Joseph Patti - President, Chief Executive Officer Mark Colonnese - Executive Vice President, Chief Financial Officer Anna Novotney-Barry - Vice President, Clinical Development Will O’Connor - Stern Investor Relations.

Anita Dushyanth - Zacks Investment Research Christopher James - FBR.

Good morning ladies and gentlemen. Welcome to the Biota Pharmaceuticals Second Quarter 2016 Earnings conference call. At this time, all participants are in a listen-only mode. Following the formal remarks, we will open the call up to your questions. I would now like to turn the call over to Will O’Connor of Stern Investor Relations. Please go ahead..

Thank you, Operator. My name is Will O’Connor of Stern Investor Relations. I would like to welcome you to the Biota conference call and webcast to review the company’s second quarter 2016 earnings results and to provide an update on recent pipeline and corporate developments.

This morning, we issued a press release which outlines the topics that we plan to discuss today. The release is available at biotapharma.com. With me today from Biota are President and CEO, Dr. Joseph Patti; EVP and CFO, Mark Colonnese, and Vice President of Clinical Development, Anna Novotney-Barry.

Before we begin the call, I’d like to remind you that today’s discussion will contain forward-looking statements that involve risks and uncertainties. These risks and uncertainties are outlined in today’s press release and in the company’s recent filings with the Securities and Exchange Commission, which we urge you to read.

Our actual results may differ materially from that is discussed on today’s call. With that, I would like to turn the call over to Biota’s CEO, Dr. Joseph Patti..

for our RSV fusion inhibitor BTA585, report data from the Phase I multiple ascending dose trial later this quarter, initial a Phase IIa challenge study next quarter, and report Phase II data from that trial in the second half of the year, and also for vapendavir, complete enrollment and report top line data in the second half of the year from the Phase IIb SPIRITUS trial.

With that, I’ll turn the call over to Mark to review the financials..

Thanks Joe, and good morning everyone. Today I’ll be reviewing the financial results of the second quarter of our 2016 fiscal year, as well as providing an update on our cash position. Let’s start with a review of our revenue and expenses.

Revenue decreased to $1.7 million for the three-month period ended December 31, 2015 from $13.9 million in the same period of 2014. There are a couple factors contributing to this variance, with the largest being related to contract service revenue.

In the December 2014 quarter, we recorded more than $7 million in revenue from a government contract that has since been concluded. As such, there was no corresponding contract revenue this year.

Also impacting our year-to-year comparison was lower royalty revenue from our two flu products that are commercialized by GlaxoSmithKline and Daiichi Sankyo respectively. The royalty decline was related to a larger Relenza government stockpile order received in the prior year and a decline in seasonal sales of the products.

At this point, the seasonal sales decline seems to be timing related, reflecting an unusually early flu season in 2014. In that year, we saw very high revenues in the fourth quarter and lower revenues in the first quarter of 2015, which is the reverse of what we’d normally see since winter is typically by far the most severe flu season.

Coming back to the current year revenues, we are encouraged by the fact that if we look at end market sales of our licensed flu products in the December quarter for each of the last five years, excluding last year’s aberrant early season, we saw a greater than 20% increase in this year’s sales over any of the prior year levels, so our partners are doing a nice job for us in their respective markets.

Turning now to cost of revenue, we saw a decline of zero to this quarter, which reflected the absence of the service revenue from the concluded government contract.

Research and development expense increased to $6.3 million for the three-month period ended December 31, 2015 from $4.8 million in the same period in 2014, which we feel is reflective of the progress we’ve made with our product pipeline.

In the current December quarter, we have been funding our large Phase IIb SPIRITUS trial with vapendavir and two Phase I trials of BTA585, as well as paying for start-up activities for our Phase IIb trial with BTA074. In the prior year, most of our R&D costs were related to our early stage research program in the facility where we conducted them.

Based on our strategy to transition to a clinical stage organization with higher value potential, we have shut down the early stage facility and now focus on progressing our clinical candidates rapidly towards late-stage clinical development.

As such, with our two products candidates BTA585 and BTA074 ramping up their Phase II clinical activities next quarter, we expect that our R&D spending with continue to grow, albeit at a measured pace. Our general and administrative expenses were reduced to $2.1 million this quarter from $2.6 million in the comparable prior year quarter.

This decline was due to administrative cuts associated with closing our early stage research facility. In summary, we reported a net loss of $6.5 million for the three-month period ended December 31, 2015 as compared to net income of $6.5 million in the second quarter of the prior fiscal year.

Basic and diluted net loss per share were each $0.17 for the three-month period this year compared to basic and diluted earnings per share of $0.19 in the same period of 2014. Turning to our cash position, we held $57.2 million of cash and investments at December 31, 2015.

We expect that this cash will be sufficient to get us to important clinical data readouts later this year from two of our Phase II programs with an appropriate cushion. As a reminder, the second quarter 2016 financial results, as well as this morning’s announcement, will be available on the investor section of our website.

At this point, let’s open up the call for questions.

Operator?.

[Operator instructions] Our first question comes from the line of Anita Dushyanth with Zacks Investment. Your line is open..

Good morning, how are you today?.

Fine, thank you..

My question has a couple of things. One is have you started enrolling for the Phase I multiple ascending dose concerning the BTA585? My second question is regarding the SPIRITUS. Would you be able to tell us how many people have been enrolled in the trial so far/.

Yes Anita, actually the Phase I multiple ascending dose for 585 has been completed. All the dose cohorts are done. We haven’t unblended the study yet, and we’re still waiting for PK, so as I said in the prepared remarks, we expect later this quarter to have the top line results from that study.

As far as enrollment for SPIRITUS, because it does change weekly depending on how many colds in our screen population, we don’t give guidance on exact patients enrolled other than to say that we feel comfortable based on where we’re at that we should have top line data from that study in the second half of this year..

Okay, thank you..

Thank you. As a reminder, ladies and gentlemen, if you have a question, please press star and then one on your telephone keypad. Our next question comes from the line of Christopher James with FBR. Your line is open..

Hi, good morning, and thanks for taking my questions. Just regarding the BTA585 data, what should we expect from those data, and what would you consider good versus great results? And I’m going to have a follow-up, thanks..

I’ll let Anna handle that question..

The two key things we’re assessing in the SAD and MAD Phase I studies are, of course, safety, tolerability and PK.

As far as the PK, what we want to see is plasma levels of BTA585 that reach levels that are consistent with antiviral activities in vitro, so that’s a key thing that we’re measuring in the study, and of course you want to look for safety and tolerability, which means the absence of a safety signal or a trend that would be adverse.

You don’t want to see changes in clinical laboratory values, changes in other assessments such as ECGs or physical exams, so that’s what’s being assessed there.

That’s what allows you to move ahead into efficacy studies into Phase II, and also hopefully what you see with your PK is a dose response so that it becomes possible to accurately select a dose for efficacy studies..

Great, that’s really helpful.

Then on vapendavir, remind us your partnering strategy and when do you think you will have a sufficient data set to partner the asset?.

Chris, obviously the totality of the data is going to be the driver for our partnering strategy, and so I think the good news is I think we have a lot of optionality with all of our programs, including vapendavir.

We definitely will engage with potential partners ahead of the data so that they’re aware that it’s coming, and so we’ll have the appropriate discussions there, but I think it’s unlikely that anything substantive would happen prior to having that top line data in the second half of this year..

Great, thanks Joe. I’ll jump back in the queue..

Thank you. If you have any follow-up questions or any further questions, please press star, one on your telephone keypad. I’m showing no further questions at this time. I’d like to turn the call back to management for closing remarks..

Thank you. In closing, we’re very pleased with the progress we’ve made executing our clinical strategies. Our three clinically active programs address important viral infections that have limited therapeutic options.

We are in solid financial position from which to continue to execute our plans, and we expect to achieve a number of clinical milestones in the coming months that we believe should enhance our shareholder value. Thank you for joining this morning, and have a great weekend..

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program. You may all disconnect. Everyone have a great day..