[PALATIN LOGO]

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                                                            EMPLOYMENT AGREEMENT



THIS EMPLOYMENT AGREEMENT (the "Agreement"), made this 1st Day of October 2005,

is entered into by Palatin Technologies, Inc., a Delaware corporation with its

principal place of business at 4C Cedar Brook Drive, Cranbury, New Jersey 08512

(the "Company"), and Shubh Sharma.



The Company desires to continue employing the Employee, and the Employee desires

to continue to be employed by the Company. In consideration of the mutual

covenants and promises contained herein, and other good and valuable

consideration, the receipt and sufficiency of which are hereby acknowledged by

the parties hereto, the parties agree as follows:



1.0  TERM OF EMPLOYMENT. The Company hereby agrees to continue to employ the

     Employee, and the Employee hereby accepts the continuation of employment

     with the Company, upon the terms set forth in this Agreement, for a two

     year period commencing on October 1, 2005 (the "Commencement Date") and

     ending on the second anniversary of the Commencement Date unless sooner

     terminated in accordance with the provisions of Section 4.



2.0  POSITION TITLE & CAPACITY



     2.1  The Employee shall serve as Vice President and Chief Technical

          Officer, with responsibilities consistent with this position and as

          the Chief Executive Officer of the Company (the "Chief Executive

          Officer") or its Board of Directors (the "Board") may determine from

          time to time, with powers and duties as may be determined, from time

          to time, by the Chief Executive Officer or the Board, consistent with

          the Employee's position. The Employee shall be based at the Company's

          corporate headquarters, which is based in Cranbury, New Jersey. The

          Employee shall also be available for travel at such times and to such

          places as may be reasonably necessary in connection with the

          performance of his duties hereunder.





2005-2007 Employment Agreement, Shubh Sharma                       Page 1 of 16

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     2.2  The Employee hereby accepts such employment and agrees to undertake

          the duties and responsibilities inherent in such position and such

          other duties and responsibilities as the Chief Executive Officer or

          the Board shall from time to time reasonably assign to him. The

          Employee agrees to devote substantially all of his business time,

          attention and energies to the business and interests of the Company

          during the Employment Period. The Employee agrees to abide by the

          rules, regulations, instructions, personnel practices and policies of

          the Company and any changes therein which may be adopted from time to

          time by the Company. The Employee acknowledges receipt of copies of

          all such rules and policies committed to writing as of the date of

          this Agreement.



     2.3  The Employee specifically covenants, warrants and represents to the

          Company that he has the full, complete and entire right and authority

          to enter into this Agreement, that he has no agreement, duty,

          commitment or responsibility of any kind or nature whatsoever with any

          corporation, partnership, firm, company, joint venture or other entity

          or other person which would conflict in any manner whatsoever with any

          of his duties, obligations or responsibilities to the Company pursuant

          to this Agreement, that he is not in possession of any document or

          other tangible property of any corporation, partnership, firm,

          company, joint venture or other entity or other person of a

          confidential or proprietary nature which would conflict in any manner

          whatsoever with any of his duties, obligations or responsibilities to

          the Company pursuant to his Agreement, and that he is fully ready,

          willing and able to perform each and all of his duties, obligations

          and responsibilities to the Company pursuant to this Agreement.



3.0  COMPENSATION AND BENEFITS. During the Employment Period, unless sooner

     terminated in accordance with the provisions of Section 4, the Employee

     shall receive the following compensation and benefits:



3.1  SALARY. The Company shall pay the Employee, in equal semi-monthly

     installments or otherwise in accordance with the Company's standard payroll

     policies as such policies may exist from time to time, an annual base

     salary of $201,900. Such salary shall be subject to review thereafter, as

     determined by the Company's Compensation Committee and approved by the

     Board, on an annual basis, but the Board shall not decrease the Employee's

     annual base salary at any such annual review.





2005-2007 Employment Agreement, Shubh Sharma                       Page 2 of 16

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3.2  CASH PERFORMANCE BONUS. The Employee will be included in the Company's

     annual discretionary bonus compensation program based on a June 30th year

     end in an amount to be decided by the Company's Compensation Committee and

     approved by the Board, payable no later than September 30th of each year

     during the Employment Period. Such performance bonus compensation shall be

     based upon yearly objectives mutually agreed upon by and between the

     Employee and the Company.



3.3  STOCK OPTIONS. As additional compensation for services rendered, the

     Company has granted to the Employee the right and option (the "Option") to

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