Good day ladies and gentlemen, and welcome to the Strongbridge Biopharma's Fourth Quarter and Year-end 2017 Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct the question-and-answer session and instructions will be given at that time. [Operator Instructions]. As a reminder, this call is being recorded. I'd now like to turn the conference over to your host for today Brian Davis, Chief Financial Officer. You may begin.

Thank you, operator, and good morning, everyone. We are pleased that you could join us today for Strongbridge Biopharma's fourth quarter and year-end 2017 earnings conference call. Joining me from Strongbridge this morning are Matthew Pauls, President and Chief Executive Officer; and Dr. Fred Cohen, Chief Medical Officer. Before we begin, I'd like to remind you that during this call, the company will be making forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ from the results discussed in the forward-looking statements. Reference to these risks and uncertainties are made in today's press release and disclosed in detail in the company's periodic and current event filings with the U.S. Securities and Exchange Commission. In addition, this presentation includes non-GAAP financial measures. This presentation is not intended to be a substitute for financial results presented in conformity with generally accepted accounting principles in the United States. The most directly comparable GAAP information and a reconciliation between the non-GAAP and GAAP figures are included in the company's fourth quarter and year-end 2017 earnings release, which has been furnished on Form 8-K. Investors and potential investors are encouraged to review this information. I'll now turn the call over to Matthew Pauls.

Thank you, Brian. Good morning, everyone, and thank you for joining us. For today’s call, I'll provide a high-level overview of our fourth quarter and full-year results, as well as an update on our key growth objectives as we look to 2018. I will then turn the call over to Dr. Fred Cohen, our Chief Medical Officer to discuss KEVEYIS medical activities and development plans as well as the ongoing Phase 3 clinical development program for RECORLEV. Brian Davis, our Chief Financial Officer, will then discuss the Company's fourth quarter and full-year 2017 financial results. We will then open the call up for questions. With that, let me start by saying 2017 was a defining year for Strongbridge Biopharma. On the commercial front, we executed a strong early launch for KEVEYIS with encouraging early uptake in the market that generated the company's first product revenues and drove our decision to more than double our field based team in and during the fourth quarter. On the clinical front, we completed enrollment in the pivotal Phase 3 SONICS study of RECORLEV in Cushing’s syndrome and activated additional clinical trial sites to support enrollment in the LOGICS study. Our 2017 success was driven by a number of key activities and events that position us for success in 2018 and beyond, which I'd like to take a few minutes to highlight now. Since acquiring the rights to KEVEYIS in December of 2016, we believe, we have put in place the right strategy, the right team, and the right amount of investment to achieve success. In 2017, we expanded our neuromuscular field-based team from 12 to 21 experienced sales representatives, along with the addition of three regional business directors and very importantly three patient access managers, a move that has positioned us to further reach…

Thanks, Matt, and good morning, everyone. Beginning first with KEVEYIS, in 2017 we supported the launch of KEVEYIS through a targeted medical education outreach effort that I described in detail during our last corporate update. These efforts will continue to accelerate throughout 2018 and will become increasingly publicly visible as evidenced by the recently announced presentations of new analyses of KEVEYIS clinical data at the American Academy of Neurology or AAN annual meeting in April, by Dr. Ciafaloni of the University of Rochester Medical Center, and Dr. Shieh from UCLA. You can expect this to be followed by the publication of multiple original manuscripts and additional presentations at scientific and clinical gatherings throughout the year. As a leader in Periodic Paralysis, it is important that we do all we can to help physicians in understanding and treating this disease. During our Analyst Day on April 5, our investors will have a chance to hear from a clinical expert in neuromuscular disease. Dr. Amit Sachdev from the Michigan State University. Before I turn my attention to RECORLEV, I did want to mention some of the medical function activities that will help us prepare for the launch of our newest product, MACRILEN later this year. Such activities include organizing a scientific advisory board meeting this month in conjunction with the Endocrine Society Meeting and staffing medical booths at the Endocrine Society and AACE meetings. We've already been busy communicating with key thought leaders, including those responsible for preparing Phase 3 MACRILEN study data for publication and those who treat patients with traumatic brain injury, a major risk factor for AGHD. Our investors will have a chance to hear from one of these thought leaders, Dr. Beverly Biller from the Massachusetts General Hospital at our Analyst Day on April 5. Regarding RECORLEV, we…

Thank you, Fred. I will now recap Strongbridge's sales performance for the fourth quarter and full-year 2017. In the fourth quarter KEVEYIS net product sales totaled $3 million, up 20% from the $2.5 million reported in the third quarter of 2017. The cost of goods for the fourth quarter were $500,000. Total revenues for the full-year were $7 million and cost of goods for the full-year were approximate $1.5 million. Research and development expenses were $5.1 million for the fourth quarter of 2017 compared to $4.1 million for the same period in 2016. Selling, general and administrative expenses were $10.2 million for the fourth quarter compared to $3.6 million for the same period in 2016. On a GAAP basis, basic and diluted net loss attributable to ordinary shareholders for the fourth quarter was $18.7 million or $0.47 per share compared to $16 million or $0.71 per share for the same period in 2016. On a non-GAAP basis, our basic and diluted net loss attributable to ordinary shareholders was $12.3 million or $0.31 per share for the fourth quarter compared to $6 million or $0.27 per share for the same period in 2016. We continue to maintain financial and strategic flexibility as a result of our strength in the balance sheet. We ended the fourth quarter with $57.5 million of cash and cash equivalents. In conjunction with the acquisition of MACRILEN in January of this year, we completed a public offering of ordinary shares in January and February, that resulted in net proceeds of $33.3 million. And also amended, our existing senior credit facility with CRG in January, to increase total potential borrowing from $50 million to $100 million. After adjusting for the net proceeds of the debt and equity financings completed in the first quarter of 2018 and the cost…

Thank you. [Operator Instructions] Our first question comes from Hartaj Singh of Oppenheimer. Your line is now open.

Yes. Hi. Thank you very much. I really appreciate the question. I’ve just got a couple. I will keep things really short, and then really thanks for a pretty comprehensive update. One is, just on SONICS and then LOGICS, can you just kind of walk us through really quickly the difference between SONICS and LOGICS? And then, just touch upon the patient population that you’re targeting in Cushing's disease? And my second question is on KEVEYIS. I know you keep on presenting data. There will be more data at AAN this year, and I am looking forward to that, how is this additional sort of data cuts assisting and then helping in terms of gaining more awareness in this disease area, which is really the critical step you have to overcome and then I just -- I imagine after getting patients onboard will be less of an issue. Thank you.

Thanks, Hartaj. I appreciate the questions. And I’m going to take them in reverse order, if that is okay. So let’s talk about KEVEYIS and the data cuts et cetera. A huge part of us organizing and building the PPP market similar to many analogous ultra rare, rare disease markets that have had to be built interestingly enough, Cushing's Syndrome is one that comes to mind over the last few years that has shown nice construction and growth. There are multiple things that are part of our plan to help organize the market and help physicians quite frankly practice better medicine when it comes to primary Periodic Paralysis. Clearly, the generation of new clinical data, which Fred and his team are doing a very good job is helping, especially in the academic institutional environments. We've also -- I mean, clearly around raising awareness and again organizing the market a number of key tactics that we rolled out in the second half of last year are really just starting to kind of bear fruit, so to speak, which has led to very strong trends and momentum that we're seeing here in the first quarter of 2018 around KEVEYIS. So we are excited about the momentum and the direction that we're going with KEVEYIS. And most importantly, we're really proud of the work that we're doing in the PPP community on behalf of patients and physicians and other members of the ecosystem. Regarding RECORLEV, I will have Fred take that question. Fred?

Sure. So we’ve two Phase 3 clinical studies and the first one we will be reporting out midyear, this year, that’s called SONICS. SONICS is an open-label clinical study. It consists for the primary efficacy endpoint really of just two phases. So, the first phase, patients are titrated, individualized up to a therapeutic dose as tolerated. And if they achieve that therapeutic dose, they enter what’s called the maintenance phase. It is this maintenance phase that serves as the basis for efficacy demonstration for regulatory purposes. The maintenance phase is a 6-month treatment phase. And at the end of the 6-month treatment phase we look to see whether patients who entered by virtue of having been controlled remain controlled, and that's determined by urinary free cortisol evaluation. If a patient maintains urinary free cortisol within the normal limits at the 6-month time point and did not at any time during the six months prior to that have an increase in their dose, then they would be considered a responder for the primary efficacy endpoint. And as we’ve stated previously, the study was powered to rule out a response rate overall of 20% or less. And then, the LOGICS study has a very much different design. It's randomized, placebo-controlled, double blinded, randomized-withdrawal study. So in this study patients who are on a therapeutic dose and controlled either by virtue of having completed SONICS and having been on the therapeutic dose for some period of time or having been newly established via dose titration are randomly assigned to either stay on their current regimen of RECORLEV or taken matching number of placebo tablets. And that period of time, when they’re treated either with active drug or placebo, continues for approximately 8 weeks. What we expect is that patients who stay on their active therapy will maintain a stable urinary free cortisol at the end of that time, whereas patients who are randomized to receive a placebo regimen will quickly lose their prior control. We do have rescue criteria built in. If a patient loses UFC control with or without need for rescue, then they would be considered a completer. And then, we will tally up the proportion of patients that complete by virtue of needing rescue or loss of UFC response versus not. And that’s how that study power and sample size was determined. As a reminder, we will be having an Investor and Analyst Day on April 5. Dr. Auchus will be discussing how he views potential of RECORLEV, and I will also at that point go into further detail on the studies and take questions that you might have about the populations. But just in a nutshell, the populations are broad Cushing's syndrome population is not restricted to Cushing's disease, which is a pituitary tumor. We take all comers, except for those who have Cushing's syndrome by virtue of cancer. We don't allow patients with adrenal cancer into the study.

Great. Thank you, Dr. Cohen. Thanks, Matt.

Thank you.

Thank you. Our next question comes from Alicia [indiscernible] of H.C. Wainwright. Your line is now open.

Hi. Thank you for the update and congratulations on progress on both the clinical front and the commercial front. I just had a question regarding your guidance for earnings in 2018, and how comfortable you’re with the guidance?

Yes. Thanks for that question. As I alluded to in the previous question, we have a strong confidence in the guidance range that we’ve provided. And again, just to -- I think it bears repeating that we double our field-based effort during the fourth quarter and actually exited the year with strong momentum with regard to patient referrals. And in addition, you think about for instance the late September, early October launch of our first-in-class genetic screening program that’s free for patients and their families. We’ve saw -- we’ve seen very strong uptake on that front along with a whole host of other tactics that are really critical as you organize and build rare disease markets such as peer-to-peer education. So, it also should be noted that our guidance this year is really based -- it's a demand-based, it's almost exclusively demand-based revenue range. So this is about finding patients that are in need of treatment and therapy and acquiring them and retaining them as appropriate. So, again, I think we feel very strongly based on the trends and momentum that we’re seeing in the first quarter of this year.

Great. Thanks.

You’re welcome. Thank you.

Thank you. Our next question comes from Liisa Bayko of JMP Securities. Your line is now open.

Hi. Just a follow-up on that question, not just the comfort level, but can you just maybe go through, I guess, your assumptions into getting to the $16 million to $19 million range?

Yes, Liisa. This is Brian. So in terms of the base level assumptions in terms of patients, we won't be talking about that. We wanted to really refer to the guidance in total. However, we do think if you take a look at things like what our growth rate has been from Q3 to Q4, and you extend that out, that can get you pretty easily to within that range, and you obviously Q4 we didn't have the benefit of the -- really the full sales force expansion that we undertook during that quarter. So, we're hopeful as we go through the year, that we will be able to keep revisiting that range and feel pretty good about it right now, but we will keep revisiting on a quarter-by-quarter basis.

And I think it should be noted, we used early on in the launch, the first few quarters, started forms of referrals as a guide, given the fact that we weren't giving any revenue guidance. Now that we’re -- we believe that we're going to -- what's best is to keep it very simple and straightforward. And again, we're very confident on the $16 million to $19 million revenue guidance that we provided for this year.

What kind of persistence are you seeing on the drug?

Yes. So, we haven't talked publicly about persistence. We -- early on in the launch its one of those things that it takes a few quarters, if not longer to really get your arms around what that looks like. And what we're seeing is -- we've not seen persistence adherence that is any different than what was in the Phase 3 trials, and in fact maybe a little bit better. But we -- that’s something that we continue to focus effort and resource on because the retainment component of that is -- the KEVEYIS treatment is so important to patients and physicians. So, again, not just similar to what we saw on the long-term Phase 3 trial, but a continued area of focus always.

Okay. And then what is the time to from -- the average time from kind of like prescription to a patient receiving drug in terms of the reimbursement audit and all that kind of stuff?

Yes, yes. Great question. So I will say that what we’ve said before stands, which is this is not a conversion timeframe that takes months. This is much more -- takes weeks versus months and I think it's -- that's a very important distinction, there are number of ultra-rare, ultra-orphan conditions that can take very long time. This does not take again months. It is an area that like any company in the orphan disease space, you always put effort and resource and trying to shorten that timeframe down. But again not months, more like weeks.

Okay. And then, I think just in terms of the LOGICS study, what’s kind of your -- what will be your optimal profile in coming out of that study? And how does that help you kind of there will be argument for conversion off of ketoconazole?

I will let Matt address the issue of converging in the marketplace in terms of ketoconazole. But in terms of the LOGICS study, the study is designed to sort of prove efficacy, if you will, randomized withdrawals is an ideal design for that because if you take someone that's seemingly is well-controlled and you put them on placebo and changed nothing else, if they lose control that's a very powerful argument when compared to the group that stays on the drug. And so it's basically just cementing the long-term efficacy. For people that have been on the drug for a long period of time, if they lose control, you can infer that efficacy remained for that entire time period when they were taking the drug. So we should be able to establish long-term as well as short-term confirmations of efficacy from that study. But the key factors, the key things that clinicians care about are all going to come out of the SONICS study, long-term safety, long-term efficacy demonstration, a host of very important secondary efficacy endpoints including cardiovascular risk markers, quality-of-life, depression, clinical signs and symptoms. So when we unveil the SONICS data, that is really going to tell the tale so to speak.

Yes, and Liisa, based on conversion, I think we will have -- we have plenty of time obviously to work through that. But based on our base case targeted product profile and therefore the potential data that could flow from SONICS and LOGICS. We believe, RECORLEV has the potential to be positioned as the first line first choice medicinal therapy for Cushing's syndrome patients who need medicinal treatment and therapy. So, obviously, we're very excited about midyear data revealed for SONICS and very helpful.

Thank you. Our next question comes from Justin Kim of Cantor Fitzgerald. Your line is now open.

Good morning. Thank you for taking the questions and congratulations on the sales progress. Just one on the endocrine specialist market. Could you provide a little bit of detail on the overlap between prescribers of those who may use MACRILEN and those who treat Cushing's patient?

Yes. Justin, thank you for that question. So, now to be very clear, we want to be MACRILEN to us as a standalone opportunity is progressively continues to become when we were excited when we did the deal, our excitement grows everyday above the potential. For MACRILEN, especially when you look at an area like traumatic brain injury, where currently there are not many patients with TBI's that are being assessed around AGHD and the guidelines on treating TBI's is very clearly stated from moderate to severe TBI as they should be. So excitement around MACRILEN is very exciting. Now the beautiful part about the MACRILEN acquisition is that the overlap is -- as strong or as strategically aligned as you -- we could probably ever find quite frankly as a companion to RECORLEV in the rare endocrine space. So, there are approximately between 150 and 200 pituitary centers in the United States and as you can imagine those are places where a strong proportion of Cushing’s syndrome patients are both diagnosed as well as treated, and the same thing goes for the AGHD population. There are between 5,000 and 6,000 endocrinologists in the United States. And again when you segment those and you segment by pituitary specialists, where you have approximately 1,000, 2,000 just at a specialist level the overlap is significant. So, we will be out in the rare endocrine market, hopefully with what we believe is disruptive technology or a market disruptor in MACRILEN, and be talking to and working with basically the same exact physicians that will be diagnosing and treating Cushing's syndrome. So the overlap that -- a longwinded answer that the overlap is significant.

Okay, great. And then as it relates to the MACRILEN launch, should we expect the same number that was given before of around 21 to 23? And would these numbers change following a potential positive read out with RECORLEV?

So I’m sorry that the 21 to 23 is -- you’re referring to …

[Multiple speakers] reimbursement in your organization?

Yes. So, we are currently actively recruiting for approximately 15 highly experienced, specifically rare endocrine sales representatives. So we will have approximately 15 territories and another 5 to 7 field-based folks in reimbursement as well as in a couple of other areas in a support of -- in support of roles for the launch. So that number is approximately again that's good. Yes, that there is -- I think you’re spot on there. And then, the second question, I'm sorry, can you repeat it?

Oh, just would these numbers change in terms of a positive read-out with RECORLEV sort of in anticipation?

Yes, another great question. To be determined. With a -- and timing as well as -- the SONICS data are positive. And again, as Fred mentioned earlier, we will then obviously engage with the -- with regulatory authorities about the review of those data and potential options regarding regulatory pathway. We will revisit both size and scope of the rare endocrine sales force in commercial effort. So it could increase, but to be determined.

Okay. And then I just had a last housekeeping one, potentially for Brian. Just want to know how we should think about cost of goods, it's been improving over the past couple of quarters, and just want to know what we should maybe model for 2018?

Yes, I think the experience that we had with Q4 would be something that you could think as modeling going forward that can be impacted on the KEVEYIS front as we reach certain sales level milestones on a particular quarter that’s of course good news. But otherwise standard cost of goods you can expect to look similar.

Okay, great. Thanks so much.

Yes.

Thank you. Our next question comes from Annabel Samimy of Stifel. Your line is now open.

Hi. Thanks for taking my question. Just clarify the guidance that you put out there $16 million to $19 million, given that you’re launching MACRILEN in the second quarter. Does the guidance include any of the MACRILEN sales? And if I could ask also, on KEVEYIS, can you sort of give us a little bit of color to what extend doctors are starting to use a genetic test into diagnose patients? And are you seeing, I guess, quicker on boarding after diagnosis? And then just another follow-up on KEVEYIS. Are there any observations you can share about the conversion of the patients from start to actual treatment? Is it now compressing? I know you mentioned it's weeks, you’re not giving numbers anymore, but are you seeing a positive trend in that direction? Thanks.

Thanks, Annabel for the questions. Much appreciate it. So the first question the $16 million to $19 million in 2018 revenue guidance is strictly KEVEYIS. It does not include MACRILEN and as you surely can imagine you can count on MACRILEN revenue in the second half of this year. We are not providing guidance at this time related to MACRILEN. But there will be incremental revenue from MACRILEN post launch in the second half of this year. KEVEYIS genetic testing, it's still too early. We -- there's -- obviously a delay. We launched about -- on October 1-ish or so. So the data that we get is kind of on a monthly basis and that it's -- it takes time to kind of wait through and there's a whole host of issues as you probably imagine that go along with those data to ensure that we are being treated appropriately. So we don’t the answer to that yet, but we are obviously looking very hard at it and are -- hopefully in the second half of this year we will have a much better lens into it. It's very clear just based on the numbers of genetic samples that have come in, that the attention around PPP, the interest in PPP, and clearly families and physicians wanting to know definitively around their genetic situation related to PPP is growing at very rapid pace. Lastly with regard to conversion, again, I'll just talk about -- the focus here is continuing to find ways to compress that both the front end with regard to once a new patient is identified and raises their hand, then of course to getting them on KEVEYIS. We're working like every -- most other orphan rare disease companies, we really hard with a lot of time and energy focused on continuing to shrink that down. So, overall, we continue to see KEVEYIS have great access and that we’re able to really -- patients that want and need KEVEYIS by and large at a very high percentage are getting it.

And if I could just clarify your comment when you talk about the whole host of issues that patients have once they are genetically tested. Can you just share with some of these issues are, what the steps are they need to go through to actually potentially get prescribe this drug, or get on board? And not necessarily from a logistical perspective, but just from a diagnostic and a clinical perspective what would -- where are the issues at that patients seemed to -- what are the decisions that patients need to make it actually get on treatment?

Yes. So I did clarify. My apologies on my communication. That was actually the host of issues that companies need a deal with when handling data. That's what I meant. It's not about once patients are diagnosed and move into treatment. So I want to clarify. We just -- we’re -- we like other companies are very sensitive to ensure that any and all data are handled appropriately. That’s all I meant.

Okay. Okay. And if I could just ask another question on KEVEYIS. Do you have a sense of what the average dose is now that patients are on? Is it still 125 milligram?

Yes, it's still approximately 125. So, yes, that’s correct.

Okay. And then, finally on SONICS, I seem a little bit curios about pushing the data release into mid instead of 2Q, given that it was enrolled already in 2Q '17, and I guess you should have the time lines sort of locked up at that point. Is there anything that happened in between that pushes that data out further?

Yes. Thanks for asking the question. This is purely an operational kind of pushback. I mean, this is -- the SONICS data read out is a summertime data read out that we are projecting. So just to be clear, this is not months and months. This is just to ensure that as we go through the cleaning process that we get everything buttoned down 100%, and that’s really it. That’s -- there's nothing more than that.

Thank you. And ladies and gentlemen, this does conclude our question-and-answer session. I’d now like to turn the call back over to Matthew Pauls, Chief Executive Officer for closing remarks.

Thank you everyone again for attending this morning's call. 2017 was a truly defining year for Strongbridge Biopharma. And I'm very pleased with our accomplishments and performance. We’ve many opportunities and milestones ahead in 2018, including continuing to drive KEVEYIS growth, successfully launch MACRILEN, our SONICS top line data read out midyear for RECORLEV, and delivering on our financial goals and objectives. With Strongbridge's rare focus, rare commitment and rare passion, I'm confident we can end the year as a leading rare disease company with growing revenues and potentially three viable and important rare disease products. Again, thank you for joining today's call and for your continued support.

Ladies and gentlemen, thank you for participating in today’s conference. This concludes today’s program. You may all disconnect. Everyone have a great day.