Guy Goldberg - Chief Business Officer Dror Ben-Asher - CEO Ori Shilo - CFO.

Vernon Bernardino - MLV & Company Scott Henry - ROTH Capital Swayampakula Ramakanth - H.C. Wainwright.

[Calls Starts Abruptly].

Thank you. 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 to those of you who are on our call live today, thank you for joining us. Today, we will review the status of our lead programs. I will focus on the important short-term milestone. We aim to achieve by generating in mid-to-end of June this year, the Phase III top-line result with RHB-105 for the treatment of H. pylori infection.

In this respect, it is worth by mentioning here that we will be hosting an investor webcast forum on H. pylori and RHB-105 sometime in mid-May and we will circulate the full details of that webcast event in due course. But first, I would like to refer to Ori for discussion of quarterly results, which we announced earlier today..

Thank you, Dror. Good morning and good afternoon everybody. I will provide a short overview of our financial results for the first quarter of 2015.

In the first quarter of 2015, we did not record meaningful revenues compared to $7 million of revenues that we had in the first quarter of 2014, mainly from the licensing transaction of RHB-106 to Salix Pharmaceuticals back in February, 2014. R&D expenses bill in Q1 2015 was $3.8 million, compared to $1.7 million in Q1 2014.

The significant increase is mainly due to the three ongoing Phase III trials with RHB-105 for H. pylori, RHB-104 for Crohn's disease and BIKANDA for gastroenteritis and gastritis. G&A expenses during the first quarter of 2015 were steady in the range of $1 million, which is more or less the same range as recent previous quarter.

Operational loss for the first quarter of 2015 was $4.8 million, compared to operational profit of $3.3 million in Q1 2014. Operational income in Q1 2014 derives mainly from the $7 million revenues of the Salix transaction. Operational loss during the first quarter of 2015 is attributed mainly to R&D expenses.

Our operational burn rate during the first quarter of 2015 was around $3.3 million and is mostly related to increase in R&D activities. Cash flow for financing activities in the first quarter of 2015 was $13.2 million, mainly due to our first public offering in the U.S.

in February, 2015 with a total growth rate of $14.4 million with the participation of permanent investors, such AvMed, ROTH Capital and others. Currently, our cash position is strong, stronger compared to the previous quarter with over $32 million in cash, with no debt.

Our cash position should allow us to continue executing our R&D plan in the coming quarters, including the three ongoing Phase III trials. I will now turn the discussion back to Dror. And we will be happy to take questions later on. Thank you..

Thank you, Ori. By way of background, RedHill it is focused on development of late-clinical stage proprietary orally administered treatment for gastrointestinal or GI and its inflammation related diseases, including cancer. I will also add that our focus is increasingly on small molecules, which we find appealing in various respects.

We headed into the second quarter of 2015 with a balanced pipeline, including three ongoing Phase III GI program, gastrointestinal GI program, and two additional products for which we already filed marketing applications. We also have a number of Phase II stage oncology related development programs ongoing.

So, in accordance with our multiple short-term goals, risk mitigation strategy and our primary therapeutic focus on inflammatory and gastrointestinal diseases, we are currently conducting in parallel three Phase III studies in the U.S. in GI indications. The first, and the one that I will talk most about, is RHB-105 for H.

pylori infection with top-line Phase III data expected in mid -- end-of June less than two months away. The second is a BEKINDA, previously called RHB-102 for gastroenteritis and gastritis with top-line Phase III data expected in the fourth quarter of this year. And the third Phase III program we are currently running is RHB-104 for Crohn's diseases.

As I mentioned earlier, my focus today will be on the very near-term major milestone we are expecting to achieve in mid-to-end of June with the top-line Phase III results with RHB-105 for the treatment of H. pylori infection. This study is called the ERADICATE HP Study.

RedHill’s team and our various service providers are focused on executing the plan and on delivering the Phase III top-line results on time and in the best possible and professional manner. The RHB-015 program has a lot going for it. In terms of medical need, the H.

pylori infection is a major cause of chronic gastritis, peptic ulcer disease, gastric cancer and other types of diseases. It has been named qualifying pathogen by the FDA under the GAIN Act, which is intended to encourage development of new antibiotic drugs for the treatment of serious or life threatening infections.

In fact, approximately, two-thirds of the world population is infected with H. pylori during their lifetime and 3 million patients are treated annually in United States to eradicate H. pylori with a potential market of H. pylori eradication therapy in the U.S. estimated at approximately $1 billion to $1.5 billion a year.

In addition, FDA has granted RHB-105 QIDP, Qualified Infectious Disease Product, under the GAIN Act I mentioned earlier. This basically means that we have additional five years of market exclusivity if and when we reach the market on top of the existing three, for total of eight years marketing exclusivity.

This is more than an orphan drug and more than a new chemical entity because of the strong and unmet medical need. It also gives us fast-track status, development status, which is an expedited development pathway, as well as a priority review of the New Drug Application once filed.

FDA has also permitted ready to pursue with RHB-105 a significantly broader indication than that of existing H. pylori therapies. And this is targeting the first-line treatment of H. pylori infection, regardless of ulcer status.

Again, we expect to generate top-line results from our ERADICATE HP Phase III Study with RHB-105 in mid-to-end of June this year and this is a major event for the company. Moving on to another important near-term milestone, this one is BEKINDA, formally called RHB-102, once daily oral treatment for gastroenteritis and gastritis.

The ongoing Phase III Study with BEKINDA is called the GUARD study, it is a randomized, double-blind, placebo-controlled, parallel group Phase III study that will enroll a total of 320 acute gastroenteritis and gastritis patients, all of them in the United States.

Acute gastroenteritis is an inflammation of the GI tract causing nausea and vomiting with a potential worldwide market estimated to exceed $650 million. If approved for marketing by the FDA, RHB-102, BEKINDA is expected to be the first ever 5-HT3 antagonist drug indicated for acute gastroenteritis.

We expect top-line Phase III results from this study in the fourth quarter of this year.

It's also worth mentioning about BEKINDA that we have filed a marketing application in Europe for the oncologist support inductions of chemotherapy and radiotherapy-induced nausea and vomiting and expect regulatory feedback from the UK authority in the second half of the year.

The third ongoing Phase III study in gastrointestinal disease is RHB-104 in Crohn's disease. You may recall that RHB-104 is one of our flagship products; it is a potential paradigm changer for the treatment of Crohn's disease.

And the reason for that is that the RHB-104 targets the potential cause of the disease, the potential underlying cause of the disease as opposed to being only a symptomatic treatment. We believe the underlying cause of Crohn's disease is range of cellular mycobacterium avium subspecies paratuberculosis, which is called in short MAP.

The Phase III of RHB-104 is called MAP U.S. And the MAP U.S. study continues with nearly 80 clinical sites initiated and actively enrolling patients in United States, Canada and Israel.

Additional sites are in the process of being initiated in Australia, New Zealand and Europe for a total number of approximately 120 clinical sites, including those countries the U.S., Canada and Israel. The total number of patients in the MAP U.S.

Phase III study will be 270 and qualifying patients who are on anti-TNF drug, such as the Remicade and Humira are now included in the study, which significantly increases the potential pool of patients that are potentially eligible to enter the study.

Our team continues to work closely with the Crohn's & Colitis Foundation of America, the CCFA, our global CRO, the site and many other service providers that are dedicated and involved in this exciting global study.

In relation to the study, its worth mentioning that we concluded back in January together with Quest Diagnostics, our partner, a pre-submission meeting with FDA regarding the development part of a commercial companion diagnostic test for the detection of MAP in Crohn's disease patients.

Following that, the FDA meeting in January, a study of 40 Crohn's disease patients to access the clinical utility of the companion diagnostic MAP test has commenced and is now underway in the United States.

Its worth mentioning that RHB-104 is also being development for multiple sclerosis with recruitment of patients in the ongoing Phase II proof of concept study for MS nearing completion and top-line interim Phase II results expected in the second half of this year.

We continue our expensive business development activity in relation to partnerships for commercialization of some of our products. And in terms of acquisitions, our effort remains clearly within the RedHill's strategic focus on orally administered proprietary late-clinical stage gastrointestinal and inflammation related condition, including cancer.

In this respect, last month, we acquired exclusive worldwide rights to the Phase II stage drug candidate ABC294 from Pennsylvania based Apogee Biotechnology, a small privately-owned U.S. biotech company. ABC294 is a proprietary first-in-class orally administered SK2 Inhibitor with anti-inflammatory and anti-cancer activities.

It is targeting multiple oncology and inflammatory and GI diseases at Phase II clinical study with drug for lymphoma is planned to commence this quarter and will be largely funded by a grant from the National Cancer Institute in the U.S.

A second Phase II clinical study with the same drug for the treatment for multiple myeloma is planned, subject to funding by a pending grant from the National Cancer Institute. And a third Phase II study with this drug is being planned by RedHill itself in order to evaluate the drug.

It's a radio-protectant and radiation enhancer in cancer patients undergoing radiotherapy.

To sum up, we headed into the second quarter of 2015 with plenty of catalyst in the horizon and a balanced pipeline including three ongoing Phase III program and two product for which three marketing applications have been filed, as well as a number of Phase II stage oncology related development programs.

Our advanced stage development pipeline reflects both our strong and continued commitment to addressing strong unmet medical needs and our multiple shots on goal risk mitigation strategy. We are backed by strong healthcare investors and maintain a strong balance sheet allowing us to execute our plan.

In particular, we are excited, very excited about Phase III top-line results with RHB-105 for the treatment of H. pylori infection, which we are looking to generate and announce in mid-to-end of June this year, two months or so from now.

Again, ahead of the RHB-105 top-line Phase III results, we will be hosting in mid-May an investor webcast forum on H. pylori and RHB-105, and we will be circulating the detail of that webcast event in due course, so please stay tuned. I will now turn back to Emma. And we will be happy to take any questions you may have..

Thank you. [Operator Instructions]. We have a question now from Vernon Bernardino from MLV & Company. Please go ahead. Mr. Bernardino, your line is open. Please go ahead..

Hi. My apologies, I had it mute.

Can you hear my now?.

We can hear you now. Please go ahead..

Okay, thank you. Thank you for taking my questions and congratulations again on the completion of enrollment for 105. Just had a few questions. So the -- with the status of the study being close with the results mid or end of June, it's possible of course that the 105 will be in the market on the '16.

It is probably too early to say what your strategy will be as far as marketing, but I am actually curious about the strategy for marketing outside the U.S..

Thank you Vernon. And good morning..

Good morning..

For the time being, for the foreseeable future, we have no aspiration to market the drug ourselves outside the U.S. For the U.S. itself, which is the most lucrative market, it remains to be seen what kind of deal we will be doing. We have mentioned before that we do have initial aspiration to go somewhat vertical in the U.S. in the future..

Terrific. And -- okay, that's all I have for 105. And I apologize, I have quite a few questions. I'll ask two more and then get back in the queue. Regarding the SK2 inhibitor ABC249, so what needs to be done before you start it? You had mentioned that this quarter.

Will you do some genetic testing or will you just take all comers for the Phase II study, Phase II B2 study? And then in the anticipated design, will you just add the SK2 inhibitor or since it's a refectory or relapsed patients you just add start treating these patients with ABC294?.

Thank you for that, Vernon. The drug has been acquired last month. The study, an informal study has been registered and is available to look at on clinicaltrail.gov for quite a while. That said, from the moment we took over, obviously, we need to take certain steps to assure ourselves that this study is done right.

And that takes a little bit of time and will create little delay. And this is why we haven't started yet and are looking to start later in the quarter. Unfortunately, I cannot elaborate too much about the protocol because we haven't finalized it, but we are very close to it and we'll announce the related details as soon as we commence the study..

Terrific. And I have one question, and then I will get back in the queue. Regarding BEKINDA, when -- and sorry I missed this.

You had expected a feedback from the European regulators on what again for the oncology support, what kind of feedback?.

It is undergoing review by the imagery and other reference states. We have filed the marketing application. It is currently in formal review. And you are rightly asking about what kind of feedback potentially, it could be a complete response letter equivalent or in the other extreme it could be an approval.

So the short answer is that that we don't know..

Okay. And one follow-up to that. When do you expect -- usually they have 120 days or so type of response and they may ask you questions or so.

When do you anticipate getting an answer or the feedback?.

We receive questions and interact with the regulators in Europe constantly during the review. This is typically the case, similar to FDA process.

So, sometimes second half of the year we would expect something more definite and more formal that will give us a direction, whether we are heading for a relatively straightforward approval or we need to conduct additional work before we can get approval.

The short answer is that, at this point, we don't know and sometime in second half of the year we are expecting to know..

Okay. Thank you for taking my questions. I'll get back in a queue..

Thank you. We now have a question from Scott Henry from ROTH Capital. Please go ahead..

Thank you. And good morning. A couple quick questions. First on BEKINDA, you are targeting fourth quarter '15 data.

I just wanted to ask, is there any risk in that timeline? How is the enrolment proceeding?.

The number of patients is high, 320. We have several sites that are up running and enrolling. They are enrolling well. That said, the pace of recruitment in this type of study fluctuates a lot. And what is the main reason that? The main reason that is that gastroenteritis is somewhat seasonal. It's difficult to predict, but somewhat seasonal.

And sometimes, we see very high recruitment and sometimes we see a slowdown in recruitment. So it's difficult to predict. Right now, we are hopeful for Q4 results. If we see that any delays, we will announce it as soon as we know. We're also adding sites as we speak, so we will have a fuller picture in the next, I would say, quarter or so..

Okay. Thank you for that color. And then as well on RHB-104 for Crohn's disease, what are your expectations of when you will give us some guidance on the pathway and the timeline for that product? I believe you were targeting second quarter '15; I want to make sure that's still the case..

Yes. We are still aiming to provide you with timeline within that timeframe. We are in the process of initiating numerous additional sties in Australia, New Zealand and Europe, which should further improve the recruitment pace.

I can say that since we did a pretty major amendment to the protocol, which we announced to the market a couple of months ago and included anti-TNF, refractory Humira and Remicade patients, in the study we are seeing a nice improvement in the recruitment pace. And the patient pool has increased significantly, this we are seeing..

Okay, great.

And then as well just going down the list RHB-106, given what happened with Salix, do you still feel comfortable that that molecule will move into the clinic this year?.

We do not know of anything, any change following the valiant acquisition of Salix. We are in touch with relevant people. If and when there is any change to what we announced we will of course update the market immediately..

Okay, great. And just the final question.

R&D, how would you expect that to track on a quarterly basis over the rest of the year? Should we expect small increases or steady, just any guidance you could give would be appreciated?.

Yes. Of course, we anticipated small increase in R&D in the coming quarters, nothing very material. And G&A, we expect it to stay the same more or less about $1 million per quarter..

Okay ,great. Well, thank you for taking the questions..

Thank you. We have a follow-up question now from Vernon Bernardino from MLV & Company. Please go ahead..

Hi. And thanks for taking my follow-up question.

I just wanted to confirm, regarding the Quest study you had mentioned that is going to be in 40 Crohn's patients, it has commenced and you anticipate the results in the second half of this year?.

Yes. It's a good question. It's going very well. I think within a few weeks we should have the data..

Oh, okay. And you had also mentioned about the SK2 inhibitor, ABC294, you mentioned the Phase II largely funded by NIH, and then a third study that you will commence is ABC294 as the radio-protectant.

But you had also mentioned a second study is pending funds from the National Cancer Institute, what kind of study is that again?.

It's a multiple myeloma study that is planned in Duke University. We have a pending grant with the National Cancer Institute with NIH. And if we get the grant, which we are certainly hopeful, we will commence that study as well..

And one final question for me. Thank you for that. Housekeeping.

What is the number of shares you have at the end of first quarter?.

I think we have about 100 million shares, which equivalent to 10 million ADR traded in the U.S..

Great. Thank you very much. And congratulations on fantastic progress, looking for the same in second quarter..

Thank you..

Thank you. We have a question now from Swayampakula Ramakanth from H.C. Wainwright. Please go ahead..

Good morning, Dror.

How are you doing? Now, that we are getting close to RHB-105, I know that you are excited about this investor event that you are planning to do in mid May, what kind of information are you expecting to disburse during that event? And also, do you need just one study or do you know if FDA is comfortable with that or does it -- do they require a second study to file in the U.S.?.

Let me answer first the second question. And I appreciate the interest, RK. With regard to additional study, we said all along that we assume we will need to do additional study. And thus, a second Phase III study will be required.

That said, we don't know the scale exactly and we will not know until we actually have the data and go to FDA -- go back to FDA with it. Remember, we have been in discussions about this program with FDA for roughly three years.

And FDA has been very much in the know as far as the study design, the indication which was awarded to us, which is an expanded indication and the QIDP. And the QIDP status can make a difference, because it allows us to have fast-track development. Well, whatever that means, right.

I mean you never know for sure, but in theory and to some extent in practice fast-track development means that agency and RedHill will be walking together on that program jointly. So, we said all along -- to sum up, we said all along we assume we will need a second Phase III study.

Under certain circumstance we may need more than one additional study, but we also have a QIDP. And if we have the positive result that we are hoping for and we go back to FDA, it's maybe a whole new ballgame as far as the development program forward. That's the second question that you asked.

The first one regarding our planned event, we call it investor forum, it would be a webcast that people will be able to dial-in or access through their computer. We will have three main components. The first will focus on the H. pylori markets and the unmet medical need in that space.

The second will focus on reinvestments, pricing, market size and so on. And the third we’ll focus on RHB-105 and our study design.

This means that we will talk about the development so far, clinical development so far, the various study that has been conducted with our drug, including the design of the existing ongoing Phase III study, the endpoint and potentially a little bit about the powering as well. I hope this answers your question..

No, that's fantastic. I think that that information will be very useful to the investors. Now, moving down the pipeline, going into 104, we talked a little bit about the Crohn's disease already during the previous questions.

Could you update us a little bit on the MS program as well, because I thought we were expecting some interim data in the second half of this year?.

There's really no change here, we expect interim data in second half of this year. We expect to complete enrollment very soon and we will announce as soon as we complete. We don't have the exact visibility on when we will complete, because we are constantly screening patients, the final -- the last patient.

And those that are eligible will be randomized and we will announce it. Whether it's one month from now, two months from now or few weeks from now, I'm not sure, but we are almost there..

Okay, okay. And then regarding European decisions in the second half of '15, we talked about BEKINDA for oncology support.

What's going on the other drug RIZAPORT? And is there anything that you can tell us about the progress with the EU authorities there?.

There is nothing new, I'm afraid, on that front as well. We expect regulatory feedback, which can range from complete response letter equivalent in Europe to an approval.

I can say though that just like our deal partners at Intergenic said, I know you are following them as well, the European authorities do not have the same import ban imposed on the API supplier that we are having trouble with for the U.S. market with FDA for whatever that means. So, we hope that in Europe we will not experience delays on that front..

Okay. And then the last question, which is more like a strategy or a long-term thinking on the company.

Now that you have gained assets from Apogee and trying to turn RedHill and aiming it more to become a GI centered company, do you think at some point in time as time goes along you would start thinking about divesting your interest in your non-GI product?.

We only have two non-core products, which are RIZAPORT for migraine, and another cardio drug.

Are you referring to those or to the oncology program?.

Yes..

To those, yes..

No, I think the oncology program you still love it..

Right. So -- yes. The answer is that we are very active in trying to divest those non-core programs to the right partner, under the right terms..

Okay. Thank you. Thanks for taking my questions..

Thank you very much. [Operator Instructions]. Gentlemen, we have no further questions at the moment..

Thank you, Emma. I would like to thank you again for participating in our call today. As management, we remain committed and available to answer your questions and interact and continue a dialogue with all investors and analysts, so please do not hesitate to contact us. I remind you again, that we are planning on an investor forum event about H.

pylori and RHB-105 and we hope to see as many of you participate in as possible. Thank you and have a great day..