Nuvo Pharmaceuticals Inc.

John London - President and Co-Chief Executive Officer Stephen Lemieux - Vice President and Chief Financial Officer Daniel Chicoine - Chairman and Co-Chief Executive Officer

David Novak - Cormark Securities Daniel Pearlstein - M Partners David Martin - Bloom Burton & Co. Inc.

Thanks, Jonathan. Good morning, everyone.

And thank you for joining our call today. On the call with me this morning from the Nuvo executive management team are Dan Chicoine, Nuvo’s Chairman and Co-CEO; and Stephen Lemieux, Nuvo’s Vice President and Chief Financial Officer.

Before we begin, I’ll remind you that certain matters discussed in today’s conference call or answers that may be given to questions asked could constitute forward-looking statements that are subject to risks or uncertainties relating to Nuvo Research’s future financial and business performance. Actual results could differ materially from those anticipated in these forward looking statements.

The risk factors that may affect results are detailed in Nuvo’s periodic and annual disclosure documents, as well as the news release that we issued yesterday evening. And you can access these documents in the SEDAR database under www.sedar.com.

Except as required by law, Nuvo Research is under no obligation to update any forward-looking statements discussed today and investors are cautioned not to place undue reliance on these statements. Last evening, after the market closed, we announced our third quarter results.

Stephen Lemieux, our CFO will walk you through the financial results in a moment. But first, I’d like to update you on some strategic highlights.

It’s been a very exciting quarter for Nuvo. In September, we announced a proposed transaction to separate Nuvo into two publicly traded companies.

One company that will be named Nuvo Pharmaceuticals Inc. will be a pure-play commercial healthcare company with growing revenue and EBITDA to be owned 100% by Nuvo shareholders.

The second company, that will be named Crescita Therapeutics Inc., will be a pure-play biotech development company, also owned 100% by Nuvo shareholders. Crescita will have a pipeline of product candidates treating multiple therapeutic indications including our development stage topical product candidates and our immune modulating drug, WF10.

Crescita will have sufficient capital to execute its current business plan for at least the next 24 months. And we expect that the proposed transaction, which is subject to a number of conditions, including court and shareholder approval, will be completed in Q1 of 2016.

I would also like to mention the recent addition to our board of directors. We were pleased to announce last week that Samira Sakhia has been appointed to the Nuvo board.

Samira was most recently the Chief Financial Officer of Canada’s premier specialty pharmaceutical company, Paladin Labs Inc. for 14 years.

She has a very solid background in the pharmaceutical business. And her expertise in pharma mergers and acquisitions will be of great assistance to us as we look to grow the revenue side of our business through acquisitions of accretive businesses and products.

I will now turn the call over to Stephen, who will walk you through our quarterly financial results. I will then discuss what those results mean to the future of Nuvo’s commercial business that will be the focus of Nuvo Pharmaceuticals, if the proposed separation transaction is approved.

And then, Dan will discuss the operational highlights and strategy for the development side of the business that will be transferred to Crescita Therapeutics, if the proposed separation transaction is approved. And then, of course, we’ll take any questions.

So, I’ll turn it over to Steve.

Thanks, John. Nuvo had a strong third quarter with growing revenue, improving margins on product sales and cash in the bank of $50.8 million.

Total revenue which is comprised of product sales, royalties, and research and other contract revenue increased to $5.7 million in the quarter from $3 million in the comparative quarter in 2014. The most significant component of our revenue in this quarter was product sales, which increased to $5.2 million from $1.5 million in the prior year.

The increase in product sales was primarily related to the sales of Pennsaid 2% to Horizon for the U.S. market.

Year to date, product sales have increased to $12 million from $4.9 million in the prior year. Total operating expenses for the quarter were $7.3 million compared to $6.7 million in the comparative period.

Total operating expenses is comprised of cost of goods sold, research and development expense, general and admin expense, and net interest income. Cost of goods sold increased in the quarter to $2.6 million from $1.2 million in the comparative period.

The increase in cost of goods sold is related to higher product sales. And the gross margin on product sales in the quarter increased to $2.6 million or 51%, compared to only $300,000 or 19% in the comparative period.

The improvement in gross margin is related to the significant increase in Pennsaid product sales. Year to date, the gross margin was $5 million or 42% of product sales compared to $900,000 or 19%.

Research and development expenses increased slightly in the quarter - or decreased slightly in the quarter to $1.8 million from $1.9 million in the comparative period. The cost in the current quarter related to the Pennsaid 2% phase 3 trial for the treatment of acute pain and the WF10 Phase 2 trial for the treatment of moderate to severe allergies to grass and ragweed pollens.

G&A expense also decreased in the quarter to $3 million from $3.5 million in the comparative period. Net loss was $1.2 million in the quarter compared to net income of $49.8 million for the prior year.

As you may recall, in the prior year we had a $52.3 million gain related to our litigation settlement with Mallinckrodt, which included a cash payment of $10 million U.S. and the return of the Pennsaid franchise which was subsequently sold to horizon for $45 million.

Our cash position continues to be strong with $50.8 million in the bank at September 30. Our cash decreased by only $1 million in the quarter and has included payments of $1.2 million related to the clinical trials for both Pennsaid 2% and WF10.

For the year, our cash burn was $7.5 million, of which $3.5 million related to payments towards these two clinical studies. Overall, we had a strong quarter with total revenue increasing by approximately 90% to $5.7 million.

The gross margin on product sales was $2.6 million or 51%, and we finished the quarter with $50.8 million in the bank. I will now turn the call back to John.

Thanks, Stephen. The third quarter demonstrates the strength of the commercial side of our business that will form the core of Nuvo Pharmaceuticals, if the proposed separation transaction is approved.

As Stephen mentioned, our product sales and gross margin increased significantly in the quarter. And we believe that there is an opportunity to increase the revenue by additional product sales to Horizon as it continues to grow Pennsaid 2% sales in the U.S., and by out-licensing Pennsaid 2% rights to commercial partners throughout the world.

Nuvo Pharmaceuticals will also focus on acquiring strategic complementary revenue-generating products or businesses to further increase its revenue and profitability. Our goal is to make Pennsaid 2% a global brand.

Currently, Pennsaid 2% has been approved for marketing only in the U.S. It’s available for out-licensing in all jurisdictions except the U.S., Canada, Russia and Greece, where we already have partners in place.

NovaMedica, our Russian marketing partner recently advised that the Pennsaid 2% clinical trial it sponsored in Russia was successful. And that it now intends to apply for Russian regulatory approval to market Pennsaid 2% in Russia.

We are currently conducting a Phase 3 clinical trial in Germany for the treatment of acute pain to support regulatory approval applications for Pennsaid 2% in Canada and the EU. The trial commenced in July of 2015 and top line results are expected in Q1 of next year.

It should be noted that many jurisdictions will base the regulatory approval of Pennsaid 2% on its U.S. FDA approval and won’t require additional clinical trials, and we started to approach and have discussions with potential international marketing partners for the right to market Pennsaid 2% in available territories.

We hope to complete some out-licensing agreements in 2016 with launches in different territories commencing in 2017. Dan will now provide you with an update on the development side of our business that will form the core of Crescita Therapeutics, if the proposed separation transaction is approved.

Dan?

Thanks, John. Nuvo has two categories of assets and development that will be transferred to Crescita, if the proposed separation transaction is approved.

First, we have topical products that use our proprietary technologies to deliver active ingredients into or through the skin. Second, we have our immune modulating drug, WF10.

We are excited about the prospects for both. With respect to the Crescita topical products, we have a number of proprietary formulations that comprise our pipeline.

Although, no final decisions have been made as to which product candidates will be advanced, I would like to highlight a few of the promising formulations that we are currently evaluating for further development. The first product is IBUFOAM, our topical Ibuprofen foam for the treatment of acute pain.

Ibuprofen is a very popular oral NSAID. We believe IBUFOAM could be a complementary addition to Pennsaid 2% in the growing topical pain market that is evidenced by the recent U.S.

commercial success of Pennsaid 2%. The second product we are considering for development is our topical formulation for the treatment of onychomycosis, a prevalent fungal infection of the nail.

Recent launches in this space have demonstrated a very significant market opportunity. The two recently approved topical products currently being sold have achieved significant commercial success, notwithstanding that they have demonstrated very low cure rates in the clinic.

Our formulations have demonstrated high levels of penetration of the actives through nail in preclinical studies, which we believe is an important marker of clinical success. Our third high prospect topical product is Flexicaine, an improved Lidocaine/Tetracaine formulation that uses our self-occluding DuraPeel technology.

We are targeting a neuropathic pain indication, where there is a significant unmet need and a large market opportunity. This would allow us to also leverage our significant experience in executing topical pain trials to advance this product towards approval.

Finally, we have almost completed our responsibilities in formulating two new drugs for dermatological conditions under our co-development agreement with Ferndale in a dermatological CRO. These products are targeted to begin Phase 2 clinical studies in 2016.

Under the terms of the co-development agreement, we develop patented formulations and our partners then conduct and pay for Phase 2 clinical studies, after which the products are made available for out-licensing. Nuvo shares in the licensing proceeds based on a formula that compensates us for developing the patented formulations.

Our IP group has continued to do a great job ensuring our topical drug candidate patent production in major territories. In the quarter, the United States patent and trademark office granted a new U.S.

patent covering highly permeating topical formulations of Terbinafine, an antifungal drug that we are using in our onychomycosis product candidate. In September, the United States Patent Office granted a U.S.

patent covering novel topical foam formulations that include DMSO together with certain drug actives. The claims cover our IBUFOAM drug candidate that I mentioned.

We are very excited about our topical pipeline and look forward to utilizing our unique technologies to develop novel products that we believe will increase shareholder value. I would now like to update you on the status of our Phase 2 clinical study of our immune modulating drug, WF10, for the treatment of patients who are allergy to grass and ragweed pollens.

72 patients have completed this placebo-controlled Phase 2 trial that compares WF10 to placebo in the treatment of allergic rhinitis. Patients were qualified for the study by ensuring that they were highly symptomatic to grass and allergy pollens in an environmental exposure chamber and to grass in the field.

After being dosed with WF10 or placebo, patients’ symptoms have been recorded in the field throughout the grass and ragweed seasons. And most recently in an environmental exposure chamber where they were exposed to grass and ragweed pollens.

Just this past weekend, we completed the patient monitoring portion of the study. Top-line results are expected to be available late this year or early Q1 2016.

We are optimistic that the results of this study will replicate the results of our very successful Phase 2 poof-of-concept study conducted in 2010. If it does, we believe that WF10 has a potential to be a revolutionary treatment for patient with severe multiple allergies.

However, even if the WF10 study is unsuccessful, we believe that our development business has promising core topical assets that significantly address unmet needs in lucrative markets. To summarize, we believe that splitting Nuvo into two separate public companies continues to be the right strategy.

Each of Nuvo Pharmaceuticals and Crescita Therapeutics has promising prospects following two unique strategic paths. If the separation is approved, each Nuvo share will be exchanged for one Nuvo Pharmaceuticals share and one Crescita Therapeutics share, giving our existing Nuvo shareholders the opportunity to sharing the potential growth of both companies.

And we look forward to updating you on the progress of that transaction in the coming weeks. So this ends our formal remarks and I will now turn this back to the operator for questions.

Hey folks, congratulations on the quarter, and thanks for taking the question. It’s been real pleasure watching the story evolve.

Just a couple of quick ones from me with respect to Pennsaid, are you aware whether or not Horizon uses specialty pharmacies to distribute Pennsaid?

They don’t own and don’t have options on specialty pharmas. They have made that clear.

They do use their prescriptions-Made-Easy program that effectively sticks Horizon in the middle of doctors and patients and payers to ensure that scripts do get filled. And that way they have the opportunities to subsidize co-pays to manage deductibles and then some cases to actually fully subsidize the cost of a prescription.

So in that sense, they are using a specialty pharma function, but it’s not specialty pharmas in the sense that some other companies that, I think everyone knows about, have got them into trouble for.

Yes. There are not exclusive to them, those pharmacies.

They also service other customers by the way.

Yes, excellent. Thank you very much.

It’s a hot topic, so certainly had to be asked. With respect to the current ASP of Pennsaid 2%, and when thinking about total Pennsaid sales, how should we think about price increases going forward?

I guess, with the arrangement you have with Horizon, they can kind of price it however they want. It really wouldn’t impact you, is that the right way to think about this?

Yes. The way we look at it is.

We’re totally indifferent as to what it is that Horizon charges for the product. I mean we’re confident that Horizon is going to do, what it needs to do to maximize sales.

But because our price that we receive from Horizon by shipping bottles of Pennsaid 2% to them is a fixed price subject to some cost of living adjustments and so on moving forward, then we really are indifferent as to what Horizon charges for the product.

Excellent. And just looking at the IMS data, scripts are tracking phenomenally for Pennsaid 2%.

Do you have any insight into where Pennsaid 2%’s current penetration is in terms of the total topical NSAID market?

Yes. I mean, we know that right at the moment, in terms of - if one just looks at scripts, I believe that Pennsaid 2% is probably about 10%, maybe slightly less of the total number of scripts of Voltaren Gel, which is really the only other competitor product in the marketplace.

So there’s lots of opportunity to grow. However, you need to take that data with a little bit of a grain of salt, because Voltaren Gel scripts are filled with less than one month supply on average, whereas a Pennsaid script is filled with slightly in excess of one month’s supply.

So there is a few moving parts in there, David, but for all intents and purposes, the bottom line is. There certainly looks to be up lots of opportunity to grow.

But the other comment that I would make is, it appears that Horizon is not just taking scripts away from Voltaren Gel, it’s actually growing the market. So Voltaren Gel has continued to grow throughout the Horizon launch of Pennsaid 2%, which is obviously very encouraging for us, because we’ve always thought that the topical NSAID market in the U.S.

certainly hasn’t reached anywhere near its peak potential.

Yes, another way to look at it is that the total NSAID market, oral and topical, is a very, very big market. And the topical portion of that total market is still very small.

So there’s lots of room to grow the topical NSAID business. That’s why we’re pursuing IBUFOAM.

And we think IBUFOAM will grow without having any impact on the current products in the market. It will just steal from the orals.

Great, perfect. Thank you.

And finally, just on product margin they were fantastic in the quarter. How should we be thinking about product margins going forward?

So, yes, we did have a strong quarter which was we sold majority of Pennsaid 2% in the quarter and we did benefit from the foreign exchanges rates, as our transfer price is a U.S. dollar price.

I think for the mix of Pennsaid that we normally see throughout the year, the year to date margin that we discussed around 42% somewhere in that range a little north of that is probably somewhere to consider from a total basket with Pennsaid 2% in the Pennsaid product.

Perfect. That’s great.

Well, thank you very much. That’s it for me, and congratulations again on the quarter.

Thanks, David.

Hey, good morning, guys, and congrats on the quarter. Just a quick question to start, any further insight into script growth and kind of on the front lines what make a physician switch over from using something like the competitor’s product or one a new - what a new physician might want to use Pennsaid 2%?

Any insight into, I guess, why some of the script growth is at least showing according to IMS?

Well, I guess, a couple of things that are probably relevant. I don’t know that I have direct answers for that.

But one of the things that Horizon discovered, when they took marketing of the product over from Mallinckrodt, is that Mallinckrodt had not only done little marketing of the product, in a number of cases they hadn’t marketed the product at all. So our concern that there was a tainted market out there, because of Mallinckrodt poor performance, really in lot of cases proved not to be the case, that Horizon from their point of view it was a fresh launch.

So when they were out talking to doctors, doctors in many cases hadn’t even heard of Pennsaid or Pennsaid 2%, which I think has been very, very helpful to them going forward. In terms of where scripts are going to go, it’s extremely difficult for us to predict that.

I mean, we like you watch that IMS data every week. We read reports of analysts that cover Horizon, where they make predictions as to where they think Pennsaid 2% sales are going to go and they’re predicting 50% growth year-over-year for the next couple of years.

But as to any other predictors, we hope, but for us to sort of have any strong data that supports what that growth rate would be, we just don’t know.

Got you.

But in terms of the competitive position at the doctor’s office, what the feedback from Horizon is, the twice-a-day feature versus Voltaren Gel at four times a day, and to have a metered dose pump. The feedback has been terrific from both doctors and patients.

And Horizon is very pleased, which is I think fueling a lot of the growth.

Okay, great. Okay, and also on - I guess, what will be Nuvo Pharma, do you have any other insight into, I guess, complementary kinds of products or businesses that might be a good fit for that going forward at this point?

We’re at the fairly early stages of looking at things. But we’d like to find things that are complementary with our core expertise.

One of the things that we are looking at are possible contract manufacturing operations to take advantage of our manufacturing expertise. We are very aware of the fact that there is a lot of competition for approved prescription products.

And I think we’re going to have to be a little more nimble - and nimble around the edges of the life sciences opportunities rather than trying to compete with all of the big players that have significantly more resources than we will have. But the one thing that we are committed to as we certainly won’t take on any asset that has any significant development costs that would put us straight back into the business model that we are looking to escape from by splitting the company in two.

Right. Okay.

And then, lastly on the - in terms of the enrollment in the WF10 trial, is that tracking as you expected and will you still have enough of a sample set to get what positive results you hope?

Yes. We think the 72 people should be enough to give us the reading we need to ascertain if the drug is [Technical Difficulty] or not.

We had 60 in the 2010 file, and now I think with 72 patients, we should be able to tell, if we have a successful drug or not.

And that number by the way, Daniel, is now locked. As Dan said in his remarks, this past weekend the patients finished the chamber sessions.

So we know for certain that we have 72 patients in that study.

Yes. They are now into basically quality control of the data and making sure everything is basically up to par before we unlock any data.

Okay. That sounds great.

That’s it for me. Thanks for your time.

Thanks, Daniel.

Thank you.

Hi, thanks for taking my question. Congratulations on your business development efforts going forward.

I had a couple of questions. One is, does Horizon have any plans to step up marketing of Pennsaid?

I have certainly seen TV ads, for instance, for Voltaren Gel. And I don’t think I’ve seen any for Pennsaid.

I’m wondering if there will be more money planned going towards marketing the product.

We don’t know of their, we know that they have increased their team that’s evaluating Pennsaid. And - but there has been no - they were planning to increase reps, that is something that they’ve talked about, although we’re not sure of timing on that.

But they haven’t said anything about direct-to-consumer advertising. We’re not aware of that.

I mean, the other potentially positive development is, as I think you know Horizon has launched a hostile takeover a bid for Depomed. If that’s successful, that would certainly substantially increase their sales-force.

Now, we’re not anticipating that that entire sales force would necessarily be detailed in Pennsaid 2%, but the more sales reps that would be available to detail Pennsaid 2% the better from our perspective.

Okay. And the growth in your sales of Pennsaid to Horizon this quarter, was any of that attributed to Horizon building their inventory levels to higher than usual?

Not that we’re aware of, like that’s more were certain to track to the scripts that Horizon is building to in the market.

They work on inventory buildup in the second quarter - first quarter, I’m sorry.

They’ve built the pipeline. They’ve gone through the pipeline.

And now we’re - our production is in line with the script growth that we’re seeing through IMS.

Okay. And then, last question is the chamber that’s used for the final readout in the WF10 study, will you be able to incorporate that in a Phase 3 program or is that something that’s unique to Phase 2?

Well, that’s funny you say that. We had a meeting yesterday with Inflamax, the senior people there, who are doing the study.

And one of the things that we were discussing is whether the FDA would, in fact, accept a Phase 3 chamber study. To date, FDA has not, but it sounds like Inflamax, because, of course, this is their business, has laid a lot of groundwork there.

So I think in their view, there is an opportunity to do that. But we don’t know that for certain.

Okay. Thank you.

At the moment, for the particular division of FDA that we would be going to, their position so far has been that it needs to be a field study for your Phase 3. But that may change.

Okay. Thanks.

Thanks, Jonathan. We have no further comments.

I think those were great questions. Thank you for those analysts that posed those questions.

If anyone else has any questions and they want to get a hold of us directly, they can either send us an e-mail to our IR line or feel free to call the office and talk with any one of us. So, thanks very much.