Duane DeSisto - President and Chief Executive Officer Carsten Boess - Chief Financial Officer

Paul K. Choi - Merrill Lynch Michael Weinstein - J.P. Morgan Securities Mimi Pham - JMP Securities Bruce Cranna - Leerink Swann & Company [Newt] - Canaccord Adams, Inc. Benjamin Andrew - William Blair & Company Philip Legendy -Thomas Weisel Partners [Anred Nepal] - Winthrop

Welcome to the Insulet’s first quarter 2008 earnings conference call (Operator Instructions). I would now like to turn the presentation over to your host for today’s call, Duane DeSisto, CEO.

With me today is Carsten Boess, Insulet’s Chief Financial Officer. Thanks for joining us to discuss our results from the first quarter of ’08, another strong quarter for Insulet. We will be making forward-looking statements about various aspects of our business, so please refer to our 10-K for a full discussion of our risk factors. I am very proud to say that we’ve hit a number of commercial milestones this quarter. We added approximately 1,200 new customers, another record quarter for new customer growth and we broke in through a major milestone for our installed customer base by surpassing the 5,000-customer mark. Since the time that we were designing and developing the OmniPod system, we were always confident that the products customer friendly form factor would be immensely appealing to people with diabetes. We were sure that if we could deliver insulin pump therapy without the disadvantages of conventional pumps, we could overcome the obstacles preventing so many people from choosing the best possible treatment for Type 1 diabetes. The tough part, we knew, was going to be building the manufacturing capacity to meet the markets interest level in such an innovative product. I’m proud to say that we’ve continued to make impressive advances on the production front and reached the manufacturing output of 95,000 Pods per month at the end of April and we’re on track to reduce our per unit production costs and break through positive gross margins sometime during Q3 and achieve positive quarterly gross margins for the full fourth quarter of this year. Based on this type of progress, we were confident that the time had come in the first quarter to build out the sales, marketing and customer support infrastructure to match our new capacity levels. One of our first initiatives in executing this strategy or 2008 was to significantly ramp up the expansion of our sales force. We’ve added 321 territory managers since the beginning of the year and now have a total of 49 reps. I am pleased to say that we now have nation wide sales coverage and we expect the new reps added in Q1 to be contributing to sales by the end of Q2. We are also broadening the scope of our marketing activities to expand consumer awareness of the OmniPod. At the same time, we’ll continue reaching out aggressively to health care professionals. A key part of our consumer outreach strategy is to get people to try the OmniPod and see how easy it is to use, through our unique trial program using the OmniPod personal demonstration kit of PDK. We recently introduced a non-inserting PDK which 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. Since we’ve achieved national sales coverage, we’ve been able to increase our direct to consumer marketing. In January we began running direct to consumer magazine and Internet banner advertising featuring the length of the PDK order page. We’ve also been running ads on Delight, a television program targeting the diabetes community. These activities have driven an increase in excess of 50% in traffic to our website. In addition a few weeks ago we dropped our first direct mailing marketing piece to people with Type 1 diabetes. We’ve also continued to engage in a variety of local marketing events that enable potential customers to learn about and experience the OmniPod system. We’re very encouraged by the early results from all of these marketing programs. We continue to invest in demonstrating the clinical differentiation of the OmniPod system relative to other insulin delivery options. We’re focused on expanding the market for our product, including the use of OmniPod in the hospital setting and applications outside the diabetes market. We believe there are a number of potential applications as a result of the OmniPod’s cost model in the control that it allows hospital staff. We are supporting the first clinical trials of the OmniPod in a hospital setting, which recently enrolled its first patient. As an example of the strong and varied interest in OmniPod, it was specifically selected to be used in a preclinical study presented by Micromet, Inc. at the American Association of Cancer Research meeting in April exploring different routes of administration of its BiTE antibody for the treatment of cancer. The data demonstrated good bioavailability and predictable serum levels of BiTE antibodies delivered through the Omni Pod system and the study’s authors specifically noted OmniPod’s potential to improve the quality of life for patients receiving cancer treatment. In addition, we expect to announce an agreement for our first non-diabetes drug delivery application later this year. While we always knew OmniPod would emerge as platform technology for innovation, other leaders in the diabetes space are recognizing this too. Insulet is an industry partner in the Juvenile Diabetes Research Foundations Artificial Pancreas Project. Since we became involved last year, the majority of the sites have elected OmniPod as the insulin delivery technology of choice for their research. Our cutting edge engineering was also recognized by the NIH an FDA when they invited John Garibotto our Vice President of Research Development and Engineering, to participate in an upcoming FDA NIH JDR workshop on engineering considerations for building a closed loop system. We are honored that the product is being sought after by the thought leaders, clinicians, and institutions. Other industry players are also recognizing OmniPod’s value. We continue to work with Abbott and DexCom to integrate their continuous glucose sensing in our PDM. These types of agreements demonstrate the power of the OmniPod system to capture and grow the insulin pump market and the value that market holds for our partners who provide diabetes diagnostic tools. Looking ahead our plan for the rest of 2008 is to continue investing in the business, both in manufacturing and in sales and marketing infrastructure. With OmniPod production not more than 58% in the first four months of the year, we are on track to achieve our business goals. 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 plans. Now I’ll turn the call over to Carsten to discuss our financial results in more detail.

In the first quarter of 2008 we recorded sales of $6.7 million compared to $2 million in the first quarter of 2007. On a sequential basis, revenue rose from $4.4 million in the fourth quarter of 2007, representing an increase of 53%. Reported revenue for the first quarter of 2008 was favorably impacted by $1.2 million due to a change at the company’s estimate of preferred revenue. Prior to the first quarter of 2008 the company deferred revenue on all initial shipments for the final 45 days in the quarter. The company’s deferred revenue is now based on two years of historical experience. If we adjust for deferred revenue, the sequential increase from fourth quarter 2007 to first quarter of 2008 was 31%, which is a better representation of the growth of the underlying business. During the first three months of 2008 approximately 1,200 new patients began using the OmniPod system. From the first quarter of 2007 to the first quarter of 2008 revenue increased 232% while in the same period our cost of revenue increased only 119%, a reflection of the significant leverage in our model. Operating expenses were $16.7 million in the first quarter of 2008, up from $8.2 million in the first quarter of 2007. The majority of this increase was related to increased sales and marketing expenses. Operating expenses were up 21% from $13.7 million in the fourth quarter of 2007 as we significantly ramp up our sales and marketing efforts by customer care, training and clinical services, sampling, marketing of reimbursement, as well as significantly increasing the number of territorial managers to a level of 49. We reported a net loss of $19.9 million for the first quarter of 2008, compared with a net loss of $11.6 million for the first quarter of 2007 and a net loss of $15.7 million for the fourth quarter of last year. As of March 2008, Insulet’s cash and cash equivalents totaled $73 million, compared to $94.6 million at December 31, 2007. Moving to guidance, we continue to expect revenues for the full year 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. A key initiative for Insulet is to drive down our production costs for OmniPod. We believe we have significant leverage in our financial model and higher volumes, drive, economics of scale. We have substantially improved our gross loss and expect to achieve even more upside from incremental manufacturing output in 2008. As a result, we expect to break even on a gross margin basis some time during the third quarter and achieve positive quarterly gross margins for the full fourth quarter of 2008. Based on the progress to date in manufacturing output, we continue to expect to be able to accelerate our manufacturing capacity towards the end of 2008, reaching or exceeding an output level of 200,000 OmniPod’s per month in the fourth quarter. In the remainder of 2008 we continue to invest in our sales force, reimbursement processing, customer service, marketing, sampling, training, and education. We expect these investments will help drive patient involvement, in particular towards the end of 2008 and into 2009. Now I’ll turn the call back to Duane.

Over 1.2 million Americans have Type 1 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 ¼ of the patients with Type 1 diabetes currently take advantage of insulin pump therapy. With the OmniPod’s systems innovative design, Insulate is gaining ground, penetrating the $4.3 billion insulin infusion therapy market opportunity. Our products ease of use, combined with its discreet, tubeless feature set, has the potential to significantly expand the use of pump therapy amongst people with diabetes. This year we’re investing in our business. We remain focused on increasing our manufacturing capacity and in particular, expanding our commercialization efforts in order to meet the growing demand for the OmniPod system. We are confident that our unique and easy to use product can address a significant unmet need in the diabetes therapy market and advance our mission to improve the lives of people with diabetes.

(Operator Instructions) Your first question comes from Paul K. Choi - Merrill Lynch. Paul K. Choi - Merrill Lynch: First on the patient adds you have in the past couple quarters added about 1,100, 1,200 patients each quarter here while you’ve been wrapping up the sales force. Can you just help us gauge in terms of what your demand levels are seeing and how much you’re holding the reigns back in terms of distributing OmniPod out there, given the fact you have ramped up your sales force significantly.

I think just looking back, if you looked at the last couple of quarters here, I think we’ve gone about 750 patients, 950 and then the reported numbers for this. We are continuing to ramp up those numbers, that’s number one. Number two is if you take a look at the productivity level that we’re at, we believe that 95,000 OmniPod’s per month can support approximately another 1,200, 1,300 patients in a comfortable manner. What we’re trying to do is gauge the effectiveness of the sales force when we bring them in to have them hit the same stride in productions, so that’s where we’re going with this. Paul K. Choi - Merrill Lynch: The implication now, with the back end half of the year being so heavily reliant, can you just help us understand how much pent up demand there is, that you think, in terms of incremental patient adds and perhaps a target number exiting this year?

I think while we’re comfortable, and you can probably back into the number, I think we’re very comfortable with the $40 to $45 million worth of revenue. We basically said that we’re going to exit the year at approximately 200,000 Pods per month on the manufacturing and if you use the math model of 14 to 15 Pods, roughly, per patient per month that would give you a pretty good indication of where we think we’re going to be. With regards to demand, we’re still early in the marketing programs, but as we stated we’ve seen a 50% increase just in doing a few little ads. We continue to monitor, if you look at our advertising we have different 800 numbers for the various ads so we can try to understand which is the most productive. We are now just in the process, given that a lot of these adds were generated in the back half of the first quarter, what we want to do is it’s great that we have the leads, it’s great that people are interested in trying the product. The obvious next step is over the next few months here we’re going to track and see how many turn into orders and we’ll have a much better feel for that by the end of Q2. Paul K. Choi - Merrill Lynch: Then on the expense side, it looks like in terms of sales and marketing expenses it went up by about $3 million versus the previous quarter. Can you help us understand how much of that will be 1x DTC sales force additions and how much of that will be ongoing for the rest of the year?

Actually the $8.5 million in the first quarter will be a good representation of the coming quarters. You will continue to see a slight increase. The three drivers in the growth from the $5.5 million in the fourth quarter of ’07 to the $8.5 million in first quarter are 32 new reps coming in early in the quarter. It is DTC and we’ll carefully monitor the dollars we’re spending in DTC and see if they give the appropriate ad return. Then number three is and that’s very important, that is we’re investing in samples: because we have this, it’s an important differentiator factor for us in the marketplace, because we can sample our products and therefore to have 32 new reps productive come in, in Q2, we have to continue to invest in samples to make sure they have the samples with them in the health care professional offices. So, the expense, Q1 is a good representation with a slight increase as we move forward. Paul K. Choi - Merrill Lynch: In terms of the cash burn it looks like you went through $20 to $21 million approximately this quarter versus the fourth quarter. Is this the bulk of the cash you’re going to use for this year and should the cash spend for the rest of the year abate off from these levels?

A good representation is we have guided to an operating loss say in the neighborhood of $55 to $60 million, as indicated here. If you consider an expected CapEx number of an additional $10 to $12 million for the year then you have a good indicator.

Your next question comes from Michael Weinstein - J.P. Morgan Securities. Michael Weinstein - J.P. Morgan Securities: Let me first go through a couple of metrics that I’d love to get your read on: one would be patient retention rates, or reorder rates once they start on a Pod. Then two, could you talk about product quality, any return issues that you may be seeing. What’s the overall satisfaction with the device? Having followed the pump market for longer than I’d like to say, pumps have historically had issues following initial launches. Yours has gone extremely well at this point, so I’d just love to get an update on both patient satisfaction and then resulting retention rates and then product quality, any issues we should be aware of?

The answer to your first question is the attrition rate for the product is running, right now, about 7% to 8%, about half of that is related to insurance. To give you some indication, whether it’s co-pays or secondary insurance not covering enough of the piece; so I would tell you about half of that is related to financial and then the other half’s broken down amongst literally hundreds of categories. With regards to the product quality, as we continue to ramp as quickly as we’re ramping, what we do is we’re constantly monitoring the quality in the field. I would tell you this last big step up from where we are, the 50 some odd percent growth. We monitor all the stuff but the final test that would tell you the quality, a final test slip may be a point or two, we’ve been constantly monitoring that. The real issue for us has nothing to do with us, it really is, when we take that big step up, a 50% increase, we really continue to stress the supply chain. So we’re paying very, very careful attention to that, we’re reacting immediately to it when we see something like that. But, I would tell you, I think overall we continue to do satisfaction surveys and granted they’re surveys done by an independent house for us, but we still continue to march in the 80%, 85% range on an ongoing basis. From those surveys is probably the best indicator. We haven’t seen any attrition. Michael Weinstein - J.P. Morgan Securities: You’ve dramatically increased your number of territory managers since the start of the year. Could you talk about the training of those managers, what you’ve had to do to train them? Where they came from were they from any diabetes companies, other areas? Then what is your sense for a productivity curve for a new rep hire?

The background of all these diabetes, Shawna Gvazdauskas, who is our Senior VP of Sales and Marketing, has a significant amount of experience in this space; she has literally thousands of contacts and she’s leveraged all those to help us ramp as quickly as we have. All the people that we’ve brought on, as an average, don’t hold me to everyone, but as an average they have about 10 years experience in the diabetes industry. There are a significant number of them from strip companies, from competing companies, and there were some that came from an I-port type thing, but all of them have significant diabetes backgrounds. We’ve been very, very fortunate. We have very, very seasoned people. With regards to how we’re tracking the effectiveness of this group, I would tell you a lot of these guys, their start day was pretty much the beginning of January. We had a national sales meeting, we flew everybody into one place, and we literally spent a week training all those people. Then they went out, the regional managers traveled with all of them, so we probably have a couple of week’s hands on experience with all the individuals. We brought all the people from the company to one place to get them comfortable with it, we brought customer service people, field service people, to get them all up to speed and we went through all the product demos. I would tell you the way we’re tracking it in our internal profile is it’s 90 to 120 days from the time we get them into the building, depending on when we get them trained up and we’re assuming that they’re going to be as effective as the existing guys. Now there are only two territories we’ve divided, so those two I would say are an exception, because we really don’t know. What we did is, as part of the expansion we divided a couple of territories, because we really want to start understanding the dynamics of those two territories. If we’re going to continue to grow and we don’t think we need a lot more people, but if we divide those territories, that profile may be a little different than just putting someone in a new territory. Michael Weinstein - J.P. Morgan Securities: What just was the timing of the adds that you had and where you are in your manufacturing curve? You’ve made a lot of progress here in the last few months. It would seem that you’ve got both pieces in place, the manufacturing, the reps, the product, to now really start to open up the gates a little bit on marketing the product? Is that a fair statement? So, we should see that start to manifest a little bit in the second quarter, but then more meaningfully in the third and fourth quarters on your revenue ramp?

That is a spot on. Michael Weinstein - J.P. Morgan Securities: Obviously you’re guiding to a decrease in your quarterly operating loss over the next three quarters. I was hoping you could just provide some additional insights into that.

That is absolutely correct and the key driver here and that’s why we are stressing and what we are telling the market. We’re stressing that we’ll be able to drive positive gross margins towards the very end of the year and therefore allowing that dollar amount, coming from gross profit towards the end of the year, to reinvest now in our sales marketing infrastructure in particular. That’s why I’m saying on the OpEx side and the key driver there and I think I said on the last call, that 80% plus of our investment in OpEx will actually come from the sales and marketing line. It is important to stress that Q4 is the quarter where we’ll break through at full quarter in terms of the gross margin and that’s the dollars we’re investing now in the sales and marketing infrastructure. Michael Weinstein - J.P. Morgan Securities: Your view is that your SG&A expenditures will be relatively stable with the addition of whatever commissioned hours you’re paying out and your additional promotional expenses?

That is exactly correct. In a way an experiment is, you would take Q1 OpEx and multiply it by four, then it’s $66 million in total OpEx for the year and that means, in that scenario, $6 million has to come for us to hit the $60 million operating loss, $6 million has to come from the gross margin line. If you continue with various scenarios there, because I just said to Paul, there will be a slight increase in the sales and marketing costs, that means the contribution from gross margin has to exceed that and we are on plan to do so. Michael Weinstein - J.P. Morgan Securities: Your cash position is $73 million at the end of the first quarter. You were going to refinance some of our existing debt? Maybe you could just update us on that if you can at this point?

Yes, we continue to remain comfortable on the cash persist in liquidity. We are currently exploring the debt refinancing alternatives that are out there and expect to pursue a refinancing of the existing facility before the end of the next couple of quarters. So, the signal is that we are comfortable with the position and the progress we are making in that respect.

Your next question comes from Mimi Pham - JMP Securities. Mimi Pham - JMP Securities: Can you talk about the time line for the Abbott or DexCom integration? Last week, DexCom had mentioned December 2009 time frame for seven to be integrated with your J&Js pump?

Our goal with both partners is basically to be into the FDA in the first half of 2009. Then both of our partners are significantly more familiar with that whole regulatory path, but our goal with both partners is in the first half of ’09 to be into the FDA. Mimi Pham - JMP Securities: Meaning submit the PMA supplement, if the supplements necessary, the first half of ’09?

What ever form of document that would be. But, the engineering and everything else would be completely done. We have satisfied whatever requirements there are from the FDA and we would submit it. Mimi Pham - JMP Securities: Reimbursement coverage, I know you normally talk about it in terms of number of lives, but now that you have sales covering fifty states, can you speak to it in terms of how many states you cover?

We cover all the states. I would tell you that some of the states range from 50% coverage to as high as 90% coverage and that’s, we have four people ongoing continuing to try to fill in all those boxes. Mimi Pham - JMP Securities: Your 45 territory managers are you done for ’08 and are you done for ’09 or do you add more at some point?

We think the right number and I think we’ve consistently said it is somewhere between 50 and 55. I think a lot of that’s just going to depend, whether we fill that out before the end of the year is going to just depend on how all this is going. We think that’s about the right number to be at. Mimi Pham - JMP Securities: Do you have the estimated percent of new patients versus upgrades for that 1,200?

It’s still running about 75-25, we haven’t seen anything. It’s going to be interesting, from our standpoint, once we start seeing some of the effects of this advertising and direct to consumer, if that metric starts to change anyway, because that would be the way we would find those people.

Your next question comes from Bruce Cranna - Leerink Swann. Bruce Cranna - Leerink Swann & Company: Carsten, just on the deferred revenue piece, the $1.2 million in the quarter, was that just changing the accrual rate for the quarter, or was there some reversal of prior period in that number as well?

What we are saying is that the reported revenue of Q1 was $6.671 million, right? If we had done it the old way, i.e., the way we were doing it by the end of fourth quarter, then the revenue would have been $1.2 million lower, so $5.5 million, which would still have been a 25% sequential growth. Bruce Cranna - Leerink Swann & Company: Just based upon your quarterly run rate and what rate you defer quarterly sales at?

Yes. We have, in a way, moved by the end of the fourth quarter from a strict 45-day deferral the last 45 days sales of the quarter, to now a deferral policy that is linked to our historical track record in terms of returns, in terms of typical gross to net sales calculation elements. Then it’s also important, because it’s actually interesting, that the deferred revenue by the end of Q1 equals the deferred revenue by the end of Q4 and a key element of that is that in that deferred element is the current portion of the Abbott prepayment associated with the chain strip deal with Abbott. So, that’s important to keep in mind. It is a total coincidence that those two numbers, by the end of Q4 and the end of Q1 are the same. Bruce Cranna - Leerink Swann & Company: You mentioned you’re now over 5,000 users. Can you put a little bit of a finer point on that for our benefit?

I think, look, we’re running about a 7%, 8% attrition rate. You add that into the installed base rapport with the 1,200 and I think you get there or less. The only reason we’re starting to shy away from just the total number is simply due to the fact, calculating then the changes on a daily basis or a weekly basis and as we get more and more people onto the curve here, it’s just getting tougher and tougher to track. Having said that, the attrition rate and the new customers, which we really think are the driver of this whole business, those are the two numbers for you. Bruce Cranna - Leerink Swann & Company: I’m starting off with the 4,800 from last quarter, with the attrition rate?

Yes. Bruce Cranna - Leerink Swann & Company: I just want to revisit your plans in Europe. Are you still thinking a CE mark some time this year?

We are looking to file CE mark by the end of this year with the agency there and to have that in place before the end of this year, yes. Bruce Cranna - Leerink Swann & Company: Seeing some of the next generation prototype products out there, I’m curious, when you think about the OmniPod and I think we all would probably admit that there will be a day when there is competition in the field. Do you contemplate any next generation device and if so, what things do you focus on when you think about that?

There are a couple things. One is obviously we’re working with the industry partners to integrate continuous sensing, which would be the next step up. So, we’d have two versions. Then the piece of our development, we continue to look at ways to make the products smaller and we think we have a thorough understanding of the product. We have several different variations on the drawing board at different stages of development, so we think we know how to get to the next step in this particular product. Bruce Cranna - Leerink Swann & Company: You might share the prototype with us when the time is right?

Yes, at the end of the day what we always worry about, what we always worried about, is we think we have a state of the art product. At the moment we have a pretty wide-open field, so that last thing in the world we want to be doing is competing with ourselves. But, when the time is right, we are very cognizant of all the players that are out there. We also I think are very cognizant of all the hurdles we’re going to have to overcome, which is more than just creating a product. We think we understand our product very well and we think we understand the timing of where and when, all that could happen.

Your next question comes from William Plovanic - Canaccord Adams. [Newt] - Canaccord Adams, Inc.: There is some buzz about Mandingo coming out with a product. Can you just compare and contrast some of what people are talking about on the street versus your OmniPod and how you might be able to maintain your edge?

I’ll start with the most basic: I can make 100,000 a month, and they’re running around with prototype. I think until they’re in the marketplace, there is really not a lot to talk about. [Newt] - Canaccord Adams, Inc.: In terms of foreign exchange for your costs, do you think foreign exchange is going to impact the ultimate cost of your products and is it also going to in any way impact you raw material costs?

The only threat we have to our raw material costs is we have four silver oxide batteries in our product and with the price of silver going up, that has the potential to be problematic. While we’ve had long-term contracts in place, nothing lasts forever, so that would be the one threat we see. With regards to foreign exchange and the rest of the stuff, we’re very, very comfortable with, but that is the one that we cannot control. With regards to the strength of foreign currency, it is interesting as we start talking to people in Europe and looking at the strength of the euro versus the U.S. dollar, given that reimbursements all in euro’s over there, we actually think it’s a very interesting opportunity for us. [Newt] - Canaccord Adams, Inc.: Given the ramp in production that we saw this quarter, do you still feel confident about reaching 400, 000 units by some time in early ‘09? Also, you mentioned you were thinking about increasing your capacity. Are you starting to think about a third line and if so, have you made any changes in terms of your timing for actually purchasing that second line for China?

Where we are is the production number you see are basically the chasses being built in Asia and being sent to us. The equipment is all installed right now with the people at Flextronics in China; they are in the process of qualifying that entire line. So, we’re really before we make any decision, we’re looking to some time in Q3 to see that line come up. If that line comes up, I think at that point in time we’re going to be pretty comfortable looking forward at larger potential lines, but we still have to see it come up. We’re thrilled with the progress, we’re very impressed with the quality of work being performed by the Flextronics people, but we’re still not up and running yet. Like I said, the chasses are being produced there, but the actual final product continues to come out effort. [Newt] - Canaccord Adams, Inc.: You’re still on track for the 500,000 units by some time in early.

Yes, we are still on, yes.

Your next question comes from Benjamin Andrew - William Blair. Benjamin Andrew - William Blair & Company: Duane, how do you think about and measure productivity in the field today and is that going to change in any way over the course of ’08?

I think that what we have is we have a track record with some of the guys on the East coast who have been selling now for almost two years; so we’ve benchmarked a lot of people against them based on the number of key endocrinologists in a particular territory; so we think we have a pretty good understanding and we’re seeing the ramp up and we’re monitoring that right now. The thing that I would tell you that we really do not have a good feel for is when we take a territory and split it in half, do you get twice the productivity, do you get half the productivity? We’re going to have to monitor that. A lot of territory’s that we’re going into, it’s a function of the amount of lives we have covered, which is key and then the number of key endocrinologists. We’re monitoring all that. We looked at the productivity for the territory managers in terms of, it’s pretty simple: it’s the number of referrals and shipments per month, per rep. Like I said, we have a pretty good benchmark that we started on the East Coast, so we have some people that have two years experience; we have some people that have one-year experience. We think we understand the ramp, but like I said, right now we’re watching. Benjamin Andrew - William Blair & Company: Because, if I just do a little bit of math and I look at Q1, 1,250 new patients, 17 reps active, coming the end of the year and maybe those weren’t all fully active; I know there’s a range there even with that group, but your basically 74 new patients per rep. Is that a relevant number? I know you’ve got a lot more data then we do, but is that one way for us to think about it?

That is one way for you to think about it, yes. Benjamin Andrew - William Blair & Company: Second, if you think about the training, other infrastructure support systems that you are going to need over the course of 2008, is that contributing meaningfully to spending or is that still to come? I think back to the days of Mini Med, the level of support they were building in the back office both for reimbursement and patient support was pretty substantial.

I would tell you that the major challenge for us today, right now based on watching the sales reps, we think we have a pretty good understanding of productivity. Like I said, the only time with us we’re, we’re pretty comfortable with that. The challenge for us, in pure candor, is we have to get the back room right. It’s one thing to get a referral in, it’s a whole another thing to get it processed. We are going to several industry leaders, we have a couple of consultants that have come in to help us, and we are beginning to streamline that. Having said that, we think we understand it, but once again we’re talking about a significant ramp up between here and the end of the year. We’ve taken a big first step here in the first quarter, so that ‘s going to be, to be honest with you I think that’s going to be the gaining factor. I don’t think it’s product demand; I don’t think it’s interest from the field; I don’t think it’s going to be the productivity of the sales people, but we haven’t proven all that yet. I think the real challenge for us is just making sure we have the right, most efficient infrastructure. How we go about doing that, we’re looking at various models right now. Benjamin Andrew - William Blair & Company: Do you think you’re far enough along in that look for the ramp you’ve got in Q2 to Q4? Can you really support 4,000 or 5,000 patient adds?

We think we understand how to get there, but understanding and actually executing, we have to go through it. I think Q2 is going to be a real good test for us and then Q3 will be another significant rap. If we can execute as well as we hope in Q3, then I think we’ll be fine, but that’s going to be the real big step up for us. Benjamin Andrew - William Blair & Company: Somebody asked before about product quality issues and you talked about seeing a little bit of a bump in issues. Are you catching those at the manufacturing level or are those coming back out of the field?

I’d love to tell you we catch them all at the manufacturing, but we have seen a slight blip of probably 1% to 2% out in the field in terms of phone calls. We’ve reacted to them. I think our customer service is doing a great job, I think it gets pretty high marks when people talk to them and I think what we’ve seen we’ve been able to deal with so far. Benjamin Andrew - William Blair & Company: Do you credit back a Pod or two and try to make nice to the patient, or do you lose people from that? Has it become recurring with any individual?

It is. I would tell you it takes a lot of time and effort to get the patients, so we will do whatever it takes to keep the patient.

Your next question comes from Philip Legendy - Thomas Weisel Partners. Philip Legendy -Thomas Weisel Partners: I wanted to ask if you’ve seen any changes in pricing in the quarter. The revenues were a bit high for what we would have expected at $30.00 a Pod.

No, the pricing and the pricing is just a function of the mix that’s running through based on the insurance carriers, where the stuff is coming from. Let’s put it this way, there’s nothing of note. Philip Legendy -Thomas Weisel Partners: So $30.00 is still the strike zone here for price?

$29.00, $30.00, yes. Philip Legendy -Thomas Weisel Partners: What was the total contribution from deferred revenues in the quarter?

That’s the $1.2 million. Philip Legendy -Thomas Weisel Partners: The $1.2 is the total, not the difference between what it would have been. Then what percent of revenues are you now deferring, now that you have these two years of experience?

Remember again, we have $1.3 million in the deferred revenue and we had revenue in the quarter of $6.7 million, so the percents there give you an indication. Remember again, an important piece there is the current portion of the Abbott prepayment associated with the change in their swift deal. Philip Legendy -Thomas Weisel Partners: CapEx in the quarter, I didn’t hear you say what it was?

CapEx in the quarter is actually not in the press release, but it will be in the 10-Q, it was $5 million, a significant portion of that was the finalization of downstairs in Bedford and then a part of the payment for the machinery that has gone to China, as Duane eluded to before.

And what you see in shipment was it’s not new equipment. While the equipment is here, typically the way it works is 1/3 up front, 1/3 on delivery and 1/3 on final approval. Philip Legendy -Thomas Weisel Partners: In general, I wonder if you can give us an update on what you’re seeing competitively, there’s been buzz about Mandingo, but just I wonder if you could just put it to bed for us all, what’s going on out there?

Once again, what we are seeing is we are seeing Medtronic Mini Med linking continuous sensing with insulin pump. That’s what we’re seeing competitively in the market. We don’t see anything from Mandingo on the market. The only time we talk about Mandingo is on these particular calls. I apologize if it sounds curt, but look at the end of the day when we have to compete with them, we think we understand a lot about their products, but I would tell you it’s all second and third hand. We think we’re in a great position to compete with them, but until they’re in the market actually selling and doing all this, it’s a theoretical exercise that I don’t want to get roped into.

Your next question comes from [Anred Nepal] - Winthrop. [Anred Nepal] - Winthrop: Carsten, I wanted to follow up on the discussion you were having with Mike Weinstein on the gross margin. I think you said if you annualize the operating expenses for the first quarter, that’d be roughly $66 million and as you said it will be a little higher, so call it $67 or $68 million; so in order to make you net loss guidance, you’d need $6 million of positive contribution from the gross profit line, is that correct?

That is correct in the scenario. We just take the OpEx for Q1 and multiply it by four then that is $66 million. If we have to hit the high or lowest end of the operating loss of $60 million that means $6 million has to come from the gross margin. That is just to indicate to you that what we are doing is we are taking that expected gross margin contribution at the end of the year and investing our fund in the year to make sure we have built the infrastructure from a safe margin point of view. [Anred Nepal] - Winthrop: Just to follow up on that, so if you took the high end of your revenue guidance, $45 million and you applied $6 million of gross profit, that would imply for the year, that you would have a positive 13% gross margin, which would, based on the comments that you made about hitting break even during the third quarter and getting positive for the full fourth quarter, doesn’t that imply by math a gross margin well above 50% in the fourth quarter of the year, or am I doing the math wrong?

It implies a significant ramp up in gross margin in the fourth quarter and as we are indicating, we are planning now and on the way to a break through sometime during Q3, so your math is correct. [Anred Nepal] - Winthrop: It sounds like you’re very confident about it. I just want to make sure I understand because, I was operating under the assumption that if you hit break even sometime during the third quarter that it’s a gradual process of generating a significant gross profit percentage, but it sounds like it may be more steep than I had anticipated.

A key element here naturally is that we are currently at the 95,000 monthly output and we are confident that we’ll get to the 200,000 of the month in the fourth quarter and as a result of that, because it is all volume driven, both in terms of building material and in terms of absorption of overhead costs, we feel confident that we’ll get there.

Your last question comes from William Plovanic. William Plovanic - Canaccord Adams, Inc.: You had previously mentioned on other calls that you would be partnering with a pharmaceutical company. Is the Micromet portion of the press release is that the partnership you had mentioned, or is there something else?

That is not the partnership that we are alluding to, no. William Plovanic - Canaccord Adams, Inc.: Are you still expecting something by the end of the year?

We would be disappointed if we don’t get something by the end of the year, correct.

I would like to thank everybody for joining us today and we look forward to updating you on our next call. Thanks a lot.