Guy Goldberg – Chief Business Officer Dror Ben Asher – Chief Executive Officer Ori Shilo – Deputy Chief Executive Officer, Finance and Operations.

Scott Henry – Roth Capital Vernon Bernardino – MLV.

Good day and welcome to the Redhill Biopharma Q3 2014 Financial Results and Business Highlights Conference Call. At this time, I would like to introduce to the conference, Redhill’s CEO, Mr. Dror Ben Asher and Mr. Ori Shilo, Deputy CEO, Finance and Operations. Before we begin, we will read from Redhill’s Safe Harbor statement. Please go ahead..

This conference call may contain projections or other forward-looking statements regarding future events or the future performance of the company. These statements are only predictions and Redhill cannot guarantee that they will in fact occur. Redhill does not assume any obligation to update that information.

Actual events, results or achievements may differ materially from what Redhill projects today.

Additional information concerning factors that could cause actual events, results or achievements to materially differ from those contained in the forward-looking statements can be found in the company’s annual report on Form 20-F and in its other filings with the Securities and Exchange Commission..

Thank you, Guy. And thank you Sarah and to those of you who are on our call live. Thank you for joining us. Today, we’ll review the status of our lead program as well as several important events that took place in the last quarter.

We’ll also set to upcoming corporate events, but first I’d like to refer to Ori for discussion of our third quarter financial announced earlier today..

Thank you, Dror. Good morning and good afternoon everybody. I’ll start with short overview for our financial results for Q3 2014 and we will be happy to take questions later on. During this quarter, we did not book any meaningful revenues.

For the first nine months of 2014, we had revenues of $7 million, mainly from the licensing transaction of RHB-106, our bowel preparation drug to Salix Pharmaceuticals back in February. In terms of operational activities during the third quarter, we had an increase in R&D expenses to $4 million, compared to $3.2 million in Q2 2014.

For the first nine months of 2014, we had meaningful increase in R&D expenses to $9 million compared to $5.5 million in the first nine months of 2013. The increase is mainly due to the ongoing Phase III trial with RHB-104 for Crohn’s and RHB-105 for H. pylori.

G&A expenses during the quarter were approximately $1 million, which is similar to the previous quarter while in the first nine months of 2014, we were about $2.9 million compared to $1.8 million in the first nine months of 2015. The increase was mainly due to the increase in personnel and in consulting services.

Operational loss for the quarter is $5 million compared to about $4.9 million in the previous quarter mainly due to the increase in R&D expense during the third quarter. For the nine months period, operation loss was $5.8 million compared to $7.3 million during the same period last year.

The decline in operational loss is mainly due to the $7 million revenues from the Salix transaction. In terms of cash position, we burnt about $5 million during the quarter, which $4 million on operation and $1 million on the position of storing new on quality growth.

Our cash position at the end of the quarter remains strong is $29 million in cash with no debt, which allows us to continue executing our R&D plans including three ongoing Phase III trials.

During the quarter, we acquired an option, it was the right of RP101 and Phase II on quality drug usefully decide to exercise the option, we will pay a total of $100,000 in cash as well as potential milestone payments and tiered royalties on net revenues, ranging from single digit to mid-teens once the product get to the market.

At this point, I will turn the discussion back to Dror..

Thank you, Ori. To refresh everybody’s memory right here, we are primarily focused on development of late-clinical stage orally administered treatment for gastrointestinal or GI and inflammation-related diseases including GI cancer.

In accordance with our multiple short-term goal, risk mitigation strategy and our primary therapeutic focus which I just mentioned, we are currently conducting in parallel three Phase III studies in the U.S. The first one is RHB-105 for H. pylori infection with top-line Phase III data expected in the second quarter of 2015.

The second Phase III study we’re conducting is with RHB-102 for gastroenteritis and gastritis with top-line Phase III data expected in the second half of 2015. The third is RHB-104 with an ongoing Phase III study for Crohn’s disease. So we are currently running three Phase III studies running in the U.S.

with three different products in three different gastrointestinal disease indications. Specifically, turning to this morning’s announcements regarding the FDA grants of Qualified Infectious Disease Product QIDP, Fast-Track designation under the 2012 GAIN Act, to our Phase III trial with RHB-105 for the treatment of H.

Pylori infection, we are very excited about this designation, we think it had a significant value to the product as a whole and by well background to this announcement H. pylori infection is a major cause of chronic gastritis, peptic ulcer disease and gastric cancer and has recently been named a qualified pathogen by the FDA under the GAIN Act.

The generating antibiotic incentives now are so called in GAIN Act. The fact is intended to encourage development of new antibiotic drugs for the treatment of serious or life-threatening infections. Approximately, two-thirds of the world population is infected with H.

pylori at some point during the lifetime and 3 million patients are treated annually in the U.S. alone to eradicate H. pylori. The potential market for H. pylori eradication therapies in the U.S. is estimated approximately $1 billion to $1.5 billion annually.

So return for this morning’s announcement, we announced the FDA has granted RHB-105, the Qualified Infectious Disease Product, QIDP designation under the GAIN Act, and basically this means that the designation allows for additional five years of market exclusivity in addition to existing exclusivity.

Fast-Track status which is an expedited development upgrade and a priority review status, which shortened review time for marketing application, one of the marketing applications has been filed.

With half of the targeted 120 patients already recruited in the ongoing RHB-105 Phase III study in the U.S., we currently expect top-line data from that study in the second quarter of 2015.

Previously, in August we announced that in order to enhance sophistical powering and expedite recruitment we increased both the number of subjects and the number of clinical sites participating in our H. pylori study. And we also announced that the FDA permitted us to pursue with RHB-105, a significantly broader indication than that of existing H.

pylori therapy. Those can typically target ulcer whereas our drug is targeting a first line treatment of H. pylori infection regardless of ulcer status, which is a broader, bigger indication.

Moving on to our second productive Phase III RHB-102, our once-daily oral ondansetron and in September, we announced the initiation of our Phase III study of RHB-102 for gastroenteritis.

The study is a randomized, double-blind, placebo-controlled, parallel group Phase III study, this will enroll 320 acute gastroenteritis and gastritis patients in the U.S.

Acute gastroenteritis for those who don’t know is an inflammation of the GI tract causing nausea and vomiting with potential worldwide market estimated to exceed $650 million a year. If approved for marketing by FDA, RHB-102 is expected to be the first ever 5-HT3 antagonist drug indicated for acute gastroenteritis.

We expect top-line data from this study in the second half of 2015. With regard to our third Phase III GI drug, RHB-104 for Crohn’s, the Phase III MAP U.S. study continues with all the 60 clinical sites already initiated in the United States and mainly but also in Canada and Israel.

Our team continues to work closely with the CRO, the sites that many other service providers involved in the study. The total number of planned clinical sites had been increased to also approximately 100 sites in the U.S., Canada and Israel as well as other countries. Redhill is an official sponsor of the U.S.

Crohn’s and Colitis foundation, the CCFA and our Phase III study with RHB-104 has been featured in CCFA Awareness Campaign targeting Crohn’s patients across the nation. We are currently looking to provide further details about the Phase III MAP U.S.

study in the first quarter of 2015 as we continue to learn more about the older order recruitment phase and the likely interim analysis and study completion time. RHB-104, I’d like to add is also being developed for multiple sclerosis with the recruitment of patients in the ongoing Phase II proof-of-concept MS study nearing completion.

Following the acquisition from Germany’s WILEX of MESUPRON in the previous quarter, Phase II proprietary orally administered uPA inhibitor targeting GI and other solid tumor cancer.

We announced in August, the last quarter, the third quarter, an exclusive option agreement with Germany’s RIZAPORT for the acquisition of another Phase II stage oncology drug called RP101. The RP101 is a proprietary first-in-class, heat shock protein 27 inhibitor. It’s administered orally and it may prevent the induction of resistance to chemotherapy.

It is called chemoresistance. It may maintain sensitivity of the tumor to chemotherapy and potentially enhance the patient’s survival. RP101 has been granted Orphan Drug designation for the treatment of pancreatic cancer by the U.S. Food and Drug Administration and the European Medicines Agency, EMA.

MESUPRON in RP101 are substantial additions to our clinical stage pipeline as we continue to advanced new and innovative therapy for inflammatory and gastrointestinal related diseases including gastrointestinal concepts.

In October, we announced together with our Canadian partners IntelGenX that we submitted a European Marketing Authorization Application, an MAA with our thin film migraine treatment to RIZAPORT, previously called RHB-103.

The marketing application in Europe was submitted in Germany with Germany being the reference states on other European Mutual Recognition Procedure for approval of drugs for marketing in the European Union.

Looking ahead through the remainder of the year, we expect to file a marketing authorization application in Europe with RHB-102, our once-daily oral drop for prevention of nausea and vomiting, and constipation following chemotherapy and radiotherapy.

We also continue our -- our strength should be in development activities in relation to partnerships for commercialization of some of our products. We continue to explore potential acquisition that fits our therapeutic focus on development and commercialization of late clinical stage GI and inflammatory related conditions including GI cancer.

I’ll now turn back to Sarah and we’d be happy to take any questions you may have..

Thank you, sir. (Operator Instructions) And we’ll now move to our first question state from Scott Henry of Roth Capital. Please go ahead..

Thank you and good morning. I guess starting out with RHB-104 in Crohn’s, do you have a sense of when we may see and I missed the beginning of the call, my apologies if you mentioned it, when we may see data from the U.S. or Europe trials in as well when we may see the futility analysis at that right point..

What we said earlier today is that we’re not in a position to make any strong decision because if we continue to rollout more and more sites in more and more countries, we currently have 64 clinical sites that has been initiated and as we continue to make various changes in order to expedite recruitment and work with organizations such as the CCFA, we learn more and more about the recruitment phase that we can expect, once all studies are up and running, which we hope to happen during the first quarter of 2015.

For the short answer, Scott, I apologize that I cannot elaborate more at this point is that during Q1, the first quarter of 2015, we will be providing guidelines towards timing of both the Data and Safety Monitoring Board, the interim analysis of the study and the overall likely completion time for the study as a whole.

We may be able to provide that guidance earlier than Q1 2015..

Okay, thank you, that’s helpful. I will look forward to that.

In R&D spending, how should we think of Q3 relative to Q4 going forward, should we expect to see an increased ramp in Q4?.

Yes, I would say that we expect to have a moderate increase in Q4..

Okay and writing that down, when you think, I mean that the pipeline has really, you made a lot of progress in the past year, you’ve brought a lot of products in, I mean are you starting to run out of capacity to take on new products or I’m just wondering how much bandwidth you had left at this point?.

Yes, thanks Scott. It’s a two-way treat really, one part of RHB-106 was already out licensed to Salix and Salix is running with it, you recorded they put a lot of emphasis on the product making big effort and we hope to see some significant progress there.

In this RHB-106, the bowel prep, we do not have to invest anymore resources therefore it’s outside of current spending plan.

In addition, we announced that we are looking to out license as a high priority, RHB-103, RIZAPORT for migraine, because this is a non-core product, it’s not GI, not inflammation and we will account on the partner to commercialize it.

So there, we pick it as last completed the investment of internal resources except pretty moderate expenditure moving forward, nothing that’s too meaningful. So those are two products that are in a way outside, our current expenditure to allow us that.

Then we acquired a couple of oncology GI drug, operating GI in other solid tumor cancers and those are product that we believe should be eligible for a significant research grant and we are very careful how much resources we will be dedicating to them.

We think those are indications such as pancreatic cancer, this may qualify for all sorts of assistance, both on the regulator and also government agencies. So to summarize, most of our resources right now are going for three Phase III studies that we listed earlier RHB-105 for H. pylori.

This study is about to be completed in the second quarter of 2015, RHB-102, which is not a very expensive study in gastroenteritis, with those are expected in the second half of 2015.

We have resources to complete both of these studies effectively, and the third and longer and bigger study RHB-104 for Crohn’s, for which significant investments have been made already, I hope this answers your question..

That is very helpful. And just a final question and I’m not sure if you touched it on earlier, but RHB-103, when will we expect to see final approval in the U.S. and then when would you target a launch, obviously you needed a partner there as well..

Thank you, Scott. So to refresh everybody’s memory, we filed a new drug application in 2013. We received the complete response letter focused on factoring issues. In February 2014, the main issue that currently delays eventual approval is discussions between the raw material, the active pharmaceutical ingredient, manufacturer and FDA.

That’s a particular active pharmaceutical ingredient manufacturer was found in an FDA inspection to have a significant deficiency which are in the process of being corrected. The control of Redhill over that process between FDA and that party is minimal if any.

However, we are optimistic about eventual compliance of the API manufacturer for FDA purposes and we are also doing whatever is under our control to secure a second alternative API (indiscernible) so one of those should be able to provide us to we’ve lost the remaining issues, we will see if hopefully in the coming months and your PDUFA date that will lead to eventual approval all goes well.

So generally speaking, we were speaking that we will not have a PDUFA date before the coming month..

Okay, thank you for the color and thank you for taking the questions..

Thank you, Scott..

Thank you. (Operator Instructions) We’ll now move to our next question from Vernon Bernardino from MLV. Please go ahead..

Hi, Dror and Ori, thanks for taking my question.

Scott asked my question about one of the three and you answered it about the manufacturer and so you are pursuing other manufacturers, but you have nothing to as an update right now, but just wondering if you could provide a little bit of insight into your discussions with FDA, for example as to whether it’s just a matter the current manufacturer is getting expected and having their paperwork and what exactly are still the items that needs in the box that still need to be checked off before the FDA can provide a PDUFA date..

Thank you, Vernon. One thing that I’d like to emphasize about the raw material manufacturer and the issues that they are having with FDA compliance is that the deficiency that they received are not specific to RHB-103 or RIZAPORT. The deficiencies that they received applied to processes that govern dozens of products that are being sold into the U.S.

market and Europe and Canada and Australia and other jurisdictions. So there is nothing that we are aware of specific to RHB-103 in the FDA’s deficiency. Secondly, it was mentioning that the same manufacturer and the same plants continue to sell as we speak into as our western countries and market with us and import all in some of those jurisdictions.

So FDA’s complete response letter was really almost all about packaging and manufacturing. The finished goods deficiencies were pretty minimal; we believe we are resolving them satisfactorily, so we are really left effectively with the API, the raw material issue that is being resolved as we speak.

It will – it may take several more months especially since FDA needs to re-inspect the relevant facility, but we were not asked to do any additional clinical studies or anything of that so we consider the CRL, the complete response letter, a relative favorable one, did answer your question?.

Yeah, yes, it does and as a follow-up to that, I was just wondering, at one point, I know I mean estimates compares first projection of the market opportunity.

But at one point might if you want to consider actually just manufacturing yourself is possible and just going forward with that because it is possible that this manufacturer, it’s just going to continue to have problems and that’s the real market opportunity that is in no way your control?.

Thank you, Vernon and just to remind you the issues are not with the finished product so much, those are very minor. We’re talking about the raw material for the Active Pharmaceutical Ingredient, API only..

Yes, and so but we need, it’s the manufacturer of that API that is deficient and so that – their compliance and their pace of trying to be a compliance as that therapy, might it be something that will be interesting to just either terminate that or go in other manufacturer or manufacture yourself?.

Indeed, we have identified an alternative supplier, which we believe is compliant with FDA regulation and we are not just sitting, they are waiting for the existing raw material manufacturer..

Right, I know..

Yeah, and taking the active steps..

That’s very good, you can’t wait I’m certainly that usually it goes the wrong way, but also now going to, with regards to psoriasis how quickly is that trial enrolling if I may ask?.

Yeah, gastroenteritis study, the first site have been initiated, this was announced by a month and a half ago, we will be providing a recruitment update throughout the study, but we expect study completion in the second half of 2015..

And at that time you will be announcing some top-line data or just announcing that the -- all the dosing and enrollment has been completed?.

Hopefully, top-line data, if there is any delay, we will announce ahead of time..

Okay, thank you. Thank you for taking my questions or if you can -- heard me very well..

Thank you, Vernon..

Thank you. (Operator Instructions) And it appears we have no further questions at this time, sir..

Thank you, Sarah. I would like to thank all the participants for taking their time and for their interest in Redhill. We are here as a team, are available to answer any questions you may have and address any concerns you may have at any time.

We’re looking forward toward the end of the year with the expected events that I mentioned and we will do another call when we announce the full year results. Thank you again for taking the time and for your interest..

Thank you. That will conclude today’s conference call. Thank you for participation ladies and gentlemen. You may now disconnect..