Sunil Bhonsle - President Marc Rubin- Executive Chairman Kate Beebe - EVP & CDO

Jason Napodano - Zacks Mark Cohen - Westside Investment Management

Thank you for holding and welcome to the Titan Pharmaceuticals second quarter 2012 financial results conference call. At this time, all participants are in a listen-only mode. There will be a question-and-answer session following today's remarks. 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 call over to Mr. Sunil Bhonsle, President of Titan Pharmaceuticals. Please go ahead sir.

Thank you, Brian and thank you all for joining us today. Welcome to the Titan Pharmaceuticals call to review financial and operational results for the second quarter of 2012. Before we begin, let me remind you that we filed our Form 10-Q with the and subsequently issued a press release on August 10, 2012, detailing our first quarter financial results. This press release can be found on our website at www.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 go in to the details of the second quarter performance, and an update on the company, I want to remind everyone that certain matters we will discuss today, other than historical information consist 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. Well, having said all of that, let's start with an overview from our Executive Chairman, Dr. Marc Rubin.

Thank you, Sunil and hello to everybody joining us today and thank you for listening and participating. The Titan board has been generally pleased with the ongoing progress that Titan has made in preparing the Probuphine or NDA for filing later this year. This will obviously be an important milestone and as you know it is now expected to be completed in October which is slightly delayed from the previously communicated timeline of September 2012. Sunil and Kate will provide additional information on the specifics of this and on the progress with the preparation of the overall NDA in a few minutes. Importantly, the Titan Board has been closely monitoring Titan’s partnership discussions and is pleased with the progress being made with negotiations of a licensing agreement with the frontrunner. Our goal which we have consistently communicated to all of you has always been to complete a strategic partnership by the time of the NDA submission. And we believe we are firmly on track to accomplish this goal. Such a partnership could and should provide the full resources to complete the regulatory review and the approval process for Probuphine and prepare for its commercialization. As you know the board of course has a fiduciary duty to prepare for even unforeseen circumstances and as such we are preparing back up plans for bridge financing should they be needed. Ultimately the entire Titan team is working hard to bring a novel treatment for opioid dependence to the physicians, to the patients and to the families who have all shown a critical need for new approaches and new therapies for this growing and devastating disease. And I will stop there and I am going to pass the call back to Sunil. Sunil?

Well great thank you very much Mark. Next I will provide you with our second quarter financial results and will then turn the call over to Kate for a discussion of Probuphine and ProNeura development programs. To conclude we will open up the call for your questions for the Titan management team. So let's start with the financial results. Total revenues for the second quarter were approximately $1.4 million compared to approximately $0.7 million for the comparable period in 2011. Second quarter 2012 revenues consisted of royalties on net sales of the Fanapt which will be paid by Titan to Deerfield Management Company in accordance with the terms of the agreement entered into last year. Total operating expenses for second quarter 2012 were approximately $3.1 million compared with approximately $4.9 million for the second quarter of 2011 and these consisted largely of research and development expenses of approximately $2 million compared to approximately $3.9 million for the comparable period in 2011. This decrease which was primarily in external R&D expenses was a result of the completion of the Phase III clinical trials of Probuphine last year. General and administrative expenses totaled approximately $1.1 million compared to approximately $0.9 million for the second quarter of 2011. The slight increase in G&A expenses was related to increases in consulting and professional fees of [$5.3 million]. Net loss applicable to common stockholders for the second quarter of 2012 was about $1.7 million or approximately $0.03 per share compared to a net loss of about $7 million or approximately $0.12 per share for the comparable period in 2011. Our net loss for the six months period ended June 30, 2012 was $6.9 million or approximately $0.11 per share compared to a net loss of approximately $11.5 million or about $0.19 per share for the comparable period in 2011. At June 30, 2012; Titan had cash and cash equivalents of about $4.1 million compared to about $5.4 million at the end of 2011. We believe that our working capital at June 30 is sufficient to sustain our planned operations into October of 2012 which is also our current timeframe for submitting the new drug application for Probuphine in the treatment of opioid dependence. As Marc mentioned, our goal is to establish a partnership for the future commercialization of Probuphine prior to the submission of the NDA and this would provide the company with these resources to complete the regulatory review and approval process in a timely manner. We believe that our progress to-date keeps us very much on track for meeting this objective. At the same time as Marc already mentioned it is also in the best interest of the company and our shareholders to evaluate other options available to us for additional capital that could provide a [bridge] if needed to support continued progress with the NDA submission and the regulatory review process. We're working diligently and making very good progress with both our active ongoing partnership discussion and our final preparation of the NDA submission for Probuphine. And with that, I'll now turn the call over to Kate to provide an update on the Probuphine program, our NDA submission process, and also to touch briefly upon our preclinical program. Kate?

Thank you Sunil, and thanks to all of you joining us today. As you know, the safety and effectiveness of treatment with Probuphine has been demonstrated in five clinical studies conducted to-date as part of our phase III program and this includes two six months control studies, two six months open label safety retreatment studies and (inaudible) studies, all of which will comprise the clinical portion of our new drug application. In that regard, we've completed or nearly completed the harmonization of the clinical database and the preparation of all the individual study reports, the integrated summaries of efficacy and safety, the product label, the risk evaluation mitigation strategy or REMS, the abuse liability review, the pediatric plan and the priority review justification. And similarly the non-clinical pharmacology and the CMC sections are also nearing finalization in anticipation for the last step to preparing the submission which is the electronic publishing. Now the analytical testing required to complete the CMC section of the NDA is also progressing satisfactorily and now the new facility is complete. However, the commercial scale production equipment has taken a little bit longer than expected to be fully qualified and this is due to some minor adjustment and recalibration of the equipment that was required following testing of the production line. This is now being completed and we anticipate that the first batch demonstrating the commercial scale production capability will be produced in the next couple of weeks, so demonstration of the commercial scale production capability is a requirement prior to submission to NDA which as Marc and Sunil have said is now expected to occur in October of 2012. Finally on the Probuphine front, Titan and our research and clinical key opinion leaders will be presenting data at several upcoming medical conferences and meetings including the California Society of Addiction Medicine or CSAM meeting and that’s going to be on September 5, in San Francisco, California. The International Society of Addiction Medicine or ISAM meeting on October 16, in Geneva, Switzerland and the American Academy of Addiction Psychiatry, the AAAP on December 8 in Aventura, Florida. Before turning the call back over to Sunil, I would also like to briefly highlight our recent ProNeura progress. As you know Probuphine is the first product to utilize our proprietary long-term drug delivery technology ProNeura which has the potential to be used developing products for the treatment of other chronic conditions besides opioid dependence. In the last month we announced that we had successfully completed a preclinical investigation into the feasibility of a long-term round the clock non-fluctuating treatment for Parkinson’s disease with an already approved dopamine agonist (inaudible) where maintaining a stable round the clock blood level may benefit the patient and improve mental outcomes. Now this preclinical study was primarily funded by $495,000 grand award to Titan by the NIH under the SPIR program and administered by the National Institute of Neurological Disorders and Stroke, patents for this indication have been granted in several countries today and prosecution continues in the US and other countries as well. This is a very exciting development and we will continue to provide you with updates as appropriate. Now back over to Sunil and your questions.

Thank you Kate, and Brian, we are now ready to take questions from the call participants

(Operator Instructions) And we will take our first questions from Jason Napodano with Zacks. Jason Napodano - Zacks: Question on your cash runway into October I assume that amount that you are calculating includes sufficient funds to complete all of the test patches and final manufacturing production that is needed for the filing?

Yes it does, absolutely. Jason Napodano - Zacks: And what about the PDUFA filing stage?

You known as you probably know Titan qualifies as a small business and for us this is our first NDA filing, so we do not need to provide the fee. There is actually guidance for the industry on user fee waivers and so on which we have followed and applied for a waiver of the fee. So we won’t be needing to the pay the user fee at this time, which is very good for us and we like that. Jason Napodano - Zacks: No absolutely, it saves about $2 million.

Absolutely. Jason Napodano - Zacks: So you’ve applied for that waiver I guess just can you give me a little bit of color on how the FDA, I guess, have you been granted that waiver or exemption and if not kind of when will we hear about that?

Sure. In this setting the application kind of essentially made to this user free waiver office and we sent in the information that they required from us for this. This was done a while ago in June and since then, there has been some interaction with the small business administration which is the office that then establishes whether you are a bonafide small business and so they have asked us for more information which we supplied in every case and there has been nothing that indicates that we will not be granted the small business status in the setting. So there has been an interactive process which is going on. We have heard nothing about back to indicate that there is any reason that we would be denied this. So we are proceeding as of this as approved and we will continue to do so and file the NDA in that manner.

Sunil, this is Marc, let me just add, we clearly qualify as a small business under all of the criteria, the size, number of employees etcetera. So we fully expect that we will be granted that waiver. Jason Napodano - Zacks: And as far as qualifying following a licensing agreement, are there rules on maintaining that exemption or is there, if you do have licensed the product?

You know, in the licensing process, clearly the qualifications and so on are not directly related to anything other than if there is a direct control over Titan; unless that’s affected in anyway there will be no effect to it. Jason Napodano - Zacks: Okay, that makes sense. So as long as you maintain the NDA, as control of Titan, the exemption still stands.

That is correct. That’s (inaudible). Jason Napodano - Zacks: And then just as far as the update from or your request for priority review, can you give us any additional color around your initial conversations there and, well I won’t put you in a spot and ask you to predict if you’ll get it, but any additional information there might be helpful?

Sure, Jason. This is Kate. You may recall that we talked pre-NDA meeting that we had last October in which the Director, or the Head of the Division that we’ll be submitting to, Dr. Bob Rappaport, was very good about giving us exclusive guidance and details about what would need to be included in the priority review justification, which is a substantial document that we have written that contains all the major points that would be required to support their decision; ultimately, we won’t know if we are going to get that until after we submit, but it’s really essentially based on the growing epidemic of Suboxone and other forms of buprenorphine that are on the market now and are being to worried and misuse and the pediatric exposure accidental ingestion and mortality associated with that and the fact that Probuphine largely solves this problem in that it is very abused and deterrent – diversion deterrent formulation is the basis for our priority review. Jason Napodano - Zacks: And as far as, when we will find out about that I assume that comes with the acceptance.

That is correct; that is the time frame that we can find out. Jason Napodano - Zacks: And then final question with respect to some of the things that the FDA asked on the EVA, the safety and purity of the EVA; can you give us any additional information on some of the data that you have generated there to provide to the agency and whether or not any of that information or data will be available to investors in a sense of before the PDUFA decisions?

I can tell you that we have completed the evaluation of the EVA and assessed what the FDA had requested of us. We believe all of the information that we have generated fully supports the safety of the EVA in this setting and that is going to be a part of the NDA submission. As far as the data itself that is know will be part of the NDA and really not something that would be published separately at this stage and it is proprietary and it is something that will be included in the NDA and we fully believe it meets the requirement.

(Operator Instructions) And we will take our next question from [Arthur Davis] a Private Investor.

My question is really a long term question which concerns planning and I just having the review, the reports of Titan since 1997 and I see the only year in which there was of profit was 1997 at $0.05 per share. Has the company considered profitability as a goal in a year in which that would come to pass and if so what year?

I would put that it is a real long-term question and then obviously you have looked at the history as well. As we've mentioned, our focus right now is really to make sure that we can add value through a bringing Probuphine on through the regulatory review process and on the market. And partnering that, making certain that the resources are available to get that through the process. Last year that you think of as being profitable for Titan was the time that Titan entered into a partnership for Iloperidone and obviously when you get payments for partnerships, it can show certainly a profitability for that here, but longer term sustained profitability truly depends upon continued revenues. And for us our goal is to generate those continued revenues through this type of a partnership for Probuphine and based on that, we certainly expect to get to profitability at a future date, but at this stage I do not want to speculate on specific years. Our goal is really to get this partnership done and this product on the market and as we go through that process and once that is ongoing, we will look at the long-term objectives of Titan, the profitability as well as what's Titan and the programs and the strategies that we need to follow.

Could I infer from your response that since the last year in which there was a profit was the year in which a partnership was consummated with Novartis concerning Iloperidone, that if you consummate the partnership with a frontrunner who has been referred to today, but the date of the filing of the NDA that this calendar year which show a profit?

I will not speculate till we have actually completed and put the numbers out and then you will know.

The last question I have is the front runner has been used traditionally in the past, we turned three to five potential partners who had passed the initial stage of due diligence and (inaudible) stage. Are there is still up to three to five potential pioneers other than the frontrunner who are still at the table?

I want to comment Arthur in this case is certainly, there is continued interest expressed by other companies but we're focused on concluding a transaction with a front runner and that really is our goal right now.

And has the progress past the term shift phase?

We have certainly gotten into the agreement and negotiating agreement as we mentioned in the press release and so on.

We will take our next question from Mark Cohen with Westside Investment Management. Mark Cohen - Westside Investment Management: I had a question with respect to the NDA filing and the timing of announcing the potential partner. Is it more important to tighten from a financing standpoint or more important from the partners point of view to be contributing to the NDA with respect to the announcing of who that lead partner is?

Honestly Mark it's both. I am sure you realize that. Mark Cohen - Westside Investment Management: I understand that but I am just trying to this has been going for little bit, you have announced or you have mentioned that you have or considering contingency financing and after the last round of financing I hope that’s not anything that comes to fruition, but I am just trying to weigh the importance of the partner contributing the NDA in the event that the partnership agreement isn’t or has not come to fruition by the time you file.

I think they way I can summarize it Mark, it is truly in the best of interest of all parties in this case to make sure that the NDA progresses smoothly in a timely manner and in a way that satisfies both parties and that truly is the goal here and that’s what’s being worked on. Mark Cohen - Westside Investment Management: And is there anything that’s holding up pronouncing who the partner is with respect to finalizing the transactions other than just regular last minute negotiating are there any which you would consider to be material points of disagreement?

What I can reemphasize in this case is we clearly are working on the agreements and we expect fully to be on track with this timeframe and I don’t want to speculate one way or another, our comment on specifics Mark, you understand that. Mark Cohen - Westside Investment Management: No, I understand, but I got to ask.

Yeah, I appreciate that.

(Operator Instructions) And we will take our next question from [Dr. Jonathan Elias] who is a Private Investor.

My question is, once you obtain the partnership and your resources are increased, are there plans to start doing studies or increasing the studies for chronic pain or are you planning to wait until after approval of the NDA?

In this case clearly Jonathan for us the potential of looking at additional indications for Probuphine is very attractive as it would be for a partner as well. However, the goal first is to get Probuphine approved for the treatment of opioid dependence and our focus and our resources even after filing the NDA will be geared towards that. There is continued support of that NDA that will be necessary and we will continue to do that we expect as you know the interactions with the FDA and so on that will continue on and that requires a lot of time and effort on our part and that’s what the focus will be. The other indications will be looked at once that is all completed.

And if you do get approval, the fast track, what’s the timeframe of that usually for approval?

Sure. The timeframe for that is typically a six months clock that the FDA works on and that’s what we will be looking at. So it’s a very intense and very fast in some ways.

And this brings the Q&A session to a close. And I would now like to turn the call back to Mr. Sunil Bhonsle for his closing remarks.

Thank you very much Brian 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 truly appreciate your ongoing support. Thank you all.

And ladies and gentlemen that does conclude today's conference call. We thank you for your participation.