Good day, ladies and gentlemen and welcome to the pSivida Third Quarter 2015 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now turn the conference over to your host Ms. Lori Freedman, Vice President of Corporate Affairs. Ma'am, please go ahead.

Thank you, Amanda. Good morning, everyone and thank you for joining us. Before the market opened today, we released our third quarter financial results for fiscal 2015. A copy of the release is available in 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 of 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 maybe 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 Quarterly Report on Form 10-Q for the quarter ended September 30, 2014. 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 would like to turn the call over to Paul.

Great, thank you, Lori, and good morning everyone as we discuss the results of our fiscal 2015 third quarter. This was another really good quarter for us. ILUVIEN which we licensed to Alimera Sciences was launched in the U.S. and very importantly we reached the agreement with the FDA on a clear regulatory path for our own product Medidur posterior uveitis. So let's get into the details. We believe ILUVIEN has an important alternative treatment alternative for patients with DME, which typically manage with either laser therapy or repeated intra-articular injections of the anti-VEGF drugs, Eylea Lucentis and off-label Avastin. These injections offer us treatment as every month and laser therapy only stays up the progression of this disease for a short period. By contrast, ILUVIEN provides three years of sustained treatments for the single injection. We're optimistic that ILUVIEN will be a significant alternative for DME patients. As you know, Alimera obtained FDA approval for ILUVIEN at the end of September 2014 the patients with DME who previously undergone a corticosteroids treatments without experiencing a clinically significant rise in intraocular pressure. This is a broader label than was approved in Europe, where ILUVIEN has marketing authorization in 17 EU countries for the treatment of vision impairment associated with chronic DME considered insufficiently responsive to existing therapies. ILUVIEN was launched in Portugal in January and is already sold in Germany and the U.K. In the U.K. we’re pricing a reimbursement by the National Health Service has been in a place for a while we’re beginning to see a nice up-tick in sales. ILUVIEN was launched by Alimera in the U.S. in early March and is actually in February and is now widely available to an estimated over 500,000 patients with clinically significant DME. So, ILUVIEN is now launched in the…

Thank you, Paul and good morning everyone. I will briefly review our third quarter fiscal 2015 results reported earlier today, starting with our financial position. As Paul noted at March 31, 2015 we had cash and cash equivalents and marketable securities of $31.7 million, which represented net cash usage of $4 million during the third quarter. We continue to believe these capital resources are sufficient to fund our current and planned operations into calendar 2017 including our two Medidur trials without taking into account any potential future net profit share amounts that we may earn on sales of ILUVIEN by Alimera. As Paul also noted earlier previous liquidity projections are already contemplated conducting two clinical trials for Medidur so that our current projections were not changed by the recent FDA guidance. Turning now to our third quarter fiscal 2015 results, revenues totaled $328,000 for the quarter ended March 31, 2015 compared to $2 million for last year’s quarter. The decrease was primarily attributable to the prior year recognition of $1.5 million of contingent consideration under a completed feasibility study agreement and an approximate $100,000 decrease in Retisert royalty income. Research and development expense totaled $3.3 million in this year's third quarter, an increase of $1.1 million or 47% compared to $2.3 million in the prior year period. This increase was primarily attributable to higher CRO cost for the clinical development of Medidur. General and administrative expense increased by $95,000 or 5% to $2 million for the three months ended March 31, 2015 from $1.9 million in the prior year quarter primarily due to higher stock-based compensation expense. Income tax benefit was $44,000 for the three months ended March 31, 2015 compared to $31,000 in the prior year period and consisted of foreign research and development tax credits in both periods.…

Great, thanks Len. To sum up, it was a really good quarter for us. Key points are number one, ILUVIEN launched in the U.S. and sales beginning to pick up in the U.K. where reimbursement has been established. Two, we agreed with the FDA on a clear regulatory path for Medidur in posterior uveitis, which should allow us to file the NDA in the first half of the 2017 ending results. This plan calls for 12 months data from our current Phase 3 trial together with a six months data from second already budgeted Phase 3 study. Number three, we completed enrollment of the first Phase 3 trial with data read out anticipated in Q2 2016 and initiated the second study. Four, we continue to progress on our preclinical programs focusing particularly on wet and dry AMD, our Tethadur programs are continuing to progress and with our partner hospital for special surgery with IND filing for osteoarthritis that's a development stage product. Five, we believe we have enough cash to fund our planned operations into 2017 including the Medidur trials without any cash from ILUVIEN net profits. So at this point, we will be happy to take your questions. Amanda, could you please initiate the Q&A portion of the call?

[Operator Instructions] And our first question comes of Suraj Kalia from Northland Securities. Your line is open. Please check your mute button. Our next question comes from the line of Matt Kaplan of Ladenburg Thalmann. Please go ahead.

Hi, good morning Paul.

Good morning Matt, how are you?

Doing well, thank you. Couple of questions – congrats, I guess first congrats on the progress during the quarter and the clarity from the FDA with respect to next step needed from Medidur. With respect to ILUVIEN, can you talk a little bit about pricing and reimbursement status that has been able to been established so far by Alimera?

I really will discuss Alimera for that discussion but thanks very much for the - congratulations on the uveitis clarity.

And I guess maybe focusing on Medidur with respect to the additional, the second Phase 3 study, can you give us some more details on what the endpoint and primary endpoint of that study will be and your thinking on the timing?

Yes. The primary endpoint will be recurrence of uveitis at six months after enrolment in the study.

Okay.

After the first study, it was a 12 month primary endpoint. So the primary endpoint in both studies is the same i.e. recurrence of disease. So the first one is 12 months and the second one is only 6 months, which obviously shortens the whole thing.

Right. And is it you said you’re going to be randomized placebo controlled?

Yes, we have lot of things it’s randomized controlled study

Great. And is it only going be - only going to be a carry out in India or other countries as well?

Just India.

Okay. And with respect to the guidance from the FDA, anything as the components of what you need to complete obviously the first Phase 3 study, the second Phase 3 study or is there anything else that they gave you guidance on in terms of that's necessary for filing?

Well it's important that we're able to reference the ILUVIEN Phase 3 study because that takes out a lot of additional royalty, we would otherwise have to do. We also plan to do the utilization study with our new inserter, it is going to be a very important to have a new inserter going down a 27 gauge is a significant clinical advantage. So we had discussions with them about that inserter study and I think about that one is we’re already looking at the efficacy of the inserter itself as suppose to a long term follow up where we have to look at the efficacy of the in plant for intravitreal study.

Great. And I guess shifting a little bit to your pipeline, can you give us a little bit more detail in terms of your plans for wet and dry AMD and potential timing on those programs in terms of moving into the clinic.

Yes, we hope to get into the clinic sometime in calendar 2016.

Okay.

As you know there has really been a surge and interest in wet and dry AMD and we’re beginning to see some – shall I say, unfortunate results where people have tried topical drops to deliver drugs to the back of the eye. As you know, my personal view is topical drugs need not work for the back of the eye diseases. It's very clear that you need a means to get the drug into the back of the eye which is why of course people are injecting it there right now with Lucentis and Eylea. The trick is to keep it there where you don't have to have injections every month. And we've go the only technology that it's proven to be able to do that.

Very good. And any other detail you can give us on your catheter and where that is into play?

We're continuing to move that in preclinical models. It's a new technology so there's some bugs appear as you move through things, we are continuing to iron those, I think we are pretty much where we need to be. We need to do a couple of preclinical tests to ensure that indeed the case and the bugs finally been worked out.

Okay. So these are preclinical studies that are going to allow an IND filing?

Let's hope, yes.

And is that potentially a 2016 timeline for an IND filing.

Yes, 2016 is a reasonable guess.

Okay.

I'd like to had in 2015 but -

All right. Thank you very much for taking the questions.

Thanks Matt.

[Operator Instructions] Our next question comes from Ben Shim from MLV. Your line is open.

Good morning Paul, and congrats on the ILUVIEN launch. I got a question for you regarding osteoarthritis, is that the Phase 1 program baked into your guidance, your liquidity guidance for 2017 as well.

It will not affect the liquidity guidance, so yes.

Okay, great. With respect to Medidur, will there be any clinical expense following the completion of the Phase 3 trials?

Well, there is always the additional follow-ups for Medidur and regulatory folks who will give you whatever all the guidance they need for post approval surveillance and all those kind of thing.

Okay. So monitoring the patients, okay.

Yes.

I know its little bit early but are you at a point where you will be able to true up the joint commercialization costs for ILUVIEN with your partner?

Sorry, I don't understand the question.

Will you be able - have the joint commercialization cost that I guess will be coming out of your profit share, has that final number been settled done or reviewed or concluded?

You're talking about the pre-commercialization possibility costs?

Yes.

Those are obviously ongoing. I believe, I would presume because we haven't gone over the numbers yet with – let's say with respect to Q1, I would presume that given the long chest the product in this quarter in the U.S. The U.S will not be a profitable quarter this time around.

Okay. Thank you very much.

Thank you.

Thank you. And our next question comes from the line of Jesse Greenfield from Greenfield Investments. Your line is open. Please go ahead.

Can you give us a little more color arthritis program with the Hospital for Special Surgery?

Yes.

And what do you think is the potential market, size of the market?

Well, the basic premise is this, steroids are often injected in conjoint these days and patients with osteoarthritis. And they last [AP] [ph] at a time units and then people frequently get reinjections. The size, the amount of drugs that's injected is pretty high because you know that you have the thing left for a while, you give vein [indiscernible] therapeutically necessary give it get cleared out of the joint very quickly. So you try to give in a therapeutic amount for longer I’m putting in super therapeutic amount to begin with. Now this is very analogous to what has been going on in the eye for years also. People fluocinolone acetonide into the eye for macular edema and it lasts for - you inject four milligrams and it lasts for three or four months. Now with the ILUVIEN device, we can - or rather with the insert of comprise of the ILUVIEN, there we are injecting point two of a milligram approximately, and it lasts for three years. So you can have a far lower dose and have it last it far longer. So that's the basic approach of the hospital with the Hospital for Special Surgery folks is with that technology to provide a lower overall dose of steroid will have it last very long time indeed. So that’s the approach. I think it’s one of the things that theoretically you know will work than just the case of showing that it works. In terms of how many people would be potentially treated and what the market size is, to be honest it’s a little bit early for that because until you have the efficacy and any side effects, we don't anticipate but we need to look for. And till you know the efficacy and side effects it’s kind of difficult to do your market research because you wouldn't know how to describe the product to a potential R&D position. But it’s obviously, potentially a very large market.

Okay. Thank you very much.

Thank you. And at this time, I would like to turn the call back to management for any closing remarks.

Okay. Well thank you for joining us today. And 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. Thanks again.