Good day, and welcome to RedHill Biopharma's First Quarter 2022 Financial Results and Operational Highlights Conference Call. At this time, I would like to introduce to the conference call RedHill's CEO, Dror Ben-Asher; Rick Scruggs, President of RedHill Biopharma, Inc. and Chief Commercial Officer; Guy Goldberg, Chief Business Officer; Gilead Raday, Chief Operating Officer; Micha Ben-Chorin, Chief Financial Officer; Adi Frish, Chief Corporate and Business Development Officer; and Rob Jackson, Senior Vice President of Marketing. Before we begin, we will read from RedHill's Safe Harbor statement. Please go ahead.

This conference call may contain projections or other forward-looking statements regarding future events or the future performance of RedHill, including statements with respect to the business, financial results, operational cost savings, promotion and other efforts related to RedHill's commercialization activity, potential acquisitions and the initiation, timing, progress and results of RedHill's research, manufacturing, preclinical studies, clinical trials, marketing applications and approvals, if any, including the clinical trials of opaganib and RHB-107 for the treatment of COVID-19 and RHB-204 for NTM disease. These statements are only predictions, and RedHill cannot guarantee that they will, in fact, occur. RedHill does not assume any obligation to update that information. Actual events, performance, timing, results or commercialization activities may differ materially from what RedHill projects today. Additional information concerning factors that could cause actual events, performance, timing, results or commercialization activities to materially differ from those contained in the forward-looking statements can be found in the Company's annual report on Form 20-F filed with the SEC on March 17, 2022, and its other filings with the Securities and Exchange Commission. I will now turn the call to Dror Ben-Asher, RedHill's CEO.

Thank you, Debbie. Good day, everyone, and thank you for joining our first quarter earnings call. To address the current market reality, RedHill is decisive about controlling its own destiny. We are highly focused on achieving earlier profitability, targeting positive cash from operations to start during the second half of 2022. Our comprehensive cost reduction plan is expected to generate operational cost savings of approximately $50 million over the next 18 months. We are already seeing a significant positive impact of our disciplined cost control approach, with a reduction of over 70% in cash used in operating activities in the first quarter. The majority of our cost reduction plan savings results from an approximately one-third reduction of the U.S. commercial team workforce. We have also streamlined operational expenditure, including SG&A expenses and refined the Company's R&D strategy to rely mostly on external funding sources for now. Based on the promising clinical data generated to date, our excellent R&D progress will be discussed shortly by Gilead Raday, our Chief Operating Officer. On behalf of the Company, I would like to express my profound and respectful gratitude to the colleagues who have departed RedHill. While difficult, the changes we have made as part of our cost reduction plan were necessary, given the current reality. I would also like to thank our resilient and highly driven team as well as various stakeholders for their patience and support as we continue to diligently and decisively grow the business against various headwinds. In summary, RedHill has significantly improved financial stability results from major cost savings, a robust commercial portfolio with three FDA-approved proprietary drugs, continued prescription growth, expanded managed care coverage, and the recently improved credit agreement with Healthcare Royalty. RedHill is, therefore, well positioned for further growth, both organically from our own pipeline and non-organically through potential acquisitions of additional revenue-generating synergistic products to expedite and increase cash generation, both in the short term and the longer term. I will now be turning to our Chief Business Officer, Guy Goldberg, and the rest of the team for our detailed commercial R&D financial presentation to be followed by Q&A discussion.

Unfortunately, it seems we are experiencing a minor technical issue. We will be with you shortly.

Thank you, Dror, and apologies to our listeners who had to bear with us while we had some technical challenges. I will start at the beginning of Slide 4. This is Guy, and I'll walk through an overview on my section, and then we'll continue the presentation. So Dror just made his remarks, and I'll be now on Slide 5. So RedHill is going through an important transformational process to achieve financial independence. This is one of the longest and deepest downturns that the biotech sector has ever been through. Only resilient companies will emerge stronger at the end of the tunnel. In this new reality, RedHill implemented important cost control measures to weather the storm. In other words, as can be seen in the illustration at the bottom of the slide, by investing less, we're able to conserve cash and speed up the point where we achieve breakeven. We have been implementing a comprehensive cost reduction program that aims to make us cash flow positive from operations during the second half of 2022. By focusing on achieving operational profitability earlier, we expect savings of approximately $50 million over the next 18 months. In conjunction, we have completed other complementary initiatives to support this strategy, including improving the terms of key covenants in our credit agreement with our partner, Healthcare Royalty. We're also continuing discussions on various business development opportunities that fit the strategic goal that is commercial stage products that match our current call points and are accretive in terms of revenue and return on investment. We have a top-tier commercial organization in place and any additional product would benefit from our excellent commercial team drive, talent, and experience and would also see the benefit company-wise of economies of scale. Next on R&D, while RHB-204 continues to progress as before, for our other programs including our two COVID drug candidates, we are currently expecting to advance those programs through external funding. We are committed to our COVID programs and believe the data we have generated is highly promising and justifies continued development. In this funding environment, we are in discussions for other non-dilutive sources of capital, including public and private grants, largely in the U.S. and Europe, COVID-19 platform studies, and industry partnerships. This slide shows our R&D activities. I want to emphasize that our COVID-19 programs, opaganib and upamostat, are core programs for RedHill, and we will continue to move forward. The need for oral therapeutics in this space is still acute. Research indicates that the new sub-variant of Omicron shows substantial resistance to vaccine-induced and infection-induced serum neutralizing activity. COVID continues to be an important field of drug development for two reasons. First, it is an ongoing and future public health threat with a huge unmet medical need. And second, it has shown to be a very large, relatively undeveloped market opportunity. We firmly believe in our COVID programs, and we think their unique post-directed mechanism of action puts us at the forefront of development in this field. In fact, the broad-acting antiviral nature of our programs is very important given the growing general interest in pandemic preparedness. Gilead will provide more updates on our COVID programs and other development programs later. I will now turn it over to Rob to discuss our commercial progress.

Thank you, Guy, and good morning. Over the next few minutes, I'm going to summarize the progress we made during the first quarter with our sales, marketing, and market access activities so that you can understand why we continue to feel confident about where the business is heading this year. Our clear corporate priorities are to drive revenue growth and manage expenses as we continue to progress towards operational profitability in the second half of 2022. I'd like to begin my presentation by recognizing the efforts of our RedHill colleagues, especially our sales team, as we all strive to deliver consistent profitable growth. Thank you to everybody for your contributions. During the first quarter, RedHill achieved record quarterly prescription volume. In the first quarter, RedHill delivered our second-best quarterly performance for Movantik since we added it to our portfolio. We maintained a very strong prescribing trend during the always challenging start of a new deductible season, and Movantik continues to maintain clear market leadership within the PAMORA class with nearly 74% market share. During the first quarter, RedHill grew Talicia prescription volume by 12.8% over the fourth quarter of 2021, a significant achievement following our very strong record close to last year. Talicia prescription volume has surpassed Pylera, establishing Talicia as the most prescribed branded H. pylori therapy in the United States. This is strong evidence that payers and prescribers increasingly and rapidly recognize Talicia's ability to overcome the combined challenges of clarithromycin resistance, H. pylori regimen tolerability, and diminished efficacy. These are the issues that frustrate prescribers and patients every day, consuming valuable health care resources and forcing patients to endure multiple rounds of a 14-day antibiotic regimen while searching for effective therapy such as Talicia. Our two lead brands are well positioned to continue the performance trends into the second half of the year. In June, we already achieved new weekly prescription volume records for both Movantik and Talicia, we're closing the second quarter with a trend of growing volume and are entering the third quarter with positive momentum. During the first quarter, RedHill delivered Movantik prescription volume that was within 1% of our record fourth quarter results. Our first quarter volume represented an 8.6% improvement over what we achieved in the first quarter of 2021. We achieved this by continuing to take a disciplined approach and focusing on target prescribers in the pain specialty segment. In tandem, we also executed marketing strategies focused on growing the PAMORA market. This is a key objective for Movantik as the established market leader. We invested to raise awareness of opioid-induced constipation with patients and prescribers and to educate potential customers about how Movantik can provide relief from the symptoms of opioid-induced constipation. The positive impact of these investments in market development can be seen in the next slide. Looking at the 12-month moving annual total of PAMORA prescriptions, a clear trend of market growth has developed over the past three quarters. This is a significant change for the PAMORA class, reflecting RedHill's investment in building awareness of opioid-induced constipation and encouraging provider-patient conversations. Many believe the PAMORA class would decline in tandem with the opioid market. In fact, the opposite is happening, and we expect that opioid prescribing may flatten or even increase in the near future, providing further support for the PAMORA market. Movantik is the clear market leader, and it will disproportionately benefit from more patients being treated with PAMORA agents. Recently, the CDC announced draft revisions to their 2016 opioid prescribing guideline, and this new guideline is expected to provide further support for opioid use in patients experiencing chronic pain. The intent of the revised guideline is to address the misapplication of the 2016 guideline. The CDC expects to publish their final guidance by the end of this year. It remains to be seen, but the new guideline may relax some portions of the 2016 guideline resulting in a potential increase in responsible opioid prescribing and a subsequent increase in demand for PAMORA agents. An alternative view of Movantik prescribing data, the 13-week moving annual total trend also shows robust growth as we move into the second quarter of 2022. After facing the challenge of the COVID-19 pandemic and the allocation of corporate focus on Talicia launch in 2020, we successfully developed a positive growth trend for Movantik that continues to improve. To summarize, Movantik continues to achieve new milestones. Movantik delivered 8.6% growth versus first quarter 2021. Movantik maintains its competitive advantage of having best-in-class payer coverage with nearly 92% of insurance plans providing access to Movantik. Since the original launch, over 3 million Movantik prescriptions have been dispensed. Simultaneously, Talicia continued to achieve new milestones. As you can see in this graph, monthly prescription volume continues to increase consistently. In the first quarter, Talicia achieved its best-ever performance in terms of prescription volume and market share, and our March volume represented a strong finish to the first quarter. In the first quarter, Talicia achieved 12.8% quarter-on-quarter growth and record prescription volume building on the record volume previously achieved in the fourth quarter of last year. Additionally, when we compare the first quarter of 2022 to the first quarter of 2021, Talicia's first quarter results represented an 80% growth in prescription volume, and we expect this trend to continue. On the payer front, our market access team has continued to improve our already competitive position with payers. Effective January 1 of this year, Talicia became available to 14 million Medi-Cal beneficiaries as a preferred brand with no restrictions. This has helped RedHill accelerate its uptake in what is the second largest individual state for H. pylori infections and treatments. Effective April 1, Talicia gained similar coverage on Florida Medicaid. Additionally, another large Part D plan coverage became effective earlier this quarter. Effective July 1, another national PBM will improve access to Talicia on its commercial formulary, improving Talicia's position from restricted, not preferred to preferred. We expect to see a further prescription volume lift from this success during the second half of 2022, carrying into 2023. These victories are consistent signs that healthcare providers and payers are increasingly recognizing; first, the challenge of clarithromycin resistance. These challenges are clearly outlined by the American College of Gastroenterology's 2017 guidelines; secondly, the pitfalls of continuing to persist using clarithromycin based therapy as a first-line treatment of choice, and third, the clinical benefits of prescribing Talicia. To summarize, Talicia continues to achieve new milestones. We achieved record prescription volume driven by 12.8% volume growth over the fourth quarter of 2021 and 80% growth over what we had in the first quarter of last year. We've generated significant improvements in payer coverage, and we currently have the highest level of payer coverage compared to any of the other branded H. pylori therapies. In summary, we finished the first quarter with a consistent growth trend for our two lead brands: Movantik and Talicia. We remain focused on our corporate priorities of driving revenue growth and managing expenses as we continue to progress toward positive cash from operations and increased independence in the second half of this year. As the market leader in the PAMORA class, we demonstrated our ability to continue to grow new Movantik prescriptions, grow prescription volume in the PAMORA class, and further improve our already strong Movantik payer coverage. We continue to build the case for Talicia with payers, emphasizing the known shortcomings of clarithromycin based therapies and the clinical benefits of prescribing Talicia. We continue to advance new ways to grow and pull up volume in the primary care segment. We look forward to further growing our business during the remainder of the year. Thank you, and I'll turn the call back to our COO, Gilead Raday.

Thank you, Rob. I will provide a brief update on our R&D activities. Opaganib is our orally administered, first-in-class selective sphingosine kinase 2 inhibitor in advanced clinical development. Opaganib has broad antiviral activity and inhibits viral replication of multiple types of viruses, including COVID-19. Opaganib also reduces the body's excess immune response, providing a dual-action benefit to patients with a severe inflammatory response to viral infection. Opaganib development is also being continued in oncology indications with cholangiocarcinoma Phase 2 top line data expected in Q3 2022. With promising data from the Phase 2/3 study in hospitalized COVID patients and with new data confirming opaganib's antiviral activity also against influenza, which I will discuss in the coming slides, opaganib is a highly promising therapeutic candidate for viral pandemic preparedness, which is currently the spotlight of public health events. RHB-107 is our second clinical stage novel COVID-19 oral field candidate. RHB-107 is well positioned to treat early-stage mild to moderate COVID-19 infection, targeting human serine proteases, which are involved in viral replication. We announced positive and promising results from Part A of a Phase 2/3 study in non-hospitalized symptomatic COVID-19 patients that show upamostat's potential capacity to prevent deterioration with excellent safety and tolerability, and we are progressing towards potential participation in a COVID-19 outpatient platform study. With opaganib and RHB-107, RedHill holds two promising products that could serve as important tools in responding to future pandemic waves caused by SARS-CoV-2 variants or by other viruses. In fact, we are seeing a shift in focus of government funding sources, public health experts, institutions, and industry towards looking for broad antiviral mechanisms of action that could address emerging new variants of SARS-CoV-2 as well as combat other viruses that might create future pandemic waves. This is a more sustainable long-term approach than having to rediscover and reinvent very specific antiviral therapeutics, which quickly become obsolete in the face of rapidly mutating viruses. The novel host-targeting antiviral mechanisms of RedHill's opaganib and RHB-107 are highly suitable to meet the demand of this long-term pandemic preparedness approach. RHB-204 is the most clinically advanced stand-alone oral therapy in development for first-line treatment of pulmonary non-tuberculous mycobacteria. The ongoing Phase 3 study is progressing. Overall, in line with our strategy to support operational profitability in the second half of 2022 and in view of the highly promising clinical and preclinical data generated to date, we anticipate external funding for much of our promising R&D programs through grants, industry partnerships, and participation in platform studies. I will highlight some further details regarding each program in the next few slides. The opaganib clinical data package has been submitted to several regulatory agencies. Based on regulatory input, a positive confirmatory study constitutes the likely pathway to potential opaganib's submissions for approval in the U.S., EU, and multiple other territories. As a reminder, the global Phase 2/3 data met part of its pre-specified endpoints. The study showed a 70% reduction in mortality for opaganib when given on top of remdesivir and corticosteroids, with less than 7% mortality in the opaganib arm versus over 23% mortality in the placebo control arm with a p-value of 0.034. Opaganib also provided a 34% benefit in time to recovery by day 14 with a p-value of 0.013. Additionally, opaganib improved the median time to viral RNA clearance by at least four days, with a hazard ratio of 1.34, and a nominal p-value of 0.043. Seeing an improvement in viral clearance at such a late stage of the viral infection in patients with a median of 11 days from the onset of symptoms is a unique clinical finding that indicates opaganib's antiviral effects in the most challenging clinical setting of advanced and severe viral infection. Further cost analysis has also shown the market benefit in reducing mortality, a 62% reduction in a large subpopulation of over half of the study participants, which consisted of moderately severe post-hospitalized COVID-19 patients. Data from the global Phase 2/3 study has recently been published on Medarex ID and is in the submission process to a peer-reviewed scientific journal. The results will also be the subject of a late-breaker oral presentation at the International Conference on emerging infectious diseases, which is hosted by the CDC in collaboration with the Task Force for Global Health to be held this August in Atlanta. Adding to opaganib's expanding patent suite on June 21, 2022, RedHill was granted an additional U.S. patent, covering a method for the treatment of patients with moderate to severe COVID-19 using opaganib. Given its broad antiviral activity, opaganib is continuing to be developed for treating additional viral infections, including RSV, Ebola, and influenza. Previous data indicated opaganib's capacity to inhibit Ebola virus replication. Recent new data utilizing preclinical services from the National Institute of Allergy and Infectious Diseases, which is part of the National Institutes of Health, demonstrates opaganib's potent activity against the influenza A H1N1 strain. The results were obtained in human bronchial epithelial cells, which are the natural human target of the virus, making the test assay a realistic model of the infection. Opaganib achieved potent inhibition of viral replication at low concentrations with no evidence of toxicity at those levels. As can be seen from the results, opaganib inhibited 90% of viral replication at a concentration that was over 60 times lower than the concentration that reduces cell viability by 50%. This markedly exceeds the target threshold for indicating potent antiviral activity in this assay and provides further evidence of opaganib's potential broad-spectrum antiviral activity. We are also continuing to advance opaganib's development program in oncology and inflammatory indications with cholangiocarcinoma Phase 2 study top line analysis expected in Q3 2022. As previously announced, RHB-107, also called upamostat, provided positive top line results from Part A of the Phase 2/3 study in outpatients in the U.S. Part A met the primary endpoint of safety and tolerability. Moreover, Part A provided highly promising efficacy results despite its small sample size of 61 subjects. We saw a 100% reduction in COVID-19-related hospitalization with 0 out of 41 patients who were treated with RHB-107 versus 15% on the placebo control arm requiring hospitalization. There was also an 88% reduction in reported new severe COVID-19 symptoms after treatment initiation. Only one RHB-107 patient out of 41, equating to 22.4%, reported new severe COVID-19 symptoms versus 20% of patients reporting new severe COVID symptoms in the placebo control arm. Importantly, for early-stage COVID-19 infected patients, RHB-107 presents a highly favorable profile. It is taken orally once a day as a stand-alone treatment with excellent safety and no major drug-drug interactions limiting its potential use. Given the promising outcomes, work is underway to complete data analysis and submit to regulatory agencies for moving into Phase 3 studies. Furthermore, we anticipate potential participation in a platform study, which is in advanced regulatory preparations with the FDA. RHB-204 is the only first-line stand-alone oral treatment in late-stage clinical development for pulmonary NTM disease caused by Mycobacterium avium complex (MAC), a rare condition with no FDA-approved first-line therapy. We continue to advance the ongoing Phase 3 study in first-line pulmonary non-tuberculous mycobacteria towards potential NDA submission for this indication. We are expecting enrollment to pick up with the waning of COVID-19 in the U.S. and with the expansion of study participating sites. As a reminder, the study is a randomized placebo-controlled study and has a six-month co-primary endpoint sputum culture conversion and clinical benefit using patient-reported outcomes. After the first six months, study subjects cross over to open-label active treatment with RHB-204 for an additional 12 months from culture conversion in accordance with clinical practice. Of note, RHB-204 has been granted Orphan Drug Designation and QIDP status. Together, these designations provide for expedited development, priority review of the NDA, and a total of 12 years market exclusivity from potential approval in the U.S. We see a lot of interest from the industry in this program and are in discussions with several potential industry partners to further support and accelerate. I will now turn it over to Micha for reviewing the Q1 2022 financial results.

Thank you, Gilead. RedHill is now focusing on cash flow and financial independence. This facilitated the achievement of a positive contribution from our commercial operations segment for the first time in Q4 of last year. We are now targeting positive cash flow from operations before interest payment for the whole company to start during the second half of this year. This follows a recently implemented comprehensive cost reduction plan, which is expected to achieve operational cost savings of approximately $50 million over the next 18 months. Importantly, looking at Q1, the continuous implementation of cash optimization measures reduced cash used in operating activities by more than 70%, to approximately $4 million compared to approximately $15 million in Q4 of last year, signaling a clear path towards our stated goal of achieving financial independence. Net revenues of $18.2 million in Q1 compared to $22.1 million in Q4 of last year. Reduced revenues are due to typical cyclical trends in Movantik sales, which remain on track in Q2 with the last week measured earlier this month showing record scripts of both Talicia and Movantik. Gross profit was $10.2 million in Q1, representing a 56% gross margin, which is expected to continue to improve as Talicia scripts continue to grow. Research and development expenses for the quarter were $3.1 million as compared to $5.9 million in the fourth quarter of 2021. This decrease was attributed to the ongoing optimization of R&D costs and completion of elements of the opaganib and RHB-107 development programs. Compared to the previous quarter, we had lower operating loss, lower net loss, and lower cash used in operating activities. This led to a cash position of approximately $45 million as of March 31 of this year, prior to the $15 million of gross proceeds from our registered direct offering in May. To summarize, our projected organic sales growth potential in licensing and synergies FDA-approved revenue-generating products and out-licensing activities together with our vigorous cost reduction plan position us strategically to achieve our target of positive cash flow from operations before interest payments expected to start during the second half of this year. I'll now turn the discussion back to Dror for Q&A.

Thank you, Micha. We are happy to take questions.

Our first question today comes from Brandon Folkes from Cantor Fitzgerald. Brandon, please go ahead. Your line is open.

Thanks for taking questions and thank you for all the updates today. Maybe just firstly, can you talk about the reduction of the commercial team? And any impact on overall sales. Maybe just some color in terms of whether those territories will be covered by the remaining reps or if they remain uncovered? And then secondly, maybe just staying on the commercial portfolio, how do we think about gross to net in 2022 compared to 2021?

Thank you, Brandon. As far as the gross to net, starting from your second question, I refer to Micha. For the first question thereafter, it will be taken by Rick, our Chief Commercial Officer. Micha, please.

We believe we stabilized on gross to net, and we will continue in more or less where we are now.

I'm sorry. And how does that compare to last year?

The comparison of last year is a little bit more gross to net because of the coverage increase.

Brandon, are you okay on gross to net? Should we continue?

Yes, please.

Thank you. Well, gross to net has to do with increased coverage. Rick, please.

Yes, sure. This is Rick. I will just briefly mention or answer your question. We did a comprehensive analysis of our commercial operation. We did a comprehensive analysis of all the territories, the territories that were profitable, those that have opportunities for growth, and those that could be merged. We did merge territories. We did line up with a few territories going to white space. We employ in our commercial organization, a group called Customer Engagement Specialists. They answer questions from physicians and reach out to physicians in the white space. So we have consolidated our commercial organization. It was a tough reorganization, but there's something we need to do, and we have successfully completed that operation, and we feel poised to go forward right now.

And maybe just one more, if I may. On the $50 million OpEx savings over the next 18 months, any color in terms of how quickly you expect that to be achieved? Or how we should at least think about modeling that over the next 18 months?

Yes. So, we prepared a very detailed plan, which shows that in the next six quarters, more or less on the same pace, we will save those $50 million.

Thank you. The next question today comes from the line of Boobalan Pachaiyappan from H.C. Wainwright. Please go ahead. Your line is now open.

This is Boobalan. Can you hear me okay?

Very well. Thank you.

All right. Great. A few questions from our end. So I wanted to start off our discussion first by focusing on potassium competitive acid blockers. So obviously, one of your competitors recently received FDA approval. I just want to hear your thoughts on this kind of upward pressure these agents can put on Talicia sales? And also, how do you see the evolution of H. pylori treatment in the wake of potassium channel blocker approval?

Thank you, Boobalan. Gilead will answer the first aspect. Rob Jackson, our Head of Marketing and Sales, will discuss the evolving landscape. We’ll start with Gilead.

Thank you. So Talicia, to put it succinctly, has best-in-class on-label efficacy, especially in addressing the clarithromycin-resistant population, which is the major issue for empirical first-line treatment of H. pylori infection. So we're highly confident in Talicia continuing to be the leading brand for H. pylori treatment going forward.

Thank you, Gilead. Rob, would you like to speak about how we see the landscape evolving?

Absolutely. Thank you, Dror. I think as a company, we certainly welcome the increased focus on H. pylori infections and the need for new treatments. We think any additional noise that comes into the category from a new entrant will be positive. In terms of how we'll stand up against the new competition and how this impacts the competitive landscape, to Gilead's point, I think resistance is really the key issue here. What we've identified with Talicia in our clinical studies is that we have 90% efficacy regardless of the patient's resistant status. That's a true differentiator for Talicia; it’s going to stand strong for the brand in the long term. I think that's going to really play into our favor as the market grows, and we will continue to capture a disproportionate share of that business.

Okay. And then the next one. It appears you're doing two things at once, which are cost reduction and achieving profitability. What's interesting is that the cost reduction comes in the backdrop of rising momentum in Movantik and Talicia sales. Guy presented an interesting graph, and I believe the slopes are communicating some value. Just curious whether the priority here is to achieve early profitability but to grow at a slow pace rather than to grow fast but achieve profitability at a later stage.

Thank you, Boobalan, and excellent question. We have a very clear priority to preserve cash and generate as much cash as possible and target breakeven during the second half when it comes to cash from operations. This is the clear goal. Longer term, we want to achieve whole company P&L profitability, and we are committed to that. As far as sacrificing growth, as Rick outlined, we have conducted extensive analysis, and we are confident that we can continue to grow given cost optimization and shifting resources inside the Company together.

Okay. Great. Just two more, if I may. Today's press release mentioned that you are engaged in a non-binding discussion to acquire a GI drug. Just curious what has to happen in order for the process to complete? And how do you expect to fund the transaction?

Thank you. Unfortunately, we cannot provide additional color on this one beyond what we already stated.

Understood. Just one last question. What are your thoughts on the commercial outlook for COVID-19 therapeutics targeting more severely ill patients given the evolving nature of the pandemic?

We see COVID-19 remain a very dynamic evolving problem with variants and mutations arising continuously. The landscape is shifting, and it's very hard to predict exactly what comes next in terms of the waves of COVID-19 infection. Certainly, the public health focus is on pandemic preparedness for waves of infection from SARS-CoV-2 variants and from other sources of pandemics outside the SARS-CoV-2 family line. So in the long term and in the short term, we see our antiviral programs as very much in the focus of public health interest, both for COVID-19 future potential waves and also for other potential viruses that are lying in the wake.

Thank you. The next question today comes from the line of Scott Henry from ROTH Capital. Scott, please go ahead. Your line is now open.

Thank you, and good morning. I guess for starters, it seemed like the call was later in the calendar year this year. Was there a reason for that?

Thank you, Scott. There are several reasons for that. For example, you saw that we just announced an improved credit agreement. That was important. We also had other reasons for the delay, but the results were announced already over a month ago in a public filing, so there was nothing particularly extreme in doing so.

Okay. Fair enough. I just wanted to ask. And then I guess the other thing I just wanted to understand is the cash flow positive from operations and how you define that. Gross profit is about $10 million. SG&A is $20 million. It's hard to see how those numbers will match, but I think you're probably pulling some things out, so I just wanted to get a better understanding of the way you define cash flow positive from operations?

Thank you for the question, Scott. We are actively taking significant actions to reduce expenses, which will decrease substantially across all areas, including sales and marketing, general and administrative costs, and primarily research and development. We also expect our revenues to continue growing, and potentially at an even faster rate. This growth will enable us to generate cash from operations before interest payments starting in the second half of the year, specifically in either the third or fourth quarter.

Okay. So you are including all G&A and selling expenses in that calculation?

Correct.

I assume you're backing out stock comp; maybe you are, maybe you're not, but just for clarity.

Sorry. Sorry, can you repeat the question?

So I guess by cash flow from operations, are you including G&A and selling expenses in that?

Yes, we do.

Okay. So are you including stock compensation?

No, because we are talking about cash flow. The equity compensation will be in the P&L, and we are referring to cash flows.

Okay. And approximately how much is that on a quarterly basis? I'm just trying to get a sense of what levers need to happen to close that, I mean, basically, you can close that $10 million gap.

We are third in the conference call to the percentage of the workforce that we are using. This will give you the answer of how this is going to look like. And on the R&D, since we completed the programs of COVID, you can assume that our R&D expenses will continue to go even lower than the levels that we presented and will also support our achieving positive cash from operations before interest payments.

Thank you. The next question today comes from the line of Matt Kaplan from Ladenburg Thalmann. Please go ahead. Your line is now open.

Just wanted to kind of follow up on Scott's question. I guess, given the implementation of your cost-cutting plan, what's your current cash runway given your current cash levels of, I guess, 45 at the end of the quarter plus the registered direct? What's your, I guess, cash runway?

Thank you, Matt. This is Dror. We have no going concern remark, as you probably noticed, and we feel confident not only in the next 12 months but well beyond that.

And just to add to that, according to the plan that we put together, we will be able to reach operational profitability in terms of cash flows and later on also to support our overall debt service. So we have enough cash in hand for the next coming quarters.

Okay, that's helpful. And can you break out the revenue contribution performance for Talicia and Movantik for the first quarter?

So in this quarter, we had three main components, Movantik with a little over 14. We had an out-licensing deal for Talicia for $2 million, and the rest were commercial sales of Talicia.

Okay. Thank you. And then regarding the pathway for opaganib from a regulatory point of view, can you give us some detail regarding your thoughts for that pathway in COVID-19? I guess the question is, will it include more use authorization? Or is that off the table; do you have to do a full clinical development plan right now?

So for COVID-19, the current expectation is that a confirmatory, positive confirmatory study for either opaganib or also upamostat, depending on the situation of the pandemic, will support potential use authorizations and possibly also full applications depending on the outcome of the study. But that remains to be seen and also depends on the state of the pandemic at the time of submission. I hope that answers your question.

Yes, yes. And then last question in terms of RHB-204 and NTM. You're talking about potentially getting some external funding for that. I guess, can you plot out the two pathways there if you have to fund it yourself, the ongoing Phase 3? Where are you in enrollment there? What does that look like if you fund it yourself? And then secondly, if you bring on some external funding, what's the timing of that program in both scenarios?

We haven't provided exact guidance on timelines, but of course, with additional sources of capital and resources, which could be provided by interested partners, that could accelerate the timeframe of enrolling the patients, increasing the number of sites, and possibly expanding the study also out of the U.S. to the U.K. and Japan, for instance, which are very interesting territories with a high unmet need and potential market for NTM. We see a lot of benefit in finding co-development partners, and there's a lot of interest in that respect and ongoing discussions. That's where we think the benefit to accelerating the study can come in. We hope to be able to enroll the study, I would say, within 1.5 years. That could put six months accelerated review of an NDA and a six-month primary endpoint allowing for a pretty rapid completion of the study and proceeding towards NDA filing.

Thank you. That concludes today's question-and-answer session. So I'd like to pass the conference back over to Dror Ben-Asher for closing remarks.

Thank you. Thanks all for joining the call. Please reach out to us if you have any additional questions. Keep safe, and have a pleasant day.

That concludes today's conference call. Thank you all for your participation. You may now disconnect your lines.