the SEC on a timely basis. We could also be required to expend significant resources to remediate any deficiencies or material weaknesses.

If we are unable to comply with applicable financial reporting and disclosure requirements, we could become subject to regulatory scrutiny, investigations or sanctions by the SEC or the securities exchange on which our common stock is listed, become ineligible to use certain short-form registration statements or otherwise experience limitations on our ability to access the capital markets. In addition, investors could lose confidence in our financial reporting, which could adversely affect the market price and liquidity of our common stock. Any of these events could materially and adversely affect our business, financial condition and results of operations.

If securities or industry analysts do not publish research or publish unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our common stock may be influenced by research and reports that securities or industry analysts publish about us, our business, our product candidates or our industry. We do not control whether analysts cover our company or the content, opinions, estimates or recommendations included in their reports. As a smaller biotechnology company, we may have limited analyst coverage, and analysts currently covering us may discontinue coverage at any time.

If one or more analysts downgrade our common stock, issue unfavorable commentary or research regarding us or our product candidates, lower their estimates or price targets, or publish views that differ materially from investor expectations, the market price of our common stock could decline. In addition, if analysts do not initiate or maintain coverage of us, fail to publish reports on us regularly, or if we are unable to attract additional analyst coverage, investor interest in our common stock could decrease, which could adversely affect the market price, trading volume and liquidity of our common stock.

Holders of our Series A Preferred Stock and Series D Preferred Stock may have interests different from our common stockholders.

We are permitted under our certificate of incorporation to issue up to 10,000,000 shares of preferred stock. We can issue shares of our preferred stock in one or more series and can set the terms of the preferred stock without seeking any further approval from our common stockholders. As of September 25, 2026, there are 4,030 shares of Series A Preferred Stock outstanding, convertible into an aggregate of 1,534 shares of common stock, and 3,400 shares of Series D Preferred Stock outstanding, convertible into an aggregate of 61,816 shares of common stock. Each share of Series A Preferred Stock and Series D Preferred Stock is convertible into common stock at any time, at the option of the holder, and such conversion could dilute the value of our common stock to current stockholders and could adversely affect the market price of our common stock. 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 and 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. 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 the Company 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 Preferred Stock and Series D Preferred Stock 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.

Because we do not anticipate paying any cash dividends on our common stock in the foreseeable future, capital appreciation, if any, will be our stockholders’ sole source of gains.

We do not anticipate paying any cash dividends in the foreseeable future and intend to retain future earnings, if any, for the development and expansion of our business. Our outstanding Series A Preferred Stock, consisting of 4,030 shares on September 25, 2026, 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. In addition, the terms of existing or future agreements may limit our ability to pay dividends. As a result, capital appreciation, if any, of our common stock will be our stockholders’ sole source of gain for the foreseeable future.

Anti-takeover provisions of Delaware law and our charter documents may make potential acquisitions more difficult and could result in the entrenchment of management.

We are incorporated in Delaware. Anti-takeover provisions of Delaware law and our charter documents may make a change in control or efforts to remove management more difficult. Also, under Delaware law, our board of directors may adopt additional anti-takeover measures. Under Section 203 of the Delaware General Corporation Law, a corporation may not engage in a business combination with an “interested stockholder” for a period of three years after the date of the transaction in which the person first becomes an “interested stockholder,” unless the business combination is approved in a prescribed manner.

We are authorized to issue up to 300,000,000 shares of common stock. To the extent that we sell or otherwise issue authorized but currently unissued shares, this could have the effect of making it more difficult for a third party to acquire a majority of our outstanding voting stock.

Our charter authorizes us to issue up to 10,000,000 shares of preferred stock and to determine the terms of those shares of stock without any further action by our stockholders. If we exercise this right, it could be more difficult for a third party to acquire a majority of our outstanding voting stock.

In addition, our equity incentive plans generally permit us to accelerate the vesting of options and other stock rights granted under these plans in the event of a change of control. If we accelerate the vesting of options or other stock rights, this action could make an acquisition more costly.

The application of these provisions could have the effect of delaying or preventing a change of control, which could adversely affect the market price of our common stock.

We are a smaller reporting company and the reduced disclosure requirements applicable to smaller reporting companies may make our common stock less attractive to investors.

We are currently a “smaller reporting company” as defined under the Securities Exchange Act of 1934, as amended, and are therefore permitted to take advantage of certain reduced disclosure requirements applicable to smaller reporting companies, including reduced executive compensation disclosure and certain other scaled disclosure requirements in our SEC filings.

We cannot predict whether investors will find our common stock less attractive because we rely on these reduced disclosure requirements. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, the market price of our common stock may be more volatile, and our ability to raise capital could be adversely affected.

As of September 25, 2026, there were 8,763,962 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 and delivery of restricted stock units.

As of September 25, 2026, approximately 180 holders of our outstanding dilutive securities had the right to acquire the following amounts of underlying common stock:

• 1,534 shares issuable on the conversion of our immediately convertible Series A Preferred Stock, subject to adjustment, for no further consideration;
• 61,816 shares issuable on the conversion of our immediately convertible Series D Preferred Stock, subject to adjustment, for no further consideration;
• 202,484 shares issuable upon exercise of stock options with a weighted-average exercise price of $63.53 per share;
• 95,446 shares issuable under restricted stock units which will vest on dates between December 9, 2026 and December 9, 2029, subject to the fulfillment of service or performance conditions;
• 5,408 shares of common stock which have vested under restricted stock unit agreements, but are subject to provisions to delay delivery;
• 2,136,000 shares of common stock issuable upon exercise of pre-funded warrants issued in the Company’s November 2025 Offering, with a nominal exercise price of $0.0001 per share until exercised in full and which may not be exercised to the extent such exercise would cause the holder to beneficially own more than 4.99% or 9.99%, as applicable, of the Company’s outstanding common stock;
• 37,712 shares of common stock issuable upon exercise of Series B warrants at an exercise price of $94.00 per share. 5,228 Series B warrants expire on June 24, 2029, and 32,484 Series B warrants expire on July 25, 2030, the five-year anniversary from the date of stockholder approval;
• 36,630 shares of common stock issuable upon exercise of common warrants at an exercise price of $273.00 per share, which expires on February 1, 2028;
• 1,831 shares of common stock issuable upon exercise of the placement agent warrants issued to the placement agent or its designees as compensation in connection with the Company’s February 1, 2024, offering, with an exercise price of $10.00 per share, which expires on February 1, 2028;
• 1,818 shares of common stock are issuable upon exercise of the placement agent warrants issued to the placement agent or its designees as compensation in connection with the Company’s October 2022 offering, with an exercise price of $10.00 per share, which expires on October 31, 2027;
• 78,153 shares of common stock issuable upon exercise of Series C warrants issued in the Company’s December 2024 Offering, with an exercise price of $43.75 per share, which expires on December 17, 2029;
• 2,358 shares of common stock issuable upon exercise of the placement agent warrants issued to the placement agent or its designees as compensation in connection with the October 2023 Offering, with an exercise price of $10.00 per share, which expire on October 20, 2028;
• 39,076 shares of common stock issuable upon exercise of Series D warrants issued in the Company’s December 2024 Offering, with an exercise price of $43.75 per share, which expires on July 25, 2030, the five-year anniversary from the date of stockholder approval;
• 93,760 shares of common stock issuable upon exercise of Series E warrants issued in the Company’s February 2025 Offering, with an exercise price of $50.00 per share, which expires on August 12, 2030;
• 129,613 shares of common stock issuable upon exercise of Series F warrants issued in the Company’s May 2025 Offering, with an exercise price of $15.00 per share, which expires on May 8, 2030;
• 64,387 shares of common stock are issuable upon exercise of Series G warrants issued in the Company’s May 2025 Offering, with an exercise price of $7.50 per share, which expire on the earlier of the 31st calendar day following the date the Company receives the U.S. Food and Drug Administration acceptance of the Company’s investigational new drug for an in-house obesity treatment compound (long-acting peptide or oral small molecule), provided that, if such date is not a trading day, the termination date shall be immediately following the trading day or May 8, 2027;
• 50,593 shares of common stock are issuable upon exercise of Series H warrants, which are only issued upon exercise of Series G warrants, with an exercise price of $11.25 per share, which expire 24 months from the date of issuance;
• 123,636 shares of common stock are issuable upon exercise of Series I warrants issued in the Company’s June 2025 Series D Convertible Preferred Stock Offering, with an exercise price of $5.50 per share, which expires on July 25, 2030, the five-year anniversary from the date of stockholder approval;
• 2,765,400 shares of common stock are issuable upon exercise of Series J warrants issued in the Company’s November 2025 Offering, with an exercise price of $6.50 per share. Expires the earlier of (i) the 18-month anniversary of the Initial Exercise Date if FDA IND acceptance has not been received, or (ii) 31 days after notice of FDA IND acceptance of the Company’s investigational new drug for an in-house obesity treatment compound (long-acting peptide or oral small molecule), in each case adjusted to the next Trading Day; provided that under clause (ii) the date is extended until a registration statement and prospectus are available for 30 consecutive days;
• 2,770,400 shares of common stock are issuable upon exercise of Series K warrants issued in the Company’s November 2025 Offering, with an exercise price of $8.125 per share. Expire on the 5-year anniversary of the Initial Exercise Date, or, if the Holder’s Series J Common Stock Purchase Warrant terminates pursuant to clause (ii) thereof prior to full cash exercise, the same Termination Date as the Series J Warrant, in each case adjusted to the next Trading Day; provided that the date is extended until a registration statement and prospectus are available for 30 consecutive days following notice of FDA IND acceptance;
• 55,907 shares of common stock are issuable upon exercise of the placement agent warrants issued to the placement agent or its designees as compensation in connection with the November 2025 Offering, with an exercise price of $8.125, which expires on November 12, 2030;
• 10,000 shares of common stock issuable upon exercise of settlement warrants issued pursuant to a settlement and release agreement with H.C. Wainwright & Co., LLC, with an exercise price of $10.00 per share, which expires on January 12, 2028; and
• 79,997 shares of common stock available for future issuance under our 2011 Stock Incentive Plan.

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 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.

If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock could be delisted, which could adversely affect the market price and liquidity of our common stock and our ability to raise capital.

Our common stock is currently listed on the Nasdaq Capital Market (“Nasdaq”) under the symbol “PTN.” To maintain our listing on Nasdaq, we must satisfy applicable continued listing requirements, including requirements relating to, among other things, the market price of our common stock, stockholders’ equity, market value of publicly held shares, number of publicly held shares, number of stockholders and corporate governance.

Our common stock was delisted from NYSE American in 2025. On May 7, 2025, NYSE American suspended trading in our common stock after NYSE Regulation determined that we were no longer suitable for listing under Section 1003(f)(v) of the NYSE American Company Guide, and from May 8, 2025, until November 11, 2025, our common stock was quoted only on the OTC Pink and OTCQB markets. To regain compliance, we effected a 1-for-50 reverse stock split effective August 8, 2025, and our common stock resumed trading on NYSE American on November 12, 2025. On May 29, 2026, we voluntarily transferred the listing of our common stock to the Nasdaq Capital Market, which requires, among other things, a minimum bid price of $1.00 per share, stockholders’ equity of at least $2.5 million and a minimum market value of publicly held shares. As of June 30, 2026, our stockholders’ equity was $6.7 million. There can be no assurance that we will continue to satisfy Nasdaq’s continued listing requirements. The market price of our common stock, our stockholders’ equity and other factors relevant to our continued listing may be affected by matters outside of our control.

If we fail to satisfy one or more of Nasdaq’s continued listing requirements, we may receive a deficiency notice and may be required to take actions to regain compliance. Such actions could include, among other things, seeking stockholder approval of or implementing a reverse stock split, raising additional capital or taking other actions that may be costly, disruptive to our business or dilutive to our stockholders. There can be no assurance that any actions we take would enable us to regain or maintain compliance with applicable listing requirements.

If our common stock were delisted from Nasdaq and was not eligible for listing on another national securities exchange, trading could occur in the over-the-counter market. A delisting could result in reduced liquidity and trading volume, increased volatility, limited availability of market quotations, reduced analyst and institutional investor interest and a reduced ability to raise capital on terms acceptable to us or at all. A delisting could also result in our common stock no longer qualifying as a “covered security” under the National Securities Markets Improvement Act of 1996, which could subject the offer and sale of our securities to additional state securities law requirements. Any of these consequences could materially and adversely affect the market price of our common stock and our ability to access the capital markets.

Risk Management and Strategy. We have established processes for identifying, assessing and managing material risks from cybersecurity threats as part of our overall risk management and technology management processes. These processes are designed to help protect our information systems, technology infrastructure, confidential and proprietary information and other technology assets from cybersecurity threats and are periodically reviewed and updated to address changes in technology, cybersecurity threats, our business operations and applicable regulatory requirements.

We engage third-party service providers to assist us in assessing, monitoring and managing cybersecurity risks and the effectiveness of our cybersecurity processes and controls. We and our third-party service providers utilize managed detection and response services to monitor our technology infrastructure and information systems for potential cybersecurity threats. We also provide cybersecurity awareness training to employees regarding cybersecurity threats and their responsibilities in identifying, preventing and responding to potential cybersecurity incidents.

Because we rely on third-party service providers, contractors, consultants, collaborators and other third parties in conducting our business, cybersecurity incidents affecting the information systems of such third parties could also adversely affect us. We seek to assess and manage cybersecurity risks associated with third-party service providers as appropriate based on the nature of the services provided and the information systems or data involved. However, our ability to monitor and control cybersecurity risks associated with third parties is limited, and there can be no assurance that cybersecurity measures implemented by us or our third parties will prevent or mitigate all cybersecurity threats or incidents.

During the last two fiscal years, we have not identified any cybersecurity threats or incidents that have materially affected, or are reasonably likely to materially affect, our business strategy, results of operations or financial condition. However, cybersecurity threats are evolving and becoming increasingly sophisticated, and we cannot eliminate all cybersecurity risk or provide assurance that we will not experience a material cybersecurity incident in the future or that we have not experienced an undetected cybersecurity incident. For additional information regarding cybersecurity risks, see Item 1A. “Risk Factors—Our internal computer systems, or those of our third-party contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product development programs.”

Governance. Our board of directors has overall responsibility for risk oversight, and the audit committee of our board of directors provides oversight of risks relating to cybersecurity and our technology management strategy. The audit committee receives periodic updates from management regarding cybersecurity matters, including the overall status of our cybersecurity risk management processes, significant cybersecurity threats and, as applicable, cybersecurity incidents.

Management’s role. Our Executive Vice President, Chief Financial Officer and Chief Operating Officer, Stephen T. Wills, is the member of management responsible for assessing and managing material risks from cybersecurity threats and for implementing and maintaining our cybersecurity risk management processes. Mr. Wills does not have formal training in information security. His relevant experience consists of nearly 30 years as our Chief Financial Officer, and 15 years as our Chief Operating Officer, with responsibility for our financial reporting systems, disclosure controls and procedures and internal control over financial reporting and for the selection and oversight of the third-party providers on which we rely for information technology and cybersecurity. Management, including Mr. Wills, works with our third-party information technology and cybersecurity service providers in monitoring our information systems, evaluating cybersecurity threats and responding to cybersecurity incidents. Material cybersecurity matters, if identified, are reported to the audit committee and, as appropriate, the board of directors.

Our corporate offices are located at 301 Carnegie Center Drive, Suite 304, Princeton, New Jersey, where we lease office space under an agreement that expires in January 2029, subject to renewal provisions. We also lease approximately 3,600 square feet of laboratory space in Monmouth Junction, Township of South Brunswick, New Jersey, under a lease that expires in January 2030. Our corporate offices are used primarily for administrative and business activities, and our laboratory facility supports our research and development activities. We do not own any real property. We believe that our existing facilities are adequate for our current needs.

From time to time, we may become involved in claims and legal proceedings arising in the ordinary course of our business. We are not currently a party to any legal proceedings that we believe are material to our business, financial condition or results of operations.

The following discussion and analysis should be read in conjunction with the consolidated financial statements and notes to the consolidated financial statements filed as part of this Annual Report.

Forward-Looking Statements. The following discussion and analysis contains forward-looking statements within the meaning of the federal securities laws. You are urged to carefully review our description and examples of forward-looking statements included earlier in this Annual Report on Form 10-K (this “Annual Report”) immediately prior to Part I, under the heading “Special Note Regarding Forward-Looking Statements.” Forward-looking statements are subject to risk that could cause actual results to differ materially from those expressed in the forward-looking statements. You are urged to carefully review the disclosures we make concerning risks and other factors that may affect our business and operating results, including those made in Part I, Item 1A of this Annual Report, and any of those made in our other reports filed with the SEC. You are cautioned not to place undue reliance on the forward-looking statements included herein, which speak only as of the date of this document. We do not intend, and undertake no obligation, to publish revised forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events.

Introduction. Palatin Technologies, Inc. is a biopharmaceutical company developing first-in-class medicines based on molecules that modulate the activity of the melanocortin receptor system. The Company’s product candidates are targeted, receptor-specific therapeutics for the treatment of diseases with significant unmet medical need and commercial potential.

The melanocortin receptor system is involved in the regulation of food intake, metabolism, sexual function, inflammation and immune responses. There are five melanocortin receptors, MC1R through MC5R. Modulation of these receptors through receptor-specific agonists, which activate receptor function, or receptor-specific antagonists, which inhibit receptor function, can produce significant pharmacological effects.

Our principal strategic development focus is the advancement of MC4R agonists for the treatment of obesity, with an emphasis on rare neuroendocrine and other MC4R pathway diseases. We are developing selective MC4R long-acting peptide agonists and oral small-molecule agonists with potential utility in hypothalamic obesity, Prader-Willi syndrome, Bardet-Biedl syndrome and other rare obesity and orphan indications.

We are also developing, subject to the availability of resources, melanocortin receptor agonists with potential utility in ocular diseases and inflammatory and autoimmune diseases, including uveitis and inflammatory bowel disease. A product candidate targeting MC1R for the treatment of dry eye disease, also known as keratoconjunctivitis sicca, has been licensed to a third party, and a family of melanocortin receptor compounds for the treatment of retinal diseases has been licensed to Boehringer Ingelheim. We believe that certain melanocortin receptor agonist peptides in development may have anti-inflammatory effects through mechanisms involved in the endogenous melanocortin system’s regulation of immune responses and resolution of inflammation.

Our prior commercial product, Vyleesi® (bremelanotide injection), was approved by the U.S. Food and Drug Administration (“FDA”) in June 2019 for the treatment of hypoactive sexual desire disorder (“HSDD”) in premenopausal women. Vyleesi was initially licensed to AMAG Pharmaceuticals, Inc. in January 2017. That license was terminated in July 2020, and the Vyleesi assets were subsequently sold to Cosette Pharmaceuticals, Inc. (“Cosette”) in December 2023.

Critical Accounting Policies and Estimates

Our significant accounting policies are described in Note 2 to the consolidated financial statements included in this Annual Report. We believe that our accounting policies and estimates relating to revenue recognition, the carrying value of, accrued expenses and stock-based compensation are the most critical.

Revenue Recognition. For licenses of intellectual property, we assess 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 non-refundable, 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. We determine if the bundled performance obligation is satisfied over time or at a point in time. If we conclude that the non-refundable, upfront license fees will be recognized over time, we assess the appropriate method of measuring proportional performance.

Research, development and regulatory milestone payments are considered variable consideration subject to constraint and excluded from the transaction price until it is probable that a significant reversal would not occur. At each reporting period, we will assess whether there still is significant uncertainty associated with the variable consideration and revenue relating to the milestones recorded in the period where the significant uncertainty is resolved.

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.

We recognize revenue for research and development services under customer agreements as the services are performed. We record these services as revenue and not as a reduction of research and development expenses as we are the principal in the research and development activities based upon its control of such activities, which are part of our ordinary activities.

Accrued Expenses. Third parties perform a significant portion of our development activities. We review the activities performed under all contracts each quarter and accrue expenses and the amount of any reimbursement to be received from our collaborators based upon the estimated amount of work completed considering milestones achieved. Estimating the value or stage of completion of certain services requires judgment based on available information. If we do not identify services performed for us but not billed by the service-provider, or if we underestimate or overestimate the value of services performed as of a given date, reported expenses will be understated or overstated.

Stock-Based Compensation. We expense the fair value of stock options and other equity awards granted to employees and nonemployees for services. Compensation costs for stock-based awards with time-based vesting are determined using the quoted market price of our common stock on the grant date 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 and are recognized over the derived service period. Compensation costs for awards containing a performance condition are determined using the quoted price of our common stock on the grant date or for stock options, the value is 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. The Black-Scholes option pricing model requires us to make estimates of expected volatility and interest rates, which we estimate based on prior experience and public sources of information. The expected term of the option used is based upon the simplified method, which represents the average of the vesting and contractual term. Compensation expense is not adjusted for subsequent changes in the estimates used to calculate fair value or for actual experience. Forfeitures are recognized as they occur. As the amount and timing of compensation expense to be recorded in future periods may be affected by the achievement of performance conditions and employee terminations, stock-based compensation may vary significantly period to period.

See Note 3 to the consolidated financial statements included in this Annual Report for a description of recent accounting pronouncements that affect us.

Results of Operations

Year Ended June 30, 2026 Compared to the Year Ended June 30, 2025:

Revenue. For the year ended June 30, 2026 (“fiscal 2026”), we recognized $13,185,031 in collaboration and license revenue which consisted of $9,433,909 related to the Boehringer Ingelheim Agreement and $3,751,122 related to the Altanispac Agreement. We did not recognize revenue for the fiscal year ended June 30, 2025 (“fiscal 2025”).

Research and Development. Total research and development expenses, including general research and development spending, were $12,368,873 for fiscal 2026, compared to $14,898,494 for fiscal 2025. The decrease is a result of lower spending on our MC4R programs.

Research and development expenses related to our MC4R programs and other preclinical programs were $6,066,487 for fiscal 2026, compared to $8,548,616 for fiscal 2025. The decrease is primarily related to a decrease in spending on our MC4R programs.

The amounts of program spending above exclude general research and development spending, which amounted to $6,302,386 for fiscal 2026 compared to $6,349,878 for fiscal 2025. The decrease in general research and development spending is primarily attributable to decreased compensation costs.

Cumulative spending from inception to June 30, 2026 was approximately $572,400,000 on our MC4r programs (which include Obesity, Vyleesi, Ulcerative Colitis and Ocular), and other melanocortin receptor agonists and terminated programs). Due to various risk factors described herein under “Risk Factors,” including the difficulty in currently estimating the costs and timing of future Phase 1 clinical trials and larger-scale Phase 2 and Phase 3 clinical trials for any product under development, we cannot predict with reasonable certainty when, if ever, a program will advance to the next stage of development or be successfully completed, or when, if ever, related net cash inflows will be generated.

General and Administrative. General and administrative expenses, which consist of costs related to Vyleesi in addition to compensation and related costs, were $9,484,446 for fiscal 2026, compared to $7,809,345 for fiscal 2025. The increase is primarily attributable to an increase in consulting fees.

Gain on Purchase Commitment. Gain on purchase commitments was $2,117,900 for fiscal 2025 as a result of an amendment to the minimum purchase commitment that was previously reserved under the Catalent and Ypsomed agreements.

Gain on Sale of Vyleesi. For fiscal 2025, we recorded a gain of $3,130,000 on the sale of Vyleesi as a result of the settlement of sales-based milestone payments and certain purchase commitments.

Other Income (Expense). Total other income (expense), net was $290,393 for fiscal 2026, compared to $152,590 for fiscal 2025. For fiscal 2026, we recognized investment income of $297,119 offset by interest expense of $6,726. For fiscal 2025, we recognized investment income of $167,665 offset by foreign currency transaction losses of $50 and interest expense of $15,025.

Effects of Inflation. We do not believe that inflation has had a material impact on our business, revenues or operating results during the periods presented.

Liquidity and Capital Resources

Since inception, we have generally incurred net operating losses, primarily related to spending on our research and development programs. We have financed our net operating losses primarily through debt and equity financings and amounts received under collaborative and license agreements.

Our product candidates are at various stages of development and will require significant further research, development, and testing and some may never be successfully developed or commercialized. We may experience uncertainties, delays, difficulties, and expenses commonly experienced by early-stage biopharmaceutical companies, which may include unanticipated problems and additional costs relating to:

• the development and testing of products in animals and humans;
• dependence on third party contractors and collaborators for part of our research and development;
• ability to attract and retain experienced personnel;
• product approval or clearance;
• regulatory compliance;
• good manufacturing practices (“GMP”) compliance;
• intellectual property rights;
• product introduction;
• marketing, sales, and competition; and
• obtaining sufficient capital.

Failure to enter into or successfully perform under collaboration agreements and obtain timely regulatory approval for our product candidates and indications would impact our ability to generate revenues and could make it more difficult to attract investment capital for funding our operations. Any of these possibilities could materially and adversely affect our operations and require us to curtail or cease certain programs.

During fiscal 2026, net cash used in operating activities was $13,533,270 compared to net cash used in operating activities of $21,306,637 in fiscal 2025. The decrease in cash used in operations in fiscal 2026 compared with fiscal 2025 was a result of a lower net loss in fiscal 2026 due to an increase in license and collaboration revenue from the BI and Altanispac agreements.

During fiscal 2026, net cash used in investing activities was $51,299 related to the purchases of property and equipment. During fiscal 2025, net cash provided by investing activities was $3,130,000 related to proceeds from the sale of Vyleesi.

During fiscal 2026, net cash provided by financing activities was $18,512,318 which consisted of proceeds from the sale of common stock and warrants, net of issuance costs, of $16,910,891 and the exercise of outstanding warrants of $1,620,941 offset by payment of withholding taxes related to restricted stock units of $19,514. During fiscal 2025, net cash provided by financing activities was $11,213,506 which consisted of proceeds from the sale of common stock and warrants, net of issuance costs, of $7,960,765 and the exercise of outstanding warrants of $3,398,237 offset by payment of withholding taxes related to restricted stock units of $99,482, and payment of finance lease obligations of $46,014.

We had a net loss for fiscal 2026 of $8,377,895. We may not attain profitability in future years, which is dependent on numerous factors, including, but not limited to whether and when development and sales milestones are met, regulatory actions by the FDA and other regulatory bodies, the performance of our licensees, and market acceptance of our products.

We expect to incur significant expenses as we continue to develop our MCR product candidates. These expenses, among other things, have had and will continue to have an adverse effect on our stockholders’ equity, total assets, and working capital.

We have incurred cumulative negative cash flows from operations since our inception, and have expended, and expect to continue to expend in the future, substantial funds to complete our planned product development efforts. Continued operations are dependent upon existing licenses, including royalties and milestones, to complete equity or debt financing activities and enter into additional licensing or collaboration arrangements. As of June 30, 2026, our cash and cash equivalents were $7,492,014 with current liabilities of $1,771,973.

Our obligations include aggregate lease obligations of $158,263 for the year ending June 30, 2027, and $65,416 for the year ending June 30, 2028.

We intend to utilize existing capital resources for general corporate purposes and working capital, including preclinical and clinical development of our MC1R and MC4R programs, and development of other portfolio products.

Based on our cash and cash equivalents of approximately $7.5 million as of June 30, 2026, and our current operating and development plans, including our ability to reduce or delay certain expenditures within management’s control, we do not expect our existing cash and cash equivalents to be sufficient to fund our operations for at least twelve months following the issuance of these financial statements.

We will require additional financing to continue advancing our development programs and fund our operations. Although we intend to pursue additional capital through equity financings, collaboration arrangements and other potential sources, there can be no assurance that financing will be available when needed or on acceptable terms. Accordingly, substantial doubt exists about our ability to continue as a going concern.

Cash Requirements. Our material cash requirements as of June 30, 2026, primarily consist of research and development expenditures associated with our MC4R programs; compensation and employee benefits; general and administrative expenses; and contractual obligations, including operating lease payments.

Our planned research and development activities include IND-enabling studies, manufacturing of clinical supplies and initiation of a Phase 1 clinical study for our long-acting MC4R peptide program, as well as continued advancement of our oral small-molecule MC4R program. The timing and amount of these expenditures will depend on several factors, including the availability of financing, the results of ongoing preclinical studies, regulatory requirements, manufacturing activities, clinical development decisions and our ability to manage or defer certain expenditures. Accordingly, actual research and development expenditures may differ materially from our current plans.

We also incur costs associated with research and development services performed under our collaboration agreement with Boehringer Ingelheim, for which we are entitled to reimbursement in accordance with the agreement.

We expect to fund our cash requirements through existing cash and cash equivalents, reimbursements under our collaboration agreements and additional financing, including potential equity financings. The timing and availability of additional financing are uncertain, and there can be no assurance that sufficient capital will be available on acceptable terms, or at all. If additional financing is not available when needed, we may be required to delay, reduce or discontinue certain development activities or implement additional cost-reduction measures.

Known Trends and Uncertainties. We currently have no product revenue and do not expect to generate product revenue unless and until one or more of our product candidates receives regulatory approval and is successfully commercialized.

All revenue recognized during fiscal 2026 was derived from our collaboration and licensing arrangements, consisting of $9,433,909 under the Boehringer Ingelheim Agreement and $3,751,122 under the Altanispac Agreement. The revenue recognized under the Altanispac Agreement included non-cash consideration associated with the cancellation of certain obligations. We expect that any revenue recognized in the near term will continue to depend primarily on our collaboration and licensing arrangements.

Boehringer Ingelheim is responsible for advancing the licensed retinal disease program, and Altanispac is responsible for the development and commercialization of PL9643 for dry eye disease. We do not control their development or commercialization decisions or the timing or amount of potential milestone payments or royalties. Accordingly, the timing and amount of future revenue from these arrangements are uncertain and may fluctuate significantly between reporting periods.

Our future operating expenditures will be driven primarily by the advancement of our MC4R development programs. The timing and amount of these expenditures will depend on available capital, preclinical and clinical results, regulatory requirements, manufacturing activities and other development considerations. We may adjust the timing and scope of our development activities in response to these factors.

Our common stock is listed on The Nasdaq Capital Market, and we must continue to satisfy applicable listing requirements. Failure to maintain compliance with these requirements could result in the delisting of our common stock, adversely affecting its liquidity, market price and our ability to raise additional capital.

Our management carried out an evaluation, with the participation of our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based upon this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of June 30, 2026, our disclosure controls and procedures were effective.

A control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Management’s Report on Internal Control Over Financial Reporting.

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) or 15d-15(f) of the Exchange Act. Our internal control system was designed to provide reasonable assurance to management and the board of directors regarding the preparation and fair presentation of published financial statements.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Management assessed the effectiveness of our internal control over financial reporting as of June 30, 2026. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework as adopted in 2013. Based on its assessment, management believes that, as of June 30, 2026, our internal control over financial reporting is effective based on those criteria.

Changes in Internal Control Over Financial Reporting. There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) under the Exchange Act that occurred during the fiscal quarter ended June 30, 2026, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.