Stan Crooke - Chairman and CEO Lynne Parshall - EVP and CFO KristinaLemonidis - Associate Director, Investor Relations Jeff Jonas - EVP Kate Corcoran - VP, Corporate Development

Ajim Tamboli - Lehman Brothers Mark Monane - Needham Alan Carr - Needham Emily Merchant - Summer Street Research Ted Tenthoff - Piper Jaffray Salveen Kochnover - Jefferies & Co Aaron Reames - Wachovia Joseph Schwartz - Leerink Swann Eric Schmidt - Cowen and Company Debjit Chattopadhyay - Boenning & Scattergood Geraldine O'Keeffe -Fortis Bank Gabe Hoffman - Accipiter Capital Management

Good day everyone, and welcome to the Isis PharmaceuticalsThird Quarter Financial Results Conference Call. Today's conference is beingrecorded. Leading the call today from Isis isDr. Stan Crooke, Isis Chairman and CEO. Dr. Crooke, please begin.

Thank you, Lisa. Good morning and thank you, everyone, forjoining us on today's conference call to discuss the financial results andhighlights for the third quarter of 2007. Participating with me in this call are Lynne Parshall,Executive Vice President and CFO; Kristina Lemonidis, Our Associate Director ofInvestor Relations. Also sitting in with us are Jeff Jonas, our Executive VicePresident; Kate Corcoran, our Vice President of Corporate Development; and BethHougen, our Vice President of Finance and Chief Accounting Officer. As we've mentioned, we will be hosting an Analyst andInvestor Day in New Yorknext Tuesday, November 13th. So we will keep this call relatively brief. TheAnalyst/Investor Day presentation will be webcast, and we hope to see a lot ofyou there in person. Isis has continued toexecute its business strategy with tangible successes on multiple fronts overthe past quarter. In our last earnings call, we talked about the AmericanDiabetes Association Conference and highlighted some of our research stageprograms in metabolic disease. Recently, we moved the drug targeting SGLT2 intoour development pipeline from that program. We also discussed how our strategy to license antisensedrugs to a number of partners has increased the breath and value of ourpipeline. We highlighted new partnerships, including the license of our drugdiscovery effort on PCSK9 to BMS, and our technology license with Archemix. Tothose, we recently added licenses to two diabetes drugs and initiation afocused metabolic disease research collaboration with J&J's Ortho-McNeil. In addition, we launched the newly formed joint venture, Regulus,and announced that the newly formed company, Altair, which focuses on pulmonarydisease recently. Each of these, of course, represents growth opportunities forantisense drugs discovery and development. We had several positive mipomersen presentations at the DALMmeeting in October, and we've now initiated a Phase 3 program for mipomersen inpatients with familial hypercholesterolemia. Today, Lynne will discuss how our recent activities haveaffected our financial performance and outlook. At the end of our preparedremarks, we will be happy to answer any questions you might have. First, let me turn the call over to Kristina to review our policyon forward-looking statements.

Thanks, Stan, and good morning, everyone. As a reminder toeveryone, this webcast includes forward-looking statements regarding ourbusiness, the financial outlook for Isis aswell as Ibis Biosciences' subsidiary and its Regulus joint venture, and thetherapeutic and commercial potential of Isis Technologies and products indevelopment. Any statement describing Isis' goals, expectations,financial or other projections, intentions or beliefs is a forward-lookingstatement and should be considered an at risk statement, including thosestatements that are described as Isis' goals. Such statements are subject to certain risks anduncertainties, particularly those inherent in the process of discovering,developing and commercializing drugs that are safe and effective for use ofhuman therapeutics and in the endeavor of building a business around suchproducts. Isis' forward-lookingstatements also involve assumptions, and if they never materialize or provedcorrect could cause its results to differ materially from those expressed orimplied by such forward-looking statements. Although Isis' forward-lookingstatements reflect the good faith judgment of its management, these statementsare based only on facts and factors currently known by Isis.As a result, you are cautioned not to rely on these forward-looking statements. These and other risks concerning Isis' programs aredescribed in additional detail in Isis annual report on Form 10-K for the yearended December 31, 2006, and its quarterly report on Form 10-Q for the quarterending June 30, 2007, which are on file with the SEC. Copies of these and otherdocuments are available from the company. Stan, back to you.

Thanks, Kristina. 2007 continues to be an exciting year for Isis on all fronts. Since our last conference call, wehave advanced our drug targeting SGLT2 and its development. ISIS388626 is the first antisense drug that interacts with targeting the kidneys anorgan in which antisense drugs naturally accumulates. The remarkable potency and activity of ISIS388626 in animal models make it a particularly attractive antisense drug whichcomplements our exciting pipeline of drugs to treat type 2 diabetes. In September, we announced our new collaboration with Ortho-McNeil.We licensed two drugs for type 2 diabetes; ISIS 325568 targeting the glucagonreceptor and ISIS 377131 targeting theglucocorticoid receptor. We also initiated a focus research program in metabolicdisease and these licenses and the research program collaborations were on veryattractive terms. We've also expanded our relationship with Alnylam to createRegulus, our microRNA joint venture. Recently we, in addition, added Altair to a growing list ofdrug development partners. We continue to apply our technology to exploreopportunities in various metabolic and cardiovascular indications. We presentedpreclinical data from one of these exploratory programs in regulation of bloodclotting or thrombosis at the American Heart Association Conference earlierthis week. In addition, we succeeded in securing significant fundingfor other programs, including funding from CHDI, to discover and develop anantisense drug to treat Huntington's disease, a debilitating and fatal diseasewith very limited treatment options. This enables us to continue to expand ouractivities focused on creating treatments for severe CNS diseases. Our existing partners have also had a very successful year.OncoGenex continues to move forward toward Phase 3 trials with OGX-011 and recentlyinitiated Phase 1 studies of the second drug discovered in the Isis-OncoGenexcollaboration. iCo advanced iCo-007, another Isis-discovered drug in theclinical development. Lilly is continuing its work with two of anti-cancerdrugs in clinical development. And Alnylam initiated broad collaboration withRoche that involved a sublicense of our technology. In addition, our Ibis subsidiary was awarded contracts andgrants for up to $5.4 million to fund the development of a wide variety ofapplications for the Ibis T5000 Biosensor System. Our success in creating new strategic partnerships is in myview, a direct bi-product of the performance of mipomersen. The value of thesetransactions end of our pipeline in totaled have increased dramatically, becauseof the proof-of-concept provided by mipomersen. At the Drugs Affecting Lipid Metabolism or DALM meeting lastmonth, we announced further data supporting the attractive profile ofmipomersen. We show that mipomersen effectively reduces lipids in all populationstested with data presented in heterozygous FH, patients adding to thepreviously presented data for homozygous FH, and routine high cholesterolpatients, all of these data showing potent, linear dose dependent reductions inlipids, both for alone and when added to other lipid lowering therapies. Mipomersen has a unique profile in lowering all atherogeniclipids. Adding to previous data showingstatistically significantreductions in LDL, VLDL and triglyceride, data presented at the DALMshows statistically significant reduction in Lp(a), an independent cardiovascular risk factor. The first safetydata from our long-term treatments with mipomersen show that, as predicted by long-term studiesin monkeys and mice, the drug continues to be well tolerated in patientstreated for five months and longer. Preclinical datashowed that the inhibition of apoB-100, the target of mipomersen resultsin changes in fat metabolism that actually reduce liver fat, adding additionalmechanistic support for the mipomersen safety profile. So as we wrap up our initial Phase 2 exploration ofmipomersen, we are very gratified with the body of evidence supporting thedevelopment of the drug. At this stage in drug development there are severalquestions that you want to be able to answer affirmatively and we can certainlydo that for mipomersen. Is there evidence of efficacy? Yes, mipomersen is anextremely effective lipid lowering drug with a remarkably valuable profile. Isthe safety profile expectable? Yes, mipomersen is well-tolerated in all patientstudy to-date. Is there a clear class to registration? Yes, LDL cholesterollowering is a well excepted clinical endpoint. Has dosage schedule beingselected? Yes, 200 million per week is right in the middle of our dose responserange and appears to be a safe and will be a highly effective dose. Does thedrug address a major unmet medical need? Yes, over 16 million U.S. patients are at high risk forcardiovascular disease and are not meeting LDL targets with current lipid loweringdrugs. And now, we have initiated our Phase 3 program for mipomersen inpatients with FH. So, now, I'll turn the call over to Lynne.

Thanks, Stan. As usual, I am assuming you all had anopportunity to read the press release we issued earlier this morning, so I willnot reiterate what's detailed in the release. Please feel free to ask questionsat the end, on any points from the release that need clarification. The financial impact of our recent activities has been veryimportant in solidifying our financial position. We received $15 millionupfront from BMS and we will receive $9 million in Research Funding over thenext three years, plus milestones and eventually royalties as PCSK9 drugs moveforward. We received $45 million upfront from Ortho-McNeil, as wellas $5 million for the initial milestone for the glucocorticoid receptor drugand will receive $7 million in research and development funding over the nexttwo years plus milestones and eventually royalties as a drug to treat metabolicdiseases that are part of this collaboration advance. We will receive nearly $10 million in funding from CHDI todiscovery drugs to treat Huntington's Disease. Ibis received contracts andgrants for up to $5.4 million to fund the wide variety of applicationdevelopment for Ibis T5000. We were awarded with an SBIR grant for up to $1.5 million tofund our optimization and discovery efforts in creating single-stranded drugsthat trigger RNAi pathways. : iCo paid us $1.25 million milestone in equity for initiationof the Phase 1 study of iCo-007 for diabetic macular edema. Alnylam paid us$26.5 million related to their alliance with Roche, as part of our technologylicensing agreement granting Alnylam right to practice and sublicense ourtechnology related to double-stranded RNAi drugs. And Archemix granted usequity and will pay us milestones, royalties and a portion of sublicensingrevenue generated from its progress with aptamer drugs that exploit ourinventions in oligonucleotide chemistry. All of this progress has had a very positive effect on ourfinancial outlook and continues to exemplify our execution of our businessstrategy of entering into promising partnerships and advancing our technologyplatform though our own efforts, as well as, in collaboration with partnersworking on complementary applications. Now, I'll provide a just a little more explanation about whatyou are seeing on our third quarter financial statement. As you know, in associationwith the Ortho-McNeil transaction, we purchased Symphony GenIsis at the end ofthe third quarter. While the significant upfront payments of $45 million, plusthe glucagon receptor Phase 1 milestone payment of $5 million in the initialresearch and development funding from Ortho-McNeil are not reflected in our thirdquarter cash balance, because they were received in October. The purchase ofSymphony GenIsis was completed during the third quarter, so the numbers we arereporting reflect reductions in cash related to the purchase as well as sharesissued for the same purpose. We purchased Symphony GenIsis for $120 million, of whichapproximately $80 million was in cash and the remainder was paid withapproximately 3.4 million shares of Isisstock. The shares issued to Symphony Capital have all been sold, so Symphony isno longer a 5% shareholder. By purchasing Symphony GenIsis well before the completion ofthe four-year term of the collaboration, we saved approximately $75 million,and regained full ownership of mipomersen, which has significantly increased invalue since we put our collaboration with Symphony in place in April of 2006. In other words, the Symphony GenIsis partnership did exactlywhat we intended it to do. As Stan mentioned, mipomersen's Phase 2 performance hascertainly been gratifying, and we believe that it's had a very positive impacton the value of all of our antisense programs. All together, the partnering successeswe are experiencing in 2007 have had an important impact, both in our cash positionas well as our net operating loss projections. We began the year with the guidance that our pro forma 2007net operating loss, excluding non-cash compensation expense, will be in amid-to-high $60 million range. And that based on reasonable assumptions from new sources ofrevenue and cash, we believe that we had sufficient resources to meet ouranticipated funding requirements through at least the middle of 2010. When we reported second quarter results, we adjusted ourguidance for net operating loss for the mid-to-high $40 million range, andextended our cash guidance to estimate that based on reasonable assumptionsfrom new sources of revenue and cash. We believe we have sufficient resourcesto meet our anticipated funding requirements through at least the end of 2010. And then early last month, we further adjusted our netoperating loss guidance to the mid-to-high $20 million range. And of course,back last January, we refinanced our convertible debt to extend the maturityand further strengthen our balance sheet. We'll now be happy to take your questions. Operator, couldyou please begin the Q&A session.

Thank you. (Operator Instructions) And our first question comes from Ajim Tamboli with LehmanBrothers. Ajim Tamboli - LehmanBrothers: Hi. Good afternoon. I guess with the changing cash balance,Lynne, do you mind just going through what the pro forma balance is and whatthat includes?

We don't have a pro forma cash balance. Our actual cashbalance was right around $146 million at the end of the quarter. That doesinclude the reductions in cash associated with the Symphony GenIsis repurchase,but does not include the cash that we received from OMI, which we received atthe beginning of the fourth quarter. So, cash we received from OMI was $45 million for thelicensee, $5 million for the glucagon receptor drug Phase 1 initiationmilestone, plus additional money associated with the initiation of the R&Dcollaboration. Ajim Tamboli - LehmanBrothers: Okay. Thanks for clearing that up. And then, I guess, just aquestion on the space overall perhaps for Stan. Clearly, more interest and partof that is simply due to your Phase 2 data, proof-of-concept data. But what arethe factors of getting large pharma partners involved in this space and what'sdriving that interest level?

First, you're right. I think there is a great deal of moreinterest in antisense technology today than even a year ago. And it's not justlarge pharma, it's smaller companies, and it is venture capitalists, very highend venture capitalists that are now interested in applications of antisensetechnology. I think the answers are really pretty simple. First,antisense works, works in cells, works in animals, and mipomersen unequivocallyprove that it works in man the way it works in animals. And second-generationantisense drugs have proven to be dramatically better. And probably the most interesting feature of the BMS andJ&J transactions is that both those transactions are focused on chronicdiseases where drug safety is crucial. And so I think all of that speaks wellto the technology. Second, we've shown that second-generation antisense drugswere up against un-druggable targets. And so there is great deal of interest intargets that can't be attacked using small molecules or monoclonals. And third, we demonstrated that we can deliver these drugsby essentially all routes. And so, Altair is a company that was formed by uswith our drug and technology to exploit aerosol applications. And finally, the RNA world, in terms of just science that'sgoing on continues to resolve in extraordinary insights into how the body worksand everyone of those insights generates new potential targets for antisensedrugs including microRNAs. Hope that answers the question, it was a baseballand long-winded. Ajim Tamboli - LehmanBrothers.: It does. Thanks for taking the questions.

You bet.

And our next question comes from Mark Monane with Needham. Mark Monane - Needham: Good morning, and thank you. From New York City, I have Alan Carr here as well.A question one Phase -- first of all, congratulation on being a Phase 3company.

Thank you.

Thank you. Mark Monane - Needham: Can you tell us a little bit more about the decision onwhich population to include in the familiar hypercholesterolemia group, ofcourse, there is still be heterozygous the homozygous, how you, are youapproaching this separately or together in the Phase 3 trail?

Well, Mark, we have had our end of Phase 2 meeting with theFDA, and we are continuing to have productive conversation with the FDA, whichare taking sometime to complete. Primarily, we believe because of the FDAscheduled, due to the pressing business that that division is dealing with. So,we haven’t gotten yet definitive answers to all of the questions we ask. Whenwe receive definitive answers to all of our questions, we'll share our plans,for our entire Phase 3 program in more detail with you. I should add to that one additional comment. As you know, thisshow efficacy for mipomersen, we don’t need large numbers of patients. However,we've said, actually several times that when we file our NDA for familiarhypercholesterolemia, we plan to meet or nearly meet ICH Guidelines for safetyexposure. I think that's a crucial thing to remember. We intend to have or nearly meet the ICH Guidelines, whichmeans the total exposure of about 1,500 subjects with significant long-termexposure. So, we are not scooping on the investment to deal with long-termsafety. And we are intending to have that information in time for the FH, NDA. Of course I should also mention that we plan to host an Analystand Investor Day next Tuesday in New York. And at that meeting, we will be providingadditional data on mipomersen including an integrated safety analysis of ourtotal experience in Phase 1 and 2 studies in human beings. And we believe that those data continued to demonstrate thatmipomersen has a very encouraging safety profile. So stay tuned. We willprovide a much more detailed answer to your questions when we have gottendefinitive answers to all of the questions that we ask the FDA. Mark Monane - Needham: And have you start -- a concrete question. Has the firstpatient gotten dosed?

Yes. Mark Monane - Needham: Have gotten dose in the Phase 3 trial?

Yes. Mark Monane - Needham: Yes, okay. Here is Alan Carr's quick question. Alan Carr - Needham: Yeah. I also wanted, I guess a broader question that you'veobviously made substantial progress with mipomersen in targeting the liver, butI was wondering what sort of challenges and maybe technical characteristicsthat might change when you go after the [long] or the kidneys. You mentionedthat you have a program moving forward against SGLT2 and then there is thepartnership with Altair, so…..

[: So, while this is SGLT2 is the first drug that works, Iguess a target that's expressed primarily in the kidney, that we taken indemand, it's by no means the first that we've looked at in animal, that has atarget in the kidney. All we're doing is using what the drugs do naturally, inthe design of our research programs. So, we expect that the behavior of the drug in man will bethe same as it has been in animals and the same as all the other drugs havebeen. Obviously, we can't know that for sure, until we get the clinical trialstarted. Now, with the pulmonary disease approach at Altair and at Isis, there we use local delivery. And we've shownactually for quite some time now that these drugs are ideal drugs to administerby aerosol for local applications in the lung. They particalize nicely, theyreach all the areas in the lung, and they are very stable, and of course, theyare very potent when delivered by aerosol to the lung. Alan Carr - Needham: Thanks you very much. Thanks for the added information.

Thank you.

And our next question comes from [Emily Merchant] withSummer Street Research. Emily Merchant -Summer Street Research: Hi. Thanks for taking my call.

Sure. Emily Merchant -Summer Street Research: I'm just wondering, moving forward, how things stand withyour development of a partnership for mipomersen, and if you're going to havean upcoming publication?

The partnership conversations are going very, very well, andwe are on track to meet our plan, which is to have a choice of partners andthen license it to the best partner before we begin Phase 3 trails in routineor polygenic high cholesterol. There are additional presentations on mipomersenthat will be scheduled over the next many months, and there will bepublications put together. One of the interesting features of putting publicationstogether for mipomersen, is that we have to delay final analysis, because wefollow these patients for five months after treatment stops, at least fivemonths. And so that means that it takes some time to put final data together. Emily Merchant -Summer Street Research: Okay Great. And additionally, I'm just wondering wherethings stand with your cooperation with Lilly?

Well, the Lilly collaboration continues. They are developingboth survivin and eIF-4 anticancer drugs, and they are progressing according totheir plan of with those drugs. Emily Merchant -Summer Street Research: Thanks for taking my question.

Thank you.

And our next question comes from Ted Tenthoff with PiperJaffray. Ted Tenthoff - PiperJaffray: Great. Thank you very much, and Stan, thanks for theliterary reference earlier. You made my morning. A quick question. Youmentioned, and we have been seeing certainly in New York at the DALM meeting, and we willsee next week likely at the Analyst Day. But maybe you can dig in a little bitmore into the statement of protection versus hepatic steatosis with mipomersen. What is your understanding, thinking about that mechanism ofaction? Because I do think it flies somewhat counter to a lot of experts'opinion out there. So, I just wanted to get kind of year-over-year a littlepreview on that, about how and why you think and what data you have to supportthat we may actually see this protecting the liver from an accumulation of fat?

The data we have derived from several years' of studies inmice and monkeys, and they include high-dose toxicity studies for a year inmonkey and six months in the mouse. And the data are unequivocal. That is withlong-term treatment with ISIS 301012 ormipomersen, contrary to our expectations and expectations of people who havestudied apoB-100, we see a statistically significant decline in liver fat infat-fed animals. We also see no evidence of liver toxicity at doses as highas 75 milligrams per kilogram per week in the mouse and 30 milligrams per kilogramper week in the liver in the monkey. Those are the data. Actually they are unequivocal,and they do differ from what might have been expected, based on the belief thatinhibiting apoB-100 would result in fat accumulation, because it can’t beexported. Now, the data that we have reported in several forums showthat about two weeks after dosing starts with mipomersen in mouse and monkeys,we see changes in transcription of genes in the liver. These genes are involvedin fat synthesis and fatty acid oxidation. And the net impact of those is that yousee a decline in production of fat in the liver and an increase in theoxidation of fat in the liver. Those data explain very clearly, why we get the results thatwe see. There are changes secondary to inhibiting apoB that result in a reducedliver fat content in mice and monkeys. We are very comforted by the fact thatthe transcriptional profile that we see in the mouse are replicated in themonkey. So, it's not a single species. And in fact, the same thing appears tohappen both in a mouse and a primate. So, our belief is that apoB-100 is the primary exporter offat in the liver. And that when lower apoB-100, that is sensed by the liver andit quite sensibly turns off liver fat synthesis and increases fat oxidation. Moreover, we have in collaboration with Lipomics developedmetabolomic assays that can be used within blood. And those metabolomic assaysconfirm the transcriptional changes that we see when we take the liver andexamine transcriptional changes. And so, we hope that we'll be able to use these assays inman to confirm that the same transcriptional events are taking place in man, asare taking place in mouse and monkey. I would say that if you ask an expert whohasn't looked at our data, he would say what we might have said three yearsago, that we might expect to see liver fat accumulation. I think if you ask anexpert who has actually looked at our data, he will say exactly what I justsaid. Ted Tenthoff - PiperJaffray: And I think data is changing. And just, I guess the finalconnective point would be the MRI data, and when do you anticipate seeing that,and what is the endpoint of that study, that timeframe?

That study has changed quite a bit. It was originallydesigned as primarily a safety study, and now we are hoping to demonstrate thesame results that we saw on animal. So it's become almost a profile expansionstudy. It's much larger and it's going to take some time. As you know, torecruit patients who are wiling to undergo multiple MRIs is challenging andthere are a limited numbers of sites that have the expertise to do that. So, wecan't give you guidance here about when that study will be done. Ted Tenthoff - PiperJaffray: Fair enough. I'll look forward to the data. Thanks so much,Stan.

It is progressing well.

(Operator Instructions) And our next question comes from Salveen Kochnover ofJefferies & Co. Salveen Kochnover -Jefferies & Co: Hi, Good morning. Thank you for taking my question. Youknow, could you comment whether the patients that have been dosed in the Phase3 FH trail, whether they are homozygous patients?

Our preference is to say simply that we've begun the Phase 3program, and that we'll provide a much more detailed update when we havedefinitive answers from the FDA to all the questions that we've asked. Salveen Kochnover -Jefferies & Co: :

What we said is that we will present the 200 milligram threemonths data this year. And we've also said that we will be reporting new datanext week at our Analyst Day, including a full analysis of the integratedsafety from our Phase I and Phase II experience. Salveen Kochnover -Jefferies & Co: And then, in terms of, [Ibis] placements, are you still ontrack for eight placements, at least eight placements by the end of the year ofT5000?

Yes. Salveen Kochnover -Jefferies & Co: Thank you.

And our next question comes from Aaron Reames of Wachovia. Aaron Reames -Wachovia: Yes. Thank you for taking my questions. First question I hadis, have you initiated 26-week dosing study in the polygenic population, Ithink, that's where you're going to follow patients for a year.

We are in progress. And our position is that we will providea more detailed explanation of all the activities that we have in progress,once we have the definitive answer from the FDA. Aaron Reames - Wachovia: Okay.

To all of our questions. Aaron Reames -Wachovia: Got you. I guess next week we will see an update of theopen-label extension program as well?

We will present an integrated safety analysis of our Phase 1and 2 experience. I don’t believe that we'll be cutting the open-labelextension study in to little slimy sectionsover the next bit. What we want to do is accumulate substantial data in theopen-label extension, meaning quite a number of patients treated quite a longtime, before we present anymore information on that study. Aaron Reames -Wachovia: Then, I guess just maybe a more general question there. Tomeet the guidelines of having long-term exposure in 1,500 patients, I guesswill you be expanding programs dramatically here in the near-term, to be ableto meet that type of goal. And I would imagine then, it would be across to anumber of different patient populations, is that an accurate assumption?

We will meet or nearly meet the ICH Guidelines before safetyand, of course, the bulk of that safety experience will come from routine highcholesterol patients because they are just so many more of those patients. Ourplans have always been to do that. So, our plans have included a significantnumber of studies in the next year, in addition, to the studies that we'vealready completed that will flush out our safety profile numbers. Aaron Reames -Wachovia: Thank you.

Okay.

And our next question comes from Joseph Schwartz with LeerinkSwann. Joseph Schwartz -Leerink Swann: Hi. Good morning, and congratulations on all the progress.Just wondering if you could update us on the status of 113715 in diabetes, whenmight we see that data, and what would you consider potential scenarios for thedata and further development?

This is Jeff Jonas. That study is progressing well, andright now we anticipate in ['08] in the first half of next year that we will havedata to look at. It's enrolling well, and obviously we are encouraged by that. Andit could be our future plans. But beyond that, it will depend on, obviously theresults of the study. But, we are optimistic that we'll have number of optionsto pursue when we outline the trial. Joseph Schwartz - Leerink Swann: Okay. Andjust to like revisit the partnership process, is there any way you can give ussome additional color on the steps of the talks with various parties without listingany names, of course, just what has already happened and what needs to happenand when that all might happen?

We've indicated, Joe, and I can just really reiterate whatwe said. That we are running an auction process, we are pleased with theresponse of the auction process. That auction process means multiple companies whohave expressed interest, we provide a summary of the experiences we have with mipomersen,and then those that want to participate further must engage in additional stepsprior to our granting due diligence. That process is underway and going well,and we are very pleased with the level of interest. Joseph Schwartz - Leerink Swann: Okay. Goodenough. Thank you

Our next question comes from Eric Schmidt with Cowen andCompany. Eric Schmidt - Cowenand Company: Thanks. Congratulations on starting the Phase 3. Stan, Iguess I am just a little bit confused. It sounds like you're still waiting forsome FDA sign off on the trial design. But you've started the study. So I takeit from that that you must feel relatively confident in certain aspects of thestudy, the entry criteria, the fact that you are going to be dosing at 200 mgsevery week, etcetera, otherwise you wouldn't have multi-patients. Is thatcorrect?

We had a list of quiet a number of questions is that pertainto the overall Phase 3 development program that go beyond a simple questionabout the design, for example of a homozygous FH trial. We are awaitingdefinitive answers to all of those questions. But we have begun the FH program,and I think I'll just leave it there. Eric Schmidt - Cowenand Company: Okay. So you're relatively confident in certain aspects ofthe program and that's what led you to start the enrollment?

I want to leave our answer where it was. I think that is themost prudent answer I can give you. Eric Schmidt - Cowenand Company: Okay. And Lynne, just a housekeeping question on the revenuerecognition from Ortho, have you figured out now the timing over which yourecognize that $52 million.

Well, the $50 million, which constitutes the upfront licensefee, plus the first milestone will be recognized over the two-year period ofthe R&D collaboration. The additional $2 million is R&D payments justfrom the first quarter of the collaboration, and that will be recognized over thefirst quarter of the collaboration. And we will continue to get that R&Dfunding on a quarterly basis. Eric Schmidt - Cowenand Company: Thanks a lot.

Our next question comes from Debjit Chattopadhyay with Boenning& Scattergood. Debjit Chattopadhyay- Boenning & Scattergood: Thank you for taking my question. I was just wondering ifthe Ibis monetization plans are still on track for, say, some time early nextyear.

Yes. Debjit Chattopadhyay- Boenning & Scattergood: The second question is, for mipomersen once a week injectionwith a half life of, say, 30 days. Could we go down though not in the currentclinical program, but assuming the drug gets approved, could this be changedto, say, once every two weeks or once a month or something like that?

Yes, it can. The basic properties of the drug are that ithas a 30-day or longer half life, and therefore to dose once a month istheoretically feasible. We're focused on once a week dosing at 200 milligrams aweek as our initial dose and schedule. We are confident, based on the data we have and the modelingwe've done, that once-a-week 200 milligrams will give us approximately 50%reduction in LDL on top of the reductions achieved by statinsor statins plus ezetimibe. At some point, we will look at other doseschedules, and probably the most attractive other schedule is once a month.Once every two weeks is in many ways less attractive than once a week, becauseit becomes more complicated to remember when to give your self the dose, thatsort of thing. But our primary focus for the initialindication and the initial NDA is once a week at 200 milligrams per week withno induction or loading dose. One of the things that I think has gotten lost inthe conversation is about the safety of mipomersen. Is how remarkable it’ssafety has actually been, given the fact that we've used loading and inductiondoses, which of course represent the maximum stress that we could put on apersons liver. Clearly, in our longer-term trials, we won't need to do that,and we believe all of that is very encouraging that we'll see even bettersafety as we go that schedule. Debjit Chattopadhyay- Boenning & Scattergood: The next question I have is in terms of formulation,obviously you could delivery that on aerosol, but could you formulate this interms of a tablet, because clearly that would be an advantage of having tabletas opposed to an injection?

We have reported oral data in humans with mipomersen, Ithink about a year or so ago. And in that data we saw slightly less than 10%oral viability, and we saw the level of reduction of apoB, and LDL you wouldexpect for that. We have said that, while that is proof-of-concept, it probablyisn't a commercially viable formulation because of cost. And we believe that the best strategy for that is afollow-on product for mipomersen, which will be one of the generation 2.2drugs, will be the drug that we developed orally. We liked that idea, becauseit will give us a follow-on product to extend the apoB franchisee and at thatstage we believe we'll have sufficient viability and potency with that it wouldbe cost competitive with existing medications. Debjit Chattopadhyay- Boenning & Scattergood: And my last question is regarding the SGLT2 on PTB1B, weren'tSGLT2 be a more, say, benign target as opposed to PTB1B, which could influence alot of other things downstream?

I guess, I understand the theory, but the data in human sofar for PTB1B I suggest that this drug, it’s quite well-tolerated. With thatSGLT2, obviously, the animal data also suggest that both it will work and isalso well tolerated. So and both these agents, as you know are highly specificas most antisense molecules are and potentially complementary. So, we don’treally think that that's likely be a risk for either of these agents.

You’re probably referring to some of those small moleculeexperience with attempts to selectively inhibit PTB1B, those small moleculeshave failed for the reasons this molecule sale usually and that is they are notspecific enough, in that PTB1B family there are many phosphatases and if youaren’t specific for PTB1B, you have the potential reproduce a wide rangeeffects, many of them very detrimental. With selective PTB1B inhibition, wehaven’t seen those side effects. Debjit Chattopadhyay- Boenning & Scattergood: Thank you very much.

Yes.

Next question comes from Geraldine O'Keeffe with Fortis. Geraldine O'Keeffe - FortisBank: Hi. Good morning. Thanks for taking my question. Lynne, Ijust want a few, kind of, housekeeping questions for you actually. Just on yourguidance for the full year and operating losses mid-to-high 20s, what kind ofrevenue should we expect then on the fourth quarter to reach that? Depending onwhat the visibility on that, I guess you get some payment from Ortho or you'dbe bookings some payments from Ortho, but are there other payments you bookedin the fourth quarter?

Yes, Geraldine. I think probably the easiest way to figureit out, since we don’t give specific revenue and expense guidance, it is toassume that our expenses are not going to go up very much. Geraldine O'Keeffe - FortisBank: Okay.

And so, that probably makes it pretty easy for you to comeup with the revenue number. Geraldine O'Keeffe - FortisBank: Yeah, that was my next question because the expense did jumpquite a bit in the third quarter, is this kind of the level we should expect tosee them maintain that?

Yeah. We do think we don't have any extraordinary changes inthe expenses that we were anticipating in the fourth quarter. Geraldine O'Keeffe - FortisBank: :

No, we are not waiting for a partner to develop the familialhypercholesterolemia indication and the safety database will come from all ofthe FH patients that we have treated. All of the people treated so far in Phase2 and Phase 1 and additional Phase 2 studies in the routine high cholesterolpolygenics. And we do intend to license the drug that is our strategy, andobviously, we believe that we will achieve a value for that license and that'sour plan. Geraldine O'Keeffe - FortisBank: Just one, the final one then Stan, about how many patientshave been exposed to the drug at this stage?

We exposed almost 300 subjects to the drug and we willpresent, maybe it's 250. So that 300 when you include everyone in every study,but in terms of meaningful exposures its probably closer to 250. But we'regoing to go through all that in some detail for you next week. Geraldine O'Keeffe - FortisBank: Okay. Thank you.

(Operator Instructions). And we'll take our next questionfrom Gabe Hoffman with Accipiter Capital Management. Gabe Hoffman -Accipiter Capital Management: Hi. Thanks for taking the question. Just was wondering inthe Phase 3 that you've already initiated for mipomersen, could you tell us thesize of the needle gauge that is being used and also will the injections beself-administered or administered by even at the doctors' office?

The size of the gauge of the needle is very small. It's 30gauge I think. Jeff, is that right?

Its 30.

I think it's 30. And in our clinical trials that areprogressing today, both Phase 2 and Phase 3, the drug is administered by thephysician, because we want that level of control. We will be developing devicesand protocol for self administration by patients, but we expect to have thoseready for the launch of a drug for routine high cholesterol. Gabe Hoffman -Accipiter Capital Management: Would you expect it a requirement or to have a number of patientsfor the broader populations go through testing with self administration or isthat having all of the patients in clinical studies receive administration in aphysician's office? Is that typical for clinical development of a drug of thiskind?

It can be typical at what role we need to demonstrate is anone of our protocols during, even during the extension that self administrationis feasible. I think as Stan mentioned, it's a small needle, it’s subcutaneous.So the actual process, which is reasonably simple, you can also do stages whereyou have a nurse observe and then the patient goes home. And those are all –and so I think we intend head by the time of filing, to have the option of thiseither being physician-administered or self-administered.

By the time of filing of the polygenic.

Polygenic, right. Sorry. Gabe Hoffman -Accipiter Capital Management: Sounds great. Thanks for that.

I think we are going to have to wrap it up. We will take onemore question.

And Dr. Crooke, there are no further questions at this time.

Great. If there are no further questions, thanks everyonefor your interest. We look forward to seeing you next week. And if you can'tjoin us, please have a look at the webcast. Thank you.

And that concludes today's teleconference. Thank you foryour participation. Have a good day.