Remi Barbier – Chairman, President and Chief Executive Officer Peter Roddy – Vice President and Chief Financial Officer.

Kevin Kendra – Gabelli Timothy P. Lynch - Stonepine Capital LLC Steve Owsley - Madison Street Partners Drew Mckinley Hayworth - Madison Street Partners Steven Shapiro - Intrepid Capital Management.

Greetings and welcome to Pain Therapeutics Third Quarter 2014 Financial Results Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions). As a reminder this conference is being recorded. It is now my pleasure to introduce your host, Mr.

Pete Roddy, you may begin..

Thank you. And welcome to our earnings call for the third quarter 2014. We appreciate that you are on the line. Remi Barbier, Chairman, President and CEO is with me here today.

Just take a quick note, our earning release is posting imminently but as you will see it’s [inaudible] report and consistent with our prior quarter and the comments that I’ll make on the call here will sound directionally we’re sure.

Here's our agenda I’ll provide a reminder regarding forward-looking statements hit on some of the financial highlights for the third quarter. And then Remi will then provide an update on our business and we'll have time for questions after Remi's comments.

So as usual please keep in that during the course of this call we will make forward-looking statements including statements related to REMOXY as well as some of our products candidates and our finances. These forward-looking statements involve risks and uncertainties. Actual results may differ materially from our forward-looking statements.

Further information regarding these and other risks are included in our annual reports on Form 10-K and Form 10-K, our Form 10-Qs for the first two quarters of this year and other SEC filings. Now I will comment on the financial highlights for Q3.

We started the quarter with about $45 million, used $1.7 million in the third quarter and at September 30th, we had about $43.2 million. Our guidance for 2014 continues to be to use cash of about $12 million.

Pfizer will continue to pay the cost related to REMOXY during the transition and our expenses for FENROCK were already included in our guidance for 2014. So our cash balance continues to translate to between four and five years of cash.

Whether or not it reflects precise number it’s a strong balance sheet and we continue to exert discipline over our use of cash. Please keep in mind and remember that for the third quarter and the first nine months of 2013 the revenue there was not cash revenue. It came from the accounting from the upfront payments from Pfizer from years past.

We finished up all the accounting for that in the fourth quarter of 2013. That’s why you don’t see any of this type of non-cash revenue in 2014. We increased our R&D spending in Q3 primarily on specific third party activities on our early stage assets up to $2.1 million from $1.4 million in the third quarter of 2013.

In each I reminded everyone about insider stock option exercise activity in 2014. I’ll just take a moment to remind you again that some of these auction exercises were so called net exercises and given how net exercises are reported to the SEC some people might confuse net exercises with sales, they are not.

There have been no insider sales in PTI stock this year and again, we are not aware of any plans for insiders to do so. Remi will take it from here..

Okay, thank you Pete. So as usual on the financial front Pete and his team did a very, very nice job of keeping us very disciplined and well within budget. I am very certain at this point that we will end the year within budget as we have probably for this past I won’t say seven or eight out of ten years.

This could be a remarkably short conference call to the extent that we have not received or reviewed additional clinical or non-clinical data from Pfizer related to REMOXY, so I don’t have anything new to present to our investors. Perhaps it’s worth reiterating our top priorities at this point. Priority number one is straightforward.

First priority is a very orderly smooth and prompt transfer of REMOXY from Pfizer to ourselves. I think I gave you a sense of appreciation for a -- what a transition plan might look like.

It could easily be on the order of perhaps 100,000 documents being transferred from their files to our files and then possibly a semi-tractor trailer full of collaboration equipment that needs to change hands, a number of contracts, third party contracts and vendor contracts that need to be assigned and kind of shuffled from here to there.

It’s a fairly intensive in fact it’s a very intensive effort. We had done it before. We did it with regards to transferring REMOXY from ourselves to King Pharmaceuticals some years ago. So we have experience with it and furthermore we have informal discussions with people who have actually had tech transfers before from Pfizer to other companies.

Anyway our first priority has to be on an orderly and prompt transfer of all things related to REMOXY from them to us. Second, second priority is to really finalize the strategy around the concept of us re-filing the REMOXY NDA under our control.

Again as I told investors on Monday this is a very substantial path I do not want to minimize the amount of work it involves. At this point in the ecosystem of the industry there are number of consulting firms that will help parties such as ourselves with re-filing NDAs on a fee-for-service basis.

In addition, our good friends at Durect have volunteered to pitch in if needed especially on the CMC side and I know they have a lot of strength on that side of the house. The point being that we're really try to work cooperatively on coming up with the optimal strategy for re-filing the NDA.

As I said on Monday we don’t have a firm timeline on when we can re-file. The timeline will depend, I am pretty sure, will depend substantially on not so much on the quantity of documents and data that are being transferred but really on how they are being transferred to us.

If it's an orderly transfer as I expected to be hopefully it's a relatively short transfer period. But again per contract it could last up to six months. Third, our third priority is we lost a partner. We're pretty confident we can gain a partner.

I want to be clear that finding a potential partner is an -- it's really kind of falls in the category of long term dating. It's not something that happens overnight. It should not happen that way. I expect it to be an ongoing courtship.

Most deals in fact every deal I have been involved with, every substantial deal and worthwhile deal I have been involved with has taken I would say an average of nine to 12 months and Pete’s shaking his head, yes. Between Pete and myself I think we -- and others on the team we've seen a lot of deals.

It’s a long term -- I mean it’s a priority but it’s a long term courtship is what I am saying. Also want to be clear that we propose to pursue all these three priorities in parallel, which is to say we're not going to do one than stop do the other, not at all. We're going to do all three simultaneously.

While at the same time of course Pete's got it here to keep us very disciplined about our use of cash over the next 12 months. As Pete reminded us we have about $43 million of cash as of September 30th.

By the end of the year, I think safe to say we'll have approximately $40 million to the extent that it may cost us $2 million to re-file the NDA and our fixed cost specifically are around $6 million.

I am not giving guidance but rather I am giving kind of heads up that we have if we're judicious about our cash use, I believe we have -- we may have four to five years of cash on hand without raising cash from any third party.

So I think at times like these our business model -- really I take comfort from our business model, relatively low overhead and relatively high variable costs. I also want to point out that I misspoke on one point on Monday. I said our manufacturing was being done at Covidien. My mistake it's actually being done at Mallinckrodt.

I have lost track of who owns whom at some point Covidien owned Mallinckrodt or vice versa and then they split. Then they got back together. Point being is there is as far as we know there is no interruption to the manufacturing process related to REMOXY.

Everything will continue to continue and there is no thought of changing from Mallinckrodt to any other third party. Last, before we turn it over to questions, I want to remind investors that literally as we speak there is a public meeting going on at the FDA on abuse-deterrent drugs and proposed solutions.

The FDA has formed an industry working group. We are part of that working group.

Its Pain Therapeutics and I forgot if its seven or eight other companies that have a vested stake in abuse-deterrent opioid drugs and I don’t want to steal the wind from the presentation and so forth but I want to make at least three points that we're hearing loud and clear.

The first point is that FDAs is looking for multiple solutions from multiple different vendors. I think for obvious reasons no one wants to be dependent on a single solution especially when it comes to opioids drugs.

So if you haven't heard it elsewhere you heard me loud and clear, FDA wants multiple solutions regarding abuse deterrents from multiple vendors. Second thing that's coming out is it does appear like the drug approval and drug labeling process are or will become two kind of distinct processes.

Drug approval will always be based on safety and always be based on efficacy, no change there. Drug labeling on the other hand, I think will have to do with a number of different factors and there is a tier system depending on whether you have in vitro data on in vivo data or actual demographics data.

But the point being is that while no change in drug approval the drug labeling process will be based around the data and furthermore from time to time the label can and will be changed on an opioid product based on new and compelling data, regarding abuse resistance.

For evidence of for example look at Pfizer’s product, [inaudible] recently got upgraded from whatever it was before to a different label based on abuse resistance data.

The third thing and really something that I suppose you can say we as an industry are pushing for it is really kind of standardization of all these in vitro and in vivo abuse potential studies. Right now different parties have different definitions of what abuse potential may actually be.

We are challenging the FDA and I suppose you might say the FDA is challenging industry to come up with a standard, I should say standardized [inaudible] tests that demonstrate a drug candidate’s abuse potential on both in vivo and in vitro conditions.

So again the three points that I personally took -- am taking away from the FDA's industry working group for opioids is they are looking for multiple solutions from a number of different vendors, drug approval and drug labeling are kind a two distinct but parallel processes. And there is a push for standardization of abuse potential studies.

That's about all we have for investors today. Again at this time we've not received or reviewed additional clinical data from Pfizer related to REMOXY. So feel free to ask but my answer will be the same. With that I’d like to turn it over for questions..

(Operator Instructions). Our first question comes from the line of Kevin Kendra with Gabelli. Please proceed with your question..

Hi, Remi. Just had a few question. Not sure if at this time that you might be able to answer them. Maybe first, just thinking about the confidence level that you guys seems to have in being [inaudible] drug, REMOXY, despite not having actually seen the data.

Can you maybe just go into a little bit deeper what is really giving you that confidence this drug is ready to go to the FDA?.

Again reiterating what we said on Monday, we have not seen the data. And I am very much a show me person. So until I see the data with my very own eyes and until the team sees the data and until we independently get the data analyzed I would say stay tuned. On the other hand the people that we talked to at Pfizer I think they are very honorable people.

There is no reason for them not to be. And what we heard verbally encourages us that the REMOXY NDA can and should be re-filed. .

Okay, and in terms of the re-filing, do you anticipate having to meet with the FDA before then and if so have you made any efforts to reach out to the agency to set up a potential meeting ahead of filing?.

You cannot actually reach out to the agency. Right now the REMOXY NDA is legally still under the control of Pfizer. So as far as the FDA is concerned we are a third-party. One of the top priorities of an orderly transition plan is obviously transferring legal responsibility for the regulatory file REMOXY regulatory file from them to us.

And as soon as that happens we then will have the -- we'll have an open mind to FDA.

As far as reaching out to them, it depends if it turns out in the materials that Pfizer sends us it turns out they have already reached out and they have made kind of plans to file the NDA them maybe we’ll reach out and introduce -- reintroduce ourselves but don't necessarily need kind a call it pre-NDA meeting.

On the other hand if there has been radio silence between Pfizer and FDA for the X months which I doubt, but you never know then I think you're right. It would be very, very wise decision for us to reach out. .

Okay. And you mentioned Mallinckrodt’s the manufacturer.

Have you had any contact with them or has the indication also just come directly from Pfizer about their status?.

Again the legal contract is between Mallinckrodt and Pfizer. So we're not in a position to insist on anything, not yet. On the other hand, I think I believe Pfizer is doing the right thing. We are requesting that they not turn out the lights on or terminate or basically do anything to diminish the potential value of REMOXY.

And we're pretty confident that they will. So I don't to really have any concerns about someone calling Mallinckrodt and saying shut the lights off or delete the data. I think it will continue to -- we hope I should say, should be continued to continue with regards to third-party vendors and REMOXY’s development. .

Maybe one last question on talk about partnership, why is that partnership would be the right direction as opposed to say taking this asset to market yourself, if it's -- if it can be filed sometime next year and potentially be on the market in 2016, why not potentially the lumpy asset yourself or possibly pursue just an outright sale of the company.

.

So those are two very distinct questions. I would say at this point, we're talking to a number or we will talk to number of different potential parties about a number of different potential scenarios, be licensing, be M&A stay tuned. I don't know.

These are board level decisions, three are Remi decisions, but I can tell you if I put my shareholder hat on we're flexible, we're open. What was the other question, was nurturing the thought.

Kevin what was your first question?.

Well it was -- just as far as why not do it yourself?.

Yeah, I am look more of an innovation manager, R&D type manager. Sales and marketing is a very, very different expertise. And I would say that in this environment selling is probably the easy part.

The hard part is all the ancillary services around selling and that could include everything, from reimbursement policies to Medicaid to Medicare policies to dealing with large health groups to, I mean you name it.

It's a very complex world out there and the idea that a small company can sell into a $2 billion market, well I think some companies are trying and some I can think of a couple that actually have done it successfully.

But the ones I'm thinking of had a distinct call it managerial talent for sales and marketing and not really innovation or research and certainly not development. It just a whole different -- it's based on football. That covers it, Kevin..

Yeah, I think that was all I had. .

Our next question comes from Timothy Lynch with Stonepine Capital. Please proceed with your question. .

Yeah, thanks for taking my question.

Remi, I know you're waiting for the tech transfer and review the data and that could take many, many months and once you analyze that and ready to -- once you analyze that and are ready to present it to investors we will have more information but just so we have a sense and you may be able to go in to the details of the kind of interactions you’ve had with Pfizer over the last year and even if you can’t characterize under the license do you get kind of regular reports on development status or any kind of data status or is it radio silence on those kind of details?.

Well I want to be clear it’s never been radio silence. I also want to be clear Pfizer has been a tremendous partner. REMOXY had some deficiencies which the FDA identified especially with on the CMC side of the house, manufacturing basically and Pfizer did a tremendous job.

They really have some very, very good people and they applied those good people to addressing deficiencies around REMOXY. So praise be to Pfizer as far as technical competence and work and so forth. As far as communication, I mean look it’s a big company. Any relationship is complex, let alone a relationship between a small company and a big company.

What is material for us is probably a pin hole to them. So yes there are always ways to improve and that’s not just us. I think if you talk to any company any small company that has or has had a relationship with a big company there is always a sense of well they are big and we are small.

So we wish they would communicate better, that’s absolutely accurate.

On the other hand my concern here is with the performance of REMOXY and the prospects of re-filing the NDA and if in fact the data is as we think it is and it’s fileable I am a happy camper, I am not happy about what happened with regards to the stock price, not happy for my shareholders.

It’s never good, ever good when shareholders losing off half their value. On a personal basis I own whatever I own, 7 million, 8 million shares, so I feel the pain. On the other hand there are situations, I could think of plenty in this industry and it’s a volatile industry.

I can think of many situations where short-term pain results in ultimately long-term gain and I think right now we’re in a situation of short-term pain that will ultimately fill long-term gain..

Okay, thanks.

And so under your license with them, I know it’s not a full kind of 50-50 partnership or anything but have they have been obligated to give you legally information updates on things like data, or is that not part of the license?.

Again at this point I forget the exact wording and I want to say the actual agreement is who knows with the amendments maybe 200 pages of legalese. So I don’t know, I don’t want to speak and this represent exactly what they owe us.

I can tell you that we’ve had -- when they had data a year ago, when they were trying to make their go, no-go decision they did invite us in. They presented all their data. It looked good. They told us what they had to do, namely these four or five Phase I studies and then they didn’t.

So on a personal basis I did attempt to reach out, every week, maybe every couple of weeks or so maybe two or three weeks just to see what’s up but it’s what you are getting at. Did we have inkling that they would transfer the asset from them to us, absolutely not.

I did not, I can’t imagine anyone else within or outside the company would have either..

And that’s all helpful. I wasn’t looking to get to that. I was more I think where investors are struggling and maybe where the company is struggling right now is try to know whether to be excited or not about having the product back and you won’t really know until you have the full tech transfer which will take a long time.

But just trying to price how much Pfizer was obligated to update you or how much they did update you around things like data results along the way or whether it was more of a input data results along the way or whether it was more of an informal catch us, catch hand kind of arrangement on things I didn’t need you for..

Probably a little bit of both. Again as in every relationship it's a dialogue. I can honestly say I did my part. I believe I did my part to reach out but again they are a big company, we're a small company. We have an important asset. Also I want to address something I think you've said twice.

We're not going to know the data for six months or I forget exactly how you said it. The entire exercise can take up to six months but we don’t expect, we expect the important data, the relevant data to be -- to come closer at hand and then closer to the few weeks then months. There is nothing magical about six months.

The whole thing may take a month, may take three months, it may take four months it may take all five months, we don't know yet. .

Okay. That’s helpful.

Just, and I know this is kind of -- if I am beating a dead horse just tell me but from kind of a corporate view and I realize they don’t need to share this but they haven’t actually come out and told you why they're returning it from their point of view?.

I think that falls into your -- what you called the category of dead horse. .

Okay.

So their corporate development people then say this is what happened internally and this is why we're returning it?.

Now, I don’t believe I've ever talked to their corp. development people -- sorry business development people or whatever they are called. I mean again not to beat the dead horse but if they have an internal competitive product, product in the same space, sits on the same shelf, targets the same customers.

With REMOXY they owe a big fat royalty plus milestones. With their internal program they don’t. I mean I kind of see it as a portfolio decision tied to relatively straightforward NPV math. .

Yeah. Okay that’s what it looks like, just trying to see how much insight they gave along the way on multiple levels and I think the color you gave is, I know it’s limited but then it's helpful, so thank you. .

Great..

(Operator Instructions). .

All right if there are no further question….

Excuse me, our next question comes from Steve Owsley with Madison Street Partners. Please proceed with your question..

Remi, can you -- I mean this is just really out of curiosity, can you comment on how Pfizer contacted you, I know this was over the weekend, just only out of curiosity..

I think much the normal way, you contact anybody. They sent an invitation to join them on a conference call. I told them I was traveling Friday and Saturday I would rather not do it and they said it’s important we talk. So on Friday at the -- I forget exactly the time but it was -- I believe it was aftermarket hours.

We held the conference call and pretty short call, about 30 minutes or so and I think the rest about and that was on Friday and really the decision between Friday and I guess Sunday was the form of termination and please don’t ask me about that because it’s got all sorts of legal wrinkles that I don’t necessarily care to understand.

But what was important was the form of termination, whether it was I guess at will or not at will. And then on Sunday, I believe it was on Sunday they emailed us a letter saying it was an at-will termination and Monday we had our conference call and press release..

Secondly, can you comment on how much development cost Pfizer had in this thing. They obviously took the -- they took over King Pharmaceuticals with REMOXY kind of being the so called prize asset.

Can you comment on how much development cost you had to share in what’s roughly, what do you think that they had in this development program?.

I have never seen those numbers. So anything I'd say would really be speculation..

Can you comment on the deal that we had from King or say we -- the shareholders. The deal from King where the royalty rates at 15% and 20% we have found out from industry sources that, that was a relatively sweetheart deal.

Do you anticipate getting the same sort of royalty structure that if you -- without a sale of the company as somebody else pointed out on a question, say royalty structure if you went down the route of gaining a partner?.

Look it's a great question but Steve it depends. I think if we were to license it tomorrow morning, I think 15% to 20% would be on the high side. On the other hand if we wait until the product is actually approved, then it's probably an honest discussion about whether you go M&A or licensing.

The other thing I'll add is keep in mind Pain Therapeutics is the pioneer of the entire abuse deterrent movement, okay. So when we have first had REMOXY, I think the idea of abuse deterrents, I mean the words, the descriptors didn't even exist to describe the work we were doing.

We had a tough time explaining to a number of pharmaceutical companies what abuse deterrents really meant, just as we had our time explaining it to investors for that matter. Since then, the abuse deterrent industry or sub-industry segment, if you will has been legitimized by and populated by I would say probably a dozen different companies.

So yeah, if you are the first one with an iPad or iPod yeah, you can charge a lot of money. If you're not the first one -- if you're the second or third player in it, you're probably not going to look at -- you're not looking at a 20% royalty anymore. .

And -- go ahead..

I would just say, also I mean the FDA still is still unsure what to request and what to ask out of abuse, the whole abuse deterrent movement. It can very well be the case that by the time REMOXY is approved, if it's approved of course. It maybe ourselves, it maybe one or two other players, in which case yeah we'll get a very healthy royalty I believe.

On the other hand if REMOXY is the -- whatever seventh abuse deterrent drug in its category, we're not going to get 20% royalty. .

Okay.

So that kind of goes into my last question which is, how do you view the competitive landscape from the July ‘011 timeframe to where we are right now, with other companies, other competitions maybe people entering the space, maybe being able to get to the market quicker where you have the competition?.

Yes I don't spend a whole a lot of my time tracking other companies' specific progress. What I still maintain is that a number of other -- of our competitors technologies focus on a small and limited relative abuse.

So some companies have amazing crush proof or crush resistant technology, and I really mean amazing, you need like a hydraulic jack to break open the their pills or capsules. On the other hand these same companies may not be that good on the (inaudible) direction front or it may be possible to extract the oxycodone VSM sort of thermal cycling.

I believe where REMOXY shines is the fact that it's got this super viscous elastic property makes it very difficult to inject, very difficult to freeze, very difficult to boil. It's got a number of different -- it's got abuse deterrent properties on a number of different fronts.

The question we don't know and hopefully some of the answers come out of this upcoming FDA meeting is what's important to FDA, what's important to payers, what's important to end users, to patients and physicians. So again when we had REMOXY when we announced REMOXY what was it, 12-13 years ago I think the world was a lot simpler place.

We were hoping to win first place, the world was a lot simpler place, we were hoping to win first place. That was then, now is now. The good news is the industry, the whole abuse deterrent movement has been absolutely legitimized.

The bad news is they're still not an ideal solution in my opinion out there and there is still room for an independent third party to win. .

Okay. Thank you. .

Our next question is from Drew Hayworth with Madison Street Partners. Please proceed with your question. .

Hey Remi.

Steve pretty much answered or asked all of our questions but I just wanted to -- it just seems somewhat simplistic for Pfizer in developing a competing drug because from pretty much all industry insiders and participants the Pfizer’s buy of King was to get REMOXY and for a reasonable last, call it 12, 18 months all we’ve been hearing from not only Pfizer in their quarterly calls as well as you guys and you guys were in our office on June 10th is that it is progressing to a mid-‘015 re-filing of the NDA, everything is progressing fine.

Pfizer listed REMOXY in their Phase 3 assets on pretty much every presentation and get to kind of your first hand goal on the one yard line and they take a [inaudible] seems really, really unusual and maybe this is normal in the pharmaceutical industry that the big pharma companies take the smaller ones right to the end line and say hey guys sorry we changed our mind, no big deal, move on and your stock gets clipped for 50% but it just seems that everybody, Steve and I have talked to said Pfizer really -- the asset they wanted from King was REMOXY and then just to take it this far just to say well we have another drug and we don’t want to share the space with, if the market is truly -- potentially this large I think it’s really unusual.

I doubt you can really comment on that. Maybe we'll know the true data that's going to come out here when you guys receive it all from Pfizer but obviously to you all and to all the other shareholders that are on the call this is not the outcome, none of us we're expecting. And primarily all we've heard is positive things, positive things.

Yes, we're moving forward, moving forward. I remember Pfizer had a comment on one of their calls, we have a clear path forward for REMOXY. Well apparently something got in front of that path.

And so any comments on whether it's this call ongoing forward to keep shareholders a little more in tune to whatever is happening because right now it’s kind of a like a lottery ticket, we come in one day maybe it's up, come in next day Pfizer in our experience, Pfizer opens its mouth and stock is clipped for 50%.

But it would be nice for you all once you get the stuff back from Pfizer at least to convey to your shareholders the specific plan because quite frankly I don't know if I speak for everybody on the call or even shareholders that were so left out in the dark that we just wake up one morning and it’s flip a coin and then it’s kind of hard up to be a partner with the management team and a company when your relationship’s based upon a flip of the coin.

So it'd be nice to get rid of the shocks and maybe that's just the way it is in the biotech industry, you know better than I probably would but nonetheless it just seems really unusual that we've been going on for the last 12 months it’s kind of clear sailing, everything’s on track, every things on track and boom.

You get a phone call Friday night saying I’m sorry, you have good luck..

Yeah, I mean I share your frustration and yes it is the nature of drug development to be -- it's a very volatile business, a very volatile industry and I think that will never change.

There is something you said that and I heard this from others which is to say, I believe you said that ostensive -- was something like ostensively Pfizer bought King for $3.6 billion for REMOXY. It's interesting.

I am hearing this now that they actually gave us back REMOXY I've heard this from several different investors and yet when we said this, whatever three years ago, I think people were saying no that can't be the case. It can’t possibly be that valuable. Well yeah, it is the case. And that event neither here nor there it's a volatile industry.

Again your pain is my pain. I am on your side. I own -- I forget how many shares you own but for me owning 7 million, 8 million shares whatever I own that’s a significant hit. Pfizer, this is not a unique thing, this is not unique to Pfizer.

I think the big companies do this all the time I forget the specifics but yes, I think it was Lily gave back a product to a small company, I want to say four years ago and the stock crashed and it was doom and gloom and I think it was 18 months later the product got approved and there was a very happy ending for shareholders and for the company.

I am not saying this is scenario here but I am saying that it’s not unusual. What Pfizer takes, Pfizer gave us and vice-versa..

Okay, thanks..

Our next question is from Steven Shapiro with Intrepid. Please proceed with your question..

Yes, hi Remi. I am just following up on some of the other questions that are been asked. obviously I sense there is a lot of frustration obviously on the shareholders part and I appreciate the fact that you are the larger shareholder in fact as best as I can tell you been adding to your stake recently. So clearly it was surprise to you.

Given the fact that there are lot of questions on the [five star] that you said, I think that’s what we are all focused on as investors maybe you could just -- I know you mentioned it on the call the other day but I think you whipped through it pretty quickly.

Could you tell us -- you mentioned there were Phase I studies could you perhaps tell us exactly what the focus of those studies were, the studies on which we are still awaiting data? And within that perhaps you could either share with us what you know of the top level data or if not just give us some sense of what it is that gives you confidence that there won’t be any surprises, any negative surprises buried out in the data when you actually get all of that nuts and bolts data back from Pfizer whenever that maybe?.

In order to demonstrate bioequivalence FDA typically -- in fact FDA almost always requires four types of studies. First is called dose proportionality. Second is called alcohol interaction. The third is bioequivalent or in this case it was what Pfizer is calling it pivotal bioequivalence.

Then there was a food effect study and then for labeling purposes there is an abuse potential study that could reflect what kind of label you might get Tier 1, 2 or 3. So again I don’t have the data in front of me. As I said earlier I am very much a show me person.

So I kind of feel like I answered this already until I get the data it’s not right to say left, right, good, better and different..

It sounds like it was the first four are they binary sort of outcomes, I mean would that be fair to characterize it that way?.

The first point you don’t have the first four, I think the odds of re-filing or the odds of approval -- the first four are binary. The last one the abuse potential study again is required for long-acting opioids or actually I believe all drugs have abuse at this point and those are typically used by FDA for labeling.

I don’t have the data in front of me so I just can’t answer in more level of detail like I think we kind of answered this already. The other thing I will add because you ask is as a large shareholder. The data is negative. There is no hesitation on my part to go to the board and say the data is negative, not going to fly. Let’s move on.

I don’t have that impression at all but if that were the case I would not hesitate to make that recommendation to the shareholders or to the board. But I just don’t think we are there. I think for $2 million we can re-file this, roughly $2 million might be a little more or little less.

I can tell you the timeframe hopefully in a few weeks as to we can, I can tell you the timeframe hopefully in few weeks after we've had a look at the early data. And the rest is a waiting game. .

And just so I'm clear on it the alcohol interaction, I mean what is that dose proportionality. I mean you've done a lot of these before on the previous compound. Doesn't that -- I mean isn't that right you must have done it as you went through your various studies.

I mean are they what they sound like, I mean alcohol interaction we’re basically taking the pills, taking in alcohol and just seeing if that if the opioid bleeds out. I mean you’ve done those before, I mean as we seen like there should be an issue with that.

What's dose proportionality? I don't want to put words in your mouth but I mean that are those kinds of things that are giving you confidence that there really shouldn't be any surprises?.

Yeah you're correct, I mean I've done a lot of these studies throughout my career we have done I should say many of these types of studies throughout our careers as drug developers. This is pretty basic stuff if you are a drug developer.

Drug proportionality means that roughly speaking [2 10] is equal to 20 mgs or 40 mgs is equal to [1 4 10] mgs alcohol interaction again in maintenance term, melts in your mouth or melts in your body not in alcohol, bioequivalence I think that's really self-explanatory.

Food effect we know REMOXY has a food effect and we've always said take with food twice a day and every more.

And then abuse potential study and recreational abuse is again this is a study where you give the drug under relatively controlled conditions to a handful or number of so-called recreational drug abusers and then they come back and say I loved it, I hated it, I pay this much money or and then you also take a blood measurement to kind a confirm the dose something effects.

So again I don't want to beat a dead horse. We've been through this. I would say stay tuned for the data..

Okay thank you. .

(Operator Instructions). Appears there are no further questions at this time. I would like to turn the floor back over to management for concluding comments. Excuse me we got someone in the queue. The question comes from [Michael Baty], a private investor. Please proceed with your question..

Remi, I know this space is volatile but a quick question on your earlier comment on M&A activity.

In our own opinion, I know you can’t give us a definitive answer but would there be potential suitors for at the stock price today before the date is confirmed, sometime in 2015, has that crossed your mind or do you believe in this space, there is a potential for someone to take that risk even before the data as because you sound fairly still confident do you think they might be?.

I mean one of the things you learn in kind of one on one is everything has a value. So we could be trading at $2, $20, or $0.20, that would be the consensus value of the totality of the firm. Right now the market is saying our value is $2 a share. Investors have spoken.

And no one’s happy about it, but I still maintain that if the data is as we believe it is, we can re-file and if we re-file and if it’s approved I believe the stock could be a multiple of where it is today. That’s a lot of I believes and lot of steps between now and a multiple today. But again this is a volatile industry.

One of the things I -- when I read the newspaper, one of the things I love to look at is daily gainers and daily losers. And it just seems to me that every day there is at least one biotech that is in top 10 daily gainers and one biotech in top 10 daily losers. I think that tells you all you need to know about the volatility of the industry. .

No, my point, sorry maybe I'd make it clear was would there in your opinion from many conversations over the period of time with private equity firms, would there be in what maybe you've spoken to in the past, is there a potential for a firm to come in and see value in the stock prior to the results coming back. .

I would hope so but we've never talked to private equity firms so. It's just to your question is a valid one but it's just too hypothetical for me to attach any meaningful response to it. .

Okay, thank you. .

There are no further questions at this time. I'd like to turn to floor back over to management for concluding comments. .

Well, thank you everyone for lending us your ears. Again kind of we are in a sweet and sour situation, stay tuned and as we have answers we will communicate them appropriately. Thank you. .

This concludes today's teleconference. Thank you for your participation. You may disconnect your lines at this time..