Thank you for holding, and welcome to the Titan Pharmaceuticals First Quarter 2012 Financial Results Conference Call. [Operator Instructions] Please be advised that this call is being taped at the company's request and will be archived on the company's website starting later today. At this time, I would like to turn the conference over to Mr. Sunil Bhonsle, President of Titan Pharmaceuticals. Please go ahead, sir.

Thank you, Pete, and thank you all for joining us. Welcome to the Titan Pharmaceuticals' call to review financial and operational results for the first quarter of 2012. Before we begin, let me remind you that we filed our Form 10-Q with the SEC and subsequently issued a press release on May 11, 2012, detailing our first quarter financial results. This press release can be found on our website at titanpharm.com. On the call today from Titan, we have Dr. Marc Rubin, our Executive Chairman; Dr. Kate Beebe, Executive Vice President and Chief Development Officer; and Brian Crowley, Vice President of Finance. Before we get into the details of the first quarter performance and an update on the company, I want to remind everyone that certain matters we will discuss today, other than historical information, consists of forward-looking statements relating to, among other things, our expectations concerning our financial results, available cash, clinical programs and regulatory strategies. The forward-looking statements are not guarantees of future performance and are subject to a variety of risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties are described in our annual report on Form 10-K filed with the SEC and subsequent SEC filings. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today. We undertake no obligation to update or revise the information provided in this call whether as a result of new information, future events or circumstances or otherwise. Having said all that, let's start with an overview from our Executive Chairman, Dr. Marc Rubin. Marc?

Thank you, Sunil, and hello to all of you joining us today. Speaking for the Titan board, we have been pleased with the ongoing progress and advances the company's been making in preparing the Probuphine new drug application, or NDA, for filing later this year. Sunil and Kate will discuss this in a bit more detail later in the call, but I'm pleased to say that we remain fully on track to file the NDA in September of 2012. The board is aware that for Titan, a key step to building shareholder value is establishing a clear path for the commercialization of Probuphine in the United States. Our focus on selecting the right commercial partner continues and our goal remains to establish partnership by the time we have submitted the NDA. As you all know, this is a competitive process, and it needs to be managed confidentially. And we're doing so effectively with the help of Woodside Capital Partners and Keelin Reeds Partners. Ultimately, our goal, as you know, is to bring a novel treatment for opioid dependence to the physicians, the patients and the families, all of whom have shown a real critical need for new therapeutic options. And I will stop there and turn the call back to Sunil.

Thank you, Marc. Next I will provide you with the first quarter financial results and will then turn the call over to Kate for a discussion of our Probuphine development program. And to conclude, we'll open up the call for your questions for the Titan management. So let's start with our financial results. Total revenues for the first quarter were approximately $1.3 million compared to $0.9 million for the comparable period in 2011. First quarter revenues consisted primarily of $1.2 million in royalties on net sales of Fanapt, which will be paid by Titan to Deerfield Management Company in accordance with the terms of the agreements entered into during 2011. First quarter 2012 revenues also included $42,000 in grant revenues from the National Institutes of Health, Small Business Innovation Research grant, which has provided most of the funding for a nonclinical study investigating the application of Titan's proprietary ProNeura drug delivery technology in Parkinson's disease. This study has been successfully completed in late first quarter and upon completion of the final report, the data will be presented at the appropriate scientific forum. Total operating expenses for first quarter 2012 were approximately $4.8 million compared with approximately $4.5 million for the first quarter 2011 and consisted primarily of research and development expenses of $3.1 million compared to approximately $3.7 million for the comparable period in 2011. This decrease was primarily associated with the completion of the Phase III clinical trials of Probuphine. G&A expenses totaled approximately $1.7 million compared to approximately $0.8 million for the first quarter of 2011. The increase in G&A expenses was primarily related to one-time, noncash stock compensation expense incurred in the first quarter of 2012. Net loss applicable to common stockholders for the first quarter 2012 was approximately $5.2 million, or approximately $0.09 per share. This was compared to a net loss of approximately $4.5 million or $0.08 per share for the comparable period in 2011. At March 31, 2012, Titan had cash of approximately $2.3 million, compared to about $5.4 million at December 31, 2011. On April 9, Titan completed a registered direct offering, which provided an additional $5 million in capital, net of fees and expenses. This capital infusion has enabled us to continue our progress in all areas and is expected to fund our operations into the fourth quarter past our submission of an NDA for Probuphine in opioid dependence, which is expected to occur in September of 2012. As Marc highlighted, this is a busy time at Titan with multiple activities being managed by a handful of people. We are making very good progress with the manufacturing expansion for commercial scale production and related activities, as well as additional EVA testing and characterization as requested by the FDA. Kate will provide additional insight into our progress to date in preparation of the NDA. We are also equally focused on advancing our ongoing partnering discussions regarding Probuphine and continue to interact with possible commercialization partners, addressing questions, and providing support for the potential value of the Probuphine program. At the end of the call, Brian and I will be happy to address any questions you may have about the quarter or the full year financial results. I will now turn the call over to Kate to provide an update on the Probuphine program and our NDA submission process. Kate?

Thank you, Sunil, and thanks to all of you joining us today. As many of you know, the safety and effectiveness of treatment with Probuphine has been demonstrated now in 5 clinical studies conducted and completed to date as part of our Phase III program. This includes two 6 months controlled studies, two 6 months open-label safety retreatment studies and a pharmacokinetic study and all of these will comprise the clinical portion of our new drug application, which has, as both Marc and Sunil stated, is currently in preparation and on track for submission to the FDA this September. Earlier this year, we announced the results of an open-label, 6 months safety retreatment study, which is called PRO-811, and this is in patients with opioid dependence who previously completed a full 6 months retreatment in Titan's confirmatory Phase III clinical trial of Probuphine. In 85 patients enrolled in this retreatment study, Probuphine was shown to be very well tolerated including the implant insertion and removal procedures with a low incidence of adverse events and an overall safety profile similar to what we saw across the other Phase III studies. I presented some of these data along with the results of the Phase III confirmatory study at the American Society of Addiction Medicine, otherwise known as ASAM 43rd Medical Science Conference in Atlanta next month and at that meeting, I was very pleased with the response of clinicians that I met with, who attended the poster session. There was considerable interest, for example, in when the product is going to be available and with many of the clinicians requesting information about how to obtain the training necessary to perform the implant procedures. As I mentioned last quarter, we are very pleased with the work of our extended regulatory submission team, which includes a highly experienced contract research organization; leading regulatory clinical, nonclinical and manufacturing expert consultant; and our contract manufacturing partner, DPT. The commercial scale contract manufacturing facility expansion is on schedule, as is the qualification of the manufacturing equipment to be used for the commercial scale manufacturing capability. The additional testing that's required to generate data requested by the FDA as part of the CMC section continues to progress on schedule. And as I previously mentioned, the NDA is expected to be ready for submission in September of this year. Now I'd like to turn the call back over to Sunil, and I would be happy to address your questions. Sunil?

Thank you, Kate. Kate, at this time, we are ready to take questions from the call participants.

[Operator Instructions] We'll take our first question from Elemer Piros with Rodman & Renshaw.

If I could address this question to Kate. Kate, you mentioned that the additional testing is ongoing related to the EVA component. What sort of technical data do you expect to gain from this additional work? If you could, maybe a little bit further, characterize of the nature of the testings that is going on?

Elemer, thanks for the question. I'm actually going to ask Sunil to answer this.

Sure. Elemer, in terms of the testing that was requested by the FDA, it has to do with a full characterization of the EVA, the ethylene-vinyl acetate, excipient that's being used in this product. And we had already done these kinds of studies but had not identified anything that was below the ICH guidelines. As you know, the ICH has guidelines on the level of drug or impurities that you may see. And then based on that, shall we go [ph] identify anything that's above those limits. What the FDA requested was that they would like to see all of the impurities identified. And so, we are doing studies that and essentially are forced extraction of impurities out of the EVA in aqueous as well as alcohol solutions, and these are at high temperatures to force something to come out. You don't expect this to happen in the normal situation in a subcutaneous implant, but this is just a characterize anything that is there in the EVA. Does that give you an idea of the kind of things?

Yes. And stability testing has been completed already, I presume?

We've done extensive stability testing in obviously all of the clinical lots that were made, and we have data that shows that this product is stable over a 4-year period. We've seen no degradation in the product. And as you know, the actual manufacturing in this setting, will be using the exact same equipment that was used for the clinical lots. So the extruder is the same, the process is identical, the formulation is the same. So we feel very confident of our stability data in this setting.

Is there anything Sunil or Kate or Marc, anything specific in this manufacturing process of the combination of EVA and the active ingredient and the rod itself, the final product, that is somewhat difficult to, or proprietary, that would make a potential generic formulation further down the road beyond 2024, somewhat more difficult than if you are dealing with a generic pill?

Sure. I mean in this setting, obviously, extrusion of such a product, first of all, you have to actually set up the capability. These are not available as a standard manufacturing process anywhere. And there is propriety information regarding obviously the pressure, the temperature settings, different parts of the actual process to make the implant that makes it uniformly distributed through such an implant and provide the kind of drug release that we have developed. This takes time and a lot of effort and development and all that means is a lot of investments to really come up with this type of a product. Of course, we have our intellectual property, or patent, in the U.S., it's a method of use patent, but it specifically covers ethylene-vinyl acetate and the drug and a number of parameters regarding blood levels and so on that -- and treatments above 3 months, things that protect our product through 2024 in this setting.

Just as a side question to the team, have you seen or do you have any additional intelligence on generic Suboxone being in front of the regulators?

Elemer, that's a great question. We do know that there are other companies that are attempting to come up with that formulation. We don't know of anyone who has actually submitted it for review at the division yet. But that's certainly something that will potentially be on the horizon given the size of this market and this opportunity.

And Kate, if I could ask you maybe a little bit about the foreign regulatory environment. Have you explored, for example, Europe, what would it be, the requirement, or better, a regulatory dossier, if you plan to submit one, would it look similar to the U.S. NDA?

Another great question Elemer. Yes, we believe that the data that we have collected at least within the clinical program would satisfy a number of different countries. We've had preliminary discussions with several countries, this was a few years ago and those conversations would, of course, have to be revisited. But with the good -- the robust efficacy and the very good safety profile that we have demonstrated across 5 studies now, including the PK data, I think that we are in a good position, particularly on the heels of hopefully getting FDA approval, we should be able to go to some other countries outside the U.S. and have those discussions fairly quickly.

Okay. And on a licensing front, if I may ask, are there additional territories besides the U.S. being discussed or explored by those potential parties? And would you be willing to divide territories if talks go with that direction?

Sure. In terms of the discussions, clearly, the largest market, as you know, Elemer, in this setting, is the U.S. Our focus has been in the U.S. and on filing the NDA here. So bulk of the discussions are really focused on this market and with regards to U.S. licensing. That doesn't mean that they haven't expressed interest in other countries and companies from other countries that have expressed interest in this product as well. But it is focused on the U.S. for now.

Okay. And Sunil if you could provide an update on this, whether have you examined any term sheets that were provided to you by these potential licensees?

I cannot comment specifically on anything but, absolutely, we are in that stage and I expect to continue having these discussions around term sheets.

[Operator Instructions] We'll take our next question from Jason Napodano with Zacks Investments.

So in the shareholder letter that you guys put out last month, you mentioned that you were obviously in discussions with, I think, you said 3 to 5 interested parties, but that the pace can obviously be protracted. There's clearly an end in sight with respect to the NDA filing but maybe you can just give us a little bit more color with respect to what the partners are looking for. I mean, obviously, these NDA filings, there's enormous amount of information in there. You'll have the information that the FDA has recently requested. But are the partners kind of working or do they see the process of the NDA being prepared now and so that they could make a decision around the filing or do you think that it'll be after the filing before the partners really get comfortable with all of the information that you've submitted in there?

Okay Jason. In terms of the information that the partners review and look at, obviously there is all of the technical information that's the clinical, the CMC and there's a lot of data around that, that they kind of dig into and have questions. So we've addressed a lot of those. So the second part that comes up then is the commercial aspects of this, the market. The market research that we, ourselves, have conducted to establish what we see as potential for this product. And then gets into -- and how do you actually distribute, market such a product, which is an implant, and it requires certain key aspects like training to be provided to physicians and how to actually administer such a product, how to monitor the patients. So there is a variety of information that we have collected, which we then provide, which then the partners also want to verify. And so they have to do some of their own market research in this process. All of this has been going on and getting to the stages where we believe it is now -- the questions are getting down to the final ones of trying to establish in their own minds their best values that they see. And obviously, we want to make sure that the product is valued appropriately and they've spun all of the information we've developed.

This is Marc, Jason. Just to add and finish an answer to your question, we do expect that -- hope and expect that we will have term sheets and, hopefully, a deal prior to NDA filing, not after.

Got you. That's helpful. I'm not trying to put you guys on the spot or anything, but how would you describe the number of parties relative to the 3 to 5 that you mentioned a month ago? Are we still talking roughly about the same number?

We're talking about the same number, yes.

With respect to the market, I think RB has done a pretty good job here of transferring patients over from the oral to the film. How much are guys keeping an eye on, on that process? It would seem like the conversion of patients and scripts from the oral tablet to the film would be something that you would want to almost model in the sense of, if there's people saying or if there's doctors or patients that are saying they're not interested in taking an oral pill. The film is certainly a viable option and you could use that as kind of a roadmap for how you would want to launch your product. Are you guys keeping an eye on that?

We've certainly looked at the information that has been provided whether it's via [indiscernible] or others, some of the analysts who have been following it. And from what I could tell you and at this stage, the conversion seems to have started to flatten out and it's about half the patients seemed to be on film, and maybe half on the tablet and maybe and it may get to be 60, 40 film and tablets so far. But seems to be in that proportion. The process that they used, which then I think was a very good conversion process, of course, providing a lot of incentives around the conversion to the film. So patients who switched to the film would be given additional incentives, which is very successful in rapidly converting the patients. But in our setting, when you look at the market research that we have done with the physicians and so on, and ask them who are the best patients that they see that they would look to put on long-term therapy such as Probuphine, there are very specific groups of patients and that go over the entire spectrum. Younger patients and new patients, some relapse patients, things like that. So we have the target patient populations as you start commercializing this product. And so the strategy will be more of making certain that the physicians are well-trained and can successfully convert patients over from the film or tablet formulation. But the patient has to be the ones that are, the appropriate ones, who fit the profile that have -- that doctors believe will be most successful and beneficial with that treatment. So [indiscernible].

So safe to say that even within the patients that are on the oral tablet or patients that are on the film, there's still significant opportunity to go after these -- either/or patients with products?

Absolutely. Either/or. And Kate?

Jason, that's a good point. And just judging by the response that I've had at some of the medical conferences that I've attended this year, there's a really high level of interest among clinicians that attend these conferences and the fact that they already have patients that they can imagine who would be appropriate for this treatment and they're just waiting for an approved product and waiting for the training that will allow them and enable them to treat patients. So it's not a difficult thing to -- once the clinicians understand the data and the process to get them interested and for them to immediately conjure up which of their patients will be appropriate.

And ladies and gentlemen, at this time we have no further questions in the queue. I would like to turn the conference back to Mr. Sunil Bhonsle for any additional or closing remarks.

Thank you, Keith. And thank you all, for participating in this call. We remain confident in our belief that Probuphine, once approved for marketing, could be a revolutionary new treatment for opioid dependence and we certainly appreciate your ongoing support. Bye.

Ladies and gentlemen, this does conclude today's conference. We appreciate your participation. You may disconnect at this time.