Good day, ladies and gentlemen, and welcome to the Spectrum Pharmaceuticals First Quarter 2017 Earnings 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 follow at that time. [Operator Instructions] As a reminder, this conference is being recorded. I would like to turn the conference over to Shiv Kapoor, Vice President of Strategic Planning and Investor Relations. You m ay begin.

Thanks. Good afternoon, and thank you for joining us today for Spectrum’s first quarter 2017 financial results conference call. I hope you've all had a chance to review our press release which we issued earlier today. If not it’s available on our website at www.sppirx.com. I would like to remind everyone that during this call we will be making forward-looking statements regarding future events of Spectrum Pharmaceuticals, including statements about the product sales, profits and losses, the safety, efficacy, development, timelines, and clinical results of our drug products and drug candidates that involve risks and uncertainties that could cause actual results to differ materially. These risks are described in further detail in our reports filed with the Securities and Exchange Commission. These forward-looking statements represent the company’s judgment as of the day of this conference call, May 2, 2017, and the company disclaims any intent or obligation to update these forward-looking statements. However, we may choose to update them, and if we do so, we will disseminate the updates to the investing public. For copies of today’s press release, historical press releases, 10-Ks, 10-Qs, 8-Ks and other SEC filings and other important information, please visit our website. Dr. Raj Shrotriya, our CEO will start the call today and provide you with the highlights of the first quarter and overall strategy. I’d now like to turn the call over to Dr. Shrotriya.

Thank you Shiv and thank you everyone for joining us this afternoon. This is an important time in Spectrum and the focus on multiple near-term catalysts. I would like to share some of those with you today and briefly talk about our three highest priorities drugs. One, first let me talk about ROLONTIS, a novel G-CSF which now has a new amended SPA or Special Protocol Assessment with a reduced number of patients in advanced pivotal trial. Second, POZIOTINIB our third generation irreversible tyrosine-kinase inhibitor, potentially best in class is being studied in a variety of cancers, including non-small cell lung cancer with Exon 20 insertion mutation. And thirdly, I’ll briefly talk about QAPZOLA, a novel bladder cancer drug which has a new SPA requiring far fewer patients. I'm very pleased with the progress that ROLONTIS is making towards BLA filing in the next year. Joe will provide you with more details about it in a few minutes. Before that I would like to share with you our excitement about POZIOTINIB in lung cancer. Lung cancer is the most common cancer worldwide accounting for approximately 1.8 million new cases and approximately 1.6 million deaths as last reported by The World Health Organization. According to the data reported by the American Cancer Society, in 2016 lung cancer was the leading cause of death in men and has surpassed breast cancer as the leading cause of death in women in the United States. Approximately 245,000 patients are newly diagnosed with lung cancer annually and there are approximately 158.000 deaths annually, less than 5% patients with metastatic lung cancer survive five years. A variety of genetic mutations are considered a reason as to why standard chemotherapy and even targeted therapies have unsatisfactory responses in many of these patients. Non-small cell lung cancer patients…

Thank you, Rajesh and good afternoon everyone on the call today. I'll just cover a couple of important financial highlights from the quarter. Let me begin with revenue. Total revenues for the first quarter were $20.1 million of this product sales were $25.8 million/ EVOMELA, which is our most recently launched product had sales of $6.3 million. This number was in line with our expectation. As we mentioned in our last earnings call, we did see some stocking at a few hospitals based on initial orders which accounted for $2 million to $3 million dollars of sales in the fourth quarter. In the first quarter, these orders did not repeat, as these customers worked through their inventory. We are pleased with the launch trajectory of EVOMELA, end user demand for this drug remains strong and continues to grow. We believe we have a differentiated product and the market response is validated the merits of this brand. I also want to make a comment on our cash balance. Our cash burn this quarter was higher than previous quarters, but half of this burn this quarter is related to changes in working capital and we do not anticipate that these will continue in subsequent quarters. Excluding these working capital changes, our quarterly cash burn would have been similar to what we've seen in previous quarters, which has been in the $10 million to $12 million range, excluding financing. With that, let me hand this call over to Joe.

Thank you, Kurt. Thank you, Shiv and Dr. Raj and thank you to everybody on the call. I believe our exciting advanced stage pipeline is transferring Spectrum into unique development stage and oncology focused biotech company. Today we have the distinction of having six market in oncology products that provide revenue and a sales force functioning at a high level to support our future. I want to highlight our pipeline assets that have the potential to change the face of the company. Let me start with the company's highest priority, ROLONTIS, a long acting Granulocyte- Colony Stimulating Factor or G-CSF. ROLONTIS is a novel molecule that has been constructed using a proprietary platform technology. In Phase II studies ROLONTIS has shown impressive safety and efficacy. We are currently enrolling at pivotal trial called ADVANCE that will form the basis of our BLA filing. The design and endpoints of this trial are similar to our Phase II program. The company recently reached an updated special protocol assessment with the FDA to reduce the number of patients in the Phase III advance study to 400 patients for 580 patients. As Dr. Raj mentioned, the enrolment in this trial is 75% complete. We are also initiating an additional smaller Phase III study called RECOVER to strengthen our regulatory package in both the US and in Europe. This trial is expected to enrol 218 patients. We believe we have a comprehensive clinical program for ROLONTIS. These registrational trials are both multi-center, randomised and active control trials, enrol patients receive chemotherapy every 21 days. ROLONTIS is administered subcutaneously at a fixed dose. The primary study endpoint is a duration of severe neutropenia, assessed to the absolute neutrophil count and cycle one of chemotherapy, based on a central laboratory assessment of AMC over the 21 day…

Thank you, Joe. I'm optimistic about our future and believe we are in a position of strength. Each of our three latest stage assets will have a significant event in the next 12 months. We look forward to completing enrolment in the ADVANCE study soon, filling the BLA for ROLONTIS next year, have an interim data from POZIOTINIB in lung cancer potentially before year end and starting with QAPZOLA Phase III pivotal study in third quarter. I believe we are poised to execute on these opportunities effectively. With that, let's open the call for questions. Operator?

Thank you. [Operator Instructions] And our first question comes from Ed White with FBR & Company. Your line is now open.

Hi, guys. Thanks for taking my questions. So just a couple of things. First on POZIOTINIB, here you gave a great update on the long opportunity and the development there. Can you just give us a little bit more on the breast cancer, the Phase II update and when we can expect to see some data from that study? And then also on Hanmi you had mentioned the breast cancer enrolment has been completed, I think you have of interim data by year end. Are there any updates from any of the other trials that Hanmi is running?

Hi, Ed. Thank you for your question. Good question. So in lung cancer as you know that the initial Phase I and Phase II trials were done in Korea. They have treated more than 100 patients and the dosing they had used was two weeks on in one week offs. And in the US we started the same protocol, similar protocol with the same dosing two weeks on one week off. Because the Korean patients are underweight compared to American patients, we decided to increase the dose from 12 to 16 milligrams in Korea, we decided to increase the dose to 24 milligrams in the United States and we treated 32 patients with that dose. However looking at talking to our consultants experts and looking at our own experience, we decided that actually we need to treat these patients continued dosing. So a protocol has been amended and the new patients enrolment has begun with the new protocol which is the continuous dosing and that’s exactly what we are doing in the lung cancer trial. Lung cancer trial we are using 16 milligrams using continuous dosing on lung cancer patients and we plan to do the same thing with the revision of the protocol in the United States. In addition as you heard from Joe, we also plans to start a early stage breast cancer patients with combinations TDM-1. So there will be a study with TDM-1 and POZIOTINIB on the books, and is going to start imminently. Talking about the program from Korea, yes, the Korean study in about 100 patients has been completed. Data has now been put together and I believe the data is being - is plan to be analyzed soon and we hope to have a publication from them or a report before the end of this year. So as we have the data we’ll share it with you.

Okay. Thanks, Dr. Raj. And then just regarding the size of the exon20 mutation market in lung cancer, maybe you can speak a little bit to that and then I just have one follow up question?

So exon 20 insertion mutation patients, the estimates – the best estimate I have got is a range between 5000 and 9000 patients here in United States. So this is a ultra orphan disease. However, keep in mind that the lung cancer which has about 225 patients diagnosed each year, almost 75% of these patients have one or the other genetic mutation and you might be well aware of another drug or ALK mutation, it’s called Xalkori which sells about $0.5 billion a year. And the incidence of ALK mutation to best of my knowledge is even less than what the exon 20 insertion mutation is. So from the - from the perspective of the number of patients and the kind of value that bring us, keep in mind, that patients with exon 20 insertion mutation – progress for the survival is less than two months, 1.8 months and the total survival is less than a year, in fact six or seven months. So now our first patient at least has now been alive for five and a half months and is a stable disease and we are excited about this.

Great. Thanks, Dr. Raj. And then my last question is just with the – on the currently marketed products. I think in the past you had said that MARQIBO has a great - much greater potential than what you're currently you know have a commercialized for, I was just wondering if can give us an update on the trial in Germany in NHL and maybe talk about the potential there for MARQIBO you know regarding greater development? Thanks.

So Ed, you're right. I believe - as a physician I believe that vincristine is one of the most widely used drug for treating cancer, unfortunately vincristine cannot be given more than 2 milligrams per [indiscernible] dose and there is a lifetime dose. However, with MARQIBO there is no upper limit on the dose. We have given drug in three or four times the dose and we find the drug is effective and safe. However, the current indications – approved indications with the FDA is for a very smaller market, what’s called Philadelphia negative, acute lymphoblastic leukaemia e. So currently in large trial involving more than thousand patient is underweight in Germany by the lymphoma group, the most prestigious hematological oncology group in Germany is currently doing this trial. This trial has been going on well before we acquired this drug from Therapeutics. So the drug for nearly – the trial has been going for nearly five years and we are expecting within a year or two we will have better understanding. Our Senior Vice President, Clinical Affairs, Dr. Zane had just actually met with the personal investigator and we are counting on the drug to give us the data in about another year or two years time. In addition to that, we are making significant progress on the delivery of MARQIBO. Currently as you know there are two vial system and it’s of cumbersome to give this drug. We haven't been able - successfully been able to produce a single vial system and we hope that we'll be getting into the vial study very soon. So we are quite – we remain very excited about MARQIBO, because I believe that if we can have a second indication we could have a significant market. Also keep in mind that we have submitted a protocol for a SPA as comparing chart at CHOP [indiscernible] so it is chart versus chamber study, we had - concomitant has been replaced with MARQIBO. So we will have forward best combination as first line therapy for these patients, that protocol we have inspired to be a Phase III trial inside imminently.

Okay. Thanks, Dr. Raj.

And our next question comes from Laura Engle with Stonegate Capital Partners. Your line is now open.

Good afternoon. Thanks for taking my questions. I'm following up on some of them are already being asked but just kind of looking forward to milestones and timing on - with everything else going on, some specifics on QAPZOLA. So with the smaller group being enrolled starting in Q3 when is the earliest you think you might be able to share any sort of information data, feedback from that study with us?

So Laura, let me share some timelines with you here. So we are planning to start this trial, and re date the trial with 425 valuable patients within next quarter, third quarter and we expect about 18 months an enrollment time. And then the last patient entered has to be observed for about two years, one and half to two years. So we think that this data is likely to reveal growth as you can ADVANCE 3 in ample of time.

Okay. And then to clarify on the Hanmi, I think I originally had expected maybe a - I had no sort of mid 2017 read out and did I hear you say that's more like yearend now?

Right. So the Hanmi’s Phase II study in breast cancer studies the enrolment is complete already of this year and the study – database is lock. So it’s in screening and authorised. Canadians conversation with our partners at Hanmi is project to have the top line result of set forth in summer of this year and they are prepared for the presentations at major oncology conference within 2017, so this time for launch.

Okay, great. All my other questions have been answered. I appreciate all the good information today and I'll get back in the queue.

Thank you. And our next question comes from RK with HC Wainwright. Your line is now open. Q – RK: Thank you. Good afternoon, folks. Some of the pipeline questions have been asked, so I got a couple of quick financial questions. One other things we know this is about the COGS that it has been steadily increasing, such that you know the gross margin now is in low 30s. Last year about this time it was in mid - you know, as I say it mid-teens and then jumped up to 20s in the second half. Can you kind of give us a little bit of a flavour to us to how we should be thinking about this cost line as the year progresses?

So let me just hand over this call to Kurt, but before that I'll just make a comment that you know, very sensitive to – associating to that drug. And I know the result had a constant from operations, constantly looking into ways of reducing its cost, of these costs are directly related to our manufacturers out there, how they are involved with the maintaining the GMT requirements and what not, but Kurt can give you a more precise answer with this RK on your question on cost of goods increasing in this quarter.

Yes. So RK, thanks for the question. There is probably two primary factors that I would point you to which are driving that increase in cost as a percent of sales. The first one is while we continue to hold on to a good share of POZIOTINIB market, the price of that drug continues to drop based on the generic competition there. So you know, there's really no changes to our cost structure there, but we're generating less sales in COGS as percent of sales in terms of larger – a larger number. So that's probably the primary driver of what we see over the last little last few quarters. The second point that I would make is, EVOMELA is a lower margin product in some of our other products. So that product sells more it's just a product and mix issue. And as Raj said there are – that one product in particular is one where we are seeking to gain further efficiencies and bring COGS down in the future. So it's kind of a few slip pricing story and a product mix story that's driving that. I will say as we look ahead FUSILEV is not going to go down that much further, we’re probably seeing most of the changes there. And so because as you look ahead, I don't think that that's going to be a driver to continue this trend that much further. Q – RK: Thank you, Kurt. And thanks for giving me the segway as well. So the next question I have was on EVOMELA sales and as we look at the last three quarters the number seems to be kind of stuck around $6 million a quarter. Is this an indication of where that option rate you know will continue to be at or is there something that the management and the sales force is trying you know to push that number to a higher number per quarter?

So RK, our Chief Commercial Officer Tom Riga, so I’ll have Riga answer the question.

Hey, RK. How are you? When I stare at the EVOMELA number you saw the $2 million to $3 million of stocking that we reported last earnings call, that get repeated this one obviously, but we remain really bullish and optimistic about this brand and I think we continue to see share growth in the marketplace. So while we don't provide forward-looking estimates on where the sales line is going, our team remains really optimistic. I think the market receptivity to the product and the streakiness of the differentiation that this brings the bone marrow transplant centers, the early read after the fruit for several quarters is very positive. Q – RK: Thank you, folks.

Yeah, RK, I just would add, it you normalize for that stocking, you know, we're seeing growth here. So as I said in my comments, we're seeing our market share continue to grow here. Q – RK: Thank you.

And I'm showing no further questions at this time. I would like to turn the call back to CEO Dr. Rajesh Shrotriya for any further remarks.

Well I would like to thank all of our shareholders on the conference call this afternoon. I will thank you for your continued interest in Spectrum and we look forward to updating you in the near future on and continue and exciting progress. Thank you.

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