AGREEMENT WITH BOEHRINGER INGLEHEIM

6 Months Ended

Dec. 31, 2025

(5)

AGREEMENT WITH BOEHRINGER INGLEHEIM

On August 14, 2025, the Company entered into a Research Collaboration, License and Patent Assignment Agreement (the “Assignment Agreement”) with Boehringer Ingelheim International GmbH (“Boehringer Ingelheim” or “BI”) to research, develop and commercialize first-in-class melanocortin receptor-targeted peptides developed by the Company for the treatment of retinal diseases, including diabetic retinopathy.

Under the terms of the Assignment Agreement, the Company assigned certain patent rights and provided a license to Boehringer Ingelheim (the “Assigned Patents”), and the Company will conduct research services on behalf of Boehringer Ingelheim at Boehringer Ingelheim’s expense focused on development during a two-year period, which Boehringer Ingelheim has the right to extend by up to six months. The Company retains an exclusive, fully-paid license to PL9643 for treatment of dry eye disease. The Company determined that two performance obligations exist under the Assignment Agreement (i) patents and license assignment and (ii) research and development services.

The patents and license assignment performance obligation relates to intellectual property that is distinct from other performance obligations identified in the arrangement. The consideration received for this performance obligation includes both fixed cash consideration and variable consideration subject to constraint. During the three and six months ended December 31, 2025, the Company recorded $2,340,000 in revenue related to the assignment and transfer of the patents and license to BI for which BI can benefit and use. The Company received approximately $2,000,000 of cash related to the upfront payment as the cash received was net of foreign withholding taxes which were recognized in accounts receivable at December 31, 2025, as the Company expects to receive a refund during FY 2026. Additionally, during the six months ended December 31, 2025, the Company was notified that BI had successfully completed the first research milestone and accordingly the Company recorded $6,490,000 of revenue during the quarter. In October 2025, the Company received approximately $5,400,000 of cash related to the achievement of this milestone as the cash received was net of foreign withholding taxes that the Company expects to receive as a refund during FY 2026. Variable consideration related to the remaining future milestones was fully constrained because the Company cannot conclude that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, given the inherent uncertainty of success with these future milestones. The Company may receive up to $21,200,000 in near-term research milestone payments and up to $307,000,000 in success-based development, regulatory, and commercial milestone payments, plus tiered royalties on net commercial sales of products.

PALATIN TECHNOLOGIES, INC.

and Subsidiary

Notes to Consolidated Financial Statements

The research and development services performance obligation relates to specific research activities during the research term, and BI will reimburse the Company for these activities at a full-time equivalent (“FTE”) rate of €300,000 (approximately $346,341) per year per FTE, up to 3.25 FTEs, inclusive of direct labor, supplies, and allocated overhead. The Company will invoice BI for actual hours worked, and BI is obligated to pay within contractually defined timelines. During the three and six months ended December 31, 2025, the Company recorded $116,036 and $133,586 of revenue for research and development services performed.

During the three and six months ended December 31, 2025, the Company recorded revenue related to the Assignment Agreement, which consisted of the upfront payment for the Assigned Patents, the achievement of a research milestone during September 2025, and FTE related reimbursements as follows:

SCHEDULE OF ASSIGNMENT AGREEMENT

	Three Months Ended December 31, 2025		Six Months Ended December 31, 2025

License and assignment of intellectual property	$	-	$	2,340,000
Research, development and regulatory milestones achieved		-		6,490,000
FTE Reimbursements for research and development services		116,036		133,586
Total	$	116,036	$	8,963,586

PALATIN TECHNOLOGIES INC 10-Q