Good day ladies and gentlemen. Thank you for standing by. And welcome to the pSivida Corp's Q2 2014 Earnings 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 call is being recorded. I would now like to turn the conference to our host, Ms. Lori Freedman. Ma'am you may begin.

Thank you, Eric. Good afternoon everyone and thank you for joining us. After the market closed today, we released our second quarter financial results for fiscal 2014. A copy of the release is available on the Investor section of our website at www.psivida.com. On the call with me today is Dr. Paul Ashton, President and Chief Executive Officer; and Len Ross, Vice President, Finance. Before I hand the call over to Paul, I need to remind everyone that some of our prepared remarks are and answers to your questions may be forward-looking in nature. Forward-looking statements are inherently subject to risks and uncertainties. All statements other than statements of historical facts are forward-looking statements, and we cannot guarantee that the results and other expectations expressed, anticipated, or implied will be realized. Actual results could differ materially from those anticipated, estimated or projected in the forward-looking statements. For a more detailed discussion of risk factors that could impact our future results and financial condition, I refer you to our filings with the SEC including our Annual Report on Form 10-K for the fiscal year ended June 30, 2013. We undertake no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after this conference call. With that, I’d like to turn the call over to Paul.

Thank you, Eric. Good afternoon everyone and thank you for joining us. After the market closed today, we released our second quarter financial results for fiscal 2014. A copy of the release is available on the Investor section of our website at www.psivida.com. On the call with me today is Dr. Paul Ashton, President and Chief Executive Officer; and Len Ross, Vice President, Finance. Before I hand the call over to Paul, I need to remind everyone that some of our prepared remarks are and answers to your questions may be forward-looking in nature. Forward-looking statements are inherently subject to risks and uncertainties. All statements other than statements of historical facts are forward-looking statements, and we cannot guarantee that the results and other expectations expressed, anticipated, or implied will be realized. Actual results could differ materially from those anticipated, estimated or projected in the forward-looking statements. For a more detailed discussion of risk factors that could impact our future results and financial condition, I refer you to our filings with the SEC including our Annual Report on Form 10-K for the fiscal year ended June 30, 2013. We undertake no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after this conference call. With that, I’d like to turn the call over to Paul.

All right. Thank you, Lori. And welcome everyone as we discuss the results of our second quarter of fiscal 2014. This was another very good quarter for us, with good progress on Medidur, ILUVIEN for DME and Tethadur. Progress on our lead development product Medidur continues on track. This product is an injectable sustained release micro-insert for the treatment of posterior uveitis, A serious disease of the back-of-the-eye, which is about the third or fourth largest cause of blindness in the U.S. Enrollment for the first of our two planned pivotal Phase III trials for Medidur is expected to be completed by the end of the summer. Based on the clinical trial results for Retisert, the FDA approved product for the treatment of posterior uveitis that we developed and licensed to Bausch & Lomb and on the results of ILUVIEN for DME we expect our trials for Medidur will show that it is as effective as Retisert, but with a better safety profile. We're developing Medidur independently. Turning to our lead licensed product, ILUVIEN for DME, we received very, very promising news in both the U.S. and the UK. ILUVIEN is an injectable sustained release implant for the treatments of Diabetic Macular Edema that we developed and licensed to Alimera Sciences. In December, Alimera reported that it had entered into labeling discussions with the FDA, with respect to ILUVIEN for DME but the FDA had scheduled a meeting with the Dermatologic and Ophthalmic Drugs Advisory Committee to provide assistance in the deficiencies identified in the FDA's October complete response letter and advice with respect to patient population in which the benefits of the drug product might avoid the risk. As a result of the labeling discussions, that meeting was deemed unnecessary and has been canceled and Alimera plans to file…

All right. Thank you, Lori. And welcome everyone as we discuss the results of our second quarter of fiscal 2014. This was another very good quarter for us, with good progress on Medidur, ILUVIEN for DME and Tethadur. Progress on our lead development product Medidur continues on track. This product is an injectable sustained release micro-insert for the treatment of posterior uveitis, A serious disease of the back-of-the-eye, which is about the third or fourth largest cause of blindness in the U.S. Enrollment for the first of our two planned pivotal Phase III trials for Medidur is expected to be completed by the end of the summer. Based on the clinical trial results for Retisert, the FDA approved product for the treatment of posterior uveitis that we developed and licensed to Bausch & Lomb and on the results of ILUVIEN for DME we expect our trials for Medidur will show that it is as effective as Retisert, but with a better safety profile. We're developing Medidur independently. Turning to our lead licensed product, ILUVIEN for DME, we received very, very promising news in both the U.S. and the UK. ILUVIEN is an injectable sustained release implant for the treatments of Diabetic Macular Edema that we developed and licensed to Alimera Sciences. In December, Alimera reported that it had entered into labeling discussions with the FDA, with respect to ILUVIEN for DME but the FDA had scheduled a meeting with the Dermatologic and Ophthalmic Drugs Advisory Committee to provide assistance in the deficiencies identified in the FDA's October complete response letter and advice with respect to patient population in which the benefits of the drug product might avoid the risk. As a result of the labeling discussions, that meeting was deemed unnecessary and has been canceled and Alimera plans to file…

Thank you, Paul and good afternoon everyone. I will briefly review our second quarter and fiscal year 2014 results reported earlier today, starting with our financial position. As Paul noted at December 31, 2013 we had cash, cash equivalents and marketable securities of $15.7 million. The net decrease of $800,000 compared to September 30, 2013, reflected approximately $1.25 million of proceeds received from initial sales of shares under the ATM facility and 1.2 million received from an existing collaboration agreement as well as the effect of increased cash outlays in the quarter related to the first of our Medidur Phase III trials. We anticipate that the combination of our existing capital resources, together with expected and registered royalty income and other expected cash inflows under existing collaboration and technology evaluation agreements, will enable us to fund our current and planned operations through the first quarter of calendar year 2015. This includes expected cost through that date of our Phase III clinical trials of Medidur but excludes any potential milestone or net profit share receipts under our Alimera collaboration agreement. We believe that the funding of our operations beyond the first quarter of calendar year 2015 depends significantly on first, possible cash flows from our Alimera agreement including the successful commercialization by Alimera of ILUVIEN for DME and a $25 million milestone payment due upon an approval of ILUVIEN. Second, payments we may be entitled to under our other existing in any future collaboration technology evaluation or other agreements. And third the net proceeds from any financing transactions in which we may engage, including our ATM program. Although we sold additional shares in early January resulting in net proceeds of $224,000 and we may sell additional common shares under this ATM program, we do not know whether and to what extent…

Great. Thanks a lot. To sum up, this quarter our clinical trials for our lead development product Medidur for posterior uveitis continued on track and we continued to progress our pre-clinical product development based on our Tethadur and Durasert technologies. Our lead license product ILUVIEN for DME made significant strides, both in the UK with expanded access to the products funded by the National Health Service and in the U.S. with the initiation of labeling discussions with the FDA on the and the planned response this quarter to CRL without the requirements of new clinical trials. We add it to our cash resources and gave ourselves potential future capital raising flexibility by putting an ATM in place, although we haven’t used it since December. On our quarterly cash burn, we expect it will continue to show some variability in the near future, primarily due to the timing of clinical trial costs and payments from collaborating companies. I am very optimistic that 2014 will be a very good year for us as we have a number of catalysts including our own Phase III clinical trial program for our own product that’s moving forward, preclinical data on Tethadur products and hopefully increase in sales ILUVIEN to DME in the EU and FDA approval in the U.S. At this point, we’d be happy to take your questions. Operator, would you please turn over the next portion of the call for the Q&A?

Certainly. [Operator Instructions] And our first question comes from Suraj Kalia of Northland Securities. Please go ahead.

So, Paul as you make -- Alimera makes the final submission at the end of Q1, the type two response, is the expectation in terms of final approval sometime late Q3, Q4, if my timeline is still reasonably accurate?

Yes, it would a type two response. That is six month review.

So, say if we could speak to the other piece in next Q3, okay. And in terms of your discussions with Alimera, Paul, again to the extent that you can share, what’s the breakeven point, breakeven threshold for ILUVIEN sales in the EU, after which you all start generating -- start driving net profits to yourselves, the 20% royalty stream?

Well, it’s not quite that simple because it’s all done on a country-by-country basis. So it’s net profits in a given quarter in a given country.

And just in terms of a macro basis, you haven’t done an internal analysis that suggests that let’s say all these countries blended together if they -- Alimera does $5 million or $10 million in sales, above that you’ll would start deriving the royalties. I’m just trying to get a ballpark idea.

It’s a little -- it’s difficult to apply those kind of ballparks Suraj because it’s done on a country-by-country basis. And it’s the commercialization expenses incurred in that particular country. So in Europe for example -- in Europe they could be, in a given quarter unprofitable because this perhaps the long [ph] trust in France. However if in Germany they’re profitable, then things would be given based on the profitability in Germany. So it’s a little bit unrelated.

Fair enough. Final question Paul and I will get back in queue. In terms of the Uveitis trial, maybe I’ve missed this but did you talk about the status of the trial enrollment numbers or anything to that effect?

Yes, it’s progressing. We anticipate the enrollment will be complete by the end of summer in 2014. That is the first trial.

Our next question comes from Juan Sanchez of Ladenburg. Please go ahead.

Good evening Paul I only have one question on - I need some [ph] growth results. What’s your take on what kind of product we have here for the long term? Do you think this level of revenues is going to be maintained in the long term or do you think future - over the near term Uveitis developments or make this product less used than it is right now?

So regarding Ratisert, really over the last couple of years and Len please interject if I’m wrong, it’s been very variable one quarter to the next. So it’s difficult to come off with any long term trend. And it’s notable in that there really hasn’t been a long term trend at this point. I would imagine however that as and when Medidur is approved, then sales in Ratisert may take a significant hit.

Our next question comes from Anup Dalal of KVP. Please go ahead.

Paul, a couple of questions. First of all if you can comment on this, any color on what the product for the patients that have come out of the study so far, any color on the blended event rate in terms of recurrence.

For which study?

For the Phase III Uveitis study.

Too early, I have no information.

Okay, great. And the second question was, are your assumptions regarding discontinuation in the study sort of conforming to what you expected?

Discontinuation?

These people come out of the study early.

I haven’t looked. Its early stages.

Okay. And then last question, Paul, just strategically, how - there’s maybe an opportunity for you to potentially, in respect to the $25 million that Alimera owes you, you theoretically could take that down in exchange for higher economics on the backend. Other hand its upfront cash and important for you for obvious reasons. I wanted to see if you could give us any color on how you’re thinking about that. I’m sure that discussion is going to happen.

Interesting Phil, but I can’t really comment.

[Operator Instruction] I’m showing no further questions at this time.

Great then, I’d like to thank you all for joining us today. I look forward to speaking with you again next quarter. In the meantime of course if you have any additional questions, please feel free to contact us. Thank you.

Ladies and gentlemen, this does conclude today’s conference. Thank you for your attendance. You may now disconnect. Have a great day.