Good day, ladies and gentlemen and welcome to the Vital Therapies’ First Quarter 2016 Financial Results 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 call over to your host today, Mr. Al Kildani, Vice President of Investor Relations. Mr. Kildani, you may begin.

Thank you. Good afternoon. My name is Al Kildani, Vice President of Investor Relations and Business Development. Thank you for joining Vital Therapies' management team on our conference call to discuss the Company's operations, update and earnings for the first quarter ended March 31, 2016. On today's call are several members of the Vital Therapies' senior management team, including Dr. Terry Winters, Co-Chairman and Chief Executive Officer; Dr. Duane Nash, President; Mike Swanson, Executive Vice President and Chief Financial Officer; Rob Ashley, Executive Vice President and Chief Technical Officer; Dr. Jan Stange, Chief Medical Officer. Before we begin, we'd like to remind you that some of the statements we make today will include forward-looking statements, such as statements related to the timing and conduct and enrolment of our clinical trials, future clinical trial results, the timing of certain development goals, including regulatory filings, possible mechanism of action of ELAD, our projected cash runway and plans and objectives of management for future operations. Forward-looking statements are subject to a number of risks and uncertainties that could cause actual events or results to differ materially, including the risk at our clinical trials program is delayed or is ultimately unsuccessful. Please note that these forward-looking statements reflect our management's views only as of today's date and we disclaim any obligation to update any forward-looking statements expect as required by law. Please refer to our SEC filings for a more detailed discussion of the risk factors that could cause actual events or results to differ materially. Vital Therapies property makes available on its Web site reports that the Company files or furnishes to the SEC, corporate governance information, press releases and other posters and presentations. A replay of this call will be available on our Web site later today. I would now like to introduce Dr. Terry Winters, Vital Therapies' Co-Chairman and CEO.

Good afternoon everyone and welcome to our first quarter 2016 update call; first, a brief summary of the Company for those of you who maybe new to our story. We are developing ELAD, an extracorporeal human allogeneic cellular therapy, which could improve survival in acute forms of liver failure. ELAD is at the phase 3 clinical trial stage and has open drug designation in the U.S. and the EU. Assuming successful clinical results in the future, we plan to seek regulatory approval and to commercialize ELAD directly in most major markets at the world. VTI-208 in our first phase 3 clinical trial which reported top line data last August, enrolled 203 subjects primarily in severe acute alcoholic hepatitis, but did not meet its primary or secondary survival endpoints. However, the encouraging data from pre-specified and post-hoc analysis led us to the design of a new phase 3 trial called VTL-308. The agenda for today’s call will be first to review the status of the VTL-308 trial and then to review additional analysis of the VTI-208 trial; to provide an update on recent medical meetings, including the European Association for the Study of the Liver or EASL meeting and our scientific advisory board meeting; to summarize the latest work to define ELAD’s mechanism of action, to provide an update on our financial condition, and finally, we will open up the call to Q&A. So first, the status of or VTL-308 phase 3 clinical trial. We continue to expect enrolment of the first subject in the first half of this year, and to report top line data in mid-2018. We have eight clinical sites open, six in the United States and two in Europe, and they are actively screening for subjects. This is slightly behind our projected rate of site openings. However,…

Thank you, Terry. We ended our first quarter with cash and cash equivalents of $77.9 million. Our average monthly cash usage for operations and capital expenditures during the quarter was approximately $3.4 million. This included a net reduction in accrued expenses of $1.5 million, primarily reflecting payments on our completed VTI-208 and other clinical trials. We expect accrued expenses to increase as subjects enroll in our VTL-308 clinical trial. Assuming we limit our focus principally to the VTL-308 clinical trial and related activities, we expect our average cash usage in 2016 to be about $3 million a month. Our use of cash flow vary based primarily on the timing and enrolment of the VTL-308 trials. Through April we raised net proceeds of $6.6 million under the at the market sales agreement, selling 763,234 shares at an average price of $9.03 per share. Summarizing our results for the quarter ended March 31, 2016, the Company reported a net loss of $9.6 million or $0.31 basic and diluted loss per share. Non-cash expenses for stock based compensation, depreciation and amortization totaled $1.5 million in the first quarter of 2016. This compare to a net loss of $14.8 million or $0.62 basic and diluted loss per share for the first quarter of 2015, which included non-cash expenses of $1.1 million for stock based compensation, depreciation and amortization. For more details on these financial results, please refer to our press release issued yesterday and our 2016 quarterly report on Form 10-Q. With that, I’ll turn it back to you Terry.

Thanks Mike. Before we take your questions, I would like to summarize our key upcoming milestones. First, enrolment of the first subject in VTL-308 is anticipated later this quarter; the top line data expected in mid-2018. Next, additional presentations on ELAD mechanism of actions are expected at Medical meetings in 2016. And thirdly the possible publication of VTI-208 results in a peer review journal could occur later this year. We would now like to open up the call to your questions. In addition to Mike, joining me for the Q&A portion of our call are Dr. Duane Nash, President; Rob Ashley, EVP and Chief Technical Officer; and Dr. Jan Stange, Chief Medical Officer. Operator can you please provide instructions and open up the call for questions.

Thank you [Operator Instructions]. Our first question comes from Katherine Xu of William Blair.

I was just wondering, maybe if you can explain a little bit the seasonally slow start of 308, and also the major differences, key differences, that you think, from a operational perspective between 208 and 308?

Let me take a try at that, it's certainly a key question. First of all, one of the assumptions we made was that if we made few changes to the VTI-208 protocol this would fly through the aisle of these much faster, and that is not proven to be the case. And what they’re doing is they’re assuming that 308 is a totally new trial. Secondly, I would point out that we basically are still on track. We’re little bit slower in opening up sites. And what’s happened there I think is that the bureaucracy and the administration surrounding the site opening seems to be just getting worse and worse. It takes a minimum of about six months to open up these sites. But they are opening up and we’re certainly hoping to catch up on that schedule over the next few months. And I think the second part of your question was the operating differences. Could you call upon either Jan or Rob to talk about that?

I can connect on that. From a administrative perspective what the patient has to do and so on, there really are no differences, meaningful differences between 208 and 308. There are some differences in the inclusion criteria in particular a limit on the maximum level of serum creatinine, that’s allowed into the study, a change and the limit on INR, a reduction in the age and then increase in the bilirubin limit. But we still don’t really have enough information to understand that that’s going to significantly impact the available population. I would agree with Terry that the bureaucracy associated with opening the sites has become very challenging, or challenging, and that’s what’s causing us to be slightly behind in opening sites so far.

Our next question comes from Matt Keller of Credit Suisse.

Just a follow up on the trial as well -- the obvious question you’ve maybe a quarter or so delayed on when do you expect to have majority of centers open but reiterating the data timing. So just what gives you the confidence on been able to have that data mid-2018?

I think we’re very close to being on planning in terms of enrolling the first patients we said in the first six months of this year. And we are certainly hoping and we’re feeling fairly confident that we’ll be able to get up to enrolling patients at a rate that’s probably similar to what we did 208 study. And that’s what really gives us the confidence to continue to be on track for top line results in mid-2018. Anybody else like to add anything?

And then I know it's early when we got these sites open. But anything that you’ve learned is from patient turned down rates or the patients that are continue get into trial, about how 308 maybe different than 208 in terms of the patient population?

The straight answer to that is no. We’re out there right now trying to obviously growing up patients. The big difference here as that we’re probably going to get a much larger number of referral patients from the referral sites to the main treatment centers. And we put in place special group in the Company to work with the PIs to make that happen and that’s basically just getting up and running. But after the present time we have not seen any differences.

Just one last follow up on expense. Mike talked about $3 million a month in cash burn. Are you expecting R&D expense to tick up throughout the year as you open more sites, enroll more patients? Or is there an offset versus the first quarter?

Well, I would certainly expect the expense to tick up as we open more sites. But it's the expense on an accruing basis, I believe. And traditionally in fact our experience tells us that hospitals take an awful long time to bill us for the patients. I’d be embarrassed to tell -- that to tell you how long hospitals take. But yes we would expect that to tick up probably temporarily over the $3 million level through 2017. Mike, do you approve that…

That’s correct. It will vary based on enrolment. And Terry is correct it takes time particularly for the clinical sites to bill it. We do, from the other vendors that are involved. We will get billings that are tied to patient enrolment. So it’ll vary from month to month and increase as we get to a steady run rate hopeful on that patient and grow in 2017.

Yes, the thing to remember as well is that this is an in-ICU study and those billings take a long time to catch up with us.

I am showing no further questions at this time. I would now like to turn the call back over to Vital Therapies’ CEO, Terry Winters.

Well, thanks everyone for being on the call. We appreciate the support and the interest in what we’re doing. Is the next call I believe we’re talking August, right that’s fine. Thanks everybody. Good bye. Thank you.

Ladies and gentlemen, this concludes today’s conference. Thank you for your participation and have a wonderful day. You may all disconnect.