Welcome to the Third Quarter 2014 Vanda Pharmaceuticals, Inc. Earnings Conference Call. My name is Christine, and I will be the operator for today's call. (Operator Instructions) Please note that this conference is being recorded. I will now turn the call over to Mr. Jim Kelly, Vice President and Chief Financial Officer. You may begin.

All right. Thank you, Christine. Good morning and thank you for joining us to discuss Vanda Pharmaceuticals' third quarter 2014 performance. Our third quarter 2014 results were released this morning and are available on the SEC's EDGAR system and on our website, www.vandapharma.com. In addition, we are providing live and archived versions of this conference call on our website. Joining me on today's call is Dr. Mihael Polymeropoulos, our President and CEO. Following my introductory remarks, Dr. Polymeropoulos will update you on our ongoing activities, then I will comment on our financial results for the third quarter of 2014 before opening the lines for your questions. Before we proceed, I'd like to remind everyone that various statements that we make on this call will be forward-looking statements within the meaning of federal securities laws. Our forward-looking statements are based on current expectations that involve risks, changes in circumstances, assumptions and uncertainties. These risks are described in the Risk Factors and MD&A sections of our annual report on Form 10-K for the fiscal year ended December 31, 2013, and on our subsequently filed quarterly reports on Form 10-Q, which are available on the SEC EDGAR system and our website. We encourage all investors to read these reports and our other SEC filings. The information we provide on this call is provided only as of today, and we undertake no obligation to update or revise publicly any forward-looking statements we may make on this call on account of new information, future events or otherwise except as required by law. With that said, I would now like to turn the call over to our CEO, Dr. Mihael Polymeropoulos.

Thank you, Jim. Good morning, everyone. With our first full quarter of the HETLIOZ commercial launch, our Company has reached a significant milestone as we’re transitioning from a developing stage to a commercial stage company. Q3 has been an outstanding quarter for Vanda. I would like to share with you in more detail the progress of the HETLIOZ commercial launch and also discuss our pipeline. HETLIOZ was approved by the US FDA in January of 2014 and launched in the U.S in April of this year for the treatment of Non-24-Hour Sleep-Wake disorder or Non-24, an orphan debilitating disorder that is common among the totally blind. Non-24 is estimated to affect 80, 000 people in the U.S alone. To date, over 600 patients have received prescriptions for HETLIOZ. We have applied an innovative process in commercializing HETLIOZ which includes direct to consumer awareness campaigns, patient case management and physician account management. The majority of the more than 600 scripts received to date are for patients who have responded to our DTC campaign. Our close loop system between patients and case manager on one end and physician and account manager on the other is driving our commercial engine and the production of new scripts. We continue to see positive reception by payers and we expect that the vast majority of our scripts will be filled as we have not experienced any reimbursement blocks. HETLIOZ solutions, our patient and physician service hub, is tasked with benefits investigation, copay support and patient and physician support and is successfully facilitating the fulfillment for prescriptions. Q3 has been a critical quarter in the HETLIOZ commercial launch as we focused on understanding drivers of efficiency. Based on Q3 pilot programs, we have now starting October, implemented adjustments to the commercial engine, including the addition of a…

Thank you, Mihael. During the third quarter of 2014, Vanda recorded a net loss of $1.4 million as compared to a net loss of $21.6 million for the second quarter of 2014. On a diluted shares basis, this reflects a loss of $0.04 per share for the third quarter of 2014 as compared to a net loss per share of $0.64 for the second quarter of 2014. This strong sequential quarter performance is a result of the impressive first quarter of our HETLIOZ launch in the U.S, plus a decrease to our Non-24 awareness spending in the third quarter. We believe this gives investors a good picture of our commercial cost structure absent awareness spending and underscores the favorable financial profile we have for our U.S HETLIOZ business. Total revenues for the third quarter of 2014 were $14.8 million as compared to $10.9 million for the second quarter of 2014. During the third quarter of 2014, we had 4 sources of revenue. They were HETLIOZ product revenue, Fanapt royalty income, Fanapt product revenue from ex-US sales and Fanapt licensing revenue. HETLIOZ product revenue for the third quarter of 2014 was $5.2 million compared to $1.6 million in the second quarter of 2014. Gross to net adjustments for HETLIOZ product revenue are below 10% for year-to-date sales. HETLIOZ is sold through the specialty pharmacy channel. In the third quarter, HETLIOZ product revenues are reflective of underlying prescription demand. As of September 30, 2014 the specially pharmacy channel held approximately 2 weeks of inventory as calculated based on trailing demands. Vanda recognized approximately $100,000 of Fanapt product revenue from sales to our distribution partner Megapharm in Israel. This reflects the first ex-U.S product sales for Fanapt. Third quarter 2014 Fanapt loyalties received from Novartis were $1.7 million compared to $1.5 million in…

Thanks very much, Jim. At this time we’ll be happy to address any questions.

(Operator instructions) Our first question comes from Joshua Schimmer from Piper Jaffray. Please go ahead. Joshua Schimmer – Piper Jaffray: Thanks for taking the question and congrats on a very strong quarter. Two questions for me. One is maybe if you can describe the cadence of prescriptions. Since the last update, are you starting to see any decline that’s pushing you towards re-launching the DTC campaign sooner than later? Then the second question is, is that it is unusual to see this type of fluctuating spending during a launch. So maybe you can help explain your strategy for why it is so up and down, and why it hasn't been smoother. And should we expect this kind of volatility of the spend going forward on a quarter to quarter basis in 2015? Thank you.

Thank you, Josh. On the first question, we’ll give you a little more color of what we see with prescriptions. The headline is for every month since launch, we have seen a demand of over 80 new scripts per month. The only exception was the month of September with about 50 script demand and that was the month where we retooled our commercial organization. Now having launched our close loop system with case management and account management, we’ve seen now in October tracking again towards the over 80 scripts per month. So we believe that there is a continuous and steady addition of script month over month. Now to your question of operational expenses and the fluctuation; as Jim provided more detail, the Q3 did not have expenses in the large DTC campaign which was conducted in the first half of this year. As we had communicated before, we specifically planned to have that large awareness campaign early before and during the first month of launch so that we can create awareness, feeding through the opt-in database into demand for scripts. Now, almost each one of the script that we have today are a product of the previous awareness campaign. We had planned and we are executing a much smaller, streamlined efficient DTC campaign this month. We actually started with television campaign on the week of October 13 and that is a campaign that will last for about five weeks. What we do see in this campaign is again no decrease in the rate of acquisition of opt-ins per dollar spend and therefore that would suggest that we are driving demand from a much larger pool of people as was expected with the prevalence of about 80,000 people in the U.S. The answer to both questions in summary is there is no change in the rate of script acquisition. That includes the new data in October. And the OpEx most probably will become less volatile, but we would expect a change this quarter over quarter as we adapt and optimizing our awareness campaign.

And Josh, you can see since our guidance really hasn’t changed all that much since the very original guidance we gave, the point you should take away is that our spend profile on awareness is exactly as we mapped it early on in the launch. And so we are just simply executing against the previously stated plan.

Our next question comes from Jason Butler from JMP Securities. Please go ahead. Jason Butler – JMP Securities: Thanks for taking the questions. Just wondering if you could give us any updates on the average time you are seeing from a prescription being written to being dispensed by the specialty pharmacy. And then, if you are able at this point to give us any color quantitatively or qualitatively on the dropout or persistent rates for -- or patients refilling prescriptions.

From script to fill, the early numbers are 8 to 12 weeks, which is generally consistent with other orphan drugs. And we are aiming over this quarter and as we go forward to decrease the time from fill to script. Your next question was about gazing into dropout or what we call the eventual chronic patient. Any data we have now are quite encouraging on both early refill rates and compliance even past our first three months, which is the general recommendation how long one should try the drug for. This data would suggest that our expectation and guidance, that more than half the patients eventually will be chronic patients continues to hold true. Today, this number is much higher than 50, but of course over time would expect to normalize. The guidance we are giving is that from new scripts in, the long term expectation is at least more than half the patients will become chronic patients. Jason Butler – JMP Securities: Okay, that's helpful. And then just another question on the expense guidance, and I guess thinking a little bit further out, and acknowledging you're not going to guidance for 2015 at this point, can you give us some idea of how you think about your current cash runway and an update on your views on cash needs over the longer-term?

Yes. Jason, we are not going to give guidance, but now that we have seen the quarter without the awareness campaign and almost now explicitly you have a quarter guidance, this fourth quarter guidance can be used as a going forward estimate. However 2015 guidance we cannot give at this time. Jason Butler – JMP Securities: Okay. And then just last question on the European regulatory review. Can you just give us any more details there on whether you have received the 120-day questions from CHMP yet, if there is anything in there that’s notable that gives you more encouragement or concern about the potential for approval in Europe?

All I can say is that we did receive the day 120 questions and we do not give incremental updates on regulatory filings, but remain optimistic for a successful outcome early in the third quarter of 2015. Jason Butler – JMP Securities: Okay, great, thanks for taking the questions, and congrats again on the strong launch.

Thank you. I will now turn the call -- we have no further questions at this time. I will now turn the call back to Dr. Polymeropoulos for closing remarks.

Thank you very much. Thanks for your questions and comments. This concludes our third quarter call and we look forward to talking to you soon.