Palatin Technologies, Inc. — financial distress indicators
Financial-health summary
Palatin Technologies, Inc.'s reported numbers place it in the 'Very weak' financial-health band (distress score 75/100). The main indicators are cash runway under 12 months, losses in each of the last 3 years and revenue collapse. Independently, the Ohlson accounting model puts its 1-year failure probability at 100% and the market-implied (Merton) default probability is 0.2%. In its favour: cash on hand covers all debt (net-cash balance sheet).
Stress by dimension
Share price — last 12 months
Indicators behind the score
Each red flag shows the evidence from the company’s own filings and the financial or legal principle behind it. Points add to the 0–100 score.
At the current free-cash-flow burn, cash covers ~8 months.
Going-concern standard: management must assess ability to continue for 12 months (ASC 205-40). Runway below that horizon forces dilution, asset sales or default.
Net income negative in 3 of 3 fiscal years.
Persistent losses erode equity and the capacity to absorb shocks.
Revenue changed -100% year over year.
A >30% sales drop typically breaches leverage covenants and starves fixed-cost coverage.
Operating cash flow negative in 3 of the last 3 years.
A business that cannot fund itself from operations depends on external capital to survive.
O-score 12.09 → model probability 100%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Share count up +159% in a year.
Survival financing: repeated equity raises at depressed prices.
Price is -68% from its 52-week high.
For financial firms a share-price run often precedes a deposit or funding run (confidence channel).
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Cash on hand covers all debt (net-cash balance sheet).
- Strong current ratio (5.04).
📰 Recent news scan
- Average basic shares outstanding of Poltronic S.A. – GPW:PTN - TradingViewGoogle News · 2026-10-08
- $PTN Q4 2026 Earnings Preview: Recent $PTN Insider Trading, Hedge Fund Activity, and More - Quiver QuantitativeGoogle News · 2026-09-19
- Palatin Technologies (PTN) gains 4.7% stake holder AuGC BioFund in 13G/A - Stock TitanGoogle News · 2026-08-14
- Palatin Technologies (Nasdaq:PTN) - Stock Analysis - Simply Wall StreetGoogle News · 2026-06-01
- PTN Stock Price and Chart — NASDAQ:PTN - TradingViewGoogle News · 2026-05-29
- Palatin to Begin Trading on Nasdaq Stock Exchange - PR NewswireGoogle News · 2026-05-18
⚖️ U.S. legal pathway — Title 11, U.S. Code
Which chapter would apply?
- Chapter 11 — reorganisation. Management usually stays in control as debtor-in-possession; the automatic stay (§362) halts collection; a plan must meet the best-interests test (§1129(a)(7)) and the absolute priority rule (§1129(b)) — creditors are paid before shareholders, who are frequently wiped out.
- Chapter 7 — liquidation. A trustee sells assets and distributes proceeds by statutory priority (§§507, 726).
- Subchapter V (“Chapter 5”) is a fast track for small-business debtors under a statutory debt cap, but SEC-reporting companies are excluded (§101(51D)) — so it rarely applies to listed companies.
What typically triggers a filing
- Payment default or covenant breach lenders will not waive; a debt maturity that cannot be refinanced.
- Auditor going-concern doubt (ASC 205-40 / PCAOB AS 2415) — often itself a default trigger in loan agreements.
- Creditors can force a case with an involuntary petition (§303) if debts are not paid as they come due.
- Delisting after sustained sub-$1 prices or equity deficits cuts off equity funding.
Transactions shortly before filing can be clawed back (preferences — 90 days, §547; fraudulent transfers — 2 years, §548).
Frequently asked questions
What do Palatin Technologies, Inc.'s financial-health indicators show?
As of 2026-10-08, Palatin Technologies, Inc.'s public financial data places it in the 'Very weak' band with a distress score of 75/100, driven by cash runway under 12 months, losses in each of the last 3 years and revenue collapse. This is a statistical screen of reported numbers — it does not mean the company is insolvent, has defaulted or will enter insolvency proceedings.
What is Palatin Technologies, Inc.'s financial distress score?
75/100 ('Very weak'). Ohlson O-score 12.09 (model 1-year failure probability 100%). Merton distance-to-default 2.91 σ (model default probability 0.2%).
What works in Palatin Technologies, Inc.'s favour?
Cash on hand covers all debt (net-cash balance sheet). Strong current ratio (5.04).
How are shareholders treated if a company enters insolvency?
In a Chapter 11 reorganisation the absolute priority rule pays secured lenders, then unsecured creditors, before shareholders — so existing shares are usually cancelled or heavily diluted. In Chapter 7 the company is liquidated and shareholders rarely recover anything.
Other Pharma & Biotech companies with distress indicators
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- IM Cannabis Corp. (IMCC)Very weak 100/100
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Methodology
Score = capped sum of rule-based red flags across seven dimensions (liquidity, solvency, profitability, cash flow, sales trend, market signal, news). Ohlson O-score (1980) gives an accounting-based 1-year failure probability; Merton distance-to-default (Bharath & Shumway 2008) gives a market-implied probability. Financial institutions use a capital-based rule set. Recalculated every trading day from the latest filings, prices and news.