Stan Crooke - Chairman & CEO Wade Walke - Head, Corporate Communications & IR Lynne Parshall - COO & CFO

Salveen Richter - Canaccord Chad Messer - Needham & Company Ted Tenthoff - Piper Jaffray Eric Schmidt - Cowen and Company Stephen Willey - Stifel Nicolaus

Good day, ladies and gentlemen, and welcome to Isis Pharmaceuticals' Second Quarter Financial Results Conference Call. Leading the call today from Isis is Dr. Stanley Crook, Isis's Chairman and Chief Executive Officer. Dr. Crook, please begin. Stanley Crooke - Chairman & CEO: Good morning and thanks everyone for joining us on today's conference call to discuss our second quarter financial results. Lynne will walk you through our financial results for the second quarter of this year and after that, I’ll give you a brief update on what we’ve accomplished so far this year, and then focus on the important events in the second half of the year. Joining me on today's call are Lynne Parshall, COO and CFO, Beth Hougen, Vice President of Finance and Wade Walke, Executive Director of Corporate Communications and Investor Relations. Before we begin, I’m pleased to share with you that Kristina has continued to advance her career in Isis and has taken on new responsibilities. She will continue to be an integral part of the Isis team in her new role leading our Patient Advocacy Relations Group, while we’ll miss Kristina’s efforts in our Investor Relations activity, Kristina’s science and nursing background coupled with her vibrant and caring personality make her a great choice to spearhead this new endeavor, actually I agree with all that. So, with that I’d like to introduce the newest member of our Investor Relations team. Please join me in welcoming Wade Walke who will head up our Corporate Communications team. Wade holds PHD in Biochemistry from the University of Michigan and completed the postdoctoral training in St. Jude’s Children's Research Hospital and The Scripps Research Institute. Manny of you may know Wade from this previous positions at Lexicon Pharmaceuticals where he was Head of Corporate Communication and Investor Relations Department for the past six years. So, please welcome Wade and Wade your first formal task is to present our forward looking language.

Thanks, Stan. Good afternoon, everyone. A reminder to everyone this webcast includes forward-looking statement regarding Isis’s business, the financial outlook for Isis and the therapeutic and commercial potential of Isis technology and products in development. Any statement describing Isis's goals, expectations, financial or other projections, intentions or beliefs including the planned commercialization of KYNAMRO 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 of human therapeutics and in the endeavor of building a business around such drugs. Isis's 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's forward-looking statement reflects 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 31, 2011 and its most recent quarterly report on Form 10-Q which are on file with the SEC. Copies of these and other documents are available from the Company. Now, I'll turn the call over to Lynne.

Thanks, Wade and welcome. Good morning, everyone, and thank you for joining us. As usual, I am assuming you've read the details of our quarterly financial results in our press release, so I plan to just cover the highlights. Consistent with our projections we ended the quarter with more than $335 million in cash and pro forma net operating income of $6.2 million. We also reported the year-to-date pro forma net operating loss of $10 million. The significant improvement in our financial results for this quarter and the first half of the year was driven primarily by the $25 million milestone payment we earned from Genzyme when the FDA accepted the KYNAMRO NDA filing. Let me spend a few minutes discussing how this affects the rest of our year. As you’ve heard me mentioned before our revenue fluctuates from quarter-to-quarter based on the timing of payments from our partners as the Genzyme milestone in the second quarter of this year clearly demonstrates. In our 2011 year-end call in February, we projected 2012 revenue of $112 million, including more than $40 million from the amortization of upfront payment. In the first half of this year we’ve earned more than $30 million in revenue from the amortization of upfront payments, which is most of what we projected for the year. This includes $28 million from the amortization of the Genzyme upfront payments which ended on schedule in the second quarter of this year. As a result that will not be a component of revenue in the second half of the year. In addition to the $28 million we earned from Genzyme, we’ve earned $7 million from the amortization of upfront fees from our GSK collaboration and our Biogen Idec collaboration for SMA and we expect to earn the same amount from these two collaborations in the second half of the year, also our new revenue in the second half of this year from the amortization of the $12 million upfront payment we received from Biogen Idec for our recently established myotonic dystrophy collaboration. I’ll spend some time on this new deal in a few minutes. The nature of our business strategy and partnership ensures that we have a steady stream of milestone payment opportunities each year. In February, we projected we were going to earn $50 million in KYNAMRO milestone payments, and consistent with each of the past several years in the $15 million range for non-KYNAMRO milestone payments. The most significant milestone payment so far this year was of course the $25 million milestone payments from Genzyme for the acceptance of the NDA. As we mentioned in May, with the January 2013 PDUFA date, we now expect to earn the $25 million KYNAMRO NDA approval milestone next year. Because we use conservative projection of our financial results to set our guidance each year, which does not include any significant new transactions, any new alliance we establish will have a positive effect on our guidance, and as such, it’s still too early to predict how the shift of the approval milestone will affect our guidance for the year. As we move into the second half of this year, we also expect to earn revenue from non-KYNAMRO milestone payments as our other partner drugs advance in development. For example, we plan to initiate a Phase 3 clinical study for our TTR drug in patients with familial polyneuropathy, for which we would earn a $10 million milestone payment. We continue to support the KYNAMRO commercial launch, and in the first half of this year, we received more than $6 million from Genzyme for the sale of drug to support this launch. We expect to earn a similar amount in the second half of this year as we continue to supply Genzyme with the drug. Our expenses for the first half of 2012 were moderately higher than our expenses from the first half of 2011 but right on target to meet our projected guidance. In February, we predicted a 7% increase or $10 million in our operating expenses to support our later stage drug development program. We have many drugs that are already in late-stage development or will be entering into late-stage clinical studies this year. These studies are designed to support rapid reach to the market or to support attractive new partnerships based on robust Phase 2 data packages. Our increase in development spending for internal program is offset in part by a decrease in KYNAMRO related expenses because we are now sharing KYNAMRO development expense 50/50 with Genzyme until KYNAMRO is profitable. Ongoing development expenses for KYNAMRO are primarily related to the FOCUS FH study which is well underway. Also Genzyme is paying all of the marketing and selling expenses for KYNAMRO. In summary, our profitability this quarter was primarily driven by one-time milestone payment. It does illustrates the fact that because of our cost structure and revenue base from partnerships will not take significant revenue to move us to profitability on a sustainable basis. With KYNAMRO approvals on the horizon, we’re looking forward to that possibility. Now I’d like to switch gears and discuss how our investments in our pipeline and partnership approach have enabled us to remain financially strong. Last quarter, I reviewed several drugs from our pipeline that we believe represents potential product launches over the next five years or could be very valuable licensing opportunities over the next two years. Today, I would like to spend a few minutes discussing how our severe and rare disease franchise our latest alliance with Biogen Idec fit into our business strategy. Severe and rare disease as they are often genetically based hard to treat diseases that have been underserved by pharmaceutical companies. As such there is a tremendous unmet medical need for these patients and potentially rapid routes to market for effective and safe drug. In just a few years, we’ve been able to expand our severe and rare disease franchise and maintain a broad research program in which we’re evaluating many different diseases that could be treated with an antisense drug. Of these diseases, myotonic dystrophy type 1 or DM1 is characterized by progressive muscle atrophy, weakness and disabling muscle spasms. Currently there are no treatments available for patients with DM1 even through these diseases expect to affect more than 150,000 patients in the U.S., Europe and Japan combined. DM1 is caused by toxic RNA, not a protein making it very difficult to treat using standard drug discovery technologies such as small molecule. Because the antisense technology targets RNAs, we have a unique opportunity to develop an effective drug for these patients. Our new collaboration with Biogen Idec to develop an antisense drug to treat DM1 is structured similarly to our earlier collaboration with Biogen Idec for our SMA drug, albeit for a much earlier program. We’ve provided Biogen Idec with an option to license in the future an antisense drug to treat DM1. Biogen Idec will provide discovery and development milestone payments to Isis as we advance the program, discover a drug and move it into clinical development. At the time of licensing after we have evidence of value in clinical studies, we will have a knowledgeable and invested partner. Additionally Biogen Idec’s expertise in neurodegenerative diseases and their strong commercial track record from moving new drugs to the market rapidly for these diseases is a perfect complement to our strong drug discovery resources. Together we plan to identify a development candidate to move into clinical studies soon. By partnering programs like DM1, with partnership brings substantial expertise and experience to the development program, we can add more drugs to our pipeline and advance these drugs more rapidly than we would be able to do on our own. We retain the right to attractive licensing terms and maintain control over the early development of the drugs. We also continue to benefit after- licensing with an invested partner and substantial development and regulatory milestone payments and royalties on these drugs. So, in short 2012 has been very productive thus far. As you can see we continue to successfully execute our business strategy through new partnerships and accomplishments in existing partnerships, while maintaining our expenses at a consistent level supporting our strong financial position. So, far in this year we’ve already received more than $85 million from our partners. We move into the second half of the year in a very strong financial position with many opportunities for continued growth. With that, I’d like to turn the call back over to Stan to wrap up with the accomplishments we’ve already achieved this year.

Thanks Lynne. As Lynne said, the first half of 2012 has been very busy and very productive. The most important achievement so far this year was the successful filing of the KYNAMRO NDA. With this filing, we are one step closer to bringing KYNAMRO to the market for patients who are at significant cardiovascular risk, in fact, patients who have a fatal cardiovascular disease. Our development programs for KYNAMRO provided a solid and robust filing package with data for than 800 subjects dosed in 20 clinical trials, including four Phase 3 studies. In addition, we recently reported data in patients who’ve been treated with KYNAMRO for more than three years. In these patients, KYNAMRO continues to demonstrate consistent reductions of all atherogenic lipids and a consistent safety and tolerability profile that we believe support our initial commercial markets for KYNAMRO. These data give us ever greater confidence that compliance with patients taking KYNAMRO will be very good once the drug gets to the market. Together with Genzyme, we continue to make progress on the regulatory front. European review is progressing as scheduled and we look forward to KYNAMRO being improved in Europe this year. We’re also looking forward to the FDA Advisory Committee panel on KYNAMRO which is now scheduled for October 18 and of course we look forward to approval in the U.S. thereafter. Finally, we are pleased to announce that the European Medicines Agency has approved our manufacturing facility which is making drug substance for KYNAMRO commercial launch. The successful completion of a pre-approval inspection is an important milestone for us and validation of the high standards and excellence that we engage in manufacturing such drugs, it’s all great news. With the potential for KYNAMRO approval on the horizon, this is an exciting time to be at Isis. We believe with the initial indications KYNAMRO could be a substantial commercial opportunity with the largest market being Europe initially. In addition, together with Genzyme we’re progressing towards expanding the market potential for KYNAMRO with new indication. FOCUS FH study designed to support the long-term growth potential of KYNAMRO is progressing well. As I have said before, we believe that KYNAMRO is great drug that has been comprehensively studied and can bring real benefit to desperately needing patients. KYNAMRO has been shown to lower all ApoB containing atherogenic lipids, that’s our measure, including LDL cholesterol and other independent risk factors such as Lp(a). An analysis of the Lp(a) data from all (inaudible) studies was recently presented at the European Atherosclerosis Society. In all patient population study, KYNAMRO produce sustained reductions of Lp(a) with either neutral or positive effect on HDL cholesterol or good cholesterol. That is a unique profile and extremely valuable profile. For patients who are unable to reduce their LDL cholesterol to acceptable levels with currently available lipid lowering therapies, the only option is apheresis expensive, invasive and very difficult procedure. We believe that KYNAMRO could reduce LDL levels in many of these patients to below the levels where they might require apheresis. In fact, last year at the European Atherosclerosis Society, they represented highlighting KYNAMRO’s potential to reduce the necessity for apheresis by lowering LDL cholesterols below the threshold. This Year at the European Society of Cardiology and ordinal analysis of the potential of KYNAMRO to reduce LDL cholesterol levels below these thresholds will be presented. We hope that you will join us on a webcast on August 29 during which Dr. Parhofer of the Ludwig-Maximilians University in Munich will present the results of this analysis. Now let’s focus on the second half of the year. In the second half of this year, we expect to report clinical data from studies on a number of drugs, including Phase 2 data from our CRP drug in patients with rheumatoid arthritis this year or early next year and the results from an endotoxin study in which we will be able to assess the ability of our drug to blunt acute increases in CRP and other inflammatory mediators and alter signs and symptoms associated with an endotoxin challenge. We believe that this next year will be a very, very important year for our CRP drug and for medical science. With these data in hand, we will have for the first time the opportunity to address further lowering CRP and generate therapeutic benefit in a variety of diseases. We’ll complete report of Phase 1 study in patients with SMA later this year and move on to Phase 2 multiple dose setting. Next year we plan to initiate a Phase 3 study in these children with spinal muscular atrophy. In addition, we’ll have a number of opportunities to evaluate clinical data from our metabolic disease franchises. Clinical trials will be completing, including our first anti-obesity drug that targets FGFR4 and our glucagon receptor antagonist, with a corticoid receptor antagonist and our novel insulin sensitizer PTP1B. So, we have a very full agenda for our metabolic drugs in the coming months. We’ll continue to advance the pipeline with the addition of initiation of clinical trials for many drugs, including a Phase 3 study for our TTR drug that we’re developing to treat TTR amyloidosis with a partner GSK. We’re pleased to announce that we were recently granted orphan drug designation by the FDA for our TTR drug and look forward to evaluating this drug in patients later this year. A Phase 2 study in patients who were undergoing total knee replacement for our anti-thrombosis drug, Factor XI is underway or getting underway. In this study, we hope, to see reductions in Factor XI with no bleeding, consistent with the results we saw in Phase 1. In addition, we’ll be evaluating the effects of our drug on the deep vein thrombosis of deep vein thrombosis associated with total knee replacement and we’ll compare those results in terms of efficacy and safety to enoxaparin, low-molecular weight heparin drug and of course we will continue to add new drugs to our pipeline, including drugs to treat severe rare diseases. Our severe rare disease franchise is one of the fastest growing areas of our pipeline. Antisense drugs offer a unique approach to treat many severe and rare diseases for which there are no specific disease-modifying drugs. With our technology, we can target toxic RNAs, non-coating RNAs, RNAs that are involved in the production of disease-causing protein. We’ve shown that with our SMA drug means we can alter splicing of an RNA enabling the cell to produce protein necessary for normal function. So, it’s obvious that using our drug discovery technology, we can develop antisense drugs to many different severe rare diseases and we have an active research program doing just that. As an example, there are now two very striking papers that have recently been published that demonstrate the potential of antisense drug to treat these hard-to-treat disease. Earlier in the summer we and our collaborators, UCSD and Genzyme published a paper in the journal Neuron that highlights the selectivity and potential benefit of the management’s approach to the treatment of Huntington's disease. We have reported that a single injection of Antisense drug designed to target Huntington RNA produced a rapid sustained improvement in a mouse model of Huntington's disease. After one injection directly into the spinal fluid treated mice exhibited increased mobility and steadily progressed in normal mobility. These improvements were still being observed nine months after a single dose was administered. I am very encouraged with this work and the clear demonstration of activity in an animal model of Huntington's disease and we look forward to advancing this program into development in the near future. More recently, we and our collaborators at the University of Rochester published paper in the journal Nature that demonstrated similar striking sustained results in a mouse model of myotonic dystrophy. In this study we were able to rapidly reduced our target of toxic RNA in scalable muscle and reduce the disease for more than year after treatment. These data are especially significant as this is the first time we have developed an antisense drug to target toxic RNA and this is the first time we published data showing the potential for therapeutic benefit by targeting an RNA and scalable muscle. We used to think that second generation antisense drugs did not work well in scalable muscle, but thanks to continued advances in our technology and our understanding of the mechanisms by which antisense drug distributed in the body. We now know that we can get our antisense drug into muscle cells with very good effects. By the way I’ve emphasized that the drugs are formulated in simple saline solution, doesn’t require any special formulation for any disease. This of course expands the potential utility even in antisense once again. As Lynne mentioned we recently patterned our myotonic dystrophy program with Biogen Idec and together we’re moving this program forward rapidly to identify development, so stay tune. We have a busy second half of the year ahead and we look forward to continue to share our successes and progress with you. So with that, I’ll thank you all for joining us today. We will open up the call for questions-and-answers. Derik, if you can set us up for questions that will be helpful.

(Operator Instructions). And our first question has comes from the line of Salveen Richter from Canaccord. Salveen Richter - Canaccord: My first question just around the KYNAMRO regulatory filing you submitted filing in last July and it looks like we should have heard by now in terms of the CHMP decision. Was there any additional updated data that you submitted or is it due to questions that you’re responding to that this just seems has taken a while for us to get an answer here?

No, I think the progress on the European filing is exactly on schedule and the process has been very standard. We received a typical 120-day questions and then a formal 180-day questions. We’re responding to the 180-day questions. The questions were straightforward and we feel we have very solid answers to all the questions. In the meantime, the manufacturing plant has been inspected and approved and so we're right on the schedule that we expected and we’re looking forward to getting the drug approved in Europe. Salveen Richter - Canaccord: And can you provide the date on which the CHMP is reviewing the drug?

Genzyme doesn’t give out that level of regulatory detail Salveen, so unfortunately we can’t. But we’re expecting approval this year. We’ve been consistent about saying that.

The committee on medicines meets monthly, but the August meeting this year was not held principally because of the Olympics. There were difficulties in getting meetings together around the Olympics. Salveen Richter - Canaccord: Then just another question just in your long-term outlook for the company. You’ve never had an intention to be a commercially focused company but when you look at entering and focusing on these rare genetic diseases, have you thought about maybe keeping these assets, given that there’s not a huge investment required on the commercial front and sort of partnering them out?

Yes, we’ve thought about that in some detail, not just for what is typically thought of as rare diseases but for our market subdivision or probable development strategy for things like APOC3 which is a subset of patients that might be considered, if not rare, certainly not common. And the basis for our strategy is primarily has to do with long-term innovation and the commitment to be a long-term innovate and to do nothing that diminishes our ability to innovate and that is the primary basis of our business strategy coupled to the efficiency of Antisense technology. With the additional financial flexibility that we have, obviously what we’re doing is developing more drugs and we’re keeping them in longer. So with rare disease drugs, very often you have the opportunity to do Phase III programs that are relatively modest and do not require a giant organization or infrastructure and so some of those were certainly keeping longer before we partner. We may do distributorships and the like. So what we're trying to do with every drug in the pipeline is optimize the partnering strategy that in a way that acknowledges the risk and assures appropriate participation and investment and the opportunities and we'll continue to do that. Salveen Richter - Canaccord: Can you provide us with any color on the TTR phase III trial design?

We will be able to do that very shortly. I can tell you that we have had the opportunity to get advice from both the European and regulatory agencies. We're very encouraged by their response to drug, the data and our plan and we're in the process of putting the dot on the i and crossing the t in the protocol and the changes in the business transact where necessary as we move forward into Phase III. Remember that the transaction with GSK is a contemplated Phase II program followed by Phase III. So we should be able to tell you a lot more about it very, very soon.

I just want to add, we just have given some amount more granularity on that trial. So I thought I'd just repeat that for your benefit. It will be a couple of series on 200 patient trial. Its 12 to 15 months of dosing, using a neurological impairment scoring system that's unique but similar to one's use of the drug as the end point.

And your next question comes from the line of Chad Messer from Needham & Company. Chad Messer - Needham & Company: My question is also on your TTR program. Your colleagues and sometimes friendly competitors over at Alnylam just a couple of weeks ago put out some Phase I data on their program and the market reacted very, very favorably to that. I was wondering if you could just compare and contrast maybe the approaches that you guys are taking with the drug and the development pass in TTR and does the data that they showed raise the bar for your own expectations in any way?

Well first of all, we and Alnylam were great friends and always friendly and we work together on many, many things including of course co-founding Regulus. So we're very excited for our friends at Alnylam. I think the market reaction to Alnylam was a product of seeing the TTR data and the PCSK9 data as clinical validation that double strand RNA can work in the clinic. And so I think it was many factors that worked there. We have shown dose-dependent reductions in TTR that took TTR to undetectable levels in normal volunteers. Our drugs are single-stranded. They are drugs that work in cells and animals and in men. And they work in all tissues, they work in all organs and they work for multiple diseases. They require no special formulation and we have more than 6,000 patients in our safety database saying they are safe and effective. So our drugs are the product of a very mature technology that we find here and we know about that. The Alnylam drugs are double strand RNA. So they differ dramatically. Double strand RNA is as different from single strand as night and day in terms of distribution and other kinds of properties. Double strand RNAs require either cationic lipid formulations or more recently our friends Alnylam have shown that a conjugate called GaINAc can be also used. They've been shown to work and deliver and of course the lipid formulations are very complex and the combination of lipid formulations and double strand RNA is inflammatory and as a consequence, patients need to be pre-treated with steroids and antihistamines, both H1 and H2. The GaINAc doesn't require a special formulation, but again, so far has been shown always to work in the liver. The results of the TTR studies that Alnylam and we have done have shown roughly comparable reductions in target and so the bar for us isn't raised at all and the effects are we're moving to Phase III. So we excited for Alnylam and we're excited for the patients and we look forward to seeing what chronic administration of double strand RNA is like and we believe that Alnylam is going to continue to advance that technology and we support them in every possible way. Chad Messer - Needham & Company: And can I just ask a quick-follow up on apoC-III and apologize if you touched on this when you were doing your pipeline review. When are we expecting Phase II study to initiative and when will we see more of the Phase I data?

When you've seen all the Phase I data, the drug, it produce dose-dependent reductions in apoC-III, post prandial and fasting triglycerides. And again, it was extremely well tolerated. The Phase II study is well underway. And we expect to finish it and have those data for you later this year, early next year. And that's our Phase II study in patients who have triglycerides that are greater than 500. We're also looking core patients that we're treating in combination with fibrates. We're further doing a study called a clamp study in patients with diabetes. In these studies what you do is you treatment look to determine whether insulin sensitive has improved. We certainly expect that to be positive because lowering apoC-III and triglyceride should improve insulin sensitivity. So we can have data from those studies and some other things that we are doing here by the end of the year or early next year and that would make us ready then to begin Phase III work. We're very excited about what we're seeing and we're excited about this drug. We've also had informal regulatory conversations as you're allowed to in Europe to discuss our strategy of initially targeting patients with triglycerides greater than a 1,000 who have an enhanced risk of pancreatitis. Actually, we're going to 880 as the number. And so we're very encouraged by what we got out of the regulatory agency in Europe. So this program is moving gangbusters.

: Ted Tenthoff - Piper Jaffray: So you mentioned that the panel meeting for KYNAMRO, if I heard correct is going to be October 18. Is there anything in particular that you're working with or prepping Genzyme for, Sanofi for, for that meeting? And what do you think are going to be the most important issues that are raised?

Sure, obviously the panel was supposed to look at the risk and benefits of the drug and the benefit of this drug is very substantial. It's supported by four robust Phase III clinical studies and each of which all of the endpoints primary, secondary, tertiary end points are all very, very positive. The drug works in the liver and the principal effects that we've seen in the liver which are monitorable and manageable, those are the principal side effects that we've seen with the drug and I think you should assume that that's what FDA and the committee will think about in terms of assessing the drug.

: Eric Schmidt - Cowen and Company: On the SMN update that Stan gave, I think he mentioned the place one he said it will be presented later this year or released later this year. Is it a medical form that you're targeting or is that I guess be a press release?

I don't remember. Can we get back to you on that Eric? Eric Schmidt - Cowen and Company: Sure. Can you also discuss plans…?

What I think is important we thought is that we've already gotten to the top dose that we projected in our dose escalation and have seen excellent tolerance and safety. So we're certainly void by what we're seeing in the clinic and moving as fast as we can to multiple doses in these little children. Eric Schmidt - Cowen and Company: And you also mentioned plans to potentially start a Phase III next year. Is that based on what you're saying in safety and tolerability or anything else behind that?

The safety and tolerability of course reported the plans. The Phase III plans that we discussed are a product of thinking about the disease and then conversations with the regulatory authorities. Eric Schmidt - Cowen and Company: What would you need see in Phase II to go into Phase III? Would you need to see strong signs of efficacy?

No, I think what we need to see is safety and we'll begin to measure muscle strength and those sorts of things but as you know, these children are so sick that any suggestion or benefit I think would be strong support for continuing to evaluate the drug.

And one of the principal things that we're hoping to see of the Phase II, Eric, is to generate the pharmacokinetic data to help us determine dose interval. We think this drug may be able to be dosed as frequently as once every six months to maybe even longer and so principal purpose of the Phase II study is to look using a variety of term biomarkers at Piquet paramets so that we can set the Phase III up appropriately and we are planning initiating two different Phase III studies, one in the infant form of the disease and a second in the children with the type 2, 3 forms of the disease and we plan on starting both of those late next year or early 2014.

One more point of clarification, not biomarkers, we'll just mention the drug. And the reason the treatment will be so infrequent is the clearance of drug from CSF is determined by CSF turnover and not primarily by metabolism. So we know based on our experience to date that it shouldn’t be certainly six months or longer and obviously the fewer times per year, you have to make an injection the off these kids are. Eric Schmidt - Cowen and Company: So moving to TPR, you mentioned plans to start the pivotal in the familial subs type. Is Glaxo interested in other subs types of diseases here, cardiac variance or the CNL systemic variance?

Yes, first step is fab; next step is the rest of the disease. Conceptually, the drug should work very well in all forms of the disease. Eric Schmidt - Cowen and Company: Is there plans to start trials in other forms?

Yes, but what I would prefer is to just focus on what we're doing just now as we move toward the rest of the work underway, we'll talk about it in more detail then. Eric Schmidt - Cowen and Company: Okay, last question; I'm just intrigued by the publication last week on the TM1 side and the ability to clear toxic RNAs. Have you disclosed any other programs that are toxic RNA based in nature?

No. but we have them. It's not that we haven't deliberately chosen not to disclose, it just hasn’t come up. There are quite a number of diseases and many of them are these triple repeat diseases like Huntingtons where there is some debate about whether the problem is at a protein level or the toxic RNA level or both. And so this is an area of very active interest for us for quite a while now and as opportunities emerge, we're let`s just go, you got an RNA that's problem itself. It's very forward for us because that RNA disease reduced and so it makes a great opportunities that are uniquely approachable with antisense. And most of them are in the nucleus and so really the only mechanism that you can use, even from antisense perspective is RNA stage. And so we really like the opportunity it presents because it's so uniquely approachable with our technology. Eric Schmidt - Cowen and Company: So you mentioned Hungtington standard or any other indications you care to note now?

They all are, but not that I want to talk about now. I think they are early and I rather wait and talk about them when we have more data.

Your next question is coming from the line of Stephen Willey from Stifel Nicolaus. Stephen Willey - Stifel Nicolaus: Just a quick question actually on the manufacturing front. I know on Friday you highlighted in the press release that you’ve been able to significantly reduce the COGS and capacity associated with KYNAMRO at this point. And so just wondering where you are on that front in terms of where you think you might be able to take COGS to from a steady state perspective, and then where you are on the capacity front and what can you currently supply the market with, just based on where you are in that process?

Sure. Let’s deal with capacity first. Remember that our goal is not to be a commercial manufacturer. So we have the capacity to make in our facility today all the drugs and clinical development plus large quantities of KYNAMRO, and we could do large quantities for TTR for example. We are working with Genzyme Sanofi to transfer technology, so that in due course at the Sanofi plant in Germany, they can take over manufacture of KYNAMRO, and before that happens, we’re fully capable of providing all the KYNAMRO that’s necessary. In addition, there are numerous now third-party manufacturers, Malaysia's probably the best-known, and the supply chain for oligonucleotides in terms of building blocks and so on, getting into detail you probably didn’t want me to, but all of that stuff that we’ve worked on for 23 years and is well on hand. In terms of cost of goods, of course we’ve worked steadily to reduce cost of goods and we have I think been public in our projections that at a ton scale and KYNAMRO won’t be at a ton scale, but at a ton scale we think we can achieve $20 or in the range of $20 a gram cost. Remember that our dose for KYNAMRO is 200 milligrams a week, so that’s 50 weeks, that’s 10 grams last I looked, and obviously at KYNAMRO scale we won’t be at $20 a gram but cost of goods are certainly well in hand for KYNAMRO and all the drugs that we’re developing, something we look at very carefully when we make a decision to develop a drug and is technology that we’ve invented and continue to progress and we’re very confident we’re going to be able to get cost to the level I mentioned, cost of goods to the level I mentioned and we believe significantly lower over time. Stephen Willey - Stifel Nicolaus: And so the transfer to Sanofi takes place later this year?

It’s taking place now. Exactly when their plant comes online is not fully defined yet, but the technology transfers has been underway with Genzyme first and then when Sanofi acquired Genzyme with the Sanofi Genzyme team for months. Stephen Willey - Stifel Nicolaus: And then could you maybe just give us a little bit of an overview in terms of what Genzyme has disclosed to you or in your discussions with them regarding the commercialization of this drug, how they've outlined the pricing and reimbursement strategy within Europe? Have they indicated this is going to be the conventional drug launch we’ve seen in recent years whereby you try to take price in a region like Germany or the recent events in Germany changed that strategy? I was curious as to how you guys maybe, what if mentioned Genzyme has provided to you on that front?

I am going to give you an answer that isn't going to be satisfying because Genzyme has provided us a lot of information about that that they have asked that we not share. Genzyme and Sanofi together obviously are extremely well positioned in Europe. We are dealing with a drug for a rare disease patient population and all I can say is there is a lot of uncertainty in Europe. Genzyme and Sanofi absolutely recognize that they believe they have a good handle on how to approach on a country by country basis Europe and given what’s going on in Europe today, I can’t think of two companies or a company in a group that I would rather have on our side in negotiating their way through Europe than having Sanofi and Genzyme to do that for us.

That’s the art of using a lot of words and not saying much. That’s one of the arts that you have to have.

Your next question is coming from the line of Carol Werther, Summer Street. Carol Werther - Summer Street: Can you just discuss a little bit what you expect the label for KYNAMRO to look like both in the US and the EU?

Carol I don’t think I can provide more granularity than I have. We expect the indication in Europe to be broader than the US, just because that’s what they told us and we expect the label to read that KYNAMRO is to be used in patients who can’t achieve target LDL levels with conventional therapies to be used in combination. In the US it will be narrower, and beyond that there's not much else that I can tell you today. Carol Werther - Summer Street: Okay. Correct me if I'm wrong but is Sanofi still planning to file another broader EU filing this year?

I'm sorry, is who? Carol Werther - Summer Street: Sanofi, Genzyme, I thought at one point after approval in Europe, they were going to file another for the label to be broadened to I think patients that have cholesterol levels of 150?

So, we do have plans that we’ve discussed. We set around the steady focus of age to expand indications in both the US and Europe. That study is underway and that will be the basis of the filing. We expect to finish enrollment necessary early next year, and that’s a one year study, so we would have the data a year later to support then broadening the filing, so certainly not this year but good progress towards extending the label, both in the US and Europe. Carol Werther - Summer Street: And if I may, one more question, and I know you’re probably not going to be able to answer this, but I’m trying to get an idea, when I look at your pipeline, what product might be the next one commercialized?

I’m happy to answer that. There are five if we are looking forward to that have we think a reasonably high probability of getting through the market, during the period when KYNAMRO is growing significantly, so over the next five years or so. The first and most important to me is apoC3, tremendously exciting opportunity, and we’re proceeding down a pyramidal development half, like we did with KYNAMRO. The first indication will be patients who have severe triglyceride problems and high risk of pancreatitis. We’re well along the way towards getting that done. Next is TTR. We’re beginning Phase III work this year and we think that’s a tremendous opportunity that we’ll be developing with our partners at GSK. The third is OGX-011, as you know that’s being developed by OncoGenex and Teva, encouraging Phase II data and the Phase III prostate study is going to complete and we hope that supports filing. The fourth is SMA which is a bit earlier, but as I said I think any benefit that we can bring to these children will be sufficient to support approval and as I said earlier, we start Phase III next year, and then finally and very, very excitingly is the (inaudible) that’s the Excaliard drug that Pfizer now owns and is being developed for scarring. Here is a drug that really works, it’s worked beautifully in Phase II, is administered locally, so there are no systemic risk with the drug to be the very significant need of patients who develop bad scars after a plastic surgery or surgery of any sort and there again I think Pfizer is progressing toward getting that drug to the market in the five year timeframe. So we have five drugs. We think all of them have a real good shot of getting to the market and we think we can get it all done in the next few years. And that’s a good focus for people and next time we’ll talk, we'll talk about all the hot licensing opportunities that we’re going to have over the next couple of years as we complete these critical clinical trials for drugs that we want to license before Phase III. These are very exciting times for us Carol.

I think we probably need to bring this call to a close. I very much appreciate your interest and questions, and we look forward to keeping you apprised as we progress. Thanks very much everyone.

Ladies and gentlemen, that concludes today's conference. We thank you for your participation. You may now disconnect. Have a great day.