Good morning, ladies and gentlemen, and welcome to Veru Inc's Investor Conference Call. All participants will be in listen-only mode. [Operator Instructions] After this morning's discussion, there will be an opportunity to ask questions. Please note that this event is being recorded. The statements made on this conference call that are not historical in nature are forward-looking statements. Such forward-looking statements reflect the company's current assessment of the risks and uncertainties related to our businesses. Our actual results and future developments could differ materially from the results or developments in such forward-looking statements. Factors that may cause actual results or developments to differ materially include such things as the risks related to the development of the company's product portfolio, risks related to the ability of the company to obtain sufficient financing on acceptable terms when needed to fund development and company operations, risks related to competition, government contracting risks and other risks detailed in the company's press release, shareholder communications and Securities and Exchange Commission filings. For additional information regarding such risks, the company urges you to review the 10-Q and 10-K SEC filings. I would now like to turn the conference over to Dr. Mitchell Steiner, Veru Inc's Chairman, CEO and President. Dr. Steiner, please go ahead.

Thank you, Operator, and good morning. This is Dr. Mitchell Steiner, Chairman, President and CEO of Veru Inc; and joining me are Michele Greco, CFO and CAO; and Phil Greenberg, Executive Vice President, Legal. Thank you for joining our call. Veru is a urology and oncology biopharmaceutical company focusing on prostate cancer novel medicines. Today, we will update you on the clinical development of our drug pipeline and the commercialization of our products, as well as provide financial highlights for the fourth quarter and year-end fiscal year 2018. We had a successful year, and are well on our way to transforming our company into a biopharmaceutical company. We have advanced several near-term and mid-term urology products at the same time to have multiple shots on goal, to file drug approval applications on and to commercialize several drugs in oncology and urology. We have also begun to see our strategic plan for our existing commercial products taking hold as we anticipate solid revenue growth in these commercial products. With this strong foundation in place, it is time for our company to further articulate to our shareholders our business plans and priorities as this will inform our investors on objectives and goals for the next year and beyond. Our strategy is to eventually be known as the prostate cancer company. Rather than focusing on one drug class or one research platform, we aspire to be disease-focused by providing a continuum of care for prostate cancer patients. This means we expect our drug development and commercial activities to align with the clinical management of prostate cancer patients. Although prostate cancer remains the second most frequent cause of cancer deaths in men, advances in the diagnosis and effective treatment of prostate cancer have resulted in many men living longer, even decades with the disease.…

As Dr. Steiner indicated, during the fourth quarter, we were delighted to see the increase in the U.S. prescription net revenues and being awarded a substantial portion of the South Africa tender, which would result in orders in fiscal 2019 and beyond. In the U.S. FC2 prescription market, we saw an increase of 238% in units sold during the fourth quarter compared to the units sold during the combined three quarters of this fiscal year. Let's review our fourth quarter results. FC2 net revenues for the quarter totaled $5.2 million, an increase of 41% from the prior year quarter of $3.7 million. This increase occurred even though the FC2 unit sales for the fourth quarter of fiscal 2018 had a reduction of 1% from the fourth quarter of fiscal 2017 to 6.3 million units. Gross profit increased 78% to $3.2 million for a margin of 61%, compared with $1.8 million for a margin of 49% in the prior year quarter. Net revenue per unit was $0.77 compared to $0.54 in the prior year quarter. The increase in the U.S. prescription net revenues resulted in the increase in our net revenue per unit and the increase in our gross margins. Operating expenses increased $2.4 million from the prior year quarter to $7 million. The increase in operating expenses was primarily due to an increase in research and development expenses of $1.6 million for our clinical development programs. The operating loss for the fourth quarter of fiscal 2018 was $3.7 million compared to $2.8 million in the prior year quarter; the increase being primarily due to the increase in research and development expenses. With after-tax expense of $4 million, the bottom line results for the fourth quarter of fiscal 2018 was a net loss of approximately $7.9 million, or $0.14 per diluted…

Thank you, Michele. In summary, we are poised to see open label clinical data for VERU-111, the novel, proprietary first-in-class oral tubulin inhibitor for refractory metastatic castration resistant prostate cancer as well as top line clinical results for Phase 2 clinical trial evaluating zuclomiphene for the treatment of hot flashes caused by androgen deprivation during the first half of 2019. We plan to primarily use revenues from the urology specialty pharmaceutical assets and our commercial products FC2 and PREBOOST to invest in the clinical development of our pipeline of drugs for large markets in prostate cancer and prostate cancer supportive care. We are committed to driving shareholder value, we're becoming known as the prostate cancer company, by providing a continuum of care for prostate cancer patients. With that, I now will open the call to questions, Operator?

Thank you. Ladies and gentlemen, at this time we will begin the question-and-answer session. [Operator Instructions] We will pause momentarily to assemble our roster. The first question comes from Jason McCarthy with Maxim Group. Please go ahead.

Hey, good morning, thanks for the question.

Hey, Jason.

So with regards to 111, we're looking at the changing prostate cancer landscape. It looks like PARPs could soon be a part of it at least in the BRCA-harboring subpopulation, who are no longer responsible to ADTs like Zytiga or Xtandi. So could you tell us where VERU-111 might fit into the treatment paradigm?

Sure. So, everybody is familiar with the PARP inhibitors. So the PARP inhibitors were primarily in patients that have a mutation involved with DNA repair, and so you would actually have to -- and you'll see the trials, they're looking for patients that have for example BRCA-1 and BRCA-2 mutations, and so, I was recently at a urology clinical site that was running one of our studies and I asked him about that, and he said he's having a hard time finding those patients, and one of our board members who is a -- Mario Eisenberger who takes care of advanced prostate cancer patients, and he said the same thing. He said these patients are rare. Now that doesn't mean anything. From a prostate cancer standpoint what that means to me is that for those patients that you can identify with a genetic test that have those mutations, BRCA-1, BRCA-2 and others related to DNA repair that that should be an effective oral drug for them. Now for the other 98% plus of patients who do not have that mutation that's where VERU-111 would fall best. As you know as an anti-tubulin just like the taxanes, cabazitaxel and docetaxel we hope to be given prior to that -- and not only prior to that, but be given by urologists before the patient goes to the medical oncologist. And one of the things that's very important is that when we had the pre-ID meeting with the FDA now and having filed the IDs of VERU-111 and have clear understanding of the FDA's position, the FDA is allowing us to take patients that have failed abiraterone and enzalutamide before they go to taxanes, before they go to PARP inhibitors, before they go to any of those other drugs and allowing us to begin the Phase 1 B2 for those patients and for that indication, which as you know, Jason is the largest growing segment of patients that are failing prostate cancer treatment today. So I think that PARP inhibitors would be for a select group, and I can envision even a combination therapy in the future with VERU-111 and PARP inhibitors, because if you look at PARP right now they're trying to combine it docetaxel. So can you imagine now having instead of an oral drug PARP inhibitor and an IV drug docetaxel being given by a urologist, they don't give IV, medical oncologists do. So can you imagine now a PARP inhibitor oral and VERU-111 oral? It would be given by the urologist, and as you know the urologists are managing these patients.

That some day would be very helpful.

Yes. Great, thank you.

[Operator Instructions] The next question comes from Deepankar Roy with Brookline Capital Markets. Please go ahead. Mr. Roy, your line is open.

Oh, sorry. I was just talking to myself. Thanks for taking my question. I was wondering a bit about the update on the Brazil order for FC2 and if you can add any more color to like how it is going to go for the next year for the FC2 orders?

Okay. To make sure I understand the question, so the question is can we give you any update on the Brazil order, is that what you said?

Yes…

Yes, that's what I thought I heard and then any -- so my comments were that we -- during the call was we just heard from Brazil, Brazil has a much smaller order than it has ever had in the past, and as you know it's been a very difficult year with Brazil mainly because of the government and the government changes. Now with the new president, very, very quickly they came back and said we're going to order up to 6 million units of FC2, and we don't know what the future is going to hold, but we think it should be more as they get settled politically. As it relates to South Africa, what I can guide you is we got 75% of the tender, which is 120 million units over three years, that's roughly 30 million additional units a year which money wise would be $10.4 million additional a year. Our base business, which is UNFPA, USAID and others -- historically, it's been between 14 million and 15 million a year. We actually think this year it'll be better and -- but the biggest change in the FC2 business and I tried to give some clarity where it's heading from a trend is in the U.S. prescription business -- the U.S. prescription business has high margins, and this U.S. prescription business is growing rapidly and I think we have really embraced some of the new ways that people are selling these kinds of products in the U.S. and -- through social media telemedicine through prescriptions going to doctors' offices with the 1099 group, and so we had told you about a year ago we felt that the U.S. business would potentially match in revenue what we're seeing ex-U.S. and 2019 may be that year.

Okay. Thank you.

Thank you.

Ladies and gentlemen, this concludes our question-and-answer session. I will now like to turn the conference back over to Dr. Mitchell Steiner for any closing remarks.

Thank you, Operator. I appreciate you joining us on today's call, and I look forward to updating you all on our progress at our next investors call, happy New Year, have a nice holiday, and look forward to seeing everybody next year, thank you.