Palatin Submits Biologics License Application to FDA Seeking Clearance to Market LeuTech Infection Imaging Agent.

PRINCETON, N.J.--(BUSINESS WIRE)--Nov. 23, 1999--

Palatin Technologies Inc. (Nasdaq:PLTN) Tuesday reported that it has submitted a Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA) seeking clearance to market the company's proprietary LeuTech(R) antibody-based infection imaging agent for its first indication, the diagnosis of equivocal (difficult to diagnose) appendicitis.

LeuTech is a kit-packaged, monoclonal antibody labeled with Technetium that is injected intravenously and binds to white blood cells. It accumulates quickly at the site of an infection, giving a bright, clear image on a gamma camera. It is estimated that there are 500,000 cases of appendicitis in the United States each year, approximately 50 percent of which are equivocal.

According to the announcement by Palatin Chairman & CEO Edward J. Quilty, the 58-volume, 12,000-page BLA was submitted to the FDA following the successful completion of more than three years of clinical studies. In addition to trials to establish the safety and efficacy of LeuTech, the studies included a 10-site, pivotal Phase 3 trial that involved 203 patients ranging in age from five to 86 years of age.

Data from these trials show LeuTech enables radiologists and nuclear medicine specialists to obtain images easily, in a very short period of time, with no blood handling, adding a measure of safety and ease of use for health-care workers and patients. Physicians involved in the clinical trials found LeuTech to be highly accurate and believe the product will improve the quality of patient care and reduce costs.

Palatin has a strategic alliance with St. Louis-based Mallinckrodt Inc. (NYSE:MKG), whereby that company has an exclusive worldwide license (excluding Europe) for the sales, marketing and distribution of LeuTech products.

"The submission of the BLA for LeuTech is a significant milestone achievement for Palatin," Quilty said. "We are now in the final leg of the journey to commercialize LeuTech, a product that has significant health-care system and patient benefits.

"LeuTech addresses a large market and fills an important clinical need and we believe it has the potential to become the 'gold standard' for the diagnosis of equivocal appendicitis, as well as other infection imaging indications we are currently developing.

"With the Mallinckrodt alliance and our strong balance sheet, we are well-positioned to bring LeuTech to market and complete the trials for a number of additional indications."

In July of this year, Palatin completed a multi-site, multi-indication Phase 2 study of LeuTech for the detection of a number of forms of osteomyelitis, which is the next indication of several anticipated for LeuTech. Two additional Phase 2 studies of osteomyelitis are now underway, and studies of indications beyond osteomyelitis will start in the near future.

Eric Rypins, M.D., FACS, chief of general surgery at Tri-City Medical Center, Oceanside, Calif., commented, "Our experience during the LeuTech clinical trials has convinced us that once FDA approved, it will almost certainly become the standard method at Tri-City for diagnosing appendicitis in patients with atypical symptoms.

"LeuTech helped to either confirm or rule out appendicitis both quickly and accurately and it improved both the quality and cost effectiveness of patient care in that we were able to avoid some unnecessary operations and admissions for observation. There is not, in our experience, another product like it. Moreover, it will likely find broader use in other hard-to-diagnose infections."

According to Palatin Chief Operating Officer Charles L. Putnam, Phase 3 data for LeuTech showed that the time from injection to the first positive image was as little as four minutes (38 percent of patients), and was typically eight minutes (the median of all patients).

This data also indicated that LeuTech detected appendicitis in 91 percent of positive subjects, and correctly predicted the absence of appendicitis in 96 percent of negative scans, without the use of computerized image enhancement (SPECT). No significant adverse events were reported during the studies.

Frederick Weiland, M.D., FACNP, chief of radiology at Sutter Roseville Medical Center in Sacramento and clinical associate professor of radiology at the University of California at Davis, said, "LeuTech's performance in the diagnosis of suspected appendicitis in patients presenting with atypical symptoms turned our surgeons and emergency-room physicians into true believers.

"They found that LeuTech was the diagnostic procedure of choice and was preferred over all other traditional tests previously used to diagnose suspected appendicitis. I am experienced with this type of radiopharmaceutical, and nothing I have used has been as promising as LeuTech."

Palatin announced on Nov. 12 that it had entered into a definitive agreement to merge with Molecular Biosystems Inc. (NYSE:MB) (MBI), which would create a company with a broad product offering and robust product pipeline. Following approval by the shareholders of both companies and closing of the merger, the combined company will keep the Palatin name and have headquarters in Princeton. Quilty will become its chairman, president and CEO.

The combined Palatin will have one FDA-approved product on the market (OPTISON(R)), one product filed for FDA clearance (LeuTech(TM)), and a variety of promising therapeutic and diagnostic agents in the development pipeline. OPTISON is cleared for ultrasound imaging of the heart wall and cavity. Products in development include MB-840, a liver-selective CT imaging agent with therapeutic potential, and PT-14, Palatin's drug for sexual dysfunction.

Palatin Technologies is a development-stage medical technology company involved in developing and commercializing products and technologies for diagnostic imaging, cancer therapy and ethical drug development based on its proprietary monoclonal antibody radiolabeling and enabling peptide platform technologies.

For further information, visit the Palatin Web site at www.palatin.com. For Palatin investor information, visit the Allen & Caron Inc. Web site at www.allencaron.com.

Statements about the company's future expectations, including closing of the merger, product development, the quality of product portfolios, regulatory plans, timing of FDA reviews, FDA clearances, sales volumes, market acceptance of products and all other statements in this document other than historical facts, are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and as that term is defined in the Private Securities Litigation Reform Act of 1995. The company intends that such forward-looking statements be made subject to the safe harbors created thereby. Since these statements involve risks and uncertainties and are subject to change at any time, the company's actual results could differ materially from expected results.