Welcome and thank you for standing by. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session. (Operator Instructions) Today’s conference is being recorded. If you have any objections, you may disconnect at this time. I will now introduce to your host for today’s conference Mr. Mike Watts, Vice President of Investor Relations. Sir, you may begin.

Thank you, Sherry and good afternoon everyone. I am pleased to welcome you to this conference call to discuss our fourth quarter 2011 business results. A press release announcing our results was issued today just after 4 p.m. Eastern Time and is posted on our website at www.gen-probe.com. After our prepared remarks today, we’ll take your questions for the balance of an hour, then post our script on our website for your convenience and reference. Before we begin, let me review our safe harbor policy. Forward-looking guidance – financial or otherwise – is only provided on conference calls or in our press releases. Any statements about our expectations, beliefs, plans, objectives, assumptions, or future events or performance are forward-looking statements. For example, statements concerning 2012 financial guidance, financial condition, regulatory approvals and timelines, the development and commercialization of new products, future results of operations, growth opportunities, plans and objectives of management, market trends, and future economic conditions are all forward-looking statements. Forward-looking statements are not guarantees of performance. They involve known and unknown risks and uncertainties that may cause 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 most recent Form 10-K, and all subsequent periodic reports. Copies of these reports are available on our website, at www.sec.gov and upon request. Gen-Probe assumes no obligation and expressly disclaims any duty to update any forward-looking statements to reflect events or circumstances occurring after this call or to reflect the occurrence of unanticipated events. In addition, our presentation today includes information presented on a non-GAAP basis. We believe these non-GAAP financial measures provide meaningful supplemental information regarding the company’s performance by excluding certain expenses and other items that may not be indicative of core business results. We refer you to the press release we issued this afternoon, which is available on our website, for a reconciliation of the differences between the non-GAAP presentations and the most directly comparable GAAP measures. Now I’d like to turn the call over to Carl Hull, Gen-Probe’s Chairman and CEO.

Thank you Mike, and good afternoon everyone. I’m pleased to report that Gen-Probe finished 2011 strongly. In the fourth quarter, revenues were in line with our expectations, and earnings per share came in a little better than we had forecast. Clinical diagnostics revenues continued their solid growth in the quarter, led by the APTIMA women’s health portfolio, while sales of blood screening products increased significantly as supply chain shipments rebounded. Just as important, we enter 2012 with excellent momentum. We have three important new product launches – PANTHER in Europe, and Trichomonas and HPV in the U.S. – that are off to good starts around the world, with two more expected soon, pending FDA approval. In my remarks today, I’ll discuss our revenue results for the fourth quarter, and spend a few minutes on our near-term growth drivers. Herm will then discuss fourth quarter expenses and our 2012 guidance. In that context, he will highlight future investment priorities that we believe will drive sustainable organic growth for the next several years. You’ll notice a consistent theme in our remarks today, a focus on one unique, differentiating capability that plays a role in almost all our past successes and future plans. And that’s our ability to deliver automation to our laboratory customers. For example, blood banks around the world continue to value the automation and process controls of the TIGRIS system, which led to significant sales of instruments to Novartis in the fourth quarter. The automation of TIGRIS is also driving continued growth in sales and market share for the APTIMA Combo 2 assay, more than a decade after we launched the product for STD testing. At the same time, TIGRIS automation is enabling adoption of two new products, our APTIMA Trichomonas assay and our APTIMA HPV test, as we begin…

Thank you, Carl, and good afternoon everyone. I’ll start by reviewing collaborative research revenue, which was $1.4 million in the fourth quarter, down 62% from the prior year period. This decrease was due, as expected, to Novartis hitting their cap for reimbursement of PANTHER blood screening development costs earlier in 2011. Royalty and license revenue was $1.6 million in the fourth quarter, down 16% from the prior year period due mainly to lower royalties from Novartis related to the plasma testing market. Now let me turn to quarterly expenses, which I will discuss on a non-GAAP basis. Gross margin on product sales was 66.7% in the fourth quarter, compared to 69.5% in the prior year period. As we forecast in our last call, gross margin was down due to increased sales of low-margin TIGRIS instruments to Novartis. These instrument sales, of course, are a necessary precursor to higher-margin assay sales down the road. If you back out the effects of all instrumentation from our fourth quarter results, gross margin on product sales would have been 72.8%, 60 basis points higher than the comparable number from the prior year period. Research and development expenses for the fourth quarter were $28.2 million, up 5% compared to the prior year period due primarily to the addition of GTI’s R&D programs. Marketing and sales expenses in the fourth quarter were $17 million, up 13% compared to the prior year period, due mainly to strategic investments in our European commercial infrastructure and the addition of GTI’s cost structure. General and administrative expenses were $15.6 million in the fourth quarter, 6% higher than in the prior year period, again due mainly to the addition of GTI’s cost structure. Total other income in the fourth quarter was $400,000, roughly half the level of the prior year period.…

Thanks Herm. I’d like to introduce the members of management who are joining us for Q&A today. We have Bill Bowen, senior vice president and general counsel; Eric Tardif, senior vice president of marketing and corporate development; and Kevin Herde, vice president of finance and corporate controller. In order to ensure broad participation in today’s Q&A session, please be courteous and limit your questions to one plus a related follow-up, then jump back into the queue. Operator, we’re ready to take the first question.

(Operator Instructions) Our first question will come from Bill Quirk of Piper Jaffray. Your line is open,

Yeah, good afternoon everybody. It’s Dave Clair here for Bill. I guess, the first question, given that we are three months into the HPV launch here, is there any change to your pricing strategy, and what are you hearing feedback from accounts so far?

Well, Dave, we've pretty much made it a practice not to discuss our pricing strategies in public forums. I think it’s fair to say that you’re seeing a market space that has had increased competition over the last nine months with the entrance of Roche and us into a space that previously was really dominated by one party. I think that you could expect different people have different reactions. Our point of view is we have a differentiated offering both in terms of automation and assay performance and we intend to capture the value associated with that differentiation.

Okay. Then a quick follow-up here on guidance. What are the assumptions between the high end and the low end? What’s the delta there?

Well, as we’ve said in the past, the way we handle the guidance is we generally take a look at the upside, downside. We do our forecasting from the bottom up and then we take a look at from the top down and what the ranges could be for things like foreign exchange effects and the like. That’s pretty much how we go about doing on that.

Our next question comes from Jon Groberg of Macquarie Capital. Your line is open.

Hi, thanks a million for taking the questions. I guess, Carl, obviously if you look at the guidance on what you are expecting for the year, the big question is obviously the significant ramp that you must be expecting in the second half. Can you maybe talk a little bit about – a lot of that would be, I guess, trich that you alluded to in HPV. So you have the TIGRIS instruments there, you have to run them in batches, obviously very automated for the batches that you run. Can you maybe just talk a little bit more specifically about your customers that are running that are doing this or running trich, kind of the feedback they are getting? And just what gives you the confidence that you are going see to that big ramp in the second half?

Sure. Jon, I think there are several elements to it. First, it’s just practicality with introducing new products and building momentum. And take the example I gave of the doubling time, if you will, for trich that we experienced this year in the United States, gives you a good example of that. So we get a couple of things working in our favour. The first is the PANTHER installed base in Europe. Those instruments, I said, have been coming out and getting validated, coming fully operational. So those start to kick in and we expect to continue placements in Europe and those will begin to generate revenue in the back half of the year. As we launch PANTHER in the United States, we’re really not expecting that in and of itself, to be a big contributor this year while it’s a very significant contributor in ’13, and ’14 as those instruments through just like in Europe come more mature placements and are really up and running. As we look at trich, we’re just seeing continued strong interest, especially from major laboratory customers. They have a sales channels that to get the word out and develop the market and develop the demand. And that effort is ongoing. As I said, we’re very pleased with the results thus far and the discussions I’ve had with many of our major customers directly, that are thrilled with the product offering and it allows them to expand the menu on the services that they offer to customers. So you combine that with trich, you look at HPV, we do think of HPV in the United States as likely to be a discontinuous variable. In other words, it’s going to be a couple of big accounts that will influence the overall shape of the marketplace. So very hard to project those kind of things but they won’t have it right away. They will take some time to implement. So that’s kind of how we see it.

So just as a follow-up, just to be clear. So I think in the past, you thought maybe HPV within a year or so, you could get to kind of that similar market share that Hologic had gotten. Just to be clear, it sounds like you are saying, it could be a little bit lumpy as you go throughout the year. And then just kind of follow up here, getting the revenue numbers out there. For PANTHER for blood screening, do you anticipate that internationally, are you getting sales for that in 2012? Thanks.

Let me parse on a couple of different things to answer your question kind of working backwards. With PANTHER for blood screening, I don’t think you will see significant assay revenues in 2012. There is, however, $5 million milestone payment once it’s commercialized for blood screening and that is baked into our numbers. With respect to HPV, if I wasn’t clear, we do expect to see a number of accounts adopting. I mentioned earlier, we’ve already achieved the first commercial revenues and have customers ordering and reordering. We are quite pleased with that at this stage of the launch. So I think that will go on throughout the course of the year. But what I was referring to is that you may see really big upsides against our baseline forecast if a big customer too decides to move in our direction. But again, all that stuff is likely to be back-end loaded.

Our next question will come from Bill Bonello of RBC Capital. Your line is open.

Just a question on, maybe a follow up on the guidance. And just trying to understand a little bit more the gross margins guidance. Maybe you can give us a quantification of sort of the basis point impact of the currency, that impact on gross margin in 2012?

It’s within our range of 68% to 69.5% gross margin. We’re basically looking and sensitize it $5 million or $10 million, I am not going to tell you where but some number like that on either side. And so that’s included in the range that we have out there, Bill.

Hey, Bill, it’s Mike. So that FX effect, as you might recall, falls straight to gross margin. So that’s the single biggest item affecting the gross margin percentage for 2012.

In addition, we also have high amount of instruments in there as well. So that’s going to affect gross margin too. In our prepared script, you could see there was a couple hundred basis points between the net margin that is reported and what it would have been if you take instruments out. And there’s going to be significant instrumentation every year.

Okay. That’s helpful. And just in terms of a follow-up on the Q1 revenue guidance. It looks like you are looking for sort of exceptionally low growth at the low end of the guidance, and appreciate a limited flu season and the ramp in the back half of the year. But what else in Q1 would make growth just so much lower than what it’s been the last many quarters?

Well, certainly for the last quarter, our sequential basis is a huge amount of blooding screening assay revenue and instrumentation. That’s going to be the biggest one.

Right, but it’s lower than sort of where you’ve been trending prior to that.

Well, as we said in the prepared script, Bill, that flu has been very weak, and certainly the biggest one I can think of, top of my head is going to be Novartis.

Our next question comes from Vijay Kumar of Deutsche Bank. Your line is open.

Hi, thanks for taking my question. So I guess, my first one was in CT/NG, I know that Roche recently had their array approved, could you guys talk about sort of what you are seeing in that marketplace?

Yeah, Vijay, I can give you a little color and maybe I will ask Eric to step in here as well. Roche has not, as you know, been a significant factor in the overall market for CT/NG here in the United States. Obviously much different outside the United States where they had a historically strong position. Let me ask Eric to tell you what we understand about the most recently cleared assay.

Yeah, and thanks for the question. It’s our understanding that for now at least that their CT/NG assay is cleared on a limited set of sample types. And so that clearly limits the uptick that they can target and also they continue to be at a disadvantaged from an automation point of view. So we’re watching the development but right now it does not appear to be a significant commercial impact for us.

Okay. And my follow-up was or I guess, my next question was on cap deployment. And could you talk about what the focus will be in ’12? I know that you are ramping up on investments, building up your commercial organization. But like you said, you’ve fulfilled your existing buyback programs. So what’s the focus?

Yeah, Vijay, I think that our philosophy, if you will, remains unchanged here. We’ve demonstrated the board’s view that there is really two major issues of our strong operating cash flow. The first of those is clearly strategic acquisitions when they make sense to us. Eric and his team are active in that area, scanning the opportunities that exist. And failing opportunities to utilize the cash on that fashion we think the buybacks have made historical sense. And I think that philosophy is going to stay that way for the time being.

And our next question comes from Dan Leonard of Leerink Swann. Your line is open.

Thank you. Can you talk a little bit about the performance of APTIMA COMBO 2 in the U.S. during the fourth quarter? Was it still growing, is there still PACE conversion or competitive takeaways to be had in the U.S. market?

Why don’t I ask Mike to answer that for you?

Yeah, Dan, APTIMA had another good quarter in the U.S. and internationally, up double digits in the U.S. Some of that, of course, is PACE conversion. The PACE is a pretty small product left for us right now. The biggest chunk was market share gains. So we’re enthusiastic about that.

Okay, thanks Mike. And then my follow-up on the guidance for 2012. Herm, I know you have a lot of visibility in your blood business than you used to. Is there anything we should be aware of in terms of quarterly cadence of that blood revenue throughout 2012?

We hope not. Yeah, we think that’s ramped back up to normal inventory levels.

And Dan, I think we’ll pay as close attention to that as we can. It is a complex logistical relationship that we have with our partner. And we know what to be paying attention to it.

Our next question comes from Jon Wood of Jefferies. Your line is open.

Hey thanks a lot. It doesn’t sound like you rolled up your guidance this way Herm but I will ask this anyway. If PCA3 and PANTHER are not approved in the U.S., can you still hit the bottom end of your revenue forecast for the year? And then I will just do my follow-up quickly. Can you give us cash flow outlook for ’12, CapEx included if you have it? Thank you.

Well, our guidance rolls up with assumptions that – so I think we implied that in our prepared comments are approved, we said probably for the instrument PANTHER by mid-year. And PCA3 we talked already in the past about discussing labelling with the FDA and that normally implies you’re getting closer to the finish line. In terms of cash flow, I mentioned a few times in the $13 million to $15 million of cash flow per month. We tend to spend roughly in the $40 million to $50 million range per year, which gives you enough to work with, Jon.

Hey, Jon, it’s Carl. I will be a bit little bit more direct with the first part of your question. I think the answer is yes. We can’t do that but you have to temper that right. As I said earlier, PANTHER contributions to assay revenues in the United States given an assumption of clearance in the first half would not be a terribly significant overall whereas it’s much more important in 2013. And as you do know, we continue to sell PCA3 as an analyte specific reagent here in the U.S. and kitted product outside the United States. So there will be base business that goes on. It’s not like it’s going from zero to some big number.

Our next question comes from Ashim Anand of Natixis. Your line is open.

Thanks for taking my questions. I was wondering what was the growth rate of revenue in Europe for 2011?

Yeah, in Europe for – I will do for diagnostics, was in a high single digits.

So in terms of guidance, to the extent you can comment, obviously you guys have been doing extremely well in Europe, high teens growth. However, the situation in Europe has changed, however it’s very demographic based, southern Europe, northern Europe et cetera. So to the extent Europe affects your guidance if you can comment on that.

Ashim, it’s Mike. Let me just clarify one thing too on the numbers. So sorry, I think we’re going back and forth between blood screening and diagnostics. But diagnostics ex-U.S. which is how we look at it internally was up around 20% for the year, so nice strong growth there.

Okay. So overall how do you guys are thinking about Europe this year in terms of your guidance? In terms of the various variables where does it stand, obviously there are new products and stuff like that. So just if you can give us a general commentary how much you are worried about Europe or you’re not worried about Europe. So just general – anything general you can comment on?

Ashim, it’s Carl. I’ll take a shot at it. I think for us it was sort of the good news, bad news, right. The good news is we didn’t have a whole bunch of business in Europe prior to this that was at risk. That's equally the bad news. So we've been trying to build it out. I think from the point of view of headwinds, you’re hitting on the things that are probably much more significant to our business substantially than in the United States but on much, much smaller base. So I would tell you that as we look at it right now, we think that the growth that we are seeing with APTIMA COMBO 2 across the board, coupled with the launch of PANTHER and the menu expansion of PANTHER should be two good drivers even in the face of economic headwinds overall. And keep in mind that we are not operating a capital intensive model where it’s necessary for customers who are cash-starved to come up with significant investment to adopt our technologies. So that would be my take on it. Mike, do you have anything to add to that?

Well, the only other thing I would add, Ashim, is that most of our business in Europe, it goes back to what Carl said, good news, bad news is the major industrialized markets. It’s the UK, it’s Germany, it’s France. So those economies certainly have not been as impacted as severely as some of the Mediterranean countries.

And our next question comes from Quintin Lai of Robert Baird. Your line is open.

A question, a little bit on the R&D pipeline. You talked about real-time TMA, real-time PCR, maybe give us – you could explain what your strategy is there. What assay do you see being real-time TMA focused and why putting on real-time PCR on the heels of that? Or do you envision your platform to have capabilities to do both?

Let’s start off with the question real-time PCR just period. I think we mentioned that one of our focuses is coming up with the right long-term platform for PRODESSE business and our ability to expand and to leverage that. After a lot of careful thought and evaluation of the alternatives, we concluded that integrating real-time PCR on to PANTHER was an optimal solution for that. So that was one very important factor in our thinking. The second piece of it is as you look at the future of the business, there are many assays that can be done easier or better with one technology or the other, whether it’s qualitative TMA, quantitative TMA or quantitative PCR. And we don’t want to be in a situation where we are locked into having only one hammer. We like having multiple different hammers so that we can go out and add menu as customer needs dictate not as technological limitations dictate. So that’s really our thinking. And as you look at the long-term development of the market, a lot of the stuff today that’s considered early stage clinical markers that are being validated or being run perhaps in other (ph) settings, a lot of them are on PCR type platforms and they may make good sense for us to be thinking about as part of our portfolio five years, or 10 years down the road.

Our next question comes from Isaac Ro of Goldman Sachs. Your line is open.

If I could just start on the investments you are making on the expense side this year with regards to new products. Maybe if you could just add a little more color. You mentioned R&D and the growth rate there but for sales and marketing just maybe qualitatively some of the things you need to do to be successful against your goals in HPV and PCA3 in terms of sales force, that kind of stuff.

Isaac, hi, it’s Carl. I think that the most important things that we are looking at on the non-R&D side are really in the commercial support of the new product launches. So you saw us build out in Europe and we’re comfortable that Europe at the scale that it’s at right now is well equipped to support business that is there right now. But we have some pretty high expectations for growth in Europe. So you could expect us to see or you could expect to see us expand our sales and field service capabilities as that business expands. Much importantly though is the United States, thinking about it really two perspectives. One is the launch of PANTHER in the U.S. and then the second, of course, is just the continuing growth of the business and how we are going to spend marketing dollars for launch of the new products. I will ask Eric to comment on the market spend here in just a second. The thinking again about sales and service, we have intentionally not expanded the U.S. sales and service organization in front of the PANTHER launch. We wanted to time it more closely to when the instrument is actually available. We have a very detailed plan that we put together over the last nine months of where we want to add resources, what kind of resources we want to add, and the majority of them will be field-based in support of the actual launch of the instruments. So that’s how we are kind of doing it operationally. Let me ask Eric to comment on the market stuff.

Yeah, I think on the marketing side, we are in a nice position that we are launching two important new differentiated products in the U.S. in HPV and hopefully PCA3 this year. And in both cases, I think there is a need to carry a message, in some cases, to clinicians and certainly to labs. And so we’ve signaled this for a while that, while we are not planning on building a large physician oriented sales force, we certainly will invest to be able to get a clinical message out into the marketplace. And that’s a big part of the expansion you will see.

Right. Thanks and just a follow up on PRODESSE, actually I think when you guys purchased the asset that was running about $15 million annualized in revenue. And I understand, of course, this year was a tough flu season, but if we look at sort of a normalized growth rate for that business going forward, how are you guys looking at your goals for that portfolio of assets and technologies?

I would say it is obviously very contingent on how the flu season goes. Last year was a nice growth year for PRODESSE off a stronger flu season that in the previous year. And this year we have been modeling an average flu season which so far hasn’t come to pass. So that business continues to do well in terms of gaining market share, in some cases, and fending off an increasing number of competitors. And certainly as we look out in the future with PANTHER becoming available as proprietary platform, we look at that as a major growth engine for PRODESSE.

Our next question comes from Tycho Peterson of JPMorgan. Your line is open.

A question maybe just on some of the incremental R&D spend here. You’ve got, kind of the announcements you made earlier this year on the new instruments. Obviously you’ve got some follow-up work-on APTIMA, HPV in terms of studies. And then some near term stuff in terms of porting over additional assays to PANTHER, can you help us think about – are you able to put any of that in the buckets, how much of the incremental is going to be on follow-up studies versus some of these longer term projects versus the incremental spend on porting assays over the PANTHER or TIGRIS?

Tycho, it’s a good question that we probably won’t answer for you at the level of detail that you like. We have a very clear view internally of where those funds are going to go and how we’re going to apply them. I think what you see us doing right now is making a combination of what we term derivative products. So you can think about doing assays using existing formats. So that could be a new PRODESSE assay, or it could be a new TMA assay on one of our instruments versus breakthrough investments which really fall more in the category, say, of what we are doing with the next generation of PANTHER and adding real-time PCR to it. So from a portfolio view, Eric and his team have us look at those investments in major buckets of type of spend. And once we determine that we strive to have a balanced set of investments. So we are not doing all derivatives on the one hand, but we are also not doing all breakthrough projects on the other. Eric, well if you want to add anything.

No, I think that’s the right way to look at it. It’s all about striking balance and positioning us for the next wave of growth a few years out with the key projects we just announced.

But on the follow-on studies that you talked about previously, should we think about those rolling off there this year, next year? How do we think about the magnitude of when those will start to wear off?

Yeah, the HPV follow up which the probably the most significant finishes sometime late next year.

And on the chlamydia and gonorrhoea, I know you had the question earlier on Roche. Can you talk about within the core business, how are you thinking about pricing trends for chlamydia and gonorrhoea specifically? And I mean, you are withdrawing PACE officially from the market this year, is that right, I know it’s a small piece of business but just wondering about that.

Yeah, that is correct, Tycho. I would tell you that the pricing trends, CT and NG have been stable as a board for a long, long period of time. It’s something that we look at extremely carefully that we have seen no negative impact at all. All right. Operator, it looks like we are at the bottom of the hour here. So we’ve a couple of concluding remarks. So with that I’ll just wrap up by saying that we appreciate your time today and thanks for your questions. Our fourth quarter financial results were solid. We look forward to a year of accelerating top-line growth in 2012, driven by the new products that build on our core competency in automation. We are also excited about the opportunity to leverage our PANTHER platform with new assays and capabilities that will generate long-term, sustainable growth. In closing, let me remind you that our prepared remarks will be posted on our website momentarily, and we encourage you to refer to them if you missed a fact or a number during the call. Thanks for your time and attention today, and please call us if you have follow-up questions.

Thank you for participating in today’s conference. You may now disconnect.