Thank you for holding. Welcome to the Lexicon Pharmaceuticals Fourth Quarter and Year-End 2012 Conference Call. (Operator Instructions) At this time, I would like to introduce your host for today’s call, Alex Abuin, Vice President, Communications and Alliance Management. Please go ahead, Dr. Abuin.

Good morning, and welcome to the Lexicon Pharmaceuticals fourth quarter and year-end 2012 conference call. I am Alex Abuin, and with me today are Dr. Arthur Sands, Lexicon’s President and Chief Executive Officer; Dr. Pablo Lapuerta, Senior Vice President and Chief Medical Officer; Dr. Brian Zambrowicz, Lexicon’s Executive Vice President and Chief Scientific 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 remainder of our time to answer your questions. The call will begin with Dr. Sands, followed by Dr. Zambrowicz and Lapuerta, who will provide an update of our clinical programs and by Mr. Wade, who will review our financial results for the fourth quarter and full year 2012 and discuss our financial guidance. We will then open the call to 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 the homepage for today’s webcast. Before we begin, I would like to say that we’ll be making forward-looking statements including statements relating to Lexicon’s research and development of LX4211, LX1031, LX1033, LX2931, LX7101, and telotristat etiprate, also known as LX1032, and therapeutic and commercial potential of those drug candidates. This call may also contain forward-looking statements relating to Lexicon’s future operating results, financing 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 related to the timing and results of clinical trials and preclinical studies of our drug candidates, our dependents 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 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, Alex, and thank you everyone for joining us this morning. We’ll turn to our pipeline slide and I’d just like to make a few introductory comments regarding 2012 as this is the year-end call. It was a very successful year for Lexicon and a very important year in terms of our progress of our most advanced programs. Looking back at the year just briefly, I think it was dominated by the results from our Phase 2b trial of LX4211 in type 2 diabetes, which we had in July in mid-year. And, of course, those were very positive results. I will be highlighting just a few of those again today and providing some context on some of what we’ve learned since obtaining those results. In addition, in 2012, we initiated our first Phase 3 program with telotristat etiprate in carcinoid syndrome that was a real milestone for the company. That trial is enrolling and we’ll provide an update with regard to telotristat etiprate, so our first move into Phase 3. And then I think, lastly, with regard to our advanced pipeline, LX1033 began its major Phase 2 trial, which we believe will be its only Phase 2 trial given what we know about the mechanism in irritable bowel syndrome (IBS-d). That’s a 360-patient trial which is also enrolling and we’ll be providing an update on that today as well. So it was a very important year moving to Phase 3 2012. We’re even more excited about 2013. And at the end of this call, I’ll provide a little bit of guidance with regard to some of the major results milestones we expect in 2013. So, let’s move now on to some of the more specific topics for today. This call will be focused on really some updates and some perspectives on our key programs as we have progressed them. And so with that, I’ll turn it over to Brian to highlight some items regarding LX4211. Brian?

Thank you, Arthur. Although we’ve discussed in the past, I do want to remind everyone some of the key differentiating characteristic to LX4211, our agent for type 2 diabetes. It is a first-in-class dual inhibitor of SGLT1 and SGLT2 sodium dependent glucose transporters. And, of course, what makes its mechanism of action unique is the SGLT1 component. Since SGLT1 is the transporter involved in taking up virtually all of the glucose from the diet, one of the primary effects of SGLT1 inhibition is to reduce postprandial glucose levels due to this reduced uptake of glucose from the gastrointestinal tract. And the other effect of SGLT1 inhibition is it triggers the elevated release of beneficial gastrointestinal peptides including GLP-1 and PYY. The differentiation based on this dual inhibition, we believe, was supported (inaudible) data from our Phase 2b study. It was a study done in 299 patients failing stable dose metformin and there were four treatment arms of LX4211 and a placebo arm with a 12-week dosing study. The primary endpoint was hemoglobin A1c at week 12 with multiple secondary endpoints. To remind you then, we carefully measured the effects of LX4211 on SGLT2, here once again showing the glucose to creatinine ratio which was measured based on a spot-check of the urine in all patients who took part in the trial. Green is placebo. Of course, there was very low – there was a very low ratio of urine glucose to creatinine as was there was a very low level and low ratio in the gold in the low dose. What we did see though is maximized affect where we saw about 39 for the glucose to creatinine ratio in blue with 200 milligram dose. And as we pushed the dose in red or black to 200 milligram BID or…

Thank you, Brian. I’m happy to provide an update of our ongoing and planned studies. For our LX4211, we have a study ongoing in renal impairment. This is a good opportunity for us because renal impairment is so common in type 2 diabetes, and there’s so few treatment options for patients with this condition. Furthermore, it’s an area where the selective SGLT2 inhibitors have shown that their benefits are limited in patients with compromised renal function. And yet, the SGLT1 inhibition in the gastrointestinal tract of LX4211 could provide significant benefit. So our study is ongoing with 20 patients of type 2 diabetes and moderate renal impairment. We’re treating them with 400 milligrams of LX4211 versus placebo. And we’re on track to have results in the first half of 2013, and the study is progressing well. On slide 12, we’re also initiating our study in type 1 diabetes. Patients with type 1 diabetes have difficulty achieving their glycemic targets. And yet with LX4211 in combination with insulin, they could enhance glycemic control and potentially reduce their insulin needs. There is an especially good opportunity for LX4211 here because, in addition to enhancing glucose excretion, it reduces gastrointestinal glucose absorption and elevates GLP-1. This can help patients reach their hemoglobin A1c targets with less hyperglycemia and less insulin and less weight gain. The study we’re initiating will have 33 patients with type 1 diabetes. They’ll be treated with LX4211 or a placebo. We are looking at a reduction in total insulin use. Also, various measures of glycemic control. And we’re now in the enrollment phase of the trial, and we’re very pleased. We’re also finalizing our late-stage development and commercialization strategy on slide 13. We’ve completed our discussions with the FDA and EMA and we feel that our design for the…

Thank you, Pablo. So as you’ve heard in the summary, we have several programs now advancing into Phase 3. So those are very significant transition for Lexicon, one which we see progressing in 2013. If we progresses to the timeline slide, which is slide 21, we’ll give you some visibility with respect to the series of results we can expect over the next four quarters or so. So I’ll walk through this, first on the top line there, the results section, above the timeline. And this is, of course, dependent on the actual rates of enrollment as we move towards completion of these trials, as well as some of the logistics with respect to data analysis to bring forward the top line results. But our current view of this is that we should be seeing the results from telotristat etiprate in ulcerative colitis sometime at the end of the second quarter or first part of the third quarter as indicated in the brackets there. At similar timeframe, we think perhaps early Q3 or into Q3 would be then results from the renal impairment studies that is the proven concept study that Pablo summarized, which is ongoing. And that will – that’s designed to provide us information to better plan the Phase 3 study in the renal impaired populations. Next, we believe, towards the end of Q3, perhaps early Q4, we should conclude and see top line results from the IBS-d study, the Phase 2 study, the 360-patient study. So that’s obviously going to be quite a significant amount of information. And as Pablo indicated, we’ve got a number of parameters, biomarkers, etcetera that we’ll be studying there. So that will be I think a very interesting from a data standpoint and also is designed to enable us to progress into…

Thank you, Arthur. I will provide a brief financial update. As indicated in our press release today, we had revenues for the 2012 fourth quarter of $0.2 million, a decrease of 36% from $0.3 million in the prior year period. For the year, revenues decreased 41% to $1.1 million from $1.8 million in 2011. Our research and development expenses for the 2012 fourth quarter decreased 25% to $21 million from $28.1 million in the prior year period. The decrease was primarily attributable to decreases in external manufacturing and clinical research and development costs. For the year, our R&D expenses decreased 10% to $82.6 million from $91.8 million in 2011. 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 those payments are expected to be made are recorded in our consolidated statements of operations. The associated change in fair value at Symphony Icon purchase liability was negative $0.2 million in the fourth quarter and $9.9 million for the year. Our general and administrative expenses for the 2012 fourth quarter were $3.9 million, a decrease of 2% from $4.0 million in the prior year period. For the year, our G&A expenses decreased 2% to $17 million from $17.4 million in 2011. Our net loss for the 2012 fourth quarter was $24.9 million, or $0.05 per share, compared to a net loss of $33.8 million, or $0.10 per share in the prior year period. Our net loss for the year was $110.2 million or $0.23 per share compared to a net loss of $116.2 million or $0.34 per share in 2011. For the 2012 fourth quarter, our net loss included non-cash…

Thank you, Jeff, and we can now open the call to questions.

(Operator instructions) your first question comes from the line of Cory Kasimov with JPMorgan. Cory Kasimov – JPMorgan: Hey, Good morning guys. Thanks for taking the questions. I have three of them for you. So, first of all on 4211, wondering if you can provide us with a little bit more granularity on the progress of your partnership discussions. Maybe, I’m reading a little too much into this, but timelines for the start of Phase 3 have gone from first half of 2013 to mid-year to now it sounds like second half of the year. And you also seem to be making your strongest comment yet that you don’t plan to start Phase 3 – you are not willing to start Phase 3 on your own. So, if I’m on the right track here, I guess, I’m wondering if there’re any specific areas of concern from prospective partner standpoint given that the deal is not yet done? Are they waiting to see the renal impairment data or is there something else that you can give us here? And the second question is on 1033 and with the Phase 2 data coming up relative near-term, I’m wondering if you can just frame expectations a little bit there in terms of what you think would constitute a successful outcome? If the results are in line with what you saw with your prior formulation, is that good enough to move into Phase 3? And then lastly, your press release mentioned you’ve data for 2931 and 7101. You didn’t mention them in your comments, so I’m just wondering if those are being advanced or terminated. Thanks a lot.

Okay. Thank you, Cory. So, let’s start off with comments on the partnership timing. Jeff, do you want to start there?

Sure. So, we’re continuing to make good progress in our partnership discussions for LX4211. We’re pleased with the progress. There is not anything that we’re waiting on in particular for that. And we are continuing to plan for the advancement of LX4211 into Phase 3 this year with a partnership in place. So that continues to be our expectation.

So, the only thing that I’d add there, Cory, is that you also asked if there were any particular issues or problems identified and there are not. So we’re very pleased with all the diligence proceedings as they’ve gone forward. It’s a very thorough process and it takes time. But we do think we’re on a good track there. Turning to your next question then on 1033, the Phase 2 results, what would be successful, what are we thinking, I’ll start with Brian, please.

Sure. So, I think we’re very pleased, obviously, with our proof-of-concept data with LX1031, the predecessor compound, and particularly when we reanalyzed the data, the published data, with new FDA guidelines for both entry criteria and the dual endpoint of pain and stool consistency improvement. And when we reanalyzed using the new FDA entry criteria and dual efficacy endpoint, we had a 52% response on our active and about 14% on placebo. I think that bodes well for anywhere in the ballpark of that kind of benefit relative to placebo. It would be a tremendous success and we’d be moving forward to Phase 3 aggressively.

Pablo, do you have anything to add with regard to IBS-d?

Our primary endpoint is stool consistency and we think we’re very well powered to demonstrate that benefit. And it looks as well that we’ll be able to have a good estimate for the – for a combined endpoint that integrates stool consistency, abdominal pain and to compare that for LX1032 to placebo.

Okay, thank you. And then, Cory, your last your was with respect to 2931 and 7101. We did have results from those studies, those proof-of-concept studies in 2012. With 2931, we are currently discussing what the next steps might be, if any, for that drug. And, actually, it did produce indications of positive results in rheumatoid arthritis in a very small study that we did in dose escalation. But the key there is if we move forward in RA or select a different indication for the mechanism. So we’re brainstorming on potential alternative indications that might actually make more sense for this mechanism. And the competitive landscape of RA has changed, and we may find a more advantageous avenue for that in the area of autoimmune disease. So there’s still is a path – a potential path forward, but it’s one that requires, I think, some recalculation. With regards to 7101, we did see positive results in lowering of intraocular pressure. This is a glaucoma agent. And it does require the reformulation, we think, to improve its efficacy. So we’re discussing that, and we’re making plans around reformulating that compound, which would then be accompanied by appropriate preclinical testing. So each of those, I think, programs are at a hiatus right now, while we face those respective decisions that I outlined. So I think that covers your three primary questions, and... Cory Kasimov – JPMorgan: Yes, it does. Thanks a lot. That’s helpful.

Sure. Thank you.

Your next question comes from the line of Liana Moussatos with Wedbush Securities. Liana Moussatos – Wedbush Securities: Thank you. Congratulations on a good quarter and year. And I was wondering if you could say for your partnership discussions for LX4211, are you talking to a couple of companies now or still multiple companies? And then can Brian repeat the reanalyzed LX1031 data – what percent benefit versus placebo?

Yeah. So, Liana, we’re talking to multiple parties. And so that’s part of the process. And then turning back to 1031?

Yeah. Again, this was a post-hoc reanalysis of our data based on the new FDA guidelines for entrance criteria, and the dual endpoint of pain and stool consistency improvement. And what we saw was a 52% benefit on high-dose of 1031 and a 14% benefit with that dual endpoint on placebo. A tremendous separation between the two, really providing additional encouragement that the new FDA guidelines fit well with our mechanism of action. Liana Moussatos – Wedbush Securities: Are you going to publish those – that reanalysis?

We’ve been discussing that. We may very well – are likely to present it in an upcoming meeting. Yes. Liana Moussatos – Wedbush Securities: Okay, thank you.

Thank you.

Your next question comes from the line of David Friedman with Morgan Stanley. David Friedman – Morgan Stanley: Hi. Thanks for taking my question. Just two. First is can you talk a little bit about the type of partnership you are looking for out of 4211? And whether there is any amount of cost sharing that you would be looking to do, in order to try to get better economics, either through development or cost sharing commercially. And then the second question is can you just clarify what your fully diluted share count is?

So I’ll answer the question on the partnership front. So we are looking for a partnership where we think we can fund the program out of the partnership. And so that’s something that we – that is one of the objectives that we’re seeking. And we do want to have a significant level of involvement in the program, as well. But that’s – those are some of the objectives that we have for that partnership process. In terms of the shares outstanding, we have a little over 512 million shares outstanding in aggregate. Options are anti-dilutive at this point, given the fact that we are not profitable. David Friedman – Morgan Stanley: Okay, and so does that number you said include the options or exclude?

That does not include the option. David Friedman – Morgan Stanley: And just what would the sort of pro-forma diluted share count be, if you did include them?

So, in aggregate, we have options outstanding – about 21.5 million shares subject to the outstanding options. David Friedman – Morgan Stanley: Okay, great. Thank you.

Thank you.

Your next question comes from the line of Alan Carr with Needham & Company. Mark Monane – Needham: Hi, this is actually Mark on for Alan, thanks for taking for my question. I was wondering if you guys had any insights that you could share with us after the canagliflozin (inaudible) recently.

That’s a very good question. I think we do. Why don’t we start with Pablo on that? Pablo, cana?

So, overall, we were pleased with the advisory panel supporting the approval of canagliflozin. We think we benefit as the SGLT2 market takes shape. We still see opportunity for differentiation. And we saw that with the data that canagliflozin provided in renal impairment. We feel that we can have a stronger efficacy in renal impairment because of our dual mechanism of action. We’ve noticed there was a lot of attention to cardiovascular data. And we think the strategy of having a large cardiovascular outcomes trial as part of Phase 3 is a good strategy. And we’re prepared to do that, as well. And we’ve all seen from that that submission of that interim data is very helpful, in terms of giving information on the benefit/risk profile. And we’re planning to be able to submit fairly robust cardiovascular data at the time of our initial filing. Therefore, the cardiovascular outcomes study will be one of the first that we initiate. So those are some of the lessons. We think we do have a window to differentiate in renal impairment. And I would say, as well, in terms of safety, we saw canagliflozin has a lot of urinary glucose excretion, and we have potentially less glucose excretion with potentially less adverse events – not just the general infections, but potentially hypovolemia as well. Mark Monane – Needham: Great. Thanks, very much.

Thank you.

(Operator Instructions). Your next question comes from the line of Phil Nadeau with Cowen & Company. Phil Nadeau – Cowen & Company: Good afternoon. Thanks for taking my questions. First a question on the cardiovascular outcomes trial that based on your comment that you just made. Those trials tend to take years to do, and are typically done before in a post-approval setting. I’m intrigued that you’re going to have the cardio outcomes data at the time of your initial filing. Can you talk about what that data will be and how it will be ready for your initial filing?

Sure. Pablo?

Yes. We have been talking to regulatory agencies about pursuing a similar strategy to canagliflozin, where we initiate the study during Phase 3. We provide an interim analysis to support the filing. But the complete set of data to provide the most robust results comes in really around the time of approval, or certainly after approval, in order to have even more follow-up and more definitive cardiovascular data. Phil Nadeau – Cowen & Company: Okay, got it. And the second, would you be willing to share with us more details on the Phase 3 program? Such things as how many studies? How many people in total?

So, Phil, we’re probably not going to share that at this time. We’re getting very detailed on that part of our discussions with partners. So we probably prefer to hold off on that. Phil Nadeau – Cowen & Company: Okay. Is it fair to say that that’s perhaps subject to the input of the final partner?

Yes, I think that’s definitely true. Clearly, this is a study that’s on a scale that we’ve seen before with cana and others. So to give you some idea. I don’t mean to be evasive about it. But in terms of details, we probably prefer not to go into it right now. Phil Nadeau – Cowen & Company: Okay. And my last question is on the carcinoid Phase 3. Could you give us some sense when you anticipate enrollment for that completing? Thanks.

Yeah. So our goal is to complete enrollment by Q2 of 2014. And if we’re able to achieve that, then we should have results towards Q3 or Q4 of 2014. That’s an aggressive goal. We think we can do it, and that’s why we’re pushing hard on site initiations and enrollment. Phil Nadeau – Cowen & Company: That’s helpful, thank you.

Thanks.

(Operator Instructions). Your next question comes from the line of Stephen Willey with Stifel. Steve Willey – Stifel: Yeah, thanks for taking the question. And forgive me if you guys have already mentioned it. But could you talk about kind of where the SGLT1 selective inhibitor is with respect to moving into the clinic? Is that still kind of a year-end event? And I guess, second to that, is that asset kind of part of the ongoing partnership discussions? And is that something that you’d be willing to provide a partner access to? Thanks.

Thank you, Phil. So, if you’re referring to LX2761, for those maybe not quite as familiar with our pipeline as Phil is, that it’s a program that we’ve selected as a clinical candidate at the end of the year, which is the selective SGLT1 inhibitor locally acting – I should say, SGLT1 inhibitor. Brian, would you like to comment on the progress of that?

Sure. So that’s a locally acting inhibitor, which stays in the GI and inhibits SGLT1. There is virtually no systemic exposure, and no urine glucose excretion produced. So, it’s currently an IND-enabling study we would anticipate sometime early next year, getting that into the clinic.

And then Steve, with respect to your question on the partnership, we prefer not to specify exactly how that would be handled since that may be different in different circumstances. Steve Willey – Stifel: Okay, thanks.

Thank you.

(Operator Instructions). At this time, there are no additional questions.

All right. Well, I’d like to thank everyone for participating. And, we look forward to 2013 and as we indicated in our upcoming milestone slide, there is going to be a lot of data events and we anticipate also some significant business events. Thank you.

Thank you. This concludes today’s conference. You may now disconnect.