Thank you for holding. Welcome to Lexicon Pharmaceuticals Third quarter 2011 Conference Call. At this time, all participants are in a listen-only mode. There will be a question-and-answer session to follow. Please be advised that this call is being taped at Lexicon’s request. At this time, I would like to introduce your host for today’s call, Wade Walke, Senior Director of Communications and Investor Relations. Please go ahead, Dr. Walke.

Good morning, and welcome to Lexicon Pharmaceuticals third quarter 2011 conference call. I am Wade Walke and with me today are Dr. Arthur Sands, Lexicon’s President and Chief Executive Officer, Dr. Brian Zambrowicz, Lexicon’s Executive Vice President and Chief Scientific Officer, Dr. Pablo Lapuerta, Lexicon’s Senior Vice President of Clinical Development and Chief Medical Officer; and Jeff Wade, Lexicon’s Executive Vice President of Corporate Development and Chief Financial Officer. We expect that you have seen a copy of our earnings press release that was distributed this morning. During this call, we will review the information provided in the release, provide an update on our clinical programs, and then use the reminder of our time to answer your questions. The call will begin with Dr. Sands who will discuss our key accomplishments for the third quarter. Dr. Zambrowicz will then give an update on our LX4211 program, Dr. Lapuerta will then review our LX1032 and LX1033 programs and Mr. Wade will review our financial results for the third quarter and discuss our financial guidance for 2011. We will then open the call for your questions. If you would like to view the slides for today’s call, please access the Lexicon website at www.lexpharma.com, you will see a link on our homepage for today’s webcast. Before we begin, I would like to state that we would be making forward-looking statements, including statements relating to Lexicon’s research and development of LX1031, LX1032, LX1033, LX2931, and LX4211. And the potential therapeutic and commercial potential of those drug candidates. This call may also contain forward-looking statements relating to Lexicon’s future operating results, financial arrangements, cash and investments, discovery and development of products, strategic alliances, and intellectual property. Various risks may cause Lexicon’s actual results to differ materially from those expressed or implied in such forward-looking statements, including uncertainties relating to the timing and results of clinical trials and preclinical studies of our drug candidates. Our dependence upon strategic alliances and ability to enter into additional collaboration and license agreements, the success and productivity of our drug discovery efforts, our ability to obtain patent protection for our discoveries, limitations imposed by patents owned or controlled by third parties, and the requirements of substantial funding to conduct our drug discovery and development activities. For a list and a description of the risks and uncertainties that we face, please see the reports we have filed with the Securities and Exchange Commission. I will now turn the call over to Dr. Sands.

Thank you, Wade, and welcome everyone. I will commence with our traditional pipeline slide as will be focusing as usual on this call on our four programs in Phase II development. All these of course, our small molecule programs developed by Lexicon’s research teams and all operate through novel mechanisms of action. Through this programs have achieved proof-of-concept already and before 2931 is – we believe on its way. One of three two for carcinoid syndromes telotristat etiprate are also have fast track status with FDA, and Orphan status with the EMEA. I think – I’d also like to mention one of the points on the slide, you’ll note that LX1031, the program for irritable bowel syndrome, which includes the follow on compound LX1033 was slightly also the designation on 1031 indicate that we are now focusing our attention on 1033 and progressing it rapidly into Phase 2 development and will be giving you an outline of that study which we intend to commence in 2012. I’ll also say that I guess it’s not captured on this slide, nor we’ll be able to cover in the call is a very significant amount of preclinical and non-clinical work that is proceeding on each of these programs as we’re focusing on making 4211 and 1032 Phase 3 ready programs and we believe also 1033 will be soon in that category. Turning to the next slide on our clinical milestones and goals, I’d like to first focus on the Q3 2011 box in which you see the milestones that we’ve achieved in the past quarter and we’ll be discussing each of these on today’s call. First LX4211, we’ve completed a very interesting mechanistic study in healthy volunteers and we’ll be sharing you – with you some topline data from that. These are new…

Thank you, Arthur. I’ll be describing data from our recent study, LX4211 healthy subjects, as you go to the next slide please. This was mechanistic study that we undertook with two purposes in mind. The first was related to dose timing. Previously, on our Phase 2a study we dosed LX4211 two hours before breakfast and in this study we tested dosing regimens relative to meals to identify regimens that gave optimal effects due to SGLT1 inhibition in the gastrointestinal tract. The second reason is that we’re very interested in looking at the effects of LX4211 on postprandial glucose levels in healthy subjects. The reason for our interest through the SGLT2 selected compounds currently in Phase 3 clinical trials have been tested in the healthy subjects and reported to produce no reductions in a blood glucose levels after either a morning meal or glucose challenge. So for the first time this allowed us to compare effects of LX4211 to these SGLT2 selective agent to determine whether dual Avastin produces more robust reduction in postprandial glucose levels. So, in this study our primary endpoint work, if you look at the pharmacokinetics effects by LX4211 in healthy subject secondary objective was to evaluate safety and tolerability, and we measured a number of parameters including urinary glucose excretion, fasting and postprandial glucose levels and insulin. And as biomarkers for our SGLT1 in addition we are measuring both PYY as well as active and total GLP-1. Looking at the next slide, this is the study design. It began with screen period and that’s minus to the subjects were structured. We were able to get a baseline measure for the fasting and post-prandial glucose as well as models good want to line, and then we have seven days of dosing and the purpose of those seven…

Thank you, Brian. I’ll review some of the data we have for telotristat etiprate and carcinoid syndrome. On slide 15, is the summary of the top line results from our placebo-controlled study. In this study, we looked at responders in terms of specific cut-offs that we thought would not be seen on placebo but that could be seen with telotristat etiprate. A clinical response we defined as at least the 30% reduction in bowel movements for at least two weeks. There were no responses on placebo. There were five on telotristat etiprate. Our biochemical response we defined as a 50% reduction or normalization in urinary 5-HIAA, which is a measure of serotonin synthesis and serotonin metabolic I should say. And there were no responses on placebo, but nine on telotristat etiprate. And these patients with carcinoid syndrome and multiple gastrointestinal complaints, we has to about adequate relief at week four and there were no patients with adequate relief on placebo and yet there were six with telotristat etiprate. These top line results have held up and can be considered final. And what we even in the last few weeks is, to perform some additional analysis that support our understanding of efficacy. On slide 16, we have the distribution of individual patient responses and our study of carcinoid syndrome. Patients entered with the base line number of bowel movements between five and eight in general, and they had significant reductions in bowel movements frequency with telotristat etiprate but not placebo. What you have on this slide is a ranking of all subjects, from best on the left to worst on the right. And if we look at the five best responses, they were all on to telotristat etiprate and they were the five patients who had a reduction in bowel movements…

Thank you, Pablo. I will provide a brief financial update. As indicated in our press release today we had third quarter revenues of $0.4 million, a decrease of 55% from $0.8 million in the prior year period. Our revenues of $1.5 million for the nine months ended September 30, 2011 reflected a 59% decrease from $3.7 million for the prior year period. Our research and development expenses for the 2011 third quarter were $19.7 million, an increase of 4% from $18.9 million in the prior year period. The increase was primarily attributable to an increase in external preclinical and clinical research and development costs, offset impart by a decrease in personnel costs. Our R&D expenses at $63.7 million for the nine months ended September 30, 2011 reflected a 6% increase from $60.3 million in the prior year period. In connection with our acquisition of Symphony Icon, we made an initial estimate of the fair value of our liability for the base and contingent payments, changes in this liability based on the development of the programs and the time until such payments are expected to be made are recorded in our consolidated statements of operations. The associated increase in Fair Value of Symphony Icon Purchase Liability was $2.3 million in the third quarter and $5.2 million for the first nine months of 2011. Our general and administrative expenses for the 2011 third quarter were $4.1 million, a decrease of 18% from $4.9 million in the prior year period. The decrease was primarily attributable to decreased personnel costs. Our G&A expenses of $13.3 million for the nine months ended September 30, 2011 reflected a 14% decrease from $15.5 million for the prior year period. Our net loss for the 2011 third quarter was $26.1 million or $0.08 per share compared to a…

Thank you, Jeff. As you are formulating your questions for us, I will just like to comment – you can see certainly has a very full clinical program and have a very good significant amount of data which is very encouraging and so we’ve taken some extra time to share that with you today. Specifically, our data on LX1032 Telotristat Etiprate it’s been particularly well-received in our partnership discussions. And as you may have noticed in our press release that we issued this morning, I stated that we are in fact progressing with plans to partner LX1032 on the basis of – on the strength of that Phase 2 data. And we’re currently engaged in active discussion of a multiple partners about the program. So, assuming a successful completion of those discussions, we would anticipate partnering this program in the near-term and as usual there usually have some questions on our partnering activity, so we can certainly take any in that regard as well. So we can now open it up to Q&A.

(Operator Instruction) Your first question comes from the line of Liana Moussatos with Wedbush Securities. Liana Moussatos – Wedbush Securities: Hi. Thank you for taking my question. For the European study for 1032 can you give us timing of that?

Pablo, would you like to answer that please.

Yes. So, the European study recruited eight patients and we have a couple on training, so we will have a few more. Our original target for that European study was to have a total of 16 patients. But given the nature of the results that we have and what we feel our clear signals of efficacy, we will be terminating that study at the end of the year, because it met its scientific objectives. So the final number of patients may be something like 10 or 11 patients. Liana Moussatos – Wedbush Securities: Okay. And for the RA program can you give us an update on timing of that?

Pablo, would you like to keep going.

Yes. We initiated a study of 10 patients in rheumatoid arthritis, we’ve already recruited several of the patients and they’re going to do increasing doses of 2931. This study is going smoothly, and we would expect to have results in the first quarter of 2012. Liana Moussatos – Wedbush Securities: Thank you very much.

Thank you, Liana.

Your next question comes from the line of Cory Kasimov with JP Morgan. Matthew Lowe – JP Morgan: Hi, there. It’s actually Matt Lowe in for Cory. Just regarding an update on the Phase IIb trial for 4211 and the pace of getting sites up and running, did the DAPA Panel have any obvious impact on the PACE enrollment or could you just comment generally on how the enrollment really progressed in that study? Thanks.

Pablo.

We’re very pleased with the enrollment and high participation in the study. We have enrolled 150 patients. So, we’re more than half way done with this study to-date and the pace of enrollment has picked up in the last couple of months. We don’t feel it was adversely impacted by the DAPA funds and advisory committee. The investigators seemed pleased with the protocol and with the patient experience and the sites that recruits a few patients they end up recruiting a few more. So the study is proceeding well and the investigators are supportive. Matthew Lowe – JP Morgan: Okay. That’s great. Thank you.

Your next question comes from the line of Alan Carr with Needham & Company. Alan Carr – Needham & Company: Hi, thanks for taking my question. Want to come back to 1032 and commercial and partnering strategy, you mentioned that you’re making progress in partnership discussions, is that worldwide or just ex-U.S.? And then to continue on 1032, I wonder you can tell me how things are looking in terms of – on a regulatory front there in terms of what discussions with the FDA and Phase III design and that sort of thing?

So, we’re discussing, its different models for partnership that mostly world-wide partnership. And so we believe those discussions are progressing pretty well.

With regard to the discussion with the FDA, it’s our plan to schedule meeting with the FDA and outline with them our registrational trial based on the data that we’ve accumulated today. And I think that also is provides a timing framework for us with regard to partnership. In terms we’ve anticipated that any partner coming on board will have obviously lots of interest in participating with us and planning that FDA meeting and of course the registrational trial. So that all of those fronts kind of come together with our overall plan to move into Phase 3 for that program as rapidly as possible. Alan Carr – Needham & Company: If a partnership doesn’t emerging in the near term, do you plan to move forward with means – with the FDA or would you just postpone that until you have a partnership from Dove?

We are moving forward with the FDA meeting absolutely. And I think those will be instrumental for giving us real clarity as to what’s required for the Phase 3 program, the budge et cetera. So this is ongoing forward and we will be the – Lexicon will be driver of the scheduling of that. Alan Carr – Needham & Company: Okay. And then you have three preclinical program 7101, 5061 and 2311, I don’t think you brought them up today. Do you still plan to move those into the clinic late this year or early next year or are you going to be focusing the vast majority of your efforts on the four Phase 2 programs?

Certainly, we’re focusing the vast majority of our efforts on the four Phase 2 programs. As you know the other programs as they progress through IND enabling studies, it’s hard to predict on the consumer’s resources along the way. I’d like to ask Brian to talk briefly about each of those starting with our first anticipated IND filing, the first program in that list.

Sure. LX7101 for glaucoma we have an upcoming meeting with the FDA to finalize our plans before we file our IND anticipating – anticipate filing that IND year end. The next one coming up would be LX2311 for autoimmune disease; we anticipate that we would file an IND for that program somewhere between mid-year to third quarter of 2012. And finally LX5061, we did encounter some unexpected toxicity that we haven’t seen before we monitored GLP studies and so we have stopped LX5061 and are working on a back of compound and move forward. Alan Carr – Needham & Company: Okay. Thanks for the update.

Thank you, Alan.

(Operator Instructions) Your next question comes from the line of Nicholas Bishop with Cowen & Company. Nicholas Bishop – Cowen & Company: Hi there, I have two questions. The first one is on LX1032 and you provided a lot of interesting detail on some of the outcomes benefits to the patients besides the reduction in bowel movement frequency and is still your expectation and that would be the primary end point of the phase III or could there be room for some of these other benefits to be in that outcome?

Pablo, would you like to address that?

Well, we feel that there is plenty of room for these other benefits to be in the label. They may not be in the primary end point, but they may still be in the label based on discussion with regulatory agencies. And so that’s one of the things we hope to map out in our strategy. We feel that adequate relief is really telling us a lot about patients, but there is an attraction and robust data around bowel movement frequency. So the discussions with regulatory agencies will focus on how do we get a primary end point that’s objective and that satisfies the requirement. But how do we get the other information that completes the understanding of the clinical response of the subject in the label. Nicholas Bishop – Cowen & Company: Okay. Thank you. And then just one quick financial one. Operating expenses have been – well R&D and SG&A have been declining over the last few quarters and I have two questions about that. One is based on your guidance should we expect an increase in either of those in the fourth quarter or is that trend likely to continue and also you mentioned some reduction in personnel expense. I was wondering if you could comment on or to make sure that?

Sure. The reduction in personnel expense, I’ll answer the second part first. The reduction in personnel expense relates to reductions that we had earlier or the beginning of the year and that’s carried through each one of these quarters. We will expect to have a somewhat higher expense, R&D expense in the fourth quarter, and that relates to the timing of clinical and CMC activities. So that our fourth quarter, if we kind of look at what we expect so far and what we expect to spend in the fourth quarter the fourth quarter expense will be somewhat higher and it’s mostly related to the timing of clinical activities. Nicholas Bishop – Cowen & Company: Okay. Thank you. That’s helpful.

At this time there are no further questions.

Well, thank you for participating in this call. We look forward to updating you at next quarter. Bye-bye.

Ladies and gentlemen, this does conclude today’s conference call. You may now disconnect.