Jack Howarth - VP, Corporate Affairs Bob Apple - President and CEO Fred Powell - SVP and CFO

Christian Moore - Jefferies Matt Kaplan - Ladenburg Thalmann John Vandermosten - Zacks Oren Livnat - H.C. Wainwright

Ladies and gentlemen, welcome to the Antares Pharma’s Third 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. [Operator Instructions] I will now hand the conference over to Jack Howarth, Antares' Vice President of Corporate Affairs. Please go ahead, sir.

Thank you, Tracy and good morning everyone. This morning, we released our third 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 US 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. Forward-looking statements provide Antares' current expectation or forecast of future events. Factors that could cause actual results to differ include, but are not limited to, statements about new product approvals and FDA action, including anticipated discussions regarding the complete response letter or CRL received from the FDA regarding XYOSTED, the company’s ability to adequately and timely responds to the deficiencies in XYOSTED CRL, the company’s ability and timing to resubmit the NDA for XYOSTED, and FDA acceptance of the resubmitted NDA and any approval of the Company’s NDA for XYOSTED, revenue, growth opportunities, the timing and results of research, development, clinical trials and financial performance are also identified on slide 2 of today's presentation, and from time-to-time in the company's filings with the SEC on Form 10-K and is updated in Antares' recent 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 third quarter and recent operating activities. Fred will then take you through the third quarter and year-to-date financial results and then Bob will give you a business update. After that we will open up the lines for your questions. Please turn to slide 4. I'll now turn the call over to Bob Apple. Bob?

Thanks Jack and good morning to all the participants on today’s call. I hope everyone had had chance to review this morning’s operating and financial results press release, which highlighted record quarterly revenues for the company. Before we get in to the details driving revenue growth, I’d like to start this morning’s call with a discussion on our XYOSTED new drug application. On October 11, the company received a Deficiencies Preclude Discussion Letter from the FDA which was the week before the previously communicated target action date of October 20. The letter stated that as part of the ongoing review on the XYOSTED application, deficiencies had been identified which precluded the continuation of the discussion of labeling and post-marketing requirements or commitments at that time. On week later on October 20, we received a CRL, which identified two deficiencies related to our clinical data. Based on findings in our studies QST-13-003 and 15-005, the FDA was concerned that XYOSTED could cause a clinically meaningful increase in blood pressure. In addition, the letter also raised a concern regarding the occurrence of depression and suicidality. We are obviously very disappointed with outcome of the review, however, it is our intent to communicate with the FDA to further understand and work to resolve the deficiency cited in the CRL, thereby establishing a potential path forward for approval. We are currently in the process of developing a detailed response to the two deficiencies identified in the CRL, and we intend to submit a briefing book to the FDA for requesting a face-to-face meeting. We anticipate getting further clarification from the FDA on this test required to resolve the outstanding issues, as well as determine a time table for responding to the CRL. Joining now at slide 5 and moving on the third quarter results, we had another outstanding quarter with record revenue of 15.1 million which comprised of 13.3 million in product sales. As a benchmark for measuring progress in our diversified business model, and to give you some sense as to how much progress we’ve made in our commercial business in a short period of time, 2014 full year product sales were 13.2 million. We believe that in present growth and revenue from our commercialized products in less than three years. Both OTREXUP and Sumatriptan injection were the primary drivers for the third quarter product revenue growth, and Fred will take you through those details in just a minutes. This past quarter, we announced the sale of the worldwide rights for the ZOMAJET needle-free auto injector device to Ferring Pharmaceuticals for $14.5 million. The purchase price will be paid in four instalments consisting of a $2 million upfront payment which was received in October and three additional instalments totaling 12.5 million, which will be paid upon completion of contractual milestones and subject to customary closing conditions. We believe the transaction can be completed by the end of 2018. We will continue to shift product to our ZOMAJET partners and continue to receive royalties on those sales until the completion of the transaction. The divestment of this non-core legacy asset which has represented approximately 5.5 million in annual revenue over each of the past three years will allow the company to better focus resources on several near-term strategic objectives as we believe make the shareholder value. I would like to now turn the call over to Fred, who will walk you through our third quarter and year-to-date financial results. Fred?

Thanks Bob. Let’s begin by looking at the revenue details for the third quarter on slide number 6. Total revenue was $15.1 million for the three months ended September 30, 2017 compared to $13.5 million in 2016, an increase of 12%. Total revenue for the nine months ended September 30, 2017 was 14.5 million compared to the $38 million in 2016, an increase of 6%. Product sales represented of sales of proprietary products, as well as sales of our devices or device components to our partners. Product sales were $13.3 million for the three months ended September 30, 2017 compared to $11.1 million in 2016, and $30.7 million for the nine months ended September 30, 2017, compared to $30.6 million in 2016. The increase in product sales for the three months ended September 30, 2017 as compared to the same period in 2016 was primarily driven by an increase in both, OTREXUP revenue, shipments of Sumatriptan injection, and the related profit earned under the profit sharing arrangement with Teva. Revenue from OTREXUP was $4.6 million for the three months ended September 30, 2017, as compared to $3.9 million in 2016, and $13.1 million for the nine months ended September 30, 2017, as compared to $11 million in 2016. Revenue attributed to Sumatriptan was $6.4 million for the three months ended September 30, 2017, as compared to $3.4 million in 2016, and $12.3 million for the nine months ended September 30, 2017, as compared to $6.4 million in 2016. Our Sumatriptan revenue is dependent upon the revenue forecast on pre-filled syringes that we received from Teva and therefore is highly variable on quarterly basis. Development revenue was $1.5 million for the three months ended September 30, 2017 compared to $2.1 million in 2016, and $7.9 million for the nine months ended September 30, 2017, compared to $6.5 million in 2016. The decrease in development for the third quarter of 2017 compared to 2016 was primarily a result of lower development revenue related to Exenatide and injector program. The increase in development revenue for the nine month period was primarily the result of increased development activities with AMAG for the Makena auto injector product offset by lower development revenue from the pen injector and auto injector programs with Teva. Turning now to slide number 7; operating expenses were $11.5 million in the third quarter of 2017, compared to $11.6 million in 2016, and $32.5 million for the first nine months of 2017 compared to 35.8 million in 2016. The decrease in operating expenses for the three and nine months periods of 2017 was primarily due to reduction in external clinical and development cost related to XYOSTED, partially offset by an increase in sales and marketing expenses in preparation for a potential launch of XYOSTED. Net loss per share was $0.03 for the third quarter of ’17, as compared to $0.04 in 2016, and $0.08 for the first nine months of 2017, as compared to $0.13 for the comparable period in 2016. As of September 30, 2017 cash, cash equivalents and short-term investments totaled $37.4 million compared to $27.7 million at December 31, 2016. I’ll now turn the call back to Bob. Bob?

Thanks Fred. Lets’ turn now to slide 8, we continue to be extremely pleased with the broad reach of Teva’s distribution of our Sumatriptan injection products. Sumatriptan continues to be a key commercial product for Antares. In the 15 months since we launched the product with our distribution partner, market share growth has been impressive. To date we recorded 21 million in revenue over six quarters. According to Symphony Health Solutions, the third quarter market share for our Sumatriptan injection product was 27%, up from 26% in the second quarter of this year. And while our weekly data is not always the most accurate data available, its worth noting that the most recent market share gain of a week ending October 27 was 31%. We remain very pleased with the market acceptance of our product, and we believe that Teva’s strong commercial presence in Walgreens and CVS has obviously help contribute to the strong market share. We’re hopeful that the strength of this product launch may potentially translate to future successes in our three other product collaborations with Teva. Turning to slide number 9, as you can see from this bar chart, OTREXUP prescription is continuing to grow. According to Symphony prescription data, both in the third quarter and nine months year-to-date total prescriptions grew 11% versus the same period last year. We believe product messaging, improved perception of access and affordability and easy-to-use device and pull-through utilizing our OTREXUP total care support program has helped drive sales and should continue to help drive sales growth in the coming quarters. Importantly, for the first nine months of 2017 on a standalone basis, the OTREXUP business continues to be profitable. Now let’s wrap up by turning to slide number 10, and I’ll provide an update on our alliance business. Beginning with Exenatide, we are executing on a purchase order for commercial devices with Teva. Teva’s ANDA for Exenatide is still under active review at the FDA. You’ll recall that all litigation with AstraZeneca has been settled and Teva negotiated a settlement launch date of October 15 of this year. While the October 15 date has passed, we continue to manufacture pre-launched quantities of devices in anticipation of other potential FDA approval. Teva anticipates receiving 180 days of marketing exclusivity post approval. Turning now to Epinephrine, we shipped approximately $500,000 worth of pre-launched devices at Teva in the third quarter, bringing the total dollar amount for devices shipped to date to approximately $20 million. We continue to work with Teva towards a potential approval of the Epinephrine ANDA, which remains on our active review at the FDA. With respect to Teriparatide, Teva’s ANDA is also still under active review in the US. With a paragraph 4, 30 months stay ending in the US in August of 2018. Globally, Teriparatide has been approved with marketing authorizations granted in 17 countries within EU last December. We believe Teva is anticipating a 2018 launch in certain countries in Europe, but the exact timing of those launches could be impacted by the overall US patent litigation currently ongoing as well as existing European patents. And finally, AMAG previously reported that the FDA had sent their sNDA review period at 10 months, which resulted in target action date of February 14, 2018. We are currently executing on a purchase order for commercial devices for use in their Makena subcutaneous auto-injector product, as AMAG awaits FDA action on their sNDA. Overall, I am pleased with the operational progress we made during the past quarter in our commercial business and remain excited about our near-term alliance business opportunities. And while we are extremely disappointed with the regulatory setup on XYOSTED, we will continue to work with the FDA to develop a path forward for XYOSTED’s potential approval. We plan to continue to grow our marketed progress and work with our partners Teva and AMAG as they move towards approvals of our remaining applications currently under active review at the FDA. I look to forward to providing an update on our progress to our next quarterly call. That concludes our prepared remarks for today. Operator, could you now open the lines for the question-and-answer session.

[Operator Instructions] And we’ll go first to Oren Livnat with H.C. Wainwright. [Operator Instructions].

Tracy lets go to the next one, maybe Oren can get back in the queue.

And we’ll go next to Anthony Petrone with Jefferies.

This is Christian Moore on for Anthony from Jefferies. May if you could just provide a quick update or a more in-depth update on the discussion with the FDA regarding the go-forward step to XYOSTED, maybe specifically if we would be hearing any updates prior to the next earnings call and just in terms of anything you could help us understand from a timing perspective of where we could now see XYOSTED revenue contribute at the earliest point, and then anything else there.

So the only thing I can tell you is at this point we’ve had no dialog with the FDA to this point. The process that you after you receive a CRL is you have to officially a meeting. And in order to do so you have to have a pretty comprehensive briefing book completed. And so our target date is to have that completed this year and request a meeting and typically they have to have that meeting within 30 days of the request. So until we have that meeting, we really don’t have any clarity as to what data is the FDA looking for or how we’re going to proceed getting that data. Our intent again is to basically complete a very comprehensive briefing book, file that with a request for a meeting that we can go in there fully prepared for that meeting. So I cannot give any guidance as to timing or any kind of timing on when and if XYOSTED will be approved and launched at this time.

And then maybe on the hiring front back in August you had mentioned that seven regional sales managers has been hired with them recruiting 60 reps actively, has that been paused this point with the delay of XYOSTED and then what is the impact on the cash burn for the company with those regional sales managers now as full time hires.

So the plan was always to make the offers to the sales reps to be contingent upon the approval and that’s what we did. And so therefore we have no liability related to any additional sales reps. As for our seven district managers, they are with our company and we are utilizing them in other ways and so that will continue in the near future and hopefully we’ll able to continue to use them as we hopefully get ready to launch XYOSTED if things go well with the resubmission and so forth. As far as the burn is concerned, I don’t think it’s really that material and then we did incur a large number of expenses in Q3 in anticipation of the launch and we’ll be looking at what kind of obligations we have in Q4 for cancelling certain things that were in process. But again, we think it’s all reasonable because we were prudent in how we went forward with kind of timing our expenses related to the new potential approval of XYOSTED.

And then, sorry if I missed this, just something back and forth between a few this mornings, but given the updates on the timing of the generic EpiPen just from a higher level?

The only thing I can say is that all three of the ANDAs are under active review and Teva hasn’t given any updated guidance on those products and so there’s nothing new to tell you, other than that we are preparing for the launch of those programs by making devices for Teva. And we’ll be ready when and if the approvals come.

[Operator Instructions] And we’ll go next to Matt Kaplan with Ladenburg Thalmann.

Just wanted to dig in to a little more in to the XYOSTED CRL? The two items that were mentioned obviously were blood pressure and then depression suicidality as the outstanding items. With respect to blood pressure, if you look at your long term data and the data that you’ve presented already it seems to be there’s unremarkable changes in blood pressure that you see over the 52 weeks. Could you help us understand what could have driven the questions around that were there outliers or significant outliers with respect to change in the blood pressure?

What we can see is that, obviously when you’re going through the approval process of XYOSTED, we were pretty late in to (inaudible) discussions, and so we were surprised by the CRL and the content on the CRL. So I don’t have additional information to give you, because like you mentioned the blood pressure and depression is in most of if not all the labels of other products in this class and until we meet with the FDA and understand their sensitivities towards it, I really can’t comment. Other than we were really surprised by this CRL and we’re looking forward to meeting with the FDA to understand what their concerns are, so we can resolve them. When we think of XYOSTED, we still believe XYOSTED is a great product and we are fully prepared to get that product on the market. But until we meet with the FDA, I can’t give you any specific information with regards to how we go about that, if it’s our in our data already or if there’s any additional work to be done, like I said we are preparing what we think is a very comprehensive briefing book. So we get in to the FDA with our best foot forward and try to mitigate any type of long term delay for this product.

And then you said you’re in labeling discussion, as you mentioned and as we’re seeing pretty much all the discussion on labels there is mentions of hypertension and also mention of depression and suicide potential as side effects. Was your label any different than and your label discussions any different than current labels?

When you are 505 (b) (2), you tend to stick to the label of the references of product that you’re working off of, and so the only difference I would say was our PK data and now everyone knows that our PK data was very strong. We met every efficacy endpoint requested by the FDA, we had excursions and so again from a clinical standpoint we felt pretty strong about what we filed and the product itself. So the labeling was, I would say, was generally characterized as a traditional 505 (b) (2) labeling with differences in the PK and the fact that it was a device as opposed to just a needle and syringe or a gel. So I can’t stress the words apprised enough as far as the CRL. So we are committed to working with the FDA to move forward and back on track to potentially get it approved and on the market.

And then just in terms of the three ANDAs that are under review right now. The timing with respect to those really hasn’t changed or remains?

As far as those are ANDAs they are having, as everyone knows it, they are Teva’s ANDAs and we try to really just rely on their guidance and none of their – and as I said earlier, the guidance has not changed recently. And so we’re working on our end to make sure they have the devices for launch and one thing obviously have come to learn is that you don’t know how the FDA is going to respond. So me trying to guess what somebody else’s ANDAs going to do is probably not the best thing for me to do at this point, given the XYOSTED event for us. So we’re doing everything we can for the product launch, although all those ANDAs as well as the sNDA with AMAG and - I think that’s representative of our business that you see in our product sales and the evolving revenue and so we’re excited to get all those or one of those whilst in a short period of time hopefully.

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

First question on gross margin, its moved around quite a bit over the last few quarters, and I was wondering if there’s any help you could give us in terms of anticipating where this will be going forward based on the revenue forecast?

I think going forward, the margins’ dependent on if we’re looking at product revenue versus development revenue with product revenue for our own products, in particular with OTREXUP. We have a larger margin as oppose to Sumatriptan. Going forward I think it’s going to be more normalized than we were looking at right now, rather than looking at year-to-date margin we are right around 50% as you said for the quarter. We were looking at a margin of about 43.4%. So I think it’s going to be closer to the mid-40s, maybe a little bit higher for the margins going forward. Again, it’s all dependent on the revenue mix that we have in any individual quarter.

Second question was on OTREXUP. I think last quarter we saw a little decline in terms of the realized price. What was the quarter-over-quarter trend or for the third quarter?

Quarter-over-quarter trend for the OTREXUP product; we actually had an increase in the price, as you suggested. Again, we had more products going out, we had some additional true-ups taking place looking at the growth that true-ups take place based upon estimates versus actuals, and so we ended up very strong with the third quarter selling price for OTREXUP. Looking at the remainder of this year, looking at Q4 I think we’re going to be somewhere between we were for Q2-Q3. Don’t forget in Q3 we also had a price increase that took effect as well. So it was a combination of factors there.

And I guess that we can expect that to layer on over the next year.

That is as we take a look at our year-to-date number, you will continue to see a year-to-date number go up, and that will be as a result being the higher selling price that we now have.

And finally on the needle-free injector segment, how much of that gets down to pre-tax income when you look at it on a variable basis?

I think that obviously we’re still working on the accounting of that sale, but we believe it will be a gain as far as from the accounting standpoint. And because the asset has been out in the market for quite some time, it will be a pretty large gain relative to the price. There is not a whole lot of offsets we have on that now. So for us it was a great transaction, it’s going to bring in cash over the next year, and this allows us to focus on our auto-injector and pen-injector technology. So it’s really where a large percentage of our business is currently and again its asset that we’ve been selling for 20 plus years, and I think the transaction speak at the quality of the device and the importance of it (inaudible), but at the end of the day, it was a great transaction for us to bring in some cash and allow to focus more on where the business is going as oppose to where the business has been.

Exactly I agree with that assessment. And then just in terms of any fix cost that maybe our SG&A or anything like that related to that line to then your free line?

There’s almost no cost whatsoever in the SG&A line items for our needle-free device, it’s purely sales and cost of sales, all other cost would run through that and the royalty was obviously below the line and that will eventually go away when the transaction is done. But that 5.5 that we cited included both the gross and the net sales of the devices and disposables as well as the royalty.

[Operator Instructions] And we’ll go next to Oren Livnat with H.C. Wainwright.

So I’m not sure if any one asked this, and I apologize if they did. And I want to put words in to your mouth, but from this sort of 11th hour XYOSTED safety signal highlighted and as I wanted to point out it is in everybody else’s labels and yours’ is probably at least if not safer than theirs, given you have our 12 PK data, and no excursion. I’m just wondering, should we assume that the breaks were put on sort of further up the FDA food chain for bigger reasons about the, concerns about the market for TRT in general. If that means that the FDA is not going prove anything new for years, let say, because they want perspective, long term safety trials, cardiovascular or otherwise. Are you prepared to walk-away from this product and when could you make that decision, and if you did do you have other pipeline I disclosed, maybe with in-house and partners that you could focus on quickly?

So let me try to answer that multiple-layered question as best I can. There’s no indication that this is some broad concern with regards to the class. As far as we know we have not had any communication with the FDA that suggest that. And so until we get in front of the FDA and until we determine what they are looking for us to do, I would not start to be concerned about those more broad applications or broad issues that you bring up. I think that our PK data was excellent and how that translates to the FDA analysis of safety is really – we don’t know what they’re thinking as far as [juggling] what their overall concern is. So I would say that we have information to suggest that’s an issue. What I stated before and I’ll say it again, we are committed to XYOSTED. We think it’s a very good product, we think it’s a much needed product in this space and we’re going to do everything we can to get this product across the goal line and get it launched. But until we get further clarity, I can’t tell you what steps it’s going to take to make that happen. And with regards to the other question as far as other products are on development, we do have products that we’re looking at, we do have products that we haven’t disclosed yet because we really want to get to the IND stage before we disclose it. Typically that requires a little bit of work demand before hands or at least data to suggest its safe and effective in the early stages. So we’re hoping to have some – be able to give you some indications as to what other products we’re working on sometime early next year. So, as far as our partnered programs, I think we are always looking to do additional business alliance work with companies or honestly the four in progress we right now are keeping us quite business, and so we are focusing on getting them across the goal line and if we have another opportunity to do another auto-injector or pain injector program with another party with Teva or others, obviously we would be very willing to take a look at that and determine whether or not it’s something that we can make money off of and it makes sense for the company from a long term standpoint. To try to answer your question, I think your question was difficult, because we haven’t been in front of the FDA, but like I said, I don’t see any move or unwillingness of the FDA at this point to approve a product like XYOSTED.

Were there any material inventory movements on the channel for OTREXUP?

No, there was normal shipments that took place. We didn’t see any significant end of the quarter shipments taking place for OTREXUP.

It appears there are no further questions at this time. Mr. Howarth I’d like to turn the call back to you for any additional of closing remarks.

Thank you Tracy, and thanks again for joining us on today’s conference call. If you have any follow-up questions, you can reach me at 609-359-3016. That completes today’s call.

This does conclude today’s conference, and we thank you for your participation. You may now disconnect.