Good day, ladies and gentlemen, and welcome to the Retrophin Second Quarter 2017 Financial Results and Corporate Update. 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 Chris Cline, Vice President, Investor Relations.

Thank you, Latoya. Good afternoon, everyone, and thank you for joining Retrophin’s second quarter 2017 financial results and corporate update call. Joining me on the call today are Steve Aselage, Chief Executive Officer; Neil McFarlane, Chief Operating Officer; Laura Clague, Chief Financial Officer; and Dr. Bill Rote, Senior Vice President and Head of Research and Development. Before we begin, I would like to remind everyone that statements made during this call regarding matters that are not historical facts are forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties and assumptions that may cause actual results, performance and achievements to differ materially from those expressed or implied by the statement. Please see the forward-looking statement disclaimer on the company’s press release issued today as well as the Risk Factors section in our Form 10-K filed with the SEC. In addition, any forward-looking statements represent our views only as of the date – as of today’s date, August 9, 2017, and Retrophin specifically disclaims any obligation to update such statements to reflect future information, events or circumstances. With that, I’ll now turn the call over to Steve. Steve?

Thanks, Chris. Good afternoon, everyone. Thank you for joining us on our call today. The team made remarkable progress during the second quarter, which resulted in the continued growth of our commercial portfolio and advancement of our pipeline. Most notably, we made significant progress with both of our late-stage clinical programs during the quarter. We recently reached a key milestone, with the first patient dosed in our Phase III FORT study, evaluating fosmetpantotenate or RE-024 in PKAN. From here, our efforts will be focused on accelerating enrollment in the U.S. as well as initiating our international study sites in the coming months. Our current expectation is that we will have the FORT study fully enrolled sometime during the second half of 2018. We also made considerable progress with our sparsentan Phase III program in FSGS. On our last call, we laid out our plan to confirm alignment on our pivotal trial protocol and statistical plan with the FDA in the second half of the year. I’m pleased to report that we are on track to reach that goal. We have completed our protocol design development and are in the process of preparing our submission to the FDA to ensure alignment. We’re also preparing for protocol assistance discussions from the EMA. All interactions to date suggest our proposed trial design should support both MAA and NDA filings. We look forward to updating you on the trial specifics later this year and subsequently initiating the study for FSGS patients. Additionally, we are very pleased that two new patents covering the use of sparsentan for treating glomerulosclerosis were granted during the quarter. These patents have a meaningful impact on the value of our sparsentan program as we expect them to extend our U.S. and European market exclusivity in FSGS until at least 2030.…

Thanks, Steve. We achieved key milestones during the quarter for both fosmetpantotenate or RE-024 and sparsentan. I’ll start with fosmetpantotenate. Early in the quarter, we had a successful U.S. investigator meeting for our Phase III FORT study in PKAN. I’ve been in many investigator meetings over the years, and I’m happy to say that these meetings stood out as being one of the best in terms of engagement and enthusiasm in the program. Since the investigator meeting, we’ve been activating new sites through the IRB and country-specific approval process and identifying patients for the trial through our extensive KOL and advocacy network. We were very pleased to announce recently that the first patient had been dosed in the study. This was a great milestone for the fosmetpantotenate program as it marks tangible clinical progress toward our goal of delivering therapy that can make a meaningful difference in the – for the PKAN community. As a reminder, the FORT study is being conducted under a special protocol assessment agreement with the FDA, which means that the trial design is expected to support an NDA filing. European authorities have also reviewed our trial design, so we expect that positive results in the trial would enable us to file for marketing authorization in the U.S. and Europe. Our focus with the FORT study has turned to accelerating enrollment in the U.S. and working with our international sites to get them open and screening patients. We expect to have a steady cadence of international sites coming online through the end of the summer and fall, which we expect will hasten enrollment. While we will not be giving incremental updates on patient enrollment, as Steve mentioned, our current expectation is to have the last patient enrolled during the second half of 2018. Lastly, regarding fosmetpantotenate,…

Thanks, Bill. Our commercial business turned in a strong second quarter. Revenues from our marketed product portfolio grew 16% year-over-year to $38.8 million. As Steve mentioned, that growth keeps us on track to meet our full year guidance of $150 million to $160 million. We continue to see growth across all three products, and as expected, we saw our gross-to-net adjustments move back towards typical levels after the routine first quarter impact. We are seeing great focus from our newly expanded and dedicated sales teams, one supporting Thiola and one supporting Cholbam. Specifically, regarding Thiola, demand among cystinuria patients remains strong. We continue to utilize secondary data to identify patients who are treating cystinuria patients. These tools, such as ICD-10 diagnostic codes and laboratory data, remain key instruments allowing us to identify physicians with Thiola candidates and expect they will continue to help us grow the brand for the foreseeable future. Additionally, compliance rates for Thiola patients remain strong as a result of our first-in-class hub services for patients. Lastly, regarding Thiola. We have made significant progress with our partners on a new formulation. We have advanced the development of a more patient-friendly formulation and expect we’ll be in a position to file an NDA in 2018. As we get closer to filing, we will provide additional detail on the new formulation, but the steps taken thus far to advance this new option for cystinuria patients are noteworthy. Cholbam, our bile acid replacement therapy for potentially fatal hepatic diseases, specifically bile acid synthesis and Zellweger Spectrum Disorders, grew in the second quarter as well. As many of you know, due to the extended diagnostic algorithm, the call cycle with Cholbam is a bit longer than Thiola. Our newly dedicated Cholbam sales team has had considerable success educating health care professionals…

Thanks, Neil. During the second quarter, net product sales for our commercial portfolio grew 16% year-over-year to $38.8 million. We reported a GAAP net loss of $13.2 million for the second quarter of 2017. After adjusting for noncash expenses, we reported a non-GAAP net income of $1.1 million. Significant noncash adjustments for the quarter included $15 million of non-GAAP operating loss adjustments, an income tax benefit of $1.9 million and a $1.3 million – and $1.3 million related to the company’s derivative liability resulting from changes in share price. R&D expenses, on a GAAP basis, were $19.5 million for the second quarter of 2017. The year-over-year increase is primarily due to higher clinical expense related to sparsentan and fosmetpantotenate. On an adjusted basis, R&D expense for the second quarter was $17 million. Relevant noncash expenses for the second quarter included $2.5 million of stock-based compensation and amortization. Selling, general and administrative expenses were $28.8 million on a GAAP basis for the second quarter of 2017. The increase over the same period last year is largely attributable to additional headcount, support of our growing commercial products and a nonrecurring $2 million advancement of legal fees. On an adjusted basis, non-GAAP SG&A expense for the second quarter was $19.7 million. Significant noncash adjustments for the quarter consisted of $9.2 million related to stock-based compensation and depreciation and amortization. At the end of the quarter, we received the final $47.5 million payment resulting from the sale of our PRV to Sanofi that occurred in 2015. That number is now included in our marketable securities line instead of being included in notes receivable. As of June 30, 2017, we had $296 million in cash and cash equivalents and marketable securities. Overall, we are on incredibly strong financial footing to execute on our development programs and support the growth of our commercial portfolio. Looking ahead, we continue to expect our operating expenses will rise year-over-year as a result of the advancement of our pipeline in support of our commercial organization. I’ll now turn the call back over to Steve for his closing comments. Steve?

Thank you, Laura. In the second quarter, we turned a strong operational performance and made considerable headwind in key initiatives that have put us in excellent position to deliver value for patients and for our shareholders. Our greatest priority remains executing on our pipeline programs. Fosmetpantotenate and sparsentan each represents significant opportunities to help people living with devastating rare diseases, while simultaneously transforming our commercial potential and creating long-term diversified growth. We will continue our focus on reaching the key milestones that will move these programs forward as quickly as possible, and we look forward to updating you on our achievements over the balance of the year. Let me now turn the call back over to Chris and open the lines for questions. Chris?

Thanks, Steve. Latoya, can we go ahead and open up the lines for Q&A, please?

Thank you. [Operator Instructions] And the first question is from Do Kim of BMO Capital Markets. Your line is open.

Good afternoon. Thanks for taking my questions. First on 024, could you give us a sense of what you expect to see as a baseline PKAN-ADL score? And also, how advanced is – would the disease be if the patient scored a six or higher?

Certainly, this is Bill. Thanks for the question. The minimum entry into the trial is PKAN-ADL score of six or greater, and that’s achievable by the vast majority of patients with PKAN. We expect them to be higher than that. I think there will be diversity based on the heterogeneity of the disease, how it presents as well as how it progresses as well as the broad spread in age amongst the participants.

So you’re – based on the entry level, you’re expecting patients with mild display of symptoms enrolled in the study?

I don’t know if I’d use the term "mild." I’d say there is a spread and where you may have severe symptoms in one domain, you may not have symptoms in another domain, depending on how the disease presents itself. I think that – and I expect that the vast majority are going to be well above 6.

Okay. And for sparsentan, could you give us a better sense of time lines to the FDA discussion and the disclosure of the final study protocol? How long does it take to schedule a meeting with the FDA? And will you wait for the minutes in order to let us know what the protocol will be?

Yes. I don’t know that today we’re going to get into time lines for submission of that protocol. We’re working as quickly as we can to get that back to the agency. And once we do have feedback from them, we’ll be back to tell that story and give the specifics of the protocol. Highly likely that we will wait for minutes before we’re doing that.

Okay. Thank you. Congrats on the progress.

Thank you. The next question is from Tim Lugo of William Blair. Your line is open.

Hey, guys. This is Ashiq Mubarack on for Tim. Thank you so much for taking my question. And congrats on the progress this quarter. Just a couple of quick ones. I’m just trying to get a sense of how we might be able to think about the four patient physician-initiated study results and how that might potentially translate into FORT. Can you maybe talk a little bit about how those patients compare to the ones you’re planning on enrolling? I’m assuming that it would meet the exclusion criteria. And could you just remind us about general details there? And then just jumping to sparsentan, I remember during DUET, statistical powering was the one point of discussion. Can you maybe – I don’t know if you can, but can you maybe discuss any strategies you have there regarding – showing significance in the results for that? Thank you.

So the first question was around the four individuals who are taking fosmetpantotenate under compassionate use. They’re 2.7 to 3.5 years of experience for those individuals. All have shown benefit, and all have remained – preserved that benefit over time. I think that, yes, they are representative of patients that could be in the FORT study. They’re adults that were diagnosed as children, lived with the disease for a period of 20 years or so before receiving the medicine under compassionate use, so they would have met criteria for the study. The second question was around powering, and I’m not clear, are you asking about powering for the sparsentan study or for the FORT study?

For sparsentan.

Yes. I don’t – we’re not going to get into discussions of the powering at this stage of the game. I think once we’ve got a protocol that we can discuss, that would be the appropriate time to raise that.

Okay. That makes sense. And I think you mentioned something about business development. Are you able to talk about – are you looking at a particular class of compounds? Or are you more interested in a potential acquisition? Or any details you might be able to share?

We really can’t provide any details on that at this point. I think one of the things we’ve learned over the last couple of years is you don’t have any kind of a deal until the final paperwork is signed. Neil said in his commentary, we are seeing good opportunities right now. Actually, I think it’s a better market situation for acquisitions than it was maybe a year or so ago. But we’re also going to continue to remain very disciplined in our approach and make sure that if we move forward in our own acquisition, it’s going to create value in the near term for us and it’s going to be a meaningful component of a portfolio.

Thank you. The next question is from Liisa Bayko of JMP Securities. Your line is open.

Hi, good afternoon. This is Jon on for Liisa. Thanks for taking the questions. Just a couple of quick ones. Could you remind of the process you undertook to develop your statistical plan and protocol? And what else is left to do before submitting this to FDA? And then just the second one on Thiola. We saw that FDA listed that on their new list of branded drugs that don’t have exclusivity and there’s no generics. We’re wondering if you had any dialogue with the agency about this list and how you view that as far as any competition coming in.

Thanks for the question. This is Bill. I’ll take the sparsentan question first. We worked with the NEPTUNE consortium to look at the existing databases, longitudinal databases for patients with FSGS and worked predominantly around the linkage between reductions in proteinuria and how that reflects on ultimate renal health measured by eGFR. And that was the core of the work that was being done in collaboration with that group. Your other question on next steps is really what remains is putting together the package that goes to the agency and setting up that interaction.

And with regard to the Thiola, we have not had direct interaction with the agency on that list. We were actually pleased to see Thiola on that list. The – historically, you hear a rumor a quarter about generic Thiola coming tomorrow, and we have definitive proof now that no ANDA has been filed. That’s what we’ve contended for some period of time, and it’s good to get confirmation of that.

Okay. Thank you very much.

Thank you. The next question is from Joseph Schwartz of Leerink Partners. Your line is open.

Great. Thanks very much and congrats on all the progress. I was wondering, also on the new formulation of Thiola, what the rate-limiting steps to the NDA submission might be, and if you can describe the value proposition relative to the existing formulation of Thiola and whether there’s any IP in the new formulation.

Let me cover as much of that as I can. And I’m going to start with the latter part of your question, if I can. What we’ve said from the beginning is we feel the need for a more patient-friendly formulation. Thiola is a tremendously effective drug and it’s a generally safe drug. But it’s not particularly patient-friendly. Patients have to take a lot of pills. There’s a substantial pill burden. And they have to take those pills on an empty stomach. And the combination of an empty stomach and a multiple times-a-day dosing and a sugarcoated type of formulation can combine to cause some GI side effects and put a real strain on a patient’s ability to comply with the regimen in order to get the maximum benefit from the therapy. So we haven’t gone into specifics. But I think what you can say, or what we can say, is we’re looking at a formulation that would require fewer pills and hopefully reduce side effects. We think we’re well on our way towards getting there. In terms of what we still need to do, there’s still additional stability. We still have some additional PK work to do, particularly PK work related to with food versus on an empty stomach. But we’ve seen a lot of progress over the last quarter. And we feel pretty comfortable, at this point, that we should be able to file next year.

Understood. And then as far as patents go, it sounds like this might be something that could get orphan drug exclusivity. Any thoughts on that?

Well, we’re certainly going to take a look at that. I mean, there’s a potential for IP, but it would certainly not be a given. One of the things we didn’t do at all was talk about the IP we had filed for sparsentan until the patent’s actually issued. And we don’t want to put a lot of emphasis on potential IP with Thiola until unless we have something definitive rather than hypothetical. In terms of potential for orphan exclusivity, again, we’ve seen a couple of other products in the market, if you think about RAVICTI or PROCYSBI, products where a new formulation has created a safer formulation and allowed orphan drug designation, we’ll certainly take a look at that. But again, at this point, we don’t have data to – we’re certainly going to check out all possibly ways to protect the product, but at this point, I’d be speculating if I said we could get either additional IP or orphan designation. We’ll look at it. If it looks possible, we’ll certainly pursue it.

Great. That’s very helpful. Thanks for that color. Can – and then on PKAN, can you talk a little bit about whether there’s like a natural history study or other registering available that can help you gauge what’s expected in the placebo arm? And can you remind us how this study is powered, like what you assume the ADL will change in the placebo arm and that you need to show in the active arm to be successful?

Well, there really isn’t any natural history data. It’s quite a rare condition. But there’s continued deterioration over time, different rates of deterioration with different patients as it is barely heterogenous in its presentation. We haven’t talked about powering on that study and don’t intend to do that at this point in time.

Okay. Thanks for taking my question.

Thank you. There are no further questions in the queue at this time. I’ll turn the call back over for closing remarks.

Great. Thank you, Latoya. Thank you, everybody, for joining our second quarter call. This concludes the conference call, and we look forward to updating on our progress on upcoming calls.

Thank you. And ladies and gentlemen, this concludes today’s conference. You may now disconnect. Good day.