Palatin (PTN) 10-Q 12 Feb 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Dec. 31, 2017	Feb. 09, 2018
Document And Entity Information
Entity Registrant Name	PALATIN TECHNOLOGIES INC
Entity Central Index Key	911,216
Document Type	10-Q
Document Period End Date	Dec. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		195,373,239
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,018

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($)	Dec. 31, 2017	Jun. 30, 2017
Current assets:
Cash and cash equivalents	$ 34,958,048	$ 40,200,324
Available-for-sale investments	0	249,837
Accounts receivable	0	15,116,822
Prepaid expenses and other current assets	1,288,504	1,011,221
Total current assets	36,246,552	56,578,204
Property and equipment, net	178,767	198,153
Other assets	556,916	56,916
Total assets	36,982,235	56,833,273
Current liabilities:
Accounts payable	703,767	1,551,367
Accrued expenses	5,527,776	10,521,098
Notes payable, net of discount and debt issuance costs	7,889,152	7,824,935
Capital lease obligations	0	14,324
Deferred revenue	9,548,228	35,050,572
Total current liabilities	23,668,923	54,962,296
Notes payable, net of discount and debt issuance costs	2,321,124	6,281,660
Deferred revenue	500,000	0
Other non-current liabilities	866,135	753,961
Total liabilities	27,356,182	61,997,917
Stockholders' equity (deficiency):
Preferred stock of $0.01 par value - authorized 10,000,000 shares: Series A Convertible: issued and outstanding 4,030 shares as of December 31, 2017 and June 30, 2017	40	40
Common stock of $0.01 par value - authorized 300,000,000 shares: issued and outstanding 195,373,239 shares as of December 31, 2017 and 160,515,361 shares as of June 30, 2017, respectively	1,953,732	1,605,153
Additional paid-in capital	350,787,078	349,974,538
Accumulated other comprehensive loss	0	(590)
Accumulated deficit	(343,114,797)	(356,743,785)
Total stockholders' equity (deficiency)	9,626,053	(5,164,644)
Total liabilities and stockholders' equity (deficiency)	$ 36,982,235	$ 56,833,273

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2017	Jun. 30, 2017
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, Series A Convertible, shares issued	4,030	4,030
Preferred stock, Series A Convertible, shares outstanding	4,030	4,030
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	195,373,239	160,515,361
Common stock, shares outstanding	195,373,239	160,515,361

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
REVENUES:
License and contract revenue	$ 10,612,153	$ 0	$ 37,553,661	$ 0
OPERATING EXPENSES:
Research and development	6,045,884	8,134,575	20,208,981	19,360,659
General and administrative	1,625,189	1,306,300	3,169,764	2,515,646
Total operating expenses	7,671,073	9,440,875	23,378,745	21,876,305
Income (Loss) from operations	2,941,080	(9,440,875)	14,174,916	(21,876,305)
OTHER INCOME (EXPENSE):
Interest income	81,356	5,991	133,082	12,636
Interest expense	(391,363)	(594,535)	(848,040)	(1,218,520)
Total other expense, net	(310,007)	(588,544)	(714,958)	(1,205,884)
Income (Loss) before income taxes	2,631,073	(10,029,419)	13,459,958	(23,082,189)
Income tax benefit, net	399,120	0	173,865	0
NET INCOME (LOSS)	$ 3,030,193	$ (10,029,419)	$ 13,633,823	$ (23,082,189)
Basic net income (loss) per common share	$ 0.02	$ (0.06)	$ 0.07	$ (0.13)
Diluted net income (loss) per common share	$ .01	$ (0.06)	$ 0.07	$ (0.13)
Weighted average number of common shares outstanding used in computing basic net income (loss) per common share	197,238,056	177,798,511	197,175,316	171,823,390
Weighted average number of common shares outstanding used in computing diluted net income (loss) per common share	202,711,616	177,798,511	200,430,824	171,823,390

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Consolidated Statements Of Comprehensive Loss
Net income (loss)	$ 3,030,193	$ (10,029,419)	$ 13,633,823	$ (23,082,189)
Other comprehensive income (loss):
Unrealized gain (loss) on available-for-sale investments	153	515	590	(62)
Total comprehensive income (loss)	$ 3,030,346	$ (10,028,904)	$ 13,634,413	$ (23,082,251)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ 13,633,823	$ (23,082,189)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	28,886	15,261
Non-cash interest expense	104,108	160,711
Stock-based compensation	1,041,900	853,241
Deferred income tax benefit	(500,000)	0
Changes in operating assets and liabilities:
Accounts receivable	15,116,822	0
Prepaid expenses and other assets	(277,283)	481,877
Accounts payable	(847,600)	3,992,124
Accrued expenses	(4,968,942)	(320,908)
Deferred revenue	(25,002,344)	0
Other non-current liabilities	112,174	168,358
Net cash provided by (used in) operating activities	(1,558,456)	(17,731,525)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from matured investments	250,000	0
Purchases of property and equipment	(9,500)	0
Net cash used in investing activities	240,500	0
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on capital lease obligations	(14,324)	(13,534)
Payment of withholding taxes related to restricted stock units	(24,380)	0
Payments on notes payable obligations	(4,000,000)	(2,000,000)
Proceeds from exercise of warrants	114,384	0
Proceeds from the sale of common stock and warrants, net of costs	0	23,856,972
Net cash (used in) provided by financing activities	(3,924,320)	21,843,438
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(5,242,276)	4,111,913
CASH AND CASH EQUIVALENTS, beginning of period	40,200,324	8,002,668
CASH AND CASH EQUIVALENTS, end of period	34,958,048	12,114,581
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	632,185	891,717
Unrealized gain (loss) on available-for-sale investments	590	(62)
Non-cash equity financing costs in accrued expenses	$ 0	$ 50,861

ORGANIZATION

ORGANIZATION	6 Months Ended
	Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION	Nature of Business The Company’s primary product in development is bremelanotide for the treatment of hypoactive sexual desire disorder (“HSDD”), which is a type of female sexual dysfunction (“FSD”). The Company also has drug candidates or development programs for cardiovascular diseases, including heart failure and fibrosis, and inflammatory diseases, including inflammatory bowel disease and ocular indications. Key elements of the Company’s business strategy include using its technology and expertise to develop and commercialize therapeutic products; entering into alliances and partnerships with pharmaceutical companies to facilitate the development, manufacture, marketing, sale and distribution of product candidates that the Company is developing; and partially funding its product candidate development programs with the cash flow generated from its relationships with third parties. Business Risk and Liquidity – On November 21, 2017, the Company entered into a license agreement with Kwangdong for exclusive rights to develop and commercialize bremelanotide in the Republic of Korea. (“License Agreement with Kwangdong”) (Note 7). As of December 31, 2017, the Company’s cash and cash equivalents were $34,958,048 and current liabilities were $14,120,695, net of deferred revenue of $9,548,228. The Company intends to utilize existing capital resources for general corporate purposes and working capital, including the preparation of and filing a New Drug Application (“NDA”) on bremelanotide for HSDD with the U.S. Food and Drug Administration (“FDA”), and preclinical and clinical development of the Company’s other product candidates and programs, including natriuretic peptide receptor and melanocortin receptor programs. Management believes that its existing capital resources will be sufficient to fund its planned operations through at least one year after the date that these financial statements are issued. The Company will need additional funding to complete required clinical trials for its other product candidates and, assuming those clinical trials are successful, as to which there can be no assurance, to complete submission of required applications to the FDA. If the Company is unable to obtain approval or otherwise advance in the FDA approval process, the Company’s ability to sustain its operations would be materially adversely affected. The Company may seek the additional capital necessary to fund its operations through public or private equity offerings, collaboration agreements, debt financings or licensing arrangements. Additional capital that is required by the Company may not be available on reasonable terms, or at all. Concentrations –

BASIS OF PRESENTATION

BASIS OF PRESENTATION	6 Months Ended
	Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BASIS OF PRESENTATION	The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnote disclosures required to be presented for complete financial statements. In the opinion of management, these consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) considered necessary for fair presentation. The results of operations for the three and six months ended December 31, 2017 may not necessarily be indicative of the results of operations expected for the full year. The accompanying consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2017, filed with the SEC, which includes consolidated financial statements as of June 30, 2017 and 2016 and for each of the fiscal years in the three-year period ended June 30, 2017.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Dec. 31, 2017
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Principles of Consolidation Use of Estimates Cash and Cash Equivalents Investments The fair value of substantially all securities is determined by quoted market prices. The estimated fair value of securities for which there are no quoted market prices is based on similar types of securities that are traded in the market. Fair Value of Financial Instruments Credit Risk Property and Equipment Impairment of Long-Lived Assets Revenue Recognition Revenue Recognition for Arrangements with Multiple Elements ● the delivered item has value to the customer on a stand-alone basis; and ● if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item is considered probable and substantially in control of the vendor. Under FASB ASC Topic 605-25, if both of the criteria above are not met, then separate accounting for the individual deliverables is not appropriate. The Company has determined that it is appropriate to recognize the consideration received under its License Agreement with AMAG as revenue using the input-based proportional method during the period of the Palatin Development Obligation as defined in the License Agreement with AMAG. Refer to Note 5 for additional information on this topic. Under its License Agreement with Fosun (Note 6), the Company received consideration in the form of an upfront license fee payment and determined that it was appropriate to recognize such consideration as revenue in the first quarter of 2018, which was the quarter in which the license was granted, since the license has stand-alone value and the upfront payment received by the Company is non-refundable. Under its License Agreement with Kwangdong (Note 7), the Company received consideration in the form of an upfront license fee payment and has currently determined that it is appropriate to record such consideration as non-current deferred revenue because the upfront payment received by the Company is subject to certain refund provisions. Revenue resulting from the achievement of development milestones is recorded in accordance with the accounting guidance for the milestone method of revenue recognition. Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred revenue on the Company’s consolidated balance sheet. Amounts expected to be recognized as revenue in the next 12 months following the balance sheet date are classified as current liabilities. Research and Development Costs Accrued Expenses – Stock-Based Compensation – Income Taxes Pursuant to the License Agreement with Fosun (Note 6) and the License Agreement with Kwangdong (Note 7), $500,000 and $82,500, respectively, was withheld in accordance with tax withholding requirements in China and the Republic of Korea, respectively, and will be recorded as an expense during the fiscal year ending June 30, 2018. For the three and six months ended December 31, 2017, the Company incurred $100,880 and $326,135, respectively, in income tax expense and the remaining balance of $256,365 was included in prepaid expenses and other current assets at December 31, 2017. Any potential credit to be received by the Company on its United States tax returns is currently offset by the Company’s valuation allowance. On December 22, 2017, the U.S. government enacted wide-ranging tax legislation, the Tax Cuts and Jobs Act (the "2017 Tax Act"). The 2017 Tax Act significantly revises U.S. tax law by, among other provisions, (a) lowering the applicable U.S. federal statutory corporate income tax rate from 35% to 21%, (b) eliminating or reducing certain income tax deductions, such as deductions for interest expense, executive compensation expenses and certain employee expenses, and (c) repealing the federal alternative minimum tax ("AMT") and providing for the refund of existing AMT credits. As a result of the 2017 tax Act, during the quarter ended December 31, 2017, the Company recorded a tax benefit of $500,000 related to the release of a valuation allowance against an AMT credit; accordingly $500,000 is included in Other long-term assets at December 31, 2017. In addition, as a result of the enactment of the new corporate income tax rate, the Company remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse and with the exception of the AMT credit, the Company continues to maintain a full valuation allowance against its net deferred tax assets. Net Income (Loss) per Common Share Earnings per Share The following table is a reconciliation of net income (loss) and the shares used in calculating basic and diluted net income (loss) per common share for the three and six months ended December 30, 2017 and 2016: Three Months Ended December 31, Six Months Ended December 31, 2017 2016 2017 2016 Net income (loss) $ 3,030,193 $ (10,029,419 ) $ 13,633,823 $ (23,082,189 ) Denominator: Weighted average common shares outstanding - Basic 197,238,056 177,798,511 197,175,316 171,823,390 Effect of dilutive shares: Common stock equivalents arising from stock options, warrants and conversion of preferred stock 3,525,013 - 1,792,803 - Restricted stock units 1,948,547 - 1,462,705 - Weighted average common shares outstanding - Diluted 202,711,616 177,798,511 200,430,824 171,823,390 Net income (loss) per common share: Basic $ 0.02 $ (0.06 ) $ 0.07 $ (0.13 ) Diluted $ 0.01 $ (0.06 ) $ 0.07 $ (0.13 ) For the three and six months ended December 31, 2017 and 2016, common shares issuable upon conversion of Series A Convertible Preferred Stock, the exercise of outstanding options and warrants (excluding the Series A 2012, Series B 2012, Series C 2014, Series E 2015 and Series I 2016 warrants issued in connection with the July 3, 2012, December 23, 2014, and July 2, 2015 private placement offerings and the August 4, 2016 underwritten offering as such warrants, to the extent not yet exercised, are already included in the weighted average number of common shares outstanding used in computing basic net income (loss) per common share since they are exercisable for nominal consideration), and the vesting of restricted stock units amounted to an aggregate of 46,966,803 and 57,174,473 shares, respectively, and are excluded from the weighted average number of common shares outstanding used in computing basic net income (loss) per common share. For the three and six months ended December 31, 2017, an additional 5,473,560 and 3,255,508 of common shares, respectively, have been included in the computation of diluted EPS using the treasury stock and if-converted methods. However, for the three and six months ended December 31, 2016, no additional common shares were added in the computation of diluted EPS because to do so would have been anti-dilutive.

NEW AND RECENTLY ADOPTED ACCOUN

NEW AND RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS	6 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
NEW AND RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS	In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments Credit Losses: Measurement of Credit Losses on Financial Instruments, In March 2016, the FASB issued ASU No. 2016-09, Compensation – Improvements to Employee Share-Based Payment Accounting In February 2016, the FASB issued ASU No. 2016-02, Leases In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments: Recognition and Measurement of Financial Assets and Financial Liabilities In November 2015, the FASB issued ASU No. 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes, In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers Identifying Performance Obligations and Licensing

AGREEMENT WITH AMAG

AGREEMENT WITH AMAG	6 Months Ended
	Dec. 31, 2017
Agreement With Amag
AGREEMENT WITH AMAG	On January 8, 2017, the Company entered into the License Agreement with AMAG. Under the terms of the License Agreement with AMAG, the Company granted to AMAG (i) an exclusive license in all countries of North America (the “Territory”), with the right to grant sub-licenses, to research, develop and commercialize products containing bremelanotide (each a “Product,” and collectively, “Products”), (ii) a non-exclusive license in the Territory, with the right to grant sub-licenses, to manufacture Products, and (iii) a non-exclusive license in all countries outside the Territory, with the right to grant sub-licenses, to research, develop and manufacture (but not commercialize) the Products. Following the satisfaction of certain conditions to closing, the License Agreement with AMAG became effective on February 2, 2017. On that date, AMAG paid the Company $60,000,000 as a one-time initial payment. Pursuant to the terms of and subject to the conditions in the License Agreement with AMAG, AMAG is required to reimburse the Company up to an aggregate amount of $25,000,000 for reasonable, documented, direct out-of-pocket expenses incurred by the Company following February 2, 2017, in connection with the development and regulatory activities necessary to file an NDA for bremelanotide for HSDD in the United States related to Palatin’s development obligations. The Company has determined there is no stand-alone value for the license, and that the license and the reimbursable direct out-of-pocket expenses, pursuant to the terms of the License Agreement with AMAG, represent a combined unit of accounting which totals $85,000,000. The Company is recognizing revenue of the combined unit of accounting over the arrangement using the input-based proportional method as the Company completes its development obligations. For the three and six months ended December 31, 2017, the Company recognized $10,612,153 and $32,553,661, respectively, as license and contract revenue related to this transaction. As of December 31, 2017 and June 30, 2017, there was $9,548,228 and $35,050,572, respectively, of current deferred revenue on the consolidated balance sheet related to this transaction. In addition, pursuant to the terms of and subject to the conditions in the License Agreement with AMAG, the Company is eligible to receive from AMAG: (i) up to $80,000,000 in specified regulatory payments upon achievement of certain regulatory milestones, and (ii) up to $300,000,000 in sales milestone payments based on achievement of annual net sales amounts for all Products in the Territory. AMAG is also obligated to pay the Company tiered royalties on annual net sales of Products, on a product-by-product basis, in the Territory ranging from the high single-digits to the low double-digits. The royalties will expire on a product-by-product and country-by-country basis until the latest to occur of (i) the earliest date on which there are no valid claims of the Company’s patent rights covering such Product in such country, (ii) the expiration of the regulatory exclusivity period for such Product in such country and (iii) ten years following the first commercial sale of such Product in such country. Such royalties are subject to reductions in the event that: (a) AMAG must license additional third party intellectual property in order to develop, manufacture or commercialize a Product, or (b) generic competition occurs with respect to a Product in a given country, subject to an aggregate cap on such deductions of royalties otherwise payable to the Company. After the expiration of the applicable royalties for any Product in a given country, the license for such Product in such country will become a fully paid-up, royalty-free, perpetual and irrevocable license. The Company engaged Greenhill & Co. LLC (“Greenhill”) as the Company’s sole financial advisor in connection with a potential transaction with respect to bremelanotide. Under the engagement agreement with Greenhill, the Company was obligated to pay Greenhill a fee equal to 2% of all proceeds and consideration paid to the Company by AMAG in connection with the License Agreement with AMAG, subject to a minimum fee of $2,500,000. The minimum fee of $2,500,000, less credit of $50,000 for an advisory fee previously paid by the Company, was paid to Greenhill upon the closing of the licensing transaction. This amount will be credited toward amounts that become due to Greenhill in the future, provided that the aggregate fee payable to Greenhill will not be less than 2% of all proceeds and consideration paid to the Company by AMAG in connection with the License Agreement with AMAG. The Company will pay Greenhill an aggregate total of 2% of all proceeds and consideration paid to the Company by AMAG in connection with the License Agreement with AMAG, including future milestone and royalty payments, after crediting the $2,500,000 that was paid to Greenhill upon entering into the License Agreement with AMAG. The Company also reimbursed Greenhill $7,263 for certain expenses incurred in connection with its advisory services. Pursuant to the License Agreement with AMAG, the Company has assigned to AMAG the Company’s manufacturing and supply agreements with Catalent Belgium S.A. to perform fill, finish and packaging of bremelanotide.

AGREEMENT WITH FOSUN

AGREEMENT WITH FOSUN	6 Months Ended
	Dec. 31, 2017
Agreement With Fosun
AGREEMENT WITH FOSUN	On September 6, 2017, the Company entered into the License Agreement with Fosun for exclusive rights to commercialize bremelanotide in the territories of mainland China, Taiwan, Hong Kong S.A.R. and Macau S.A.R. Under the terms of the agreement, the Company received $4,500,000 in October 2017, which consisted of an upfront payment of $5,000,000 less $500,000 which was withheld in accordance with tax withholding requirements in China and will be recorded as an expense during the fiscal year ending June 30, 2018. For the three and six months ended December 31, 2017, the Company incurred $54,712 and $279,967, respectively, in income tax expense utilizing an estimated effective annual income tax rate applied to income for the three and six months ended December 31, 2017 and the remaining balance of $220,033 was included in prepaid expenses and other current assets at December 31, 2017. The Company will receive a $7,500,000 milestone payment when regulatory approval in China is obtained, provided that a commercial supply agreement for bremelanotide has been entered into. Palatin has the potential to receive up to $92,500,000 in additional sales related milestone payments and high single-digit to low double-digit royalties on net sales in the licensed territory. All development, regulatory, sales, marketing, and commercial activities and associated costs in the licensed territory will be the sole responsibility of Fosun.

AGREEMENT WITH KWANGDONG

AGREEMENT WITH KWANGDONG	6 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
AGREEMENT WITH KWANGDONG	On November 21, 2017, the Company entered into the License Agreement with Kwangdong for exclusive rights to commercialize bremelanotide in the Republic of Korea. Under the terms of the agreement, the Company received $417,500 in December 2017, consisting of an upfront payment of $500,000, less $82,500, which was withheld in accordance with tax withholding requirements in Korea and will be recorded as an expense during the fiscal year ending June 30, 2018. Based upon certain refund provisions, the upfront payment has been recorded as non-current deferred revenue at December 31, 2017. For the three and six months ended December 31, 2017, the Company incurred $46,168 in income tax expense utilizing an estimated effective annual income tax rate applied to income for the three and six months ended December 31, 2017 and the remaining balance of $36,332 was included in prepaid expenses and other current assets at December 31, 2017. The Company will receive a $3,000,000 milestone payment based on the first commercial sale in Korea. Palatin has the potential to receive up to $37,500,000 in additional sales related milestone payments and mid-single-digit to low double-digit royalties on net sales in the licensed territory. All development, regulatory, sales, marketing, and commercial activities and associated costs in the licensed territory will be the sole responsibility of Kwangdong.

PREPAID EXPENSES AND OTHER CURR

PREPAID EXPENSES AND OTHER CURRENT ASSETS	6 Months Ended
	Dec. 31, 2017
Prepaid Expenses And Other Current Assets
PREPAID EXPENSES AND OTHER CURRENT ASSETS	Prepaid expenses and other current assets consist of the following: December 31, 2017 June 30, 2017 Clinical costs $ 753,614 $ 657,069 Insurance premiums 53,886 182,966 Foreign withholding tax (Notes 6 & 7) 256,365 - Other 224,639 171,186 $ 1,288,504 $ 1,011,221

INVESTMENTS

INVESTMENTS	6 Months Ended
	Dec. 31, 2017
Investments
INVESTMENTS	The following summarizes the carrying value of the Company’s available-for-sale investments, which consist of corporate debt securities: December 31, 2017 June 30, 2017 Cost $ - $ 262,023 Amortization of premium - (11,596 ) Gross unrealized loss - (590 ) Fair value $ - $ 249,837

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	6 Months Ended
	Dec. 31, 2017
Fair Value Disclosures [Abstract]
FAIR VALUE MEASUREMENTS	The fair value of cash equivalents and investments is classified using a hierarchy prioritized based on inputs. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on management’s own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The following table provides the assets carried at fair value measured on a recurring basis: Carrying Value Quoted prices in active markets (Level 1) Other quoted/observable inputs (Level 2) Significant unobservable inputs (Level 3) December 31, 2017: Money market account $ 34,769,696 $ 34,769,696 $ - $ - TOTAL $ 34,769,696 $ 34,769,696 $ - $ - June 30, 2017: Money market account $ 40,019,336 $ 40,019,336 $ - $ - Corporate debt securities 249,837 249,837 - - TOTAL $ 40,269,173 $ 40,269,173 $ - $ -

ACCRUED EXPENSES

ACCRUED EXPENSES	6 Months Ended
	Dec. 31, 2017
Accrued Expenses
ACCRUED EXPENSES	Accrued expenses consist of the following: December 31, 2017 June 30, 2017 Clinical costs $ 5,055,378 $ 9,138,827 Other research related expenses 180,820 217,307 Professional services 51,732 434,768 Other 239,846 730,196 $ 5,527,776 $ 10,521,098

NOTES PAYABLE

NOTES PAYABLE	6 Months Ended
	Dec. 31, 2017
Debt Disclosure [Abstract]
NOTES PAYABLE	Notes payable consist of the following: December 31, 2017 June 30, 2017 Notes payable under venture loan $ 10,333,334 $ 14,333,334 Unamortized related debt discount (78,564 ) (143,524 ) Unamortized debt issuance costs (44,494 ) (83,215 ) Notes payable 10,210,276 14,106,595 Less: current portion 7,889,152 7,824,935 Long-term portion $ 2,321,124 $ 6,281,660 On December 23, 2014, the Company closed on a $10,000,000 venture loan which was led by Horizon Technology Finance Corporation (“Horizon”). The debt facility 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%, and provides for interest-only payments for the first eighteen months followed by monthly payments of principal of $333,333 plus accrued interest through January 1, 2019. The lenders also received five-year immediately exercisable Series D 2014 warrants to purchase 666,666 shares of common stock exercisable at an exercise price of $0.75 per share. The Company recorded a debt discount of $267,820 equal to the fair value of these warrants at issuance, which is being amortized to interest expense over the term of the related debt. This debt discount is offset against the note payable balance and included in additional paid-in capital on the Company’s balance sheet at December 31, 2017 and June 30, 2017. In addition, a final incremental payment of $500,000 is due on January 1, 2019, or upon early repayment of the loan. This final incremental payment is being accreted to interest expense over the term of the related debt. The Company incurred $209,367 of costs in connection with the loan. These costs were capitalized as deferred financing costs and are offset against the note payable balance. These debt issuance costs are being amortized to interest expense over the term of the related debt. On July 2, 2015, the Company closed on a $10,000,000 venture loan led by Horizon. The debt facility 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% and provides for interest-only payments for the first eighteen months followed by monthly payments of principal of $333,333 plus accrued interest through August 1, 2019. The lenders also received five-year immediately exercisable Series G warrants to purchase 549,450 shares of the Company’s common stock exercisable at an exercise price of $0.91 per share. The Company has recorded a debt discount of $305,196 equal to the fair value of these warrants at issuance, which is being amortized to interest expense over the term of the related debt. This debt discount is offset against the note payable balance and is included in additional paid-in capital on the Company’s balance sheet at December 31, 2017 and June 30, 2017. In addition, a final incremental payment of $500,000 is due on August 1, 2019, or upon early repayment of the loan. This final incremental payment is being accreted to interest expense over the term of the related debt. The Company incurred $146,115 of costs in connection with the loan agreement. These costs were capitalized as deferred financing costs and are offset against the note payable balance. These debt issuance costs are being amortized to interest expense over the term of the related debt. The Company’s obligations under the 2015 amended and restated loan agreement, which includes both the 2014 venture loan and the 2015 venture loan, are secured by a first priority security interest in substantially all of its assets other than its intellectual property. The Company also has agreed to specified limitations on pledging or otherwise encumbering its intellectual property assets. The 2015 amended and restated loan agreement include customary affirmative and restrictive covenants, but does not include any covenants to attain or maintain specified financial metrics. The loan agreement includes customary events of default, including payment defaults, breaches of covenants, change of control and a material adverse change default. Upon the occurrence of an event of default and following any applicable cure periods, a default interest rate of an additional 5% may be applied to the outstanding loan balances, and the lenders may declare all outstanding obligations immediately due and payable and take such other actions as set forth in the loan agreement. As of December 31, 2017, the Company was in compliance with all of its loan covenants.

STOCKHOLDERS' EQUITY (DEFICIENC

STOCKHOLDERS' EQUITY (DEFICIENCY)	6 Months Ended
	Dec. 31, 2017
Equity [Abstract]
STOCKHOLDERS' EQUITY (DEFICIENCY)	Financing Transactions – On August 4, 2016, the Company closed on an underwritten offering of units, with each unit consisting of a share of common stock and a Series H warrant to purchase 0.75 of a share of common stock. Investors whose purchase of units in the offering would result in them beneficially owning more than 9.99% of the Company’s outstanding common stock following the completion of the offering had the option to acquire units with Series I prefunded warrants substituted for any common stock they would have otherwise acquired. Gross proceeds were $9,225,000, with net proceeds to the Company, after deducting offering expenses, of $8,470,897. The Company issued 11,481,481 shares of common stock and ten-year prefunded Series I warrants to purchase 2,218,045 shares of common stock at an exercise price of $0.01, together with Series H warrants to purchase 10,274,646 shares of common stock at an exercise price of $0.70 per share. The Series I warrants were exercised during the fiscal year ended June 30, 2017. The Series H warrants are exercisable at an initial exercise price of $0.70 per share, are exercisable commencing six months following the date of issuance and expire on the fifth anniversary of the date of issuance. The Series H warrants are subject to a limitation on their exercise if the holder and its affiliates would beneficially own more than 9.99% of the total number of the Company’s shares of common stock outstanding following such exercise. On July 2, 2015, the Company closed on a private placement of Series E warrants to purchase 21,917,808 shares of Palatin common stock and Series F warrants to purchase 2,191,781 shares of the Company’s common stock. Certain funds managed by QVT Financial LP (“QVT”) invested $5,000,000 and another accredited investment fund invested $15,000,000. The funds paid $0.90 for each Series E warrant and $0.125 for each Series F warrant, resulting in gross proceeds to the Company of $20,000,000, with net proceeds, after deducting offering expenses, of $19,834,278. The Series E warrants were exercisable immediately upon issuance at an initial exercise price of $0.01 per share. As of December 31, 2017, all of the Series E warrants have been exercised. The Series F warrants are exercisable at an initial exercise price of $0.91 per share, are exercisable immediately upon issuance and expire on the fifth anniversary of the date of issuance. The Series F 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 the Company’s shares of common stock outstanding following such exercise. The purchase agreement for the private placement provides that the purchasers have certain rights until the earlier of approval of bremelanotide for FSD by the FDA and July 3, 2018, including rights of first refusal and participation in any subsequent equity or debt financing. The purchase agreement also contains certain restrictive covenants so long as the funds continue to hold specified amounts of warrants or beneficially own specified amounts of the outstanding shares of common stock. During the six months ended December 31, 2017, and 2016, the Company issued 23,344,451 and 27,989,685 shares, respectively of common stock pursuant to the cashless exercise provisions of warrants at an exercise price of $0.01 per share, and during the six months ended December 31, 2017, the Company received $114,384 and issued 11,438,356 shares of common stock pursuant to the exercise of warrants at an exercise price of $0.01 per share. As of December 31, 2017, all warrants with an exercise price of $0.01 per share have been exercised. Stock Options Also, in December 2017, the Company granted 1,075,000 and 125,000 performance-based options to its executive officers and employees, respectively, which vest during a performance period ending on December 31, 2020, if and upon i) as to 100% of the target number of shares upon achievement of a closing price for the Company’s common stock equal to or greater than $1.50 per share for 20 consecutive trading days, which is considered a market condition; ii) as to thirty percent (30%) of the target number of shares, upon the acceptance for filing by the FDA of an NDA for bremelanotide for HSDD in premenopausal women during the performance period, which is considered a performance condition; iii) as to fifty percent (50%) of the target number of shares, upon the approval by the FDA of an NDA for bremelanotide for HSDD in premenopausal women during the performance period, which is also considered a performance condition; iv) as to twenty percent (20%) of the target number of shares, upon entry into a licensing agreement during the performance period for the commercialization of bremelanotide for female sexual dysfunction in at least two of the following geographic areas (a) four or more countries in Europe, (b) Japan, (c) two or more countries in Central and/or South America, (d) two or more countries in Asia, excluding Japan and China, and (e) Australia, which is also considered a performance condition. The fair value of these options, as calculated under a multifactor Monte Carlo simulation, is $602,760. The Company is amortizing the fair value over the derived service period of 1.1 years. The Company recognized $42,034 of stock-based compensation expense related to these options during the three and six months ended December 31, 2017. In September 2017, the Company granted 54,000 options to a newly appointed non-employee director under the Company’s 2011 Stock Incentive Plan. The Company is amortizing the fair value of these options of $18,176 over a 48 month vesting period. The Company recognized $1,136 and $1,515, respectively, of stock-based compensation expense related to these options during the three and six months ended December 31, 2017. In June 2017, the Company granted 1,797,000 options to its executive officers, 780,000 options to its employees and 378,000 options to its non-employee directors under the Company’s 2011 Stock Incentive Plan. The Company is amortizing the fair value of these options of $445,533, $194,689 and $89,220, respectively, over the vesting period of the options. The Company recognized $62,506 and $125,013, respectively, of stock-based compensation expense related to these options during the three and six months ended December 31, 2017. In September 2016, the Company granted 828,000 options to its executive officers and 336,000 options to its employees under the Company’s 2011 Stock Incentive Plan. The Company is amortizing the fair value of the options vesting over a 48 month period, consisting of 595,000 options granted to its executive officers and all options granted to its employees, of $188,245 and $106,303, respectively, over the vesting period. The Company recognized $17,703 and $35,406, respectively, of stock-based compensation expense related to these options during the three and six months ended December 31, 2017 and $16,568 and $21,784, respectively, during the three and six months ended December 31, 2016. The remaining 233,000 options granted to the Company’s executive officers vested 12 months from the date of grant, and the Company amortized the fair value of these options of $67,160 over this vesting period. The Company recognized $11,193 of stock-based compensation expense related to these options during the six months ended December 31, 2017 and $15,111 and $19,868, respectively, during the three and six months ended December 31, 2016. In June 2015, the Company granted 570,000 options to its executive officers, 185,800 options to its employees and 160,000 options to its non-employee directors under the Company’s 2011 Stock Incentive Plan. The Company is amortizing the fair value of these options of $446,748, $145,439 and $111,876, respectively, over the vesting period. The Company recognized $36,478, and $72,957, respectively, of stock-based compensation expense related to these options during the three and six months ended December 31, 2017 and $35,192 and $67,485, respectively, during the three and six months ended December 31, 2016. Unless otherwise stated, stock options granted to the Company’s executive officers and employees vest over a 48-month period, while stock options granted to its non-employee directors vest over a 12-month period. Restricted Stock Units Also, in December 2017, the Company granted 1,075,000 performance-based restricted stock units to its executive officers and 670,000 performance-based restricted stock units to other employees which vest during a performance period, ending on December 31, 2020, if and upon i) as to 100% of the target number of shares upon achievement of a closing price for the Company’s common stock equal to or greater than $1.50 per share for 20 consecutive trading days, which is considered a market condition; ii) as to thirty percent (30%) of the target number of shares, upon the acceptance for filing by the FDA of an NDA for bremelanotide for HSDD in premenopausal women during the performance period, which is considered a performance condition; iii) as to fifty percent (50%) of the target number of shares, upon the approval by the FDA of an NDA for bremelanotide for HSDD in premenopausal women during the performance period, which is also considered a performance condition; iv) as to twenty percent (20%) of the target number of shares, upon entry into a licensing agreement during the performance period for the commercialization of bremelanotide for female sexual dysfunction in at least two of the following geographic areas (a) four or more countries in Europe, (b) Japan, (c) two or more countries in Central and/or South America, (d) two or more countries in Asia, excluding Japan and China, and (e) Australia, which is also considered a performance condition. The fair value of these awards, as calculated under a multifactor Monte Carlo simulation, is $913,750 and $569,500, respectively. The Company is amortizing the fair value over the derived service period of 1.1 years. The Company recognized $106,850 of stock-based compensation expense related to these restricted stock units during the three and six months ended December 31, 2017. In September 2017, the Company granted 54,000 restricted stock units to a newly appointed non-employee director under the Company’s 2011 Stock Incentive Plan. The Company is amortizing the fair value of these restricted stock units of $27,000 over a 48 month vesting period. The Company recognized $3,516 and $4,414, respectively, of stock-based compensation expense related to these restricted stock units during the three and six months ended December 31, 2017. In June 2017, the Company granted 1,140,000 restricted stock units to its executive officers, 780,000 restricted stock units to its employees and 378,000 restricted stock units to its non-employee directors under the Company’s 2011 Stock Incentive Plan. The Company is amortizing the fair value of these restricted stock units of $421,800, $288,600, and $139,860, respectively, over the vesting period. The Company recognized $171,574 and $323,204, respectively, of stock-based compensation expense related to these restricted stock units during the three and six months ended December 31, 2017. In September 2016, the Company granted 558,000 restricted stock units to its executive officers, 350,500 of which vest over 24 months and 207,500 of which vested over 12 months, and 336,000 restricted stock units to its employees under the Company’s 2011 Stock Incentive Plan. The Company is amortizing the fair value of the restricted stock units of $284,580, and $171,360, respectively, over the vesting periods. The Company recognized $27,491 and $91,483, respectively, of stock-based compensation expense related to these restricted stock units during the three and six months ended December 31, 2017 and $80,228 and $100,732, respectively, during the three and six months ended December 31, 2016. In December 2015, the Company granted 625,000 performance-based restricted stock units to its executive officers and 200,000 performance-based restricted stock units to its employees under the Company’s 2011 Stock Incentive Plan, which vest during the performance period, ending December 31, 2017, if and upon the earlier of: i) achievement of a closing price for the Company’s common stock equal to or greater than $1.20 per share for 20 consecutive trading days, which is considered a market condition, or ii) entering into a collaboration agreement (U.S. or global) of bremelanotide for FSD, which is considered a performance condition. This performance condition was deemed met as of February 2, 2017, the effective date of the License Agreement with AMAG. Prior to meeting the performance condition, the Company determined that it was not probable of achievement on the date of grant since meeting the condition was outside the control of the Company. The fair value of these awards, as calculated under a multifactor Monte Carlo simulation, was $338,250 and was recognized over the derived service period which was through December 2016. The Company recognized $55,410 and $142,289, respectively, of stock-based compensation expense related to these restricted stock units during the three and six months ended December 31, 2016. Upon the achievement of the performance condition, which occurred in the three month period ended March 31, 2017, the grant date fair value was utilized and an incremental $222,075 was recognized as stock-based compensation expense during the three months ended March 31, 2017. Also, in December 2015, the Company granted 625,000 restricted stock units to its executive officers, 340,000 restricted stock units to its non-employee directors and 200,000 restricted stock units to its employees under the Company’s 2011 Stock Incentive Plan. For executive officers and employees, the restricted stock units vest 25% on the date of grant and 25% on the first, second and third anniversary dates from the date of grant. For non-employee directors, the restricted stock units vest 50% on the first and second anniversary dates from the date of grant. The Company is amortizing the fair value of these restricted stock units of $425,000, $231,200 and $136,000, respectively, over the vesting period of the restricted stock units. The Company recognized $35,553 and $77,010, respectively, of stock-based compensation expense related to these restricted stock units during the three and six months ended December 31, 2017 and $85,996 and $187,252, respectively, during the three and six months ended December 31, 2016. In June 2015, the Company granted 400,000 restricted stock units to its executive officers, 185,800 restricted stock units to its employees and 160,000 restricted stock units to its non-employee directors under the Company’s 2011 Stock Incentive Plan. The Company is amortizing the fair value of these restricted stock units of $432,000, $200,664, and $172,800, respectively, over the vesting period. The Company recognized $7,067 and $13,954, respectively, of stock-based compensation expense related to these restricted stock units during the three and six months ended December 31, 2017 and $40,430 and $80,859, respectively, during the three and six months ended December 31, 2016. Unless otherwise stated, restricted stock units granted to the Company’s executive officers, employees and non-employee directors vest over 24 months, 48 months and 12 months, respectively. Stock-based compensation expense for the three and six months ended December 31, 2017 for equity-based instruments issued other than the stock options and restricted stock units described above was $43,277 and $72,023, respectively, and $121,098 and $232,972, respectively, for the three and six months ended December 31, 2016.

ORGANIZATION (Policies)

ORGANIZATION (Policies)	6 Months Ended
	Dec. 31, 2017
Organization Policies
Nature of Business	Palatin Technologies, Inc. (“Palatin” or the “Company”) 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 programs are based on molecules that modulate the activity of the melanocortin and natriuretic peptide receptor systems. The melanocortin system is involved in a large and diverse number of physiologic functions, and therapeutic agents modulating this system may have the potential to treat a variety of conditions and diseases, including sexual dysfunction and inflammation-related diseases. The natriuretic peptide receptor system has numerous cardiovascular functions, and therapeutic agents modulating this system may be useful in treatment of heart failure and other cardiovascular diseases. The Company’s primary product in development is bremelanotide for the treatment of hypoactive sexual desire disorder (“HSDD”), which is a type of female sexual dysfunction (“FSD”). The Company also has drug candidates or development programs for cardiovascular diseases, including heart failure and fibrosis, and inflammatory diseases, including inflammatory bowel disease and ocular indications. Key elements of the Company’s business strategy include using its technology and expertise to develop and commercialize therapeutic products; entering into alliances and partnerships with pharmaceutical companies to facilitate the development, manufacture, marketing, sale and distribution of product candidates that the Company is developing; and partially funding its product candidate development programs with the cash flow generated from its relationships with third parties.
Business Risk and Liquidity	Since inception, the Company has incurred negative cash flows from operations, and has expended, and expects to continue to expend, substantial funds to complete its planned product development efforts. As shown in the accompanying consolidated financial statements, the Company had an accumulated deficit as of December 31, 2017 of $343,614,797 and had net income for the three and six months ended December 31, 2017 of $2,530,193 and $13,133,823, respectively. The Company anticipates incurring losses in the future as a result of spending on its development programs and will require substantial additional financing to continue to fund its planned developmental activities. To achieve sustained profitability, if ever, the Company, alone or with others, must successfully develop and commercialize its technologies and proposed products, conduct successful preclinical studies and clinical trials, obtain required regulatory approvals and successfully manufacture and market such technologies and proposed products. The time required to reach sustained profitability is highly uncertain, and the Company may never be able to achieve profitability on a sustained basis, if at all. On November 21, 2017, the Company entered into a license agreement with Kwangdong for exclusive rights to develop and commercialize bremelanotide in the Republic of Korea. (“License Agreement with Kwangdong”) (Note 7). As of December 31, 2017, the Company’s cash and cash equivalents were $34,958,048 and current liabilities were $14,120,695, net of deferred revenue of $9,548,228. The Company intends to utilize existing capital resources for general corporate purposes and working capital, including the preparation of and filing a New Drug Application (“NDA”) on bremelanotide for HSDD with the U.S. Food and Drug Administration (“FDA”), and preclinical and clinical development of the Company’s other product candidates and programs, including natriuretic peptide receptor and melanocortin receptor programs. Management believes that its existing capital resources will be sufficient to fund its planned operations through at least one year after the date that these financial statements are issued. The Company will need additional funding to complete required clinical trials for its other product candidates and, assuming those clinical trials are successful, as to which there can be no assurance, to complete submission of required applications to the FDA. If the Company is unable to obtain approval or otherwise advance in the FDA approval process, the Company’s ability to sustain its operations would be materially adversely affected. The Company may seek the additional capital necessary to fund its operations through public or private equity offerings, collaboration agreements, debt financings or licensing arrangements. Additional capital that is required by the Company may not be available on reasonable terms, or at all.
Concentrations	Concentrations in the Company’s assets and operations subject it to certain related risks. Financial instruments that subject the Company to concentrations of credit risk primarily consist of cash and cash equivalents, accounts receivable and investments. The Company’s cash and cash equivalents are primarily invested in one money market account sponsored by a large financial institution. For the three and six months ended December 31, 2017, the Company reported $10,612,153 and $32,553,661, respectively, in license and contract revenue related to a license agreement with AMAG for bremelanotide for North America (“License Agreement with AMAG”) (Note 5). In addition, for the six months ended December 31, 2017, the Company reported $5,000,000 in license revenue related to a license agreement with Fosun for bremelanotide for China and certain other Asian territories (“License Agreement with Fosun”) (Note 6). The Company did not generate any revenue for the three and six months ended December 31, 2016.

SUMMARY OF SIGNIFICANT ACCOUN21

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Dec. 31, 2017
Summary Of Significant Accounting Policies Policies
Principles of Consolidation	The consolidated financial statements include the accounts of Palatin and its wholly-owned inactive subsidiary. All intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates	The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents	Cash and cash equivalents include cash on hand, cash in banks and all highly liquid investments with a purchased maturity of less than three months. Cash equivalents consist of $34,769,696 and $40,019,336 in a money market account as of December 31, 2017 and June 30, 2017, respectively.
Investments	The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and reevaluates such determinations at each balance sheet date. Debt securities are classified as held-to-maturity when the Company has the intent and ability to hold the securities to maturity. Debt securities for which the Company does not have the intent or ability to hold to maturity are classified as available-for-sale. Held-to-maturity securities are recorded as either short-term or long-term on the balance sheet, based on the contractual maturity date and are stated at amortized cost. Marketable securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value, with unrealized gains and losses recognized in earnings. Debt and marketable equity securities not classified as held-to-maturity or as trading are classified as available-for-sale and are carried at fair market value, with the unrealized gains and losses, net of tax, included in the determination of other comprehensive income (loss). The fair value of substantially all securities is determined by quoted market prices. The estimated fair value of securities for which there are no quoted market prices is based on similar types of securities that are traded in the market.
Fair Value of Financial Instruments	The Company’s financial instruments consist primarily of cash equivalents, accounts receivable, accounts payable and notes payable. Management believes that the carrying values of cash equivalents, accounts receivable, available-for-sale investments and accounts payable are representative of their respective fair values based on the short-term nature of these instruments. Management believes that the carrying amount of its notes payable approximates fair value based on the terms of the notes.
Credit Risk	Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. Total cash and cash equivalent balances have exceeded balances insured by the Federal Depository Insurance Company.
Property and Equipment	Property and equipment consists of office and laboratory equipment, office furniture and leasehold improvements and includes assets acquired under capital leases. Property and equipment are recorded at cost. Depreciation is recognized using the straight-line method over the estimated useful lives of the related assets, generally five years for laboratory and computer equipment, seven years for office furniture and equipment and the lesser of the term of the lease or the useful life for leasehold improvements. Amortization of assets acquired under capital leases is included in depreciation expense. Maintenance and repairs are expensed as incurred while expenditures that extend the useful life of an asset are capitalized. Accumulated depreciation and amortization was $2,310,875 and $2,281,989 as of December 31, 2017 and June 30, 2017, respectively.
Impairment of Long-Lived Assets	The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. To determine recoverability of a long-lived asset, management evaluates whether the estimated future undiscounted net cash flows from the asset are less than its carrying amount. If impairment is indicated, the long-lived asset would be written down to fair value. Fair value is determined by an evaluation of available price information at which assets could be bought or sold, including quoted market prices, if available, or the present value of the estimated future cash flows based on reasonable and supportable assumptions.
Revenue Recognition	The Company has generated revenue solely through license and collaboration agreements. The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 605-25, Revenue Recognition for Arrangements with Multiple Elements ● the delivered item has value to the customer on a stand-alone basis; and ● if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item is considered probable and substantially in control of the vendor. Under FASB ASC Topic 605-25, if both of the criteria above are not met, then separate accounting for the individual deliverables is not appropriate. The Company has determined that it is appropriate to recognize the consideration received under its License Agreement with AMAG as revenue using the input-based proportional method during the period of the Palatin Development Obligation as defined in the License Agreement with AMAG. Refer to Note 5 for additional information on this topic. Under its License Agreement with Fosun (Note 6), the Company received consideration in the form of an upfront license fee payment and determined that it was appropriate to recognize such consideration as revenue in the first quarter of 2018, which was the quarter in which the license was granted, since the license has stand-alone value and the upfront payment received by the Company is non-refundable. Under its License Agreement with Kwangdong (Note 7), the Company received consideration in the form of an upfront license fee payment and has currently determined that it is appropriate to record such consideration as non-current deferred revenue because the upfront payment received by the Company is subject to certain refund provisions. Revenue resulting from the achievement of development milestones is recorded in accordance with the accounting guidance for the milestone method of revenue recognition. Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred revenue on the Company’s consolidated balance sheet. Amounts expected to be recognized as revenue in the next 12 months following the balance sheet date are classified as current liabilities.
Research and Development Costs	The costs of research and development activities are charged to expense as incurred, including the cost of equipment for which there is no alternative future use.
Accrued Expenses	Third parties perform a significant portion of the Company’s development activities. The Company reviews the activities performed under all contracts each quarter and accrue expenses and the amount of any reimbursement to be received from collaborators based upon the estimated amount of work completed. Estimating the value or stage of completion of certain services requires judgment based on available information. If the Company does not identify services performed but not billed by the service-provider, or if the Company underestimates or overestimates the value of services performed as of a given date, reported expenses will be understated or overstated.
Stock-Based Compensation	The Company charges to expense the fair value of stock options and other equity awards granted. The Company determines the value of stock options utilizing the Black-Scholes option pricing model. Compensation costs for share-based awards with pro-rata vesting are determined using the quoted market price of the Company’s common stock on the date of grant and allocated to periods on a straight-line basis, while awards containing a market condition and performance conditions are valued using multifactor Monte Carlo simulations.
Income Taxes	Income Taxes Pursuant to the License Agreement with Fosun (Note 6) and the License Agreement with Kwangdong (Note 7), $500,000 and $82,500, respectively, was withheld in accordance with tax withholding requirements in China and the Republic of Korea, respectively, and will be recorded as an expense during the fiscal year ending June 30, 2018. For the three and six months ended December 31, 2017, the Company incurred $100,880 and $326,135, respectively, in income tax expense and the remaining balance of $256,365 was included in prepaid expenses and other current assets at December 31, 2017. Any potential credit to be received by the Company on its United States tax returns is currently offset by the Company’s valuation allowance. On December 22, 2017, the U.S. government enacted wide-ranging tax legislation, the Tax Cuts and Jobs Act (the "2017 Tax Act"). The 2017 Tax Act significantly revises U.S. tax law by, among other provisions, (a) lowering the applicable U.S. federal statutory corporate income tax rate from 35% to 21%, (b) eliminating or reducing certain income tax deductions, such as deductions for interest expense, executive compensation expenses and certain employee expenses, and (c) repealing the federal alternative minimum tax ("AMT") and providing for the refund of existing AMT credits. As a result of the 2017 tax Act, during the quarter ended December 31, 2017, the Company recorded a tax benefit of $500,000 related to the release of a valuation allowance against an AMT credit; accordingly $500,000 is included in Other long-term assets at December 31, 2017. In addition, as a result of the enactment of the new corporate income tax rate, the Company remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse and with the exception of the AMT credit, the Company continues to maintain a full valuation allowance against its net deferred tax assets.
Net Income (Loss) per Common Share	Earnings per Share The following table is a reconciliation of net income (loss) and the shares used in calculating basic and diluted net income (loss) per common share for the three and six months ended December 30, 2017 and 2016: Three Months Ended December 31, Six Months Ended December 31, 2017 2016 2017 2016 Net income (loss) $ 3,030,193 $ (10,029,419 ) $ 13,633,823 $ (23,082,189 ) Denominator: Weighted average common shares outstanding - Basic 197,238,056 177,798,511 197,175,316 171,823,390 Effect of dilutive shares: Common stock equivalents arising from stock options, warrants and conversion of preferred stock 3,525,013 - 1,792,803 - Restricted stock units 1,948,547 - 1,462,705 - Weighted average common shares outstanding - Diluted 202,711,616 177,798,511 200,430,824 171,823,390 Net income (loss) per common share: Basic $ 0.02 $ (0.06 ) $ 0.07 $ (0.13 ) Diluted $ 0.01 $ (0.06 ) $ 0.07 $ (0.13 ) For the three and six months ended December 31, 2017 and 2016, common shares issuable upon conversion of Series A Convertible Preferred Stock, the exercise of outstanding options and warrants (excluding the Series A 2012, Series B 2012, Series C 2014, Series E 2015 and Series I 2016 warrants issued in connection with the July 3, 2012, December 23, 2014, and July 2, 2015 private placement offerings and the August 4, 2016 underwritten offering as such warrants, to the extent not yet exercised, are already included in the weighted average number of common shares outstanding used in computing basic net income (loss) per common share since they are exercisable for nominal consideration), and the vesting of restricted stock units amounted to an aggregate of 46,966,803 and 57,174,473 shares, respectively, and are excluded from the weighted average number of common shares outstanding used in computing basic net income (loss) per common share. For the three and six months ended December 31, 2017, an additional 5,473,560 and 3,255,508 of common shares, respectively, have been included in the computation of diluted EPS using the treasury stock and if-converted methods. However, for the three and six months ended December 31, 2016, no additional common shares were added in the computation of diluted EPS because to do so would have been anti-dilutive.

SUMMARY OF SIGNIFICANT ACCOUN22

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	Dec. 31, 2017
Summary Of Significant Accounting Policies Tables
Schedule of net income (loss) per share	Three Months Ended December 31, Six Months Ended December 31, 2017 2016 2017 2016 Net income (loss) $ 3,030,193 $ (10,029,419 ) $ 13,633,823 $ (23,082,189 ) Denominator: Weighted average common shares outstanding - Basic 197,238,056 177,798,511 197,175,316 171,823,390 Effect of dilutive shares: Common stock equivalents arising from stock options, warrants and conversion of preferred stock 3,525,013 - 1,792,803 - Restricted stock units 1,948,547 - 1,462,705 - Weighted average common shares outstanding - Diluted 202,711,616 177,798,511 200,430,824 171,823,390 Net income (loss) per common share: Basic $ 0.02 $ (0.06 ) $ 0.07 $ (0.13 ) Diluted $ 0.01 $ (0.06 ) $ 0.07 $ (0.13 )

PREPAID EXPENSES AND OTHER CU23

PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables)	6 Months Ended
	Dec. 31, 2017
Prepaid Expenses And Other Current Assets Tables
Schedule of prepaid expenses and other current assets	December 31, 2017 June 30, 2017 Clinical costs $ 753,614 $ 657,069 Insurance premiums 53,886 182,966 Foreign withholding tax (Notes 6 & 7) 256,365 - Other 224,639 171,186 $ 1,288,504 $ 1,011,221

INVESTMENTS (Tables)

INVESTMENTS (Tables)	6 Months Ended
	Dec. 31, 2017
Investments Tables
Carrying value of our available-for-sale investments	December 31, 2017 June 30, 2017 Cost $ - $ 262,023 Amortization of premium - (11,596 ) Gross unrealized loss - (590 ) Fair value $ - $ 249,837

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	6 Months Ended
	Dec. 31, 2017
Fair value of restricted stock units granted, amortized over 24 month vesting period
Schedule of assets at fair value	Carrying Value Quoted prices in active markets (Level 1) Other quoted/observable inputs (Level 2) Significant unobservable inputs (Level 3) December 31, 2017: Money market account $ 34,769,696 $ 34,769,696 $ - $ - TOTAL $ 34,769,696 $ 34,769,696 $ - $ - June 30, 2017: Money market account $ 40,019,336 $ 40,019,336 $ - $ - Corporate debt securities 249,837 249,837 - - TOTAL $ 40,269,173 $ 40,269,173 $ - $ -

ACCRUED EXPENSES (Tables)

ACCRUED EXPENSES (Tables)	6 Months Ended
	Dec. 31, 2017
Accrued Expenses
Accrued Expenses	December 31, 2017 June 30, 2017 Clinical costs $ 5,055,378 $ 9,138,827 Other research related expenses 180,820 217,307 Professional services 51,732 434,768 Other 239,846 730,196 $ 5,527,776 $ 10,521,098

NOTES PAYABLE (Tables)

NOTES PAYABLE (Tables)	6 Months Ended
	Dec. 31, 2017
Debt Disclosure [Abstract]
Notes Payable	December 31, 2017 June 30, 2017 Notes payable under venture loan $ 10,333,334 $ 14,333,334 Unamortized related debt discount (78,564 ) (143,524 ) Unamortized debt issuance costs (44,494 ) (83,215 ) Notes payable 10,210,276 14,106,595 Less: current portion 7,889,152 7,824,935 Long-term portion $ 2,321,124 $ 6,281,660

ORGANIZATION (Details Narrative

ORGANIZATION (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Jun. 30, 2017	Jun. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accumulated deficit	$ 343,114,797		$ 343,114,797		$ 356,743,785
Net income (loss)	3,030,193	$ (10,029,419)	13,633,823	$ (23,082,189)
Cash and cash equivalents	$ 34,958,048	$ 12,114,581	$ 34,958,048	$ 12,114,581	$ 40,200,324	$ 8,002,668

SUMMARY OF SIGNIFICANT ACCOUN29

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Numerator:
Net income (loss)	$ 3,030,193	$ (10,029,419)	$ 13,633,823	$ (23,082,189)
Denominator:
Weighted average common shares outstanding - Basic	197,238,056	177,798,511	197,175,316	171,823,390
Effect of dilutive shares:
Common stock equivalents arising from stock options, warrants and conversion of preferred stock	3,525,013	0	1,792,803	0
Restriced stock units	1,948,547	0	1,462,705	0
Weighted average common shares outstanding - Diluted	202,711,616	177,798,511	200,430,824	171,823,390
Net income (loss) per common share:
Basic	$ 0.02	$ (0.06)	$ 0.07	$ (0.13)
Diluted	$ .01	$ (0.06)	$ 0.07	$ (0.13)

SUMMARY OF SIGNIFICANT ACCOUN30

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	Dec. 31, 2017	Jun. 30, 2017
Range 6
Cash equivalents	$ 34,769,696	$ 40,019,336
Accumulated depreciation and amortization	$ 2,310,875	$ 2,281,989

PREPAID EXPENSES AND OTHER CU31

PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($)	Dec. 31, 2017	Jun. 30, 2017
Prepaid Expenses And Other Current Assets Details
Clinical study costs	$ 753,614	$ 657,069
Insurance premiums	53,886	182,966
Foreign withholding tax	256,365	0
Other	224,639	171,186
Total prepaid expenses and other current assets	$ 1,288,504	$ 1,011,221

INVESTMENTS (Details)

INVESTMENTS (Details) - USD ($)	Dec. 31, 2017	Jun. 30, 2017
Investments Details
Cost	$ 0	$ 262,023
Amortization of premium	0	(11,596)
Gross unrealized loss	0	(590)
Fair value	$ 0	$ 249,837

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details) - USD ($)	Dec. 31, 2017	Jun. 30, 2017
Money Market Account	$ 34,769,696	$ 40,019,336
Corporate debt securities	0	249,837
Total	34,769,696	40,269,173
Level 1
Money Market Account	34,769,696	40,019,336
Corporate debt securities	0	249,837
Total	34,769,696	40,269,173
Level 2
Money Market Account	0	0
Corporate debt securities	0	0
Total	0	0
Level 3
Money Market Account	0	0
Corporate debt securities	0	0
Total	$ 0	$ 0

ACCRUED EXPENSES (Details)

ACCRUED EXPENSES (Details) - USD ($)	Dec. 31, 2017	Jun. 30, 2017
Accrued Expenses
Clinical study costs	$ 5,055,378	$ 9,138,827
Other research related expenses	180,820	217,307
Professional services	51,732	434,768
Other	239,846	730,196
Accrued expenses	$ 5,527,776	$ 10,521,098

NOTES PAYABLE (Details)

NOTES PAYABLE (Details) - USD ($)	Dec. 31, 2017	Jun. 30, 2017
Notes Payable Details
Notes payable under venture loan	$ 10,333,334	$ 14,333,334
Unamortized related debt discount	(78,564)	(143,524)
Unamortized debt issuance costs	(44,494)	(83,215)
Notes payable	10,210,276	14,106,595
Less: current portion	7,889,152	7,824,935
Long-term portion	$ 2,321,124	$ 6,281,660

STOCKHOLDERS' EQUITY (DEFICIE36

STOCKHOLDERS' EQUITY (DEFICIENCY) (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Stock based compensation			$ 1,041,900	$ 853,241
Equity-Based Instruments
Stock based compensation	$ 43,277	$ 121,098	72,023	232,972
2011 Stock Incentive Plan | Stock Options | Grant One
Stock based compensation	17,904	0	17,904	0
2011 Stock Incentive Plan | Stock Options | Grant Two
Stock based compensation	42,034	0	42,034	0
2011 Stock Incentive Plan | Stock Options | Grant Three
Stock based compensation	1,136	0	1,515	0
2011 Stock Incentive Plan | Stock Options | Grant Four
Stock based compensation	62,506	0	125,013	0
2011 Stock Incentive Plan | Stock Options | Grant Five
Stock based compensation	17,703	16,568	35,406	21,784
2011 Stock Incentive Plan | Stock Options | Grant Six
Stock based compensation	0	15,111	11,193	19,868
2011 Stock Incentive Plan | Stock Options | Grant Seven
Stock based compensation	36,478	35,192	72,957	67,485
2011 Stock Incentive Plan | Restricted Stock Units | Grant One
Stock based compensation	46,940	0	46,940	0
2011 Stock Incentive Plan | Restricted Stock Units | Grant Two
Stock based compensation	106,850	0	106,850	0
2011 Stock Incentive Plan | Restricted Stock Units | Grant Three
Stock based compensation	3,516	0	4,414	0
2011 Stock Incentive Plan | Restricted Stock Units | Grant Four
Stock based compensation	171,574	0	323,204	0
2011 Stock Incentive Plan | Restricted Stock Units | Grant Five
Stock based compensation	27,491	80,228	91,483	100,732
2011 Stock Incentive Plan | Restricted Stock Units | Grant Six
Stock based compensation	0	55,410	0	142,289
2011 Stock Incentive Plan | Restricted Stock Units | Grant Seven
Stock based compensation	35,553	85,996	77,010	187,252
2011 Stock Incentive Plan | Restricted Stock Units | Grant Eight
Stock based compensation	$ 7,067	$ 40,430	$ 13,954	$ 80,859