Titan Pharmaceuticals Inc (TTNP) 2007 Q4 法說會逐字稿

Thank you for holding, and welcome to the Titan Pharmaceuticals fourth quarter and full year 2007 financial results conference call. At this time, all participants are in a listen only mode. There will be a question and answer session following today's remarks. Please be advised that this call is being taped at the company's request, and will be archived on the company's website for two weeks from today.

At this time, I would like to turn the call over to Dr. Marc Rubin, President and CEO of Titan Pharmaceuticals. Please go ahead.

Thank you, and thank you all for joining us this morning, and welcome to the Titan Pharmaceuticals call for the fourth quarter and full year of 2007. With me today is Bob Farrell, our Chief Financial Officer and Sunil Bhonsle, our Chief Operating Officer. Today we will be updating you on the financial results for the fourth quarter and the full year 2007, as well as Titan's significant achievements during 2007. We will continue include with a discussion of our main 2008 goals with respect to our major programs. Following our remarks, we will open the floor to questions.

As a reminder, certain matters we will discuss today, other than historical information, consist of forward-looking statements relating to, among other things, our expectations concerning our financial results, available cash, clinical programs, and regulatory strategies. The forward-looking statements are not guarantees of future performance and are subject to a variety of risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties are described in our annual report form 10-K for the year ended December 31, 2006, as well as our form 10-K for the year 2007, which will be filed shortly and subsequent SEC filings. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today. We undertake no obligation to update or revise the information provided in this call, whether as the results of new information, future events or circumstances or otherwise. Before I turn the call over to Bob to review our financial results for the fourth quarter and the full year, 2007, I would like to make a few opening comments.

First of all, I would like to tell you all a little bit about my background, since as you know, I joined the company only in October of 2007. I am a physician, have been in the pharmaceutical industry to 18 years, all of those in big pharma with the exception of my time in Titan. My medical education was at Cornell, medical training in internal medicine at Johns Hopkins, followed by time spent at the National Institute of Health where I did subspecialty training in oncology and infectious diseases. In 1990 I joined Glaxo where I stayed 14 years through its development into Glaxo SmithKline. While at GSK I had early stage, late stage and commercial responsibility until I joined the executive board of Schering AG in 2003. At Schering, I had responsibility for global development and three of our four business units. I then joined the executive board of Bayer Schering after the acquisition of Schering by Bayer, and there I had functional responsibility for global research and development. And it really was at Schering and Bayer that I had the opportunity first to work with Titan.

And so it was with this background and experience that I welcomed the opportunity to join what I feel is a unique and very well-positioned company. And specifically, in making my decision, I saw that Titan, as a relatively small company, had a disproportionately large opportunity to make a significant advance, and advances that could change how medicine is practiced, how healthcare is administered in general, and most importantly, positively impact the lives of large populations of patients. Titan is developing a range of products that are in areas of real, unmet needs that will make real differences in patients' lives. And ultimately, I really believe it is going to be the driver of success for the company. I was thrilled with the Titan opportunity personally, and at the same time, in joining a public company, I believed, and I do believe that it also represents very exciting opportunity for the investing public.

So how is Titan unique? Well, as a development-based company, Titan is close to making a major impact in medicine. We have three late-stage development programs, all in the central nervous system or CNS, areas and all with key upcoming milestones in the third quarter of this year. So throughout my first five months, I, along with the rest of the management team, have continued to implement targeted strategies that we believe will allow us to achieve success in each of our programs. As we move forward, we will focus on, support and increase effective and clean communication with all of our stake holders. These efforts will soon include an updated website. Our stake holders, of course, include our shareholders, our employees, our partners, patients and physicians. We will proactively interact with the public and we are enthusiastic about what we believe will be a mutually beneficial partnership with all of our stake holders. So to this end, we have taken one of the first steps with this conference call.

I am personally very excited to have come on board at this time, in the history of Titan. And I believe that Titan has all the ingredients necessary to be successful. We have the capital necessary to reach upcoming critical milestones following our fourth quarter private placement, during which we raised more than $20 million. We have three strong clinical development programs that have the potential to yield products that serve unmet needs in large and growing markets, and make a real difference in medicine. And we have a strong management team that is focused on achieving results. Our future is bright, we are very enthusiastic about the prospects. And before I discuss some of our programs in a bit of detail, I'd like to turn the call now over to Bob Farrell, our CFO, for a review of our financial results. Bob?

Thanks, Mark. And hello, everyone.

For the fourth quarter ended December 31, 2007, we reported a net loss of $6.2 million or $0.14 per share, compared with $3.3 million or $0.09 per share for the quarter ended December 31, 2006. For the full year 2007, net loss was approximately $17.7 million, or $0.41 per share, compared with approximately $15.7 million or $0.42 per share for 2006. Our net loss increased from 2006 to 2007, primarily as a result of additional research and development expenses related to the Phase III clinical study of Probuphine, an opiate dependence that was initiated in 2006. Research and development expenses totaled $4.5 million in the fourth quarter of 2007, compared with $2.3 million in the fourth quarter of 2006. For 2007 as a whole, research and development expenses were $12.2 million, compared with $11.6 million in 2006. General and administrative expense was $1.9 million in the fourth quarter of 2007, compared with $1.2 million in the fourth quarter of 2006. Full year general and administrative expenses were $6.2 million, compared with $4.9 million in 2006. Our G&A expenses increased as a result of additional expenses incurred for marketing and brand development, investor relations activities, and additional employee-related costs.

As we look forward throughout 2008, we will be looking at all of our expenses to insure that they match our planned prioritization of the development programs for our three major opportunities, Iloperidone, Spheramine and Probuphine. Our goal is to utilize our resources to maximize the potential of our most promising opportunities. So as the year progresses, we will be implementing strategies that allow us to align our expenses with these opportunities.

Turning to our cash position, as of December 31, 2007 we had approximately $30 million in cash, cash equivalents and short-term investments, compared with $13.7 million at December 31, 2006. Our current cash position includes approximately $19.9 million in net proceeds from the private placement transaction we closed on December 21, 2007. Under the terms of the transaction, we sold 13.3 million shares of our common stock, and 5 year warrants to purchase 6.65 million shares of our common stock. This was placed with certain institutional investors. We currently have approximately 58.3 million shares of common stock outstanding. This concludes our financial report, and I'd like to turn the call back over to Marc for a discussion of our clinical progress.

Thanks, Bob.

As I mentioned in my opening remarks, I believe that Titan is a differentiated company for a lot of reasons, not the least of which is the number of late stage drivers that we have for success. Which is really unusual for a company of this size. We do not have a research or base, and as a result, we are not encumbered with those attendant costs. But we are a company that focuses on adding value through creative development. We have three products in late stage clinical testing that each have key milestones coming up in 2008. And as Bob said, we plan to really focus our internal resources on those late stage programs, especially Probuphine, which is currently not partnered and is entirely under our control. As a management team, we will make sure our cost basis and our structure are fit for purpose to maximize progress and success in these priorities.

What I'd like to do now is provide you with an update on these priorities. Our three most advanced clinical problems -- programs, and I will include some background on the markets and the programs as this is my first call with Titan and our first call as a company for some time.

First up is Iloperidone, and this is an a typical antipsychotic, which is focused on really big arena of schizophrenia. This program is partnered with Vanda Pharmaceuticals and the NDA was filed in September of 2007 and accepted by the FDA in November of 2007. The PDUFA date is July 27, 2008 and we are hopeful for an approval this year, led by our partner Vanda. As a result, Iloperidone could be launched in 2009. The economics of this partnership for us are that we get between 8% and 10% royalties on global net sales, specifically, we will be entitled to an 8% royalty on up to $200 million in sales per year and 10% over $200 million per year with no associated expenses.

Let me quickly give you an overview for the market that Iloperidone will be entering. It is very large and will likely be a $16 billion to $18 billion market in 2008, with seven or eight major players in the field. We believe there is room in the competitive landscape for new entrants, and entrants that can be differentiated based on their profile, which Iloperidone can. We have seen clear efficacy across a wide range of short-term and long-term trials with both positive and negative symptom scores for schizophrenia,and this efficacy is coupled with really an outstanding safety profile. As those of you familiar with there class of drugs know, patients typically cycle through the various available therapeutic options and side effects are one of the most common reasons for patients changing therapy. Some of the most problematic side effects with this class include weight gain, diabetes, movement disorders, lethargy and insomnoids.

Iloperidone's side effect profile stacks up very nicely against the other atypical anti-psychotics on the market, with side effects ranging from minimal to best in class in some cases, and we -- and will be, the side effect profile will be a differentiating factor across that therapeutic class. Vanda is also conducting a couple of other programs that will have the asking same economics for us. These programs include a four week depo program, a program in bipolar disorder with a study in Phase II in preparation, and they also a very interesting pharmacal genetics program aimed at enhancing the overall benefit risk profile of Iloperidone. We are very excited about the positive upcoming milestones for Iloperidone.

The second of our major programs to discuss is Probuphine, which is in the large and growing market of opioid addiction. This is an opportunity that is wholly owned by Titan. It is currently in Phase III, and we are very proud that our Phase III study, which fully enrolled in December 2007 actually enrolled a month ahead of schedule. As many of you know, it is often rare these days that a Phase III clinical trial enroll on time, much less earlier than expected. We expect to have pivotal results for this Phase III study in the third quarter of 2008. Probuphine, our product , is a novel formulation of Buprenorphine, and Buprenorphine has become the gold standard for so-called medical assisted treatment of opioid addiction.

A few words about opioid addiction. First, it's an area of treatment that's growing very quickly. There are now over 6 million opioid addicts globally and increasing by the day. In addition to the potential patient population addicted to illicit opioids like heroin, about half of this population is comprised of patients that are dependant on prescription drugs, sometimes referred to as white collar addicts. This latter group is a important population, and the treatment needs of this group have helped to spur support in the medical community for the view that opioid dependence is a real, treatable medical condition, and not just a psychological affliction, or a psychological weakness. There is now growing acceptance among medical practitioners that opioid addiction can, and often should, be treated with medicine. There are now over 750,000 people globally receiving medical treatment for the opioid addiction. As I mentioned, Probuphine is a novel formulation of Buprenorphine designed to produce six months of steady state drug delivery. In order to understand why Probuphine will be such an important product, it's essential to understand the properties of Buprenorphine itself, both in the market and as a molecule. So I'd like to review that briefly.

Buprenorphine has, as I mentioned, become the gold standard for the medical treatment of opioid addiction. It's currently sold mainly in the form of a sublingually delivered tablet as the brand Suboxone and had worldwide sales of about $450 million in 2006, with more than half of the sales coming from the United States. The interesting dynamic for this drug is that when it was approved for sale in the U.S, the authorities decided that physicians who prescribe Buprenorphine for addiction, one, could be office-based and two, should be certified to prescribe it for addiction. The certified -- the certification process itself is rather simple. And what it has done is, it has created a very measurable and trackable prescribing population. And from a commercial perspective, this is excellent. For a company like Titan that might want to market Probuphine on our own, this is an especially valuable tool. The current form of Buprenorphine, which is combined with (inaudible), was approved in the United States in 2002. And since then, the number of doctors certified to prescribe the drug has grown rapidly to about 12,000. This market has shown real growth in a very short time, and we believe we can participate and contribute to this growth with Probuphine. And it is really Buprenorphine's molecular properties that have enabled it to become the standard of care for treatment in this area.

As a mixed partial agonist and antagonist, it is very effective in decreasing cravings and withdrawal symptoms. In addition, it is associated with little or no euphoria in many patients, and allows patients to re-engage in a normal life pattern. Finally, it has a very favorable safety profile, because it is a mixed partial agonist and antagonist, the risk of respiratory depression at high doses, or on top of other illicit opioids is overall minimized. It is also covered by third party payers and it has a broader distribution than methadone, as it can be ministered by the certified office-based physicians and does not require distribution only through sanctioned treatment centers, which is the case for methadone. So while Buprenorphine is the gold standard, there are still some issues that do persist, primarily surrounding the way it is delivered. Because it is a daily sublingual tablet, there is the potential for diversion and misuse, an issue that is on the rise globally with all current forms of opioid therapy. In addition, because an addict needs to decide every day whether or not to take this tablet, compliance can be, and often is, very poor.

Finally, it actually delivers declining blood levels of the drug in the system over 24 hours. So this can lead to the potential for feelings of withdrawal before the next dose in some people. So while the molecule itself is very good for addiction, we think there are many ways that we can improve upon the current formulation that is on the market. And our product, Probuphine, then, is a very elegant, simple way of delivering Buprenorphine to overcome the shortcomings that I just mentioned. Probuphine is delivered through a co-polymer based subcutaneous implant that is inserted in an easy, office-based procedure, into the upper arm . The implant then delivers constant levels of Buprenorphine for an entire six month period. Since Buprenorphine is already an approved agent, we believe that this should represent a reduced clinical, as well as regulatory approval risk, compared to your average Phase III program.

As I mentioned earlier, our Phase III trial enrolled a month early. We actually ended up over enrolling this trial and we believe that this is absolutely indicative of the enthusiasm and the potential demand for Probuphine that will serve a very clear, unmet need. In our pilot study in 12 opiate addicts, Probuphine virtually eliminated all objective and subjective signs of craving and withdrawal in patients for the entire six month period. Our Phase III program is ongoing. As I mentioned, we expect to deliver results in the third quarter of this year. The overall program will consist of this Phase III study that's ongoing, an additional global Phase III study, an open label study and a study that allows patients to get an additional course of Probuphine, which is underway. We plan to complete this in 2010, followed by global filing.

We are also beginning a program for Probuphine and chronic pain, and we are actually holding our first Probuphine for pain advisory board meeting in the next few days. For many of the same reasons that Probuphine offers advantages for opiate addiction, it makes an excellent candidate for the treatment of chronic pain. Chronic pain presents an even bigger patient population and represents a huge unmet medical need. Probuphine has the potential to solve many of the medical community's concerns associated with optimal pain management, especially the concerns around safety, around diversion, around addiction and around physician liability for both over and for under prescribing opiates. There is obviously a lot of room for improvement in this area. And Buprenorphine as a molecule is an excellent, very potent analgesic, compared to other opioids, and we believe that Probuphine will be a very exciting new therapeutic option for moderate chronic pain. We have seen a very positive response from opinion leaders and experts in the pain field. We plan to make substantial progress toward beginning a Phase II study and chronic pain this year, and we will be updating you on our plans for chronic pain in future calls. We are now looking very carefully at the commercial options for Probuphine, which include retaining all of the commercial rights ourselves, as well as a range of partnering options.

Let's move on to our third program. And the last that I want to cover in this call. Which is Spheramine, which is a unique program in late stage Parkinson's disease that we have partnered with Bayer Schering. And during my tenure at Bayer, Spheramine was one of the programs that my group was responsible for, and Bayer continues to be a strong partner to Titan. It is currently in a Phase IIb trial, and our third significant milestone this year will be the key results from this trial, which are expected also in the third quarter of 2008. Spheramine is an unusual and what I would actually call an out of the box program for treatment of late stage Parkinson's.

Long-term treatment of Parkinson's disease is a largely unmet medical need and treatment of advanced Parkinson's has become an even bigger problem. Many advanced Parkinson's patients have run out of treatment options or cannot take treatments because of the very significant toxicities that are associated with the therapies themselves. So there is a real need for new approaches to treatment and similar to Iloperidone and Probuphine, we believe Spheramine can meet a large market's unmet needs. Parkinson's disease itself results when neurons, or neuronal cells in the striatum portion of the brain drop out and die for reasons that we really do not fully understand at this point. But these particular neurons make Dopamine. And when you lose those neurons, and lose the ability to make Dopamine, you then get the progressive, debilitating symptoms of Parkinson's.

Spheramine is a cell-based therapy that takes human retinal pigment epithelial cells or so called RPEs from eye tissue donated to eye banks as the starting material. These RPEs are then expanded through cell culture processes and used to make Spheramine. These cells are capable of making Levodopa, which is the precursor to Dopamine. So the idea is these cells can be attached to small, gelatin micro carriers and then neurosurgically are inserted to the striatum portion of the brain. It is our hope they will then stay there and produce and become micro factories producing l-dopa, right in the area where it is needed in the brain to combat the symptoms of Parkinson's.

So based on a lot of excellent in vitro and animal data in Parkinson's that showed this can be a very viable treatment option, Schering, now Bayer Schering, undertook a pilot study in six patients that had late stage Parkinson's disease . The pilot study began in 2000. Each patient was given one unilateral treatment, in other words, treatments on one side of Spheramine into the striatum of the brain. They were measured before the administration of Spheramine and one year following administration. The primary end point that was measured was the motor score portion of the unified Parkinson's disease ratings scale or UPDRS, which is a classic measurement of Parkinson's patients' motor skills. And I would categorize the results that they saw as remarkable. After a single application of Spheramine, all six of the patients showed between a 40% and a 60% improvement in the UPDRS motor scale at one year after the single treatment. This was a truly remarkable outcome. What was even more remarkable was that these findings lasted four to five years beyond the first single treatment, which I believe is highly unlikely to be caused by a chance effect, or by a placebo effect.

So based on this very encouraging pilot data, Bayer Schering undertook a very resource intensive program to begin to study this more formally in patients. In 2003, they began a randomized study where one after half of the patients received bilateral treatment with Spheramine and one-half received a sham surgery, just a burr hole . This study completed enrollment with 71 patients, it actually over enrolled by three in June of 2007, and we will get results in the third quarter of this year. If we see results that mirror the pilot study, this will be a very exciting advance in the treatment of Parkinson's disease. The FDA has granted both fast track status as well as orphan drug status to Spheramine. And the current plan is to follow the Phase II study with a definitive Phase III study. Bayer Schering pays for all the development expenses and upon commercialization, Titan would receive a high teens royalty, representing a very good economic proposition for Titan.

So based upon our clinical progress, we are really very excited about our future. We have a number of critical milestones coming up in 2008. And we believe we have many exciting opportunities for all of our stake holders, including patients, physicians, employees and shareholders. We also look forward to building a pathway of proactive communications and updating you on our progress as we move forward. I want to thank you in advance for your support. At this time, I would like to turn the call back over to the operator for the

(OPERATOR INSTRUCTIONS) And your first question comes from the line of Guillaume Van Renterghem with Canaccord Adams. Please proceed.

Marc, and good morning, Rob. Actually I have a few questions on Iloperidone and Buprenorphine -- I mean Probuphine, actually. My first question is on Iloperidone, actually you say that you, I mean your partner is about to start a phase, I mean a clinical trial in bipolar, but I was wondering what type of clinical trial is it, is it a Phase II or Phase III? And in term of time line, what do you expect?

Yes, thank you Guyam. My understanding this is a Phase II trial. And I'm sorry. I didn't hear the last part of your question.

Yes, sorry. When do you expect the clinical trial to start, and what type of trial do you think it's going to be, how many patients any idea on the design?

Vanda has not announced that yet.

Okay. Thanks. And I'm still unclear. On FDA guidance with regards to Buprenorphine and a part of the guidance will be to start patients ideally with a mix of Buprenorphine and Naloxone. And so, because Probuphine is only Buprenorphine, I was wondering how do you think it will impact the use of Probuphine should product be approved?

You mean the absence of Naloxone?

Exactly.

I think this should have no impact whatsoever. What's a good question Guyam. The Naloxone is part of current formation of of Buprenorphine which is a sublingual tablet, only to prevent the tablet from being crushed and injected intravenously. Let me explain that. Naloxone, when it is given sublingually with Buprenorphine is actually not absorbed at all. And Naloxone the is a complete blocker of the opiate receptors. So if it were absorbed, as it is if the tablet were crushed and injected, it would completely block the effect and it is meant to decrease abuse in that way. Probuphine, by nature of the product, really gets around any issues of abuse or diversion, just because it is a device that is implanted and stays there for an entire six months . So we think there really are no issues with diversion or abuse such as there could be with the current formulation that is one of the big advantages

Okay, thank you. And one last question on Probuphine. You have more work to do including a global Phase III. I was wondering whether you expect to do this file yourself, or to seek a partner first to do the trial and file?

We will keep all the options open as we move ahead as I said, on all aspects of Probuphine. The Phase II study in pain we will be conducting ourselves, that I mentioned. We are going to keep all the options open for progressing ahead with another Phase III study for Probuphine.

Okay. And actually, with quite a few clinical trials to run in -- I mean, to start running in 2008, where do you see the R&D climbing at in 2008?

Let me ask Bob to answer that make sure he understood the question. It is a little difficult technically to understand that but Bob?

I think Guyam, you are asking about how we see R&D spending for 2008?

Exactly.

Yes, I think what we see is will be spending probably around $19 million in R&D this year. Probably the first couple of the quarters of the year will be a little less and toward the end of the year, when we probably invest more money in the Probuphine program, including the initiation of the pain study. But $19 million or so overall for the year.

Okay. Thank you very much. I'm done with my questions. Thanks a lot.

Thank you.

Next question from the line of Navdeep Jaikaria with Rodman and Renshaw. Please proceed.

Good morning and thanks for taking the question.

Good morning, Navdeep.

I wanted to ask you a few questions. Let's start with Iloperidone. What is your thought whether or not a panel would be required by the FDA to discuss the approval of Iloperidone?

Yes, thanks. That's always a good question these days. I think we can never predict that. As you know, the FDA can decide for any reason to con convene a panel. And I think if we look historically at drug approvals, we are seeing more and more panels as the FDA focuses overall on risk benefits more and more in general. So, I think we really can't predict whether or not there is going to be a panel. I personally would not see it as a bad thing if a panel was convened. In fact, I think it would in good because I think a group of opinion leaders would look upon the properties of Iloperidone very favorably . But we can't

Great. Probuphine is quite an exciting molecule. And the Phase III data is around the corner. And if it turns out to be positive, what is your plan next? Are you going to go ahead with the Phase III by yourselves? Or will you look for a partner? And if you would, are there any discussions ongoing?

Yeah, thank you. As I mentioned, we are going to keep all the options open on how best to proceed for that Phase III program with Probuphine. We are very enthusiastic about it. I'm very confident that we are going to see positive results based on the data I have seen so far from Probuphine in our pilot study and what I know about the molecule. But we will keep all the options open for the best way to proceed with Phase III. And we will let you know as soon as we make that decision.

And, the pilot study for Probuphine that you mentioned, are those patients -- are you still following them? And the second part of the question is, are those, results from those studies, have they been published? Or are you planning to publish them?

Yes, those results should be published soon. And no, we are not following those patients. That study was done in 2003, 2004. They were followed up for a period of time but they are not being followed at this time.

Anytime line on whether we can see the data published?

I would say within the next six months, we certainly hope to see it published. And again we'll update you on that as we get more information.

And one more -- sorry.

Sorry, Navdeep. I wanted also just note that the data from that study was presented and has been published. So the data is available for anyone to see.

And the Spheramine study, are you -- from the pilot study, are those patients still being followed? And are you providing -- going to provide any update on those patients at all?

Yes, those patients are still being followed very closely. And I am sure that Bayer will plan to analyze that data at some.in the near future and provide an update. But I can't tell you exactly when that's going to be at this point.

Great . Thank you. Finally, final question . I think one of the clouds over the stock recently has been a lawsuit that was filed by a patient for Spheramine against Schering. Can you -- is there any update you can provide? How is that proceeding? Or

Well, I don't want to comment on legal issues here. I think you are referring to the patients that was described in the Wall Street Journal article.

That's right.

First let me say that our sympathy and empathy and best wishes for the best possible medical outcome and future are with the patient and with the family. Our hearts go out to anybody in any position that is suffering. I think the very important piece for us to emphasize, is that there was no association in that with Spheramine itself. So there has been no determination whatsoever that Spheramine was responsible for any of the unfortunate symptoms that this patient had. And I just want to remind everyone that Bayer Schering and Titan and the data safety monitoring board and the FDA have been following the safety and all aspects of that trial very, very closely since its inception. And everyone has felt that there are no safety issues that in any way would preclude moving forward or continuing move forward with that study. So we are pleased with the overall safety profile that we have seen so far.

And just finally a comment. I think that that's great that you outlined that. Because if there was a safety issue, the data safety monitoring board would have stopped -- recommended the stopping of the trial, isn't that true?

That's one of the main reasons for having a data safety monitoring board.

Great. Thank you for taking my questions.

Thank you, Navdeep.

Next question from the line of Daniel DeClue with [Arnhoe S. Blackroter]. Please proceed.

Thanks very much for holding the call and for all the background information. Dr. Reuben, I have two questions. Both related to Probuphine as well. The first is, I would like to ask if you might describe the intellectual property landscape around Probuphine and Buprenorphine. And then secondly, to ask if you might be able to give a little more information as to the thinking behind the opportunity in pain and any work that has been done previously with Buprenorphine in the pain indication. Thank you.

Yeah, thank you, Dan. What we've said previously and what is clear is that we absolutely had Hatch-Waxman protection which is three years of exclusivity beyond approval in the United States, and a similar provision in Europe which allows for ten years of market exclusivity in Europe and we now have a number of patents forward ongoing with the patent and trademark office around PK and PD properties and we remain optimistic that we will be able to obtain additional method abuse patents. In terms of pain, I'm sorry, ask the second part of the question again.

Sure, if you could give some background in terms of any previous experience with Buprenorphine in the pain indication? And maybe any more color in terms of your reasons for optimism about the compound in this setting, which is obviously an enormously large, unmet need and equally large economic opportunity.

Yes, I think this really makes the opiate addiction opportunity, which we believe is a big one in growing, it makes that somewhat small in comparison because the pain opportunity is immense. There is a great deal of experience in using Buprenorphine as a molecule in pain and it is a very effective analgesic. That experience is much more outside of the United States and really, much more in Europe than it is in the United States. In the United States, as you know, Buprenorphine, the sublingual formulation is only approved for addiction. And I can't comment on how much off label use there is for pain. But we do know as a molecule, it is very, very effective. It is a potent analgesic if we compare it on the scale of other opioids. It remains its excellent safety profile, as I mentioned, in terms of probably less respiratory depression and other adverse events and so for that reason I think it is absolutely ideal for Probuphine as a delivery system. And I think it could capture a material and significant percentage of that market. We haven't given specific numbers, but I think it could be a very meaningful number.

In Europe or other places where it's used is it typically dosed orally?

It is typically now dosed as a patch so transdermal delivery is most common.

And are you thinking it as a context of Probuphine in terms of some sort of a chronic pain indication?

Absolutely. We are thinking of it in terms of a chronic pain indication probably for moderate chronic pain, would be ideal.

Thanks very much.

Thank you, Dan.

Next question comes from the line of [Michael Kellen] with Arnhoe and Blackroter. Please proceed.

Good morning. You mentioned in your remarks that one of the important pillars in the Titan story is Iloperidone. Assuming that the drug is approved, and I certainly hope it is, with your extensive experience in the pharmaceutical industry, would you be willing to share with us your thinking as to how best to maximize the value of Iloperidone for patients for Vanda, since they control the drug, and of course for Titan as well?

I think -- I don't want to speak for Vanda. I think that would be inappropriate. And I don't want to speak for them. I think they are obviously looking at all the of the option, they have made that very clear in terms of partnering and also in terms of potentially taking some of that themselves. It is also a focused market that doesn't require a huge number of reps as many other areas do. So they believed it would be possible to do that, and I agree with that. But I think they -- we have to let them continue to look at all of the options to see how to best maximize it. What I am sure of is that based on the profile, it can do very, very well in the marketplace. I know they are intent on making it a success. So I'm confident it will do well.

Thank you.

There are no additional questions at this time. I would now like to turn the call over to Dr. Marc Rubin for closing remarks.

Okay, I just want to thank you all, again, for your participation. We look forward to sharing our future successes with you. And if you do have any additional questions as we move forward, please don't hesitate to let us know and to contact us. Again, thank you all very much for your time.

Thank you for your participation in today's conference. This concludes the presentation, you may now disconnect. Good day.