Dror Ben-Asher - CEO Micha Ben Chorin - CFO Guy Goldberg - Chief Business Officer Gilead Raday - COO.

Scott Henry - North Capital Swayampakula Ramakanth - H.C. Wainwright Vernon Bernardino - FBR & Company Donald Ellis - JMP Securities Edward Woo - Ascendiant Capital.

Good day ladies and gentlemen and welcome to the RedHill Biopharma's Second Quarter 2016 Financial Results and Business Highlights Conference Call. At this time, I would like to introduce to the conference RedHill CEO, Mr. Dror Ben-Asher, Mr. Micha Ben Chorin, RedHill CFO and Mr. Guy Goldberg RedHill's Chief Business Officer.

Before we begin, we will read from RedHill's safe harbor statement. Please go ahead..

Thank you, Daniel. 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 Reports on Form 20-F and in its other filings with the Securities and Exchange Commission..

Thank you Guy and to those of you who on our call live thank you for joining us. We'll focus today on selected operational highlights covering our three ongoing Phase III flagship programs for gastrointestinal diseases, RHB-105 for the treatment of H.

pylori bacterial infection, RHB-104 for Crohn's disease and BEKINDA for gastroenteritis and gastritis.

We'll also briefly mention YELIVA our inaugural Phase II stage first in class oncology and inflammation SK2 inhibitor and keep in mind that in the coming weeks we expect to issue our customary mid-year operational update covering the status and estimated timelines of our main programs.

But first I would like to refer to Micha our CFO for discussion of our first quarter 2016 financial results announced earlier today..

Thank you Dror, good morning, good afternoon everybody. I will provide a short overview of our financial results for the second quarter of 2016. In the second quarter of '16 we did not record meaningful revenues, R&D expenses during the quarter were $6 million compared to $5.1 million in Q2 '15.

The increase was mainly due to the clinical trial costs related to the ongoing Phase III MAP US study with RHB-104 for Crohn's disease and for preparations for the several Phase I, II studies with YELIVA for multiple oncology inflammatory and gastrointestinal indication.

G&A and business development expenses in the second quarter were $1.2 million compared to $800,000 in second quarter of '15. The increase was mainly due to enhanced business activity, development activities. Operational loss for the quarter was $7.2 million combining the $6 million R&D and $1.2 million G&A and business development.

Our operational cash burn rate during the second quarter of ’16 was $5.7 million compared to $4.7 million in Q2 ’15. The increase was in line with our expectations and represents increased clinical development activities.

Cash flow from investing activities in the quarter was $2.9 million compared to net cash provided by investment activities of $3.5 million in second quarter of ’15. The increase in net cash using investment activity was mainly due to an increase in bank deposits.

For summary our cash position remained strong with $47.7 million and no debt, a decrease of $5.7 million for March 31, 2016. So I will now turn the discussion back to Dror and we’ll be happy to take any questions later on. Thank you..

Thank you, Micha. In a nutshell, as of the end of the second quarter, we maintained a stronger balance sheet and balanced pipeline including three ongoing Phase III GI programs, as well as several additional Phase II stage development programs. We are earning to become a GI inflammation focused specialty pharma in the United States.

Selected outcome in potential milestones include interim data and safety monitoring boards, DSMB analysis of the ongoing RHB-104 Phase III study for Crohn disease. Final results from the ongoing Phase IIa study with RHB-104 for multiple sclerosis. Initiation of three Phase I and I study we deliver for additional oncology and inflammatory indications.

Top line results from the ongoing Phase III study with BEKINDA for gastroenteritis and gastritis, initiation of the confirmatory Phase III study for RHB-105 for the treatment of H. pylori infection.

Recently key milestones include first patient dose in the Phase II study with BEKINDA for IBS-D Diarrhea-Predominant Irritable Bowel Syndrome, positive Type B meeting with FDA supporting the planned confirmatory Phase III study with RHB-105 for H.

pylori infection, notice of allowance from the United States Patent Office USPO -- USPTO for new patent recurring RHB-105, positive final results from the Phase I study we deliver for advanced solid tumors confirming that the study successfully makes those primary and secondary endpoints, exclusive license agreement with Grupo JUSTE for the commercialization in Spain of RIZAPORT oral thin-film migraine drug.

And the research collaboration with the National Institute of Health the NIH for potential Ebola treatment. Starting with the BEKINDA for virus GI indications, currently in Phase III study for gastroenteritis and gastritis.

In June we announced that first patient has been dosed in the randomized double blind placebo controlled two arm parallel group Phase I clinical study in Untied States, evaluating the safety and efficacy of BEKINDA 12 milligram in patients with IBS-D.

The study is being conducted in 12 clinical sites in the United States and we enroll a total of 120 patients, who will be randomized 60:40 to receive either BEKINDA or placebo, once daily for a period of eight weeks.

The primary endpoint is a proportion of patients in each treatment group with response and stool consistency as compared to baseline per US FDA guidelines definition.

Secondary endpoints include a proportion of patients in each group who are pain responders and a proportion of patients in each treatment group who are responders to the combined end points of stool consistency and pain per FDA guidelines. In parallel the Phase III study with BEKINDA for gastroenteritis and gastritis is ongoing.

This study called Regard study may be sufficient as a single study to support the filing of a marketing application for BEKINDA 24 milligram subject to achieving sufficiently striking positive results. Moving on to our second Phase III program, RHB-105 for H. pylori infection.

On July 21st we announced a notice of allowance from the US PTO for a new composition patent covering RHB-105. This patent expands RedHill's patent portfolio covering RHB-105 and is expected to be valid until 2034 once granted.

Most importantly in April, we announced that a very positive track B meeting with FDA was concluded regarding the positive marketing approval of RHB-105 and the planned confirmatory Phase III study for the treatment of H. pylori infection.

The FDA confirmed that the plan's two arm randomized double blind active comparator design of the confirmatory Phase III study is the right one.

Based on FDA's feedback and subject to successful completion the planned confirmatory Phase III study along with successfully completed Phase III study and data from a supportive PK program are expected to support a US new drug application, an NDA for RHB-105.

To refresh your memory the FDA fast-track B meeting in April followed a successful final results from the first Phase III clinical study with RHB-105 called the Eradicator HP study which we reported in March 2016 confirming that the Eradicator HP study successfully met its primary endpoint of superiority over historical standard of care eradication rate of 70% with high statistical significance at 001.

The results demonstrated 89.4 efficacy in eradicating H. pylori infection with RHB-105. RHB-105 has been granted a QID B status under the gain act providing a fast track development pathway as well as a priority review status potentially leading to a shorter review time by the FDA of RedHill's NDA for RHB-105 once filed.

If approved RHB-105 will have a total of eight years of market associavity regardless of its patent status. H. pylori bacterial infection is a major cause of chronic gastritis, septic ulcer disease, gastric cancer and MALT lymphoma. There is a growing worldwide concern over the clearing efficacy rates of available treatments.

100 million Americans and over half of the world's population are estimated to be infected with H. pylori and approximately 3 million patients are treated annually in the United States to eradicate H. pylori. 2015 worldwide and U.S. market potential for H. pylori education therapy were estimated at 4.8 billion and 1.4 billion respectively.

Moving on to our third Phase III GI program, RHB-104 for the treatment of Crohn’s disease, which is one of our flagship drug candidates. This is an exciting year for RHB-104 in the Crohn’s program, interim DSMB Data Safety and Monitoring Board’s analysis from the ongoing MAP U.S.

Phase III study is expected by the end of this quarter or in the fourth quarter. We are on track to achieve this important milestone. The ongoing Phase III with RHB-104 is a potential paradigm changer, as far as the treatment of Crohn’s disease is concerned for years to come.

It's target to potential cause of the disease, the intracellular , Mycobacterium avium paratuberculosis or in short MAP. RHB-104 is also being explored for the treatment of relapsing remitting multiple sclerosis.

You recall that in March, we announced encouraging interim results from the ongoing CEASE-MS Phase IIa proof of concept clinical study, evaluating fixed oral dose RHB-104 in patients treated for relapsing remitting multiple sclerosis, demonstrating positive safety and clinical signals and supporting further clinical developments.

The top line interim results demonstrated an annualized relapse rate, ARR at 24 weeks of 0.288 in the modified intent-to-treat population and 0.0 in the per-protocol population, comparing favorably with previously reported pivotal studies of interferon beta-1a therapies Avonex at 0.67 and Rebif at 0.87 to 0.91.

88% of the mITT patient population and 100% of the per protocol population were relapse free at 24 weeks, comparing favorably with previously reported pivotal data on the use of Rebif at 75% in comparison with Avonex at 63% as a standalone first line therapy. No patients in the CEASE-MS study relapsed after week 8 of treatment.

Importantly, although not powered for efficacy, a reduction in total MRI T2 lesion volume was observed at 24 weeks as compared to baseline, suggesting a decreased burden of the MS disease and comparing favorably with previously reported Avonex and Rebif data.

Another product we’ll briefly mention today is our Phase II stage novel drug candidate YELIVA. YELIVA is a proprietary first-in- class orally administered SK2 inhibitor with anti-inflammatory and anticancer activities, targeting the multiple oncology and inflammatory GI diseases, many of which markets are potential blockbuster markets.

Several Phase II/I and II programs has been initiated -- completed or are planned to commence in the coming months.

The development of YELIVA has been and continues to be significantly supported by NCI, National Cancer Institute, grants awarded to our partner Apogee in conjunction with several US academic institutions with additional support from RedHill. In June we announced positive final results from the Phase I study with YELIVA in advanced tumors.

The results confirm that the study successfully met both primary and secondary endpoints demonstrating that YELIVA can be safely administered to cancer patients at doses which provide circulating drug levels that are predicted to have therapeutic activity based on levels required in pre-clinical models.

Moreover the study included the first ever the analysis of plasma S1P levels as potential PD marker for activity of SK2 drug. Administration of YELIVA is also interrupted and pronounced accretive in S1 1P levels over the first 12 hours with return to baseline at 24 hours which is consistent with clearance of the drug.

YELIVA was well tolerated over a prolonged period at dosage induced in respect that PD effect.

In May we announced that the US National Cancer Institute NCI has allotted, has awarded another grant for this program to the Medical University of South Carolina, a $1.8 million grant to support a road branch of the study on the feasibility of target in SK2 treatment on a variety of solid tumor cancers including a planned Phase II study with YELIVA for advanced hepatocellular carcinoma HCC, the most common primary malignant cancer of the liver.

Last but not least a brief update about our Ebola virus disease development program. On July 13th, we announced the signing of a research and collaboration agreement with the US National Institute of Allergy and Infectious Disease NIAID, the part of the National Institute of Health, the NIH.

It's intended to evaluate RedHill's proprietary experimental therapy for the treatment of Ebola virus disease. This new research collaboration follows encouraging results from preliminary, non-clinical studies conducted in conjunction with the NIAID using RedHill's proprietary experimental therapy.

If successful this study is intended to provide supportive data for discussion with FDA for potential use of the animal role pathway for approval. Ebola virus disease is a severe and often fatal illness which can cause severe fever in human and animal target of up to 90%. There's clearly no FDA approved treatment for Ebola virus disease.

Moving on to corporate development activities in relation to both acquisition of commercial assets in the United States primarily within RedHill's specialty focus on GI and inflammation and partnerships for commercialization of some of our products through out licensing.

In relation to out licensing we continue to take particular care to ensure that our pharma partners on transaction terms are the right ones, providing the best possible home for our products to maximize value generation for RedHill's late clinical stage assets.

In this respect on July 5th we announced together with our co-development partner IntelGenx the signing of an exclusive license agreement with Grupo JUSTE for the commercialization of RIZAPORT oral in Spain for acute migraine.

Apogee takes advantage of exclusive right to register and commercialize RIZAPORT in Spain and a right of first refusal for additional territories in Latin America and the Middle East. RedHill and IntelGenx were entitled to receive an upfront payment, additional milestone payments, as well as royalties.

To sum up, with important potential milestones and catalysts in the horizon, a strong balance sheet, high quality institutional support and balanced pipeline including stable Phase III programs and several Phase II programs, targeting strong unmet medical needs, we continue to aggressively and diligently execute our plans.

We are positioning RedHill as an emerging specialty pharma focused primarily on GI inflammation in the United States with strong clinical development capabilities as well as integrated U.S. commercial operations.

Again, in the coming weeks, we expect to issue a customary mid-year operational update covering the status and estimated timelines of our main programs, so please stay tuned. I will now turn back to Barbara and we’ll be happy to take any questions you may have..

[Operator Instructions] We will take our first question today from Scott Henry from North Capital. Please proceed..

Just had a couple of questions on the pipeline, I want to make sure I had the timelines correct.

For starters the GUARD study, are we still expecting that to read-out in Q4?.

We expect to announce the more likely timelines in the coming weeks. Right now it doesn’t seem like we would meet end of Q4, it's likely to spill over into Q1 also..

And then the full dataset on 104 for MS, is that a fourth quarter event?.

Yes. We completed the study essentially completing the analysis we should be able to constantly to release the final results in Q4, maybe even before..

And then for BEKINDA, when should we think about a launch in Europe? Is that a 2018 event, or could that be in 2017?.

Scott, for which indication?.

For the oncology indication….

For the oncology we are conducting additional supportive programs and discussions with several additional regulatory authorities in Europe, not only [GRA] but stock and are speaking to others, and expect to have some news later this year..

And then with 105, if I assume data in the second half of ’17, do you think -- would we expect a filing by year-end ’17, or would that be a first half ’18 event for filing of 105?.

Filing in 2017 would be a stretch. It's not impossible but it would require a phenomenal execution on the recruitment, so it's highly unlikely..

Okay, fair enough, and then I guess on the Ebola indication, what will we expect, what's the next event in that program, what should we be watching there?.

We are looking to commence a study later this year with the NIH at the NIH labs, it's relatively short study that will take several weeks at which point we expect to go to FDA and seek some guidance relating to the animal role.

Animal role is a pathway approval of new drugs without efficacy data in human but with safety data in human, we will go to FDA only if we are sure that the therapy that we're developing is successful in the study which we will conduct later this year..

Okay, and I'm just about done here, are the interim analysis for RHB-104 in Chron's, when that occurs what is the message you would expect to send to the investment community, meaning will there be any specific data or will it just be a status of the trial whether it's halted for a positive efficacy, negative efficacy, adding patients.

I'm just wondering what kind of color we should see around that announcement..

Our plan is to announce pretty soon as much data as possible about this program, the S&B analysis is still under discussion the original plans are still effective, was to seek not only safety but also futility analysis.

Everything is under discussion as it relates to the best path forward to maximize success we'll provide much more color in the coming weeks so the market ending this know exactly what we intend to do to ensure the higher likelihood of success in this study. But we do expect that the S&B analysis end of this quarter or in the fourth quarter..

Okay great, and the absolute final question, I didn't see, is there a shares outstanding number I can use for the quarter, I didn't see that in the release..

127 million shares..

Thank you, our next question today comes from Swayampakula Ramakanth from H.C. Wainwright, please go ahead..

Good morning Dror, how are you doing today?.

Good morning..

Regarding RHB-105, now that you know you have had that positive meeting with the FDA in April and have started designing the experiment, could you elaborate to us you know some facts about the study in terms of like number of patients, what kind of endpoints and how long do you think this study could take especially the confirmatory piece.

I will defer to Gilead who is next to me, who’s leading this program. We’re expecting probably around 400 patients, give or take. Gilead all yours..

Thank you, Dror. As Dror said, we are planning a 2-arm study.

This is based on feedback from FDA with an active comparator and approximately 220 or so each arm and the active comparator should allow us to complete the clinical package or the baseline study versus the active comparator should allow us to complete the clinical package for NDA filing as per FDA guidance.

In terms of timing, we discussed it but based on our experience we don’t have guidance yet on when we expect the study to end, but it shouldn’t take longer than what we had previously conducted.

It should be shorter and we expect to have approximately 40 to 50 sites on average of 10 subject to size which is similar to what we conducted in the previous study..

Regarding BEKINDA for gastroenteritis, what’s -- I know that you have an understanding that if you have a positive data this could go through into filing. Is there some metrics which you are looking for to make this go to the regulatory filing? And otherwise I guess you’ll need to do a second study.

Correct?.

The message from FDA has been very consistent, both in minutes of meetings, written and orally, which is that is the result of proficiency striking, meaning notable order line. There is a possibility we get approved on the basis of this single study.

I can remind you, although I know you know that for sure, that this program was initiated at the FDA’s request and FDA has been extremely helpful in assisting us throughout the process, providing guidance and helping us, making sure that this study is robust and generate the right data to support approval. Now if we fail, it's not going to matter.

But if we are successful enough, meaning doing suddenly better than 005 and 05 then we’re going to be in a situation where we stand a different chance to get approved..

Regarding RHB-104 and MS, I know you gave a little bit of color when Scott asked the question.

But what I am trying to understand is, is there -- what sort of data is required for you to stop the study at the DSMB interim look? And are there any other additional interim looks beyond this one, which you’re going to announce?.

So you are asking about DSMB analysis of the Phase III ongoing for Crohn’s, the MAP U.S. study. So, right now, we're planned to receive not only heads up for safety but also signal based on the futility analysis.

As I mentioned the answering Scott's question before, there are discussions about possible changes, what to guide DSMB to provide us with? We are looking to provide you and the market very soon with a lot of visibility about our plans, the reasoning for our plans and how we think we can optimize, maximize the likelihood of success of these program which we are doing our best to complete, not only complete but complete successfully and potentially revolutionize the treatment for Crohn's.

There's a lot of consideration here, cannot go into now, I apologize but we will provide all the relevant considerations to the market in detail very soon..

Thank you, so I guess at that point you will tell us a little bit more about the MAP US study as well, correct?.

Correct..

Okay, then the last question, I know you've been talking about setting up in a commercial structure in the United States. Are you at this point able to tell us a little bit more about how you want to set this structure up now that you know a couple of your studies are in the final stages and also getting into the filing situation..

Certainly we already recruited people for a commercial operation to have an kind of an angle and the focus right now is on a acquisition of FDA approved commercialized assets in the GI space that we'll seek our criteria and once we do that and we certainly hope to complete one or more such acquisitions of products in the coming months we'll get going on the market and gradually prepare for the launch or co-launch of or promotional launch of our big GI product in two three years.

The plan is to be able to have the capabilities and the infrastructure two three years down the road to make the most out of the product that we have invested so much in developing as opposed to simply giving all the US rights away which would give most of the up side away for the reasons that we do not think are strong enough.

In other words we think we are sitting on several Phase III GI assets that are potential blockbusters with decent likelihood of success and we would love to keep the US rights at least co-promotion rights in the US not ex US by building our commercial infrastructure in the US in the coming two to three years and first selling products that are not ours which we are trying to acquire as we speak..

Fantastic, those plans look very encouraging, thank you, thank you very much for your time today..

Thank you RK..

Thank you, our next question today comes from Vernon Bernardino from FBR and Co, please go ahead..

Hi, thanks for taking my question and congrats on the progress in the second quarter. Just wondered if you could, and I am sorry if I missed this, any timing on what we may see as far as active, which RIZAPORT.

I know you have the Spain offset up, but if you could just provide what you may see, we may see, at the end of this year, as far as commercialization?.

Thank you, Vernon. Just to refresh your memory, RIZAPORT is a non-core asset in the fence that not GI not within our therapeutic focus. Regardless, it's an important product. It was approved in Germany. We think it will be approved in additional European countries. And we also hope and expect U.S. FDA approval next year.

With regard to the Spanish deal, we expect commercial launch in Spain at the end of next year and potentially additional territories that Grupo JUSTE has rights to later on. We are currently very busy trying to complete and strike additional deals in additional territories, and not only in Europe but also in the United States..

And you had mentioned about BEKINDA as far as the Phase III and the meetings you’ve had with FDA are very encouraging and if sufficiently positive maybe you could make a regulatory filing.

Could you -- again if you could please remind me if I missed this, the timing of any data? And if the FDA had encouraged, as you say, the conduct of the study, if the timing is far at, why not perhaps have filed for a special protocol assessment just to at least make sure the FDA has got something formally in writing?.

I’ll start with the second question. We have not been seeking an FDA in this case. We don’t think it's necessary not as much fundamentally. From the timelines recruitment phase we are making a nice progress, but we could face this on and off, it's difficult to predict.

Right now, as I mentioned to Scott, I think it's going to be very difficult to meet years end -- end of recruitment. So we are probably spinning into 2017. I don’t think it's going to be a measure delay but we are probably not completing recruitment by the end of this year.

We will have a bit more visibility in the coming weeks and we’ll include it in our mid-year R&D update that you can expect soon..

And then one last question I have is regarding 105, the design requires agreed upon an active comparator.

What have you seen thus far as current eradication rates in the active comparator that you’ve seen, that we may perhaps want to look for as far as result of the confirmatory Phase III study?.

Vernon I have to say, it's an excellent question. And I will defer you to Gilead. It is a key fundamental question.

Gilead, please?.

Thank you, Dror. We have literature from studies that were conducted in the U.S. and actually on the label of the Prevacid lansoprazole, which is the equivalent comparator regimen with amoxicillin in dual therapy.

So, that comparator, which is equivalent to the comparator we will be conducting in our study, has shown in previous randomized studies, eradication rates ranging between 61% and 70% ITT on intensive treated basis.

So that is the level of eradication that we see from the comparator that we are using as an equivalent comparator in the study that we're planning..

And one follow up if I may, regarding the confirmatory Phase III study, you are using your experience with the Phase III study that was completed and the results were fantastic, it seems like toward the end of that study recruitments was faster and therefore the completion of the study accelerated.

Do you anticipate the conduct of this confirmatory study will be more or less at that pace or you'll rather measured because you want to make sure it's done right and confirm the results..

That's definitely an important point and from an operational perspective we had a learning curve in the first study which we are going to implement going forward into the next study of how to conduct operationally the studies in this indication.

We are also going to use the appropriate resources in order to bring on to the study at the right sites, the sufficient number of sites in order to execute based on what we learned from the previous study at the optimal phase..

Perfect, thanks Dror and thanks Gilead..

Thank you..

Thank you, Vernon..

[Operator Instructions] We will take our next question from Donald Ellis from JMP Securities, please go ahead..

Thank you, thank you for taking the question. I'm relatively new to the story so could you describe for us your current thoughts on market opportunity and the competitive landscape for RHB-105 in H. pylori and RHB-104 in Crohn's disease specific to the US, thanks..

Certainly, certainly. Don it is great to have you with us and a very good question. On the H. pylori I have to say that the way we think about it here in the company is this is a very highly prevalent infection. We are talking about 30 to 40% of the US adult population. In some countries there are 80% or so infection rates among the adult population.

We think this kind of indication that when we look at from the financial market perspective is yet to be discovered.

Maybe certainly relative to what happened to Nash not that long ago when suddenly the financial market discovered a disease that is extremely widespread with a very strong unmet medical need coupled with the huge commercial opportunity. So if we talk about numbers, current treatment in H.

pylori infection, [indiscernible] infection selling is up to 800 or even $1000 per treatment. We are talking roughly two weeks, 12 days to each treatment. Currently there is roughly 3 million people treated a year in the US alone, but this is only for a label that specifies ulcer related H. pylori infection. Meaning our intended label of H.

pylori infection as such H. pylori infection is a disease is far, far broader, it includes ulcers, but it also includes investigated ulcer patients which are probably going to be the vast majorities of patients. So treatment in the U.S. is only the starting point and we are talking average of $400 to $500 per treatment.

This is a very large market, so even conservative assumptions would lead us in the U.S. alone to $1.5 billion and worldwide to nearly $5 billion. Again, this is based on existing labels and existing pricing. We are trying to show if we have shown in our first Phase III study that we are superior to anything out there, any kind of care out there.

We are doing it in a very convenient regimen of an all-in one custom proprietary eight years market facility and under the GAIN Act, specifically granted to us the 105. And patent, granted U.S. patents, now going all the way to 2034. This is for us potential company maker offers very significant scale. This is RHB-105 in the market.

RHB-104 for Crohn’s is a different story. This is a specialty, the specialty drug focus on GI clinics. There are 700,000 patients in the U.S., worldwide we’re talking several billion. Existing treatments are priced onto 40,000 a year or so since the Humira, Remicade and TiVo.

Those are big pharma drugs, anti-CNS biologics that come with very problematic safety profile that are attractive for some of the patients, the minority of the patients for some time. And in the end of the day unfortunately 80% or so the patients end up in surgery.

We are connected with a therapy that we believe RHB-104 is targeting the underlying cause of the disease, a specific micro-bacteria. And this will be unique in that respect because all treatments currently are symptomatic. So we are finding the underlying cause of the disease.

Secondly, we are connected with a drug that so far has demonstrated in everything we have seen, a good safety profile. Again, we haven’t finished the study, but everything we have seen so far looks promising on the safety front. Thirdly, we are connected with an oral treatment, which is also important for chronic treatment.

All-in-all, we -- if we’re successful, we should be doing very well and purchase very nicely to current market, we do not need to price $40,000 or $30,000 pay fully reimbursed, we have a lot of flexibility here. The potential is clearly multi-billion dollar markets U.S. and worldwide..

And then just one last question roughly, when are you expecting it to be ready for regulatory filings for the 105 and 104..

We have not provided the likely timelines but I'll do my best here.

With RHB-105 assuming it takes a year and a half to complete the study from the moment we start and we will be, we're looking to commence in the coming months, we should have a six month preview under the QIDC with the QIDC status, sorry you could do the math, it's most likely not next year.

RHB-104 with the [indiscernible] recruitment phase assuming the number of patients stays the same we should be completing recruitment sometime early next year. The treatment period is one year. Half a year for primary endpoint and another half a year for maintenance.

However for RHB-104 for Crohn's we said all along and we continue to say that we will need an additional Phase III study. This Phase III study that's ongoing is not enough, so we cannot provide additional visibility at this point, we'll do our best as we continue to make progress..

That's funny, thank you very much, I really appreciate it..

Thank you..

Thank you, [Operator Instructions], we will take our next question from Edward Woo of Ascendiant Capital please go ahead..

Thank you for taking my question, a lot of the questions have already been answered but I just have a couple more. Your cash burn for the quarter went up a little bit quarter over quarter, do you think those are continuing to go up or do people turn that statistic for a little bit..

Hi Ed, well the bracket traffic picking up between $6 million and $8 million per quarter and in Q1 it was fixed now it went up a little bit, by the way a lot of it had to do with various business development activities and expedited recruitment phase in the Crohn's study and so, so you could continue to look for roughly $6 million to $8 million per quarter probably around $7 million per quarter moving forward..

Great, does that factor in I guess investments that you guys are making too I guess little bit your top product your US dissipation..

The investment in the US commercial operation right now is negligible, it will not be significant, it will not affect our financials significantly anytime soon, we are talking about a small team that is very effective, I wouldn't worry about that at all..

Great, and then moving on back to RIZAPORT on the Grupo deal, congratulations. In terms of having commercialization one year out to when you had signed the deal, do you think that that's the expected timeline for future deals or do you think commercialization maybe happen faster with our future deals..

The commercialization has to do with manufacturing and registration which takes time, we do not need to do additional studies fortunately, I would say similar timelines..

Great, thanks for the clarity and best of luck going forward, thank you..

You have follow up question from Vernon Bernardino from FBR & Co. Please go ahead..

Your comments on the U.S. infrastructure are very intriguing. And you said you had perhaps going to, please correct me if I am wrong, focus on -- perhaps one or two acquisitions in the U.S.

If you could comment a little bit perhaps on what size of an opportunity you’re looking at? And when we may see an announcement of such a thing? I know for sure that you keep got to go but very busy and this could be something that happens very soon..

Thank you, Vernon. To be clear, when we talk about negligible investment in commercial operations, we are talking up to the point where when we acquired the first product, which is also to your question when discussions with quite a few potential sellers of products, we’re not talking about companies at this point but products.

And the range is broad, anything from 7 million a year on promoted products to dozens of millions in somewhat under-promoted products. It has be a unique opportunity that make sense in terms of the criteria we’re looking for, GI which probably oral with a clear competitive edge that is currently being under-promoted for one or more reasons.

The terms are critical. You recall our history that as a company we are trying to do transactions that do not jeopardize what we already have, that do not create leverage or over-leverage. And we’re pretty conservative about that.

All the deals we have done so far and we have many product acquisitions for development, for product and the development, have been very cautious, very careful.

The sum of [indiscernible] commercial assets, we do not think that it is justified to jeopardize what we have built here at RedHill with several Phase III programs in order to acquire commercial products.

We’ll make sure those are the right products under the right terms and that they’ll be profitable very quickly following the acquisition if not at the time of the acquisition..

Thank you. As there are no further questions in the queue, I’ll hand the conference back over to your host for any closing or additional remarks..

Thank you, Barbara. I would like to thank everybody for the time you took today. As always, we remain available to answer any questions you may have, you will always find us very responsive. Thank you very much..

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