Good morning, welcome to the Palatin Technologies KOL event. At this time, all attendees are in a listen-only mode. A question and answer session will follow the formal presentations. If you'd like to submit a question, you may do so by using the Q&A text box at the bottom of the webcast player or by emailing your questions to questions@lifesciadvisors.com. As a reminder, this call is being recorded, and a replay will be made available on the Palatin website following the conclusion of the event. I'd now like to turn the call over to Carl Spana, Chief Executive Officer of Palatin Technologies. Please go ahead, Carl. Great. Thank you, Tara. I'd like to welcome everyone to today's event. Can you please go to next slide? As a forward-looking statement, we are a publicly traded company. We trade on the NYSE Amex under the symbol PTN. This just tells you that you should go look at our filings at the Securities and Exchange Commission. Next slide. Great. We are very excited today to talk to you about our PL9643 treatment for dry eye disease, which we believe, based on its excellent ocular tolerability, its broad efficacy, has the potential to become a leading treatment for dry eye disease. Before we get started, I'd like to provide a little context. PL9643 is a melanocortin agonist in development for the treatment of the signs and symptoms of dry eye disease. We are currently conducting a phase III clinical trial called MELODY-1. MELODY-1 is designed as an adaptive clinical study and has two parts. First part consists of the first 120 patients to complete treatment. They were designated the lead-in population. You're going to hear a lot about the analysis of that population today. They were reviewed by a data monitoring committee. Second part is actually the double-blind part of the study. The population in this part of the study will actually be the analysis population for the final study. After reviewing the lead-in population, the DMC recommended that we continue the study, that it was very promising, and that we conduct a more detailed analysis of the lead-in population. That's what we're going to go over today. The speakers and agenda for today are as follows. There's myself, Carl Spana. As you know, I'm the CEO of Palatin. I'll be kind of moderating and overseeing the presentation today. First speaker up will be George Ousler. George is a Senior Vice President of Anterior Segment at Ora. Ora is a leading CRO in the ocular space. They're actually helping us conduct the Phase III clinical trial. George is well experienced, a leading expert in the conduct of dry eye disease, their analysis, regulatory aspects of it. I think he's been involved in just almost many of the pro-products that have gotten approved, George has had a hand in directing those programs or advising those programs through Ora. He's going to talk today about the regulatory environment for dry eye disease, how we do clinical trials, what the endpoints are. He's going to be followed by Dr. Michael Raizman. He's Palatin's Chief Medical Officer. In addition to that, he's actually a practicing clinician. He treats patients with dry eye disease as well as many other Anterior Segment conditions. He's actually been involved in a number of these dry eye disease programs as a clinical investigator. He'll be talking to us today about the results of dry eye disease, but it's also the implications of PL9643 as a treatment for dry eye disease. Our final speaker today will be Dr. Bruce Stouch. He's a very well-respected biostatistician. Bruce was actually integral in the design of the MELODY-1 study and the design of the process that we use for the lead-in analysis. He'll present the results, process, and the implications for the double-blind part of the study. Finally joining us for the Q&A part will be Steven T. Wills. He's Palatin's chief financial officer and chief operating officer. Robert Jordan, he's our Senior Vice President of Program Operations. Actually, Rob is the one overseeing the clinical operations of the clinical program. We can move on to the next slide. Just a quick reminder, we have a very deep pipeline. These are all of our programs are based on melanocortin agonist. We have a very strong footprint in that space. In addition to the clinical trial readout for PL9643, which will occur a little bit later this year, we have 2 additional clinical trials, one in ulcerative colitis and one in diabetic nephropathy. These are smaller phase II proof of concept studies. They also have clinical readouts later this year as well. In addition, as you are aware, we do have a approved product called VYLEESI, which was conducted or developed by Palatin start to finish, and that's under the direction of Steven T. Wills. If you want to find out anything more about these programs, please go to the website. There's lots of information there. The main of today's program will really be focused on PL9643 and the analysis of the lead-in population. Next slide. Just before we go forward, this is the program slide for 9643. We're going to talk about the interim analysis today. Just keep in mind, we are actively enrolling patients in the remainder of MELODY-1, we want to get those double-blind patients in. We expect to have data out second half of the year. Based on success, we will have MELODY-2, which will be another phase III efficacy study, followed in MELODY-3, which will be an open label safety. I'm done talking. I'm going to pass it over to George, he's going to talk to us about the regulatory implications and endpoints in dry eye disease studies. George. Thank you so much, Carl. I want to walk through the regulatory requirements for the FDA for the approval of a dry eye therapy. Our base case is that we demonstrate efficacy in 1 sign and 1 symptom. This is the first initial approach here. The definition of success is to show a statistically significant difference between active and placebo, again, on 1 sign and 1 symptom. The agency's quite flexible in the endpoints that we choose. A pre-specified symptom can commonly be things like ocular discomfort, pain, dryness, and grittiness. The pre-specified sign can be things like ocular surface staining, which is damage of the epithelial layer, tear film break-up time, and tear production. We are held to demonstrate this efficacy in 1 sign and 1 symptom across 2 phase III studies to demonstrate reproducibility of the outcome. due to the fact that there is a lack of correlation at times between signs and symptoms for dry eye, there is what we call a follow-on approach, where we can look at signs and symptoms in two independent studies for the optimal patient population. In the optimal symptom-based group as well as the optimal sign group. However, this does require a total of four studies 'cause you need to show that replication of a sign finding in two independent trials and a symptom trial, in two independent trials as well. gives you a total of four Phase III studies. Another approach is what we call sign-only. And this is a little bit higher of a hurdle, and it's really based on responder analyses or responder groups. The first one that is commonly used and has brought several products to market is the percentage of patients who exhibit a Schirmer test improvement by at least 10 millimeters compared to baseline. This is a measure of tear production. We do need to show this also in two independent phase III studies to demonstrate the reproducibility. We can also look at the percentage of patients who exhibit clearing of total corneal staining. Again, a higher proportion of patients in the active group versus placebo, that's statistically significant would meet that requirement, but also across two independent phase III programs. Finally, we have what we call the symptom-only approach, and this is typically not accepted by the FDA historically. The reason is that if a product reduces symptomatology, it may shut down the compensatory mechanisms for the eye to combat against different signs. The inability to produce more tear or avoid insulting situations which could put the patient at risk. Next slide. The PL9643 MELODY program is evaluating both signs and symptoms as primary endpoints. Let's walk through that. What do dry eye disease endpoints evaluate? As we discussed, we're looking at both signs and symptoms, and typical measures for signs include things that are looking at ocular surface inflammation or damage to the ocular surface as well as tear production. Then symptom endpoints are patient-reported outcomes or questionnaires that evaluate how the patients are feeling. This is that subjective analysis in common terms would be things like ocular pain, dryness, discomfort. We think about what is the right patient population. As we just previously mentioned, there can be a lack of correlation in signs and symptoms within the same patient population. You may have a statistically significant finding on a sign and not a symptom, and vice versa. What do we do? We design clinical trials that enrich our patient populations, and we're very careful in how we select the different patients to achieve a statistically significant finding in a symptom. Lastly, how have commercial products achieved approval? As you'll see in the next slide, the most common approach has been that tear production, that responder analysis, the percentage of patients who have a 10-millimeter increase compared to baseline, and that's been, again, the majority of approved approval pathways. We do know that Xiidra demonstrated efficacy in a single sign and a single symptom, that was across 4 different trials to achieve that optimal patient population. They did have efficacy for two sign endpoints as well as two symptom endpoints. Next slide. The key objective for the PL9643 dry eye program is the following. In the same phase III study, achieving statistical significance for both a primary clinical sign and a clinical symptom endpoint, as well as potentially achieving multiple secondary signs and symptom endpoints. How does this compare to other approved products? As you can see in this list here, Cequa, Restasis, and Tyrvaya all were approved with that% responder rate for tear production of that 10 millimeters or greater compared to baseline. Xiidra was approved by a 1 corneal, 1 endpoint of inferior corneal staining for the sign and a 1 endpoint of eye dryness for the symptom. Ikervis, it's a little hard to compare 'cause this is a 2-week treatment. They did demonstrate efficacy on a symptom, which is ocular discomfort, as well as a sign, which is conjunctival hyperemia or redness of your eyes. I think it's important to note here that currently there are no approved product that has improvements on multiple signs and multiple symptoms on their label. Okay, at this point, I'll turn it over to Michael. Thank you, George. Let's talk about clinical strategy. Based on the phase II data and the phase III lead-in population data, we believe PL9643 can be the best approved treatment for dry eye disease. PL9643, as you heard from Carl, is a melanocortin agonist. It works by resolving inflammation and promoting tissue healing. These are unique attributes in a dry eye therapy. They represent two new mechanisms of action not found in drugs for this condition. Summarizing the phase II data in moderate to severe patients, which numbered 61 in our trial, PL9643 achieved statistical significance at week 2 and week 12 for multiple signs and symptoms, including inferior corneal staining, Lissamine green staining of the conjunctiva, ocular discomfort, burning, and tear film break-up time. This is a topical formulation administered 3 times a day. The efficacy is broad, covering multiple signs and symptoms. There's a statistically significant co-primary sign and symptom in multiple secondary endpoints. The safety profile of PL9643 is unprecedented. Based on phase II clinical trial data and the phase III lead-in population, no safety or side effects are expected in MELODY-1 or in any of our studies with this product. The differentiating factors are superior safety and tolerability to approved treatments with robust and broad efficacy. Next slide, please. Ocular tolerability is a major issue with currently approved dry eye products for all of the products. You see them listed here on the left: Restasis, Xiidra, Cequa, EYSUVIS, Tyrvaya. Installation site pain, irritation, and burning is noted and is a common reason for discontinuation of these therapies. Other significant adverse events for some of the products include redness, a bad taste in the mouth, and sneezing and coughing. In contrast, PL9643 has excellent tolerability. In the phase II ITT population, there were no treatment-related serious AEs or any ocular AEs. With PL9643 treatment, the do-drop tolerability is similar to artificial tears. That is to say, extremely comfortable and well-tolerated. In our leading cases in phase III MELODY-1 to date, we've confirmed the phase II study results with no patient receiving PL9643 having any ocular adverse events. As I said, I think this is unprecedented tolerability for a drug. Next slide. Let's talk about the phase III clinical study and the interim analysis lead-in population. Next slide. Here's the study design. A 12-week multi-center randomized double-masked vehicle-controlled adaptive design study. We evaluated the efficacy and safety of PL9643, and we will look in up to 480 adults with moderate or severe dry eye. That definition is disease duration of greater than or equal to 5 years, an inferior corneal staining score of greater than 1, and an eye discomfort score greater than or equal to 25 as measured by the visual analog scale or VAS. The VAS is a visual analog scale where subjects rate symptoms on a line graph on a score of 0 to 100. As in the previous studies, this study will use the CAE, which is the controlled adverse environment. Subjects are placed in a chamber that tends to maximize the stress on the ocular surface, and this facilitates the capturing of data in the clinical trial. After a two-week run-in with placebo therapy, subjects are randomized to PL9643 or placebo three times a day. It's important to recognize the placebo in these studies is actually an active product, an active comparator. Artificial tears, for example, or any lubricant eyedrops cause an improvement in the signs and symptoms of dry eye disease. The subjects in the trial will be periodically subjected to the controlled adverse environment. The primary sign endpoint in MELODY-1 will be inferior corneal fluorescein staining. The primary symptom endpoint will be ocular pain. Next slide. Let me turn this over to Bruce, who's going to go over the statistical analysis and help you to understand how we're moving forward with this trial. Thank you, Michael, and good morning. There are 6 sections for the supporting phase III program that I'd like to review with you this morning. The first 5 are focused on increasing the probability of success for the phase II program. When we look at this slide, the purpose is really to describe the process we went through to identify the most sensitive population for both a clinical sign and a clinical symptom. Starting at the very top box, the phase II moderate to severe patient population. Through this, we were able to identify a combination of a disease characteristic, clinical sign at baseline, and a clinical symptom at baseline. The identification of this refinement has served as the inclusion criteria into the MELODY-1 phase III program. Again, looking specifically, middle box here, at the sign endpoint. We have had an additional refinement looking at the time in the chamber to receive or to actually achieve the highest level of response, and that is how we are identifying our symptom endpoint. Next slide, please. As Carl alluded to, following the DMC meeting where the results were promising, the DMC recommended that we examine a lead-in population for optimization of additional refinement regarding clinical signs and the clinical symptoms. I'd like to have you draw your attention to the bottom left-hand side, the text in blue. There are four primary research questions we're attempting to answer going through this analysis process using the lead-in population. The first is identification of the symptom population. For that, we are using the chamber that Michael referred to. The second is identification of the sign and symptom optimal endpoints. Exactly at what point coming either into the chamber or out of the chamber, finding the greatest separation between PL9643 and vehicle. The third is the optimal time point, and that we have identified as 12 weeks. Finally, the identification of the analysis method that will be used for the phase III analysis. The middle part of this slide has 4 boxes, and these are actually broken into 2 groups. The 3 boxes on the left-hand side really deal with the process we have been going through dealing with the lead-in population. The 4th box on the right has to do with the ongoing surveillance of the phase III program. We will get into that later. Starting on the far left-hand side, we started with the lead-in population, the goal being to assess the sample size needed for success, and we were able to identify that for a clinical sign, and we tied to that a sample size that was required of 350 patients. However, the symptom data was inconclusive and required a more refined analysis, again, specifically looking at the time in the chamber, the CAE, to identify the best symptom. The results of this have been very fruitful for us because we've identified a symptom endpoint of ocular pain, again, measured on the VAS, the 0 to 100 scale at 12 weeks. We have identified the symptom population and a sign population through mining of going through this process of the lead-in population. The third box refers to the independent validation we went through. We then took all of the analyses we did. We contracted with an outside independent group of analysts that have confirmed not just the sign, but also the symptom that we're going to be looking at moving forward. The fourth box, as I alluded to, is the blinded study surveillance. In this case, the goal is really to compare the blinded means and standard deviations from the initial completers in the phase III double-blind study to the lead-in population. What you'll see later is very similar means standard deviations, which means that the patients that we are enrolling in the double-blind study are lining up nicely with what we're seeing with the lead-in population. Next slide, please. The next three slides that I'm going to cover deal specifically with the clinical signs with inside the lead-in population. PL9643 was found to be superior to vehicle in all of the 13 assessed clinical signs based on the change from baseline. We're defining in this context, superiority to be greater improvement within the PL9643 group compared to vehicle. These results demonstrate improvement in the ocular surface inflammation, as Michael has covered, with daily use of PL9643. Of the 13, you can see a number of these have 1 or 2 asterisks after it. 2 asterisks refer to a probability value less than 0.1 in the lead-in population, and that is considered to be highly suggestive of a significant difference. Next slide, please. This is the second of the three clinical sign slides I'll be presenting. The clinical sign endpoints have been ranked for the final analysis in the double blind study. What we have calculated based on the change from baseline is the minimum required sample size to achieve 80% power. In order, you see the four signs that will frame the testing strategy for our clinical signs. I'd like to speak just for a moment about power. What does power mean? If we repeated this study 5,000 times, what that means is in 80% of the simulated studies, the primary sign endpoint would be met. You can see that the sample sizes required for each of these individual four clinical sign endpoints is below the target sample size that we're enrolling of a maximum of 480 patients. Next slide, please. We've turned this around a little bit and said, well, let's apply the least square mean estimates from each of these individual parameters and assume that we've enrolled just 450 patients. What would be the power coming out of that analysis? You can see for each of the clinical signs, again ranked in the order of testing that they will be evaluated in the double blind portion of the phase III study. You can see the actual power calculation is well north of 85% here. This gives us great comfort moving forward that our sample size is certainly of 450 patients up to 480, certainly robust enough to go ahead and find significance, meaning separation between the vehicle and the active treatment group. Next slide, please. Okay, I'm sorry, George, this slide goes to you. Yes. Thank you, Bruce. I'm going to walk through the clinical symptoms and the analysis of this lead-in patient population and what we learned. As previously discussed, following advice from the DMC and an independent data analysis by SDC, we had 3 key findings. The first is that we identified this symptom responder subpopulation using the controlled adverse environmental model. As described, the CAE model is a well-established model that were created more than 25 years ago, and it's used to help identify what we call modifiable patients and patients that have to show a worsening in both a symptom as well as a sign when challenged in this acute challenge. When we look at the patient population, in this first, lead-in population, we did see that there were patients who are what we call hypersensitive to the challenge, where they become symptomatic very quickly. This is an indication of a patient population that will be more sensitive to symptom endpoints, and help to demonstrate greater treatment effect, but also minimize any sort of vehicle or placebo effect. The CAE chamber identified this subgroup, and it also retained the greatest number of patients for the final analysis based on the time point chosen. As I just said, we optimized the treatment effect, between PL9643 and vehicle. The second key finding is that we identified what would be the most appropriate primary symptom endpoint, for the final analysis. This is pain as measured by the VAS at week 12. Third, the team was able to identify the optimal calculation for this primary symptom endpoint. What this is it's an analysis of a change from pre to post CAE at week 12 compared to baseline. This is an analysis that's been well-established for many years in many programs in the dry eye space. I will turn it back to you, Bruce. Thank you, George. There's a slide, the single slide I want to present here on clinical symptoms has to do with the power estimates, assuming 450 patients are enrolled. I want to draw your attention to the text in blue here, that the current FDA-approved products have an effect size of 0.25 in one symptom or one sign. What is effect size? Effect size, and I will describe this mathematically for you, it's the arithmetic difference of the least squares means, okay? It's the difference between the mean value from PL9643 minus the mean value from vehicle divided by the common standard deviation. Effect size is not just the arithmetic difference between the active and the vehicle results. Again, the FDA-approved products are coming in with an effect size of 0.25. Based on the estimates that we have generated looking at the lead-in population, we're looking at effect sizes in the range of 0.47 to 0.69, which are strong effect sizes. These translate into a power calculation of over 94%. In summary, with the 450 patients, we feel that we have excellent power for ocular pain measured on the VAS. The FDA also views positive secondary endpoints as very supportive for approval. Our two secondaries that we will be testing are burning, again, measured on a VAS, and foreign body sensation. These effect sizes are both 0.31. Again, over the effect size that we're seeing with the approved products. Next slide, please. This is the fifth of the six sections that I will be reviewing today. This specific is for the pain symptom endpoint, looking at the lead-in refined population based on the chamber results and the double-blind population, which of course we are still blinded to. In the top box here, what we're seeing is there are two rows here, PL9643 and vehicle. If you look at the least squares means values here, we're seeing a drop in PL9643 in terms of the pain at 12 weeks and an increase in the pain in the vehicle arm. Now, this difference is 14.5, and this 10-point change is considered clinically meaningful. We have eclipsed this 10-point change. In the bottom box, we're looking at now in aggregate, the results from the lead-in population, again, coming out of the chamber, 61 cases. In the lead-in cases, there's 61, and the least squares means value is 41. I'm sorry, 45. In a double blind, we're seeing with these cases, a least squares means of 45. We are seeing very similar results in terms of the lead-in case results relative to pain compared to the patients that are being enrolled in the double-blind study. Again, when we look at the standard deviations, these are very close, as are the standard errors. Next slide, please. My final slide is really a review of where we are here. There are five points I'd like to make. Based on the statistical separation in the lead-in population, we have identified a primary sign and a primary symptom for testing in the double-blind study. The primary sign endpoint is the inferior corneal fluorescein staining. The primary symptom endpoint is ocular pain measured on the VAS. Point number two is a statistical point in terms of the testing strategy here. To preserve the Type I error rate at 5% for evaluating the primary clinical sign and symptom, we are going to employ a step-down approach. This means that we will first test our primary clinical sign, and if that passes at a probability value less than 0.05, we will then test the primary clinical symptom. Point number three is because we have multiple clinical signs that are very encouraging from the lead-in population and encouraging clinical symptoms, that we are going to employ the same hierarchical testing strategy. We will continue to test the endpoints until an endpoint fails to be less than 0.05. At that point, we can continue to test. However, it's not going to be considered significant because we failed to be less than 0.05 in terms of separation from vehicle. The 4th point is the target sample size for the phase III study has been fixed at 450 patients. We have the ability to enroll 480, but we certainly have sufficient power, as you've seen today, with 450 patients. Finally, the phase III double-blind study will be run as a fixed design. There will not be an interim assessment or an interim analysis performed on the double blind study patients being enrolled currently. I'd like to turn the presentation back over to Carl. Next slide. Can I have the next slide? Can you hear me? Hello? Hi, Carl. The next slide is up. I didn't see a change on my screen. Sorry. Great. Thank you, Bruce. Listen, I hope you could understand our great excitement around PL9643 based on the presentation from the excellent speakers today. We've got a very robust phase III clinical program. We've used an adaptive design that's given us lots of flexibility. I think it's really helped reduce or mitigate the risk of this particular program. Right now the ocular tolerability, the broad efficacy, really makes us excited about the potential for PL9643 to be a leading treatment for dry eye disease patients. I'd like to thank the speakers today, LifeSci for setting this all up, and I'm going to turn it back over to Tara so she can start the Q&A prompt. Thank you, Carl. Please hold for a brief moment while we pull for questions. Our first question comes from Joseph Pantginis from H.C. Wainwright. Please go ahead, Joe. Hey, everybody. Thanks a lot. just remembered to unmute. thanks for all the details today and nice signals with regard to the lead-in data. I guess my questions are going to focus on, you know, building the profile for your asset here. I guess first off, you know, the confidence that you have that you picked the right primary sign and symptom, and how you sort of gauge that with the hierarchy you've designed after that. You know, expectations where you think then where you think PL9643 might not work from a mechanistic standpoint. That, that's the first aspect of building the profile. Thanks. Okay. Bruce, you want to take a stab at this? Sure. I'd be more than happy to. Again, you know, when we look at the clinical trial program, our focus is on the regulatory application, and what we are looking for is to optimize the strongest signal we can to have the highest probability for success in terms of having a positive study. When you're seeing real concentration in just a couple signs and a couple symptoms, as you saw with the 13 clinical signs, everything was moving in the right direction. If I interpret your question correctly about where does this work, where does this not work? We're not seeing a scenario where this drug is not having effectivity across multiple areas of the eye. To that, I'd like to move over and ask George to address this, and please Michael, because we've discussed this multiple times about how unique it is to see clinical signs having a drug having an effect on the clinical signs, in multiple areas of the eye. Sure. Thank you, Bruce. Happy to share some thoughts here. As you point out, there are efficacy signals in multiple signs and multiple symptoms. This is challenging to achieve. What it does suggest to us is that there's a broad acting molecule here. The team's been very methodical in understanding and determining which is the best endpoint to move forward with. I would also add that, you know, a presentation that was recently done at ARVO demonstrated that when you look at the phase II data in conjunction to this lead-in population, that you see a lot of replication. That's another thing that's encouraging is when you have two independent studies showing the same outcome, and then you have a lot more data to make wise decisions moving forward. No, that's very helpful. Thank you. I guess the second question having to do with building the profile is, you know, I'll just use Melody as an example with regard to your inclusion criteria and where the drug might fit in if approved in the initial parts of commercialization. I'll just use one of the aspects as a specific example, and that's disease duration of greater, equal or greater to 5 years. Does that imply that, you know, you'll have to have patients that have had dry eye for a while if approved? Would physicians use it earlier on? Mechanistically, would it not This work earlier on or, you know, even in patients that have had dry eye for much longer periods. I guess how would you talk about the addressable population if approved? Real quick, say, I'm gonna ask both George and Michael to comment on that. George, can you just, yeah, talk about what these labels look like, what a dry eye these label looks like? Sure. just some results that we're getting. Sure. As we walk through the regulatory requirements for FDA approval, we saw that if you demonstrate efficacy in a sign and a symptom, that will give you the full label for the treatment of dry eye. That's what we would anticipate here. I think the inclusion criteria are designed to identify the patients who have sufficient signs and symptoms to be able to demonstrate efficacy in both. That would represent the majority of the patients. If you look at the continuum of dry eye, there is a very early-stage dry eye patient that may be more symptomatic and a very late-stage dry eye patient that may have more clinical signs. Through technology, so things like the controlled adverse environment, through strict inclusion criteria, you target that group of patients that are in the middle and represent the majority. Long answer to your question, but really, you know, this represents the majority of the dry eye patient population, and the label would be for the treatment of dry eye. Maybe, Michael, you treat these patients, so I think maybe your perspective on the profile, what do you think? Yeah, it's a really good question. From the label standpoint, we don't have any difficulty based on the inclusion criteria for the population. Clinicians in treating dry eye don't use the study design to dictate which population they treat and how they use the drugs for that population. We have every reason to believe that PL9643 will be effective with a broad spectrum of dry eye patients. The changes on the ocular surface that we're seeing from the first two studies are really dramatic. All of the parts of the eyes show healing and improvement in ways that point to a broad efficacy for the product. That's the way clinicians will look at this product once it's approved. Thank you, everyone. Thanks for the questions, Joe. Our next question comes from John Newman from Canaccord. Please go ahead, John. Hi, team. Good morning. Thanks for putting on this presentation, and thanks for taking my question. I apologize, this question may sound a bit simplistic given the level of capability we have here and the statistics that we just discussed. I just wondered if panelists could talk for a moment about the safety profile of the product and what you see in the real world today with current products to where patients, if they're not satisfied, maybe they discontinue and just kind of how the tolerability of a product like this could make a difference. Thanks. May I address that? Yeah. As someone who treats these patients every day. If you look at the statistics, the majority of patients who are prescribed a cyclosporine product do not refill. More than half do not refill their product. More than half are off of the product after a year or before a year of therapy. The same is true with all of these products for various reasons. Patient acceptance really revolves around the tolerability. The products available are all safe, but tolerability is a different issue. That's why I used the word unprecedented when I talked about PL9643. There's really nothing like this that we've seen for the therapy of dry eye. This is as comfortable as putting an artificial tear drop in the eye, which is always soothing to the patients. Thank you. Thanks for the questions, John. Our next question comes from Michael Higgins from Ladenburg. Please go ahead, Michael. Thank you. Thanks, guys. Thanks, John, Carl, and Steven T. Wills, for hosting the event. It's great to hear from KOLs here. Question I have for them is on the use of the lead-in populations in dry eye disease trials. Just trying to get an understanding for the background here to help us understand what we're looking at. Why does the agency use lead-in populations? Doesn't seem to be needed here with the MELODY trial so far, but curious as to what the FDA's thought process is. We are seeing some approved meds get to the market and not be adapted, we don't see lead-in populations for most trials. Just trying to get an understanding for why we use it here. I think maybe I'll have George and then Bruce take this one. Sure. I would just say that, it's not a requirement, rather it's a strategy. Palatin has been quite smart about using this lead-in population to properly identify the appropriate primary endpoints as well as identifying all the key secondaries so that it can be put into a hierarchical approaches. Not only that, but coming up with the appropriate power calculations to make this program as successful as possible to increase the likelihood of success. I think it's a nice strategic approach. Ultimately, instead of doing multiple phase II studies or multiple phase III studies, which some other companies have had to do, this approach allows the program to be efficient and again, increase the likelihood of success. That's very helpful. Thanks. When looking at the responses and taking a look at PL9643's mechanism of action, and maybe this is for you, Carl Spana, and others can chime in as well. Are the responses you're seeing albeit early lining up with the mech of action that you'd expect from PL9643? It's a really nice question. Yes. You know, the way the melanocortins work is really they don't block a particular inflammatory process that may be a pro-inflammatory process. They work on the resolution of inflammation. What we mean by that is it's really helping to bring the cells that are actively involved in driving the inflammation on the ocular surface back into a more regulatory quiet state. It's kind of the end stage of the process. You expect a very broad effect, and that's why I think we're seeing it across multiple parts of the eye and was multiple parameters that we're measuring. I think it really is, it's consistent and it's very nice to see the results that we're seeing, on the science part in particular because that really speaks to the mechanism and the broad base of the mechanism. We appreciate it. Thanks, guys. Thanks for the questions, Michael. This concludes the verbal portion of our Q&A session. I'll now turn it over to Carl to read the written questions. Okay. For the writing questions, we have a few that we'd like to address. One of is, what is the next steps for this program? They're pretty straightforward. We're gonna complete the enrollment in MELODY-1, get the results out towards the end of the year. We anticipate them now to be positive, we're now preparing for MELODY-2, which is the second of the 2 required phase III clinical trials. In addition to that, there's a MELODY-3, which is open-label safety, which is also again, a regulatory requirement. That's kind of what's on tap for us from an operating standpoint. That leads into a second question, which was, what are your business development strategies around this product? I'm gonna turn that over to Steve, and let Steve make some comments about the business development strategies. Sure. Yeah. Thank you, Carl. Just like with our other programs, we and specifically with this program, our business development philosophy is no different than what we're doing from a clinical standpoint, which is try to be the most informed as possible. Whether we were phase I, phase II, and 100% as we were morphing in and evolving into phase III, we make sure we talk to a lot of people, not just the existing Palatin folk, KOLs, the small companies, the medium-sized companies, the large companies, to make sure if we end up on, say, second base does someone care? Are the factors differentiating enough? Michael Raizman, our CMO, and a practicing physician, mentioned about the safety and the tolerability. You know, the other drugs are safe. Our differentiating factor is tolerability. Regarding efficacy, our differentiating factor is our efficacy. We believe it's stronger, multiple signs and symptoms. Our development philosophy is as we're going forward to make sure everyone knows where we've been, where we're at, and where we're going. As of right now, we have multiple NDAs. We have multiple parties in the data room. I'm not gonna tell you the objective is to absolutely license it, if it makes sense from a value standpoint, post this phase III data coming out in the second half of the year, we will look hard at potentially doing a collaboration prior to going to the next stage, which is a MELODY-2 and a MELODY-3. We really couldn't be any more excited about where we're at, and where we're going and we wanna share that excitement with others, especially if it leads to a collaboration that makes sense for Palatin and its investors and shareholders. Okay. Okay, let's see going in. There was another question relating to surveillance, and what does that kind of mean? Maybe Bruce, you might want to articulate a little bit more on the design behind the surveillance strategy. Sure, Carl, I'd be glad to. When we're talking about a surveillance strategy, what we're doing, is we're looking at the lead-in population results. Again, these are patients recruited at the same centers as the double blind patient enrollment. The surveillance has to do with what response did we see in the 120 lead-in cases or lead-in population, and how do those line up with the double blind population? We're seeing, as you saw on that one slide, that they line up very nicely. The least squares means are very, very close. As we move forward, and actually additional sites will be brought in in recruiting patients, we'll continue to calculate what is the least squares means difference between the two treatment groups to see if that is changing. Is that consistent with what we saw in terms of lead-in population? In other words, in aggregate, when we look at the 120 lead-in population, how do they look over time with the different variables relative to the double blind? It's a surveillance, not just looking at for the primary endpoints, but it's looking across all of the 13 clinical signs, all of the clinical symptoms at all of the time points to again, see what is really lining up the very closest. We believe since we're drawing from the same pool of patients that we had in the lead-in population for the double blind portion of the phase III study, that this gives us the greatest probability for success because the heterogeneity that we would see over time in terms of enrollment of different pools of patients, this can shift endpoints, shift timing, shift estimates. We're monitoring this very carefully because we have the opportunity to go ahead and make changes in terms of endpoints and timing of the analysis. In other words, the 12-week is a pre-chamber, post-chamber, the delta delta. That's the surveillance program. We try to stay informed to make sure that we have the highest probability for success here. Okay. I think, there are no additional questions that are appropriate for this venue. There are some that Steve and I will address in a couple of weeks when we have our quarterly conference call, they're not appropriate for this discussion. I'm gonna ask any of the panelists that were here today if they have any concluding remarks they'd like to make. Not an obligation, just anything you'd like to state about PL9643, you know, I'll open it up. He has to make a comment. All right. With that being said, listen, I'd like to thank the panelists for their time today. I'd like to thank all of you for listening, Palatin participants as well on LifeSci Advisors. I hope that we may able to really convey the real excitement we have about this product. We designed a very, very robust clinical program here. You know, we're a small company. This is a big endeavor for us. We wanted to give ourselves every opportunity to have success, and we want to get this product approved by the FDA. The goal here is to hit that sign symptom in the same clinical trial so that we can be efficient. 2 clinical trials, not 3 or 4 or more. I think we're well on track for that. I have to say, based on its efficacy, the supreme ocular tolerability, I mean, we really, you know, kind of have a tiger by the tail here, and we really couldn't be more enthusiastic about what we're doing. I'm gonna thank everyone. thank the audience again, and I'm gonna turn it back over to Tara, and she's gonna end the call. Great. Thank you, Carl. This concludes today's event. You may now disconnect. Great. Thank you.