Michael Watts - Vice President, Investor Relations and Corporate Communications Carl W. Hull - President and Chief Executive Officer Herm Rosenman - Senior Vice President, Finance and Chief Financial Officer Eric Tardif - Senior Vice President, Corporate Strategy Eric Lai - Senior Vice President, Research and Development Stephen J. Kondor - Senior Vice President, Sales & Marketing

Imron Zafar - Deutsche Bank Dan Leonard - First Analysis Bill Quirk - Piper Jaffray Marshall Urist - Morgan Stanley Brian Weinstein - William Blair Isaac Ro - Leerink Swann Zarak Khurshid - Caris Anthony Petrone - Maxim Group Spencer Nam - Summer Street Sumit Harish - Needham & Company Sara Michelmore - Cowen And Company

Welcome and thank you for standing by. At this time all participants' lines are in a listen-only mode. At the end we will conduct a question and answer session. (Operator Instructions) Today's conference is being recorded. If you have any objections you may disconnect at this time. Now I'd like to turn the call over to your host Mr. Mike Watts.

Thank you Christian and good afternoon everyone. I am pleased to welcome to you to this conference call to discuss our third quarter 2009 business results. A press release announcing our results was issued today just after 4:00 PM Eastern Time and is posted on our website at www.genprobe.com. In today's call, Carl will review our revenue results and strategic progress, then Herm will discuss expenses and our updated financial guidance. We'll take your questions for the balance of an hour, then we'll post our prepared remarks on our website for your convenience and reference. Before we begin, let me first review our Safe Harbor policy. Forward-looking guidance financial or otherwise is only provided on conference calls or in our press releases. Any statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and are forward-looking statements. For example, statements concerning 2009 financial guidance, financial condition, regulatory approvals and timelines, possible or assumed future results of operations, growth opportunities, plans and objectives of management, and future economic conditions are all forward-looking statements. These statements are not guarantees of performance. They involve known as well as unknown risks and uncertainties that may cause actual results to differ materially from those expressed or implied. Factors that might cause such differences include, but are not limited to, those discussed in our SEC filings, including our report on Form 10-K for the year ended December 31, 2008, and all subsequent periodic reports. Copies of these reports are available on our website, at www.sec.gov and on request from our Investor Relations department. Gen-Probe assumes no obligation and expressly disclaims any duty to update any forward-looking statements to reflect events or circumstances after the date of this call or to reflect the occurrence of unanticipated events. In addition, our presentation today includes information presented on a non-GAAP basis. We believe these non-GAAP financial measures provide meaningful supplemental information regarding the company's performance by excluding certain expenses that may not be indicative of core business results. We refer you to the press release we issued this afternoon, which is available on our website, for a reconciliation of the differences between the non-GAAP presentations and the most directly comparable GAAP measures. Now I'll turn the call over to Carl Hull, Gen-Probe CEO. Carl W. Hull: Thank you, Mike. And good afternoon everyone. Gen-Probe had a very busy and very productive third quarter of 2009, both operationally and strategically. In terms of our operations, we established new sales records for STDs, clinical diagnostic products and total revenues. We delivered total revenues of $122.7 million right in the middle of our guidance range and at same time kept a tight lid on expenses which boosted our operating profitability. We also used our balance sheet to capitalize on our temporarily depressed share price, completing our $250 million share repurchase plan faster than originally planned. All this led to non-GAAP earnings per share of $0.47 in the quarter, which we believe represents very good operational performance. In terms of our strategy, we tightened our focus on growing profitable human diagnostic opportunities where we can leverage our core competencies and deliver clinically meaningful products. We spun off our industrial testing assets, closed the Prodesse acquisition, and initiated U.S. clinical trials for our prostate cancer and trichomonas assays . With that prologue, let's get into the details. In the third quarter, total revenues were a record $122.7 million, up 1% compared to the prior year period. Keep in mind that in the third quarter of last year, we recorded a $10 million milestone from Novartis associated with the full U.S. approval of the PROCLEIX ULTRIO assay on the TIGRIS system. Excluding this non-recurring collaborative research revenue, total revenues would have grown by about 10% this quarter. Product sales in the third quarter established a new record of $119 million, up 10% versus last year. Foreign exchange remained a headwind compared to the prior year, reducing growth by about 2%. In other words, product sales grew 12% on a constant currency basis. Our core STD testing business had an especially good quarter, with low-teens revenue growth on a year-over-year basis. STD growth also accelerated sequentially for the second straight quarter. Once again, STD growth was driven by global market share gains of our APTIMA Combo 2 assay, by conversions from the older, non-amplified PACE assay to APTIMA, and by increases in underlying test volume, especially among customers using our fully automated TIGRIS system. This strong performance in STDs, combined with in-line results from our other clinical diagnostics products and our HLA and genetic testing businesses, helped overall clinical diagnostics sales grow to $69.6 million, up 25% on a reported basis, or 27% in constant currency. Strength in clinical diagnostics helped offset continued softness in blood screening sales, which we forecast in our last call. Blood screening revenues totaled $45.4 million in the third quarter, down 14% on a reported basis, or 11% in constant currency. Remember we record blood screening donation revenue with a one-month lag, so the weakening of the dollar in September did not benefit our third quarter results. I'm not going to spend as much time on blood screening today as I did three months ago, because there's little to add to our previous commentary. As expected, blood screening sales declined mainly due to unfavorable ordering patterns by Novartis Diagnostics, our commercial partner. Even though Novartis strives to maintain steady inventory levels, various factors can nonetheless cause significant lumpiness in our quarterly results. In the past, this variability has been obscured somewhat by rapid underlying growth in the overall market. But as the market has matured and that growth has slowed, these supply chain fluctuations are becoming more apparent. In the third quarter, for example, we shipped $7.9 million less product to Novartis than we did in the prior year period. The reasons underlying the shipment decline were the same as in the second quarter, although their relative magnitudes were different. First, and most significantly, we shipped several million dollars less of the PROCLEIX HIV-1/HCV assay in the United States, as customers adopted the triplex PROCLEIX ULTRIO assay which also tests for hepatitis B and burned off inventory of the older duplex test. Second, we also shipped less of the PROCLEIX ULTRIO assay in the United States, due to the completion of the post-marketing study that was still underway in the prior year period. Recall that in this trial, which helped us gain full FDA approval, some blood was tested in pools of eight or individually. This required us to ship more product relative to normal testing, which is typically done in pools of 16 donations. Third, and least significant, we shipped less of our West Nile virus product than in the prior year period. This was a continuation of the destocking that was caused, as we have discussed, by lower-than-expected levels of individual donor testing. We believe we have now worked through most of these supply chain issues, and therefore continue to expect Novartis's ordering patterns to improve in the fourth quarter, leading to a return of year-over-year growth in the blood screening business. Our third quarter performance in blood screening confirms the market perspective we first described three months ago. Now, and in the future, we see blood screening as a mature, highly profitable business that will be characterized by flat to low-single-digit growth rates, high barriers to entry, and relatively stable market shares. In support of this view, donations tested by our customers during the quarter increased by a little more than 1%. Let me wrap up the revenue discussion by touching briefly on our research products and services business, which we acquired with Tepnel. Sales in the quarter were $3.9 million, about where we expected them to be. The business continues to be affected by consolidation and other changes underway in the pharmaceutical industry, but we remain interested in its long-term potential as a platform for expansion into companion diagnostics. Now I'm going to shift gears and discuss the strategic progress Gen-Probe made in the third quarter of 2009. In September, we announced that our industrial testing assets and partnerships were being spun off into a new, private company, Roka Bioscience. Although this transaction was a non-event financially, we believe it was very important strategically, because it enables us to focus on the things we do well, and those things that drive shareholder value. We continue to believe that industrial fields such as biopharmaceutical production and water and food testing represent excellent opportunities for rapid, highly sensitive molecular tests. These are very long-term opportunities, however, limiting their net present value for our shareholders. In addition, although we had great partners to commercialize our products, these collaborations further diluted our economic return. Finally, the long-term success of our industrial initiatives was tied to the development of our portable, rapid, low-volume instrument, known as CUDA. Advancing the CUDA platform had become increasingly challenging for us as we devoted more and more organizational energy and resources to the PANTHER instrument, which is focused on clinical diagnostic and blood screening applications. Based on these factors, we believed an independent, focused company, one with an excellent management team, by the way, would maximize the value of our technologies in industrial markets. Gen-Probe retains a minority equity stake in Roka, and we will receive royalties on product sales, providing access to long-term upside. And most importantly, we are now free to focus our internal expertise on the considerable near-term opportunities ahead of us in human diagnostics. We believe one of these opportunities is in respiratory infectious diseases, a market we're now pursuing through our acquisition of Prodesse, which closed last week. Prodesse has three FDA approved products based on real time PCR technology. Most importantly, our ProFlu+ product, which simultaneously detects and differentiates influenza A, influenza B and RSV, has grown rapidly following its approval in early 2008. ProFlu+ also identifies as influenza A the novel 2009 H1N1 virus, or swine flu, so customer interest has been exceptionally high in recent months. And just this morning, we announced that the FDA had granted an Emergency Use Authorization, or EUA, for Prodesse's ProFlu-ST product, which differentiates among novel 2009 H1N1, regular seasonal H1, and seasonal H3, which tends to cause more severe complications. Many experts believe the swine flu will overlap with the regular seasonal flu in coming months. If this happens, we believe the ability to differentiate various influenza A strains will be increasingly important, since research has shown that the regular seasonal H1 flu has developed resistance to the common antiviral drug Tamiflu. From a strategic perspective, ProFlu+ fits nicely with our focus on clinically differentiated infectious disease products. It provides a more rapid answer than traditional culture tests, and a more sensitive result than rapid antigen tests. In this way, our marketing goal with ProFlu+ is to duplicate our success in STD testing, where we have displaced slower, less accurate traditional tests with cutting-edge molecular technologies. Prodesse has already made great progress toward this goal, and we believe our global sales force and commercial infrastructure can help them move even faster. ProFlu+ is a perfect fit for our sales group, which is regarded by customers as one of the industry's best. As you might imagine, most of Prodesse's customers were already Gen-Probe accounts, but the vast majority of Gen-Probe's customers are not yet users of Prodesse's products. That's the opportunity we hope to maximize. Our sales force has already been trained on Prodesse's products, and are actively promoting them in the field. It's hard to predict revenues in the very near-term, especially in the midst of a flu pandemic, but our reps are excited about the new opportunity. And given their track record in STD testing over the last several years, I have a high degree of confidence that they will succeed. Before I leave Prodesse, let me mention that in addition to the good strategic fit, we believe the economics of the deal make good sense. We paid $60 million in cash for what we believe will be about $15 million of revenue next year, or roughly four times sales. Our purchase price could increase to as much as $85 million if Prodesse achieves certain financial and regulatory milestones over the next two years, so their employee-shareholders are highly motivated to succeed. I will also point out that should our purchase price increase, the revenue and profit multiples will decline based on the continued business improvement, making the transaction even more attractive to our shareholders. In addition to acquiring Prodesse, in the third quarter we redoubled our efforts to move new products into clinical trials and ultimately commercial use. Toward this end, we restructured our research and development organization away from a functional alignment and into a series of cross-functional project teams. We believe this structure will increase alignment with our corporate strategy, better integrate research activities with product development, accommodate new areas of therapeutic focus, and ultimately increase development efficiency and speed to market. As you know, our R&D organization has been busy lately, as we've initiated pivotal U.S. clinical trials for our PROGENSA PCA3 assay for prostate cancer, and for our APTIMA trichomonas assay. I'm not going to spend much time on these products today, since we discussed them in detail at the last call, but I will say that both products fit nicely with our focus on clinically differentiated products for human use. We believe PCA3 will be an important tool to help urologists better manage the millions of men trapped in the PSA dilemma of elevated PSA scores and negative biopsies. And our trichomonas assay should be a complementary menu addition for the roughly 200 TIGRIS instruments that are used by clinical diagnostic customers worldwide today. TIGRIS has been a great success story for Gen-Probe, mainly because it meets key customer needs for automation, process controls and throughput. Imitation is the sincerest form of flattery, however, so it's not surprising that our competitors would like to emulate our success. In doing so, however, they must be mindful of the broad intellectual property we have developed as an innovator in the field. Specifically, we have received more than 70 patents worldwide surrounding the automation of molecular testing, and are willing to protect our inventions in court. Toward this end, we recently filed a patent infringement suit against Becton Dickinson, asserting that their Viper XTR system infringes eight of our U.S. patents. This litigation is likely to be expensive, and there can be no assurances about its outcome. But we do not enter into litigation lightly, and we have a good track record when forced to take a stand on IP issues. So in summary, Gen-Probe had a very good quarter, both operationally and strategically. Solid revenues and tight expense controls helped us enhance operating profitability and outperform on the bottom line. And we are working hard to continue to build our aggressive, strategically focused company. This is a continuous process, to be sure, and we made important progress this quarter through the industrial spin-off, the Prodesse acquisition, an R&D reorganization, the initiation of two clinical trials, and a lawsuit to protect our intellectual property. All in all, it was a good quarter, and we look forward to many more in the future. Now I'll turn the call over to Herm.

Thank you, Carl and good afternoon everyone. Let me begin by discussing non-product revenues. Collaborative research revenue was $2 million in the third quarter, down significantly from a year ago. As discussed, this decrease resulted from a $10 million milestone we earned from Novartis in the prior year period based on the full U.S. approval of the ULTRIO assay on the TIGRIS system.. Royalty and license revenue was $1.8 million in the third quarter, up 13% compared to the prior year period and a little higher than expected based on the timing of several items. Royalties received from Novartis for the use of our technologies in the plasma screening market continue to be the largest component of this line. Now let me turn to expenses. As Carl mentioned, Gen-Probe's profitability improved on a sequential basis in the third quarter, based on a less onerous foreign exchange environment than in the second quarter, and very deliberate efforts to manage our cost structure. Both our gross and operating margins improved by more than 200 basis points compared to the second quarter of 2009, and expense management will continue to be a focus going forward, even as we continue to invest appropriately in key strategic initiatives to drive future growth. Gross margin on product sales was 69.5% on a non-GAAP basis in the third quarter, down from an exceptional 71.7% in the prior year period. Compared to last year, gross margin declined primarily due to the stronger U.S. dollar, which reduces our profitability, and the addition of lower-margin Tepnel revenues. Research and development expenses for the third quarter were $27.5 million, up 12% compared to the prior year period. This increase was due mainly to expenses associated with clinical trials of our HPV, PCA3 and trichomonas assays, and the addition of Tepnel's R&D activities. However, R&D expenses were lower than expected in the third quarter, mainly due to the timing of expenses in our multiple clinical trials. Marketing and sales expenses in the third quarter were $13.5 million, up 26% compared to the prior year period. This increase resulted from the addition of Tepnel's cost structure, and our ongoing European sales force expansion and market development efforts. European expansion remains a key objective for the company, even more so now with the acquisition of Prodesse's products. General and administrative expenses were $14.2 million in the third quarter on a non-GAAP basis, up 10% versus the prior year period due principally to the addition of Tepnel's cost structure. If not for Tepnel, Gen-Probe's G&A expenses would have been down compared to the prior year period, reflecting our ongoing efforts to contain such costs. Non-GAAP G&A expenses in the third quarter excluded $1.1 million of acquisition-related expense, mainly professional fees associated with the Tepnel and Prodesse acquisitions and the industrial spin-off, as well as the amortization of acquisition-related intangibles. This expense line will increase in the future based on our Prodesse acquisition, although we won't know by how much until an independent, third party valuation has been completed to allocate the purchase price over the assets and liabilities acquired. Total other income in the third quarter was $4.3 million, an increase of 95% that resulted mainly from a $1.6 million impairment charge in the prior year period associated with our investment in Qualigen. About $2 million of this quarter's other income came from gains we realized from our investment portfolio, largely to fund the acquisition of Prodesse, and this amount will not continue in the future. In terms of share count, we bought back 1.8 million shares of our stock in the third quarter for approximately $69.3 million, completing the $250 million repurchase program that we began in August of 2008. Throughout the program, we bought back 6 million shares at an average price of $41.72, thus returning significant value to shareholders. So, on the bottom line, all this nets out to $0.47 of non-GAAP earnings per share in the quarter, a very good performance that is well ahead of the $0.40 guidance we gave in our last call. Earnings per share declined compared to the $0.52 we posted in the prior year period, but keep in mind that last year's results included $0.12 of earnings per share from the $10 million Novartis milestone. Excluding this non-recurring item, earnings per share would have grown by about 18% on a non-GAAP basis. Operating cash flow was also very solid in the quarter, at $31.9 million, almost 50% higher than GAAP net income. This led to very good free cash generation of more than $24 million, as we invested only $7.6 million on property, plant and equipment in the quarter. Now I'd like to discuss our updated 2009 financial guidance. I'll provide this guidance on a non-GAAP basis that excludes transaction-related expenses, as well as acquisition-related intangibles amortization. In terms of total revenues, we are tightening our guidance range by $3 million on both the top and bottom end, and now expect full-year revenues of between $493 and $500 million. We continue to anticipate substantial year-over-year product sales growth in the fourth quarter, driven by continued strength in the clinical diagnostics business. We expect that initial revenues from our Prodesse acquisition, which could total a few million dollars, will more than compensate for minor sequential declines in non-product revenues, which are caused mainly by timing variances and the transfer of Millipore's research reimbursement to the Roka spin-off. Please appreciate, however, that Prodesse's results could vary significantly based on how the flu season plays out, and this uncertainty contributes to our relatively wide revenue range. We believe our blood screening business bottomed out in the second quarter, improved a little in the third quarter, as expected, and should return to growth in the fourth quarter. If we look beyond all this quarterly variability, however, we continue to believe that the blood screening business will see flat to low-single-digit underlying growth rates. Turning to expenses, although our full-year guidance has changed very little, we do expect all four major expense lines to increase slightly on a sequential basis in the fourth quarter, based on some simple timing variances, the strategic investments that I described a moment ago, and the addition of Prodesse's expense structure. At the same time, however, we still believe that our operating margin will improve on a sequential basis in the fourth quarter, based mainly on the improvement in sales we anticipate. For the full year, we forecast that gross margin on product sales will be around 69%, consistent with year-to-date levels. Gross margin is expected to decline slightly on a sequential basis in the fourth quarter, based on increased sales of low-margin instruments within our product sales mix. R&D expenses should approximate 22% of total revenues in 2009, also similar to our results in the first nine months of the year. We expect R&D to increase sequentially in the fourth quarter, to around $28 million, as certain clinical trial expenses accelerate. We anticipate that sales and marketing and G&A expenses will each be around 11% of total revenues for the full year, with both expense lines forecast to be slightly higher in the fourth quarter than in the third. In sales and marketing, this increase will be driven by a couple of studies of key new European products that are expected to pick up speed in the fourth quarter. In terms of G&A expenses, Prodesse's cost structure and outside legal fees are expected to contribute to G&A expenses rising by a $1 million or more on a sequential basis in the fourth quarter. And I should point out that higher outside legal expenses are forecast to continue in 2010 as well. Now let's turn to other income, which we expect to be around $19 million, net for the year. As you might imagine, other income will decline significantly in the fourth quarter of 2009, probably to around $2 million, as well as in the future, based on the absence of realized gains, and the lower cash balances resulting from our acquisitions of Tepnel and Prodesse and the buyback program. To round out our updated guidance for this year, we expect a tax rate of a little less than 34%, and a diluted share count of around 51.5 million shares, based on the aggressive completion of our repurchase plan. All this leads to our revised 2009 earnings per share guidance of between $1.90 and $1.93 on a fully diluted non-GAAP basis. Our updated guidance continues to imply a net, after tax profit margin of approximately 20%, even as we invest 22% of revenues in what we believe is a vibrant R&D pipeline. Now I'll turn the call back over to Mike for Q&A. Mike?

Thanks Herm. Members of management who are joining us for Q&A are Bill Bowen, senior Vice President and general counsel; Steve Kondor, senior Vice President of sales and marketing; Eric Lai, senior Vice President of R&D; Eric Tardif, senior Vice President of corporate strategy; and Kevin Herde, our Vice President and corporate controller. In order to ensure broad participation in the Q&A session, please be courteous and limit your questions to one plus a follow-up, then jump back into the queue. I really appreciate your cooperation in this regard, since in our last call, I understand that several of you were left waiting in the queue at the end of our hour. So Christian, I think we're ready to take the first question. Operator? Christian can you hear us?

Thank you (Operator Instructions) Our first question comes from Mr. Imron Zafar from Deutsche Bank. Sir your line is open. Imron Zafar - Deutsche Bank: Hi good afternoon thanks for taking question. My first question is on the Prodesse H1N1 testing, can you just explain what the utility of this would be, how will it be used? In other words right now if you are suspected to have H1N1 and you test positive for influenza A or you're pretty much given Tamiflu. How do you see this test being used going forward?

Hi Imron, this is Eric Tardif. First of all the protocol that we see being used and we think that clinicians are going to adopt is to first screen with the ProFlu+ test which as you indicated would detect the presence of H1N1 if it's there. And subsequently if there is a desire to sub-type in to figure out whether the flu is in fact H1N1, to run the prove ProFlu-ST which is the sub typing assay. The utility comes very simply from the fact that there is an increasing to know what flu strain is present because some of them do respond to antivirals and others do not. Imron Zafar - Deutsche Bank: Okay and then just on the Prodesse asset again, so you talked about 15 million in revenues in 2010. Herm, can you just talk about the seasonality of this business, how we should think about it for modeling purposes for 2010 and beyond? And then Carl maybe just give us a little bit of peek into the pipeline of this --

Imron it's early days for us and we are not all that familiar with the business. Obviously we are talking about flu here, so it probably has some seasonality but, at this point we're certainly not going to give 2010 guidance but nice try.

Yeah Imron, I would add to that by saying that I think all bets are off in terms of previous patterns the seasonality of flu test and products of all kinds, things are obviously happening today that are very different than historical patterns. And having been the owner of the business for what seven working days now, I don't think any of us want to, how it goes as to how that seasonality is actually going to pan out. We're doing everything we can obviously to maximize the immediate opportunity that's in front of us and I think based on the initial feedback from our sales team that opportunity is a robust one. With respect to the pipeline you could expect to see Prodesse continue to focus on respiratory infectious diseases of all types. I think if we draw back the clock about six years, you can see a clear pattern of every couple of years, a fairly significant novel pathogen emerging is a threat on a global basis. Prodesse will be certainly very well positioned and very well prepared to provide assays to assess those threats as they emerge, additionally those have (ph) c.diff assay and we will clearly maximize our sales efforts with that product as well. Imron Zafar - Deutsche Bank: Great, thank you very much.

You bet.

Our next question comes from Mr. Quintin Lai from Robert Baird. Sir your line is open.

Good afternoon this is actually Matt Atoriani for Quintin. Thanks for taking my question guys.

Hey Matt.

Just kind of going off with Imron's first question, I was just wondering do you guys have a feel for the percentage of market share the Prodesse has for NAT based respiratory testing at all or --

And what we -- I don't that we're going to give that specific guidance today. We do think that it's early days for PCR based full testing and there's obviously a notable competitor out there in Luminex and we think that we're holding our own genre in the marketplace. But we don't have perfect visibility, I don't think we're going to guide to that. .

Yes Matt, we will clearly develop our own views of the market over the of course the next couple of quarters and much like we do with our STD business manage our performance using market share as the key tool doing that.

Hey Matt this is Mike, just to add to that. I mean clearly, the molecular test as a whole or a relatively small piece of the overall flu market, we think there's a pretty significant opportunity to provide added clinical benefit over the rapid antigen test which tend to have fairly low sensitivity as well as expand this relative to some of the home brew tests that are out there. So we certainly think there's room for growth for the category as a whole.

Great thanks for all that color. As a follow up and this is just kind of a longer-term with this Prodesse, you bring PCR into the product menu offering. So, just help us out of me, how should we think about menu expansion going forward? Is it going to be more technology and platform agnostic and more focused on different areas or any detail there? Thanks.

Yeah Matt that is a good characterization. We are looking for market opportunities where there are unmet clinical needs and where we think some of the technologies that we don't have in hand today or that are out there, offer solutions to those these clinical needs, we're going to be technology agnostic about those. Having said, we clearly think there's lots of opportunity for continued new assay development both on TMA and now with PCR platform and we will pursue those aggressively. Okay operator we're ready for the next question.

Our next question comes from Dan Leonard from First Analysis. Sir your line is open. Dan Leonard - First Analysis: Thank you. I have a question on the guidance. So Prodesse now in your revenue forecast but you didn't increase your revenue guidance. So, what is the offset?

Okay. Well we came in as we said right in the middle of our range right? It also said that expenses for all of the major expense lines are going to increase, so that certainly implies that our revenues are going to be up fairly substantially in the fourth quarter. But we also mentioned legal expenses, so we are going to see some additional legal expenses and we are not exactly sure what the timing or amounts of those will be. We talked about the timing of R&D expenses. We have three clinical trials underway, so there's a lot of variability that could happen. And we also talked about other income specifically the unrealized gains or the gains that we've actually realized this year in the absence of those going forward. And so that is in a variability there that and we're really just talking about fairly small amount money right, by 1% or so. So I think that should give you enough information to be able to figure it out. Dan Leonard - First Analysis: Okay and my follow up, which I think is related, do you have any insight into what Novartis's expectations were for West Nile season and that's how the season is tracking according to their plan?

I don't think that Novartis's expectations of the West Nile virus were much different from how we saw it. Clearly this season had a lower incidents of disease and infection identified compared to I guess boom season of couple of years back. So, it had a lower level this year than we have seen in the past. I think right now, the triggers and then the time triggers and other things are in place and we expect the experience like we had this year continue on a go forward basis. Dan Leonard - First Analysis: Thank you.

Operator.

Our next question comes from Mr. Bill Quirk from Piper Jaffray. Sir, your line is open. Bill Quirk - Piper Jaffray: Thanks. Good afternoon congrats on the Prodesse deal.

Thank you Bill. Bill Quirk - Piper Jaffray: Hi Carl just thinking a little bit, I guess on the guidance question here, looking at the midpoint of the revenue guidance if I am doing by math correctly, we're looking at a pretty big call it 14 to $15 million sequentially increase. I understand that Prodesse effectively offset the industrial business. But can you just help us think about the level of confidence you guys have in this number. And I guess the increase, but I guess we should be expecting that largely in clinical diagnostics.

Well we've got a couple of things going on. We're clearly seeing strength in clinical diagnostics, there is no question about that. But, I think we also indicated that we expect to see the downtick that we've experienced in last couple of quarters, that we saw year-on-year basis in blood screening to have reversed. So, we do feel that the forecast for the last quarter is a solid one and I would say in total other than the addition of the new revenues which we just don't have, hard track record Prodesse to give you a gut feel for, we feel pretty good about this forecast. Bill Quirk - Piper Jaffray: Okay. Very good. It's a follow up, how are we thinking deploying the balance sheet now to make sense to continue with the recent acquisition strategy?

Well, we're still going to be active in looking for similar opportunities because we think some of those are out there today. But I think we would characterize on just based on what we have done. What you see with Tepnel, what you see with Prodesse are acquisitions that make good sense to us and to our shareholders. And if those similar opportunities to present themselves, we'll go after them for sure but again we don't see big dilutive deals out there that make intuitive or strategic sense to us right now. Bill Quirk - Piper Jaffray: Thank you.

You bet.

David Lewis from Morgan Stanley, your line is open. Marshall Urist - Morgan Stanley: Yeah hey guys, it's actually Marshall in for David. Couple of questions, the first one you mentioned the R&D reorganization, why don't you talk about it a little bit more and you also mentioned that could increase through the number of programs that you would be able to sort of have in the channel at any one time. So what are the implications here for spending, is this is it in line with your previous expectations for long term R&D or does this give you flexibility to increase or actually move in the other direction?

Yeah Marshall we do feel the reorganization allows us to be more efficient and by that I mean to do more programs and a greater progress with comparable or similar levels of resources. So, I don't think it signals anything different in terms of the overall spending profile and where we're headed with R&D. Let me ask Eric Lai to comment specifically on some of the elements of the reorg and what we think it will do for us.

This is Eric Lai. The re-org basically turned the organization from a functional alliance into project specific alignments. So, that we decreased the ten off and minimized the interfaces and maximized the efficiency and at the same time support the corporate strategy and allow us to do hopefully more projects with the same type of resources. And also allow us to absorb and align ourselves with all these new acquisitions at the same time and they get efficient instead of just there's something I want to do?

Yeah Marshall I don't know if you got your Blackberry on vibe. We're getting some interference. Marshall Urist - Morgan Stanley: Okay, yeah there is, I just tossed it over, so hopefully that'll help. And maybe just this is a -- maybe this is a stretch of the related follow up. I was wondering also if you could talk about help us to understand just what's your thinking on the timing around the BDK? And sort of what is the goal here? Is this in response to something that you are seeing from a competitive point of view? Thanks.

Yeah, I don't think we can give you a lot of color there Marshall, each one of these kinds of litigation has a life of its own in effect. So there will be fixed time tables for their responses to us and that sort of thing and we'll see how those progress. We don't -- we expect spending to begin almost immediately because that's the way these kind of cases go, but we'll not have resolution if it goes all way through litigation for as much as a couple of years or longer. So, there is a wide range in there and I can't give you anymore specifics than that. With respect to your question about what's the signal with respect to competition et cetera, all I can tell you is there are variety of considerations that go into filing a case like this. I don't think we care to go into any of them in detail, but suffice it to say that there was a lot of analysis and thought that went into our decision making process here and we feel this is the right thing to do at this juncture. Marshall Urist - Morgan Stanley: Okay. Great. Thanks a lot.

You bet.

Our next question comes from Mr. Brian Weinstein from William Blair. Sir your line is open. Brian Weinstein - William Blair: Thank you, good afternoon. Starting with blood screening I just want to make sure that we kind of parse this out a little bit, you said unit volume was up 1%, can you tell was that U.S. or worldwide?

That was a worldwide number of 1% and we have visibility now in our revised relationship to the donations that are effectively built by the collaboration. So, it's a global number. Brian Weinstein - William Blair: Do you have any idea what it was in the U.S.? And the reason I ask is that we consistently were hearing about the drop off cases year-over-year even though the summer months are typically light due to anything from the economy to, even to H1N1 effect and even some changes in the teen requirements for donating. Have you seen anything like that?

Yeah I think it's hard for us to extract a pattern out of the U.S. from the numbers that we see. I can tell you that you're right, the previous quarter is the slowest one because the summer months and in particular I think we say probably July was one of the lower months of the year. Is that economy related or is it vacation dependent, we really don't know those kinds of things. The growth rate will be slightly higher outside the U.S. but the other than that I can't give one more thought. Brian Weinstein - William Blair: Okay and then second question, do you guys plan on keeping the Prodesse reference lab that they have there? And do you intend to use it until you potentially launch Tasavir (ph) --

So the first -- the answer to the first question is yes, we do intend to keep the lab that they have there. As you know it's not a dominant part of the business right now. It's a relatively small part of the business. And I think we're going to investigate what we can do with it in the future but we don't have plans yet to change the business model.

Yeah I think we would say Brian, the nature of that reference lab is actually a potentially valuable public health resource. Especially when you get in first time and lots of testing are being done and there have been times when the lab's just something that can't cope with volume of specimen and that's a valuable place for this kind of specialized testing to go. Brian Weinstein - William Blair: Okay great, thank you very much.

You bet.

Isaac Ro from Leerink Swann, your line is open. Isaac Ro - Leerink Swann: Hi good afternoon, thank you for taking the question.

Hi. Isaac Ro - Leerink Swann: Hi first off on Prodesse I was just wondering if you could maybe offer a little detail on your earnout structure and maybe specifically if you could talk a little bit about whether -- or how it's broken down in terms of revenue growth targets and maybe if there's a profitability mandate included as well?

So I think what I'll tell you there is what we communicated publicly which is that, there are regulatory milestone based payments and there are basically financial performance based payments. And the majority of the earn-out is really related to the latter, so to the financial performance of the business. Beyond that I don't think we are going to give more granularity. Isaac Ro - Leerink Swann: Great thanks very much. Secondly, on the flu I just wanted to see if you could comment a bit more on the notion of sort of confluence of the seasonal H1N1 strains that you mentioned earlier. Are you getting that sort of a data point from sort of nationwide among various hospitals or is it something that you are getting maybe from your contacts within CDC or sort of international agencies?

I think that we are experiencing H1N1 and flu at the same time as everybody else is right now and we don't know ultimately what's going to happen with the patterns. But, certainly there is evidence that it is here to stay and that it will and has begun to overlap with the other seasonal patterns. And beyond that what happens next year and how it behaves we simply don't know at this point. Isaac Ro - Leerink Swann: Got you, Thank you very much.

Thank you.

Our next question comes Mr. Zarak Khurshid from Caris. Sir, your line is open. Zarak Khurshid - Caris: Close enough. Good afternoon guys. Thanks for taking the questions. I wasn't not sure if you guys broke out Tepnel molecular revenue in the quarter, if you could that'd great. And what was the core growth of the STD business if you strip that out?

Yeah, we did not break it out, it's included in our clinical diagnostics business. And therefore we're not going to strip it out either.

Zarak, this is Mike. On the second piece of that, we did say in our script that the core STD business was up in the low teen, sure as detail that has, what your model is and kind of figure out from there. Zarak Khurshid - Caris: Sure, great thanks and then as a follow up. Just going back to the Prodesse acquisition any color on the C.diff product and any market share gains versus the rapid immunoassay in light of the beta tests and generally how are you thinking about kind of the C.diff opportunity versus influenza long term in your mind? Thanks.

Right, so it is early days for the C.diff product. We do think that that's going to be a compelling product in its applications which is really, not really an HAI kind of test but much more of a diagnostic for C.diff. Labs are validating and are considering the test but as you can imagine right now the predominant focus has been on the flu test. In the long run we think that, that could be a good product but we're going to give it some time to develop

Go ahead operator.

Our next question comes from Mr. Anthony Petrone from Maxim Group. Sir your line is open. Anthony Petrone - Maxim Group: Thank you. One on guidance here and then another follow up on PANTHER. On guidance if we take a look at the mid point here and we assume that's really a follow up to Tepnel, if we take a look at and assume -- should we assume low teens growth again for STD in the fourth quarter as more of the revenue contribution in that quarter reflected in HLA?

Yeah, I think we said that it was going to be pretty -- we implied it was pretty equivalent growth and that will be driven by APTIMA Combo 2. So we're probably looking at low teens, growth continuing in clinical diagnostics.

It's Mike. Just one thing to keep in mind of course is, if you look at the prior year periods, those do tend to jump around a little bit. So you've got to make sure you keep the comp issue in mind. I think second quarter of last year for example was a really big comp and third quarter of last year was not so big. So just keep that mind as you are working through it. Anthony Petrone - Maxim Group: Yeah it's very, very helpful. And Carl you mentioned last quarter on, in regards to PANTHER 20 units running on a 24 hour cycle. You went to the finalist hardware design an integrate assays. Just wondering where that is, is hardware finalized now and how many assays are now compatible on the system?

We are on schedule with the PANTHER program against all of these major milestones, the program recently completed our phase get review of our development process successfully. And we continue to increase the number of instruments that we have in hand. We'll move to final log validation work early next year and it's all on schedule. Anthony Petrone - Maxim Group: Great thanks.

You bet.

Spencer Nam from Summer Street, your line is open. Spencer Nam - Summer Street: Hi thanks for taking my question. Just have a one question, since I can't get to specific with the limit to questions. Your pipeline -- would you generally characterize your pipeline to be on schedule in terms of where the trials are and when you guys expect some of the new assays to hit the market, U.S. market in particular?

Yeah, I think we are very comfortable that from a time point of view, we got the major programs on schedule beginning with PANTHER, obviously in the midst of the HPV trial and driving to conclusion for that trial which is our biggest endeavor. And then we announced last quarter the addition of the two other trials for the components in PCA3 here in the U.S. And we began those studies as we anticipated and enrollment is underway in both so, we feel pretty comfortable. Spencer Nam - Summer Street: Great thanks.

Thank you Spencer.

Our next question comes from Mr. Eric School from Thomas Weisel Partners, sir your line is open.

Hey good afternoon guys. It's Eric in for Peter.

Hi Eric.

So I guess, now that you have PCR related platform, how do you see the when the PCR royalties start rolling of in 2011-2012 how do you see that affecting your business as far as the product development?

Well I don't think we'll comment on the PCR patented stake, it's a fairly complex one from my recent memory. I would just say that we think that the licenses in the business that we've acquired are sufficient to allow us to do a number of different things in the space. We are comfortable with it and we are going to exploit all the related commercial opportunities we can identify

Okay and then just one follow up on that, any plans on developing a PCR dedicated instrument or maybe an instrument that runs both assay platforms?

Right now we have access to a platform that's already in the field, throughput that's on the supply arrangements they have in place. We feel comfortable with that solution be an adequate for the testing that's out there today. Will we evaluate opportunities for integrating platforms? Yeah, of course we will do that just as we have done and do with our Tepnel related technologies. But that's more part of the routine business.

Great thanks.

Thank you.

Sumit Harish from Needham & Company, your line is open. Sumit Harish - Needham & Company: Hi, thanks for taking the question. Wanted to start off by following up on the market share question in terms of flu, can you maybe speak a little bit in terms to availability of systems at the hospital level compared to the competitive technologies?

Yes, so I'll take that. It is pretty clear to us that the systems on which Prodesse assays run are pretty widely distributed as they stand right now on this quite broad acceptance of the platform. As you know the assays are principally cleared on the smart cyclo system. And so the availability of systems has not been a hindrance to the placement of new accounts and clearly continues to provide those systems and continues to be able to support new account introductions. Sumit Harish - Needham & Company: Okay and the second sort of a similar follow up, in terms of new account validations for the Prodesse test, as you move into some of the existing Gen-Probe accounts that haven't done the test. What's the validation timeframe and do you think keeping that in mind you can get significant contribution in this flu season from new customers or is that more of a next year flu season event?

I think the validation time period is pretty account specific. What I would say is that our sales force has ramped pretty quickly to start addressing new accounts and introduces -- and we are seeing interest in validating the test in terms of how many of those were materialized in the current season, I think we just don't know.

But Sumit to elaborate on that, we have a -- actually are in the process even this week of training our field technical folks on the assays of technical provider, direct support to customers. And I think you know we have a very good track record of being able to get quite complex multi assay TIGRISes up and running in a relatively rapid fashion in our existing customer base. So we think this is much more straight forward endeavor focused on one or a couple of assays and it's something that's right in the sweet spot of our field technical team.

Sara Michelmore with Cowen, your line is open. Sara Michelmore - Cowen And Company: All right great, thanks for taking my question. Carl I was hoping you could just give us a quick update on where the European commercial expansion stands? I know a lot has changed since you close the technology interested in terms of the data three port there and what we should think about going forward. Herm had mentioned that maybe the product acquisition with required investment as well, it will be worth some investments, so just curious in terms of how we should think about that? Thanks.

Let me ask Steve Kondor to comment on that.

Sara, I can say that we're on track in terms of our European expansion initiatives. We have sales people, service people and tax report people in all the major countries now in Europe. We have an office that's opening up the end of this year, and we're great pleased with the addition of these sales people in terms of contributions that they have made to date on the top lines. So everything is going very well there. With regard to your last question, comment regarding of Prodesse, Prodesse has a few distributors in Europe but primarily, our sales people will be selling that product line direct in and they are right now after acquisitions, are being trained on the product line and are looking at very forward to being able to place those products correctly in the countries where we have dedicated sales people? Sara Michelmore - Cowen And Company: Is the bulk of the build out behind the company, is that fair to say at this point?

Let say that we've got the necessary building blocks in place, Steve articulated in the major markets where we want to play. We tend to use this model of having both our field support, our sales guys put in place to get things going. After that you would see an expansion model that we focus on really revenue based opportunities and I think you add sales people to that model as you see the opportunities being large enough in the individual countries. So you should expect to see future expansion there but it won't be kind of bullish as we've done until this point. Sara Michelmore - Cowen And Company: Okay. And then my last question is on HPVU coming to the end of the clinical trials here hopefully in the next several months, when should we think about seeing or getting a good look at that data set? Is there any sort of time target you are thinking about or a strategy in terms of data determination? Thanks.

Yeah, I think Sara that we've said that filings will go in by the fourth quarter of next year. We're on track with that. As you know with a data set in the trial as large as this is, it will be hard to have interim publications or piecemeal publications. So we will really take the entire data set and then work out publication strategy thereafter. But it's hard for me to give you a visibility to say hey you could expect to see that prior to this -- Sara Michelmore - Cowen And Company: Okay. Thanks so much.

Thanks. Fred, I think we got time for one more and then we will have, very brief closing remarks.

Thank you. Our last question comes from Amit Hasson from Oppenheimer. Sir your line is open.

Amit, are you there?

Can you hear me? This is Lisa filling in for Amit. This is actually --

Hi.

Hi, a follow up on the last question, so you guys have recently presented some findings from the trial where you had a specificity that was 20 points better specificity, stayed the same. And we were just wondering when we should be expecting the final results from that study and what will be the impact of that data?

You can expect to see that data in its final format presented at the European conference in the first quarter of next year in Europe.

And we should take, as we did not respond to Sara's question, there will continue to be publications of marketing driven clinical studies from Europe in the period of time as we are doing our U.S. submission so that, that will be an ongoing process. Okay. With that, I would like to just thank you all for your questions and to wrap up, Gen-Probe had a good third quarter. Operationally we combined solid revenue growth which was driven by strong results in our core STD business, with good leverage in the middle of the income statement, to generate bottom-line outperformance. Strategically, we made significant progress in building our aggressive, focused company by spinning off the industrial business, acquiring Prodesse and beginning key clinical trials. Before we sign off, let me remind you that our prepared remarks will be posted on our website momentarily, and we encourage you to refer to them if you missed a fact or a number during the call. In addition, we hope to see many of you at our annual analyst day the morning of Thursday, December 3, at the NASDAQ Market Site in New York. Please contact Mike or Paula if you would like to RSVP. Thank you for your time and attention today, and please call us if you have follow-up questions.

Thank you for participating. Today's conference has concluded. Please disconnect.