Good day ladies and gentlemen, and welcome to the Q1 2010 Amylin Pharmaceuticals Inc. Earnings Conference Call. (Operator instructions) I would now like to turn the call over to Mr. Michael York, Senior Director of Investor Relations. Please proceed sir.

Good morning and welcome to Amylin Pharmaceuticals' quarterly update conference call. We have uploaded a presentation to accompany this conference call that provides additional background on the quarter. Today's discussion will contain forward-looking statements that involve risk and uncertainties. These risks and uncertainties are outlined in today's press release, the website presentation 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; Mark Foletta, Senior Vice President, Finance and Chief Financial Officer; and Vince Mihalik, Senior Vice President, Sales and Marketing and Chief Commercial Officer. I will now turn the call over to Dan Bradbury.

Thanks Michael and welcome to our first quarter call. This morning our comments will build on the press release issued earlier today. In a few moments Mark will provide additional details on the quarter’s underlying financial results and comment on our outlook for the rest of 2010. Vince will then review our commercial activity for the quarter and highlight our plans for the remainder of the year. At the beginning of the year, I laid out for you four areas of focus for 2010 that we believe will help maximize shareholder value. I will now provide a brief update on our progress during the quarter as it relates to those goals. First, we remain focused on driving revenue of our existing products. We did not meet our expectation for revenue generation in the first quarter. We will, however, continue to aggressively promote the benefits of treatment with BYDUREON and SYMLIN that have been established over the past five years. Second, we intend to successfully launch BYDUREON while continuing to build on our clinical superiority strategy. In mid-March we received a complete response letter from the FDA regarding the new drug application for BYDUREON. The receipt of a complete response letter means our product can be approved after the agency’s outlined concerns are addressed. So importantly we have a clear path forward. We have been working closely with our colleagues at Lilly over the past few weeks to prepare our response, and consistent with our prior guidance we will be submitting it this week. We are also pleased to note that our marketing authorization application for BYDUREON has recently been submitted by Lilly to the European Medicines Agency. We are excited that BYDUREON may soon be a treatment option for patients and physicians in this growing market. Third, we plan to…

Thanks Dan, and good morning. Earlier this morning we announced our financial results for the quarter ended March 31, 2010. As Dan mentioned and we have discussed in previous calls, we are managing the business with operational discipline and are focused on generating sustainable positive operating cash flow and maintaining a strong cash position. Our measure of operating cash flow is non-GAAP operating loss, which in the first quarter was $3.8 million, an 81% improvement from a loss of $19.9 million in the first quarter of 2009. In 2010, we are continuing to efficiently manage our business and remain on track to achieve sustainable, positive operating cash flows by the end of this year. Total revenues decreased in the first quarter $174.1 million from $180.4 million, and our gross margins remain strong at 88%. Our operating expenses were $118.5 million in Q1, consisting of $76.7 million of selling, general and administrative expenses and $41.8 million of research and development expenses. This represents an overall $15.8 million or 12% reduction from expenses of $134.3 million in the same quarter in 2009. This reflects the continued benefit from efficiencies we have incorporated into our operating model. We ended the quarter in a strong financial position with $598 million in cash and investments. We remain well positioned to execute our business plan. For further details regarding our financial results reported today, please refer to the presentation available in the investors section at our company website. I would know like to make a few additional comments comparing the first quarter of 2010 sequentially to the fourth quarter of 2009. BYDUREON sales were down $13.9 million sequentially or 8%, which is consistent with the decline in prescriptions during this period. SYMLIN sales were up $1.8 million or 9% sequentially, despite a 7.5% decrease in prescriptions.…

Thank you Mark. The Amylin sales and marketing organization remains focused on our day-to-day business, driving revenue for our currently marketed products BYETTA and SYMLIN and preparing for the launch of BYDUREON. I will start with BYETTA. As a reminder, BYETTA is the first FDA approved GLP-1 receptor agonist available on the market. BYETTA addresses specific (inaudible) benefits of powerful glucose control with potential weight loss, supported by a lower risk of hypoglycemia. Sales were down 8% quarter over quarter reflecting a 7.7% decrease in total prescriptions for the quarter, but overall prescriptions for the diabetes market remained relatively flat. The performance of BYETTA during the quarter did not match our expectations. However, though sales were down quarter-over-quarter, we observed some intriguing dynamics in the diabetes market during the first quarter of 2010. Since the launch of our first competitor in the GLP-1 receptor agonist class, we have seen signs that the class is returning to growth. In fact the new to brand [ph] prescription data indicates that the GLP-1 class has grown by more than 60% over the past eight weeks. During this time we have not seen a major impact on new prescriptions for BYETTA. We see this as a clear sign that the market is willing to adopt new entrants into this interesting class of therapies, a sign that bodes well for the launch of BYDUREON. Along with the well-established safety and efficacy profile of BYETTA, we offer a highly favorable level of access with managed care plans. Following the approval of BYETTA for use as a monotherapy, we continue to maintain 85% tier Amylin Pharmaceuticals access, having reduced the number of step-edits by over 40%, and expect to further reduce the remaining step-edits as we move through the year. Now let us move on to SYMLIN…

Thanks Vince. I will just add a few more updates before we close. In the third quarter of 2009, we announced the partnership with Takeda to co-develop and commercialize obesity medicines. Now that we have completed the phase 2 studies for pramlintide/metreleptin and davalintide, we have reviewed the data with Takeda and made the decision to advance pramlintide/metreleptin into phase 3 clinical studies. During the fourth quarter of 2009, we also completed a phase 2 study of davalintide, a second generation analog of Amylin, for the treatment of obesity. In this study the weight loss efficacy and tolerability profile of davalintide were not improved over pramlintide, and were inferior to that of pramlintide/metreleptin combination. Based on this information and as part of our co-development and commercialization agreement with Takeda, we have decided to halt further development of davalintide at this time. There is an enormous unmet need for therapies that could help reduce the individual and society [ph] burdens associated with the rampant obesity epidemic. Making the decision to advance the pramlintide/metreleptin combination into phase 3 clinical studies is an important step towards bringing such a therapy to patients. Now as we enter the second quarter of 2010, I would like to quickly preview our presence at the American Diabetes Association scientific meeting that will be held June 25 through June 29 in Orlando. Once again, we are planning to have a significant scientific and commercial presence at that meeting. I'm pleased to announce that we have had more than 20 abstracts accepted at the meeting with several additional studies submitted as late breakers. A preliminary list of abstracts and other activities at ADA will be posted to our corporate website when available. Of particular note, please mark your calendars for a web cast of our annual investor reception on…

(Operator instructions) Your first question comes from the line of Jim Birchenough with Barclays Capital. Please proceed.

Yes, hi guys. I'm just wondering if you can update us on any discussions you might have had with FDA since receipt of complete response letter, and then just based on you know, discussions you had with the agency with Lilly and internally, what are your expectations in terms of the black box on the label finally, and then class 1 versus class 2 designation for your response. Thanks.

Hi Jim, good morning. Thanks for your questions. So I will try and get all of them down. So firstly with regards to discussions with the agency, we did have a number of discussions with the agency since the receipt of the complete response letter, and as such I think it's fair to say that we remain confident in the response that we'll be submitting to the FDA later this week in terms of addressing the questions that were raised in the complete response letter. The second part of your question with regards to the label, I will just say that the label hasn’t been finalized. You know, as we have communicated previously based on the data available there does appear to be differences across compounds in this class. I would also note that we are aware of the agency's public comments and you know, since we are in discussions with the agency at the moment, it wouldn’t be appropriate for me to comment on what may or may not be the outcome of those discussions, but I would stress to everybody that we do want to make BYDUREON available as fast as possible to patients. You know, the good news is that we do have a clear path forward. We will submit our response this week. We are going to continue to work with the FDA towards the goal of getting BYDUREON approved, and you know, given the profile of BYDUREON Jim, I know you're as excited as I am about the fact that we are seeing such tremendous efficacy with the product and being dosed just once a week. I think it gives us a real opportunity. The third question you had I think was with respect to whether you expected – we expect the agency to designate a class I or a class II response. That is a designation that they, you know, determine and so as such we are not in a position at the moment to comment. I would add though that we have worked to minimize the work that would be required by the agency. That having been said you know, it's one of those things that they have the final say on that.

Great. Thanks for taking the questions Dan.

Thank you Jim.

Your next question comes from the line of Yaron Werber with Citigroup. Please proceed.

Hi good morning. This is Navdeep filling in for Yaron. Since the launch of Victoza have you seen any, you said that you've seen growth in the GLP market. Do you expect – can you find more qualitative background on that, and also on BYETTA inventories, how do they look at end of Q1?

Thanks Navdeep. I'm going to ask Vince to respond with regards to GLP-1 market, and then Mark maybe in response with regards to inventories.

First of all, let's look at in terms of looking at the GLP-1 market, it's a little early to tell what's going to happen. We are seeing, as I commented, 60 % growth in what our new to brand prescriptions. These are patients who are naïve to the therapy, it's not a Repeat NRx [ph], but they are ones we haven't had an NRx in the last 12 months, and from that we believe the GLP-1 class is clearly growing. As I commented, the competitor’s growth is strong and following pretty much the BYETTA uptake curve. So overall the growth of the competition is in line with our expectations, and I would also say that their growth is stronger than the BYETTA losses we've seen to date. So it's clear that the market, the GLP-1 market is growing a little bit in terms of the overall diabetes branded market.

Yes, and the second question Navdeep, with respect to wholesaler inventories for BYETTA, as we said in the past there is a range of normal wholesaler inventory levels and as you know, quarterly fluctuations are expected, but based on our analysis, the wholesaler inventory levels do appear to be down slightly from the levels observed at the end of the fourth quarter. You know, importantly we believe wholesaler inventories are adequate to meet patient demand, but we do believe they are probably towards the lower end of the range that we’ve seen historically with BYETTA. Thank you.

Okay, and a quick follow-up. Taking into account BYDUREON’s better convenience versus available GLP-1s, what's your pricing strategy for it especially compared to Victoza?

Yes, thanks Navdeep for the question. So we are going to determine the final pricing strategy once we have a final label from the agency, and we can make a determination of the appropriate relative benefit for the product. I think, one of the things that would be clear, it is important though to stress is that we will clearly maximize the value of the molecule once we are in the possession of a final label from the agency.

Okay, all right. Thank you.

Your next question comes from the line of Thomas Lee [ph] with Jefferies. Please proceed.

Hi, thanks. I know back on March 15th when you got the complete response letter, you said that it would be submitted in the next few weeks. Can you let us know what the rate limiting step has been in the resubmission, it has come a little bit later than I think most of us would have thought?

Well, Thomas I’d just say that we believe we are on track from what we guided as I mentioned in our previous remarks. So certainly I think it's within the range that we expected that we would be submitting. One of the things that has occurred during the time since we received the complete response letter, as I mentioned previously, we have had a number of interactions with the agency. So, one of the things that we've been trying to do is ensure that everything that we summit to the agency is in complete accordance with their expectations.

And on the guidance for a positive operating cash flow by the end of the year, is that too independent of the $40 million milestone from Lilly?

Yes Thomas, I think it's important, this is Mark here. It's important to remember that we are putting a significant amount of costs in our Ohio facility into the R&D line through this year. So, certainly as we move those into inventory and ultimately obviously into cost of goods sold, we will see continued improvement in our income statement. So, yes, you know, we believe the business is really operating as you can see from two of the last three quarters relatively close to neutral at the non-GAAP line, and that is in the face of segment investments we were making to prepare for the launch of BYDUREON.

And on the R&D line, as we go forward over the course of the year, how should we expect that change for the second quarter and into the second half of this year?

Yes, Tom this is a good question. As you have noticed over the last few quarters, the R&D line has been somewhat lumpy. We did decrease sequentially about $8 million from the fourth quarter. As we said in the prepared remarks, that was associated mostly with the timing of manufacturing readiness activities at Ohio. Primarily, I think that was inventory components, not really the level of effort to prepare the facility for launch, and manufacturing activities will continue to drive variability over the upcoming quarters. So it is a little difficult to predict the exact amount. Just know that the base efforts that are underway in Ohio are continuing and that the expenses associated with all the DURATION programs and the cardiovascular study that will be commenced very soon here. We are in preparation to that as you know, we will continue to create some variability within the research and development line.

Thanks.

Thanks Thomas.

Your next question comes from the line of Cory Kasimov with JP Morgan. Please proceed.

Hi, good morning guys. Thanks for taking the questions. My first one I guess is for Vince, and going back to your comments on the market dynamics within the GLP-1 space, now that Victoza is available, and this new to brand growth you mentioned, are you seeing uptake among primary care docs at this point or is this primarily among specialists as was the case with the launch of BYETTA?

Go ahead Vince.

First of all Cory, yes, we are seeing uptake among primary care physicians. In fact if you look into the data, above 50% of the scripts roughly are coming from endos [ph] and about 50% from primary care physicians, but as a percentage of the class obviously far more endos are writing than PCPs, and secondly the PCPs we do see writing tend to be the ones, (inaudible) are more likely to adopt new brands.

Okay, and then I guess the next question may be for Mark. I'm wondering how soon after the BYDUREON’s approval in Europe, do you expect to begin recognizing royalties, are the thresholds there the same for what you have with BYETTA?

Yes, I think it's important to remember that the threshold was really tied to the exenatide molecule. So we are really proceeding towards that threshold with BYETTA, which has been on the market for a number of quarters as you know in Europe. So we’ve guided that we expect to hit that threshold either late this year or into 2011.

There is nothing that resets with BYDUREON?

Absolutely not. No, it's really tied to a cumulative threshold for the entire molecule.

Okay, great and then my last question is on the once monthly formulation of exenatide, is there anything you can offer on the initial data or studies you’ve done that prompted pushing this into phase 2 and I guess if the ongoing development is indeed successful what might clinical timelines look like for this product?

So, Cory with regards to I guess what we can offer, I mean just to say that last year we completed an initial proof of concept study using the suspension formulation. It was really based on the pharmacokinetics that we saw in that study that we believe that we could now develop a once-monthly formulation. Looking at both the release profile, but also the variability around the release profile was key to that. I guess with regards to what the development plan would be going forward, it is going to be very much subject to the outcome of the study that we are commencing this quarter. That having been said, I think you should expect that we would be pursuing a follow on regulatory strategy similar to the regulatory strategy that we've pursued with BYDUREON.

Okay, great. Thanks for taking the questions.

Thank you.

Your next question comes from the line of Catherine Arnold with Credit Suisse. Please proceed.

Hi, good morning everyone. I wanted to – I have a follow-up on the once-monthly form and I also wanted to ask you about your CV outcome study. On the once-monthly form, could you just clarify, you said that enrollment – you said enrollment will commence this quarter. So am I to infer from that that you don't need to wait for the approval of BYDUREON to begin the enrollment there?

That's correct Catherine. We have submitted an IND for the once-monthly formulation. So the first patient visit is scheduled later this quarter.

And do you know when you'll be able to give us more information on the characteristics of this particular form. Is that going to be an ADA update along with your sort of rollout of what else is happening at ADA?

Actually, at this time we don't have any plans for characterization or any data from the suspension formulation to be presented at ADA this year. I expect that probably once we've completed this study that we’ll be providing more characterization of the formulation.

Okay, and then another question on the CV outcome study, it seems that the enrollment was expected to be 12,000 patients and now it's down to 9,500. I just wanted your comment on the original target for 12,000 was set for the very early days trying to think through you know, what might be very conservative numbers versus what you're seeing in terms of your experience of the product with clinical studies, and I noticed that you're not changing your guidance on when the study will report out, but I would imagine that even though that you're probably a little delayed here as you mentioned earlier, your enrollment will be down much sooner. So I'm wondering if the guidance for 2016, completion of this study might be conservative and then how should we be thinking about the R&D costs longer-term with you progressing on such a big study with 20% reduction in patients?

Right. So, yes number of questions there. First, you are absolutely right. With regards to the change in the study sites that was really driven by further analysis looking at the power required for the study, and on the completion of, you know, more duration studies we were able to have greater precision in the determination of that study sites. With regards to your question about the completion timing, there is obviously you know, a fair amount of flexibility around that. You know, the study completion is actually going to be event driven. So that's very much an estimate, and so at this time that estimate is really not changing, and it's not that sensitive, I would say that estimate is not that sensitive, you know, quarter versus quarter. We do expect to receive feedback from the agency on the CV outcomes study protocol, the EXSCEL study protocol in the near future and that should enable us to initiate first patient visit very soon thereafter.

And I will just comment on your last question Catherine, with respect to longer-term R&D, I think you should think of that as us continuing to invest in the exenatide lifecycle management as the CV outcomes study does pick up other activities though will wind down. We don't see over time significant increases in our investment in the exenatide franchise overall in our research and development over the longer-term.

Thanks.

Thanks Catherine.

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

Thanks for taking my questions. You know, since you've been monitoring the Victoza launch and the effect of BYETTA, how do you intend to position the sales force to endos versus PCPs and the marketing message here for BYDUREON?

Hi Salveen, I'm going to ask Vince to take that.

Salveen, obviously we made changes into our footprint last year, and Lilly made changes in their footprint in the fourth quarter. What we attempted to do with those changes were to build deeper relationships with endos and physicians, and also with patients through our BYETTA By Your Side program. So our focus is really on building and establishing those kinds of relationships to make sure that we will have the right connections. And I would say that you know, those footprints we have today now covers more than 50% of the branded diabetes business in terms of the doctors who prescribe. The other 50% obviously you know, in a concentration curve goes over 100,000 plus doctors. So we think we are focused on absolutely the right doctors to launch BYDUREON.

Okay, and then just in terms of pramlintide/metreleptin can you maybe describe the design of the phase 3 trial?

Actually Salveen, at this time we haven't finalized the design of the phase 3 studies. We are conducting additional studies that will enable those designs to be finalized later on this year.

Thank you.

Your next question comes from the line of Josh Schimmer with Leerink Swann. Please proceed.

Great. Thanks very much for taking the questions. First of all, on the gross margin commentary on BYDUREON, can you give us a sense what the gross margins are going to be before and after the autoinjector introduction, what does the autoinjector contribute?

Hi Josh. Just a couple of comments there. So the comment that was made by Mark with regards to gross margin, he was really commenting about the fact that at the time that we would introduce BYDUREON in the custom dozing kit that has been designed for the launch of the product, obviously we will be incurring significant costs that will be charged as a result of the fact that it is a brand-new facility against the cost of good to the product. That will decline over – those will decline over time as volume increases. That is not related to the introduction of the BYDUREON pen.

So, once you have the pen and the initial inventory has been worked through, where do you expect gross margins on BYDUREON to wind up?

Yes. Josh, what we have said is that we really believe the minimum target for margins is 75%. Obviously we would look to improve it as we can, closer to 80%. I think you need to remember a couple of things. One, we do have a drug delivery partner there with a mid-to-high single digit royalty that will be booked through the cost of goods line. So that is one difference with respect to BYETTA. And as Dan indicated and I indicated in the prepared remarks, we have the plant early on, where we will have – we won't have the economies of scale. But we do expect to drive towards margin in that greater than 75% to 80% range.

Okay, great. And then your partner Eli Lilly took a bit of a hit on healthcare reform on the top line, and on the bottom line as well, was there any impact first of all for you guys in the first quarter, and what do you expect the healthcare reform effect on Amylin to be for 2010 and beyond?

Yes, sure Josh. We certainly have modeled all the new legislation, as all the companies did. The impact in our first quarter was really not significant and relates primarily to the expansion of Medicaid discounts. As you know, importantly the provisions of healthcare reform will be implemented over time, and we do expect greater discounts to the government in the future. Importantly though this new legislation was contemplated in our business plans, and really not an obstacle to our achievement of our stated business goals that we put forth. Obviously this is something we will continue to watch as we go forward. But I want you to know that this is something we really considered and is within our expectations thus far.

Okay, great. And then may be one last quick question on the Leptin lipodystrophy filing, what is the basis for the filing, what are you going to be submitting to the FDA, what have you discussed with the FDA in terms of the application, and maybe you can talk as well a little bit about the commercial opportunity there?

Yes, thanks for the question Josh. So, our plan is that later this year that we would submit the clinical section of the NDA, followed next year by the CMC section. The basis of it is the studies that have already been completed in patients with severe lipodystrophy, a number of which have been published, particularly some major work is being done by the NIH in this regard. And showing absolutely remarkable effects in people with severe lipodystrophy with complete reversal of the disease in some cases. So we are actually very excited about it. In terms of – I'm excited in terms of making it available to people who really have no other effective treatment option. The population that we are talking about is a relatively small population, estimated in the United States to be somewhere between 500 and 1000 people with severe lipodystrophy, And as such it qualifies as an orphan drug designation, and indeed we already have that designation for metreleptin.

Okay, great. Thanks very much.

Your next question comes from the line of Ian Somaiya with Piper Jaffray. Please proceed.

Good morning guys. It's just a question for Vince, on the Victoza launch, just curious, you know, what type of qualitative feedback you've got in terms of physicians’ perceptions of the black box warning, you know, how much of a hindrance or road block is that for their adoption of Victoza, and how meaningful of a competitive advantage would it be for BYDUREON not to have that.

So, thank you Ian for the question. I think we – the doctors’ responses have been pretty much a normal response curve. There are certainly early adopters who are not concerned at all about the thyroid c-cell warnings given the fact that they’ve been seen in rat models, and not in humans and at the other end you can expect that there are physicians who are concerned about the long-term safety of patients who may consider this a kind of a wait and see, how scripts go over a period of time. So I think we are seeing what we would have expected to see that there is a variety of different responses in the marketplace. Based on the way you see scripts being written, clearly endos don't have as strong a concern and certainly a good portion of the PCP market doesn't seem to have as much of a concern and then obviously if there were – if we see in the future a different label for BYDUREON that would certainly have a possible effect.

And just a question on BYDUREON, I know you're not speaking to the pricing of the drug yet, but as we look at the market opportunity, you know, what portion would you attribute I guess longer term to sales coming from the endocrinologist community versus the primary care physician community, and is there any price sensitivity in the primary care market that may be we’re not, we shouldn't expect on the endocrinologist side?

Harder to say. First of all our final pricing decision has been made as you know, and Dan has commented just previously and it's always a balance between access scientific value utilization of the drug and price. So we'll have to balance all of those once we have a final label, and we can work that into our thoughts and certainly come up with a price. Keep in mind though that based on the DURATION series of clinical trials, we do show that BYDUREON provides value over current therapies, and that would give us some sense to maximize the value of the molecule.

Okay, thank you very much.

Thanks Ian.

Your next question comes from the line of Craig Gordon with Cowen & Co. Please proceed. Craig Gordon - Cowen & Co: Hi, good morning. Thank you for taking my questions. Just two of them, first on the obesity program, so I know you guys are saying you're hoping to finalize later this year. So is starting the trials a year-end event or is that more likely to begin in 2011?

More likely to begin in 2011 Craig. Craig Gordon - Cowen & Co: And then second on R&D and SG&A, can you just break out for us non-stock compensation for those lines?

Yes, one second, let me just get that in front of me here. It's here one second. Okay, it is for the quarter $9.3 million to SG&A and $6.2 million to R&D, $15.5 million total. Craig Gordon - Cowen & Co: Thank you very much.

Thank you.

Thank you. Appreciate it.

This concludes the question-and-answer portion of today's conference call. I will now like to turn the call back over to Dan Bradbury for any closing remarks.

Well, as always thank you for your interest and for your questions. We have a huge opportunity here at Amylin to continue to advance our mission and discovering, developing, and commercializing medicines to improve the lives of patients, particularly those with diabetes. Additionally, I'd like to further reinforce that our leadership team and the many dedicated employees of Amylin remain focused on both building the business today, and laying the necessary foundation of success for tomorrow. If you have any additional questions please call Michael York, the head of our investor relations team after this call. Thank you.

Thank you for your participation in today's conference call. This concludes the presentation. You may now disconnect. Good day.