RUBIN BAUM LEVIN CONSTANT & FRIEDMAN
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[LETTERHEAD]
November 25, 1997
Palatin Technologies, Inc.
214 Carnegie Center, Suite 100
Princeton, New Jersey 08540
We have acted as counsel for Palatin Technologies, Inc., a Delaware
corporation (the "Company"), in connection with the preparation of the
Registration Statement on Form SB-2 (the "Initial Registration Statement") filed
with the Securities and Exchange Commission (the "Commission") on August 13,
1997, Registration No. 333-33569, as amended by Pre-Effective Amendment No. 1 on
Form S-3 to the Initial Registration Statement (the "Amendment") filed with the
Commission on November 24, 1997 (the Amendment and the Initial Registration
Statement are collectively referred to herein as the "Registration Statement"),
under the Securities Act of 1933, as amended (the "Act"), for registration under
the Act of the following securities of the Company:
1. Up to 2,777,739 shares of common stock, par value $.01 per share (the
"Common Stock"), issuable upon conversion of 137,780 shares of the Company's
Series A Convertible Preferred Stock, par value $0.01 per share (the "Series A
Convertible Preferred Stock");
2. Up to 277,770 shares of Common Stock issuable upon conversion of 13,778
shares of Series A Convertible Preferred Stock issuable upon exercise of the
Company's Preferred Stock Placement Warrants ("Preferred Stock Placement
Warrants") issued to designees of Paramount Capital, Inc. (the "Placement
Agent") in connection with the issuance of the Series A Convertible Preferred
Stock;
RUBIN BAUM LEVIN CONSTANT & FRIEDMAN
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Palatin Technologies, Inc.
November 25, 1997
Page 2
3. Up to 3,055,509 additional shares of Common Stock issuable upon an
adjustment in the conversion price of the Series A Convertible Preferred Stock;
4. Up to 69,122 shares of Common Stock issuable upon exercise of the
Company's Class C Warrants ("Class C Warrants") issued in connection with the
merger of a newly-formed wholly-owned subsidiary of the Company with and into
RhoMed Incorporated, a New Mexico corporation ("RhoMed"), pursuant to which all
of the equity securities of RhoMed were exchanged for Common Stock of the
Company (the "Merger");
5. Up to 177,788 shares of Common Stock issuable upon exercise of the
Company's Common Stock Placement Warrants ("Common Stock Placement Warrants")
issued by RhoMed to designees of the Placement Agent;
6. Up to 39,167 shares of Common Stock issuable upon exercise of the
Company's Class B Warrants ("Class B Warrants") which were by RhoMed
in connection with a private offering;
7. Up to 1,953 shares of Common Stock issuable upon exercise of the
Company's Class B Placement Warrants ("Class B Placement Warrants") issued by
RhoMed to designees of the Placement Agent;
8. Up to 138,241 shares of Common Stock issued or issuable upon exercise of
the Company's Class A Warrants ("Class A Warrants"), of which 55,296 shares of
Common Stock are outstanding as of the date hereof, which were issued by RhoMed
in connection with a private offering;
RUBIN BAUM LEVIN CONSTANT & FRIEDMAN
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Palatin Technologies, Inc.
November 25, 1997
Page 3
9. Up to 20,733 shares of Common Stock issuable upon exercise of the
Company's Class A Placement Warrants ("Class A Placement Warrants") issued by
RhoMed to designees of the Placement Agent;
10. Up to 12,500 shares of Common Stock issued upon exercise of the
Company's Financial Services Advisory Agreement Warrants ("Advisory Agreement
Warrants") issued to a designee of the Placement Agent; and
11. 63,910 shares of Common Stock issued to the designee of the Company's
largest creditor to pay accrued interest as of April 30, 1997.
As counsel to the Company, we have examined such corporate records,
documents, agreements and such matters of law as we have considered necessary or
appropriate for the purpose of this opinion. Upon the basis of such examination,
we advise you that in our opinion:
1. Up to 2,777,739 shares of Common Stock issuable upon conversion of
currently outstanding shares of Series A Convertible Preferred Stock, if and
when paid for and issued upon conversion of the Series A Preferred Stock in
accordance with the terms thereof, will be legally issued, fully paid and
non-assessable.
2. Up to 277,770 shares of Common Stock issuable upon conversion of the
Series A Convertible Preferred Stock after exercise of the Preferred Stock
Placement Warrants, if and when paid for and issued upon conversion of the
Series A Convertible Preferred Stock and the exercise of Preferred Stock
Placement Warrants in accordance with the terms thereof, will be legally issued,
fully paid and non-assessable.
RUBIN BAUM LEVIN CONSTANT & FRIEDMAN
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Palatin Technologies, Inc.
November 25, 1997
Page 4
3. Up to 3,055,509 shares of Common Stock issuable upon adjustment in the
conversion price of the Series A Convertible Preferred Stock, if and when paid
for and issued upon conversion of the Series A Convertible Preferred Stock in
accordance with the terms of the Series A Convertible Preferred Stock
Certificate of Designation, will be legally issued, fully paid and
non-assessable.
4. Up to 69,122 shares of Common Stock issuable upon exercise of Class C
Warrants, if and when paid for and issued upon conversion of Class C Warrants in
accordance with the terms thereof, will be legally issued, fully paid and
non-assessable.
5. Up to 177,788 shares of Common Stock issuable upon exercise of Common
Stock Placement Warrants, if and when paid for and issued upon conversion of
Common Stock Placement Warrants in accordance with the terms thereof, will be
will be legally issued, fully paid and non- assessable.
6. Up to 39,167 shares of Common Stock issuable upon exercise of Class B
Warrants, if and when paid for and issued upon conversion of Class B Warrants in
accordance with the terms thereof, will be legally issued, fully paid and
non-assessable.
7. Up to 1,953 shares of Common Stock issuable upon exercise of Class B
Placement Warrants, if and when paid for and issued upon conversion of Class B
Placement Warrants in accordance with the terms thereof, will be legally issued,
fully paid and non-assessable.
RUBIN BAUM LEVIN CONSTANT & FRIEDMAN
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Palatin Technologies, Inc.
November 25, 1997
Page 5
8. Up to 138,241 shares of Common Stock issuable upon exercise of Class A
Warrants (48,404 of such shares of Common Stock have been legally issued and are
fully paid and non-assessable), if and when paid for and issued upon conversion
of Class A Warrants in accordance with the terms thereof, will be legally
issued, fully paid and non-assessable.
9. Up to 20,733 shares of Common Stock issuable upon exercise of Class A
Placement Warrants have been duly authorized for issuance, if and when paid for
and issued upon conversion of Class A Placement Warrants in accordance with the
terms thereof, will be legally issued, fully paid and non-assessable.
10. Up to 12,500 shares of Common Stock issuable upon exercise of Advisory
Agreement Warrants, if and when paid for and issued upon conversion of Advisory
Agreement Warrants in accordance with the terms thereof, will be legally issued,
fully paid and non-assessable.
11. The 63,910 shares of Common Stock issued to the designee of the
Company's largest creditor to pay accrued interest as of April 30, 1997, which
may be sold in accordance with the provisions of the Registration Statement,
have been legally issued and are fully paid and non-assessable.
We are members of the Bar of the State of New York, and the opinions
expressed herein are limited to questions arising under the laws of the State of
New York, the General Corporation Law of the State of Delaware and the Federal
RUBIN BAUM LEVIN CONSTANT & FRIEDMAN
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Palatin Technologies, Inc.
November 25, 1997
Page 6
laws of the United States of America, and we disclaim any opinion whatsoever
with respect to matters governed by the laws of any other jurisdiction.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the references to this firm under the caption "Legal Matters"
in the Prospectus which is a part of the Registration Statement. Reference is
made to the section of the Registration Statement entitled "Legal Matters" for a
description of ownership of the Company's securities by certain attorneys of
this firm.
Very truly yours,
RUBIN BAUM LEVIN CONSTANT & FRIEDMAN