Welcome to the Isis Pharmaceuticals’ Year End Financial Results Conference Call. Please note this event is being recorded. Leading the call today from Isis is Dr. Stan Crooke, Isis Chairman and CEO. Dr. Crooke, please begin.

Good morning, everyone. And thanks so much for joining us on our call to discuss our year end financial results. So on the call today, Lynne will review the 2013 accomplishments; Beth will walk you through our financials and our guidance for 2014, and then I’ll focus on our key goals for 2014. We think 2014 is going to be a very exciting year. Joining me on today’s call are Lynne Parshall, Chief Operating Officer; Beth Hougen, Chief Financial Officer; and Wade Walke, Vice President of Corporate Communications and Investor Relations. And so, Wade, will you read our forward-looking language statement please.

Yes. Thanks, Stan. A reminder to everyone this webcast includes forward-looking statements regarding the financial outlook for Isis, Isis’ business and therapeutic and commercial potential of Isis’ technology, and products, and development. Any statement describing Isis’ goals, expectations, financial or other projections, intentions or beliefs, including the commercial potential of KYNAMRO 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 they never materialize or prove correct, could result its results to differ materially from those expressed or implied by such forward-looking statements. Otherwise these 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, 2012, and its most recent quarterly report on Form 10-Q, which on filed with the SEC. Copies of these and other documents are available from the company. Now, I’ll turn the call over to Lynne.

Thanks, Wade. Good morning, everyone, and thank you for joining us. 2013 was a year of significant achievement in every aspect of our business. Together with Genzyme, we successfully brought KYNAMRO to the market in United States for patient with homozygous familial hypercholesterolemia. KYNAMRO’s approval for chronic use in patient with life long disease highlights the potential of [ISIS] technology and our success in creating drugs that bring benefit to patients with severe disease. We demonstrated in the broad Phase 3 program and KYNAMRO significantly lowered LDL-cholesterol and reduced other atherogenic lipids the independent risk factors for cardiovascular disease. Moreover, KYNAMRO was dozed as a single, weekly, at home injection, that’s easy and convenient to use and using KYNAMRO doesn’t require any restriction on diet or any additional monitoring. Importantly, KYNAMRO can be safely used with the other medications patients with homozygous FH frequently take. These attributes give us confidence in KYNAMRO’s commercial success. While Genzyme does not wanted to give out specific details on sales, what we can say is that while the launch got off to a bit of slow start, sales showed significant quarter-over-quarter growth in 2013 and we believe the sales will continue to increase significantly this year. There are hundreds of physicians who haven’t certified to prescribe KYNAMRO. We believe that the increase number of prescribers will translate into increase prescription of patients on drug. Genzyme tells us that the reimbursement process is working well and they are successfully working with payers to move patient expeditiously from prescription to drug and this is all great news. Genzyme has increased it sales force to support KYNAMRO’s anticipated sales growth. As we enter 2014 we expect to see returns from this increase investment. In addition to marketing KYNAMRO in United States, Genzyme marketing KYNAMRO in Mexico, Argentina…

Thank you, Lynne. We substantially exceeded our cash guidance and significantly improved upon our pro forma NOL guidance. We also ended the year in the strongest financial division in the company’s history with more than $650 million in cash and a pro forma NOL of $40 million. We achieved these financial results by effectively executing our business strategy and successfully advancing the drugs in our pipeline. These results illustrate that our business model is working by consistently generating cash and revenue as our drugs progressed and allowing us to maintain a modest and predictable expense level. Today in our pipeline, we have one drug for every 12 ISIS employees. A comparable number and pharmaceutical company would be in the thousands of employees and if you subtract marketing and sales, it would be many hundreds. This limited infrastructure is only possible because of the efficiency of the antisense technology platform we’ve built. Our 2013 year end cash balance of more than $650 million with an increase of approximately $300 million over the prior year. The substantial improvement in our cash position was driven in large part by more than $220 million we received partners of which $130 million came from upfront payments from Biogen Idec and Roche. And over $90 million came from a variety of payments associated with our advancing pipeline. We ended 2013 with a pro forma NOL of $40 million which was added above our initial guidance from last February as well as our revise guidance from later in the year. Revenue was $147 million, a 44% increase over 2012 and reflects the maturation of our pipeline and the partnering successes we had in the year. We recognized revenue from these sources of $42 million, primarily from the amortization of upfront fees we received from Biogen Idec, AstraZeneca…

Thanks, Beth. So, now, I’ll shift focus on 2014. We expect 2014 to be another important year for Isis with multiple pipeline events that we hope will continue to enhance our value. Of course, the first quarter has been dominated by news of ISIS-SMNRx. Although we are still early in the development of ISIS-SMNRx, what we’ve observed so far is very encouraging to us, to Biogen Idec, to the investigators, to the patients and to the parents. We look forward to providing a more detailed update on the progress of this drug in April at the American Academy of Neurology meeting in Philadelphia. Even more importantly, we entered partnership with Biogen Idec to finalizing our Phase 3 plans. As we get those studies underway, we look forward to sharing our plans with you. 2014 is another important year for our other Phase 3 assets. Our partners at OncoGenex and Teva plan to report the results of the Phase 3 trial in human prosate cancer on Custirsen. Isis bears no expense for the development Custirsen, but does receive a share of payments, OncoGenex receives from Teva plus royalties. So all this is upside for us. ISIS-TTRRx is already well along in the Phase 3 study and patients with TTR amyloidosis. We have patients in this study who have been treated for almost a year. We plan to complete the enrollment in this study in 2015 and if positive, we believe the study will support registration of ISIS-TTRRx in patients with the familial polyneuropathy. We are also working with GlaxoSmithKline to finalize development plans for patients with cardiac 1 of this disease. In the lipid franchise, the most important event this year will be the start of the two Phase 3 studies in patients with FCS and the second inpatients with severally…

(Operator Instructions) And our first question is from Alethia Young, Deutsche Bank. Please go ahead.

Thanks for taking my question and congrats on the progress around SMA and I’m really wishing that’s for the patients here, but why don’t focus on something else today. You know I know kind of we might have some proof-of-concepts around myotonic dystrophy maybe next year, but just can you give us a little bit more detail about disease and how it compares versus SAM, and then also how the market compares as far as the initial prevalence? And then just confirm or reconfirm around the timelines and your expectations there but getting a little bit of proof-of-concept interesting program? Thanks.

Well, the most important difference is that myotonic dystrophy is a disease that will be treated peripherally with systemic antisense drugs and the treatment needs to take place in muscle. And we’re just in the process of getting the studies underway. And so I would rather -- we think the market opportunity is substantial as does Biogen and we’d rather get into more of those details a little later as we really begin to know more about what the profile of our drug looks like.

Our next question is from Jim Birchenough of BMO. Please go ahead.

Hi. Good morning. It’s Nick Abbott for Jim this morning, who is home with the flu unfortunately. In terms of SNA program, what data have you shared with FDA and what feedback have you got from them in terms of their level of excitement or their desire to get this drug to the market in an expeditious fashion?

Well, we’ve had of course a productive relationship with the FDA and the European authorities since we began this project, and they have been very supportive and facilitating our activities. We’ve already had our end of Phase 2 meetings, and so they’ve had the opportunity to see quite a bit of data that were presented at that time. They continue to be supportive and very enthusiastic about the drug so far as we can tell. Obviously, I can’t speak for the FDA other than to say that they’re very responsive and we have a clear path to move our drug forward. Lynne, do you want to add anything?

I would just echo what Stan said. The FDA has been very -- their interactions have been positive and supportive and they have not -- they don’t have in front of them the current, recent set of data and we would after AAN plan on sharing that with them.

I guess that was really my point is, if you know from the natural history of type 1 that whatever the data show and you’re clearly showing 20 patients that you’ve changed the natural history as far as we know it. Would FDA really want you to do a place-controlled trial? I mean, obviously, you don’t know, but that when you present the data to them after AAN, is that one of the things that you want to test the waters for?

My preference is not to speculate about that. I think why don’t we just let these babies mature, let the data mature. And as we began to understand the real impact that we have that we seen to be having on these babies, we will confront those opportunities and decisions and when we do, we will discuss them of course.

Okay, thank you.

Our next question is from Chad Messer of Needham & Company. Please go ahead. Chad Messer - Needham & Company: Thanks for taking my question. It’s always impressive to get overview of all the activities going on over there. My question is actually on KYNAMRO and I know you can’t share any sort of quantitative metrics or Genzyme won’t let you share them which is unfortunate. But is there anything qualitative you can tell us about the launch and the patients that you’re having success with? So like specifically here we learnt recently from Aegerion that an unexpectedly large number of patients are getting scripts written but not filling them and that’s mostly likely due to the tolerability issues and the diet. Is this something you have any anecdotal information that you can share with us, or are you getting patients on your drug that specifically are intimated by the dietary restrictions of lomitapide, is that a big selling factor?

Chad, I have to say first that of course we don’t have direct access to that information. Everything that we know, it comes from Genzyme. And the things I am comfortable saying is we remain very impressed with the commitment, the energy and support that Genzyme, Sanofi is focusing on our drugs. We’re very pleased with the expansion of their sales force and the quality of effort there. As we look at our drug, we think there are many attributes that KYNAMRO has that should make it highly successful in the marketplace and compete very well against lomitapide, including the fact that there is no diet requirement, there are no drug interactions. And we low our all iatrogenic lipids. And we’re seeing the responses to the profiles as we hear about it from Genzyme that one would predict. Lynne, do you want to -- is there some more color you can provide.

Yeah. I think the only thing that I would say, Chad, just to put that in perspective is Genzymes marketing and sales technique as you would want and expect are focused on positive attributes of our drug, not counter selling what might be potentially negative attribute to the different drug. And so we do think patients are taking KYNAMRO because of the whole breadth of this positive set of attributes and one that I would add to the list. Stan gave you is because of our pregnancy category B, it’s a more interactive alternative for women of child bearing than pregnancy category acts potentially. But we’re hearing back from the field is that the overall profile of KYNAMRO is driving patients to physicians to prescribe it and driving patients to want to take it.

The other thing that I think it’s important to remember is that we and Genzyme are investing in expanding the opportunity with KYNMBRO with focus of age which is going well. And we’re optimistic that that study will be very positive. And so I think if you think about the longer term future, while -- while Genzyme and we are investing in creating that longer term future. I think that longer term future is very bright. Chad Messer - Needham & Company: Great. Thanks for the added information.

Our next question is from Cory Kasimov with JPMorgan. Please go ahead.

Hi, this actually Whitney on for Cory this morning. Thanks for taking the question.. I guess, first on SMA in sort of the emerging competitive landscape. I think we’ve seen trials from PTC and Novartis initiated this year. Just wondering, do you have any information on those candidates?

PTC is Roche drug. And we don’t have any new information on that drug other than that it’s -- how it works and why it works is still not understood. The other thing I would say is that enrollment in our studies with SMNRx is really impressive in the support of the families of SMA, the SMA foundation and the parents. Patient is as positive as I’ve seen for any drug that I’ve been associated with.

Got it. And then can you just quickly remind us the design of the GCGR trial, I mean what data we should expect to see when that reads out?

This is a study in patients who have Type II diabetes, uncontrolled on metformin. It's a randomized double-blind placebo control trial 13 weeks. And we’re looking at 100 and 200 milligrams a week of GCGR. But we hope to see a significant reductions in fasting blood glucose. And of course with 13 weeks, you don't have nearly enough time to get to equilibrium line on hemoglobin A1c but we're hopeful that we’ll see some improvement in hemoglobin A1c. And of course, we’ll be watching also for tolerability issues, because this target is associated with small molecule that -- small molecules that have been looked at is associated with what appears to be manageable target related ALT elevation, so all of those things we’ll be looking at.

In addition to fasting glucose, we also have a number of shorter-term measures like glucose control that are built into the study, again because it’s a three-month study.

We also will be looking at GLP-1. Remember that in animals, we see a significant increase in GLP-1, and we think that could be a very important feature of the drug, as that added mechanism should make it. This drug, we expect based on animal data to be extremely effective and to be able to work and to be used in people who have advanced diabetes as well as earlier. We will also look at hypoglycemia. We think in animals and in our Phase 1 trial, we did see hypoglycemia. And we think there are mechanisms that explain that. So we want to look careful that as well. And we’re very excited about this drug.

Got it. Thanks for taking the questions.

Our next question is from Salveen Richter of Canaccord. Please go ahead.

Hi, good morning. This is Andrew on the line for Salveen. Could you just remind us about the economics, particularly the royalties for SMN, I believe it’s a 10% royalty? Can you give us any color if it’s high, low, or if it’s tiered, and if that differs between the type 1 and the 2, 3?

Yes, it’s not a 10% royalty, it’s an ascending double-digit royalty. We haven’t given out what the tiers are, but it is a tiered royalty. And it does not differ. It will be same drug in infants and children. It doesn’t differ between the two indications.

And as Lynne mentioned earlier, there are quite substantial milestones (inaudible) and regulatory milestones that matter a great deal to us.

Okay, great. And then just a follow-up on KYNAMRO and the FOCUS FH read data, just hoping if you could give any kind of clarity on how you see the competitive landscape, particularly against the PCSK9s and I guess population?

Well, I thing the PCSK9s are working well but in folks who have LDL-receptors. And our focus with KYNAMRO is homozygous and severe where we think KYNAMRO have a very good profile that would be competitive with what the PCSK9 inhibitors do. Remember also that our strategy for the lipid franchise was to create in KYNAMRO a drug that could be used in combination with PCSK9 inhibitors. And so for the really severe patients, I can easily see combinations between our drug and PCSK9 inhibitors that I don’t think would be nearly subtractive with an MTP inhibitor.

Okay. Thank you very much.

(Operator Instructions) And our next question is from Navdeep Singh of Goldman Sachs. Please go ahead.

Hey, good morning, guys. And thanks for taking my questions. May be a quick one on SMN. Just wondering if you could give us some color on the amount of data, how many patients and what kind of follow-up time from the 12 milligram cohorts you will have ready by AAN? And then I have a follow-up. Thanks.

Yeah. I would prefer not. I mean, we’re -- it is the 12 mg doses are just really going on now and it’s enrolling a lot. So whatever number I gave you would be wrong today. It's only a couple of months and we’ll -- we'll be all that at the end.

Okay. And then I understand you're not providing KYNAMRO sales, but any sense on how many patients are on KYNAMRO?

So -- yes we know how many patients are on KYNAMRO but again that's information on Genzyme considers at this point to be competitive, intelligence and so I apologize, we're not free to give you that.

Okay. Then maybe on TTR, maybe you could discuss the overall profile of TTR versus the Alnylam product and when we should expect Isis to initiate the Phase III studies in FAC patients. And just wondering on -- is there a rate lending stuff there, do you still have to talk to FDA on the trial design and what not?

So the profile for our TTR drug, it is very attractive. It's a once a week drug, that’s being very well tolerated, easy to use. Patient can administer the drug themselves. The current drug that Alnylam is developing requires IV Infusions and coming into an infusion center. And so we believe not only are we substantially ahead, we think that our drug has a profile as much more attractive. And the potencies are roughly equal. The level of activity is more than sufficient. It's in the plus 80% level depending on the maximum level, the activity is roughly the same. So we're very optimistic about TTR both against the disease and against the competition and the FAC decision is principally a business decision by GSK.

Okay, thanks a lot and congrats on the progress.

Thanks very much.

And our next question is a follow-up from Nick Abbott of BMO. Please go ahead.

Hi, just two quick follow-up. I was interested by your comment about the GCGRRx as there maybe some protection of pancreas. Wondering if you could just elaborate on that and then more broadly, what are your goals for the antisense technology, what are the top three on your wish list of things you would like to be able to deal with this technology? Thanks.

Well what we have observed in animals is that we preserve the pancreas. And the mechanism is thought to be both effective. We reduce along the glucose drive and we increased GLP-1. And of course demonstrating that in human beings is, it will require some time. But I think the level of activity that we expect is based on animal data that it should be substantial and the GLP-1 increases we hope will be meaningful. And those will be signpost to tell us that we're seeing in men what we're seeing in animals. And just because no ones asked about Factor XI, I can't in this call without encouraging you to think about Factor XI. There are still plenty of opportunity for improved treatment of thromboembolic disease. And we think Factor XI is FXIRx is very exciting opportunity and encourage you to spend some time thinking about it and we would be glad to talk about it. With regard to technology, we already know that it works, we know that it works broadly in multiple organs, we're not limited to a single organ, and we demonstrated that we can give antisense drug by every route of administration, including oral, although certainly not ready for primetime. So our main goals are to continue to expand the pipeline and expand the uses and routes of administration of antisense to make oral administration available and move forward to next level -- the set of drugs that we have, that we think are going to be somewhere in the 5 to 10 times more [potent] range than the drugs that we have in the clinic right now. We want to continue to explore our Generation 2.5 drugs for difficult to reach tissues like cancer and muscle. And so those are our main goals. And we're sort of in a period of just exponential growth and our understanding of how antisense drug were and using that information to create progressively better performing drugs over the next two decades is sort of our long-term goal. Does that answer your question?

Yes. So it’s just -- sorry on the GCGRRx. So is that -- do you think there is something difference between exogenous gluten administration, which is associated with pancreatitis versus this endogenous gluten production?

We think the amounts and the types and all sorts of things, whether it's pulsatile or not pulsatilel. So there are variety of things that maybe different, but I think the key thing as we need to look at the data that we have from this Phase 2 study and see what kind of profile we have at this drug and then we'll go from there.

Okay. Great. Thanks very much.

And our next question is a follow-up from Alethia Young of Deutsche Bank. Please go ahead.

Great, thanks. So on Factor XI, I'm just curious about like your -- will you press release and then have data at the medical meeting and then what medical meeting might be a potential opportunity for that data?

We will press release it, we will almost certainly have a webcast and then the data will get presented in a verity of meetings and the meetings that make most sense for it are things like ASH and so on. But again, we will, as the data emerge, obviously if the data aren’t as positive as we hoped, then it’ll get into the meetings in one way. And if they are as positive as we hoped, then it will get into meetings with a very different feeling.

Great. Thanks for the follow-up.

You bet. With that, I think the hour is dragging on. I think we probably out to bring it to close. And in closing, I would say that we've spent a good time talking about the pipeline and we're very excited about number of drugs in the pipeline with glucagon receptor in Factor XI being central in the first half of the year as well as getting the Phase 3 programs underway. And we continue to experience extraordinarily high levels of interest in our technology, the drugs that we have in development and in partnering, and so we're very optimistic that we will certainly achieve our business goals as well. Thank you very much.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.