Elizabeth Woo - Vice President, Investor Relations James C. Mullen - President and Chief Executive Officer Bill Sibold - Senior Vice President, U.S. Commercial Cecil Pickett, Ph.D. - President, Research and Development Paul J. Clancy - Executive Vice President and Chief Financial Officer Dr. Dr. Alfred Sandrock - Senior Vice President of Neurology Research and Development

Michael Aberman - Credit Suisse Geoffrey Porges - Sanford Bernstein May-Kin Ho - Goldman Sachs Ian Somaiya - Thomas Weisel Partners Geoffrey Meacham - JP Morgan Jim Birchenough - Barclays Capital Jason Zhang - BMO Capital Markets Joel Sendek - Lazard Capital Markets Mark Schoenebaum - Deutsche Bank Eric Schmidt - Cowen and Company Steve Harr - Morgan Stanley William Tanner - Leerink Swann Rajiv Kaul - Fidelity Investments

Good morning. My name is Dennis, and I will be your conference operator today. At this time, I would like to welcome everyone to the Biogen Idec Fourth Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions). I will now turn the call over to Ms. Elizabeth Woo, Vice President, Investor Relations. Please go ahead ma'am.

Thank you, Dennis. Welcome everyone to Biogen Idec's earnings conference call for the fourth quarter and full year 2008. Before we begin, I'd encourage everyone to go the Investor Relations section of our website biogenidec.com to print out the press release and related financial tables. These will be particularly useful when our CFO, Paul Clancy reviews the financial results and the reconciliation to non-GAAP financial measures discussed today. We have also posted slides on our website that outline the topics discussed on today's call. Let me start with the Safe Harbor statement. Comments made in this conference call include forward-looking statements about the company's expectations, regarding future financial results, including our 2009 financial guidance, our longer term operational and financial goals, the sales potential of TYSABRI and other products, the availability of external growth opportunities and pipeline advancements. Such statements are subject to risks and uncertainties which could cause actual results to differ materially from expectations. In particular, careful consideration should be given to the risks and uncertainties that are described in our earnings release and in Item 1A of the company's reports on Form 10-K and 10-Q and in other reports Biogen Idec files with the SEC. The company does not undertake any obligation to publicly update any forward-looking statements. Information concerning the solicitation of proxies will be included in our 2009 proxy statement which we file with the SEC and which will be available free of charge at the SEC's website or the company's website. Today on the call, I'm joined by Jim Mullen, CEO of Biogen Idec; Bill Sibold, Senior Vice President, U.S. Commercial; Dr. Cecil Pickett, President, R&D; and Paul Clancy, CFO and Executive Vice President of Finance. I'll now turn the call over to Jim. James C. Mullen: Thank you, Elizabeth. Good morning everyone. Thanks for joining us. Value is created with outstanding products pipeline performance, and we've been delivering it in all three for our shareholders. In 2008, we grew revenues 29% to more than $4 billion and non-GAAP EPS by 34%. TYSABRI is well on its way to becoming a blockbuster, and we've transformed the pipeline over the past two years with 22 programs in Phase II trials and beyond. As we complete 2008 and look forward to 2009, let me update you on our progress towards our stated 2010 goals and you can find that on the 6th chart that we have on the website. Our marketed products posted extremely strong business performance in 2008. Total revenues grew 29% year-over-year, the highest growth rate since 2003 merger and grew to over 4.1 billion. The growth was driven by AVONEX 18% year-over-year growth to 2.2 billion. This market leading success for AVONEX as a billion brand, is due to its long-term safety and efficacy profile. TYSABRI global revenue more than doubled to over 800 million with Biogen Idec realizing 589 million. The number of patients on TYSABRI continues to grow. Approximately 2300 patients were added in the fourth quarter for a net total of 37,600 on therapy at year-end. At the end of the year and post-marketing setting, TYSABRI had over 10,000 patients with at least 18 months and 4,300 with at least two years of therapy. These numbers are same numbers I presented at JP Morgan Conference in January. As we proceed throughout the year, the long-term experience with TYSABRI will continue to grow and provide the medical community with greater clarity on the safety and efficacy profile of TYSABRI over the longer periods of time. Our marketing efforts will continue to focus on the efficacy story, education on PML, and placing PML management in the context of the overall product. Almost 18 months ago, I set a goal of over 100,000 patients on therapy by the end of 2010. We remain highly focused on achieving the 100,000 patient goal. But at this point, it looks like ... it looks as if it will be quite difficult to reach the number by that date. We continue to believe 20% market share is relevant target for the most efficacious MS therapy in the market, and Bill Sibold, our Senior Vice President, U.S. Commercial, will take you through an update of the MS franchise in a few moments. Revenue from RITUXAN unconsolidated joint business grew 22% and to over 1.1 billion and RITUXAN is on track to achieve two additional indications. The first is in rheumatoid arthritis DMARD Inadequate Responders. This file will be submitted... has been submitted and its PDUFA date is later this summer. The IMAGE data announced in Q4 should strengthen the competitive profile for RITUXAN in rheumatoid arthritis. In addition, we and our partners are planning to expand the label in CLL but filing this CLL-8 and REACH data in both U.S. and Europe later this year. Strategically, our pipeline is focused on first-in-class or best-in-class specialty products in diseases with high unmet need and global applications. Finding a good drug is obviously the most difficult stuff and by comparison building a specialty marketing infrastructure is relatively easy. We have a good mix of first-in-class and best-in-class molecules throughout the pipeline, and the biology of many of our programs have clinical applications across a variety of therapeutic areas. Under Cecil Pickett's leadership, the pipeline has been substantially strengthened over the past two years. This progress is due to additions from disciplined business development as well as clinical progress. We currently have five programs in late stage development and expect to have six shortly with the initiation of the peginterferon Phase III trials mid year. We now have 22 programs in Phase II and beyond, more than 60 clinical trials ongoing and more than 15 indications and more than 35 pre-clinical and discovery research programs. In 2008, three proof-of-concept studies were initiated and five programs went into clinic and started first in-human trial. Cecil will review 2008 pipeline progress in his comments. And finally, with respect to performance, our goal from 2007 to 2010 is to deliver 15 and 20 top and bottom-line compounded annual growth rate similar to what we achieved in the 2003 to 2007 timeframe. Out of the gates in year one, we posted very strong start with 29% top line and 34% bottom-line growth while simultaneously driving the pipeline forward. As you'll hear in greater detail from Paul Clancy, our CFO, we expect 2009 non-GAAP earnings per share to be above $4 per share. Two variables that will... have the most impact in the 2009 P&L are on the top-line pace and timing of TYSABRI growth; in expense line, the speed of advancement of late-stage clinical trial. In conclusion, we have strong franchises, strong cash flows and the strong balance sheet ending the year with approximately 2.3 billion in cash and marketable securities. We continue to focus on products pipeline as drivers of long-term shareholder value creation. As you have seen from our second press release this morning, we have received a notice from Icahn Entities proposing affiliated directors for elections to our Board at the 2000 Annual Meeting and several other proposals. This notice just came in last night. The Board has not reviewed the proposal. I'll now turn the call over to Bill Sibold, the Head of our U.S. Commercial business. Bill?

Thanks Jim. I'm pleased to report that Q4 was another strong quarter that capped the great 2008. In 2008, our global neurology business reached approximately $2.8 billion in revenue with about 721 million of that coming in the fourth quarter. This is up 33% for the full year versus 2007 and up 22% for the quarter versus the prior year. This was driven by strong results for both AVONEX and TYSABRI. AVONEX's $566 million in global revenue in Q4 was up 13% year-over-year. In Q4, revenue was up 22% year-over-year in the U.S. and 1% year-over-year internationally. For the full year, AVONEX's revenue grew 18% to $2.2 billion. These results reflect the strength of AVONEX market leading position, with over 135,000 patients on therapy worldwide. TYSABRI had in-market revenue of $218 million in the fourth quarter and over 69% increase compared to the prior year. For the full year, TYSABRI's market revenue more than doubled to $813 million. As we announced in January, we continue to increase the number of patients on TYSABRI in the U.S. and internationally. As you can see from the numbers in the press release, we are approaching 40,000 patients on therapy and have significant increases in the number of patients on therapy for one year, 18 months and two years. These strong results help position us for continued success with top brands in 2009. We will be leveraging AVONEX's proven efficacy in early MS as well as its clear long-term benefit. Specifically, we now have available the ASSURANCE data that was released at ECTRIMS which shows that patients who remained on AVONEX for up to 15 years since the original pivotal trial had reduced disability progression, greater quality of life and significantly greater sense of independence and self-care versus those patients who had either switched to another therapy or discontinued therapy. Additionally, we're looking forward to the release of the results from the 10-year CHAMPIONS extension trial at AAN in May. This is the first trial looking at the long-term impact of treatment in early MS patients. The combinations of AVONEX's proven efficacy and best-in-class compliance is why it is the number one MS therapy in the world. AVONEX disrupts the disease, not patients' lives and has demonstrated that it has the power to work early and keep patients active longer. Turning to TYSABRI, as you know there remains significant unmet need in the MS market. There are over 450,000 patients on therapy worldwide, and we estimate that about 20% of ABCR patients are switching therapies every year. Market research indicates that over 90% of physicians consider TYSABRI to be the most effective MS therapy. Therefore, we are looking forward to the time when TYSABRI will be the leading product prescribed for MS patients. While we recognize that there are hurdles to be overcome, it is difficult to find examples where a product with the commanding efficacy benefits, for a serious disease like MS, does not also become the most broadly administered therapy. To achieve this goal, we have three key objectives for 2009. First, refocus communication on TYSABRI's unprecedented efficacy for both physicians and patients. Second, help physicians increase their comfort diagnosing and managing PML. Third, translate resulting improvement in TYSABRI's benefit-risk perception into increased and sustained views. We continue to closely monitor TOUCH data to understand trends in U.S. TYSABRI prescribing pattern. As you are aware, the moderation in patient growth that occurred in Q3 was driven by both a slowdown in the rate of new patient adds as well as an increase in discontinuation. That trend appears to have generally stabilized in Q4. The slowdown in new patient add is largely driven by perception of benefit-risk which has been impacted by recent events. However, the type of patients coming to TYSABRI appears to be unchanged based on both their time since diagnosis with MS and their prior therapy. COPAXONE is still the largest source of switchers. And additionally, we continue to see about 4 to 5% of TYSABRI patients naïve to therapy. We are launching a number of programs in 2009 that directly address physicians' and patients' perception of TYSABRI's benefit-risk profile. This is to build on the progress we made at the end of 2008. The percent of physicians who believes that the benefit of TYSABRI outweigh the risk, rebounded in December from a low in August and is approaching pre July 31st levels. We are increasing the level of education about PML and clinical vigilance to increase prescribers' awareness and comfort. Additionally, many of you are aware of the data presented at ECTRIMS showing that TYSABRI reverses disability in some patients. As we move forward into 2009, we will be enhancing our focus on communicating this powerful and unmatched efficacy data. MS is a very serious disease and not treating it with an appropriate sense of urgency almost certainly leads to inferior outcomes for patients. We're also closely watching patient discontinuations. While anecdotally we hear of some physicians considering treatment holidays, we do not see evidence in the TOUCH data that this practice is common. We believe that the optimal dosing and administration are as described in the label. We are addressing discontinuations with physicians. For example, we are focusing educational efforts on clinical vigilance and benefit-risk. We've also been enhancing our focus on patient communications. Most importantly, we continue to add new patients and prescribers each day. In conclusion, we believe that our strong MS franchise of AVONEX, the best product to start with and savored for the long term, TYSABRI, the product for those in need, that need more efficacy, and a deep and broad MS pipeline, physicians as well as to drive strong performance in the future. Nobody is doing more for MS than Biogen Idec. I will now hand the call to Dr. Cecil Pickett, President, R&D. Cecil Pickett, Ph.D.: Thank you, Bill and good morning everyone. 2008 has been a year of important progress in our development pipeline. I'll report on 2008 progress and recent updates and on upcoming data readouts. First, a comment on TYSABRI. We are reporting today one new case of PML in the post-marketing setting, confirmed yesterday. The patient is in the EU and had 12 months of TYSABRI monotherapy. We chose to disclose this case ahead of the website update later today, given the timing of our earnings call and in the interest of full disclosure and transparency. Four of the five PML patients since 2006 re-launch are alive with varied degrees of disability. We would expect, any further updates about these patients, will be presented at upcoming medical meetings. I think it is important to point out; we have learned a great deal about the JC virus and PML in the past few years and are working actively on ways to identify patients at risk, improve early detection, and potentially mitigate the outcomes. Our goal is to detect PML early and make it a manageable side effect. And we believe, we are making progress towards that end. Turning to recent data releases and presentations. We and our partners recently announced the positive results of IMAGE, our radiographic study of RITUXAN in methotrexate-naïve early RA patients, which further bolsters our data on RITUXAN and RA. The study met its primarily endpoint with patients in the 1,000 milligram treatment group showing significantly less progression of joint damage compared to methotrexate alone. We plan on submitting the data for presentation at ULAR (ph) and we'll make a regulatory filing decision early this year. RITUXAN also featured prominently at ASH 2008 with positive data presented from both the first-line CLL-8 and the second line REACH trials, the largest studies ever conducted in CLL. We plan to submit BLAs or both CLL-8 and REACH by the third quarter of this year. We accomplished 11 data readouts in 2008 that enabled to go... no go decisions. You can see all the readouts on the slides. We recently reported positive data from our Phase II heat shock protein 90 inhibitor in gastrointestinal stromal tumors, and BIIB14 our A2A receptor antagonist in Parkinson's disease. We'll be taking them both forward to the next step in clinical development, and you'll see additional details on the data and clinical plans later this year. We also initiated three proof-of-concept studies in 2008, TYSABRI and multiple myeloma, BG-12 and rheumatoid arthritis and AVONEX and ulcerative colitis. Five programs started first in human trials in 2008: an antibody against IGF-1R in solid tumors, and antibody against the cell-surface antigen CRIPTO linked to nystatine (ph) in solid tumors and antibody against TWEAK cytokine in rheumatoid arthritis, long-acting recombinant factor IX in hemophilia B, and a back-up inhibitor, heat shock proteins 90 inhibitor for solid tumors. And finally, you can see from the slides, six programs were transitioned from research to development. I think you can see progress was excellent across all phases of the pipeline, and I believe one of our most productive years in recent memory. I'll now touch on the late stage pipeline and 2009-2010 data readouts. A number of programs have potential data readouts in 2009 and 2010 including RITUXAN Phase III LUNAR study in lupus nephritis, a Phase II portion of the Lumiliximab Phase II/III study in Relapsed CLL, long-acting recombinant Factor IX Phase I/II study IN hemophilia B, Daclizumab Phase II Select study of Relapsing-Remitting MS. CDP323, the oral VLA-4 receptor antagonist, Phase II study IN Relapsing-Remitting MS and Ocrelizumab Phase III studies in TNF-IR and DMARD-IR RA. We continue to make good progress on advancing and developing our late-stage pipeline. We continue to enroll patients into our five ongoing registration programs; BG-12 and MS, Lumiliximab in CLL, Galiximab in non-Hodgkin's lymphoma, Lixivaptan in hyponatremia, and ADENTRI and acute decompensate congestive heart failure. In addition you can see on the slides, the additional registration programs in our CD 20 franchise with our partners. We expect to complete enrollment of the Phase II portion of the Lumiliximab Phase II/III trial and the first BG-12 Phase III trial over the next few months. I'll also highlight that the growth in the number of registrational programs we have ongoing or novel molecules, which are expected to double from four at the start of 2008 to eight at the end of 2009. The next molecule expected to enter a registrational trial is a PEGylated form of Interferon-beta-1a going in to Phase III in the middle of 2009. PEGylation at the N-terminal alpha-amino group increases half-life and systemic exposure of the protein. Phase I results indicated that the long acting form has similar pharmocology to Interferon-beta-1a and was safe and well tolerated. The Phase III trial will be a placebo-controlled study in 1,260 Relapsing-Remitting MS patients with annualized relapse rate at one year as the primary endpoint. In conclusion, 2008 was a very active year on the R&D front and 2009 promises to be even busier. We continue to push to decision points for each of our programs. We have 22 programs in Phase II development or beyond and you'll be able to see more detail what we believe as a broad and deep pipeline at our Investor R&D Day on March 25th. I will now hand it over to our CFO, Paul Clancy. Paul J. Clancy: Thanks Cecil. I'll review our quarterly and full year financial performance additionally I'll detail our 2009 financial guidance. The GAAP financials are provided in tables 1, and 2 of the earnings release. Table 3 includes a reconciliation of GAAP to non-GAAP results. The primary differences between our GAAP and non-GAAP results for the quarter were $91 million related to the amortization of intangible assets, $8 million for pre-tax stock option expense and a $23 million tax impact. Our GAAP diluted earnings per share was $0.70 in Q4 and $2.65 for full year 2008. Now, move on to the non-GAAP P&L operating performance of Biogen Idec which we believe better represents the ongoing economics of our business and reflects how we manage the business internally with set operational goals. Our non-GAAP diluted EPS was $0.93 for Q4 and $3.66 for full year 2008. Now, let's move through the fourth quarter and full year results in a bit more detail. Q4 total revenue was $1.69 billion, representing a 20% growth over the same quarter in the prior year. Revenue for the full year totaled approximately $4.1 billion which represents a very strong year in the top line, 29% over full year 2007. Going through our product revenues; I'll begin with AVONEX. Q4 AVONEX worldwide product revenue was $566 million which represents a 13% increase over the same period last year. Worldwide AVONEX revenue for the full year totaled approximately $2.2 billion representing an 18% year-over-year growth rate. Q4 U.S. AVONEX product revenue was $341 million representing a 22% increase over Q4 2007. U.S. AVONEX revenue for the full year 2008 totaled just under $1.3 billion representing an 18% year-over-year growth rate. U.S. AVONEX inventory in the channel ended at just slightly over two weeks in the fourth quarter, unchanged from Q3. On a year-over-year basis, units sold in the U.S. declined approximately 5% in the fourth quarter. This was more than offset by price increases. On a sequential basis, Q3 to Q4, volume declined by just under 2%. Q4 international AVONEX product revenue was $225 million, representing an increase of 1% on a year-over-year basis. On a sequential basis, AVONEX international revenues declined by 11%, largely as expected. This was due almost equally to unfavorable foreign exchange, the work down of channel... our inventory in Germany arising out of a price increase and normal fluctuations in our tender business. International AVONEX revenue for full year 2008 totaled $926 million, which represents an 18% year-over-year growth rate. This was driven by high single-digit unit increase, foreign exchange favorability, contributing mid-single digits and the remaining, due to pricing mix. Q4 TYSABRI worldwide product sales were $156 million for Biogen Idec. TYSABRI revenue for full year 2008 totaled $589 million for Biogen Idec. U.S. end-user TYSABRI sales totaled $115 million which represents a 6% quarter-over-quarter decrease. Biogen Idec booked $53 million of this amount. While patient numbers increased, we were unfavorably impacted by fewer shipping days in Q4 as compared to Q3. Our business normally ships on Mondays and Tuesdays, we just happened to have more in Q3 than Q4. International end-user TYSABRI sales totaled $103 million, a 10% decrease from the prior quarter. This decrease was largely due to the strengthening of the U.S. dollar and fewer shipping days similar to the U.S. Q4 FUMADERM revenue was $11 million. Now moving on to the RITUXAN collaboration revenues which is referred to as the revenue from unconsolidated joint business. We recorded $303 million in revenue for the quarter, representing an increase of 20% on a year-over-year basis. Revenue for the full year increased 22% to $1.13 billion. This number has three elements; first, we received our share of U.S. RITUXAN profits. As reported by Genentech, U.S. RITUXAN sales were 677 million in the fourth quarter, up 14% versus prior year. And our Q4 profit share from that business was $206 million, up 21% versus prior year. This includes a $12 million payment associated with Roche opting into the OLYMPUS primary progressive MS data. Second, we received revenue on sales of Rituximab outside the U.S., and in Q4 this was $83 million, up 21% versus prior year. As mentioned in our Q3 earnings call, we expect the decline in Rituximab rest of world revenues in 2009 as the agreements with Roche expire in a number of EU countries. We expect for the full year 2009, revenues from RITUXAN rest of world, to be approximately $270 million, depending on sales growth and exchange rates. Third; we reimbursed $14 million for selling and developing costs incurred related to RITUXAN. Q4 royalties were $29 million for the quarter and a $116 million for the year. Now, turning to the expense lines and the non-GAAP P&L which include the adjustments that I described earlier. Q4 cogs were 101 million or 9% of the revenues. Q4 R&D expense was $288 million or 27% of revenue. Quarter-over-quarter, R&D expenses increased primarily due to the one-time $31 million opt-in payment to Genentech for GA101. R&D spent for the full year totaled $1.06 billion which was about 26% of full year revenue, an increase of 16% on a year-over-year basis. Increase in R&D expenses were driven by our continued advancement of the pipeline as detailed by season. Q4 SG&A expenses were $225 million, representing 21% of the revenue and a 19% year-over-year increase. This was driven by investments this quarter are TYSABRI growth, investments to support the AVONEX business and the ongoing geographic expansion of our commercial operations. Specific for the fourth quarter, we did benefit from the strengthening U.S. dollar. Continuing down to P&L, our collaboration profit sharing line totaled $38 million in expense for the quarter. As a reminder, this line is our payment of 50% of profits outside the U.S. to Elan and the reimbursement of third-party royalty incurred by Elan outside the U.S. Now moving to other income and expense. Other income and expense for the quarter was a loss of $36 million which was 34 million unfavorable on a year-over-year basis. The loss included; a $20 million impairment of our marketable securities portfolio, a $9 million impairment in our strategic investments portfolio, which is largely comprised with public and private biotech companies, and a $5 million accounting charge related to the ineffectiveness on our interest rate swaps. We did capitalize on the historically low yields in the fourth quarter by unwinding the interest rate swaps on our 10 year notes. This contributed cash proceeds of $54 million. This gain will be amortized over the life of the 10 year notes, thereby locking in a lower effective rate. Last quarter I discussed the composition of the marketable securities portfolio. During the fourth quarter, we continued to rebalance our portfolio. At year-end 80% of our portfolio holdings were in U.S. Treasuries, government sponsored investments, money market funds or other cash equivalents. The balance of the portfolio consists of high-grade corporate bonds, non-government mortgage securities and asset-backed securities. Additionally, in Q4, we continued to implement our share stabilization program with the purchase of $3.8 million shares of stock. In January of 2009, we purchased an additional $1.2 million shares. Q4, our tax rate was approximately 28%. We benefited from the recently passed R&D tax credit legislation which was offset by certain tax reserves and a greater mix of business in the U.S. This brings us to our Q4 non-GAAP diluted earnings per share of $0.93 and our full-year non-GAAP EPS of $3.66, representing a strong 34% increase over full-year 2007. Now, I'd like to provide our 2009 financial guidance. Revenue growth in 2009 is expected to be in the high single-digits. This includes both the expected decline in the RITUXAN rest of world revenues, as well as the impact of the strengthening U.S. dollar. If adjusted for those two impacts, our revenue growth would be in the mid-teens. We expect operating expenses, excluding collaboration profit sharing expense line, to grow below revenue growth in the low to mid-single digit range to between 2.0 and $2.1 billion. R&D is expected to be approximately 26 to 28% of total revenue. Growth in R&D dollars is expected to be inline with revenue growth, yet will be dependent on the progression of the pipeline. SG&A is expected to be approximately 19 to 20% of total revenue, beyond on a percentage of sales from full year 2008. The collaboration profit sharing line will be a function of the international TYSABRI trajectory. Our non-GAAP tax-rate is expected to be between 28 and 30%. GAAP tax-rate is expected to be between 32 and 34%. Non-GAAP diluted earnings per share is expected to be above 4% achieving leverage top-line to bottom-line. GAAP EPS, expected to be above $2.80. And our capital expenditures are expected to be in the range of $210 million to $250 million, down from 2008. As a result, we expect cash flow to grow faster than earnings per share. So in conclusion, 2008 was a very strong year. Our top-line revenue grew 29% for the full year. Our non-GAAP earnings per share grew 34% for the full year. Our cash flow was strong and we ended the year in enviable cash position. With this exceptional year of performance, we look forward now to continuing to deliver strong financial results and advance our clinical pipeline. I'll hand it back over to Jim, for his closing comments. James C. Mullen: Thank you, Paul. I'll be very brief in the close here. In summary, business performance for 2008 was extremely strong. While we... now we take some headwinds in 2009. I believe that the strong fundamentals of the business across all products and geographies will continue to deliver robust results and create significant value for our shareholders. With that Elizabeth, let's open this up for Q&A.

Thanks Jim. Joining us for the question-and-answer session is Dr. Al Sandrock, our Senior Vice President of Neurology Research and Development. Operator before opening the call to Q&A, we'd ask our participant limit themselves to one question and then re-enter the queue to ask follow-up questions. And please state your name and company affiliation. We will try to end the call around 9.30. Operator, you can take the first question.

Thank you. The first question will come from the line of Michael Aberman with Credit Suisse. Michael Aberman - Credit Suisse: Can you guys hear me?

We can.

We can. Michael Aberman - Credit Suisse: I am wondering if you can just... I guess going first I'll ask the TYSABRI question. Your patient numbers grew and yet revenues shrunk in the U.S. and I know there is less shipping days, but can you help us understand that more and if you can... I mean the same TYSABRI can you talk about the trends you are seeing in January?

Yeah let me take that Michael. I think it's a great question, I know it's on the minds of many people. The big impact was, as I had noted, foreign exchange. And I think that's relatively clear in the international business that was the big effect. The other one is shipping days. We literally had essentially 14 weeks of shipping in the third quarter and only 13 weeks of shipping days in quarter four. So that, depending on how you account for that if it's a $8 million impact you could double the amount in essence, and that's on our P&L actually. So, on the full collaboration it's slightly exaggerated from that. The other color I'd give you is we've all obviously tried to look hard at that... at this. In the U.S. we do with the TOUCH program have visibility of the number of infusions, that are... which really is not a function of shipping days or anything like that, it's literally kind of our version of store sales going off the retail shelves. We saw in the fourth quarter, a slightly moderating growth of number of infusions in the United States. So,... vis-à-vis the patient ads. That was highly, highly attributable to Thanksgiving weeks as well as the last two weeks of the year. So, that does look like there was an affect of patients kind of pausing on infusions right around the Holiday. We saw that and pick up in January. I'll turn it to Bill just to talk about how our January trends are doing.

Yeah as we've said in Q4 there was a general stabilization and it's fair to say that that is what we are seeing in January of this year so far. So, we're in a generally stable period.

Your next question comes from the line of Geoffrey Porges with Bernstein. Geoffrey Porges - Sanford Bernstein: Thanks very much. Wondering if you could just give us the additional information on the P&L case that you provided before, the patients, clinical picture, their treatment, degree of disability? And also if you could provide us just with a sense of the progress of the patients that you've reported most recently the one in the U.S.? Thanks.

Yes, thanks for the question. I think as I mentioned, the patient is a patient from the European Union, 12 months of TYSABRI mono-therapy. The patient is currently hospitalized and we think it is most appropriate to wait in terms of any updates on patients to wait until they're presented at upcoming medical meetings. So we really not going to comment any further on the patient status.

Your next question comes from the line of May-Kin Ho with Goldman Sachs. May-Kin Ho - Goldman Sachs: Hello.

Hi May-Kin. May-Kin Ho - Goldman Sachs: Oh hi, sorry. Can you comment a little bit about what you're planning to do with the long-acting Factor IX program? Cecil Pickett, Ph.D.: Well currently... I mean the idea behind this program is that the way in which the recombinant Factor IX is constructed that it would have a longer half life. So... and in preclinical models, I think we've tested it now on four preclinical models and all the preclinical models have demonstrated a longer half life compared to recombinant Factor IX. We are currently engaged in recruiting patients into a Phase I/II study, to look at safety and tolerability and just to confirm that in fact it has a longer half life in people. And I think, based on that data, we will make a decision about what our registration program will look like. We anticipate it will be a fairly small number of patients. And I think something that we can do fairly rapidly looking at clotting times of hemophilia B patients.

May, this is Jim. The theory of, of the case on Factor IX and then of course on the Factor VIII program which is a similar program behind it is. With the enhanced pharmacokinetics, pharmacodynamics, you got the ability to expand utilization particularly in the more prophylaxis settings. So that's just really the case. We'll see how that plays out in real clinical data.

Your next question comes from the line of Ian Somaiya with Thomas Weisel Partners. Ian Somaiya - Thomas Weisel Partners: Thanks. Just a question on the PEGylated AVONEX program. Cecil, I was just hoping to get your perspective on what you think the profile of the drug will be relative to AVONEX and just thoughts on why not conduct the head-to-head study versus AVONEX maybe teeth out the differences or improvements? Cecil Pickett, Ph.D.: Yeah, it's a very good question. We're going to test it in the Phase III program both twice monthly as well as once monthly in terms of the dosing regimen. And it's going to be subcutaneous. As you're aware the AVONEX is currently IM, dosed weekly. So we think in terms of patient compliance that it will be a significant improvement. There is ... I've had a lot of experience with another PEGylated interferon called PEGylated -- PegIntron. And with that PEGylated product, the assumption ... and this was to treat hepatitis C patients, the assumption basically was that the safety profile would be pretty much comparable and that the efficacy profile would be comparable to the wild-type interferon alpha, will it turned out that the efficacy profile was actually better because of greater systemic exposure and the safety profile was about the same. Again, I am not definitely going to extrapolate that directly to the PEGylated interferon data. But I think one potential upside is that based on systemic exposure et cetera, that there is a chance that the efficacy could be improved. But I think what we're really aiming for is comparable efficacy with either twice a month dosing or once a month dosing.

Ian, I think it's very important to note and I think you guys have all heard me say it before or Cecil in the last couple of calls and conferences. We have an agreed path forward or registration path forward with the European regulators and the U.S. regulators. Your idea of doing head to head, it is probably a good idea that is maybe the next step after this one I would say. And given the endpoints et cetera, probably requires larger longer trials to actually teeth that out in my sense. Cecil Pickett, Ph.D.: And again I think it's also important to point out that the endpoints agreed upon was annualized relapse rate at one year. And I think that's very important.

Your next question comes from the line of Geoff Meacham with JP Morgan. Geoffrey Meacham - JP Morgan: Hi Guys. Thanks for taking my question. You've previously given the U.S. source of patients for TYSABRI in earlier conference calls. I'm wondering if you can let us know the percent of patients coming from AVONEX versus those new to the market or those on COPAXONE, just on the fourth quarter? Cecil Pickett, Ph.D.: Yeah I think if you look in previous quarters, it's generally stable from what we have seen, the mix of where patients are coming from. That hasn't changed significantly throughout 2008.

Your next question comes from the line of Jim Birchenough with Barclays Capital. Jim Birchenough - Barclays Capital: Yeah hi guys. Just a question on plasmapheresis and whether in suspected cases of PML, you're seeing plasmapheresis being used and in those instances whether there is any report of immune reconstitution syndrome. And just related to that I was just wondering if the patient in Europe was plasmapheresed and if there is any issues with immune reconstitution syndrome specifically there?

I think Al could...

Yeah Al, would you mind taking that question? Dr. Alfred Sandrock: There have been a few patients who have received plasma exchange in the U.S. in the case before full confirmation. But in a sense that is consistent with our advice which is to suspend TYSABRI dosing unless PML can be ruled out. Any kind of relapse activity or disease progression on TYSABRI is extremely uncommon because the drug is so effective. So we're advising physicians to be very vigilant. If you suspect PML, stop dosing and some patients have even gone so far as to get plasma exchange, even before full confirmation.

Your next question then comes from the line of Jason Zhang with BMO Capital Markets. Jason Zhang - BMO Capital Markets: Yes, hi, thanks for taking next year question. When you were talking about TYSABRI market dynamics, you had talked about stabilization. Were you mainly... because you've referred to the TOUCH program, were you mainly talking about U.S., or the same trend and dynamics also to in ex-U.S., could you... if there is a difference, can you tell us what's the difference there?

Well, thanks, this is Bill. The stabilization, it would be fair to say that it is U.S. and international.

And clearly when we talk about very specific stuff, Jason, the visibility that we have in the United States is far greater than the visibility that we have outside the United States to the TOUCH program.

Your next question comes from the line of Joel Sendek with Lazard Capital Markets. Joel Sendek - Lazard Capital Markets: Thanks. I had a question about the EPS guidance, just I believe about $4. I am wondering if there is any upside beyond that. Could it potentially be significantly higher than $4 a share? How much flexibility do you have on the expense side, for example?

Someone expected question, Joel. But we... you've kind of elected to just say, we've got a goal of getting above $4, I wouldn't think of that as a wide range. I think of that as the similar ranges what we've kind of had in the past were tighter. We're obviously going to work hard to drive as much shareholder value as we can for the year.

To the extent, this is Jim, Joel. To extent that we see some buoyancy on the top line with the product, I would expect the vast majority that Paul went through.

Your next question comes from the line of Mark Schoenebaum with Deutsche Bank. Mark Schoenebaum - Deutsche Bank: Okay. Hi, guys, thanks for taking my question I'm pleased that Dr. Sandrock is on. I was wondering it maybe if he'd be willing kind to kind of give his opinion on some of the emerging new data on some of the oral compounds that have come out. And key outstanding questions namely, the Cladribine data and the FPY data. And since the PEG AVONEX program the FDA is okay with the one year trial with relapse rate as an endpoint, is that... do you think if there's any indication the FDA is allowing single trials for registration now? Dr. Alfred Sandrock: Hey, Mark that was only four questions. Mark Schoenebaum - Deutsche Bank: But it was a wrong sentence. Dr. Alfred Sandrock: Mark, I can't remember the whole thing. I am sorry. Let me take the last question first. I believe... I do not believe the FDA has significantly lowered the hurdle for approval of new molecular entities in multiple sclerosis. I think they've made an exception to this... to the PEGylated interferon situation because of the interferon and the safety of interferon is well described. And moreover they have experienced with PEGylated interferons in the past. And I believe they've made an exception if you will for PEGylated interferon. With respect to your question about, the more... the recent data readouts from competitors. I don't have a lot of information beyond what you have with respect to the oral cladribine trial. I would... I have the efficacy readouts as the placebo rate being approximately 0.33 and the cladribine in one of the dose groups being 0.14 on the annualized relapse rates which translates to efficacy difference of one relapse every five years. So the question there is; is that difference... under scrutiny will that difference still be convincing? For example; we know the drug is a bone marrow suppressant. One of the physicians who rated the relapse as adequately blinded or could they have been tipped off by CBCs, complete blood counts on their patients. But assuming the raters were adequately blinded, we'd want to know whether or not their primary endpoint would support it by secondary endpoints in particular endpoints like disability progression. We understand that they might be positive, but we will give them no data on that, so how robust is the disability data for example. We are assuming the MRI data will support since prior trials of IV cladribine have shown an effect on MRI. We have been given very little information about safety. We are hearing rumors, I think as you have that there are malignancies in the Cladribine groups. I don't know that for a fact. I'm going to wait to see the data at the upcoming scientific meetings. We know that IV Cladribine has the pregnancy category D. And it is a Teratogen which is... I think it'll be of concern to, for MS patients since many of them are young women of child bearing age. And so... and then I think there is an outstanding question about how safe is long-term lymphopenia? And so I think in the end it's going to come down to all these risks and unknowns were to be the small benefits observed in the placebo-controlled of that trail. And as far as FTY 720, I think very similar comments. All we know are the sort of the top-line data from the AVONEX comparison trail. And the laundry list of adverse events include liver function abnormalities, bradycardia, dyspnea pulmonary problems, malignancies particularly skin malignancies, too fatal viral infections and macular edema, all in a relatively short trial with a fairly high discontinuation rate. So again, these are pills, which is an advance but how much are you willing to trade off safety for the convenience of the pill. Cecil Pickett, Ph.D.: I think the other thing, just to add, just to comment to Al's update on Cladribine, Cladribine is a purine analog and interestingly it actually inhibits DNA synthesis as well as DNA repair. And so, in rapidly proliferating cells obviously inhibiting DNA synthesis has an impact and that's why one would expect mild suppression. The inhibition of DNA repair in resting cells is a concern, in terms of long-term treatment, because those cells where you get mutations, which will make a normal cell turn in to a malignant cell, those mutations can not repaired. And so, I think that in terms of long-term use of Cladribine, will potentially be an issue.

Your next question comes from the line of Eric Schmidt with Cowen and Company. Eric Schmidt - Cowen and Company: Yeah good morning, thanks for taking my call. A question for Paul Clancy on the expense guidance for 2009; it looks like you are doing a great job controlling the SG&A. But I was surprised to hear you a tuck up R&D as a percent of revenue, R&D going up year and year. I think in the past you'd mentioned that it was a goal of the company to bring R&D down as a percent of revenue so maybe you or Jim can, kind of talk about what's going on there?

Yeah... I mean. It is a goal, absolutely. We've made tremendous progress on that goal in 2008, Eric. And so, I think with the kind of the top-line being somewhat impacted by the strengthening dollar, we don't want to kind of hold back on the R&D in the progression of the pipeline. So, I think that is too important for us to kind of in a one-year basis try to take our... get too focused on marching down in a linear fashion on the R&D as a percentage of the sales. We still are certainly focused on that over the long haul and we'll continue to put things in place. And I think we think about it in, when we've talked about SG&A and R&D and we certainly want to continue to do that, but I want to think about it in the total operating expenses and total kind of profit margins and getting good progress on that. So, if we can get a little bit more in SG&A one year and not as much in R&D, I think we'd be okay with that. Jim, did you have another thought?

Yeah, and the increases, the absolute increases in 2008 in R&D expense and certainly its even more of the case in 2009, is almost entirely focused at progressing late-stage clinical trials. So if external clinic trial has been... so and that's why I highlighted in my comments sort of the biggest variable in our... in the expense part of P&L is a how rapidly do the late stage trials advance. And then the, sort of unsaid but I think also important point for that is, because most of this is external expense in running clinical trials, it is not part of the prominent burn and build an infrastructure.

Your next question comes from the line of Steve Harr with Morgan Stanley. Steve Harr - Morgan Stanley: I had a question on just the TYSABRI safety profile. As you say, you are seeing a decrease in rate in PML but you now have eight cases of PML in total and only 4500 patients over two years and you have 10,000 patients over 18 months. It seems like that's relatively consistent with the labor of (ph) given the frequency with which it occurs late in or I should say the longer patients are on drug. So, two things, what gives you the confidence to say that the rate is down given that we've now seen a clustering of cases over the last six months? And two, what are your restrictions with your FDA label? Let's say you have a 1 to 1000 rate around what you can say about the rate of PML?

I'll have Al comment on this, but in the post marketing setting, there's been five cases, just to clarify. And we feel that the rate is still clearly within what is currently contained within the label. Al any other comment? Dr. Alfred Sandrock: I am not sure those numbers were quite right. I believe we have more than 20,000 people who've been on the drug for a year, at least. And so I'm not sure the denominators that the caller was using were correct. But we have been tracking the rate very carefully and doing a lot of modeling and simulations and we believe we're well within the risk. And again I think Jim Mullen has made this point in past calls that we think about the risk of PML, it's not just the incidence but the outcome. And when we were re-approved, the assumptions were that the risk of PML was one in a thousand and that it was almost universally fatal. And I believe that when you look at the outcome from the post marketing cases and also the incidence, we're well within what the label states.

Your next question comes from the line of Bill Tanner with Leerink Swann. William Tanner - Leerink Swann: Thanks for taking the question. May be a question for you Bill, just on the re-growing TYSABRI, I was just thinking about is AAN going to be sort of the next big medical conference at which the company can... they'll begin to address some of the concerns that physicians have and then may be if there is a possibility to get a little bit more color or a understanding that things have sort of stabilized, but wondering on is there been a plateau-ing (ph) in the numbers of physicians that are treating? What do you see in terms of size, of practice as to the recent treatment patterns and kind of what do you see community docs versus academics?

Okay. So first of all, there is not an intent to wait until AAN to continue to move the needle so to speak with TYSABRI. We have a lot of that but its underway with what we're doing commercially with the products. Throughout 2009, there will be additional presentations made at medical meetings like AAN, and there'll be publications that we are expecting and all of these things we think are, could be benefit-risk profile the product more in perspective, delivering some new information about analysis looking at the data of TYSABRI. And really as we take a look towards the future with a confidence of where we drive our confidence in this brand as far as starting with the disease, I am not... still remains a serious and debilitating disease. And we see that by the amount of switching we commented on in the ABCR market where we have 20% of patients switching each year. Also in the pipeline, with so many products headed towards MS, there's clearly a high unmet need. And TYSABRI, when you look at the efficacy, it really is delivering a new level of efficacy and as we stated in some patients actually reverses disability. I think that this profile, the benefit-risk with PML, is certainly getting put more in perspective in time as we have the results of patients as Cecil mentioned, for the five patients that are alive. And we also look at the number patients globally approaching 40,000, and the product's approaching blockbuster status. So we have a lot of confidence that those positive details, along with the efforts that we have throughout this year, will be beneficial. Now, as to your question about the plateauing in the number of patients or physicians have different (ph) practices. Let me take that on; we see in the U.S. the number of prescribing physicians continues to increase steadily. That, clearly, there is a breadth of physicians prescribing that we believe is sufficient to handle the number of patients that are seeking therapy. And the size of practice, any of the results that we've seen doesn't seem to be tremendous differences between large practices, small practices, academic or well above the trends that we've seen which as we've stated is a general stabilization.

Your next question comes from the line of Rajiv Kaul with Fidelity Investments. Rajiv Kaul - Fidelity Investments: Hey guys, good morning. Thanks for talking my call. I just had a question on antibody titer testing of the JC virus, and I was wondering how quickly that could be incorporated into the program, because my understanding is that, it's a pretty simple blood test? And that... and if you look at the literature, I think about 30% of MS patient probably have no antibody titers to JC viremia... not to viremia, to the virus. And so the implication of that would be that, potentially a large number of MS patients that may have never had exposure to the JC virus, if that's true, currently TYSABRI's penetration is only about 8%. And so that would give us a lot of legroom herein and it could demolish the risk of PML. So, I just wanted to get your thoughts on this and wanted to get a sense for how quickly we could move forward with some of this testing?

Al? Dr. Alfred Sandrock: Thanks. The color's right, that... in the past and with respect to PML risk mitigation, we had focused on the treatment side and for those reasons we did the plasma exchange study and we're initiating the Mefloquine study. And we believe that that plus the pharmaco-vigilance and the clinical-vigilance that's, that we advised has helped in the outcome from PML. In this year, in 2009, we're going to turn our focus on to risk mitigation. And a major push in that respect will be the prior exposure to JCV as a risk factor, and the serologies that were mentioned is a key aspect of that, and we believe that we can get into testing certainly... we believe by around mid-year, we can start testing. But certainly by the end of the year we hope to be doing testing in patients. We're doing many other preliminary steps, experiments now, but it is a major goal for 2009.

Well, thank you. I think given the time and face of that (ph) that has to be our last question. So, thank you for joining us today. And the replay number is available. Thank you.

Thank you.

Ladies and gentlemen, this does conclude the Biogen Idec fourth quarter earnings call. You may now disconnect.