Good morning. My name is Wendy and I will be your conference operator today. At this time, I would like to welcome everyone to the Impax Laboratories second quarter 2010 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer session. (Operator Instruction) Thank you. Mr. Mark Donohue, you may begin your conference.

Thank you, Wendy. Good morning everyone and welcome to our second quarter 2010 earnings conference call and webcast at www.impaxlabs.com. On today’s call we have with us, Dr. Larry Hsu, our President and Chief Executive Officer and Art Koch, our Chief Financial Officer. Following their prepare remarks both will be available to take any questions you may have as time permits. Should you have any questions after the call, please feel free to telephone Mark Donohue at Investor Relations at 215-933-3526. A replay of today’s call will be available starting at 2:00 PM today through August 10th. Please refer to our second quarter earnings release for replay details. Our discussion today may include certain forward-looking statements and actual results may differ from those presented here. The factors that could cause such a difference are outlined in our SEC filings and on our website. Please refer to our earnings release for additional information on our financial performance and highlights. With that, it’s a pleasure to turn our call over to Dr. Larry Hsu.

Thank you, Mark. Good morning and thanks for joining us. I very pleased to report that our focus and the determination to achieve our strategic initiative, continues to result the significant growth of our business. Our solid second quarter of 2010 financial results far exceeded our last year’s second quarter. Combined with the record result in the first quarter, our first half of 2010 has already exceeded our full year 2009 performance. This exceptional performance has resulted in the significant increase in our cash position, that will plan to reinvest in vital strategic initiatives to continue to drive near and long-term growth. Total revenue in the second quarter increased 162% to $153 million lead by our generic Adderall XR, Flomax and the fenofibrate product. Operating profits increased to more than $49 million, from $4 million last year. This solid result lead to a $28 million increase in net income and a $0.45 increase in earnings per diluted share. I will have more to say about our quarter’s performance in a moment. I wanted to discuss some of the events that occurred during this quarter and update you on our pipeline. First, we will continue to enjoy the final weeks of our exclusive selling period for generic Flomax. The result of the campaign was dramatic and that this launch now takes its rightful place as the most successful in our history. Second, we enjoy our third consecutive quarter of supplying generic Adderall XR to the marketplace. This has proven to be an important component of our generic business. And we are working hard to build a significant and lasting customer relationship. On our first quarter earnings call in early May, we discussed the existence of some supply issue that would begin to experience for generic Adderall XR. In addition, we have…

Thanks Larry and good morning. We had another dramatic quarter and our business continues to generate substantial working capital to invest both internally and through M&A activity to create incremental long-term growth opportunities. In the past nine months we have generated more than $653 million in revenue and $201 million in net income. This exceptional performance has placed us in a stronger financial position than at any time in our history. Our cash and short-term investments have increased to more than $328 million, an increase of $220 million over that period and we have no debt. This strong performance is a testament of our ability to successfully develop our pipeline of high value ANDAs in our generics business. We have benefited significantly from the recent launches of generic Adderall and Flomax. We are confident that our current generic pipeline of 88 products offers both near and long term opportunities that have the potential to generate revenue and profit in the months and years ahead. In addition to our internal product development efforts, we have very aggressive business development activities to accelerate our growth in both divisions, by a significant increase in cash. With our significant increase in cash the range of development opportunities we can consider is expanding. In our generics division, we are primarily focused on acquiring product technology businesses in complimentary dosage forms where our core competency in drug delivery and formulation expertise can be combined to produce above average growth in high value products. Our brand business growth strategy is similar to that of our generics business and we will continue to focus our efforts on our internal R&D program while pursuing additional external growth opportunities. Our business development activities are focused on one, obtaining strategic partners for promotion and marketing of our products outside the US…

(Operator Instructions) And your first question comes from the line of Chris Schott from JPMorgan.

This is actually Dewey Steadman for Chris. I was just wondering if you can give some more color on the rate limiting factors for the Adderall XR supply from Shire and what will help you get market share within the generic market?

To better frame the question, second quarter sales of generic Adderall trails the first quarter by about 25%, and there were two main factors at play. First: in the first quarter, while we were concentrating all of our efforts on our generic Flomax launch, we made sales of generic Adderall to customers who turned out to be slow movers of the products. So the volume of reorders in the second quarter fell behind the first quarter take. Secondly, we experienced some disruption of supplies for certain strengths of the product, which made selling new accounts with the entire suite of products difficult. We have begun to see improvements on both issues. We are marketing aggressively to accounts with more predictable patterns of usage and we have received additional supplies of the products. Structurally, there is nothing preventing us from splitting the generic market with Teva and we will be working to expand our share in a responsible and determined manner in the second-half. But please keep in mind, we will always be dependent on supply and hitting our target depends on a consistent supply of the product.

And then on the expense progression to the second half with this additional $6 million in R&D. Do you expect that to be fourth quarter weighted or third quarter weighted?

Slightly fourth quarter weighted, but pretty much over the half.

And your next question comes from the line of David Amsellem.

Just a couple. In terms of the Adderall, can you talk about where you are in your dialogue with Shire to improve your supply issues? Is there any possibility of an expanded DEA quota and are legal options similar to what Teva resorted to still on the table? Thanks.

Impax always has great many choices in working through situations like this. The choice we chose during the second quarter and to-date is to work with Shire and avoid litigation and we’ve some fruits of that strategy already with increased supplies in July, already. So, we think the approach we’ve taken is having the impact we need and we are satisfied with where we are at the moment.

And then, you talked about potentially splitting the market, the generic portion of the market with Teva. Obviously, you haven’t gotten to that at this point in time. But, where do you see your share in the next six months and is there a reason, well to think, that you can get to that split by year-end?

David, it’s an often asked question and unfortunately we are not in a position to give that kind of guidance. What we can do is describe as we’ve done what the landscape looks like and let you know that our strategy is to approach the market in a responsible way, but determined as well to fight for accounts one at a time and build market share responsibly.

And then, one last question if I may. This is on generic Effexor XR. Are you expecting a significant number of additional entrants after the expiry Teva’s exclusivity by year-end and just give us some color on what your plans are for that product.

There is a large number of filers, David, on that product, and I think it’s like 13. So, we don’t expect that to be a significant contributor given the highly competitive landscape of that product.

Your next question comes from the line of Louise Chen.

A few questions for you. The first question I had was on your thoughts on Concerta, now that Lovenox’s position has been resolved. Do you see any change in the FDA with respect to some of these more difficult ANDA products?

Well Louise, I’ll only try to answer this question. You recall that FDA had a vital committee meeting back, I believe as, in April in which they addressed the so called compact formulation product, which you did actually talk specifically on the ANDA side and in Concerta, we believe that's the beginning of the process and again we are getting to the Lovenox, which is not exactly the same type of issue compelled to for example Concerta or Ambien or Adderall in this case. So we think FDA is continuingly working toward that direction but we still believe that for a compact formulation like the Adderall or Concerta they are at the beginning of the process.

My second question is on your branded pipeline IPX066, can you talk about why it’s better, or potentially better than other drugs on the market and also why you are confident that you can successfully launch your branded drug whereas other generic companies have failed at this endeavor.

Can you repeat the second half of your question?

Sure so first of all why is IPX066 better and secondly why do you feel that you could successfully launch a branded product or what gives you confidence that you can successfully launch a branded product when a lot of generic companies have had minimal success with branching out into those drugs?

The first question about the IPX066, we believe that from the Phase II study we have seen that the IPX066 is not only better than the Sinemet which is the most likely used staliva carbidopa-levodopa but and in direct comparison we believe this is even better than the Stalevo which is the product which has been on the market for the last few years and was very successful commercially. So we have a lot of confidence on the IPX066 and the Phase III results of course as we pointed out, The Phase III results should be available within the next six months to nine months so we really are looking forward to see the result from that. The second half, if you recall that we have a small sales force, very focused on the neurologist with sales force with the 66 sales representatives. Currently it’s promoting the Lyrica for Pfizer and as a matter of fact you will recall that the same sales force has been promoting for Shire back in the first three years with a product called Carbatrol, but also focused on the neurologists. So what I am trying to get to is that our sales force has been establishing the relationship with the neurologist community and we believe that by 2012 when the product is approved the IPX066 is approved, we will be in the excellent position of this sales force to promote the product to target the subscriber neurologist community.

Okay and then just one more question on the longer term gross margins. I know you've said in the past that you expect brand sales to make about 50% of your gross margin. Can you talk about how you expect to achieve this and then the timeframe for when you expect to reach that kind of a goal?

Well, in terms of the gross margin I think that on the generic side we are going to continue pushing for the first-to-file which will naturally give us a higher gross margin but also we expect the blend product, when its launched in 2012 or 2013 that blend product certainly should give us very good gross margin as well. So combined with the generic strategy and the entry of the good blended product we are pretty confident that we will be able to maintain the 50% of gross margin in the future.

Your next question comes from the line of Corey Davis from Jefferies. Corey Davis - Jefferies & Co.: I assume that that $328 million in cash is burning a hole in your pocket but how would you characterize the landscape for acquisitions on both the brand and the generic side right now?

Well, we are working really hard trying to spend the money and most important though is during the process that we are looking for a suitable target, a suitable M&A target. We want to make sure that we would spend the money wisely. We want to make sure that we buy the product will fit in our strategy. We want to make sure the company will go out to fit in our strategy very well. If you try to go and buy a company, buy a product, it’s easy, but to buy the right product, the product fitting our strategy is not so easy. Okay, so we have put a lot of effort on trying to make sure that any acquisition we do doesn’t matter part of our company will help accelerate our growth from that point of view. So we will put in a lot of effort and as soon as we have a result, we will let you know. Corey Davis - Jefferies & Co.: Do you have any sort of internal criteria with respect to accretion or timelines for accretion or is it just needed to be the right thing for the company either short term or long term?

The latter, in other words, we do not have a timeline. We know with these type of things its really difficult to set a goal and we end up, in order to meet the goal, we just grab of whatever we have that’s achievable during that timeframe. We do not want to do that. Our focus is to do the right thing and do the right acquisition and to find the right partner from that point of view. Corey Davis - Jefferies & Co.: I’m sorry I had to jump off for a second, I didn’t hear what Louise asked in the last question, why your R&D went up in the brand component of your R&D spend. What changed in the Parkinson's program?

Well that the main reason is that we underestimate the cost for the clinical trial as we get in, we end up have to enroll more patients because we worry about too many drop out on the patients so there is a couple of reasons, number one is that we are probably estimate a little bit less than what we estimate the end of our last year on the total cost. The second thing is that just to make sure we have the number of patients we decide increase the enrollments to get more patients and just incase there are more drop out than what was expected, and that end up with the regional cost. Corey Davis - Jefferies & Co.: Can you put some numbers behind that? What is the dropout rate? And what are the total enrollment going up to?

Well I don’t have the number with me on that but I don’t think that typically we would comment on these things, but what we have decided is that its not that we already expensed an exceptional high drop put, but when we start seeing some drop out we want to make sure that the study ends with the acceptable number of patients, so we don't suffer from -- when we create the statistic, we don’t want to end up with not enough subjects in that

Your next question comes from the line of Ken Cacciatore with Cowen and Company. Ken Cacciatore - Cowen & Company: A little bit of follow-up from Corey's questioning in terms of kind of what you are looking at how the landscape is changing. Some of your larger generic competitors have made moves, and most recently Mylan. So can you give us a sense of as you kind of look maybe even larger, sometimes you are looking at even smaller. How competitive are the dynamics, is that, you are looking at things and it’s more does it fit for you or you finding that the bidding process is becoming a little bit too rich at times. Also maybe talk about, would you be willing to go international in looking for opportunities and then also maybe Art if you can give us couple of near term opportunities in terms of product launches or litigation that you would like us to focus on, but maybe we are not, thanks?

Well Art do you want to answer that the question or you want me to answer part of it.

Whatever you like Larry.

Why don’t you answer that question?

Okay. In terms of the landscape it’s clear that it is competitive type. We are searching for something that is very special to us. We are looking where we can add our formulation, our drug delivery expertise. As you know not everybody is looking for that and therefore we have a little bit of a competitive advantage. In terms of kinds of things, we find that there is probably a larger audience of smaller, privately-held, rather than household names we all know from the generics industry as a likely full candidate, but you never know, there are opportunities that show up at the strangest time. In terms of guideposts, we are thinking of acquisitions of EBITDA somewhere in the $50 million to $150 million range as a pretty wide target area where we are pursuing. But again the focus is on businesses where our formulation expertise our drug delivery core competency will create synergies in the product pipeline. And again the competitive landscape is fair, it is a competitive landscape, but we think we have a number of tools available to us to compete and we think we should have a fair shot at a good opportunity. In terms of a pipeline Ken, we have six products with 30 months days expiring in 12 to 18 months. Those are the nearest term product opportunities and it’s a question that’s often asked, but I’d like to point out though that this time last year, we weren’t talking about either Adderall or Flomax in terms of near-term product opportunities and things that we are not supposed to file on either of those of products either. So product opportunities can come in addition to the applications and disclosures we make in the course of our patent litigation. In terms of first-to-file opportunities, it’s important to mention Doryx and Rubella, but the pipeline is more concentrated in first-to-file opportunities than never before and the flow as those products come to the regulatory process and approval, will begin to show up in revenues as well.

Your next question comes from the line of Sumant Kulkarni from Bank of America Merill Lynch.

This is just getting back to generic Adderall XR. Of the three quarters that you've booked sales so far, which one would you say would be most representative of normalized sales on that product?

It’s a good question Sumant, if there is a normal in this market, I can’t wait to find out. It’s a very unique situation. As you know, the brand is unusual, the generic landscape is unusual and I don’t, we’ve been plagued with supply issues at different times in different quarter, and I think it’s really hard to call anything normal or abnormal. This is a very dynamic market. We are competing head-to-head and determined to win our share.

And on the generic base business, other than Adderall XR, Flomax and to a certain extent fenofibrates, are there any other products that could be relatively more important in the base?

We have a number of smaller products that are disclosed in our filings, but they are not individually significant or not. They make a nice basket of based products and we manage that base very carefully, but not that I would think we should call out or single out. I think that it’s a basket of based products.

And how would you characterize the recent prices or is it in the base relative to a year ago or couple of years ago?

What we have observed is, it is price competitive, we don’t want to paint a picture of not price competitive, but the emphasis on price as the sole decision, determinant for customers has waned. There are other considerations including quality of the product and consistency of supply that weigh in more heavily on the purchases decisions than 12 and 18 months ago.

On the business development side, I know you have more flexibility now given the cash inflow from Flomax, but if you had to pick a side, would you prefer generics or the branded side or both are equally good?

We look at both.

No, please go ahead.

Okay. We look at both, the generic and the brand opportunity here. And I think obviously as you pointed out correctly with more cash in the bank, we have more flexibility, but we understand that our strategy is to grow both the generic and the brand. Therefore, from the M&A point of view, we are looking at both the areas equally.

And final accounting question for Art. It looks like the inventory turns have increased quite a lot and would you expect this level of inventory to sustain? Will it go up or down?

Well, I think the inventory turns reflects the high volume of Flomax sales in the first half of the year, and to the extent that won’t be recurring. I would expect the turns to shrink a little bit. In my judgment we don’t have an outsized investment in inventory if normal levels that support the volume of sale.

(Operator Instructions) Your next question comes from the line of Michael Tong from Wells Fargo.

Good morning. Just a clarification question, I am not sure if I heard you right or heard you correctly, Art. When you are looking at acquisitions, you are looking at acquisitions of businesses that delivers $50 million to $150 million in EBITDA or businesses that might cost you $50 million to $150 million?

The former, Michael. We are looking for businesses that have that kind of contribution.

And is there an accretion dilution criteria that you apply to it?

Well because we are looking for a profitable business and because we have virtually no debt on the balance sheet and significant cash we are not envisioning an accretive, if not immediately within the first year acquisition.

Okay and then finally where does the potential for adding dosage form capabilities rank in your acquisition packing order?

It’s right there, dosage forms are another way to deliver value to patients and formulation and drugs delivery expertise at the highest level is really independent of the dosage form. So diversifying beyond oral solids is a very key part of our priority.

And your next question comes from the line of Elliot Wilbur from Needham. Elliot Wilbur - Needham & Company: Art, I want to go back to some of your other commentary on Adderall XR, no surprise I guess. You indicated that at some point in time we should expect or you expect to basically be splitting market share with Teva, but just with respect to sort of the overall trends in substitution or market share for the generics it seems like Shire has done a very good job at controlling supply or limiting supply between the two companies such that total substitution has been sort of capped at 60% approximately for several months. And I’m just wondering as we sort of think about the overall share of pie if we should be thinking more along the lines that substitution does in fact stay around 60% and then at some point in time we should see more equal distribution between the two players involved.

The expectation from the marketplace is that brand penetration will likely erode Shire subjects themselves in their releases. They don’t, they are not specific in terms of where they expect it to go but they have made statements indicating that they do expect brand concentration to decline overtime and we are certainly pursuing that category of market opportunities vigorously as is Teva. And then as I said we are working towards rolling our share responsibly almost account by account rather than any other approach to market that we think will produce long term value for our customers and for our shareholders. Elliot Wilbur - Needham & Company: And just one follow-up question here. I understand that Flomax is sort of yesterday's news but given the pricing levels that existed at the end of the quarter or even just recently, is that even a profitable product for you at this point in time? Is there still going to be some small residual amount being sold?

Yes there is a small residual amount, it is profitable but it’s really, it’s just like a month’s question. It’s a base product now and not individually worth studying, it’s just another component of our base business.

And there are no further questions at this time.

Thank you Wendy and thank you all for joining us today and enjoy the rest of your summer.

This concludes today’s conference call. You may now disconnect.