Greetings and welcome to the DARA BioSciences First Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jim Polson, Investor Relations. Thank you, sir. You may now begin.

Thank you, Operator. Good morning and welcome to the DARA BioSciences first quarter 2015 earnings call. Thank you all for joining us on the call this morning. I’d like to begin by reminding our listeners that remarks made during this call may contain forward-looking statements that involve risks and uncertainties. Forward-looking statements on this call are made pursuant to the Safe Harbor provisions of the Federal Securities laws. Information contained in the forward-looking statements is based on current expectations and is subject to change and actual results may differ material from forward-looking statements. Some of the factors that could cause actual results to differ are discussed in reports DARA files with the SEC. These documents are available on the DARA website at www.darabio.com and we encourage you to review these documents carefully. Joining me on the call today is Christopher Clement, DARA’s President and Chief Executive Officer; Dr. David J. Drutz, Executive Chairman of the Board and Chief Medical Officer; Dave Tousley, Chief Financial Officer; and David Benharris, Vice President of Sales and Marketing, who will be available for the Q&A portion of the call. Chris will begin the call with opening comments and review of the key progress and results made during the quarter, followed by update an update from Dr. Drutz regarding our development asset KRN5500. Dave Tousley will conclude with a review of the financials and we'll then open the call up for your questions. With that it is now my pleasure to turn the call over to Chris.

Thanks, Jim, and good morning, everyone. I’m very pleased to welcome you to our first quarter 2015 earnings call. As always, we appreciate your time, interest, and participation in this event. As you likely saw in our press release after market close last night. We began 2015 with the solid quarter of results. DARA reported net revenues of $652,000 for the first quarter based upon the first quarter based upon gross product sales in excess of $850,000 as compared to net revenues of $161,000 for the year period ago. A year-over-year increase of 304%. As we move into 2015, there are number of important and interesting trends I wanted to highlight for you. First our dedicate team has within place for little over year and they’re using the strong relationships they have built during this time to solidify and grow their territories. We’re seeing prescription increase across all of our products which is encouraging and that the portfolio approach and synergy we’re expecting to see in selling multiple products is working. Ongoing access remains very good and we continue to refine in supplement our targets as we focus on highest potential practices. We have supplemented our marketing and sales team with couple of highly experienced individuals including [indiscernible] who bring DARA over 25 years of sales and marketing expertise with a number of highly success pharmaceuticals products launches to its credit. This team is developing unique sales material and programs to help maximize the potential for each product in the portfolio while also exploiting the synergistic values concerning multiple products together. Second Gelclair is our flagship product and continues to be the leading gel barrier product prescribed in the retail sector. Since the second quarter of 2014 Gelclair market share has more than doubled in this retail market sector and…

Thank you, Chris. Good morning and thanks to all of you for joining us. I'd like now to provide an update on our redevelopment candidate KRN5500 in particular regard to items with a direct impact on our ongoing partnering efforts. As a quick reminder KRN5500 is our novel non-opioid non-narcotic drug candidate that has shown early clinical trial efficacy and the management of refractoring nerve pain attributable to damage induced by prior cancer chemotherapy. KRN5500 has both fast track and orphan designations in the area of neuropathic pain, orphan designations providing an enhanced seven year period of IP market exclusivity once the product is approved for marketing. I am very pleased to announce that the US patent and trademark office has issued a noticeable announce as it relates to a new formulation of KRN5500. A noticeable allowance indicates that an invention qualifies for patent. Typically a patent will issue about three months after a noticeable allowance. The protect technology covers both DARA's proprietary formulation for KRN5500 and its uses. The importance of this allowance is as follows. KRN5500 is not a water soluble drug. It needs to be dissolved in certain excipience in order to be administered therapeutically. The excipience provide the basis of the drug formulation. KRN5500 is an extremely difficult drug to formulate because of certain basic physical attributes. The original formulation of this drug as licensed from in 2004 [indiscernible] part of different two of these exceptiance are no longer acceptable in marketed products in United States. So it was essential for DARA to create a new formulation capable of passing with the FDA. DARA's new formulation has several key advantages which we believe will be of great importance to partners. As I reported at the fourth quarter 2014 earnings call, the new formulation had already shown…

Yeah thanks David and thank you all for joining us this morning. Our net revenue for first quarter of 2015 were approximately $652,000 compared to the net revenues of $161,000 in same quarter of 2014, representing an increase of 304% the significant increase was driven primarily by increases in Gelclair sales but we also saw some nice growth in sales in Soltamox as well. In spite of this significant increase in net revenues, our cost of sales for first quarter of 2015 increased only 179% quarter-over-quarter reflecting the spreading of fixed distribution cost over significantly higher volumes. Our sales and marketing expense increased approximately $389,000 million on a quarter-over-quarter basis reflecting increase personnel cost including an increase in incentive based yield sales compensation driven by higher sales achievement. Our research and development expenses were essentially flat on a quarter-over-quarter basis, with only a slight decrease of $4000. Our general administrative expenses, increased by approximately 218,000 on a quarter-over-quarter basis, primarily as a result of an increase in personnel related costs, and stock based compensation. At the end of the quarter, our principal sources of liquidity to our cash and cash equivalents, which totaled approximately 9.9 million. As of March 31st, we had net working capital at approximately 7.4 million. Starting Q2 2015, with cash on hand of approximately 9.9 million, and based upon achievement of our current operating plan, we believe that we have sufficient working capital to continue our operations through the first quarter of 2016. I’ll be happy to answer any questions you have during the Q&A, and I’ll now turn the call over to Jim.

Operator, we are ready to open the call up for questions. Thank you .

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Matt Kaplan of Ladenburg Thalmann. Please go ahead with your question.

Hi, good morning guys.

Hi Matt.

So first just wondered sort of asked with Oravig your new product in your portfolio that’s going to be launched I guess in first quarter, re-launched in the first quarter. Can you give us a little bit more detail in terms of what you view as its’ potential for DARA?

Matt, this is David Drutz. Good morning. So the Oravig market the localized where we would refer to it as the localized treatment for thrush, OPC or oropharyngeal candidiasis in the mouth, the prescription basis over 3 million prescriptions on an annual basis. So the market size is very large, and we feel we have a good portion of the market covered between our oncology and primary care, between ourselves and our partners admission in the primary care sales force, so we do see the opportunity for Oravig to be a major contributor to the DARA portfolio.

I think Matt, you know one of the other things we really like about Oravig is how easy it is for patient to use. So we like the fact that it’s once a day, we like the fact that the concentration of the drug is in the mouth that you don’t get a lot of systemic absorption, so you know it really does provide some very interesting benefits you know over competitive agents, and I think combines you know as David said, our focus in oncology and our partner in you know primary care. I think that’s going to be very interesting. The other point that I’d like to touch upon we said it in our remarks a little bit, you know is the fact that we are now also kind of building a strategy targeted in the oral cavity or in the mouth, you know so a nice combination and opportunity that synergies –position not only in -- and then in those oncology patients probably mostly head and neck cancer patients you know with – results. So you know, we are very excited about the prospects both in the oncology sector, as well as in the primary care you know when our colleagues admission are equally you know enthusiastic about this drug.

And how should we think about pricing or that to you guys in terms of –

Yes Matt, we are undertaking a complete pricing analysis now, since this is a branded product you know we will look to price it appropriately from a branded perspective, as Chris said it’s a unique delivery system, it offers a lot of advantages to patients because it’s once a day as a localized treatment for oropharyngeal candidiasis or thrush, and it’s also a unique not only a unique delivery system, but a unique product therapeutical component which is -- it’s delivered that way in the mouth, So we are undergoing that research now, but it will be a premium price, is a branded product versus the competitors that are in the market.

Okay as it should be.

And how are the revenues split between you and yes your marketing partner and the –

The way it’s going to work Matt you know, is with,..because we have the exclusive rights and through the product we are going to book all of the sales that we have in place. In a similar vein and this is one of the benefits of also working with a mission, You know it’s going to be a similar arrangement at least initially, to what we have with them for you know for the mission products that we sell. You know so they are going to sell on our behalf, we are going to book those sales you know we are going to pay them, you know we are going to pay them a fee for doing that. And then as you know we get more performance on the product we will look to – look at different ways for splitting the revenue but that's the way it will start at least initially.

And do you owe anything back to licensee?

I am sorry do we owe?

Anything back to the company license?

Yes so in terms of the actual terms of the agreement we haven't really publicly disclosed anything relative to that but it has standard provisions in it for supply and a milestone most –

Okay, that's great. And in terms of the I guess question for David in terms of breakdown of revenues for the quarter can you give us – in terms of break down on a product basis?

We are still breaking that out – we haven't done it on filing. So but as we have said Soltamox has nice increase this quarter and Gelclair is the majority for sure.

Okay and then in terms of – I am sorry.

No Matt I was just going to say as we – we are very pleased to provide guidance for the remainder of this year we have combined it for Soltamox and Gelclair obviously as we get some performance metric on Oravig we will provide guidance on that as well and honestly I think as we continue to get more performance matrix on Gelclair and Soltamox we will break that out as well. But at least you get a sense where we will – we believe we will be this year relative to Gelclair and Soltamox on a net basis.

Okay and then should we think of those in terms of the 3.7 guidance broken down kind of 70:30 or something like that or just think of them as an aggregate.

It's pretty much the same comment. Unfortunately – sorry.

Okay. No worries. And then I guess a question for -- in terms of 5500 when do you think we will have – on a development task from the FDA from a timing perspective and –

Well you know this obviously depends on the time line of the FDA follows but to answer to the question is we have been really very actively engaged with them for the last several months and what we are involved in exchange and our partners want clarity on what this program is going to look like all the way up to final approval of the product and it takes us time to work through those details with the agencies. All I can tell you is as recently as this week we have been in contact with the division with the pain division, and we are expecting feedback in near term but what near term means I am not certain I can tell anybody.

Okay and then in terms of -- can you give color in terms of what your approaching to the FDA and where you think it’s going to likely --

So the next step in the development program is -- to be development program and the phase 2 development program is in our view and we are waiting for final word is a relatively small clinical trial that will number one confirm the results that we are in phase 2 A trail because it was a small trial -- large number of patients. But it also will give us more clarity on those response curve we need to better understand what the optimal dose of KRN5500 is we have hints from the pre-clinical data actually the pre-clinical data that were published from mass general that pain response in the animal model is a function of the dosage you deliver. So in the original phase 2A clinical trial that DARA conducted again before the present management team was in place, the trial is really conducted in extraordinarily low dose of KRN5500 and it certainly was efficacious we need to be able to move that dose a bit further to see if we can get even more powerful pain relief. So those are the two main goals of the phase 2A clinical trial. Because we have fast track and orphan designations in the neuropathic pain area we are hoping to be able to work out with the FDA in aggressive time line for moving this product forward all the way to NDA and this is certainly what several of our potential partners have been asking as us to do so we are trying to get some – I mean obviously this is iterative and with a very successful phase 2 B clinical trial we probably would be in a really good position to argue with the FDA that we need – all the way to approval but right now we have got to get phase 2B data before I can really complete the rest of that conversation or negotiation.

Do you think you will be in position in other words potentially to start the phase 2B sometime later this year?

Well again everything we are focus is timing that partner. So the answer would be we have prepare to financially support this moving forward.

Sure. Alright. One last question for David and I will jump back on queue. In terms of the stock base comp charges for the quarter can you give us – can you break that out for us?

The stock base comp is it broken out on the cash flow statement and for the quarter is about 390,000.

Alright. Thanks for taking all the questions guys. And congrats on progress.

Thank you. Our next question comes from the line of Reni Benjamin with H.C. Wainwright. Please go ahead with your question.

Hey good morning guys. Thanks for taking the questions. Matt got pretty much all mine questions but I am -- talk to -- first but I do have two -- left. One having to do with the -- that you seeing can you give us any color behind that growth and I guess where I am going on with this is is there any seasonality that we should be aware of as we try to think how the rest of the year might shape up?

So hey Reni its Chris. Yeah there really is no I wouldn't say there is a seasonality other than the fact that as we said we were impacted early in January and February but we saw that bottleneck sort of come and where we rebound nicely and in March into the second quarter but specifically to give you little bit more color on that I am going to ask David Benharris to comment.

Hi Reni. So seasonality products I don't think apply relative to the fact that -- side effects on oncology and cancer patients and that's not seasonal. The only seasonal thing that may potentially apply moving forward are in general industry the summer months are little bit slower and in general industry around the Christmas holiday can be a little bit slower just because the fact that people take vacations around those time so there is less phase time in offices with customers because a, they are not there, b our field force has vacations time as well and patient take somewhat vacations but we don't have any seasonal type of disease state that we treat with our products because cancer is not a specific- is not tied to a specific time frame in the year that has seasonality associated with it.

Got it. And then one other question I have already -- you mentioned the fourth quarter of this year and I thought I had -- that this should be launched in the third quarter and so did I have notes wrong or is this little bit of push back and if it is a push back what is involved in this in the push back. Yes, it’s not just to give you a sense you know after the – we signed a license agreement obviously, there is a lot of work that needs to be done, from a manufacturing point of view, from getting the all the packaging ready and all that kind of stuff. So you know logistically, you know it’s just the time necessary to manufacture the product demand and you know all the schedules are in place, and ready to go now. So you know I think when we say, the fourth quarter, you know we are really talking the early part of the you know fourth quarter, based upon you know the way things are flowing out at this point. So it’s here’s nothing you know, there is nothing that is preventing us from getting to the market sooner other than to just practical aspect of you know, of having the product manufactured, packaged, you know and get it into the distribution network. And that’ takes time, because it’s – you know it’s being manufactured by a third party, you know that you know that manufactures a product for other companies as well. So you know you get – you line yourself in the queue, once the license agreement is signed, and you know that’s where we are. So early fourth quarter are simply based upon the logistics of getting the product manufactured and stocked in the US.

Fair enough, and then I may have asked this in the past, but I’ve forgotten the answer, but you know based on I mean this product was already out…out in the market at 1.2, and you know, so it’s—since it’s the same manufacturer who is manufacturing, if you can confirm that and then also, can you give us some color as to how this product did when it was on the market?

Yes, I am going to ask…again I am going to ask David to comment on that briefly, but yes the manufacturer of the product is still be the same, it’s a proprietary technology you know and that is patented, so it’s the same…it’s the same company. But to give you a little bit more historical context, I am going to ask David to talk.

So in the market, when the product was initially launched by Strativa, when the product had a good prescription growth uptake in a very promotionally sensitive ramp of the first 12 months of the year. so what we saw with the product, is the opportunity to promote and sell the product and get an immediate response, because it’s –earlier that the unique product from formulation delivery perspective in this marketplace, it’s a unique product relative to how many times a day it’s taken, in the marketplace, it’s a unique product for the actual excuse me, therapeutic sss Excuse me, has delivered at a local level is the only localized treatment that’s available, and really has multitude of benefits for patients, so the promotional sensitivity around selling those very simple points that help a patient a) take the products scan the products for the cost of therapy and then have [indiscernible] are promoted to the thrush gives it a leading position of what’s out there for localized treatment of oropharyngeal candidiasis, so we saw a very, very good growth from a prescription perspective with Strativa, it was very quick and it was extremely promotionally sensitive, so we are encouraged by the fact that not only do we have promotional, we know how promotion in the oncology space medical oncology in the Cology, Oncology and Radiation Oncology but we will also have coverage to our partners admission in the primary care case. General practice internal medicine. So we have a lot of good opportunity ahead of us, in two spaces with two sales forces, with consistent promotion that we expect to see, you know good ramp and promotional sensitivity, a positive outcome through that.

And sorry, just as a follow up, you know you mentioned very good ramp, can you just quantify you know even ballpark in terms of revenues, not that you guys will have the same because obviously it’s promotionally sensitive so you could have a much better you know promotion but it probably provides at least for in investors minds in terms of revenues.

So the product they propounded for 10 to 12 months alone due to unfortunate circumstances not allowed –for that matter to stop promoting the product. But nothing to do with nothing to do with it was an internal issue with the company. But they were able to get it to a run rate within 10 months of you know over $5 million pretty good.

Thank you very much and good luck going forward.

Thank you.

Thank you Randy.

Thank you ladies and gentlemen. There are no further questions at this time. I would now like to turn the floor back over to Christopher Clement for closing remarks. Christopher Clement Well thank you very much, I’d like to sincerely thank you all for joining us this morning. We are very encouraged with the traction and progress of our commercial sales strategy, and we remain committed to building upon the momentum generated over the course of the last year sale. I look forward to keeping you abreast of our progress throughout the remainder of this year. Thanks very much, and have a great day.

Ladies and gentlemen, this does conclude our teleconference for today. You may now disconnect your lines at this time. Thank you for your participation and have a wonderful day.