Duane M. DeSisto – President, Chief Executive Officer & Director Carsten Boess – Chief Financial Officer

Analyst for Michael Weinstein – JP Morgan Paul K. Choi – Merrill Lynch Global Securities Bruce Cranna – Leerink Swann & Company Ben Andrew – William Blair & Company William Plovanic – Canaccord Adams, Inc. Phil Legendy – Thomas Weisel Partners Mimi Pham – JMP Securities Hamid Khorsand – BWS Financial Matt [Mulberger] – Renaissance Capital Vivian Wohl – Federated Kaufmann Funds

Good day ladies and gentlemen and welcome to the Insulet Corporation fourth quarter and full year 2007 earnings conference call. My name is Jahida and I will be your coordinator for today. At this time all participants are in a listen only mode and we will be facilitating a question and answer session towards the end of this conference. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today’s call Mr. Duane DeSisto, President and CEO of Insulet. Please proceed. Duane M. DeSisto: Good morning everyone and welcome. Thanks for joining us for our fourth quarter and full year 2007 call. We will be making forward-looking statements about various aspects of our business so please refer to our 10Q and S1 for a full discussion of our risk factors. 2007 was a tremendous growth year for insulate corporation. We more than tripled the number of customers using the OmniPod System, significantly increased our manufacturing volume and expanded our sales force coverage in the US. We achieved all this while significantly lowering our gross loss in the fourth quarter. We achieved this growth my focusing on several key goals in 2007, the most critical of which was expanding our manufacturing capacity. We designed the OmniPod for automated manufacturing and throughout 2007 we increased the level of automation in our existing line. In the first half of the year we entered into an agreement with Flextronics International for it to manufacture a key subassembly. Later in the year we expanded that agreement to include production of the complete OmniPod. At the time of our IPO in May we were producing 30,000 Pods per month, today our manufacturing output has reached 75,000 Pods per month. Our plans to increase production volume and build our commercial operation is on track for 2008 and we are poised to meet the growing demand for our innovative product. We expect that our agreement with Flextronics will enable us to exceed our goal of producing 200,000 Pods per month by the end of 2008. We now expect to accelerate towards the 400,000 monthly production level in the first half of 2009 rather than our previous expectation of reaching 400,000 by the end of 2009. We are pleased to say that the automotive equipment for our first full Asian line has arrived at Flextronics site in China. Another key initiative for Insulet is reducing our per OmniPod unit production cost. We believe we have significant leverage in our financial model and higher volume drive economies of scale. In 2007 as our manufacturing capacity increased we substantially improved our gross loss and expected to achieve even more upside from incremental manufacturing automation in 2008. As a result we believe we will be able to reach positive gross margins before the end of 2008. With increased manufacturing output and reduced per unit cost we have been able to expand our sales and marketing initiatives and 2008 will be a year of further investment in that aspect of our business. We introduced OmniPod using a phased commercial roll out strategy. We continue to accelerate the roll out of the OmniPod scaling up from 17 territory managers at the end of the year to over 40 as of today, significantly ahead of our previous target of 30 territory managers by midyear. We anticipate that these new reps should achieve solid productivity by the end of the second quarter. We also have some really exciting sales and marketing initiatives in place. We recently added a new dimension to the OmniPod trial program by introducing a non-inserting personal demonstration kit or PDK. It expands the reach of our trial program as patients no longer need to go through a doctor to experience the product. Potential customers can order the non-inserting PDK directly through our website. In January we began running direct-to-consumer magazine ads and Internet banner advertising featuring the link to the PDK order page and we’re very pleased with the results so far. Another important part of our strategy to get more people to try the OmniPod system is to engage people on a local level and spread awareness through regional market activities. One example was this past weekend in the Boston area. We sponsored a terrific event with Radio Disney and the JDRF. The Jonas Brothers themed festival was exclusively for kids with diabetes and their families and we had several hundred attendees and approximately 100 people demoed the product. These types of events are perfect opportunities for OmniPod product demos and this is just one of the many local market events we have planned throughout this year. In addition to patient awareness, our roll out strategy has been focused on two important precursors to patient adoption: key physician awareness and third party payer reimbursement. Healthcare professionals benefit from the more efficient training model of the OmniPod system. Insurance providers benefit from lower upfront cost and our pay as you go model. In 2007 we demonstrated impressive growth by focusing on these two audiences. As of the end of the year we had contracts with insurance companies that have 146 million lives under coverage. In 2008 we’ll continue to broaden our reach and plan to launch the OmniPod system nationally. We’ve also been working on clinical initiatives to demonstrate the clinical and functional benefits of the OmniPod system relative to other insulin delivery options. In 2007 at the American Diabetes Association 67th Annual Scientific Session, Dr. Howard Zissar presented the results of his study which found that short term interruptions of continuous subcutaneous insulin infusion therapy can result in significant glucose elevation in Type I diabetes patients. The full results of this study were recently published in the February 2008 Diabetes Care. It underscores the potential benefits of the OmniPod system which does not require disconnection. In 2008 we will continue to pursue a variety of clinical developments to both further demonstrate the benefits of the OmniPod system as well as broaden its potential uses. We also believe that we will announce our first non-Diabetes drug delivery application before the end of this year. While we always knew OmniPod would emerge as a platform technology other leaders in the diabetes space are recognizing this too. In January we signed a joint development agreement with DexCom to integrate their continuous glucose monitoring technology into the OmniPod personal diabetes manager. We have a similar development agreement with Abbott Diabetes Care to integrate their continuous glucose monitoring system, the Navigator which was just approved by the FDA last week. An OmniPod PDM with either Abbott or DexCom’s technology will combine the proven benefits of insulin pump therapy and continuous glucose monitoring in a single safe, discreet and easy to use system. We believe an integrated system that utilizes a consumer focus and customer friendly design of the OmniPod platform will broadly expand the acceptance of the technology beyond what can be accomplished with the alternative on the market today. Another example of OmniPod’s platform value is our expanded agreement with Abbott Diabetes Care for their FreeStyle blood glucose monitor. Earlier this month we amended our existing licensing and development agreement to make FreeStyle the exclusive meter available in the OminPod PDM. In connection with this amendment Abbott paid us a one-time fee and will begin reimbursing us for services provided in connection with each sale with of a PDM with a FreeStyle meter starting in July, 2008. Since there was some confusion about this I would like to clarify that this agreement covers Abbott’s blood glucose meter not their continuous blood glucose monitoring technology. It does not impact our joint development agreement with DexCom and it may be terminated by us in the event that Insulet is acquired by a third party. We believe this amended agreement with Abbott demonstrates the power of the OmniPod system to capture and grow the insulin pump market as well as the value that market holds for our partners who provide diabetes diagnostic tools. Looking ahead to 2008, our plan is to invest in the business both in the manufacturing and sales and marketing infrastructure. As we continue to see our manufacturing capacity in China come on line successfully we will invest in additional capabilities that will allow us to exceed our original manufacturing production goals. Now, I’ll turn the call over to Carsten to discuss our financial results in more detail.

In the fourth quarter of 2007 we recorded sales of $4.4 million compared to $1.6 million in the fourth quarter of 2006. On a sequential basis revenue rose 15% from $3.8 million in the third quarter 2007. At the end of the fourth quarter 2007 approximately 4,150 customers were using the OmniPod system, a 30% increase from 3,200 customers at the end of the third quarter 2007. As you are aware we defer revenue from new patients for 45 days. If we add back the deferred revenue the sequential increase from third quarter 2007 to fourth quarter was approximately 25% which is a far better representation of the growth of the underlying business. From the fourth quarter 2006 to the fourth quarter 2007 revenue increased 166% while in the same period our costs of revenue increased only 69%, a reflection of the significant leverage in our model and if we look more carefully at the fourth quarter 2007 results compared to the third quarter 2007 this trend clearly accelerated in the fourth quarter as costs of revenues declined 12% while revenue increased 15%. In other words our gross loss declined 39% in the fourth quarter compared to the third quarter. Operating expenses were $13.7 million in the fourth quarter of 2007 up from $6.9 million in the fourth quarter of 2006. The majority of this increase was related to increase sales and marketing expenses. Operating expense were up 27% from $10.8 million in the third quarter of 2007 as we continued ramping up our sales and marketing efforts like customer care, training, sampling, marketing and reimbursement as well as territory managers. In addition, we incurred costs associated with the secondary offering in November, 2007. We reported a net loss of $15.7 million for the fourth quarter 2007 compared with a net loss of $10.9 million for the fourth quarter of 2006 and a net loss of $13.6 million for the third quarter of this year. Net loss in the fourth quarter included approximately $900,000 associated with costs of the company’s secondary offering completed in November, 2007. As of December, 2007 Insulet’s cash totaled $94.6 million compared to $33.2 million at the end of 2006 including the net proceeds of $113.4 million from the company’s initial public offering in May and approximately $9.2 million from the company’s secondary offering. For the full year 2007 revenue increased to $13.4 million compared to $3.7 million in 2006 representing more than a tripling of revenue. Net loss for the year was $53.5 million compared to a net loss of $36.2 million for 2006. Operating expense for 2007 increased to $41.5 million from $22.6 million in 2006 primarily driven by increased marketing expenses. Moving on to guidance, we are projecting revenue for 2008 to be in the range of $40 to $45 million. We anticipate our 2008 operating loss to be in the range of $55 to $60 million. We expect to achieve positive quarterly gross margins no later than the fourth quarter of 2008. Additionally, as Duane indicated earlier based on the progress to date in manufacturing output we now expect to be able to accelerate our manufacturing capacity build up in early 2009 beyond previously expected production output numbers. Accordingly, in 2008 we plan on significantly increasing our investment in our sales force, reimbursement processing, customer service, marketing, sampling, training and education. We expect these investments will help drive patient enrollment particularly towards the very end of 2008 and into 2009. So to sum up, the progress in 2007, we tripled our manufacturing output, we more than tripled our revenue and patient numbers and we took more than $20 out of the fully loaded cost of revenue per OmniPod. In addition, we have scaled up the number of territory managers from five to more than 40 and as such we feel well equipped to deliver another successful year in 2008. Now, I’ll turn the call back to Duane. Duane M. DeSisto: Over 1.2 million Americans have Type I Diabetes. Insulin pump therapy offers them the best control and the least risk of severe long term complications yet conventional insulin pumps are cumbersome, costly and complicated for both patients and providers. Consequently, less than a quarter of the patients with Type 1 Diabetes currently take advantage of insulin pump therapy. With the OmniPod’s innovative design Insulet is gaining ground in penetrating the 4.3 billion infusion therapy market opportunity. Our product’s discreet tubeless feature set has a potential to significantly expand the use of pump therapy amongst people with diabetes. In 2008 we intend to invest in our business. We remain focused on increasing our manufacturing capacity and expanding our commercialization efforts in order to meet the strong and growing demand for the OmniPod system. We’re confident that our unique product can address a significant unmet need in the diabetes therapy market and advance our mission to improve the lives of people with diabetes. With that operator, I’d like to open up the line for questions.

(Operator Instructions) Your first question comes from the line of Michael Weinstein with JP Morgan. Please proceed. Analyst for Michael Weinstein – JP Morgan: Just a couple, I wanted to see if you could talk a little bit more in detail on your marketing strategy particularly as you come up the curve with OmniPod supply over the next 10 to 12 to 18 months. Are we talking about a kind of heavy onslaught with DTC advertising? Are we targeting more individual thought leaders? Maybe you could go into a little more detail on that? Duane M. DeSisto: Sure. I think first of all obviously we’ve accelerated the build out of the sales force so we’re feeling good about the production side of the business, so that’s step one. The second step really is to do more public relations and our definition, once again, our definition of direct-to-consumer advertising is really to advertise in the diabetes focused magazines. It is children with diabetes, it’s on the JDRF sites and it’s doing more local. This really is kind of a grassroots type marketing campaign to focus on the people that have Type I Diabetes. Analyst for Michael Weinstein – JP Morgan: Okay that’s really helpful. Then I guess on the manufacturing front, sounds like a positive update there where you’re looking to accelerate your move to the 400,000 units per month and my understanding is that would be through ramping Bedford. So, I guess two questions there, what investment is required to get Bedford from where we are today to kind of a 200,000 units per month level? Then, what would the gross margin look like at kind of volume there in Bedford versus say what you can get done on the gross margin line [inaudible]. Duane M. DeSisto: I think quite simply the investment in Bedford has been completed so we actually accomplished that during 2007. All the equipment for China is on the ground at Flex’s facility in China so other than the final third, approximately 30% payment, all that money has already been invested. So, those two facilities gave us the capability of producing 400,000 pods per month. We are going to charge ahead with both of them. I think the guidance we have given in the past is out of Asia, 200,000 Pods per month of fully loaded billable material is below $15 and out of Bedford, it’s basically if we only produced them in Bedford it would be a positive margin so obviously it would be in the $20 to $25 range and if you do the math depending on how much we get out of either one it’s kind of a weighted average. But, that’s kind of the guidance we’ve given in the past, it’s nothing that’s really changed in that regard.

Your next question comes from the line of Paul Choi with Merrill Lynch. Please proceed. Paul K. Choi – Merrill Lynch Global Securities: Just with respect on the manufacturing in terms of the ramping up to 400,000 units by middle of next year. It sounds like most of the manufacturing will still have to come through Bedford and then Flextronics will ramp up as a latter period in late this year early next year. So, should we think about the margin ramp up still being really somewhat dependent more on Bedford at the moment and then we’ll see incremental benefit coming through perhaps late this year and early next year from Flextronics manufacturing? Duane M. DeSisto: Paul, I think Flextronics, our goal is to have all this online the fourth quarter, Asia would be all on line the fourth quarter this year or the first quarter of – well, it should all be on line the fourth quarter this year, the Asian facility so basically give you some sense of the timing of that. Paul K. Choi – Merrill Lynch Global Securities: Okay. Very good. Then, a financial question in terms of cash usage, since the IPO you guys have been averaging about $12 million a quarter in cash usage. Are you comfortable with that rate on a quarterly basis for 2008 given the incremental spending you guys are targeting for sales force investments and manufacturing ramp up? Is that a generally comfortable rate you guys are budgeting for?

If you take a look at the free cash flow during that quarters, you’re right quarter one was $14, quarter two $12.7 and quarter three $15.6 and here in the fourth quarter it was $17.9. The thing to remember about fourth quarter is that we actually started repaying the debt at the $30 million debt facility which we were suppose to start paying back with 33 equal monthly installments of $900,000, we started October 1. So, going into 2008 the plan is the next three to six months to work on refinancing the debt and as a result of that you would see given our guidance of $55 to $60 million that the burn will be just because of an approximate $10 million cap ex that we’ll have to spend in 2008 then it will be just on the high side of $60 million level and divide that by four and you have your answer. Paul K. Choi – Merrill Lynch Global Securities: Okay, very good. Then, just one perhaps line item in terms of modeling purposes, with respect to research and development you guys have a couple more things coming on in terms of continuous glucose monitoring and in the fourth quarter we saw a bit of a step up in R&D expenditures to a little over $3 million. Are you guys comfortable with rate or is that more of a seasonal affect here on a quarterly basis?

I think we are comfortable with that rate. And again, it is related to as you mentioned yourself that we are moving ahead with the two continuous sensing projects the one with DexCom, the one with Abbott. Then, on top of that we have a few interesting additional clinical projects going on, the U500 study on Type II Gestational study, pediatric care study. So, we’re comfortable with that rate. Speaking about 08, in total in terms of their use of operational spend the key is however to signal that in excess of 80% of the delta costs 08 versus 2007 will be dedicated towards building the sales and marketing infrastructure so that will be the driver from a cost perspective in 2008 so that we build that and invest in that infrastructure appropriately to be able to handle the additional volume in the end of this year going into 2009.

Your next question comes from the line of Bruce Cranna with Leerink Swann. Please proceed. Bruce Cranna – Leerink Swann & Company: Duane, I know prior to this call we had talked about capacity being at about 200,000 per month by the end of this year, it sounds like that’s going to be exceeded a little bit as Asia comes on line. I don’t want to put too fine of a point on it but is that a reasonable way to think of it that actually 4Q you might be above that level of capacity in the sort of linear progression from there to 400,000 by let’s say mid 09 or something? Duane M. DeSisto: That is a reasonable way to think about it. Bruce Cranna – Leerink Swann & Company: And how do you think about I guess having the demand for that kind of capacity? It’s a material step up from here. Do you guys feel comfortable with you have that kind of demand out there? Do you have any sense of latent patient demand? Any sort of metrics we can think about? Duane M. DeSisto: So Bruce, this will be a little bit of a long winded answer but we do believe the demand is out there, that’s why we’ve accelerated the sales force. The second way to look at this is basically having 400,000 Pods per month accounts for about 2% of the Type I Diabetes market. Now, having said that we will have a much better indication on the back half of Q2 as a lot of these sales people we’ve just hired become effective. So, that will be a much better indication but obviously we’re making the investment, it’s only 2% of the Type I Diabetes market so it’s not like we’re shooting the moon here. So, we think so and we’ll know a lot more at the end of Q2. Bruce Cranna – Leerink Swann & Company: But, you don’t sort of maintain a backlog or anything? Duane M. DeSisto: The backlog in the diabetes space, if you don’t process the order and ship the order within 60 to 90 days most patients will move on to something else. So, that is kind of how we’re operating. Bruce Cranna – Leerink Swann & Company: Okay. Then, I just want to talk about Abbot and the FreeStyle agreement a little bit and make sure I understand it. Can you perhaps give us a sense how much the one-time fee was? Duane M. DeSisto: No. We’re basically – the agreement with Abbott is we’re going to keep that confidential, we filed for confidentiality with the SEC so we’ll leave it at that. Bruce Cranna – Leerink Swann & Company: Okay. But, we’re going to see that come into the P&L I would imagine in Q1? Duane M. DeSisto: I imagine you’re right.

Remember, the upfront fee will be amortized over the period of the contract which is a five year area. So, a very insignificant impact in terms of P&L affect in 2008. Bruce Cranna – Leerink Swann & Company: No, that’s fair. I was just trying to figure out if it’s going to come in on the other income line Carsten?

No, not other income, it will definitely be positive from a cash flow perspective but not from a P&L perspective. Bruce Cranna – Leerink Swann & Company: My question is as small as it might be, does it come in on the other income line of the P&L?

It’s part of the revenue line. Bruce Cranna – Leerink Swann & Company: So, it will come in on the revenue line?

Yes. Bruce Cranna – Leerink Swann & Company: Then, you talk in the press release about the reimbursement that Abbotts paying you I guess for the customer care activities. You probably don’t want to ballpark that either but how should we think about that? Is that an offset to SG&A or is that coming in other income as well?

That is out of the revenue line as well. Bruce Cranna – Leerink Swann & Company: That’s going to come in on the revenue line?

Yep. Bruce Cranna – Leerink Swann & Company: Okay. Then last one for me, I’m sorry if I missed this Duane, I think you said something about in 2008 a non-insulin product or initiative? I guess some color there, if you don’t mind? Duane M. DeSisto: Well, since we do not have one finalized we are well down the road with a couple of potential activities here. Both pharma products outside the diabetes space and I guess the best way to put it was we’d be disappointed if one of these didn’t turn into an agreement. So, we have two that we’ve gone through stability testing, flow accuracy testing and we’re well down the way. It is our belief that this is in fact the platform technology and more than us talking about it hopefully we’ll have an agreement in place in 2008 to prove it. Bruce Cranna – Leerink Swann & Company: And if that happened in 2008 there would be an announcement of an agreement not necessarily you supplying product to someone? Duane M. DeSisto: It would be an announcement agreement and knowing that I know about both of them it would really start showing up in the P&L in 2009, more than likely.

Your next question comes from the line of Ben Andrew with William Blair. Please proceed. Ben Andrew – William Blair & Company: Just a quick follow up on the last question, Carsten the $40 to $45 million revenue projection you’ve got for 08, what percent of that is coming from non-Pod revenues? Is it material, say 5% even?

No, it is not material in 2008, it is in material in 2008. Where we start to see the full year impact of the flat fee for PDM we ship according to the Abbott contract is starting really January 1, 2009 so we’ll see this have a greater impact 2009. But, in 2008 not material. Ben Andrew – William Blair & Company: So, it may well be material in 2009 versus the total you have at that point?

That is correct, yep. Ben Andrew – William Blair & Company: And, as you think about the expansion of the sales force, what is the impact that you’re seeing today? I know you’re waiting for the second quarter to sort of see the full benefit but is that allowing you to open up additional accounts and start to prime the pump for placements that we’ll see really taking effect in the back half to take advantage of the new capacity? Duane M. DeSisto: In a word, yes. I think very simply there was a significant amount of pent up demand from people that have been made aware of the product, have not seen the product. So, what is happening as we speak, a lot of people for the first time are going to actually be able to touch, feel, see the product and that’s really what’s going on now. How much we convert into orders, we’ll start seeing the result of that in the back half of the second quarter. Ben Andrew – William Blair & Company: Okay. And Duane, can you talk about patient churn rates? What chunk of patients that go on this system don’t keep using it after say a month, or three or six months? Duane M. DeSisto: It changes from month-to-month but we continue to run 94 to 95% retention rates. Ben Andrew – William Blair & Company: Okay. So the 4,150 number is really obviously an ongoing patient number. So, if we think about the delta we would boost it up a little bit from Q3 to Q4. Duane M. DeSisto: That’s a net, the number we provide you is always the net number. Ben Andrew – William Blair & Company: Okay. Then, we’ve sort of seen a pretty steady progression of the Pod capacity up to 75 here from the IPO. Should we continue to expect you to ramp to 200 say towards the fourth quarter in a linear fashion? I know you said linear from 200 to 400 but is it going to be linear up to 200 or is there a step function in there?

There’s really a step function. So, a lower slope on the curve going into the second quarter starting to accelerate in the third quarter towards the 200,000 level or slightly above 200,000 level in the fourth quarter. Ben Andrew – William Blair & Company: Great. Then, in terms of the Navigator now that they finally have the approval of the product, do you have an updated perspective of when you can launch a combined product with them? Duane M. DeSisto: Both engineering teams met last week in conjunction with that approval in Chicago and we’re working out a timeline so the answer is not yet.

Your next question comes from the line of William Plovanic with Canaccord Adams. Please proceed. William Plovanic – Canaccord Adams, Inc.: A couple of questions, just a little clarity you said you had 40 reps when roughly did you have those bodies in place? Duane M. DeSisto: Most of the offers and acceptances occurred in the month of January and they have been coming on since then. So, as we sit here today we do have the 40 that are now on the payroll. Some have been on board for 30 days, some have been on board for about a week. William Plovanic – Canaccord Adams, Inc.: Okay. Then, when do they all go through training? Duane M. DeSisto: The people that have been on board for a week will go through training in the next week or so. The other people have in fact been through training. My understanding is last week they received their business cards so that will give you some sense of how new they are. Then obviously they’re all out in the field working as we speak. It really is a first quarter event where we brought them all on board. William Plovanic – Canaccord Adams, Inc.: Good. That’s what I was looking for. Then, in terms of the manufacturing capacity and the 75,000 at the end of February, was that a phenomena that you kind of hit in the month of February or was that hit earlier in the quarter? My question really stems from how much inventory you’re going to have as we kind of move forward?

So, the 75,000 is also a good representation of the month of March and a slight ramp up going into second quarter, as I said to Ben’s questions. Then, a little bit slower ramp into two accelerating in the third quarter towards the 200,000 level. We still on the inventory front when you get our 10K and get a chance to see the inventory and we are still running at the six weeks of inventory that we have communicated and that is important in terms of final product and the reason is we want to make sure we have sufficient safety in inventory on hand. William Plovanic – Canaccord Adams, Inc.: Okay. Good. Then, you mentioned that you can get down to about $20 to $25 per Pod in the Bedford facility. If I kind of just do the math it looks like your cost in the quarter was around $40 a Pod maybe a little more than that. When do you see reaching that $20, $25 per unit? Duane M. DeSisto: I think the magic number of us Bill is once we start producing 200,000 Pods per month whether it comes out of Asia or comes out of the US we start making positive margins. How big the margin is, is determined whether it comes out of Asia or the US. But, around 200,000 Pods per month that really is the breakeven and once again, to put it in perspective that’s 1% of the Type I Diabetes patients. William Plovanic – Canaccord Adams, Inc.: Right, no I understand that. Then, in terms of your Chinese manufacturing that equipment will be put in place, you’ll have one line up and running. You haven’t said did you have multiple machinery built so you can have a second and third line going up simultaneously? Or, is this a deal where you get the first line up, tweak it and then you order more machinery? Where are we in the process of kind of getting the next lines going? Duane M. DeSisto: What we’re going to do is we’re going to put the equipment in place, we’re going to tweak it, make sure everything works well in Asia and at that point in time we can then accelerate the plan. William Plovanic – Canaccord Adams, Inc.: Okay. Then, just the last question I have is in terms of the customer care costs, I believe one of the biggest differentiators for your model is there’s significantly lower cost of customer service due to the fact that it’s a disposable. As we’re two years into launch now, still ramping up do you still think that holds true? Or, do you think the support costs are going to be little bit higher in terms of what you originally expected? Duane M. DeSisto: It’s still our belief that we can do this for 20 to 25% less than the traditional insulin pump company. We have seen nothing to date that would lead us to any different conclusion. William Plovanic – Canaccord Adams, Inc.: Okay. Then, I didn’t see an update on the number of lives covered. Duane M. DeSisto: Through the end of the year we had approximately 146, 147 million lives covered and to put that in perspective there’s about 200 million private lives in the US. Bill, from our standpoint, we’ll continue to monitor that and if it changes materially, we’ll let you know. But, we’ve kind of put that a little bit in our rear view mirror here.

Your next question comes from the line of Phil Legendy with Thomas Weisel Partners. Please proceed. Phil Legendy – Thomas Weisel Partners: I want to ask if you could outline for us when you say that you may be able to get to the 400,000 in monthly production by the first half of 09, where would the components of those units be produced? Because my understanding is that you’re currently producing the chaises in China and then assembling them in Bedford. So, I guess what’s the mix that you would be assuming at that point in time? Duane M. DeSisto: At the 400,000 Pod level all the chaises would be produced in China and then complete Pods would be coming out of Asia and chaise subassemblies would be sent to the Bedford facility and the final product would be produced here. So it would be produced in both places but all the chaise subassemblies would be coming out of Asia. Phil Legendy – Thomas Weisel Partners: Okay. Then, how many – you gave the number of reps, how many total people are there in selling organization? Because I know there are other kinds of folks in there as well. Duane M. DeSisto: I think the best way to look at that between customer service, reimbursement, marketing, clinical educators, it’s probably a little more than double that. Phil Legendy – Thomas Weisel Partners: Than double the 40? Duane M. DeSisto: Yeah. Between the infrastructure, the customer service people, the reimbursement people, so it’s probably if you double that number you’re approximately there. I don’t have the exact headcount but that would kind of give you order of magnitude what that number would look like. Phil Legendy – Thomas Weisel Partners: Headcount is around 80. Okay. Then, you have talked in the past about pushing production even harder and potentially even ceasing production in the United States. I guess I’m wondering if you have your finger on the trigger what would be the sign that you wait for in China to make that move? Duane M. DeSisto: I really think what we’re looking for is we want to see that equipment come up on schedule and every indication is at the moment is that it is and then we want to see once again, quality of the product coming out. I would tell you internally what we’re taking a very hard look at is we kind of have a first mover advantage in the disposal pump business and the real key to us I think is to gobble up as much market share as quickly as we can. Like I said, what we’re waiting on is to actually see China up and completely working. I think as a company we got through the first hurdle which was new ground for us which was producing equipment in the US, having the people from Flex basically sit with the guys from Rite Industry, disassemble the equipment, move it offshore, get it all through customs, get it all up to their facility in China. All that went through perfect and now the next big step obviously is the facility is all built we just have to get the equipment up and running and then we have to validate the equipment and validate the quality of product coming out of there. Phil Legendy – Thomas Weisel Partners: This is the equipment that lets you produce the finished product in China, is that right? Duane M. DeSisto: Right. What we’re looking for is complete and total product coming out of Asia. Phil Legendy – Thomas Weisel Partners: How many quarters of good product would you wait to see until you said, “Okay, this is working.”? Duane M. DeSisto: Our view is pretty much – it really is for us we think it is going to be about a fourth quarter event that we’ll have enough experience that we’ll really know. Because, the trick when you do something offshore like this isn’t the fact that the product works, the question is how quickly can you react when something breaks, one of the pieces of the equipment, is the capability on the ground in a place like Asia to be able to respond immediately and get it back up and working. So, when everything works right it is easy to shake your head and say, “That’s terrific.” The real question is, and like I said the Bedford facility is pretty easy, the engineer is on the second floor, the equipment is on the first floor, they walk down a set of steps. So, what we really want to do is understand that whole interrelationship with the people at Flex once Asia is up and working.

Your next question comes from the line of Mimi Pham with JMP Securities. Please proceed. Mimi Pham – JMP Securities: Duane, on your sales guidance would you say the difference between the high end and low end is primarily based on your assumption of Pod utilization of how quickly you reach new centers or your manufacturing ramp? Duane M. DeSisto: I think the difference between the high and low is just on Pod utilization. Mimi Pham – JMP Securities: Pod utilization, okay. Then, for the ADA this year can you review again your key message based on your presence last year I feel like most of the attendees would already know about the OmniPod and the advantages over traditional pumps, what’s the newer message you want to sort of hone in on this year? Duane M. DeSisto: I think there’s a couple of things, I’m cautiously optimistic we’ll have a little clinical data that I would go into on this call but I think we’ll have a little clinical data to show the effects of long term use on the OmniPod system and how its impacting people [inaudible] so we’re hoping to be in a position to present that at the ADA. We’ll have done some prototype work on the integration of the continuous sensing so we can start showing that to people. I think it’s a couple of product related things and hopefully a couple of clinical related things we have going on. Mimi Pham – JMP Securities: Okay. Can you provide some general sense of how many potential Pod customers you lose to Metronics just because Metronics pumps interact with CGM? Duane M. DeSisto: I’d be guessing, I’d absolutely be guessing so good protocol, I won’t. I would tell you that when we go head-to-head with Metronics that is the issue that they put in the forefront as the basis of their argument. So, from what we can tell that is their key competitive advantage and that’s what they present. Mimi Pham – JMP Securities: Okay. Last question, how are you tracking your return on the DTC investment, is it just number of new leads? Duane M. DeSisto: Right now we’re doing it in terms of number of new leads. So, like we said we started, we did the first kind of banner advertising on websites and with children with diabetes, that started in January and where we are in this whole process is we’ve had over 1,000 people request a demo, the kind of wearable demo kit and then we’re going to track that to conversions which obviously is the ultimate test. Mimi Pham – JMP Securities: Okay. So as long as you’re getting hits and request for demos you’ll continue to invest in the DTC? Duane M. DeSisto: Yeah Mimi, it is our belief that if we can get a customer to wear this product we’re more than half way home on converting. So, it’s very, very important that people get the opportunity to trial the product in our mind because we’re uniquely positioned in that we’re the only company where you can actually wear a sample before you ever have to buy the product so it’s very important to us.

Your next question comes from the of Hamid Khorsand with BWS Financial. Please proceed. Hamid Khorsand – BWS Financial: Just two question, which insulin user type is converting to the OmniPod? Duane M. DeSisto: 75% of our customers have never been on a pump before so they are typically multiple daily injections. Hamid Khorsand – BWS Financial: You significantly ramped manufacturing in the last couple of quarters, is new OmniPod user rate increasing at the same rate as manufacturing? Duane M. DeSisto: They are going lockstep. Just to give you some sense, before we’d hired the sales people we’d have to see the production. So, I would tell you the number of sales reps trails the production slightly but we are trying to do it as close to lockstep as we possibly can.

Your next question comes from the line of Matt [Mulberger] with Renaissance Capital. Please proceed. Matt [Mulberger] – Renaissance Capital: First, one quick bookkeeping item, I was wondering what your total debt outstanding was at the end of the fourth quarter.

Total debt outstanding as we started October 1, repaying principal by $900,000 a month was approximately $27 million. Matt [Mulberger] – Renaissance Capital: Then second, on Metronics I know in your original IPO prospectus and also in the secondary prospectus about a year ago you guys received a letter inviting you to discuss taking a license. I was wondering has there been any development on that front? Duane M. DeSisto: There’s been no further development on that front.

Your next question comes from the line of Vivian Wohl with Federated Kaufmann. Please proceed. Vivian Wohl – Federated Kaufmann Funds: I’m wondering when your accountants will deem your experience to be positioned so that you don’t have to reserve for the new users. Duane M. DeSisto: Vivian, with that the rules are pretty explicit you have to have eight quarters under your belt so that basically says in Q1 of this year we have the ability to calculate, based on that eight quarters we have the ability to calculate a more reasonable reserve. Vivian Wohl – Federated Kaufmann Funds: Okay. And since we’re almost through with Q1 can you give us some sense of the continuing momentum this quarter? Obviously you have nice guidance for the full year, I’m just wondering if you can comment on Q1?

I think the important thing there that the only, in a way, update we’ve given you is production number 75,000 and again, as we have tracked in third quarter, as we have tracked in fourth quarter there’s been a good ratio between patients we bring on board and production number is 1 to .7. So, let’s take fourth quarter for instance 60,000 production and 4,150 that ratio is approximately .7. If you do the same on 75,000 then you’ll get to a number approximately of 5,100 on the customers. So that gives you a sense and that also speaks nicely as to what I talked about before that it is a flatter line in the beginning of the year but then accelerates going into third quarter. Then, as Duane alluded to the more than 40 reps we have on board now will really start to be productive come end of second quarter which will allow us to also see an acceleration on that side of the business.

(Operator Instructions) At this time you do not have any more questions in queue and I would like to turn the presentation back to Mr. DeSisto for closing remarks. Duane M. DeSisto: Thanks everyone for joining us today. We look forward to updating all of you on our progress on our next call. Thanks a lot.

Thank you very much for your participation in today’s conference. This concludes the presentation and you may now disconnect. Good day.