Nasrat Hakim - President and Chief Executive Officer Carter 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 listen-only mode. Before management begins speaking, the Company has the following statement. This conference call 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 conference call. Listeners are cautioned that such forward-looking statements involve risks and uncertainties including, without limitation, Elite’s ability to obtain FDA approval of the transfers of the ANDAs or the timing of such approval process, delays, uncertainties, inability to obtain necessary ingredients and other factors that are 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 forward-looking statements may include statements regarding the expected timing of approval, if at all, of SequestOx by the FDA, the steps Elite may take as a result of the CRL, and the actions of the FDA required of Elite in order to obtain approval of the NDA. These forward looking statements may include statements regarding the expected timing of approval if it all of SequestOx by the FDA and the actions of the FDA require ability in order to repair approval of the NDA. These forward-looking statements are not guarantees of future action or performance, these risks and other factors, including without limitation Elite'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 approval by the Food and Drug Administration and other regulatory authorities and intellectual properties, protections and defenses are discussed in Elite's filings with the Security and Exchange Commission, including their report on form 10-K, 10-Q and 8-K. Elite is under no obligation to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise. With that covered, it is now my pleasure to turn the floor to your host Mr. Nasrat Hakim President and Chief Executive Officer of Elite Pharmaceuticals. Sir, the floor is yours.

Thank you, Catherine. Good afternoon, ladies and gentlemen. My name is Nasrat Hakim. I am Elite's President and CEO. This is Elite's earnings call, so Carter Ward our Chief Financial Officer will give us a summary of Elite's financials, after which I will come back with an update on SequestOx, pending ANDAs, R&D pipeline and sales and marketing. And I will also answer a few questions that you submitted to Diane. Mr. Ward, you have the floor.

Thank you, Nasrat, and thanks as always to everyone calling in today. Yesterday we filed our 10-K for the fiscal year ended March 31, 2018 we're on a March 31 fiscal year, so it is our 2018 fiscal year. The 10-K is available on the Investor section of our website, which is elitepharma.com as well as sec.gov and on the many other websites that provide links to our filings. We also issued a press release yesterday morning prior to filing of the 10-K announcing the passing of our director Mr. Eugene Pfeifer and like to start with that. Gene officially joined Elite in 2016, but he was a great friend, a supporter and a trusted advisor for many years prior to 2016. I had the privilege of meeting Gene and working with him during my time in Elite and his relationship with Nasrat goes back much further than the Elite years. His stellar career, impeccable credentials and the insight and depth of knowledge and experience that he brought was beyond compare. Gene's contribution to Elite is evidenced in our successful inspections, multiple product filings and in the product approvals that we expect will follow. His legacy will extend far beyond his all too brief years as a member of our board. I personally found Gene to be not just a very impressive man but also a terrific guy who was great to be around. Thanks to my role in Elite. I was fortunate to meet and to get to know Gene, that's something I'll always be grateful for. We all loved him at Elite and we will miss him. I send my deepest condolences to his family as all of us at Elite do as well. So getting back to the 10-K, it was filed yesterday we haven't gone through the K yet. Please get a copy from elitepharma.com or one of the other usual sites. I am going to briefly take you through some of the key parts of the financials, providing some analysis, context, and extra insight into the numbers. As always, we received questions and comments from shareholders and Elite followers. I'll do my best to address those that are financials related. First, before we even start the financials, I got some comments on the timing of the filing. So SEC regulations require us to file the 10-K within 75 days from the end of the fiscal year so that makes the Ks due on June 14th and we usually have our Investor call the next day, which is today. That's why we are today. Quarterly reports are due 45 days after quarter ends, so you can expect our next filing for the June 30th quarter to be on august 9th. June 30th quarter is the first quarter of our 2019 fiscal year. So let's go to the financials, starting with the P&L. Revenues for the year ended March 31, 2018 were $7.5 million, that’s compared to $9.6 million for the 2017 fiscal year. It’s a 23% decrease and its due in large part and actually in all part it's due to decreases in methadone and naltrexone revenues. So first with regards to methadone, methadone is a product we had been manufacturing on a contract basis for single customer over these past few years. Orders from this customer fluctuated greatly over those years. And the contract expired on December 31, 2017. We are not expecting future revenues, manufacturing on a contract basis this product for this customer. I mentioned before that this contract manufacturing business line was not in our long-term plans. It was once an important part of our revenues, but future growth prospects in this type of business are limited and not attractive in the long run. While the revenue certainly contributed, our plans have been focused in a different direction due to these long-term limiting factors. So when the contract expired in accordance with its terms, it was not renewed and we moved on. We have other products in the pipeline, which are part of our strategic plan. They are our own products and they will take the place eventually of the contract manufacturing business, and I'll discuss that shortly and Nasrat will also give an update on these as well. The second product related to the decrease in revenues is naltrexone. That's our own product, which we manufactured and we licensed to TAGI for marketing and distribution. There has also been fluctuations in naltrexone orders. They were down in the March 2018 quarter and lately have been up quite a bit. Naltrexone is an expensive material making an expensive product, so fluctuations here have a larger top line effect than the other less expensive products. This is a long-term product for us. It's important in the treatment of opioid addiction and overdose and we do remain committed to it. All our other products commercial products showed growth in revenues. Phentermine, phendimetrazine, isradipine, hydromorphone all these products were up revenue wise. So the takeaway here is that the decrease in revenues is due to number one, the ending of our contract manufacturing line which is something was expected, and a temporary downward fluctuation of an expensive products with large top line effects. The naltrexone is recovering and we have six files products moving to the FDA process, review process to bring revenues to where they once were and much higher. So moving down the P&L to research and development expenses, which were $9.6 million this year as compared to $8.3 million last year, so it's a $1.3 million increase dollar wise or 16%. Now R&D costs are classified as either external or internal. External R&D costs consists of clinical trials, outside lab studies, raw materials, regulatory and filing fees and various other costs paid to third parties. So, on the external cost side this year we had three ANDAs filings and the fourth filing that occurred just after March 31st. Each ANDA filing costs us $170,000 in fees paid to the FDA that's just the filing fee. Last year that fee was around $70,000. So we had more filing than in the prior year when we just had two and each filing cost $100,000 more per filing this year as compared to last. Those filings also incur cost of materials, other third-party costs which is standard for this type of thing, but it's still a material amount to us. The fact that we either file or substantially completed everything required for the filing of four ANDAs this year was a significant driver of R&D costs for this year. We also conducted two pilot clinical trials for SequestOx with the second pilot study yielding very promising results. Nasrat will go over this in greater detail, but the pilot studies indicates that we may have address the Tmax issue with SequestOx and we’re all very encouraged by that. On the internal cost side of R&D costs, the number of chemists, formulators, technicians and regulatory personnels remained higher than in previous years, and our facilities continue to be improved and expanded. That also has a direct effect on our product development capabilities, which are strengthening. These increased internal resources have focused not just on the filings and studies already announced, they continue to work on the additional SunGen products in development as well as several other of our own products with these activities progressing in accordance with plans and expectations. On the accounting side, accounting rules require that we expense the R&D costs when incurred, which is what we do that results in cost on our P&L statement have to be booked, but we expect to receive future benefits from what we spent today and in the past on R&D. So that’s some insight into what's behind the R&D expense number on our P&L, but as I said many times before when it comes to R&D just as important as the amount is what was achieved. So here’s a summary of what was achieved during this year. Number one, three ANDAs were filed during fiscal 2018 and the fourth ANDA filed shortly after March 31st. Secondly, a successful pilot study indicating that we may have solved the issue that has been standing in the way of SequestOx approval. Third is the development of additional products in the pipeline, this development is continuing and is on schedule. The goal is to keep the pipeline flowing, there’s already a critical mass of products already filed, six ANDAs have been filed and they are moving through the FDA review process and we’re working to continue to add even more products as the six that have previously been filed receive approval and become commercialized, so we have to keep that pipeline filled with the critical mass as it is right now. For filing on the P&L, looking down to P&L, we had a net operating loss of $9.1 million for fiscal 2018. That $9.1 million is less than the 9.6 million that we spent on R&D, that operating loss also includes just over a $1 million in depreciation, and non-cash expense, so we put those two together and you get a good idea of the contribution that is being generated from our current existing commercial operations, even in light of a revenue decrease from the prior year. When the six products already filed start getting approved and coming over to commercial operations we expect a positive correlation on both revenues and operating profits. Now, one last thing that I think is significant on our 10-K, it’s a disclosure item and it occurred last month in May, and that would be our establishing a strategic marketing alliance with Glenmark Pharmaceuticals. We’re pleased we’re excited to partner up with Glenmark. We will own and manufacture the products, and Glenmark will market and distribute under license from us. Two products have been identified initially phendimetrazine and one of the undisclosed ANDAs that's already been filed, and that's the end that we expect approval of in the near term, that’s the first one to come online. In addition, the Alliance with Glenmark includes the ability to expand and add more products. Glenmark's marketing capabilities and resources are well established and they are significant, expanding the product lines in our alliance is something both of us are interested in. So, the potential is great were optimistic as to the future of the Elite Glenmark strategic alliance. Now, our chairman and Chief Executive Officer, Mr. Nasrat Hakim, would like to give an update and his comments.

Thank you, Carter. Many of your questions that you've submitted [indiscernible] what I was going to on, so I incorporated some of your comments in the update; however, at the end of my update, I intent to go back and go through several of the questions that you've in the little more detail. So, what we’re going to cover is SequestOx, the status of the generic pipeline including partnership pipeline, status of the pending ANDAs, and R&D projects and the sales and marketing agreement with Glenmark that Carter just spoke of. I will proceed with an update on our first basket to anti-abuse deterrent technology basket that contains many products including SequestOx. I will start with the SequestOx development status because several of your questions pertain to that. Regarding SequestOx, as you know, we have successfully completed an efficacy study, withdrawal study, a PK study and in vivo human abuse liability study, and in vitro abuse liability study and all of them were completed successfully. No comments from FDA on any of these areas. We completed a fasting and fed bioequivalence study that shows that SequestOx is bioequivalent to the brand except for the Tmax. As you know, instead of controlling this issue with labeling, FDA asked us to reformulate. We did and the formulation modification based on the pilot study results address the primary issue raised by the FDA, which is the delay in Tmax it overcame that. With the modified formulation, we saw no Tmax delay compared to the referenced drug oxycodone. We have written to the FDA, as we said we vote in our last call and provided a summary of our results. In the letter to FDA, we ask them to confirm the study requirements for submission and we await the reply. The reason we're doing this is very simple. I want to make sure this is the last thing they are asking us for. I want to ensure that the FDA says, yes, we're all in the same wavelength, go ahead and proceed with the BE study repeating the fasting and fed and show us that you can overcome that in a full blown BE study. And it's the last study they're going to ask us for because if you spent couple of million dollars on submitting, they come back with something else that’s devastating for a small company like us. We await their response when we get it, we will share it with you. Elite will be filing a patent, covering the modification that resulted in the successful Tmax result from the pilot. Obviously, it was not obvious how to overcome this issue, but do have an IR oxycodone that was rejected by FDA due to Tmax issue. We resolve that issue and our patent attorney, Dr. Smith determined that this is something patentable and we will be filing a patent sometime next week. SequestOx is not the only ADF product that we are working on. We have done and continued to work on lots of other anti-abuse opioid products. We work on vitro, stability and formulations. We are not running clinical trials obviously because of the expense, but we have a pipeline of products that once we get clearance for SequestOx, we can move forward with. We recently filed a patent for platform technology for ADF product that is not pharmacologically based. ADF is an area that is quarterly and will remain as such. Our genetic pipeline is our second basket and it has three components to it. There's the commercially and already approved but not commercialized product. What I mean by that? I mean products like [Indiscernible]. The basket of products that we purchased from Mikah and we contracted with Epic for a manufacturing and supply agreement in order for them to transfer these product by the equipments for that pay us royalty every time they file or get an approval and then sell these products and share the profits with us. That agreement moved forward on a much smaller scale than we would like. Epic developed hydroxyzine, which they are selling and marketing or actually transfer, I should say not develop -- and we transfer isradipine. In addition, we had phendimetrazine that we've been selling since day one among others. We would like to see -- we would like to have seen Epic that bring to the market all of the products that we submitted to them. Unfortunately, that does not happen and the contract with Epic regarding this specific manufacturing and supply agreement expires in October of 2018. We intend to bring all of these products home to Elite and we intend to launch them by 2019. Our own pending and to be filed ANDAs and our partner ANDAs, we have currently six ANDAs already filed with FDA and pending approval. Two of the six ANDAs were filed within the last six months with our partner SunGen. Actually, one was just filed in May and one is in February. The last ANDA that was filed in May is an extended-release central nervous system product that we co-developed with our partner SunGen. The branded and generic sales of this product are approximately 1.6 billion and there are currently just four manufacturers including the brand and its authorized generic. This is an outstanding product for us once we get an approval because we will be the fifth in this arena, and even if there were more people than that and we've got just 10% of that market, that's $160 million, a $160 million in revenues will do wonders to Elite stock. Even if we cut it in half between us and SunGen and you take out the actual cost which is another half and walk away with only $40 million, that will take our market cap from 80 million which is today to $800 million with one product only. The ANDA that we filed in February was also an immediate release for central nervous system product that we co-developed with also with SunGen. That market is $400 million market. We expect to file more ANDAs later this year. The next filing is expected to be a product that is owned by Elite and that two after that are a joint partnership with SunGen. We will tell you more about these ANDAs when they are filed. I believe that we'll start seeing approval soon in Q3 of this year. It is possible for us to get two to three approvals this year. I would say on average, we should be getting at least an approval a quarter and a filing a quarter for the next four quarters. The next approval I believe should be the undisclosed pain product licensed to Glenmark and we believe this ANDA could be approved within a couple of months. For sales and marketing as Carter updated you, we recently announced a strategic alliance deal with Glenmark. I've talked before about how we had been entertaining alternate ways for sales and marketing, whether it is going at it alone with a partner. Well, we decided that it is best for us at this time to find a partner of Glenmark's caliber that has a much wider reach and a larger distribution channel than we could ever have if we started our own. Therefore, we are very excited to work with Glenmark and we look forward to that partnership. Glenmark will be selling our phendimetrazine product and then will sell the undisclosed pain product that we hope as I said will get an approval for the next two months. Phendimetrazine is a product that we have been selling for about three four years. We will get 100% of the sales that we are making for phendimetrazine. Glenmark will only get a share of the new business that they bring in. This alliance also offers a potential alternative for the products that we may be bringing back from Epic in October. To summarize, Elite has six ANDA submitted to the FDA, we expect to start seeing the first approval soon and next quarter and start launching these products as we go along. We continue to move forward with SequestOx. For now, we await a response from FDA regarding the studies required. After that, we will diligently move forward for the submission, and we continue to develop other generics with our partners and by ourselves alone. So we expect to continue approvals on launches this year and the next and that is what will drive revenues and growth for Elite. A - Nasrat Hakim: Okay, the history of SequestOx I'll just summarize it for you. The contract regarding SequestOx with PuraCap is still valid. It expires in 2020. Until then, its contents are binding on both of us and if we get approval that's required to pay us 7.5 million, that's the milestone that is in the contract. We've been negotiating with Puracab. The problem is that PuraCap has undergone change of management three times excluding the change of the Epic management since they purchased the Company. First, we had the Epic team taken over then they brought in their own management team. They changed that to somebody else and now recently they changed it one more time. Our primary concern remains how the FDA will react to the latest success that we've had with the Tmax and the pilot study. Once Epic management is settled, we can discuss that but first we need to hear from the FDA to know what the path forward is. Question about -- three questions about Pfizer's Troxyca. I'll try and answer them all together with one statement. Regarding Pfizer's extended-release oxycodone product Troxyca ER which was approved quite a long time ago and they have not launched it. Pfizer did not launch it and recently designated it as discontinued. Pfizer has three and half years exclusivity, three years exclusivity for the work they've done and six months for pediatric, till then nobody else can enter the market. So we need to work with FDA to determine, how do we get to the market when Pfizer is not even making the product. You see an order for us or run a BE study, we need their product. If that’s not making it and they went straight to discontinue we cannot do that. So they are effectively stopping us from entering the market. FDA needs to be able to provide the means for us to do so, and I'm not sure what that path is yet but we need to work with FDA to figure out, how do we get into the market, if Pfizer chose not to make a product. How do we run a BE against the product that’s discontinued. And once we know the answer to that, so that's the answer we will definitely share with you. On the generic pipeline, couple of questions, some of the filings were more than 18 months ago. When can we begin to expect approvals and additional filings in the future? Also, Dr. W added, ANDA approval for Elite seem to have extended beyond the average length of time one might expect approvals or CRLs. That's a fair, accurate and a good question. As to the first part I address that we expect approvals and filings on the rate of at least one ANDA per quarter approved and one ANDA per quarter file new ANDA for the next four quarters. This is my goal target and assessment. To address the projected schedule for approvals, as the length of time it takes let me say this way. FDA started their PDUFA fees $170,000 plus per application about a year ago, because of that they are tracking their performance and reporting to Congress on their own time performance or achievement because obviously that’s charging us for reviewing the application. When the 10 months PDUFA fee date is up, they come either, ask you a simple question, issue a complete response letter, issue a minor amendment or a major amendment and that stops their clock and that means they are done, okay. Then we have to respond. And when we respond even if it's a simple question and I'll give you a couple of examples. Then their clock starts again on a different PDUFA attribute, meaning if they ask me a question after 10 month or issued a minor amendment, and I answer them, then they give themselves between three months, which is the super minimum. I haven’t seen anything answer that less than that on the PDUFA. And up to a year, okay. That part they can take as much time as they want and then come back not necessarily with an approval, but maybe with another question, okay. So that back-and-forth even though the issues could be really minor and I’ll give you an example in a second. It drags it and delays us by 6 to 12 months, and I hope and this is something that's happening all over the industry and we are revising up to that and I'll share with you in a minute with what we are doing. But this really becomes a drag on our resources because we were hoping and counting on something specific because we pay a huge application fee that they are going to have a thorough evaluation within a specific period of time. And that’s not exactly what is happening, there are loopholes obviously. So let me give you a couple of examples. When we filed them Oxy APAP, one of the things that we did is what is required or what all companies do, and that is if the product if the tablet has a score in it, you are required to break it and put it on the stability for a month to see in case of a pharmacist wanted to give a patient half amount. So they break it they put it in their pharmacy, and should last about a month. With that that’s what Oxy APAP filed it and the review and chemist to thought that part of the application was fine there was no issue with it. So when we filed the second application few months later for the Hydro APAP, we did exactly the same thing. That if you and chemist rejected, it had us go back and repeat it because he or she wanted to know not only the content and the solution, but that is also the great a test that we have never done before, never heard of in the industry, but this was his feelings or her feelings, they wanted to do one more thing, so that application stopped, till that person sent us an inquiry. We went ahead tablets of the brand and of ours and broke them off and put them on stability and tested them and then responded to them, and then now once they got that, they gave themselves three or six months, I don’t recall in order to answer us. So these simple little things that really are not a bond break to the application, but they need some documents from you. Now, they think a very long time because as simple as the issue is the minimum criteria they have is three months to respond to you for anything they ask for. You can do it, you have up to year to give it to them or you can give it to them in one minute. But once you deliver the document to them, even if it's a minute later, they give themselves a minimum of three months to respond, okay. Another issue encountered with couple of the early applications, in 2017, element and impurities were not required. While the application of course went through to 2018 and now it became required, so they sent us deficiency saying take care of this. We were ready for that. We did provided them with what we’ve done. And of course they took three months to review that and then came back with one of the suppliers of magnesium stearate even though they were exempt from the elemental impurities. Somehow, the FDA decided that this specific supplier should not be exempt and ask everyone within the industry, not only us to go ahead and perform the elemental impurity validation on that product. So again that back-and-forth takes about six months. Even though, it's not a big deal to hire an outside lab to test the elemental impurities, the big deal is the communication and the back-and-forth. I think we’re in the very good shape and we’re just targeting approvals and we’ve addressed all of these issues and the -- it’s only a matter of time when we start hitting the 10 to 12 months target. And frankly to remedy the situation, we compiled with our partner SunGen, a database that has in it all the issues that are hitting the industry. Whatever the FDA is hitting the industry where we and industry are talking and making a database, what they say to you, what they say to me, and try to preempt a later discussion and filing refusal, it’s just asking us for more documents to delay this stuff. So for the rest of the ANDAs especially the two that we’ve filed recently, it is my expectation that they’ll be approved in under 12 months because I do think that we’ve spent a lot of time studying all of these and new things that FDA is coming with, and we can be 100%, but never the less we’re getting much closer to it than we were before. Your next question was, Glenmark provide additional information about the agreement? We will cover that, two things I’ll add. One is, we make the product as a cost plus that’s a transfer price. And second the profit sharing is really the most favorable of all of the contacts we worked on. So we’re very happy with the Glenmark. Next set of question is on SunGen and update on the products from SunGen. I already covered that. I have this to say. We’ve five products with SunGen. Two we’ve already filed this year. Two more we may file by the end of this year maybe December, January, and one will be next year. We’ve so much work with SunGen really we need to slow down a bit and we still need to start shifting our focus from file-file-file to approve-and-launch-launch-launch. And that really is what we’re going to do over the next year. I am hoping that next year will be the year of the launch. As promised you about the year and half ago, we’re going to stop filing an ANDA every quarter and we’ve been doing it. Now, we’re going to shift and start launching ANDAs every quarter. Can you provide additional information into the unique art product you spoke about during the last CC? Were these unique art products always Elite’s plan? Or were they a backup plan in case the two big technology failed? The art technology that you’re speaking of that we’re on a clinical file on the pilot study. This technology has nothing to do with the two big pharmacological technology or approach, okay. It's a different platform that focuses on creating anti-abuse genetics for all IR opioids. We actually find a patent last week regarding this technology, okay. The patent was filed last week. So this is an exciting technology. We will update you more once we get to the clinical trial phase, but definitely this is not a better plan for two big systems as it's a totally different technology. It shows our dedication to the anti-abuse arena at Elite. I will take one more question. Last question is about valuation, okay. Nasrat, in order for Elite stock price to reach dollar land, the Company would have to be worth wanted $2 billion fund. Do you still feel confident that Elite can eventually generate the revenues to work on such evaluation? And the answer is absolutely, yes. I already give you an example on the product with Octobot from SunGen. We have another product that we're partnering with SunGen, that’s bigger than this one. The combination of these two alone when we launch them would get us there very easily. Elite doesn't have that much revenue, so and we don't that much in order to reach dollar land. So whenever we generate a $50 million in profit on 1 billion shares outstanding and a PE of 20 already dollar a share, you’re ready at the billion dollar valuation, okay. So, it is absolutely outstanding guest that is the case, I do believe it. I am Elite's number one stockholder. I have always believed in Elite's stock so much so that I have never been paid a paycheck and something in this company except in stocks. Elite pays me in stocks a single paycheck. Every time quarter issues me restricted stocks in salary, I have to pay taxes on it. I have to for three years. I had to pay the IRS on stocks that are really not cash, and I was paying 40% to 50% in taxes on money that I have not seen, okay. It’s a restricted certificate that quarter gives me and the IRS counted as cash and I have to give them money. And today I'm still getting paid in stocks. Today, I live five days a week away from my family to take care for Elite's business because I truly believe in Elite. I truly believe that we have created the foundation of a solid company that will have fundamentals and have earnings to justify the billion dollars evaluation. And I do believe we’re going to get there unless in less than two years. And on that note, we conclude our earnings call. Thank you all for listening. Thank you, Catharine, and have a great weekend.

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.