Todd Brady - President and Chief Executive Officer Stephen Tulipano - Chief Financial Officer David Clark - Chief Medical Officer John Sheppard - Virginia Eye Consultants, Norfolk, Virginia, Lead Investigator.

Ritu Baral - Cowen & Company Roy Buchanan - Janney Montgomery Scott Yale Jen - Laidlaw & Company.

Good day and welcome to the Aldeyra Therapeutics Inc. First Quarter 2016 Financial and Operating Updates Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Stephen Tulipano, CFO. Please go ahead sir..

Thank you. Good morning everyone. Let me start our discussion today with Aldeyra's Safe Harbor statement if I may.

This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended, including statements regarding Aldeyra's plans for or assumed future results of operations and expenses, business strategies and plans, research and development plans or expectations, trends, market size and competitive positions, industry environment, potential growth opportunities among other things.

Forward-looking statements include all statements that are not historical facts and in some cases can be identified by terms such as may, might, will, objective, intend, should, could, can, would, expect, believe, anticipate, project, target, design, estimate, predict, potential, plan or similar expressions and the negatives of those terms.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Aldeyra's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

Aldeyra is at an early stage of development and may not ever have any products that generate significant revenue.

Important factors that could cause actual results to differ materially from those reflected in Aldeyra's forward-looking statements include, among other things, the timing of commencement, enrollment and completion of Aldeyra's clinical trials, the timing and success of preclinical studies and clinical trials conducted by Aldeyra and its development partners; the ability to obtain and maintain regulatory approval to commercialize Aldeyra's product candidates, and the labeling for any approved products; the scope, progress, expansion, and costs of developing and commercializing Aldeyra's product candidates; the size and growth of the potential markets for Aldeyra's product candidates and the ability to serve those markets; Aldeyra's expectations regarding its expenses and revenue, the sufficiency or use of Aldeyra's cash resources and needs for additional financing; the rate and degree of market acceptance of any of Aldeyra's product candidates; Aldeyra's expectations regarding competition; Aldeyra's anticipated growth strategies; Aldeyra's ability to attract or retain key personnel; Aldeyra's ability to establish and maintain development partnerships; Aldeyra's expectations regarding federal, state, and foreign regulatory requirements; regulatory developments in the United States and foreign countries; Aldeyra's ability to obtain and maintain intellectual property protection for its product candidates; the anticipated trends and challenges in Aldeyra's business and the market in which it operates; and other factors that are described in the risk factors and management's discussion and analysis of financial condition and results of operations, sections of Aldeyra's Annual Report on Form 10-K for the year ended December 31, 2015 and quarterly report on Form 10-Q for the quarter ended March 31, 2016, which are on file with the Securities and Exchange Commission and available on the SEC's website at www.sec.gov.

In addition to the risks described above, and in Aldeyra's other filings with the SEC, other unknown or unpredictable factors also could affect Aldeyra's results. No forward-looking statements can be guaranteed and actual results may differ materially from such statements.

The information in this presentation is provided only as of May 09, 2016 and Aldeyra undertakes no obligation to update any forward-looking statements contained in this presentation on account of new information, future events, or otherwise, except as required by law. Now, I would like to turn the call over to Dr.

Todd Brady, President and Chief Executive Officer of Aldeyra. Dr.

Brady?.

Thank you, Steve and thank you all for joining us today to discuss the positive results of our Phase II clinical data in noninfectious anterior uveitis, our ocular development clinical and regulatory plans and our first quarter 2016 financial results.

For today's call we have filed a set of slides with the SEC which are available on the SEC website at www.sec.com. The slides are also available on the investor page of our website ir.aldeyra.com and we will review the slides during this call.

We are excited to report today positive results from our Phase II clinical trial of topical ocular NS2 in patients with active noninfectious anterior uveitis.

The results of the trial indicated that NS2 was statistically indistinguishable from standard of care corticosteroid administration in reducing inflammatory cell count at the anterior chamber of the eye.

The potential for NS2 to treat inflammation to a degree that is comparable to corticosteroids is a major advance in the treatment of ophthalmic inflammation given the ocular toxicity of corticosteroids which may lead to cataracts, glaucoma and other morbidities. Dr.

Stephen Foster, a leading expert in ocular inflammation and the principal investigator of the clinical trial has described this study outcome as a very encouraging result with NS2 demonstrating clear activity in anterior uveitis and no evidence of significant adverse effects. Dr.

Foster also commented effectiveness equal to topical corticosteroids with the absence of eye pressure elevation or cataract production would make this anti-inflammatory therapy an attractive therapeutic option for treating uveitis.

The data we reported today represents the second positive clinical trial with tropical ocular NS2 to be released this year and further validates the novel therapeutic mechanism of aldehyde trapping in human disease.

Unlike allergic conjunctivitis where NS2 is dosed up to 16 days and demonstrated positive clinical effects that were reported in February, uveitis is severe autoimmune like ocular inflammation that can lead to partial or complete loss of vision and often required six more weeks of treatment.

Taken together the Phase II data from allergic conjunctivitis and noninfectious anterior uveitis indicate that NS II is acutely and after sustained treatment in both mild and severe forms of ocular inflammation and in allergic and autoimmune inflammatory disease. Prior to turning the call over to Dr.

David Clark, our Chief Medical Officer to discuss the design and results of the trial, I'd like to briefly review the role of aldehyde in inflammation and the potential of aldehyde trapping to represent a novel approach for the treatment of inflammatory disease.

Slide 3 of the presentation released this morning diagrams what is thought to be the pro-inflammatory mechanism of aldehyde which appear to be upregulated early in inflammation and modified protein function via novel signaling mechanism that involves binding certain amino acid residues.

Sufficient aldehyde binding alters the function of proteins, particularly kinases and cellular receptors which then leads to activation of pro-inflammatory transcription factors and an inflammatory response mediated by cytokines.

Cytokines are classic targets of inflammation, but aldehydes have to date been generally ignored and thus represent a novel target for the treatment of inflammatory disease. Slide 4 highlights the balance of Th1 and Th2 cytokines which can cause the two common types of inflammation, autoimmune disease and allergy respectively.

In February of this year we released positive data from our Phase IIa clinical trial of topical ocular NS2 in allergic conjunctivitis, a common allergic disease affecting the eye.

With the release of today's data in noninfectious anterior uveitis, NS2 has now demonstrated efficacy and autoimmune like inflammation and thus NS2 represents a potential broad based ocular anti-inflammatory drug candidate with therapeutic application across many inflammatory diseases and as a major commercial opportunity that we will discuss later in today's call.

We were optimistic about clinically testing NS2, our first in class aldehyde trap as result of a variety of positive results from preclinical studies, the data from two of which are summarized on Slide 5 and 6.

On Slide 5, data presented at the American Academy of Asthma, Allergy and Immunology in 2015 indicated that in the murine model of cytokine storm systemically administered NS2 significantly lowered levels of both Th1 or autoimmune related and Th2 or allergy related inflammatory cytokines while upregulating IL-10 the most recognized anti-inflammatory cytokines.

Slide 6 summarizes data presented at the American Association for Research in Vision and Ophthalmology or ARVO in 2015 indicating that in a rat model of ocular inflammation the activity of topical ocular NS2 compared favorably to that of topical ocular corticosteroid administration.

Based on the proposed role of aldehydes in mediating inflammation in addition to the preclinical activity of NS2 in reducing IL-5 and other Th2 cytokines, we initiated a Phase IIa clinical trial of a single dose topical ocular NS2 in patients with allergic conjunctivitis last year and we're pleased to report positive results from that trial in February.

The trial design and data from that trial has been reported previously and we summarized those on Slide 7, 8, and 9. As shown on Slide 8, after a single eyedrop topical ocular NS2 significantly reduced occur itching and tearing in allergic conjunctivitis. The positive clinical effect of NS2 continued after 14 days of dosing as indicated on Slide 9.

Based on the preclinical activity of NS2 in diminishing Th1 cytokines as well as ocular inflammation in our preclinical model of uveitis, last year we initiated a Phase II trial of topical ocular NS2 in patients with active noninfectious anterior uveitis.

As summarized on Slide 10, noninfectious anterior uveitis is a rare, but serious autoimmune like ocular disease that can lead to a number of morbidities including blindness. I would now like to turn the call over to Dr. David Clark, our Chief Medical Officer, to review the trial design and clinical data. Dr.

Clark?.

Thank you. I'd like to start by describing the design of the noninfectious anterior uveitis Phase II trial which is summarized on Slide 11. This was a randomized, parallel group, investigator masked, comparator controlled trial to evaluate the safety and efficacy of NS2 ophthalmic solution in patients with anterior uveitis.

The trial assessed signs and symptoms of anterior uveitis which included anterior chamber cell counts, which as you may know have been utilized as the primary endpoints in registration studies of anterior uveitis. The study was conducted at 15 clinical sites in the U.S. and the principal investigator was Dr.

Stephen Foster at the Massachusetts Eye Research and Surgery Institution in Waltham, Mass. Dr. John Sheppard from Virginia Eye Consultants in Norfolk, Virginia was also a leading investigator for this study. 45 patients with anterior uveitis were randomized to each of three treatment groups, two monotherapy groups and one combination treatment group.

The groups were NS2 ophthalmic drops 0.5% dosed four times daily for six weeks, Pred Forte, that is prednisolone acetate ophthalmic suspension 1%, commonly used ocular corticosteroid dosed four times daily and then tapered over six weeks and a combination treatment group in which NS2 ophthalmic drops 0.5% were dosed four times daily for six weeks which is the same ratio as the monotherapy group and Pred Forte was dosed two times daily and then tapered over a four-week period.

On Slide 12, you will see the randomization schedule resulted in 15 patients on NS2, 14 on Pred Forte and 16 on the combination treatment. Prioro to unmasking one subject in the Pred Forte group was removed from the intent to treat population for history of ovarian cancer within the past five years which met exclusion criteria.

And as a result, we performed the analysis on a modified intent to treat population with 13 patients in the Pred Forte group. Patients were followed for eight weeks and monitored for safety and efficacy at six scheduled visits.

Efficacy was assessed by standard ophthalmic examination procedures, including slit lamp examination, and response to treatment was graded according to established uveitis scales. The visit schedule included a screening randomization visit, a day four telephone follow-up visit and clinic visits at weeks 1, 2, to 4 and 8.

Because patients with anterior uveitis can permanently lose vision, subjects in this clinical trial who did not improve at ACC were rescued based on standard predefined rescue criteria. Rescue therapy consisted of medication selected and dosed at the clinical discretion of the treating physician.

Rescued patients were followed through the week 8 end of study visit. Now I'll move on to the study results starting with the main efficacy outcomes on Slide 12. NS2 produced clinically meaningful effects on anterior chamber cell counts abbreviated as ACC in anterior uveitis population.

This was seen both on the proportions of patients achieving a treatment response of grade zero for ACC and also on the proportions improving by at least one grade on ACC. These ACC treatment effects were comparable for the three treatment groups at most visits.

At the week 2 study visit, grade zero ACC treatment response was seen in 33% NS2 patients, 31% Pred Forte patients and 31% combination patients. And at the week 8 study visit, sustained grade zero ACC treatment response was seen in 40% NS2 patients, 46% Pred Forte patients and 44% combination patients.

For ACC improvement of at least one grade a successful response were seen in 53% NS2 patients, 46 % Pred Forte patients and 50% combination patients.

For subjects who did not respond to therapy, rescue medication rates during the study were also similar between NS2 and Pred Forte with rescue medication required in 20% NS2 patients, 38% Pred Forte patients and 25% combination patients.

Slide 13 indicates that for the last observation carried forward or LOCF population, the pattern of reduction in ACC was comparable among the three treatment groups. Although it is not shown here, it is worth noting that the response on anterior chamber flare was similar to the effects described for the anterior chamber cell counts.

As summarized on Slide 14, as you would expect from review of these data today, although the trial size is small and not formally powered, there were no statistically significant differences evidenced between the three treatment groups on any of these objective ophthalmic examination endpoints.

As you will see on Slide 15, NS2 was generally well tolerated in the anterior uveitis population and there were no safety concerns during the study, including ocular exams scores, intraocular pressure, corneal thickness and visual acuity. There was an increased frequency of ocular stinging and burning in the NS2 treated groups.

These types of adverse events are not uncommon with current topical ocular therapies. One subject in the NS2 group and one subject in the combination group withdrew for an adverse event of stinging. There were no serious adverse events. We have Dr. John Sheppard on the call with us today. Dr.

Sheppard is a leading expert in ocular inflammation and was a key investigator in this Phase II clinical trial. I would like to invite Dr.

Sheppard to comment on the impact of the anterior uveitis data as well as the previously released allergic conjunctivitis phase II data and what these data suggest regarding the novel mechanism of action of NS2 as a potential treatment option for ophthalmology patients..

Thank you very much Dr. Clark. To summarize what has been discussed with you this morning, NS2 has shown activity in line with that of a corticosteroid treatment in this anterior uveitis study. In addition, ocular allergy is extremely common in the United States affecting up to 25% of the population and ocular symptoms are by far the most common.

Uveitis is the third leading cause of visual disability in the United States due to its chronicity and onset in young patients. These effects in such a serious ocular inflammatory disease in addition the activity in the Phase II allergic conjunctivitis study the Aldeyra team reported earlier this year are indeed very impressive.

In both anterior uveitis and more persistent forms of allergic conjunctivitis, corticosteroid treatment is associated with significant adverse effects. It is notable that for example, NS2 has been dosed for six weeks in the uveitis population and two weeks in the allergic conjunctivitis patients with no change in intraocular pressure detected.

NS2 may therefore provide a real opportunity for clinicians to treat both anterior uveitis and though allergic conjunctivitis patients do require long term prophylactic treatment without the concern of intraocular pressuring patients and other adverse effects that we have recorded or steroids given to the eye such as viral reactivation, infection and the potentiating of healing defects.

As well as reporting moving forward with the aldehyde ophthalmology program development work in anterior uveities and allergic conjunctivitis these data also indicate that NS2 will be worth evaluating in additional ocular inflammatory conditions.

These indications include for example, populations such atopic conjunctivitis, the severe blinding form of ocular allergy as well as post cataract surgery inflammation..

Thank you very much Dr. Sheppard. We really appreciate your expert input on our program. I would now like to discuss our proposed clinical and regulatory plans for the development of topical NS2 in ocular inflammation summarized on Slide 16.

It is important to note that all of our clinical development is contingent on future discussions with the FDA and our ability to proceed further in clinical development will depend in part on the FDA’s requirements.

Based on the compelling Phase II results evidenced to date in allergic conjunctivitis and anterior uveitis, we plan to discuss both of these programs with the FDA focusing on the main clinical and regulatory components of the registration program for NS2 in both indications.

Subsequently we intend to file an IND for allergic conjunctivitis in the U.S. since the previous clinical program was conducted in Canada and proceed into late phase clinical development for both the indications.

In addition, based on the successful demonstration of clinically meaningful activity in two out of two ocular studies and with the encouragement from clinical ophthalmology experts, we are evaluating additional ocular inflammation Phase II trial design to present both in rare and common diseases. And now I will turn the call back over to Dr.

Brady for concluding remarks..

Thank you, Dr. Clark. While it is clear that non-infectious anterior uveitis and other ocular diseases are often treated with topical steroids, steroids can often lead to cataracts and glaucoma and other ocular complications that resolved in significant and costly morbidity.

Thus in ocular inflammation as well as in inflammation that affects other aspects of the body, there is considerable need for novel, non-steroidal therapies and today we have not observed corticosteroid like complications with NS2.

Now that NS2 has demonstrated activity in the two major forms of ocular inflammation, on Slide 17 we have summarized the potential indications for future development of NS2. There are many diseases where we believe NS2 may have clinical utility and in aggregate those diseases represent a significant number of patients.

For example, based on primary market research performed on our behalf, we estimate that there are approximately 1 million allergic conjunctivitis patients that are resistant to antihistamines, the mainstay of therapy in that disease and these patients require topical corticosteroids for effective symptomatic control.

Branded corticosteroid therapy on average may cost as much as $400 per course. Based on 2015 IMS data topical ocular corticosteroids represented approximately $1.5 billion in revenues, about 80% of which is derived from branded products.

Thus we believe that the current market for novel nonsteroidal anti-inflammatory medication for the treatment of ocular inflammation is substantial. I would now like to introduce Steve Tulipano to review our first quarter 2016 financial results.

Steve?.

Thanks Dr. Brady. For the first quarter ended March 31, 2016 Aldeyra reported a net loss of approximately $5 million compared to a net loss of approximately $2.1 million for the same period in 2015. Basic and diluted net loss per share was $0.51 in Q1 2016 compared to basic and diluted net loss of $0.32 in the same period of 2015.

R&D expenses were $3.5 million in the quarter compared to $1.1 million for the same period last year. The increase of $2.4 million is due to increases in our external research and development expenditures including preclinical manufacturing and clinical efforts and an increase in personnel costs.

G&A expenses were $1.5 million in Q1 2016 compared to $1 million for the same period last year. The increase is related to an increase in insurance costs, legal and personnel costs due to increased headcount. Cash, cash equivalents and marketable securities were $23 million at March 31, 2016.

Operator, we would like to open up the call to questions at this point..

Thank you. [Operator Instructions] Let me go ahead and take our first question from Ritu Baral with Cowen & Company..

Hi guys. Thanks for taking the questions. Congratulations on the data. I did want to ask about the combination arm.

Are you surprised there wasn't additive efficacy in the combination arm this study?.

Well, let me take – hey Ritu, thanks for your question, this is Todd. Let me take a stab at that and may be Dr. Clark can provide some color. In anterior chamber cell count you can't get better than zero. You couldn't have negative cells in front of eye.

So steroids essentially eliminate cells and I think what you're seeing in the data today that is shown NS2 and so does the combination arm. So it's hard to see synergy when there's a floor effect. I don't know, but David if you want to expand on that..

No I agree with that. I mean in essence the steroid dose which was chosen for the monotherapy group is within clinical guidelines as you would expect. We needed to use a steroid dose that was within standard clinical practice.

The dose of steroid which we described for the combination group, I mean it's substantially below the dose of steroid which is within clinical guidance, but we still saw equivalent effects. So I think that speaks to, by this positive an outcome as you could as Todd was alluding to as you would expect in this type of a study.

That was a positive outcome for the combination treatment group with regards the dose of steroid that was used..

That's an important point Ritu and I think the reason that arm, the combination arm was placed into the trial is because that's a sub-therapeutic dose of steroid.

No one would every treat patients like this with twice a day steroid, but the data are positive in a sense, but if you combine in as two with that sub-therapeutic dose of steroids they're still in effect equivalent of four doses of steroid. Obviously more important is NS2 monotherapy looks just like steroid as well..

Right, and the monotherapy sort of looks say equivalent to the sub-therapeutic plus NS2.

So, just as we look to the Phase II/III moving forward, do you do you feel that that combination arm would also be taken forward? I mean obviously that would support some sort of idea of steroid sparing, but since the NS2 and the prednisone arms are equal as it is how do you sort of look at that strategy?.

Well, we need to discuss this with the FDA, but based on our conversations with the key opinion leaders such as Dr. Sheppard we would probably not intend to take the combination arm forward. At this time of course that's pending regulatory discussion..

Understood.

And then final question, as you look at your side effect profile, do you have any detail on the grade of stinging that caused a withdrawal in the study arm and also what in larger studies what – I guess what more serious side effects would you be watching for just based on the mechanism, based on theory?.

So to take the second part of your question first, I think in larger follow on studies that we plan, one of the main focus is side effect wise will be the sort of to confirm that NS2 does not produce the sort of significance steroid side effects which are well recognized with topical steroids.

So we will continue to have the focus of that, because that is clinically meaningful for the patients. Regards our concern and the sort of the type of adverse event profile, there is a variety was mixed. It ranged from mild to severe for the burning and stinging. But the dropout rate was within what you see in this type of uveitis study.

So we weren’t concerned about it..

And just mechanistically is there any reason to believe that NS2 and aldehyde trapping would result in increased ocular pressure or cataract like developments in the eye?.

I mean we have no reason based and including a fairly extensive pre-clinical data sets, we have no reason to think that would be the case..

Understood, thanks for taking the questions..

Thanks, Ritu..

And we'll take our next question from John Newman with Canaccord Genuity..

Hey guys, this is Lydia on for John Newman. Congrats on the great data, but just a couple of quick ones.

In general, how long do patients have to be on steroids in order to experience the type of adverse events that you've been taking of for example, rise in IOP or induction of cataracts?.

So, Dr.

Sheppard would you be willing to take that question with your expertise?.

Yes, that's an excellent question. The role of the uveitis specialist and a general eye care specialist taking care of these patient is to one, produce as rapid a recovery as possible and two, do as little as side effects as possible. And central to that strategy is a steroid sparing strategy.

In the influence of a strong steroid like difluprednate or prednisolone acetate patients will development significant pressure spikes within six weeks and there is wide literature to document that. But if we now go through numerous studies over the past half century that this population is divided three ways.

5% of populations will develop severe pressure rises in as little as two weeks of topical corticosteroid therapy. About 30% of the population will develop a mild increase and the rest of us don't develop pressure rises. So within this uveitis population there is undoubtedly that the net predisposition distribution.

So I think certainly with this initial six weeks of therapy, we would have ferreted out at least that 5% to 30% of the population prone to developing pressure rises on corticosteroid therapy..

Got it and do you see the same percentage of population having these IOP increases in this trial?.

Those would have to be screened genetically. So we don't know genetics of these patients are in terms of susceptibility..

Got it, got it, okay thank you..

Yes, I was just going to add to Dr. Sheppard's answer. So we didn't - in this study we didn't see any evidence or concern over intraocular pressure increases with NS2..

All right, got it, thank you, so much..

Thanks..

And we'll take our next question from Roy Buchanan with Janney Montgomery Scott..

Hi guys, thanks for taking the question, nice set of data.

I had a few about, I guess your next plans for the studies, you guys have any plans for discussions with the European authorities?.

Good morning, Roy and thanks for your question. So yes, we would plan to discuss our program with European authorities. Our focus initially will be the FDA though as we presented this morning..

Are you going to await the outcome of the FDA discussions and then go to Europe?.

That's correct..

Okay, and then I guess another question is when do you think possible timing on starting these studies and kind of finance, will you finance from yourself, partner, what do you think that's ideally?.

So, we're thinking second half of the year, obviously regulatory discussions will precede the initiation of initial clinical trial and it is certainly feasible to obtain data next year..

Okay..

Steve, do you want to comment on the financing?.

So, I think we have enough flexibility in our budget as it currently stands that we could move forward in another Phase II in ocular, but we'll be advantages Roy whenever possible..

Okay, sounds good, thanks guys..

Thanks Roy..

And we'll take our next question from Yale Jen with Laidlaw & Company.

Good morning and congrats on the data back there.

Two questions here, first one is for the stinging, could you find out that in the conjunctivitis study as well also it was there in the way to sort of mitigate or reduce the impact for the [study]?.

So yes, it was also reported in the allergic conjunctivitis population, that is correct and we will be exploring with different formulation options whether we could impact this adverse event that is being seen in both of these studies..

I think it is important to note that stinging is a common side effect of ocular medication delivered topically. In fact, the eye is designed to keep things out of it and so there is often a stinging like response to foreign material.

The other complicating factor is that in both of these diseases, allergic conjunctivitis and uveitis, the patients are already in pain. So sometimes it is difficult to distinguish the pain derived from the disease itself versus pain from installation of eye drops. We've been in discussions with Dr.

Sheppard and others about the stinging and I can just tell you that the general consensus is lack of concern given the way ocular drops are perceived by patients..

Okay, that's very helpful and maybe just follow up a little bit on this which is that the details in terms of roughly 35% of the patients are more likely to have concerns in terms of the steroid impact.

Will those patients be in the next set of clinical study, will those patients be the preferred patients to start the study or you want to do for the entire [indiscernible]?.

So, I mean this will be subject obviously to really detailed discussion with the regulatory agencies initially the FDA. But our plan right now would be to continue forward with a similar population to the population of a study. So we would not right now plan to select out these specific patients with the steroid response..

Okay, great. And gain thanks and congrats on the good results..

Thanks Yale..

[Operator Instructions] We will go ahead and take our next question from [indiscernible]..

Hi thanks, first question is just a point of clarification for the patients who showed one grade improvement, first at what time point is that also at 8 weeks and then also does that also then include all the patients who ended up with a zero cell count at week 8?.

It does, the answer to that is it does and the figure we gave was the total who throughout the study had a one point reduction at any stage. So that would be the finger figure you achieved at the end of the study at week 8. And obviously the time that we achieved that one point reduction was a lot earlier than week 8..

Okay, second question, if you are thinking of taking this forward and based on this data let's say you designed this study is to demonstrate non-inferiority with two arms as you possibly suggested, what type of sample size enrollment are we looking at?.

The sample size for the pivotal program really will be one of the key outcomes of our discussions with the FDA which is why we prefaced our forward development plans that way. So it will depend on exactly what is the primary outcome measure they want.

But you can see from ongoing programs the sample size in the past has been approximately 50 patients per arm for a change from baseline in ACC and it had been just north of hundred patients per arm for some programs where you focus on number of patients who have to achieve a treatment grade of zero.

So it depends on some factors which we will be discussing with the FDA..

Okay, and then finally, if we think about - if you had positive pivotal trial registration study and you take this out to the market based on the last slide in your presentation in the pricing that you show there what would you think about the pricing for NS2 as an alternative for steroids in terms of pricing, is it what you are showing on that sheet or more or how should we think about that?.

Well, good morning Kay [ph] it is Todd and thanks for the question, that's a good one. We're not prepared to comment on pricing for NS2 right now. This slide, Page 17 that you reference is a reference point for where other drugs have priced. I do think as Dr.

Sheppard alluded to in his comments that anti-inflammatory effect in NS2 without the corticosteroid like side effects is a major commercial opportunity. And one would think that the value of such medication would be in excess of where steroids are today including branded steroids and generic steroids.

But other than that I don't want to get too much more specific, I mean there are obviously a lot of patients in all these diseases on Slide 17 there is a tremendous medical need for an anti-inflammatory without the side effects that are manifested in steroid therapy.

And if you combine all that together, I think the market for NS2 and like drugs is substantial..

Okay, thank you..

Thanks Kay [ph]..

And then if there are no further questions at this time, I'd like to turn the conference back over to our speakers for any additional remarks..

Well, thank you all for joining us today and we look forward to following up with a group of your afterwards. Take care..

And that does conclude today's conference. Thank you for your participation. You may now disconnect..