Good day, ladies and gentlemen, and welcome to the Q3 2016 Flex Pharmaceuticals Incorporated 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 time [Operator Instructions]. I would now like to turn the call over to Elizabeth Woo, SVP, Investor Relations and Corporate Communications. Please go ahead.

Thank you. Good morning. And thank you for joining us to discuss Flex Pharma's third quarter 2016 financial results as well as our recent progress and outlook. Earlier today, we issued a press release announcing recent business highlights and detailing our third quarter 2016 results. You can find these documents on our Web site at flexpharma.com. Today, we will be making certain forward-looking statements about future expectations, plans, events and circumstances, including statements about our strategy, future operations and the development of our consumer and drug product candidates, plans for future potential product candidates and studies and our expectations regarding our capital allocation and cash resources. These statements are based on our current expectations, and you should not place undue reliance on these statements. Actual results may differ materially due to our risks and uncertainties, including those detailed in the risk factors section of our 10-K filed with the SEC and other filings we make with the SEC from time to time. Flex Pharma disclaims any obligation to update information contained in these forward-looking statements, whether as a result of new information, future events or otherwise. We'll provide a brief overview and then open it up for Q&A. And on the call, I’ll be handing it to Dr. Christoph Westphal, Chairman and CEO of Flex Pharma. We also have Dr. Tom Wessel, our Chief Medical Officer; Kathie Lindemann, Chief Operating Officer; and John McCabe, our Head of Finance. I'll now pass the call to Christoph.

Thanks, Elizabeth. Thanks all of you for joining us this morning. We have been enjoying the World Series Pro and college football and many professional sports events more than usual given that we have many major league baseball, NFL, NBA and NHL and college teams purchasing HOTSHOT. With more than 15,000 customers, including endurance athletes, Olympians and well over 50 professional and collegiate teams our consumer business off to a strong start. Beginning in June, the team has executed an outstanding launch of HOTSHOT, providing a promising start to the business and laying the foundation for robust growth. Q3 product revenues representing our first full quarter post-launch exceeded our expectations. Kathie Lindemann, our Chief Operating Officer, with extensive consumer beverage background as COO of DAVIDs TEA and SVP at Starbucks, will provide an overview on our HOTSHOT business and share some of our positive results so far. Turning to our clinical assets first. Our MS and ALS exploratory Phase 2 studies are underway in Australia. Both studies are on track with results expected in late 2017. Based upon FDA input, we are planning a parallel design Phase 2 study in nocturnal leg cramps to be initiated in the first half of 2017, after our IND application has been accepted. Since our regulatory and clinical update regarding FLX-787 in nocturnal leg cramps in mid-October, we continue to analyze the data and study conduct as it sites to better inform our understanding of the past four in nocturnal leg cramps. While the recent NLC data were not as clear as we would have hoped, we do believe there is an efficacy signal for FLX-787 in these explorative human studies that is promising, warranting further evaluation and development in subjects with NLC and also other indications. In three human settings involving muscle cramps, we have demonstrated efficacy with consistent effect sizes. First, in the recent exploratory nocturnal leg cramp studies, we saw efficacy signals in two of the three sites that was in 37 subjects and in the dosing and formulation study with FLX-787 that was 29 subjects. Second, in the earlier NLC study with our original extract formulation, which we presented at AAN in April, we demonstrated statistically significant positive efficacy effect in a randomized blinded controlled cross-over study with 50 patients. And then third, we electrically induced human cramp model, the EIC model. We showed a statistically significant sigmoidal dose-response curve in five human subjects. In addition, we have shown randomized blinded controlled statistically significant data in over 100 subjects and over 200 safety and efficacy data-point, which we have and will continue to report at scientific meetings. In a few moments, Dr, Tom Wessel, our Chief Medical Officer will expand upon our clinical plans in his comments. We have extended our cash runway into late 2018, based on updated clinical plans, savings and G&A, R&D and consumer, plus greater than expected consumer sales. I will now hand the call to Dr. Tom Wessel.

Thank you, Christoph. Based upon the totality of our NLC data and the written guidance from the FDA supporting moving forward with the Phase 2 parallel arm study, we are now in the process of designing this next study. We will incorporate mechanisms for including a more well-defined patient pollution and we expect to begin in the first half of next year. As Christoph mentioned, since we provided the update a couple of weeks ago, the team has been hard at work shifting through the data and this study conduct to better understand our findings in these exploratory NLC studies. We have a better sense of the importance of patient selection, close monitoring of patient reported outcome measures in real time, and the need to establish compliance with respect to nightly dosing. It is important to remember that Flex is testing a new therapeutic mechanism in a new indication. Our initial studies of this condition were exploratory allowing us to learn more about our agent and more about the indication. Over the past year, we have gained important insights from these exploratory studies that will inform our human efficacy studies moving forward. We have a better understanding of issues related to patient selection, investigator instructions, recording a frequency and severity of muscle cramping, fluidity and regulatory acceptability of end-points and so forth. We now have sufficient information to embark upon the next step in the development of FLX-787 and nocturnal leg cramps given the multiple efficacy signals repeatedly observed in these studies. Firstly, positive signals on muscle cramping in the parallel design portion of two exploratory human proof-of-concept studies. And these represent promising new exploratory data. Those cross-over studies that we discussed recently offer evidence of drug efficacy. Secondly, FLX-787 has shown a statistically significant sigmoidal dose-response curve in a…

Thank you, Tom. Good morning everyone. As most of you know, we’ve created a truly unique consumer brand based upon the breakthrough scientist insight by Nobel price winnings in nueroscientist and endurance athlete Dr. Rodd Kennan. In early June, we launched HOTSHOT, our sport shot with the kick on our branded Web site TeamHOTSHOT.com. HOTSHOT is the first and only consumer product scientifically proven to prevent injury exercises associated muscle cramp. Our digital and social media campaign, along with our PR efforts, have resulted in some of the most influential publications, showcasing the science behind our discovery and have also benefited in driving visitors to our Web site. In mid-July, the Wall Street Journal published the article, a new way to prevent muscle cramps, highlighting the breakthrough science behind HOTSHOT. The story range number one for three days and remained one of the top five most popular articles on wsj.com for a full week. The Wall Street Journal article, as well as other targeted media and magazines like Triathlete, Runner’s World, and Competitor Magazine, to just a name few, have helped raise our HOTSHOT brand awareness and trial. Our marketing continues to focus on raising awareness of our scientific breakthrough and driving credibility of the HOTSHOT brand. We are leveraging a slate of scientific and athletic sports people to share their personal experiences with HOTSHOT, including endorsements from endurance athletes highly respected among their peer group. Our Olympic brand ambassadors place well in Rio, and continue to be very engaged on social media, advocating the use of HOTSHOT regularly on Twitter, Facebook and Instagram. We continue to educate athletes, nutritionist and coaches on a new category in sports nutrition called neuromuscular performance or NMP. NMP is how the nerves and muscles work together in an optimal way. HOTSHOT is the…

Thank you, Kathie. So operator, could you give the instructions for the Q&A.

[Operator Instruction] Our first question comes from Mara Goldstein with Cantor Fitzgerald. Your line is now open.

If I could just ask on HOTSHOT, so I know it's early days and you barely have a couple quarters behind you. But can you speak to as the Company has led out a plan of what the expectation is in terms of a very modest launch looking for it to rise overtime, where should we think about those inflection points being given that you have gone from really zero to 0.5 million in sales already?

Driving trial and developing real customers who order regularly and who advocate for our product are going to have a great impact on our business long-term, and that’s ultimately what we’ve been focused on for just the four short months that we’ve been in business. And so right now, again, we’re unaware of exactly what seasonality will mean for us, and we’re working to compensate for that, but it's still again very early days.

And Mara, you probably recall from the Investor Day that we had last year when we gave many examples around core brand strategies and how they are successful. But they do reward that 100 patients in the early days, which can be three to four year example that we gave in that Investor Day that that seems to be time period that you have to give the product and then it can hit an inflection point and become more mainstream.

I guess just from external perspective as we look to quantify some metrics around what constitute to success other than obviously your reported sales. What are things that we might be able to look to?

Ultimately, revenue is the most important measure, Mara. And again we’re looking at various underlying metrics to determine which ones we believe best correlate to revenue. And we’re looking at things such as number of visitors that we are able to attract to our branded Web site, the number of Web site visitors that purchased, the amount of reached sale. And again its very early days and re-key is important to us and we are looking at that. And we’re happy so far, but it's still little bit early to really report on where that’s headed.

And I think we also in terms of base line with regards to brand awareness within our target audience of the endurance athlete and then we’ll be going back to that group time-over-time to check-in on brand awareness because that’s the core target that we want to solidify first before we are able to take that tipping point more main stream. So it’ll just turn that brand awareness in that core target group.

And if I could just also ask on the parallel design Phase 2 study, switch gears for a second. I know the timing has been around sometime in the first half of 2017. Is there any greater refinement as to where that might fall in the first half?

Well, we’re now in the process of assembling our IND. So as soon as we have the go-ahead, we would be able to jump to it quickly. And we are now in this phase of really designing the study and making sure you need to have clear communications with our CRO and the Investigators that will involve this study.

Our next question comes from Matthew Andrews with Jefferies. Your line is now open.

Christoph and Tom, can we just talk about what beyond Phase 2 data analysis in NLC, and finalizing the study’s protocol. What steps remain for you to proceed with filing the IND in terms of pre-clinical talks? Do you have to conduct another electrical induced cramp model to look at those ranging. Can you just talk about some of those items before filing the IND?

Yes, I mean, the good news on the IND is this appears to be a very safe compound to-date, and we have a lot of experience already dosing at therapeutic doses repetitively in humans. And we also, based on the tox funding we know issue with filing an IND. So there is really nothing other than pulling it together currently that stands between us and filling the IND.

Do you have a fair amount of feedback from the FDA recently? To the extent that maybe apparent from the dialog, do you have a sense of what the agency sees as clinically meaningful in terms of cramp reduction for NLC. Is it really the historical quinine data that you would be looking to at least be comparable to in your Phase 2, any thoughts there?

Yes, I know it's a great question, and in fact that was obviously part of our dialog also with them. It's a really unique situation we’re in, right. There is no drug available for these patients in the United States and there used to be a drug that was prescribed millions of times a year. And so it's a little bit different than a market that has a drug already available. We think that if we’re in the range of quinine and we’re safe, that should be of interest. Of course, that all depend on further feedback from FDA. In other indications like MS and ALS, as you know and we’ve discussed the only agents that are available are sedating agents that are systemically available where you also worry about drug into the actions possibly. So again there we think we’re quite a differentiated options for patients with MS and ALS. And we’ll have further dialog with the FDA. But Tom, do you want to ad that?

Well, I think that it's clear that there is not much in the way of regulatory precedent. But there seems to be a broad acceptance of utilizing the historical quinine data, specifically looking at cramp frequency over two week period as an end-point that has great phase fluidity. Now, as we move forward, we’ll have a better understanding of where the greatest benefits actually occur in this population. And in the pivotal studies we may need to readjust accordingly. We do have some indications that one end point that we already examined the increase in cramp free nights might actually be an even more sensitive end-point. So there’re still things that could be discussed and that are typically part of the dialog with the FDA at the end of Phase 2 meeting. So we know we are away from that. I just want to remind everybody, we are still pre-IND here.

Just lastly any initial thoughts relative to what the plans maybe for the indication in Europe?

Well, Europe poses a particular opportunity for us, I believe. And there are many, many patients, especially in the United Kingdom that utilize quinine regularly. And as you may know more recent data showed that there are over 4 million scripts that were generated in 2013. I think the regulators in the UK are aware that there are certain issues regarding the safety profile of quinine. So we think that they will invite us to conduct trials. And for me as a clinical developer, there is obviously an opportunity to utilize patients that have been on long-term quinine therapy, because they actually represent a high degree of clinical certainty that they actually do have underlying nocturnal leg cramps. So there might be a clinical research opportunity to do one of our studies in the UK or other European countries in the future.

[Operator Instruction] Our next question comes from Mike King with JMP Securities. Your line is now open.

Regarding HOTSHOT, can you provide a number of cases or models you may have given for free or as promotion?

I don’t have a précised number. But what we do with our sampling is we’re very purposeful about that. As I mentioned, we go to marquee events and we actually focused our sampling at the expo where we have an opportunity to educate. The recipients around the use of HOTSHOT, we will put it in base bags, and obviously that comes with information for the athlete as well. And most significant presses when we actually sample on the course and with marathons we tend to like be right around mile 17 or 18 where people have d tendency to cramp. And we have found a lot of people very happy to find the stairs. So, it’s a very important part of our brand outreach.

And I am showing no further questions. I would now like to turn the call back over to CEO, Christoph Westphal for any further remarks.

Great, thanks so much. We look forward to continuing our work to finding the positive impact of Chemical Neuro Stimulation on painful and debilitating muscle cramps for the benefit of patients and athletes. This novel and important discovery, by Nobel Laureate Dr. Rod MacKinnon and Dr. Bruce Bean, may be a generally applicable method to treating disorders of cramping and spasms stemming from alpha motor neuron hyperexcitability. We wish all the best to both the cubs and inions at game 7 tonight. We are also rooting for all our pro and college team customers as HOTSHOT appears to be helping them to treat and prevent painful and debilitating cramps. Thank you, for joining us this morning. Goodbye.

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