Good day, everyone, and welcome to the Depomed second quarter 2008 conference call. Today's conference is being recorded. At this time, I would like to introduce Ms. Ina Cu. Please go ahead.

Thank you. Good afternoon. This is Ina Cu, and with me today are Carl Pelzel, President and Chief Executive Officer; Tammy Cameron, Controller and Interim Principal Accounting and Financial Officer; and Dr. Mike Sweeney, Vice President of Product Development. At the close of market today, we issued our financial results for the second quarter ended June 30, 2008. The purpose of this call is to expand on the contents of our press release, provide an update on our business, and to provide financial guidance for the remainder of 2008. Before we begin, I’d like to remind you that during this call we will be making forward-looking statements related to various aspects of our business, including statements related to clinical development, financial matters, and commercialization of our marketed products. Actual results may differ materially from the results described. We encourage you to review the risk factors in our most recent quarterly report on Form 10-Q. I will turn the call over to Carl Pelzel.

Thank you very much, Ina. Good afternoon and thank you for joining us for our second quarter 2008 conference call. I would like to start with a few comments regarding the state of the pharmaceutical industry, which I believe is continuing to evolve in a manner that strongly validates our business model. Now, more than ever, new chemical entities are not an automatic route to success as managed care, physicians, and patients insist on meaningful product differentiation. A good example of this is GSK's initial withdraw of their application for an extended release version of Requip after the FDA questioned its clinical benefits compared to immediate release Requip. As line extensions with little differentiation are called into question, big pharma's enormous investments in new chemical entity development programs are becoming more risky. As you know, there are numerous examples of the many pre-approval and post approval risks in the NCE model. In contrast, our model of developing known chemical entities has proven to be far less costly and less risky since we identify a target profile in advance, using a compound with a long established safety record, and then move our programs forward with a higher degree of confidence in our ability to meet that profile. While big pharma's response to the new challenges in our industry is somewhat fragmented, I think that the industry's recognition of the need for meaningful differentiation is reflected in GSK's recent request that several European health agencies rank GSK's early stage product pipeline to get a sense if the products would be reimbursed and to understand what data would be needed for reimbursement. Another good example is Pfizer's recent announcement at a health care conference of its intention to become a world leader in product enhancements and reformulations. Now, I don't mean to suggest…

Thank you. (Operator instructions) We’ll take our first question from Andy Schopick with Nutmeg Securities. Andy Schopick – Nutmeg Securities:

Yes. Thanks for the question, Andy. We didn't hear the first part of your comment, but I didn't think it was relevant to the question, so I won't ask you to repeat it. Let me first address what we are going to use this for. Looking ahead three years, we see that there is a major series of events when we receive approval of both the hot flash product as well as the PHN product. And with our stock where it is and with the current capital markets where they are, we felt it prudent to gain access to additional cash. As far as what we intend to do to reduce the interest rate as we go forward, we intend to draw down the last tranche before September. And so, our ability to reduce the interest would be based on whether we want to pay the loan off early, and we're going to have to see how our cash position progresses and how our need for cash changes over time. Let me ask Tammy Cameron to address the prepayment penalties.

Yes. Andy, there is – on this debt facility, there is a 3% to 5% prepayment penalty depending on the timing and there is a 2% unused line fee. Andy Schopick – Nutmeg Securities: Okay. You are going to utilize a lot so that won't come into play here at all.

Right. Andy Schopick – Nutmeg Securities: Okay. Secondly, with respect to the Santarus deal, I was on the Santarus conference call when this was announced and they revealed that the gross profit margin on Glumetza is a very attractive 83%. And obviously under the terms of this arrangement, they are going to capture 70% to 75% of all gross margin dollars associated with Glumetza sales. I just, again, would like to question why management felt it necessary to give away as much of the profit potential associated with any future Glumetza sales because certainly you are a lot further along with that than you are with the Gabapentin situation right now.

Yes. We see that Glumetza has tremendous potential in the diabetes market. When you compare the product profile of Glumetza against Fortamet and you compare it to other products that are available for patients, we think the potential is great. And simply milking the product, letting it sit there and keeping all those revenues to ourselves, we feel would not enable us to maximize the opportunity Glumetza has. We see very significant sales potential. However, that can only be realized with the large sales force, 200 to 300 people that are highly motivated, very aggressive, and significant marketing budget. So, we don't see the $20 million run rate as representative of Glumetza's potential. We see that as the starting point. And the value we see in the product is in the sales increases we expect to see going forward. Andy Schopick – Nutmeg Securities: Once again, my point being that a lot of the gross margin dollars are going to Santarus.

As it has to. If you expect a company to bring forward and focus a 300-man sales force against a product, they have to be reimbursed for that. Andy Schopick – Nutmeg Securities: They are going to be. My only other question here is really getting a sense of what – how one would model this company's revenue potential over the next three to five years because it's still a lot of things have been juggled and changed over the last two years; agreements that were put in place, that were terminated, and so on and so forth. So it’s kind of a work in process and it’s just real hard to get your hands around what the opportunity is going to be here.

I guess a couple of components. Number one, we have plenty of cash. One, I do not see any kind of dilutive financing out beyond 2009 certainly. Secondly, most of the value in the company I feel is focused on Gabapentin, the PHN program and the hot flash program. And I think modeling significant amount of our value around those near-term events makes a lot of sense. I think it's looking to our pipeline products, the omeprazole program certainly has the potential to bring significant product differentiation into a highly competitive market and it has a clinical difference. It's just not a once-a-day product. And now the Levodopa/Carbidopa opportunity has the potential to increase clinical efficacy in an area of high unmet needs. So I would put most of our value on those near-term events. Andy Schopick – Nutmeg Securities: Okay. Thank you.

Thank you, Andy.

And we will move next to Scott Henry with Roth Capital. Scott Henry – Roth Capital: Thank you, and good afternoon. I guess just starting – first, the decision to start the hot flash trial in Q3 versus waiting for a partnership agreement, at least on one of the indications, any thoughts on that? I mean, in theory you could start moving in both trials and a partnership could get delayed and it becomes a heavy investment. Just any thoughts on that process?

Again, one of the reasons we chose to move ahead was that we had a very positive meeting with the FDA, and the FDA are obviously following the women's health initiative looking for to approve medications for the non-hormonal treatment of hot flash. These are two very large studies. And what you need to do is start one, have all of your investigators lined up, everything moving, all the systems tested, and then start a second a month later. And that will allow you an overall quicker update and movement on your studies. If you try to start them both at the same time, you risk even more delays. So we think that the optimum way is to start one in the third quarter and start the second about a month or so later. Scott Henry – Roth Capital:

Scott Henry – Roth Capital: And will there be any escalation in those arms?

No, there won't be. Scott Henry – Roth Capital: Now, if I recall correctly, the Phase 2 trial did have escalation as high as 3000 milligrams. Do you have any concerns that you might have under-dosed this trial? And particularly if you have to – let's say, the 1800 milligrams is a successful arm, is the product less appealing as a twice-a-day product?

No, just to – I’ll take [ph] this question. Just to refer you back to our press release when we announced the results of the Phase 2 study that we did not see evidence of greater efficacy above 1800 milligrams. I would mention to anybody that we will be presenting the data more fully at the North American Association of Menopause in Orlando in September. So, the post will be available on our website immediately after that meeting. Scott Henry – Roth Capital: Okay, that should be helpful. And could you talk a little bit about how the 1200-milligram – I'm just looking at – I believe there was a 1200-milligram once-a-day arm in the Phase 2, obviously less number of patients, but how was the trend in that arm?

That was a positive. The study was a titration study. The 1200-milligram once-daily was only in the first six weeks. So we have to project out the results based on the first six weeks of the study. And they indicate, as Carl mentioned in the briefing, that we should see with these patient numbers not trend statistically and clinically significant efficacy. In addition, this was also associated with very low instance of side effects.

So, Scott, we are really hedging our bets. In other words, we know in the study that the 1800 milligrams b.i.d. works, worked exceedingly well and seem to represent the top of the dose response curve. So that's – I can't say a given, but we feel very strongly about that, as did the FDA. But certainly we would expect once-a-day dosing with the 1200 milligrams to have fewer side effects, and based on what we saw in the Phase 2, to Mike's point, should work based on the larger number of patients in these two trials. As you may recall in the literature, 900 milligrams has worked in a number of trials. So we feel really good about the 1200, but wanted to hedge our bets with the 1800. Scott Henry – Roth Capital: Any reason why you wouldn't hedge with an 1800-milligram once-a-day, given what you have seen in the other trials?

Cost and timing. And frankly, we feel really good about the 1200-milligram dose. Scott Henry – Roth Capital:

Yes. That was driven primarily by the IVAX settlement. So there is royalty coming through just above 300,000 this quarter related to that settlement. Scott Henry – Roth Capital: Okay. And those should continue on?

They will continue on until we hit the $2.5 million cap. It will vary slightly because it's an effective 9% royalty on the sales of Teva’s and IVAX's Glucophage XR. So, it's pretty stable at the moment, but you might see it go up or down over time. Scott Henry – Roth Capital: Great. Thank you for taking the questions.

Thank you, Scott.

That does conclude our question-and-answer session. At this time, I’ll turn the call back over to Carl for any concluding or additional remarks.

Thank you very much for joining us on this call, and I look forward to keeping you apprised of our progress in the coming months. Good afternoon.

This does conclude our conference call for today. We thank everyone for your participation.