Carl Spana - President and CEO Steve Wills - CFO, COO and EVP Jeffrey Edelson - CMO

Charles Duncan - Piper Jaffray Joe Pantginis - Roth Capital Partners Rahul Jasuja - Noble Capital Markets Charles Duncan - Piper Jaffray

Good morning, ladies and gentlemen, and welcome to the Palatin Technologies Fourth Quarter Fiscal Year End 2014 Conference Call. As a reminder, this conference is being recorded. 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 to you 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 and Executive Vice President; and Dr. Jeffrey Edelson, our Chief Medical Officer. On today’s call we will cover the details of our recently announced bremelanotide license and co-development agreement with Gedeon Richter, updates on our development programs and our fiscal year end 2014 financial results. To begin, Steve will provide the financial updates.

Thank you Carl and good morning everyone. Regarding fiscal year June 30, 2014 and recent operational highlights, on August 29, 2014 we executed a licensed co-development and commercialization agreement with Gedeon Richter Plc a European based specialty pharmaceutical company with a strong focus in female healthcare to co-develop and commercialize bremelanotide for female sexual dysfunction indications in the European Union, other European countries and additional selected countries. On September 4th last week we’ve received €6.7 million approximately $8.8 million as part of the total upfront payment of €7.5 million approximately $9.8 million. €800,000, $1 million as an option fee was received prior. The total of approximately $9.8 million is being recorded as deferred revenue and will be amortized to income ratably over the anticipated European development period. A milestone payment of €2.5 million approximately $3.3 million is due upon the initiation of the Phase 3 clinical trial program in United States. We also have the potential to receive up to €80 million approximately $106 million in regulatory and sales related milestones. This $106 million consist of approximately $30 million in regulatory milestones and approximately $76 million in sales based milestones, plus low double-digit royalties on net sales in the licensed territory. All sales, marketing and commercial activities and associated costs in the licensed territory will be the sole responsibility of Gedeon Richter. We completed discussions and meetings with the FDA on Phase 3 protocols for our bremelanotide for female sexual dysfunction program in the United States. We received comprehensive guidance from the European Medicines Agency on Phase 3 protocols for bremelanotide for female sexual dysfunction in Europe. We advanced our lead natriuretic peptide compound, PL-3994, a receptor-A agonist for treatment of cardiovascular and pulmonary indications. A Phase 2A multiple dose clinical study in heart failure patients is targeted for the first half of calendar year 2015. We announced that the United States Patent and Trademark Office issued a Notice of Allowance for U.S. Patent Application Serial Number 13/311,824. The application includes composition of matter claims on a next generation of melanocortin receptor-specific peptides for sexual dysfunction, obesity, metabolic syndrome and other indications. We also announced that the U.S. Patent and Trademark Office issued two new patents to Palatin supporting our program developing synthetic mimetics of the neuropeptide hormone atrial natriuretic peptide. These mimetics may be useful in the treatment of heart failure, hypertension, acute asthma and other indications. We advanced our clinical development candidate selected for our melanocortin receptor program for inflammation and dermatologic indications. A first in human clinical trial is targeted for the first half of calendar year 2015. We received approximately $1.85 million in net proceeds from the sale of New Jersey state, net operating loss carry forwards via the state of New Jersey’s Technology Business Tax Certificate Transfer program. Now switching over to the financial operating results, regarding the fourth quarter and fiscal year ended 2014, our net loss for the quarter ended June 30, 2014 was 4.3 million or $0.04 per basic and diluted share compared to a net loss of 4.7 million or $0.04 per basic and diluted share for the same period in 2013. The decrease in net loss for the quarter ended June 30, 2014 compared to the net loss for the quarter ended June 30, 2013 was a result of a decrease in operating expenses primarily related to our Bremelanotide for female sexual dysfunction program. For the year, ended June 30, 2014 we reported a net loss of 13.9 million or $0.13 per basic and diluted share compared to a net loss of 20.9 million or $0.21 per basic and diluted share for the year ended June 30, 2013. The decrease in net loss for the year ended June 30, 2014 compared to the net loss for the year ended June 30, 2013 was mainly attributable to the recognition of a 7.1 million non-cash charge to expense for the increase in fair value of warrants related to our July 03, 2012 private placement offering. Regarding revenue, there were no revenues recorded in the quarters ended June 30, 2014 and June 30, 2013. There were no revenues recorded for the year ended June 30, 2014 compared to $10,000 of revenue recorded for the year ended June 30, 2013. This revenue consisted entirely of reimbursement of development cost and per employee compensation earned at the contractual rate pursuant to our collaboration agreement with AstraZeneca. Regarding cost and expenses, total operating expenses for the quarter ended June 30, 2014 were 4.3 million compared to 4.7 million for the comparable quarter of 2013. The decrease in operating expenses for the quarter ended June 30, 2014 was primarily the result of lower period cost related to our Bremelanotide for female sexual dysfunction program. Regarding Palatin’s cash position, our cash and cash equivalents were 12.2 million as of June 30, 2014 compared to cash and cash equivalents of 24.4 million at June 30, 2013. And as stated previously we did receive $8.8 million last week related to the execution of our licensed co-development and commercialization agreement with Gedeon Richter. Total liabilities as of June 30, 2014 were 1.8 million, which is net of a 1 million of deferred revenue figure compared to 2.1 million as of June 30, 2013. We believe that existing cash, capital resources including amounts received from Gedeon Richter will be adequate to fund our planned operations but not initiating patient enrollment for Bremelanotide for female sexual dysfunction program without new funds through the quarter ending September 30th, calendar year 2015.

Thank you, Steve. Our fiscal year end 2014 operational and programs update will start with an overview of our Bremelanotide Phase 3 female sexual dysfunction program. Our activities are focused in two areas, operations required to start and conduct Bremelanotide North American Phase 3 pivotal registration studies and ongoing corporate partnering activities. We believe that there is a substantial global market for Bremelanotide with the United States being the large potential market followed by the European Union. We believe the most effective strategy is to have distinct partners each of the United States, European Union and other territories of the world. Carrying out this strategy we announced last week that we entered into a license and co-development agreement with Gedeon Richter, a European based specialty pharmaceutical company. Earlier in this teleconference Steve provided additional details on the agreement, I will now provide some details on what this agreement means to our Bremelanotide program. We believe Gedeon Richter will be excellent partner for Bremelanotide as they were a leader in the development and marketing female healthcare products. The female healthcare franchise at over $500 million in sales in 2013 and they have a strong ongoing presence in Europe and other regions. In addition Gedeon Richter brings relevant regulatory and clinical operations experience that will help to ensure the potential success of the Bremelanotide European Phase 3 development program. Prior to execution of the agreement Palatin and Gedeon Richter met with the European Medicine Agency and received written scientific and regulatory guidance for the Bremelanotide European Phase 3 program. Bremelanotide European development program will mainly consist of a single Phase 3 pivotal trial conducted in Europe. Gedeon Richter with support from Palatin will conduct European Phase 3 clinical trial. Currently we’re working with Gedeon Richter on the activities required to begin enrollment in European trial. Our agreement with the Gedeon Richter is a key milestone for our Bremelanotide program. I'll now cover Bremelanotide’s activities in United States. As previously stated we have reached agreement with the FDA on the key components of the Bremelanotide phase 3 pivotal clinical trials. This includes patient population, clinical trial design, endpoints, open label safety study and additional support of clinical trials. We have been actively engaged in completing the activities required to begin entering patients into the Bremelanotide Phase 3 North American trials and we are planning to begin patient screening in the fourth quarter of 2014. And turning to a potential of licensing agreement for Bremelanotide in North America, we continue to make progress with these activities, working with potential partners as they conduct their due diligence. As stated previously, the start of the Bremelanotide Phase 3 pivotal program in United States is dependent on a number of factors including the status of our corporate partnering discussions and financial resources. I would now like to spend a few minutes discussing our natriuretic peptide program and our clinical development candidate PL-3994. The natriuretic peptide system is an endogenous neuropeptide hormone system involved in the regulation of cardiovascular function. Natriuretic peptide system includes the peptide hormones atrial natriuretic peptide and b-natriuretic peptide and their associated receptors. Natriuretic peptide system functions the lower blood pressure, suppress the renin angiotensin aldosterone system, inhibit cardiac hypertrophy and fibrosis, increase in atrial lysis and protect cardiac and kidney function. We believe that the natriuretic peptide system holds great promise as a target for cardiovascular disease in heart failure drug therapy. The high value of targeted natriuretic peptide system for heart failure treatment is demonstrated by recent phase 3 clinical trial results with LCZ696, a compound under development by Novartis. LCZ696 is a one-to-one mixture of the angiotensin receptive block of Valsartan and the neutral endopeptidase inhibitor AHU 377. In phase 3 clinical trials, LCZ696 was compared to ACE inhibitor therapy in heart failure patients and the trial resulted early due an outsized increase in survival in the LCZ696 patients. The neutral endopeptidase component of LCZ696 upregulates endogenous natriuretic peptide system by blocking the enzymatic degradation of atrial natriuretic peptide and b-natriuretic peptide. The detailed results of the LCZ696 phase 3 trial was recently published in New England Journal of Medicine and clearly established the natriuretic peptide system as a validated target for heart failure therapy. It is highly likely that upregulation of the natriuretic peptide system will become part of the standard of care for heart failure patients. Our natriuretic peptide system program with multiple approaches to upregulate the natriuretic peptide system is uniquely positioned to take advantage of this potential paradigm shift in the treatment of heart failure. PL-3994 our lead drug candidate is a numerical atrial natriuretic peptide and an agonist of the NPR-A receptor. PL-3994 has completed two phase 1 clinical studies. Our pre-clinical and clinical studies show that PL-3994 increases circulating cyclic GMP levels, dialysis and natural lysis inhibits the renin angiotensin and aldosterone system, decreases systolic and diastolic blood pressure and inhibits cardiac remodeling. PL-3994 has potential applications in heart failure and is clearly suited for replacement therapy in patients with core and other pro-hormone processing deficiencies. In addition to PL-3994 via pre-clinical development drug candidates that fine tune and block the natriuretic peptide c-receptor thus increasing endogenous atrial natriuretic peptide and b-natriuretic peptide by decreasing their clearance to the NPR-C receptor. The recent publication of LCZ696 data has increased the interest among potential partners in our natriuretic peptide system program where we are currently working with potential partners as they conduct due diligence on our program. We are preparing to initiate PL-3994 Phase 2 clinical development program and given appropriate financial and development support, we could initiate the next PL-3994 clinical study in the first half 2015. Our next update covers the melanocortin receptor-1 base therapeutic program. We are very excited by the potential of the melanocortin receptor-1 base therapeutic for the treatment of a variety of inflammatory and immunological indications in inflammatory bowel disease, kidney disease and uveitis. Our lead compound PL-8977 has completed the pre-clinical activities required to begin human clinical trials and we are targeting to file investigational new drug application with the Food and Drug Administration in the fourth quarter of calendar 2014 with first-in-human studies occurring in the first half of 2015. In parallel with these development activities, we have begun discussions with potential corporate licensing partners. Our final update today is on our melanocortin 4-receptor obesity programs. After a period of corporate restructuring, AstraZeneca has assigned a new product development team to our joint melanocortin 4-receptor obesity program. During this restructuring period, scientists of Palatin continue to progress our research in melanocortin 4-receptor biology and we believe we have identified multiple potential lead clinical candidates. We recently met with the new senior director of the program to discuss how best to move this program forward. We expect the timeline to potential clinical trials will be clarified as we continue to work with AstraZeneca. Melanocortin 4-receptor is a well validated target for obesity therapeutics. Human, genetic and preclinical experimental evidence indicates a key role for this receptor and associated signaling pathways in the regulation of food intake and weight. Our results from earlier clinical trials of these patients with compounds that target the melanocortin 4-receptor, show significant reductions in food intake and weight loss. We believe this program has significant clinical and commercial potential and we believe that our partner AstraZeneca have the resources to progress development of the program and realize its potential. Before we open the call to questions, I would like to make a few concluding remarks. In fiscal 2014, we made substantial progress with all of our pipeline programs. We are extremely pleased with our opportunity regarding Bremelanotide for the treatment of female sexual dysfunction and a substantial commercial potential of our product pipeline. Our excitement of bremelanotide is supported by the strength of our Phase 2B efficacy and safety data, regulatory guidance in both the U.S. and the European Union and the significant interest on potential collaboration partners. We have designed a comprehensive Phase 3 program, that if successful will provide the safety and efficacy data to support regulatory submission for approval of Bremelanotide treatment for pre-menopausal women with female sexual dysfunction. The key milestone for this year is a definitive licensing and co-development agreement for bremelanotide in the European Union and related territories with Gedeon Richter the European specialty pharmaceutical company with a strong focus on female healthcare. In the U.S. we have reached an agreement with the FDA on the key aspects of our bremelanotide Phase 3 development program and we are on track to initiative the North American Phase 3 pivotal registration studies in the fourth quarter of calendar 2014. Our recent FDA feedback and our European Union partnership further strengthened our ability to enter into a partnership with bremelanotide North American development and commercialization rights. We also continue to present and publish the data of bremelanotide Phase 2B program and you can find many of these presentations on our corporate website. Recent clinical data indicates that the natriuretic peptide system has a potential to play a key role in the treatment of heart failure. Our pre-clinical and clinical work with our lead clinical candidate PL-3994 puts us in a good position to take advantage of this potential paradigm shift in the treatment of heart failure. Regarding melanocortin-1 receptor program, PL-8177, our lead candidate has completed pre-clinical activities required upon IND with the FDA and to conduct first in human studies. We also continue to make progress in identifying potential corporate partners. And finally we made excellent progress with melanocortin-4 receptor in obesity and diabetes program with multi-potential lead candidates identified. We continue to work with AstraZeneca to determine the best path forward. I would like to thank everyone for participating in Palatin’s fiscal year end 2014 conference call and we will now open the call to questions.

(Operator Instructions) And we will take our first question from Charles Duncan with Piper Jaffray. Charles Duncan - Piper Jaffray: I wanted to ask you a question regarding bremelanotide and the FSD programs. You spoke about giving some decent advice. I'm wondering if it might be useful to just remind us of some of the differences between the Phase 3 trial design as proposed in the United States and the Phase 2 data or a Phase 2 trial. And then perhaps even talk about maybe some of the differences between the U.S. and European strategy?

Sure, I will cover a couple and then Jeff may jump in. There weren’t a tremendous number of differences, the endpoints that will be -- we had a single primary endpoint in the Phase 2B program which was the change in satisfying sexual events, it will now be a co-primary endpoint of the change of satisfying sexual events and then the change in desire as measured using the female sexual function index desire sub-domain. And I know that’s a lot to say, but the FSFI desire domain is a validated instrument for measuring changes in desire. That was a secondary endpoint in the Phase 2B program, which is elevated to a co-primary. Other than that, really the changes, the trial design will be fairly similar. The duration of treatment was 12 weeks in the Phase 2B, it will be 24 weeks in the Phase 3 program. But beyond that I think they're fairly similar. I don't know Jeff if you have any additional?

Sure Charles, it is Jeff Edelson speaking. The other two major improvements really in the design are the removal of the fairly rigorous ambulatory blood pressure monitoring program that was part of the Phase 2. As you recall one of our goals there was to actually characterize the presence, magnitude and duration of any change in blood pressure, we did that and don’t feel that further characterization is required going forward. And there will be just one active dose of BMT in the pivotal, having shown that the 1.75 milligram dose is safe, effective and well tolerated. We feel this is an appropriate dose to progress in pivotal studies. Charles Duncan - Piper Jaffray: At latter point it seems to me -- is a big positive in terms of impacting potential placebo effect. Are there any differences in -- call it the level of superiority or the enrollment criteria that you would point out?

No these patients will be screened in a very similar way to the way they were done in the Phase 2B program. Placebo and probably realize this, but female sexual dysfunction is not characterized by severity of disease, you either have it or you don’t, it’s kind of, more of a biphasic diagnosis. So they're not stratified by severity of disease. We of course do secondary analysis based on scores, but none of that has been validated to show that there is any difference.

Yes Charles, I mean as Carl says it’s a binary diagnostic, but the issue for us is potential confounders of the diagnose so for example substance abuse, relationship dysfunction, concomitant depression will be things that could confound the diagnosis of FSD. Charles Duncan - Piper Jaffray: And you will be keeping track of all those things at screening, right?

: Correct, those are all things that we monitored during screening and quite frankly I think we did a very good job in the Phase 2B in getting a handle on to actually do a diagnosis of this across a broad number of size to make sure that we get a consistent patient population and a lot of those learnings of course are tracking into the Phase 3 program. So I think we have a good handle on making sure that we will get as uniform patient population for Phase 3 as we can. Charles Duncan - Piper Jaffray: And then the European advice, how could things will be different, is there going to be some kind of active control there?

: No, there is nothing approved in European Union, so we don’t have the issue of active control. Again it’s not that dissimilar compared to the U.S. there maybe two doses evaluated there, the 1.75 milligram and a lower dose is under consideration. The European Union, the women are a little bit lighter in weight so a lower dose maybe commercially reasonable to have. Addition to that the end points will be very similar patient selection criteria will be very similar.

: One of the differences was that the EMA advice thus not to conduct the placebo baseline period. We actually wanted to characterize the placebo response and then innumerate the drug effect on top of the placebo response as we did in Phase 2 that is our U.S. design. They did some sophisticated analysis and felt that we could just demonstrate the total drug effect, which obviously would include some element of placebo effect in European study and we find that doable. Charles Duncan - Piper Jaffray: Okay, good, and then the size of that trial roughly similar or I guess if you’re going to include possibly another lower dose it might be a little bit larger.

: Well, it get larger I mean I think we’re talking around 600 patients in each of the U.S. pivotal so about 300 patients per arm, the European pivotal program as it includes two active arms plus the placebo would be around that.

: Yes, we can innumerate the central tendency or the standard deviation if we will around the treatment effect including the placebo effect by back calculation from our Phase 2 data we have. Charles Duncan - Piper Jaffray: Okay. And then, I’m sorry to take more time, but I had a quick question, it wasn’t clear to me what you’re saying Carl regarding 3994, do you plan to conduct the Phase 2 yourselves or would the next be looking for possibly a collaboration to help fund that program for 3994 in heart failure?

I think we’re running potentially right both in parallel, so we have the resources internally to prepare to do the next study with 3994. We’ve actually got a fair amount of corporate interest in that program as well. We really don’t have to make that decision until the beginning of next year. So we are putting all the pieces in place and we’ll make a decision probably as we really get into the beginning of next year whether or not we'll run it. The next study is not a large study, it’s a multiple ascending dose study that would be conducted in the clinic, so it is something that -- not would be something within the realm of what we could conduct at Palatin. Will be the study after that which would be the one that'll be a larger and proof of concept where you're talking about larger number of patients going to be at home setting and that's something where we most slightly want to have a partnership on board with that.

And we’ll take our next question from Joe Pantginis from Roth Capital Partners. Joe Pantginis - Roth Capital Partners: Hi guys good morning, thanks for taking the question. Maybe just a little more feedback on the end points for the Phase 3 in the U.S. Obviously you have agreement with the FDA in terms if you will, I guess the question that I have is FFD seems to be a little bit in flux still with the physician community company is waiting to see if flibanserin is going to get approve I believe it's at the end of October I think the FDA is hosting a workshop regarding FFD and end points to look at parameters in the space. So I guess my question would be, is there the potential for any future changes still to your pivotal design study based on what happens with flibanserin or the potential outcomes from this FDA workshop?

: Joe, couple of things, one, flibanserin is a little bit an odd situation because the two pivotal trials there they use satisfying sexual events as one of the co-primaries, but they use the daily assessment of desire as the second co-primary end point and they fail to meet that. So what they’re actually are basing, potentially the FDA will be basing their approval on would be a number of larger trials that were not considered to be pivotal in which the satisfying sexual events and the change in desire as measured by the FSFI Desire sub-domain the 28 day recall was the second co-primary end point. So I think in line with that our end points are in line with where I think current FDA thinking is. You asked me with the exchange if things are in flux, one of the things that we’re doing is we have a fairly robust assortment of secondary end points and measures in the phase 3 pivotal program and I'll just give my opinion, Jeff can give his own, this is purely an opinion. If there is probably going to be a change in how the FDA potentially evaluates these products it would be more likely based off of the day that we generate than just an overall coming up with things but Jeff may have a different opinion.

Yes, I think that the way I see the trend, this is just my opinion, but I think it’s pretty clear that regulatory agencies including the FDA are increasingly comfortable with a combination of a behavioral measure like SSEs which is kind of the integrated sum of a lot of inputs and then something that more relates directly to the path of physiology of the disease which is the decrease in desire. So the FSFI desire domain has been well validated, we think the interrogation interval of a month is appropriate because there is pretty good data that women conceptualize their sexuality over a more longitudinal period and there is some data that daily assessment of desire they just find annoying and then kind of negative. So we think there is a sort of general themes emerging and we think we’re totally -- our program is can concurrent with those and in fact in these end points, these specific end points in the phase 2A program, the program was very successful. So, we think we’re well situated to evaluate the drug in its phase 3 program. Joe Pantginis - Roth Capital Partners: That’s helpful, thanks and anything any, just quick comments about the upcoming FDA workshop.

: This is I think -- I won’t say public relations, it may be not the right word but this is a process that the FDA is doing for a number of indications they’ve done it for restless leg syndrome, I think they've done it for fibromyalgia and this is one of the series of these public workshops that they’re doing where they’re trying to be seen as reaching out to the patient and advocacy groups to illicit their input into the FDA process.

: Yes, I mean this is part of the patient consultation program and as such we hope that it clearly captures both the both prevalence of this disease and the severity and impact it has on individual people.

And we’ll take our next question from Rahul Jasuja with Noble Capital Markets. Rahul Jasuja - Noble Capital Markets: I missed almost the entire prepared statements, so if I’m being redundant excuse me. One clarification on the FSD program so it’s my understanding that there is two studies acquired in the U.S. 600 patients each and then there is one study in Europe and then the U.S. supporting data for a sufficient to submit with the EMA with just one study in Europe but given the fact that there is a small difference in the design given the measure that placebo response is that still true that it just needs one study in Europe and the supporting study will based on the U.S. study even though there is a small difference in the placebo design, placebo management rather?

Yes, Rahul this is Jeff Ed, that is correct. The clearest anticipated difference would be that if in the European study the primary analysis enumerates both the placebo effect and the drug effect one might anticipate there will be a larger magnitude of effect and the U.S. studies will be backing out the placebo effect at baseline and as we can model from our phase 2 data, the absolute magnitude maybe slighter but the clinical significance et cetera, responder analysis et cetera will be identical we think.

: Also this topic was actually discussed with the EMA scientific advice group and they’re well aware of the differences and they’re comfortable with the concept that Jeff just talked about. So we don’t see an issue with the U.S. studies being supportive or the European trial. Rahul Jasuja - Noble Capital Markets: And then again I want to ask and again I apologize, I missed the prepared statements this maybe redundant, I want to talk about 3994 and especially in the context of -- the Novartis data was great, it has ramifications for in the value of 3994 but could you comment on the past experience with Natrecor which was again a different kind of drug different setting and then on the renewed interest with the natriuretic peptide system approach for heart failure there was past use of the NPS system, how is the current setting, the current data at Novartis change everything and this may be redundant because I missed the prepared statements but please --

: We didn’t address that topic. Natrecor is approved as a short acting IV infused product for acutely decompensated patients really for symptom relief and was predominantly given in hospital setting where these patients came in after having a decompensating event. The issues with Natrecor were really got into trouble when it was used off label as an intermittent treatment for heart failure patients and they were making plans that there may be real benefit there and it turned out in large studies there went, which is not surprising that we’re giving it our short acting drug once a week by the infusion and trying to see if they would have long-term effects. Our program 3994 was actually designed to actually in part to have a long acting natriuretic peptide upregulation, so that you could interrogate the value of upregulating natriuretic peptide system on a more chronic basis. Novartis took a very similar approach, in that they wanted to upregulate the system, they did it by blocking degradation. So what it tells you at least is that when you add-on natriuretic peptide upregulation, you get additional benefits that help in the management of heart failure patient -- the symptoms get better, the hospitalization rates get better, survival gets better. And that’s not surprising, the natriuretic peptide system essentially counteracts a lot of the negative effects of heart failure. Jeff you want to?

Yes, I mean it’s an interesting question. I think the most obvious difference as Carl emphasized is the difference in PK and that’s a very short acting drug in terms of its plasma half-life, not clear how long the biological effects and potential benefit last but clearly it doesn’t appear to be a chronic therapy. The 696 program is interesting because just in terms of the natriuretic side of the equation, the neurolysin inhibitor is clearly much more long lasting in its pharmacodynamics and one would anticipate that the endogenous natriuretic peptides are -- the effect is sustained for a much longer period of time. So I think that’s probably one of the biggest differences. There is a lot of complexity in this pathway. Neurolysin actually -- there are other vasoactive peptides that also decay which could be inhibited by blocking neurolysins, that’s one hypothesis. Additional hypothesis is that we know that there is a functional defect in activation of some of the natriuretic peptides in a large percentage of the population as many as 15% of some sub-groups of people have a deficiency of corn which is the processing engine that activates some of the natriuretic peptides. And then finally what we don’t understand that the receptor pathway level is whether there is attenuation of the response with continued signaling. So, there is a lot of complexity to be sorted out, but bottom line is that the drug was beneficial with a significant mortality and morbidity benefit and we find this extraordinarily exciting. Rahul Jasuja - Noble Capital Markets: Thanks. And then one more follow on that front quickly. This phase 1/2 data, this phase 1 data that was completed several years ago 3394 and the utility of the NPA system was I guess less rather than today. And if I remember correctly there was really encouraging cardiovascular metrics that panned out of the phase 1 study. So, one, are you going to build on that approach of course the same sort of clinical trials for the phase 1, 2 going forward? And isn’t there a subset of patients that have a mutation in the NPA system that can be targeted more as a mixed population?

: That’s great -- a really excellent question Rahul, yes, there are some population of people who one might anticipate to have greater benefit. My understanding of the PARADIGM-HF trial that was published two weeks ago was that there was no selection based on pharmacogenetic or genotype markers. We would attempt to characterize that during the phase 1b, phase 2 program with this drug. One question is do people respond differently to different doses of drug like is there a rationale for individual dose titration, one might anticipate people who have a corn deficiency to have a different optimal dose than people without such a deficiency for example. So these are things that need to be sorted out I think in the clinic. Clearly there are endpoints like cardiac ejection fraction, cardiac function imaging and response to exercise loading that can all be done in smaller, more carefully controlled trials. And then obviously if the drug looks promising there than a more larger phase 2a proof-of-concept study I think would be in order.

And we’ll take our next question from Charles Duncan from Piper Jaffray. Charles Duncan - Piper Jaffray: Thanks guys for taking the follow-up. I have a quick question on the obesity program, which I understand now a lot of folks are focused on but I did want to ask you, if you and your current partner AZ have a development candidate that is identified and ready to move through IND enabling studies yet?

: As I think I mentioned on the call while AstraZeneca was kind of going through their internal changes and so we’re almost kind of -- didn’t get as much attention as it probably deserved. We continued to do the work at Palatin on moving forward. So, we have a Palatin developed additional compound that we characterize and characterize as we compounds based on our internal characterizations. We’ve shown that data to AstraZeneca and we are in the process of working with them to determine if these compounds will be acceptable for them to go forward. But we believe that they are quite strong candidates and will be acceptable. Charles Duncan - Piper Jaffray: Let me ask you Carl if AstraZeneca doesn’t agree or perhaps a different way, does AZ have total ownership of this program or would you be able to seek alternative or additional partnerships perhaps for a different region and move this program forward?

The answer is yes. So the compounds that I am referencing were developed by Palatin and owned exclusively Palatin. If we decided not to go forward then we would have the ability to do -- to move them to either on our own or with other partners.

There are no further questions in the queue. At this time, I would like to turn the conference back over to Dr. Carl Spana for any closing remarks.

Well thank you all for participating on our fiscal year end 2014 conference call and obviously thanks for the excellent questions. I hope to certainly bring clarity to some of the things that we covered on the call. So we look forward to a very exciting 2015. We have a lot of exciting programs and projects running on and we are working very hard to get our bremelanotide Phase 3 program started. So with that being said, I am going to close the call, wish you all the very good day and certainly look forward to seeing as many of you as we go out and meet with investors over the next several months. So good bye and have a great day.

That concludes today’s conference, thank you for your participation.