Welcome to the Isis Pharmaceuticals first quarter financial results conference call. Leading the call today from Isis is Dr. Stan Crooke, Isis Chairman and CEO. Dr. Crooke, please begin.

Thank you. Good morning and thanks everyone for joining us on today’s conference call to discuss our first quarter financial results. Joining us on today’s call are Lynne Parshall, COO and CFO; Beth Hougen, Vice President of Finance; and Kristina Lemonidis, Director of Corporate Communication. Kris, will you lead the forward-looking statement please.

Sure, Stan. Good morning, everyone. A reminder to everyone that this webcast includes forward-looking statements regarding Isis’s business, the financial outlook for Isis as well as Regulus, a majority-owned subsidiary and the therapeutic and commercial potential of Isis technologies products and development. Any statement describing Isis goals, expectations, financials 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 goals. 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 as human therapeutics and in the endeavor of building a business around such products. Isis’s forward-looking statements also involve assumptions that if never materialize or prove correct, could cause its results to differ materially from those expressed or implied by such forward-looking statements. Although Isis’s forward-looking statements reflect the good faith judgment of its management. These statements are based only on facts and factors currently known by Isis. As a result, you are cautioned not to rely on these forward-looking statements. These and other risks concerning Isis programs are described in additional detail in Isis’s annual report on Form 10-K for the year ended December 31, 2009, which is on file with the SEC. A copy of these and other documents are available from the company. With that, I’ll turn the call over to Lynne, to review financial results.

Thanks, Kris. The purpose of the call today is to report our financial performance for the first quarter of 2010. As usual, I’m assuming that you’ve read the details of our quarterly financial results in our press release. So I planned to just cover the highlights. Because we’re conducting a series of conference call to discuss our pipeline and we have continuing news following the promotion, and today’s call will primarily focus on our financial results. The main points I plan to emphasize are: first, we’re in very strong financial position, and we’ve plan to do better than our guidance for the year. Second, we’ve completed the first, the new type of partnership with GSK. This type of transaction is indicative of our new deals paradigm and we’re ensuring a high level of interest from pharmaceutical companies in this new model. Third, we off to an excellent with 2010 with successes in all elements of our business, and we have many more important milestones ahead of us this year. As I’ve said, we’re off to a great start, because we think that GSK transaction is unique and similar to other opportunities that we may consider I’ll spend a little bit of time reviewing it for you. The GSK transaction is what we call the preferred partner alliance. It’s consistent with our business strategy, which is to retain our drugs through Phase II proof-of-concept and then license them as they reach this key value inflexion point. Benefits of this type of transaction are that we retain control of our discovery and early development and we have a knowledgeable partner at the time of our licensing decision. For us and our partner, this means that we can move much more expeditiously and of course, we gain immediate and continuing financial benefit. Let…

Thanks, Lynne. Before I discuss the milestones, we hope to achieve in the rest of the year, I do want to spend just a minute discussing the accomplishment we already have under our belt. With regard to this development in December, Teva License OGX-011 from our partner OncoGenex and we received our portion of the initial payment. During the first quarter GSK broadened its relationship with our joint venture Regulus and of course Regulus itself and the partnership, the original partnership and the expansion are all based on technology that were developed by Isis. We also announced our prefer partner alliance with GSK and then finally we received a $6 million milestone (Audio Gap) from BMS associated with approval to initiate clinical trials with our PCSK9 drug. Now focusing on mipomersen, our Phase III program continues to advance with outstanding results announced from heterozygous FH clinical trial. We also published the complete results of our homozygous FH trial in Lancet and we’ve already made very significant progress in getting ready for US and EU registrations. The rest of our pipeline is continued to mature the good phase, our partner Excaliard initiated three proof-of-concept Phase II studies in wound healing. We began the 13 week dosing portion of our Phase I study with SGLT2 inhibitor. We also reported positive Phase I results with the glucagon receptor antagonist and we initiated the Phase I study and patients with ALS for SOD1 inhibitor. Finally, late last year, we broadened our pipeline with the additional development candidates for three new programs, each of which is unique and exciting, ApoCIII, Factor XI and SMN. As you can see we’ve had lots of progress in the business across the Board. Now let’s focus on the busy agenda that we have for the remainder of the year.…

(Operator Instructions) Our first question comes from the line of Salveen Kochnover with Collins Stewart; please proceed.

Stan, when we look at the two upcoming Phase II mipomersen trails, how should we think of these populations as compared to the heterozygous and homozygous FH population in terms of baseline lipid-lowering therapy that they’re taking?

You should think of these populations is very similar. Remember that everyone in all of these patient populations has eye to severe cardiovascular risk and everyone is taking maximum tolerated lipid-lowering therapy. So there might be slight differences in the exact amounts of what patients are taking more in character.

In terms of the full Phase III Memphis data and heterozygous patients, when should we expect that?

We are submitting four scientific meeting and as soon as we know, whether it’s exceptive grow we’ll let you know exactly where and when.

Our next question comes from the line of Mark Monane with Needham & Company. Mark Monane - Needham & Company: I have a couple of questions for the team on today’s comments. One is on the mipomersen. Could you kind of after review with us how many patients are in the current trial or we’ll see data and I don’t see the trial that like a lot, which is statin intolerant patients, if you can also update us on that?

There are 58 patients in this severe study and 158 patients in the high cholesterol, high cardiovascular risks and I think the statin intolerance study is progressing along nicely and I’m not sure that Lynne, have we provided guidance, when we are going to provide those data?

We have it, and the study is doing just according to plan. Mark, we just had queue these things there. Our team is working really hard to get the NDA filed and so it’s all the same people doing all of these studies. So our focus is on making sure we get the data in for the pivotal Phase III studies, but that study is going on just fine. Mark Monane - Needham & Company: I spoke recently at the lipid conference and there was lot of emphasis not on LDL rather on non-HDL cholesterol, saying that that maybe the new focus going forward. Is that something you’re familiar with and how would mipomersen doing a worldwide, where you think more of LDL just putting about all the particles together, so you just have HDL and then non-HDL cholesterol?

Well, we completely subscribe to that and what we’ve reported is that the mipomersen causes a reduction in all assets and equipments, and so it reduces LDL and triglycerides and VLDL on Lp(a), so one of the reasons that mipomersen so excites people in cardiovascular community is a bit lowers every atherogenic lipid that is at least known today. And so, if you look at non-HDL versus HDL, mipomersen shined even better one of the mistakes that I think has been made, really is showcasing things solely on LDL reduction, mipomersen does a lot more than that and it’s all good. Mark Monane - Needham & Company: Then in terms of the cancer program, I guess we’re going to have an update on the cancer program, is that coming up?

Yes, we set up not yet, Chris.

Yes, and we will send our reminder shortly. Mark Monane - Needham & Company: Will there be any data of the upcoming ASCO or EHA meetings?

I think so, yes.

Our next question comes from the line of Ted Tenthoff with Piper Jaffray; please proceed.

Just to clarify, when it actually comes to responsibility for filing the NDA that rest in the hands of Genzyme, if I’m not mistaken and do you foresee any issues with their recent challenges with the FDA spilling over into the mipomersen filing?

The responsibility does we decide with Genzyme and we don’t see a significant likelihood of issues spilling over. Remember the problems that they’re having are related to biological manufacturing. We manufacture mipomersen and mipomersen is in the drug division is clearly a different division and a different set of issues.

When it comes some of the other studies and I apologize, this was asked. Such as a less frequent dosing and things along those lines what’s the status there?

We’re not looking at less frequent dosing, where we are comparing yet eventually we will probably look at less frequent dosing, but the strategy has been from the time I first talked to you about mipomersen, is it we filed the first NDA, with a simplest set of data as possible to 100 milligrams a week, injection once a week all patients treated that way. As soon as we’ve thought that we had a solid evidence of efficacy in Phase III, we then began looking at different dose schedules so that we can offer patients options actually this is SubQ Drug and some patients won’t like giving the drug in the side that are some might like giving it in the abdomen, some like giving small doses daily, some might like it weekly; and so, we’ve now began that program and it’s going really well. We are looking at small daily doses, three times a week dosing and the 10 versus weekly dosing. We’re confident that those other regiments will be work and will be nice alternative which had talker to patients and so that program was moving along and we would expect to be offering those alternatives doses to patients in supplemental filings that could happen fairly rapidly after our initial filing.

Just have add, I’ve been enjoining the pipeline uptake cost, I think that’s really a unique idea and very helpful to go through in detail all the different drug scenarios that you’re working on.

Thanks Stan. It’s a great problem to have when you have 22 drugs and you’re too complicated to deal with on a single call. How many companies do you fall with have that problems?

Our next question comes from the line of Eric Schmidt with Cowen and Company. Please proceed.

Hi, this is Craig Gordon for Eric. Just a couple of questions first, I was hopingly you could let us know when you might provide the next safety update in terms of all the mipomersen data on hand?

We haven’t really talked about that, Lynne do you want to comment on that.

We don’t really have a particular time when we will do that in every time we announce the Phase III study, I think we’re providing quite a lot of detail and, we have two Phase III study set the data that are coming up in the middle of the year, the two studies that Stan talked about, so there is no you current plan to talk about safety in our ongoing studies, because we feel like we are presenting it on a pretty regular basis as we get these Phase III event.

I think the best answer we’re going to give you is not so much about numbers, but what do the numbers mean, and with regard to liver safety, what I hope we can do, is in our panel conversation at our annual meeting. Help people understand, how to think about ALT elevations and not by what we say, what the deal experts and all of them putting the (Inaudible) rules together that’s (Inaudible) and who will deal with these patients on a regular basis. We think the overall profile continues to look about the same as it always has and we think what’s really been missing from a lot of thinking on (Inaudible) is the context with about with the ALT elevation, that’s something we’re going to very hard to do with our annual meeting.

If I may just ask two more questions, Lynne why are you guys waiting till mid year carries guidance, is there any particular reason why you don’t want to do it now?

Because, we could do it now, and then we could do it mid year, again we want to make sure that we have a very clear picture again that may happen for the rest of the year, so that we can give you the best update that we can.

If I may, just one last question, as you guys begin to work on, or has you begin to think about the NDA filing and how you and Genzyme given thought you where a rental program do you might suggest, if you guys do paying on suggesting the rents program and if you can kind of just update us on your thoughts there?

The answer is, of course that something that we’re actively thinking about and it will premature at this point to share our thoughts on it, but we’ve got a significant team working on that.

Our next question comes from of line of Carol Werther with Summer Street Research; please proceed.

I was just wondering if there’s any update on when you might start the outcome trial with mipomersen?

Well, we’re making great progress. The things that we are learning really relate to a long term compliance with the drug, that’s the single most important thing that we need to do now that we are confident that we have a efficacious drug and we believe it’s going to be safe and there we’ve completed some work that helps us understand various approaches that physicians can take to mitigate injections at reactions. We are also looking at the alternative dose schedules and in addition, we’re getting our first experience with those adjustments, so that we’re allowing in our long term dosing experience. All of that is feeding into the outcome study planning and so we feel, we’re making very good progress towards that outcome study.

So the different doses might decrease the skin reactions, is that what you’re saying?

Well, they do seem to decrease skin reaction, lower dose gives you a little less per injection, but the important thing is, if it gives patients different options to use, different patients like different things. So in an outcome study, the thing that we want to do, we want to avoid an outcome study that fails and because of a poor study design. So we are taking the lesson that we’re getting from all of these trials including looking at long term compliance in very long term follow-up and incorporating that information in our planning for outcome study and we think that that’s the most important thing that we can do, and that’s what we’ve been talking that for the last, I guess nine months for year. Lynne, do you want to add anything to that?

No.

In terms of the injection, did the patients have to mix it up now and would some of these other doses be like a fancy kind of pen?

The patients don’t mix it up. It’s pre-filled. It’s in solution, it just drawn up into a syringe. As we look at different dosing solutions we’re also now beginning to look at different administration devices. The first NDA will have simply a 200 milligram, a week dose and viral. In subsequent fillings, we expect different dose schedules as well as different presentations of the drug, pre-filled syringes, needle-less injector, all these things are being developed and all of them will improve compliance over the long term and so we want as much of that information before we start three or four, whatever this year outcome study to help us design the study properly.

Do you have any timeline on when we might and see some of the results of the different dosing trails?

We don’t have a timeline yet, we have to talk with Genzyme about it. I can tell you that we’re very pleased with the progress we’re making. We had a meeting with our team in Genzyme, yesterday. So I don’t suppose that we discussed.

No, we don’t have any particular timing, but this is a Phase I study and it showing us exactly what we need to go onto the next sets of studies that Stan described, but we are very pleased with progress, everything is on schedule and moving along well.

Our next question comes from the line of Pamela Bassett with Cantor Fitzgerald; please proceed.

Did GSK preferred partnership really to me highlight the ability that Isis has to leverage the platform and you really monetize the platform to rather than later and I’m wondering how many of these types of partnerships can the organization manage and integrate?

We agree with you; and we think that the level of interest that we have is reflective of what real skeptic in the pharmaceutical industry now, think about what we’ve accomplished. These are no longer early adaptors betting on a future. These are people looking at the data, the technology and saying, we need to use this to fill our pipeline. I think that’s a very big difference. We are highly selective these days about what transactions we’ll consider and this preferred partnership type transaction is what we consider the idea of solution for us and our partners; and we can contemplate quite a number, it depends on scale of the particular partnership. Of course we’re not willing to do partnerships that take us in the areas that we don’t want to go. So there are some areas that we’re not interested in and partners interested in those areas, that’s not something that strategically of interest. So we have a very clear strategy that assures that the deals that we get are going to be strategically contributory and help us move in directions that we think are right for the company and/or the scale that fits with the size of organization that we want from size of organization we have. We think that we can manage quite a number.

Just remind me whether the ideal structure includes R&D payments in addition to the milestones?

The ideal structure from our perspective is one in which we are accountable for the early discovery and early development. So what’s crucial is that we don’t have a whole series of joint committees that we have to manage through between the discoveries and when we offer the drug to license; and so typically it’s not going to have a lot of R&D payments rather it will have excess payments and funding in other ways and all of that processes assures that we can proceed relevantly independently on a course that’s mutually agreed. Lynne, do you want to add anything to that?

Yes, I think just a little bit of color, it may be on the answer, but we tend to see of it many biotech companies doing that we’ve historically done where you have a detailed budget that the other company pay us in the form of R&D payments. As you would expect, that team really interested in where every single dollar is going and not just understanding that, putting control in that, which takes away the type of autonomy that is our goal in each transactions, once you say, we’ll give an option on these drugs, we are going to go develop them, this is the package that we’re going to give you to consider to make your licensing decision and you don’t have to pay us for experiment we do, we get to decide what those experiments are. It really supports the operating model that we’re devolving here which is, it is much more hands off, our partners are showing the confidence in us, that we can conduct the discovery and development in ways that are effective and efficient then to meet the goal of having a high quality Phase II package. And so the detailed R&D budget, R&D planning control aspects of traditional deals is exactly what we’re moving away from and we’re happy that our partners are showing the confidence in us to agree with that model.

So that type of agreement then basically condenses, potentially condenses development time line by minimizing interaction with a variety of committees as well as may be pushing up to potential royalty payment, not receiving cash from them?

Well we see, one way to think about it is, that we could license in Phase II, or we can give an option to a company to have a license in Phase II on terms and better agree. And when we do the option, we trade away the opportunity to run an auction like we ran from your promotion partner gains from that. On the other hand we get funny now and we also partner as in the GSK, we’ll get money all along the way and we get partner that’s ready and trained in those the drug when its time to license is these trade off and so the simplest way to think about it is that the money and the autonomy must be right for us to do one of these transactions or we’ll simply wait until Phase II and run on option.

Our next question comes from the line of Shiv Kapoor with Morgan Joseph.

I want you guys to discuss dropout rates and compliance going forward and the reason obviously I am interested in this is because the success of mipomersen will depend upon the outcome trails eventually, and the outcome trials, the biggest risk I see there is compliance because of the higher the compliance we know the drug works. So are there some steps that you’re taking through improved dropout rate? What do you expect in the current studies for the drop rate to be and with all the new stuff you are doing with new regimens, are you focusing on dropouts?

So the current studies are all rigid, remember all these Phase III studies are designed exactly the same, the patients must take 200 milligrams a week, it has to be at site, it has to be administered most injections have to be administered at the clinical trail site. So none of the work that we are doing to mitigate is really contributing to the dropout rates or lessening the dropout rates in any of the Phase III trials all of the work that we are doing looking at mitigation and alternatives is designed for the future commercial success for the drug and the things that we are doing are, first, we’re trying to learn about things [reflection] and that can start reaction that essentially happens. Things like cold, topical steroids and things like that and we found a lot and that’s going to incorporated. We have also learned that allowing patients to inject themselves helps, and we have learned that allowing patients to select the site they prefer helps. Is it in the fire in the abdomen or beyond? In addition, we are looking at different dose schedules as we planned to again see whether to give people the opportunity to say I’d rather give myself small daily doses or a larger weekly dose. We think people will sort out into different types of people who want to use all that, so all of that is in progress and all of that will contribute to the commercial success of the drug and all of that will contribute to reducing dropouts in the outcome study.

Like we should expect similar dropouts in the current study?

We certainly are incorporating any of these things to reduce dropouts in the ongoing Phase III study.

(Operator Instructions) Our next question comes from the line of Stephen Willey with Thomas Weisel Partners.

Just also wanted to echo the appreciation here with the disease focused costs. I wasn’t able to participate in the last week, so that will be manifest is SGLT2, question just a couple things, one, can you may be just talk about some of the potential advantages that we seen emerge with respect to hitting SGLT1 as well and may be what your thoughts are there. And then secondly, it sounds like your drug is actually able to clear more glucose through the kidneys or now we’ve seen a fairly high rate of urinary tract infections with the first generation of drugs, so wondering how you think about those infections with respect to pushing more glucose to the urine as well? Thanks.

Yeah, I think those are all questions that we’re going to try the answer as soon as possible. Here are the potential advantages that we think our drug has. First, small molecule drugs adjust the KM or the infinity of the glucose transporter for glucose. As such, the maximum effect is maybe 50%. We lower SGLT2 levels about as much as we want, so if you want SGLT2 to go down 90% we can do it, make it go to 95%. So we think our maximum glucose clearance should be higher. Second, we think specificity is important we are certainly aware of the argument that SGLT1 maybe contributing to the performance of some drugs in the clinic. We think long-term inhibiting SGLT1 in the gut may produce some meaningful problems if may in the short-term benefits efficacy within the long-term we think it may be associated with problems. And so we think there should be some safety benefit that comes from being as selective this we are. As we increased glucose in urine, we expect slightly the other SGLT2 inhibitors to have an increase in urinary tract infections we think that will be a class issue. And we think that it’s mostly not really have X-concentration in the urine, but that you have a meaningful amount of sugar in the urine, and so we’re certainly hopeful that we will not see a dramatically greater increase in urinary tract infection, because it’s the presence of glucose not the absolute amount of glucose in urine that we think is the factor there. Okay. A lot of questions and one of the points that we made on our call is that we understand that this drug is the accession improves rule, this is the only drug that we’ve chosen to move forward where there is small molecule competition. And we’ve done it eyes open because we think the target is interesting because it expands us into the kidney because our drug is so potent and interesting. And the fact that in Phase I and early Phase II, we’re going to be able to judge what will just a benefit as we hope for the drug or not and if we hear we’ll proceed, and if we don’t then will move on to something else.

It appears there are no additional questions. I will now turn the call back to Dr. Crooke for closing remarks.

Well, thank you very much for all the interest in the questions and we look forward to chatting with you in the near future. Thanks very much, bye.