Greetings, ladies and gentlemen and welcome to the Incyte Corporation’s Fourth Quarter 2010 Financial Results. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation (Operator Instructions). As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. Pamela Murphy, Vice President of Investor Relations and Communications. Thank you. Ms. Murphy, you may begin.

Good morning and thank you for joining us. On the call today are Paul Friedman, Incyte’s President and Chief Executive Officer; Dave Hastings, Executive Vice President and Chief Financial Officer; Rich Levy, Executive Vice President, Chief Drug Development and Medical Officer; and Pat Andrews, our Executive Vice President and Chief Commercial Officer. To begin, Paul will provide a brief review of our accomplishments in 2010 and describe key goals for this year. Dave will follow with a discussion of our fourth quarter and year-end financial results and provide 2011 financial guidance. We will then open up the call for Q&A. Before beginning, we’d like to remind you that some of the statements made during the call today including statements regarding our plans and expectations for our drug development program, including timing of our clinical trials, regulatory submissions and the potential safety and efficacy of our compound as well as our expected financial results and guidance are forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties that may cause our actual results to differ materially including those described in our Form 10-Q for the quarter ended September 30, 2010 and from time-to-time in our SEC document. Paul?

Thank you, Pam. Good morning, everyone. The fourth quarter and the full year were exceptionally productive for us. We accomplished many major corporate goals, not the least of which was the achievement of positive results for COMFORT-I, the pivotal trial of Incyte 18424 in myelofibrosis or MF and the start of preparations for the submission of our first NDA. This NDA could result in the approval of the first JAK inhibitor to treat MF, which can be a profoundly disabling, life-shortening disease that places tremendous burden on the patients. And if approved, we certainly expect 424 to have a significant impact on the way this disease would be treated. Last week, we learned that the World Health Organization has accepted ruxolitinib as the recommended International Nonproprietary Name for 424, and as you saw in this morning’s press release, we are now using this global generic name and practicing the pronunciation. During the fourth quarter of our pipeline -- our pipeline of JAK compounds advanced with the initiation of the joint global Phase III registration trial, RESPONSE, for ruxolitinib in advanced polycythemia vera or PV and our partner Lilly began the Phase IIb trial for Incyte 28050 in rheumatoid arthritis. In addition to these being important clinical accomplishments, these events also triggered substantial milestone payments of $69 million from our strategic partners, Novartis and Lilly, bringing the total for the year in earned milestones to $102 million. We also succeeded in our goal of initiating a new clinical program in oncology with the start of the dose escalation study of Incyte 283 -- 24360, a selective orally available inhibitor of indoleamine 2, 3-dioxygenase or IDO. And this compound, which is being developed as an immunotherapeutic, has shown impressive anticancer activity in preclinical studies and is another example of the productivity of…

Thanks, Paul and good morning, everyone. I will begin today by reviewing our financial results and then I will discuss our financial guidance for 2011. 2010 was a really solid year for us from a financial perspective. We continued to benefit from the two significant strategic accomplishments of 2009, which were the recapitalization of the balance sheet, including our senior convertible note and equity issuances and our strategic collaborations with Novartis and Lilly. The recapitalization allowed us to redeem the remaining outstanding 2011 convertible senior subordinated notes in February, 2010. And the two strategic collaborations greatly strengthens our cash position while still retaining significant value from the partner programs. As a result, we are now well-positioned financially to potentially launch our first product this year. We ended 2010 with $424 million in cash, not including the $38 million we hold in escrow for payment of interest in our 4.75% convertible senior notes. Our cash used in 2010 was $154 million, not including a $252 million we received in upfront and milestone payment from our collaborative partners, the $11 million in proceeds received from the exercise of employee stock options. And the $159 million used for the redemption of the 3.5% convertible senior and subordinated notes. Our operating expenses for both the quarter and the year were in line with our expectations and reflected our continuing investment in our discovery efforts, clinical development programs and commercial preparations for the potential launch of ruxolitinib in MF. Now, moving to our financial guidance. We still view cash use as our most important financial metric. We expect our 2011 cash use to range from $185 million to $200 million, not including any potential milestones from strategic partners or proceeds from stock option exercises. The increase in the use of cash in 2011 is consistent…

Thanks, Dave. I am going to open the call for questions in just a moment. But as some of you may have seen from our 8-K filing, Brian Metcalf, our Executive Vice President and Chief Drug Discovery Officer, has elected your retire in May. Brian has been with Incyte since February of 2002, just a few months after I came and was one of the original architects of our drug discovery strategy and instrumental in helping us recruit what I consider to be some of the best chemists in the industry. Brian’s organization is the engine behind Incyte’s current pipeline and while we will miss his day-to-day presence, fortunately he has agreed to serve as a very active consultant to the company. So we can continue to utilize his expertise in medicinal chemistry and drug discoveries. We thank Brian for his service and we wish him well in his retirement. He leaves the drug discovery group in very capable hands as we promoted [Wen Shin Yao] to lead chemistry and [Reid Hubert] to lead biology, two extremely experienced and talented individuals. I have a long history with both of them as Wen Shin and Reid were part of my team at DuPont Pharmaceuticals and they elected to join me at Incyte. So we are quite confident that we are in good hands in both of those disciplines moving forward. So, operator, we can now open up the call for questions.

Thank you. (Operator Instructions) Thank you. Our first question is coming from Salveen Richter of Collins Stewart. Salveen Richter – Collins: Good morning. Thanks for taking my question. Can you just comment on the future clinical development plans for rux -- I am going to pronounce it incorrectly, but -- 424 in ET.

Good morning. Thanks for taking my question. Can you just comment on the future clinical development plans for rux -- I am going to pronounce it incorrectly, but -- 424 in ET.

Ruxolitinib. In ET, yes. So I’m going to ask Rich Levy to opine on that.

So it’s interesting that you bring that up in that we have a discussion with Novartis today to try to come to an agreement on the path forward. So I’m going to punt until next time but it is something that is actively being discussed. Salveen Richter – Collins Stewart: Great. And then is there any way you can give us a sense of the market opportunity for MF patients that also have low platelet counts in the U.S.?

Pat, do you want to try that?

Sure. So low platelets can be defined in a variety of different ways. We’ve used 100,000 as a marker because our Phase III study has patients who had starting platelets over 100,000 and the low platelet study we are referencing to is patients who have less than 100,000. That being said -- and that’s about 40% to 50% of the market. That being said for the practicing oncologist, the hematologist, they are very used to working with platelets of all different levels. And for them, the definition may actually be lower. And they aren’t seriously concerned about low platelets until it falls below say 25,000 which is a relatively, very small percentage of [net] of the market. So we are really working between those two sets of numbers. Salveen Richter – Collins Stewart: Great. Thanks and then just one last question. In the pancreatic cancer Phase II trial, will you be genotyping for JAK mutational status to enter the study?

No. That’s not necessary to do. Salveen Richter – Collins Stewart: Okay. Thank you.

Thank you. Our next question is coming from Bret Holley of Oppenheimer & Company. Bret Holley – Oppenheimer & Company: Yes. Thanks for taking the question. I guess, I’m wondering, does your 2011 SG&A expense guidance reflect a nearly full buildout of the ruxolitinib commercial team or should we expect, I guess, you know more buildout in 2012 there?

Yeah. But it does reflect the full buildout, but it is done gradually over the year. So it is not a fully loaded cost line for the sales force. Bret Holley – Oppenheimer & Company: Okay. And I was wondering what the timeline might be for data from the M.D. Anderson trials for ruxolitinib?

These are the hematologic malignancies. Bret Holley – Oppenheimer & Company: Yeah. Yeah.

I would expect that there will be public presentations at ASH most years. I don’t know when the study would actually be “finished”, but there will usually be updates I would expect probably each time. And that’s I think the first time you’d hear about it would probably be ASH this year. Bret Holley – Oppenheimer & Company: Okay. Thanks very much.

Thank you. Our next question is coming from Eric Schmidt of Cowen and Company. Eric Schmidt – Cowen and Company: Yeah. Could you talk about the number or percent of patients who are on the open label studies, COMFORT-I and Phase II and still compliant with drug?

COMFORT-I, I think, is probably of the 309 patients that were involved. It’s still somewhere over 250 to 260 but I don’t have an exact number. And the patients who were -- originally randomized to placebo have now crossed over. So they’re essentially on drugs. With respect to the [7251], I don’t have that number at hand. 154 patients were originally randomized into the study. We know that at M.D. Anderson, a really high percentage of the patients are still on drugs at Mayo Clinic. That percentage has come down considerably more but I don’t have a total number. I would suspect, it’s probably around half of the original patients still on drug but I just don’t know offhand. Eric Schmidt – Cowen and Company: And then a couple of financial questions for Dave. First, do I interpret all the guidance you’ve given with regard to U.S. approval, timing, and milestones for 2011 to mean that you don’t get any milestone from Novartis upon approval in the U.S.?

So, when you think about that contract and where a partner would place the most value, it would really be outside the U.S. And so, while I can’t give real detailed guidance, that will give you some direction as to milestone flows for that program. Eric Schmidt – Cowen and Company: Okay. And in terms of the support you get from Novartis, are they going to pay for the expanded kind of early phase program around ruxolitinib for lymphoma and pancreatic cancer and some of the other things you are doing?

So the way things work, is that there are studies that we do. There are studies that they do and there are studies that we split 50-50. There are some studies that are investigator-initiated studies and those are pretty much done by regions. So if it’s an investigator initiated study, in the U.S., we would tape the whole thing. If an investigator study initiated in Europe or outside of the United States, they would pay the whole thing. With respect to the pancreatic and lymphoma studies, those are U.S.-based studies. We are actually paying for those but there are other things that we haven’t talked about so much that will also come to our benefit that they are completely paying for. And for example, the response study in PV is being shared 50-50. Eric Schmidt – Cowen and Company: Okay. And last question, if I look at the 2011 guidance and the stock compensation expense, that’s ramping up pretty substantially year-on-year. It looks like you’re allocating a greater percentage of total expenses to stock compensation. Was there a change in the compensation scheme?

No, but it’s just driven by Black-Scholes. So as the evaluation of the company increases and your stock prices higher, it drives the higher non-cash expense. Eric Schmidt – Cowen and Company: Thanks for that.

Thank you. Our next question is coming from Cory Kasimov of JPMorgan. Matt Lowe – JPMorgan: Hi. It’s actually Matt Lowe in for Cory today. Just wondered if you could offer any clarity on timing of the COMFORT-II results and whether you -- Novartis to disclose -- how much information you expect them to disclose when they announce the top-line results of that study?

Yes. So, difficult to speak for Novartis, both because they don’t like us to and because I don’t know what they ultimately will decide to do. But you know, they did have what I thought was a minimalist press release on the COMFORT-I results when we put ours out. So I suspect in the not-too-distant future, once they’ve sifted through the COMFORT-II results that they will put out such a press release. And you know I’m -- I can’t speak for them, but I’m certainly hoping that they will present their results in a scientific form very soon, maybe at ASCO. Hopefully. Matt Lowe – JPMorgan: Okay. That’s great. Thank you very much.

Thank you. Our next question is coming from Matt Roden of UBS Financial. Matt Roden – UBS Financial: Hi. Good morning and thanks for taking my questions. With regard to your market research, Pat, have you been able to tease out expectations for 424 utilization by risk classification? It’s fairly obvious that the -- there’s a great unmet need in the higher risk patients but what are you seeing in your market research with respect to the milder risk patients such as [INT1]?

Okay. So, I will say that the risk classifications that we used in our study and that are in the literature are not widespread within the community of practicing oncologists and the hematologists in the United States. And they tend to look at patients and see -- sometimes you know mild, moderate or severe, sometimes they look at them by spleen and symptoms. They look at our host of other factors. So that classification, I wouldn’t say that there is any direct correlation that we’ve seen in our research. What we have done is we’ve shown target product profiles of ruxolitinib to practicing hematologists, say 200 in the U.S. and gotten their sense based on spleen size and symptom severity whether they would consider this drug appropriate for that patient population. And as you might expect, for the greater -- the larger the spleen and the greater the symptoms, the more likely they are to use the drug, but there was even at levels of very mild symptoms and very small spleen enlargement, there was drug utilization. So look at it as kind of a continuum. Matt Roden – UBS Financial: Okay. Thanks for that. And then Paul, any progress in terms of being able to identify baseline which patients are chronically inflamed? And it would be perhaps more likely to see an anemia benefit on therapy?

Yes. It’s hard to -- we have no way of identifying those people before hand. There’s certainly a minority of the patients. These patients have a failing bone marrow. So that is from a quantitative standpoint, the most important aspect of their anemia. And then there are subset of people who have more -- from the cytokines have -- will have more or less of a contribution of a chronic anemia component and it’s that subset where you could see some mild benefit in hemoglobin. But, I mean, because of the mechanism, the predominant effect in most patients is going to be a JAK2 inhibition leading to a decrease signaling through the EPO pathway. It’s just at the end of the day, what these drugs do. So I -- there’s -- and there’s really no way to identify who -- who that subset is, who will possibly have mild upticks in hemoglobin when they get treated. Matt Roden – UBS Financial: So it’s not as straightforward as just looking at CRP levels or other product information?

No. We have not been able to correlate that. Matt Roden – UBS Financial: Okay. Thanks a lot for taking the questions.

Thank you. Our next question is coming from Thomas Wei of Jefferies & Company. Thomas Wei – Jefferies & Company: Hi. Thanks. I wanted to ask a little bit more about the low platelet count study, just whatever you can share with us about the design, the number of patients, how the dose titration scheme differs and it sounds like maybe the cutoff for platelet counts at baseline might be 25,000. Any details there might be helpful. And also when you might expect to have data from the study?

So, the baseline platelet counts that will be allowed into the study will be down to like 50,000. Allowing patients on drugs potentially go down to as low as 25,000 before they would have to take a drug holiday. In terms of the designs, we’re looking at a couple of different studies. One is kind of almost a Phase I study, looking at dose escalation starting at like 5 mg BID and working up and another one is a larger study that will start with relatively low doses and dose adjust patients right from the start. The first study is likely to start within the next month. The (inaudible) study is likely to start before the end of the second quarter. Thomas Wei – Jefferies & Company: And would you have the potential for there to be informative data for doctors at the time of the product launch?

Yeah. Sorry. That was a part of your question and an important part. So, the first study we expect to have data at ASH in 2010 which will be around the time of the launch and the second study, we might have data, but it wouldn’t be -- 2011, sorry. And the second study would be not ready to submit an abstract at ASH, but there may be other data from that study that could even be more robust because of the larger size of that study. But not, you know, in an ASH abstract most likely. Thomas Wei – Jefferies & Company: And neither one of them would contain a control-arm?

That’s correct. Thomas Wei – Jefferies & Company: Okay. And then just a separate question here on patients with -- who do not have an enlarged spleen. Can you just remind us what your most recent market research says on – excuse me -- the proportion of patients who don’t have an enlarged spleen? And how should we think about the potential utility of 424 in that patient population?

So, you know, really, the vast majority of patients do have an enlarged spleen. I think the number is like maybe 70% and then there are those who have had a splenectomy and they tend to have enlarged livers and that is like another 8% to 10%. So at least 80% probably have an enlarged something that the drug helps. But you know, you might think that you only have symptoms if you have an enlarged spleen. But actually there’s some patients who have symptoms and don’t have any palpable spleen enlargement. And that adds another 5% to 8% to it. So that’s how we look at really the potential market. Thomas Wei – Jefferies & Company: Thanks. That’s very helpful.

Thank you. Our next question is coming from Rachel McMinn of Bank of America/Merrill Lynch. Rachel McMinn – Bank of America/Merrill Lynch: Yeah, Paul, can you just go into a little bit more detail on your comments about sheddase? You said something about doing an analysis of European studies. What is that about? And, I guess, when would you have more confidence -- have you actually made a decision to go into Phase III? It is a little bit hard to tell.

Well, no, we would only -- these -- so what this is and the reason we’re doing it and it almost sounds like I say the same thing every quarter because this program has been delayed for a variety of reasons. We have -- there’s a single paper in the literature that points out, I think in a very convincing way, that patients who are HER2-positive and additionally p95-positive do significantly more poorly when they receive Herceptin-based regimens than the patients who are HER2-positive, but not p95-positive. And then our data which is from a reasonable number of patients, but not an overwhelming number of patients, supports that position, that -- and so, we have the opportunity by getting histologic samples from completed studies with patient histories to determine in a large -- with a large N that this hypothesis is indeed correct before we take the plunge and do a Phase III study. And so that is what we’re doing now. We are staining and analyzing these samples, doing immunohistochemistry to determine who was p95-positive, who wasn’t, what level of p95 positivity were they and what their clinical outcomes were. And we were fortunate that we been able to get a significant sample set to look at from a variety of completed studies. And we’ve not made a definitive decision to go to Phase III because these data, we believe, should confirm what we believe is a very viable hypothesis. Rich?

Yes? Can I make a clarification? So, when Paul said that our data confirm this, our data basically show that whereas the p95s do poorly on Herceptin-based regimens…

Right.

…. in our case p95 plus our sheddase inhibitor 7839, those patients do very well.

Right.

So that said that there is a real divergence between what a control group on Herceptin would do -- Herceptin-based regimen alone would do and when you add our drugs in those p95-positive patients. And so we just need to confirm with a larger data set that the control group is going to do as poorly as this first paper suggests. And that’s what we should have within the next couple of months and then be able to make the final decisions from there.

Yeah. So, what he is saying is the control group, our p95, we have to be certain that they do more poorly than those who are not p95-positive. Rachel McMinn – Bank of America/Merrill Lynch: Okay. That makes sense. That’s very helpful. And just, Dave, I guess in terms of the numbers, does the R&D guidance actually include a Phase III sheddase spend? You kind of hinted at that, but I guess the R&D expenses, does that go up if you decide to go into Phase III? And then also a little bit more clarity on when you are hiring the reps for 424? Thanks.

Yes. So the guidance is all inclusive for the studies that Paul outlined. So that would include any initiation of Phase III studies for sheddase.

Pat, do you want to address the sales reps?

Sure. So we’ve had a VP of Sales onboard since mid last year. And with that, we’ve put in place what needs to be done to recruit the leadership level in the second quarter of this year and the reps in the third quarter. So they should all be on board by the end of the third quarter. Rachel McMinn – Bank of America/Merrill Lynch: Perfect. Thanks very much.

Thank you. Our next question is coming from Ying Huang of Gleacher & Company. Ying Huang – Gleacher & Company: Thanks for taking my question. Going back to your comment on the platelet level because you enrolled only patients who had more than, greater than 100,000 platelets level in Phase III. Do you think that will be on the label when FDA approves this drug?

Yeah. We -- if you look at labels for oncology drugs, there -- there’s no precedent for that and we do not believe that that will be the case. It’s a possibility but we think it is a fairly remote possibility. The studies will be described. There will probably be a statement somewhere in the label saying that patients below 100,000 have not, we are not studied in Phase III, but we don’t think there will be a labeling restriction on use. Ying Huang – Gleacher & Company: Okay. Thank you and then can you give us a little bit more clarity in terms of the size of the potential sales force here for 424?

Sure. So we need about 60 reps to cover the market of approximately 7,000 hematologists and oncologists in the U.S. to teach in that patient (inaudible). Ying Huang – Gleacher & Company: Thank you.

Thank you. Our next question is coming from Dave Friedman of Morgan Stanley. Dave Friedman – Morgan Stanley: Hi. Thanks. Just wanted to ask a little bit more about the spending plan. I mean, it looks like the incremental spending year-over-year on the SG&A line is not that dramatic. And given that we have seen some hematology launches cost $40 million plus upwards of incremental SG&A spend, are there things that you guys have identified that you don’t need to spend money on or how are you able to do it with different budget or apparent budget?

Well, I’ll just sort of one element of it and Pat you may want to give some further context. But if you think about on the sell side, at least, Dave, the hiring plan is sort of titrated throughout the year. So you are not getting a fully loaded SG&A number. But that said, we are obviously looking to be as efficient as possible with our capital. It’s a very important year for us and so we are being responsible and careful. Pat, do you want to give more context on that.

Well, so I’ll just add. I mean, we are being prudent with our spend but that being said, there’s no area that I feel like we are underinvesting in for this launch. In fact, I believe -- you know, Incyte brought me on board more than two years ago which is a long lead time for a company of -- a development stage company to bring on board a commercial person. And we had been putting in the appropriate resources and staffing all of that time. So I would actually say we are extremely well-positioned to have commercial -- successful commercial launch later this year. Dave Friedman – Morgan Stanley: So just a quick follow-up if I can, for Dave. So, I mean, I guess what it seems like you’re saying is that your end of year spend is going to be at a higher run rate than your guidance is. Is that sort of a reasonable way to interpret what you’re saying?

Yeah. Exactly. It will gradually ramp each quarter, Dave. Dave Friedman – Morgan Stanley: Okay.

The better since for what let’s say 2012 sales and marketing will look like will be the fourth quarter of 2011. Dave Friedman – Morgan Stanley: Okay. That’s great. Thank you.

Thank you. There are no further questions. I’d like to hand the floor back over to management for any closing comments.

This is Paul. Thanks for tuning in this morning. We -- we’re obviously energized about getting the NDA in and hopefully presenting our results at ASCO and the earlier programs we think are quite promising. We have a mostly binary type decision to make with respect to sheddase, the sheddase inhibitor. And I think by the next time we speak we will probably, unless there’s yet another delay in the program, we will be in a position to clarify where we stand there. In any event, stay tuned and we will keep you updated with our progress. So thanks again for tuning in and good morning.

This concludes today’s teleconference. You may disconnect your line at this time. Thank you all for your participation.