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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, 2005

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 2, 2005, 58,770,737
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, 2005 and June 30, 2005                       | 2   
|                                    | Consolidated Statements of Operations
     for the Three Months ended September 30, 2005 and 2004 | 3   
|                                    | Consolidated Statements of Cash Flows
     for the Three Months ended September 30, 2005 and 2004 | 4   
|                                    | Notes to Consolidated Financial
     Statements                                                   | 5   
|Item 2.                             | Management's Discussion and Analysis of
     Financial Conditionand Results of Operations         | 11  
|Item 3.                             | Quantitative and Qualitative
     Disclosures About Market Risk                                   | 15  
|Item 4.                             | Controls and Procedures                                                                           | 15  

PART II - OTHER
INFORMATION

|        |                                                                  |   
|------- | ---------------------------------------------------------------- | --
|Item 1. | Legal Proceedings                                                | 16
|Item 2. | Unregistered Sales of Equity Securities and
     Use of Proceeds | 16
|Item 3. | Defaults Upon Senior Securities                                  | 16
|Item 4. | Submission of Matters to a Vote of Security
     Holders         | 16
|Item 5. | Other Information                                                | 16
|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, 2005    June 30, 2005
                                                                ------------------   ---------------
ASSETS
Current assets:
 Cash and cash equivalents                                         $  23,084,810     $   15,720,364
 Available for sale investments                                        2,365,981          2,385,570
 Accounts receivable                                                   1,133,953          5,441,425
 Inventories                                                           1,680,008          1,382,160
 Prepaid expenses and other current assets                             1,857,561          1,889,269
                                                                   --------------    ---------------
     Total current assets                                             30,122,313         26,818,788

Property and equipment, net                                            6,362,162          6,464,324
Restricted cash                                                          475,000            475,000
Other assets                                                           1,315,369          1,408,158
                                                                   --------------    ---------------
    Total assets                                                   $  38,274,844     $   35,166,270
                                                                   ==============    ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Capital lease obligations, current portion                        $      11,526     $       11,269
 Accounts payable                                                      3,862,811          4,773,297
 Accrued expenses                                                      4,008,440          3,925,406
 Accrued compensation                                                    125,000            545,870
 Deferred revenue, current portion                                     4,695,675          3,790,828
                                                                   --------------    ---------------
    Total current liabilities                                         12,703,452         13,046,670

Capital lease obligations, net of current portion                         15,954             18,934
Deferred rent, net of current portion                                  2,941,281          3,001,980
Deferred revenue, net of current portion                               9,083,564          9,873,438
                                                                   --------------    ---------------
    Total liabilities                                                 24,744,251         25,941,022
                                                                   --------------    ---------------

Commitments and contingencies

Stockholders' equity:
 Preferred stock of $.01 par value - authorized 10,000,000 shares;
  Series A Convertible; issued and outstanding 11,347 and 11,447
   shares as of September 30, 2005 and June 30, 2005, respectively           113                114
 Common stock of $.01 par value - authorized 150,000,000 shares;
  issued and outstanding 58,758,227 and 54,236,544 shares as of
   September 30, 2005 and June 30, 2005, respectively                    587,582            542,365
 Additional paid-in capital                                          150,482,805        140,167,431
 Accumulated other comprehensive loss                                    (19,589)                 -
 Accumulated deficit                                                (137,520,318)      (131,484,662)
                                                                   --------------    ---------------
    Total stockholders' equity                                        13,530,593          9,225,248
                                                                   --------------    ---------------
    Total liabilities and stockholders' equity                     $  38,274,844     $   35,166,270
                                                                   ==============    ===============


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

2

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Table of Contents

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

Three Months Ended September 30,
                                                                   ---------------------------------
                                                                         2005               2004
                                                                   --------------    ---------------
REVENUES:
     Royalties                                                     $     915,515     $      327,314
     Product sales                                                             -            416,325
     Licenses, grants and contracts                                    4,228,263          3,747,980
                                                                   --------------    ---------------

          Total revenues                                               5,143,778          4,491,619
                                                                   --------------    ---------------

OPERATING EXPENSES:
     Cost of product sales                                                     -             88,062
     Royalties                                                           183,329             71,882
     Research and development                                          9,365,368          5,648,765
     General and administrative                                        1,752,533          1,832,663
                                                                   --------------    ---------------
          Total operating expenses                                    11,301,230          7,641,372
                                                                   --------------    ---------------

Loss from operations                                                  (6,157,452)        (3,149,753)
                                                                   --------------    ---------------
OTHER INCOME (EXPENSE):
     Investment income                                                   124,222            112,288
     Interest expense                                                     (2,426)            (2,058)
                                                                   --------------    ---------------
          Total other income, net                                        121,796            110,230
                                                                   --------------    ---------------

NET LOSS                                                           $  (6,035,656)    $   (3,039,523)
                                                                   ==============    ===============

Basic and diluted net loss per common share                        $      (0.11)     $        (0.06)
                                                                   ==============    ===============

Weighted average number of common shares
     outstanding used in computing basic and
     diluted net loss per common share                                54,488,412         53,375,147
                                                                   ==============    ===============


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

3

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Table of Contents

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

Three Months Ended September 30,
                                                                   ---------------------------------
                                                                         2005                2004
                                                                   --------------    ---------------
     CASH FLOWS FROM OPERATING ACTIVITIES:
       Net loss                                                    $  (6,035,656)    $   (3,039,523)
       Adjustments to reconcile net loss to net cash
         (used in) provided by operating activities:
           Depreciation and amortization                                 303,667            374,475
           Stock-based compensation                                      355,138           (124,293)
           Changes in certain operating assets and
     liabilities:
             Accounts receivable                                       4,307,472         (1,930,515)
             Inventories                                                (297,848)          (451,258)
             Prepaid expenses and other assets                           124,218           (869,718)
             Accounts payable                                           (910,486)         1,128,705
             Accrued expenses and other liabilities                     (398,535)          (511,082)
             Deferred revenues                                           114,973         15,871,974
                                                                   --------------    ---------------
                 Net cash (used in) provided by operating
              activities                                              (2,437,057)        10,448,765
                                                                   --------------    ---------------

     CASH FLOWS FROM INVESTING ACTIVITIES:
           Purchases of property and equipment                          (201,226)           (71,954)
                                                                   --------------    ---------------
                 Net cash used in investing activities                  (201,226)           (71,954)
                                                                   --------------    ---------------

      CASH FLOWS FROM FINANCING ACTIVITIES:
           Payments on capital lease obligations                          (2,723)           (26,526)
           Proceeds from common stock, stock option
             and warrant issuances, net                               10,005,452          3,627,867
                                                                   --------------    ---------------
                 Net cash provided by financing activities            10,002,729          3,601,341
                                                                   --------------    ---------------

     NET INCREASE IN CASH
       AND CASH EQUIVALENTS                                            7,364,446         13,978,152

     CASH AND CASH EQUIVALENTS, beginning
        of period                                                     15,720,364         17,947,076
                                                                   --------------    ---------------

     CASH AND CASH EQUIVALENTS, end of period                      $  23,084,810     $   31,925,228
                                                                   ==============    ===============


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

4

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Table of Contents

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 focused on discovering and developing
melanocortin (MC)-based therapeutics, which the Company believes is one of the
fastest growing areas of pharmaceutical research and development. The MC family of
receptors has been identified with a variety of conditions and diseases, including sexual
dysfunction, obesity, cachexia (extreme wasting, generally secondary to a chronic disease)
and inflammation. The Companys objective is to become a worldwide leader in
MC-based therapeutics by pursuing a strategy based on commercializing its products
under development and identifying new product targets through the utilization of its
patented drug discovery platform.

NeutroSpec,
the Companys proprietary radiolabeled monoclonal antibody product for imaging and
diagnosing equivocal appendicitis, is marketed and distributed by the Companys
strategic collaboration partner, Mallinckrodt Imaging, a business unit of Tyco Healthcare
(Mallinckrodt). The Company is currently conducting additional clinical trials
with NeutroSpec and evaluating its market potential as an imaging agent for osteomyelitis
(bone infection), fever of unknown origin, post surgical infection, and inflammatory bowel
disease.

PT-141,
an MC receptor agonist and the Companys lead therapeutic drug candidate, is a
patented, nasally-administered peptide that is in clinical development for the treatment
of both male and female sexual dysfunction, under a collaborative development and
marketing agreement with King Pharmaceuticals, Inc. (King), a specialty
pharmaceutical company.

MIDAS,
the Companys proprietary platform technology, is utilized to design and synthesize
novel pharmaceuticals that mimic the activity of peptides, but which the Company believes
offer significant advantages to conventional protein or peptide-based drugs. Through
MIDAS, the Company has initiated preclinical development programs based on the MC
family of receptors for obesity and cachexia, and a program for congestive heart failure.

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
investigation, 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 its NeutroSpec and PT-141 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 of
$137,520,318 as of September 30, 2005 and incurred a net loss in the three months ended
September 30, 2005. The Company anticipates incurring additional losses in the future as
it conducts clinical trials for other indications of NeutroSpec and continues research and
development of PT-141 and its MIDAS technology. 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 had cash and cash equivalents of $23,084,810 and investments of $2,365,981 as of
September 30, 2005. The Company expects that its existing capital resources will be
adequate to fund the Companys operations for at least the next twelve months.
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 financing
efforts will be successful. If adequate funds are not available, the Companys
financial condition will be materially and adversely affected.

5

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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, short-term
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 as of September 30, 2005 consists of amounts due
from Mallinckrodt under its collaboration agreements.

Revenue
from King represented 80% and 39% of the Companys total revenue in the three months
ended September 30, 2005 and 2004, respectively, and revenue from Mallinckrodt represented
20% and 61% of the Companys total revenue in the three months ended September 30,
2005 and 2004, respectively.

(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 financial statements
contain all adjustments (consisting of normal recurring adjustments) considered necessary to present fairly the financial position
as of September 30, 2005 and the results of operations and cash flows for the three-month periods ended September 30, 2005 and
2004. The results of operations for the three-month period ended September 30, 2005 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, 2006.

The accompanying consolidated
financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included
in our annual report on Form 10-K, filed with the Securities and Exchange Commission, which includes consolidated financial
statements as of June 30, 2005 and 2004 and for each year in the three-year period ended June 30, 2005.

(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 Statements of Cash Flows  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 accounts for its investments in accordance with Statement of
Financial Accounting Standards (SFAS) 115, Accounting For Certain
Investments in Debt and Equity Securities. The Company classifies such investments
as available for sale investments and all such investments are recorded at fair value.
Unrealized holding gains and losses, net of the related tax effect, if any, are excluded
from earnings and are reported in other comprehensive loss and as a separate component of
stockholders equity 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, marketable securities, accounts receivable and
accounts payable. Management believes that the carrying value of these assets and
liabilities are representative of their respective fair values.

Inventories
 The Companys inventories are related to NeutroSpec. Inventories are valued at
the lower of cost or market using the first-in, first-out method and exclude certain costs
incurred prior to the FDA approval of NeutroSpec in July 2004, which were charged directly
to research and development expense. Inventory costs consist primarily of costs to
third-party vendors for work-in-progress materials and do not include general and
administrative costs.

6

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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 lab 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.
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 its long-lived assets,
management evaluates whether the estimated future undiscounted net cash flows, without interest charges, are less than the
carrying amount of the assets. 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 discounted cash flows based on reasonable and supportable assumptions.

Other
Assets Other assets includes certain license fee payments related to PT-141 and
the Companys collaborative agreement with King, which are being amortized over the
period in which the Company performs certain development activities under the agreement.

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 for the buildings the
Company occupies, as well as the value of tenant allowances. Rent expense is being recognized ratably over the life of the leases.

Revenue
Recognition Product sales represent the sale of NeutroSpec by the Company to
Mallinckrodt, pursuant to the collaboration agreement. Product sales are billed upon
shipment of product to Mallinckrodt. Revenue is recognized upon acceptance of the product
by Mallinckrodt based on conformance with product specifications. Upon acceptance of the
product, Mallinckrodt does not have the right of return or right to cancel or terminate
the sale.

Royalty
revenues represent amounts due from Mallinckrodt and are earned based on a contractual
percentage of Mallinckrodts net sales to customers. Revenue is recognized by the
Company in the period in which Mallinckrodts net sales occur, as reported by
Mallinckrodt to the Company on a quarterly basis.

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. Milestones are based on the occurrence of a substantive element
specified in the contract or as a measure of substantive progress towards completion under
the contract. Grant and other contract revenues are recognized as the Company provides the
services stipulated in the underlying grants and/or contracts based on the time and
materials incurred.

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 Effective July 1, 2005, the Company has adopted 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 financial statements, measured by the fair value of the equity or liability
instruments issued, adjusted for estimated forfeitures.

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Prior
to the adoption of SFAS 123(R), the Company applied the intrinsic-value-based method of
accounting prescribed by Accounting Principles Board Opinion (APB) 25,
Accounting for Stock Issued to Employees, and related interpretations, to
account for its fixed-plan stock options to employees. Under this method, compensation
cost was recorded only if the market price of the underlying stock on the date of grant
exceeded the exercise price. SFAS 123, Accounting for Stock-Based
Compensation, established accounting and disclosure requirements using a
fair-value-based method of accounting for stock-based employee compensation plans. As
permitted by SFAS 123, the Company elected to continue to apply the intrinsic-value-based
method of accounting described above, and adopted only the disclosure requirements of SFAS
123. The fair-value-based method used to determine historical pro forma amounts under SFAS
123 was similar in most respects to the method used to determine stock-based compensation
expense under SFAS 123(R). However, in its pro forma disclosures, the Company accounted for
option forfeitures as they occurred, rather than based on estimates of future forfeitures.

The
previously-disclosed pro forma impact on its earnings of adopting the fair-value-based
method of accounting for stock-based compensation under SFAS 123 for the three months
ended September 30, 2004 is as follows:

`Net loss attributable to common stockholders:
         As reported                                            $ (3,039,523)
         Stock-based employee compensation expense
           included in the determination of net loss as
           reported                                                   68,333
         Impact of total stock-based compensation expense
           determined under fair-value-based method                 (320,958)
                                                                -------------
         Pro forma                                              $ (3,292,148)
                                                                =============
         Basic and diluted net loss per common share:
         As reported                                            $      (0.06)
                                                                =============
         Pro forma                                              $      (0.06)
                                                                =============`

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

Compensation
costs for fixed 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 are expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income 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 tax laws which may limit the
Companys ability to utilize its net operating loss carryforwards.

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Net
Loss per Common Share  The Company applies SFAS 128, Earnings per
Share, which requires dual presentation of basic and diluted earnings per share
(EPS) for complex capital structures on the face of the statement of
operations. Basic EPS is computed by dividing the income (loss) by the weighted average
number of common shares outstanding for the period. Diluted EPS reflects the potential
dilution from the exercise or conversion of securities into common stock, such as stock
options and warrants. For the three months ended September 30, 2005 and 2004, there were no
dilutive effects of stock options or warrants as the Company incurred a net loss in each
period. Common shares issuable upon conversion of Series A Convertible Preferred Stock and
the exercise of outstanding options and warrants amounted to an aggregate of 15,175,188
and 13,126,719 as of September 30, 2005 and 2004, respectively.

Reclassifications
Certain amounts in prior years consolidated financial statements have
been reclassified to conform to the current year presentation.

(4) OTHER COMPREHENSIVE LOSS

Other
comprehensive loss consists of the following:

`For the three months ended September 30,
                                    ----------------------------------------
                                            2005              2004
                                       --------------    --------------
Net loss                               $ (6,035,656)     $ (3,039,523)
Unrealized loss on investments              (19,589)           (4,776)
                                       --------------    --------------
Comprehensive loss                     $ (6,055,245)     $ (3,044,299)
                                       ==============    ==============`

(5) INVESTMENTS

The
following is a summary of available for sale investments:

`September 30, 2005
                   ------------------------------------------------------------
                                       Gross           Gross
                                     Unrealized      Unrealized        Fair
                       Cost            Gains           Losses          Value
                   ------------    ------------    ------------    ------------
Mutual funds       $ 2,385,570     $         -     $   (19,589)    $ 2,365,981
                   ------------    ------------    ------------    ------------
Total              $ 2,385,570     $         -     $   (19,589)    $ 2,365,981
                   ============    ============    ============    ============


                                            June 30, 2005
                   ------------------------------------------------------------
                                       Gross           Gross
                                     Unrealized      Unrealized        Fair
                       Cost            Gains           Losses          Value
                   ------------    ------------    ------------    ------------
Mutual funds       $ 2,385,570     $         -     $         -     $ 2,385,570
                   ------------    ------------    ------------    ------------
Total              $ 2,385,570     $         -     $         -     $ 2,385,570
                   ============    ============    ============    ============`

(6) STOCKHOLDERS EQUITY

Common
Stock Transactions  In September 2005, the Company sold 4,499,336 shares of its
common stock, and warrants to purchase 719,894 shares of its common stock, in a private
placement to King for a total purchase price of $10,000,000. The
warrants are exercisable for a three-year period commencing September 26, 2005, at an
exercise price of $2.22 per share. The sale of stock and warrants was made pursuant to the
Companys collaborative development and marketing agreement with King. Under the
agreement, King may pay future milestone payments to the Company totaling up to
$90,000,000 for achieving certain male erectile dysfunction (ED) and female
sexual dysfunction (FSD) development and regulatory approval targets. After
regulatory approval and commercialization of PT-141, King may also pay milestone payments
to the Company totaling up to an additional $130,000,000 upon achieving specified annual
North American net sales thresholds. A portion of the above milestones may be received in
the form of equity contributions.

Stock
Option Plan  The Companys 2005 Stock Plan was approved by the
Companys stockholders in June 2005 and provides for incentive and nonqualified stock
option grants for up to 5,000,000 shares of common stock to employees, non-employee
directors and consultants. The 2005 Stock Plan is administered under the direction of the
Board of Directors, which may specify grant terms and recipients. Options granted by the
Company generally expire ten years from the date of grant and generally vest over three to
four years. As of September 30, 2005, 3,850,858 shares were available for grant under the
2005 Stock Plan.

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As
of September 30, 2005, there were 23,093 options available for grant under the 1996 Stock
Option Plan, which expires in 2006. The 1996 Stock Option Plan is administered under the
direction of the Board of Directors, which may specify grant terms and recipients. Options
granted by the Company generally expire ten years from the date of grant and generally
vest over three to four years.

The
Company has also granted options under previous plans and under agreements with
individuals, which were not under any plan.

The
following table summarizes option activity for the three months ended September 30, 2005:

|                                                                 |  |                  |  |                                 |  |                                 |  |                          
|---------------------------------------------------------------- |  | ---------------- |  | ------------------------------- |  | ------------------------------- |  | -------------------------
|                                                                 |  | Number of Shares |  | Weighted Average Exercise Price |  | Weighted Average Remaining Term |  | Aggregate Intrinsic Value
|Outstanding at beginning of period                               |  | 4,688,152        |  | $3.41                           |  |                                 |  |                          
|Granted                                                          |  | 1,152,947        |  | 2.06                            |  |                                 |  |                          
|Exercised                                                        |  | (3,858)          |  | 1.41                            |  |                                 |  |                          
|Forfeited                                                        |  | (42,105)         |  | 2.27                            |  |                                 |  |                          
|Outstanding at end of period                                     |  | 5,795,136        |  | 3.15                            |  | 6.7                             |  | $1,103,496               
|Exercisable at end of period                                     |  | 4,150,758        |  | 3.51                            |  | 5.6                             |  | $   643,049              
|Weighted average fair value of options granted during the period |  |                  |  | $1.33                           |  |                                 |  |                          

The intrinsic
value of options exercised in the three months ended September 30, 2005 was $2,342.

The
fair value of option grants is estimated at the date of grant using the Black-Scholes
model. For grants during the three months ended September 30, 2005, the Companys
weighted average assumptions for expected volatility, dividends, term and risk-free rate
were 85%, 0%, 6.7 years and 3.9%, respectively. Expected volatilities are based primarily
on the Companys historical volatility. The expected term of options is estimated
based on the Companys historical exercise and employment termination experience
determined separately for certain employee groups. The risk-free rate is based on U.S
Treasury yields for securities with terms approximating the expected term of the option.
In the three months ended September 30, 2005, the Company recorded share-based
compensation of $355,138, representing approximately $0.01 per share, net of an allowance
for estimated forfeitures of $42,927, which is included in the Companys net loss for
the period. The Company did not record a tax benefit related to share-based compensation
expense. As of September 30, 2005, there was $1,810,078 of total unrecognized compensation
cost related to unvested options, which is expected to be recognized over a
weighted-average period of 1.3 years.

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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 our
annual report on Form 10-K for the year ended June 30, 2005 and in our other Securities
and Exchange Commission filings.

We
expect to incur additional losses in the future as we conduct FDA-required post-marketing
studies related to the approval of NeutroSpec for imaging and diagnosing equivocal
appendicitis, conduct clinical trials for other indications of NeutroSpec and continue
research and development of PT-141 and our MIDAS technology. Our operating losses may
fluctuate significantly from quarter to quarter.

Critical Accounting
Policies

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, 2005. 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 without a payment
obligation on our part, 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. We consider our performance period under the King collaboration to be the period
in which we perform development activities during the initial research term, which is currently estimated to be five years from
the inception of the agreement. Specific performance periods are not stated in the agreement and are estimated by management based
on detailed development programs agreed upon by the parties. 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.

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 we
underestimate or overestimate the value of services performed as of a given date, reported
expenses will be understated or overstated.

11

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Stock-based Compensation

The
fair value of stock options granted has been calculated using the Black-Scholes method,
which requires us to make estimates of future interest rates, 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 or pro forma disclosure related to an option grant is not
adjusted for subsequent changes in these estimates or for actual experience. Effective
with the adoption of SFAS 123(R) in July 2005, the amount of our recorded compensation is
also dependent on our estimates of future option forfeitures. If we over-estimate future
forfeitures, our reported expenses will be understated. Changes in estimated forfeitures
will affect our reported expenses in the period of the change.

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. As a result, stock-based
compensation charges may vary significantly from period to period.

Overview

We
are primarily focused on discovering and developing melanocortin (MC)-based
therapeutics, which we believe is one of the fastest growing areas of pharmaceutical
research and development. The MC family of receptors has been identified with a variety of
conditions and diseases, including sexual dysfunction, obesity, cachexia (extreme wasting,
generally secondary to a chronic disease), and inflammation. Our objective is to become a
worldwide leader in MC-based therapeutics by pursuing a strategy based on commercializing
our products under development and identifying new product targets through the utilization
of our patented drug discovery platform.

NeutroSpec,
our proprietary radiolabeled monoclonal antibody product, for imaging and diagnosing
equivocal appendicitis, is marketed and distributed by our strategic collaboration
partner, Mallinckrodt Imaging, a business unit of Tyco Healthcare
(Mallinckrodt). We are currently conducting additional clinical trials with
NeutroSpec and evaluating its market potential as an imaging agent for osteomyelitis
(infection deep inside a bone), fever of unknown origin, post-surgical infection and
inflammatory bowel disease.

PT-141,
our lead therapeutic drug candidate, is a nasally administered peptide that is in clinical
development for the treatment of both male and female sexual dysfunction under a
collaborative development and marketing agreement with King Pharmaceuticals, Inc.
(King). It is an MC receptor-based therapeutic. Pursuant to the terms of the
collaboration agreement, Palatin and King will share all collaboration development and
marketing costs and all collaboration net profits derived from net sales of PT-141 in
North America based on an agreed percentage. Palatin and King currently plan to seek a
partner for PT-141 for territories outside of North America and will jointly share in
collaboration development and marketing costs and all collaboration revenues generated
from those territories. We have the option to create, with King, a urology specialty sales
force to co-promote the product in the U.S. if the product is successfully developed and
commercialized.

MIDAS
is our proprietary platform technology that allows us to design and synthesize novel
pharmaceuticals that mimic the activity of peptides, but that we believe offer significant
advantages to conventional protein or peptide-based drugs. We have initiated a MIDAS
program to discover and develop compounds that interact with the MC family of receptors.
Based on this effort, we have preclinical development programs based on the MC family of
receptors for various therapeutic indications including obesity and cachexia, and a
program for congestive heart failure.

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 our product candidates under investigation; expansion of our pipeline
through the utilization of our MC expertise and patented drug discovery platform; and
opportunistic acquisition of synergistic products and technologies and partial funding of
our development and discovery programs with the cash flow from our NeutroSpec and PT-141
collaboration agreements.

12

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We
incorporated in Delaware in 1986 and commenced operations in the biopharmaceutical area in
1996. Our executive offices and research 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 Securities and Exchange Commission. Our website and
the information contained therein or connected thereto shall not be deemed to be
incorporated into this report.

Results of Operations

Three Months Ended September 30,
2005 Compared to the Three Months Ended September 30, 2004.

Royalties For the three months ended September 30, 2005, we recognized $0.9 million of
royalty revenue compared to $0.3 million in the three months ended September 30, 2004.
Royalty revenues represent amounts due from Mallinckrodt pursuant to our collaboration
agreement and are earned based on a contractual percentage of Mallinckrodts net
sales of NeutroSpec to customers. NeutroSpec was approved by the FDA in July 2004. The
increase in royalty revenue primarily reflects increased net sales by Mallinckrodt.

Product
Sales For the three months ended September 30, 2005, we recognized $0 of
product sales compared to $0.4 million in the three months ended September 30, 2004.
Product sales represent revenue from our sale of NeutroSpec units to Mallinckrodt,
pursuant to our collaboration agreement. Under our agreement, each Mallinckrodt purchase
from us is subject to certain minimum quantities, which currently results in a limited
number of product shipments by us during the year. Accordingly, our periodic revenue from
product sales is highly dependent on the timing of orders and shipments and may vary
significantly. During the three months ended September 30, 2005, there were no such
shipments of NeutroSpec to Mallinckrodt. In the three-month periods ended June 30, 2005,
March 31, 2005, December 31, 2004 and September 30, 2004, we recognized $0.8 million, $0,
$1.3 million and $0.4 million, respectively, of product sales to Mallinckrodt.

Licenses,
Grants and Contracts For the three months ended September 30, 2005, we
recognized $4.2 million in licenses, grants and contract revenue consisting of (i) $4.1
million related to PT-141, pursuant to our collaboration agreement with King, and (ii)
$0.1 million related to NeutroSpec, pursuant to our collaboration agreement with
Mallinckrodt. For the three months ended September 30, 2004, we recognized $3.7 million in
licenses, grants and contract revenue, consisting of (i) $1.7 million related to PT-141,
pursuant to our collaboration agreement with King, and (ii) $2.0 million related to
NeutroSpec, pursuant to our collaboration agreement with Mallinckrodt. The increase in
revenue from King reflects increased reimbursements related to increased PT-141 costs and
the existence of the agreement for the full three-month period. The agreement with King
was completed in August 2004. The $2.0 million received from Mallinckrodt in the three
months ended September 30, 2004 represented a milestone payment received upon FDA approval
of NeutroSpec in July 2004.

Cost of Product Revenues
and Royalties  For the three months ended September 30, 2005 and 2004, we recognized $0 and $0.1 million, respectively,
in cost of product revenues related to NeutroSpec. As noted above, there were no sales of NeutroSpec in the three months ended
September 30, 2005. Prior to the FDA approval of NeutroSpec in July 2004, all costs associated with the manufacturing of
NeutroSpec were included in research and development expenses when incurred, including costs of usable raw materials and finished
goods in inventory at the date of approval. As we use and sell this inventory, the cost of product sales we recognize will exclude
amounts previously expensed. On the date of approval, we had sufficient active drug substance to produce all of the product units
sold to date. Cost of sales for these units includes primarily packaging and other materials. We expect our cost of product
revenue to increase significantly in future periods as this inventory is consumed and replaced. Royalty expense increased from
$0.1 million in the three months ended September 30, 2004 to $0.2 million in the three months ended September 30, 2005 as a result
of our increased royalty revenue from NeutroSpec.

Research
and Development  Research and development expenses (R&D)
increased to $9.4 million for the three months ended September 30, 2005 compared to $5.6
million for the three months ended September 30, 2004. The increase of $3.8 million is
primarily attributable to increased spending for the PT-141 program and higher personnel,
facilities and other indirect research and development expenses. Direct expenses related
to PT-141 increased approximately $2.8 million in the current period compared to the same
period of the prior year, primarily due to the initiation in July 2005 of two Phase 2
studies, an at-home efficacy study in approximately 600 ED patients and an
at-home efficacy study in approximately 250 ED patients with diabetes
mellitus. Associated costs include fees to clinicians, costs of drug supplies and study
monitoring and management. Increases in general research and development expenses amounted
to $0.9 million.

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General
and Administrative  General and administrative expenses of $1.8 million for the
three months ended September 30, 2005 were comparable to the three months ended September
30, 2004 as increased personnel, consulting, and other general expenses, reflecting the
general expansion of our business activities, were offset by lower compensation expense,
due to performance bonuses affecting the 2004 period, and lower legal expenses.

Stock
Options Effective July 1, 2005, we have adopted 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 financial statements, measured by the fair value of the equity or liability
instruments issued, adjusted for estimated forfeitures. Prior to the adoption of SFAS
123(R), we applied the intrinsic-value-based method of accounting prescribed by Accounting
Principles Board Opinion 25, Accounting for Stock Issued to
Employees, and related interpretations, to account for our fixed-plan stock options
to employees. Under this method, compensation cost was recorded only if the market price
of the underlying stock on the date of grant exceeded the exercise price. In the three
months ended September 30, 2005, we recorded approximately $355,000 of compensation
expense related to stock options.

Liquidity and Capital
Resources

Since
inception, we have incurred net operating losses, primarily related to spending on our
research and development programs. As of September 30, 2005, we had an accumulated deficit
of $137.5 million. We have financed our net operating losses primarily through equity
financings and revenue received under collaborative agreements.

As
of September 30, 2005, we had cash and cash equivalents of $23.1 million and short-term
investments of $2.4 million.

Our
product candidates are at various stages of research and development and some may never be
successfully developed or commercialized. We received regulatory approval to market and
sell NeutroSpec for diagnosis of appendicitis, and we will need regulatory approval to
market and sell PT-141, MIDAS products and NeutroSpec for other indications. PT-141, MIDAS
products and NeutroSpec for other indications will require significant further research,
development and testing. 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 other products and indications would impact
our ability to increase sales 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.

In
July 2004, we received approval from the FDA to market NeutroSpec. Approval of NeutroSpec
does not assure the products commercial success. If NeutroSpec does not achieve
adequate market acceptance, our financial condition and results of operations will be
adversely affected.

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During
the three months ended September 30, 2005, we used $2.4 million of cash for our operating
activities. In the three months ended September 30, 2004, operating activities provided
$10.4 million of cash as a result of amounts received from King under our collaboration
agreement, which was completed in August 2004. In the three months ended September 30,
2005, our accounts receivable balance decreased $4.3 million due primarily to the timing
of the receipt of reimbursements from King for PT-141 costs. Our periodic accounts
receivable balances will continue to be highly dependent on the timing of such receipts.
Accounts receivable as of September 30, 2005 consisted of amounts due from Mallinckrodt,
primarily representing royalty revenue based on Mallinckrodts net sales during the
quarter ended September 30, 2005 and due from Mallinckrodt after the end of the quarter.

During
the three months ended September 30, 2005 and 2004, net cash provided by financing
activities was $10.0 million and $3.6 million, respectively, due primarily to proceeds
from the issuance of common stock and warrants to King and the exercise of options and
warrants.

We
are, and expect to continue, actively searching for certain products and technologies to
license or acquire, now or in the future. 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.

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 existing capital resources
will be adequate to fund our projected operations through at least September 30, 2006, based on
current and projected expenditure levels, which include receiving certain milestone
payments from collaborative partners. 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 intend to continually
monitor the progress of our development programs and the timing and amount of related
expenditures and potential milestone receipts and may seek additional financing during the
fiscal year ending June 30, 2006. We plan to continue to refine our operations, control
expenses, evaluate alternative methods to conduct our business and seek available and
attractive sources of financing and sharing of development costs through strategic
collaboration agreements or other resources.

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.

Item 3. Quantitative and
Qualitative Disclosures About Market Risk.

Interest
Rate Risk. Our exposure to market risk due to changes in interest rates relates
primarily to our investment portfolio. We invest in instruments that meet high credit
quality standards and we limit the amount of credit exposure as to any one issue, issuer
and type of investments.

As
of September 30, 2005, our cash and cash equivalents were $23.1 million and our short-term
investments, which consisted of mutual funds, were $2.4 million. Due to the average
maturity and conservative nature of our investment portfolio, we do not believe that short
term fluctuationsin 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 Rule 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 for timely
gathering, analyzing and disclosing the information required by this report. 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.

15

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Table of Contents

PART II  OTHER
INFORMATION

Item 1. Legal
Proceedings.

None.

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

See
our current report on Form 8-K dated September 26, 2005 regarding our sale of shares of
common stock and warrants to King Pharmaceuticals, Inc.

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:

| |       |                                                                                                                                                                                                                                                                                                                  
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.32 | Amendment to Strategic Collaboration Agreement dated as of October 1,
     2005, between Palatin and Mallinckrodt, Inc. We have requested confidential treatment of certain provisions contained in this
     exhibit. The copy filed as an exhibit omits the information subject to the confidentiality request.
| |       |                                                                                                                                                                                                                                                                                                                  
| | 10.33 | Employment Agreement dated as of October 1, 2005 between Palatin and
     Carl Spana.                                                                                                                                                                                                                            
| |       |                                                                                                                                                                                                                                                                                                                  
| | 10.34 | Employment Agreement dated as of October 1, 2005 between Palatin and
     Stephen T. Wills.                                                                                                                                                                                                                      
| |       |                                                                                                                                                                                                                                                                                                                  
| | 10.35 | Employment Agreement dated as of October 1, 2005 between Palatin and
     Shubh D. Sharma.                                                                                                                                                                                                                       
| |       |                                                                                                                                                                                                                                                                                                                  
| | 31.1  | Certifications of Chief Executive Officer.                                                                                                                                                                                                                                                                       
| |       |                                                                                                                                                                                                                                                                                                                  
| | 31.2  | Certifications 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.                                                                                                                                                                     

16

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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 7, 2005 |  | /s/ Carl
     SpanaCarl
     Spana, Ph.D.President andChief Executive Officer                                                           
|                       |  |                                                                                                                                         
|                       |  |                                                                                                                                         
|Date: November 7, 2005 |  | /s/ Stephen T. WillsStephen T. WillsExecutive Vice President andChief Financial Officer
     (PrincipalFinancial and Accounting Officer)

17

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EXHIBIT INDEX

| |       |                                                                                                                                                                                                                                                                                                                  
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.32 | Amendment to Strategic Collaboration Agreement dated as of October 1,
     2005, between Palatin and Mallinckrodt, Inc. We have requested confidential treatment of certain provisions contained in this
     exhibit. The copy filed as an exhibit omits the information subject to the confidentiality request.
| |       |                                                                                                                                                                                                                                                                                                                  
| | 10.33 | Employment Agreement dated as of October 1, 2005 between Palatin and
     Carl Spana.                                                                                                                                                                                                                            
| |       |                                                                                                                                                                                                                                                                                                                  
| | 10.34 | Employment Agreement dated as of October 1, 2005 between Palatin and
     Stephen T. Wills.                                                                                                                                                                                                                      
| |       |                                                                                                                                                                                                                                                                                                                  
| | 10.35 | Employment Agreement dated as of October 1, 2005 between Palatin and
     Shubh D. Sharma.                                                                                                                                                                                                                       
| |       |                                                                                                                                                                                                                                                                                                                  
| | 31.1  | Certifications of Chief Executive Officer.                                                                                                                                                                                                                                                                       
| |       |                                                                                                                                                                                                                                                                                                                  
| | 31.2  | Certifications 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.