Good morning, ladies and gentlemen, and welcome to Palatin Technologies’ first quarter fiscal year 2010 conference call. (Operator Instructions) Before we begin our remarks, I would like to remind you that statements made by Palatin that are not historical facts may be forward-looking statements. These statements are based on assumptions that may or may not prove to be accurate and actual results could differ materially from those anticipated due to a variety of risks and uncertainties discussed in the Company’s most recent filings with the Securities and Exchange Commission. Please consider such risks and uncertainties carefully in evaluating these forward-looking statements and Palatin’s prospects. Now I would like to introduce your host for today’s call, Dr. Carl Spana, President and Chief Executive Officer of Palatin Technologies.

Thank you. Good morning, ladies and gentlemen and welcome to the Palatin conference call. I am Carl Spana, President and CEO of Palatin Technologies. With me today is Steve Wills, Palatin's Executive Vice President of Operations and Chief Financial Officer, and Dr. Trevor Hallam, Palatin's Executive Vice President of Research and Development. To start our conference call off, let me say a few words that serve to outline our three main programs. Palatin is focusing on three exciting programs that we believe will create significant shareholder value. These are: our sexual dysfunction program aimed at both male and female sexual dysfunction; our obesity and diabetes program which is partnered with AstraZeneca; and lastly, our heart failure program with our lead development compound PL-3994. All our programs target patient populations where the medical need is high and with tremendous commercial potential. We are quite excited by the potential of our Melanocortin targeted sexual dysfunction program. Our lead compound in this program is bremelanotide which has been extensively studied in clinical studies as a treatment for both erectile dysfunction as well as female sexual dysfunction. A potential safety concern with intranasal bremelanotide is its ability to significantly raise systolic blood pressure in a small number of patients. To address this potential concern, we conducted a repeat dose Phase I safety study using subcutaneous instead of intranasally administered bremelanotide. The results demonstrate that with subcutaneous administration, consistent therapeutic blood plasma levels can be obtained without blood pressure side effects. Palatin has been in discussions with the FDA concerning the clinical development of bremelanotide for men with erectile dysfunction and who do not respond to current PD5 inhibitive therapy. We anticipate beginning enrolment of patients in the bremelanotide erectile dysfunction program later this calendar year. In addition, we intend to develop bremelanotide as a…

Thank you, Carl. Good morning, everyone. For the quarter ended September 30, 2009 which is the first quarter of our fiscal year, Palatin reported a net loss of $37,000 or $0.00 per share compared to a net loss of $4.3 million or $0.5 per share for the same period in 2008. The decrease in net loss for the quarter ended September 30, 2009 compared to the same period last fiscal year was primarily due to an increase in revenue recognized under Palatin's license and clinical trail agreements with AstraZeneca and a net decrease in operating expenses resulting from strategic restructuring and refocusing of Palatin's clinical stage development programs in 2008. As of September 30, 2009, Palatin's cash, cash equivalents and investments totaled $7.7 million compared to $7.8 million at June 30, 2009. During August, we raised $2.8 million in net proceeds from a registered direct offering of 9.5 million units at a price of $0.33 per unit. Each unit consisted of one share of common stock and one warrant exercisable at any time on or before the five-year anniversary date of the issuance to purchase 0.35 of one share of common stock at an exercise price of $0.33 per share. In September 2009, we signed an amendment to our exclusive research collaboration and license agreement with AstraZeneca to discover development and commercialized compounds that target Melanocortin receptors for the treatment of obesity and related indications. Under the terms of the amendment, AstraZeneca has agreed to make a $2.5 million payment and that payment was received in October 2009 and subject to completion of certain tasks relating to the program, an additional $2.5 million in the first quarter of calendar year 2010. Under the amendment, the terms of the original collaboration and license agreement signed originally in January of 2007 relating to milestone payments and royalty rates were restructured. Regarding licensing and contract revenue for the quarter ended September 30th, 2009, Palatin recognized $3.7 million of contract revenue under its collaboration agreement with AstraZeneca compared to $746,000 for the same period in 2008. Based on the September 2009 amendment, Palatin will provide research services to AstraZeneca through January of 2010. Accordingly, contract revenue is being recognized over the estimated remaining performance period. Regarding costs and expenses, total operating expenses for the quarter ended September 30, 2009 were $3.8 million compared to $5.1 million for the comparable quarter of 2008, primarily due to a strategic restructuring and refocusing of Palatin's clinical stage development programs.

Thank you, Steve. Now I will hand the call over to Trevor for the latest on our research and development programs. Trevor.

Thanks, Carl. Good morning. Let me start out with the sexual dysfunction program. So going back a couple of years, previous Phase II data with intranasally administered bremelanotide revealed a couple of key concerns; a wide variation in plasma exposure for a given intranasal dose across the ED population and secondly a propensity to cause small increases in blood pressure. Of most concern, however, a few individuals in the study seemed to show larger blood pressure increases. So Palatin has addressed a major objective to further understand the mechanism responsible for these underlying cardiovascular effects. We have redefined the bremelanotide ED program to optimize the benefit to risk. First we aim to target the identification of second line therapy for those with ED who are non-responsive to PD-5 inhibitors. Secondly, we will switch to subcutaneous routes of administration and lastly, we will evaluate BMT for use both as adjunct to PD-5 inhibitors and as potential mono-therapy. Over the last 18 months, Palatin has performed a number of pre-clinical studies and as Carl mentioned previously, an additional clinical study with bremelanotide to further elucidate the mechanism of blood pressure increase and its relationship to bremelanotide plasma levels. Our data had suggested that by changing the routes of administration of bremelanotide from intranasal to subcutaneous, there is much less variability in plasma exposure. The additional clinical data generated in the first half of this year confirmed that subcutaneous administration of bremelanotide with its predictable plasma exposure levels reduces or eliminates the blood pressure response when dosed at efficacious levels. In addition, those side effects that were most likely associated with intranasal administration were absent and the incidents of gastrointestinal side effects, such as nausea and vomiting, were also much better controlled. Palatin have had a guidance meeting with the FDA to discuss…

Thank you, Trevor. Before we move on to the question and answer session, I have a few additional comments. I remain very excited about the Palatin product pipeline. The depth and potential of our programs has allowed us to access needed resources during a very difficult economic period. However, we realize that we will not be able to pursue all of our opportunities and we will have to prioritize. In the near-term, we will focus on our Melanocortin programs for sexual dysfunction and our Melanocortin programs for obesity and diabetes. Because of our strength in Melanocortin research, our partnership with AstraZeneca and the size of commercial opportunities, we believe that these programs represent the best risk return for our shareholders. The sexual dysfunction space is an area where there is clinical need with very few products in development. 35% of the patients with erectile dysfunction do not respond to current PD-5 inhibitor therapy and an additional 20% are only marginally satisfied. We believe this non-responsive population is an excellent commercial opportunity for bremelanotide. Based on our clinical experience with bremelanotide, we believe that bremelanotide will have significant benefit in this patient population. Our recent work to address the potential safety concerns of bremelanotide has increased our confidence that bremelanotide can be commercialized with an acceptable risk to benefit ratio. In the female sexual dysfunction space, patients and their doctors have very limited treatment options. Based on our clinical data, we believe that Melanocortin-4 targeted therapy holds great potential for treating these patients. We are fortunate to have two potential drug candidates, bremelanotide and PL-6983, for this indication. As previously mentioned, we met with the FDA and we plan to begin the bremelanotide erectile dysfunction clinical program later this calendar year. Regarding PL-3994 and our other early stage Melanocortin programs, we intend to enter into corporate partnerships to access the resources to move these exciting opportunities forward. In closing, through tight control of our expenses and increasing our projected cash flow by expanding our obesity and diabetes collaboration with AstraZeneca, we are confident we can move Palatin forward and secure significant value for our programs. Now I would like to open the call to questions.

(Operator Instructions) The first question comes from the line of Matt Kaplan of Ladenburg. Matt Kaplan – Ladenburg Thalmann: So talk a little bit about how will I guess the subcu bremelanotide, your vision in terms of it being incorporated into the current treatment paradigm for both ED and FSD. And then talk a little bit more about the timeline for FSD as well.

With regard to erectile dysfunction, when we think about the patient population that is not responding well to PD-5 inhibitor therapy, which we mean Viagra sales and Lavitra, they really don’t have a lot of treatment options. Today the only other approved therapies are either direct injectable [inaudible], which is a needle that you directly inject into the penile tissue, or a muse, which is a inter-urethral pellet that you have to add into the urethra. So those generally tend to be a little bit -- much more invasive and because they are not so widely used. The other alternative is surgical, in which case they can get an implant put in. So when we think about that non-responsive patient population, a very simple, relatively painless small subcu injection that can be given in the upper arm or the upper leg or the abdomen stacks up quite well. So we think that with the efficacy that we will see in the profile of the drug, that the second line population is one where we will get pretty rapid adoption and good adoption of the use. Switching to the female front, there really to date aren’t any options available so again, although one might like to have an oral medication for that indication and we are indeed working on that and believe that we will get that, we do think that there’s a good -- still a very good commercial opportunity for bremelanotide in light of the fact that there are no treatment options and the few treatments that are in development tend to be chronic, meaning that they have to be taken every day, whereas bremelanotide is an on-demand. So I think that’s a much more convenient profile for the patient, even though it would be subcu versus non. I hope that answers it. Matt Kaplan – Ladenburg Thalmann: And then in terms of when you think you’d get the FSD program up and going?

We’ve been having meetings with the AC to discuss the male program and we are going back to request our meetings with the female reviewers. I would expect we will get that meeting early in 2010 and based on the outcome from that, we should be able to start in the first half of next year. Matt Kaplan – Ladenburg Thalmann: And then one other question in terms of Trevor mentioned in his prepared remarks, or perhaps you did, that with the natriuretic peptide you are looking at potentially partnering that. Are there any next steps you have to do internally to make that a partnerable package or is it pretty much set to be partnered as is?

I think it is at a stage where it is pretty well set to be partnered. I mean, we have a clear expectation of what the compound is capable of doing pre-clinically and it all comes down to choosing the right patient population and looking then to see whether you are going to see the expected benefit in terms of renal and cardiac function. So we’ve defined our dose range and where we should be able to go in there. We need to reconfirm that with the right population of folk, heart failure patients, and then extend that through into a longer treatment paradigm. But I don’t think there is much else we can do pre-clinically now to really de-risk it or we’ve defined the opportunity and I think it just needs to be executed in that. Matt Kaplan – Ladenburg Thalmann: But in terms of the next steps, that would probably be done with a partner and not --

Yes, we anticipate so. Matt Kaplan – Ladenburg Thalmann: Thanks for taking my questions.

That does conclude today’s question-and-answer session for today. At this time, I will turn the call back over to Dr. Spana for any additional or closing remarks.

I would like to thank all of you for participating in the first quarter calendar year 2010 Palatin conference call. With that, we look forward to updating you as we continue to make progress with the development of our exciting programs next quarter. Have a good day and we will talk to you soon. Bye-bye.

That concludes today’s conference call. Thank you for your participation.