Dr. Stan Crooke - Chairman and CEO Lynne Parshall - Chief Operating Officer Beth Hougen - Chief Financial Officer Paula Soteropoulos - CEO, Akcea Therapeutics Wade Walke - VP, Corporate Communications and IR

Jim Birchenough - BMO Capital Chad Messer - Needham & Company Alethia Young - Deutsche Bank Stephen Willey - Stifel Eric Schmidt - Cowen and Company Jessica Fye - JP Morgan Mike Schmidt - Leerink Yale Jen - Laidlaw & Company

Good morning and welcome to Isis Pharmaceuticals’ Year End Financial Result Conference Call. All participants will be in listen-only mode. [Operator Instructions]. After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded. Leading the call today from Isis is Dr. Stan Crooke, Isis’ Chairman and CEO. Dr. Crooke, you may begin. Dr. Stan Crooke: Thank you. Good morning everybody, and thanks for joining us on today’s call to discuss our year-end financial results. As we begin, I do want to acknowledge that tomorrow is International Rare Disease Day. We do have a large and important and exciting pipeline of treatments for severe rare diseases. And everyone at Isis is committed to bringing these important new medicines to these patients who clearly need them. On the call today Lynne will share with you our 2014 successes and provide an update on the progress we’re making with our new lipid focused subsidiary Akcea Therapeutics. Beth will review our 2014 financial results and provide guidance for 2015. And then I’ll finish by putting the events that already happened this year in the context and give you a preview on what to look forward to in the remainder of 2015. Joining me on today’s call are Lynne Parshall, Chief Operating Officer; Beth Hougen, Chief Financial Officer; Sarah Boyce, Chief Business Officer and Paula Soteropoulos, Chief Executive Officer of Akcea Therapeutics; and finally, Wade Walke, Vice President of Corporate Communications and Investor Relations. And so, Wade, will you read our forward-looking language statement please?

Thanks, Stan. A reminder to everyone that this conference call includes forward-looking statements regarding the financial outlook for Isis, Isis’ business and the therapeutic and commercial potential of Isis’ technologies and products and development. Any statement describing Isis’ goals, expectations, financial or other projections, intentions or beliefs, including the commercial potential in KYNAMRO, ISIS-APOCIIIRx, ISIS-MNRx and ISIS-TTRRx 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 to the process of discovering, developing and commercializing drugs that are safe and effective for use as human therapeutics and in the endeavor 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 31, 2013, and in its most recent quarterly report on the Form 10-Q, which are on file with the SEC. Copies of these and other documents are available from the company. Now, I’d like to turn the call over to Lynne.

Thank you, Wade. 2014 was another year of growth for Isis. Pleased with value of the advancements we’ve made in our technology, our pipeline and our business strategy have been recognized by the market, creating value for patients and shareholders. We had successes in every element of our business and those successes have established a strong base and upon which to build in 2015. Isis is a leader is a leader in developing RNA targeted drugs. We have 38 drugs in development. We are the only company to have commercialized RNA targeted drugs. Our pipeline continues to mature and today includes several near-term commercial opportunities. We have six different drugs in Phase 3 studies for nine different indications including three drugs for which we are conducting the Phase 3 studies, ISIS-SMNRx, ISIS-TTRRx and ISIS-APOCIIIRx. These drugs are focused on orphan indications in which patients have limited or no therapeutic options. Each of these has Phase 3 data planned for 2016/2017. Two of these drugs are partnered with major pharmaceutical companies, Biogen Idec and GSK who are adding considerable value to the programs including preparing them for approval and commercialization. In fact, Biogen and GSK each plans to initiate additional studies to support these drugs which they will be conducting in parallel with the work we’re doing. The third drug, ISIS-APOCIIIRx is in our sweet spot, lipids. And this is an asset we have put into our new subsidiary Akcea Therapeutics. With Akcea, we plan to build the world class lipid therapeutics company with the unique line of first-in-class drugs to treat lipid disorders. In December, the groundbreaking Phase 2 data from two of our programs was highlighted in two New England Journal of Medicine articles, one ISIS-APOCIIIRx and on ISIS-Factor XIRx. ISIS-Factor XIRx publication showed that inhibiting Factor XI, a novel therapeutic target in the clotting cascade could for the first time, safely and robustly reduce clotting events without increasing bleeding. ISIS-APOCIIIRx publication showed the important and previously unknown role that APOCIIIRx plays in triglyceride clearance in patients with the rare genetic disease, familial chylomicronemia syndrome or FCS. These publications illustrate the significant value of antisense technology in creating novel therapies that effectively act through novel mechanisms to treat diseases in novel ways. In addition to the data on FCS, our robust Phase 2 program for ISIS-APOCIIIRx showed significant triglyceride reduction regardless of incoming triglycerides and evidence of glucose control hemoglobin A1c reductions. The drug was also well-tolerated. This profile allowed us to initiate the Phase 3 program on this drug last year. In our Phase 3 studies in infants and children with spinal muscular atrophy, we observed increases in muscle function scores in both infants and children treated with ISIS-SMNRx. In addition, we observed that infants in our open label study compared favorably in terms of event-free survival to infants with SMA in a recently published and comparable national history study. We also took this drug into Phase 3 clinical trials last year for both the infant and child with SMA. Last June, we reported that our glucagon receptor antagonist, ISIS-GCGRRx reduced hemoglobin A1c by more than 2.2 percentage points in our Phase 2 clinical study in patients with type 2 diabetes. We recently reported encouraging top-line data from another Phase 2 study in patients with type 2 diabetes treated with ISIS-PTP1BRx. And we plan to present more detail on this study at a medical meeting later this year. Altogether, we and our partners reported clinical data from 18 studies in 2015 but 15 of those data sets were positive. It’s a reflection of the efficiency and effectiveness of our technology. We also added six new drugs to our pipeline in 2014 and another six so far this year. These new additions to our pipeline many of which are in our lipid franchise and severe and rare disease franchise nicely profile our expanding technology reach. They include gen 2.5 and LICA conjugated drugs. They include drugs targeting liver, the CNS, the eye and muscle tissues. They include drugs targeting not only traditional messenger RNA targets but micro RNA target and two toxic RNA targets. They show considerable successes in our partnered programs with two new drugs for each of our Biogen and GSK collaborations and one new drug in our Roche collaboration. As we go through 2015, we expect the listed new targets to continue to grow and the breadth of utility of our technology to also grow. We continue to benefit from our business strategy, which is designed to maximize the value of both our technology and our pipeline. As our partnered programs advance in development, we benefit financially. In 2014, successes from our partnered programs contributed more than $200 million in revenue and more than $230 million in cash. We added a new partnership with J&J which supports us expanding our technology to new area, oral administration of the antisense drugs to treat autoimmune disease in the gastrointestinal tract locally. We ended 2014 in the strongest financial position in our history. This financial strength has allowed us to continue to evolve our business strategy with the formation of Akcea, our new subsidiary which will take up a responsibility through developing and commercializing our suite of lipid drugs. This evolution positions us to retain a significant portion of the commercial value from our lipid drugs while keeping the core of Isis focus on advancing our antisense technology and developing our earlier stage assets. Before I turn the call over to Beth, I’d like to share with you the important contributions our Akcea team is making in our first two months on board. Today, I’ll preview for you a few of the exciting things going in Akcea. And coming up in a next month or two, we plan to have webcast in which we will talk quite a bit more about our lipid franchise and Akcea. We are very excited about the opportunities that Akcea is creating for us as we take this next step in evolving our business strategy. We’ve made rapid progress getting Akcea up and running. At the beginning of the year, we hired Paula Soteropoulos, as the CEO of Akcea. Paula is a strong leader who brings wealth of experience in developing and commercializing orphan drugs as well as drugs in the lipid space. Paula is already building a high caliber operational and commercial team for Akcea which will be headquartered in Cambridge. And the Akcea team is working seamlessly with our Carlsbad based development team. As their first priority, the Akcea team has been working on plans to position ISIS-APOCIIIRx commercially as a best-in-class therapy to address the severe unmet needs of patients with rare dyslipidemia. They’re focusing on all the things you’d expect, understanding in depth the patients and treating positions for these diseases, increasing awareness of these diseases, enhancing the speed and quality of diagnosis and understanding the health economic environment for diseases in U.S. and globally. These pre-commercialization activities support our ability to maximize value of the entire franchise. One of the most important decisions the team has made is the addition of a new ultra orphan indication for ISIS-APOCIIIRx. This new indication is to treat patients with partial lipodystrophy. We believe that the addition of this new indication should double the initial patient population for Isis ISIS-APOCIIIRx with two severe and rare disease opportunities that we plan to pursue in parallel. Partial lipodystrophy is not a disease as widely known. It’s a rare lipid disorder and one of sample distinct lipid dystrophies that are disorders of adipose tissue or fat. It’s characterized by both selective loss of fat from various areas of the body and range of metabolic abnormalities, which include elevated APOCIII and triglycerides as well as diabetes. Conventional drugs to reduce triglycerides and control glucose do not work well in these patients. We believe that the robust triglyceride lowering plus improved glucose control we observed in ISIS-APOCIIIRx Phase 2 clinical study have the potential to benefit partial lipodystrophy patients. It’s important to note that partial lipodystrophy is a very different disease than generalized lipodystrophy. Generalized lipodystrophy is driven primarily by a leptin deficiency and can be treated by leptin-replacement therapy. Patients who have partial lipodystrophy have no approved treatment options. We plan to rapidly initiate a Phase 3 study in patients with partial lipodystrophy. The development program for partial lipodystrophy will build on our development program already underway for FCS with data predicted in 2016 or 2017. Since partial lipodystrophy is more prevalent patient population and many patients are treated at known centers, we should be able to initiate and enroll this study rapidly. For that reason, we plan to complete both Phase 3 studies roughly at the same time. With expanded development plan, adding the partial lipodystrophy indication allows us to maximize the initial potential value of Isis ISIS-APOCIIIRx by creating rapid access to our innovative therapy for two groups of patients with very rare lipid disorders. These first two patient populations are both small and largely treated by the same physicians, which enables us to deploy a very efficient development, marketing and sale strategy with FCS and partial lipodystrophy or ultra orphan indications with no currently available therapeutic options, which means the Akcea team can develop a pricing and reimbursement package that reflects the significant value ISIS-APOCIIIRx can potentially bring to these patients. The decision to focus ISIS-APOCIIIRx and two ultra-orphan indications coincides with the acceleration of our LICA follow-on, ISIS-APOCIIILRx. We can pursue very rapidly two orphan disease opportunities with ISIS-APOCIIIRx while pursuing broader indications with the follow-on drug. The follow-on drug incorporates our LICA technology which increases drug activity in liver and should provide an upto 10-fold increase in potency for ISIS-APOCIIILRx over the period of drug. Because of its enhanced profile, which we believe could support very infrequent and convenient dosing; we plan to develop ISIS-APOCIIILRx for a larger patient population. This includes patients with severely high triglycerides, and patients with high triglyceride and type-2 diabetes. Although it’s significant risk, these patients are generally healthier than patients with FCS or partial lipodystrophy. For that reason, we believe that enhanced convenience of ISIS-APOCIIILRx should make patients even more likely to go on and stay on the drug, because the regulatory path for severely high triglycerides is clear. Based on our positive FDA and EMA interactions on the parent compound, we believe we can rapidly advance ISIS-APOCIIILRx. This exciting revision to our development plan for the APOC family streamlines the development plan and increases the value of the program on a short-term by focusing initially on ultra-orphan dyslipidemias and doubling the initial patient population and in the longer term, by accelerating the development of the follow-on drug with an even more convenient profile for the broader indications. In this way, we believe the development plan for the two drugs, ISIS-APOCIIIRx and its LICA follow-on supports the reimbursement and marketing strategy that should maximize the value of the overall program. We’re very excited about the work our Akcea team is doing and look forward to providing more detail in our upcoming webcast on Akcea and the lipid franchise. And now, I’d like to turn the call over to Beth to talk more about our 2014 financial performance and our 2015 guidance.

Thank you, Lynne. In 2014, we significantly improved upon our pro forma NOL guidance and substantially exceeded our cash guidance. We ended the year in a strongest financial position in our history with nearly $730 million in cash and pro forma NOL of $16 million and we reported net income $32 million in the fourth quarter. Significant contributors to our profitable fourth quarter were nearly $70 million in milestone payments and more than $30 million related to our ownership in Regulus. These results illustrate that we are effectively executing our business strategy and that our business model is working as designed to consistently generate cash revenues as partnered programs succeed. Our strong financial position has allowed us to develop and expand our pipeline and to make important advances in our technology, all while maintaining a moderate expense level. Today in our pipeline, we have one drug for every 12 Isis employees. This level of productivity is only possible because of the efficiency of the antisense technology we have developed and continue to advance coupled with our business model by which we leverage our partners’ resources. Our pro forma NOL of $16 million in 2014 was significantly better than our guidance of a pro forma NOL I the low $50 million range. Our revenue was $214 million, up 34% increase over our guidance, reflecting against the successes we had with our partnered programs during the year. The most significant component of revenue for us is milestone payments we earned as our programs advance. And last year, nearly two-thirds of our revenue came from milestone payments including $22 million from AstraZeneca, $22 million from GSK and $80 million from Biogen Idec. And we continued to experience in our existing partnerships. So, far this year, we have achieved $27 million in milestone payments including $22 million from Biogen Idec and $5 million J&J. Our satellite companies also contributed to our 2014 financial results. We earned $10 million from our collaboration with Alnylam, which takes advantage of our dominant intellectual property state. We also realize financial benefits when our satellite companies advance their drugs to key value inflection points. For example, late last year, Regulus reported positive clinical data on anti-miR drug to treat patients with hepatitis C. Regulus’ stock price increased significantly which also increased the value of our ownership in Regulus. And in response, we sold a small portion of our Regulus stock resulting in a gain of $20. And because of remaining ownership in Regulus increased in value substantially over 2013, we also recognized significant tax benefit. We’re pleased with the progress Regulus is making. And of course if Regulus’ stock price continues, so will the value of our Regulus stock. As of yesterday, our remaining Regulus stock was valued at more than $105 million. As Lynne just described, we made substantial pipeline progress in every therapeutic area including initiating multiple Phase 3 studies and numerous earlier stage clinical studies. And we accomplished all of this while only increasing our expenses by $43 million. In addition to significantly improving upon our pro forma NOL guidance, we significantly exceeded our cash guidance in 2014. We ended 2014 with nearly $730 million in cash, which was an increase of more than $150 million above our guidance and more than $70 million above our ending 2013 cash balance. The substantial improvement in our cash position primarily reflects success in our partnered programs for which we generated more than $230 million in payments from partners last year. We also received more than $25 million from the sale of stock we owned in our satellite companies including Regulus. Further, we took advantage of strong market conditions and the increase in our stock price to refinance the majority of our two and three quarter percent convertible notes. We achieved all of our objectives for the financing by reducing our interest rate to 1%, reducing the potential dilution from our convertible notes, extending the maturity of the notes and adding more than $45 million to our balance sheet. Now, moving to our 2015 guidance, we are projecting to earn more than $220 in revenue, which reflects continued advances in our pipeline this year. Our revenue is comprised primarily of milestone payments and the amortization of upfront payments from our partners. We’ve not included any KYNAMRO profit share revenue in our 2015 guidance, although Genzyme is continuing to make significant investments in KYNAMRO and sales are continuing to grow. In 2015, this year, we are projecting our expenses to increase by about $45 million, a similar amount to the increase in our expenses last year. We think this is a modest increase, considering that we are developing more drugs and conducting more, later stage clinical trials this year than we did last year. So, all of this rolls up into a projected financial guidance of a pro forma NOL in the mid $50 million range. This NOL projection is very similar to our NOL projection for last year while we are supporting a much larger and more mature development pipeline. We’re also projecting year-end cash balance in excess of $630 million, which represents cash use of approximately $100 million to move forward the pipeline of 38 drugs. The ability to do so much for so little is again a testament to the efficiency of antisense technology platform and the successful execution of our unique business model. And now, I’ll turn the call over to Stan. Dr. Stan Crooke: Thanks Beth. So, we certainly are pleased with where we are financially. And we’re also pleased with the trajectory. We look forward to where we’re heading. So, let me begin by putting a few recent events in context for you. And hopefully that will allow you to better appreciate how I think the progress this year is likely to generate increased value for patients and for shareholders. Just this week, we reported clinical results for ISIS-PKKRx. This new addition to our severe and rare disease portfolio is for the treatment of patients with hereditary angioedema HAE. We think that this is a program that with our capabilities and our resources, we can easily move forward IRR. HAE is characterized by rapid and painful attacks and inflammation throughout the body including face, larynx and trachea. The attacks are always painful and debilitating and can be fatal. HAE is caused by inappropriate activation of prekallikren or PKK. Our drug is designed to effect the cause of the disease by reducing production of PKKs and directly therefore blocking biological processes that lead to HAE attacks. In our early work, we evaluated several steps in the disease to the pathway to find the best target. That’s one of the great strengths of the antisense technology; it’s possible to look at everything. And not surprisingly, PKK appear to give us the best results. It enabled us to target the source of the disease. So, in our preclinical studies, we observed significant improvements in disease models of HAE, 40% to 50% with only 40% to 50% reduction of PKK. And we recently completed this initial clinical trial in healthy volunteers. And in this study, we observed a significant dose dependant reduction to PKK of upto 95%, and great safety and tolerability for the drug. So, this combination of preclinical data and the Phase 1 data and the fact that PKK is central to the cause of the disease, there is a lot of optimism that we have substantial and have a best in class for proactive treatment for patients with HAE. We certainly look forward to starting the Phase 2 study in patients with HAE later this year. One key take-away from the clinical data we reported recently is that the performance of what we call now generation 2 plus drugs continues to be consistently better than earlier generation 2 drugs. These drugs are more potent and better tolerated despite the fact that they are exactly the same chemistry as the other generation 2 drugs. The key point is that we continue to advance the technology; we continue to advance our ability to screen and identify better drugs. And we’re realizing tangible value for those advances in the technology and the performance of today’s antisense drugs. We continue to expand our pipeline. As you heard, in 2014 we had six new drugs. And already this year, we’ve added another six into development including LICA follow-on or all three drugs in our lipid. And we just added a LICA drug that targets angiotensinogen, thus ISIS-AGTLRx. This is design to treat a small but highly significant group of patients with treatment of resistant hypertension. These patients are very difficult to manage even with all the antihypertensive treatment today. So, there has been a significant amount of interest in finding ways to treat these patients. But to-date, nothing has really panned out. So, we think this is a great opportunity. Further, as part of our partnered programs, we added a drug that targets rhodopsin to treat patients with a rare and severe form of retinitis pigmentosa; two drugs to treat patients with undisclosed neurological disorders; and a drug to treat patients with Huntington disease. Huntington disease program is of particular interest as it will be the first drug in a clinical development that’s designed to actually treat the underlying genetic cause of the Huntington’s disease, not just the symptoms. Huntington’s disease belongs to a group of diseases we’re referring to as triplet repeat diseases in which genetic sequences are replicated inappropriately leading to toxic effects of both the RNA and the protein. This is the second triplet repeat disease that we’re pursuing with, myotonic dystrophy being the first. One of the important advantages of our antisense technology is the ability to target RNAs of all types in all cellular spaces, including the nucleus. So, we think that there will be many more opportunities like this as we move forward. These drugs emphasize several themes that will play out during the year. We’re broadening and maturing our pipeline. We’re increasing the number of drugs that we will be advancing toward the market ourselves. We are focused on creating drugs that with the highest value for the neediest patients. To do that, we begin with the novel target, which is often genetically validated and for which, reducing the target has chance to radically change the understanding of the disease and improve therapy for disease, such as we’re doing with ISIS-APOCIIIRx and ISIS-FXIRx. Then we develop the drug for the genetically or phenotypically defined subsets of patients who will benefit the most from the drug. These drugs also expand the number of tissues in which can treat, expand the types of RNAs we can target and of course expand our reach into new diseases. Recent clinical results obtained with RG-101 represented another important theme for the year, which is the value of our business model. RG-101 is a miR-122 anti-miR that’s intended to treat patients with HCVs. It demonstrates once again the value of Isis core technology and the value of Isis satellite company strategy. Remember the basic discovery on miR 122 is done at Isis and transferred to Regulus. And most of the patient properties of the anti-miR drug are derived from Isis technology. The clinical data is impressive. And we own today 11% of the Regulus stock, which at yesterday’s price is worth about $105 million. We also have royalties under the drug. So, we’re looking forward to real value creation for Isis shareholders by Regulus. In short, what I’m saying is that you should pay attention to our satellite companies. We believe many of them like Regulus should be successful. And you should build value for those successes into your modeling of the Isis value proposition. Now, let me switch gears and talk about Factor XIRx. This is a drug we believe that has the potential to be [indiscernible] the treatment of thrombosis. In December last year, we reported for the first time that a drug could prevent clotting without increased bleeding. Previously, these two biological events were thought to be inseparable. In our Phase 2 study with ISIS-Factor XIRx, we observed seven-fold decrease in clotting with no increase in bleeding rates compared to standard of care. We were even able in that study to fully anti-coagulate patients before doing an after surgery with no increase in bleeding including no increase in bleeding during surgery. There are numerous potential indications for Factor XIRx that we will be pursuing. But the initial patient population for this drug is patients with atrial fibrillation who have renal dysfunction. Right now, we’re finalizing the protocol to evaluate ISIS-Factor XIRx in patients with renal failure and hope to get that study up and running soon. Of course, as you might imagine, we are seeing significant interest in this drug from large pharmaceutical companies. We believe that having the right partner can greatly enhance the value of Factor XIRx. But we intend to take our time to find the right partner with the right development plan and the right resources at the right price. We believe with all the interest we have, we will be able to make a good choice here. Now, let’s focus on the Phase 3 programs. ISIS-SMNRx remains one of the most important and exciting drugs with I had the privilege of being associated. All of us are deeply committed to being benefit to patients with SMA. Of course we have a lot more work to do. The Phase 3 program is progressing nicely toward a 2016 and 2016 completion and data. We also look forward to updating on the results of the Phase 2 program later this year. Certainly as time passes, we remain very encouraged by the performance of ISIS-SMNRx. The ISIS-TTRRx program is also moving along nicely. Perhaps the most interesting observation that we can make now that Phase 3 study is quite mature and we have a fairly significant number of patients who finished 15 months and are in the open label. The extension out of the protocol is that almost all of the patients are completing treatment. The high rate of compliance reflects how easy it is for patients to administer ISIS-TTRRx. And as another demonstration of how much better performing, our recent generation 2 or generation 2 plus drugs are in earlier versions. We’re also encouraged by the robust reduction in TTR that we’re seeing in patients with ISIS-TTRRx in studies that support the Phase 3 program. We plan to provide an update on our polyneuropathy program for you at the upcoming American Academy of Neurology meeting where we’ll have two podium presentations. I’m also pleased to tell you that GSK has now completed the plans for Phase 3 study in patients with the cardiac for of the disease and then GSK plans to get that study underway in the near future. You’ve already heard about the exciting progress on ISIS-APOCIIIRx, so I won’t deliver it other than to emphasize that we believe that the decisions we’ve made to enhance both the short and long-term value of the APOCIII and represent maturation of our thinking driven by the maturation of our organization represented Akcea. Of course our lead drug in lipids is KYNAMRO. Together with Genzyme, we plan to complete and report the Phase 3 FOCUS FH study for KYNAMRO in patients with heterozygous FH in the middle of the year. These data will add to the growing safety database for the drug and if positive, should support regulator other activities that should broaden the market for KYNAMRO. In addition, we’ll a number of other opportunities to share clinical data with you, a little later this year. We’ll be reporting clinical data on ISIS-ANGPTL3Rx [ph] next month. We’re excited about this drug. It can be great additional therapy for several severe and rare lipid disorders and potentially later for a larger group of patients who have less severe but still medically important lipidemias. It is complementary to the other drugs in our Akcea subsidiary and is -- Lynne mentioned we’ll be having a webcast on this drug, the lipid franchise and Akcea later this quarter or early next quarter. We plan to see our ISIS-GCGRRx Phase 2 data shortly. That’s a drug to treat type 2 diabetes. Together with AstraZeneca, we plan to report data on both STAT3 and androgen receptor drugs this year. Remember that androgen receptor drug is one of the generation 2.5 out of the 4 generation, 2.5 under development. We plan to complete and report data from the Phase 2 study on ISIS-APO(a)Rx in patients with elevated Lp(a) levels; and on ISIS-DMPK-2.5Rx in patients with myotonic dystrophy around year-end. With the pipeline as large as ours, we’ll have a number of earlier stage programs that should complete clinical trials. And we look forward to sharing those results with you as well. We’re also planning to initiate a number of important studies this year. As Lynne mentioned, we look forward to getting the Phase 3 study on ISIS-APOCIIIRx up and running rapidly in patients with partial lipodystrophy. We plan to initiate Phase 2 clinical trials of upto six drugs. And finally, we’ll have a number of earlier stage drugs that should enter clinical development such as ISIS-DGAT2Rx for the treatment of NASH. Some of our partnered programs will also begin -- or should also begin clinical development. And of course, we’ll continue to add new drugs to the pipeline. So, that is pipeline. In 2015, you should also see value created by advances we’re making in the technology. These will be measured by the discovery and development of drugs that enable lower doses, less frequent dosing and are even better tolerated. As importantly, our generation 2.5 technology significantly broadens the tissues in which we believe that we can get good antisense fix, such as in muscle and certain tumor cells. With four generation 2.5 drugs in development, we’re gaining a good deal of clinical experience now with our generation 2.5 drugs. And we’re very encouraged by the safety we’re observing. We look forward to telling you more about the progress with generation 2.5 chemistry this year and look forward to adding additional generation 2.5 drugs to our pipeline. We believe that our LICA technology will give us upto a 10-fold improvement in potency for drugs with target to the liver. We have LICA drugs in our pipeline today, so progress is rapid here as well. With the combination of LICA and generation 2.5 chemistry, we could see potency increases of upto 100-fold, compared to today’s generation 2 plus drugs. That’s potentially a game changer because that’s a total dose of 1 milligram to 5 milligrams per week, could lend itself to monthly or less frequent dosing. This represents tangible progress across the utility progress and technology. We are making more potent and tolerated drugs that are increasingly convenient for patients to use. We’re also using multiple mechanisms and multiple routs of administration and we are affecting targets in multiple tissues. This translates into a rapidly expanding set of opportunities for Isis and our partners. These new advances into technology truly do represent a tip of the iceberg. Of course we don’t have time to -- the time it would take to talk about all the advances we’re making in the technology with you today. But this year, we will be telling you about new approaches that will allow us to actually increase protein production using new mechanisms that we discover. The work we’ve done here opens up many new opportunities to treat diseases caused by deficiency in protein production, in addition to treating the diseases that are associated with poor regulation or overabundance of protein. So, why should you care about this? You should care because with every step that we take, we broaden the utility of our technology; we extend our control of the technology via broad patent that reflects the innovation at Isis. The third clinical component of our business strategy is partnering. We’ve already got the year off to a great start. We have as Beth mentioned, already received a number of milestone payments from existing partners. We expect that to continue. GSK is taking the important step that expands the value of ISIS-TTRRx by beginning the cardiac study. We have made important progress in our Biogen collaboration and we added J&J as a partner for the pursuit -- or local delivery of drugs to treat disease of the gut; are partnered with J&J as an alliance who wishes the strength of both companies, complement each other and together we hope to create a franchise of drugs that neither of us will create as well on our own. This reliance allows us to use partner of choices and actually to broaden the reach of the technology. So, to conclude, we at Isis are at an exciting and unique moment in our history. We’re making significant technology advances that expand the application of the technology and broaden the opportunity for drugs. We are advancing a large broad pipeline of first in class with best in class therapies for patients who often have limited or no treatment options available and desperately need these new treatments. With Akcea we have a subsidiary devoted to making our lipid franchise drugs commercial successes. Already we’ve identified an indication that doubles the initial patient population for ISIS-APOCIIIRx and we streamlined the development of the follow-on. We also have the solid plan to broader indications for each of these drugs with our LICA follow-on. We’re making progress with ISIS-SMNRx with the two Phase 3 studies that we are running and additional studies being started. And as I mentioned, GSK is expanding our TTR program to include patients with cardiomyopathy. Finally, as I mentioned earlier, we’ll be starting the next study with ISIS-FXIRx to support the initial indications of patients with atrial fibrillation and renal failure. And of course partnering interest is high in this and other programs. So, we have a busy year ahead. And we are continuing to be able to do this with a small, innovative and driven group of employees. With that, I’d like to open up the call for questions. So, Chad, if you can set the questions please?

[Operator Instructions].

Our first question today comes from Jim Birchenough with BMO Capital.

Hi, guys. Congratulations on all the progress. Just on the TTR update we’ll get at AAN, could you maybe give us a better sense of what we should be looking for in those two podium presentations? And then just had a couple of follow up questions. Dr. Stan Crooke: As you know, of course Phase 3 study is blinded. So, won’t be reporting any Phase 3 data. But we do have some ancillary studies that are in progress in patients. And that will give us the opportunity to talk about both the ability of the drug to reducing targeting patients and also its tolerability.

Will there be any functional data Stan, anything on their conduction that sort of thing? Dr. Stan Crooke: I think I’d like to leave it there, Jim. So, the presentations are just being put together now, and I haven’t actually seen the actual presentation. So, I would leave it there.

So, maybe bigger picture question, with the advantage you have with the LICA technology, can you go back and conjugate something like KYNAMRO and create a novel second generation drug that you retain yourselves? Dr. Stan Crooke: First of all, we can do exactly that but our deal with Genzyme gives them ownership of KYNAMRO well of the target.

And maybe just a final question for Beth, just so we get a better sense of the sustainability of the revenues you see this year and how confident you are in the guidance. Could you maybe discuss how you go about giving revenue guidance when there are so many moving parts around milestones and a lot of it’s contingent on things going right? I’m imagining there is probability adjusting. How do you do that? And then, are these revenues, do you think as model forward that there will be sustainable when you look at in aggregate what’s coming in terms of all these programs in development.

Sure. So, you’re absolutely right, Jim. When we put together our revenue guidance, we look down the list of all of the opportunities we have to earn revenue from our partnerships, particularly milestones. And we go partner by partner, drug by drug, research program by research program and we look at those milestone opportunities. And we probablize them for timing and the probability of success. And then we aggregate those probablized amounts into our revenue guidance. So, we feel like there is tremendous opportunity to -- we are very confident that we can meet our revenue guidance. And in 2014 we provided guidance of about $160 million to $170 million worth of revenue and we ended the year in excess of $200 million. So, I think the approach that we take is very reasonable and it creates and opportunity for us to achieve our guidance. Does that answer your question?

Yes. And just as we look ahead, how sustainable do you think these revenues are? Can you grow off this base when you look in aggregate at what’s coming from all these different programs?

Definitely. We continue to have tremendous productivity in our pipeline and in our partnered programs. And Biogen alone, we have our research collaborations in neurology that has a tremendous opportunity to continue to generate new targets and new drugs. And all of those as they advance will create milestone opportunities. And across all of our partnerships, we have the ability to earn license fees as our partners exercise their options to move those drugs forward towards the market. Dr. Stan Crooke: We also have a very high level of interest in the technology, the drugs in the pipeline. And so, we are very selective about what we are willing to partner and to whom and for what price? But certainly that’s another source of optimism for us.

Okay. Thanks for taking the questions.

Next question comes from Chad Messer with Needham & Company.

Great. Thanks for taking my question. I’m very interested in this strategy you’re employing for APOCIII, taking your generation 2.0 drug rapidly into now a couple of orphan indications and then using a LICA compound to go after perhaps some broader indications. It seems like this would be a strategy you could potentially reemploy in a number of areas. Could you maybe comment on whether you would agree with that observation and perhaps remind that where you have good LICA follow-on drugs; what programs you have done some more advanced work on LICA 4? Dr. Stan Crooke: Well, absolutely agree with what you had to say. And just to recall the basic strategy at Isis in terms of defining what drugs we develop is to create the maximum value in the initial phase of population. And to do that I think there are two steps that are uniquely available to us with the technology we have. The first is we take genetic information directly. Most of the targets that we’re really interested in are genetically validated. And we of course evaluate all of the relevant targets in a pathway and pick the best target as we did with PKK. And then the second step is to identify using very similar approaches, genetics; epigenetics; and phenotype, subsets of patients who we think are most likely to benefit in the greatest way from manipulating that specific target. And so we do that across the board in every part of the pipeline that we can. There are some diseases that don’t lend themselves to that easily but the vast majority do. Now, for the liver targets that we of course we have LICA follow-on opportunities for all of them. We also have LICA 2.5 opportunities and so each of these is a separate equation that we write. And we ask how far long is a parent drug; how -- do we have a good spot for the parent drug; should we replace the parent drug with the LICA. Each one of these opportunities is unique -- opportunity and a unique challenge and therefore, we write a unique equation. And that helps us decide when and how we are going to use the follow-on. With APOCIIIRx, we are far along. We think we’ve got a great looking drug for rare diseases. And with these two rare disease, we’ve got a super market opportunity which prices comparably, should give us great opportunities there and the LICA follow-on has its own place. So, each drug is different. And as the pipeline continues to evolve, you’ll see more and more of the drugs being 2.5 and LICA and 2.5 LICA because those are our best quality drugs. A lot of words, did I answer your question?

Yes, mostly. I mean maybe actually to move on to something different. So, I like the flexibility that the strategy of having two actual different drugs out there gives you, both in terms of pricing and then also partnering. Could you comment on whether you would see APOC drug for a larger population, so the LICA follow-on as something you would consider partnering down the road? Dr. Stan Crooke: Yes.

Okay, great. Thanks. I’ll get back in the queue. Dr. Stan Crooke: I made up from my long winded; the short is the answer of the day.

Our next question comes from Alethia Young with Deutsche Bank.

Hey guys, thanks for taking my questions. One is just we know in talking about the partial lipodystrophy -- what have you seen back in the papers and the biology that implicate APOCIII to give you so much confidence? And then kind of in parallel to that, have you spoken to the FDA about your plans in Phase III yet? Dr. Stan Crooke: So, we have been in contact with the FDA and European regulatory agencies on our APOCIII franchise. We’ve not yet spoken to the FDA on the partial lipodystrophy. But based on the conversations we’ve had with both sets of regulators, we feel there is a lot of enthusiasm for APOCIIIRx and what we’re doing with it. And what we show with APOCIIIRx is that we can lower triglycerides in any patient population and we look at partial lipodystrophy as a triglyceride disease. And lipodystrophy patients have elevated APOCIIIRx to APOCIII. So, it’s I think pretty straight forward to think about the disease mechanistically as it fits appropriately in this space for APOCIIIRx. I think it’s more obvious choice in some ways in FCS where we’ve got the surprise that we were able to produce effects in patients with FCS. But I think it’s fairly straight forward, Alethia.

And then as far as these patients being in the same clinics, I mean is that why you have confidence that you can enroll these trials at the same time; is that their synergy is with the doctors there in the current clinical trial? Dr. Stan Crooke: That’s a part of it. The patient group is larger, so we feel that with the expertise that we have in lipid franchise, the fact that we know the centers, know the KOL, know the patients, we can take advantage of all of that as the value of actually having a franchise. And there is such excitement about APOCIIIRx in the community. And of course in doing that it also sets us up kind of thinking of a much better and be prepared to learn from the processes compared to commercialize. I think that’s all of this, the thing excites you most about this…

And just one last logistical one; you said that the discontinuation seemed little lower I think in the TTR, are you willing to disclose what your assumptions were heading into designing the Phase 3 study? Dr. Stan Crooke: No, but I will tell you, I will give you some color unless Lynne interrupts me and tells me I can’t. If you look at the study, I think the dropouts were like 40. Is that right Lynne, 40%, 50%, somewhere in that range?

40, yes. Dr. Stan Crooke: And with KYNAMRO, we had dropouts in one year studies; they were in the 20-plus range. And so, we modeled dropouts, it would be appropriate to those two considerations. And we’re seeing far less.

Okay, great. Thanks for taking my questions. Dr. Stan Crooke: Lynne, do you want to add or subtract anything from that?

No, I think that’s great.

Our next question comes from Stephen Willey with Stifel.

Yes. Thanks for taking the questions. Just wondering if there is anything you can say about the proposed design GSK is contemplating in FAC with TTR just in terms of I guess to endpoint specifically, and whether or not they’re going to be pursuing something ventured and/or more functional based? Dr. Stan Crooke: Well, we certainly can’t share any of that today, Steve. The protocol, the study is getting underway here and we’ll be able to share that a little later but not today. Lynne, do you want to add anything to that.

Yes. GSK has asked us because they view it as sort of a competitive advantage, not to talk about it until the study starts. But we will be enthusiastic about talking of that, when they’re ready to start the study. Dr. Stan Crooke: We’re very pleased with -- I mean we’ve had of course quite a bit of time to really understand the space thoroughly as has GSK. And so, at least from the Isis side, we’re quite excited about the decisions that GSK is waiting.

Okay. And then, I know that there’s been obviously discussion about the improved 2.5 chemistry, but just kind of wondering when we might see kind of more comprehensive safety data from one of those studies. I know that we’ve done a handful of STAT3 data and I think there is some more (a)R and DMPK readouts scheduled for the end of the year. But I’m just kind of wondering what kind of dose durations are we going to see, I guess specifically from DMPK that may allow us to better assess the safety of 2.5? Dr. Stan Crooke: STAT3 is not terribly helpful because you’ve got STAT3 target adverse events that were predicted and have been encountered. With androgen receptor, that’s been very helpful because the target toxicity is reducing androgen receptor a minimal. And AstraZeneca has taken the drug to super high doses in patients with cancer. And so, we’ve had a chance to look at the dose of that drug upto 2,700 milligrams a week, which probably a 150 times what we would dose for any target. And we haven’t encountered any safety issues there yet. The DMPK work is -- we have normal volunteer experience and now we’re gaining patient experience and that’s had normal doses. And so, we’ll have very high dose experience, although for quite a number of months in patients with androgen receptor and then, real world dose experience for somewhat shorter period but months in both normal volunteers and myotonic dystrophy patients.

And then I guess as we think about DMPK data towards the end of this year, I think it’s primarily set up to be kind of a safety and PK study, but just wondering if there is any kind of clinical efficacy that’s going to be gleaned out of that and maybe just what some of those endpoints are? Dr. Stan Crooke: Lynne, do you want to answer that? Maybe not. So, there are endpoints that evaluate both target reduction and muscle performance. But you’re right, the primary goal is to demonstrate safety and pharmacokinetics.

Okay. Thanks.

The next question comes from Eric Schmidt with Cowen and Company.

Thanks for taking my questions; just two quick ones. Stan, should I assume that since you mentioned AAN as a possible site for the SMA Phase ½ update, we won’t be seeing it at that forum and if that’s the case, when do you think we might see the data? Dr. Stan Crooke: We mentioned AAN with regard to TTR, and that’s what you supplied.

Not known, specifically asking about when we’ll see the SNA data. I’m guessing it’s not going to be at AAN since you didn’t mention it? Dr. Stan Crooke: We have an analysis that will be done and it will be done on schedule. And so, there is quite shift with AAN but there are numerous opportunities. So, it won’t be in the conditions, right?

Okay, thank you. And Beth, on the revenue guidance, just one follow-up to Jim’s question. Should we therefore assume that the 2015 guidance doesn’t include any new collaborations or do you also try and probability adjust those?

We probability adjust all of the opportunities for revenue, Eric. So, if there is -- if we do have a collaboration and assume any revenue from a new collaboration, the probability would have been probably fairly low because those are obviously very significant transactions and involve a lot of complexity. Dr. Stan Crooke: The short answer is that new deals are probablized low enough that they really don’t constitute much in our projections.

Thanks very much. Dr. Stan Crooke: It’s just proven to do that right.

Our next question comes from Jessica Fye of J.P. Morgan.

On the prekallikren product, can you maybe elaborate on your expectations around the clinical profile for that asset, in terms of what you believe the 90% reduction in prekallikren might mean for impact on attack rates in HEA patients? Also is there anything you can share about what dose or doses you plan to study in Phase 2, whether you expect to stick with once weekly dosing and maybe any color around injection site reactions in the Phase 1? Dr. Stan Crooke: Well, let’s do it in reverse order. Injections are reactions with new groups of generation 2 drugs are really de minimis. We are having almost no problems with injection site reaction site. They mean to apply sub-cu [ph] drugs. They do produce a spot on the skin but nothing like what we face with KYNAMRO. There is a difference. And they are different because we made some of -- the answers allow us to make better drugs. And the more potent, in the PKK study, we had excellent safety and tolerability with really no issues reported. The Phase 2 program, we haven’t decided formally, but we will use dose. I imagine when we look at couple of doses but we haven’t decided yet. And it will be weekly. And our experience with these drugs is what we see in normal volunteers in terms of target reduction, it translates almost one to one in every patient group we’ve looked at. We don’t think we need to reduce PKK by 90% at all. In animal models, we see very good activity of 40% to 50% reduction of PKK. So, we’ll target greater than that. And the whole is that by getting rid of the substrate for the inappropriate activation which these patients test their problem, they don’t have the inhibitor, we should see really very substantial benefit in terms of both the frequency and severity, which acts.

Okay, great. Maybe one more on Factor XI, I know you’ve talked about potentially partnering that asset. And I think in the prepared remarks you said you are getting interest, but then you also said you will take your time. What does that mean in terms of when we should expect a partnership? Dr. Stan Crooke: Thursday, March 26. It means we’ll tell you as soon as we decide on one. We have a lot of interest and it’s certainly an active conversation that’s in progress today with a number of companies. And we don’t need to partner we think we can handle all the next steps that should be taken. But we want to partner, so that we make the development program as broad as rapidly as possible. And on the other hand, we want to be sure that the partner we pick is a partner we’re going to be happy to live with for a long time and who’s going to make this drug better. So, I don’t know how to make it any more precise than that. Lynne, do you want to give a specific date?

Yes, I would say March 27th but no. But I just want to say there is nothing about this program that’s slowing down. As Stan said, we’re pursuing the next steps. So, we are moving the compound forward. And we have the ability to take our time and make sure that we find the right partner with the right development program for the right price. And plan to do that. There is no -- nothing to be gained from rushing.

Got it. Thanks.

That’s a longest non-answer we’ve given today.

Next question comes from Mike Schmidt with Leerink

Hi, good morning. I just had a follow-up on APOCIII. I was wondering -- I’m trying to better understand timelines around the LICA formation for instance for the severe hydro-glyceride population. Do you essentially have to go back to preclinical and Phase I studies before launching a large efficacy study, or is there an accelerated clinical path if you reformulate generation 2.0 drugs into LICA conjugated versions? Dr. Stan Crooke: I wouldn’t refer to this reformulation. For me, something very specific that you’re putting in new formation; it’s new chemical entity. We think of it as a pro drug. We have already with LICA follow-on, said that for the lipid franchise, we’ve already done all the preclinical work necessary. And we do believe that we can abbreviate the initial clinical trial work and move very rapidly into efficacy study. But at the moment, we still feel that we need to work our way through an initial clinical trial and normal volunteers for most of the indication we go to patients. But it will be quite disastrous.

Got it, okay. And then, I think you mentioned Biogen Idec and Glaxo both initiated some additional studies and for ISIS-TTRRx and SMNRx respectively. Could you just comment on what those studies are, and whether or what data we might see for those before Phase 3 trials read out? Dr. Stan Crooke: Lynne, do you want to…

Sure. Biogen Idec is initiating two clinical studies, one of them is a study that includes both new born screening as well as presymptomatic treatments of infants who are at new born screening diagnosed to have MSA. And they’re also initiating a study in patients who are too old for our infant study and too young for our childhood onset study. They’re getting both of those studies up and running. And as Stan mentioned, GSK is initiating the Phase 3 clinical trial in cardiomyopathy form of TTR amyloidosis. So, those are the studies that we were referring to. We may have some data coming out of the Biogen studies. The studies are just starting and they haven’t come with the presentation, publication plan for them yet. But obviously the Phase 3 cardiomyopathy study is the study that we will not have data on before the study that we’re finishing up the Phase 3 study, we are finishing up which is polyneuropathy study. That being said, as Stan said, we do have two podium presentations and we will be talking about the TTR program with data from some ancillary studies that we think is very interesting in terms of the program.

Okay, got it. Thanks. And then last question for FCS and the partial lipid dystrophy indications, can you comment on how many patients are actually identified versus prevalence that can be a discrepancy sometimes for rare diseases? And I guess what are you doing to -- do you have activities in place to drive diagnoses rates of those rare patients ahead of a potential launch later on? Thank you. Dr. Stan Crooke: Paula, maybe you can handle that?

Sure. Mike, this is typically like you would see with other rare diseases where all of the patients are not known and identified. We see with FCS patient population of one in a million and with partial lipodystrophy it’s about two to three in a million. And so, we will be working to help drive diagnosis earlier. Eventually those patients do get found because of manifestation of the disease and they eventually get to a lipid specialist. What we want to do is drive that diagnosis earlier so that we can actually intervene earlier and actually help these patients really affect their disease. So, all of the decisive things that we would do from a commercial activity would be to really understand today how these patients are diagnosed, what is that journey to get them to the right specialist, how do we improve the diagnosis, how do we increase the awareness to -- not go with the specialist, they understand the disease but beyond those physicians actually be referring early and really increase that awareness and leveraging the patient community because they already know the ground flow of these patients in both diseases that are getting momentum with their voice around their disease and will enhance that. Dr. Stan Crooke: We learned a lot from KYNAMRO and the work that Paula did when she was at Genzyme and in bringing awareness of the disease forward. And we think that’s helped a lot getting recruitment done in the trials and helped both lomidipide and KYNAMRO get launched.

Okay, great. Thank you very much.

Our next question comes from Yale Jen with Laidlaw & Company.

Good morning and congrats on good quarters. And most of my questions been answered, so here just a very brief one. Could you give us a little bit more color in terms of the partial lipodystrophy trial design if you have it and when you anticipate that to start? And then I have a short follow-up after that. Dr. Stan Crooke: I’d like to defer that answer for just a little while. We’re finalizing all that now. And we’re working seriously to get the study up and running, I mean as fast as we possibly can. Paula, do you want to add anything to that?

Yes. I think that that’s right. I mean we will get that study up and running as quickly as possible. And we’re in the middle of defining how that study looks like and can we know where the sites, it’s really defining the clinical protocol endpoints. Dr. Stan Crooke: Give us just a little bit of time, we’ll share with you.

Sure. I appreciate that. And also my understanding is that the partial lipodystrophy has both the familial portion as well as the acquired portion. I know the size of those two is very different. In this study, would you include patients from both sort of cohorts or you’d be more focusing on one of the two?

Initially we’ll be focusing on the familial partial lipodystrophy. Dr. Stan Crooke: It’s well defined patient population, so well defined severe rare population. And we think it’s in a size similar to FCS population though it gets larger. So, it fits in terms of the launch, in terms of payers, in terms of pricing and so on. So, one of the things we really like about the decision is that we have a really well-matched set of opportunities that we should be able to take advantage of more effectively.

Okay, great. Thanks a lot. Dr. Stan Crooke: I think we’ve covered all the questions. If that is the case, I do want to thank everyone for joining us today. We are pleased with where we are as we enter 2015 and we’re pleased with the value that’s been created. But we think the value that’s been created is just a tip of the iceberg. We think a lot more is to come. And we think a number of good decisions have made about the lipid franchise, substantially enhanced its value in addition to the other things that we’re doing that we think will bring added value to shareholders. Thanks very much.

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.