Good afternoon, everyone. Thank you for joining us for the Aytu Bioscience First Quarter Fiscal 2019 Business Update Call. With me this afternoon are Aytu's Chief Executive Officer, Josh Disbrow; Chief Financial Officer, Dave Green; and Chief Operating Officer, Jarrett Disbrow. Aytu BioScience issued a press release earlier this afternoon with details of the company's operational and financial results. A copy of the press release is available on the news page of the company's website at aytubio.com. I would like to remind everyone that today's call is being recorded. A replay of today's call will be available by using the telephone numbers and conference ID provided in the earnings press release. In addition, an archived webcast replay will be available on the company's Investor page, under Corporate Presentations and Media at aytubio.com, following the conclusion of this conference call. Finally, I'd also like to call your attention to the customary safe harbor disclosure regarding forward-looking information. The conference call today will contain certain forward-looking statements, including statements regarding the goals, strategies, beliefs, expectations and future potential operating results of Aytu Bioscience. Although management believes these statements are reasonable based on estimates, assumptions and projections as of today, November 7, 2018, these statements are not guarantees of future performance. Time-sensitive information may no longer be accurate at the time of any telephonic or webcast replay. Actual results may differ materially as a result of risks, uncertainties and other factors, including, but not limited to, the factors set forth in the company's filings with the SEC. Aytu undertakes no obligation to update or revise any of these forward-looking statements. I would now like to turn the call over to Aytu's CEO, Josh Disbrow.

Thank you, Moira. Good afternoon, everyone, and thanks for joining us for today's first quarter update call. This was an exciting quarter on multiple fronts and a great start to the year. We are very pleased with the results we brought in and the recent developments that followed quarter end. During the quarter, Natesto achieved all-time-high revenue numbers, and the gross-to-net increased markedly. Also, we just licensed another exciting commercial stage product in Tuzistra XR, a product competing in the $3 billion U.S. anti-tested market. And soon, we're expecting to close on a $5 million debt investment from a very reputable health care institutional investor, Armistice Capital. The strategic commercial changes we implemented back in the spring with Natesto have taken root, and, along with the sales force that keeps getting more effective, we have grown revenues to all-time highs. Further, we successfully launched ZolpiMist and earlier than we previously announced. That further strengthens the sales force's bag and is driving incremental revenue. And later, we'll discuss the acquisition of Tuzistra XR that nicely complements our primary care portfolio. It was a very busy quarter, and I'm proud of what the team has accomplished already this fiscal year. Taking a deeper dive now into our commercial strategy and progress against our stated goals. When we last spoke to investors in August, we said that our transformed commercial strategy and our drive to increase revenue would start to really pay off this quarter. We also said we expected to post substantial sequential revenue growth; that we would launch ZolpiMist; and that our commercial model shift will continue to yield a higher Natesto gross-to-net than we'd seen before. And we'd show that this change wasn't a blip. I'm happy to share that we've done all of these things and more, and we…

Thank you, Josh, and thank you all for joining us today. Today, I'll review our financial results for this first quarter of our 2019 fiscal year that ended September 30, 2018. First, a couple of housekeeping items. Earlier today, we filed Form 10-Q with the SEC. We also issued a press release earlier today with a summary of the Q1 results. The press release, including Q1 financial statements and the 10-Q report, could be found on our website, www.aytubio.com. I'll start this report by acknowledging top line net revenue of $1.4 million is the highest ever quarterly revenue recorded by Aytu since beginning operations in 2015. The $1.4 million of revenue represents 33% year-over-year growth compared to Q1 of 2018 and 55% growth sequentially compared to the fourth quarter of 2018. Adjusting out $245,000 of revenue from discontinued products from last year's first quarter, our year-over-year revenue growth increases from the reported 33% to 72%. We recognized growth from both Natesto and MiOXSYS, plus stronger-than-expected ZolpiMist revenue. The accelerated ZolpiMist launch, which began during the second half of July, provided for earlier-than-expected stocking orders and pull-through. That said, record revenue for the quarter was led by Natesto, with 44% year-over-year growth. The strong Natesto performance was driven by a favorable gross-to-net performance, which translates to more revenue dollars per Natesto script. The higher gross-to-net performance was accomplished as a result of the commercial model changes implemented at the beginning of Q4 last year. This is now 2 consecutive quarters of strong revenue growth that is directly connected to the strategic changes that were implemented last fiscal year. Our gross profit margin came in at 71% for Q1, which produced more than $1 million of gross profit, another Aytu record. The 71% gross margin was slightly lower than the 73% and…

Thank you, Dave. I'll touch on some of the developments that have occurred since the quarter closed. As Dave just said, we closed on a $15.2 million oversubscribed offering the first week in October. We had participation from both new and existing investors and brought in multiple fundamental health care investors. The offering was led by a large health care institutional investor. This new cash infusion positions the company very well, and, along with the expected senior note from Armistice Capital, we have the longest cash runway we've ever had. In another recent development, I'm very excited to share with you that last Friday, we entered into an exclusive license to commercialize the FDA-approved, antitussive Tuzistra XR, and a to-be-named complementary antitussive that is pending FDA approval. We license these assets from privately-held Tris Pharma and look forward to the beginning of working relationship with founder Ketan Mehta and his team. Tuzistra XR is a truly unique product, and we're pleased that we were able to get this deal done with Tris. Tuzistra XR is the only FDA-approved, 12-hour codeine antitussive oral solution. It competes in a estimated $3 billion market with over 30 million prescriptions written annually. Current codeine antitussives have inherent shortcomings as they need to be dosed every 4 to 6 hours. Thus, sleepless nights due to cough and drippy throats persist. This nighttime awakening due to cough is a huge unmet need. As the only 12-hour codeine antitussive on the market, Tuzistra will deliver all day, all night relief from patients' cough and cold symptoms. Importantly, Tuzistra have been introduced to the U.S. market and generated more than 40,000 prescriptions in calendar 2017. We believe we can rapidly win back prescribers and are quickly prepping for our launch this cough and cold season. 40,000 prescriptions translates…

[Operator Instructions] The first question is from Carl Byrnes from Northland Securities.

With the addition of Tuzistra, can you talk a little bit about your expectation in terms of SG&A, how that may change, if at all, during the course of the year? Are you looking to augment your direct sales force or add any sort of direct campaigns and sampling? Sort of anything that you can amplify in terms of how the marketing approach you're entering with Tuzistra here for the cold and flu season.

Thanks for your question, Carl. This is Dave. And yes, we do expect a step-up in operating expense. It's very early at this point, and the launch is still kind of being pulled together and in development. So we don't have a lot of guidance and additional incremental cost at this point. That said, it's not expected to be anything near proportional with what we're spending now on our current 2 marketed products. And I'd also say that we do expect a much larger step-up in revenue relative to expense with the launch of Tuzistra for this fiscal year.

Great. And just as a follow-up question, if I could. If we're looking at the selling effort with Natesto being over -- and ZolpiMist being over 50% of folks that are targeted, how would you qualify or quantify Tuzistra with that? I mean, mainly, it's going to be marketed to primary care practices. So I think that there will be a significant amount of overlap. But any comments that you can provide along those lines would be great.

Yes. Thank you, Carl. This is Josh. Generally speaking, we call on primary care about half the time. So if you look at Natesto, the targets are cross section of endocrinology, urology and primary care. And some are -- some folks are surprised to hear that some of the largest prescribers of testosterone replacement therapy are primary care physicians. So we're in those offices, so we can, certainly around the winter months, really augment the portfolio. Obviously, Natesto remains the priority and then Tuzistra is, frankly, a quite simple story. It's a very straightforward 12-hour cough relief versus the standard 4-, 6-hour dosing. So when there is -- in those PCP offices, you offer a quick detail, samples. And by the way, that market, the cough and cold market, is very sample-sensitive. So it's a less intensive detail than Natesto, so it complements very well. And again, it's seasonal, so it's really sort of pulse -- pulse on, pulse off promotion, so we'll be able to very efficiently do that. While there will be a small step-up in SG&A, it will be, as Dave said, far less than what we expect to generate in incremental revenue.

Great. And then just one final question. Considering that Tuzistra is the only codeine-based 12-hour, if we look at what's happened with reclassification of hydrocodone from class Schedule III to Schedule II, how significant is [indiscernible] in your eyes?

That's a good question, Carl. We feel like it's quite significant. And frankly, since the reclassification of hydrocodone with products like Tussionex, there has been almost no promotion in the field. There is a smattering of small cough, cold companies that market the old DESIs and so forth. But generally speaking, there's not a national footprint out there talking about this. So we expect it to be a significant factor. Moving from a Class III to a Class II is a game changer with respect to receiving samples in a physician office. How they shift, how they're controlled for and just the overarching concern around opiates and specifically controlled products like C IIs, whereas our product is codeine-based, and because of the level of codeine, it's a C III. So everything from sampling to the distribution channel to physician's just overall comfort is different. We believe they'll be significantly more comfortable writing a Class III and essentially gives the same efficacy of a hydrocodone without some of the potential concerns. When you start seeing Schedule II, many physicians have begun to run for the hills, and that's quite notable. Just look at the Oxycontin and hydrocodone markets, Oxycontin and hydrocodone markets in general, they've been greatly depressed. Codeine, we think, can be a very nice replacement and really help realize some of the gap that will need to be filled.

[Operator Instructions] The next question is from Tony Polak from Aegis Capital.

Could you address the insurance, what the insurance is on the 2 new products, the Tuzistra and the ZolpiMist?

Yes, good question. So it's a different insurance situation than, for example, we have with Natesto. Both Tuzistra and ZolpiMist are, generally speaking, third tier products. And ZolpiMist is a bit different in that it often requires that a patient had been on Ambien before. But many times, what we're seeing, if they'd been on Ambien, the physician simply has that included in the chart. The pharmacy calls to get that information so they can get the prescription filled. But a product like Tuzistra, the cough, cold, allergy market is not heavily managed, if you will. So these products tend to default relatively readily to just the tier 3 co-pay. And with both products, we offer co-pay savings cards to buy down the patient's co-pays, such that it's competitive with tier 2 or, even in some cases, the price of a generic co-pay. So the insurance coverage is pretty good. Obviously, it's 2018, nothing is universally covered anymore. We know that. We understand that, and we've worked very well within that system. And so we would expect certainly some early learnings, and we'll have to put some things in place to potentially fill any gaps. But at this point, we feel good about the fact that they'll be largely covered on tier 3 and then we'll have the opportunity to buy that down.

Great. On this University of Miami study, you talked about you're having some interim results this year. Is that in 2018 or is that this fiscal year?

We expect this calendar year. So we expect relatively shortly to have an update out to investors, whereby we can report any additional patients that have come through in an overall status. And frankly, at this point, we don't have any reason to believe and haven't heard anything to the contrary, such that we would expect to continue to see the same types of results. As I mentioned, we had a very, very productive advisory board meeting here in Denver, and the reception was nothing short of positive. It was very, very well received. Frankly, people have a hard time getting their mind around how something like this could not impact sperm production. But the pulsatile dosing, the 3 times -- PK profile, 3 times daily dosing seems to be playing a very important role in that. So yes, excited to report that out here relatively shortly.

How long do the patients -- in the study, how long do they take the product for, besides 3 times daily, how long is that for?

So it's 24 weeks, so essentially a 6-month study. So they come in for a baseline. They come in for a 1-month, a 3-month and then a 6-month checkup, and they're getting full laboratories as well as semen analysis at those time points. We're specifically reporting our baseline semen analysis, month 3 semen analysis and then month 6 or essentially week 24 semen analysis. And what we've seen with just the first 5 patients through, essentially no impact on any of the key parameters. Concentration, motility and total motile sperm count all stay essentially flat. In fact, concentration actually goes up slightly. So very exciting data.

Great. Who's paying for this?

Well, we're the sponsor. But frankly, we've paid very little. This was -- is what you call an investigator-initiated study. Dr. Ramasamy actually approached us, and so we pay by virtue of free product. And then there's some overhead costs that we pay, but it's nominal, quite frankly, call it, $50,000 across the entire study. So getting very rich data that, frankly, could springboard us to many more things as we get this wrapped up.

Do you think this will end up being published in a journal? Or is that just an announcement from you guys?

I would expect minimally a presentation and likely another interim type of readout that gets published in a journal that hasn't been specifically confirmed. But based on the level of interest and the fact that the 5-patient data set was specifically solicited by European Urology Focus, so I would expect to have additional publications and, certainly, a publication in what we would expect to be a high-impact journal once the entire data set is read out.

And the final should be next summer is it, did you say?

Relatively next summer, we expect to be able to read that out. And at that point, we'll obviously take stock of the data and really evaluate next steps with respect to getting it into the label, obviously, broadening our claims, and are already moving forward in earnest around an IP strategy in terms of how this might further support our patent coverage.

All right. Good. Could you give us a little idea on October and beginning November sales?

It feels very good to say, Tony, that we continue to be very much on track with our internal expectations. And while we don't guide, what I can say is we are absolutely where we expected to be, where we wanted to be. The improved gross-to-net on Natesto has been -- has really, really helped a lot. And with that new improved much higher gross-to-net, we're now growing in the month of October, had our best month since the change and we would expect November to continue on that trend. Obviously, we've got a holiday week with Thanksgiving. We've got more or less a couple of holiday weeks with December. We've got those appropriately accounted for, and I think this is going to be a very solid quarter.

We have a follow-up question from Carl Byrnes from Northland Securities.

I think you referenced cash around approximately $60 million, and then you're going to close very soon under the 3-year note with Armistice, which is another $5 million. In terms of burn, where does that take you out to as you're looking at it internally at this juncture?

Carl, I would say that we are well positioned for the foreseeable future, with the expectation that the top line is going to continue to grow. We're going to have a small bump-up in the operating expenses but nothing substantial relative to where we are today. So we are confident that there's not going to be a substantial need to access the capital markets anytime soon.

There are no further questions at this time. I would like to turn the floor back over to Josh Disbrow for closing comments.

Thank you, Moira. Thanks for your questions. Thanks to everyone for joining today's call. We're excited about the quarter and the results that we just posted. We look forward to sharing more next quarter. So until then, thanks again for joining, and have a good evening.