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Table of Contents

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, DC 20549

FORM 10-Q

(Mark One)

|[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934
|--- | --------------------------------------------------------------------------------------------

For the quarterly period ended September 30, 2007

or

|[  ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934
|---- | ---------------------------------------------------------------------------------------------

For the transition period from ___________ to __________

Commission file number 001-15543

---

PALATIN TECHNOLOGIES, INC.(Exact name of registrant as specified in its charter)

|Delaware                                                            | 95-4078884                          
|------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of
     incorporation or organization) | (I.R.S. Employer Identification No.)
|                                                                    |                                     
|4C Cedar Brook Drive                                                |                                     
|Cranbury, New Jersey                                                | 08512                               
|(Address of principal executive
     offices)                       | (Zip code)                          

(609) 495-2200(Registrant's telephone number,
including area code)

Indicate by check mark whether the registrant (1) filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
   Yes [X]   No [  ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).    Yes [X]   No [ ]

Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

As of November 6, 2007, 85,204,169
shares of the registrants common stock, par value $.01 per share, were outstanding.

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PALATIN TECHNOLOGIES, INC.Table of Contents

|                                    |                                                                                                   |     
|----------------------------------- | ------------------------------------------------------------------------------------------------- | ----
|                                    |                                                                                                   | Page
|PART I  FINANCIAL
     INFORMATION
|Item 1.                             | Financial Statements (Unaudited)                                                                  |     
|                                    | Consolidated Balance Sheets
     as of September 30, 2007 and June 30, 2007                       | 2   
|                                    | Consolidated Statements of Operations
     for the Three Months Ended September 30, 2007 and 2006 | 3   
|                                    | Consolidated Statements of Cash Flows
     for the Three Months Ended September 30, 2007 and 2006 | 4   
|                                    | Notes to Consolidated Financial
     Statements                                                   | 5   
|Item 2.                             | Management's Discussion and Analysis of
     Financial Conditionand Results of Operations         | 10  
|Item 3.                             | Quantitative and Qualitative
     Disclosures About Market Risk                                   | 14  
|Item 4.                             | Controls and Procedures                                                                           | 14  

PART II - OTHER
INFORMATION

|         |                                                                  |   
|-------- | ---------------------------------------------------------------- | --
|Item 1.  | Legal Proceedings                                                | 15
|Item 1A. | Risk Factors                                                     | 15
|Item 2.  | Unregistered Sales of Equity Securities and
     Use of Proceeds | 15
|Item 3.  | Defaults Upon Senior Securities                                  | 15
|Item 4.  | Submission of Matters to a Vote of Security
     Holders         | 15
|Item 5.  | Other Information                                                | 15
|Item 6.  | Exhibits                                                         | 16

SIGNATURES

1

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Table of Contents

PART I  FINANCIAL
INFORMATION

Item 1. Financial Statements

PALATIN TECHNOLOGIES,
INC.Consolidated Balance Sheets(unaudited)

|                                                                       |  |                   |   |                  |  
|---------------------------------------------------------------------- |  | ----------------- | - | ---------------- | -
|                                                                       |  | September 30,2007 |   | June 30,2007    
|ASSETS                                                                 |  |                   |   |                  |  
|Current assets:                                                        | 
|Cash and cash equivalents                                              |  | $   24,305,501    |   | $   31,447,615   |  
|Available-for-sale investments                                         |  | 2,339,456         |   | 2,323,642        |  
|Accounts receivable                                                    |  | 460,269           |   | 607,841          |  
|Prepaid expenses and other current assets                              |  | 568,796           |   | 1,008,464        |  
|Total current assets                                                   |  | 27,674,022        |   | 35,387,562       |  
|Property and equipment, net                                            |  | 6,084,611         |   | 6,070,226        |  
|Restricted cash                                                        |  | 475,000           |   | 475,000          |  
|Other assets                                                           |  | 250,047           |   | 848,446          |  
|Total assets                                                           |  | $   34,483,680    |   | $   42,781,234   |  
|                                                                      
|LIABILITIES AND STOCKHOLDERS' EQUITY                                   | 
|Current liabilities:                                                   | 
|Capital lease obligations and notes payable, current portion           |  | $        305,538  |   | $        216,841 |  
|Accounts payable                                                       |  | 966,346           |   | 1,120,894        |  
|Accrued expenses                                                       |  | 2,372,604         |   | 2,420,837        |  
|Accrued compensation                                                   |  | 694,165           |   | 941,300          |  
|Deferred revenue, current portion                                      |  | 1,916,669         |   | 4,864,833        |  
|Total current liabilities                                              |  | 6,255,322         |   | 9,564,705        |  
|                                                                      
|Capital lease obligations and notes payable, net of current portion    |  | 295,583           |   | 275,126          |  
|Deferred rent, net of current portion                                  |  | 1,849,125         |   | 1,966,628        |  
|Deferred revenue, net of current portion                               |  | 7,222,220         |   | 12,443,087       |  
|Total liabilities                                                      |  | 15,622,250        |   | 24,249,546       |  
|                                                                      
|Commitments and contingencies (Note 7)                                 | 
|                                                                      
|Stockholders' equity:                                                  | 
|Preferred stock of $.01 par value - authorized 10,000,000 shares;      | 
|Series A Convertible; issued and outstanding 4,997 shares as of        | 
|September 30, 2007 and June 30, 2007                                   |  | 50                |   | 50               |  
|Common stock of $.01 par value - authorized 150,000,000 shares; issued | 
|and outstanding 85,204,169 and 85,126,915 shares as of September 30,   | 
|2007 and June 30, 2007, respectively                                   |  | 852,042           |   | 851,269          |  
|Additional paid-in capital                                             |  | 206,435,357       |   | 205,875,438      |  
|Accumulated other comprehensive income                                 |  | 15,814            |   | -                |  
|Accumulated deficit                                                    |  | (188,441,833      | ) | (188,195,069     | )
|Total stockholders' equity                                             |  | 18,861,430        |   | 18,531,688       |  
|Total liabilities and stockholders' equity                             |  | $   34,483,680    |   | $   42,781,234   |  

The accompanying notes are an integral part of these
consolidated financial statements.

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Table of Contents

PALATIN TECHNOLOGIES,
INC.Consolidated Statements of Operations(unaudited)

|                                            |                                  |                  |      |                  |  
|------------------------------------------- | -------------------------------- | ---------------- | ---- | ---------------- | -
|                                            | Three Months Ended September 30, |                 
|                                            | 2007                             |                  | 2006 |                 
|REVENUES:                                   |                                  |                  |      |                  |  
|Licenses, grants and contracts              |                                  | $   8,977,731    |      | $    4,935,102   |  
|                                           
|OPERATING EXPENSES:                         |                                 
|Research and development                    |                                  | 7,943,877        |      | 12,125,252       |  
|General and administrative                  |                                  | 1,659,010        |      | 1,560,922        |  
|Total operating expenses                    |                                  | 9,602,887        |      | 13,686,174       |  
|                                           
|Loss from operations                        |                                  | (625,156         | )    | (8,751,072       | )
|                                           
|OTHER INCOME (EXPENSE):                     |                                 
|Investment income                           |                                  | 396,621          |      | 324,235          |  
|Interest expense                            |                                  | (18,229          | )    | (10,066          | )
|Total other income, net                     |                                  | 378,392          |      | 314,169          |  
|                                           
|NET LOSS                                    |                                  | $    (246,764    | )    | $ (8,436,903     | )
|                                           
|Basic and diluted net loss per common share |                                  | $          (0.00 | )    | $          (0.12 | )
|                                           
|Weighted average number of common shares    |                                 
|outstanding used in computing basic and     |                                 
|diluted net loss per common share           |                                  | 85,177,298       |      | 70,878,521       |  

The accompanying notes are an integral part of these
consolidated financial statements.

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PALATIN TECHNOLOGIES,
INC.Consolidated Statements of Cash Flows(unaudited)

|                                                        |                                  |                |      |                |  
|------------------------------------------------------- | -------------------------------- | -------------- | ---- | -------------- | -
|                                                        | Three Months Ended September 30, |               
|                                                        | 2007                             |                | 2006 |               
|CASH FLOWS FROM OPERATING ACTIVITIES:                   |                                  |                |      |                |  
|Net loss                                                |                                  | $    (246,764  | )    | $  (8,436,903  | )
|Adjustments to reconcile net loss to net cash           |                                 
|used in operating activities:                           |                                 
|Depreciation and amortization                           |                                  | 340,724        |      | 344,200        |  
|Stock-based compensation                                |                                  | 450,463        |      | 224,494        |  
|Changes in operating assets and liabilities:            |                                 
|Accounts receivable                                     |                                  | 147,572        |      | (849,956       | )
|Prepaid expenses and other                              |                                  | 1,038,067      |      | 635,655        |  
|Accounts payable                                        |                                  | (154,548       | )    | (536,564       | )
|Accrued expenses and other                              |                                  | (412,871       | )    | (51,109        | )
|Deferred revenues                                       |                                  | (8,169,031     | )    | (1,375,953     | )
|Net cash used in operating activities                   |                                  | (7,006,388     | )    | (10,046,136    | )
|                                                       
|CASH FLOWS FROM INVESTING ACTIVITIES:                   |                                 
|Purchases of property and equipment                     |                                  | (156,321       | )    | (61,248        | )
|Net cash used in investing activities                   |                                  | (156,321       | )    | (61,248        | )
|                                                       
|CASH FLOWS FROM FINANCING ACTIVITIES:                   |                                 
|Payments on capital lease obligations and notes payable |                                  | (89,634        | )    | (33,496        | )
|Proceeds from exercise of common stock warrants         |                                  | 110,229        |      | -              |  
|Net cash provided by (used in)  financing activities    |                                  | 20,595         |      | (33,496        | )
|                                                       
|NET DECREASE IN CASH AND                                |                                 
|CASH EQUIVALENTS                                        |                                  | (7,142,114     | )    | (10,140,880    | )
|                                                       
|CASH AND CASH EQUIVALENTS, beginning                    |                                 
|of period                                               |                                  | 31,447,615     |      | 28,333,211     |  
|                                                       
|CASH AND CASH EQUIVALENTS, end of period                |                                  | $ 24,305,501   |      | $ 18,192,331   |  
|                                                       
|SUPPLEMENTAL CASH FLOW INFORMATION:                     |                                 
|Equipment acquired under financing arrangements         |                                  | $      198,788 |      | $      121,348 |  

The accompanying notes are an integral part of these financial
statements.

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PALATIN TECHNOLOGIES, INC.Notes to
Consolidated Financial Statements (unaudited)

(1)    ORGANIZATION

Nature
of Business  Palatin Technologies, Inc. ("Palatin" or the "Company") is a
biopharmaceutical company primarily focused on discovering and developing targeted,
receptor-specific small molecule and peptide therapeutics, including melanocortin
("MC")-based therapeutics.  Therapeutics affecting the activity of the MC family of
receptors may have the potential to treat a variety of conditions and diseases, including
sexual dysfunction, obesity and related disorders, cachexia (extreme wasting, generally
secondary to a chronic disease), skin pigmentation disorders and inflammation-related
diseases.  The Company is exploring other receptor-specific therapeutics, including
congestive heart failure therapeutics.

Bremelanotide,
an MC receptor agonist, is a patented, nasally administered MC-based peptide in clinical
development for the treatment of male and female sexual dysfunction.  In 2004, we entered
into a collaborative development and marketing agreement with King Pharmaceuticals, Inc.
("King") to jointly develop and commercialize bremelanotide.  In September 2007, the
Company received notice from King terminating the collaborative development and marketing
agreement between the Company and King, in accordance with its terms, effective December
5, 2007.  Upon termination, Palatin will solely own all rights to bremelanotide.  See
Note 4 regarding the agreement with King.

The
Company has a licensing and research collaboration agreement with AstraZeneca AB
("AstraZeneca") to discover, develop and commercialize small molecule compounds that
target MC receptors for the treatment of obesity, diabetes and related metabolic
syndrome.  The Company is also conducting research on peptidomimetic compounds for the
treatment of other disorders, including congestive heart failure.  Certain compounds
under investigation result from the Company's MIDAS(TM)technology, a proprietary platform
technology to design and synthesize compounds that mimic the activity of peptides.

NeutroSpec
is the Company's radiolabeled monoclonal antibody product for imaging and diagnosing
infection and the subject of a strategic collaboration agreement with the Mallinckrodt
division of Covidien ("Mallinckrodt").  In July 2004, the Company received approval from
the U.S. Food and Drug Administration ("FDA") to market NeutroSpec for imaging and
diagnosing equivocal appendicitis.  In December 2005, the Company and Mallinckrodt
voluntarily suspended the sales, marketing and distribution of NeutroSpec following the
occurrence of certain serious adverse events involving patients who received NeutroSpec.
 Significant development activities pertaining to NeutroSpec are currently suspended
while the Company and Mallinckrodt evaluate future development and marketing alternatives.

Key
elements of the Company's business strategy include entering into alliances and
partnerships with pharmaceutical companies to facilitate the development, manufacture,
marketing, sale and distribution of the Company's product candidates under development,
expansion of the Company's pipeline through the utilization of its MC expertise and
patented drug discovery platform, opportunistic acquisition of synergistic products and
technologies and partial funding of the Company's development and discovery programs with
the cash flow from collaboration agreements.

Business
Risk and Liquidity  The Company has incurred negative cash flows from
operations since its inception, and has expended, and expects to continue to expend in
the future, substantial funds to complete its planned product development efforts.  As
shown in the accompanying consolidated financial statements, the Company has an
accumulated deficit as of September 30, 2007 and incurred a net loss for the three months
ended September 30, 2007.  The Company anticipates incurring additional losses in the
future as a result of spending on its development programs.  To achieve profitability,
the Company, alone or with others, must successfully develop and commercialize its
technologies and proposed products, conduct successful pre-clinical studies and clinical
trials, obtain required regulatory approvals and successfully manufacture and market such
technologies and proposed products.  The time required to reach profitability is highly
uncertain, and there can be no assurance that the Company will be able to achieve
profitability on a sustained basis, if at all.

The
Company believes that its cash, cash equivalents and available-for-sale investments as of
September 30, 2007, together with expected receipts from collaboration and license
agreements and other income, are adequate to fund operations for at least the next twelve
months.  The nature and timing of the Company's development activities are highly
dependent on its financing activities.  Management plans to continue to refine its
operations, control expenses, evaluate alternative methods to conduct its business, and
seek available and attractive sources of financing and sharing of development costs
through strategic collaboration agreements or other resources.  Should appropriate
sources of financing not be available, management would delay certain clinical trials and
research activities until such time as appropriate financing was available.  There can be
no assurance that the Company's

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financing efforts will be
successful.  If adequate funds are not available, the Company's financial condition will
be materially and adversely affected, due to the Company's expected negative cash flows
from operations.

Concentrations 
Concentrations in the Company's assets and operations subject it to certain related risks. Financial
instruments that potentially subject the Company to concentrations of credit risk
primarily consist of cash and cash equivalents, available-for-sale investments and
accounts receivable. The Company's cash and cash equivalents are primarily invested in
one money market fund sponsored by a large financial institution.  The Company's accounts
receivable balance as of September 30, 2007 consists of amounts due from its
collaboration partners, including $317,000 due from AstraZeneca, $90,985 due from
Mallinckrodt and $52,284 due from King.

Revenues
from collaboration partners as a percentage of total revenues were as follows (see Note 4
regarding the agreement with King):

|             |                                  |     |      |     | 
|------------ | -------------------------------- | --- | ---- | --- | 
|             | Three Months Ended September 30, |    
|             | 2007                             |     | 2006 |    
|King         |                                  | 91% |      | 99% | 
|AstraZeneca  |                                  | 8%  |      | -%  | 
|Mallinckrodt |                                  | 1%  |      | 1%  | 

(2)    
          BASIS OF PRESENTATION:

The
accompanying unaudited consolidated financial statements have been prepared in accordance
with U.S. generally accepted accounting principles for interim financial information and
with the instructions to Form 10-Q. Accordingly, they do not include all of the
information and footnote disclosures required to be presented for complete financial
statements. In the opinion of management, these consolidated financial statements contain
all adjustments (consisting of normal recurring adjustments) considered necessary to
present fairly the Companys financial position as of September 30, 2007, and its
results of operations and its cash flows for the three months ended September 30, 2007 and
2006. The results of operations for the three-month period ended September 30, 2007 may
not necessarily be indicative of the results of operations expected for the full year,
except that the Company expects to incur a significant loss for the fiscal year ending
June 30, 2008.

The
accompanying consolidated financial statements should be read in conjunction with the
audited consolidated financial statements and notes thereto included in the Companys
annual report on Form 10-K, filed with the Securities and Exchange Commission
(SEC), which includes consolidated financial statements as of June 30, 2007
and 2006 and for each of the fiscal years in the three-year period ended June 30, 2007.

(3)    
          SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles
of Consolidation  The consolidated financial statements include the accounts of
Palatin and its wholly-owned inactive subsidiary. All significant intercompany accounts
and transactions have been eliminated in consolidation.

Use
of Estimates  The preparation of consolidated financial statements in conformity
with U.S. generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the consolidated financial statements
and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.

Cash
and Cash Equivalents  Cash and cash equivalents include cash on hand, cash in banks
and all highly liquid investments with a purchased maturity of less than three months.
Restricted cash secures letters of credit for security deposits on leases.

Investments
 The Company classifies its investments as available-for-sale investments and all
such investments are recorded at fair value based on quoted market prices. Unrealized
holding gains and losses, net of the related tax effect, if any, are generally excluded
from earnings and are reported in accumulated other comprehensive income/loss until
realized. Interest and dividends on securities classified as available-for-sale are
included in investment income. Gains and losses are recorded in the statement of
operations when realized or when unrealized holding losses are determined to be other than
temporary, on a specific-identification basis.

Fair
Value of Financial Instruments  The Companys financial instruments
consist primarily of cash and cash equivalents, available-for-sale investments, accounts
receivable, accounts payable, capital lease obligations and notes payable. Management
believes that the carrying value of these assets and liabilities are representative of
their

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respective fair values based on
quoted market prices for investments and the short-term nature of the other instruments.

Property
and Equipment  Property and equipment consists of office and laboratory equipment,
office furniture and leasehold improvements and includes assets acquired under capital
leases. Property and equipment are recorded at cost. Depreciation is recognized using the
straight-line method over the estimated useful lives of the related assets, generally five
years for laboratory equipment, seven years for office furniture and equipment and the
lesser of the term of the lease or the useful life for leasehold improvements.
Amortization of assets acquired under capital leases is included in depreciation expense.
Maintenance and repairs are expensed as incurred while expenditures that extend the useful
life of an asset are capitalized.

Impairment
of Long-Lived Assets  The Company reviews its long-lived assets for impairment
whenever events or changes in circumstances indicate that the carrying amount of the
assets may not be fully recoverable. To determine recoverability of a long-lived asset,
management evaluates whether the estimated future undiscounted net cash flows from the
asset are less than its carrying amount. If impairment is indicated, the long-lived asset
would be written down to fair value. Fair value is determined by an evaluation of
available price information at which assets could be bought or sold including quoted
market prices, if available, or the present value of the estimated future cash flows based
on reasonable and supportable assumptions.

Deferred
Rent  The Companys operating leases provide for rent increases over the terms
of the leases. Deferred rent consists of the difference between periodic rent payments and
the amount recognized as rent expense on a straight-line basis, as well as tenant
allowances for leasehold improvements. Rent expense is being recognized ratably over the
life of the leases.

Revenue
Recognition  Revenue from corporate collaborations and licensing agreements consists
of up-front fees, research and development funding, and milestone payments. Non-refundable
up-front fees are deferred and amortized to revenue over the related performance period.
The Company estimates the performance period as the period in which it performs certain
development activities under the applicable agreement. Estimated reimbursements for
research and development activities and government grants are recorded in the period that
the Company performs the related activities under the terms of the applicable agreements.
Revenue resulting from the achievement of milestone events stipulated in the applicable
agreements is recognized when the milestone is achieved, provided that such milestone is
substantive in nature. See Note 4 regarding the agreement with King.

Research
and Development Costs  The costs of research and development activities are charged
to expense as incurred, including the cost of equipment for which there is no alternative
future use.

Stock
Options  The Company accounts for options granted to employees in accordance with
Statement of Financial Accounting Standards (SFAS) 123(R), Share-Based
Payment. SFAS 123(R) establishes standards for the accounting for transactions in
which an entity exchanges its equity instruments for goods or services and requires that
the compensation cost relating to share-based payment transactions be recognized in the
financial statements, measured by the fair value of the equity or liability instruments
issued, adjusted for estimated forfeitures.

The
Company accounts for options granted to consultants in accordance with Emerging Issues
Task Force (EITF) Issue 96-18, Accounting for Equity Instruments That
Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or
Services, and SFAS 123(R). The Company determines the value of stock options
utilizing the Black-Scholes option-pricing model.

Compensation
costs for share-based awards with pro rata vesting are allocated to periods on the
straight-line basis.

Income
Taxes  The Company and its subsidiary file consolidated federal and separate-company
state income tax returns. Income taxes are accounted for under the asset and liability
method. Deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of assets and
liabilities and their respective tax bases and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary differences or
operating loss and tax credit carryforwards are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is recognized in
the period that includes the enactment date.

In
accordance with SFAS 109, Accounting for Income Taxes, the Company has
recorded a valuation allowance against its deferred tax assets. The valuation allowance is
based on managements estimates and analysis, which includes consideration of tax
laws that may limit the Companys ability to utilize its net operating loss
carryforwards.

Net
Loss per Common Share  Basic earnings per share (EPS) is computed
by dividing net loss by the weighted average number of common shares outstanding for the
period. Diluted EPS reflects the potential dilution

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from the exercise or conversion of
securities into common stock, including stock options and warrants, restricted stock
units and shares of Series A Convertible Stock. As of September 30, 2007 and 2006, common
shares issuable upon conversion of Series A Convertible Preferred Stock and the exercise
of outstanding options, warrants and restricted stock units amounted to an aggregate of
16,266,314 and 16,697,450 shares, respectively, and were not included in the computation
of Diluted EPS because to do so would have been anti-dilutive for the periods presented.

(4)    
          AGREEMENT WITH KING

In
September 2007, the Company received notice from King terminating the collaborative
development and marketing agreement between the Company and King, in accordance with its
terms, effective December 5, 2007. As of September 30, 2007, the Company has no further
obligation to perform any services for King. The notice followed communication with
representatives of the FDA, which raised serious concerns about the benefits and risks of
the progression of bremelanotide into Phase 3 clinical studies for erectile dysfunction.
Upon termination, Palatin will solely own all rights to bremelanotide without any
obligation for future payments to King, other than any amounts payable for the
reimbursement of bremelanotide costs incurred by King prior to termination. King has no
obligation for future payments to Palatin, other than any amounts payable for the
reimbursement of bremelanotide costs incurred by Palatin prior to termination.

In
connection with the termination of the agreement, the Company recognized in the quarter
ended September 30, 2007 $6,499,796 of deferred up-front license fees received from King,
together with $815,561 of associated deferred costs, which prior to termination were being
recognized as revenues and amortized as research and development costs over the estimated
period of the Companys performance under the agreement, respectively. In addition,
the Company recognized all costs incurred by King and the Company pursuant to the
reimbursement provisions of the agreement as of September 30, 2007.

(5)    
          COMPREHENSIVE LOSS

Comprehensive
loss consists of the following:

|                               |                                  |            |      |              |  
|------------------------------ | -------------------------------- | ---------- | ---- | ------------ | -
|                               | Three Months Ended September 30, |           
|                               | 2007                             |            | 2006 |             
|Net loss                       |                                  | $ (246,764 | )    | $ (8,436,903 | )
|Unrealized gain on investments |                                  | 15,814     |      | 7,553        |  
|Comprehensive loss             |                                  | $ (230,950 | )    | $ (8,429,350 | )

(6)    
INVESTMENTS

The
following is a summary of available-for-sale investments:

|                               |                                  |            |      |            | 
|------------------------------ | -------------------------------- | ---------- | ---- | ---------- | 
|                               | Three Months Ended September 30, |           
|                               | 2007                             |            | 2006 |           
|Cost                           |                                  | $2,323,642 |      | $2,323,642 | 
|Unrealized gain on investments |                                  | 15,814     |      | -          | 
|Fair value                     |                                  | $2,339,456 |      | $2,323,642 | 

(7)    
          COMMITMENTS AND CONTINGENCIES

Contingencies

As
discussed in the Companys annual report on Form 10-K for the fiscal year ended June
30, 2007, Competitive Technologies, Inc. (CTI) initiated arbitration
proceedings with the Company for breach of the terms of its license agreement for patent
rights related to certain compounds and methods of treatment for sexual dysfunction and
for other actions asserted to arise out of the license agreement, and also initiated
litigation against the Company by filing a suit in Connecticut Superior Court for breach
of the settlement agreement of an earlier arbitration between CTI and the Company. In
September 2007, the Company received a notice of termination of the license agreement
from CTI, which notice was subsequently declared null and void by the arbitration panel
in the

8

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arbitration proceeding in an order
on motion for contempt. A second notice of termination was subsequently served on the
Company by CTI in October 2007, and was also declared null and void by the arbitration
panel. The Company amended its counterclaim to assert actions for declaratory and
injunctive relief relating to CTIs assertion of termination of the license
agreement, and actions for defamation, prima facie tort and unfair trade practices
relating to CTIs issuance of a press release falsely asserting that the license
agreement had been terminated. CTI filed an answer denying all material allegations
asserted by the Company, and filed an additional counterclaim for defamation, asserting
that the Company had quoted portions of a press release issued by CTI out of context, and
for breach of the license agreement relating to the termination of a sublicense to King.
The Company filed an answer to CTIs additional counterclaims, denying all material
allegations asserted by CTI. The Company cannot reasonably predict the outcome of the
disputes or reasonably estimate the range of potential loss, if any. Although the amount
of any liability that could arise with respect to these matters cannot be predicted, the
Company does not believe that the resolution of these matters will have a material
adverse effect on its financial position, results of operations or liquidity.

(8)    
          REDUCTION IN WORKFORCE

On
September 25, 2007, the Company reduced its work force by approximately 30% and accrued
approximately $560,000 of severance and related costs to be paid over the following nine
months. This expense is allocated between research and development and general and
administrative expenses in the amounts of $546,000 and $14,000, respectively, based on the
respective positions eliminated.

(9)    
          STOCKHOLDERS EQUITY

On
September 25, 2007, the Company issued grants of restricted stock units under the
Companys 2005 Stock Plan totaling in the aggregate 1,573,915 shares of common stock
as retention bonuses to its employees, other than the executive officers, that were not
affected by the reduction in workforce. The shares approved for grant exceed the number of
authorized shares available for grant under the 2005 Stock Plan by 109,984. In the event
that additional authorized shares are not available by January 1, 2008 through shareholder
approval to increase the authorized shares or from the expiration of previous grants under
the 2005 Stock Plan, the grants issued will be reduced pro rata to cover the short fall.
As a result, for accounting purposes the 109,984 shares are not considered granted until
the date that sufficient authorized shares are available. These units will vest on
September 30, 2008, provided that the employee remains continuously employed by the
Company through such date, or earlier if the employee is involuntarily terminated by
reason of a position elimination or change in control. The Company will amortize the fair
value of the 1,463,931 authorized restricted stock units, totaling approximately $700,000,
on a straight-line basis over the next year. The 109,984 unauthorized restricted stock
units will be valued on the effective grant dates and amortized over the vesting period.

9

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Table of Contents

Item 2. Management's Discussion and
Analysis of Financial Condition and Results of Operations.

The
following discussion and analysis should be read in conjunction with the consolidated
financial statements and notes to the consolidated financial statements filed as part of
this report.

Statements
in this quarterly report on Form 10-Q, as well as oral statements that may be made by us
or by our officers, directors, or employees acting on our behalf, that are not historical
facts constitute forward-looking statements, which are made pursuant to the
safe harbor provisions of Section 21E of the Securities Exchange Act of 1934 (the
Exchange Act). The forward-looking statements in this quarterly report on Form
10-Q do not constitute guarantees of future performance. Investors are cautioned that
statements that are not strictly historical statements contained in this quarterly report
on Form 10-Q including, without limitation, current or future financial performance,
managements plans and objectives for future operations, clinical trials and results,
product plans and performance, managements assessment of market factors, as well as
statements regarding our strategy and plans and our strategic partners, constitute
forward-looking statements. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors that could cause our actual results to be
materially different from historical results or from any results expressed or implied by
such forward-looking statements. Our future operating results are subject to risks and
uncertainties and are dependent upon many factors, including, without limitation, the
risks identified in this report, in our annual report on Form 10-K for the year ended June
30, 2007 and in our other Securities and Exchange Commission (SEC) filings.

We
expect to incur losses in the future as a result of spending on our planned development
programs and losses may fluctuate significantly from quarter to quarter.

Critical Accounting
Policies and Estimates

Our
significant accounting policies are described in the notes to our consolidated financial
statements included in this report and in our annual report on Form 10-K for the year
ended June 30, 2007. We believe that our accounting policies and estimates relating to
revenue recognition, accrued expenses and stock-based compensation are the most critical.

Revenue Recognition

Revenue
from corporate collaborations and licensing agreements consists of up-front fees, research
and development funding, and milestone payments. Non-refundable up-front fees are deferred
and amortized to revenue over the related performance period. Due to the uncertainty
inherent in our development programs, including the possibility that a program is
terminated prior to completion, we recognize such revenue on a straight-line basis, as we
believe that no other basis is more reflective of the pattern over which such revenue is
earned. Management monitors the progress and results of these development activities and
adjusts its estimated performance period accordingly. The actual performance period may
vary based on the results of the related development activities, changes in development
plans agreed to by the parties, regulatory requirements and other factors. Increases in
the estimated performance period would result in increases in the period over which such
deferred revenue is to be recognized and corresponding decreases in the amount of revenue
recognized each period. As of September 30, 2007, a one-year increase in the estimated
period of performance would result in a decrease in the amount of deferred revenue
recognized per quarter of approximately $65,000.

Accrued Expenses

A
significant portion of our development activities are performed by third parties. We
review the activities performed under significant contracts each quarter and accrue
expenses and the amount of any reimbursement to be received from our collaborators based
upon the estimated amount of work completed. Estimating the value or stage of completion
of certain services requires judgment based on available information. If we do not
identify services performed for us but not billed by the service-provider, or if we
underestimate or overestimate the value of services performed as of a given date, reported
expenses will be understated or overstated.

Stock-Based Compensation

The
fair value of stock options granted has been calculated using the Black-Scholes model,
which requires us to make estimates of volatility and expected option lives. We estimate
these factors at the time of grant based on our own prior experience, public sources of
information and information for comparable companies. The amount of recorded compensation
related to an option grant is not adjusted for subsequent changes in these estimates or
for actual experience. The amount of our recorded compensation is also dependent on our
estimates of future option forfeitures and the probability of achievement of performance
conditions. If we initially over-estimate future forfeitures, our reported expenses will
be understated. Changes in estimated forfeitures will affect our reported expenses in
future periods.

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Table of Contents

Certain
options are subject to periodic re-measurement over the vesting period as services are
rendered, based on changes in the fair value of our common stock. In addition, the vesting
of certain options is dependent on future events. As a result, stock-based compensation
charges may vary significantly from period to period. In October 2006, we granted
restricted stock units to certain executives that vest upon the achievement of specified
stock prices. We will record expenses in future periods pertaining to these
grants, the timing of which may vary based upon our future stock price.

Overview

We
are a biopharmaceutical company focused on discovering and developing targeted,
receptor-specific small molecule and peptide therapeutics. Our proprietary drug
development pipeline is based primarily on melanocortin (MC)-based
therapeutics, and we believe we are a leader in this area of pharmaceutical research and
development. Therapeutics affecting the activity of the MC family of receptors may have
the potential to treat a variety of conditions and diseases, including sexual dysfunction,
obesity and related disorders, cachexia (extreme wasting, generally secondary to a chronic
disease), skin pigmentation disorders and inflammation-related diseases.

Bremelanotide
is our nasally administered MC-based peptide in clinical development for two distinct
indications, the treatment of male erectile dysfunction (ED) and the treatment
of female sexual dysfunction (FSD). In 2004, we entered into a collaborative
development and marketing agreement with King Pharmaceuticals, Inc. (King) to
jointly develop and commercialize bremelanotide. Pursuant to the agreement, we and King
shared all collaboration development costs based on an agreed percentage. In September
2007, we received notice from King terminating the agreement in accordance with its terms
effective December 5, 2007. As of September 30, 2007, we have no further
obligation to perform any services for King. Termination followed comments by the U.S.
Food and Drug Administration (FDA) raising serious concerns about the
acceptable benefit/risk ratio to support the progression of bremelanotide into Phase 3
studies for ED as a first-line therapy in the general population. Upon termination, we
will solely own all rights to bremelanotide.

In
January 2007, we entered into an exclusive global licensing and research collaboration
agreement with AstraZeneca AB (AstraZeneca), a major international
pharmaceutical and healthcare business, to discover, develop and commercialize small
molecule compounds that target MC receptors for the treatment of obesity, diabetes and
related metabolic syndrome. The collaboration is based on Palatins MC receptor
obesity program and includes access to compound libraries, core technologies and expertise
in MC receptor drug discovery and development. We and AstraZeneca are in the process of
identifying clinical candidate MC therapeutic small molecules for the treatment of obesity
and related disorders.

We
have developed a library of novel natriuretic (promoting sodium excretion) receptor
compounds, and identified a lead clinical candidate for which we submitted an
Investigational New Drug application with the FDA, and initiated Phase 1 clinical trials
for the treatment of congestive heart failure (CHF). We are also conducting
research to identify additional clinical candidate compounds for the treatment of both
chronic CHF and acutely decompensated (rapidly deteriorated) CHF.

We
are evaluating future development and marketing activities involving NeutroSpec, our
radiolabeled monoclonal antibody product for imaging and diagnosing infection, with the
Mallinckrodt division of Covidien (Mallinckrodt), with whom we have a
strategic collaboration agreement. In December 2005, we and Mallinckrodt voluntarily
suspended the sales, marketing and distribution of NeutroSpec following certain serious
adverse events involving patients who received NeutroSpec. NeutroSpec was approved for
marketing for imaging and diagnosing equivocal appendicitis by the FDA in July 2004.

Key
elements of our business strategy include: entering into alliances and partnerships with
pharmaceutical companies to facilitate the development, manufacture, marketing, sale and
distribution of product candidates we are investigating; expanding our pipeline through
the utilization of our MC expertise and patented drug discovery platform; acquiring
synergistic products and technologies; and partially funding our development and discovery
programs with the cash flow from our collaboration agreements.

We
incorporated in Delaware in 1986 and commenced operations in the biopharmaceutical area in
1996. Our corporate offices and research and development facility are located at 4C Cedar
Brook Drive, Cranbury, New Jersey 08512 and our telephone number is (609) 495-2200. We
maintain an Internet site at http://www.palatin.com, where among other things, we make
available free of charge on and through this website our Forms 3, 4 and 5, annual reports
on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments
to those reports filed or furnished pursuant to Section 13(a) or 15(d) and Section 16 of
the Exchange Act as soon as reasonably practicable after we electronically file such
material with, or furnish it to, the SEC. Our website and the information contained
therein or connected thereto shall not be deemed to be incorporated into this quarterly
report on Form 10-Q.

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Results of Operations

Three Months Ended September 30, 2007
Compared to the Three Months Ended September 30, 2006.

Licenses,
Grants and Contracts  For the three months ended September 30, 2007 and 2006, we
recognized $9.0 million and $4.9 million, respectively, in licenses, grants and contracts
revenue consisting of (i) $8.2 million and $4.8 million, respectively, related to
bremelanotide pursuant to our collaboration agreement with King, (ii) $0.7 million and $0,
respectively, related to our license agreement with AstraZeneca, and (iii) $0.1 million
and $0.1 million related to NeutroSpec pursuant to our collaboration agreement with
Mallinckrodt. The increase in revenue primarily reflects $6.5 million of license revenue
related to Kings up-front payment that was recognized in September 2007 in
connection with the termination of our collaboration agreement with King. License and
contract revenue from AstraZeneca consists of $0.3 million of revenue related to our
research services performed in the three months ended September 30, 2007 and $0.4 million
of license revenue related to AstraZenecas $10.0 million up-front license fee
received at the inception of the agreement. Contract revenue from Mallinckrodt reflects
Mallinckrodts share of the costs incurred in certain NeutroSpec development
activities. Future contract revenue from AstraZeneca and Mallinckrodt, in the form of
reimbursement of shared development costs and the recognition of deferred license fees,
will fluctuate based on development activities in our obesity and NeutroSpec programs. We
may also earn contract revenue based on the attainment of certain development milestones.

Research
and Development  Research and development expenses decreased to $7.9 million for the
three months ended September 30, 2007 from $12.1 million for the three months ended
September 30, 2006.

Research
and development expenses related to bremelanotide decreased to $2.5 million in the 2007
period from $7.8 million in the 2006 period, as a result of (i) the completion of certain
Phase 2B trials on both men and women, and (ii) the delay in the initiation of Phase 3
clinical trials for ED. The 2007 period includes the recognition of $0.8 million of deferred costs recorded in
connection with the termination of our collaboration agreement with King which prior to termination were being
amortized as research and development costs over the estimated period of our performance under the agreement. In
addition, we recognized all costs incurred by King and us pursuant to the reimbursement provisions of the
collaboration agreement as of September 30, 2007.  Upon
the completion of further discussions with the FDA and external consultants, we will
determine the next steps related to the further development of bremelanotide for ED and
FSD.

Research
and development expenses directly related to our obesity, CHF and other pre-clinical
programs increased from $0.7 million in the 2006 period to $1.0 million in the 2007
period. Spending to date has been primarily related to the identification and optimization
of lead compounds. We expect to spend approximately $2 million to $3 million of direct
costs during fiscal 2008 on laboratory research and the commencement of clinical trials
for a compound. The amount of such spending and the nature of future development
activities are dependent on a number of factors, including primarily the success of our
discovery programs, preclinical studies, our ability to progress a compound into human
clinical trials and discussions with AstraZeneca and other potential development partners.

The
historical amounts of project spending above exclude general research and development
spending, which increased from $3.6 million in the three months ended September 30, 2006
to $4.4 million in the three months ended September 30, 2007, primarily due to increased
personnel and related costs, including severance expense arising from our September 2007
reduction in workforce.

Cumulative
spending from inception to September 30, 2007 on our bremelanotide, NeutroSpec and other
preclinical programs amounts to approximately $117.1 million, $55.1 million and $34.4
million, respectively. Due to risk factors described in our periodic filings with the SEC,
including the difficulty in currently estimating the costs and timing of future Phase 1
clinical trials and large-scale Phase 2 and Phase 3 clinical trials for any product under
development, we cannot predict with reasonable certainty when, if ever, a program will
advance to the next stage of development or be successfully completed, or when, if ever,
significant related net cash inflows will be generated.

General
and Administrative  General and administrative expenses in the three months ended
September 30, 2007 and 2006 amounted to $1.7 million and $1.6 million, respectively. The
increase in expenses for the 2007 period is primarily due to increased personnel and
related costs.

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Table of Contents

Liquidity and Capital
Resources

Since
inception, we have incurred net operating losses, primarily related to spending on our
research and development programs. We have financed our net operating losses primarily
through equity financings and revenue received under collaborative agreements.

We
will need regulatory approval to market and sell our products. Our product candidates are
at various stages of development and will require significant further research,
development and testing and some may never be successfully developed or commercialized.
We may experience uncertainties, delays, difficulties and expenses

commonly experienced by early stage
biopharmaceutical companies, which may include unanticipated problems and additional
costs relating to:

| | the
development and testing of products in animals and humans;
|- | --------------------------------------------------------------

| | product
approval or clearance;
|- | ------------------------------

| | regulatory
compliance;
|- | ----------------------

| | good
manufacturing practices;
|- | -----------------------------

| | intellectual
property rights;
|- | -----------------------------

| | product
introduction; and
|- | -------------------------

| | marketing,
sales and competition.
|- | ---------------------------------

Failure to obtain timely regulatory
approval for our product candidates and indications would impact our ability to
increase revenues and could make it more difficult to attract investment capital for
funding our operations. Any of these possibilities could materially and adversely affect
our operations.

During
the three months ended September 30, 2007, we used $7.0 million of cash for our operating
activities, compared to $10.0 million in the three months ended September 30, 2006. Lower
net cash outflows from operations in the 2007 quarter resulted primarily from lower
operating expenses and the timing of the receipt of reimbursements from King for
bremelanotide costs. Our periodic accounts receivable balances will continue to be highly
dependent on the timing of such receipts and the division of development responsibilities
between us and our collaboration partners.

We
have incurred cumulative negative cash flows from operations since our inception, and have
expended, and expect to continue to expend in the future, substantial funds to complete
our planned product development efforts. We expect that our cash, cash equivalents and
available-for-sale investments as of September 30, 2007, together with expected revenue
from collaboration and license agreements and other income, will be adequate to fund the
Companys operations for at least the next twelve months. No assurance can be given
that we will earn future milestone payments that are contingent on specified events or
that we will not consume a significant amount of our available resources before that time.
We plan to continue to monitor the progress of our development programs and the timing and
amount of related expenditures and potential milestone receipts, refine our operations,
control expenses, evaluate alternative methods to conduct our business and seek additional
financing and sharing of development costs through strategic collaboration agreements or
other resources.

We
are actively searching for certain products and technologies to license or acquire, now or
in the future, and expect to continue to do so. If we are successful in identifying a
product or technology for acquisition, we may require substantial funds for such an
acquisition and subsequent development or commercialization. We do not know whether any
acquisition will be consummated in the future or whether we will be able to obtain
additional funding if such an acquisition is located.

Our
license agreements related to NeutroSpec require royalty payments by us based on
commercial net sales and payments of up to $2.25 million contingent on the achievement of
specified cumulative net margins on sales by Mallinckrodt. No contingent amounts will be
payable related to NeutroSpec unless we recommence sales and marketing of NeutroSpec. We
do not reasonably expect to make any such contingent payments during the next twelve
months. We also have a license agreement for patent rights related to certain compounds
and methods of treatment for sexual dysfunction. The license agreement requires contingent
payments based on certain up-front fees we receive as a result of a sublicense. We do not
reasonably expect to sublicense such rights or make any material contingent payments
during the next twelve months.

We
anticipate incurring additional losses over at least the next few years. To achieve
profitability, we, alone or with others, must successfully develop and commercialize our
technologies and proposed products, conduct pre-clinical studies and clinical trials,
obtain required regulatory approvals and successfully manufacture and market such
technologies and proposed products. The time required to reach profitability is highly
uncertain, and we do not know whether we will be able to achieve profitability on a
sustained basis, if at all.

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Table of Contents

Item 3. Quantitative and
Qualitative Disclosures About Market Risk.

Interest
Rate Risk. Our exposure to market risk from changes in interest rates relates primarily to
our investment portfolio. As of September 30, 2007, our cash and cash equivalents were
$24.3 million and investments, which consisted of mutual funds, were $2.3 million. Due to
the average maturity of our investment portfolio, we do not believe that short term
fluctuations in interest rates would materially affect the value of our securities.

Item 4. Controls and Procedures.

Our
management, with the participation of our Chief Executive Officer and Chief Financial
Officer, has evaluated the effectiveness of our disclosure controls and procedures, as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e), as of the end of the period covered
by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial
Officer concluded that our disclosure controls and procedures were effective. There were
no changes in our internal control over financial reporting that occurred during our most
recent fiscal quarter that materially affected, or that are reasonably likely to
materially affect, our internal control over financial reporting.

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Table of Contents

PART II  OTHER
INFORMATION

Item 1. Legal Proceedings.

As
discussed in our annual report on Form 10-K for our fiscal year ended June 30, 2007, we
are the respondent in an arbitration proceeding before the American Arbitration
Association initiated by Competitive Technologies, Inc. (CTI) alleging breach
of the terms of our license agreement for patent rights related to certain compounds and
methods of treatment for sexual dysfunction and other actions asserted to arise out of the
license agreement. In September 2007, we received a notice of termination of the license
agreement from CTI, which notice was subsequently declared null and void by the
arbitration panel in an order on motion for contempt. A second notice of termination was
served by CTI in October 2007, and was also declared null and void by the arbitration
panel. We amended our counterclaim to assert actions for declaratory and injunctive relief
relating to CTIs assertion of termination of the license agreement, and actions for
defamation, prima facie tort and unfair trade practices relating to CTIs issuance of
a press release falsely asserting that the license agreement had been terminated. CTI
filed an answer denying all material allegations, and filed an additional counterclaim for
defamation, asserting that we had quoted portions of a press release issued by CTI out of
context, and for breach of the license agreement relating to the termination of a
sublicense to King. We filed an answer to CTIs additional counterclaims, denying all
material allegations asserted by CTI.

We
cannot reasonably predict the outcome of the disputes with CTI or reasonably estimate the
range of potential loss, if any. Although the amount of any liability that could arise
with respect to these matters cannot be predicted, we do not believe that the resolution
of these matters will have a material adverse effect on our financial position, results of
operations or liquidity.

Item 1A. Risk Factors.

There
has been no material change in our risk factors as previously disclosed in our annual
report on Form 10-K for the fiscal year ended June 30, 2007 in response to Item 1A., Part
1 of such Form 10-K.

Item 2.  Unregistered
Sales of Equity Securities and Use of Proceeds.

None.

Item 3.  Defaults Upon
Senior Securities.

None.

Item 4.  Submission of
Matters to a Vote of Security Holders.

None.

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibits
filed with this report:

| |      |                                                                                                                                             
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------
| | 31.1 | Certification of Chief Executive Officer.                                                                                                   
| |      |                                                                                                                                             
| | 31.2 | Certification of Chief Financial Officer.                                                                                                   
| |      |                                                                                                                                             
| | 32.1 | Certification by Chief Executive Officer pursuant to 18 U.S.C. Section
     1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002.
| |      |                                                                                                                                             
| | 32.2 | Certification by Chief Financial Officer pursuant to 18 U.S.C. Section
     1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002.

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Table of Contents

SIGNATURES

In
accordance with the requirements of the Exchange Act, the registrant caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

|                       |  |                                                                                                                                         
|---------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------
|                       |  | Palatin Technologies, Inc.(Registrant)                                                                                                  
|                       |  |                                                                                                                                         
|                       |  |                                                                                                                                         
|Date: November 8, 2007 |  | /s/ Carl
     SpanaCarl
     Spana, Ph.D.President andChief Executive Officer                                                           
|                       |  |                                                                                                                                         
|                       |  |                                                                                                                                         
|Date: November 8, 2007 |  | /s/ Stephen T. WillsStephen T. WillsExecutive Vice President andChief Financial Officer
     (PrincipalFinancial and Accounting Officer)

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EXHIBIT INDEX

| |      |                                                                                                                                             
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------
| | 31.1 | Certification of Chief Executive Officer.                                                                                                   
| |      |                                                                                                                                             
| | 31.2 | Certification of Chief Financial Officer.                                                                                                   
| |      |                                                                                                                                             
| | 32.1 | Certification by Chief Executive Officer pursuant to 18 U.S.C. Section
     1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002.
| |      |                                                                                                                                             
| | 32.2 | Certification by Chief Financial Officer pursuant to 18 U.S.C. Section
     1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002.