Athenex, Inc.

Fourth Quarter and Fiscal 2018 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn your conference over to your host, Tim McCarthy, with LifeSci Advisors. Thank you. You may begin.

Good morning and thank you for joining our conference call as we provide an update on the finance business as well as a review of financial results for the fourth quarter and full year 2018. The news release detailing the fourth quarter results crossed the wire earlier this morning and is available on the company's website. A replay of this call will also be archived on the company website. During the course of this conference call, the company will be making projections or forward-looking statements regarding future events including statements about financial and clinical milestones anticipated in fiscal year 2019 and beyond. We encourage you to review the company's past and future filings with the SEC, which identify specific factors that may cause the actual results or events to differ materially from those described in the forward-looking statements. You can find our SEC filings in the EDGAR databases at SEC.gov or in the investor relations section at our website at athenx.com. This morning, we are joined by Dr. Johnson Lau, Chief Executive Officer, Jeff Yorden, Chief Operating Officer, Dr. Rudolph Kwon, Chief Medical Officer, and Randall Zee, Chief Financial Officer, and several other executives who will be available to answer questions after the prepared remarks. With that, I'll turn the call over to Johnson for introductory comments.

Thank you, Tim, and good morning, everyone. We're still early in 2019. but this is already shaping up to be another very exciting year for Apnex, with potential for further transformation of the company and value creation. We have important Phase 3 clinical announcements from both our Oral Discovery and Sarcinase programs. Our pipeline is advancing and continues to generate very promising data that validates our technology. Beginning with Oral Discovery, the most important milestone for Afinex in 2019 will most likely be the planned announcement of top-line results from our ongoing phase 3 trial for orexo for the treatment of metastatic breast cancer. We announced that we reached the target enrollment of 360 patients in early January and the results should be available mid-year. We believe that a successful outcome will serve as a major validation for our technology and will potentially set us on a path to commercialize our first oral discovery product. Besides breast cancer, we are testing OREXO in other indications and in combination with targeted therapy and immunotherapy. We are also making important progress in our other oral discovery programs. The data we've generated so far provide additional evidence that our technology works and is capable of delivering various chemotherapy agents orally. Importantly, we believe that if we demonstrate the safety and effectiveness of our oral absorption technology with ORAXO, we'll be able to advance the other drug candidates paired with this technology in a more efficient and expedited development process. We have submitted a number of abstracts on our ORAXO program and other pipeline programs to ASCO the American Society of Clinical Oncology meeting. And in fact, this year's ASCO will probably be the busiest one that a phoenix had today. We will be presenting data on six of our products at this meeting. The second phase three clinical announcement this year, which occurred just over a week ago at the beginning of March, was the presentation of positive top line results from our two phase three studies of case two 391 ointment in the treatment of actinic keratosis. The results were featured in a late-breaking oral presentation at the 2019 American Academy of Dermatology annual meeting in Washington, D.C. These studies both met their primary endpoints with statistical significance, demonstrating excellent activity for 391 in the treatment of actinic keratosis on the face or scalp. The safety profile of this product is excellent. It has been shown to be well tolerated and compliance rate was over 99%. We believe that, once approved, this will serve to differentiate 391 from existing treatments. Our medical officer, Dr. Rudolph Kwan, will provide you with details of the results, but suffice to say This product has demonstrated what we believe to be a very competitive efficacy and safety profile in the clinic. We are commercializing this product in collaboration with Emerald. We think that Emerald is the ideal partner. They are the one that leads the independent dermatology companies in the US and Europe and they are leader in the AK market. They have recently increased their U.S. footprint by acquiring the dermatology assets of Allergan in the U.S. The economics of this partnership are very favorable to Affinex, with development and sales milestone payments that could potentially be in the hundreds of millions of dollars in addition to commercial royalties. I want to mention briefly a strategic agreement that was signed with Chongqing Jingdong Pharmaceutical in December 2019 to license and commercialize CAKES2-391 in China. You probably have seen our announcement last week that we have decided not to proceed with this collaboration and have regained the rights to commercialize CAKES2-391 in Mingling, China. The excellent profile of CAKES2-391 in adenocaritosis and the additional dermatology and oncology indications that we are planning will better position us to capture the market opportunity in China. Full-year revenue for 2018 was $89.1 million, up significantly from the $38 million we reported in 2017. Although this was below our most recent guidance, the shortfall was due to us not receiving an expected licensing fee of $14.5 million from Chongqing Jingdong Pharmaceutical at the end of the year. Importantly, Our operating business continues to perform well. Reproduct sales up 56% year-over-year. Our CFO, Mr. Randall Zee, will expand on our financials as well as provide update guidance for 2019. I will now turn the call over to our Chief Medical Officer, Dr. Rudolph Kwan, to provide you with an update on our clinical pipeline.