Good day and welcome to the RedHill Biopharma's Q3 2016 Financial Results and Business Highlights Conference Call. At this time, I would like to introduce to the conference RedHill CEO, Mr. Dror Ben-Asher; Mr. Micha Ben Chorin, RedHill CFO; Dr. Ira Kalfus, Medical Director; and Gilead Raday, Chief Operating Officer. Before we begin, we will read from RedHill's safe harbor statement. Please go ahead.

Thank you, Pascal. This conference call may contain projections or other forward-looking statements regarding future events or the future performance of the Company. These statements are only predictions and RedHill cannot guarantee that they will in fact occur. RedHill does not assume any obligation to update that information. Actual events, results or achievements may differ materially from what RedHill projects today. Additional information concerning factors that could cause actual events, results or achievements to materially differ from those contained in the forward-looking statements can be found in the Company's Annual Reports on Form 20-F and in its other filings with the Securities and Exchange Commission. Please go ahead Mr. Dror Ben-Asher.

Thank you Shani and to those of you who are on our call live, thank you for joining us. Today we will briefly discuss selected operational highlights and upcoming milestones in the coming months including several important data points covering our ongoing Phase III and Phase II flagship GI programs. RHB-105 for the treatment of H. pylori bacteria infection with confirmatory Phase III study expected to be initiated during the first half of 2017. RHB-104 for Crohn's disease with DSMB efficacy evaluation of the Phase III MAP US study including potential earnings cap for our earnings success in the second quarter of 2017. And BEKINDA for gastroenteritis with topline Phase III results expected mid-2017. And last, topline Phase II results in IBS-D with BEKINDA also expected mid-2017. We will be happy to answer your questions in the end of this call, but first I would like to refer to Micha, our CFO for discussion of our third quarter 2016 financial results announced earlier today.

Thank you, Dror, good morning or good afternoon everybody. I would provide a short overview of our financial results for the third quarter of 2016. In the third quarter of 2016, we did not record meaningful revenues. R&D expenses during the quarter were $7 million compared to $3.9 million in Q3 of 2015 and compared to $6 million in Q2 of 2016. The increase was mainly due to the clinical trial cost related to the ongoing Phase III MAP US study with RHB-104 for Crohn's disease and the ongoing Phase II and Phase III studies with BEKINDA, and firm preparation with several Phase I/II studies with YELIVA for multiple oncology inflammatory and gastrointestinal indication. General and administrative, and business development expenses in the third quarter of 2016 were $1.4 million compared to $700,000 in the third quarter of 2015 and compared to $1.2 million in the second quarter of 2016. The increase was mainly due to enhanced business development activities. Operational loss for the third quarter of 2016 was $8.5 million, combining the $7 million R&D and $1.4 million general and administrative, and business development. Our operational burn rate, cash burn during the third quarter of 2016 was $7.4 million compared to $3.7 million in Q3 2015 and compared to $5.7 million in Q2 of 2016. The increase was in line with our expectation and represents increasing clinical development activities. Net cash used in investment activities in the third quarter of 2016 was $10.7 million compared to net cash used by investment activity of $2.4 million in the third quarter of 2015. The increase in net cash used in investment activities was due to an increase in bank deposit and marketable securities in 2016. Our cash position as of September 30, 2016 was $40.5 million with no debt, a decrease of $7.2 million from June 30, 2016. I’ll now turn the discussion back to Dror and we'll be happy to take any questions later on. Thank you.

Thank you, Micha. As of the end of the third quarter we maintain balanced pipeline including of Phase III GI programs and several additional Phase II stage development programs. Our vision and objective is to become GI and inflammation focused specialty pharma in the United States. Selected recent highlights include the enhancement of the RHB-104 Phase III Crohn's disease program including the introduction of an option for early start for success for overwhelming efficacy expected in the second quarter of 2017. Initiation of Phase II studies with YELIVA for multiple myeloma and lever cancer, exclusive license agreement with Grupo JUSTE of Spain for the commercialization in Spain of RIZAPORT, our oral thin-film migraine drug, and filing on a national marketing authorization in Spain by Grupo JUSTE. As well as binding term sheet with Pharmatronic for the commercialization of RIZAPORT in South Korea. Moving onto selective upcoming potential milestones those include safety focused independent data and safety monitoring for DSMB meeting for the MAP US Phase III study with RHB-104 which is on track for Q4 2016, later this quarter. Topline final results from the ongoing Phase IIa CEASE-MS study with RHB-104 for multiple sclerosis also expected later this quarter. The DSMB evaluation of the MAP US Phase III with RHB-104 for Crohn’s disease as mentioned earlier with potential early start for success also in the second quarter of 2017. Initiation of a confirmatory Phase III study with RHB-105 for H. pylori infection planned for the first half of 2017. Topline results from ongoing Phase III study with BEKINDA for gastroenteritis and gastritis, GUARD study expected in May 2017. Topline results from the ongoing Phase III study with BEKINDA for IBS-D also in the US expected in mid 2017. And resubmission of RIZAPORT for migraine, the NDA expected to be filed…

[Operator Instructions] We will now take our first question from Scott Henry from ROTH Capital. Please go ahead. Your line is open.

Thank you and good morning. I was hoping to first dig in a little bit on your comments about a potential commercial presence, I guess it seems to be some optionality to that position. When would you expect to make a final decision? When could that go into effect and how should we think about that operation from a cash burn perspective? Would it be cash neutral or how should we think about that?

We are looking to continue [indiscernible]. We have not completed due diligence nor have we completed the definitive recommendation. Nor do we have the final corporate approval that are necessary, but we're looking to do it as quickly as possible ideally before the end of the year. In terms of cash flow, we're not looking to do any deal that will be a lot later. If we do not think that we can have a profitable operation, not from day one, but not long thereafter, we will not do the transaction. We're not looking to bring in any loss later.

Okay. So it may not be neutral on day one, but very soon thereafter. Fair enough. And I mean could you give any comment on the magnitude of this size, are we -- were you looking to start relatively small or a larger product, just trying to get any sense of the magnitude of this venture?

The specific transaction is not going to be of very large magnitude, but it's going to be meaningful.

Okay. Fair enough. Thank you for the color on that. Couple other questions and I guess the DSMB safety readout in the fourth quarter is probably not expected to be a huge event, since there will be no efficacy out analysis. I guess will you 8-K that when that happens, will you put out a press release. How should we look for that event?

Yes. We will issue a PR and I will defer to Ira, next to me, our medical director who will provide some color on that DSMB.

Hi, Scott. How are you? Right. So we’re probably going to just issue a PR and we'll follow that up with a filing just to announce the meeting has been held and there have been no safety -- we expect there to be no safety issues that have been identified just to confirm the findings that we expect given where we are right now in the study.

Okay. Fair enough. And then just a couple kind of accounting questions, you mentioned 40 million cash at the end of the quarter. It looks to me like that should be enough into 2018, is that a fair assumption?

We have one year ahead and bearing will go up, we expect bearing to go up to roughly 10 million on average. Q3 was 7 million, pretty much in line with previous quarters, but moving forward, we do increase bearing to go up to roughly 10 million on average, could be 9, could be a little bit more than 10, but that's what we're looking at.

Okay. Thank you for that color. And final question just a minor thing I didn't see in the press really, did you give out the shares outstanding for the quarter.

There was no change during the quarter in the shares outstanding. So it's still 127 million.

Common shares which translate into 12.7 million ADS.

Thank you. [Operator Instructions] We will now take our next question from Vernon Bernardino from FBR & Co. Please go ahead. Your line is open.

Hi, everyone. Thanks for taking my question and good morning. Good afternoon. I just wanted to ask you about RIZAPORT and Grupo JUSTE. So the commercial launch you are projecting is second half 2017. What actually are still ongoing ahead of that and again can you remind us why you think a commercial launch will need to occur second half 2017 instead of earlier?

Just to make sure, Vernon that I get your first question, right. You are asking what steps we are taking towards our commercial launch of a new product or you’re asking about RIZAPORT?

RIZAPORT.

Okay. RIZAPORT really is related to Spain. There was a marketing application that was filed in Spain. We’re looking at the end of 2017 hopefully to be on the market there. Does it answer your question?

Yes.

Your second -- again I’m not sure I understand your question, is why?

Yes, exactly why, that’s pretty much 9 to 12 months from now, right?

Yes. So the product is approved in Germany and it’s under the neutral recognition procedure. So we need to go state by state. All goes well, the reimbursement is negotiated with the government, the product is approved following the first reference state, which was Germany where we are proved already and it takes time, it’s not something that is done in an instance.

Okay. Thank you. Regarding RHB-104, just wanted to confirm the first look by the DSMB, which is going to occur this quarter, fourth quarter of 2015, is just for safety or will they be able to see any hints of efficacy although they may not un-blind themselves in a – paying debt would cause them to have any, make just any changes in this study or will they just say, RHB-104 is safe and no changes in the study at this time?

They will just be saying if it’s safe in that, just so that they’re not really being given the efficacy data.

Okay. And then you mentioned two small scale studies in Crohn's, do you have any further details what those studies entail or will they subgroup or different dosing regimens or combinations with other drugs?

So that’s still up in the air, but it will still be, RHB-104 the identical product, the question will be what the patient population that we will be studying in those that will be similar to what we have in the current study, we may have a small subset of patients that are a little bit different as far as recombinant medications.

Thank you. And then my last question, RHB-105, now the start of the confirmatory Phase III will be for example when the PK study is done and that will be first half 17, will the PK study be done at that time, and then you start or will that PK study actually be done earlier and then by the sometime the middle of 2017, this Phase III study will be initiated?

The expectation is to complete the PK study earlier in the year and then to start the confirmatory Phase III study on confirmation of that data.

Okay. So by July 1, you think you will have initiated the Phase III or no?

The expectation is to start before July 1. Thank you. [Operator Instructions] Now, there are no further questions waiting at the moment.

Thank you, Pascal and thank you to the audience. We remain available to answer any questions you may have. You will find us responsive as always. Have a great day.