Palatin Technologies, Inc., a biopharmaceutical company developing targeted, receptor-specific peptide therapeutics for the treatment of diseases with significant unmet medical need and commercial potential, announced that it has closed on a private placement of 2,050,000 shares of its common stock and Series C warrants to purchase 24,949,325 shares of its common stock. Funds under the management of QVT Financial LP invested $10 million and another accredited investment fund also invested $10 million. The funds paid $0.75 for each share of common stock and $0.74 for each Series C warrant, resulting in gross proceeds to Palatin of $20 million, with net proceeds, after deducting estimated offering expenses, of approximately $18.6 million.
Palatin also announced the closing of a $10 million venture loan led by Horizon Technology Finance Corporation. The debt facility, which includes an interest-only payment period for the first eighteen months, is a four year senior secured term loan that bears interest at a floating coupon rate of one-month LIBOR (floor of 0.50%) plus 8.50%. The lenders also received Series D warrants to purchase 666,666 shares of Palatin's common stock.
"We believe this combination of equity and debt satisfies our funding needs at an attractive cost of capital," said Stephen T. Wills, Chief Financial Officer and Chief Operating Officer of Palatin. "With these transactions, we have sufficient funding to achieve a number of key milestones in calendar years 2015 and 2016."
Palatin intends to use the proceeds from the financings for general corporate purposes and working capital, including its bremelanotide phase 3 clinical trial program for female sexual dysfunction, preclinical and clinical development of its melanocortin receptor-1 peptide program, PL-3994 natriuretic peptide advancement, and development of other portfolio products.
The Series C warrants are exercisable at an initial exercise price of $0.01 per share, exercisable immediately upon issuance and expire on the tenth anniversary of the date of issuance. The Series C warrants are subject to limitation on exercise if QVT and its affiliates would beneficially own more than 9.99% (4.99% for the other accredited investment fund holder) of the total number of Palatin's shares of common stock following such exercise.
The Series D warrants are exercisable at an initial exercise price of $0.75 per share, exercisable immediately upon issuance and expire on the fifth anniversary of the date of issuance. The securities offered and to be sold by Palatin in the private placement have not been registered under the Securities Act of 1933, as amended, or state securities laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission ("SEC") or an applicable exemption from registration requirements. Palatin has agreed to file a registration statement with the SEC covering the resale of the shares of common stock issued in the private placement and issuable upon exercise of the Series C warrants.
Palatin Technologies, Inc. is a biopharmaceutical company developing targeted, receptor-specific peptide 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 in order to maximize their commercial potential.
Horizon Technology Finance Corporation is a leading specialty finance company that provides capital in the form of secured loans to venture capital backed companies in the technology, life science, healthcare information and services, and cleantech industries. The investment objective of Horizon is to maximize total returns by generating current income from a portfolio of directly originated secured loans as well as capital appreciation from warrants that it receives when making such loans. Headquartered in Farmington, Connecticut, Horizon has regional offices in Walnut Creek, California and Reston, Virginia.