Good afternoon ladies and gentlemen and welcome to the Retrophin Third Quarter Financial Results and Corporate Update Call. At this time, all participants are in a listen-only mode. Later, there will be a question-and-answer session and instructions will follow at that time. [Operator Instructions] And as a reminder, this conference call is being recorded. I would now like to turn the call over to your host for today Mr. Chris Cline.

Great, thank you, Kirby. Good afternoon everyone and welcome to Retrophin third quarter 2019 financial results and corporate update call. Today's call will be led by our Chief Executive Officer, Dr. Eric Dube. Eric will be joined for the prepared remarks by our Chief Medical Officer, Dr. Noah Rosenberg and our Chief Financial Officer, Laura Clague. Dr. Bill Rote, our Senior Vice President of Research and Development will join us for the Q&A session. Before we begin, I'd like to remind everyone that statements made during this call regarding matters that are not historical facts are forward-looking statements within the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties, and assumptions that may cause actual results, performance, and achievements to differ materially from those expressed or implied by the statements. Please see the forward-looking statement disclaimer on the company's press release issued earlier today as well as the risk factors section in our Form 10-Q and 10-K filed with the SEC. In addition any forward-looking statements represent our views only as of the date such statements are made October 30th, 2019 and Retrophin specifically disclaims any obligation to update such statements to reflect future information, events, or circumstances. With that, let me now turn the call over to Eric. Eric?

Thank you, Chris and good afternoon everyone. We are continuing to fulfill our important mission of identifying, developing, and delivering life changing therapies to people living with rare disease. During the third quarter, our teams had solid execution across our pivotal development programs and the commercial portfolio. With the continued advancement of the sparsentan Phase 3 programs, we made progress towards our goal of creating transformational growth in the coming years. Patients with FSGS and IgA nephropathy are at a high risk of end stage renal disease with no approved treatment options. So, we continue to act with a great sense of urgency. I am pleased with the execution on both of our Phase 3 programs and the pivotal DUPLEX and Protect studies remain on track to meet their timelines for topline data. On our last quarterly call, we talked about the implementation of initiatives to support enrollment beyond the key centers of excellence for our pivotal DUPLEX Study in FSGS. We now have more than 200 sites open in the DUPLEX Study. Most importantly, our site engagement and recruitment efforts have resulted in positive momentum for enrollment in the study. We have also seen a positive change in trajectory for screening, which as a leading indicator for enrollment, gives us confidence in our ability to achieve our targets. Our PROTECT study in IgA nephropathy, s maintaining its robust support from the community and we are seeing a continuation of strong enrollment trends there as well. If approved, sparsentan has the potential to expand the addressable population for our treatments to more than 100,000 patients in the U.S. and Europe. On the commercial side of the business, we continued our track record of delivering year-over-year organic growth in net product sales. We saw new patients initiate treatment and our portfolio…

Thank you, Eric, and good afternoon. Our clinical development teams have made solid progress, advancing our pivotal trials, evaluating Sparsentan in FSGS and IgA nephropathy, both of these rare kidney disorders are characterized by progressive loss of functional familiar tissue, defect in the filter function and subsequent proteinuria. It is anticipated that 40% to 50% of these patients diagnosed with FSGS in IgA nephropathy will progress to renal failure within 10 years to 20 years, requiring dialysis or transplantation. This decline in renal function ultimately leads to a remarkable reduction in quality of life and life expectancy. With no FDA or EMA approved pharmacologic treatments indicator for these disorders, there is a significant unmet need to improve outcomes and delay progression to end stage renal disease for patients. Our goal with the ongoing pivotal programs in FSGS and IgA nephropathy is ultimately deliver Sparsentan as a first-in-class therapy, to shape the treatment paradigm for patients with these rare kidney disorders. Sparsentan unique dual mechanism and selectivity profile blocks both, angiotensin and endothelin receptors, which once stimulated are believed to lead to detrimental effects on renal structure when compared irbesartan treated patients with FSGS. This outcome gave us great confidence in Sparsentan potential and the ability to demonstrate a clinically meaningful reduction in proteinuria after 36 weeks of treatment in our Phase III duplex and protect studies. I am pleased to report, that our clinical and operations teams have made meaningful progress on our initiatives to drive enrollment and continued quality in both studies. Most recently, we completed our second scheduled independent Data Monitoring Committee meeting for both DUPLEX and PROTECT and the DMC recommended to proceed as planned with both studies. For the DUPLEX study in FSGS, we now have more than 200 sites open for screening, which is an…

Thank you, Noah. During the third quarter net product sales from our commercial portfolio grew $44.4 million, a 9% increase over the same period in 2018. For the first nine months of 2019, we reported net product sales of $128.7 million and we remain on track to reach our guided growth for the full year. We reported a GAAP net loss of $36.5 million for the third quarter of 2019. After adjusting for non-cash expenses and income tax, we reported a non-GAAP net loss of $28.2 million. On a GAAP basis, R&D expenses were $33.2 million for the third quarter of 2019. The increase over the same period in 2018 is largely attributable to higher expenses to support our clinical and product development efforts. On an adjusted basis, R&D expenses were $31.2 million for the third quarter. Relevant non-cash expenses for the third quarter included 2 million of stock-based compensation and amortization. Selling, general and administrative expenses for the quarter were $29.8 million. The increase over the same period in 2018 is largely attributable to increased compensation expense and higher professional fees. On an adjusted basis non-GAAP, SG&A expenses for the third quarter were $22.3 million. Significant non-cash adjustments for the quarter consisted of $7.5 million in stock-based compensation and depreciation and amortization. Consistent with our previous guidance related to the discontinuation of the joint development program with CNSA-001, during the period we incurred a 15 million impairment of a long-term investment associated with that program. Looking ahead, we anticipate operating expenses in the fourth quarter will be similar to what we reported for this quarter, as DUPLEX and PROTECT activities continue to accelerate and as we work to complete the fourth study closure. For 2020, we anticipate that operating expenses will decline from current levels. We expect to see a modest decrease in SG&A from what we anticipate reporting for the full year of 2019, and we anticipate our overall R&D spend in 2020, it will decline incrementally from our current state given the discontinuation of the fosmetpantotenate program. We are maintaining a disciplined approach to our investments in our balance sheet remains quite strong with $407 million of cash and cash equivalents as of September 30, 2019. Importantly, we anticipate this cash balance will allow us to invest in sparsentan growth potential and support our current level of operations beyond the planned interim readout of the DUPLEX study. Let me now turn the call back to Eric for his closing remarks. Eric?

Thank you, Laura. As you heard from the team's remarks, we are building positive momentum and are well-positioned for advancement towards our vision. Following the decision during the quarter to discontinue the fosmetpantotenate program, we've realigned our organization to maximize our chances of success and to focus on our strengths and the key priorities that are expected to create the greatest value for patients and our shareholders. As we move ahead with clear purpose, we are going to leverage our strong financial foundation and focus on optimizing our transformational value through the execution of four key priorities. We will drive the successful enrollment of our pivotal DUPLEX and PROTECT studies as quickly as possible, while maintaining the strong quality and study conduct we are seeing today. We will explore work to evaluate additional development opportunities for sparsentan may have additional potential for patients. We will continue building upon our strong commercial teams capabilities to realize the full potential of our approved product portfolio and to ultimately prepare for a successful launch of sparsentan. And finally, we will prioritize business development to diversify our growth potential and remain disciplined in our focus on opportunities that we believe can create meaningful value in the near-term. Our team is incredibly dedicated and talented employees at Retrophin are in position to execute, and we look forward to sharing our progress on each of these priorities as we move throughout the balance of 2019 and into 2020. Now, let me turn the call back over to Chris to open it up for questions. Chris.

Great, thanks Eric. Kirby, can we go ahead and open up the lines for Q&A please?

Absolutely. [Operator Instructions] We now have a couple of question. First question comes from the line of Joseph Schwartz of SVB Leerink. Joseph your line is now open.

Great, thanks very much and congrats on the progress. I was wondering if you've detected any difference in the type of patients in terms of like their type of FSGS or severity or other baseline characteristics of those that are being enrolled now from non-centers of excellence and being driven towards referrals sites with those at the referral sites where you were primarily getting patients earlier is there any difference in terms of the baseline characteristics or anything else?

Joe thanks for the question. I think importantly, we see consistency across the protocol for the studies and ultimately what we're looking to do is to replicate and strengthen the results that we saw from the DUET Study in Phase 2. I'll ask Noah to give his thoughts on what we're seeing thus far.

Yes, no, that's a great question, Joe. Let me just say that we are currently blinded to the data set and we've got -- obviously we just had our Data Monitoring Committee. And so we don't -- right, at this stage, we haven't broken the data out by community versus the main centers, but that is something that we certainly will look at in the future. And I think the important point being that we had a DMC meeting recently and they've been able to look at a number of different parameters, we have as well in a blinded level and we can say that overall the data are consistent with what we've seen in the past with the DUET. I think that's probably as much as I can say.

Okay, that's helpful. Thanks. And then on Thiola 2.0, what aspects of the new product profile are resonating the most in the market? Are there are any surprises or any notable points and learnings that you found that can inform the launch going forward? And then you mentioned that some patients are coming back out of the woodwork, can you give us a sense of what that opportunity would represent if you could somehow capture all those patients who were previously lost to Thiola 1.0?

Sure. Thanks Joe. I think overall with regard to the aspects of Thiola EC, we're hearing that patients are pleased with the flexibility of being able to take the therapy with or without food. And that was a very important aspect that we heard in the development of the product as well as the market research that we did with patients and physicians before the launch. We also have seen that the average number of pills that a patient takes per day has been reduced by seven for those patients that are on Thiola EC. And we know that for many patients pill burden can be a challenge. That's anecdotally, what we're hearing thus far. Again, it's early in the launch. And with regard to as, we move forward the important thing is the continued growth that we expect to see in our commercial portfolio. And our focus has been on the identification of new patients given that the majority of patients with Cystinuria are not currently treated. And for those patients that discontinued therapy in the past, it's a proportion of the Thiola patients that over time we think it's a meaningful segment of patients that we want to engage, but broadly we're focused on them and new patients to continue the growth that we've seen over the last few years. And that's largely what our teams focused on now.

Okay. Great. Thanks again for taking my questions.

Thanks, Joe.

Your next question comes from the line of Liisa Bayko of JMP Securities. Liisa, your line is now open.

Hi. This is John on for Liisa. Just a couple of quick questions on DUPLEX, I'm wondering how many patients have you enrolled so far. And of the 200 sites enrolling how many would you could consider as centers of excellence?

John thanks for the question. So we've not commented on the number of patients that have enrolled. What we have continued to provide guidance on is the timeline for reporting of headline data and we are very pleased with the progress of the study to be able to achieve for DUPLEX that readout in the first half of 2021. And I'll hand it over to Noah to answer the rest of your questions.

Yeah, I think the question on centers of excellent, the majority of these sites would be considered centers of excellence. And what I was really referencing was there are about 300 academic sites. The two clinical research in United States most of which are academic. There are – there was a percentage that aren't – and then there is about 8,700 community Nephrology centers. And the key really for this program one of the key learning's we've had is connecting up these centers of excellence over to the community Nephrology centers on the registries to broaden out the foundation of the sites. If that makes sense.

That's helpful. And then on a blended basis, do you have any color on how many patients are able pay for higher dose and how many you're titrating down to the Florida to make dose?

We don't have that – we haven't looked at that data at this stage. It's something that would be accessible to the Data Monitoring Committee. Let me rephrase that. We actually can see that on a blinded basis, but we haven't commented on that.

And just one quick clarification question for Laura, I believe you said you expect OpEx in 4Q to be somewhere to this quarter. Are you saying just SG&A and R&D or are you also including the 50 million impairment asset? We think in total OpEx or SG&A and R&D. Thanks.

Yeah, we're really just talking about SG&A and R&D that one-time impairment you kind of have to carve that out. So, Q3 versus Q4 levels will be similar for the line item SG&A in the line item of R&D.

Thanks, again.

Thanks, John.

Your next question comes from the line of Maury Raycroft from Jefferies. Maury, your line is now open.

Hi, everyone. Congrats on the progress and thanks for taking my questions. To start for Thiola EC, you mentioned 80% being covered by payers. Is that a number that can be improved upon going forward?

Maury thanks for the question. So, the number we're referring to is the number of claims that we've received for Thiola EC prescriptions that have been adjudicated and approved by payers. Certainly, you would expect to see continued evolution of that. I think what we're looking for us to ensure that there is no difference really in the access for Thiola and Thiola EC. I think, we're on track to be able to achieve that and in prior launches that I've been familiar with as well as looking at recent assessments of launches having 80 plus percent of lives covered or prescriptions adjudicated in the first 90 days is a very very strong sign of access for patients.

Got it. And you mentioned that the date of the DMC size consistent with data from DUET. I guess, can you provide any more clarity there and whether you're referring to proteinuria or something else?

Yes I guess, what I'm just saying Maury that the data that we're seeing, the baseline data that we're seeing coming in, is consistent with what we've seen from what we saw on DUET. I guess it's more of a clarification there. And I'll also say, in terms of the 800 milligram, 400 milligrams dose question, I can add a little bit of color. I mean, I think, the key messages, we're really not seeing any significant safety issues or safety concerns overall, and we can get a look at that obviously on a blinded basis. So, I think that's the most important message at this stage in the study. And it's also supported by the green light from the Data Monitoring Committee as well.

Got it. That’s helpful. And then for DUPLEX for the positive change in trajectory that for screening patients that you're seeing, are you referring to an improvement in the screening failure rate. And if so what are you doing differently on this front or is the screening improvement just a result of having more sites?

Yes, that's a really good question. Let me sort of high level talk about the confidence in the timelines and what we're doing to improve the trajectory here. So, I think that's really the subtext your question. We are and I am confident the timelines -- part of that is based on as leaders in FSGS. As you know, we realize this is an underserved area, both from an awareness standpoint and a clinical research standpoint. I mean, from DUET, what we learned was, there really are some key pieces that you need to put in place to establish what is the largest study in DUPLEX right in this field. So, setting up those challenges, the way that we've addressed it, I think this is why we have the confidence and we're seeing the inflection is getting a solid foundation of sites, getting the right sites in place, ensuring that there is active engagement with those sites, both at a physician and a community level and that takes time, Maury. As you know, to get that engagement, sometimes its engagement, its re-engagement, ensuring that both the patients are aware of the study and the physicians are aware of the importance of study. And I think that's the team has done a really good job there. And then extending that out to the connectivity to the community sites we referred to and to their registries. And actually, what that's led to, is an increase in enrollment and increase in screens. And I would -- I can just say that, we've definitely seen the screen fill rate come down somewhat and I think that is probably because as the sites are learning and train, they develop better screening techniques and they get the right patients in-house. So, I think it's really a combination of those but the main message is the increase in recruitment has really given us confidence in our ability to execute in the first half of -- and get the data and the first half of 2021.

Got it. That’s very helpful. Thanks for taking my questions.

Thanks, Maury

And your next question comes from the line of Gena Wang from Barclays. Gena, your line is now open.

Thank you. This is Gena. Thank you for taking my questions. Maybe just one follow the enrollment question, just wondering what portion of 190 patients have already enrolled.

Thank you, Gena for your question. So we don't comment on the enrollment rate and the progress that we've seen. Again our focus in the guidance is on the timeline for data readout. So we are absolutely on track to be able to deliver the headline data in the first half of 2021.

Okay. So is it fair to say you expect enrollment of 490 patients by say mid-2020 in order to be able to deliver the data?

Yes I think that's absolutely the case. If you think about the 36 weeks that are required in study and then the time to be able to clean and analyze the data.

Okay. And then another question regarding Thiola Pharma for this quarter $24.4 million how much is from EC and how much is from first generation?

Thank you for the question Gena. So we are reporting the combined revenue for both of those brands we're not breaking that out. At this point it's early in the launch we may consider doing that reporting out later. But at this point it's not something that we're in a position to do.

So is it fair to say like majority of the revenue is still from the first generation products?

Again that level of detail we're not really in a position to do. If you think about for quarter three that reflects only two months of the launch. And as you know with many launches there is a ramp up period. So you can imagine that it's the majority of it's with Thiola but I don't want to set a precedent where we're starting to break out those especially early in launch.

Okay. Well, thank you for taking my question.

Thanks, Gena.

Your next question comes from the line of Do Kim of BMO Capital Markets. Sir, your line is now open.

Hi this is Jason [ph] on for Do, thanks for taking my questions and congrats on the quarter. So this is a very broad-based general catch all question, how do you think about going forward how do you think about profitability versus acquiring pipeline assets and just your general thoughts about your business development strategy. Thank you.

So I'd say our strategy really remains in the priorities that we outlined of continuing the execution of our Sparsentan development programs as our top priority. A business development certainly is an important one as well. We do want to continue to diversify our portfolio and our pipeline. We'll continue to look opportunistically within the rare and ultra-rare spaces. Importantly we don't feel pressured to do a deal and we want to make sure that any deal that we do and the approach that we take is very disciplined. We do think that there are opportunities in the near-term for value creation in bringing assets in and we want to make sure that any deal that we do bring in would leverage the Retrophin strength and capabilities and very much be aligned in our strategy of focusing on rare and ultra-rare with that kind of broad set of therapeutic areas. I hope that gives you a better sense of what we're thinking about for business development, we're sensitive to the use of our stock at this current price. And we believe that the cash position gives us the flexibility and looking at assets to bring in, and certainly in a way to not compromise our ability to execute exquisitely on the sparsentan programs.

Thank you. That's great. Just a quick follow-up. In terms of the assets, are you looking for late-stage, early-stage commercial?

Yeah, it's a great question. I mean, part of what we want to do opportunistically is look broad, but if you think about where the strength of this organization lie, I would say it's more in the late-stage development in commercialization aspect. We have the opportunity to bring those in without distracting or having to invest significantly to build new capabilities. And that's probably where we will prioritize most of our efforts.

Perfect. Thank you so much.

Thanks, Jason.

And your next question comes from the line of Christopher Marai of Nomura Instinet. Christopher, your line is now open.

Great. Hi. Thanks for taking the question. I wanted to ask about THIOLA EC launch, maybe could you comment on any positive impact you might be seeing also on just THIOLA scripts or patients now moving directly to THIOLA EC? And then secondarily, I think if I recall correctly you were not looking to perform a sort of switched type launch where you move THIOLA patients over to THIOLA EC, any indications at this point in the launch that you may want to pursue such a strategy or is that potentially panning out organically? I have a follow-up.

Yeah. Thank you, Chris for your questions. First, with regard to new patients. We are seeing the continued growth of new patients treated for cystinuria and we're very pleased with that progress including new patients coming on to THIOLA EC. I think part of what we're looking at as early signs of the launch is, is there patient demand? And the patient demand might come not just from new patients who learn about the treatment options, but also for existing patients who may look to improve certain aspects of the profile and those are two sources of THIOLA EC up that we have seen. In terms of a switch strategy that's not the approach. Our strategy here for our commercial portfolio is continued growth. That growth is going to come from new patient acquisition, largely and then it will be bolstered by patients that may have discontinued THIOLA coming back to therapy likely on THIOLA EC given the improved profile for those patients. That's the approach that we're taking and we're pleased that we're in line with delivering our overall growth for this year and setting us up for continued growth next year.

Okay. Thank you. And then just with respect to your ongoing R&D collaborations, the NGLY1 ALGS. Any update for us with respect to those and potential IND filings in the near term maybe in 2020? Thank you.

Yes. Thank you Chris for that. I'll ask Bill Rote to give his comments on the progress we've seen with those collaborations.

Certainly. Thanks for the question, Chris. Your last question there any IND filings in 2020. The answer is no. The collaborations aren’t at a maturity stage to be at a point where we're triggering events. We have had a lot of production on the NGLY1 collaboration with NCATS and broadly we find both collaborations to be very productive and very efficient way to leverage the teams at NIH as well as the efficacy organization and bringing patients into the early stages and actually the earlier stages of discovery research. The Alagille project, just getting off the ground and more of an early stage, so we'll have more on that in the future, but that's our current status.

I think it serves as a very important model for us to explore to be very efficient with their resources, but be able to go into areas of high unmet need and potential innovation from a scientific standpoint.

Absolutely. And I guess short of any IND filings, do you expect any material work to arise from your collaborations that you'll be able to share within the next 12 months regarding these programs? Points that might help the derisk the clinical path forward?

Well, I think with discovery research, it's difficult to predict where it's going to be over the next 12-month period. But certainly if those events occur, we would come back and we don't.

Great. Thank you.

Thanks Chris.

And your next question comes from the line of Michelle Gilson of Canaccord Genuity. Michelle, your line is now open.

Hi, thank you for taking my question. Can you maybe talk a little bit about the focus area for the DMC and what it takes for them to recommend proceeding as planned? And then maybe from a high level on sparsentan, can you just talk about some of the key areas that you're looking at when you think of bringing Sparsentan into additional rare kidney indication?

Sure. Thank you, Michelle. I'll ask Noah to take those two questions.

Sure. So, the DMC is generally focused -- has a primary focus on safety, ensuring that looking carefully at adverse events, SAEs, making sure there are no signals -- concerning signals. And as I mentioned earlier, they are unblinded. We don't actually have an opportunity to see what they look at. It's really between the DMC and the blinded statistician, they communicate. And so it's actually pretty encouraging when you get the green light because they're really getting a full dataset. They can ask for anything and everything and they often do. And that was really a good signal for us for both Protect and DUPLEX, of course, not surprising given that we've got to do what data set and we've got a large Phase 3 data set to draw from and clearly, you've seen some good safety from that study, which I know you're familiar with as well. So, I think that's -- probably the best way to summarize the DMC discussion. From a long-term outlook on sparsentan, we did allude to in the script and at ASM, we have upcoming on Alport. From additional indications, it's something that we're not ready to commit to at this stage we certainly have encouraging data from the mouse model, in terms of proven of each kidney function, as well as hearing which is an important finding in patients and they've told us that that's something to definitely look at in terms of endpoints, but we're really not ready to commit. We're talking to the experts and doing our valuation. I will say that, in general Michelle when we talk to the advisors and again this is coming from our KOLs because of the common pathway of both and they'll fill in an angiotensin with regard to disease. I mean, it does open up other opportunities broader opportunities beyond FSGS and IgA even Alport and these are things that we are looking at from a feasibility standpoint longer term. And there are some other things we're looking at too, which when we're comfortable and we've got more clarity on, we certainly will come back and share with you. It's a great question.

Okay. Thank you.

Thanks, Michelle.

And your last question comes from the line of Tim Lugo from William Blair. Tim, your line is now open.

Hey, this is Lachlan [ph] for Tim. Thanks for taking the questions. I was just wondering if you could talk a little on how you're managing the risk of fluid retention in the Sparsentan trials that are ongoing? And whether you have any more or expect any more data-monitoring committees before the interim readout in DUPLEX?

I think -- great question. The best way I think to answer that question is looking at DUET, where we did see some a bit of fluid retention, which was managed well with diuretics and we did not see heart failure there. And so that was extremely encouraging, because as you know I think the backdrop of the question is there have been some increases in heart failure fluid retention with the class. We're not seeing that, specifically within our DUET days that we looked at that very carefully. And I think let me add a couple of other points here Lachlan. First of all, the ability to look at both studies together, gives the DMC greater kind of data and power to identify if there are signals emerging. So, it is encouraging that they're continuing with the progression of the study. But they're also based on the approach with DUET, some aspects of the protocol to be able to manage adverse events and fluid retention.

And I think that's right, Eric. I think the key really is you're going to see some fluid retention with these drugs. The question is, is it manageable, right? Is it something that the PIs can manage and I think we've heard that with diuretic use, they're able to manage these patients and continue them on this important therapy.

Okay, great. Thank you. And just on the Data Monitoring Committee, are there any more planned before the interim of DUPLEX?

There are. I can say that there are plans future DMC meetings. We haven't disclosed the timing of those meetings but, when they occur as a courtesy of course, we will certainly update this group and let you know what the findings are.

Great. Thank you.

Great. Thank you for the question.

There are no further questions at this time. I would like to turn it back to Mr. Cline.

Great, thank you, Kirby. Thank you everybody for joining us today. This concludes our call. We look forward to updating you in the near future on our progress.

Thank you, so much our presenters and to everyone who participated and you have a great day.