Good day, ladies and gentlemen and welcome to the Edge Therapeutics First Quarter 2017 Conference Call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question-and-answer session, and instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference, Greg Gin, of Edge Therapeutics. Please go ahead.

Thank you, operator and good morning, everyone. Thank you for joining us. Today, we reported our first quarter 2017 financial results and recent corporate highlights. Joining me this morning are Brian Leuthner, President and CEO; and Bert Marchio, Chief Accounting and Administrative Officer and Interim CFO. Brian and Bert will make brief prepared remarks and then we’ll open up the call for Q&A. Before we begin, let me note that the press release we issued this morning is available on our website at www.edgetherapeutics.com. In addition, the live webcast of this call is also available on our website. To access the website, click the Investor's link on the top navigation menu, then click on News & Events, then Events & Presentations on the left navigation menu. There will be taped replay of this call, which will be available approximately two hours after the call conclusion and will remain available for seven days. The operator will provide the replay instructions at the end of today's call. Today's conference call may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. To the extent that any statements made on this call contain information that is not historical, these statements are forward-looking statements and are not guarantees of future performance and involve risks and uncertainties including those noted in this morning's press release and Edge's financials filings with the SEC. Investors, potential investors, and other listeners are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Actual results may differ materially from those projected in the forward-looking statements. Edge specifically disclaims any intent or obligation to update these forward-looking statements, except as required by law. And with that, I will now turn the call over to Brian.

Thanks, Greg. I would like to welcome everyone to our call this morning. I'll begin with a high-level summary of our first quarter results and financial activities before handing the call over to Bert Marchio for a more detailed review of our financial performance. We began 2017 with positive momentum, driven primarily by substantial progress last year in our Phase 3 NEWTON 2 study of EG-1962 for aneurysmal subarachnoid hemorrhage. We've continued that momentum and we're very pleased that we remain on track with our previously stated anticipated timelines for our topline efficacy data from the interim analysis and if necessary, the full data readout. In the first quarter, we also initiated our study assessing intracisternal delivery of EG-1962 for aneurysmal subarachnoid hemorrhage. Now before I provide details on our clinical progress, I wanted to briefly comment on our recently completed registered direct offering of common stock that was sold at a premium to the market price without any advantageous features over common stock. So, this transaction was a result of an institutional investor, conducted substantial due diligence and then taking a high level of interest in Edge and also feeling that the stock was undervalued. During that transaction, we secured $18 million in gross proceeds from the transaction and this allows us to further strengthen our cash balance and provides the capital that will allow us to expedite precommercial activities for EG-1962 that we had previously planned to initiate after the NEWTON 2 interim data readout. Moreover, the financing provides additional financial flexibility to expand our product portfolio, including advancing our early phase pipeline programs such as lumbar administration of EG-1962, EG-1964 for chronic subdural hematoma and some other potential opportunities. At the same time, this transaction allowed us to broaden our strong shareholder base with a new healthcare…

Thank you, Brian. As of March 31, cash, cash equivalents and marketable securities were $95.6 million and it's down from $106.4 million at year-end a cash burn of approximately $10.8 million that was in line with our projections. Obviously, our cash position has improved since quarter end because of the registered direct offering that Brian described that brought in $18 million of gross proceeds. Research and development expenses for the quarter were $7.6 million, inclusive of approximately $600,000 of non-cash stock compensation expenses. R&D expenses in the first quarter reflected increased spending on our ongoing NEWTON 2 study for EG-1962 as spending on other clinical programs and increases in personnel costs. General and administrative expenses were $4.2 million for the first quarter including approximately $900,000 of non-cash stock compensation expense. G&A spending during the first quarter reflected increased personnel costs, nonrecurring executive separation costs, stock-based compensation expenses, facility costs and professional fees. We reported a net loss of $12.2 million for the first quarter. As of yesterday May 2, we had 30.8 million shares outstanding. As we look ahead, we expect operating expenses to increase as we continue adding sites and enrolling subjects in our NEWTON 2 study of EG-1962 and as we continue to advance our other development programs including lumbar and cysternal and build our infrastructure. Based on our current plans, we expect our cash and cash equivalents to be sufficient to fund our operations through full data readout from our NEWTON 2 study, which as Brian said is anticipated to occur in late 2018. And now I'll turn it back to Brian.

Thanks Bert. So, in summary, we're executing our clinical plan for our Phase 3 NEWTON 2 study on target. We continue to focus on activating additional study sites and ensuring the quality of the data and the patients that the sites enroll and we're looking forward to the anticipated interim and full data readout from our NEWTON 2 study in the first quarter of 2018 or later in 2018 respectively. At the same time, we're making progress on our other development programs. So, with that, thank you again for joining us today. We appreciate your continued support and look forward to updating you as we continue to advance through NEWTON 2 and our other development programs at Edge Therapeutics. So, operator, we're ready to take question now. Thank you.

Thank you. [Operator instructions] Our first question is from Paul Matties, Leerink. Your line is open.

Hey guys. Thanks so much for taking my questions. I have a few. The first one is on how many, I am just curious if you can tell us how many patients you've enrolled in the U.S. and outside of the U.S. relative to your initial plan and how you're tracking relative to your expectations? The second one is I would love to maybe just if you could talk a little bit about the intracysternal study and what you see as a successful outcome and how you're defining that in this study and then the third thing as you've talked a little -- a lot about statistical power on the primary end point. I am wondering how you're thinking about statistics on key secondary endpoints that may better convey pharmacoeconomic value like duration of ICU stay, duration of hospital stay, thanks so much.

Sure. Thanks Paul for the question. First one on patient enrolled, we have not given that out. What we just continue to say is we're on track for the interim read out in the first quarter of 2018 which is 210 subjects and also full data readout at the end of the year for 374 patients. What we do have is we've now increased our clinical sites enrolling at 49 sites and as we mentioned, we just got our first European site up in Germany a few days ago. So there continues to be tremendous excitement in Europe. So that's where we are on that. Cysternal as far as what would success look like? The first thing obviously, this is a safety and pharmacokinetic study. So, what we hope to do is just evaluate the safety of the drug given via cysternal administration and then look at that PK and we're gathering data obviously from -- we have our PK results from our earlier NEWTON study when we administered EG-1962 intraventricularly. So, we'll be comparing them. So, I think that's really what we want to look at is are we getting similar levels in plasma and just compare it to what we have and obviously we are looking at the functional outcome using the Glasgow Outcome Score Extended in that study. Regarding the powering, yes, as you know, we've spoken about this. From a statistical standpoint, we're really focused on the primary endpoint which is the Glasgow Outcome Score extended because obviously that's what FDA cares about from a standpoint of approvability. Some of the secondary endpoints we are collecting, but we really haven't spoken about the statistics around that, but we're keenly looking as you mentioned the ICU length of stay, the total hospital length of stay, where patients actually go after they go out of the hospital because as you know in the first NEWTON study, patients on oral nimodipine is a standard of care they were in the ICU meeting in 17 days in the hospital for 25 days and still two thirds of the people ended up going to rehab. So, we want to understand that and we're also looking at other measures that look at the really intensity of care, intensity of treatment on the hospital. So, as we get all of this health economic data, we'll be able to make what we feel is a strong argument if the data continue to look like what we saw in the NEWTON study. Does that answer your questions Paul?

Yes, great. Thanks, so much Brian. Really appreciate it.

Thank you, Paul.

Thank you. Our next question is from Jason Butler of JMP Securities. Your line is open.

Hi thanks for taking the questions and congrats on all the progress. Two questions, first of all can you give us a sense of what proportion of patients you expect to enroll in NEWTON 2 from the U.S. versus Europe and Australasia and then talk about any differences in how these patients are managed in the different countries? And then the second question you talked about how the increased cash position provides the opportunity to advance some earlier stage programs, any plans at this point to broaden the use of the delivery platform to molecules beyond nimodipine thanks?

Sure, thanks Jason. First question is what's our assumption on the proportion of patients in I would say North America, we look as really North America and ex North America and right now based on our assumptions we believe that we're going to have I think more patients in the U.S. because we started a little earlier on the sites in the U.S. and North America. We don't know exactly that split. As we start to see the enrollment numbers coming in from Europe, but we essentially -- in our assumptions when we're looking at the modeling, we were thinking that the percent of patients enrolled per site would be roughly equal between ex North America and North America. So again, I'll probably next quarter be able to provide a little bit more insight as we start to see how well Europe enrolls. Now the thing that we do know generally about the European sites are these are really high enrolling, excuse me, high volume centers because in Europe it's much -- it's even more concentrated efforts from the centers of excellence. So, the volume, the subarachnoid hemorrhage volume at these centers that we're doing is on average higher in Europe. Also, if we are looking at the interim analysis, clearly, we would expect many more as a percentage of patients to be in the North American centers because we're looking at 210, but then that -- getting closer to even out when we go 374. So that's why we're looking at from that perspective. I believe I wrote down your second question, Jason, if you can remind me what that was again?

Just if you have any plans at this point with the additional cash you now have to expand the use of the delivery platform to other molecules?

Yes, yes, we do. We think Precisa is a very good way to be our engine for future value creation; EG-1964, we don't spend as much time on that. That is taking a different API drug called aprotinin and using it in the chronic subdural hematoma population. So, this population is another Orphan population, we believe sill a little bigger than the aneurysmal subarachnoid hemorrhage from a patient population, but again there's no therapy out there to really help in that population and we're using Precisa and again looking at targeted and sustained release delivery using Precisa. So, we do expect and we do plan to look at other Precisa-based products and develop our portfolio.

Great. Thanks again for taking the questions.

Thank you, Jason.

Thank you. [Operator instructions] Our next question is from Vamil Divan of Credit Suisse. Your line is open.

Great. Good morning, guys. Thanks for taking my questions. Just two if I could. So, one you talked about the interim analysis earlier next year and then before the final. Just in terms of managing expectations, can you just give us a sense of how much we should focus on interim and your interim planning how much are you focusing on interim potential being positive versus just having to go through the end of the study again just in terms of managing investor expectations as we get closer to that? And then second, just on the cost side or the pricing side of this equation, obviously the data is going to drive things but wondering when we might have more insight from you guys around what you think is reasonable in terms of pricing? If there is other additional survey work or updated thoughts you have there beyond what you've shared previously that would be helpful. Just give us a sense of how to model things, thanks.

Sure. Thank you, Vamil. So, the first question is interim analysis and here is how we look at it and obviously we have the plan that we're going to hit at the interim analysis that we clearly now that it's a hurdle. If you look at the NEWTON 2 or NEWTON data, there was a 32% absolute difference between the proportion of subjects that had a favorable outcome that were treated with EG-1962 verses those that were treated with oral nimodipine. So, we have 32% delta. To win at the interim, we would need to show approximately a 20% difference in the proportion of favorable outcome and then as we talked about before, if you look at the full study we need to show around 10% to 15% difference at the full study. So again, we need to show a 20% difference. The difference is this is a blinded study, the NEWTON 2 versus the open label Phase 2, or excuse me, the open label original NEWTON study. So again, I believe we could show a difference or won the built, but it's not a slam-dunk by any means. So, on one hand, from a financial perspective, we're planning to go all the way out to the full data readout, but from an operational standpoint here, well we're planning if we hit it, we want to be ready so that we can get the regulatory documents in if we hit at the interim, we want to make sure that we have our precommercial activities started. So that's really how we look at it from our perspective. Regarding health economics, we talked about this, probably the best article we look at from a health economic standpoint as a foundation is this article published in 2010 at the Duke University Medical Center…

Okay. Thanks so much.

Thank you, Vamil.

Thank you. Our next question is from it are sick of Ed Arce of HC Wainwright and Company. Your line is open.

Great. Thank you, guys for taking my questions and congrats on all the recent progress. Just a couple questions on the main study NEWTON 2, if you could just remind us another something you went over recently but if you could remind us in relation to NEWTON 1 any differences in inclusion criteria and in particular in the endpoint with regards to pharmacoeconomic benefit that you just discussed.

Sure. Thanks for the question. So, I am starting across our Chief Medical Officer and when I ask them after the first NEWTON study how can we do everything we can to ensure that we see the same results that don't change anything. So, from our Phase 2 to our Phase 3 essentially the only difference is that the Phase 3 is a double-blind, double dummy study. So, what is the same is the same inclusion criteria so that WFNS two through four. So WFNS is a measure of consciousness when they come into the hospital and patients with they have to have an external ventricular drain to give the drug. So that's identical. The competitor is EG-1962 versus oral nimodipine. So that's the same and the primary endpoint is the Glasgow outcome score extended, which is in the cup point is the six, seven or eight determines a favorable optimum. So, we're looking at the proportion of favorable outcome of EG-1962 versus oral nimodipine and that has been the same. So, everything has been the same. The same thing we are looking at some, let's call the health economic drivers. First and foremost is if these patients deteriorate in this kind of three to 14-day window, many people have to get this intervention called rescue therapy and rescue therapy is expensive, it's time-consuming and it's only marginally effective. If you look at what we did in the NEWTON study, we reduced rescue therapy by almost 50%. So, we are looking at that. We're looking at ICU length of stay, which we decreased by 2.5 days from the median perspective in the first Phase 2 study and we're looking at the overall hospital length of stay which again we decreased by 2.5 days in the NEWTON study and we're actually tracking whether these patients go home or they go to rehab because clearly as everyone knows, spending time in a rehab facility is very expensive for the hospitals as well. So with that, the only changes we're making are again it's a blinded study in regard to 20 centers to roughly 80 centers, but the randomization and it's a one-to-one randomization in the Phase 3 study versus a 3 to 1 randomization in the Phase 2 study and obviously we did it 3 to 1 because we wanted to get more information about EG-1962 in that Phase 2 study, but otherwise everything else is similar and that's why we're spending so much time on the quality of working with the sites to make sure that everyone is aligned and educated on the inclusion and exclusion criteria as we've gone out to a broader hospital-base.

Okay. Great. And the other question that I had is on the intracysternal study that you mentioned, some of these patients as you mentioned don't qualify for the NEWTON 2 it would be helpful if you could just review some of those differences and in particular again the endpoint that you look to measure especially since there's been very little study in this area especially there.

Sure. So, the intracysternal study, so if you look at patients one thing they want to do and these patients have aneurysmal subarachnoid hemorrhage or a ruptured brain, is the first thing they want to do is secure the aneurysm and they will do that obviously for a couple ways use endovascular procedures to security aneurysm or though undergo microsurgical clipping. So, in cysternal study, what we're looking to studying and doctors all the time come to us and they say if I were a patient that I need to clear I access to see right into the area and the basal assistance underneath the brain, why couldn’t I inject the medicine directly into the basal cisterns. So that's really quote “what we're answering”. This is really customer-driven on what we're doing and so these patients would be WFNS ones and twos. They would not be eligible for the NEWTON 2 study because especially for the WFNS 2s, they would not have an external ventricular drain. The endpoint we're looking at are similar to what we did in the Phase 2 NEWTON study. So, we want to look at PK, we're going to look at obviously safety and then we're also going to look at in this population, we're going to look at the Glasgow Outcome Score extended at 90 days and compare the two sides. We're also going to be looking at rescue therapy. We're going to be looking at vasospasm and delayed cerebral ischemia. We're going to look at infarction, although these are -- we're looking at 12 subjects here. We'll also be looking at length of stay and pretty much everything that we looked at in the NEWTON study, we're just taking this to a cysternal administration. And again, this will be for those patients that if the medicine works and gets approved with external ventricular drain, this will be another option for doctors that may not have access for patients that may not be able to get this, but undergo microsurgical clipping. So that's why we're doing is really based on customer demand and we're looking at the PK safety and then we will be looking at the efficacy endpoints that we looked at in the NEWTON Phase 2 study.

Okay. Sounds good. And congrats again on all the progress.

Thank you very much. Thanks for the question.

Thank you. There are no further questions. At this time, I would like to turn the call over to Brian Leuthner for any closing remarks.

Sure. No, I just want to thank everyone for their time for turning in and for your continued support for Edge Therapeutics. So, thank you very much and have a nice day.

Ladies and gentlemen, this conference will be available for replay after 11:30 AM today through May 17 11:59 PM. You may access the remote replay system at any time by dialing 1-800-585-8367 and entering access code 7855024. International participants dial 404-537-3406. Those numbers again are 1-800-585-8367 and 404-537-3406, access code 7855024. This concludes the conference for today. Thank you for your participation. You may now disconnect at this time.