Good day, ladies and gentlemen, and welcome to KemPharm’s First Quarter 2018 Update Conference 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] I’d now like to turn the conference over to Dan Cohen, Executive Vice President. Please begin.

Thank you, and good afternoon, everyone. Thank you for joining our 2018 first quarter financial and corporate results call. At this time, I would like to remind all of our listeners that remarks made during this call, may contain forward-looking statements that involve risks and uncertainties and are subject to changes at any time including, but not limited to, statements about KemPharm’s expectations regarding future operating results. Forward-looking statements on this call are made pursuant to the Safe Harbor provisions of Federal Securities Laws. Information contained in the forward-looking statements is management’s beliefs based on current expectations and is subject to change. Actual results may differ materially from forward-looking statements. KemPharm disclaims any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments, except as required by law. There is more complete information regarding forward-looking statements, risks and uncertainties in the reports KemPharm files with the SEC. These documents are available on KemPharm’s website at www.kempharm.com under the Investor Relations section, and we encourage you to review these documents carefully. Before I introduce today’s speakers, I would like to remind listeners that KemPharm is using a slide presentation with the conference call. The presentation is accessible via the Investor Relations section on KemPharm’s website and is included also within the webcast. Joining me today on the call is Travis Mickle, President and CEO, who will provide an update on KemPharm’s corporate, clinical and product development achievements; and LaDuane Clifton, our CFO, will review KemPharm’s first quarter 2018 financial results. We’ll begin this call by reviewing our corporate achievements and upcoming milestones, and then move on to the financial results. I will now turn the call and the presentation over to Travis.

Thank you, Dan, and thanks everyone for joining the call today. As an introduction to those new to the KemPharm story, KemPharm is the prodrug research and development organization. Many individuals here at KemPharm working our labs and our product development have extensive experience in discovering and developing prodrugs. The best example of this is highlighted by our collective experiences at New River Pharmaceuticals. While at New River, we worked on the discovery and development of the product Vyvanse, it’s also a prodrug and it’s a multi-billion dollar ADHD product for Shire. In fact, my own contribution to Vyvanse led New River to place me as the lead inventor on the Vyvanse patent. Focusing on our technology, a prodrug in our hands any ways very simply is a chemically modified FDA approved drug, where we design and develop features to improve upon that original product. In the case of ADHD, we are trying to improve the onset and duration of effect for patients while also attempting to make the new prodrug less abusable. This is just one example of what we can do with our approach. Since this call comes quickly on the heels of our end of the year fourth quarter call, I will primarily focus most of our attention today on our data related to the IV abuse potential for the KP415 prodrug, which ties nicely to the significant advancements we had in the first quarter. On February 23, the FDA approved the new drug application for APADAZ, our prodrug of hydrocodone and acetaminophen for the short term management of acute pain. This marked the first FDA of approval of our Ligand Activated Therapy or LAT developed product. We believe this approval provides validation of KemPharm’s overall corporate vision, prodrug development, and business strategy. More importantly, for patients…

Thank you, Travis, and good afternoon everyone. I will provide a brief overview of our results for first quarter 2018; additional details are available in our press release, which was published prior to the call. For the quarter ended March 31, 2018, KemPharm reported net loss of $26.2 million or a $1.77per basic and diluted share, compared to a net loss of $16.3 million or $1.11 per basic and diluted share for the same period in 2017. Net loss for Q1 2018 was driven primarily by a loss from operations of $14.8 million. Net interest expense and other items of $1.7 million and non-cash fair value adjustment expense of $9.7 million. Loss from operation was increased to $14.8 million for Q1 2018, compared to $7.4 million for Q1 2017. The increase was due primarily to an increase of $7.5 million in research and development expenses, partially offset by a decrease of $100,000 general and administrative expenses. As of March 31, 2018, total cash and security-related amounts, which is comprised of cash, equivalents, restricted cash, marketable securities, trade date receivables and long-term investments was $37.2 million. This was a decrease of $11.4 million, compared to December 31, 2017. Based on our current operating forecast, the existing resources are expected to fund operating expenses and CapEx requirements into, but not through the first quarter of 2019. Now, I will turn the call back over to Travis.

In summary, the first quarter of 2018 has been extremely busy for KemPharm with APADAZ getting FDA approval and KP415 progressing into its pivotal efficacy study. looking ahead, we foresee several potential value enhancing milestones over the next several quarters including top-line data from the KP415 efficacy study by midyear, intranasal and oral human abuse potential data from KP415 in the second half of 2018, initiation of KP484 efficacy study, NDA application of KP415 in early 2019 and a potential announcement of our partnership or partnerships for APADAZ before year-end. These events combined with the ability to harness our LAT program to develop the additional products offered KemPharm an abundance of growth opportunities both near and long-term. We remain intently focused on pursuing multiple internal and external opportunities to maximize our prodrug expertise and the potential that projects can offer throughout the healthcare fields. With that, I will now open the call to your questions.

[Operator Instructions] The first question is from Randall Stanicky of RBC Capital Markets. Your line is now open.

Thanks. Travis, hey, first follow-up on Shire commentary, does that deal have any potential impact on you or your contractual arrangement with them to spread for refusal at all? That’s the first question and then I have a couple of follow-ups.

I mean it doesn’t have any impact other than it would survive and pass along to the new company. So that that’s the direct impact I mean certainly, there is a good opportunity with all the suburbs for us to look at business development opportunity.

And that was my follow-up. Are you hearing interest or seeing interest in having discussions currently, I mean you’re getting close to Phase 3 data. Obviously, the NDA filing, I think you pointed to Q1 of next year. Are you having discussions at this point and then the follow-up to that is should we be viewing KP415 and KP484 as a likely package deal?

I’ll answer the last one first, I mean obviously, they’re involved the same IP with the prodrug. So it probably, I mean, just to be honest, logistically will be challenging to separate those two. But the first question we’re in continuous discussions again, the obvious ADHD leader here at Shire, I, of course, consult and work with them regularly, but I think all of this, the attractiveness of a potentially highly differentiated product would make it obvious that there’s a lot of interest in these products.

Got it. And then just on that same topic, when you talk to KOLs, can you just talk about where their level of excitement is between the early onset long duration and abuse-deterrent where do they see the biggest opportunity or area of differentiation for KP415?

I think it’s really split with duration; the current methylphenidate products really suffer from a lack of duration and the duration even though it’s labeled as such for all of the current products is lackluster. I think the other one is abuse potential, because there’s none of the methylphenidate that have anything that’s less abusable. The only other option is Vyvanse, which doesn’t apply for many patients. So onset is a great half and I think that’s one of the things we’ve known for a while with duration and abuse potential will kind of be in the top-line drivers.

Okay. Got it. And then my last question just in terms of APADAZ, I know you pointed to year-end. Any progress there in terms of from two perspectives, one in terms of discussions with potential partners. And then two, any discussions that have given you a directional comfort around the commercial opportunity or any feedback from that perspective would be helpful. Thanks.

We continue to make great progress. We made great strides since the product actually got approved. I think we haven’t heard anything really from anybody that would make us believe that our potential path either through PVMs and/or with generic partner is anything, but a credible path. So I think there’s nothing, but good affirmation of that approach.

That’s great. Thanks, Travis.

Thank you. The next question is from Dewey Steadman of Canaccord. Your line is open.

Hi, good afternoon and thanks for taking the question, the human abuse liability studies, the IV studies look great on numerical scale. Do you have any key values to share in terms of [indiscernible] especially for the Emax?

The Emax was based on preliminary mean values. So, we didn’t calculate that, but again, given the VAS difference between the numerical values. Statistically, there is a significant difference again; we’re not quite comfortable, because we just start to complete all of our statistical analysis on that. I can tell you there is no statistical difference between the placebo and KP415 on the primary endpoint of Drug Liking Emax.

Okay. Does FDA primarily look at Emax and sort of abuse to turn some valuation? Are they looking at specific hour time point post dosage?

In this case, it’s because of the abuse potential. The established criteria are fairly straight forward and there is actually a path that’s driven an analysis that they conduct. Based on your stat plan and so our preliminary analysis of this demonstrates that there is no abuse potential of KP415 when injected.

All right. Great. And then for the other two studies for intranasal and oral, how do we use results play into your confidence about those two studies. Obviously, there are different routes of administration. I would think intranasal may play more like IV and oral may be a little bit different, but what are sort of your initial thoughts there?

Well, this was the one that you typically, you would expect the worst scenario. So here, we have absolutely no abuse potential and that’s a one extreme, where the abuser has injected it. The other extreme is where somebody has swallowed large amounts orally, trying to look for a high. We already know that the prodrug has a Tmax out at about six to eight hours and is significantly reduced versus most of the common methylphenidate comparative product. So, we feel very confident that that study based on what we know about the prodrug is going to show a significant difference between the comparatives. So, if you put the intranasal between the two, today, this is great data, because it gives us a lot of confidence that study – those two studies should go very well as well from a human abuse potential’s perspective.

Great. And then we noticed that there’s a safety study that’s been initiated for KP415, I think it’s about 250 patient study. Can you comment a bit on that and then what – if FDA is mandating that study or if any of that data would be included in the doc?

Yes. The FDA is requiring us to do a safety study; it’s based on exposure to the new prodrug. So they want to see the product viewed over time. We’ve designed the study, so it would read out at six and 12 months technically based on guidance and based on PDUFA 5. we should be able to submit that’s still in line with the first quarter with six-month data available to us, still trying to figure out exactly what the agency is going to want to see from that perspective. I actually think the study is good, because having a label, that’s comparative to other ADHD products, is really kind of necessary when you talk about side effects. you want to show that your side effects are similar better than that of the other problems.

Excellent. And then just further doing on R&D and this is my final question, sorry. We noticed a significant take-up from 4Q levels obviously, do it with all the clinical work going on. how should we approach R&D spend through the rest of the year?

Q1 was particularly high. we initiated a number of studies as you mentioned including we actually pulled the safety study in a little bit earlier than our original plan. So, Q1 is probably higher quarter relative to the rest of the year. We’re still looking at a burn rate that’s going to keep this in the range of 10 to 14 per quarter, but Q1 is probably a little high.

All right, great. Thanks, guys. Appreciate it.

[Operator Instructions] The next question is from David Solomon of Roth Capital Partners. Your line is open.

Hey guys. Dave on, thanks for taking my questions. Few were already asked, but I just want to turn the direction towards APADAZ, I’m curious how the recent opioid restrictions could impact APADAZ whether positive or negative, any color would be greatly appreciated?

Well, I haven’t seen, we’ve been monitoring volumes and they haven’t – we haven’t seen a significant reduction maybe Dan, you could give a brief thoughts on that question.

As you know David, we’ve reached peak opioid in 2011 and overall scripting rates have been dropping. But the interesting thing among that is the rates for the combination products, particularly acetaminophen and hydrocodone products has been fairly stable over the last two or three years. The overall size of the script, there is certainly going to be continuing both congressional and regulatory pressure to right size scripting and that’s where our blister packet design should be benefit within the field, probably noticed the legislation in the Senate that is going to give FDA the authority to mandate blister packs and there is some assurance that that legislation has a likelihood of being included in the ultimate package that goes to the first month of summer, but because hydrocodone and acetaminophen is a primary care physician product for acute short-term pain. There are no alternatives and our approach to the product we feel that we’re fitting in nicely with current practices and we’re, certainly, as Travis indicated earlier, not hearing anything different from the physicians in the market or the payers as well.

Great. Thanks for the color. Just one more on the data presented today, and just kind of curious, I know obviously, IV causes the greatest risk, but just kind of I want some color on how important the IV route is for methylphenidate or stimulant in general, and how important that is for the marketing message, four docs were treating ADHD versus oral or intranasal routes. Thanks for taking my questions.

I think overall, stimulant abuse is not as big a problem as opioid abuse. I think the fact that we’re going down the abuse potential route intravenous to turn route actually helps us tremendously. As I said, there’s less interpretation of what is relevant and what is not. All three of these studies have been required to assess the abuse potential through any route, commonly used by abusers. The real key area is really looking at Vyvanse as a surrogate, they have data about their oral abuse potential and they have data about IV and they’re still today viewed by many physicians in our market research, both in pain products, abuse to turn pain products, and ADHD products that Vyvanse is a less abusable option. So, I think we still see this as a key value driver and we still know that the marketplace is in need of it and just focused on completing really all three studies in order to have the best level we can.

Excellent. Thanks for taking my question guys.

Thank you. This concludes the Q&A session. I would now turn the call back over to Travis Mickle for closing remarks.

I’ll keep it brief here. In closing, I appreciate your time and attention. And I look forward to the future updates as we continue to advance KemPharm. Thanks everyone.

Thank you ladies and gentlemen. This concludes today’s conference. You may now disconnect. Everyone, have a great day.