H. Thomas Watkins - President & CEO Tim Barabe - SVP & CFO Jim Davis - EVP & General Counsel Dave Stump - EVP, R&D Barry Labinger - EVP & Chief Commercial Officer

Geoff Porges - Bernstein Edward Tenthoff - Piper Jaffray Liisa Bayko - JMP Securities Jason Kolbert - ThinkEquity Eric Farmer - Leerink Swann

Good day everyone and welcome to the Human Genome Sciences conference call. As a reminder today's conference is being recorded. At this time I would like to turn the conference over to H. Thomas Watkins, President and Chief Executive Officer of Human Genome Sciences. Please go ahead, sir. H. Thomas Watkins: Thank you, operator and good afternoon everyone. Thank you for joining us this afternoon. The press release that we just issued a bit ago is posted on our web site at www.hgsi.com. Before we begin I would like to point out that we will be making forward-looking statements based on our current intent, beliefs and expectations. They are subject to certain risks and uncertainties and I encourage everyone to look at our SEC filings for additional detail. During this call I will provide an overview of recent HGS progress. Then Tim Barabe, Senior Vice President and Chief Financial Officer, will discuss highlights from our financial results. For the Q&A session to follow we will be joined by other members of the HGS senior management team. We took a number of important strides forward that brought us closer to our goal of becoming a fully commercial organization. All three of our late stage products have continued to advance. Let me begin with anthrax. At the end of last month we achieved our first product sale when we began delivery of anthrax to the US Strategic National Stockpile for emergency use in the treatment of inhalation anthrax. We believe ABthrax can be an important contributor to our Nation's bio defense program. We expect to receive at least $150 million in revenue from this delivery with most of that to come in the first quarter of this year. We will receive an additional $15 million upon FDA licensing of ABthrax and we expect to file our biologics license application, excuse me, BLA in the second quarter of this year. We are also working at this time to secure additional orders for ABthrax and we will keep you posted on our progress. In December 2008 we reported positive results for ABthrax and we will keep you posted on our progress. Moving to Albuferon, in December 2008 we reported positive results for the first of two Phase 3 trials of Albuferon for the treatment of chronic hepatitis C. Albuferon met its primary end point and achieved two, three in patients with genotypes two and three chronic Hepatitis C. In March we will report the results of ACHIEVE 1, the Phase 3 trial of Albuferon in patients with genotype 1chronic Hepatitis C. The results of ACHIEVE 2, 3 showed that the wait of sustained vero logic response for the 900-microgram dose of Albuferon was comparable to Pegasys with half the injections and that the rates of serious and severe adverse events as well as discontinuations due to adverse events were also comparable for Albuferon versus Pegasys. If the results of the second Albuferon Phase 3 trial ACHIEVE 1 are also positive, we expect global marketing applications to be filed in the fall of this year. And we believe Albuferon could become a market leading treatment for chronic hepatitis C. Now let's turn to LymphoStat-B. LymphoStat-B presents a unique opportunity. Patients with Lupus have not seen a new drug approved by the FDA to treat their disease in more than 50 years. The Phase 3 trials of LymphoStat-B which we call BLISS 52 and BLISS 76 are the largest clinical trials every conducted in Lupus patients. We are on track to report the results of BLISS 52, our first Lupus Phase 3 trial in July 2009 and we're also on track to report results from BLISS 76; our second LymphoStat-B Phase 3 trial in November 2009. We expect LymphoStat-B Phase 3 trial in November 2009. Assuming that LymphoStat-B is successful in Phase 3, we expect to file global marketing applications in the first half of 2010. Moving to the GSK clinical pipeline. Both darapladib for cardiovascular disease and Syncria for type 2 diabetes have reached important inflection points. HGS has substantial financial rights to each of these drugs. In December 2008 GSK initiated the first Phase 3 trial of darapladib in more than the first Phase3 trial of darapladib in more than 15,000 men and women with chronic coronary heart disease. Darapladib was discovered by GSK based on HGS technology. We will receive 10% royalties on worldwide sales if this drug is commercialized and we have a 20% co-promotion option in North America and Europe. Darapladib has the potential to become an important treatment for the prevention of cardiovascular risk and we look forward with great interest to watching its progress toward the market. Earlier this month GSK advanced Syncria to Phase 3 development for the long-term treatment of type 2 diabetes. Syncria was created by HGS using our proprietary albumin-fusion technology. Syncria is a long acting form of GLP-1, a peptide hormone that acts to maintain normal blood sugar levels and to control appetite. We licensed Syncria to GSK in 2004. We are entitled to fees and milestone payments that could amount to as much as $183 million, including $24 million received to date, and an additional $9 million payment to be received in the current quarter. We are also entitled to single-digit royalties on worldwide sales if Syncria is commercialized. With GSKs advancement of both darapladib and Syncria to Phase 3 development, we now have five late-stage product opportunities moving forward. So these are indeed exciting times for HGS despite the difficult economic conditions that surround us all Now let's turn to Tim Barabe for our financial update. Tim.

Thanks, Tom, and good afternoon everyone. You have the numbers for the fourth quarter and full year 2008 in the press release. I would like to draw your attention to a few highlights. First, revenues continue to increase and rose to $48 million in 2008 from $42 million in 2007. Second, as you've seen from the press release as well as from prior guidance, we expect revenues to grow five-fold in 2009 to $250 million. This includes at least $150 million that we expect to receive and recognize from ABthrax sales. Third, I am also pleased to report that this month, we have repurchased $106 million of convertible bonds due in the second half of 2011 and 2012 for $50 million in cash. This reduces our long-term debt by more than 20% from $510 million to $404 million. We have no plans at this point for additional repurchases of debt, but we are pleased that we are able to capitalize on an opportunity to further strengthen our balance sheet by reducing our debt at reasonable prices. Fourth, net cash burn for 2008 was $245 million. In the financial guidance we provided in January 2009, we said that we expected net cash burn for full year 2009 of less than $25 million. This did not contemplate the $50 million spent to repurchase the convertible notes. We are working toward offsetting some or all of this $50 million and when we have more clarity, we will provide it to you. Finally, with $373 million at the end of 2008, our cash position remains strong and is sufficient to take us through the availability of Phase 3 data and the filing of marketing applications for our lead products, while also funding development of our product pipeline. With that, I would like to turn the call back over to Tom Watkins for our Q&A session. Tom? H. Thomas Watkins: Thank you, Tim. In summary, we continue to move aggressively toward commercialization. We have a world-class pipeline, now including five late-stage products in addition to mid-stage and earlier stage products, including promising opportunities for cancer. We have our first product sales from ABthrax. We plan to file marketing applications for Albuferon in the fall of this year. We are on track for LymphoStat-B Phase 3 results in July and November of this year, and we have a strong cash position. With that, I will open the call to questions. Operator, if you would please review the procedures? Thank you.

(Operator Instructions) We hear first from Geoff Porges with Bernstein. Geoff Porges - Bernstein: Thanks very much Tom and Tim, thanks for taking the question. Couple of quick questions, first on ABthrax, the opportunities outside the US, now you've actually started delivering, could you give us a sense of how you are going about it, what sort of reception you're getting and what the lead time might be on potentially seeing some orders in other markets? And then just a question on LymphoStat, I'm not sure whether Dave is with you, but it would be helpful to have an update on the extension study for LymphoStat-B and how that's going? H. Thomas Watkins: So, Geoffrey let me ask Jim Davis to comment first on your ABthrax question and then Dave Stump is here and we will have him comment on LymphoStat. Jim.

Sure, I would be glad to give you an update on ABthrax. Yes, the international market is something we are interested in and we are beginning to explore opportunities there now that we have begun delivery to the Strategic National Stockpile. It's very difficult at this time to really give any estimate of the magnitude or the timing with respect to that and we are interested and we are pursuing it. Geoff Porges - Bernstein: Thank you. H. Thomas Watkins: Dave?

The extension studies are going well, I presume you are talking more about what's happening with our Phase 3 extension studies? Not just the previous Phase 3 extension study. We have patients coming off double-blind, placebo controlled phase, primarily in BLISS-52 where the treatment period is only 52 weeks. So the subscription has been pretty decent reminiscent to me of what went on in Phase 2. I'll remind you patients had to actually complete the 52 weeks double-blind period in order to be eligible to roll over. So when we actually do come up with numbers we will have to make the adjustments for patients who don't finish. BLISS-76 we have much less mature data in part because we have the extra 24 week placebo controlled double-blind phase, so they actually go out to 76 weeks, we will only begin having a few patients rolling over for that extension study probably going forward from mid year. Geoff Porges - Bernstein: Guys, can you just give us a sense of how many patients on the Phase 2 are still on drug now?

I don't have the presentation in front of me but it's been very high. We had probably 90 plus percent of patients who are eligible to go into extension who did and then we ran a second phase of the extension for those who finished the first six months of extension and another 90% continued there. We've had very modest attrition overtime and that attrition has not been due to significant adverse events or lack of efficacy. I think if you'll recall the data we presented both at UR and ACR. There's been a very stable on going response rate that's been observed in this study. So my experience with the extension studies is patients drop out if they perceive they are not benefiting or if they are just getting bored or obviously if there's a tolerability problem. I don't think we've seen either of those. Obviously our next inflection point is BLISS-52 data in July. Geoff Porges - Bernstein: Great. Thanks very much.

You're welcome.

We'll take our next question from Edward Tenthoff with Piper Jaffray. Edward Tenthoff - Piper Jaffray: Great. Thank you very much. And I just want to say congratulations on the good year. I know it's been a long road here but I think with the data coming up it should actually be a very exciting '09. Two questions if I may, a little bit of housekeeping here. Firstly on the revenue guidance for this year, what is it that primarily constitutes the additional$ 100 million on top of ABthrax? And in particular are there any milestones related either to Albuferon or LymphoStat that you're expecting? And then secondly from a tax basis, will you guys be paying taxes in Q1 based on potential breakeven or better as a result of the ABthrax shipment?

Okay. Well I think the question on the second one as to whether we will be paying taxes there is no expectation whether we will be paying taxes due to the tax loss carry forwards that we currently have. So, no, we don't expect any taxes. Edward Tenthoff - Piper Jaffray: What is that currently the carry forward?

They are very, very large, significantly larger than ABthrax order. H. Thomas Watkins: About the same size as the national debt, Ed.

As to the revenue, we haven't really gone into the guidance as to what's in the revenue. We said at least $150 million of ABthrax. As you know we did sign some manufacturing alliances with Hospira. We are looking at other deals as well. We have the Syncria royalties so I think all in all there are a number of different items that could comprise the $250 million but we are rather confident that we will get to that number. Edward Tenthoff - Piper Jaffray: Okay. Thank you very much.

We'll hear next from Sapna Srivastava with Morgan Stanley.

Hi, it's Dave calling in for Sapna. Just a question, after you get the first set of LymphoStat data, I was wondering if you could just talk about if there are any implications whether the data is positive or negative on your ability to either not file the drug at all, if negative, or start filing process early if positive with the expectation that you would then supplement with the second trial?

This is Dave speaking. The second part of your question first. Our FDA for the program requires both studies reach prescribed levels of statistical significance on the primary end points. So, I don't anticipate a scenario where we would start filing on BLISS-52 data. In the end we almost make your work so complex that you can't make up the time advantage knowing that the second data comes forth. Usually FDA will say just give it all to us at once and then let's all work very efficiently at that point to move this thing through review. Your first part of your question is what we would do if we don't hit on BLISS-52. That would take us out of the [SPA] but it's really a question of how far off are you, why didn't you hit. And then what happens with BLISS 76? It's really speculative at this point to talk about that. I mean I think, what I can promise you is that we will make every attempt to get this drug approved. I would prefer it by hitting both ends points, meet our S. P. A., get a priority review, have everything be nice and clear. But if I think I have a safe and effective drug I'll work on its behalf and we should, when we all have data in front of us, I guess we will all talk together about what we think the odds of success with that will be.

Thanks very much for the answer.

You're welcome.

Our next question comes from [Eric Farmer] with Leerink Swann. Eric Farmer - Leerink Swann: Hi. Good evening guys. I was wondering that with ACHIEVE 1 coming up in March how important are the quality of life improvement from the FDAs perspective and clinician perspective?

This is Dave, let me take one aspect of this and I am going to ask Barry to comment as well. Quality of life is a pretty specified secondary end point of the study. So we are allowed to analyze it prospectively and report on it. It would almost certainly be part of scientific disclosure. But it is not a requirement for approval. At this point approval is based on hitting our pre specified non inferiority efficacy end points and having comparable safety for the dose we intend to take forward. I think maybe more importantly Barry, you might want to comment on what's important to quality of life is or is not in the marketplace.

Thanks, Dave. I would say that quality of life data from ACHIEVE 1 would be helpful to have from a clinician's perspective and our ability to achieve a leadership position in the marketplace that we expect to get to. It's helpful because it would be a further demonstration of the benefit of the drug which is really related to half as many injections and the market fully understands that each of the injections come with several days' side effects, flu-like symptoms and others. So quality of life data would be another description of that benefit because you avoid half of those side effects by not taking the shots. I don't think it's a need to have because as I said it's well understood that there are those side effects that are associated with the injections and therefore if you don't take the injections, you are offering a differentiation that is beneficial compared to current options. So nice to have, not a need to have, we look forward to the data and the trial. Eric Farmer - Leerink Swann: That's very helpful. Then with LymphoStat-B, is there any read through from the (inaudible) data from Ohio pharmaceuticals, I know it's a different mechanism and population but is there anything that might even be beneficial through LymphoStat-B that might be garnered from that study?

Yes. This is Dave. I think you answered your question, as the difference in target population and mechanism are the two key factors. I think at a more scientifically theoretical level it gets at this issue in lupus. This historical notion that it's the auto antibodies themselves that do all the damage. But we are appreciating a more important involvement this is the cellular level as well, of defining this as the cellular level as well. The source of these auto aunt boats are these autoimmune piece of clones if you will. We've been tracking a lot of cellular data. We've reported on the biokinetics if you will of LymphoStat and they are quite interesting. We are collecting that kind of data in our Phase 3 program. It may well be that just targeting anti double stranded DNA specifically for autoimmune enterprises is just too specific a target. But that being said it's a different part of population than we are studying with LymphoStat specially not just with respect to the organ of involvement but with respect to all the organ of involvement but with respect to all difficult and incumbents the patients are on. So, I don't think it reads on our trial much at all; much more provocative in my opinion more exploratory and understanding the differences there. There are some key differences. We talked about that with the public before, yeah, for patients a good Lupus surprise therapy would have been great but I don't think that's going to be it. Eric Farmer - Leerink Swann: Thank you.

You're welcome.

We'll take our next question from Liisa Bayko with JMP Securities. Liisa Bayko - JMP Securities: Hi, could you talk about the shelf life of ABthrax and perhaps anything in the contract that requires you to replenish the stockpile? and perhaps anything in the contract that requires you to replenish the stockpile? H. Thomas Watkins: Liisa I am going to have Jim Davis speak to that one.

This is Jim. The shelf life of ABthrax is we have never specified but it's typical of a liquid monochrono antibody which has a typical shelf life of two to three years. This contract is as currently drafted is for a single shipment, or a single supply of our 20,000 doses. However, we believe and we understand the government believes that ABthrax is a very important addition to the Strategic National Stockpile and we would expect the government would want to continue to maintain its supply. So we are optimistic that we may get future orders and we are working toward that end. Liisa Bayko - JMP Securities: Okay. Great. And is that something you are working on, when do you have a sense on when we might know if this would be any sorts of recurring revenue?

I think it's always difficult and speculative to predict when you can reach an agreement with the government and where those might go but at this time I can't really speculate. Liisa Bayko - JMP Securities: Okay, good. That's helpful. And then just with respect to the ACHIEVE 2/3 data that you put out, when might we see details on the trial date at [EPO] H. Thomas Watkins: We are in the process of submitting it at as a late-breaking abstract. I am biased of course, but I think the ACHIEVE studies are really important studies in the field, so I would like to think I have an optimistic shot at getting on the program there. ACHIEVE 1 is more difficult, as you may know the abstract deadline and our plan unblinding are all in March and that may be tougher for us to meet. Our investigators in steering committee, are effective folks and we will work with them as much as they think they can get to work to get achieve one on as well but that one I think is more of a longshot. We will let you know obviously as soon as we know whether one or both were actually accepted and planned for presentation. Liisa Bayko - JMP Securities: That's great. And then on the ACHIEVE 2/3 trials, now that you've had time to sort of digest the data, are there any additional comments or thoughts? I know there were some differences in the Asian population data, etc.? Anything on any further comments? H. Thomas Watkins: We continued to model, to analyze. We have made progress with our pharmacologic analysis and so far I can't explain it based on our pharmacokinetic basis. We do have still a little more formal analysis to do. If I had to guess it's going to turn out to be play of chance, such that's how things often resolve and would require confirmation by further work establish this fact, but other than that the data is pretty much what we disclosed and I think, I'm sure you are all looking forward hearing our investigators actually present it and give them your comment at the time of hopefully [EPO]. Liisa Bayko - JMP Securities: Okay, great. And then just a final question for Tim, and you may have talked about this, I just hopped on the call a little late. Are there any plans to continue buying back some of the convertible bonds?

Liisa, thanks for that. There are no plans at this current time to repurchase any more of the debt. It was a great opportunity to strengthen our balance sheet at reasonable prices. Liisa Bayko - JMP Securities: Okay, great. Thanks a lot and congratulations on a good year and we are looking forward to this year as well. H. Thomas Watkins: Thank you.

(Operator Instructions) We'll take a follow up from Edward Tenthoff with Piper Jaffray? Edward Tenthoff - Piper Jaffray: Great, thank you very much. Just looking a little bit more closely at some of the cost side, if you don't mind. I guess when we look at the guidance for this year, should we be anticipating R&D going down? It looked significantly lower, obviously in the fourth quarter than where we had been trending throughout the year. So, can you give us a sense of as the ACHIEVE study wraps up, sort of what we should be looking for on the R&D side?

Thanks for the question, Ed. As you noticed in the fourth quarter, we had a significant drop in R&D and a good piece of that was related to Albuferon. There was also a piece related to Aegera that was booked in 2007 versus 2008. So it's pretty much a 50-50 split between Albuferon and Aegera, but Albuferon was heavy in late 2007, say the second half of 2007 and the first half of 2008. Of course, LymphoStat ran throughout 2008, will run throughout 2009 because these patients will be moved on to continuation study. So, I would expect a modest reduction, but not along the lines that what you saw in the fourth quarter. Edward Tenthoff - Piper Jaffray: Just a quick question with respect to the IAP inhibitor. When should we be expecting data from that program? H. Thomas Watkins: That program progresses in its all-comer solid tumor Phase 1 study. As you know these are dose escalation studies. You go until you get into trouble from tolerability or discover surprising things pharmacologically or I suppose you could conclude that I hit a pharmacologic pre-clinical efficacy target that would let me blossom the program. That makes it kind of hard to forecast your timeline. We are well into the planned studies, so I don't think it's going to be forever, but at this point I can't say exactly when. Edward Tenthoff - Piper Jaffray: Okay. And what would be next step there? H. Thomas Watkins: The next, if you are establishing an understood safety and pharmacologic profile for the product, as a single-agent, we would then probably look to three different avenues of study. One would be single-agent tumor specific study, that would come off observed signals in your all-comer study or a particularly compelling preclinical rationale. Secondly would be combination with standard chemotherapeutic agents [analogous] of what we've done with mapatumumab. And third would be uniquely combining the IAP antagonist with mapatumumab where we've really seen very striking preclinical efficacy. So I think any three of those avenues you could see unfolding as we move forward. And it may well be those avenues would start before the end of this solid tumor single Phase 1. It depends on what exposures we reach and what the data looks like at those exposures. And what measure pharmacologic exposure we actually achieve. So, very interesting program, this is scientifically a very active area out in the field. We've had no trouble getting the attention of the community on this one. Edward Tenthoff - Piper Jaffray: All right.

(Operator Instructions). We'll hear next from Jason Kolbert with ThinkEquity. Jason Kolbert - ThinkEquity: Hi, guys. Thank you very much, very smart decision to repurchase those converts, some of them anyway. And I just wondered whether there is any cost of goods associated with the delivery of the ABthrax contract?

Thanks, Jason, this is Tim. We had expensed previously all cost of goods associated with manufacturing ABthrax. So you could expect very, very high margins in 2009 from the order that we began shipping last month. Jason Kolbert - ThinkEquity: Terrific. Thank you so much.

And we have no further questions from the phone audience. I would like to turn the conference back over to our speakers for any additional or closing remarks. H. Thomas Watkins: Great. Thank you, operator. I want to thank all of you for your participation in the call and for your interest in what's going on in HGS. We are very optimistic about this year and believe we are off to an excellent start. So have a good evening and thank you very much.

That does conclude today's conference call. We'd like to thank you all for your participation. Have a great day.