Lisa Wilson – Investor Relations Scott Tarriff – Chief Executive Officer Pete Meyers – Chief Financial Officer.

Ashley Ryu – RBC Capital Markets Myles Minter – William Blair Gregg Gilbert – Deutsche Bank David Amsellem – Piper Jaffray.

Good morning. My name is Leo, and I'll be your conference operator today. At this time, I'd like to welcome everyone to Eagle Pharmaceuticals' Third Quarter 2017 Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period.

[Operator Instructions] As a reminder, this conference call is being recorded, November 8, 2017. It is now my pleasure to turn the floor over to Lisa Wilson. Please go ahead..

Thank you, Leo. Welcome to Eagle Pharmaceuticals' third quarter 2017 earnings call. This is Lisa Wilson, Investor Relations for Eagle Pharmaceuticals. With me on today's call are Scott Tarriff, Chief Executive Officer; and Pete Meyers, Chief Financial Officer of Eagle Pharmaceuticals.

This morning, the Company issued a press release detailing financial results for the three and nine months ended September 30, 2017. This press release and a webcast of this call can be accessed through the Investors section of the Eagle website at eagleus.com.

Before we get started, I'd like to remind everyone that any statements made on today's call that express a belief, expectation, projection, forecast, anticipation or intent regarding future events and the Company's future performance may be considered forward-looking statements as defined by the Private Securities Litigation Reform Act.

These forward-looking statements are based on information available to Eagle Pharmaceuticals' management as of today, and involve risks and uncertainties including those noted in this morning's press release and our filings with the SEC. Such forward-looking statements are not guarantees of future performance.

Actual results may differ materially from those projected in the forward-looking statements. Eagle Pharmaceuticals specifically disclaims any intent or obligation to update these forward-looking statements except as required by law. A telephone replay will be available shortly after completion of this call.

You'll find the dial-in information in today's press release. The archived webcast will be available for one year on our website, eagleus.com. For the benefit of those who may be listening to the replay or archived webcast, this call was held and recorded on November 8, 2017.

Since then, Eagle may have made announcements related to the topics discussed. So, please reference the Company's most recent press releases and SEC filings. And with that, I'll turn the call over to Eagle's CEO, Scott Tarriff..

Thank you, Lisa, and good morning everyone. We had another quarter. Total revenue grew 67% year-over-year to $63 million for the quarter, and 75% to 190 million for the first nine months of 2017.

Bendeka market share rose to 97% in the U.S., driving record Bendeka royalty revenue of $41.4 million, surpassing our previous high of $35.1 million back in Q2. We expect Bendeka -- excuse me, Bendeka will continue to contribute significantly to our strong cash position as we see ongoing strength in the U.S. market.

At the end of the quarter, we had approximately $170 million in cash and receivables, an excess to an additional $100 million through senior secured credit facility. Our strong cash position allows us to invest in our pipeline, evaluate additional strategic opportunities, and return capital to shareholders when we believe it maximizes value.

We now completed the $75 million share buyback program that we announced in August '16. This summer we would repurchase an additional $100 million in shares. Given the strength of our commercial business and potential of our pipeline, we intend to begin buying shares again once we emerge from our blackout period.

I am pleased to announce that last week we received tentative approval for PEMFEXY, our ready-to-dilute pemetrexed IV formulation for the treatment of certain forms of non-small cell lung cancer and mesothelioma. Lilly prevailed in the IPRs which if upheld prevent generic entrants until 2022.

It is very important to note that our legal case differs distinctively from those generic cases; the generics laws by coping Lilly's product, by having to invalidate Lilly's main patent and failing to prove invalidity of that patent.

In contrast, we formulated PEMFEXY in a way that we believe does not infringe upon the Lilly patent and filed a 505(b)(2) application reflecting our formulation. There is a significant difference between litigating non-infringement, which is what we do, and relying solely on the invalidity arguments the generics were forced to argue.

Again, this is very important to note and we believe this defense positions Eagle to prevail where the generics have not been able to. Combined with our recent approval, our goal is to find a way to market PEMFEXY through our strengthened sales force sooner obviously than later.

Now turning to our pipeline, we remain confident in our Ryanodex portfolio. While our Ryanodex sales grew 29% year-over-year, we were hampered in the quarter due to the impact of hurricanes and seasonality, resulting in a decline in third quarter Ryanodex sales to 3.3 million compared to 5.2 million last quarter.

We expect sales of Ryanodex to revamp in the fourth quarter. As we discussed previously, we had our Type A meeting with FDA in September to discuss the status of Ryanodex for EHS subsequent to the CRL we had received earlier. The meeting ended without a final conclusion.

And FDA and Eagle agreed to an additional meeting which will take place next month. As you know, the negotiated drug development approach for exertional heat stroke is a hybrid model, which combine animal work with human clinical work. The division has raised questions about the appropriateness of the animal studies previously discussed with them.

We strongly believe in the relevancy and results of the animal models we have submitted. And this is the focus of our discussions with FDA. The outcome of those discussions will influence in part what additional human data may be necessary to complete our work. We will continue to update you as we learn more.

We continue to advance our work with Ryanodex in other areas as well. We announced positive results from the initial study in our 50 rodents to evaluate the effects of Ryanodex in an established rodent model of nerve agent induced seizures and seizure related brain damage.

We will continue to develop our animal research in collaboration with the military and the FDA with the expectation that indications like these are typically approved under the animal role. Regarding our efforts with Ryanodex for ecstasy and meth intoxication as we have previously stated, our recruiting is going slower than planned.

We are working on opportunities to mitigate the situation and will update you as appropriate. As we work to evaluate the potential new indications, I am pleased with the progress made that may soon allow us to deliver Ryanodex as an intramuscular injection. We will also provide more detail on this in the coming months.

I'll wrap my comments on Ryanodex reminding you that the patent office recently issued another patent for Ryanodex directed to method of treating non-normothermia associated with recreational drug use utilizing our formulation. This brings the total number of Ryanodex patents expiring from 2022 to 2025, now to 7.

We believe in the potential of Ryanodex. And we will continue to secure the longevity of the portfolio as we advance our developments efforts in multiple additional indications and new administration routes. As we look at other product candidates in our pipeline, we have a lot to be excited about.

With the fulvestrant IND now filed, we expect to start dosing patients around Thanksgiving with the last patient being dosed around the end of April '18.

We have been spending the last few months refining our development program and are pleased to announce that we can deliver the drug with a 23-gauge needle, which is 25% thinner than the current needle used to administer Faslodex. You'll note that the larger the gauge, the smaller the needle.

By the way of comparison, 22- to 25-gauge needles are typically used to administer the flu shot. And again to remind you, we are at 23-gauge needle. Faslodex a much higher viscosity drug requires administration in a larger 21-gauge needle.

As a reminder, Faslodex requires two deep intramuscular injections into each buttock over the course of 1 to 2 minutes each. This is a very painful monthly procedure which has been associated with adverse reactions at the inject site. As such, a cautionary label is required by FDA.

We believe we now have a product that will have multiple benefits compared to Faslodex and may not need the warning and precautions label regarding injection site reactions when administered in our version. Our formulation will deliver the recommended dose in one 5 ml low viscosity injection with a smaller needle and in less time.

We are aiming to file an NDA by the early fourth quarter of '18 and to qualify for new J-code just like we did with Bendeka. As we look ahead, we are encouraged by the long term drivers of value in the business.

With Bendeka, we have a commercial product in the United States that leads its market and has once again delivered record royalty revenue for us. To protect this longevity we have become to venture outside of the U.S. where we see a significant marketing opportunity.

The strategic licensing agreement we secured with SymBio Pharma in Japan not only provides us with a $12.5 million upfront payment but also positions us to add significant value in 2020 and beyond. The Japan patent office has issued two Bendeka patents and allowed two additional Bendeka patent applications.

Indentifying additional opportunities outside the U.S. is a priority. And we hope to do more deals like this for all of our products in the future that will continue to bring value into the company over time. With our robust pipeline, we have multiple products with promising development timelines and commercialization potential.

These include PEMFEXY, fulvestrant, and multiple additional potential indications for Ryanodex including as a treatment for nerve agent exposure. Coupled with both our strong earnings and cash position which provides us with the necessary resources to execute our plans, we have a lot to be excited about as we look out beyond 2020.

With that, I'll turn the call over to Pete Meyers, our CFO, to update you on our third quarter results.

Pete?.

Thank you, Scott. For the third quarter of 2017, our revenue totaled $63 million compared with $37.8 million in the third quarter of 2016. The revenue mix consisted of product sales, royalty revenue, and upfront payment from our licensing agreement with SymBio.

Overall, total net product sales reflecting all Eagle products were $6.9 million during the quarter, A year-over-year decline of approximately $900,000 due to lower net sales of Bendeka partially offset by higher net sales of Ryanodex.

As Scott mentioned earlier, our third quarter Ryanodex product sales were $3.3 million, up 29% on a year-over-year basis. Year-to-date, Ryanodex product sales are up 65% over the comparable period in 2016.

On a sequential basis, the IV [indiscernible] market and dollars was down 24% in the third quarter due to normal hospital seasonality for the molecule, hurricanes in Texas and Florida, and [indiscernible] reorders. However, Ryanodex dollar market share rose from 44% in the second quarter to 54% in the third quarter.

And Ryanodex unit market share rose from 23% in the second quarter to 30% in the third quarter. Again as Scott mentioned, we are expecting an improvement in the fourth quarter.

Royalty increased to $43.6 billion compared to $26.2 million during the third quarter of 2016 reflecting increased Bendeka market share on Teva sales augmented by an increase in Bendeka royalty rate from 20% to 25% upon receive of the J-code.

We recorded a $12.5 million upfront payment from SymBio upon execution of our licensing agreement compared to $3.8 million in milestone revenue during the third quarter of 2016. On the expense front R&D expenses for the third quarter of 2017 were $9 million compared to $3.2 million in the third quarter of 2016.

The increase is due to continued spending on the company's five points and then particular our focus in Ryanodex ecstasy and methamphetamine intoxication and bendamustine projects. We expect our full-year 2017 R&D expense will be consistent with the operand of a $31 million to $35 million range.

This reflects ongoing expenses for the enrollment of Fulvestrant and Ryanodex ecstasy and methamphetamine intoxication clinical trials. Excluding stock based compensation the R&D expense is expected to be $27 million to $31 million to 2017. SG&A was $16.7 million for the third quarter of 2017 compared to an $11.7 million in the prior year quarter.

Personnel related expenses grew as a result of the expansion of our sales force in the second quarter of 2017. External legal expenses also increased due to ongoing litigation. As a result, we expect our full-year SG&A expense to be in the range of $67 million to $70 million slightly higher than previous guidance.

Excluding stock based compensation and other non-cash items. SG&A expense is expected to be in the range of $53 million to $56 million. We may committed to control your expenses and are implementing a $10 million program to reduce our annualize costs. Earnings Before taxes in the third quarter of 2017 were $24.5 million.

The net tax expense for the quarter was $9 million and effective tax rate of 37% which brings us the third quarter 2017 net income of $15.4 million or $1.3 per basic and $0.98 per diluted share compared to net income of $12 million or $0.77 per basic and $0.73 per diluted share in the third quarter of 2016.

Adjusted non-GAAP net income for the third quarter of 2017 was $19.2 million or a $1.27 per basic and a $1.22 per diluted share compared with adjusted non-GAAP net income of $14.7 million or $0.95 and $0.89 per diluted share in the prior year quarter.

Our reconciliation of non-GAAP net income to the most comparable GAAP financial measures please sees the tables at the end of our press release. Our adjusted EBITDA of September 30, 2017 was a $111 million.

Our EBITDA converts sufficiently in the cash flow for example in the LPM period our cash flow from operating activities excluding the increasing net account receivable was $97 million.

For the nine months ended September 30, 2017 our adjusted EBITDA was $80 million than our cash flow cum operating activities excluding the interest, the increase in net accounts receivable was $62 million. Our LCM EBITDA of $111 million compares favorably to the $64 million and EBITDA generated in the year ended December 31, 2016.

This EBITDA growth is particularly noteworthy considering that the company earned $78 million in milestones during the LCM period in $50 million in milestones during 2016. We expected approximately $100 million and adjusted EBITDA for the year ending December 31, 2017 despite only earning $38 million milestone payments during the full-year.

During the quarter we repurchased $13.5 million worth of our shares completing our original $75 million share repurchase plan initiated in August, 2016. We expanded the program by a $100 million during the third quarter of 2017.

As of September 30, 2017 the company had $48 million in net cash in cash equivalents and $72 million in net accounts receivable, $46 million of which was due from Teva. With that, I'd like to thank you for your continued support and open the call for questions. Operator, please go ahead and open the line..

[Operator Instructions] We'll take our first question from David Amsellem of Piper Jaffray. Your line is open. Mr. Amsellem? [Operator Instructions] We'll take our next question from Randall Stanicky of RBC Capital Markets. Your line is open..

Hi, good morning. This is Ashley Ryu on for Randall. Thanks for taking my questions. Around the EHS, Scott, I know you mentioned in your prepared remarks that the meeting with FDA ended without a final conclusion.

Can you give us a little bit more detail around what the discussion [indiscernible] centered around like what FDA was proposing, basically did that end without a conclusion because of profitability [ph] disagreement over what they want you to do? Just trying to get a sense of what their position was in first meeting and what the follow-up meeting will be for..

Thank you, Ashley. So, we had our meeting. We can't really say more than we just have. We don't know the final outcome of these discussions, but we are having discussions with the agency. We did have our meeting back at the end of September, and we did not come to conclusion at that meeting. We have another meeting coming up in-person here shortly.

And I think we'll learn much more at that meeting. And at that point, we'll get back together if there is something material to report and then get back to everyone..

Okay.

And just around the DIH trial, how many patients have you enrolled thus far, and are you still kind of on track for your added enrollment?.

Yes. No, I'm sorry. As we just mentioned, we're running behind. We haven't recruited the patients at the rate that we expected to. We have a plan in place to mitigate that, that hopefully work mostly getting to more of these music festivals. It will go into next year. We won't wrap up this year at all.

And then, as soon as we get more progress and we see how our revised plan is going, we also follow-up with everybody that point as well..

All right, thank you..

Thank you, Ashley..

[Operator Instructions] We'll move next to Tim Lugo of William Blair..

Hi, Myles Minter on for Tim Lugo. Thanks for taking my questions, and congratulations on the quarter. My question surrounds the timeline in which we can potentially expect decision from your ongoing patent litigation with Lilly.

And what specifically gives you the confidence that you're operating outside of the patent [indiscernible] the composition of NASA [ph] that you're looking at, is this an indication of this, any color would be great. Thanks..

Yes, thank you for the question. So, in the case of the litigation on pemetrexed, the actual litigation started recently and so we'll just move through that process in the normal course.

Having said that, as we've mentioned earlier this morning and previously what we've done is we've reformulated the drug filed as a 505(b)(2) in the way that allows us to argue that our product does not infringe the Lilly patent that's been out of dispute all of these years.

And I think it's very important to note that the distinction here is that the generic companies are required since they have the same product filed as an ANDA. They were required to invalidate that patent, which obviously is much harder.

They were not successful with that, and it now appears that they're likely to be blocked from the market until 2022. In our case, we think we have a simpler, easier case; it's typically easier to argue not infringement than invalidity. And that's what we're doing.

And we believe we have a strong case and would just move forward again in normal course of activity in these situations and hopefully will prevail..

Okay, thanks for that.

And just a follow up out of FDA may be you're talking Ryanodex side, you mentioned that they had a little bit of trouble interpreting your animal models I'm wondering whether the same concerns would be transition to the right [indiscernible] efficacy and whether you can comment on that? Are you potentially going to change your models off the back of that meeting or how are we proceeding?.

I see, very good question.

The animal models are different by design because of the indications between all of them so there are no animal models for the ecstasy and meth that's all human clinical work so, one effect that and the nerve agent program is very different than the EHS program, so I don't believe there's any correlation and we also do not know what division that will be in at this point with the nerve agents.

And so, I can't find a correlation between the animal situations in EHS that has any spillover over to the other indications we're pursuing..

Okay, beautiful. Thanks a lot for questions. Thank you..

Thank you. Thank you very much..

And we'll take our next question from Gregg Gilbert of Deutsche Bank..

Good morning, Scott..

Good morning, Gregg..

I have just two; first is how do you plan to balance the use of your cash and cash flow between returning at the shareholders versus diversifying the pipeline on market portfolio? And secondly, maybe it's premature, but if you have any key milestones that could occur on your Biologic strategy over the next 12 to 18 months? Thanks..

Thank you, Gregg. Let me take the biologics first and then I'll turn the question over to Pete regarding the cash spend and the pipeline. The Biologics Group is actually turning out to be what we think is a really very positive acquisition by us on a number of trends.

We wound up acquiring a very talented group of people that are helping us not only on the work that we're doing in the Biologics Group which is a reason.

The main focus of why we acquired them but also in the other formulation work that we're doing here in the rest of the product line, I think as we outline our pipeline today, we made some pretty significant movement in the last reporting period, namely new routed administration for Ryanodex and then some of the work that we've done on fulvestrant and I created that group of there for some of that work which is wonderful combined with the talented team that we've always had here in our R&D team.

In terms of the actual Biologics business, we've been making some very good progress I believe in working on product candidates that will showcase the reason that we have acquired them.

I can't give you Gregg specific time frames on when we will be more news flow or announcements around that but we are very satisfied with the work they were doing in reformulating some of these Biologic products as invasion by the acquisition.

So I think over time you'll learn more but we do see this technology is really filling in nicely as you get beyond 20, 21, 22 as the next leg of our growth strategy, so we're pretty excited about what we've done so far..

Gregg, hi, it's Pete Meyers. Thank you for the question. We do indeed generate very substantial cash flow in our base business as mentioned earlier in the last 12 months, $111 million in EBITDA and we just translated into $97 million in cash flow and so we're quite pleased with the case flow generation.

We also feel that relative to the sector our balance sheet is somewhat under levered and, so we have to firepower.

We do review external business development opportunities particularly given are our potential to leverage our infrastructure in sales and marketing in the hospital stays so each opportunity does have to compete with a very compelling investment proposition which is the repurchase of our own stock..

Thank you..

[Operator Instructions] We'll take a question from David Amsellem of Piper Jaffray..

Thanks, and sorry, I missed the first go around, so just a couple of quick ones.

First can you just elaborate on what you think, you can do to boost enrollment in the Ecstasy and methamphetamine study any specifics there would be helpful? And then secondly in terms of the timing of the Fulvestrant filing I think you tighten it up to sort of later in the first half of '18 so little bit later on then what I think you're originally expected, so can you elaborate on that there anything there that we need to be aware of.

And then lastly just in terms of capital deployment and your aggressive and buying back shares but can you talk specifically about what you're looking at in terms of this Teva and other injectable assets that could be available for you? Thanks..

Thank you, David. So let's talk about the Fulvestrant timing first. We did talk around as you can tell today on the formulation a little bit and we're really pleased with the ability that we were able to wind up with a smaller gauge needle and so that was part of what we've been working on which we were pleased to report today.

If all goes, you stay with our forecast that we have internally we should be dosing our first patient here later this month which is wonderful.

We have a very aggressive time table and having patients recruited and we hope to get the last patient in around the able timeframe which would put it in a situation in early fourth quarter filing the NDA if we recruit on time and obviously we passed the study, so we're pretty excited with the path and the progress that we've made the opportunity seems to be very positive for us.

And I think the extra time that we spent taking up the formulation will probably pay off nicely by the time we get the drug to market.

In terms of the meth and the Ecstasy program what we've been learning is that we had forecasted a certain number of these music festivals to go to assuming that we would get the right amount of enrollment at each testable and we've been running below our schedule and that's a couple reasons.

We've had to some extent poor weather which doesn't help us either cooler weather or rainy weather that just unfortunately did work our way.

We've also had other competing drugs if you can believe there or not that people are using other recreational drugs in addition to instead of Ecstasy and meth and so that's reduced a little bit of the number of patients that we could recruit from and so what we've done to mitigate it is that we have just scheduled a wider amount of these music festivals to go to and potentially leaving the United States and going into some of these wave situations that exist around the world especially in warmer climates where we seem to have better uptake.

And so, a combination of just more sites and sites around the world we hope will pick things of course. We have some other ideas on how to bring patients into the study if this doesn't work. Let's roll out this new program that we have and then we'll report everybody how we've done.

In terms of capital deployment in the business development area, I think what we've done now here is we built a strategic asset in our sales infrastructure and our marketing infrastructure that quite frankly up until recently we didn't have.

We're very pleased with how Ryanodex for malignant hyperthermia has been performing and as we look to Q4 and beyond we think that we'll see an uptick that will all be very proud of and so we do have the sales force and even with an exertional heatstroke approval and some of these other products that we've been talking about we still believe we have room to give products to that sales force.

That we always have the ability at the right asset comes along to increase the size a little bit since we have the infrastructure in place and so we're looking as you can imagine for hospital based products that could be used with the sales force infrastructure that we already have but as Pete pointed out very appropriately buying back our shares is also a very positive way to return value to our shareholders..

David, if we and I just add to Scott's comment you can imagine in this environment we see a steady flow of external BD ideas. Given our existing sales and marketing restructure in a solid financial position there the hurdle rate of return is high as you can imagine. Number one, it does need to compete with the share repurchase.

Number two, you'll recall that we have retained a marketing rights to both Ecstasy and Fulvestrant and we internally here expect some very substantial returns from those opportunities and so we look at a lot of external BD, that the hurdle rate is high..

Thank you..

Thank you..

And at this time I would like to return the call back over to our host Mr. Scott Tarriff for any concluding remarks. .

Yes, well, thank you everybody for spending the time with us.

It was an exciting quarter, very excited about the company, pipeline seems to have quite a bit of potential that we're also obviously very excited about we're making strong inroads in bringing it to fruition and as we have more information to share with you we obviously will thank you again..

This does concludes today's Eagle Pharmaceuticals third quarter 2017 earnings call. You may now disconnect your lines, and everyone have a great day..