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Executives

Marc Rubin - Executive Chairman

Sunil Bhonsle - President

Katherine L. Beebe - EVP, Chief Development Officer

Brian Crowley - VP, Finance

Analysts

Jason Napodano - Zacks Investment Research

Elemer Piros - Burrill Securities

Michael Higgins - Brinson Patrick Securities

Arthur Davis - Private Investor

Titan Pharmaceuticals Inc. (OTCQB:TTNP) Q4 2012 Earnings Results Conference March 18, 2013 11:00 AM ET

[Call Started Abruptly]

At www.titanpharm.com. On the call today from Titan we have Dr. Marc Rubin, our Executive Chairman; Dr. Kate Beebe, our Executive Vice President and Chief Development Officer; and Brian Crowley, Vice President of Finance.

Before we get into the details of the fourth quarter and full-year performance and an update on the Company, I want to remind everyone, that certain matters we will discuss today, other than historical information, consists of forward-looking statements relating to among other things, our expectations concerning our financial results, available cash, development programs, partnering arrangements, regulatory strategies and business plan.

The forward-looking statements are not guarantees of future performance and are subject to a variety of risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties are described in our Annual Report on Form 10-K filed with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today. We undertake no obligation to update or revise the information provided in this call whether as a results of new information, future events, or circumstances or otherwise.

Well having said that, let’s start with an overview from our Executive Chairman, Dr. Marc Rubin. Marc?

Marc Rubin

Thank you, Sunil, and hello everybody. Thank you for joining us today. The fourth quarter and all of last year were important periods of growth and achievement for Titan as we submitted in our NDA for Probuphine and for the maintenance treatment of opioid dependence.

Our submission was accepted by the agency and were into priority review designations with a target PDUFA date of April 30, 2013. We also entered into a strategic partnership with Braeburn Pharmaceuticals for the U.S. and Canadian commercialization of Probuphine. This is a partnership that we feel not only puts Probuphine in the hands of team with a proven track record of successful commercialization and product launches, but also strongly positions the program to realize its all potential for our shareholders.

Ultimately Titan’s goal is to bring a novel treatment option for opioid dependence to patients, their families and healthcare providers.

Significant accomplishments in 2012 and the steps taken already early this year get us closer to this goal. As you all maybe aware the opioid addiction epidemic has continued to grow along with a critical need for new phase and effective treatment. Buprenorphine, an approved agent for the treatment of opioid dependence, and the drug used in Probuphine, our investigational subdermal implant is currently available in the form of daily dosed sublingual formulations with annual sales of in 2012 of approximately $1.5 billion in the United States. We believe the Probuphine has the potential to ensure compliance to treatment, well also offering a substantially decreased risk for diversion, abuse or accidental exposure.

This could mean an entirely new treatment option for opioid dependence and ultimately it will be very beneficial to patients and families and healthcare providers. The Board fully supports the collaboration between the Titan and Braeburn teams on Probuphine as we prepare for the upcoming Advisory Committee meeting and target PDUFA date of April 30th. These are exciting times for Titan and we look forward to continuing to inform you of our progress and keeping you updated as we were to advance Probuphine to the market and to make it available to patients and benefit from the new treatment option.

For more insights on the fourth quarter progress and the full-year 2012 financial results, I will now pass the call back to Sunil. Sunil?

Sunil Bhonsle

Thank you, Marc. Next I will provide you with our fourth quarter and full-year 2012 financial results and an update on the Braeburn partnership and activities during the last few months. To conclude, we will open up the call for your questions for the Titan management team. So, let’s start with the financial results.

Total revenues for the year 2012 were approximately $7.1 million compared to about $4.1 million in 2011. Revenues consisted of approximately $4.8 million in royalty revenues on net sales of Fanapt, which were paid to Deerfield Management in accordance with the terms of the agreements entered into in 2011. It was approximately $1.7 million in licensing revenues associated with the premium paid for our common stock by an affiliate of Braeburn Pharmaceuticals pursuant to the September 2012 stock purchase and option agreement and approximately $0.6 million related to the recognition of the non-refundable up-front fee received from Braeburn for the exclusive U.S. and Canadian commercialization rights for Probuphine in December 2012.

Total operating expenses for the year 2012 were about $15.5 million, compared with approximately $14.6 million for 2011, and these consisted largely of R&D expenses of approximately $10.6 million, compared to about $11.2 million for 2011. The decrease in R&D costs was primarily associated with a decrease in external R&D expenses related to the Phase 3 clinical trial for Probuphine, which was as you know completed in 2011. This was offset by expenses related to the establishment of a commercial scale manufacturing operation at DPT Laboratories and preparation and submission of our NDA for Probuphine with the FDA, which occurred in October 2012.

G&A expenses for 2012 were approximately $4.9 million, compared to approximately $3.4 million in 2011. The increase in G&A expenses was primarily related to increase in non-cash stock compensation costs of about $0.8 million and employee and consultant related costs of about $0.6 million.

Net other expense for 2012 was approximately $6.8 million, compared to about $4.7 million in 2011. The increase in net other expense during 2012 was primarily related to a $1.8 million non-cash loss related to increases in the fair value of the warrants issued to Deerfield in 2011 and the warrants from the April 2012 financing transaction as well as a small increase in the interest expense on the Deerfield long-term debt. Net loss applicable to common stockholders for 2012 was approximately $15.2 million, or $0.23 per share, compared to a net loss of approximately $15.2 million, or $0.26 per share, for 2011.

Now for details for the fourth quarter, total revenues for the fourth quarter of 2012 were approximately $3.3 million, consisting of about $0.9 million in royalty revenue on net sales of Fanapt, that were subsequently paid to Deerfield and approximately $2.3 million in licensing revenues, consisting of about $1.7 million associated with the premium paid for Titan’s common stock pursuant to the September 2012 stock purchase and option agreement and about $0.6 million related to the recognition of the non-refundable up-front license fee from Braeburn. Total revenues for the fourth quarter of 2011 were approximately $1.4 million, consisting of approximately $1.3 million in Fanapt royalties that were paid to Deerfield and about $0.1 million in grant revenues.

Total operating expenses for the fourth quarter of 2012 were about $3.7 million, consisting primarily of R&D expenses of $2.6 million and G&A expenses of $1.1 million. Operating expenses for the comparable period in 2011 were $2.2 million, which included $1.3 million in R&D expenses and about $0.9 million in G&A expenses.

Net loss applicable to common stockholders for the fourth quarter of 2012 was very small about $0.3 million, and essentially $0.00 per share. Net loss for the comparable period in 2011 was approximately $2.9 million, or $0.05 per share.

At December 31, 2012, Titan had cash and cash equivalents of approximately $18.1 million compared to about $5.4 million at the end of last year 2011, reflecting proceeds from the execution of the $4.25 million stock purchase and option agreement in September 2012, the exercise of Series B warrants for about $4.9 million in October 2012 and the receipt of a $15.75 million non-refundable up-front payment in December 2012 of the license of the exclusive rights to commercialize Probuphine in the U.S. and Canada. Titan believes that its working capital at the end of 2012, together with the FDA’s reimbursement of the $2 million NDA filing fee, is sufficient to fund our planned operations through June of 2014.

Also of note, in February 2013 Titan amended the terms of the Deerfield warrants, to permit payment of the exercise price of a $1.25 per share through the reduction in the outstanding principal of the $10 million loan from Deerfield. In February and March, Deerfield exercised its 6 million warrants in consideration of the cancellation of $7.5 million of the debt. Accordingly upon the payment of the first installment of $2.5 million due in April 2013, the Deerfield debt obligation will be satisfied in full.

As Marc also mentioned, fourth quarter of last year was one of significant progress for Titan and substantial advancement for our lead program Probuphine. As we previously announced the Probuphine NDA was submitted to the FDA in October 2012 for the maintenance treatment of opioid dependence in adult patients under section 505(b)(2) of the Food, Drug and cosmetic Act and referenced the approved sublingual tablet formulations of buprenorphine. On January 2nd of this year, we announced the acceptance of this NDA by the FDA, including prior to review designation with the PDUFA date of April 30, 2013 for FDA action.

Also in December, we announced a strategic collaboration with Braeburn Pharmaceuticals and a license agreement with the exclusive commercialization rights to Probuphine in the U.S. and Canada.

Just as a reminder, pursuant to this agreement, Titan received non-refundable up-front payment of $15.75 million and is entitled to receive a $50 million milestone payment upon approval of the NDA by the FDA, up to a $130 million, upon achievement as with unspecified sales milestones, up to $35 million upon achievement of specified regulatory milestones related to additional indications for Probuphine. And last but not least, tiered royalties on net sales of Probuphine ranging from the mid teens to the low 20.

We are extremely pleased with this partnership and feel that the Braeburn team brings important expertise and proven experience in successfully commercializing new product, including control substances. Most recently we announced that the FDA has scheduled a review of the safety and efficacy of Probuphine, with its cycle pharmacologic drugs advisory committee. This meeting will take place later this week, on March 21st, at the FDA and we’ve been working diligently with our key consultants and specialists along with the Braeburn team to fully prepare for the upcoming interactions with the FDA. The FDA’s advisory committee provides independent, expert advice to the agency on a range of complex scientific, technical and quality issues.

An advisory committee also provides a forum for a public hearing on important matters and the meeting will be webcast by the FDA and available to all. Instructions are available on the FDA’s website. Although advisory committee’s provide recommendations to the FDA, it is the FDA that makes the final decision regarding drug approval.

This brings us to the end of our formal remarks. And now, operator we’re ready to take questions from the call participants.

Question-and-Answer Session

Thank you, Mr. Bhonsle. (Operator Instructions) And we will hear first from Jason Napodano with Zacks.

Jason Napodano - Zacks Investment Research

Good morning, everyone.

Marc Rubin

Good morning.

Sunil Bhonsle

Good morning, Jason.

Jason Napodano - Zacks Investment Research

Congratulations on a very productive year, last year. Can you – let’s talk a little bit about opportunity for Probuphine in – outside the U.S. I know you’ve partnered with Braeburn for U.S. and Canada, but can you give me a sense of your plans for rest of world?

Sunil Bhonsle

Sure, Jason. I can give you sort of a brief overview. Obviously, during the development program over the last four, five years we have had interactions outside of the U.S. as well specifically with regulatory agencies in the U.K. and the France, in Australia. These are places where Buprenorphine products used quite extensively. And during those interactions we introduced them to Probuphine, the development program and generally there was agreement from all of them that what we were doing in the U.S. together with especially the final study which included an active comparator as you know the open label Suboxone arm in that study would provide sufficient data for their review. Of course our -- at this stage we would need to go back to each of these agencies, discuss the actual data and so on, and we plan on doing all of that once we have completed the reviews with the FDA here and that would be the right time to really go back to these agencies and that’s our plan currently.

Jason Napodano - Zacks Investment Research

Okay. Give me a little sense of the potential for REMS. I know there is discussion and a REMS for Buprenorphine; Suboxone has a REMS; can you give me a sense of how you think that will affect Probuphine and kind of what you’re expecting in terms of a REMS, and then the potential that maybe the REMS for Probuphine isn’t quite as restrictive as the REMS for Suboxone?

Katherine L. Beebe

Hi, Jason. This is Kate.

Jason Napodano - Zacks Investment Research

Hi, Kate.

Katherine L. Beebe

As you know we’ve submitted a draft REMS proposal with our NDA. And that has been part of the ongoing review by the division. We will be presenting as part of our Advisory Committee core presentation sort of a more detailed proposal for that REMS and answering questions around that. I really can’t comment at this point on the -- for what the differences might be between the existing REMS, and our REMS certainly there’s going to be some overlap, but I can tell you, as you would imagine that our REMS really focuses heavily on closed distribution system and on the training both for the physician as well as the patient.

Jason Napodano - Zacks Investment Research

Okay. And can you give me a sense of the payer breakdown for Probuphine or what you would expect that to be. I assume there is a large cash payment and maybe a Medicaid payment component as well. But can you give me kind of a sense of how you guys seeing a breakdown?

Sunil Bhonsle

Jason, a lot of the market research really is being done by Braeburn in this setting on how best to launch the product through the target physician audience and educating the third party payers as well as the government agencies and so on. Without getting into a lot of detail from that, what I can and certainly point out is the – first of all as a medic this will be considered a medical benefit, so it's not a pharmacy benefit. It doesn’t go through sort of the formulary type of an approach. It is more a medical benefit and third-party payers will look at it in that manner. As you know medical benefits have their own series of controls in that the patient has to participate in payment of some of it and so on, and so it's a little different than say a pharmacy benefit from third party payers. In terms of percentages of how much is covered by third party payers versus self pay and so on. Everything right now is more – the data is strictly based on Suboxone that’s known out there. And from what I’ve heard, it varies in a self pay of 20%, 30% of the patients in that range, and the rest being covered between third party payers, Medicaid, other governmental support and even private foundations that support these kinds of treatment. So, it's sort of spread in that zone. Okay?

Jason Napodano - Zacks Investment Research

Okay, that’s helpful. Can you give me the sense of the operations at Braeburn right now? How many employees do they have? Where are they? Where are they looking to add staff?

Sunil Bhonsle

I can give you a little again overview. Braeburn has and even after when the partnership was signed there was several people in that organization, and now it is over 20 people that’s actually in the company itself and these are very high level senior people in the areas of marketing, sales. And they’re starting to now target bringing in also, support for the actual launch which would be like medical liaison setting up, they have established relationships with – the sales force - the outside sales force that they will use, and also with the distribution channels for this product. So, without getting into any of the details, I want to give you a sense that they truly are preparing it in that manner and they are utilizing very well known good companies to help them through this whole period in the launch.

Jason Napodano - Zacks Investment Research

Okay. And then just the final question on manufacturing; DPT ran into some issues last year with sterility on a separate product. I’m wondering if that has any impact on Probuphine manufacturing or your ability to meet commercial demand if it's approved late April.

Sunil Bhonsle

And Jason, in that setting, really the sterility issue at DPT had nothing to do with even the facility where Probuphine is made, it was at a different location completely. But also it has fully been resolved within DPT, and I bet it's already behind them in that setting. It has absolutely no effect on Probuphine either at the -- in a manufacturing site or within their quality assurance and the procedures and so on. We’ve made sure that this does not impact Probuphine in any way at all.

Jason Napodano - Zacks Investment Research

Got you. Thank you, that’s helpful. All right guys, good luck on Thursday.

Sunil Bhonsle

Thank you very much, Jason.

Katherine L. Beebe

Thank you very much.

Sunil Bhonsle

Good talking to you.

Operator

Moving on to Elemer Piros with Burrill Securities.

Elemer Piros - Burrill Securities

Yes, good afternoon – good morning, I’m sorry.

Sunil Bhonsle

Hi, good morning Elemer. How are you?

Katherine L. Beebe

Hi, Elemer.

Elemer Piros - Burrill Securities

Okay, okay. So nearly if I could just get a couple of housekeeping items out of the way; so you reported $18 million in cash, you stay low Deerfield about $2.5 million. You expect $2 million back from the FDA, had some warrant exercises in -- I think it was in January or February, but that essentially a wash. So, the next six quarters they would consume then about $3 million on average cash. Is that your calculation?

Sunil Bhonsle

In this setting, it's sort of hard to say on a quarter basis because obviously the first couple of quarter’s of this year is where -- kind of the expenses are quite high based on obviously the kind of activity we have to do to support the NDA review and the Adcom meetings and so on. So, it will vary somewhat, but as an average number that’s appropriate, and by the way the $2 million has been refunded from the FDA. We actually received the check last month.

Elemer Piros - Burrill Securities

Okay, thank you. Now this recognition of the non-refundable portion of the upfront payment, how long would that take place?

Sunil Bhonsle

In the current sort of setting what we have looked at is the -- it is triggered in a large way by getting all of our obligations to Braeburn completed. One of which is obviously supporting the NDA getting the final review completed at the FDA, and then also related to transferring know how with manufacturing and so on. So that is fully in their knowledge base as well. And I expect that, in the third quarter to fourth quarter of this year all of this will have been completed in our minds, and that’s how we are targeting that revenue recognition.

Elemer Piros - Burrill Securities

And if I calculate it correctly, from warrant and option exercises you still – if exercised you’re still looking for about $17 million or so -- I don’t need to put you on the spot. But is that about right, if it's exercised?

Sunil Bhonsle

Are you trying to project what our cash position is?

Elemer Piros - Burrill Securities

The cash that would be received if all the outstanding warrant’s and option’s were to exercise.

Sunil Bhonsle

Elemer, I would have to really work those numbers out. But you’re probably right, I mean the information is there in our 10-K.

Elemer Piros - Burrill Securities

Yeah. So, one strategic question please; are you getting any closer to decide better to pursue chronic pain, did six months [level] of Buprenorphine or Parkinson's disease? What’s exactly the ingredient?

Sunil Bhonsle

I mean first in terms of Probuphine itself obviously, one way to make sure everything goes fine with the current application and treat opioid addition and so on. But in pain -- treatment of pain is a very high priority as well in both at Titan and Braeburn. So we will certainly look at that. With respect to other applications of the technology, as you know we have done some work in Parkinson’s. We’ve also done some work in other areas which we haven’t yet talked about and we will when the time is right and when it looks appropriate to pursue those programs. All of this of course is dependant also on the inner success of Probuphine in the next few months, and so we have looked strongly at pursuing Parkinson’s but we will wait to make the final determination at the Board over the next few months as we complete the Probuphine program. That’s sort of the strategy right now.

Elemer Piros - Burrill Securities

Okay; and may be a couple of questions to, Kate. Kate, back in ’08 when the first Phase III trial was getting on the way; just from the trial setup, it seems that there was a focus on the first 16 weeks of the 24 week treatment period in terms of the primary efficacy analysis. Would you please help us to understand the rational for it and the interaction the DFTA at that time?

Katherine L. Beebe

Sure, Elemer. So back in the initial stages of putting those development programs together, there was interest in looking at early response to treatment, and that was why we declared our primary efficacy endpoint at the first 16 weeks. And then a key secondary endpoint was week 17 to 24 to see if that treatment was [banned] and indeed we did see that. Our data showed statistically and clinically significant difference between Placebo and Probuphine for both of those time points as well as for the entire design to try in point of 24 weeks. As the program evolved and understanding about how to treat opioid addiction has advanced in the field of Buprenorphine and the use of Buprenorphine we had ongoing discussions with FDA and with their guidance changed the primary endpoint in the later study, the (indiscernible) study to looking at the cumulative distribution function over the entire 24 week treatment period is still retained looking at weeks 1 to 16 and 17 to 24 as sort of main secondary endpoint and again replicated the results for the first pivotal trial. FDA also asked us to include the patient self reported opioid use in an algorithmic fashion to see what kind of concordance we had between that and the actual urine drug testing. It was in fact high concordance and whether you analyze the data with or without the patients coming forth you still see for both studies clinically and statistically significant separation from Placebo.

Elemer Piros - Burrill Securities

And Kate, so the patients suffered what was available even for the first Phase III trial?

Katherine L. Beebe

That’s right. And we did a post talk analysis basically using the same methodology that we implied in the 806 trial for [Stat] analysis for 805 and found the same results – as the primary analysis of week 1 to 24 for just the urine toxicology with 805 data.

Elemer Piros - Burrill Securities

And so the analysis of the 805 trial the first Phase III trial from this deistical point of view if you look at the entire period, how would the statistics change if you declared the first 16 week of a primary endpoint?

Katherine L. Beebe

They don’t change. They really don’t change, we still see a robust separation from Placebo regardless of whether you look at 16 weeks or 17 to 24 weeks or 1 to 24 weeks, [enjoy] the same results.

Elemer Piros - Burrill Securities

And then the talk about clinically meaningful [set size] of about 20%, does this refer to the mean number of negative urines compared between treated and Placebo ones?

Katherine L. Beebe

Yeah the cumulative distribution function and I don’t want to take up too much time with this now, and because we are going to be in an Advisory Committee meeting on Thursday and these are likely the kinds of questions we’ll be answering at the Advisory Committee meeting. The overall treatment effect is estimated from looking at the proportion of patient to each treatment group and cumulative proportion of the percentage negative urine. It's all based on the percentage of negative urines and there was statistically significantly higher percentage of negative urines over that 24 week treatment period for Probuphine group versus Placebo.

Elemer Piros - Burrill Securities

And just one last question please; the treatment failures people who met certain criteria, was this definition of treatment failure was instituted only for those people received an additional or (indiscernible) implant or was it [possible]?

Katherine L. Beebe

That is correct -- that is correct. The way we defined treatment failure in all of the studies including the Open-Label studies was, if the patient required sublingual rescue medication up to a protocol allowed amount then they were required to receive a [cyst] implant a dose increase and that would – if it was a Placebo patient it would get a Placebo dose increase and Probuphine patients get a Probuphine dose increase. After that dose increase, if they continue to need the protocol or exceed the protocol allowed amount of sublingual rescue medication then they would be withdrawn due to our definition of treatment failure.

Elemer Piros - Burrill Securities

Very good. Thank you very much, and I wish you good luck on Thursday.

Katherine L. Beebe

Thanks so much, Elemer.

Sunil Bhonsle

Thank you, Elemer.

Marc Rubin

Thanks, Elemer.

Operator

Our next question will come from Michael Higgins with Brinson Patrick Securities.

Michael Higgins – Brinson Patrick Securities

Thank you, operator. Good morning, guys. How are you?

Sunil Bhonsle

Hi, Michael.

Katherine L. Beebe

Hi, Michael.

Marc Rubin

Good morning.

Sunil Bhonsle

Good morning.

Michael Higgins – Brinson Patrick Securities

A lot of good question here and I hadn’t take a cover last week, lot of my questions have been answered. It's just a couple of quick ones here if I may; do you know who is serving on the Adcom this week?

Katherine L. Beebe

We don’t have that information yet.

Michael Higgins – Brinson Patrick Securities

Okay. Regarding the $75 million of spent from Braeburn, it's quite a big load, can you help us understand where they’re (indiscernible) to spend that without getting too much into the (indiscernible)?

Sunil Bhonsle

Michael, you started breaking up during that question; can you just repeat that?

Michael Higgins – Brinson Patrick Securities

Sure. Sorry about that. The $75 million from Braeburn and that will be spent; can you give us some help as to what types of categories of spend that that’s going to go into?

Sunil Bhonsle

I mean, I can give us just sort of a general sense of the areas, they -- that, they’ve shared with us as well without breaking confidential information and so on, okay? It's clearly targeted for the launch. So there’s lot of obviously expenses associated with in a declaration that’s going on right now, market research, the people doing -- are being brought on board to support that. And then ongoing operations, expenses over the first couple of years during this launch period as well including the promotional expenses and so on. So it's specifically targeted to the areas like training of the physicians out there for the procedures, the REMS programs, internal expertise that they’re building up, and all geared towards that launch and hopefully a successful launch of this product.

Operator

We’ll go ahead and move to our next caller, and its Arthur Davis, Private Investor.

Arthur Davis - Private Investor

Hello, Mr. Bhonsle.

Sunil Bhonsle

Hello, Mr. Davis. How are you?

Arthur Davis - Private Investor

Fine, thank you. How are you?

Sunil Bhonsle

Very good.

Arthur Davis - Private Investor

Congratulations on progress to-date.

Sunil Bhonsle

Thank you very much, with the whole team.

Arthur Davis - Private Investor

Pardon me.

Sunil Bhonsle

I said, thank you very much from the whole team.

Arthur Davis - Private Investor

Oh, you are welcome. I have a question, the $0.6 million for a consultant and other fees. Are you at liberty to disclose the portion of that that went to the entities that found the license fee?

Sunil Bhonsle

We haven’t separately disclosed that in the actual 10-K. I’m not sure. Brian, is that included as a separate item. I can’t recall.

Brian Crowley

Actually the fees that were paid to the consultant that put together the Braeburn transaction, those are actually netted against the upfront payment, so they do not go through the income statement.

Arthur Davis - Private Investor

Will they ever be disclosed?

Sunil Bhonsle

Right now that is …

Brian Crowley

Yes, actually it has been disclosed from the standpoint of, if you look at the footnotes to the financials it will tell you that the upfront fee was $15.75 million and the expenses of that transaction were $0.75 million; so the net is $15 million. So their expenses are included in that, the expenses of the transaction.

Arthur Davis - Private Investor

So that’s included in the …

Brian Crowley

$750,000 worth of transaction expenses.

Arthur Davis - Private Investor

Fine. So their fee is included in the $750,000 amount?

Sunil Bhonsle

Yes, correct.

Arthur Davis – Private Investor

Now did they continue to receive a percentage of the revenue streams in the future?

Sunil Bhonsle

Brian is there anything in the 10-K, I don’t think we’ve disclosed any of that.

Brian Crowley

There is nothing disclosed in the 10-K associated with that.

Arthur Davis - Private Investor

All right. So, if yet to be disclosed and the answer maybe yes?

Brian Crowley

Mr. Davis just from the standpoint two things that I will point out there. One is, there is a continuing relationship as you know we will be continuing to look for partnering this outside of this country as well. And …

Arthur Davis - Private Investor

I understood.

Brian Crowley

Yeah, and that’s a continuing relationship, so yes there could be additional fees paid for that and as far as ongoing expenses and so on, or any part of future revenues, its something certainly as we go forward, we will communicate if they’re material.

Arthur Davis - Private Investor

Okay, but – so in other words future fees might be related to events outside of the U.S. and Canada?

Brian Crowley

That is correct.

Arthur Davis - Private Investor

All right. But as far as the U.S. and Canada, they’ve been paid?

Brian Crowley

The fee for the current transaction has been paid for getting this transaction done. Any ongoing fees or expenses we will let you guys know as we get – once they become material to us.

Arthur Davis - Private Investor

Very good. A couple of more questions, if I may, please. What was the date when you said the Deerfield debt would be satisfied in full?

Brian Crowley

It will be satisfied in full, in early April. There is one remaining payment, which will be made at the beginning of April.

Arthur Davis - Private Investor

Very good. And I know this question was asked, sentence being repeated, the question was did you know the composition of the Adcom panel and while I understand the information has not been released in total, do you know whether or not either doctors (indiscernible) could be part of that panel?

Katherine L. Beebe

Mr. Davis, this is Dr. Beebe speaking. We don’t know the composition of the panel. We will find that out tomorrow …

Arthur Davis - Private Investor

Okay.

Katherine L. Beebe

… that should release 48 hours before, so and we have not disclosed who else will be participating from public standpoint.

Arthur Davis - Private Investor

Have you recommended any people for the panel?

Katherine L. Beebe

We have not recommended anybody for the panel in the FDA, generally does not ask a sponsor to recommend panelists there, their own panel of expert.

Arthur Davis - Private Investor

Very good. Thank you very much …

Katherine L. Beebe

Thank you.

Arthur Davis - Private Investor

… and good luck.

Katherine L. Beebe

Thank you so much.

Sunil Bhonsle

Thank you.

Arthur Davis - Private Investor

Thank you very much.

Operator

And ladies and gentlemen, unfortunately that is all the time we have for questions. I will turn the conference back to Mr. Bhonsle for closing comments.

Sunil Bhonsle

Thank you, Kelsey. Thank you all for participating in this call. As you know this is very busy time for all of us as we prepare for the next event with the FDA and the review. We remain confident in our belief that Probuphine if approved for marketing will be a transformative new treatment for opioid dependence and we fully appreciate your ongoing support. Thank you all.

Operator

And again ladies and gentlemen, that does conclude our conference for today. We thank you all for your participation.

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