Upgrades Downgrades Penny Stock Watch: Palatin Tech (PTN)

Shares in the penny stock of  Palatin Technologies Inc. (NYSE Amex: PTN) is now covered by analysts at Roth Capital with a “buy” rating. Palatin, a biopharmaceutical company dedicated to developing targeted, receptor-specific peptide therapeutics, has seen a significant drop in revenues compared to 2010 but could be looking at a rebound in the short-term.

Six weeks ago, Palatin announced that over 400 premenopausal women, diagnosed with female sexual arousal disorder, hypoactive sexual desire disorder or both were enrolled for its Phase 2B clinical trial which is set to last 16 weeks focused on evaluating the efficacy and safety of bremelanotide for treatment of female sexual dysfunction (FSD). A week ago Palatin announced a second phase I clinical trial of AZD2820 for the treatment of obesity had commenced as a clinical candidate selected by AstraZeneca.

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PTN Stock Snap Shot:

Market Cap: 34.90M
Price/Sales (ttm): 87.30
Price/Book (mrq): 1.76
52-Week High
(Jun 30, 2011): 1.38
52-Week Low
(Jan 3, 2012): 0.39
50-Day Moving Average: 0.64
200-Day Moving Average: 0.57
Avg Vol (3 month): 61,643
Avg Vol (10 day): 22,083
Shares Outstanding: 34.90M
Float: 18.58M
% Held by Insiders: 26.56%
% Held by Institutions: 21.60%

Ytd Pct Change: 59.24%

About Female Sexual Dysfunction (FSD):

FSD is a condition arising through the action of many factors that has anatomical, physiological, medical, psychological and social components. FSD includes four disorders:

  • hypoactive sexual desire disorder,
  • female sexual arousal disorder,
  • sexual pain disorder and
  • orgasmic disorder.

To establish a diagnosis of FSD, one or more of these disorders must be associated with personal distress, as determined by the affected women.

Approximately 40 million women in the U.S. alone are affected by FSD. The National Health and Social Life Survey, a probability sample study of sexual behavior in a demographically representative cohort of U. S. adults ages 18 to 59, found that roughly 43% of women suffer from some form of FSD, with as many as 15% of them having associated personal distress required to establish a diagnosis of FSD.

Currently in the U.S., there are no approved drugs for FSD indications.

Bremelanotide for Sexual Dysfunction:

Palatin is has been developing an under-the-skin administered bremelanotide for the treatment of FSD in pre-menopausal women in patients non-responsive to current therapies. Bremelanotide, which is a a compound which binds to a cell receptor and triggers a response drug candidate, is a synthetic peptide analog of the naturally occurring hormone alpha-MSH.

About Obesity:

Obesity is a world-wide problem, with the W.H.O. having estimated that more than 1.5 billion adults are over-weight and more than 500 million are obese. Global obesity has more than 2X since 1980. A number of different metabolic and hormonal pathways are being reviewed by companies world-wide in efforts to develop better treatments for obesity. Science has proven that melanocortin receptors have a role in eating behavior and energy homeostasis, and that some melanocortin receptor agonists decrease food intake and induce weight loss in animal studies.

About the Collaboration Between AstraZeneca and Palatin Technologies:

Palatin entered into an exclusive research collaboration and license agreement with AstraZeneca in 2007 to discover, develop and commercialize compounds that target melanocortin receptors. Active development work by Palatin under the collaboration portion of the agreement concluded in January 2010. For more information on this clinical trial with AZD2820, please visit www.clinicaltrials.gov.

To view the SEC filings for Palatin, click here.

Bottom Line: When conducting an upgrades downgrades penny stock screen, we found that Roth Capital likes to issue buy ratings on companies it has a relationship with. With Palatin due to speak at one of the Roth conferences, we can see why they would issue the buy on the penny stock.

That said, PTN is worth adding to your list of penny stocks to watch, especially if you have made big money before playing the biotech sector. Palatin is already in with AstraZeneca who is flipping the bill on the AZD2820 study. Good news could send the penny stock on an instant rally.


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