Sunil Bhonsle - President Marc Rubin - Executive Chairman Kate Glassman-Beebe - Executive Vice President and Chief Development Officer Brian Crowley - Vice President, Finance

Jason Napodano - Zacks Investment Research Patrick Gaffney - FDA Law Group

Please standby. Well, good afternoon, ladies and gentlemen. And welcome to Titan Pharmaceuticals Fourth Quarter and Full Year 2013 Financial Results Conference Call. Today’s conference is being recorded. And I will now turn the call over to Mr. Sunil Bhonsle. Please go ahead, sir.

Thank you, Kelsey, and thank you all for joining us. Welcome to the Titan Pharmaceuticals call to review financial and operational results for the fourth quarter and full year 2013. Before we begin, I wanted to inform you that we filed our 2013 annual report on Form 10-K with the SEC yesterday. The press release issued on Monday, March 31st provides a summary of the results and can be found on our website titanpharm.com. On the call today from Titan, we have Dr. Marc Rubin, our Executive Chairman; Dr. Kate Glassman-Beebe, Executive Vice President and Chief Development Officer; and Brian Crowley, our Vice President of Finance. Before we get into the details of the fourth quarter and full year 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, development programs, partnering arrangements, regulatory strategies and business plans. 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. 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 the results of new information, future events, or circumstances, or otherwise. Well, having said all that, let's start with an overview from our Executive Chairman, Dr. Marc Rubin. Marc?

Thank you, Sunil, and welcome to all of you and thanks to all of you for joining us today as always. I know you were all very aware that last year presented some unexpected challenges for Titan as the FDA issued a Complete Response Letter to the Probuphine NDA at the end of April. Of course, this was very disappointing since the FDA’s Psychopharmacologic Drugs Advisory Committee or PDAC had recommended that Probuphine be approved for the maintenance treatment of adult patients with opioid dependence just a month earlier. During the course of the past year, we have worked closely with our partner Braeburn Pharmaceuticals and its team of expert clinical and regulatory advisors to secure a path forward with the FDA for Probuphine. We believe that we now have some clarity and have proceeded with the next step of submission of the full clinical study protocol which is now with the FDA for its review. Dr. Glassman-Beebe will provide further details on recent interactions with the FDA a little later in the call. Given these circumstances, in November of last year we secured a $5 million equity investment from Braeburn as part of the renegotiated partnership terms, which secured our cash flow requirements through this year and part of next year. Under terms of the amended license agreement, Titan is entitled to a milestone payment of $15 million upon FDA approval of Probuphine, potential sales milestone payments of $165 million and tiered royalties ranging from the mid-teens to low 20s. There are additional regulatory milestones of $35 million for other potential indications of Probuphine. The sales threshold to receive the highest royalty tier was lowered and Braeburn agreed to assume responsibility for all third-party expenses relating to the ongoing Probuphine regulatory process. Additionally, Titan amended the terms of the Deerfield warrants to permit payment of the exercise price through the reduction of the outstanding loan. As announced last year, Deerfield exercised all of its warrants resulting in a $7.5 million reduction of Titan’s indebtedness. In April, Titan made the last installment payment of $2.5 million and our debt obligation to Deerfield was satisfied in full removing all debt from the balance sheet. Despite the challenges we faced in 2013, we are optimistic of better ability to move forward with the proposed clinical study protocol and to meet the other requirements for the eventual resubmission of the NDA. Titan remains enthusiastic about the prospects for Probuphine. The opioid addiction epidemic has continued to grow, and new, safe and effective treatments are now needed more than ever. Buprenorphine, an approved agent for the treatment of opioid dependence and the drug used in Probuphine, our investigational subdermal implant, is currently available in the form of daily dosed sublingual formulations with annual sales of approximately $1.5 billion in the United States. If approved for the long-term maintenance treatment of opioid dependence in adults, Probuphine would be the first and only commercialized treatment for opioid dependence to provide continuous around-the-clock levels of buprenorphine for six months with the potential to reduce abuse and diversion and would offer an important treatment option for patients, their families and for healthcare providers. The Board fully supports the ongoing activities and remains committed to this endeavor. We look forward to continuing to inform you of our progress and keeping you updated as we work to advance Probuphine through the FDA process and ultimately to market. For more insights on the fourth quarter progress and the full year 2013 financial results, I will now pass the call back to Sunil. Sunil?

Thank you Marc. Next I will provide you with our fourth quarter and full year 2013 financial results and Dr. Glassman-Beebe will update you on the development activities during the last few months, including the status of discussions with the FDA regarding Probuphine. To conclude, we’ll open up the call for your questions for the Titan management team. Before I get into the numbers, I’d like to provide a little context to our 2013 financial results. Following the decision by the FDA to decline approval of the Probuphine NDA in April 2013, our focus shifted from the planned corporate development and new product development activities to supporting Braeburn in addressing the concerns expressed by the FDA. The following 2013 financial results are reflective of these changes. Total revenues for 2013 were approximately $10.5 million compared with about $7.1 million in 2012. Revenues in 2013 consisted of approximately $9.1 million in licensing revenues related to the amortization of the upfront license fee received from Titan’s partner, Braeburn Pharmaceuticals, in December of 2012 and approximately $1.4 million in royalty revenues on net sales of Fanapt, which were paid by Titan to Deerfield Management in accordance with the terms of the agreements entered into in 2011. Titan no longer reflects Fanapt royalty as income on our statements since all of such royalties are paid to third parties. The revenues in 2012 consisted of about $4.8 million in royalties of Fanapt that were passed on to Deerfield Management and approximately $2.3 million associated with the licensing and stock purchase agreements with Braeburn Pharmaceuticals. Total operating expenses for 2013 were approximately $11.4 million compared with about $15.4 million for 2012, and consisted largely of research and development expenses of about $8.3 million, compared with approximately $10.6 million for 2012. This decrease in R&D expenses, as you can imagine was related with a decrease in external costs related to the completion of the Probuphine product development program and the preparation and review of the Probuphine new drug application with the U.S. FDA. Our general and administrative expenses for 2013 were approximately $3.1 million, compared to about $4.9 million in 2012. The 2013 decrease in G&A expenses was primarily related to decrease in non-cash stock compensation costs of about $1.3 million, a reduction in employee-related costs of approximately $0.2 million and consulting and professional services of approximately $0.3 million. Net other income for 2013 was about $10.6 million, compared to a net other expense of approximately $6.8 million in 2012. The increase in net other income during 2013 was primarily related to approximately $9 million of other non-cash income generated by the termination of Titan’s royalty repurchase agreement with Deerfield, and an approximately $1.9 million gain resulting from the settlement of Titan’s indebtedness to Deerfield as a result of the exercise of all of the Deerfield warrants. The decrease in our interest expense of approximately $3.3 million related to the Deerfield loans and approximately $3.5 million related to non-cash gain on changes in the fair value of warrants. This was offset in part by approximately $0.5 million of other expenses related to unamortized transaction fees related to the initial Deerfield debt transaction. Net income applicable to common stockholders for 2013 was approximately $9.7 million, or $0.12 per share, compared to a net loss of approximately $15.2 million, or $0.23 per share for 2012. Now for the details, for the fourth quarter, total revenues for the fourth quarter of 2013 were approximately $0.9 million, consisting of licensing revenues related to the amortization of the upfront license fee received from Braeburn in December of 2012. This compares with total fourth quarter revenue of approximately $3.3 million in 2012, which consisted of $0.9 million in royalty revenue on net sales of Fanapt, which were paid by Titan to Deerfield and approximately $2.3 million in licensing revenues, consisting of about $1.7 million associated with the premium paid for Titan’s common stock by an affiliate of Braeburn pursuant to the September 2012 stock purchase and option agreement and about $0.6 million related to the recognition of the non-refundable up-front license fee from Braeburn. The decrease in fourth quarter 2013 revenue was primarily due to the one-time revenue in 2012 from the sale of common shares at a premium and Titan no longer recognizing royalty revenues from sales of Fanapt, as all of such royalties are paid to third parties. Total operating expenses for the fourth quarter of 2013 were approximately $1.6 million, consisting primarily of R&D expenses of about $0.9 million and G&A expenses of about $0.6 million. Operating expenses for the same period in 2012 were about $3.7 million, consisting of R&D expenses of about $2.6 million and this was related to the preparation of the Probuphine NDA submission and FDA review, and the general and administrative expenses were about $1.1 million. The decrease in fourth quarter 2013 operating expenses reflected the completion of preparations for the NDA submission in 2012. Net loss applicable to common stockholders for the fourth quarter of 2013 was approximately $0.2 million, or $0.00 per share, compared with about $0.3 million, or $0.00 per share in the same quarter of 2012. As of December 31, 2013, Titan had cash of approximately $11.8 million. Titan believes that its working capital at the end of 2013 is sufficient to fund planned operations through April of next year. Now to provide you an update of recent development activities, let me turn the call over to Dr. Glassman-Beebe. Kate? Kate Glassman-Beebe: Thank you, Sunil and hello everyone. I really appreciate this opportunity today to provide you with an update, as I imagine that on top of everyone’s minds first is status of the discussions of the FDA regarding the issues identified in the CRL and potential resubmission of the Probuphine NDA. The interactions with the FDA have been spearheaded by our development and commercialization partner, Braeburn Pharmaceuticals, and also fully supported by the Titan team and group of external clinical, regulatory and pharmacokinetic experts. Following an extensive re-review and additional analysis of the Probuphine data with these experts, a former briefing book was submitted to the FDA addressing all the items identified in the CRO. This was in preparation for our face-to-face meeting with them on November 19, 2013. Following receipt of their comments from the FDA, it became clear that an additional clinical study would be required to address the key item in the CRO regarding the demonstration of efficacy and study synopsis was presented to the FDA earlier this year. And as you know, in early March 2014, Titan and Braeburn reached an agreement in principal with the FDA on a path forward to address the CRO and to enable the potential resubmission of the Probuphine NDA once the additional data are available. Now that path forward includes among other steps conducting an additional clinical study, which is designed to provide a non-inferiority comparison of treatment with the dose of four Probuphine implants in stable patients undergoing maintenance treatment with 8 milligrams or less per day of an FDA approved sublingual formulation of buprenorphine. We believe this study design provides the best opportunity for an unbiased comparison of treatment with Probuphine to the current standard of care while making sure that all patients will receive active treatment for their disease. The clinical study protocol has been submitted to the FDA and we will provide you with further details of that study and of the implementation plans upon completion and receipt of the FDA’s review. And while we await the FDA’s comments, we’re working diligently with Braeburn to do all that we can to lay the groundwork now in preparation for implementing this clinical study. Although our first priority this year continues to be the support of all the activities for the continued development of Probuphine and the subsequent potential resubmission of the NDA, we will also evaluate opportunities for the potential to seek approval for Probuphine outside of North America and possibilities to develop additional products with the long-term ProNeura drug delivery platform as the resources permit. Thanks very much. And let me turn the call back to Sunil.

Great. Thank you, Kate. This brings us to the end of formal remarks. And now Kelsey, we are ready to take questions from the call participants.

(Operator Instructions) We will go first to Jason Napodano with Zacks Investment Research. Jason Napodano - Zacks Investment Research: Jason with Zacks.

Hi, Jason, how are you? Jason Napodano - Zacks Investment Research: Good.

I would say that’s Jason Napodano. How about you? Jason Napodano - Zacks Investment Research: Yes, there you go, good Italian name, anyway. So I understand you’re waiting for comments back from the FDA on the design of this necessary trial. Can you give us a sense of comparing this trial to, for example PRO-806? It seems like you’ve done this trial already. I mean, you had 806, which compared Probuphine to 12, 16 mg -- patients on 12, 16 mg of Suboxone and that trial was successful. So, I guess, I am confused as to why the FDA would wonder if the drug is non-inferior to an even lower dose of Suboxone when you showed that the drug is non-inferior to a higher dose of Suboxone. I mean, what exactly am I missing in terms of the differences in the patient population or why there would be a question on whether or not Probuphine is inferior -- sorry non-inferior to the 8 mg stabilize dose?

Well, Jason, you certainly asked very good questions with that. Obviously, we cannot go into a lot of the details in terms of the discussions with the FDA at this time than at some point later once there is clarity on the final design and so on. We could expand some more on it but I’ll have Kate give you at least a little bit of information about the discussions at this point. Kate Glassman-Beebe: Yeah, hi Jason. Great to hear your voice. Jason Napodano - Zacks Investment Research: Hey, Kate. Kate Glassman-Beebe: Just to add a little bit more color as to what Sunil was saying. You recall just in terms of comparing the 806 study design to the potential new study design. What I can tell you is that in 806, the patients that were treated with Suboxone were treated in open label fashion. They were randomized to treatment. So they had just as good a chance of being assigned to that treatment arm, as say the probuphine patients did and all of the urine toxicology results were blinded both to the patient, to the clinical site and to the laboratory. So that's how that treatment arm was controlled in that study and what the FDA has asked us to consider and what we're discussing with them is another way of controlling, exerting greater controls over the blinding of patient group treated with Suboxone. So that’s sort of the direction that we're working in. It will be similar in respect to how the patients receive treatment although this patient group is going to be a maintenance stable patient group who require a lower dose of maintenance treatment with Suboxone relative to the kinds of patients that we studied in our earlier studies in the Phase III program which as you rightfully described we did show efficacy. So that's really all I can tell you at this point until we received comments back from the FDA and we have agreement on the final protocol design. Jason Napodano - Zacks Investment Research: Okay. So the “double dummy” design of this proposed trial is the patients get both, I mean, they get some kind of tablet and they get some kind of implant. And they don't know whether or not they are on Probuphine or Suboxone and the other is the dummy? Kate Glassman-Beebe: That's correct. And that really is to ensure that all patients are getting active treatment through those studies rather than having a straight placebo arm. Jason Napodano - Zacks Investment Research: Okay. And is there any opportunity for either rescue additional implant or rescue Suboxone on top of their [essentially] [ph] protocol? Kate Glassman-Beebe: Those are details –that are going to be worked out in our discussions with FDA and we'll certainly make that information available once we have it. Jason Napodano - Zacks Investment Research: Got you, okay. I think that's it. We are looking forward to your next update when you hear back from the FDA. Kate Glassman-Beebe: Thanks so much.

That's great Jason. Jason Napodano - Zacks Investment Research: Thank you.

Thank you very much.

(Operator Instructions) We'll hear next from Patrick Gaffney with FDA Law Group. Patrick Gaffney - FDA Law Group: Thanks for being so helpful. Just a couple of real quick questions, in terms of the 12 mg to 16 mg equivalents, will this -- will the current proposed study allow the FDA to approve the technology for the broadest scope of the market both those at 8 milligrams and less and those more than 8 milligrams or less that are stable?

Patrick, hi, this is Sunil. Just from the standpoint of the total data that will be in the resubmitted NDA, of course, it will include what has already been provided in the past which included the 12 mg to 16 mg dose patients and added to that will be now the stable patient has been maintained at 8 mg dose. In terms of the final labeling and so on of course, it's a little too premature for us to look at that till we've seen all of the data and once the NDA is resubmitted at that stage, we will make that determination. Patrick Gaffney - FDA Law Group: Okay.

Okay. Patrick Gaffney - FDA Law Group: Okay, that’s fair. Next question. I recall the advisory committee notes, there were some concern about the likely prescribers for the technology not being too adept at being surgical implanters or actually having surgical skills necessary to implant the device without the foreseeable [sequelae as a] (ph) cellulitis or movement or any other complications. Is there anything being done to address those concerns in terms of making a smoother transition for the likely prescribers not to have those problems? Kate Glassman-Beebe: Hi, Patrick. This is Kate Glassman-Beebe. I would be happy to address that question for you. You may also recall from the AdCom notes that there was a considerable discussion about our risk evaluation, mitigation strategy plan and as part of that, there will be some human factors testing, that we’re going to be conducting as one of the other item as we prepare for the potential resubmission of the NDA. And that will cover the concern that you are describing right now to ensure that the people that are doing the insertion and removal procedures are qualified, number one, and are appropriately and adequately trained in demonstrative proficiency during the technique. Patrick Gaffney - FDA Law Group: Who do you foresee as being the likely prescribers of the technology, which subspecialty? Kate Glassman-Beebe: Buprenorphine prescribers would be those people designated under DATA 2000 as having the ability to prescribe our product. Patrick Gaffney - FDA Law Group: Okay. And last question and I appreciate the candour. In terms of the other applications of the technology, will Braeburn be participating in the development of the other indications and applications of the technology, or is that, will Titan have an option to develop relationship with the (indiscernible) as time evolves.

Right. In that sense, it is part of what we licensed to Braeburn, is the use of Probuphine in treating addiction. Potentially other indications like pain or others if there are. With respect to the technology itself and its use with other disease setting such as Parkinsons’ that we’ve done on clinical development in previously and talked about. Those are things that Titan will do. Those are not part of the license agreements with Braeburn. And it is our intention to look at every opportunity where our technology can provide the basis of a continuous medication, which is really important in many disease settings and so we will pursue those as our resources permit. Patrick Gaffney - FDA Law Group: Thank you very much.

Thank you.

(Operator Instructions) We’ll now move on to [Tyler Reuben] [ph].

Hi, guys. Excuse me, sorry I have a cold. Hi, guys. Thank you for taking it. I was just wondering, how are you determining in your releases, the timing, you are trying to give indications of when you’ll give us an update and then it slips a little bit. So, I’m just wondering, how are you coming up with this timeframe?

Hi, Tyler. This is Sunil. I mean, clearly for us anytime, there is a material event that we must make sure that our shareholders know. We make sure we put out press releases. So it’s really driven by changes in information that we receive, which is important for all the shareholders to know. Sometimes, we already for instance, say in our press release previously that we will submit the protocol for instance in the next two weeks. Now at that stage, we’ve already disclosed what we expect to do, so it’s no longer material to disclose it again when it’s done. So we have to make those kinds of determinations, Tyler.

Okay. Thank you.

Okay. Appreciate that very much.

Kelsey, I think that should pretty much wrap it up.

And there are no further questions at this time. I’ll turn it back to you, sir for any additional or closing comments.

Great. Thank you, Kelsey. And thank you all for participating in this call. We remain confident in our belief that Probuphine is approved for marketing, will be a transformative new treatment for opioid dependence. And we truly appreciate your ongoing support and look forward to speaking you again in the near future. Thank you.

And that will conclude today’s conference. We’d like to thank everyone for their participation.