Sunil Bhonsle - President Marc Rubin - Executive Chairman Kate Glassman-Beebe - EVP and Chief Development Officer Brian Crowley - VP of Finance

Scott Henry - Roth Capital Nisha Hirani - Zacks Investment Research

Thank you for holding and welcome to the Titan Pharmaceuticals' Fourth Quarter and Full Year 2014 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 conference over to Sunil Bhonsle, President of Titan Pharmaceuticals. Please go ahead.

Thank you, Cala, 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 of 2014. Before we begin, I wanted to inform you that on March 31, we filed our 2014 Annual Report on Form 10-K with the SEC and the press release issued yesterday provides a summary of the results and can be found on our website at titanpharm.com. Joining me on the call today from Titan are Dr. Marc Rubin, our Executive Chairman; Dr. Kate Glassman-Beebe, our Executive Vice President and Chief Development Officer; and Brian Crowley, our Vice President of Finance. Before we get into the details of the financial results and provide 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 a result of new information, future events or circumstances or otherwise. As always, let’s start with an overview from our Executive Chairman, Dr. Marc Rubin. Marc?

Thank you, Sunil and hello everybody and thank you for joining us today. We are very pleased to be here today to provide you with an overview of Titan's accomplishment in 2014 and to discuss the development of our pipeline of product candidates based on our ProNeura long-term drug delivery technology. As many of you know 2014 was a critical year for the advancement of our Probuphine program for the maintenance treatment of opioid dependence. We had a number of goals to achieve with regards to our Phase 3 clinical study and we’re pleased that we have met those goals and are well positioned for 2015. In November of 2014, Titan announced completion of enrollment in the ongoing Phase 3 study of Probuphine. The study which is being sponsored by our commercialization partner Braeburn Pharmaceuticals successfully enrolled ahead of schedule in a little over four months. We look forward to reporting the results from the Probuphine trial by the end of the second quarter of this year and resubmitting the NBA in the second half of 2015. As you're aware, this study is designed to address key questions that were posed by the FDA and its complete response letter in 2013 after the review of the original NDA. And in just a moment Dr. Glassman-Beebe will provide additional details on the study. If approved, for the long term maintenance treatment of opioid dependence in adults, Probuphine would be the first and only commercialized treatment for opioid dependants to provide continuous around the clock levels of Buprenorphine for six months, following a single treatment. As you know, Buprenorphine is currently available in the form of daily dosed sub-lingual formulations, with annual sales of approximately $1.5 billion in the United States. As a proprietary subdermal implant with packing coverage in the U.S. to at least 2024, we believe Probuphine has several advantages over the daily dosed formulations of Buprenorphine. New treatments that are safe and effective are critically needed for patients, for their families and for healthcare providers. Successful development of Probuphine also provides validation of Titan's proprietary ProNeura technology platform, and we are enthusiastic about the potential of this long term drug delivery technology. In 2014 we also began actively preparing to expand our product pipeline. To that end in October we closed public offering raising net proceeds of approximately $9.6 million. These funds are being used to support pre-clinical development of ProNeura technology based products including our product to the treatment of Parkinson's disease, as well as ongoing producing development and ex-U.S. partnering efforts. We also enhanced our IT portfolio receiving a U.S. patent in 2014 covering the sustained release in Dopmine Agonists, utilizing the ProNeura. The patent provides intellectual property protection for the company development program of ProNeura for Parkinson's disease and carries a patent churn to at least 2024. In addition to the United States, we have similar issued patents in Europe, Japan, Australia, Canada, South Korea, Mexico, New Zealand, South Africa and Hong Kong where our prosecution of additional patent applications continue in the United States, Israel, India, Japan and China. Finally to assist with our product pipeline expansion, in November we brought on two new board members who together had extensive product development, commercialization, finance and corporate governance experience. Mr. Joseph Akers is a former Bayer Healthcare Senior Executive in Finance and General Management and Mr. James McNab, Jr. is currently the Chairman and Cofounder of Curis, Inc. and also has a long and successful track record in the biotech industry. Titan's mission is to develop new products based on our ProNeura technology for a number of chronic diseases for which maintaining consistent levels of medication and blood over long periods of time may benefit patients. Most immediately we’ve focused our efforts on developing ProNeura for Parkinson's disease and Dr. Glassman-Beebe will provide further details on this program shortly. We look forward to sharing the producing clinical study results later in the quarter and to driving you additional insights into the potential use of the ProNeura platform, the Parkinson's disease and also other programs. And with that, I will pass the call back to Sunil to review the financial results of the fourth quarter and the full year 2014. Sunil?

Thank you, Marc. I will provide with our fourth quarter and 2014 financial results and Dr. Glassman-Beebe will update you on the development activities during the year and additional development plans for the coming year. And then to conclude, we will open up the call for your questions for the Titan management team. So for the financial results, total revenues for the year 2014 were approximately $3.6 million compared with about $10.5 million in 2013. Revenue in 2014 was all related to the amortization of the upfront license fee received from our partner Braeburn Pharmaceuticals in December 2012. Revenues in 2013 consisted approximately $9.1 million related to the amortization of the upfront license fee and about $1.4 million in royalty revenues on net sales of finance, which were paid by Titan for Deerfield management. Total operating expenses for the year 2014 were approximately $7.1 million compared with about $11.4 million for 2013 and consisted largely of research and development expenses of about $4.1 million compared with about $8.3 million for 2013, a decrease of $4.2 million or about 50%. This decrease in R&D expenses was primarily associated with the decrease in external R&D expenses associated with the completion of the Probuphine product development program and the preparation and review of the Probuphine new drug applications prior to the receipt of the complete response letter in April 2013. While similar costs post complete response letter were borne by Braeburn, per the terms of the amended license agreement. The general and administrative expenses for 2014 and 2013 remained constant at about $3.1 million. Net other income for the year 2014 was approximately $1.1 million, consisting primarily of income related to non-cash gains on changes in the fair value of warrants. This compares to net other income of about $10.6 million in 2013, which consisted primarily of $9.0 million in net other income generated by transactions with Deerfield and approximately $1.7 million of income related to non-cash gains on changes in the fair value of warrants. Net loss applicable to common stockholders for 2014 was approximately $2.4 million, or $0.03 per share, compared to net income of approximately $9.7 million, or $0.12 per share, for 2013. At December 31, 2014, Titan had cash and cash equivalents of approximately $15.5 million compared with about $11.8 million at the end of 2013. Titan believes that its working capital at the end of 2014 is sufficient to fund planned operations into the fourth quarter of 2016. Now for a little bit of details on the fourth quarter, the total revenues for the fourth quarter of 2014 were approximately $0.9 million consisting again of licensing revenues related to the amortization of the upfront license fee receipt from Braeburn in December 2012, and this was approximately the same amount as generated in the fourth quarter of 2013. Total operating expenses for the fourth quarter of 2014 were approximately $2.2 million consisting primarily of R&D expenses of about $1.6 million and general and administrative expenses of about $0.6 million. The operating expenses for the same period in 2013 were about $1.6 million consisting primarily of R&D expenses of about $0.9 million related to the preparation of the Probuphine NDA submission and the general and administrative expenses were about $0.6 million. The increase in 2014 fourth quarter R&D expenses was primarily related to effort supporting Probuphine manufacturing and other ProNeura based development programs including ProNeura for Parkinson’s disease. Net other income for the fourth quarter of 2014 was about $0.8 million compared to net other income of about $0.4 million in the fourth quarter of 2013. Net other income for both quarters consisted primarily of income related to non-cash gains on changes in the fair value of warrants. Net loss applicable to common shareholders for the fourth quarter of 2014 was approximately $0.5 million compared with approximately $0.2 million in the same quarter in 2013. These financial results were as expected and as Marc mentioned our progress in 2014 puts us in a very good position to further add value to Titan this year. The rapid enrollment in the Phase 3 clinical trial of Probuphine speaks to the great need for new treatments for opioid dependence. We look forward to reporting results of this study in the next couple of months, resubmitting the NDA later this year and potentially seeing Probuphine become available to physicians and their patients next year. In 2015 we will continue to aggressively pursue our development program in the area of Parkinson's disease and our enthusiastic about the broader potential for our ProNeura drug delivery platform and the potential to further expand our product pipeline. 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 everybody. I'm pleased to provide you with additional details on Probuphine and our work in developing ProNeura for Parkinson's disease today. Just to remind everybody, the Probuphine study is a randomized, double-blind, double-dummy designed that enrolled 178 patients into two parallel treatment arms across 20 clinical centers. Study participants are clinically stable patients who receive maintenance treatment with an improved sublingual formulation containing Buprenorphine at a daily dose of 8 milligrams or less. Patients have been randomized to receive either four Probuphine implants or to continue their daily sublingual Buprenorphine therapy. Now to enable the double blind design, those receiving Probuphine implants are required to take daily placebo sublingual pills, while those continuing on their stable dose of sublingual Buprenorphine pills are required to be treated with four placebo implants. The patients are expected to be treated for six months and the primary analysis will be a non-inferiority comparison of responders in the two treatment arms. Responder status will be based on an FDA agreed upon clinical algorithm, and as based on urine testing for opioid use, together with patient self-reported opioid use. We believe this study design is robust and will provide a well-controlled evaluation of Probuphine compared with the current standard of care in these stable maintenance patients. Now off note, all participants are receiving active treatment during the study. We continue to support Braeburn in all study related efforts and are encouraged by the progress to date. As previously mentioned, we expect study results in late second quarter of this year and we're looking forward to a system Braeburn in the re-submission of the NDA in the second half of this year with the potential for product approval in the first half of 2016. The US market for Opioid addiction treatment has continued to grow with prescriptions for Buprenorphine products increasing by more than 12% last year and there are now three proprietary daily dosed formulations on the market along with a few generic versions. Also off note, there are three injectable one month deeper formulation in early to mid-stage clinical development and this emphasizes the recognized importance of long term treatment. Probuphine with a six month treatment option has the potential of being the first such product on the market. In addition to these important U.S. efforts, we are evaluating opportunities for regulatory approval and commercialization of Probuphine outside of the U.S. and Canada. Having conducted initial discussions with opinion leaders and regional pharmaceutical companies in countries where Buprenorphine products are used for the treatment of opioid dependence, our strategy is now to obtain additional regulatory guidance to confirm the pathway to product approval in these countries. We expect to initiate regulatory discussions outside of the U.S. following release of the Pro-814 results later this year. Now I would like to provide you with an update on our ProNeura for Parkinson’s program which we are also very excited about. We commenced work on optimizing an implant formulation of ropinirole, a widely used Dopamine Agonist therapy, and this work along with the input from key scientific and regulatory advisors is helping us plan the non-clinical studies and an appropriate proof-of-concept clinical study. Our goal is to complete all the work required and file the IND in time to commence the clinical study in the first half of 2016 following potential approval of Probuphine. We remain on track to meet these goals. About 1 million people in the U.S. suffer from Parkinson's disease and that number is expected to double by 2030 due to the aging population according to the Parkinson's disease foundation. Dopamine agonist therapy, which is a current standard of care, is designed to replace dopamine in the brand in early stage Parkinson's patients, but typically stops working efficiently after several years and can trigger serious side effects. About one-third of treated patients develop motor response fluctuations and/or drug-induced dyskinesias within three to five years of treatment. Clinical and nonclinical research indicates suggest that these motor side effects may arise from the pulsatile dopaminergic stimulation resulting from current oral treatment modalities. Studies now show that dopaminergic stimulation by continuous infusion is able to palliate these motor complications and to also delay or prevent the onset of dyskinesias in Parkinson’s patients. Consequently, we believe that the ProNeura drug delivery system has the potential to be effective for Parkinson's disease. I look forward to providing results of the Probuphine clinical study and our progress through the regulatory process as well as other ProNeura development programs. Now I will turn the call back to Sunil. Sunil?

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

[Operator Instructions] We'll take our first from Scott Henry with Roth Capital.

Thank you, Sunil and hoping you hear me okay. I'm in a car right now. I just had a couple of questions, first you go into a new fiscal year, any thoughts what we should expect for R&D and SG&A. How we should expect those to trend relative to 2014?

Sure Scott. Hi how are you? Hope you’re driving carefully. In terms of the expenses for R&D, what we can see clearly it will start ramping up slowly as we go into the middle part of this year. The full year expenses will probably be somewhat similar to what you saw from the year before. In total what we’re projecting is that the cash, the $15.5 million that we have at the beginning of the year will take us through the next seven and half or so quarters, so clearly into the end of 2016. The major R&D expenses will really happen in the early part of next year, late part of this year primarily with the non-clinical toxicology studies.

Okay. Great, that is helpful. And then I mean this is a general question, I don’t know if you will be able to answer it but the trial has been enrolling for a while and obviously the data is still blinded but in the cumulative data set that you’ve seen so far still blinded are you seeing anything unusual, or are you seeing rates and side effects that would be typical for a trial such as this? Kate Glassman-Beebe: Hi Scott, this is Kate. And thank you for that question. As you mentioned the study is still blinded and we haven’t seen – to-date we haven’t seen anything that was not expected.

It's been very straightforward similar to what we’ve seen previously.

Okay. That's helpful. And my understanding just to confirm you would expect to get the data possibly at the end of 2Q? Is that reasonable and then what would be the turnaround for the NDA filings from clinical data? Kate Glassman-Beebe: We expect to be able to file fairly rapidly after getting the data but certainly before the end of the fourth quarter this year. So before the end of this year, we will be resubmitting the NDA as we said.

And clearly before the end of the second quarter we certainly expect to see the results.

Perfect. Thank you for taking the questions.

Thank you very much, Scott and drive carefully.

We’ll go next to Jason Napodano with Zacks Investment Research.

Hi good afternoon, this is actually Dr. Nisha Hirani calling in for Jason Napodano. Hope you guys are doing well. And I just wanted to say congrats on the completion of your Phase 3 enrollment process ahead of schedule, that's really great. My first question was, you had mentioned in the past that a pre-IND meeting with FDA was going to occur in early 2015 for the ProNeura based on clinical program for Parkinson's disease. Has that already occurred and are you able to share with us any details from that meeting?

Hi Nisha, this is Sunil. And in terms of the pre-IND meeting we have not held that yet. We want to get further along with our non-clinical data package so that when we meet with the FDA, it can be very clear in terms of providing support for the kind of non-clinical tox package that we want to do. And so, that will happen later this year or early next year but clearly our goal is to have completed the entire program meet with the FDA and be ready to get into a clinical study about the time when we get approval for Probuphine let's say by the middle of next year.

Okay, great. Thank you for the clarification and a follow-up question. If you can demonstrate good PK with ProNeura and Parkinson’s disease this would be the second successful proof-of-concept with that platform, with the first obviously Probuphine. Is that enough of demonstration of the platform to sign potential licensing and development deals in the coming future for PD or other potential uses in your opinion?

I can certainly provide just a general comment on that Nisha in the sense that, our goal is to have partners at a stage where we can provide the most value into Titan as well. And so having some level of clinical data on any particular indication really provides a proof of principle and I believe add substantial value into Titan. So, in terms of partnering each product will have its own pathway and it will really depend on what values it brings to Titan. So the timing typically though for us, we would look after having established some proof-of-concept.

Okay, great. Thank you. And just lastly for Probuphine what regions around the globe are you targeting that will piggyback after the U.S. FDA approval and allow for free sale with minimal required clinical work?

Sure. Currently when you look at the use of Buprenorphine, the sublingual Buprenorphine you see Australia is a very strong candidate. Specific countries in Europe like France, Scandinavian countries, Germany, U.K., Italy seems to be coming up in the use of Buprenorphine products. So it's specific countries where we’re targeting this at this stage. In Asia we have also looked at some potential applications or uses. There is an interest but it's still in the early stages.

Okay, great. Thank you so much. I appreciate all the information.

Thank you, Nisha.

We'll go next to Joseph [Amodeo] [ph].

Hi Sunil, congratulations to you all. I have a question Sunil, while back maybe a year or two years ago you had mentioned about taking the company on a major stock exchanges. Are there any plans in doing that in the near future?

Hi, Joseph. Absolutely you're right. I think at the time we were expecting approval of Probuphine back in 2013, we thought it would be the right time to take Titan on to a major exchange and of course there has been a delay. But we are now looking at the same situation as then and absolutely we would like to move Titan to a National Exchange and we look at that opportunity later this year hopefully later this summer.

Great. Thank you very much for taking my questions. Again congratulations to you and your team.

Thank you very much, Joseph.

[Operator Instructions] We'll go next to [Timothy Bauer] [ph].

Currently what percentage of the common outstanding shares are owned by Braeburn?

Hi, Timothy.

How are you?

I’m doing good. Braeburn owns just under 9% of the outstanding shares.

Okay. And how many more available shares - to the company have available to issue, if maybe more capital?

At this stage we have very few shares authorized but we will hopefully seek approval for getting additional shares authorized long before we need additional capital. Obviously there are number of things coming up, we raise enough capital that will take us into the end of next year. And with the potential approval of Probuphine next year, there is also milestone payments from Braeburn that will help us. So, we’ll have to watch this but our goal is to make sure we have available shares for the future as well.

Very good, I was happy to see the capital raise last fall, I think that was a very smart move on your part before the funds - so I do wish you the best of luck in getting the drug approved and hopefully we can all continue to move forward here with the company.

Absolutely. And thank you very much for participating as well as your support.

Thank you very much.

[Operator Instructions] We'll go next [indiscernible].

Hi. I was calling because I wanted to find out if the priority review, so holds for Probuphin, if there is an opportunity to have additional communication with the FDA based on the ProNeura review that you guys have established before the - meeting for Probuphin? Kate Glassman-Beebe: Thanks for your question. Yes, we absolutely are still under priority review and so that’s still holds and we will apply once we resubmit the NDA.

Great. Thank you very much.

There are no further questions at this time. I’d like to turn it back to management for any additional or closing remarks.

Thank you, Cala. Thank you all for participating in this call. We are very enthusiastic about the progress and we continue to make both in our Probuphine program and in developing ProNeura for Parkinson's. We believe the ProNeura drug delivery platform holds great promise for patients suffering from select chronic diseases for which maintaining consistent levels of medication over long periods of time, may offer safety or health benefits and we continue to do early non-clinical studies to establish and grow the product pipeline. We appreciate your ongoing support and thank you for participating. Good bye.

And this concludes today's conference. Thank you for your participation.