Good day and welcome to the RedHill Biopharma’s Fourth Quarter and Full Year 2021 Financial Results Conference Call. All participants are in a listen-only mode. After the speakers’ presentation, there’ll be a question-and-answer session. [Operator Instructions] At this time, I would like to introduce the conference call, RedHill’s CEO, Dror Ben-Asher; Guy Goldberg, Chief Business Officer; Gilead Raday, Chief Operating Officer; Rob Jackson, Senior VP Sales & Marketing; Rick Scruggs, Chief Commercial Officer; and Micha Ben Chorin, Chief Financial Officer. We have additional senior management team members available to answer questions during the Q&A session, including; Dr. June Almenoff, Chief Medical Officer; and Dr. Mark Levitt, Chief Scientific Officer. Before we begin, we will read from RedHill’s Safe Harbor statement. Please go ahead.

Thank you, Sharon. This conference call may contain projections or other forward-looking statements regarding future events or the future performance of RedHill, including statements with respect to the business financial results, promotion and other efforts related to RedHill’s commercialization activities and the initiation planning, progress and results of RedHill’s research, manufacturing, preclinical studies, clinical trials, marketing applications and approvals, if any, including the clinical trials of opaganib and RHB-107 for the treatment of COVID-19 and RHB-204 for NTM disease. 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, performance, timing, results or commercialization activities may differ materially from what RedHill projects today. Additional information concerning factors that could cause actual events, performance, timing, results or commercialization activities to materially differ from those contained in the forward-looking statements can be found in the company’s annual report on Form 20-F filed with the SEC on March 17th, 2022, and in its other filings with the Securities and Exchange Commission. I will now turn the call to Dror Ben-Asher, RedHill’s CEO.

Thank you, Alexandra. Good day, everyone and thank you for joining our fourth quarter and full year 2021 earnings call, during which we’ll be presenting R&D commercial and financial highlights. First and foremost, we’d like to thank the entire RedHill team for their remarkable achievements in the last year. Against the pandemic backdrop, the RedHill team delivered the record revenue and first positive commercial operations contribution in the fourth quarter of 2021. A strong fourth quarter for both Talicia and Movantik coupled with disciplined cost efficiency measures and intensive out-licensing and in-licensing activities, set us up for rapid organic and non-organic growth in 2022 and beyond. Rob Jackson, who is heading our Marketing & Sales will further elaborate shortly. Turning to R&D. RedHill remains at the forefront of the global search for much needed novel oral COVID-19 therapies, particularly so given the frequent emergence of new variants such as Omicron and most recently, BA.2. Our highly capable R&D team has delivered exciting efficacy data with both opaganib and RHB-107, our variant-agnostic investigational oral novel oral candidates for the treatment of hospitalized and non-hospitalized COVID-19 patients. At the same time, our ongoing Phase 3 study with RHB-204 is the most advanced first-line standalone potential treatment for NTM infection is being accelerated. Gilead Raday, our Chief Operating Officer will elaborate about our R&D programs shortly. I will now be turning to Chief – to our Chief Business Officer, Guy Goldberg and the team for our presentation to be followed by a Q&A session.

Thank you, Dror. We’ve started off the year strongly and are poised for successful 2022 with our seasoned commercial team leading the way, we’re expecting commercial operational profitability in 2022. This would mark a major milestone for the company. We will get to this important milestone by growing revenues through our strengthened salesforce, being cost efficient and maintaining disciplined cost-control measures. We look back on 2021 with a lot of pride that what we were able to accomplish. Our commercial operations had a net positive contribution in Q4 for the first time and recorded annual and quarterly revenues of $85.8 million and $22.1 million. This success was driven by our two main revenue generating products. First, Talicia for H. pylori infection. Talicia became the most prescribed branded H. pylori therapy in December. And already, we are seeing a nice growth trajectory this year. Talicia has enormous potential for patients and is a value driver for RedHill as a company. As with almost all launches we continue to advise that it takes time to build awareness and acceptance, both with payers and also with physicians. Second, Movantik for opioid-induced constipation. Movantik prescriptions are up as well as we saw quarter-over-quarter growth. We continue to maintain a market leadership position and that PAMORA class of drugs as a whole continued to rebound. Movantik is well liked by physicians, it has great reimbursement, great efficacy and safety and great brand recognition and satisfaction. There’s still a very large and underserved OIC patient population. RedHill continues to improve Movantik’s status as best unrestricted coverage in the PAMORA class. Our cash position as of the end of 2021 was $54.2 million. We also have had successful transactions and expect to see continued success on this front in 2022. There are two recent transactions to note…

Thank you, Guy. In the following slides, I will provide a brief update on some of our leading R&D programs. Opaganib is our oral pill which is a first-in-class proprietary selective sphingosine kinase 2 inhibitor. Through inhibiting this host enzyme, opaganib exerts a dual action against COVID-19, inhibiting viral replication on the one hand, and reducing the body’s excess immune response to the infection on the other hand. Given its unique mechanism of action, opaganib is currently positioned to target advanced COVID-19 infection in hospitalized patients with moderate to severe COVID-19 pneumonia. Following the promising data from the global Phase 2/3 study in hospitalized patients, we are in ongoing regulatory discussion about the path forward in multiple territories worldwide. Opaganib development is also being continued in oncology indications with cholangiocarcinoma Phase 2 top line data expected in Q2 2022. RHB-107 is our second advancing COVID-19 oral pill candidate. RHB-107 is positioned to treat early-stage mild to moderate COVID-19 infection through targeting serine proteases, which are host enzymes involved in viral replication. We recently announced positive and promising results from part A of a Phase 2/3 study in non-hospitalized symptomatic COVID-19 patients that show [technical difficulty] potential capacity to prevent deterioration with excellent safety and tolerability. Together, opaganib and RHB-107 cover the broad spectrum of COVID-19 patients from early-stage mild patients to advanced severely ill hospitalized patients. Both products are oral pills and are not affected by viral mutations to the spike protein. As such, they are both highly promising products for tackling and merging variants of concern. The importance of our products’ capacity to address new variants of concern via our mechanism of action, which is independent of the spike protein is highlighted by a recent publication in nature which claims that the lower severity of Omicron is coincidence, and…

Thank you, Gilead and good morning. Over the next few minutes, I’m going to summarize the progress we made during the fourth quarter with our sales, marketing and market access activities, so that you can all better understand why we feel increasingly confident about where our business is heading in 2022. Before I begin, I’d like to recognize the efforts of our RedHill colleagues, especially the Field Sales Team, as we all strive to deliver consistent profitable growth. Thank you everybody at RedHill for all of your contributions. During the fourth quarter, RedHill achieved record quarterly prescription volume for both Talicia and Movantik. RedHill grew Talicia prescription volume by 25.5% over third quarter, delivering 10 point improvement in quarter-on-quarter growth. Additionally, Talicia prescription volume has now surpassed [pylori] [ph] establishing Talicia the most prescribed branded H. pylori therapy in the United States. This is strong and growing evidence that payers and prescribers increasingly recognize Talicia’s ability to overcome the combined challenges of clarithromycin resistance, H. pylori regimen tolerability and diminishing efficacy, issues that first rated prescribers and patients every day, while consuming valuable healthcare resources. Simultaneously RedHill grew Movantik prescription volume by 2.4% over the third quarter, and our fourth quarter results represented our best quarterly performance with Movantik since we acquired commercial rights from AstraZeneca in first quarter of 2020. We continue to maintain overwhelming market share with Movantik and clear market leadership of the PAMORA class. Our two lead brands are well positioned to continue these performance trends into 2022. And additionally, we continue to explore opportunities to expand our portfolio and add synergistic products that complement our current salesforce focus in the Pain and GI segments. During the fourth quarter, RedHill grew Movantik volume by 2.4% over third quarter, and that fourth quarter volume represented a 9%…

Thank you, Rob. Good morning, good afternoon everybody. RedHill is executing on consistent growth and value creation strategy, which facilitate achieving positive contribution of our commercial operations segment for the first time in Q4, and which is expected to continue to grow in 2022 and reach profitability. We have achieved another quarterly and annual record of net revenues accompanied by reduction in cash burn, which resulted in cash balance of $54.2 million as of December 31st, 2021. All these against pandemic headwind. Net revenues were $22.1 million for the fourth quarter of 2021. The third consecutive quarter of record net revenues, attributable to an increase in revenues from both Talicia, 132% growth over previous year and Movantik. We generated an annual record of $85.8 million in net revenues for 2021. The record net revenues also contributed to an annual record of non-GAAP gross margin of 53% coupled with disciplined cost control measures across the business which we are committed to continue in 2022 resulted in quarterly reduction of $6.4 million in operating expenses in Q4, following previous reduction of $5.9 million from Q2 to Q3, signaling a path towards commercial operations profitability this year. We have signed a strategic investment agreement of up to $10 million with our South Korean Partner, Kukbo, which comes on top of the recently announced $1.5 million upfront opaganib license fee and the $2 million upfront Talicia license fee from our Emirates partner, GAG. Importantly, we are in intensive discussions for additional licensing and other business transaction – transactions, potentially totaling dozens of million dollars, which together with our continued organic and non-organic growth expected in 2022 set the stage for our financial independence in the near future. I will turn our discussion back to Dror to questions.

Happy to take questions. Thank you.

Thank you. [Operator Instructions] Your first question today comes from the line of Brandon Folkes from Cantor Fitzgerald. Please go ahead. Your line is open.

Hi, thanks for taking my question. Dan, congratulations on all the progress. Maybe just firstly on opaganib. Can you just help us characterize the size of the South Korea opportunity currently? And whether yourself or your partner is going to be required to run additional trials there? And then maybe along the similar lines you know should we expect potentially more partnerships on opaganib before running any additional trials? I’d love to just get your thoughts there. And then maybe the other side of business development. In terms of bringing in additional assets, should we think of these as commercial assets? Or would you look at earlier-stage assets as well? Thank you very much.

Thank you, Brandon. I’ll answer the last question first and then refer to Gilead. So, we are looking at commercial assets. FDA approved our focus to the US, we have 120 customer-facing salespeople and we can handle additional products and capitalize on economies of scale. So the short answer is, we are looking at commercial assets that are synergistic to our commercial basket our existing one. And we are very well positioned to complete such transactions, in-licensing transaction in the coming months. We have several ongoing, we are cautiously optimistic.

Thank you, Dror. With regards to opaganib and future regulatory approaches, we are working in multiple territories worldwide, and some of them as you mentioned in Korea, there is a partner involved and we are working collaboratively to advance regulatory approaches there. In other territories, different regulations and requirements, require different approaches and we are adjusting to each territory in order to – and approaching each territory with the required dossier and plans in order to move forward as effectively as possible in every territory.

I might add about the market in South Korea, you asked about that. We have received the market analysis from our partners, we are not authorized to share unfortunately, but it’s public information that in March alone, approximately 4 million new infections happened in South Korea and we are in mid-March. So, half a month with 4 million infections. That’s a big market and a big concern. Regarding the regulatory part, the same thing, our partner has analyzed that, they will get closely with the regulatory consultants. We are supporting that we are not authorized to see their regulatory analysis, but Kukbo, our partner are optimistic. I hope this helps.

It is very helpful. Thank you very much and congratulations on all the progress.

Thank you. [Operator Instructions] Your next question comes from the line of David Hoang from SMBC. Please go ahead. Your line is open.

Hi, thanks so much for taking the questions. I had mostly a few on the commercial portfolio. So just first you know in terms of Talicia, it’s great to see the – you know the growth in quarter-over-quarter scripts. I’m just wondering, though, in terms of translation to the bottom line, I think you know it’s about 2% quarter-over-quarter revenue growth if I – you know if I did the math correctly there. And so is that – you know, do you, I guess a few questions here. Is there any change to gross to net for the product? And then do you expect sort of this – you know this relationship to persist into 20 – you know through the bulk of 2022?

Thank you, David. This is Dror, I’ll refer this to Micha, our CFO.

Thank you, David. So Talicia is growing in increased pace, which we are very happy with. So, we set up in penetration into new prescribers all the time. And we believe that this growth that you currently see, we will continue to see and even more.

Okay, great. Maybe just you know a related follow-up question. So I know you’re not – you don’t give guidance, but in terms of you know full year 2022 and you know maybe next few years just in terms of the cadence of Talicia growth? You – you know do you expect kind of a continued linear trend? Or should we expect more you know of I guess you know an inflection as we enter the second full year of Talicia sales?

Yeah it’s a good question. A lot has to do with a pandemic, because until very recently, the pandemic’s impact on prescriptions in GI generally and specifically, H. pylori has been very negative and consistent for the last two years. We are seeing a rapid improvement in access to clinics, both for patients and also for on field sales. So we do expect rapid increase and rapid improvements that will be constant. That said, perhaps our Chief Commercial Officer, Rick Scruggs would like to add some color.

Thanks, Dror. It’s a good question. We have seen in the past you know the effects of the pandemic and our ability to see healthcare providers, we have addressed that, we have initiated and created a new department in our company, it’s Customer Engagement Specialist, and they reach out to physicians who now like to be seen via video, maybe not necessarily in person. So this group is out there working with physicians in the new modality they like to be called upon. And as you’ve seen by our nice growth in fourth quarter, we’re now the number one prescribe branded product in the category and we’re moving to teach physicians, to teach healthcare providers that Talicia is the best choice. It’s better than anything that’s available to treat H. pylori. So we’re going to see that, we’ve seen the growth now in first quarter and we anticipate to have a really good year with Talicia in 2022 and beyond.

Okay, I appreciate that. And then maybe you know one last one if I may and changing the topic here to the NTM RHB-204 study. In terms of the – you know the endpoint there, I know it’s the six month sputum culture conversion. Is that – you know is that sufficient to gain a full approval there or do you expect accelerated approval with the need to do a confirmatory study down the line?

Thanks, David. We would like to add a couple of sentences about the previous question. And then I’ll refer to Gilead for the question about 204 for NTM. Micha, please.

Hi, David this is again, Micha here. Just wanted to add with respect to your previous question, that we saw a growth of 17% on Talicia revenues between Q4 and Q3 of this year, which is substantial.

Thank you. Regarding NTM and the study, yes, you’re correct, we expect the primary endpoint at six months, where we’re looking at sputum culture conversion and a co-primary of patient reported outcomes to potentially support accelerated approval. We’ve continued evaluation of the longer-term treatment of up to 12 months post-conversion to eventually support the full dossier.

Okay. Thanks for taking the questions.

Thank you.

Thank you. [Operator Instructions] Your next question comes from the line of Boobalan Pachaiyappa [sic - Boobalan Pachaiyappan] from H.C. Wainwright. Please go ahead. Your line is open.

Hi, this is Boobalan. Thanks for taking my questions and congrats on all the great progress. So few from us. Firstly, with respect to opaganib for COVID-19, have you conducted any European-based market research study regarding potential positioning of opaganib?

Thank you. We see COVID-19 as a global evolving pandemic highly dynamic. And we’re doing market research and evaluations across the various territories. Our Phase 2/3 study was global and we are approaching markets and regulators on a global basis. We do expect the market for COVID-19 worldwide to continue to be highly requiring new therapies. And as we see the emerging expected revenues of products that have been used and received emergency uses or approvals in this market, we see these very, very high and growing and we anticipate that to continue.

Might add, Boobalan and thank you for the question. That if we look at the data from the last couple of weeks, we’re seeing very high numbers and rapidly increasing actually in Germany, in France, in the UK, many other countries. So, this is not going away unfortunately. And with BA.2 and future variants, this is likely to remain a very significant medical need and the resulting commercial market.

Thanks for the color. With respect to RHB-107 for COVID obviously. So the Phase 2 data is pretty intriguing. So, what are your preliminary thoughts regarding the Phase 3 study design? And will you consider including an active comparator drug in your future Phase 3?

Thank you. Yes, we are still in the process of completing the analysis of Part A, which as you mentioned and we disclosed, provided highly promising results despite being a small study in terms of the efficacy that is obtained. We are planning next steps and evaluating the next steps with FDA. We will approach FDA, present the full data and agree with them on next steps. We see the next steps to continue studying the product in a large study in non-hospitalized patients with mild-to-moderate symptoms. And we expect to be able to replicate the very promising results. And given the very attractive profile of upamostat we think this could be a very important tool in treating the mild-to-moderate patients with COVID-19.

As an add-on on the same topic. Are you open to partner – partnering for the Phase 3 trial or future Phase 3 trial? Are you planning to go solo?

Yes, we are having discussions. The strong results that were achieved in the study attracted a lot of attention. And this is not only from potential pharma partners, this is also government and other grants. So, when it comes to a large Phase 3, which we are confident about, we are confident it will be funded by external sources, be it industry or other.

Switching gears a little bit. Can you help frame the expectations for your upcoming cholangiocarcinoma study readout which is expected in second quarter and what kind of efficacy signals would generate investor confidence in this program?

Thank you. We have already disclosed that we have observed a signal of activity with patients which are very advanced after two lines of failing therapy in cholangiocarcinoma with nothing available to them. And this is a very promising signal of activity. We will complete analysis over the coming months and present the data and based on that, we will consider next steps – possibly refining the patient population targets using biomarkers is a very possible path. But again, overall, the clinicians who are very familiar with these dire condition of patients are optimistic that the signal is an important one for continuing developments of the program.

Right. One final from me if I may. How do you expect the R&D cost evolve for the remaining – for the year 2022?

So as can be seen in our press release from today, we are targeting a cost reduction program, in which, we will enhance contribution and profitability to the maximum extent possible. So, we are expecting relatively a low investment in research and development during this year 2022.

All right. Thanks so much for taking my questions.

Thank you. I will now hand the call back to you.

Thank you, Sharon and thanks everybody for joining the call. Please reach out to us if you have any additional questions. Keep safe and have a pleasant day.

Thank you. That does conclude today’s conference call. Thank you for participating. You may all disconnect.