Palatin Tech Off 22%; Co. Cites End Of Lockup
On Shrs
By Sean Davis
NEW YORK (Dow Jones)--Palatin Technologies Inc. (PLTN) fell 22% as
800,000 previously locked-up shares came on the market.
Edward J. Quilty, the company's chairman, chief executive and president, said
he didn't know who was selling the stock.
But Palatin, a development-stage drug maker, sold the shares last spring in a
private placement at $4.96 each, and Quilty said it was possible some of those
investors were taking profits.
Palatin opened Friday at 7 1/4, the high for the day. The issue recently traded
at 5 5/8, up from the day low of 5 1/2, but off 22.4% from Thursday's close.
Volume was 91,300, more than four times average daily volume of 20,500.
The drop also follows a week in which other companies with male-impotence
drugs in development saw their share prices decline.
Palatin Executive Vice President Charles Putnam discounted the possibility
that the company's shares were trading in sympathy with Vivus Inc. (VVUS)
and Zonagen Inc. (ZNG), pointing out that Palatin acquired a license to
Competitive Technologies Inc.'s (CTT) erectile-dysfunction drug only last month.
"I don't think the market associates us with that sector," Putnam said.
Palatin's lead product is LeuTech, a kit-packaged imaging agent targeted at
appendicitis and other infections. Company-sponsored Phase I and II trials of
LeuTech recently began.
But Jay Abella, a biotechnology analyst at Westergaard Online, thinks treating
male impotency will be important to Palatin.
"Clearly, their strategy is to enhance shareholder value through the use of
erectile-dysfunction products," Abella said.
After Vivus said production delays would hurt fourth-quarter revenue, sellers
took 31.4% off its market value.
The male-impotency market, which the National Institutes of Health put at 10
million to 20 million people, has become a magnet for drug developers, with
pharmaceuticals giants Pfizer Inc. (PFE) and Schering-Plough Corp. (SGP) set
to enter.
But Palatin's Putnam said the NIH estimate is higher than the company's
internal estimate of 2 million.
Based on the price of its license and the cost of the development that remains
before the drug comes to market, Palatin's Putnam said the company would be
happy with a total market of 2 million to 10 million men.
- Sean Davis; 201-938-5400 |
