SECURITIES PURCHASE AGREEMENT

dated as of January 26, 2004,

by and among

PALATIN TECHNOLOGIES, INC.,

and

ENTITIES LISTED ON APPENDIX A (each a ?Purchaser?).

TABLE OF CONTENTS

                                                                               Page
                                                                               ----
Section 1.        Purchase and Sale of Securities................................1
Section 2.        The Closing....................................................1
   Section 2.1.      The Closing.................................................1
   Section 2.2.      Conditions to Closing.......................................2
Section 3.        Representations, Warranties and Covenants of the Company.......3
   Section 3.1.      No Material Misstatements...................................3
   Section 3.2.      Incorporated Documents......................................3
   Section 3.3.      Financial Statements........................................3
   Section 3.4.      Book and Records; Internal Controls.........................4
   Section 3.5.      Independent Accountants.....................................5
   Section 3.6.      Organization; Good Standing.................................5
   Section 3.7.      Absence of Litigation.......................................5
   Section 3.8.      Brokers or Finders..........................................5
   Section 3.9.      Use of Proceeds.............................................5
   Section 3.10.     Licenses; Leases............................................6
   Section 3.11.     Intellectual Property.......................................6
   Section 3.12.     Real Property...............................................7
   Section 3.13.     Material Contracts..........................................8
   Section 3.14.     No Violation................................................8
   Section 3.15.     Due Authorization and Delivery..............................8
   Section 3.16.     No Default..................................................8
   Section 3.17.     Capitalization..............................................9
   Section 3.18.     Lock-Ups....................................................9
   Section 3.19.     Employees...................................................9
   Section 3.20.     Related Party Transactions.................................10
   Section 3.21.     Market Stabilization.......................................10
   Section 3.22.     Taxes......................................................10
   Section 3.23.     AMEX Compliance; Listing...................................10
   Section 3.24.     Insurance..................................................11
   Section 3.25.     Environmental Laws.........................................11
   Section 3.26.     Investment Company.........................................12
   Section 3.27.     Solicitation; Other Issuances of Securities................12
Section 4.        Representations, Warranties And Covenants Of Each Purchaser...12
   Section 4.1.      Organization...............................................12
   Section 4.2.      Authorization, Enforcement, and Validity...................13
   Section 4.3.      Consents and Approvals;  No Violation......................13
   Section 4.4.      Investment Experience......................................13
   Section 4.5.      Investment Intent And Limitation On Dispositions...........13
   Section 4.6.      Information And Risk.......................................14
   Section 4.7.      Disclosures to the Company.................................15
   Section 4.8.      Nature of Purchasers.......................................15
   Section 4.9.      Ownership..................................................15
   Section 4.10.     Brokers or Finders.........................................16

i

   Section 4.11.     Acknowledgement............................................16
   Section 4.12.     Confidential Treatment.....................................16
Section 5.        Survival of Representations and Warranties....................16
Section 6.        Registration of the Shares and Warrant Shares;
                  Compliance with the Securities Act............................17
   Section 6.1.      Registration Procedures And Expenses.......................17
   Section 6.2.      Restrictions on Transferability............................19
   Section 6.3.      Termination Of Conditions And Obligations..................20
Section 7.        Legends.......................................................21
Section 8.        Indemnification...............................................21
Section 9.        Notices.......................................................24
Section 10.       Miscellaneous.................................................25
   Section 10.1.     Amendments.................................................25
   Section 10.2.     Headings...................................................25
   Section 10.3.     Severability...............................................25
   Section 10.4.     Governing Law And Forum....................................25
   Section 10.5.     Counterparts...............................................25
   Section 10.6.     Entire Agreement...........................................26
   Section 10.7.     Independent Nature Of Purchasers' Obligations And Rights...26
   Section 10.8.     Expenses...................................................26

Appendix A Schedule of PurchasersAppendix
B Form of Warrant CertificateAppendix
C Company Counsel OpinionAppendix
D Intellectual Property Counsel Opinion

Appendix E Stock Certificate and Registration Statement QuestionnaireAppendix
F Certificate of Subsequent Sale

ii

SECURITIES PURCHASE AGREEMENT

        THIS SECURITIES PURCHASE AGREEMENT (this ?Agreement?) is made as of January 26, 2004 by and among Palatin Technologies, Inc. (the ?Company?), a Delaware corporation, with its principal offices at 4C Cedarbrook Drive, Cranbury, New Jersey 08512, and the entities listed on Appendix A (each, a ?Purchaser?).

        IN CONSIDERATION of the mutual covenants contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Purchasers hereby agree as follows:

Section 1. Purchase and Sale of Securities.

        Subject to the terms and conditions of this Agreement, on the Closing Date (as defined herein), each Purchaser agrees to purchase severally and not jointly and the Company agrees to issue and sell to such Purchaser severally and not jointly (i) that number of whole shares of the Company?s common stock, $0.01 par value, (the ?Common Stock?) up to an aggregate of 7,000,000 shares (the ?Shares?) and (ii) warrants in the form attached hereto as Appendix B (the ?Warrants?, together with the Shares, the ?Securities?) to purchase an aggregate of up to 1,050,000 shares of Common Stock, in each case, as set forth opposite such Purchaser?s name on Appendix A, at a purchase price that is equal to $3.25 per Share, of which $0.0188 per each 0.15% of a Warrant is allocated as consideration for the Warrants (the ?Purchase Price?). Purchaser acknowledges that the final approval of the American Stock Exchange (the ?AMEX?) is required in connection with the issuance of the Common Stock and, accordingly, the Securities may be subject to return to the Company in exchange for the return of the full Purchase Price of the Securities.

Section 2. The Closing.

        Section 2.1. The Closing.

        (a)     The purchase and sale of the Securities upon the terms and conditions hereof will take place at a closing (the ?Closing?) to be held at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York 10036, or such other location as the parties may agree, on the date hereof at such time as shall be agreed upon by the Company and the Purchasers (the ?Closing Date?).

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