Welcome to Isis Pharmaceuticals second 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. Well, again, apologies for the problems with the call. Good morning and thank you, everyone, for joining us on today’s conference call to discuss our second 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 read the forward-looking statements?

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, its majority-owned subsidiary; and the therapeutic and commercial potential of Isis technologies and products and development. Any statement describing Isis’ goals, expectations, financial or other projections, intentions or beliefs is a forward-looking statement and should be considered an at-risk statement. 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 drugs. Isis’ forward-looking statements also involve assumptions that if never materialized or proved 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’ annual report on Form 10-K for the year ended December 31, 2009 and its most recent quarterly report on Form 10-Q, which are on file with the SEC. Copies of these and other documents are available from the company. And with that, I’ll turn the call over to Lynne to review our financial results.

Thanks, Kris. We continue to make progress in the first half of 2010, highlighted by our announcement last week of additional positive data on mipomersen. We are now on track to file an NDA early next year to bring mipomersen to our first patient population. These are patients with severe risk who have no therapeutic alternative. We hope that mipomersen would be the therapeutic alternative that we will help them lead longer, healthier lives. As usual, I’ll assume that you’ve read the details of our second quarter financial release in our press release. But I would like to cover a few of the highlights now. Of course, I’d be happy to take questions at the end of the call. We had a pro forma net operating loss of $17.1 million for the first half of 2010. This result reflects a slight decrease in revenue and an increase in expenses compared with the same period last year. We expect a reduction in revenue, as it comes from the end of amortization period for collaborations that we are ending in accordance with their terms. The higher expenses in the first half of the year were also anticipated and mostly due to an increase in activities related to the ongoing mipomersen Phase 3 program, including work to complete the Phase 3 studies, NDA preparation, and preparation to manufacture for mipomersen launch. We expect our mipomersen expenses to continue at this level in the second half of the year, as we continue to progress towards our initial regulatory filings for mipomersen and continue clinical activities to support our next filings, as well as product enhancements. In addition to our mipomersen progress, the second highlight of 2010 so far was the initiation of our new collaborative relationship with GlaxoSmithKline. We are extremely pleased that so…

Thanks, Lynne. As Lynne outlined, we’ve made significant advances throughout our pipeline in the first half of this year, the most recent and the most important advance was the completion of the Phase 3 program for mipomersen. That program will support our applications for first marketing approval. Last Wednesday, we announced that we have completed the Phase 3 program for that initial filing. All four Phase 3 trials have been completed. All four Phase 3 trials were positive. The results of all four trials showed significant reductions in all forms of bad cholesterol. And the safety profile was consistent in each trial and the side effects are easy to monitor and straight-forward to manage. I want to divide my comments on mipomersen in two parts. First I’m going to describe the immediate future for mipomersen. Obviously, this is the most important thing to focus on. And then I’ll discuss the work that we are doing to enhance mipomersen’s profile and expand the market over time. Our first priority is to bring mipomersen to patients who desperately need it. These are patients with severely high levels of bad cholesterol despite all the medicines has to offer a day. They are at extremely high cardiovascular risk. In just the US and Europe, Genzyme estimates that there are about 30,000 of these patients. When we talk about these patients, we’ve frequently divided them into two groups; homozygous familial hypercholesterolemia or homozygous FH and severe. But in truth, they all have the same profile. Most have already had a cardiovascular event, and they are all doing everything they can to get their bad cholesterol down. These patients are young. The average age, for example, in the severe trial that we’ve reported last Wednesday was 51 years old, and most of the patients have had…

Thank you, sir. (Operator instructions) And your first question comes from the line of Salveen Richter from Collins Stewart. Please proceed. Salveen Richter – Collins Stewart: Good morning. Thanks for taking my question. In terms of mipomersen, how confident are you that you will be able to file for the severe indication in the first half of next year? And if this does not occur, is your regulatory strategy in terms of timelines for the outcome study going to change?

We’re absolutely confident. We have four positive Phase 3 trials, and we are working hard on the registrations. Salveen Richter – Collins Stewart: Great. And then just timelines for initiation of the outcome study?

We are getting – the outcome study will have – there is a lot more work to do in getting ready for the outcome study. The next step is to initiate our long-term – longer term trials that provide the safety database for our heterozygous FH filing, which we hope to have take place in Europe as the next filing. Lynne, do you want to add anything to that?

No. Salveen Richter – Collins Stewart: Thank you.

And your next question comes from the line of Ted Tenthoff from Piper Jaffray. Please proceed. Ted Tenthoff – Piper Jaffray: Great. Thank you very much for taking my question. Lynne, if I may just spend a little bit more time on the R&D side, we did see that big bump-up in 2Q, and I think you said this was mipo related and you gave some new guidance with respect to operating expenses and where the loss would come in. Was there anything special on this quarter that I missed? And is this kind of the level you expected to be at for the rest of the year, as you said?

Yes. The R&D expenses are at about the level we would expect them to be at. And actually, while there is – it looks like a significant bump-up between this quarter last year and this quarter for 2010, those expenses have been increasing gradually as the Phase 3 program has expanded and as we are preparing other things that are necessary to launch mipomersen, for example, getting right to commercial manufacturing. Ted Tenthoff – Piper Jaffray: Okay, great. That’s very helpful. Thank you.

And your next question comes from the line of Eun Yang from Jefferies. Please proceed. Eun Yang – Jefferies: Thanks very much. From the last week’s the two Phase 3 data, one is in severe, the other is in high risk – comparing the data from the last week’s data versus previous homozygous and heterozygous, can you comment on why the persistent ALT elevation was higher with severe and high-risk patients compared to homozygous and heterozygous?

Well, what we said on the call and what we believe is that in the homozygous FH patient population, median reduction and LDL was 25% at 28 weeks. And in the study that we reported, the median reduction and an intent to treat analysis in the severe was 36%. And we saw – so in that older, less drug resistant patient population, of course, homozygous FH patients are more drug resistant. We did see more rapid and more profound apoB reductions. And we look at these ALT as really manifestations of the basic activity of the drug and altering lipid. And so we had people who had 70%, 80%, 90% reductions in LDL in a very short period of time, and we think that’s the explanation for the differences in the numbers. The other thing I would say to folks is that we are still dealing with pretty small numbers. 54 patients in one study, 58 patients in another, and I think you can get some variations in response to other measurements that really smooth out as you get a larger patient experience. But in sum, we think that there was a slightly higher incidence of ALT elevations in severe because we’ve got a fairly significantly greater reduction in LDL. Eun Yang – Jefferies: Okay. And then the second question is that you mentioned that this alternative dosing study at 30 milligram daily or 70 milligrams three times weekly, patients on those alternative dosing, did you see low dropout rates than 200 milligram weekly dosing?

We’ve only done the initial study, which is the three-week study. You remember, in our Phase 2 experience, we had very few dropouts at the five and 13 weeks. The challenge is six months and 12-month studies. So we can’t comment on a dropout rate. What I think is important is that our intention is over time to provide better patient, physician and nurse education. We are starting to do that. We’ve started to do it over the last few months that we are going to offer patients the opportunity to dose themselves, not just in open-label studies, but in all studies. We are going to allow patients to select their site and we’re going to give patients eventually a choice of whether they like to give themselves an injection once a day, three times a week, or once a week. I don’t think it’s possible to predict which type of dosing is going to be preferred by the largest group of people. What’s important is that people are different. And some people would rather give themselves a dose daily that’s very small. Some people would rather just get it over with and do it on a Sunday night. And so our whole strategy is and has been to educate more and offer better options or more options to patients so that they can select the thing that – the approach that they like best. Eun Yang – Jefferies: And then I want to ask you the question differently. So in terms of the injection side reactions, was the 30 mg daily or 70 mg three times a weekly milder than 200 mg weekly dosing?

Yes, probably. Again, we have a lot more work to do. And what we need is experienced dosing for six months or a year before we can draw a firm conclusion. That’s the point of the next study, is to figure out what – how people feel about giving themselves daily doses versus every week doses. And we need longer-term experience before we know what the overall behavior of injection side-reactions is and the function of dose and frequency of dosing. Eun Yang – Jefferies: Thank you.

You bet.

And your next question comes from the line of Mark Monane from Needham & Company. Please proceed. Mark Monane – Needham & Company: Thank you – good morning – for taking my call. You’ve presented quite a lot of data on the Phase 3 trials in terms of LDL reduction absolute, LDL reduction present, LDL levels less than 100, LDL levels less than 70. When you and Genzyme and your teams think about the data, how do you position these different data points that you’ve pointed out in terms of both the regulatory and commercial? Are there any Stan or Genzyme favorites here?

No. There are cardiovascular community favorites. And it all depends on the patient type. In the first group of patients that we’re going to be treating, of course, percent reduction matters, but what really I think matters the most is the absolute reduction in LDL and other atherogenic lipids. And so for those patients, that’s why we’ve tried to show the 100 milligram per deciliter average drop. That’s terribly important because that’s tied directly to reductions in cardiovascular risk. So the absolute reduction in all these atherogenic lipids will be important to everyone, but obviously if you come in with an LDL of 400, getting your LDL down to any reasonable level is a giant step forward. Then there are standards based on cardiovascular risk that people would like to achieve. And for people who already have pre-existing cardiovascular disease, in a perfect world, cardiologists would like to get their LDL down to 70. And so we talk about below-70 because 70 is the number at which cardiovascular lesions – pre-existing cardiovascular lesions are thought to begin the result; and for somewhat lower risk people, getting to below 100; and then for the very, very high risk people, getting to the level where you don’t need apheresis. So all of these things matter, and we try – to the physicians who are treating these patients, and these patients, and they matter differently depending on the patient. And so we try to present as much information as possible in the vernacular that’s used by the physicians who treat these patients. Does that help? Mark Monane – Needham & Company: Yes, that definitely helps. The (inaudible) is somewhat in the eye of the beholder, and you've been very straightforward (inaudible) parameter. So that's been helpful. Can I ask a follow-up question?

Sure. Mark Monane – Needham & Company: In terms of the key milestones, what's noticeable is that you have a number of different organizations that are using antisense in different delivery technologies in terms of injections into the eye, which I know you've started with Vitravene a while ago, but also aerosolized products, topical products. Can you talk about how do you match the disease and the drug in terms of thinking about the Isis pipeline; and the disease, the drug and the delivery method in terms of the Isis pipeline?

Well, I’m just going to recapitulate the basic scenes of the pipeline called, Mark. We use systemic delivery for targets that we believe are attracted by systemic delivery. These are targets in the organs of major accumulation of these drugs, liver, kidney, bone marrow, fat cells, spleen, and cancer and sites of inflammation. We also balance our portfolio with drugs that aren’t administered systemically because clearly a drug that’s not administered systemically has a different kind of safety profile. And we use local delivery when there are targets sensible to use locally. So in the eye, clearly macular edema is a local disease. And we also know that administered systemically antisense drug don’t get in the eye. In the brain, we know that we don’t cross the blood brain barrier. But we know that we can give these drugs intrathecally, or directly injected into the fluid around the spinal canal, but that’s how we treat severe neurodegenerative diseases. And again, the opportunities in the US for the severe neurodegenerative diseases are quite different from the opportunities in risks associated with lowering cholesterol. And our drugs can work topically, and there are opportunities to improve wound healing. So our partners at Excaliard are doing that. And finally, our drugs can be administered by aerosol administration quite nicely, and they are administered that way for lung targets where we don’t really want a lot of systemic delivery. And all of that then balances our portfolio in terms of opportunity and types of risk, and we think it adds to the attractiveness of the technology and the overall portfolio that we can do all those things. Mark Monane – Needham & Company: That was helpful. And then lastly, I was unclear, and I apologize if this has been asked already, the data that we just heard about from you and partner Genzyme in terms of the patients at high risk and the severe hypercholesterolemia patients, the data they presented last week, at top line, when will we see that data so we can evaluate the entire data package?

We can’t tell you. We’re still analyzing the data. And so the analysis of two Phase 3 trials like this takes time, and then we have to put together submissions for scientific meetings and typically those submissions are many, many months ahead of the meeting. So we don’t know yet. As soon as we do know, we will let everyone know when we are doing it. But I mean, you know very well that typically is a lag of good many months. Mark Monane – Needham & Company: Right now, that's fair. That's fair. Thank you very much for the added information.

Sure.

And your next question comes from the line of Pamela Bassett from Cantor Fitzgerald. Please proceed. Pamela Bassett – Cantor Fitzgerald: Thank you. Good morning, everyone. I’d like to know whether the follow-on drug to BMS’ PCSK9 will involve 2.5 chemistry and to what extent does the advanced chemistry factor into the relationship.

In fact, the goal of the follow-on program with BMS is principally a generation-two goal. We expect the follow-on compound to be a generation-two compound. Remember that we are not quite ready to select the generation-2.5 chemistry. We’ll do that before the end of the year. But even with the very potent generation-two drugs that we have, with additional screening and additional work, we usually can find a drug. That’s three to five times more potent than the compound that we’ve selected some years ago. And that’s what we are doing with BMS. Pamela Bassett – Cantor Fitzgerald: Okay. Thanks.

Do you want to add anything to that, Lynne?

No. Pamela Bassett – Cantor Fitzgerald: Thank you.

And your next question comes from the line of Carol Werther with Summer Street. Please proceed. Carol Werther – Summer Street: Thank you. Stan, how do you think the label might read when mipomersen is approved? Do you think it will be more label for, say, something like homozygous plus severe, or do you think there would be levels of LDL? Do you have any thoughts on that at this point?

We’ve been – we're working with Genzyme and we have a lot of thoughts about it. Lynne, do you want to respond to that question?

No. I think the most important point is that we believe that it will be written to cover both of those patient populations. And I think I would defer that question with time and to our colleagues at Genzyme who are taking a lead in that regulatory strategy. Carol Werther – Summer Street: Okay. And do you think you will have any of the data on the three times a week or daily dosing in the filing?

Those are – the studies will be still in progress, I think, going on. We’ve always contemplated those as supplemental NDAs – being submitted in supplemental NDAs. Of course, we’ll have some data because the studies will be in progress that we think of those as supplemental NDAs. Carol Werther – Summer Street: And then with the Bristol PCSK9 product, are you – are they seeing skin reactions with that product also?

Sure. We see injection side reactions – I mean, you see injection side-reactions with all subcu drugs. You see it with (inaudible). And the injection side-reactions with these second generation antisense drugs were all fairly similar, and of course, we benefit with regard to all of our programs based on the experience that we’ve had in Phase 3 with mipomersen. And that informs how we handle and what we do with all of our drugs. Clearly, people who have LDL problems being treated with PCSK9 are going to be similar kinds of patients to what we are treating with mipomersen. And so all these learnings are applied across the pipeline. Carol Werther – Summer Street: And my last question has to do with titrating t1. And with the thought of – can you individualize care? Because some patients seem to respond really well to the 200 milligram dose and some less well. Can you comment on that, please?

Yes. In all the trials that we have conducted in Phase 3, we’ve had a rigid requirement that all patients be treated with 200 milligrams a week, full stop. No dose adjustments up, no dose adjustments down. We do know that there is a range of responses to mipomersen like every other drug. Actually I think one of the more remarkable things about mipomersen is how consistently it works. It works with everybody. But it’s a drug. So there will be people who are more responsive and people who are less responsive. The first step that we are taking to get to the place where the drug is used more like the real practice of medicine is in open-label studies. We’re allowing dose adjustments downward if someone is responding with the dramatic reduction in LDL or they have an issue. And as we progress, we will get a lot more experience with individualizing dosing. Those things happen not in Phase 3 typically or certainly not in your first phase three studies. They happen as you get experience with the drug and physicians become more comfortable with it and look at ways to use the drug better. And I look at it as entirely analogous to what people look at physicians do with statins. They don’t – as you probably heard at our annual meeting, they don’t think about doses in a fixed way. They look at the patients, they adjust the dose, and there are patients who respond very promptly and resoundingly [ph] to a 20 milligram dose of Lipitor and there are others that don’t. And they use the dose that seems to make more sense. That’s a product that we experience over what? How long the statin has been in the market? 30 years, or something like that. We’re at the beginning. And all of that is going to take place over time. I think it’s very difficult to predict exactly how it will work out. My prediction would be that individualizing doses would be the way people are treated, but the label will be 200 milligrams a week as our initial label. Carol Werther – Summer Street: Thank you.

You bet.

And there are no more questions in the queue. And I’d now like to turn the call back over to Dr. Crooke for closing remarks.

Thank you. In summary, I think the most important things that we said today is that we are on track for our initial filing for mipomersen in this initial group of desperately needy patients, these people with severe, high cholesterol and extremely high cardiovascular risk that we believe these patients that the therapeutic benefit of mipomersen in these patients is obvious. We know the physicians who treat these patients. Many of them have participated in the trials, and we are confident that they are excited and looking forward to the drug. We have a long-term plan to improve the performance of mipomersen, as we should. And that progress is getting underway in a nice way, and we’ve already made significant progress. I think we should look forward to a continuing evolution of the performance of mipomersen over the long haul. Thank you very much.

Ladies and gentlemen, that concludes today’s conference. Thank you for your participation. You may now disconnect. Have a great day.