Jim Brown - President & CEO Matt Hogan - CFO.

James Molloy -.

Greetings. And welcome to the DURECT Third Quarter 2015 Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to turn the conference over to your host, Matt Hogan..

Welcome to our third quarter earnings call. This is Matt Hogan, the CFO with DURECT. This call will begin with a brief review of our financial results and then Jim Brown our President and CEO will provide an update on our business. We will then open it up for Q&A session. Before beginning, I would like to remind you of our Safe Harbor Statement.

During the course of this call, we may make forward-looking statements regarding DURECT’s products and development, expected product benefits, our development plans, future clinical trials or projected financial results.

These forward-looking statements involve risks and uncertainties that can cause actual results to differ materially from those in such forward-looking statements. Further information regarding these and other risks are included in our SEC filings, including our 10-Q under the heading Risk Factors. Let me now turn briefly to our financials.

Total revenue was $4.7 million in the third quarter of 2015 compared to $4.3 million in the third quarter of 2014. Excluding all deferred revenue recognized for upfront fees from our agreements, revenue from our R&D collaborations was $1.9 million in the third quarter 2015 as compared to $1.7 million in the third quarter last year.

Revenue from this source always fluctuates from quarter-to-quarter depending on the state of development under the various programs and our role on those programs. Product revenue largely from the sale of ALZET pumps and LACTEL polymers was $2.7 million in the third quarter of 2015 as compared to $2.5 million in the third quarter 2014.

Our gross margin on these products was 67% in Q3 2015 and these product lines continue to be strongly cash flow positive for us. R&D expense was $6.7 million in third quarter 2015 as compared to $5.5 million in Q3 2014. SG&A expenses were $3.2 million in the third quarter 2015 as compared to $3.1 million in the comparable quarter last year.

Our net loss for Q3 2015 was $6.5 million as compared to $7.1 million in Q3 2014. At September 30 2015, we had cash and investments of $32.4 million, which compared to $34.9 million at December 31, 2014. We have $19.7 million of long term debt. Our cash burn rate in the third quarter was $5.4 million.

I just like to make one last comment which is on the housekeeping front. We plan to file our 10-Q tomorrow and at the same time we’re going to file for our new shelf registration statement for 125 million and as a subset of that have an additional 40 million available under our ATM facility.

Our shelf would have expired in little over year and once it is clear and effective it will have a new three year life. From a logistical and cross standpoint, we are more efficient to do these types of filings at the same time as there are other SEC filings like a 10-Q.

With that, thanks again for joining the call and I'd like to turn it over to Jim to go through the rest of the business..

Thank you, Matt. We made significant progress on multiple programs since our last earnings call. I will now highlight some of that progress focusing on our most important development programs. I'll start with DUR-928 and our epigenomic regular program.

I will then cover our later stage product candidates that are pursuing the 505(b)(2) root for approval. The discovery of DUR-928 is a potential major advancement for medicine. DUR-928 is the lead module from DURECT's epigenomic regulator program.

It is an endogenous small molecule, the first in a new family of newly discovered endogenous sulfated oxysteroid. DUR-928 is an epigenomic regulator of lipid homeostasis, inflammation and self-survival.

No toxic effects have been seen to date in the preclinical toxicology studies conducted, and we have not seen any safety signal in the Phase 1 studies we have conducted, despite achieving plasma concentrations of DUR-928 that were 500 times than normal endogenous levels in the subjects tested.

We're pursuing two distinct programs with DUR-928 and oral program is targeting chronic metabolic diseases and an injectable program is targeting acute organ injury. Today we have two announcements regarding DUR-928, the first is our reporting positive data from an important animal model of lipid metabolism.

And the second is positive results from our Phase 1 injectable study. Turning to the data from the latest animal model was DUR-928 and its effect in leptin deficient rat model. With the positive results from this study, DUR-928 is now demonstrated positive effects in eight different animal models.

This study was conducted by a contract research organization in Southern California. This study demonstrated that DUR-928 provided protection against fat accumulation in liver, of animals that are genetically predetermined to accumulate fat in their livers.

In my opinion the remarkable results from this trial are that DUR-928 was able to reverse the damage and notably improve liver morphology in these genetically deficient animals and this was accomplished by dosing DUR-928 for only three weeks. In this study leptin deficient Zucker rats are given a normal diet for 11 weeks.

These rats then weight about two times more than normal rats of a similar age and their livers have accumulated a substantial amount of fat. These rats are then treated with varying doses of where then treated with varying doses of DUR-928 or placebo for three weeks.

In this study dosing with DUR-928 significant reduced the hepatic, triglycerides, total cholesterol and free fatty acids. The liver morphology and lipidosis were also noticeably improved, which was consistent with biochemical changes.

The data from this leptin deficient rat model provides further support to the other chronic animal models and is further supportive of DUR-928's potential use against chronic metabolic disease. There are two important points to take away from today's data regarding the effective DUR-928 and the treatment of leptin deficient rats.

The first is that the effective DUR-928 was to reduce liver, cholesterol, triglycerides and free fatty acids and to restore liver morphology in a therapeutic rather than a preventative mode.

The second is the point of DUR-928 was able to repair the damage caused by the accumulation of lipids and the liver of these generically deficient animals after only three weeks of treatment. Our animal data are divided into two main categories, that is safety and efficacy.

Regarding safety and pharmacokinetic and toxicology study that have been conducted in mice, hamsters, rats, dogs and monkeys, DUR-928 has been found to be safe at all doses tested to-date. These non-clinical results supported the initiation of DUR-928 in human safety trials.

Regarding efficacy, the biochemical and biologic activity of DUR-928 has been demonstrated in eight different animal disease models involving three animal species. Four of these models represent chronic disorders of liver lipid accumulation, lipid dysfunction, inflammation and fibrosis such as what is seen in NAFLD and NASH.

And four of these models represent a Q-Toxic or ischemic organ injury demonstrated in the liver, kidney and the brain.

In the pharmacology studies, supporting the chronic indications, DUR-928 has demonstrated improved liver morphology and reduced liver triglycerides and cholesterol in high fat diet fed mice - mouse models and in high fat diet fed hamster models and after only six weeks of treatment.

We’ve also seen reduced fibrosis and NASH activity scores in a mouse NASH model with four weeks of treatment. And today we announced improved liver morphology and reduced liver triglycerides free fatty acids and cholesterol in the genetic model of leptin deficient rats after only three weeks in treatment.

In the pharmacology study supporting the acute indications, DUR-928 demonstrated an improved survival after injury from Acetaminophen and ethanol toxicity in mice, improved survival from exposure to endotoxin in mice and reduced ischemic injury in the kidney model and in a stroke model in rats.

In March we reported results from our initial Phase 1 safety study and in May we announced results from the multiple ascending dose Phase 1 study. Both of these used oral administrations. They were single site randomized double blind and placebo control studies.

The single ascending dose trial was conducted in 30 subjects and the multiple ascending dose in 20 subjects which had daily dosing for five consecutive days. The high doses resulted in plasma levels that were had a minimum 100 times higher than the endogenous levels.

And DUR-928 was well tolerated at all doses, there were no severe or serious drug related adverse events. There was no accumulation in plasma concentrations observed with the repeated dosing and dose related increases in plasma concentrations were observed with peak plasma concentrations being achieved at two to six hours after dosing.

Today we are reporting positive results from our single site randomized double blind placebo controlled single ascending-dose study of DUR-928 when injected. This study was conducted in 18 subjects consisting of three cohorts. The high doses resulted in plasma levels that were 500 times higher than the indigenous levels found.

DUR-928 was well tolerated at all doses and there were no treatment related diverse events. We're now moving on to the multiple dose Phase 1 trial with the injectable formulation which will start shortly. We’re pursuing two therapeutic programs for DUR-928 the first is for acute organ injury and the next is for chronic liver disease.

The DUR- 928 acute organ injury program will use our injectable formulation. The initial indications of interest are acute kidney injury, acute liver failure, as well as ischemia/reperfusion injury. These indications each include potential orphan indications.

In support of animal models for these indications are from the mouse and Acetaminophen and ethanol exposure, as well in mouse endotoxin exposure, and in the rat renal ischemic reperfusion injury and the rat stroke models. The DUR-928 chronic liver disease program will use our oral formulation.

The initial indications for our chronic used program are non-alcoholic fatty liver disease, as well as non-alcoholic steatohepatitis, additionally there are multiple orphan indications we plan to investigate.

The support of animal models for these applications are in the mouse for high fat diet studies, and in the hamster, the high fat diet model as well, as well in the mouse systemic NASH model and most recently in the rat leptin deficient rat model. The multiple dose injectable Phase 1 study will begin shortly.

Initial trials in patients are set to begin in 2016 in multiple patient populations. We have been working with KOL’s very closely over the past six months to define the patient studies we plan to conduct in 2016. We will provide more color on the initial trials in due course once we've finalized our study design. I will now move to POSIMIR.

First what's the reason for the name change from POSIDUR. Turns out as routine matter, the FDA considers proposed product names and to reduce the potential for any confusion in the marketplace. The FDA indicated that they had concerns about POSIDUR and that is the reason for the name change.

POSIMIR has passed the initial confusion assessment although it will have to be reconfirmed at the time of approval. But for now it's POSIMIR. As we reported last quarter that we wrapped up our discussions with the FDA and its settled down path forward for POSIMIR. Since then, we have been gearing up to start the PERSIST trial, that's P-E-R-S-I-S-T.

PERSIST is Phase 3 trial consisting of little over 300 patients undergoing laparoscopic cholecystectomy or gallbladder removal. This will be randomized parallel group double blind placebo control multi set of trial conducted in the United States.

The primary efficacy endpoint will be paying intensity on movement over the first three days after surgery. We believe the data from this trial would be confirmatory of the data we’ve seen in our hernia repair and shoulder surgery pivotal trials and that these three surgical models will support a robust NDA resubmission.

There are number of reasons we like the surgical model and the trial design. Laparoscopic gallbladder removal is one of the most common general surgeries performed in United States each year. There are about 800,000 procedures for a year mostly conducted on our outpatient basis.

With the trend towards less invasive procedures wherever possible, this would give us an additional efficacy data in a laparoscopic surgical procedure.

Lastly our confidence is based on the positive experience we've had with laparoscopic gallbladder removal in a previous 50 patient study comparing positive to bupivacaine hydrochloride and using the same statistical methodology we will employ in our new study.

We saw roughly 25% pain reduction over the first three days after surgery with the P value of 0.0235 and this was against an active competitor. In terms of timing we have been signing up and trading our clinical sides that we’re announcing today that we begin recruiting patients. We believe that it will take about a year to grow the trial.

After the last patient enrolls, we believe it will take a few months to get the topline data and then a few moments to finalize the reports and prepare the NDA resubmission, after resubmission there will be a six month review prefect PDUFA guidelines.

What are some of the differentiating features that this resubmitted NDA will have? First of all, the NDA is planning to include efficacy data from three common surgical models, we will have hernia, shoulder, and gallbladder. We’ll be aiming to be the first product to demonstrate efficacy and laparoscopic procedures.

We’ll have our superior duration of action that is three days. Our stable formulation allows for dosing 660 milligrams about 2.5 times more than other bupivacaine products.

No other product in this space is demonstrated clinically meaningful efficacy beyond 24 hours, we also have our simple and rapid administration directly into the wound individual supervision. This puts more drugs closely aligned to the impacted nerve and also facilitates the use in laparoscopic procedures and port procedures.

We often ask where are we with regard to partnering this program. There is strong interest in the program from multiple parties. The interest in POSIDUR is driven by the substantial market opportunity for a two, three-day postsurgical pain product that has the potential to meaningfully reduce opioid use.

We would like to reiterate a couple of principles. First, we're not letting our licensing discussions slow down our plans to conduct this trial. We view POSIDUR as a very valuable asset as such we are open to partnership if the turns are commensurate with the value. I now want to move onto REMOXY.

On July 23, Pain Therapeutics provided an update on REMOXY and I would like to repeat a few of the things that they said. First, they're focused on the NDA resubmission and have substantially completed the transition of REMOXY from their formal partner.

Second, they've received - recently assessed the long-term stability of REMOXY and found that stability testing at 12 months was within the specifications. Third, they earlier had announced positive topline results from a human abuse potential study with REMOXY.

This study demonstrated with statistical significance that both intact and chewed REMOXY "were less liked" that's in quotes, than immediate release oxycodone on the two primary endpoints and those endpoints were drug liking and drug high as determined by non-dependent recreational users.

Fourth, Pain Therapeutics stated that their previous partner had reached a written agreement with the FDA on the specific content of an accessible NDA resubmission and that Pain Therapeutics had recently received written confirmation from the FDA that this key regulatory document remains valid and applies to their NDA resubmission.

Lastly, they reiterated an expectation of resubmitting the NDA in the first quarter of 2016. After resubmission there will be a six month FDA review and as such we look forward to the potential approval of REMOXY in 2016.

Although there are number of products and development, to-date no new control release abuse to turn oxycodone product has been approved, and the current estimate for resubmission would mean that REMOXY would be eligible for approval in the third quarter of 2016, so potentially a year from now we can have our first product on the market. The U.S.

sales of oxycodone were about $2.4 billion last year, so it's a very large market opportunity and REMOXY has the opportunity to be a highly differentiated product. REMOXY takes a straightforward approach to abuse to turns, but not requiring a second agent to be added. It's an oral gel cap that is highly viscous.

It isn’t just another tablet that maybe a bit harder to crush. Even after crushing REMOXY's viscosity makes it practically impossible to inject through a needle, nor can one physically snort it. If one mixes it with common drinks in an attempt to release the drug more quickly, the oxycodone does not burst out.

So we believe REMOXY has the potential to be a best-in-class product providing the pain relief you would expect for legitimate chronic pain patients, while deterring multiple common modes of abuse. As a reminder, we have seven patents issues that go out at least into 2031 and we will receive a royalty of 6% to 11.5%.

So even if the sales ultimately peak in the $300 million to $400 million range at about $2.4 billion market, our royalty streams would be quiet liquidate. Moving on to Relday. In late September, Zogenix reported positive results from their 60-subject Phase 1b multi-dose trial.

Risperidone plasma concentration in the therapeutic range were achieved on the first day after dosing and reached steady state levels following the second dose and consistently maintain the therapeutic levels throughout the four-month period of the trial.

Zogenix has stated the intent to seek a development and commercialization partnership and that they are well positioned to start Phase 3 once the partner is secured. If they do partner DURECT will receive a portion of what Zogenix receives.

We will receive also milestones payments for the end of Phase 2 meeting with the FDA and for the start of Phase 3. We feel Relday will be a nice product opportunity for treating schizophrenic patients.

In the earlier Phase 1 trial, therapeutic plasma levels were achieved on the first day of dosing followed by a control release profile over a four-week period.

Relday offers a simpler dosing regimen as compared to the current therapies because the patient would likely not have to be wean off oral medications as they transition on to the long acting injectable.

Relday offers a simple subcutaneous injection rather than an IM and unlike some of the leading injectables in this category, with Relday there is no need for reconstitution prior to use. The market research on this product is quite positive and we look forward to potentially having another drug in Phase 3.

With that, we would be happy to take any questions you have..

[Operator Instructions] The first question comes from Annabel Samimy. Please go ahead..

Hi this is Andrew in for Annabel. I just had a few question first on 928. You mentioned before I think in your previous call that you were looking for a buyer market to aid in the utility of 928, any updates there and when do you plan on initiating this second Phase 1 study for 928 the injectable.

And I have another couple of questions on POSIMIR start of that..

Sure. First of all with regard to biomarkers there are number of biomarkers that we track both for liver disease we have seen in the animal models with reduction of ALT, AST we have seen reduction TNF alpha, IL-1, IL-6, COX-2 things like that.

And so there are number of inflammatory markers as well as biochemical markers and of course the cholesterol and the lipids in like that we can track to look for activity. And then with regard to starting the multi-dose injectable, that will be started shortly..

So by year end we can -.

Yes, that's our objective..

Okay, great.

And on POSIMIR when do you plan on securing the partner for that?.

It's up in the air right now we are talking to a number for people. As I said we're not letting that be a gaiting item, but there is a lot of interest as you can expect with the success with POSIDUR especially with them kind of getting back on track now with their - whatever was $59 million sales last quarter.

And they really are 20-hour or less product and true efficacy so we think our ease of application now requiring refrigeration two to three days and the fact that we will have much more significant surgeries than they are bunion and hemorrhoid. We think - we know it’s a very valuable asset and there is a lot of interest..

And will you be taking POSIMIR through resubmission or will that be the partner?.

It depends right now. I could see it going either way, but regardless if we partner, which there is a substantial good chance we could, we will still want to make sure that we control this to resubmission. We are not going to give up control of it. We have been through that few many times in the past with the other partner products..

And do you see yourself on direct commercializing this product or will the partner be taking on that roll as well..

Mostly like we will have a partnership in place for that, if we didn’t have nine to eight in the wings, that probably would be a different discussion point for us because one can see great success obviously with placebo with a much lesser product.

But we think that the value of nine to eight just we wouldn’t want to see that kind of dilution against nine to eight in order to launch this product..

Great, thank you..

The next question comes from James Molloy. Please go ahead..

Hi guys, thanks for taking my question. Just a quick follow up on a POSIDUR, I know that you are in discussions with the number of partners.

You guys able to frame how many partners that you are talking as there 100s coming through or couple three, I know with the stage of where they are and I know that Matt had said previously that it would probably be either someone near term perhaps or may be later when the data comes out either get it before the – progress too far long, - wait to see what the date I believe I'm hopefully - Matt had said correctly, can you please talk a little bit about that?.

Yes, we are in discussions with a number of partners it's not 100s but it's certainly is a good number. From a pharmaceutical standpoint it's about what you would expect I think - we have been doing this for many, many years. As far as the timing it really depends on the competitive nature of the discussion.

I mean you can sign something up by same deals get down, two weeks before the data are now. So I think it's all open, it will just depend on the market and how things go and also what’s happening within this various companies that we're talking too.

But there is a lot of interest, the marketplace has been well defined as we thought it would and even as I said earlier with the product that isn’t as good as it could be, look at the success out there.

So we think with something like POSIMIR where you get through the three days and its easier to apply, you can use it in abdominal surgeries, lot of laparoscopic surgeries, these things don’t for themselves really well for product it has to be injected around, you just simply can't cover the space.

And so with our product just quote in ones that you done it will take - if you could even do with some of other product, it will take you so long to inject themselves. So surgeons would be excited about doing it..

And then can you talk - thank you for that. Could you talk a little bit about the trial, trial for POSIDUR or any chance of speeding up there from one year.

And we are looking at first quarter 2017 for topline data, any chance that can move into 2016?.

I don’t think, I think right now we’re just projecting what we’re which is a year, at 300 patients so it’s lot of patients and we’re signing up – we’ve got a number of centers already signed up have gone through their initial training and all that. So I think we’ll be cranking along nicely but we’re just trying to be realistic..

Thank you.

And then on REMOXY, I know that PK obviously in the second quarter call referenced these FDA documents in confirmation to the FDA that you highlighted on the call earlier, have you guys seen this document, is it something that, you guys would see working to confirm the thing exist and all that and do you know where there maybe?.

I can’t confirm that exist - I guess I can, because we have seen that part of it. We have the right to see the CMC components of it. And so we have seen some of it and everything we’ve seen makes us feel very comfortable with this thing should be able to restate and should be approvable.

So that mean it is really - getting down to just few issues now, I mean the third time around there isn’t much left to continue to discuss..

Thank you.

Then maybe I know the PJ has very clear that they are not going to sell REMOXY themselves, it’s hard to judge when your own products would be licensed out but how about when you think they might be announcing the product?.

It is hard to say, I mean they think pretty close to the best, so you try best asking them..

But we think from our space, it is an asset that should be eminently partnerable.

It's a late stage asset, somebody under due-diligence can clearly look at the FDA correspondence all the data that has been gathered and it’s a big market, it’s $2.4 billion to $5 million even if there are few players that's a big market opportunity for late stage assets. So logic suggests they should be able to find a decent partner for that..

And while it is more credit than it was for headwind probably that went, we still have what we feel is really the lead, it is just a product with all the multiple methods almost everything that is out there just pressure existent in one form or another and so we are probably more than that..

Thank you.

Then last question, I know you have got a busy pipeline, have you guys thought to in-license any additional products yourselves?.

Unlikely, we have not started any effort on it right at the moment. We can’t feel like DUR-928 could be a family of products and indications in and of itself, so why look for something new to displace that. So I think our plan was with the assets we have..

Well thank you very much for taking the questions..

[Operator Instructions] The next question comes from [Adam Cohen] [ph]. Please go ahead..

Hi, thank you for taking my call. I do have a question about 928. So it being an endogenous compound can you tell us about its patentability what you hold right now and also is there possibility for other corporation to replicates similar analogue such as like Lipitor and Zocor something like that..

Well the pharma industry is ever invented right, so I will answer the second one first. That’s one of the reason why we kept it quiet for so long, we have been working on this for 4.5 years long before NASH was real popular thing to do and everything else and we have had a very active analogue program where we continue to.

It's actually one of our family of molecules, we have actually seven patent families going forward.

Although it's difficult to get a composition of matter, you are right for NASH recurring molecule you can get utility use of it therapeutic uses and whole host of them and we have just about everything we can conceive at, pretty good at getting patents here. We got way more patents and we do employee at this company.

So it’s been a legacy of our company and so I think we are in a very strong position with regard to patent opportunities..

I must add we have six patent families, which include pending applications and two granted U.S. patents. The U.S. patent coverage is to at least 2026 plus some eligible patent in terms of extension and adjustments and then of course the more recent filings we have a longer patent life than that.

So we try to be very diligent in a broadbased patenting strategy.

Even though as you rightly point out with endogenous molecules you can get the natural compound itself, you can get these patents on the front of the compound the pharmaceutical composition, the method of the treatment, the medical use, synthesis methods all those kinds of thing that’s what is going into our patenting strategy..

How is it manufactured?.

Its cholesterol based molecule. So it’s a pretty simple small molecule manufacturing process and we scale it up to one key level at GMP..

Okay. So Relday, that’s interesting because you can compare to Risperdal Consta, now a lot of psychiatrist are using Invega Sustenna right now because Risperdal Consta you have to refrigerate it and it's sort of clunky.

Do you have to refrigerate Relday?.

I don’t think so. I think the advantages of Relday is subcue and it’s like a cc or less. So it something that psychiatrist can actually do right in the office and it lasts not only just start working immediately, which is obviously a huge advantage what's out there. Then it last very nice kinetics for full month..

One issue with Risperdal Consta is, when you first put a patient on it, you have to wean him off his oral meds for the first couple of injections until he gets to the right steady state level, you don’t have that phenomenon with Relday..

And often times by the time patient presents to be switched over to an injectable kind of circumstances, often times the patients are being compliant and there is a lot of balance and so we have to kind of get them and bring them and give them a shot and then make sure they stay or get back on their orals can be a bit of challenge.

So in this case once we you can give them a shot they are going to compliant..

Some of your other products for example, the ORADUR-ADHD, I guess you are looking to prevent the abuse, but you also have to compete with stuff like Concerta and how would you work about being reimbursed because Concerta, I don’t if it is generic, but it is on the verge of becoming generic so what kind of reimbursement would you expect for something like that..

I think for that product what we are doing right now, we are actually partner Orient Pharma who are Phase 3 work right now in Taiwan and they are doing that work on their own dollar base and we will be recipients of their data.

So the advantages that we will have with our product it will be small capsule size, which is important especially for children.

We will have the abuse returns as you referenced and then its kind of all about what is the duration of activity and those kinds of things that gives you that activity, but then allows the children to go to sleep at the end of the day.

As far as reimbursement is concerned in the like, that's something that would be something that we would be in kind of close conversations with potential partners on and probably not strategically on a public phone, I wouldn’t think.

But you're right, there are certainly Concerta is in a position of going generic in the marketplace that they were shifting but that doesn’t mean there isn’t any opportunity for a new product to be able to present itself. .

Okay. Thank you very much. .

The next question comes from [Jeffrey D'silva] [ph]. Please go ahead..

Good afternoon, gentlemen. I’d like to circle back to positive, if I may.

We heard you over the last six to 12 months talk about how you wouldn’t really do a deal unless the terms were right and can you give us a sense? I mean, you’ve shared with us - there is quite a bit of activity, there are reasonably a large number of people who have shown interest in, it’s not just one or two people competing against each other but can you give us in general terms a sense of what you feel about the discussions and are you seeing preliminary indications of terms that would make sense to actually partner POSIMIR with?.

I think we are seeing preliminary presentation of terms but we don’t want to get into too many details, nor do we want to specify Jeffrey on timing as you know, that just puts the power in the hands of those to whom you are having your discussions with, with whom you are having conversations.

But as a broad outline, we would expect a meaningful upfront payment as a licensee and then we would expect that we would continue to run the Phase 3 trial as we don’t want any disruption too with a new person being deeply involved or trying to take it over.

We would expect a large milestone payment on approval and then would expect the royalty probably around 20%ish. Something like that and then set a series of sales based milestone something like that.

And lastly there was just an economic terms but I don’t think we want to do this unless the other party was somebody that we were confident we do a really strong marketing job with the product.

So, those are kind of the screens that somebody has to pass in order for us to complete the deal and we have talked in terms some of those terms with some people and if we completed one, we’re in the right ballpark for discussions..

Well, that’s very helpful. Thank you. I appreciate Jim that you can’t say too much but I just wanted to get a general sense of whether you were at least in the same ballpark as the people you’re talking to. So, thanks very much. .

Welcome, thank you..

There are no further questions at this time.

Would the Company like to make any other statements?.

I don’t think so but thank you for your interest. If any shareholder or possible investor ever has questions, please feel free to reach out to us. We would be happy to talk to you at greater lengths. So thank you very much for participating today. Thanks, bye..

This concludes today’s conference call. You may disconnect your lines at this time. Thank you for participating..