Palatin Technologies, Inc. press release dated

FOR RELEASE SEPTEMBER

26, 2007 at 7:30 a.m. EDT

Palatin Technologies

Announces Reduction of Workforce

CRANBURY, N.J., September 26, 2007

Palatin Technologies, Inc. (AMEX: PTN) (the Company) today announced it has taken

steps to reduce its workforce by 30%, resulting in annual savings of $4 million. The

downsizing, which leaves the Company with 64 employees, will provide the Company with the

greatest opportunity for near-term success of its priority programs. Palatin will take an

estimated $500,000 charge for severance payments in the quarter ending September 30, 2007.

Though it is regrettable to

have to reduce our work force, concentrating our efforts on value drivers and matching our

resources to those projects with the highest potential for near-term value is our

immediate priority, stated Carl Spana, Ph.D., President and Chief Executive Officer

The downsizing decision follows

recent responses from representatives of the U.S. Food and Drug Administration (FDA),

which raised serious concerns about the acceptable benefit/risk ratio to support the

progression of bremelanotide, a drug under development for male sexual dysfunction, into

Phase 3 studies for erectile dysfunction as a first-line therapy in the general

Palatin has engaged the FDA in

discussions in order to determine next steps related to the further development of

bremelanotide for the treatment of male sexual dysfunction. Regarding the development of

bremelanotide for the treatment of female sexual dysfunction, Palatin has completed an

exploratory at-home Phase 2 clinical trial in pre- and post-menopausal women, and the

Company will be releasing the results later this month.

In addition to bremelanotide, Palatin

will continue to focus on its pipeline programs, primarily a collaboration with

AstraZeneca for the development of compounds to treat obesity, and the advancement of a

lead clinical candidate for the treatment of congestive heart failure, for which the

Company anticipates an effective Investigational New Drug (IND) Application with the FDA

by the end of this calendar year.

Palatin Technologies, Inc. is a

biopharmaceutical company focused on discovering and developing targeted,

receptor-specific small molecule and peptide therapeutics. The Company s internal

research and development capabilities, anchored by its proprietary MIDAS technology,

are fueling product development. Palatin s strategy is to develop products and then

form marketing collaborations with industry leaders in order to

maximize their commercial potential.

The Company currently has collaborations with AstraZeneca and the Mallinckrodt division of

Covidien. For additional information regarding Palatin, please visit Palatin

Technologies website at www.palatin.com.

Statements about the Company s

future expectations, including statements about its development programs, proposed

indications for its product candidates, pre-clinical activities, marketing collaborations,

and all other statements in this document other than historical facts, are

forward-looking statements within the meaning of Section 27A of the Securities

Act of 1933, Section 21E of the Securities Exchange Act of 1934 and as that term, is

defined in the Private Securities Litigation Reform Act of 1995. The Company intends that

such forward-looking statements shall be subject to the safe harbors created thereby.

Palatin s actual results may differ materially from those discussed in the

forward-looking statements for various reasons, including, but not limited to the

Company s ability to fund development of its technology, ability to establish and

successfully complete clinical trials and pre-clinical studies and the results of those

trials and studies, dependence on its partners for certain development activities, need

for regulatory approvals and commercial acceptance of its products, ability to recommence

marketing and gain commercial acceptance of NeutroSpec , ability to protect its

intellectual property, and other factors discussed in the Company s periodic filings

with the Securities and Exchange Commission. The Company is not responsible for updating

for events that occur after the date of this press release.