Good morning, ladies and gentlemen and welcome to the Palatin Technologies Third Quarter Fiscal Year 2012 Conference call. As a reminder, this conference call is being recorded. Before we begin our remarks, I would like to remind you that statements by Palatin that are not historical facts maybe 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 you to your host for today, Dr. Carl Spana, President and Chief Executive Officer of Palatin Technologies. Please go ahead, sir.

Thank you. Good morning. I’m Carl Spana, President and CEO of Palatin Technologies. With me on the call today is Steve Wills, our Chief Financial and Operating Officer and Executive Vice President; and Dr. Jeffrey Edelson, our Chief Medical Officer. On today’s call, we will be providing updates on our product programs and financial results. To begin, Steve Wills will provide an update on our fiscal third quarter 2012 financial results. Steve?

Thank you, Carl and good morning everyone. Regarding our operating results, Palatin’s net loss for the quarter ended March 31, 2012 was $6.0 million or $0.17 per basic and diluted share compared to a net loss of $3.8 million or $0.17 per basic and diluted share for the quarter ended March 31, 2011. The increase in net loss for the quarter ended March 31, 2012 compared to the same period last fiscal year was attributable to costs related to our ongoing Phase 2b clinical trial with bremelanotide for female sexual dysfunction. This trial commenced June of 2011. The net loss per share of $0.17 for both quarters reflects the weighted average impact of a greater number of shares outstanding for the entire quarter ended March 31, 2012 compared to the same period in 2011. Regarding revenue, total revenue for the quarter ended March 31, 2012 was $24,000, compared to $61,000 for the quarter ended March 31, 2011. This revenue consisted entirely of amounts recognized under our collaboration agreement with AstraZeneca. Regarding cost and expenses, total operating cost for the quarter ended March 31, 2012 were $6.1 million compared to $2.7 million for the same period in 2011. As I mentioned, the bremelanotide trial for female sexual dysfunction commenced June of 2011. The increase in operating expenses for the quarter ended March 31, 2012 compared to the comparable quarter in 2011 was primarily due to costs related to our ongoing Phase 2b clinical trial with bremelanotide for female sexual dysfunction. Regarding our cash position as of March 31, 2012, our cash and cash equivalents were $8.8 million and our current liabilities amounted $3.4 million. We believe based on our current operating plans, that our cash and cash equivalents will be sufficient to fund our operations through March 31, 2013. Carl?

Thank you and now for an update of our program, starting with RBC and diabetes, melanocortin-4 receptor program partner with AstraZeneca. This program under the direction of AstraZeneca continues to make substantial progress. In 2011, Astra designated the compound AZD2820 which was developed by Palatin as a candidate for clinical development. AstraZeneca has completed a Phase 1 study with AZD2820 and results from this study indicate that AZD2820 has a safety and pharmacokinetic properties for further development. For all the year, this quarter AstraZeneca began enrolment in a second clinical trial of AZD2820. This study is a randomized, a single blind, placebo controlled study to investigate safety, tolerability in pharmacokinetics and pharmacodynamics of repeated and ascending doses of AZD2820 in obese subjects. Study is starting to enroll approximately 72 obese subjects, and additional details can be found on the website clinicaltrials.gov. Results of this trial should be available later this calendar year, if results of this trial support further development of AZD2820, we expect that AstraZeneca will aggressively move AZD2820 into larger Phase 2b clinical studies. The commercial drug candidate AZD2820 is a melanocortin receptor, partial agonist developed by Palatin, as part of its collaborative research program with AstraZeneca. The decision to move this program into clinical development was in part based on exciting clinical data generated by Palatin as part of our collaboration with AstraZeneca. Results and proof of principle clinical trials of obese patients with non-commercial compounds that target the melanocortin-4 receptor showed significant reductions in food intake and weight loss. We believe this clinical data along with earlier work on animal models of obesity demonstrate the significant role that the melanocortin pathway played in regulating food intake, weight loss and validates melanocortin-4 receptor as a major target for obesity therapeutics. We believe that therapeutics that target the…

Thank you. (Operator Instructions) We’ll take our first question from Joe Pantginis with Roth Capital Partners.

Hey guys, good morning. Thanks for taking the question. This first question I have is on the obesity program. I guess it’s sort of a two pronged question. And I know, you can’t really comment too much of AstraZeneca parts, but hoping you can at least share some insights. I guess the first part of the question is AstraZeneca is obviously moving the drug forward. I just wanted to see if you could provide any commentary as to, their level of excitement on the drug and the body language that you get for them regarding the commitment that they do have for the program, and which could have been, which is the second part of my question, which could have been bolstered by being a recent news that came out of Arena and the Lorcaserin Advisory Committee. And then I guess the second half of that direct question is based on Lorcaserin, when you talk about the science maybe you can just spend two seconds on the comparing and contrasting with it regarding the agonistic approach of the two drugs. Thanks a lot guys.

Thanks Joe. We’ll take it in two parts. Co we did have an opportunity earlier in a quarter to go and sit down with our colleagues at AstraZeneca. And we were given a very comprehensive review of where the program stands, and it certainly includes the Phase 1 data that was generated, as well as the design and objectives of the current trial and really the future plans, all the way out to today’s three. This is a key program for them in their Metabolism and Endocrinology Group, that’s one of their lead programs. Beyond that, I am certainly not, the enthusiasm is quite high, obviously we are not allowed at liberty to discuss the details of it, but suffice it to say that they’ve got a very comprehensive program designed and ready to implement, from where we sit today to the Phase 3, decision point. So we are very very pleased with the program, and what they’re doing and committed to putting into it. Getting on to the second part, which is thinking about different mechanisms and we certainly in the last week, had a very nice vote from the FDA advisory panel on Arena’s product Lorcaserin, that’s a 5H2C agonist, designed for the treatment of obese patients, and on the their second panel round, go around they actually had, as I said a positive vote.. One thing that’s exiting to us about the program is the melanocortin-4 receptor and it’s attended signaling pathways play key role in regulating many many different signaling pathways that are involved in food and energy regulation. For examples, signals like leptin, ghrelin, search noted signals like 5-HTC receptors, impart signal into the hypothalamus and work through the MCR-4 signaling pathway to actually bring about their effects on reduction and weight loss. So we really do believe that we are sitting in a very key signaling junction pathway, than with in a very key signaling pathway, that’s involved in regulating food intake. So, when you think about things like 5-HTC receptor agonist, these are compounds that stimulate or activating large number signaling pathways, both in the central nervous system and peripheral, many of which have benefit and some of which don’t. So, as you can see part of that panel, was quite heavily involved in discussing the potential safety effects of that drug due to its non-abusive related signaling. So, we believe that really targeting the MCR-4 receptor directly which is what AZD-2820 does, really avoids a lot of that ancillary issues around non specific activation and puts you right where you want to be, direct activation of the key signaling pathway, patients taking it feel that the satiated but food intake weight loss.

I know, thank you that’s very helpful. Maybe if I could switch gears real fast. Just over to the BMC program, obviously you have a big catalyst coming in the second half of the year, that’s also an area that’s been in the news a lot, with regard to other failures in the States, such like BioSante, so not necessarily it’s to do with compare or contrast with regards to the mechanist, because you obviously you don’t take a hormonal approach as other companies have and I think that’s a key differentiator, that may be a little to share about potential differentiation on the actual end points in the study, and how patient outcomes are reported.

Well I mean, so I keep differentiating feature with regards to the trials are one bremelanotide is an on demand product, so it’s taken just prior to a sexual encounter, as suppose to something like testosterone which is taken on a chronic basis. So, testosterone is taken probably, approximately 12 to 16 weeks before the potential for a clinical benefit can be realized by the patient and they have to take it in the case of libido every day. Because of that and because of the fact that the underlying presumption of an agent, like testosterone, is that it has a generalized increase in libido or sexual desire. They will require in their trial to measure changes in desire everyday and we are released and that and many others, is that, that is way too frequent a measuring period for desire. When we don’t think about it every day and the fact that they fill a lot of questionnaire everyday about their desire actually can increase the placebo response and that is clearly well documented in the literature. Because bremelanotide doesn’t report to take to increase in a desire and because we’re not taking on a chronic basis we don’t have that requirement. We’re measuring changes in arousal and desire on a monthly basis using validated instruments like female sexual function index, and others that have been well tested in clinical trials. So, we don’t have that daily diary issue and the other endpoint they we’re using is as many sexual events which is commonality between almost all of the Phase 3 programs in March for programs in sexual function and that is a simple odd or actually that’s within 24 hours of an event women is simply guess or no question, with the event satisfying or not. So those are some of the key differentiations, I mean in all trials, the generalities are have been satisfying sexual events, affects on arousal and desire and a decrease in sexual dysfunction associated distress. A key difference still with the chronic medications is that we’re using those arousal desire measurements are done every four weeks, and we don’t have that daily diary.

Great, thanks so much for the added color Carl.

And we’ll go next to Rahul Jasuja with Noble Financial Capital Market

Hey, good morning and thanks for taking my question. So some of my questions sort of overlap with the previous questioning. So, let me start with the FSD program, I was just going through the clinicaltrials.gov protocol out there, so just help me clarify here. So my understanding is that and, this sort of leads into, the difference in the clinical trial design that may filter out, potential high placebo responders. So let me ask the first part, wherein you got the primary endpoint as SSE, as Satisfying Sexual Events. During the last four weeks of the trial, but the trial goes to 20 weeks and could you explain to me the time length, the time the patient comes in to the weeding of process and then getting on the drug and then actually taking the measurements, that’s my first question.

Sure. I am going to let Dr. Jeff Edel, who was into and involved in the design of that study address that question.

Thanks Carl. Rahul, so basically there are four treatment assignments of one month duration, during the clinical trial. One or more of which maybe placebo, and I don’t want to go into any more detail at this point, because the trial is still ongoing. But I think at the end of the day, you’ll see the design will allow us to calibrate response to placebo, as compared to response to active agent.

So, am I right in thinking that the early weeks of the study would test if these, and I’m not sure if can answer that question, but let me ask it anyway. The early weeks of the study would test for those responders, who would potentially be the high placebo responders. And the reason I ask this is obviously is we’ve seen in past studies, namely BioSante that the placebo response had been more than expected. So, my question here isn’t it the protocol to weed out these potential high placebo responders?

No. In this study we are not eliminating people who respond to placebo. But let me just say that we are very aware and focused on the issue of the high placebo rates and then making these sorts of trials. And this trial would potentially enable Palatin to use a refinement design if needed, in future clinical studies. So this trial would enable future trials to do that, but we are not doing that in this particular trial.

Okay, so in the future you could beat them out, also the lack of a daily diary should help the placebo response being as expected.

Let me just sum this again. One of the things that we did here, just on a global basis, and we don’t want to obviously get into too many details of the clinical trial design elements be put it in to help us lessen or deal with the placebo response, because the trial is ongoing and this is an open call. We looked at this a little bit differently than maybe others have. This indication is one in which patients help assessment, instruments are widely used for most of the end points. This however is not the only indication where those are used. Things like depression, pain, (inaudible) are all clinical indications where patient reported out for measures are used. Placebo rates can be higher in those studies, however in those indications of the design of clinical trial elements that can lessen or deal with placebo response. And Jeff and his team brought some of those elements into this study, so we believe we’re going to have a good handle on the potential for measurements of the placebo response, how to deal with it and lessen it, so that we can really elucidate a drug signal, with a compound.

Okay that’s great. And then the other question I have is, again maybe a little dicey question for you guys to answer, but let me ask it anyway. So we saw testosterone in post-menopausal women, in trends as approved in Europe. But what is your view point, does testosterone work in post-menopausal women, maybe it’s better than pre-menopausal, could you sort of add some color on that, if you can?

We’re thinking, my understanding of the current approval for the Intrinsa product, is in I’m surgically post menopausal women. And that’s a pretty unique subject of people with FSD. The other aspect of the Intrinsa of pivotal studies was a standardization of estrogen levels. I mean, that’s an area that’s gotten more complex with the findings from the women’s health studies. So we’re focused on pre-menopausal females with both HSDD and FSAD, and I think our program is going to be focused on that near term.

Just getting along testosterone, I mean whether it works or not it is obviously, here we have one program that showed, here’s one that’s a little bit equivocal. But we do know that there are several million scripts seen here written off labels for testosterone in women, so at least in the community there is a potential benefit of putting women on testosterone.

Right, and really I was coming from the angle wherein a lot of the investors have looked at the testosterone study and you know forgotten about FSD, assuming that that’s the disease that is tough to handle and trying to sort parse out differences in the mechanism, but thank you, anyway. Final question I have is on obesity and its already been answered, but theoretically given the mechanism by which the MT works or rather 2820 works, you know again, theoretically you would think that since melanocortin receptors sort of integrate signals, from the brain and gut and sort of have an effect on feeding behavior. If you directly target MCR-4 in a safe and effective manner, you could have less side effects than the other targets that ultimately, indirectly target melanocortin-4, is that thinking right?

I think that’s a valid premise for the MCR-4 base treatment for obesity. You are directly activating and specifically activating the pathway, as opposed to activating multiple tangential pathways, one of which your interested in and others that you’re not. So I agree, I would agree with that.

Okay, thank you guys.

If no further questions in the queue, I would like to turn the call back to Dr. Carl Spana for any additional or closing remarks.

Great, thank you guys for participating on the call, I’d like to thank the both, the questioners, they asked in a very key questions about our programs and it gives us an opportunity to talk about them. So have a great day, we look forward to continuing to update you as our programs progress, and this is an exciting year for us. We have two major milestones coming up later in the year, we are quite excited about them and I think they really will help to transform the company, and return a lot of value to our shareholders. So with that, have a nice day, look forward to updating to all. Thanks for participating on the call.

This does conclude the call for today. We thank you for your participation.