Welcome to Isis Pharmaceutical’s Second Quarter Financial Results Conference Call. Leading the call today from Isis is Dr. Stan Crooke, Isis Chairman and CEO. Dr. Crooke, please begin. Stan Crooke – Chairman and Chief Executive Officer: Good morning and thanks everyone for joining us on today’s conference call to discuss the financials for our second quarter 2008. Lynne will review the financials and our progress today and I will primarily focus on the milestones that we hope to achieve in the coming months. Joining me on today’s call are Lynne Parshall, COO and CFO; Beth Hougen, Vice President of Finance; and Kristina Lemonidis, Associate Director of Investor Relations. Kris, would you read the forward-looking statement. Please.

Sure. Thanks, Stan. Good morning everyone. A reminder to everyone that this webcast includes forward-looking statements regarding Isis Pharmaceutical’s business, financial position and the outlook for Isis, as well as its Ibis Biosciences subsidiary, and its Regulus joint venture, and the therapeutic and commercial potential of the company’s technologies and products and development. Any statements describing Isis goals, expectations, financial or other projections, intentions or beliefs is a forward-looking statement and should be considered an at risk statement, including those statements that are described as Isis’s goals or projections. Such statements are subject to certain risks and uncertainties; particularly those inherent in the process of discovering, developing, and commercializing drugs that are safe and effective for use in human therapeutics; and developing and commercializing systems identifying infectious organisms that are effective and commercially attractive; and in the endeavor of building a business around such products. Isis forward-looking statements also involve assumptions that if they never materialize or proved correct, could cause its results to differ materially from those expected or implied by such forward-looking statements. Although, Isis’s forward-looking statements reflect good faith judgment of its management, these statements are based only on facts and factors known by Isis. As a result, you are cautioned not to rely on these forward-looking statements. These and other risks concerning Isis’s programs are described in additional detail in Isis’s annual report on Form 10-K for the year-ended December 31, 2007, and it’s quarterly report on Form 10-Q for the quarter ended March 31, 2008, which are on file with SEC. Copies of this and other documents are now available from the company. Back to you Stan. Stan Crooke – Chairman and Chief Executive Officer: Thanks, Kris. Here are the main points that we would like to make on the call today. First, we are…

Thank you. The question and answer session will be conducted electronically. [Operator instructions]. And we’ll go first to Jim Birchenough with Lehman Brothers.

Hi, guys. Just a question on the mipomersen program. Just wondering if you’d any greater clarity from FDA on whether circuit endpoints like LDL reduction would be a regulatory basis for approval for the Homozygous population for high risk patients whether you can move those discussions forward at all?

The position of the FDA is that LDBL cholesterol is an appropriate endpoint for very high risk patient. And so, obviously any patient that meets the very high risk definition is a patient that should be in a study that has LDL as the primary endpoint.

And what is that definition of very high risk then?

Well, it’s straight from the framing end definitions and that includes people who have very high cholesterol that can get to target at using traditional agents and have either coronary artery disease or cardiovascular disease of one sort or another. So, generally I think that’s the simplest way to think of it.

So, just following on with that if you look at the population that’s being enrolled in the second Phase III that you’ve announced yesterday, is that a population where FDA you would accept LDL as an endpoint for registration?

I think we are planning for LDL to be an endpoint that’s acceptable for homozygous FH and for the apheresis-eligible patients and I think the definition -- have brought the definition of very high risk yields remains to be better defined with the FDA.

Great. Thanks for taking the questions.

You bet.

We will go next Mark Monane with Needham.

Good morning and congratulations on a great productive second quarter and beginning of the third.

Thanks Mark.

Question for you regarding definition that Jim talked about, high risks versus very high risk, I mean, having high cholesterol is showing not a good thing, if you could add anything to those definitions? Is there a very, very high risk category? And maybe any update on what on the outcome study being planned as part of a comprehensive package?

As I think of it, there are very high risk and high risk patients and we are developing a drug to be used in combination with other drugs principally in patients who can’t get the target. So, by large most of the folks in the study have high cholesterol that hasn’t -- well all the folks in these studies have high cholesterol that hasn’t been amenable to get into target with the use of the available agents and most of them have a cardiovascular disease. And the categorization of very high risk and high risk is an algorithm that considers the level of cholesterol, the level of cardiovascular risk, the age, whether they have other lifestyles that puts them in a higher risk such as smoking and the like, and those who all have been fairly well defined for a number of years. So, what our plan is focus on very high risk patients and those high risk patients, even high risk patients are principally what you would think of the secondary prevention because they already have some evidence in many cases of cardiovascular disease.

Any update on the outcome study? What your plans are? What it might look like with your partner Genzyme?

We are making lots of progress and when Genzyme do plan to discuss the nature of the outcome study later in the year.

Regarding the milestones that you’ve listed, you talked about the cholesterol study starting this year that the cholesterol studies and also the CRP trial, Phase I started this year. Can we expect any other of these milestones like 715 data this year? How should we be thinking about this?

Well, what we said about 715, as the study is progressing nicely and we hope to finish it very late this year, early next year. And we hope to report the data very shortly after we finish it.

Very good. And then the last question is regarding the patent that you have, I guess the patent strategy here is looking at the targeting and the mechanism of the action. But then there is the unique patent on the novel chemical entity over new chemical entity. Can you talk about the strategy of adjusting the target or adjusting the mechanism versus adjusting a drug in particular?

We do it all, I think we control. So, of course, we have composition that matter patent and patent applications on all of our drugs including mipomersen. Secondly, method of used patents and what was allowed here as a method of use and that method of use includes any antisense’s mechanism and antisense’s chemistry, si-RNA for single strain except for Homozygous targeting any side in the message. And so, it reads a method of lowering apoB by targeting any side in the message. And then, of course, we have all of our core chemistry and mechanism of action in biology patents that give us a sort of lavish work of patent protection for the drugs and the technology. So, this patent that’s just been allowed is a very broad method of used patent that covers basically any side in the RNA that anyone could design and antisense’s inhibitor to interact with for any purpose that would be associated with apoB reduction.

Thank you very much for the added information.

You bet.

Our next question is from [Levan Raschkow] with Cowen & Company.

Good morning. Thanks for taking my questions. With first Phase III trial in Homozygous FH patients down going for some time, any involvement update that you could from that trial?

It’s going extremely well and we are right on schedule.

Okay, 36 spectator, next year any permanent fix on what we would see there from that trial next year?

No.

Okay. And one more question, the Phase II trial of the diabetes campaign 715, could you remind us the design of that Phase II trial?

Yeah, it’s a study in which patients have established diabetes, they’ve brought in for a period of weeks and rest in and out of their drugs and stabilize on the sulfonaurea. And then it’s -- then they are randomized to see that the placebo 100 mg per week or 200 mg per week of 715, they are treated for 3 months and the endpoint is two weeks after the last dose. And it was the involvement of first group that 100 milligrams of 715 the second group got the 200 milligrams because this was our first experience with 715 in combination with Type II diabetes agent. The primary endpoint of hemoglobin A1c, I think it week 15 if I remember correctly, the secondary endpoints are various measures of glucose and the ability to lower LDL cholesterol.

Okay, thanks for the clarity.

You bet. And if you want more information we can send you the summary of the posters one that at the ADA.

We’ll go next to Geraldine O’Keith with Fortis Bank. Geraldine O’Keith: Hello, good morning and congratulations on a great year so far. Stan, what color you, you are very rich now, got a lot of money in the bank. And I think its in the press release that you expected to last for five years. Maybe you can shed a little bit more light on how you expect to spend that? And if you would not expect to be profitability in five year time?

I’ll let Lynne answer the second question, she is good at taking about how we are going to save money and I’ll tell you how to spend it, except for our fund.

Anything, let me go first. Obviously we are in very strong financial position now. And that has been the case, our growth is sort of very attractive what we think would pick, good drugs and good markets. So, in putting any one of the drugs in the late stage of the pipeline on the market would make us profitable, very close to being able to be profitable now on the basis partnering revenue license fees and R&D funding. So, you can see that we’ve got a lot of things that are moving along nicely but I can’t give you our time profitability projection. And for now I’ll let Stan tell you how we are going to spend the money.

I think certainly, what I find very interesting about antisense in our business model. Since we are able to do all this with and yet spin with very little money and that’s all tied to keeping the company small, during early discoveries and early development and licensing our drugs at Phase III and not building all the infrastructure necessary for Phase III for commercial applications and so on. We think that strategy that works given the efficiency of antisense. And the evidence for that is straightforward, look at our financials and look at the pipeline and look at what we are doing. So, we tend to continue to that and clearly we can be cash flow positive and profitable, just to understand before even the first major drug gets marketed. We are planning to prudently invest more but very cautiously. And the areas we will be enhancing our first, we are going to retain more of our drugs longer that is through Phase II. We think that those Phase II data just add tremendous value. Second, we are going to be doing more robust Phase II programs CRP is an example but we will certainly be asking as many of the appropriate questions as are feasible in Phase II. I think that will add significant value to all of our drugs. And third, we are expanding into new areas, we are moving into CNS and we are re-integrating our cancer program and so you will be seeing significant number of new drugs and development and you will see it expanding into some therapeutic areas in which we haven’t been active with drugs developed by us over the last few years. I think that’s a bad as precise as ought to be today. But I hope I can give you an idea of how we’ll spend the money. We are not going to be in the category of that tech companies. We’re running through a $100 million or $400 million a year. We don’t need to do that, we don’t intend to do that. Geraldine O’Keith: That’s very helpful Stan. Would investments for the future is it also in queue perhaps investing in additional technologies?

Yeah, we’ve always, even when we didn’t have a lot of money invested in continuing to advance antisense technology. We are still at the end of the beginning in RNA based drug discovery. So, we are continuing to invest very substantially in all areas of basic research that involve our technology. We had no intention of, in the near future expanding into other technologies, we don’t need to. We can, with all new little group of people put two to four drugs per year into development with the technology that we have today. And by just investing slightly more, we can up that number meaningfully. That’s the way to spend our money. Geraldine O’Keith: Okay, thank you very much. Congratulations again.

Thanks.

We’ll go next to Ian Samaya with Thomas Weisel.

Thanks sir, thanks for taking my question. Just on the mipomersen program, Stan, you mentioned that EST is willing to accept the LDL lowering influence depending on the risk of the patient. Can you talk about from a safety standpoint, the liver -- potential for liver abnormalities, what level or colors is there from the FDA, depending on the diverse profile division?

No, I don’t think we can be precise about that and I don’t think the FDA even if you would ask them and they would tell you would maybe a precise answer to that. What happens as you look at the needs of the patient and the value that the drug brings then you make an assessment what the -- which profile is that’s how the way it’s always done. And I don’t know precise outcome, I do think it is interesting when you look at the stats in Phase III data and of course, these are the drugs that were used by everyone. The insulin of three up in the normal of ALT, when ALTs are measured monthly and require confirmation before they are reported, wants to know to the 5% if I remember correctly depending on the agent and the dose. And if you go back to the Phase II trials, the very few Phase II trials that have looked three times up as normal as function of those, the higher the dose of (inaudible) greater the incidence of ALT. So, this in fact, I think a substantial tolerance even in very low risk patients for some elevation in ALTs because people recognize that that’s just a sort of natural consequences of fiddling with lipids in the liver. I think what the FDA and the clinicians that I talk to are principally concerned with is is there any evidence of severe liver toxicity, idiosyncratic severe liver toxicity and (inaudible) best predictions of that. So, we are feeling very confident that the ALT profile of our drug is going to be very attractive and we certainly have no evidence of our drug producing any sort of severe liver toxicity. So, in some other words I don’t if I answered you question but I have to say that in the patient that we are talking about we are certainly very, very optimistic that the liver safety will be attractive related to the needs of the patients and the therapeutic of the drug.

Are you referring specifically to the Homozygous are also the heterozygous in the patients?

No, I’m talking about all the patients. I think if you look at all of the data we have, we actually have remarkably well tolerated lipid lowering drug with regard to liver and the more data we see, the better we feel about it. Now, clearly we have to get a lot more experience and the key step for us in the coming years is to gain that experience and large enough patient would and to do that prudently and then introduce the drug to patient drugs where we are doing the most value in a fashion so that we gain commercial experience that will teach us about the safety in real medical practice. So, we have all that ahead of us. There is work to be done, but as I look at this drug, its predictable, it works in every patient, it does thinks that no other drug can do and so far is imminently tolerable, so its imminently developable.

Thank you very much.

You bet.

[Operator Instructions]. We will go next to Aaron Reames with Wachovia.

Thanks for taking my questions and congratulations on a strong quarter. First question I have just is an accounting question, in terms of interest income as the rate that we saw this quarter, what we should expect on a going forward basis?

Erin, no, that has in addition to what you would think of this traditionally interest income. It has a variation in it because of the derivative accounting that we have to do for some of these. So, I can get accountants on the phone with you and walk you through how that likely will fluctuate overtime but no, the answer is no.

Okay, and then is there any update that can be provided on the regulatory status in Europe and any potential conversations that you had with the regulators there?

I want to leave questions like that for Genzyme to answer primarily. But, what I will say is that the teams are working really well together, we are making great progress on putting the documents together and getting the meeting set up and we are feeling very good about everything.

Alright. Thanks for taking my questions.

And our next question comes from Carol Werther with Summer Street Research.

Could you just tell us a little bit more about this study that started the second Phase III study. Do these patients that are at high risk, is there a LDL goal, is it 100 or is it 70? The ones that aren’t reaching goal?

The studies in patients with Heterozygous FH and as you know that’s in America, that’s not a generic diagnosis, that’s clinical diagnosis, there are 100 patients. The primarily end point is LDL reduction after 26 weeks of treatment, so 28. And if I remember correctly it is 2 to 1 immunization drug to purse though. These are patients who are on a maximum tolerated therapy and have not been able to get their LDL to target. I think the requirement to get in the study maybe a 130 LDL; I don’t remember that for sure Carol, so, don’t hold to that. And these people all have coronary artery disease. So, in a perfect world I would say that most cardiologists would tell you they’d like to see them get to 70. But in these patients people would be delighted to get them to a 100.

Yes, okay, great. Thank you that make sense. And then after the study is done at the 28 weeks, do you plan to follow these patients beyond that or are you sitting --?

Yeah, all of the folks in these trials will be allowed to continue, the opportunity to continue the drug in various open label extension studies and other processes we want to get as much long term safety data out of all of the patients that we have as possible. So, we have the primary endpoint in all these studies available all of that after six months of treatment that we certainly are having success in getting people to roll over and open label extension studies that gives us the long term safety data.

And how often are they monitored for liver abnormalities?

I don’t remember in this new study that’s starting, if you might want to ask the folks that Genzyme or even we can check that for you. But in all of our studies we’ve been monitoring weekly for all the reduction in liver safety and then as we move to the longer term studies after an initial period of weekly evaluation, we are going to monthly.

Okay, great. And can you share with us any of the secondary endpoint, are you doing any imaging study?

No, not in that trial.

Okay. And should we assume that when you start these three additional pivotal trials this year that some of those will include patients in the EU?

Oh, sure. The additional trials include apheresis eligible patients, very high risk patients and then two studies in high risk patients. And as you know, a lot of the data on mipomersen to-date have been generated in EU, we have continued to enroll patients both in the US and in Europe.

Okay, great. Thank you very much.

You bet.

[Operator Instructions]. It does appear there are no further questions at this time. Back to Crooke. I would like to turn the conference back over to you for any additional or closing remarks.

Again, thanks everyone for your interest and thoughtful questions and we look forward to continuing to make great progress and tell you all about what we are doing. Thanks.

That does conclude today’s conference. Thank you for your participation, you may disconnect at this time.