Rich Pascoe - Chief Executive Officer Steve Martin - Chief Financial Officer Angeli Kolhatkar - Burns McClellan, Senior Vice President

Keay Nakae - Ascendiant Capital

Greetings! And welcome to the Apricus Biosciences, first quarter 2014 financial results and corporate update teleconference and webcast. At this time all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Angeli Kolhatkar. Please go ahead.

Good afternoon and thank you for joining us today. I am Angeli Kolhatkar, Senior Vice President with Burns McClellan. With me today from Apricus is Chief Executive Officer, Rich Pascoe and Chief Financial Officer, Steve Martin. During today’s call, Rich will review the company’s progress in the first quarter as well as what the company expects to accomplish during the rest of 2014 and beyond. Steve will then provide an overview of the financials and we will then open the call up for questions. I would like to remind everyone that during today’s conference call, management will be making certain forward-looking statements regarding future events or future financial performance of the company, including statements relating to expectations around the timing for commercial launch of products, business development plans and objectives such as out-licensing and acquiring products and product candidates and the development of the company’s product pipeline with second generation products and other product candidates. Such statements are predictions based on current expectations and actual results could differ materially. Please refer to our most recent filings with the United States Securities and Exchange Commission for additional discussions regarding these and other risks that may affect our business. These documents can be found on the company website at www.apricusbio.com. Apricus’ earnings press release for the quarter ended March 31, 2013 crossed the wire a short time ago and its also available on the company’s website. I will now turn the call over to Rich Pascoe. Rich.

Thank you Angeli. Good afternoon and thank you all for joining us today on the call. . We are thrilled with the significant progress we’ve made to-date towards achieving our 2014 corporate goals. Most important, today Takeda launched a comprehensive Vitaros sampling program in the United Kingdome. The program is focused on key opinion leaders in the area of urology and treat erectile dysfunction. This early availability is designed to allow high prescribing urologist in the United Kingdome to gain patient experience with the product before it is made available broadly in the United Kingdome on June 16. Since the beginning of the year we have had multiple shipments of Vitaros product to Takeda in advance of commercial launch in the United Kingdome and as they complete their stocking of product in the channel with both wholesalers and retail pharmacies. We are pleased with Takeda approach to brining to market the first topical, on-demand treatment for erectile dysfunction, and we are confident that their launch in the United Kingdome will set the stage for other successful partners launches across Europe and Canada over the course of this year. As you are all well aware, the ED market is large, estimated over 150 million men on a worldwide basis and is expected to double over the next 10 years. In 2012 the global sales of the PDE-5 inhibitors were close to $5 billion, of which about half was generated in key markets outside of the United States. The larger ED markets in Europe, including the United Kingdome, France, Germany, Spain and Italy generate approximately $1 billion of revenue in 2013, of which the United Kingdome generated approximately $225 million. Moreover, the Alprostadil market for the treatment of ED in Europe is estimated to be in excess of $100 million last year. While the ED market in Europe and the United States is quite large, we believe there are further growth opportunities for Vitaros, as over 50% of men who are diagnosed with erectile dysfunctions are either contraindicated to the PDE-5 inhibitors, do not adequately respond to the PDE-5 inhibitors or stopped using the PDE-5 inhibitors due to tolerability issues. This commercial opportunity for Vitaros is quite attractive and as such we look forward to the commercial success of Vitaros in Europe and Canada and importantly, the long-term revenue stream it will provide the company. The introduction of Vitaros in Europe today marks the significant milestone for Apricus. However we believe we have the potential to further leverage Vitaros in other key markets, including the United States, and as such we are in discussions with Actavis to explore the various options available to move the Vitaros clinical development program forward in this country. With respect to the status of our other partner launches, we will begin manufacturing product this month for our partner Sandoz and Majorelle, both of which expect to launch later this year. In anticipation of the Vitaros launch in Europe, we cosponsored a symposium with our European Commercialization Partners at the European Association of Urology Meeting in Stockholm, Sweden on April 11 titled, ‘A New Paradigm in the Treatment of ED - A Topical Option,’ which brought together approximately 300 of the leading urologists in the Europe. We intend to conduct similar events such as this, as well as other marketing and clinical activities to support our partners to insure a successful launch of Vitaros in each of the countries. With respect to Vitaros in Canada, Abbott continues to work towards bringing Vitaros into the market with a shelf life that will support the needs of patients and insuring the long-term success of the brand. While we will not make specific statements regarding launch time in Canada we do continue to believe that Vitaros will be introduced both in Europe and Canada throughout 2014. As we mentioned in our third quarter call, we have made a commitment to bring on a second manufacturing site in Canada and we expect that site will be ready to manufacture Vitaros for our partners in the second half of this year. At this site we will also manufacture, our second-generation Vitaros room temperature device, which extended the shelf life for up to 36 from the current shelf life of 18 for Vitaros cold chain and will not require refrigeration. Our room temperature device product is expected to provide up to 11 years of additional intellectual property protection over the current formulation. We expect to complete our final device development in the third quarter of this year, which will allow us to compile the required real time stability data and file for approval in Europe sometime next year. When it’s approved, we will work with our commercial partners to launch the second generation Vitaros product in this room temperature configuration in 2016. Turning to our progress on the pipeline front, earlier today we announced the significant milestone for Apricus. During the first quarter we submitted an investigational new drug or IND application to the FDA begin clinical testing with our internally development product candidate RayVa, for the treatment Raynaud's phenomenon secondary to scleroderma. Last week the FDA accepted our IND for RayVa, which clears the path for Apricus to being a Phase 2a trial in patients suffering from secondary Raynaud's phenomenon. RayVa leverages our DDAIP permeation enhancer platform technology, combining it with alprostadil a vasodilator in a formulation that is topically applied to the affected extremities, in the case of RayVa namely the fingers and toes. In a non-clinical model the company demonstrated that the topical administration of alprostadil cream to cold-challenge statistically improved blood flow by 30 minutes relative to placebo, as measured by Laser Doppler. The improvement in blood flow was maintained up to 90 minutes post-challenge. This data along with our experience and developing Vitaros and Femprox served as a basis for our decision to more RayVa into the clinic. Raynaud's phenomenon is characterized by vasoconstriction in the hands, feet or other extremities, resulting in reduced blood flow and the sensation of pain, which can become severe. It is classified as either primary or secondary. Primary Raynaud's, which is not associated with an underlying medical condition, refers to vasoconstriction associated with exposure to cold or stress. Primary Raynaud's effects an estimated 3% to 5% of the U.S. population. Raynaud's disproportionately affects women with a ratio of affected women to men of approximately 5:1. Secondary Raynaud's, with symptoms similar to primary is driven by an underlying medical condition, such as scleroderma, lupus or rheumatoid arthritis and there are an estimated or approximately 500,000 patients who suffer from secondary Raynaud's in this country. The indication we are initially perusing with RayVa is Raynaud's phenomenon secondary to scleroderma. There are an estimated 100,000 patients with scleroderma in the U.S., of which approximately 90% have Raynaud's phenomenon. There is currently no approved therapy for Raynaud's in the United States, representing a substantial unmet medical need. Compounds being tested in clinical trials for Raynaud's included calcium channel blockers, oral PDE5 inhibitors and topical nitroglycerin, the later having significant adverse effects. Similarly calcium channel blockers, antagonist 2 receptor blockers, oral PDE5 inhibitors and nitrate are used off label for the treatment of Raynaud's phenomenon, highlighting the significant unmet medical need in this condition. In spite of the availability of these off label products, the benefit to patients has been limited and our market research suggest that RayVa if approved will be used as a first line therapy to treat secondary Raynaud's. Regarding our clinical development plan for RayVa, we expect to initiate the Phase 2a trial in the second half of this year. The trial will be a randomized, double blind, placebo-controlled trial in approximately 50 patients with Raynaud's phenomenon secondary to scleroderma. Each patient will receive application of placebo and doses of RayVa in a crossover design. This dose-ranging study will evaluate hemodynamics and temperature at the site of application in response to a cold challenge, as measured by Laser Doppler and thermography. Other endpoints include safety and pharmacokinetic assessments. Enrolment for this Phase 2a trail is expected to take approximately three months. Based upon the results of the Phase 2a trial and the regulatory guidance received from the FDA the company will work towards moving RayVa into further clinical studies designed to evaluate the safety and efficacy of RayVa in patients suffering from secondary Raynaud's phenomenon in 2015. The FDA has indicated that RayVa could quality for priority review given the unmet medical need and lack of approved products to treat this condition. The FDA will determine, if the RayVa new drug application qualifies for prior review, following its anticipated submission, which could occur as early as 2017. With respect to the commercial strategy for RayVa, we plan to retain commercial rights in the United States and seek ex-US commercial partners whoever possible. Given that in the United States the majority of Raynaud's patients are treaded by approximately 4,500 rheumatologists, the chronic nature of the disease and the possibility of available treatments, we believe that RayVa if approved represents an attractive commercial opportunity that could support a focused and profitable commercial franchise. Turning to Femprox, late in the first quarter we initiated a comprehensive licensing strategy to out license the development and commercialization rights for Femprox in Europe, while seeking to retain commercial rights in the United States to preserve the long term asset value. We have multiple potential partners interested and will update you when we have more clarity. As we mentioned in the past, we are seeing a European first strategy as we believe that potential European partners could be interested in Femprox as there maybe a quicker path to market in Europe. We are still targeting completion of our partnering activity in Europe this year. Finally, on the leadership front, we discussed on our last call that Dr. Wendell Wierenga was appointed to our Broad of Directors. Wendell brings decades of experience heading research and development programs. In addition, at the end of the quarter we appointed Neil Morton as Vice President, Business Development. Neil brings with him a successful track record in Business Development and specialty pharmaceuticals most, recently as the Executive Director of Business Development at Auxilium, where he led the effort to in-license Stendra from Vivus in other men’s health products. Neil will be a significant contributor in executing our strategy of commercializing innovative products in the areas of men’s and women’s health. With that, I’ll turn the call over to Steve to discuss our first quarter financials. Steve.

Thank you, Rich. We filed our quarterly report on Form 10-Q with the first quarter financial results with the United States SEC earlier today. In addition, we provided condensed, comparable 2014 and 2013 financial tables in our press release that was issued this afternoon. I’d like to provide a few highlights on our balance sheet and operating results to the end of fist quarter. As of March 31, 2014 our cash balance was $22.5 million. This includes $4.7 million in cash collections for the upfront license fees related to two of the recent Vitaros European license agreements announced over the last few months. The payments received from Sandoz related to the amended and expanded Vitaros license and the new license agreement with Recordati are a positive indications for the future of the Vitaros product. We believe we have an appropriate level of cash now to support our current operating plan into the second quarter of 2015, including for the development cost to initiate the development of RayVa. In 2014 we expect to generate cash from potential out license of Femprox and late in 2014 we expect to begin to realize initial royalty revenues from partner sales of Vitaros. As a reminder, we will be receiving our royalties on a one-quarter lag from the time sales are made by our licensee partners. We expect our expenses will be focused on the development of the room temperature formulation of Vitaros, additional cost associated with supporting commercialization and launches of Vitaros in Europe and for the initiation of the RayVa development program. R&D expenses were $1.4 million for the three months ended March 31, 2014 and were $1.4 million for the three-month period ended March 31, 2013 and continue to relate to Vitaros commercialization and the development of the second-generation room temperature device. G&A expenses were $3.1 million for the three months ended March 31, 2014 as compared to $3.8 million for the three months ended March 31, 2013. This decrease relates primarily to the general and administrative expenses that were incurred in 2013 related to the former French subsidiaries, which are no longer associated with the company. The run rate of G&A expenses has decreased in 2014 as we have further narrowed our focus on the highest value product opportunities for the business. Our net loss for the first quarter ended March 31, 2014 was $3.3 million compared to our loss of $8.7 million for the first quarter ended March 31, 2013. We reduce our 2014 net loss as compared with 2013, as a result of the deconsolidation of the French operating company and the divestiture of non-core businesses, both of which occurred in 2013. We believe that we have made significant progress in 2013 and ’14, streamlining our core business and strengthening the company’s financial position in support of our three strategic plans. I’ll now turn the call back to Rich.

Thank you Steve. We’ve made significant strides as we recalibrated the company in 2013 and we’re off to a very strong start in 2014. With Takeda’s introduction of Vitaros to Urologist in the UK today, follow on Vitaros launches later this year, forward progress on the Vitaros room temperature device program, FDA plans to begin clinical studies with RayVa, the potential to out-license Femprox in Europe and the opportunity to drive additional value from Vitaros by exploring the various options available to move the product into clinical developments in the United States. I firmly believe that Apricus is on an exciting new path to creating value for patients, healthcare providers and shareholders as we pursue our vision of being a leader in the development and commercialization of innovative products in the filed of men and woman’s health. As always, we appreciate the support and feedback we receive from our shareholders and with that, we will now open the call up for questions. Operator.

Thank you. (Operator Instructions) Our first question is from Keay Nakae from Ascendiant Capital. Please go ahead. Keay Nakae - Ascendiant Capital: Yes, thank you. First question as it relates to the new clinical application for RayVa, what do you anticipate the Phase 2a study is going to cost?

Okay, thanks for the question and thanks for being on the call. We’re not discussing on today’s call the specific cost for the program. I think as Steve noted in his remarks we believe that the cash and cash equivalents we have available will get us into the second quarter of next year and that includes the cost of conducting this Phase 2a trial. So hopefully that can put it into some perspective for you. Keay Nakae - Ascendiant Capital: Okay, well let me ask you about the trial itself. Can you give us a sense of what the follow-up period of the study is? You talked about perhaps maybe three months to enroll it. How long will they be evaluated for?

Well, we anticipate as we said that this trial will enroll approximately 50 patients and the study is designed to evaluate essentially the blood flow increases in the extremities and so there will be no formal follow-up period in this particular trial, although as you would expect in our pivotal trials, there would be a requirement for follow-up related to building a safety database that would support an NDA submission. Keay Nakae - Ascendiant Capital: Well, I guess where I’m going with this is, if you have a product such as yours approved for this indication, should we think of it as a hand cream that the patient would be applying multiples times a day?

Yes, and as we said, we are going to be studying the drug initially in this secondary Raynaud's phenomenon population. Your right, it would be an on-demand product given the nature of our product and what we know about its characteristics. Clearly as you look as some of the other products that have been tried, both in the clinical and are used off label, they are typically systemically delivered products such as calcium channel blockers or PDU5, which bring their own issues along with that and so we would anticipate that patients, if this drug will approve and introduce into the market, would use it as they encounter these episodes of Raynaud's phenomenon, which can be unpredictable and certainly can happen in multiple times per day in some cases when the disease is severe. Keay Nakae - Ascendiant Capital: Okay, lets shift gears here to Vitaros and the soft launch here by Takeda. Once they get through this initial availability of the samples and we get into the mid-June and the full launch, how would you characterize the launch that occurs at that point? Do they make it available to everybody or is it still being rolled out in a controlled fashion?

No, Takeda’s intent is to roll this product out to the full market on June 16 and they’ve made some comments to that effect. We as I said in my prepared remarks applaud Takeda’s position here as it relates to the launch itself. We think its critical that all of our partners, Takeda included, launched this product in the appropriate fashion, its going to lead to long term success. We believe that by gaining experience, early experience with high value physicians and patients who suffer from erectile dysfunction, it will help inform some of their later activities over the summer, but sufficed to say that their intent is to roll this product launch out throughout the United Kingdom in a robust fashion. We think it will set the standard for some of our other partners who will be launching later this year. So we’re very pleased with the approach that all of our partners are taking. We want to ensure that it’s a success as do they and we believe that what’s critical here is the quality of the launch, which they are most dependant to right now as opposed to the timing of the launch. So when we as you know get one chance to launch a drug in any particular territory and we believe that our partners, including Takeda are doing it in a way that’s going to lead to success. Keay Nakae - Ascendiant Capital: Okay, great to hear that and then just finally with respect to the U.S. and Actavis, just want to clarify your comments there. You know it seemed like before they were simply just taking their time to figure out what would fit the portfolio that they want to take forward or not, so as we stand down, they sort of reengage in discussions with you about the product?

Yes, and we want to first and foremost want to see Vitaros introduced into the United States at some point in the future. We all recognize that there’s additional clinical trial work that needs to be done in order for that to happen, but we think given the tremendous opportunity that the market represents in the U.S., given the unmet medical need that still exists in the U.S., that Vitaros if approved by the FDA could have a substantial market opportunity associated with it. So clearly our motivations are there, both from the Apricus side of the isle as well as the Actavis side of the isle. So our discussions more recently are focused on how to best accomplish that and so while we can’t make any specific comments on the nature or the potential outcome of our conversation, sufficed to say that Actavis as our lead are interested in finding a way to move the product into the clinic and of course we will support that in the way that we best can. Keay Nakae - Ascendiant Capital: Okay, great. It sounds like there is progress though as far as to negotiations about the product and a revolution of how this might play out going forward, so that’s good to hear.

Yes. Keay Nakae - Ascendiant Capital: All right, well that’s all I had, thanks.

Thank you.

Thanks Keay.

(Operator Instructions). We have no further questions at this time. I would like to turn the call back over to Mr. Pascoe for closing remarks.

Thank you operator and thank you all for joining us today. We are continuing to execute on our 2014 goals and we look forward to further updating you on our progress on our next call. Likewise, I look forward to seeing many of you on May 15 here in San Diego at our Annual Meeting of Stockholders. As a reminder, if you’re a stockholder or record as of March 26, 2014 please vote your shares as soon as possible. If you need assistance or would like to vote your shares by phone, please call Morrow & Co. at 1-855-231-8973. Thank you.

This concludes today’s conference. Thank you for participating. You may disconnect your lines at this time.