Carl Spana – President and Chief Executive Officer Stephen T. Wills – Chief Financial Officer and Chief Operating Officer Jeffrey D. Edelson – Chief Medical Officer

Joseph Pantginis – ROTH Capital Partners Rahul Jasuja – Noble Financial Capital Markets

Good morning, ladies and gentlemen, and welcome to the Palatin Technologies First Quarter ending September 30, 2012 Financial Results Conference Call. As a reminder, today conference is being recorded. Before we begin our remarks, I would like to remind you that statements 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 you to your host for today, Dr. Carl Spana, President and Chief Executive Officer of Palatin Technologies. Please go ahead, sir.

Thank you and good morning everyone. I am Carl Spana, President and Chief Executive Officer of Palatin Technologies. With me on the call today is Steve Wills, our Chief Financial and Operating Officer, 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 on our most recently quarterly financial results. To begin, Steve Wills will provide an update on our first quarter ended September 30, 2012 results. Steve? Stephen T. Wills: Thank you, Carl, and good morning everyone. Regarding financial highlights, during the quarter ended September 30, 2012, on July 3, 2012 we closed on a private placement of 3,873,000 shares of our common stock Series A 2012 warrants to purchase up to 31,988,151 shares of our common stock. And Series B 2012 warrants to purchase 35,488,380 shares of our common stock. As of the gross proceeds to Palatin were $35 million with net proceeds after deducting operating expenses of $34.4 million. On September 27, 2012 at a special meeting Palatin stockholders voted to increase our authorized common stock from 100 million to 200 million shares and we filed a Certificate of Amendment with the Secretary of State of Delaware at the same day. This satisfied certain contractual obligations related to the Series B 2012 warrants and our 2012 private placement. So that interest will not be payable on the value of the Series B 2012 warrants and Palatin will not be required to redeem the Series B 2012 warrants for failure to increase the number of authorized shares. Regarding the first quarter fiscal 2013 financial results, Palatin reported a net loss of $10.5 million or $0.15 per basic and diluted share for the quarter ended September 30, 2012 compared to a net loss of $3.4 million or $0.10 per basic and diluted share for the same period in 2011. The increase in net loss for the quarter ended September 30, 2012 compared to the same period last fiscal year was mainly attributable to a non-cash, non-operating expense of $7.1 million which represented the increase in fair value of the warrants which were previously liability classified until our increase in authorized shares took place. Regarding cost and expenses, total operating expenses were $3.4 million for the quarter ended September 30, 2012 and September 30, 2011. Operating expenses consist of $1.1 million of general and administrative expenses and $2.3 million of research and development expenses for the quarter ended September 30, 2012 and 2011. General and administrative expenses consist mainly of compensation and related cost and research and development expenses are primarily cost relating to Palatin’s Phase 2B clinical trial evaluating the efficacy and safety of bremelanotide for the treatment of female sexual dysfunction. Regarding Palatin’s cash position, Palatin’s cash and cash equivalents were $33.5 million as of September 30, 2012, compared to $3.8 million at June 30, 2012, with current liabilities of $1.6 million as of September 30, 2012 compared to $3.5 million as of June 30, 2012. We believe that our existing capital resources will be adequate to fund our currently planned operations, including completing analysis of results of our Phase 2B clinical trial with bremelanotide for female sexual dysfunction, submitting an end-of-phase 2 meeting request to the FDA, and commencing Phase 3 activities, through at least calendar year 2013. Carl?

Thank you, Steve. Now, for an update on our programs under development staring with our female sexual dysfunction program with bremelanotide. We issued a press release to held the teleconference call last week regarding positive top line results of our bremelanotide Phase 2b female sexual dysfunction study which evaluated bremelanotide versus placebo and approximately pre-menopausal women with female sexual dysfunction. We will be presenting the results of this study in more detail in investor and scientific conferences later this year and in the first quarter of 2013. We will also be submitting a data for publication in periodic scienctific journals. The top line results clearly demonstrate that bremelanotide resulted in clinical meaningful and statistical significant versus placebo are improving the number of satisfying sexual events, overall sexual function, personal distress associated with sexual dysfunction. I’d encourage anyone interested in more detail to review the transcript and press release of our call last week. Female sexual dysfunction is a disorder that affects approximately 20% of women at some points during their adult life. During our FDA approved treatments and it represents a large potential market opportunity. We believe that our positive bremelanotide results support the continued development of bremelanotide as a treatment for female sexual dysfunction and its potential as a commercial product. Female Palatin along with our external expert advisors are excited by the bremelanotide Phase IIb results and are working diligently to move bremelanotide into Phase III clinical studies. The next milestone for this program is in the Phase II meeting with the FDA which is targeted for the first quarter of 2013. Moving along to our obesity and diabetes program this program is under the direction of AstraZeneca. A lot of program end to an issue with the first clinical candidate the subcutaneous injected peptide AZD2820. AstraZeneca remains committed to the program and continues to make substantial progress. In September AstraZeneca decided to discontinue further advancement of AZD2820. They saw a compound specific adverse event. AstraZeneca is currently evaluating multiple lead compounds with the goal of designating a new clinically compound this calendar quarter followed by progression into clinical studies in 2013. AstraZeneca and Palatin remain committed to this collaborative program and to the continued advancement of melanocortin agonist for the treatment of obesity. Melanocortin receptor is a well validated target for obesity therapeutics. Human Genetic evidence indicates a key role for this receptor and intended pathways in the regulation of food intake weight. In addition our results on earlier clinical trials of obese patients non commercial compounds and target melanocortin-4 receptors shows significant reductions in food intake and weight loss. Pursuing to the terms of the research collaboration and license agreement with AstraZencia Palatin is eligible for milestone payments on achieving development and regulatory milestones and further payments on achieving the sales target in addition to royalties on sales of approved products. AstraZenica’s responsibility for product commercialization, product discovery and all development costs. We believe that they are really targeting the melanocortin-4 receptor, it has the potential to demonstrate the safety and efficacy required for approval and to dramatically impact the treatment of this obesity. This program has significant commercial potential and we believe that our partner, AstraZeneca, has the resources and commitment to realize this potential. PL-3994 is our natriuretic peptide receptor agonist in development for the treatment of acute severe asthma, which is defined in an ongoing asthma episode in which asthma symptoms do not adequately respond to initial bronchodilator or corticosteroid therapy. As we’ve previously stated, a key objective of our PL-3994 program is to identify a development and marketing partner. In support of this effort, we are conducting a variety of preclinical activities to better define the role of natriuretic pathways in pulmonary and cardiovascular diseases. In addition, we are also engaged in formulation and manufacturing activities needed to support clinical advancement of PL-3994 by both inhaled and subcutaneous delivery. Before we move on to questions, I’d like to introduce a program area that we’ve been working on for a number of years, and that we believe is now ready to move forward into development, is our melanocortin receptor-1 based therapeutic program. We believe that melanocortin receptor-1 based compound have the potential to treat a variety of inflammatory and [lousy] based diseases. The research in corresponding scientific publications supporting the role of melanocortin-1 receptor in regulation of inflammatory and logical function and disease pathology has been expanding rapidly over the past several years. Palatin’s core technologies and expertise in melanocortin biology and chemistry has put us in a leading position to take advantage of the emerging science in this area. Productivity in targeting the melanocortin-1 receptor have generated a substantial interest from potential partners and we are in a position to designate a first clinical lead candidate in the first half of 2013. In summary, we are extremely pleased to report the successful completion of female sexual dysfunction Phase IIb clinical trial. We achieved statistical significance in our primary endpoint and key secondary endpoints using independently developed and validated measurement tools. Importantly, we met the key objectives of the trial, which demonstrated excellent safety and efficacy of the drug and identified doses for advancement into Phase III trials and activities. We have a number of very interesting milestones coming up regarded to bremelanotide, we complete our enrollment and we put out a top line date, we will continue to analyze our data between now and the end of the year. We’ve got an end-of-phase II meeting targeted for the first quarter of 2013 and obviously we are working quite diligently on establishing a corporate collaboration to help take that program forward, which is also be a 2013 activity. Regarding the obesity/diabetes program we expect AstraZeneca to have clinical candidate selected by the end of the year and to initiate a Phase I clinical trial some time next year. With regard to 3994, we expect some very exciting data to come out on the pre-clinical front and we also continue to target a corporate collaboration. And finally on the melanocortin, MCR-1 program, we have targeted a goal of collaboration in the first half of 2013 along with a clinical candidate selection in the same timeframe. I like to thank you for participating on Palatin fiscal first quarter conference call and we will now open the call for questions.

(Operator Instructions) And we will take our first question from Joe Pantginis with ROTH Capital Partners. Joseph Pantginis – ROTH Capital Partners: Hey, guys, good morning. Thanks for taking the question. First question I have is regarding AstraZeneca, I was just wondering if you can add maybe a little more color regarding the Company’s underlying commitment to the obesity program and that might be then also taken to consideration the frequency of your interactions. And then the second question that I have is maybe coming off of your call week with the great data that you presented is, would it be possible to dive in a little more regarding a little bit of comparing and contrasting your data with the flibanserin data. Obviously these studies have very similar end points with the FSFV and FSDS, but you obviously looked at things a little bit differently? Thanks a lot.

I’ll start and then some point I am sure Jeff will jump in as well. With regarding to AstraZeneca you’ll certainly involve our correspondence with them. They remain committed to the program. They believe that this is a validated target, it’s actually one of the best validated target and they do believe that they have compounds, multiple compounds and compound classes to chose from and look forward. We speak to them relatively frequently at least once a quarter and obviously when there are key decisions to be made or it’s just to be dealt with the communications are more frequent. So let’s tackle your second question which is really, how do we put the very quick data that we generate and we modify in the context. I’ll make a personal statement, an equivalent statement that in my personal opinion I believe that in the context of large randomized clinical trials, in this indication this is one of the best data’s that exist. Maybe it’s extremely strong, when you compare it to flibanserin though we haven’t put it out yet, all details of the 1.75 milligram dose it will certainly, we will be putting it out in the appropriate content. We believe the data is superior to all measurements, when you compare it with flibanserin that includes Satisfying Sexual Events, female sexual function index associated with stress, sub scores we’ll have you. So I don’t think we could have gotten better data than what we have, it is from an internal perspective, talking about our severance everyone is extremely excited and looking forward to pushing this forward. I’ll let Jeff want to add some more color to that. Jeffrey D. Edelson: I think you have summarized that nicely and the magnitude of effect that we have seen in this study according to its primary analysis is clearly a clinical significance in other magnitude similar to or actually better courses than some of the recent programs that have been published. And I want to emphasize that that's on top of a significant placebo effect observed during the single blind arms. So not only did we distinguish from randomized placebo in the randomized component of the study, but this is clinical benefit on top of an already extend significant placebo effect. So that's what you try to do in a clinical trial, differentiate your drug from placebo and this is very successful example in this case. Joseph Pantginis – ROTH Capital Partners: And maybe just to dive in just a little more on that, so obviously the endpoints where identical essentially identical between the different studies but may be how you measure the endpoints there either with regard to length of treatment or they were certainly differences in the studies with regard to chronic versus on demand like you guys have and how you thought that dynamic helped you?

Sure, I'll make in comment and Jeff certainly can jump in at any time. We will always have good perspective when trying to compare things or how equivalent are they. Certainly the patient populations were slightly different, flibanserin enrolled only patients with hypoactive sexual dysfunction disorder, we had a much broader and more relevant patient population. We looked at patients that had desire disorder or arousal disorder or mixed and that is really where the diagnosis of this disease is going. So we actually look at – in our estimation a much more relevant patient population and one in which not all of those would have contributed equally to the benefit of the drug. That’s one key difference. Again, you point it out that we are intermittent use around demand use versus chronic which is another distinction and from an endpoint standpoint there is a clear distinction, we were not required to measure change in desire everyday, which was – what prevents from what’s required to do, because it’s a daily treatment you have to take it everyday. Length of time here is also different, we treated or randomized part of 12 weeks, we treated for 24 plus weeks and that may not event, (inaudible) that was a good service in a sense that we know that our numbers were continuing to improve. So not only we have great numbers at 12 weeks they were continuing to go up and we expect that if we treat it long, you will continue to see those numbers go up. So I mean again it brings us back to the context of, for this indication, this is a novel indication, I can understand that there is some time this confusion and understand how to put results in context, but you really are going to get better than this. This really is a drug that worthwhile, it correlates with everything, the conversations with principal investigators in this study, they were clearly able to distinguish that this drug was working, much better in comparison to other trials that they had done, clinical advancement this afternoon. I mean this really – I think (inaudible) success, Jeff. Jeffrey D. Edelson: I don’t have a lot to add. These are well validated. The FSFI, FSD, SAO, these are well validated measurement tools that have been used in the number programs as far back as it turns out. And I think that this, and do you think interrogation interval is an important question in the sense that women in many studies report that they don't really think of their sexuality on a kind of a daily moment to moment basis, but taken more global assessment. So true likely FSFI where the interrogation interval is monthly, I think is a very powerful instrument, and clearly showed an important signal in this particular study. Joseph Pantginis – ROTH Capital Partners: Great guys thanks for the added color.

We will go to next to Rahul Jasuja with Noble Financial. Rahul Jasuja – Noble Financial Capital Markets: Hi, good morning guys and thanks for taking my questions. Let me stick with FSD first, a lot of them have been answered but I've got a few more. So looking forward to Phase III plans and some of the answers I am sure you don't have right now, but I have to ask them anyway. Was there any inclining of data that showed better trend lines or efficacy in FSAD versus HSDD and potentially prospectively were those two populations be separately or could be separately defined in the Phase III study. And then the other question I had is, what are the nonclinical work has to be done and how long will that take before you can really have a Phase III ready to all set to go? Jeffrey D. Edelson: This is Jeff. I will start with the sudden group analysis which actually is ongoing as we speak. The trial as Carl mentioned patients with FSAD, HSDD and mixed disorder were eligible for participation and in fact most of the patients in the study where mixed. We’re actually doing our formal subgroup analysis right now and we will have data hopefully later this year on that point.

I don't expect the Phase 3 that it was separate populations, in words, they are actually a relatively very pleased allows the patients in the study. As Jeff said, most of them are mixed, it is really and as the drug performed beautifully in this patient population and this patient population is probably the one that DSM-V, with some streaking will define. I don't seen any reason to separate out the various subgroups. Jeffrey D. Edelson: Yeah, just to amplifying that point, actually the – as Carl mentioned, the DSM-V is now in its draft position, proposes to merge what is currently, patients were currently defined as FSAD and HSDD into a combined diagnostic (inaudible). And we actually worked with our experts to define some of those differences features like receptivity to sexual activity and initiation of sexual activity rather than the – that currently as DSM-IV focuses a lot on thoughts and fantasies and this type of thing. And so we actually have those instruments built into this data set although we haven't seen the data yet and we will be able to model the new proposed DSM-V diagnosis in this population as a part of our planning for Phase 3 and finding the appropriate population for Phase 3 study.

And I would add – I am going to allow our Chief Operating Officer handle the nonclinical activations for the Phase 3 start. Stephen T. Wills: Thank you, Carl. The Bremelanotide is a mature compound from a development standpoint. The [tox] program is complete, the cause of (inaudible) studies are complete, the API is to manufacture to a commercial scale. We have stability going out greater than five years from a drug product standpoint, the formulation is very simple. We have room temperature stability going out greater than two years, we actually already have API supply in place to cover the full Phase 3 activities. Carl?

It’s as a result of the device we will be moving from (inaudible) auto-injector the device has been selected. It’s already been gone through its user testing. So with few minor steps the device is ready to go into production of doses for the Phase 3 trial. So this is buried into our compound with a variable advance on the – not mingle with that, and quite frankly on the critical side as well the objective – our efforts to be ready just a meeting and we've got a great team working quite hard I expect that this mandate delivers us a solid Phase 3 program and I have every expectation that the team will deliver that. Rahul Jasuja – Noble Financial Capital Markets: Okay thanks. And one more question on the FSD program. Sort of trying rough and tough analogy with the PD5 inhibitors that you’ve got different doses and clinician starts you up in a lower dose and moves higher. I know you don't have everything you need right now in terms of data analysis with the top two doses, but looking forward for the Phase 3 study and even in a marketing situation, would you really want to have maybe a couple of doses that you can titrate for patients.

Well not really, quick – you want certainly want at least two doses and both 1.25 milligram and 1.75 milligram doses demonstrated more than sufficient safety and efficacy to lower and Jeff can comment on titration if you like. Jeffrey D. Edelson: The profile actually using the fixed dose, I think either the top two doses here actually did show a good safety and efficacy. But your question is an excellent one, because right at this moment, we don’t have the PK data and the patient demographic data enough granularity to know whether in fact either efficacy or tolerability relates to a PK parameter like Cmax or AUC or whether it relates simply to dose or possibly per body weight. So from the rough cuts of the data some of the tolerability issues due appear to stack by dose, but we really need to see the dose, weighted adjusted, et cetera. With a CNS product, it’s always an assumption that needs to be rigorously tested whether or not Cmax is driving either safety or efficacy and that’s what we will be learning over the next few weeks actually. Rahul Jasuja – Noble Financial Capital Markets: Okay. And then one question on the MCR-1 program, so would you like to say that you are approaching the MCR-1 receptor with your typical cyclic peptide and then that sort of the chemical nature of that, I forget if it’s an agonist or antagonist, I guess it’s an agonist, is that correct?

Sure. The answer to your question is an agonist is required for that indication or multiple indications in that biological area and we have extremely potent selective certain peptides that are small in nature that are ready to go forward and in addition to that we actually have a several nice series of small molecule compounds that we are able to generate, that will also hold quite a lot of promises well so we will be evaluating both. Obviously we have a lot of experience on the peptide front and certainly those little (inaudible) can be moved forward most rapidly, but there are multiple classes both small molecule and peptide. Rahul Jasuja – Noble Financial Capital Markets: Okay, since you have mentioned small molecule, I’ll just ask you the AstraZeneca compound for obesity. Is there potential for a small molecule compound there as opposed to injectible?

I am unable to make any comments on that. Rahul Jasuja – Noble Financial Capital Markets: That’s the answer I was expecting. Okay. Thanks.

And that conclude today’s questions-and-answer session. Dr. Spana, at this time, I’ll turn the conference back to you for any additional or closing remarks.

Thank you everyone for participating in the call. Exciting times here at Palatin. We really are thrilled with our results and position the company is in. As Steve alluded to during his part, we are very well financed. We have the capital to move the programs forward. We have a great team in place. We’ve got a great opportunity in Bremelanotide. We are quite enthusiastic about the opportunities coming along behind. Bremelanotide whether they’d be our (inaudible) program space we think that there is lot to come in this company, a lot under the hood and we continue to just work hard and we’ll move us forward and certainly look forward to speaking to you on, one on ones that I have throughout the quarter be nice as well. And certainly elevating our presence at both the investor and scientific meetings over the next several quarters. Thank you.

And ladies and gentlemen, that does conclude today’s conference call. Thank you for your participation.