Stanley Crooke – Chairman and CEO Kristina Lemonidis – Director, Corporate Communications Lynne Parshall – CFO and COO

Laura Ekas – Collins Stewart Shiv Kapoor – Morgan Joseph Carol Werther – Summer Street Lucy Lu – Citigroup

Welcome to Isis Pharmaceuticals’ Second Quarter Financial Results Conference Call. Leading the call today from Isis is Dr. Stan Crooke, Isis Chairman and CEO. Dr. Crooke, please begin.

Good afternoon, and thank you for joining us on today’s conference call to discuss our second quarter financial results. Lynne will discuss our financials, and after that I’ll give a brief update on some of our recent activities. Joining us on the call today are Lynne Parshall, COO and CFO; Beth Hougen, Vice President of Finance; and Kristina Lemonidis, Director of Corporate Communications. Kris, will you read our forward-looking language statement please?

I will. Good afternoon. A reminder to everyone that this webcast includes forward-looking statements regarding Isis’ financial position and outlook, Isis business, the planned commercialization of mipomersen and the therapeutic and commercial potential of Isis technologies and products in development including the business of Regulus, Isis’ jointly owned subsidiary. Any statement describing Isis’ goals, expectations, financial or other projections, intentions or beliefs is a forward-looking statement and should be considered an at-risk statement. Such statements are subject to certain risks and uncertainties, particularly those inherent in the process of discovering, developing and commercializing drugs that are safe and effective for use as human therapeutics, and in the endeavor of building a business around such drugs. Isis’ forward-looking statements also involve assumptions that, if they never materialize or prove correct, could cause its results to differ materially from those expressed or implied by such forward-looking statements. Although Isis’ forward-looking statements reflect the good faith judgment of its management, these statements are 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 are described in additional detail in Isis’ annual report on Form 10-K for the year ended December 31st, 2010 and its most recently quarterly report on Form 10-Q , which is on file with the SEC. Copies of this and other documents are available from the company. And with that, I’ll turn the call over to Lynne.

Thanks, Kris. We continue to make progress in the first half of 2011 highlighted by our announcement last week that Genzyme successfully submitted the mipomersen marketing application to the EMA and remains on track to submit our NDA later this year. The mipomersen European regulatory submission has a significant achievement and brings mipomersen closer to patient with severe risk of dying from cardiovascular disease. We hope mipomersen will be the therapeutic alternative that will help them lead longer healthier lives. Also last week the registered trade name for mipomersen was unveiled. So now we’ll get used to using the trade name Kynamro. As usual the purpose of the call today is to report our financial performance for the second quarter of 2011. I’m assuming you’ve read the details of the financial results in our press release, so I’ll just cover the highlights. As always I’ll be happy to take questions at the end of the call. We remain on track to meet our guidance for 2011. We ended the first half of the year with nearly $400 million in cash, and a pro forma net operating loss of approximately $24 million. Already this year we’ve recognized a significant amount of revenue from our GSK collaboration including a $5 million milestone payment we received with the initiation of the Phase I study of ISIS-CRPRx the first drug to enter development under our alliance. We also began amortizing the $3 million upfront fee we received from GSK for the expansion of our collaboration. This has been very successful collaboration and we look forward to selecting the next drug candidates to move into our pipeline. Our revenue in the first half of 2011 was lower compared to the first half of 2010 principally due to the timing of milestones and other payments. We anticipated this flow of revenue and it was offset by new revenue we received from GSK this year. The big milestone we plan to earn this year is the $25 million that we will earn when the FDA accepts the NDA filing for marketing approval for Kynamro. We’ve factored this milestone into our 2011 financial guidance. Already this year we’ve made significant progress in many areas of our pipeline. Just this quarter we initiated Phase I studies for PTP1B and TTR drugs or that begin dosing in the Phase 2 program for our CFT drug and of course we continue to make progress in all of our other ongoing studies many of which will be completed later this year or early next year. This progress translates into higher cost for these program offset by lower cost associated with the completion of the mipomersen Phase 3 program that supports our initial regulatory filings. As a result, our expenses for the first half of 2011 are essentially flat compared to the first half of 2010. Although we expect our expenses to increase modestly in the second half of the year, we remain on track to meet our guidance of an NOL in the low $40 million range. As we move our drugs forward to more advance stages of development including in the larger, longer study, the cost associated with continued development of these drugs increase. In addition this year, we expect to begin the next mipomersen study to support additional regulatory filings. Later this year, we anticipate completing our obligation to spend a $125 million on mipomersen development. You may recall that once mipomersen expenses exceed $125 million, we will share all mipomersen development expenses 50-50 with Genzyme until mipomersen is profitable. So next year, we anticipate sharing mipomersen development cost with Genzyme. And remember Genzyme is lending all of the sales and marketing costs associated with the preparation for drug launches in both Europe and the U.S. and we’ll continue to do so until mipomersen is profitable. We remain on track to meet our cash guidance. The only thing I am going to focus on today is a new item that impacts our balance sheet. As many of you know, our primary R&D facilities are spread out across three buildings which we lease. Because when leases on our R&D buildings expire at the end of this year, we exploit several options that would allow us avoid costly renovations to the aging buildings we currently inhibit and to consolidate the majority of our operations into a single facility. We chose to lease a new facility built by BioMed Realty. We’re moving into the new facility later this month and will begin paying rent on January 1 of next year. In order to make our move as efficient as possible, we requested access to the new facility prior to completion of construction so that we can install the specialized lab equipment and IT systems required to support our activities. To gain early access, we agreed to modify our release and accept additional responsibility. As a result accounting rules required us to record the cost of facility as a fixed asset on our balance sheet with the corresponding liability. We’ll depreciate the building over the term of the lease and its (inaudible) and our rent payments will reduce the liability. Although this does not look significantly different from accounting for a capital lease, I wanted to explain it to you because the building and the liability are now on our balance sheet we’re obviously very excited to move into a new facility that will support our unique and innovative culture. So with that I will turn the call back over to Stan.

Thanks, Lynne. As Lynne said 2011 has been a productive year. Our primary focus remains mipomersen. Our job is to work with Genzyme/Sanofi to assure that the three key tasks are accomplished that we gain approval for mipomersen in Europe and the U.S. and the rest of the world that we complete a successful initial commercial launch for mipomersen and we that we complete the development of mipomersen so that we can submit registration dossiers for approval for additional patient population. With the submission of the filing for marketing approval in the EU, we have taken an important step. Genzyme and we are now hard at work on finalizing the U.S. submission. We’ve had productive interactions with both the U.S. and EU regulatory authorities that give us confidence that our filings are appropriate for the indications we seek and that mipomersen or Kynamro should be approved. The Genzyme-Isis team has done a tremendous job in completing the development work and putting together the regulatory dossiers. And now we have the added strength of Sanofi to the launch and continue development of Kynamro. As someone who has been responsible for drug discovery and development for many years, I have confidence that Kynamro should be approved. I have that confidence because we thoroughly answered the key questions that should be answered about a new medicine when seeking approval. First, we have well defined patient populations with clear unmet medical needs. Patients we plan to treat are all at severe cardiovascular risk. The all have a fatal cardiovascular disease. Second, the efficacy of mipomersen has been shown in four randomized double blind placebo controlled trials that robustly met all primary, secondary and tertiary endpoints. Mipomersen has been shown to lower all estrogenic lipids with no negative effects on HDL, no other drug has that profile. Long term studies demonstrate that mipomersen continues to work well providing the same benefit seen in six months studies with longer term treatment. Third, the dose has been identified and all four Phase 3 studies were performed at the dose of 200 mg per week the commercial dose. The 200 mg per week dose was selected after a Phase 2 program that explored a range of doses. Lastly, mipomersen has an acceptable safety profile for the indications we’re pursuing. Mild-to-moderate injection site reactions are the most common side effect. These types of reactions are consistent with subcutaneous administered drugs, but mipomersen’s ISRs are much more tolerable than many. Only 8% of the patients treated in Phase 3 studies experienced modest changes in liver enzymes. Changes in these markers correlate with rapid and significant changes in lipid levels. Thus ALT effects are related to the basic pharmacology of mipomersen and not evidence of liver toxicity. They are reasonably monitored and should be easily manageable. In a small fraction of patients moderate increases in liver fat were observed with no evidence of liver toxicity such as super high ALTs, evidence of inflammation in the liver on biopsy, or any other liver dysfunction. In fact long term dosing experience demonstrates that with continued dosing liver fat stabilizes or reduces. Importantly the mechanisms by which the liver accommodates the mipomersen have been carefully studied in animals and the predictions made by studies in the animals have now been realized in man. Additionally, mipomersen has the strong support of key opinion leaders in lipidology. In just the past two years approximately a dozen positive reviews of mipomersen have been written by lipidologists. I think the sheer number of reviews demonstrates how important mipomersen is to the people who are taking care of these patients. And while each one of the reviews emphasizes the need for continuing longer-term studies, I think the enthusiasm for the drug is quite apparent. And of course those long-term studies in larger numbers of patients are exactly the studies we’re conducting. And finally, we pursued a prudent stage development program in which we are seeking initially approval to treat the patients who are at the greatest need and our continued comprehensive development program will provide data supporting Kynamro’s value and safety with longer-term treatment in larger numbers of patients before we seek broader indications. That could go on and I think you get the point. Kynamro was a unique new medicine that we believe can prolong the life of patients with fatal cardiovascular disease. It has been carefully and thoroughly evaluated. Our continuing development program will provide additional safety data and better understanding of the drug while supporting its standard use. We believe Kynamro is a great drug that has been comprehensively studied and can bring real benefit to desperately needy patients. We’re confident that the initial indications will make Kynamro a commercial success and we think there’s a great opportunity for significant long-term commercial growth as well. We have the right commercial partner in Genzyme/Sanofi. Their launch plans are right on target focusing on earlier diagnosis and treatment of FH patients and referral of these patients to lipidologists, the physicians who already know Kynamro well. And we have to limit our sales with National Lipid Association’s new guidelines and recommendations regarding diagnosis and treatment of FH patients as well as the strong support of the KOLs. Genzyme continues to focus on enhanced presentations with Kynamro, better physician and patient education about how to optimally use the subcutaneous drug and better explanation of the benefits of Kynamro’s profile. All of these efforts should enhance patient convenience in clients and understanding of the importance of Kynamro. Finally, we’re excited about the continuing development of Kynamro. We know what we need to do in the U.S. and Europe to achieve expanded patient populations, the required studies are straightforward and we’re about to begin them. But we have an exciting year ahead for Kynamro. However, with 24 drugs in our pipeline we have many other events to look forward to and this is already been an exciting year. Over the next year we plan to build on Kynamro success and the clinical success as we’ve already announced this year. We have a large number of clinical trials coming to completion. We’ll continue to report clinical data where we have the opportunity to demonstrate proof-of-concept for many of the drugs on our pipeline over the next six months. We continue to advance our pipeline such as we have with the initiation of Phase I studies the PTP-1B inhibitor, Factor XI and TTR. In fact, we expect to initiate clinical trials on three or more drugs during the remaining half of the year. We’ll also add three or more noble drugs to our development pipeline as the year progresses. So this is going to be an exciting year. Registering Kynamro is of similar importance but what adds to my excitement is all the drugs that I think have a good likelihood of working and showing proof-of-concept in the clinic. And we expect to be able to tell you about those in the coming months. So with that, I’ll thank you all for joining us today and we’ll open up the call for questions and answers. Chenal if you can set us up for Q&A please.

Thank you. (Operator Instructions) And your first question comes from the line of Salveen Richter of Collins Stewart. Laura Ekas – Collins Stewart: Hi, it’s Laura Ekas on behalf of Salveen. I just wanted to ask I guess first of all if we could talk about mipo pricing in the EU and given that you’re filing in a broader population in the EU than in the U.S. How should we think about the pricing differences in the two different geographies?

Laura, Genzyme is responsible for pricing and they have not yet set prices and I don’t think there is any particular reason to believe that the pricing is going to be dramatically different in the U.S. and Europe but we will get more information of that as we go forward. Most of our analysts are using the cost of (inaudible) as a surrogate for price both for the U.S. and Europe and (inaudible) is much more commonly used in Europe than it is in the U.S. and that in the range of $100,000 a year annual cost of therapy but I just want to reiterate it’s up to Genzyme to set the price and they haven’t done it yet. Laura Ekas – Collins Stewart: Okay and then where do you stand on the 12-month exposure study that you were running for the severe group in the U.S.

Well, we’re very excited about it. The study continues to perform very well. We have about 141, are you talking about the open label extension study or the beginning of the one year trial. Laura Ekas – Collins Stewart: The beginning of the one year trial.

Oh, I am sorry. I misunderstood. They’re progressing really well. Laura Ekas – Collins Stewart: Okay.

We should be getting that effort underway here in the next little bit. Laura Ekas – Collins Stewart: Okay, great.

We’re very pleased with the responses and in general very pleased by where, about where we stand with knowing what we need to do, to get to the next patient, next indication. Laura Ekas – Collins Stewart: Okay and then I guess just one last question, what is Sanofi’s plan for mipo in the, beyond homo and severe heterozygous group? Are they planning to try and go into the broader heFH population?

Yes absolutely. Laura Ekas – Collins Stewart: Okay.

Our plan, the plan that we’ve advertised all these years has not changed. Laura Ekas – Collins Stewart: Okay.

We are proceeding exactly on course and I think there is substantial excitement here and in our partner. Laura Ekas – Collins Stewart: Do you know when those studies might start?

We’ve very, very shortly. Laura Ekas – Collins Stewart: Okay, great. Thank you.

Your next question comes from the line of Shiv Kapoor of Morgan Joseph. Shiv Kapoor – Morgan Joseph: Thanks for taking my question, first when do you expect the acceptance of this filing, will it be in the fourth quarter or the first quarter next year?

Your mean the U.S. filing? Shiv Kapoor – Morgan Joseph: Yes.

All that we’re willing to comment on right now Shiv is that the U.S. filing will be filed later this year and we’re working very hard to get it down as quickly as possible. Shiv Kapoor – Morgan Joseph: Second question, what kind of free marketing activities is Genzyme/Sanofi doing?

Genzyme actually has a great marketing plan that we’re really excited about for mipomersen, they’ve had a very important presence at all of the major cardiovascular meetings with EAS last year at AHA, last year ESC coming up at ESC, so all of the major meetings they’re doing, continuing into medical education, sponsoring symposia and really doing all the things that one would expect them to be doing at this point. The key is to the Genzyme marketing focus I think are very important, there are focused on the physician population – treating physicians the lipidologists who treat these high risk, very high cholesterol patients. They are also focused on educating referral physicians who the internal medicine specialists, the cardiologist who may have these patients and not know that they are actually FH patients and need more aggressive treatment. So patient and physician education is a key element of the Genzyme marketing strategy and they are already beginning working with patient advocacy groups working with the National Lipid Association and partnering with all of the important groups that will contribute to mipomersen success when it’s launched.

Shiv I think in addition to all the work that Genzyme was doing, to me the most important thing that’s going on right now is the buzz in the cardiovascular community. The level of interest in mipomersen really is impressive number of reviews that have been done is really nifty. And I think in common with any drug at this stage there are differences in understanding depending on whether the physician has used the drug in clinical trials or whether he hasn’t and making sure that mipomersen is better understood by people who haven’t used it as a key step that needs to be taken and very – many ways the fact that the experts are reviewing mipomersen so frequently and positively is the most important component of all the activities that are taking place. Shiv Kapoor – Morgan Joseph: Okay, Stan and one for you. Over the next 12 to 18 months, what are you most excited about beyond mipomersen?

In addition to what we’ve already announced this year which is EXC 001 and CRP, APOCIII, Factor XI are really exciting and what’s particularly exciting about them is that I believe we’ll have the opportunity to show more than proof of concept of proof of value in initial clinical trials. We’ll complete HDL D2 in the next little bit, obviously that’s a complicated environment and then I’m and – so near term events obviously come to mind immediately, TTR is another molecule that we should be able to evaluate for proof of concept very quickly. And then we have some big events coming up with our cancer pipeline, EIF4 getting underway, Survivin we should have data from Lilly here before long and OGX-011 are continuing. So pay attention to APOCIII and Factor XI in particular. Shiv Kapoor – Morgan Joseph: Okay, well, best of luck and looking forward to all the proof of concept, seems like there’s going to be a lot of those.

Oh, I think so. Shiv Kapoor – Morgan Joseph: Thank you.

Your next question comes from the line of Carol Werther of Summer Street. Carol Werther – Summer Street: Thanks for taking my question. Stan, can you just give us a little bit of an update of how the other dosing trials with mipomersen have been going?

Yes, remember that we compared daily to thrice weekly to weekly dosing in an initial trial and the results there were very positive. That was also a trial that we looked very carefully the potential for mipomersen to prove, produce systemic increase, systemic markers of information and showed that it didn’t. So, we have all the basic data from animals now on man saying pretty much what you’d expect that once a day dosing at 30 milligrams per day or thrice weekly dosing at 70 milligrams a dose should be equivalent to 100. In our studies that we’re getting ready to move forward, we will be comparing at least two schedules. We’re also working on presentations for the daily dosing being we want to have the final presentation before we began a daily dosing study. So, we’re quite enthusiastic about it. But again I want to put it in the context that I have always tried to put these experiments in. We don’t – what we believe what we’re setting out to do is to provide patients options. We think they’re going to be patients who would much prefer taking once weekly and they’re patients who might like taking daily and there maybe patients who preferred small or three times a week injection. So, the goal is to provide options and let the patients then decide which approach they like better. I don’t believe that we have an injection site reaction problem that needs to be fixed. We have an opportunity to enhance the acceptance in their commercial... Carol Werther – Summer Street: And then, could you also just tell us if you know when some of these other pivotal trials are going to be published in a pure reviewed journal?

Yes. They, the severe has been submitted and I think the heterozygous has been submitted. So, they are in the review process now they are in top tier journals so the review process is consuming but they’re well along the way and the high risk is not quite as far along. Carol Werther – Summer Street: Okay, thank you.

We also, are continuing our long-term open label study and look forward to presenting the information from that study. We think it’s really, we have really important information there. Carol Werther – Summer Street: Thanks.

(Operator Instructions) Your next question comes from the line of Lucy Lu Citigroup. Lucy Lu – Citigroup: Hello, this is actually Anton on behalf of Lucy and thanks for taking my call. I was just wondering if given what happened today in the market with Provenge and Dendreon, do you seen any report to mipomersen with this respect and does it change any at all your expectations for the launch trajectory of the product, thank you.

I am sorry, I am going to have to ask you to repeat it little more slowly for me I really couldn’t understand it. Lucy Lu – Citigroup: Sure no problem. My question is that given what’s happened to the, in the market with the Dendreon and Provenge sort of, they need sort of launch trajectory and adoption curve for the product was a little bit slower than expected, do you think there is any risk to mipomersen and is it changing the – does it change any implications for you?

No, I don’t think the adoption of the Dendreon drug is terribly slow. I think what was – what’s different is the expectations Dendreon set versus what’s reality. I think the expectations on Wall Street are grossly under what I believe mipomersen will do and the uptake of mipomersen will be dependent on the need of the patients, the acceptance of mipomersen by the doctors and the efforts of our partner.

And we haven’t provided any mipomersen projection, so we can’t do worse than them, yes.

I think again I think there is a little temptation to confuse Wall Street expectations which are set by a variety of things with what’s reasonable and what’s reasonable for mipomersen I think is a lot better than what Wall Street expectations are today, so. Lucy Lu – Citigroup: So, I was just wondering maybe can you give us like a key indicators that we should probably follow for our modeling purposes so that would help us to estimate how fast the launch will be, like would it be like in your reimbursement concerns or anything like that?

Well, I think the only guidance that make sense is that we’ve provided guidance about the patient numbers in the U.S. and Europe we estimate 318,000, we provided as much guidance as we possibly can about pricing range. I’ve told you that there is tremendous enthusiasm at least the people I talk to and the people I don’t talk to who write these reviews. There is an urgent need, so I don’t know if there is anything more than that that we can say today. We’re still many – quite a few months away from getting the drug to market. In addition I would add that the National Lipid Association’s guidance is similarly important because it urges aggress – much more aggressive treatment, the need for new drugs. And a much more aggressive pursuit of diagnosis of the very potentially large numbers of patients who remain on diagnosis FH. So I don’t know if I even come close to answering your question but that’s about as much as I think I can today. Lynne, do you have anything that you want to add?

Yeah, the only thing I was going to add is that subject to getting the regulatory timelines working Genzyme’s planning on launching the drug next year. And as we get closer to that, we’ll have more clarity on pricing initiatives like that which will help you build your model better but where we are today, I think is exactly where you’d expect us to be this far in advance of the launch. Lucy Lu – Citigroup: Okay, great. Thank you. That’s very helpful.

Thanks.

And your final question comes from the line of Andy (inaudible).

Yes, good afternoon. As a follow-up to this Stan and Lynne, when you originally announced your deal with Genzyme in the early part of 2008 I believe part of that deal was a 5 million share offering at $30 a share and I remember the excitement that was created on that announcement. Lynne, I am curious to ask you have those shares even been registered for sale or do you know whether they have been retained for investment purposes by Genzyme.

Genzyme still owns those shares.

Thank you.

Ladies and gentlemen. There are no further questions back to Crooke.

Great well. Again thanks everyone for your attention and we forward to talking to you again in the near future and we will bring the call to a close thank you.

Ladies and gentlemen that concludes the presentation. Thank you for your participation, you may now disconnect. Have a great day.