Good afternoon and welcome to Aquestive Therapeutics Third Quarter 2018 Conference Call. At this time all participants on a listen-only mode. Later, there will be a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this call will be recorded. I would now like to introduce your host for today's conference Miss Stephanie Carrington, ICR Investor Relations. You may begin.

Thank you, Operator. Good afternoon and welcome to today's conference call to review Aquestive Therapeutics results for three months ended September 30th 2018. On this call, I am joined today by Keith Kendall CEO, Ken Marshall, Chief Commercial Officer, Dan Barber, Chief Strategy and Development Officer, John Maxwell CFO and Lori Braender, General Counsel. I trust that you've seen the press release that was issued this afternoon after market closed. It includes the results for the three months ended September 30th 2018, as well as an operational update. If you have not, the press release is also available on the Investor Relations posted on the Aquestive Therapeutics website. On today's call, Keith will provide clinical and business highlights for the third quarter 2018, followed by Ken who will provide the commercialization update and Dan will provide a more in-depth review of the update of the proprietary product pipeline and the partner products. John will then review the company's financial results for the three and nine months ended September 30th, 2018. We will then open the call to your questions and expect this call to last approximately 60 Minutes. As a reminder, the conference call is being recorded and will be available on Aquestive Therapeutics Investor Relations website shortly following the conclusion of today's call. During the call, the company will be making forward looking statements. Remind you of the company's safe harbor language as outlined in today's press release as well as the risks and uncertainties affecting the company as described in the Risk Factors section included in its registration statement on Form S-1 declared effective by the SEC on July 24th, 2018. As with any pharmaceutical product candidate, underdeveloped, there are significant risks with respect to the development regulatory approval and commercialization of new products. Given these uncertainties, you should not place undue reliance on these forward-looking statements which speak only as of the date made. All subsequent forward looking statements attributable to Aquestive Therapeutics or any person acting on behalf are expressly qualified in their entirety by this cautionary statement. The company assumes no obligation to update its forward looking statements after the date of this conference call, whether as a result of new information, future events or otherwise, except as required under applicable law. With that, I will now turn the line over to Keith

Thank you, Stephanie. Thank you everyone for joining today's call. Let me take this opportunity to remind everyone that Aquestive is a fully integrated, specialty pharmaceutical company committed to identifying, developing and commercializing differentiated products. Over the past few months, we've made significant strides in advancing our business on multiple fronts. To complement our ability to solve patient and caregiver problems and our world class manufacturing capabilities, we've assembled an experienced commercial team. This will better enable us to advancing commercialize products, and product candidates that leverage our differentiated PharmFilm technology. We have continued to build out our commercial organization as we get set for the launch of our CNS products. We added sales and marketing expertise with experience in over 50 product launches. We continue to expand and strengthen our executive team to bring the needed skills and experience to grow and perform as a specialty pharmaceutical company. We added a General Counsel with extensive experience in the life sciences field, as the Chair of the life sciences practice group at a former firm. We strengthened our board of directors as a public company, by adding Nancy Lurker and naming Sandy Costa as Chairman. Sandy, who joined our board in 2015, brings over 40 years of experience in the pharmaceutical healthcare and life science industries, and Nancy who is the current CEO of EyePoint Pharmaceuticals deepens the strategic expertise available Aquestive as it seeks to commercialize its proprietary portfolio of product candidates. Last week, we received approval from the U.S. FDA for SYMAPAZAN, our oral soluble film formulation of Clobazam. Over the past year, we've devoted considerable resources to preparing for the launch of SYMAPAZAN. We just completed our national sales meeting and have a well-trained and enthusiastic 30 person sales force, prepared to start detailing SYMAPAZAN. We've manufactured…

Thanks, Keith. As Keith mentioned, we received FDA approval on November 1st for SYMPAZAN as the first oral film approved to treat seizures associated with LGS. This is an important milestone for Aquestive and is being very well received by the LGS community. In preparation for the launch of SYMPAZAN, we spent the last 18 months speaking with over 250 health care practitioners, 80 caregivers and select patients with epilepsy. Those conversations have provided clearer insights into the disease's, burden and its management. We’ve aligned our strategy accordingly, built on our commercial team and developed a focus group of tactics, now it's all about execution. We’ve built a 30 person sales team led by three seasoned regional directors. They’ve all completed home study and most recently, live training in Orlando at a national sales meeting. In conjunction with last week's Orlando meeting, we train a faculty of 30 clinicians to support our speaker’s bureau. Our sales teams in the field as we speak, introducing the company, PharmFilm, scheduling appointments and peer meetings. As they sell in SYMPAZAN, they're also educating physicians on PharmFilm technology and its value when addressing challenges with epilepsy treatment. This will help prepare the market for the introduction of Libervant next year, given the strong overlap in target prescribers. We envision both products forming the foundation for a meaningful epilepsy franchise that will establish a questions reputation amongst physicians and patients as an organization that solves therapeutic problems. We’ve built a distribution network to ensure SYMPAZAN supply in pharmacy. SYMPAZAN will be widely available for prescription by the third week of November and we expect the first patients to start dosing by the end of the month. SYMPAZAN will be available as a very flavored strip in 5 milligram, 10 milligram and 20 milligram strings, and…

Thanks, Ken. We have made significant progress over the last few months in advancing the development of our proprietary CNS product candidates, and our proprietary complex molecule candidates. For our CNS candidates, these are being developed pursuing the FDA 505(b)(2) pathway. As Keith and Ken mentioned, we received FDA approval of SYMPAZAM, our oral soluble film formulation of Clobazam on November 1st following the recent expiration of ONFI’s orphan drug exclusivity. I wanted to highlight that one poster pretending to SYMPAZAM was accepted and will be presented at the American Epilepsy Society 2018 Annual Meeting in December. This poster presentation relates to the pharmacokinetics data presented to the FDA to support the approval of SYMPAZAM. The next product I will highlight today is Libervant. Libervant is our investigational diazepam buccal film or DBF for short, and it's being developed to address many of the challenges that caregivers of epilepsy patients continue to face. As many of you know, the only non injected formulation of diazepam approved for the acute treatment of seizures is a rectally applied gel. In late October, we announced the completion of our clinical study to assess the pharmacokinetics and safety of DBF in adult patients with epilepsy. This study was performed in an epilepsy monitoring unit or EMU, and we announced positive results which were similar to the previous interim data. Results indicated that Libervant provides comparable bio availability whether administered between seizures or during and shortly after seizures in adult epilepsy patients. Results from this study have been accepted for a late breaking poster presentation at the upcoming 2018 meeting of the American Epilepsy Society, and we plan to disclose additional details related to the adult EMU clinical study at that time. We are in ongoing dialogue with the FDA regarding Libervant, and recently received…

Thank you Dan. We continue to generate strong revenue and gross profits from our collaborative partnership products most importantly the manufacture and licensing of Suboxone and the licensing and development work for various other collaborative products which Dan covered in his comments. During the 2017 and 2018 comparative periods, we receive significant licensing payments from our partners most importantly related to Suboxone and apomorphine, a Sunovion product with the PDUFA date in late January 2019. The simplest way to look at our revenue will be to back out the often lumpy license payments and the comparable periods and look at manufacturing and co development revenues independent of license fees. On a GAAP basis Aquestive reported $13.3 million in total revenue in the third quarter of 2018 compared to $27.1 million for the third quarter 2017. After excluding license fees of $17 million in the third quarter of 2017and $3 million in the third quarter of 2018, total revenues were flat quarter-over-quarter. Co-development and research fees in the third quarter of 2018 were affected by the timing of revenue recognition for a little less than $1 million related to milestones in those development efforts that cause the revenue to go from late Q3 to Q4. On a year to-date basis excluding license fees and milestone payments from collaborative products revenues were higher by approximately 6% driven by Suboxone volume as well as higher co-development and research fees related to various collaborative development efforts. Now let's turn our attention to expenses and cash flow. Total cost and expenses were about $23 million in the third quarter of 2018 compared to $17 million in the same quarter of 2017. This increase was mostly driven by the work we did to prepare for the launch of SYMPAZAN in the fourth quarter. We expect of…

Thank you. [Operator Instructions] Our first question comes from Gary Nachman with Bank of Montreal. Your line is open.

Hi. This is Jen Hunter [ph] on for Gary. Thanks very much for taking the questions. For SYMPAZAN what should we model for gross to net on the early discount on the early stages of launch? And can you tell us more about your copay programs to patients sampling, things like that? And also how many additional reps above the 30 which you expect to add for Libervant? And when would that happen?

Okay. Sure. And thanks for the question. I’m going to let Ken Marshall to take that question for you.

There were several questions, if I skip, everyone remind me.

Thanks.

And I’ll start with our couponing program. We’ve got an aggressive couponing program that we will announce to the market and actually mentioned in this call. We’re going to ensure that folks with commercial insurance pay as little as $10 as we negotiate with payers to get more broad access. So I think that’s a key piece. We want to make it a medical decision rather than an economic decision on a prescription – when the physician decides to write a prescription, yet a question around number of representatives. And…

Yes. How the number would increase with Libervant, but also maybe more on like sampling and gross to net. I know you talked about commercial reimbursement, but how about Medicaid/Medicare?

Okay. Hang on a second, so I can take them in order. From a sample standpoint we actually don’t sample, these are scheduled medicines. We do have demonstration stripes. That’s a very important part of the experience with our platform. So our representatives will have quite a few of those. We’ll also make them available to caregivers so that everyone can experience the platform. So you asked about Medicare or Medicaid, I’m sorry. Yes, that is a significant portion of the market. It’s about 60% when you look at the prescriptions. We certainly will engage the states, each one behaves differentially, but we certainly anticipate getting business out of Medicaid and we’ll contract for access in that. And then you had a question on the number of sales representatives.

Sure.

Go ahead. Did you want me to do that? So we have 30 sales representatives now two inside, 28 outside and three regional sales directors. As we prepare for Libervant we certainly really expand that field salesforce. It will likely end up in the range of 50. We haven’t done the formal territory cuts on that, but that’s probably not a bad estimate.

We’re not projecting a gross to net number yet. Obviously, we’re positioning ourselves to make sure that we have access and Ken can certainly talk that at a high level, but we’re not going to project our gross to net yet at this point as we know the market little shift for the most of the year.

Okay. Thank you. And if I could ask one more, could we talk about Suboxone and how overall demand has been? And how that’s going to trend over the next year?

This is Keith. I think you have to look to Indivior commentary about what they view the overall market is. The volume that we are experiencing in the orders that they’re placing remain strong. We’re up about 6% year-over-year. That market continues to grow in double digits and Sublocade is not eroding that market at the rate that originally was expected. So we would expect continued strong volume for Suboxone film.

All right. Thank you. Very helpful.

Thank you. Our next question comes from Randall Stanicky of RBC Capital Markets. Your line is open.

Hi. This is Ben Bud [ph] in for Randall. I have two questions. Starting off, speaking with SYMPAZAN, we saw a quite a few generic ONFI approvals on the oral suspension format. I think that might have been five or so. Has this change, the way you’re thinking about competitive dynamics in that market and particular sustainability of pricing?

Ken, you want to take that.

Yes, sure. Yes. There were five that announced and they all have various Vacs [ph]. If you look at where we get around Vac we’re competitive with those when you look at that on the monthly basis. We’re certainly contract for access here. Also I want to make a point that the liquids are not substitutable with the strip. These products are not AB rated and we feel like we have a material different and better value proposition. So we recognize we need to be competitive with price, but we certainly feel comfortable with our Vac.

Okay, great. And then just a couple on Libervant. First off, how you’re thinking about the competitive landscape developing over the next year – couple of years especially with the UCB’s midazolam nasal spray potentially receiving approval early next year? Does this impact your commercial strategy at all?

Sure. This is Keith. I’m going to let Dan handle that question for you.

Yes. From a competitive landscape perspective we’re very comfortable with the comparison to nasal sprays. We did quite a bit of market research leading into our development program around patient’s preference and the issues associated with nasal sprays. Our plan has always fully expected, programs like the UCB program to be in the market and our projections are based on what we believe is our fair component in the market with nasal spray is available.

Okay, great. That’s helpful. And last one just on the NDA submission strategy for Libervant. Are there any more details you can provide around that or layout the different options if there’s a few of them?

We’re going to have our pre-NDA meeting in December and we’re prepared to file. We think we’ve done all the work that the FDA has asked us to do. We’ve had an extensive series of interactions with them on this product. As it’s been developed, we think we’re ready and we hope they agree. If they don’t we will work as quickly as we can to answer whatever questions they ask or we will work as quickly as we can to do whatever additional work they require and get to a filing as quickly as possible. We are prepared to file as soon as we come out of that meeting if we come out within an agreement.

Okay. Thank you.

Thank you. Our next question comes from Liana Moussato with Wedbush Securities. Your line is open.

Thank you. For SYMPAZAN, how long [Indiscernible] done a lot of preparation for commercialization, how long until it’s fully reimbursed?

Ken, you want to take that?

Yes. If you look at history in reimbursement normally when you enter a market about a third of the lives or open lives, so you started around 35% and around 10 months on average you’d see about 70% of lives covered in and that point small changes in that as people add you and drop you. And in our minds you would have the series of program to help offset copayment for patients which is really the key question making sure that patient have access geo-medicines, we would continue our couponing program throughout the year.

So, by the end of next year you would expect full on reimbursement?

Yes. If you would define full is around 70% of lives coverage, you’re not going to get a 100% of lives.

Okay. Thank you.

Thank you. [Operator Instructions] Our next question comes from Jason Butler with JMP Securities. Your line is open.

Hi. Thanks for taking the questions. I had two. One, for the riluzole product, can you just walk us through what we should be looking for when we see results from that program later this year? And the second one, looking forward through the -- to the Libervant launch, just – if you can just review so as where the overlaps are with the SYMPAZAN sales efforts and what you'll benefit from there from being out in the market was SYMPAZAN already when you launch Libervant? Thanks.

Hi, Jason. This is Dan. I’ll take the riluzole question, and then I’ll pass it over to Ken for the second question. From a results perspective, we obviously haven't shared those externally but just to define what study was. The study took a variety of mediums, liquids and solids and ALS patients would swallow those mediums and then a variety of tracking stats and videofluoroscopy were used to rate the experience that the ALS patient had in swallowing the different mediums. There was then a brief break. And our film was given and the same set of steps and videofluoroscopy was analyzed as well. And obviously a bad result would have been if our film was harder than the mediums and a good result would be if our film was the same or better than. Like I said we haven't released results. We plan on doing that in the coming weeks, but suffice it to say we are full steam ahead on moving to our filing.

Great. Thanks Dan.

I’ll now pass it over to Ken, for the second question.

Okay. Thanks Dan. Libervant and how the launch of SYMPAZAN will help prepare us for that. First of all our target audience has about a 95% overlap when you look at the folks who prescribe this. And these are two very important medicines and they’ve use very broadly in that epilepsy figure group. And then secondly it will help us understand the inner workings of an office. We’ll have relationships with the office staff. We’ll understand their workflows. We’ll have a good understanding of access and reimbursement clinic by clinic. And then as we build towards a Libervant launch we certainly would expand the salesforce to get more frequency in those important targets. As the picture around approval gets clearer, we would expand our salesforce as I mentioned earlier to a range of around 50.

Great. Thanks for taking my questions.

Thank you. And I’m showing no further questions at this time. I’d like to turn the call back over to Keith Kendall for closing remarks.

Well, thank you everybody for joining the first Aquestive earnings call. We appreciate your time and attention. We obviously are very excited about the significant progress our teams made over the past few months. We are very very excited to dive into the commercialization for SYMPAZAN and to continue to move Libervant and riluzole down their paths over the course of the rest of this year. We look forward to catching up with many of you at some upcoming investor conferences including the Stifel conference in November, the BMO Durable Goods conference in the first week of December, BMO's Prescription for Success Healthcare conference on 12th of December. And as we discussed our team we’ll have a full complement to people at the American epilepsy Society annual meeting starting November 30 in New Orleans. And we -- if you are around this, could you stop by and we’re happy to happy to talk about the efforts that are going on there. Okay. With that operator we’ll now conclude today’s call.

Thank you. Ladies and gentlemen, this concludes today’s conference. Thanks for your participation and have a wonderful day.