News of a delay in the start of pivotal trials of bremelanotide in erectile dysfunction - and the possibility that safety concerns could limit the drug's use in that indication - sent shares of Palatin Technologies Inc. plunging more than 60 percent.

Palatin and partner King Pharmaceuticals Inc. are working to determine the next steps for bremelanotide, the lead compound to emerge from Palatin's melanocortin receptor agonist program, after the FDA noted that the drug might raise blood pressure in certain patients.

The agency also called into question the overall efficacy results from Phase I and Phase II studies in ED, and stated that bremelanotide's risk/benefit ratio does not support moving into Phase III, at least not as a first-line therapy. In its press release, Palatin said the FDA was "amenable" to proposals for different development pathways for bremelanotide, such as a second-line therapy in men who fail to respond to marketed PDE5 inhibitors Viagra (Pfizer Inc.), Cialis (Eli Lilly and Co. Inc.) and Levitra (GlaxoSmithKline plc).

Executives from Palatin could not be reached for comment, but Wall Street's reaction was clear. Shares of Palatin (AMEX:PTN), which traded at 70 times their average volume Thursday, fell $1.06, or 61 percent, to close at 67 cents.

That's no surprise, given that bremelanotide is Palatin's most advanced, and only clinical-stage compound.

The drug also is being tested in mid-stage trials in female sexual arousal disorder. It's unclear at this stage whether the FDA's safety concerns in ED patients will affect ongoing work in the FSAD indication as well, and whether they will cast a shadow over other melanocortin receptor (MCR) agonists in Palatin's early-stage pipeline.

The company is working on programs aimed at cachexia and heart failure, and in January, signed a potential $310 million deal with London-based AstraZeneca plc to develop small-molecule MCR compounds for obesity and other metabolic disorders. (See BioWorld Today, Feb. 1, 2007.)

To date, Palatin and King have tested bremelanotide in four Phase II studies involving more than 1,300 patients, and data from the at-home studies showed that the drug was comparable to PDE5 inhibitors. Results also demonstrated efficacy in patients with severe ED and in those who were nonresponsive to Viagra. Up to 50 percent of ED patients treated with bremelanotide were restored to a normal level of function.

In its deal with Bristol, Tenn.-based King, Palatin has a co-exclusive license to bremelanotide in North America, while King has the right to collaborate in the licensing or sublicensing of the drug outside North America. Palatin holds the option to create a urology specialty sales force to co-promote the drug upon commercialization.

Palatin, which reported a net loss of $6.7 million, or 9 cents per share, for the first three months of 2007, had cash totaling $42.9 million as of March 31. It has not yet posted earnings for the three months ending June 30.