Albireo Pharma, Inc.

Paul Bavier - Corporate Secretary and General Counsel Errol De Souza - President and CEO Gerard Michel - VP, Corporate Development and CFO Alan Krasner - CMO

Jason Butler - JMP Securities Matt Kaplan - Ladenburg Thalmann Marc Stutman - Trimark

Thank you Errol. Biodel reported a net loss for the three months ended September 30, 2013 of $815,000 or $0.04 per share of common stock.

Biodel did not recognize any revenue during the three months ended September 30, 2013. At the end of the quarter Biodel had cash and cash equivalents of $39.8 million and 21.1 million shares of common stock outstanding.

That concludes our prepared remarks. Now, we’d like the operator to open the call to your questions.

So, just on BIOD-123, obviously you are looking for feedback from FDA next year. Is there any scenario here which pushes you towards needing to wait for a partner versus any scenario that enables you to go alone on this program?

Jason, we look at the feedback from the FDA as one of the key components for us in terms of enabling up offering strategies. In order to maximize the value of this product through a partnership, I think, we need to really define what the endpoints would be, not only in terms of the clinical trials, but questions related to the need or lack of, in terms of extension trials, which are quite costly in terms of moving forward.

Other key questions that we would like to address that I think a partner would be looking at in terms of addressing would be the kinds of study that would be required for labeling advantages in terms of a faster onset of action. So, the package in front of the FDA is the type of package that will allow us I think to make a business decision, but at the same time it’s a package that will address any of your questions that a partner would be asking in terms of looking at this asset.

Okay, great. And then for the U400 formulation 531, how do you think about making go-no decisions with that program based on the data you’re going to get?

Let me address that, and then I can turn it to Alan to add some of his comments. BIOD-531 really has a unique profile, and that’s been demonstrated I think in diabetic swine.

And the unique nature is an initial insulin peak, which provides an ultra-rapid acting profile, which is ideal to provide optimal meal coverage. This is really lacking to a great extent in the competitive product, which would be low [indiscernible] Humulin R U-500 and it’s suboptimal even in the premixes.

And then on the Basal side we will be looking at the being comparable, like twice a day type of regimen. So our benefits would really be better prandial coverage, comparable basal coverage, and in demonstrating that in the Phase 1 study -- I’ll ask Alan to sort of describe a little bit on the Phase 1 study and then how we might be able to leverage sort of the benefits in subsequent studies.

So Errol described nicely, basically what we’ve been seeing in diabetic pig model, the pharmacokinetic profiles of this candidate are unique and again could provide better mealtime coverage relative to existing products in the market, particularly better than the existing concentrated insulin on the market. The Phase 1 study involves, utilizing clamps [ph], so we don’t still have a complete pharmacodynamic profile and as always we test injections by toleration very carefully.

But assuming the data looked like we expect it to look based on the pig data, I think we can design similar or fairly straight forward studies to prove its prandial advantage relative to these same comparators. And I think what that information in -- that could involve standardized meal challenge testing, which again is a pretty straight forward and Phase 1 single dose type study to perform.

Once we have that package together, I think it could be very attractive for advanced development.

And if that kind of a package we’d look at in terms of having most of dialog with the FDA, because this is a unique product and we want to get clarity in terms of development but we envision then a very standard non-inferiority study with the advantage and the label in terms of better mealtime coverage.

And just one last question for Gerard. Sorry if I missed this in the prepared comments.

But any comment on operating expenses or cash burn in 2014?

No, I'm going to stick to kind of the guidance we gave a quarter and half back which is that our existing cash will last at least through the second calendar quarter of 2015.

Congrats on the progress you made during the quarter, got all the things done, and just wanted to focus a little bit on your glucagon, I guess now programs. And can you give us a little bit more of a sense in terms of your strategy here with the first generation and then the second generation as well and how they kind of fit in?

And then a little bit further, talk about the market opportunity here. Currently your stock is obviously trading below $3, or closer to $2.

You’ve got about $40 million in cash, and just curious in terms of the value proposition for glucagon, given your current market cap and cash positions.

Let me just comment briefly on the strategy and then I would like Gerard to comment more in terms of the market and more importantly the growth opportunity in that market, especially with our portfolio of candidates. As we looked at this market, the decision for us to first get into this market was, we’ve got to be the first entry point in terms of an autoreconstitution autoinjector type of player.

And we feel confident that with our target for the NDA in 2015 that we are ahead of the competition in terms of moving forward. Now that provides I think an entry point for us to get into the market and start capturing major segments of that market.

But to really leverage that entry point, I think, we need to grow that market and I think the Uniject exclusivity that we received on the ultra-portability value of that device is a key feature in terms of growing that market. And now I would ask Gerard to comment on how the two presentations fit and how we expect to grow the market and some comments on the size of that market.

Sure. The current market is approximately $120 million.

That represents, based on longitudinal data we purchased and examined probably less than 10% penetration in Type 1s. About a third of that market is currently going to long-term care, which is most likely geriatric patients, who are very end-stage type 2.

Because of the low penetration in type 1 and virtually no penetration in ambulatory type 2 patients, we think there is a large growth opportunity. The primary reason patients -- really two primary reasons patients don’t get this product; one, it’s fairly low awareness.

The current ADA guidelines are not specific about risk and we think that should be changed, and there is very little promotion going to the docs. For example I use here at Biodel -- as if planter's peanuts was trying to market EpiPens for peanut allergies.

In other words there is very little incentive for Novo and Lilly over the years to push this. And they evidently talk to physicians and their awareness being important to prescribing the medicine.

When we talked to patients, they say the number one reason they don’t use the product is because, their caregivers, spouse, children, office workers; when they look at the current device, and say no way am I going to use that thing, I’m just going to call 911. So there is a large opportunity to take into account that less than 10% of the Type 1s are currently getting the device to expand the market.

Now in terms of how these two products fit together, the first product we are going to come out with, the UV mix based device, autoreconstitution, is going to fit very well for patients and caregivers who want to have a product in the drawer at the office, at school, at home. And also it’s going to be great for the institutional segment where if a product is available with needle stick protection, that will be the product used for OSHA regulations.

The Uniject product, which is very-very small, and it was really developed for totally different purpose for the developing world, it’s incredibly simple to use, and most importantly very small. And we showed a whole broad range of devices to patients.

The Uniject hands-down was the one they are most interested in because of the portability. So the segment of patients who always want to have something in their pocket, literally don’t want to have a lot more kit, this product represents an excellent opportunity and we really do think that every type 1 probably we will put it in, it will be as common as having glucose strips or CGM with them at all times.

So with all that, we think confidently that market would be doubled or tippled.

And just to add one other comment in terms of really what attracted us to the Uniject, as I mentioned was the multipack opportunity. We had been in the glucagon liquid formulation business and we got out of it because of the high hurdle to achieve two years’ worth of room temperature stability.

This really gives us an opportunity to achieve exactly what we want, take it one step further with the portability that they look at four months room temperature stability. Now we have a whole host of formulations that give us this opportunity while at the same time moving forward with the portability.

So really the combination of the two made it really a very attractive proposition and we are really pleased that we could work out an exclusive deal with that integrity side. Gerard you add one other.

Yes, one other thing I think is important to note, type 2 patients right now, the conventional wisdom is they are not as significant risk for severe hypoglycemia. However, if you look at the incident data, the number of patients showing, the percentage of patients showing up at the ER is about half for type 2s.

Now obviously there are far more type 2s out there than type 1s, but we believe it will be possible to identify risk factors, which will portray what type of type 2 patients should be getting the drug and therefore which patients from a payer's perspective, it's a positive pharmacoeconomics [indiscernible] and it’s also the type of patients that you can describe to the physician to get them prescribed. So I think we can increase not only the penetration in the type 1s but we think we can create a market and a legitimate market and needed market for type 2s.

And just, couple of follow-ups, sticking with the glucagon program. I guess number one, can you give us a sense in terms of with the, the second generation device, the Uniject device, what the timing of that looks like and then I guess the second question for the first generation, you mentioned that you did a, completed a user usability study.

Can you give us a sense in terms of what that looked like and what the feedback was from that.

Let me address the timing question for the Uniject and then I'll let Gerard address the feedback and enthusiasm from the original the human factor study. Matt, I can't comment on the timing.

We just announced the deal. We reinitiated our liquid glucagon program and as you well know, you need a few months’ worth of real time stability data to look at the trends.

But given the lower hurdle we're cautiously optimistic that in over 2014 we can report on the progress on that. But the other reason I can’t even project even if I had a slew of formulations, because the toxicology requirements may be very different depending on the excipients that you have in your liquid formulation and as you know one of the excipients that we've been looking at when we originally introduced you to the liquid formulation is a license that we have from a company called Aegis.

Obviously we'll be looking at that, but that has also a unique toxicology requirement. And so we’ve got to nail down the formulation first and then we'll be I think in a much better position, hopefully over 2014 to give you sort of the kind of timelines that we have put out for the auto reconstitution program and that's why we refer to it as our first NDA being in 2015 and Gerard, maybe you can comment on the human factors study in terms of the initial response that we got.

Sure, so Matt, our goal here is to have something that is intuitive and panic proof is the phrase we’re using. Again the barrier to usage to date has been, you have a patient on the floor who's slipping into a coma or having seizures, you need to have something that someone who is shown a device maybe six months earlier, 11 months earlier, a year and a half earlier is going to be comfortable using.

So we have very high standards. Now in terms of out of this human factor study, we found that the device functions pretty much flawlessly in terms of reconstitution and we tested essentially two ways to prevent accidental reconstitution.

We found out that one worked perfectly. The other had some issues.

So now we know which one we're going to use out of the two ways to prevent accidental reconstitution, because that was one of our things we wanted to prevent. And now we're just optimizing sort of, I don’t want to give too much details, but optimizing how someone twists this and as you might remember, what we’ve designed is device where, if you can unscrew the cover -- it's essentially what it is, it’s a cover over the pen, if you could unscrew the cover you've reconstituted [indiscernible].

So we're just optimizing that final piece. So overall I think we are very-very satisfied and we’re definitely on track to move this thing from a prototype to start making some commercial type products to put up on stability.

All right, great, thanks and then, very good, couple of questions on your 123 program and analog program. With respect to your meeting with the FDA and the questions that you submitted to them, can you give us a little bit more detail in terms of the clarity you're trying to get from the FDA in your meeting that's going to occur in the first quarter and maybe a little bit of better sense in terms of when in the first quarter it's going to happen as well.

Yes. Let me talk about sort of the timelines.

We’ve sent a meeting request. T does not mean that they will grant us a meeting, there are two options they will have is they'll either grant us a meeting and provide us a date, we hope in the first quarter but there's no 30 day clock or anything like that.

So we’re just providing a guesstimate. Or the other alternative which often happens and in fact that's what happened when we requested a meeting for the glucagon program is they'll let us know that they'll send written responses and again there's no clock ticking on that.

Matt, to give you sort of a sense of sort of bookends of what a fast response and a not so fast response from the FDA is, when we requested a meeting following the complete response, we sent it sometime towards the end of November 2010 and we got a meeting with them towards the end of January 2011. That’s fast.

The other bookend was we sent in a request for a meeting for the glucagon program, my recollection at the end of September 2011 and we got written responses from them the first week of March 2012. So that gives you I think a sense of where they may come out and to a great extent it depends on the queue that the division has there.

Let me ask Alan to sort of comment, since regulatory reports in to him, sort of at a high level the general sense of the types of questions we have tried to address in the package that we’ve submitted?

Great. So Errol mentioned couple of the big topics, one of which is a need or lack thereof for long-term safety extension studies beyond the pivotal efficacy trials that are standard for new insulin products, you recall that very similar formulations, we’ve already tested in long-term safety trials which have been presented publicly up to 18 months of duration and we believe that should be very supportive for long-term safety of BIOD-123 related formation.

And so that’s a big item, we’d like some feedback on from the FDA because it is implication for the duration of the Phase III program as well as obviously the cost of a Phase III program. We also submitted proposed specific protocols for a Phase III studies and the sample sizes that would be required for those studies is another big question for the FDA.

We proposed what we believe is very reasonable samples. I just believe them to confirm that as well as many other specific design questions regarding these studies, including how they would value different endpoints in the studies, how the FDA views the measurement, for example postprandial glucose readings, currently is upgrading to us.

We are also very interested in learning how we can secure the validity and labeling of faster onset of action and we’ve already received some advice on how to do that using a standardized meal challenge study and so we submitted a specific protocol for such a study and we’d like their feedback or buy-in on the design of that study before embarking on it. So there is also a large list of other more very specific technical questions we have to them on study design and endpoint, it’s a fairly large package of question but those are the major items.

And that’s very helpful, thank you. And then in terms of the analog program, when do you think you’ll be able to share some visibility with investors with respect to being able to move forward and IDing a formulation, perhaps for either Humalog or Novolog or both that you’ll be ready to move forward with?

Yes, a great question. The gating item that is securing a GMP supply and I can tell you I’m very pleased with the progress we’ve made in achieving sort of that fine balance for treating commercially viable shelf life projection based on accelerated stability and maintaining sort of the rapid absorption profile.

And our focus initially has been primarily on lispro but we’ve also looked at aspart based formulations. But I wish the announcements were like the RHI kind of formulations of 531 that were entirely in our control.

To move forward in this type of situation, we have to make the formulation from active pharmaceutical ingredients, which means we need a GMP source of the API and we need the regulatory support that goes along with that source to enable us to do the clinical trials. So it’s not totally in our control but we’re making very good progress, both on the formulations and negotiations for API.

Questions; would you need an FDA meeting to start the Phase III?

Alan, maybe…?

Yes, I would say we need at least FDA confirmation that our Phase III protocols are appropriate for securing approval and so they don’t necessarily -- a meeting per se isn’t necessary but at least written correspondence and confirmation on the protocol is.

Okay and going -- looking at BIOD-531, if Phase I was successful, when would Phase II start and what would be encompassed in doing that?

This might be a very different program in terms of set of their traditional phase 1, 2 or 3. I’m not sure we would go down that path.

Alan maybe you can -- Alan referred to sort of -- you want to de-risk the program and the de-risking of the program, what comes in a phase 1 yield challenge study which would be a fairly single study because that’s your competitive edge that you are going to put forward. The Phase 1 program that’s ongoing Mark is actually a robust program which will tell us the PK, the PD, that the duration of action study and then following the meal challenge study, you could potentially move into a pivotal study but we wouldn’t just jump in.

We’d have a dialogue with the FDA because it’s been a long time since a product like this has been developed and we do have a unique profile. So, outline of action right now as we’ve always done with our programs is let’s confirm the data that we had shown in pigs and man.

Once we’ve got that, lets confirm the benefit in terms of the prandial usage of this in a meal challenge study and those are fairly quick studies and really cost effective studies that goes into it. Once we have that package and a dialogue with the regulators then let’s look at what we need to do to get to the goal line in terms of registration types of studies.

Alan, I don’t know?

The only thing I might add is the decision as to whether this would a standard type Phase 1, Phase 2, Phase 3 versus growing industry phase 3, might be a data driven decision, it could that the mean study and the PK of the product suggest certain dosing with respect to the meals in terms of timing. That might come into play when we decide whether or not we need practice with dosing in Phase 2 or whether the data are really tight and we feel very confident going straight into Phase 3.

And also the patents surrounding this formulation, how long do they extend till?

Paul, do you want to comment on the 531?

It’s just the same combination of excipients, our oldest patent, earliest filed, will take us up to 2025 and 2026 in the U.S. and Europe respectively.

We filed where we can subsequent follow on applications and we don’t know the status of those in terms of issuance but there may be an opportunity to get longer protection as well, which we’re working on.

And one follow up question on program. Does working with dual chamber pump such as the tandem T slim or their next version, does that depend on you completing these stability studies now?

You mean in terms of applications of the artificial pancreas?

Yes, for the dual chamber pump.

Yes. As we announced last year, we actually have a funding an I8 [ph] funding and an [indiscernible] grant for developing glucagon formulations for use in pumps and our strategy there is to develop the formulations and in parallel frankly work with all the different pumps.

And that’s a strategy that we’ve been using but you don’t want limit yourself to one pump. So, we look at compatibility in various different pumps including the ones you’ve described.

And is there any timeframe as to when you think you might actually start testing with one pump?

No. We can’t comment on that because we’ve just reinitiated our liquid glucagon program, which was sitting on the shelf because we had moved away from that.

Now that we’ve got the Uniject, we are looking at those formulations as well as the other opportunities that maybe available to us.

Thank you for your questions and for joining us this afternoon. We want to thank our shareholders and employees for their continued support and wish everyone a happy holiday season.

Have a good evening.