Nasrat A. Hakim - President and Chief Executive Officer Carter J. Ward - Chief Financial Officer

Good morning, ladies and gentlemen, and welcome to the Elite Pharmaceuticals Conference Call. At this time, all lines have been placed on a listen-only mode and we will open the floor for your questions and comments following the main presentation. [Operator Instructions]. Callers today will be limited to one question due to time constrains. Before management begins speaking the Company has the following statements. This conference contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Including those related to the effects, if any, on future results, performance or other expectations that may have some correlation to the subject matter of this press release, readers are cautioned that such forward-looking statements involve risks and uncertainties including, without limitation, its ability to obtain FDA approval of the transfers of the ANDAs or the timing of such approval processes, delays, uncertainties, inability to obtain necessary ingredients and other factors not under the control of Elite, which may cause actual results, performance or achievements of Elite to be materially different from the results, performance or other expectations that may be implied by these forward-looking statements. These risks and other factors, including, without limitation, the Company’s ability to obtain sufficient funding under the LPC Agreement or from other sources, the timing or results of pending and future clinical trials, regulatory reviews and approvals by the Food and Drug Administration and other regulatory authorities, intellectual property protections and defenses, and the Company’s ability to operate as a going concern, are discussed in Elite’s filings with the Securities and Exchange Commission, included in its reports on Forms 10-K, 10-Q and 8-K. Elite undertakes no obligation to update any forward-looking statements. With that covered, it is now my pleasure to turn the floor over to your host, Mr. Nasrat Hakim, President and Chief Executive Officer of Elite Pharmaceuticals. Sir, the floor is yours. Nasrat A. Hakim: Thank you, Dana, and good morning ladies and gentlemen and thank you for joining us. Before I turn over the mic to Carter to give us the financial update, I would like to make the following statement. As part of our branding of Elite and as we began to prepare for the launch of our ART product. I am pleased to announce the launch of a new website for Elite this morning. You will notice on the homepage and the section about Elite technology and product page actual photographs of our ART product and two of our commercial products. In the future, we will also update you on the progress of upgrading the facility for our product launch. This is exciting time for Elite. I encourage you all to go checkout our new website. We will start with Carter giving you financial statement, and after that I will come back for closing comments and update on ELI-200. Carter J. Ward: Thank you, Nasrat, and thanks everyone calling in today. Yesterday, we filed our 10-Q for the quarter and the nine months ended December 31, 2014. As you all know, we’re on a March fiscal year. So that means December is our third quarter of the fiscal year. If you haven’t seen our 10-Q yet, it’s available at the usual site such as sec.gov, Google Finance, Yahoo Finance, otcmarkets.com, and of course our own website which is elitepharma.com. And speaking of our website as Nasrat just mentioned, we had a new website that went live just this morning. I encourage everybody to visit our site. We are at an advanced and final stage of the first abuse resistant product, and that doesn’t just mean clinical trials, data, and FDA submissions, it also means expanding and enhancing our Northvale facility which we are doing, and outreach and education of the public to our website. So please take a look, there is a lot of new information there, I am sure you will find it very interesting. And by the way as Nasrat said, the capsules and tablets pictured in the background, those are the real thing we had. Those are our real products that the photographs have come in, and it really looks great, and it’s our real product, so makes it all - all the more better. So now, I would like to discuss some of the key areas of our financials starting with the income statement. First, our revenues, they were at $1.4 million for the quarter bringing our nine months revenue up to $3.8 million. We are well on our way to exceeding last year’s record revenues, and our nine-month revenues are already more than the 12-month revenues of every other year in Elite’s history, so revenues are very strong. Revenues for December 2013 quarter were $300,000 more than this year’s $1.4 million, but a quick drill down into these numbers shows that the last year’s quarters, 2013, included a one-time $600,000 milestone, which was earned pursuant to the licensing deal with Epic which we signed in 2013. This year, we had no such milestone, but instead our revenues consisted of the manufacturing and sale of our generic products that greatly increased volumes. So if you exclude the one-time milestone, our revenues from actual generic product sales are up more than 24% from the same quarter in 2013. Revenues for this quarter, they are also 8.5% above those for the September 2014 quarter, and that quarter was also 8% above the quarter before that, and the June quarter was also roughly 20% above the prior quarter, the March quarter. So we are clearly seeing an upward trend in our revenues. This was expected and we expect to continue with this trend. That’s really the biggest takeaway from these financials. Remember our generic product revenue stream is still relatively young with a lot of room for growth and upside potential. Just four years ago, at this time, we were still two months away from launching our first of the current generic products that was Phentermine tablets which we launched in April 2011. And as of December, we now have seven products on the market, and we added an eighth product which was Isradipine just last month. As you know, it takes time to establish new products and while our products are pretty much new to the market, the steady growth in revenues clearly show that they have taken room and established solid market share that is also increasing. So we do expect this trend to continue from the existing products and to be further increased by the launch of the products in our generic pipeline. We just launched Isradipine, and we expect to introduce Hydroxyzine and Dantrolene in the near-term. Moving down to P&L, there is of course research and development expenses which have increased by $1 million from $1.3 million in 2013 to $2.3 million for the December 2014 quarter. Nasrat will give an update on R&D activities, but as far as the financials are concerned, these are the costs relating to the final development and filing of ELI-200. Depreciation expense was $213,000 which was an increase of 68% from the December 2013 quarter. Once again, this is entirely due to the significant expansion and upgrade of our Northvale facility. So far this year, we have invested almost $1.5 million in our facility. We have increased generic volumes and we are ramping up for the ELI-200 filing, and this requires more equipment, facility upgrades, and financially this impacts our P&L in the form of depreciation expense. So just as with R&D costs, these capital expenditures are critical to achieving Elite’s strategic plans, once again another clear indication in our financials of Elite’s continued and systematic execution of this strategic plan. Lastly, a brief comment on our balance sheet which is the strongest since I’ve joined Elite in July of 2009. As of December 31, our working capital was $8.9 million, including cash of $8.3 million. Those are solid numbers and they demonstrate that Elite’s finances are in place to support the completion of the ongoing product development trials, the facility expansion and enhancements, as well as providing sufficient working capital required by the increasing manufacturing operations. So all-in-all, it was another solid quarter, the metrics and trends support very clearly a continued optimistic outlook. Now, our President and CEO Mr. Nasrat Hakim will give some comments and an update. Nasrat A. Hakim: Thank you, Carter. Elite is in the best shape ever, and 2014 was our best year to-date finically and in advancing our technology and building infrastructure. Carter summarized the financial status, I’ll speak to the infrastructure. We're a penny stock company with eyes on NASDAQ, and to get there, there are certain requirements that we have to follow. For example, we need to be Sarbanes Oxley compliant. So we are evaluating the gaps that we have by hiring consultants and external consultants in order to evaluate the checks and balances we have in order for us to get there, retiring one of the bonds and making [indiscernible] the other one is another example of trying to get there. We are creating infrastructure in our facilities with expanding the facilities and adding new equipment and upgrading the current equipment in order to support our product launch. We’ve increased the number of employees with higher top talent in R&D and Legal and Regulatory Affairs. In sales and marketing, we are working with a couple of companies that are very serious about partnering, but we are also looking into the potential of taking the product to the market ourselves. It’s interesting, one of the CEOs of a genetic company asked me and the Board that if we would give them our product technology, they will start their own brand division for sale, this is how lucrative this market that we are in. To be on NASDAQ, you have to have fundamentals, so product development is very important. Our product line is our life line. We are still working and developing all opioids, we're working on formulations and have formulations on stability for oxycodone, hydrocodone, oxymorphone, hydromorphone, and morphine sulfate. However, our primary focus is still ELI-200; we cannot loose sight of that. As far as ELI-200 is concerned, we have a solid formulation, we have made the regulatory batches, registration batches for FDA requirement. We have them on six-month stability an accelerated stability and 12 months controlled room temperature stability. The results are excellent. We’ve had a successful BE, we have had successful category one in vitro analysis completed, we’ve had a successful category two which is pharmacokinetic study completed and report a slide. We’ve had a successful HAL study human abuse liability study completed and was very successful. If you recall my previous presentations where people actually crushed and snorted the brand versus our product. They knew when they took the brand that they got high 92% of the patients have crushed and snorted our product, or they are taken to placebo these are outstanding results. We submitted and have a protocol for pediatric study which will be initiated a year or so after we launch the product. And we are ready to file. We met with FDA and FDA added three requirements which you saw on our press release. Two of the three FDA made it very clear that they are for labeling purposes only. One is a [FED BE] study, just to determine what right on the label take with food or take without food half an hour before a meal to our certain meal or you can take it with the meal it’s for information only. The second study is the withdrawal study again the FDA Director Dr. Hertz made it very clear that this is for pass or fail its for information only. The third is an efficacy study, which required us to submit a protocol that we’re waiting for the FDA to answer. The FDA will answer us on the middle of March. And that’s when we will initiate the study. We have already lined up five sites nationally and recruited patients, return protocols and have all of that ready for the day we get the feedback from FDA that they agree with us for they want certain things modified that will hit the ground running. This is why within eight weeks from middle of March we can have that study completed. Afterwards, we need to make sure that the – develop samples and analyze the report is written. And our target date for filing is Q3 of 2015. So how does this new requirement from FDA impact our other products such as the once-a-day or twice-a-day, it all it does really it makes it cost us a little more money. And we have to account for little more time upfront. If the FDA shared with us these three requirements last year although we are really taking care of them and we would have been able to file in December. We received the communication later this year and last year and this is why we plan for it immediately to be handled in March. As you heard from Carter 2014 was our best year, 2015 will be the year we file our first ART product, and Q1 2016 will be the year we launch our first ART product and hopefully will be the year we will be on NASDAQ. Dana, we will take any questions.

Thank you ladies and gentlemen, the floor is now open for questions. [Operator Instructions] And I am showing our first question is coming from [Craig Marsh], a Private Investor. Your line is live.

Good morning Nasrat and how are you? Nasrat A. Hakim: Fine. Thank you, Craig.

So reading through the update on the efficacy trial, I see that they are asking for 150-patient study which I am presuming 75 placebo, 75 the actual meditation. And I’m just curious, because that doesn’t sound like a lot of people, and you normally would say we’re concerned or wanted to really evaluate this product more deeply that probably requires thousands of patients to be in role. Does it mean that such a small amount it’s just kind of like a box checking situation for them?

It really has, the impression I got and the team got and the experts that were with us got is that all three studies were a checking the box. We proposed even a smaller study and the FDA came back and they wanted this study. And we have the third much larger study in mind just in case they really wanted to go all out, but they picked the middle ground and picked this one, and I believe you are correct. FDA today has enough information about naltrexone and the pharmacological deed from their dealings with Alpharma, and Pfizer and us now that the requirements are becoming a little more reasonable, and I bet you for future products they may either waive it or ask for even less than that.

Thank you. Our next question is coming from [Bob Parker], a Private Investor. Your line is live.

Good morning, Nasrat. The first comment, the new webpage looks great, I haven’t got a chance to look at all, but it’s a nice new look for the company. My question is on – there has been a lot of positive changes with Elite. Will you be considering doing another valuation of the company’s work that was done before? Nasrat A. Hakim: We’ll wait till next year most likely when we’re going to go to NASDAQ. I have not given that much thought, but let me address this because it comes up a lot. The first evaluation, we did not make, it was an independent team that made as a part of trying to get the shareholders rights plan. We needed to put in something for the shareholders because the stock was so low and literally anybody could - the market cap for the company was $28 million, anybody that came in with less than 10 million bucks that had majority stock in the company and just basically took over. So we ask the attorneys between New Jersey and Nevada to go ahead and protect us. And one of the things that they demanded by law is that they needed to do this thing on the side, they did the analysis and worked with Carter and gives us the number they gave us. My feeling is since then we have become a bigger company, we have a lot more assets in the form of clinical trials in substantiating the technology, and I hope that this is a personal opinion that when we get to a point where we want to go to NASDAQ, we are going to have to evaluate the company then and hopefully the numbers will be even a lot better. Carter J. Ward: Yes, I mean that is so true, we did this analysis as part of the shareholders rights, and it was done at that point in time with the company as it was at that time. And so, with our plans in place, another valuation will be done based upon the company at that time. Nasrat A. Hakim: Right, I truly believe the fundamentals drive the price of the shares, and I will have another valuation when we get close to going to NASDAQ doing one right now and we don’t have all the products that are bringing in the amount of money that I believe they are going to be bringing in could create even more confusion. The stock is going to take care of stuff in my opinion, it’s a matter of time, we are doing all the right things and we are going to get there.

Thank you. Our next question is coming from Scott Dickson of Private Investor. Sir, you line is live.

Good morning gentlemen. Everything looks good, I have a couple of questions, now we have set parameters on ELI-200, are those going to be probably the exact parameters for ELI-201 and ELI-202? Nasrat A. Hakim: And now that we have set parameters on ELI-200, we know what the FDA wants, and we can comply with their requirements proactively and not wait an entire year till they told us what they want really and delaying us. So yes, it’s going to be an advantageous thing. It’s going to be more expensive, but it’s going to be advantageous, yes.

Thank you. Our next question is coming from [Peter Brancaleone], a private investor. Sir your line is live.

Hello Mr. Nasrat, how are you. Nasrat A. Hakim: Fine, thank you Peter.

All right, a quick couple of questions. One is, fast track approval in Hungary, does that mean you have the bio equivalent studies – I mean efficacy studies that’s done. Does that mean then it’s to get a expedited review of the NDA that’s still in place. Nasrat A. Hakim: Yes that is correct, that’s really what the FDA told us in writing throughout our communication that we qualify for expedited review, so from the time we file usually they take six month, I hear its six to eight, but they say six months. So if we file in Q3 by Q1 of 2016, we will be receiving approval on launching the product.

Thank you. Our next question is forming from [Chris Walker], a private investor. Sir your line is live.

Yes, thank you for taking my call. While I commend you for your aspirations towards the NASDAQ, clearly given a price per share currently that’s not attainable and valuation will not get you to that. So how is it that you expect that you are going to elevate price per share so that you qualify for the NASDAQ. Thank you. Nasrat A. Hakim: There are multiple ways to doing that. You do it organically by introducing products and having the fundamentals that have been taken about for a while. Okay, let us assume for the sake of simple math okay. We have billion shares outstanding and we launch a products that brings in $100 million, then if you do a PE ratio of 20, you will go above the $1 or $2 required for you to be on NASDAQ. So that is one option. If we introduce a second product then it’s a foregone conclusion then you have a lot more leeway to be able to do that. If not, you can always have a reverse split okay, right now I’m not making a decision of what to do till I see the revenues that are coming from the products that we are working [Spartan] wit ELI-201.

Thank you. [Operator Instructions] our next question is coming from [Michael Agers], a private investor. Your line is live.

Good morning Mr. Hakim. Nasrat A. Hakim: Good morning.

I have been a shareholder for quite sometime and I just want to congratulate you on putting such an excellent team together. Nasrat A. Hakim: Thank you.

Things are looking good, as far as the progress on ELI-200. And I just want for clarity, if you can share with us the difference between the Pfizer product ALO-O2 and ELI-200, the major differences between the two? Nasrat A. Hakim: Okay, you mean, 201. 201 is our twice a day that’s comparable to Pfizer’s.

Thank you. Nasrat A. Hakim: The difference is that, theirs is one bit and ours is a two bit system. I don’t know if they fix the naltrexone leakage problem they had, I am assuming that’s why the FDA approved it. Our product has had a much better sequestering again from the public information that I have accessible to me. Other than that the two are very similar.

Thank you. Our next question is coming from [Norman Moyes], a Private Investor. Sir your line is live.

Hello, yes, he just asked a question that I was thinking of asking, but the follow-on is our other comparable products that will offer competition to Elite and how sure are you that Elite’s formulation will win-out or win market share? Nasrat A. Hakim: Well, thank you. That’s really an intelligent question. I know a lot of stockholders think about that. So let me give you my personal take on it. The opioid market is nearly $10 billion and there is room for everybody. Little Elite is not looking to have what Pfizer would have, as they $5 billion and we get $1 billion we are very happy. So we are not looking at beating Pfizer. The second thing is that I welcome people like Pfizer into the market and let me explain why. Pfizer is the company that invented statins. Statins are what you use like Lipitor when you have high cholesterol, okay. Their scientist invented the molecule, understood its characteristics went out there, educated the doctors, educated the FDA and the created this markets where everybody in the country now is on it, when Pfizer is leading the field ahead of us and their oxy with naltrexone, then that’s a great news for us because they are paving the way for us to get in, number one. Number two when a company like Pfizer embraces the technology which little Elite has that would tell you that we have as a gold cup, okay. So this is how I look at it, it’s very positive, this is a wonderful thing that little Elite has the same thing that Pfizer had and maybe a little better and second Pfizer is paving the way for us, another giant is going to jump in and want to partner with us down the road in order to compete with Pfizer.

Thank you. Our next question is coming from Will Griffin, a Private Investor. Sir, your line is live.

Hi, good morning gentlemen. Nasrat A. Hakim: Good morning, Will.

I had two questions, one if you could just give me a little comment on the market termination why now any significance to that story. And two you are trying to figure out the cost for this low Phase III assuming the similar one is going forward. What are we looking at there? Nasrat A. Hakim: Okay, regarding the market termination this was an internal decision, we decided that we don’t need the distraction, we want Elite to own all the product and get Mikah to transition out of that considering that among common factor between the two. Okay. So that was one. With respect to the Phase III trials, our current trial is, Carter help me out in here. the costs will be about probably $4 million for just the Phase III, okay, other two will add about $3 million or so. So the total is going to be $7 million to $8 million which we already have and I plan for that ahead of time. I run the company like I run my personal finances from day one I always told my Chief Financial Officer we need to have enough money to make sure that if hell breaks loose we still can survive for year and continue at the same pace we are at. And we are very smart to prepare for that, we have the money, we have already almost finished with two out of the three and the third one is already Phase IV for recruiting and all of that. So to answer your question it adds about $7 million and that money is already in the bank.

Thank you. Our next question is coming from [indiscernible], a Private Investor. Your line is live.

Hi, first of all I want to thank you for your hard work all of you. Nasrat A. Hakim: Thanks, Sally.

You are welcome. It has been a long haul for everybody investors included however I wanted to know just one thing are you getting the same kind of considerations in time span and everything if Pfizer got, are you being sprung out or little bit hung out to drive because you are small micro cap… Nasrat A. Hakim: Well, thank you Sally. I do not want to say anything negative about FDA, god bless the FDA, they are here to defend the public. This is America, in America we have people who have got lobbyist in the Congress, you have got people who have connections and that’s how you get things done. My connections are my staff and you guys over the phone and still with all of that we’ve got enough time with FDA, we are happy with what's happening and we are going, I assure of this Sally, get to the market, file a product and launch a product and that will be the first of series that are coming over the next few years.

Thank you. And our final question is coming [Robert Rail], a private investor. Your line is live.

Congratulations on increasing your profits revenue each quarter or year-over-year. My point is concerning the undisclosed generic products that you have submitted to FDA, is there any timeline or we might hear something about that and what it may be? Nasrat A. Hakim: Okay the old undisclosed products you are talking about from like three years ago? Okay it’s an old generic product so I’m not sure I will look into that and let you know, since I have been here, its been with FDA. That was filed long before I joined the company and I’m not sure that its that great of a income generating product that’s why we are not following up on it, but I promise you an answer, let me look into it and see what's that and why is it taking the FDA so long to respond and we will get back to you. End of Q&A

Thank you and that is all the time we have today for questions. If you have any follow-up questions, please direct them to Dian Well. At this time, I would like to turn the floor back over to your host Nasrat Hakim. Nasrat A. Hakim: Thank you Dana and thank you ladies and gentlemen for joining us today. These are really exciting time for Elite; it’s not only the new upside, but the new company, the upgrades, the new product. Thank you for your supports. We appreciate it. We count on continuing to go forward and hopefully are looking for great news very soon from FDA. We will continue our update on the clinical trials as soon as we have any results, we will issue a press release on that. Have a wonderful day.

Thank you ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.