Jonathan Lim - President and CEO David Ramsay - CFO Gregory Frost - VP and Chief Scientific Officer

Andrew Vaino - Roth Capital Eun Yang - Jefferies & Company Tim Bragg - UBS Financial Services Kevin Degeeter - Oppenheimer

Welcome to the Halozyme 2007 fourth quarter pipeline update conference call. At this time all participants are in a listen only mode. Following managements prepared remarks we'll hold a Q&A session. (Operator Instructions) As a reminder this conference call is being recorded today March 14, 2008. I would now like to turn the call over to David Ramsay. Please go ahead.

Thank you. And thank you everyone for participating in today's call. Joining me from Halozyme are Jonathan Lim our President and Chief Executive Officer and Gregory Frost, Vice President and Chief Scientific Officer. Yesterday afternoon we've released our 2007 fourth quarter and full year financial results. If you have not received this news release or if you would like to be added to our distribution list, please call [Alex Slav] at 858 704-8288. This call has also been broadcast live over the internet at www. .halozyme.com and a reply of the call will be available on the company's website for the next 30 days. Before we begin, let me remind you that during this conference call we will be making forward-looking statements. The Private Securities Litigation Reform Act of 1995, provide the Safe Harbor for forward-looking statements. All statements made during this conference call there are not statements or historical facts constitute forward-looking statements. The matter is referred to in forward-looking statements could be effected by the risks and uncertainties of our business. Such risks inherent to the company's business are described in our filings with Securities and Exchange Commission as well as in our press releases. The company's actual results may differ materially from those expressed in or indicated by such forward-looking statements. With that I'd like to now turn the call over to Jonathan Lim.

Thank you, David. Good morning everyone. I am very excited to be able to give you an update on the current progress of our proprietary and partnered programs during this first conference call of 2008. Gregory Frost our Chief Scientific Officer and I will be reporting on the status of our proprietary programs. And I will be updating you on our partnered programs with Roche, Baxter Medication Delivery and Baxter BioScience. As we close on the first decade since the founding of our company in 1998, Halozyme has really come into it's own as a biotechnology company focused on developing and commercializing meaningful new therapeutic products based on the extracellular matrix, which we refer to as the matrix. The matrix is a key structural component found in both normal tissues such as skin and bone, as well as abnormal tissues such as tumors. By expanding on a broad and deep scientific expertise in the matrix, we plan to develop therapeutic and aesthetic drugs within therapeutic areas such as oncology, dermatology, and metabolism. One of the key reasons for our success to-date has been our decision to pursue paths to value creation in parallel, through both proprietary and partnered programs. In fact our achievements in 2007 have advanced our partnered programs with Baxter and Roche while building a strong foundation for our proprietary programs. These are existing times for Halozyme; I realize there are some questions regarding the evaluation of our strategy from largely a drug-delivery partnership-driven model to a focus on developing our own therapeutic products. As we put together our five-year strategic plan last year, we came up with a very compelling way to create value for our shareholders. We found that the PH20 hyaluronidase enzyme the core technology is proving to be a very compelling, multifunctional technology that can be applied in a number of interesting ways. As many of you know, we first begin by forming drug delivery partnerships with Baxter and Roche to apply the PH20 technology to their products. The value of this partnership is significant and will increase overtime as Baxter and Roche ramp up development and commercialization of their products, with our PH20 technology. Baxter is mostly focused on fluids, as well as small molecules, while Baxter BioScience and Roche are focused largely on large molecules. While valuable rather than building a drug delivery company that is based solely on royalties and fees, our plan is to take our PH20 technology and apply it to the development of our own products in which we have a larger commercial stake and much greater value creation potential. Furthermore, based on our extensive expertise in hyaluronidase and other enzymes and components within the matrix, we believe we can develop and commercialize other matrix based products that can target major indications in oncology and dermatology as Greg will tell you about more, later in this call. We're delighted to have this opportunity to tell you more about these programs. In 2008, we'll continue to pursue parallel pass to value creation for patients and our shareholders. Our top three parties for driving value throughout this year are first, developing a pipeline of proprietary programs and increasing external visibility by presenting clinical and preclinical data as they become available. Second, maximizing the value of existing partnerships with Baxter International, Baxter Biosciences and Roche, and increasing external visibility regarding the progress of these programs. The third, is signing partnerships that helped advance Halozyme overall business objectives. So now I'm going to talk about the proprietary programs. There are five of these that we are focusing on in 2008 as part of our owned proprietary product development portfolio. The first three are based on taking the PH20 enzyme and applying it to existing marketed products to develop new proprietary products. I'll be discussing the status of these programs while Greg will be updating you on our last two proprietary programs, which are new molecular entities targeting the matrix in the fields of oncology and dermatology. So the first program is one that we are publicly disclosing for the first time on this call. We have initiated and nearly completed an ongoing clinical trial in a therapeutic area that represents a multi-billion dollar market. This Phase I prospective randomized trial is designed to assess the safety, tolerability, pharmacokinetics and pharmacodynamics of two different marketed therapeutic recombinant proteins when subcutaneously co-injected with and without PH20. It is anticipated that based on the existing pre-clinical study data with three different molecules co-injected with PH20 in more than one animal species, as well as based on several completed clinical trials of therapeutic agents that have been co-injected with PH20, which we've reported previously with morphine and Humira for instance. We believe that PH20 will favorably alter the absorption parameters of these proteins. Now what does this mean? Well, if the co-injection is well tolerated, and the anticipated alteration in PK and PD is observed, the existing body of clinical knowledge for this particular therapeutic area suggests that the proposed combination product including PH20 may provide a therapeutic strategy that would result in meaningful clinical benefit for patients. The commercial implications are that, we could potentially develop a best-in-class therapeutic within an existing multi-billion dollar market. Unblinding of the ongoing clinical trial is planned for the second quarter of this year. If the study findings are positive, Halozyme intends to engage the FDA in discussions of the regulatory pathway for product approval, submit a new IND in this therapeutic area in the second quarter of 2008, and initiate a second clinical trial for this indication in the third quarter of this year. The second program is bisphosphonates plus PH20, so remember this is the second program in which we are taking our PH20 enzymes and co-mixing it with an existing commercial product to develop a proprietary co-formulation. In this case it is osteoporosis, which also comprises a multi billion dollar market including both oral as well as parenteral products. Oral products have wide spread usage but long-term compliance among patient is poor in part due to insufficient efficacy as well as gastrointestinal toxicity and difficult dosing regimens. This leads to more than three quarters of patients discontinuing therapy after three years. Parenterals including the IV administered products Reclast and Boniva, currently marketed by Novartis and Roche respectively, our attractive targets to explore for converting to subcutaneous usage via formulation with PH20. Subcutaneous administration of bisphosphonates is attractive because IVs are inconvenient to patients. In addition general practitioners who are the primary prescribers of bisphosphonates have limited capabilities to administer them. Development of subcutaneous bisphosphonates with reasonable dosing schedules is challenging with existing therapies because of injection site reactions, which are potentially mitigated by formulating these parenteral formulations with PH20. Halozyme is exploring the use of both of these products with PH20 and we'll be presenting preclinical data in April at the AACR conference. We're targeting to answer the clinic for at least one of these combinations in the third quarter of this year. So now. I'll turn to the third program, which is Chemophase. The Chemophase program, which represents our most advanced proprietary product in clinical development, continues to advance according to plan. Tumor recurrence for patients with non-muscular invasive bladder cancer continues to be a major problem. After TUR-BT or transurethral resection of non-muscular invasive bladder cancer, which basically is surgery for removing superficial bladder cancer, followed by currently available intravesical or in the bladder therapy, patient experienced a tumor recurrence rate of about 40% to 85% of which 50% will recur within the first year. There is a clear need for more effective treatment which creates an opportunity for a therapeutic approach that improves disease free survival for these patients. Following the successful completion of the initial phase one Chemophase clinical trial, which demonstrated the safety of a single administration of the single dose of PH20 with mitomycin given intravesically or in the bladder, following TUR-BT, Halozyme initiated and completed enrollment in the ongoing Phase I/IIa trial. This on going trial is an open-label non-controlled multi-center trial, examining the safety and tolerability of intravesical PH20 and mitomycin C for induction and maintenance therapy following TUR-BT. Enrollment in this study proceeded in a deliberate stepwise fashion advancing through five successful escalating PH20 dose cohorts with the lowest dose of about 20,000 units and the highest dose of about 800,000 units, with the protocol specified pause for assessing safety before opening enrollment in each next higher cohort. Enrollment was completed in the third quarter of 2007. Each of the five PH20 doses was found to be well tolerated. And the highest dose, the 800,000 unit dose was determined to be the maximal tolerated dose within this study design. For the 12 patients enrolled in this MTD cohort, study drug dosing according the protocol specifications of every three months or until documented tumor recurrence has continued to be well tolerated. Given the success of the ongoing Phase I/IIa trial in determining the MTD and demonstrating the safety and tolerability of induction and maintenance dosing of Chemophase, we're currently preparing to consult with regulatory authorities including an end of Phase II meeting with FDA and scientific advise for the EU in order to determine the optimal regulatory pathway to drug approval. While this advice is being sort, we are planning a small safety study of Chemophase for immediate post-operative or IPOP dosing in order to enable the subsequent pivotal trials to incorporate IPOP dosing along with induction and maintenance. The reason we're doing this is that by maximizing the exposure to Chemophase in the randomized doubled blinded pivotal clinical trials. Halozyme intense to replicate the published findings from the randomized clinical trial with a bovine hyaluronidase combined with mitomycin that showed clinical benefit in terms of a statistically significant improvement in disease free survival in this patient population. So with the IPOP trial, it's anticipated that the subsequent pivotal trial for Chemophase will be initiated in the fourth quarter of this year. At this point, I've reported on the three proprietary programs that are based on the native PH20 enzyme. I'm now going to turn the call over to Greg to talk about our proprietary matrix programs in oncology and dermatology. And then I will return to update you on our partnered programs.

Thanks, Jonathan. Earlier this year, Halozyme nominated to bring its first systemic oncology candidate. PEG rHuPH20 into the clinic for the targeted systemic treatment of solid tumors that accumulate peritumoral hyaluronin. A significant proportion of advanced cancers readily identifiable by primary tumor biopsy produce these HA-rich Halos, we can occupy large amounts of the tumor microenvironment. These Halos prevent tumor cells from coming in contact with one and other, and elevate interstitial fluid pressure in tissues such as bone metastasis where they may also contribute to chemotherapy resistance, as well as bone pain. The ability to eliminate these Halos by intravenous hyaluronidase enzyme therapy is historically been limited by the rapid elimination of the enzyme from the blood stream combined with the rapid turnover of HAN tissues. Halozyme has now demonstrated that these Halos can be completely eradicated in prostate carcinoma models in a dose-dependant fashion, resulting in an impressive 80% reduction of tumor interstitial fluid pressure following intravenous administration of PEG rHuPH20. Unlike angiogenesis inhibitors such Avastin that can require days to lower tumor pressure, PEG rHuPH20 rapidly collapses the extracellular matrix to reduce tumor IFP within hours of administration. The effect of these compounds appear to be very dependent upon the ability of tumors to produce HA-dependent Halos and is particularly active in large bulky tumor lesions that are traditionally resistant to chemotherapy. With a half-life nearly 2000-fold longer than the non- PEGylated enzyme, Halozyme is indeed confident that it has identified the optimal lead candidate for intravenous delivery. Similar pharmacokinetics have been demonstrated in pilot primate models where the agent was found to be very well tolerated at therapeutic doses. If applicable to all cancers that accumulate pericellular HA, these target selective compound could represent a multibillion dollar opportunity in the US alone, to treat currently incurable breast, prostate and pancreatic malignancies. Based upon positive feedback from our clinical oncology advisory boards PEG rHuPH20 is being evaluated preclinically in combination with a broadly used chemotherapy agent Taxotere, initially for the treatment of hormone refractory prostate cancer. Very encouraging efficacy data have emerged that continues to fuel our excitement over this program. Data on the pharmacokinetics and pharmacodynamics of this agent in advance solid tumors will be presented at the American Association Cancer Research in Santiago next month. With regulatory guidance Halozyme intends to complete all IND enabling activities towards its first in human clinical application of this agent by the end of the year. Switching to dermatology; Halozyme news dermatology aesthetic medicine R&D team is comprised of experienced scientists from the biotechnology industry with a core focus to develop derm-based applications that are surrounded by the extracellular matrix. These novel programs leverage our existing knowledge of skin biology and our ability to rapidly develop recombinant proteins for high-value programs that can capitalize upon this economically insulated multibillion dollar therapeutic space. The strategy is to deliver high value biotechnology derived product offerings with dual aesthetic and therapeutic applications that can be developed in parallel. Several exciting new applications are now under development for the treatment of post-surgical edema, body contouring, scarring, cellulite, as well as dermal fillers, where we believe apparent extracellular matrix accumulation is a key target to the underlying pathology. One of the most exciting programs in this group is HALOZYME's conditional matrix modifying technology; proteinaceous materials such as fibril, collagen and elastin make up the bulk of the matrix in many tissues such as the skin. However, unlike rapidly regenerating targets such as hyaluronidase, these structural scaffolds are more slowly turned over in the body and must therefore be modified in a tightly controlled fashion and body contouring is the objective. For example, fibrous septae, a fibrillar anchors in the skin that contribute to the dimpled appearance of cellulite. Surgical cleavage of these septae has been shown to relieve the dimple-like appearance but is not feasible to apply over large surface areas. To meet this challenge, HALOZYME’s dermatology team has created its first recombinant human enzyme that conditionally degrades the proteinaceous components under the skin that forms fiber septae. This recombinant enzyme has a tightly regulated switch, such that it is active for only a defined period of time upon entering the body i.e., within minutes of leaving the syringe. Once switched off, the enzyme is unable to cleave the matrix and becomes an innocuous protein in the body. Halozyme has developed systems to tightly control the time in which the enzyme is active in the body, and is actively testing this agent in a number of applications where this temporal regional degradation of matrix could have defined therapeutic benefit. HALOZYME’s recombinant enzyme has demonstrated its ability to cleave fibrillar septae in a tightly controlled fashion. With the successful validation of the first enzyme of our conditional activating matrix technology platform, we are now expanding our efforts towards additional human matrix modifying enzymes for other therapeutic applications. Preclinical data on the dermatologic applications of HALOZYME’s conditionally activated enzyme will be presented in May at the International Society for investigative dermatology. These non-PH20 enzymes represent completely new technology for Halozyme and an ability of our group to leverage protein based targets in the matrix. HALOZYME’s new molecular entity and bioprocess development and manufacturing teams are now establishing high producing cell lines and purification processes for this enzyme, using a validated system we developed previously for rHuPH20. The expression system is now achieving pharmaceutically attractive production yield, sufficient for cGMP production. Upon successful completion of safety and pharmacology testing in a number of therapeutic model this year, including Cellulite, scarring and Dupuytren's contraction. This process will be transferred to cGMP manufacturing for first in human trials in 2009. And now I'll turn the call back over to Jonathan who will give an update on our partnered progress.

Thanks, Greg. As most of you know, we have partnerships with Roche and Baxter Biosciences for enhance technology and a partnership with Baxter Medication Delivery for Hylenex, our FDA approved drug. I'll be updating you on all three partnered programs beginning with Roche. While we have not provided you with much visibility regarding our Roche partnership, I can tell you that HALOZYME’s management team is happy with Roche's progress to-date. We're devoting significant resources to supporting this important partnership, including about four to six full time equivalence that are dedicated to this project. The relationship is positive and Roche and Halozyme have given about three to four joint presentations at Alliance Conferences over the last year, which really is a testament to Roche's excitement about this collaboration. We've been conducting a number of activities to advance the partnership with Roche. This is evidenced by the increased R&D reimbursement received from Roche in the fourth quarter. These activities include implementation of a second generation process that is being scaled up to support Roche, as well as HALOZYME’s internal programs. In addition, preclinical and toxicology studies have been conducted with this second generation PH20 such as those presented earlier this week by Dr. Walter Bee, our VP of Preclinical in which Halozyme found that doses up to $3.6 million units per kilogram, which is equivalent to about 1.7 million vials of Hylenex in a 150 pound person were well tolerated following either IV or subcutaneous dosing. In addition, daily administration of PH20 for one week was well tolerated with either IV or subcutaneous delivery at a daily bolus dose of 600,000 units per kilogram. A three-month interim analysis from an ongoing 39-week chronic toxicity study with weekly dosing up to 240,000 units per kilogram, revealed no changes in standard toxicity parameters or in male fertility assessment. We continue to ship our PH20 enzyme to Roche, so that they may conduct a preclinical and formulation work. So we continue to work collaboratively with Roche and we are hoping that we will provide additional visibility on this exciting partnership during 2008. On the Baxter front I realized there much be questions and some general frustration regarding how long it's taking for us to see HYLENEX sales materialize. We show this same frustration and frankly have been disappointed by the slow progress that Baxter has made on HYLENEX. However in our most recent discussions with Baxter to constructively addressee possible steps to accelerate the HYLENEX opportunity, Baxter reiterated its strong commitment to this program at the very highest levels of its organization. Both Baxter and Halozyme continue to believe that this product has $500 million sales potential. Halozyme is working closely with Baxter's top management to accelerate sales efforts in these various markets. There maybe ways to leverage Baxter's channel strength to access multiple markets. The initial areas that Baxter's is currently targeting are in the pediatrics long-term care and ambulatory surgery centers or ASC market. So let me talk about pediatrics first. This is a market believe to represent about $170 million peak sales potential. Focus is on completing enrollment of the infused pediatric rehydration study, which is designed to assess the clinical utility and safety of HYLENEX in infants and children with dehydration. Patients in this Phase IV ongoing open-label study, are children two months to 10-years old with mild-to-moderate dehydration, which is quantified by one to five on what’s known as the [Gorelick] scale, requiring parental fluid administered in the emergency department. So, these children received about 1 mil or 150 units of HYLENEX subcutaneously through a small 24 gauge catheter placed in that thigh or upper back, followed by a 20 mil per kilogram subcutaneous bolus infusion of fluid over the first hour. Subsequent subcutaneous maintenance hydration is continued as needed until discharge to home or an alternative treatment is started. The Baxter is targeting completion of enrollment for this study by the middle of this year. They will then seek publication of the results with launch into this market expected in the first half of 2009. The second target market long-term care is a market believed to represent more than $200 million peak sales potential. We believe that HYLENEX can offer nursing home clinicians a cost effective and patient-friendly alternative to hospitalization while allowing subcutaneous hydration in the nursing home setting. We understand that Baxter is currently seeking to define the health economics of these facilities and is also currently conducting test markets in several states. The third market ASC or Ambulatory Surgery Centers is a small market representing about $15 million peak sales potential. However, this is a market that maybe possible to penetrate in 2008 without additional clinical data. In fact, Baxter already has sales people in the field that have started to call on ophthalmologist in this setting. And Baxter will be scaling up the sales force during this year. Halozyme is encouraged by the strong commitment that Baxter's top management has expressed to accelerate sales efforts for Hylenex and to push for opportunities in new markets, both in the US as well as internationally. So, switching gears to our third partnership, last fall we announced a new collaboration with Baxter Biosciences for the development of subcutaneous GAMMAGARD Liquid 10% administration using our enhanced technology. For patients using GAMMAGARD Liquid therapy, currently administered IV, subcutaneous administration with enhanced technology may increase the overall convenience and improve the dispersion of this therapy. Baxter is presenting data from their GAMMAGARD enhanced technology Phase I/II clinical trial this weekend at the [Quad AI] Conference in Philadelphia. As the data are embargoed until presentation, we won't be able to comment on the results until after they are presented. As you know, the third party within our program is enhanced technology and enhanced technology is the idea of taking the PH20 enzyme, large enzyme doses and combining those with large molecule therapies. So, we're seeking partnerships on that front and we continue to be in discussions with multiple partners exploring the use of our enzyme with their biologic compounds. Over the next several months, we'll continue to discuss the progress we are making with our preclinical and clinical efforts in our various programs. We're targeting two new INDs this year, one in the second quarter of 2008 and one in the fourth quarter of 2008. As you can tell from the programs that Greg and I have reported on, there is a lot going on here. Halozyme has a unique and exciting business strategy for small biotechnology company, and unlike most companies that seek to develop one or two products, Halozyme is leveraging its multifunctional core technology in a number of interesting ways, as well as expanding its expertise into other areas of the metrics that should help drive significant value for our shareholders. We believe that it's important to take a portfolio approach to the development of these programs because you can't guarantee the success of any one particular program. But as you can tell from our five proprietary programs and three partnered programs, there is a tremendous amount of activity going on at the company, since we last spoke. Now we're convinced that success in any combination of these programs will drive significant value. We thank you for all your support and we're looking forward to reporting our progress on these programs in 2008. With that overview, I'll now turn the call over to questions.

(Operator Instructions). Your first question comes from the line of Andrew Vaino of Roth Capital Andrew Vaino - Roth Capital: Hey, I just had a quick question. Did I miss what you -- the first thing you talked about, the therapeutic area on your first new compound, did you mentioned what that was?

No, we did not, but it’s a multi-billion therapeutic area with targeting recombinant proteins. Andrew Vaino - Roth Capital: Okay, and also looking at the PEGylated PH, I know that typically PEGylation doesn’t in invoke immune responses, it does not necessary does the opposite, is there is any indication that PEGylation of the hyaluronidase will give rise to an immune response?

No nothing to date that would suggest that to be the case. Andrew Vaino - Roth Capital: Okay, I was also interested in how you control the activity of the product that indicated for destroying the cellulite dimples, can you mention how you control it, I assume you modify the enzyme a little bit, what are you doing there?

Andrew we are going to be reviewing more information about these enzymes in the coming months. So stay tuned on that front. Andrew Vaino - Roth Capital: Okay, that’s all right. It’s just that can you then mention sort of what range can you control, or you can control, half-life in terms of minutes, seconds

We can actually control -- we have for example variance where we can control it down to having it active for a period of seconds to a period of less than 10 minutes. Andrew Vaino - Roth Capital: Okay great thank you very much.

You are welcome. Andrew Vaino - Roth Capital: Thank you

You are welcome

Your next question comes from the line of Eun Yang of Jefferies & Company. Eun Yang - Jefferies & Company: My first question is about Chemophase, you guys mentioned that you want to initiate the fibrillar trials in the fourth quarter this year. Are we still going to see the Phase I/II data in the first half of this year, are you sure of that?

Yeah we are still targeting a Q2 rollout of the data from the Phase I/IIa trial. Eun Yang - Jefferies & Company: And just another question on products sales this year, I mean this quarter it was came around 98,000. I was just wondering that weakness was both HYLENEX weakness or from Cumulase or you can give a breakdown of where are the sales came from the two products?

Yeah. It's mostly from cumulase product sales. We had a great third quarter for cumulase so we saw a sequential drop from Q3 to Q4 for cumulase. There wasn't any meaningful sales of Hylenex in the period, but it is important to know the year-over-year sales increase of cumulase was actually quite strong. Cumulase sales product sales for the year 2007, was approximately $516,000, for example compared to $342,000 for 2006, so we saw a good year-over-year sales. But there is -- it's a bit lumpy so quarters sequentially could be up or down, but year-over-year it's trending spending up. Eun Yang - Jefferies & Company: Okay. Thank you.

Sure.

(Operator Instructions) There are no -- I am sorry your next question comes from the line of Tim Bragg of UBS Financial Services. Tim Bragg - UBS Financial Services: Hi, guys.

Hi, Tim. Tim Bragg - UBS Financial Services: I just wanted to see a get a little more information if I could on this R&D reimbursement number, the $652,000, Jonathan I think you drilled into it, some in your presentation anyway explaining that most of that seem to be coming from Roche. Could you talk a little bit more about, is that the case I mean it's most of this because on the press release you said from Baxter and Roche, are wee led to believe that most of this is coming from the Roche efforts?

It's coming from of them Tim and it is for the research work that we do that our partners ask us to do in support of the collaboration. And it's full of variety of activities. But it's coming from both of them. Tim Bragg - UBS Financial Services: Is that when you say variety of activities, so it's not really focused in it's safe to say not in one specific area or it's pretty well spread.

It recently on the research and development side combination of things in terms of specific work to support Baxter for HYLENEX and our GAMMAGARD and to support Roche and the work that they are doing for the collaboration in various preclinical work perhaps or more importantly the co-formulation work that we do for them. But it's a number of a different things that we do to support the partnerships and it's a -- I think the way to look at it is signal that work is ongoing in these collaborations and we are moving forward. Tim Bragg - UBS Financial Services: Okay, a follow-up question if I could this expected cash burn $40 million to $50 million, is that the first time we've seen that number that '08 number and is that higher than original projection in line or is that basically the number that we pretty much expected throughout?

So that's the first time we've given definitive 2008 guidance there for '08.

Your next question comes from the line of Kevin Degeeter of Oppenheimer. Kevin Degeeter - Oppenheimer: Hi, good morning guys.

Good morning Kevin.

Hi, Kevin. Kevin Degeeter - Oppenheimer: One quick housekeeping item for David here the $3.5 million from Baxter's first to receive in January, how does that get treated, is that basically get the cash from assuming it doesn't flow through the income statement until certain sales or just help me understand how that's going to be treated from modeling perspective?

Sure and your assumption is correct. So debit cash, credit deferred revenue and then we will bring that deferred revenue into the P&L as product sales are recognized. Kevin Degeeter - Oppenheimer: Okay. And then maybe just one more, just general, I mean there is a question here and there is an observation which is company continue to make a lot of progress on the internal pipeline, exciting update on Chemophase, moving additional programs into the clinic. And from the investor side, based on the folks I talked to, people want to see another deal. They want -- I mean you look at the performance of the stock, there is a zero sizable group out there, they are skeptical whether or not there is an additional Roche type deal out there. What do you tell those folks? How do you help those of us on the outside get comfortable that there is, both, a priority on the part of management to sign additional partnership arrangements and I realize, I understand the business development process, you're never there until you are there? But for those who have a skepticism that you can get over the finish line with the deal, help us understand why you are optimistic you will, I realized not to put timeframe on it, but -- just help us address those questions.

Yeah, Kevin, as I mentioned in our three corporate priorities, the first is advancing our proprietary pipeline. The second is optimizing the value of the existing relationships. And then the third is to continue to seek additional deals. So we haven't taken our eye off of that ball, but there is a criteria that we're applying. And the first is that, it's got to be -- the partner that we signed has to be an established market leader in their category. Also, we are open to signing deals when the party owns the molecule and when that's the best route for us to be able to explore that particular indication with that molecule. We are also looking for multi-product types of deals that can create significant value. So, we have two full-time people that are in the business development area, and they are actively pursuing these opportunities. If you look at the allocation of the roughly 95 employees at Halozyme, the lion's share of the organization is focused on priorities one and two, but we haven't lost sight of the fact that priority three is also value creating for shareholders. Kevin Degeeter - Oppenheimer: I mean that is, it's -- you mean the dilemma here for an existing shareholders, the market focus is on additional validation of the platform and it's troubling to me that the priority slipped to -- what seems to be a pretty distant third, I realized you need to maximize relationships you have. Yeah, I mean can you help us out, I mean what in terms of news flow are we going to save? Are we actually going to get an update an Roche something concrete this year to share your enthusiasm than in fact that arrangement continues to move along aggressively?

Yeah, as I mentioned in my opening remarks, we're going to be seeking ways to increase the visibility around the progress of the Roche activities and I wouldn't characterize the priorities as a distant third but really these are three priorities that the organization as a whole is pursuing. Kevin Degeeter - Oppenheimer: Okay. Thanks so much.

You're welcome.

(Operator Instructions). There are no further questions at this time.

We've made substantial progress during 2007 and we look forward to making continued progress with Baxter to commercialize Hylenex and to move GAMMAGARD forward in the clinic, providing more visibility on the Roche programs, advancing our five proprietary programs, and continuing our active business development efforts for enhanced technology during 2008. We look forward to reporting to you again soon on our progress. And thank you for your support as our shareholders and for your participation in today's call. Take care everyone.

This does conclude today's conference call. You may now disconnect.