Welcome and thank you for standing by. At this time all participants are in a listen-only mode. After the presentation we will conduct a question and answer session. (Operator Instructions). Today's conference is being recorded. If you have any objection you may disconnect at this time. And I will turn over the meeting to Mr. Michael Watts. Mr. Watts you may begin.

Thank you Kelly and good afternoon everyone. On behalf of Hank Nordhoff, Gen-Probe's Chairman, President and CEO and Herm Rosenman, our Senior Vice President of Finance and CFO, as well as the rest of the Gen-Probe's team, I am pleased to welcome you to this conference call to discuss our second quarter 2007 business results. A press release announcing our results was issued today just after 4 pm Eastern Time and is posted on our website at www.genprobe.com. In our call today, Hank will first provide an overview of our top line performance in the quarter. Herm will review our detailed results and updated guidance, then we'll take your questions. Before we begin, let me first review our Safe Harbor policy. Forward-looking guidance, financial or otherwise, is only provided on conference calls or in our press releases. Any statements in this conference call about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and are forward-looking statements. These statements are often, but not always, made through the use of words and phrases such as believe, will, expect, anticipate, estimate, intend, plan, foresee, could and would. For example, statements concerning 2007 financial guidance, financial condition, regulatory approvals and timelines, possible or assumed future results of operations, growth opportunities, industry ranking, and plans and objectives of management are all forward-looking statements. Forward-looking statements are not guarantees of performance. They involve known and unknown risks and uncertainties that may cause the actual results to differ materially from those expressed or implied. Factors that might cause such differences include, but are not limited to, those discussed in our SEC filings including our report on Form 10-K for the year ended December 31, 2006 and all subsequent periodic reports. Copies are available on our website at www.sec.gov and on request from our IR department. Gen-Probe assumes no obligation and expressly disclaims any duty to update any forward-looking statements to reflect events or circumstances after the date of this call or to reflect the occurrence of unanticipated events. With that administrative detail out of the way, I will turn the call over to Hank Nordhoff, Gen-Probe's CEO.

Thank you, Mike and good afternoon everyone. I'm very happy to report that in this milestone quarter, the 20th since our spin off from Chugai, Gen-Probe posted excellent results. We set new records and exceeded expectations across the board, in product sales both clinical diagnostics and blood screening, in total revenues and in earnings per share. As a result, we are again raising our financial outlook for the year. In addition, we secured at long last U.S. regulatory approval of our TIGRIS instrument for use for the PROCLEIX ULTRIO assay, while we still need to complete the hepatitis B yield study, this approval represents another key step on the path toward realizing the full commercial potential of this product and we made an important strategic progress in our PCA3 prostate cancer program. I'll tell you more about that in a minute, but first let me review our top line results for the second quarter. Product sales were $93.9 million representing 21% growth compared to last year and also rose on a sequential basis for the 18-time in those 20 quarters, as a public company. This robust underlying product sales growth combined with some additional timing related upside in non-product revenues that Herm will discuss, enabled us to post total revenues of $101.3 million up 19% compared to the second quarter last year. Total revenues even increased sequentially compared to the first quarter of this year which you will remember included a $10 million payment from Bayer and partial settlement of our patent infringement lawsuit. On the bottom line, net income grew to $27 million in the second quarter up 103% compared to last year. This translated into earnings per diluted share of $0.50, exactly doubled last year's performance. As a reminder net income and earnings per share in the quarter…

Thank you Hank and good afternoon everyone. As described in our press release Gen-Probe had a very strong second quarter. Product sales grew 21% compared to the same period in 2006 despite a tough comp in clinical diagnostics and also increased on a sequentially basis establishing another record. Total revenues rose 19%, and even exceeded our first quarter performance, which included $10 million legal settlement from Bayer. On the bottom line, earnings per share doubled to an all time high of $0.50, with a previously disclosed tax settlement contributing $0.16 of that. Hank, already discussed product sales. So, let me turn to collaborative research revenues, which were $5.8 million for the second quarter of 2007, down from $6.4 million a year ago. This decline resulted primarily from the reclassification of West Nile virus revenues into product sales. On the other hand, Collaborative Research revenues were higher than expected in the quarter based primarily on our recording $2.4 million of revenue from Chiron, related to previously incurred ULTRIO and West Nile virus assay development charges. We have been negotiating these catch-up charges with Chiron for a while, and are pleased that we've reached agreement during the second quarter rather than later in the year. In addition, we booked $1.4 million of revenue associated with the prostate cancer research grant we received from the Department of Defense during the second quarter. We expect revenue reorganization from this grant to conclude in the back half of this year and the remaining amount of the grant has been incorporated into our guidance As you think about modeling Collaborative Research revenues for the second half of the year, it's important to realize that this second quarter upside, essentially post forward revenue from the third and fourth quarters. Said another way, are recording revenue earlier than…

Thanks, Herm. We are happy to take your questions now. For Q&A, we are joined by Bill Bowen, Senior Vice President and General Counsel; Steve Kondor, Senior Vice President of Sales and Marketing; Lynda Merrill, Vice President of Industrial Relationships; Harry Rittenhouse, Senior Director of Cancer Research and Kevin Hardy, Senior Director of Finance. Carl Hull, who is our Executive VP and Chief Operating Officer is out of the office today and couldn't join us. In order to ensure broad participation in the Q&A session, please be courteous and limit your questions to one plus a follow-up, then jump back into the queue. Operator, we are ready to take the first question.

Thank you. (Operator Instructions) Our first question is from John Wood of Banc of America Securities.

Thanks. Hi, understanding fully its early in the PCA3 plans, can you offer some broad estimates on the cost of our pivotal trial as well as its potential duration?

It's tough to do that John, because any degree to credibility but looking at some of the other studies that have been done, its probably going to cost $2 million to $3 million and take two or three years to get it approve, ready for launch.

Okay. And if you proceed according to your internal plans, when can we anticipate that would start or that's trial?

You anticipate, we haven't finalized yet John, I can make that perfectly fair we've got some other data to collect. And we haven't had the [federal] discussion with the FDA and we want to make sure about reimbursement and things like that. But I would say that it will start in the very early part of next year.

Okay. Thank you.

You're welcome, John.

Sara Michelmore of Cowen and Company. You may ask your question.

Yes. Thank you. I did see in the press release, there was an update on the ULTRIO post-marketing study in that you had not detected any yield but just Hank, could you just update us in terms of where that trial is, how many sites you have up been running, how far you think you are through the process?

We have three sites. We've looked at -- how many specific Mike?

I think we've done about 100,000 samples thus far in the study three sites as Hank said. We got some interest from some additional sites particularly as a piggy back on the TIGRIS approval with ULTRIO earlier this year. The fact that we haven't seen yield yet is frankly to be somewhat expected given distinct a lot that we've kind of seen in Europe and other parts of the world.

Okay. And could you give us some update, I know you mentioned in the last call that ARC was continuing investigational study and now that you have the TIGRIS approval in hand. Can you give us an update in terms of their plans?

Really nothing has changed there since the last call. We haven't finalized anything, they still appear to be very interested.

Okay. And just my last question in terms of HPV I know that you were working to finalize the trial design for that product. Can you just give us the quick update in terms where you are with that program? Thanks.

Do you say HPV?

HPV, yes.

Yes sir. This is Steve. We are still towards the end of the year, beginning that study clinical, that clinical study so we are tracking forward.

Great. Thank you.

Thanks, Sara.

Quintin Lai of Robert W. Baird. You may ask your question.

Good afternoon. This is actually Matt for Quintin. Congratulations on a good quarter guys.

Thanks Matt.

Just a question kind of on blood screening, Could you give us some color on how adoption has gone outside the U.S. specifically kind of with ULTRIO?

We can give you some color on. I rely heavily of course on Chiron and Novartis, but we had a pretty strong quarter both on as Hank mentioned in shipment revenue. So, was a strong PROCLEIX and ULTRIO, particularly ULTRIO ex-U.S. quarter that was very strong as well as West Nile virus and increased pricing, so both of those things contributed to an excellent quarter in blood screening. I think the one thing that was a little surprising to us is also as Hank mentioned in the prepared comments was the level of shipment revenue particularly of ex-U.S. ULTRIO, but that’s Chiron ordering pattern issue that we don’t have complete visibility over.

Matt, if you talking about ULTRIO versus the Duplex, it appears just from what I am seeing that most of the new businesses is ULTRIO specifically in Asia-Pacific.

Great, thank you guys for the color. And then just finally the follow-up being, have you guys have any update on any discussions with potential customers in the U.S.?

Not that I am aware of. We have such a large share right now its tough to get new customers, but we would again recommend talking to Chiron and Novartis and they are still connected.

Bill Quirk of Piper Jaffray. You may ask your question.

Hi, guys. Thanks, two questions. First is, concerning the increase in shipment revenue for PROCLEIX and ULTRIO. Thanks for the U.S. color, but can you tell us, Hank with any of the, I guess inventory adjustment if you will, I guess was it an inventory adjustment or do you see any stock piling by Chiron for the U.S. side of the ULTRIO launch?

Hey Bill, I think there was a little bit of U.S. shipment in connection with the yield study.

Okay, but nothing from a customer standpoint or tough to pass out?

I think that it is pretty tough to do that. We see from our standpoint and from our forecast that the inventories level fluctuate a little bit. Based on their forecast, they probably don’t see much fluctuation. So, it’s difficult to get a good firm grip on that.

Understood. Second question, actually goes back to the earlier PCA3 questions. I guess the specific [share guess] is, are we running any studies or for them that we are the only the partners who are running studies that are looking at the other assays you have IP2 other than or perhaps in conjunction with PCA3?

Let me propose it, and then I’ll ask Harry to come in and correct what I am about to say. We do have some studies on our additional markers. There is a huge amount of excitement over TMPRSS T2 for therapeutic is possibly also for diagnostics use and Harry will give a little more color on that.

Yes, that the interest level in gene fusion is intense and the studies have been published now on a monthly basis. It's hard to believe it’s only been about two and half years when these gene fusions were first discovered. I think that the provocative hypothesis that the gene fusions are actually causal for cancer for patients who harbor the fusions is being supported by some of these studies. And I think as a general way of looking at the information on gene fusions today is that gene fusion status is important for the management and treatment of the patient and the other very important factor about gene fusions is there appears to be a spectrum. The spectrum runs all the way from the gene fusion positive been not so good to intermediate to bad to really bad and there is a very recent publication in Oncogene that described a really bad form of the gene fusion which actually predicts of lethality of the prostate cancer. So, we are working very closely with the University of Michigan and with other groups to find ways to provide this diagnostic and prognostic test.

Thanks for the color there Harry, much appreciated, should we, I guess, then in terms of market potential here, should we be thinking about these as a standalone or should we be thinking about at some point our friends in Michigan or the other collaborators are going to start using this in conjunction with again markers like PCA3 or AMACRs and I guess the point I'm trying to push towards you Harry, is are we eventually going to see some type of panel here with the four markers…?

We've been talking panel Bill all along and we have done work on AMACR as well as ERG in putting together in a single test with PCA3 and why we have seen some improvement it really hasn't been than earth shattering, which is one of the reasons why we are going ahead we believe with PCA3 as a standalone. We are also seeing and again this is new stuff, we are getting more data all the time, but TMPRSS2 T2 is showing some really interesting information as a standalone. So, in one way we can go is with the panel right now if you were to hold my feet to the fire, I'll say right now it looks like maybe a PCA3 and a T2, because the more we learn of them the more we think its going to very, very synergistic. But again still early days and we'll keep you hosted.

Understood. And so, its sounds like kind of start from an applet in the conversion here but it sounds like we should not expect to see any collaborative data if you will or combination data with any of these markers we still look for the independent data. Correct?

You'll might see that Bill those are going to take some time, and put the assays together and to get those data.

Okay.

There are two studies that we've done independently of Gen-Probe, although we work very closely with these groups. One is (inaudible) and you look that PCA3 and gene fusions and the other study by Jack Schalken, University of Nijmegen in the Netherlands and what they are demonstrating, now this is for the utility of just really detection that and the specified way that the gene fusions were analyze that there is significant synergy.

Thanks very much, Harry.

Thank you, Bill.

Tycho Peterson of JP Morgan. You may ask your question.

Good afternoon.

Good afternoon.

Good afternoon.

Hi, following up on the question earlier about [Asia to like], Hank it's been allow since we have an update in the ARC, is there anything to think about their in terms of their evaluation of TIGRIS and any potential opportunity they are going forward?

We don't have anything definitively but we believe they have finished their evaluation and we also understand that they will probably continue with Roche their current supplier.

Okay. I noticed during the quarter, you guys expanded to Millipore collaboration and if you could just give us the sense of how are large that new opportunity might be in and any update on how things are going to date?

Lynda, anything you can say there?

We did expand the relationship with Millipore and we've enjoying a MTC-NI and we believe that this will actually goes by increasing the sales of that product as well as giving Millipore a very good route to begin preparing that marketplace for our future test.

Okay. And then any update on the other collaborations emerging at this point?

They are progressing as we have pretty well laid out in the past. We do expect the first product to launch with Millipore before the end of this year.

Thanks, that's it from me. Thank you.

Thanks Tycho.

Peter Larson of Thomas Weisel. You may ask your question.

Just Herm or Hank, I just wonder the value of your total use of cash in this current wave M&A?

I think as Herm is trying to answer a bit there.

We've got a bit of -- nothing has changed there Peter. We are constantly on the look for companies products and technologies and our business development department is active as ever and we are still looking and we've come up with the right thing we will probably have a good need for it and a good use for it.

So it would be on the lines of tuck in acquisitions or technology as supposed to so for whole assets?

Well, historically it's been technology that we have done licensing in. We did MLT three years ago, but we just haven't found what we are looking for in terms of something larger than that.

And then as regard to that 3M projects which one is ramping up first, which ones are consuming the R&D for this year?

The first one of course we started was food officially, but we have done an awful lot of work preliminarily in the hospital and community acquired in section. And that will probably take more resources over the coming periods than the third. We think also the opportunity is a little bit greyer at this point.

Okay. Thanks very much.

Did you see the article on the front page of the New York Times, a week or so ago?

Yes.

That was impressive.

Very phenomenal, again, thanks much.

Spencer Nam of Summer Street Research Partners. You may ask your question.

Thanks for taking my questions. Just have three very quick questions. First one is, the Hepatitis B yield study in Europe. What was the statistical data on that? Like how many samples you had to go through before you got couple of the samples?

Spencer, its Mike. It depends a fair amount on pool size, obviously as well as comparative tests and things like that, but I think what we’ve seen in Europe and this is fairly consistent with what we saw at OBI in the US and some other states has been published and presented at ABB, is that in IDT you get a yield every somewhere between 50,000 and 70,000 samples. In pools of 16, you get a yield somewhere between every 200,000 or 300,000 samples. The complicating factors, some of our yield sites are doing pools of eight. So that number is probably somewhere between and we will just kind of have to let those play out to see when we pick the yields up.

And just a clarification, you just need two samples, is that right?

Correct.

Okay. And then the second question is, in terms of your clinical diagnostics market, you seem to be taking share away from your competitors? What sort of market share are you at right now?

Steve, do you want handle this one?

Yeah, sure. Worldwide Spencer we are about 50% in terms of revenues in the United States about 60% market share.

Great, that’s helpful. And then finally, just another extra question on the cash usage, you mentioned some possibilities of acquisition looking to technological partnerships or some of those but is that really confined to acquisition, are you, I think along that line or you have some other thoughts that options that you are exploring such as share buyback or some other movements of cash?

I think Peter mentioned a tuck-in acquisitions, but I think he mentioned all products or smaller company, I know it's certainly put that's in the area of investigation. We have explored the share buybacks, I think three separate occasions with the board and each time Herm goes up before the board to present it, he loses a little more hair and it little shorter he bit that little bit, but we are getting closer and closer. And I think under a certain sort of circumstances, it would probably make some sense, whether it makes sense now, or whether a share price the way it is somewhat doubtful.

Great, thanks very much.

You're welcome sir.

Michelle Ha of Ferris Baker Watts. You may ask your question.

Hi, first of all housekeeping questions, can you write down what the FAS 123R expenses for each of the line items were?

And I'll refer that to our Chief Housekeeping Officer.

That's me, we have not gone into that level of granularity Michelle, in the past what we've said in the past this is been pretty much on average about $0.06 to $0.08 a quarter. Probably going to be a little less than that because we've had some cancellations of options as some of, there is been some higher level turnover recently, but that's as much granularity as I want to go into, on this call.

Okay. And just one more question on PCA, how is that doing in Europe? Can you provide any color on that?

As Steve will probably tell you, it's increasing very, very dramatically, but from a very small base. So, while we are encouraged at the sub of the increase, is that going to amount to an offer a lot of dollars in the contracts of the size of our company.

The only other thing I would just -- we'll do more color on that Michelle is, we have the five lands in Europe. We have a couple more that's coming on board and we are quite pleased with the last that began offering research in Europe in terms of the patient volume that they are getting on a month-to-month basis, it's increasing nicely but we think that is on a small number.

Thanks.

Thanks Michel.

Zarak Khurshid of Caris. You may ask your question.

Hi Zarak from Caris and company. Thanks for taking my question guys, great quarter.

Well, thanks.

You talked about the ramp in the 3M collaboration what is changed there and as far as the guidance increased how much of that is a result attraction with the Millipore collaboration?

There is really, I mean, Millipore is there but it is not generating revenues and long for some period of time. And we are just progressing as expected with Millipore, I can't think of anything that's unchanged dramatically to Millipore the pace or the slope of the investment.

Great. And then what are the early revenues from before West Nile pricing due to something related to the seasonality of West Nile virus itself any color?

No, there is no seasonality in West Nile and West Nile testing it's tested, everybody, everyday, the only thing that would change perhaps is when there is an outbreak in an area and may go to smaller pool sizes to get the sensitivity up.

I'll just embellish a little on Hank mentioned because we did. We did have in the prepared comments, if you probably recall Zarak that about well over a year ago we got increased cost recovery pricing and that’s what we were referring to there.

Got it, great. And then lastly piggybacking on Bill's question, there is small lab services company making some noise recently about prostate cancer marker from health discovery company. Do you have any thoughts on the competitive landscape there? And how you rank? And may be any color on just kind of the different testing methodologies with or without massaging and if that’s really necessary long term? Thanks.

Yeah Zarak this is Steve. I am familiar with the company and services that they are going to begin offering. It's complimentary really to what we are doing there. They are going to be looking at tumor sections and they will be looking at recent scores and how it relates to potential therapeutic selection. So, it doesn't really compete with what we do but there are a lot of companies out there, they are looking at different types of sample types and tumor is one of those.

Very good, thank you.

David Lewis of Morgan Stanley. You may ask your question.

Good afternoon.

David.

Good afternoon David.

Herm, I just have a quick one here. EPS guidance you raised it by $0.08 by $0.09 raising EPS guidance to the mid point of $0.06. Are you ploughing back those three pennies into something.

No, it really relates to pull forward of collaborative research revenue and that's all of the difference here David. It's all flowing through.

Okay. And then on PCA3 I think, hey got on to hold just two to three years we had expected a PMA timeline probably something closer to two years, but you've mentioned some U.S. partners for people who are excited about the interesting data for PCA3. What is level of [excitement] by Quest and LabCorp, obviously you are limited to what you can do for marketing standpoint. Is there not on an ASR basis? Are they excited about this assay can you accelerate your programs with Quest or LabCorp and or would you consider just directly starting a clinical lab, which would give you the freedom to promote this test more aggressively bridging the period for the PMA.

There all a good questions, particularly last one. Let me ask Steve to address the first two.

Yes, David, with regard to both LabCorp and Quest we are quite happy with the progress that they are making and they are quite happy with penetration that they are seeing and the up tick of the assay. So, its early days yet particularly with LabCorp they just began offering the test very recently, but again on a month-to-month basis very nice increase.

We’ve always thought about a clinical lab. We’ve had some opportunities and decided at least at this point that would be a little bit too much to be competing with our customers and haven’t decided to go on that direction.

Okay. You don’t think PCA3 given the change in the clinical strategy here or slight change in clinical strategy is enough to convince you?

I don’t think it is, but it is certainly something that we are discussing.

Okay. And I guess, this is not my own, it’s a prior question on HPV. But may be you could remind us what is your current thinking on HPV timing in terms of strategy, regulatory discussions with the FDA? And or just maybe the last time you updated us on HPV timing?

Yeah, David this is Steven. I believe the question was asked earlier. We are on track to begin the trials at the end of this year with regards to ex-US launch, we’ve said at the back half of ’08.

Okay is there any change to assay format or design post the last update?

No.

Okay. Great, thank you very much.

You’re welcome.

(Operator Instructions)

Operator, if there are no further questions, we do have some very brief closing remarks.

There are no further questions at this time, sir.

Thank you, Kelly. Thanks for all of your questions. A wrap-up Gen-Probe’s had an excellent second quarter. We established new records for product sales, total revenues, net income and earnings per share. As a result, we are raising our 2007 guidance for both total revenues and earnings per share. We now anticipate earnings per share growth at the mid point of our guidance of around 32% this year including the one-time tax benefit. In the last few months, we also took important steps to generate future growth from our PROCLEIX ULTRIO assay in the United States and made important strategic progress towards accelerating the commercial value of PCA3 one of our key pipeline projects. Thank you for your time and attention today and please contact us, if you have any follow-up questions.