Steve Aselage - Chief Executive Officer Laura Clague - Chief Financial Officer Alvin Shih - EVP, Global Head of R&D Chris Cline - Manager of Investor Relations.

Zachary Prensky - Little Bear Investments.

Good day ladies and gentlemen and welcome to the Retrophin Incorporated, Fourth Quarter 2014 Financial Results Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions].

As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference, Chris Cline, Manager of Investor Relations. You may begin..

Thank you, Nicole. Good afternoon everyone and thank you for joining Retrophin's fourth quarter and full year 2014 financial results and corporate update call. Here with me today are Steve Aselage, Chief Executive Officer; Laura Clague, Chief Financial Officer and Dr. Alvin Shih, Executive Vice President and Global Head of R&D.

Before we begin, I would like to caution that comments made during this conference call by management will contain forward-looking statements that involve risks and uncertainties regarding the operations and future results of Retrophin.

I encourage you to review the company’s filings with the Securities and Exchange Commission, which identify specific risk factors that may cause actual results or events to materially differ from those described in the forward-looking statements.

The content of this conference call contains time sensitive information that is accurate only as of today’s date, March 5, 2015. The company undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call. With that, I’ll now turn the call over to Steve..

Thanks Chris. Good afternoon everyone and thank you for joining us today. We are very pleased to report on the significant progress we made in 2014.

Last year was one of growth and transformation for the company, the year in which we up-listed to the NASDAQ exchange, acquired the rights too and launched two meaningful commercial products for patients with rare diseases, began enrolling sparsentan in the largest ever FSGS study, and enabled access for the first dosing of RE-024 to PKAN patients outside the United States.

Importantly we’ve been able to attract and retain critical talent at both the management and director levels. In the fourth quarter we were able to bring on board a new CFO, Laura Clague who you will hear from shortly and General Counsel, Margaret Valeur-Jensen.

We were able to bolster the Board of Directors with the additions of Jeffrey Meckler and Gary Lyons who have extensive pharma and biotech experience and have already been able to provide invaluable leadership. Yesterday we announced the addition of a sixth Director, Tim Coughlin.

Tim is the current CFO for Neurocrine and will bring additional financial guidance and oversight to Retrophin. We believe we now have the personnel in place to move the company forward, provide support to our patients, drive product development efforts and create shareholder value.

On the commercial side, I’m very pleased with the ongoing relaunch of Thiola. Thiola continues to be a leading treatment for patients with persistent cystinuria and the potential for this therapy continues to improve.

Due to higher than expected initial demand, we are able to surpass our initial 2014 goal of getting 450 patients on therapy by year end. As of March 2, 2015 we have more than 650 patients receiving Thiola and we continue to add patients on a weekly basis.

The six additional sales representatives announced last quarter will help us reach a prescriber base that has grown significantly since the relaunch began in September of last year, leading to increased Thiola awareness and use throughout United States. We also expect additional growth by improving both compliance and persistence.

Early results indicate that we have been able to make a substantial impact on patient compliance with our increased patient support efforts. We continue to receive payer support and patients indicate the dedication to service, support and ease of access to therapy enables a first class treatment experience.

Moving on to Chenodal, which has been the standard of care for CTX patients from more than three decades. The patient base remains stable at around 60 patients. CTX is extremely difficult to diagnose and the median age of diagnoses is in the mid 30’s. So we know there are more end diagnosed or miss-diagnosed patients in the United States.

The earlier physicians can diagnose patients, the more we can positively impact their lives over a prolonged period of time. We remain in active discussions with the FDA to determine an acceptable pathway for the addition of CTX to the Chenodal label.

The inclusion on the label would better reflect the true nature of its current use and potentially help us accelerate earlier diagnosis. This would also allow us to further our efforts to educate pediatric ophthalmologists who may have the first opportunity to identify and aid these patients.

As part of this effort, in the second quarter Retrophin will be initiating a screening study to aid in determining the prevalence of CTX patients among juveniles with bilateral cataracts. The study should provide data to improve awareness and earlier diagnosis of CTX. We continue to expect modest net patient growth in the near future.

Looking at the pipeline, Alvin and his team were able to lay remarkable ground work in 2014 that will translate to significant value creation in the years ahead.

By identifying high priority programs, Sparsentan for FSGS and RE-024 for PKAN and divesting non-core assets, the R&D organization can operate in a more focused manner, enabling us to advance those assets through the clinic and get them to patients faster.

We look forward to meeting the goals we set for 2015 of fully enrolling the DUET trial and submitting a U.S. IND for RE-024. Our business development team continues to be very active.

In 2014 this group found and helped acquire multiple commercial products that brought the company its first revenues and they have already started 2015 with an exciting opportunity. The cholic acid transaction is a good example of our team’s capabilities.

From a strategic stand point [Cobam] [ph] fits perfectly with our current franchise and would position us as a leader in the bile acid synthesis disorder field. We are hopeful for an approval in the near term and look forward to being able to update to you on the potential for this life saving therapy.

For the remainder of 2015, business development will still be aggressive, concentrating on other late stage clinical or commercial orphan disease assets with strong IP where we believe we can unlock considerable value without adding significant infrastructure. With that I would like to now ask Alvin to go through our progress on the pipeline. Alvin..

Thank you, Steve. Retrophin research and development made strong progress in 2014. We continue to support Retrophin’s commercial products, as well as push forward on our pipeline of novel innovative therapies for rare diseases.

Our support of Chenodal includes initiating a dialogue with FDA to understand how the Chenodal label can be revised to include cerebrotendinous xanthomatosis or CTX, which is the sole use of the drug. We are working with regulators to map out the path for our label revision and we’ll have more clarity over the coming months.

Regarding our pipeline, our strategic review of our assets has allowed us to arrive at a focused number of projects where we believe we can succeed and create tremendous value both for patients and for our other stakeholders.

We continue to focus our energies on our most important pipeline programs, which includes Sparsentan for FSGS and RE-024 for PKAN. With the recent divestment of our non-core assets, my team and I have a clear focus and are dedicated to getting treatments to patients with these devastating diseases as quickly as possible.

We’ve made solid progress in our development of Sparsentan as a treatment for focal segmental glomerulosclerosis or FSGS. The Phase II DUET clinical trial is a primary focus of our clinical operations. We opened 24 sites in the United States in 2014, with several more having opened in 2015, as well as our first international sites in the EU.

In November 2014 the data monitoring committee reviewed unblinded data and improved the continuation of the study, as well as the opening of the next higher dosing cohort and the inclusion of pediatric patients.

With our additional sites and increased recruitment efforts, we remain on track to meet our goal of full enrolment of 100 patients by the end of this year. In early January the U.S. FDA granted Sparsentan orphan drug designation, which will confer seven years exclusivity upon approval for the FSGS indication, as well as numerous other benefits.

We remain highly enthusiastic about the prospects for Sparsentan and look forward to providing further updates as DUET enrolment progresses. Our second lead development asset is RE-024 for the treatment of PKAN.

The severity and degree of unmet medical need in this neurodegenerative condition is a constant remainder of the importance of developing therapeutics for rare diseases. We remain on track for our goal of filing an IND to support the clinical investigation of RE-024 in healthy volunteers.

In November 2014 two additional PKAN patients outside the United States began therapy with RE-024 under a physician initiated research effort. This brings the total to four PKAN patients who’ve now been treated with RE-024 as part of physician initiated studies.

Results from these patients will be disclosed at the discretion of the treating physicians through publication and peer review journals or at scientific meetings. Our company remains focused on filing the U.S. IND for RE-024 and advancing into the clinic and to PKAN patients as soon as possible in the United States.

On the research side, one of 2014 achievements was the successful manufacture of a formulation of an ACTH analogue RE-034. We formulated and manufactured RE-034 using a process that allows for modulation of ACTH release from the site of administration.

Preclinical development continues and we are deciding amongst several options as we consider initiating IND enabling studies this year, with the view towards developing RE-034 as a treatment for one or more severe rare diseases. Finally, we’ve made progress in other research programs for undisclosed rare disease targets.

These early stage programs will help us pave the way to sustainability of our pipeline for years to come. As we get closer to the clinic, we’ll provide further updates on our research programs. And with that I’ll turn it over to our CFO, Laura Clague.

Laura?.

Thank you, Alvin. Having joined Retrophin only a short time ago, I’m pleased to have been able to assemble a team whose extensive financial experience has helped guide the company through the necessary changes related to the management transition in 2014.

In addition, we have implemented a robust system of internal controls, which will ensure Retrophin adheres to the highest financial standards in the years to come. Net product sales for the fourth quarter were $14.1 million and $28.2 million for the full year 2014.

Reported net product sales consisted largely of Chenodal and Thiola sales, with a small contribution from the recently divested product Vecamyl. Net product sales for the fourth quarter represent the first full quarter of both Chenodal and Thiola being on the markets.

We reported a GAAP net loss of $29 million for the fourth quarter and $110.9 million for the full year 2014. Adjusting for extraordinary and one-time expenses, net loss for the fourth quarter was $9.4 million and $46.6 million for the full year 2014.

The most notable adjustments in the quarter were $3.6 million of legal and settlement expenses, stock based compensation expense of $3 million, severance expense of $1 million and an offset of $9.5 million for the change in fair value of derivative instruments related to warrants.

Research and development expenses on a GAAP basis were $14.9 million for the fourth quarter and $47.8 million for the full year 2014. The increase in R&D spend in the fourth quarter was primarily driven by clinical trial expense related to the DUET trial.

On an adjusted basis R&D expense for the fourth quarter was $12.4 million and $38.7 million for the full year 2014. Relevant non-cash expenses for the fourth quarter included $1.9 million of stock based compensation and depreciation and amortization.

Selling, general and administrative expenses on a GAAP basis totaled $18.7 million for the fourth quarter and $59.6 million for the full year 2014. The increase in SG&A expense is largely related to the rapid expansion of the company’s business, including the launch of three commercial products.

On an adjusted basis SG&A expense for the fourth quarter was $11.1 million and $30.5 million for the full year 2014. Notable one-time and non-cash adjustments for the fourth quarter consisted of $3.6 million related to legal and settlement expenses, $3 million of stock comp and depreciation and amortization and $1 million in severance expense.

As of December 31, 2014 we had approximately $27.8 million in cash and cash equivalents and marketable securities. Despite not being able to completely eliminate many extraordinary and one-time expenses in the fourth quarter, due to the timing of the management transition and legal fees, I’m pleased with our progress.

Our recent improvements associated with our people and our processes as I described earlier will help facilitate our goal of meaningfully reducing operating expenses in 2015. I will now turn the call back over to Steve for his closing comments..

Thanks Laura. While we accomplished many things in 2014, we have our sights set much higher for 2015. We expect Thiola to drive significant top line growth in 2015 as we expand the use beyond the roughly 650 patients currently receiving therapy.

As I stated earlier, we are hopeful for approval of cholic acid in the near future and look forward to sharing more on this promising treatment for multiple orphan diseases.

We were not content with our operating expense in 2014 and you should expect to see that reduced over the next several quarters as we wind down expenses related to the management transition and the investigation conducted in the fourth quarter, the results of which were disclosed in February.

With the closing of the divestment of our non-core assets, our R&D organization is more focused than ever to deliver on our goals of filing a U.S. IND for RE-024 in the first half of 2015 and fully enrolling the DUET trial and FSGS by the end of 2015.

I am very proud of the efforts and progress of the Retrophin team and look forward to an exciting and rewarding 2015. With that, I will now turn the call over to Chris to open the line for questions. Chris. .

Thanks Steve. Nicole, can we please open up the line for Q&A..

Yes, thank you. [Operator Instructions]. Our first question comes from Zachary Prensky of Little Bear Investments. Your line is now open. Again, Zachary Prensky your line is now open. .

Thank you. I was under the impression that on the prior earnings release and the one before that the company seemed to indicate that at the beginning of 2015 we would get a full year estimate in terms of expectations on the top-line revenue.

Has something changed or are you still in the progress of working on the model for the year?.

I think we are hesitant to put out guidance for 2015 full year because we’ve still got a variety of issues that are in transition. On the revenue side Thiola is very much still on a relaunch mode.

We’ve changed the size of the sales force, added six additional representatives to increase our reach and we felt like at this point in time we were going to have too wide an [indiscernible] around any estimate on either revenues or earnings per share to put out a forecast that would be meaningful too.

One of the reasons why we put out specific patient numbers on both Thiola and Chenodal is to allow you to model both growth and put together your own estimates on what we might be able do on the revenue side using patient numbers rather than dollars. .

Okay, thank you very much. I appreciate that. .

Thank you. [Operator Instructions]. One moment for our questions. [Operator Instructions]. .

Maybe while we are waiting let me add one additional comment to what I said previously and that is as I said in the prepared comments, we are hopeful of our near term cholic acid approval by the FDA but there is no way to predict exactly when that will happen and that also is going to have we think a significant impact on our 2015 revenues. .

[Operator Instructions]. And I’m showing no further questions at this time..

Great. Thank you, Nicole. With that we will bring the call to an end. Thank you all for joining us today and we look forward to updating you on our progress next quarter..

Thank you ladies and gentlemen for participating in today's conference. This does conclude today's program. You may all disconnect. Have a great day everyone..