Good afternoon. My name is Bruneil and I will be your conference operator today. At this time I would like welcome everyone to the Q3 2008 Amylin Pharmaceuticals' Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remark there will be a question-and-answer session. [Operator Instructions]. Thank you. I would now like to turn the call over to Mr. Michael York, Senior Director of Investor Relations. Please go ahead, sir.

Good afternoon, and welcome to Amylin Pharmaceuticals quarterly update conference call. Today's discussion will contain forward-looking statements that involve risks and uncertainties. These risks and uncertainties are outlined in today's press release and in our recent filings with the Securities and Exchange Commission. Our actual results could differ materially from what is discussed on today's call. Let me introduce the other members of the Amylin management team here today, Daniel Bradbury, President and Chief Executive Officer; and Mark Foletta, Senior Vice President, Finance and Chief Financial Officer. I will now turn the call over to Dan Bradbury.

Thanks, Michael. Good afternoon, and thank you for joining us today. In the face of an increasingly challenging environment for biopharmaceutical companies, in the third quarter we reported strong quarterly revenue, while reducing our operating expenses quarter-over-quarter. We are focused on managing our cash and maintaining a strong balance sheet. In that regard, today we're pleased to announce completion of a product supply agreement for exenatide once weekly in which Eli Lilly and Company will make an initial cash payment of $125 million to Amylin and we will reimburse this for their share up to more than $500 million capital investment in the West Chester, Ohio facility through the cost of goods sold for exenatide once weekly. Additionally, the agreement with Lilly makes available $165 million line of credit, dollar line of credit. This agreement not only demonstrates our close working relationship with Lilly but it also further strengthens our balance sheet and provides us with financial flexibility in the future. We will continue to manage the company towards sustainable, profitable growth and we are very focused on preserving options for the future by conservatively managing our cash. Mark and I will comment on this further later in the call. Now, as we work towards building our diabetes product portfolio we are driving near-term value by growing BYETTA and SYMLIN and bringing exenatide once weekly to market as quickly as possible. With regards to BYETTA as you know in August the FDA updated information on its website about cases of pancreatitis that have been reported with patients taking BYETTA. To be clear we believe that the safety profile and the robust benefits of BYETTA make it a valuable medicine for patients with Type 2 diabetes. However, the FDA update and the associated discussion and media coverage naturally impacted our BYETTA…

Thank you, Dan, and good afternoon. Earlier this afternoon, we announced our financial results for the quarter ended September 30, 2008. We reported total revenue of $218.4 million for the third quarter, which includes net product sales of $201.4 million. Product sales are made up of a $179.9 million for BYETTA and $21.5 million for SYMLIN resulting in third quarter growth in product sales of approximately 14% compared to 2007 an increase of 1% from the second quarter of 2008. Our revenue under collaborative agreements was $17 million compared to $12.6 million for the same period in 2007. The increase reflects higher cost sharing payments from Lilly to development expenses for BYETTA and exenatide once weekly. Cost of goods sold was $23.4 million reflecting a gross margin of approximately 88%. This compares to cost of goods sold of $13.8 million for the third quarter of 2007 and gross margin of approximately 92%. Gross margin decreased year-over-year primarily because of increased discounting, higher production cost for BYETTA and our product mix including the introduction of the SYMLIN pen which has a higher cost of goods sold in the via presentation. Selling, general, and administrative expenses for the third quarter of 2008 were $99.7 million compared to $87.7 million for the same period in 2007. The increase reflects cost associated with the company's expanded field force, investments in market development activities for exenatide once weekly and continued investment in promotional activities for BYETTA and SYMLIN. Research and development expenses were $73.5 million for the third quarter of 2008, compared to $61.5 million for the same period in 2007. The increase primarily reflects higher development expenses for exenatide once weekly. Non-GAAP research and development expenses net of cost sharing payments increased to $57.5 million for the quarter ended September 30, 2008 compared to…

Thanks Mark. Now, I will provide a commercial update starting with BYETTA and then moving on to SYMLIN. BYETTA; is the first and only FDA approved incretin mimetic, a new class of drugs that mimics the action of the human hormone glucagon-like peptide-1. We have marketed BYETTA for more than three years and has been used by approximately 1 million patients. Importantly, BYETTA is the only medicine currently available that addresses the significant unmet need for a Type 2 diabetes treatment that achieves powerful, sustained glucose control with weight loss and a favorable safety profile. As I stated earlier BYETTA prescriptions are resilient in the face of significant environmental challenges. In the third quarter, we saw modest decrease in BYETTA prescriptions compared with second quarter which we believe is mainly attributable to the FDA update. Moving forward we expect sales to stabilize and then grow over time as doctors and patients better understand the facts about BYETTA and are able to better understand the benefit risk profile of the medicine. Today, I am going to report on the sales progress we are seeing as a result of the key market accelerators introduced last quarter. Our enhanced marketing approach and more closely aligned sales organization. I will also detail how these initiatives enabled our response to the FDA update. We believe these factors will drive BYETTA sales overtime and ensure we can effectively launch exenatide once weekly when approved. First, let's take a minute and discuss our response to the FDA update in August. As you know in mid-August the FDA issued an update to a prior alert for BYETTA regarding absurd cases of pancreatitis. To address the FDA alert with our customers, our field sales and medical teams rapidly educated the healthcare community about what the FDA's update meant. In…

[Operator Instructions]. Your first question comes from the line of Thomas Wei from Piper Jaffray.

Just a housekeeping question about the sales for the quarter were actually about better than what the IMS data would have suggested any one time factors there? And then question on pancreatitis I guess I am curious like you are hearing from the seal when you break it down by end dose versus GPs any difference in the reaction there or the challenges that you see going forward and when do you think a reasonable timeframe is to judge the performance of the sales force to better the next quarter are you looking now into a timeframe into 2009? Thank you.

Hi, Thomas, thanks very much for your question. Maybe Mark you could take the first part of Thomas's question and then I'll answer the second part.

Certainly Thomas I think your question was how do we look at the revenue growth of 1% compared to a small decline in scripts quarter-over-quarter. And I think the way you should be thinking about that really is the third quarter did include a couple extra shipping days. So that's really the predominant reason we view it as huge channel inventories as consistent with where they were at the end of the second quarter.

And Thomas just to answer the second part of your question, you are asking about the perception differences between primary care physician and endocrinologist with regards to the FDA alert on pancreatitis. I think at this point what we would say is that with regards to our target audience we're seeing pretty consistent responses with regards to their understanding of the data and impact as I mentioned on my pre-prepared remarks the number of questions relating to this has dropped off considerably and these days actually is a rare occurrence and in core with endocrinologist or a primary care physician. To a point relating to the expanded field force and adjusted marketing strategy that we started in the third quarter certainly the FDA alert was very much a speed bump with regard to our efforts to grow the BYETTA franchise. My expectation is that we will continue through the end of this quarter to see impact from the FDA alert but thereafter we'll be able to grow the product going forward.

Thank you.

Your next question comes from the line of Tom Russo from Baird. Thomas J Russo - Robert W. Baird & Co.: Hi, Dan thanks, for taking the question. Just wondering it's with the noble sweet 6 extension trials seems as if they are setting up to ask not only for new patients but also for patients which is... and I was just wondering if assuming they do make it on to the market next year, what you'll able to do prepared to counter that?

Hi, Tom, thanks for the question. Well, it's difficult for us to judge the likelihood of Lira-glutide making it's the market given that we haven't seen their entire data set. However, I would comment that I think that it's clear that there is significant opportunity in the GLP-1 class in general to grow the market going forward. And so, while so I understand the data that they have presented in lead-6. I do believe that the opportunity really lies in expanding the market both in the GLP-1 area. I would, sort of comment that the lead-6 data is inconsistent with other peer reviewed and published data for exenatide. In previous open label clinical trials abided the range of absolute A1C reduction was greater than was reported in the lead-6 study in being between 1% and 1.5%. And so, as seen stand at the moment, I think we have the opportunity to present a cluster of data, which is significantly greater in volume and also in review, than it's currently available with regards to the lead-6. To the point you made at this time BYETTA is the first and the only FDA approved GLP-1 receptor agonist and another key point is that of course it's been available now for over three years and has a very, very significant safety database having been exposed to approximately a million patients. So these points I think will be important in physicians consideration of prescribing going forward. Thomas J Russo - Robert W. Baird & Co.: Okay. And just real quick I don't know if you will be able to provide this or not but, do you have any sense at this point with regard to the pancreatitis warning language whether it's more likely to be an update within the current section label or more likely to move up towards the top?

Tom, I really can not comment on our ongoing interactions with the FDA. What I would say is that of the leaf is that the posting that the agency made on the -- in the local came out in mid-August language consistent with that is likely to included in our label. Thomas J Russo - Robert W. Baird & Co.: Okay thanks very much.

Thank you.

Your next question comes from the line of Meg Malloy from Goldman Sachs. Margaret (Meg) Malloy - Goldman Sachs Research: Thanks. I guess first quick question Dan you have kind of characterized the FDA alert as a speed bump and indicated that in recent weeks, the questions on pancreatitis has dropped off yet, I don't like you are not expecting BYETTA growth in the fourth quarter am I right in that assumption if I am why?

Hi, Meg. So certainly I mean I was trying to ensure that there was appropriate characterization in terms of the understanding of what the agencies posting was in terms of our overall understanding of the benefit risk profile of BYETTA. In terms of the fourth quarter revenue, I think that it's fair to say that if you look at our guidance that Mark gave out earlier, what we're looking at is fairly consistent revenue quarter-on-quarter from third to fourth quarter. Margaret (Meg) Malloy - Goldman Sachs Research: I guess the question is what is it going to take to grow the product?

I think there is a number of things that are trying to be important in growing a product I mentioned a number in my pre-prepared marks I would step back from just a overall the most important thing I think that's going to enable us to try the product going forward is really greater recognition of the benefit that BYETTA brings to the patients. The unmet medical need is continuing to grow in Type 2 diabetes. And the potential of the plant is increasingly recognized. I do think that going forward that this will be recognized in the way the guidelines have been put together in particular practice guidelines consistent with conversations that occurred at the American Diabetes Associations meeting and also at the European Association for the study of diabetics meeting as well. Clearly we were dealing within the third quarter an unexpected event and that has not enabled us to fully realize the benefits of the sales and marketing changes that we did make at the beginning of the third quarter. Of course various benefits will be I think will stop to have a greater impact inventory... follow at the beginning of the year once we get passed also getting agreement with the agency on the change in the BYETTA label as we. Margaret (Meg) Malloy - Goldman Sachs Research: And thanks that was helpful. If I can just have two quick follow-ups one if what is the expectations about... what are the expectations about guidelines and potential changes and timelines for guidelines? And then separately do you have a sense of the timeline for when we may have more data on the incidents of pancreatitis from a broader database?

So with regards to the first question, unfortunately I don't control the timing of the issuance of guidelines, what I can tell you is that, I know that a substantial numbers of discussions have occurred with regard to guidelines and I would expect to see that some guidelines will be issued in the near future. With regards to the epidemiologic studies that we have undertaken, we are moving as fast as we can to complete all the analyses on those and I expect that during 2009, that we will be publishing data from those epidemiologic studies. Margaret (Meg) Malloy - Goldman Sachs Research: Okay, thanks a lot.

Your next question comes from the line of Matt Osborne from Lazard.

Hi and thank you for taking the question, just a quick one. Could you get a chance to look at the earliest database reporting that was updated this afternoon from the FDA?

We did have a chance to see that Matt. We constantly review those databases and just to say that the database is consistent with what we've previously reported on our conference call last quarter.

Okay. And then just here a quick take, did you see any death facility to pancreatitis due to BYETTA?

Well in FDA update... database there were some new reports that when previously in the database those are consistent with what we previously had reported on the conference call we had last quarter.

Okay, great. And can you remind us in the DURATION trials 1 and through 4, what are the pre-specified cardiovascular data that you are looking at in these trials?

Certainly not yet in the DURATION-1 through 4 studies we are measuring the ends point of blood pressure triglycerides, HDL, LDL and we're also looking at some other additional surrogate cardiovascular endpoints in varying degrees, in different sub sects of populations.

Great. Thank you.

Thank you.

Your next question comes from the line of Salveen Kochnover from Collins Stewart.

Hi, this is Brian [ph] in place of Salveen. The first is can you break up the stock option expenses for the quarter? And second is, can you tell us exactly what the IVIVC data was, that you turned into the FDA and, when do you expect to hear back from the FDA, and the path forward there? And the last one is, what is the latest point you can begin? A bridging study which is sounds like the worst case scenario and still at the filing timeline?

Okay, Hi Brian [ph] yes, Mark, do you want to answer that stock option?

Yes, Brian [ph], I'll take the first one. In the third quarter, we recorded $18 million of stock compensation. Importantly that includes both the stock options and ESOP of plan $11 million in SG&A and $7 million in R&D expenses. And if you want to breakdown of the $18 million, $14 million of that is associated with options and $4 million is associated with the ESOP.

Thanks.

Okay, and Brian with regards to your question about the IVIVC study it's pretty complicated things going to details on a call but just to say that this was a study that we have designed to look at in-vitro test versus a in-vivo finding, the in-vivo finding being looking at PK levels, drug levels that is in man compared with an in-vitro test that we conducted. And what we were able to demonstrate in that study was strong correlation between what we've seen in-vitro versus in-vivo. That data has been submitted, the timing of review of that data was it's really dependant upon the agency we have no control, there is no control over the timing of that study being reviewed. We hope to have response from the agency in the near future. However, I think it's fair to say that we're dependent upon the agencies review cycle for that. With regards to your second... your final question regarding the third path forward as I mentioned on the call that the design of the study would be finalized following input from the agency. So at this time it's not possible to give you a specific time with regards to when and if you would have to start that study. As I mentioned we are pursuing two other strategies and we're confident in those strategies going forward.

Thank you.

Thank you.

Your next question comes from the line of Ian Somaiya from Thomas Weisel.

I will hop in your last comment Dan. Can you talk about the back-up strategies in the event that the IVIVC studies are accepted by the FDA? And now your backup strategy is consistent with any feedback that you might have gotten from the FDA in the second quarter?

So Ian I have to be careful here. Because as I mentioned on the call, we need to be careful about our interactions, that we have with the agency. At this time, what I would say to you is that the IVIVC strategy is consistent with the feedback that we've received... the submission is consistent with expectations relative to feedback that we received from the agency. Additionally, the DURATION-1 crossover study is ongoing and we already have considerable amount of data that is being generated from crossover of patients through previously owned intermediate scaling material and known commercial scaling material. With respect to the need to undertake a new bleaching study at this time, we have decided that is not to be undertaken based on, we are waiting for feedback on the agency are the other key strategies.

And how long, would abridging study take start to finish?

Ian, as I mentioned earlier and in response to Brian's questions is dependent upon... only dependent upon input and further guidance from the agency.

Okay, thank you.

Thank you.

Your next question comes from line of Cory Kasimov from JPMorgan.

Hi, good afternoon guys, thanks for taking the question. First question, I guess is for Mark modeling questions regarding today's supply agreement with Lilly and with that first of all how should we account or how do you plan on accounting for the upfront fees they are going to be amortized over the life of the agreement or is it something that hits the P&L at once? And then secondly with regards to the reimbursement of the significant capital investments you've made and going against COGS is that going to not begin until exenatide once weekly is on the market or that begin going against current manufacturing of commercial material that I assume being rationalized in R&D?

Okay, Cory you had good question. Let me kind of set this up for you. Thanks for the question. I think that it's the highest level I want to make sure you understand this agreement today which is really important for us and Lilly we believe. It essentially compensates at both for the Lilly share of capital that as I said will be reimbursed in cost to goods sold over time. And also compensates us for the cost of that carry that capital over a period of time. And essentially we think getting the payment of approximately $500 million plus overtime is an efficient way to recover that cost because this will be a global facility which we'll provide material for both the United States market and the OUS market as you know there is a differential economics there. So to your second question really we will record that, as we commence product sales as we're recording cost of goods sold. With respect to the upfront and, which is really done mostly to compensate us for the cost of carrying that capital for the $125 million. I think the most important answer to your question is the debit goes to cash and the credit will be deferred on our balance sheet and we believe it'll be recognized over a period of time estimated to be the useful life of -- the estimated life of exenatide once weekly, probably 10 to 15 years through our income statement.

Okay, all right, that's very helpful. And then my next question is for Dan. Going back to this idea of comparability in the timing of the filing and everyone is very focused on getting this done as quickly as possible, but even in the case of the FDA indeed, deems of the IVIVC data is, does sufficiently demonstrate comparability. Are you absolutely going to proceed immediately with your following is there any chance that you would consider holding often till the second quarter anyway to learn from the panel and also be able to submit a more robust 120 days safety update considering that DURATION-3 and 4 at least to that point would be more complete?

Cory I guess sorry Phil, I guess answer to your question would be that it will be dependent of course on the feedback that we get from the agency. I wouldn't speculate on this at this time. Our expectations at this time is that once we do with the feedback from the agency and assuming that would be positive then we would proceed with the filing as quickly as possible.

Okay. And then with the ongoing marketing of BYETTA and you are talking about the questions on pancreatitis have come down, are there any other common genes that are out there anything potential that's new as far as push back principally from the primary care marketplace whether it's the BID dosing or the GI or something that is that's new that's come up that may is another hurdle you have to clear?

Not at this time, no.

Okay. And then lastly I just want to clarify something from the first question that Thomas asked. Mark you said there has been no inventory stocking ahead of the recent price increase if you took?

We really said, was we believe the channel inventory appropriately supports patient demand and it's comparable to the demand that we saw at the end of the second quarter at the levels of days if you will in the channels that what we're talking in the second quarter.

Okay.

We can't try it Cory, if you we do here we characterize that the third quarter did have a couple of extra shipping days.

Thanks Cory.

Okay, all right. Thanks, for taking the questions.

Your next question comes from the line of Phil Nadeau with Cowen & Company. Philip Nadeau - Cowen & Company: Good afternoon. Thanks for taking my questions. The first is actually just a follow-up to the last two, just still I am unclear. If you don't need to do a new bridging study, would you have to change your guidance for when LAR would be filed? Or is the need for new bridging study assumed in your Q2 '09 timelines?

So Phil, I think, so to say that we've assumed in our Q2 timeline the need for bridging study, however the clarity around that cannot be... is not absolute, as we haven't had direct feedback from the agency, with regards to design of that study. And we would need feedback from the agency on the design of the study before proceeding with it. Philip Nadeau - Cowen & Company: Okay, great, that's very clear. And then, my second question is on the timing of the label updates that you mentioned earlier. I believe, what is going to happen at the same time, meaning those, the BYETTA monotherapy label require you and the FDA coming to some agreement on pancreatitis language or is it possible, that you could get the BYETTA monotherapy label and some other updates following that?

Yes, great question. Thanks very much Phil, I think I expect to say that at the moment, our expectation is that the label update would come into single label update. However, it is always possible that the agency might take a different tact and to approach these things independently. However, our conservations have been with respect to the totality of the label. Philip Nadeau - Cowen & Company: Okay. And one last question technical question on pancreatitis and event rates. When you decided the event rate in the past of about one instance per 3,000 patients, what adjustment did you make for under reporting in any of the epidemiological databases that you've used to you know how the adjustments compare to what the FDA itself is doing?

Phil we've just in the past reported the epidemiologic data as we have received it. As it has been reported, we haven't made any adjustments in that regard and we have always been very deliberate and stating the facts of what we absolutely know as opposed to making any predictions. Philip Nadeau - Cowen & Company: Okay. That's very helpful thank you.

Thank you.

Your next question comes from the line of Tom McGahren from Merrill Lynch.

Hi, question for Mark, just on the noticable improvement there on the operational efficiencies. So that do you expect to use of cash to go down I guess going forward but that you talk about enhanced marketing sales opportunities I am just curious as to how you achieved better efficiencies this quarter and specifically what you are going to be doing going forward?

Yes, Tom thanks for the question. I think the way to really answer to that is the way we are looking at the business hard and really driving for efficiency across our business focused on the near-term value drivers which we see is certainly revenue growth and BYETTA and SYMLIN once weekly getting at to market and getting in the market prepared for it. And, focused investments on our obesity pipeline. Comments today regarding future quarters obviously there is only one more quarter in 2008 and I think we're saying as we're increasingly focused on that. As we did throughout 2008 we are adjusting our spending based upon expected revenues and that is our further priority for us as we move through this quarter and into 2009. And certainly, we'll provide you more guidance as to future quarters at our January year end call. I think the message we want to give you with is that we will be reducing the cash use from operations and with the completion of the plant in Ohio. We will also be reducing our capital expenditures in 2009.

Just a quick follow-up. In terms of timing for potentially partnering obesity program what are you thinking there?

Yes, Tom maybe I can answer that question. Tom, we continue to have to conversations with a number of potential partners, both financial and commercial partners with regards to the obesity program. We at this time we haven't provided any statistic guidance with regards to comments. However, I would comment that I believe that is important to when we enter into latest stage of development, where do we partner the obesity programs given the significant expenses involved in those programs.

Okay, thanks a lot.

Your next question comes from the line of William Ho of Bank of America.

I guess just with respect to the agreement with Lilly in the line of credit given your cash position, I guess my question is why now and ultimately how do you manage your business towards breaking even? What's required in terms of sales and cost savings on the operations line, especially since we are seeing growth in BYETTA slowing down as well as having competition coming through where advertised potentially next year?

Hi, William. Yes, so the first part of your question was why now, I believe with regards to the agreement with Lilly and I mean the simple answer to that question is that, we undertook to build this facility. We have an ongoing collaboration agreement with Lilly and this agreement is consistent with that agreement. We undertook to commence the building of that facility earlier and this is really just truing up in consistent with our agreement with Lilly. With regards to--

I other thing I will add because you specifically asked about the credit agreement and I actually missed that I am glad that you did come back to that in my earlier comments about compensating as for the cost of carrying this capital over time. The upfront payment obviously $125 million we received in day and having the availability of the $165 million on an unsecured basis enables us to have additional access to cash and really it was compensation through for the staff that we will not recover the entire cost of the facility for a number of years. And so really in our discussions with Lilly they stepped up and brought up to the table to help make it a fair result for both companies. I'll let Dan answer the second part of your question.

Yes, so William I mean believe the second part of your question is really asking about guidance for the future and at this point we have only guided for this year. We don't provide long-term guidance of the type that you are asking about. What I would say is that we recognize that our environment is going to be increasingly challenging going forward. And as I mentioned in my prepared remarks Amylin our goal is clearly to be a sustainable and profitable company. And that I did mention that we would further evolve our business model to be more flexible enabling us to maximize the market opportunities that we have and clearly a market opportunities to grow BYETTA and to grow SYMLIN as well as to accelerate the submission of exenatide once weekly so that, we can start generating revenue from exenatide once weekly going forward. We will need to be flexible in our approach to our business model, dependent on a wide range of different factors, that will affect our business going forward, including the timings and the nature of potential competition, which you indicated. So I would just say at this point, we continue to be very focused on this, we have made operational efficiency moves in this last quarter and we will continue to do that going forward to give ourselves the maximum numbers of options to become a profitable company in the future.

Okay, thank you.

Thank you.

Thank you. We have reached our allowed time for questions. I would now like to turn the call over to Mr. Dan Bradbury.

Well just a few final remarks to say thank you to everybody for being on the call today. We appreciate your time and interest in the company. If there any additional questions, please contact Michael York in our Investor Relations department. I would finally finish by commenting at Amylin, we remained focused on driving BYETTA and SYMLIN growth and accelerating the NDA submission for exenatide once weekly. Thank you again for your interest today.

This does concludes today's conference call. You may now disconnect. .