Jack Howarth - Vice President, Corporate Affairs Bob Apple - President and Chief Executive Officer Fred Powell - Senior Vice President and Chief Financial Officer

Elliot Wilbur - Raymond James Anthony Petrone - Jefferies Matt Kaplan - Ladenburg Thalmann John Vandermosten - Zacks

Ladies and gentlemen, welcome to the Antares Pharma First Quarter 2017 Operating and Financial Results Conference Call. Throughout today's recorded presentation all participants will be in a listen only mode. After the presentation there will be an opportunity to ask questions. I will now hand the conference over to Jack Howarth, Antares’ Vice President of Corporate Affairs. Please go ahead, sir.

Thank you, Lauren and good morning, everyone. This morning, we released our first quarter 2017 financial results and recent operating achievements and a copy of the press release can be found on the Antares website at www.antarespharma.com under the News section. In addition, this morning’s teleconference also contains an interactive slide presentation. If you have dialed into the audio-only teleconference, you can follow along with the slides, which can be found on our website under the Investor Information section. The conference call and slide presentation will be simultaneously webcast on the Investor Information section of the Antares website under the webcast tab. If you are currently unable to access our website, the conference call and slide presentation will be archived under the webcast tab at the conclusion of today’s call. Before we begin, I’d like to remind you that some of our statements made during this conference call will contain forward-looking statements within the meaning of the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are subject to certain risks and uncertainties and actual results could differ materially from those projected in any forward-looking statements. These forward-looking statements may include, but are not limited to the timing and the outcome of the U.S. Food and Drug Administration's review of the QST new drug application and FDA approval of the same, FDA approval of the SNDAs submitted by AMAG Pharmaceuticals for the auto injector from Makena and future market acceptance and revenue of the same, market acceptance and revenue for sumatriptan injection USP; growth of prescriptions and sales of OTREXUP, Teva and our ability to adequately respond to the Complete Response Letter received from the FDA for the VIBEX epinephrine auto injector ANDA and approval by the FDA of the same, and any future revenue; The timing and outcome of paragraph four patent litigation related to Teva’s Teriparatide pen program; continued progress in ongoing development programs and actions by the FDA regarding the company’s product candidates and those of its third party partners including Teva’s ANDAs for the Exenatide and Teriparatide pen’s and any future revenue related thereto; the timing and results of clinical research and development projects; and the timing of launch of products in development and future product revenue. Forward-looking statements provide Antares’ current expectation or forecast of future events. Factors that could cause actual results to differ are discussed from time-to-time in the company’s filings with the SEC on Form 10-K and in Antares’ periodic filings on Form 10-Q and 8-K and other filings made with the Securities and Exchange Commission. Links to these documents are available on the Investor Information section of our website and we encourage you to review these materials. Antares is providing this information as of the date of today’s conference call and does not undertake any obligation to update any forward-looking statements contained in this conference call as a result of new information, future events or circumstances after the date hereof, except as required by law or otherwise. The company cautions investors not to place undue reliance on these forward-looking statements. Joining me on the call today are Bob Apple, President and Chief Executive Officer; and Fred Powell, Senior Vice President and Chief Financial Officer. Let’s review the agenda for today’s call on Slide 3. Bob will begin with a review of the first quarter and recent operating progress. Fred will then take you through the detailed first quarter financial results and then Bob will give you a business update. After that we will open the lines for your questions. Please turn to Slide number 4. I’ll now turn the call over to Bob Apple. Bob?

Thanks Jack and good morning everyone. It's been a short two months since our last call so let me briefly update you on a few of our achievements and then I'll turn the call over to Fred for a detailed review of our first quarter financial results. I would like to begin today's call with a discussion around QST which I believe is our highest value asset in development. We were pleased to receive notification in the first quarter that our NDA submission for QST was accepted by the FDA as filed and the application is under active review. The FDA has set a PDUFA target action date of October 20, 2017. The primary focus of our clinical and regulatory teams over the next few months will be responding to any FDA questions that arise during the review. We will actively work with the FDA towards a potential approval by our PDUFA date. We continue to receive positive feedback on QST from testosterone therapy thought leaders and I'm happy to report that the PK and CP data from our Phase 3 study were accepted and presented at ENDO 2017. Our QST Phase 3 data has now been submitted to editorial panels and accepted for presentation at the Sexual Medicine Society Annual Meeting ENDO 2017 and the data has also been accepted for presentation at the Annual Urology Associates Meeting to be held next week. All these procedures meetings are attended by many specialists in the urology and endocrinology field and the attention and feedback to this novel drug device combination product designed to treat adult men diagnosed with testosterone deficiency has been positive. I will provide more detail on our commercial plan and branding for QST after Fred's review of the financials. Since the launch of OTREXUP in 2014 Antares from all from a pre-commercial research organization to a commercially focused entity. During this transition we executed our strategy to build and expand our commercial infrastructure and focus our resources on increasing product sales and we believe we are now seeing the impact on topline growth and margin improvement. A great example of growing product sales was the launch of sumatriptan injection. Even though our sumatriptan product was the fourth generic entry into migraine auto injector market to have a strong distribution reach, has already gotten a 26% share of the market. We will continue to leverage and where appropriate expand our commercial infrastructure in order to prepare for a possible QST launch and support other product opportunities as they arise. The last quarterly highlight I'd like to cover the ongoing progress with the Makena auto injector program. In April our partner AMAG filed a supplemental new drug application for a weekly subcutaneous auto injector version of Makena. As you may recall Antares developed a subcutaneous auto injector for Makena using the QuickShot device. AMAG has recently indicated that they expect a six months review and anticipate an approval in the fourth quarter of this year. We are beginning to build prelaunch quantities of devices for use in the Makena auto injector product in anticipation of a potential fourth quarter launch. With that, I'll now turn the call over to Fred Powell. Fred?

Thanks Bob. Let's begin by looking at the details of revenues for the first quarter on Slide number 5. Total revenue was $12 million for the three months ended March 31, 2017 compared to $12.3 million for the comparable periods in 2016. Product sales were $10 million for the three months ended March 31, 2017 versus $10.8 million for the comparable period in 2016. Product sales represents sales of our proprietary products and devices or device components to our partners. The decrease in product sales for the first quarter was primarily driven by a reduction in sales of $5.5 million of prelaunch quantities of auto injector devices for use with Teva's generic epinephrine product partially offset by increased sales of OTREXUP and sumatriptan injection. We began selling OTREXUP to healthcare professionals in February 2014. Prior to the first quarter of 2017 the recognition of revenue was deferred on product shipments until the earlier of the time that OTREXUP units were dispensed through patient prescriptions or expiration of the right to return of the product as we were developing our sales history with OTREXUP. In the first quarter of 2017 we had developed sufficient historical information to reasonably estimate future returns of OTREXUP and began recognizing revenue upon delivery to the distributors net of estimated returns. We recognized $4.6 million in product sales for OTREXUP for the three months ended March 31, 2017, which included $1.3 million for product sale to distributors in previous periods, but not previously recognized as revenue at the time of shipment. Sumatriptan product revenues were $3.6 million for the three months ended March 31, 2017. Since Antares began selling sumatriptan to Teva in the second quarter of 2016 we recorded $12.7 million in revenues and as Bob mentioned earlier achieved a 26% market share according to the Symphony data for the week ended April 28, 2017. Development revenue was $1.6 million for the three months ended March 31, 2017 compared to $1.1 million during the same period of 2016. Development revenue represents amounts earned under agreements with partners in which we develop new products on their behalf. The increase in development revenue for the first quarter was primarily a result of a net increase in development activities with Teva for the exenatide and teriparatide pen injector products. Turning now to Slide 6. Total gross profit increased 4% in the first quarter of 2017 to $5.8 million compared to $5.5 million for the comparable period in 2016. The Increase in gross profit for the first quarter is primarily related to the recognition of previously deferred revenue in connection to the change in method of accounting for OTREXUP sales and the sales of sumatriptan injection, offset by a reduction in epinephrine auto injector device sales. Total operating expenses decreased to $10.6 million in the first quarter of 2017 compared to $13.3 million in the same period of 2016, primarily due to reduction in external clinical and development costs related to QST and a decrease in administrative costs. While R&D expenses decreased, the SG&A cost increased as we commenced our initial spending for the QST commercial launch and we expect SG&A will continue to increase throughout the balance of 2017. Net loss was $4.7 million in the first quarter as compared to $7.7 million for the comparable period in 2016. Net loss per share was $0.03 for the quarter ended March 31, 2017 as compared to $0.05 loss during the same period in 2016. At March 31, 2017 cash and cash equivalents totaled to $23.7 million as compared to $27.7 million at December 31, 2016 and we have no debt. Cash burn for the first quarter was approximately $4 million. We are comfortable with our cash run rate and the strength of our balance sheet. I will now turn the call back to Bob. Bob?

Thanks Fred. Let’s turn now to Slide number 7. I am pleased to disclose today that the brand name we have selected for our QuickShot testosterone product is XYOSTED. Selecting a new brand name that potentially resonates well with patients and physicians can be a very difficult and time consuming process. We looked at approximately 100 names, many of which were quickly eliminated as they resemble the name of currently approved products. The name XYOSTED was correctly chosen for the product because it combines two key attributes associated with the QuickShot testosterone therapy. The first two letters XY represents the male chromosome. The last four letters sted is intended to both reflect the name of our Phase 3 clinical trial which was named STEADY and to convey the idea that weekly injections of our subcutaneous testosterone is associated with steady physiologically normal levels of testosterone as shown by our PK data collected from our studies. As you would expect we tested the name with likely prescribers of the product and it was well received. The FDA has traditionally approved the name and final approval is normally associated with the approval of the NDA. Turning now to Slide number 8. As I mentioned in my opening remarks the FDA accepted our XYOSTED NDA in February and we received a target PDUFA date of October 20, 2017. With the potential for a late 2017 or early 2018 launch we have developed a fairly comprehensive launch plan which initially includes hiring district managers pre-approval to help lay the ground work for a more successful launch including hiring the most qualified and experienced sales representatives. The sales reps will be hired before the launch with a start date after the approval of XYOSTED. Our approximately 60 sales reps will focus on high decile prescribing primary care physicians, urologists and endocrinologists. We believe this launch plan will allow us to leverage and expand our existing commercial organizations and infrastructure to support the launch of QST into a large market opportunity which may benefit from this new treatment option. We have ongoing discussions with third party payers and conducted payer advisory boards to assist in determining pricing and formulary positioning. We have also held several advisory meetings and focus group seminars with key opinion leaders in urology and endocrinology to better understand the marketplace and the needs of the medical community and patients. The latest Symphony data shows average monthly prescriptions for testosterone products in excess of 500,000 which translates to more than 6 million prescriptions ready on an annual basis in the united states. We believe XYOSTED has the potential to be a first line therapy for treating diagnosed testosterone deficiency. We also believe that we can capture share from both the injectable and topical segments of the market based on our product profile and a consistent PK data generated in our Phase 3 study. Turning now to Slide number 9, Sumatriptan continues to be another value driver for Antares. As you can see from this slide market share growth has been impressive over the first three quarters since launch as shown by Symphony prescription data. To date we recorded $12.7 million revenue over the four quarters with $3.6 million in the first quarter of this year. According to Symphony Health Solutions the most recent weekly market share for Sumatriptan injections distributed by Teva was 26%. We remain very pleased with the launch and market acceptance of our product. On Slide number 10, we see another quarter of growth for OTREXUP. OTREXUP prescriptions were 7.5% in the first quarter of 2017 versus the first quarter of 2016 in the next 18 months. Beginning with our asset XYOSTED we have PDUFA date of October 20 and we have been working closely with the FDA as they review our submission. We are implementing parts of our commercial plans as we prepare for the potential launch of this exciting product towards the end of this year. We are very excited about the potential and look forward to launching into the large Testosterone market. Moving next to our partner programs Exanotide is one of the three ongoing collaborations with Teva and has a launch tentative date in the U.S, of October 15, 2017 pending FDA approval. Teva’s ANDA is currently under active review of the FDA and we believe Teva has first to file status which will give them 180 days of marketing exclusivity. We reported 2016 retail sales of Byetta in United States of $284 million. Our agreement with Teva for this product provides for a margin on a supplier devices and a high single digit to mid teen royalty on their products sales. We also expect Exanotide development revenues to continue in 2017 then change over to device sales in support of the potential launch. The next project we are working on for Teva has a high public profile. As many of you know, Mylan's EpiPen product has been the subject of considerable public discussion over the past year and we will continue to work closely with Teva helping their generic version to the market. Teva has submitted all the answers to all the questions in the complete response letter and is engaged in an ongoing dialogue with the FDA. They continue to believe that there is a potential for a late 2017 or early 2018 launch of an AV rated generic and have indicated that a successful conclusion of this project remains a high priority for them. We continue to build and ship pre-launch quantities of Epi devices to Teva and are nearing the completion of the pre-launch quantity purchase order. The final project we are working on with Teva is the generic FORTEO pen-injector. Early last year we announced the FDA's to acceptance of Teva’s application for a generic version of FORTEO know as Teriparatide in the U.S. In December Teva reported that they had successfully completed the registration process for Teriparatide in Europe and the public assessment report for the decentralized procedure was just published. The product was filed in 17 countries. We didn't address the majority of the value in Europe. Teva is responsible for the launch strategy and they are not disclosing any of the details at this time, but we look forward to working with Teva to bring this product to the European market. Switching back to the Teriparatide U.S. opportunity, based on a valuable information we believe that Teva has first to file status and if approved could be entitled to 180 days of market exclusivity. You recall that on March 16, 2016 Lilly filed pattern infringement lawsuit against Teva in response to Teva’s Paragraph 4 notice and finally contained in their ANDA for Teriparatide filed with the U.S FDA. That litigation is ongoing in the 30 months as far as August of 2018. Lilly's 2016 Form 10-K listed full year global FORTEO revenues at $1.5 billion with $779 million coming from the U.S. market. The scope of our Teriparatide collaboration with Teva is worldwide. From a financial standpoint upon launch we will receive a reasonable margin on our supplied devices in a single digit to mid teen royalties on overall product sales. With respect these important opportunities I'm pleased to report that we have purchase orders in-house to build and deliver both Exanotide and Teriparatide devices for delivery to Teva this year. Beyond the numerous Teva collaborations is the AMAG partnership for the subcutaneous Makena auto injector. AMAG’s sNDA is currently under active review and we will continue to work with AMAG toward a potential approval and launch in the fourth quarter of this year. And finally, as we look beyond these five near term opportunities, we are continuing with our own internal development programs in order to expand our pipeline. Our product development and drug formulation teams have been working with a number of compounds that we believe will benefit from our proprietary delivery devices and expect to add new drug device combination products to our clinical development programs in the next 12 months. Looking forward for the balance of 2017 we expect to continue to achieve growth in our existing products of OTREXUP and sumatriptan and we also expect to see total revenue growth in 2017 versus 2016. We are also excited about the next 18 months and the potential opportunities for new future growth. We believe QST, Exenatide, Epinephrine, Teriparatide and Makena all of which are currently being reviewed by the FDA have the potential to be accretive in the near term and should provide additional value for our shareholders. I'm looking forward to updating you on progress on our next operating and financial results conference call in August. Thank you very much for taking the time to be with us this morning. Operator, we have finished our prepared remarks, could you now open the line for the question-and-answer session?

Thank you, sir. [Operator Instructions] Our first question comes from Elliot Wilbur with Raymond James.

Hi, this is David on for Elliott. Thanks for taking the questions. Would you happen to have any updates to share on the regulatory milestones related to the FDA review of QST or I guess, I should say XYOSTED, would you be able to provide any color on items such as the timing of pre-approval inspection or other progress points? Thanks.

Thanks, David. We really haven't provided that much update of exactly on where we are with the file the status because the FDA is kind of rolling situation where as they go through areas they might raise questions and so forth. The only thing I would say that they have obviously started the active review the file. They have gone out to our clinical sites and audited the number of the sites, looked at our analytical labs and we assume that that's done at this point, but on a go forward basis we're just working with them to pick the PDUFA date of October 20 of this year, so I would say nothing unusual at this point in any regards.

Got it, thanks and if I could just squeeze in a quick follow up on OTREXUP, if I kind of back out the benefit of the $1.3 million in deferred revenue recognition, it looks like year-over-year sales were basically flat, but you know kind of based on the IMS data it looks like Rx has continued to trend up year-over-year in the high single digits, so could you maybe talk about factors that might have weighed on net sales of the product over that period? Thanks.

Sure. Well, we're not immune to what every other pharmaceutical company deals with in the first quarter. First quarter you're dealing with a lot of coupons and rebates based on the fact that it you know the plans are resetting for the year, so people have high co-pays to get through working on a high deductible plan and probably are all out of pocket and so, we saw an increase in our coupon support as well as an increase in our rebate dollars. So in the first quarter we saw an increase in our prescriptions of about 7.5%, but obviously that was negatively impacted by a lower net price for OTREXUP. We saw this same trend last year and then it normalized over the year and our net price went up. I can't guarantee that that's going to be the case because we really don't know where the prescription is going to flow through, what plans and the different rebate structures that we have with certain of the larger plans if they're, if it's a disproportionate amount into the plans that have a high rebate and obviously our net price will be affected more, if it's the opposite then we'll see an increase in our revenue. But again I don't think we're seeing anything different than what we have historically seen as well as what’s in the market itself.

Got it. Thank you.

Our next question comes from Anthony Petrone with Jefferies.

Hi and good morning. Congratulations on good start to the year. Now maybe just a couple on device sales, the timing on shipments to AMAG for Makena, you mentioned you were building inventories, what is the timing of shipments as of the year end? And then how substantial are the device orders for teriparatide and Exanotide to Teva and then also timing on those device orders as well? And then I have a few on XYOSTED. Thanks.

Yes, I'll take a shot and then Fred can build more if he needs to. With regards to our device shipments for AMAG, we AMAG has indicated publicly that they expect the six month review for Makena sNDA they filed in April. So, we are working towards a basically an October potential launch and so our goal is to have all the devices that they need for prelaunch in that timeframe. And so, I would say that we'll probably see those devices being delivered in Q3 right in front of that launch of that we're ready to go for them. As far as the Teva POs this is the same type of situation and we really try to match it to when we expect the launch to happen with Exanotide. Assuming we get FDA approval sometime in the next few months the launch date is October 15 of this year and we expect to have devices ready for them for the U.S. launch in that timeframe. So again Q2, Q3 will start to deliver devices to Teva for Exanotide. And then same thing with FORTEO. We're getting devices ready for a European launch. There is no timing established for that by Teva as they try to clear the IP issues that they have with Lilly in their litigation, but obviously we want to be ready at any point that there is either a settlement or if they're cleared to actually enter into those markets in Europe as the patents expire. So I think again the POs will start delivering those devices in Q2, Q3 and in the balance of the rest of the year and the magnitude we don't discuss. I think that what we talk about in our call today is that we expect to see continued revenue growth and obviously with those items impacting that growth it being that shipments of those devices. One thing that I want to point out is that we've done I think a really good job of, last year this time we had over $5.5 million dollars of Epi devices that we sold to Teva for prelaunch quantities for the Epi program and of course we're awaiting approval for that. We've been able to replace that with sumatriptan and other products like Exanotide and teriparatide and AMAG’s product Makena auto injectors pretty successfully and fill that gap while we wait for the approval. And so I think that it's a good sign for us and our investors that we are able to really continue to potentially refill that revenue stream with various items that we have all these different opportunities that we have in front of us.

That’s helpful and maybe a few on XYOSTED, maybe just an update on the end of 2017 meeting, the reception there, what you're expecting out of AUA next week? And then maybe just an update on early pricing discussions with payers, if there's anything to add there that will be helpful? Thanks again.

Sure on the end of meeting I think what was interesting about that meeting was that we not only did we look at our investigators disclose or present the Phase 3 data, but actually looked at some of the markers that were important to endocrinologists which was the insulin in data that we generated as well as some other markers. And I think that the data was well received by the endocrinologists and we’re hearing in our advisory boards that they believe that XYOSTED has potentially has good use in their clinical need for testosterone replacement. The Urology Association we haven't announced yet, other than that we're going to be presenting there, but that will be the Phase 3 data. And again I think for purposes of our product and the potential for that product with our launches the key data there is really that 52-week PK data that was pretty steady across that treatment period. I think that everyone is impressed with how we were able to get the patients into the normal range rather quickly and then maintain that over a very long period of time and probably the longest time that anyone has seen that type of PK data published. So, I think generally the key opinion leaders are very interested in XYOSTED and are impressed by the data and we think that will translate well into the launch of the product. As far as the payer conversations we've had, so far we've had very good discussions with various levels of payers whether small plans or large plans. And I think what's important for us is we've learned a lot from the OTREXUP launch on how to price these combination products relative to the market and I think that what we're trying to do is stay a bit south of the brand pricing of the brand leaders. They are around $580 per month. We believe we'll be shouted at which will give us good access. We'll obviously have to give some type of rebate, but we don't think it will be an excessive amount of rebate to get the coverage that we want and we're looking for a Tier 2, Tier 3 positioning on the formularies. And so far we have our product profile and the pricing that we're suggesting to the plans we are very I would stay, happy is not a good word when it comes to payers, like they are really excited about this product for their patients.

Very helpful. Thank you.

We’ll go next to Matt Kaplan with Ladenburg Thalmann.

Hey, guys good morning. Congrats on the progress during the quarter.

Thanks Matt.

Just staying on the QST, XYOSTED theme for a bit, can you talk about your thoughts in terms of the launch timing given the PDUFA date in late October?

Sure, I mean, our goal is to, is to launch it before the end of the year, but I think that that would be more of a soft launch where we would have our district managers going out to them, the key prescribers that write testosterone replacement therapy. But our sales force really will be in the field assuming an October 20 approval will be in the field starting January, first week of January. And so, our goal is to once we get, hopefully we get the approval on October 20 we will quickly get the labelling done, do the assembly of the product and get it into trade by say the month of December. So we want to be able to get it into the hands of physicians as fast as possible and then probably have the full regimen of reps which we're targeting of around 60 out in the field in the first week of January.

Great, great. That’s very helpful thanks. And then in terms of your emerging pipeline of partner products a lot of moving parts there, can you help us give us a sense in terms of how you think about the opportunities for Antares for and maybe give us a sense in terms of ranking them for you guys in terms of the epinephrine, Exanotide, teriparatide and Makena as well address this?

Yes, all the projects are very important for us. I think that the more priced drug combination products that get approved for us the more opportunities will exist on a go forward basis for us and our partners. And it's kind of hard to rank them from a dollar value standpoint because each one has a very unique opportunity that may translate more than just economic value. Obviously like I've said in the beginning, I think our XYOSTED opportunity is the most important for us because it's top line revenue that we can drive and we believe it's going to enter into a very large market. Beyond that on our partner programs obviously epinephrine the market is in a great need for a generic product. We've always maintained and continue to maintain that we have a product that we believe is fully of sub suitable to the EpiPen and although the market has been changing with an Ag or the EpiPen for Mylan and some other products gaining some market share because of pricing and so forth it's still a material market. Mylan has indicated that they believe they're going to sell over $600 this year in the EpiPen sales and we'll see where that comes out. It could be higher, it could be a little bit lower. But generally, I think what's important about the EpiPen not only from an economic standpoint is really being able to provide patients the first generic EpiPen in an obviously first time ever. And I think that's a huge opportunity for Teva and us to be that as those companies that bring that product to market. Exanotide, albeit is on a huge product in that it did about $280 million last year, it's still very good value for us. We get a high single digit to mid teen royalty on their end sales of the generics Exanotide and again the more soft value or the more intangible value of a generic Exanotide is it would be the first generic in the space of diabetes, typically other than insulin itself. That's been an area that's been very difficult to penetrate for other companies including Teva and to be the first product to be available for people with diabetes have a generic valuable and obviously hopefully lower the price of those products, I think it is a big advantage a big potential for us and Teva. And then I would say Exanotide, I mean FORTEO is probably that has the highest market value at this point to us, it's $1.5 billion globally again, a very strong deal for us with high single digit royalty to mid teens when Teva gets approval and the launch into the market. So it also would be our first product with Teva that is in the European market not just the U.S. And so again it's a large market opportunity with good value and we think it's good timing for Teva to enter into the osteoporosis market with this generic. And then of course Makena, we've been a big fan of Makena and for us it's the price doing about you know it's expected do about $400 million this year and we view this as our kind of QuickShot testosterone type product, it is a viscous progesterone product that's delivered IM to women that are trying to prevent pre-term birth. The injection, the current injection takes a minute. We believe we can develop and deliver the Makena product in less than 10 seconds in subcutaneous you know view delivery method. And I think that will be a vast improvement for physicians and for patients that are undergoing this treatment regimen. So we're excited about it. Obviously, there are, they have an orphan drug exclusivity. And date of February of 2018 that they're trying to get in front of and we're doing everything we can to help them at that date.

It's hard to target which ones are more important, but I think economically they all have a lot of value for and higher on our shareholders.

Great. Thanks for added color and then one last question in terms of you mentioned your internal programs what are the criteria for the products you're looking for to bring forward into the clinic, the clinical development with your internal programs?

So, it’s a great question Matt. Obviously for us first and foremost we're trying to target the existing sales forces that we already have you know with the QuickShot Testosterone there really spends across three main areas; urology, endocrinology and then some element of primary care. So, on the primary care product like a cough and cold type of product, but it clearly does still have a very large amount of the prescriptions coming from primary care docs. And so we first view our first set of screens is what can we develop that fits into that bag or into our rheumatology bag? The second one that is we have to improve the product itself whether it's the PK or to safety or something that it can't just be that it's an auto injector and it's less painful for patients because we know the payers are very difficult and would not be very amenable to paying a branded price for products where all you're really doing is, is putting it in an auto injector. And so, I think that you know one of the key things that we feel we potentially have an advantage on is products in the rescue therapy area products where patients need the delivery of the product quickly and you have a formulation that may be provides that relief quicker or you know on a once weekly basis as opposed to a daily basis so, it's around the same type of target product profile that we met with QST where there is not only an advantage to the patient from a delivery standpoint, but also an advantage for them from a drug PK standpoint that effect. And so, we're focusing we're I think our strengths are, but I don't want to say that that's the only thing we're looking at. Obviously as we develop our QST sales force, we will look at other products and auto injector based products to fill the bag and so we're going to look at, external opportunities that there are valuable to give the sales force more than one product to sell.

Great. That's very helpful, thanks again.

And we'll go next to John Vandermosten with Zacks.

Good morning guys.

Hey John how are doing?

Pretty good. First question on XYOSTED in terms of the sales force ramp up, so with the October 20 PDUFA, I guess we should see first expenses for the sales force to come around in November for training and whatnot should it be a reasonable expectation?

Assuming that the approval happens October 20, yes because obviously what we're going to do is all the offers would be contingent upon the approvable and then assuming that’s the case then you would start to see the sales rep side of it in November. We're going to be hiring the district managers earlier. We're going to be hiring them in the July timeframe so that they can start to look at who the best candidates potentially are for those roles as well as targeting, messaging all those things that work that they are going to be working with our corporate marketing and sales people to be ready for that launch hopefully in the December timeframe that we mentioned earlier.

Okay and then we expect to have I guess 60 reps by the beginning of the year already to go, how much more expansion should we see over the next year in terms of the number there?

You know, I think that we're targeting 60 initially and that gives us actually excellent coverage. I was just talking to our Senior Director of – our VP of Sales and he felt very comfortable that 60 gave us great coverage and so we'll see how the product is growing. If it is continuing to grow and we think that it can benefit from adding some territories then we would do that, but we're obviously going to look at doing that only when the product is doing well and is supporting that type of addition to reps. I think that I would say for the first year we feel pretty comfortable that 60 would be the number, but again talk to me in nine months after the first six months of launch and see how it is going. We're confident that that will be a very good number to bring us into 2018.

Go it, got it. And in terms of XYOSTED is that going to be on inventory in the physician's office?

XYOSTED is a retail product so I would say the vast majority of patients are going to get it at their CVS or Walgreens or through their mail order prescriptions be it the CVS Caremark or Express Scripts. And everything that we talk about on those prescription numbers, the 6 million per year is retail based. There is some potential element for XYOSTED in the institutional area with regard to some of the testosterone centers, but we really focus all of our energy and time on the physicians that write the prescription and you get it filled at your local pharmacy.

Okay, thank you Bob, I appreciate the answers.

[Operator Instructions] We'll take our next question from Bob [indiscernible] Partners.

Good morning gentlemen. I'd like to ask if XYOSTED has any opportunities in Europe or the rest of the world?

Thanks Bob. I think that clearly we believe the product has the same value to patients that are [indiscernible] in the rest of the world and we are exploring those opportunities with potential partners. We're not going to launch it ourselves outside the U.S. but obviously if we can find partners whether it is in Europe, South America and other parts of the world we're engaged in dialogue with those companies today. I would say that the only issue we potentially face with Europe and other countries is pricing. I think every company in our space feels like that where the pricing isn’t as good particularly for 505 (b) (2) type products, but we're talking to companies and hopefully we'll be able to get a good price for the product and potentially launch in those other markets because they are as big as they are in the U.S. globally not individually, but globally there is a big market for testosterone outside of the U.S.

That would be a good opportunity. And I have one more question please, with all of the upcoming pending approvals and different clinical results and so forth, already substantial milestone payments expected from partners?

No, I think that to answer the question I would say that that's not our business model. We will get a milestone related to epinephrine if that gets approved, but I would say that all the other programs really focus on the high value or the royalty. We don’t want to be a milestone based company that provides for lumpy earnings which we're trying to obviously prevent or avoid, we're trying to grow our revenue on a steady basis. And we believe that's more effectively done through high royalties and the high end the reasonable margin our device sells. So a long answer to your question is we have one milestone payment related to an approval but it's not something that I would say is material to the company.

Thank you very much.

And Mr. Howarth I'd like to turn the call back to you for any closing or additional remarks, sir.

Thank you, Lauren and thanks again for joining us on today's conference call. If you have any followup questions you can reach me at 609-359-3016. That concludes today's call.

This concludes today's conference. Thank you for your participation. You may now disconnect.