Thank you for holding. Welcome to the Lexicon Pharmaceuticals Third Quarter 2013 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 recorded at Lexicon’s request. 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 third quarter 2013 conference call. I am Alex Abuin and with me today are Dr. Arthur Sands, Lexicon’s President and Chief Executive Officer; Dr. Pablo Lapuerta, Executive 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. Lapuerta, who will provide an update of our clinical programs; and by Mr. Wade, who will review our financial results for the third quarter of 2013 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 state that we will be making forward-looking statements, including statements relating to Lexicon’s research and development of LX4211, LX1033, telotristat etiprate, also known as LX1032 and other drug candidates and the 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 pre-clinical 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 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 I’d like to welcome everyone to the call. We made some significant progress in the third quarter and I think the most important event of the quarter was the results we obtained from our renal impairment proof-of-concept study in type 2 diabetes, and so we’ll spend some time in this call, Pablo will be discussing at a very top-level, the data and the importance of those findings. We did expand the type 1 trial, which is in its expansion phase, which is a placebo-controlled phase of the trial and enrollment is ongoing and we’ve continued to advance our discussions regarding partnerships in diabetes as well. With respect to telotristat etiprate program, that program has – we have expanded the number of activated sites in the Phase 3 carcinoid trial, which is very important and enrollment is going well there. And we also announced results of the proof-of-concept study of telotristat etiprate in ulcerative colitis and we’ll be discussing those results briefly. And then finally, we completed the enrollment of our LX1033 IBS-d trial and we now anticipate top line data release in the second half of November this month. So we’ll follow this format for the call and we’ll proceed to discuss LX4211 with Pablo leading that. Pablo?

Thank you, Arthur. Many of you are familiar with the profile of LX4211, our first-in-class dual SGLT1; SGLT2 inhibitor. SGLT2 inhibition enhances glucose excretion in the urine, while SGLT1 inhibition reduces glucose absorption in the stomach. Our SGLT1 inhibition is what differentiates LX4211 and selective SGLT2 inhibitors and the clinical signature is a reduction in postprandial glucose that comes from reducing glucose absorption in the gastrointestinal tract accompanied by elevations in GLP-1 and PYY, which are indirect effects of that inhibition. With that profile, we chose to explore LX4211 in patients with type 2 diabetes and renal impairment as described on Slide 4. We just entered this area, because it’s an area of high unmet medical need with a large proportion of patients with type 2 diabetes suffering from kidney disease. Also in this area, many medications are contraindicated. Metformin and most of the sulfonylurea cannot be used in patients with moderate to severe renal impairment. The area is also appealing because here is where SGLT1 inhibition can be essentially meaningful, providing benefit by reducing the glucose absorption and elevating GLP-1. The opportunity was appealing to us, because we want to position LX4211 in areas where it provides a lot of value to patients, but also we wanted to get a perspective on the clinical magnitude of the SGLT1 side of LX4211 and by studying LX4211 in a population without much kidney function, we felt the evidence of glycemic control could be primarily attributed to the SGLT1 inhibition. This is to differentiate LX4211 from the selective SGLT2 inhibitors, which have shown very little benefit in patients with compromised renal function. On Slide 5, I’ll review the primary and secondary objectives of our study. We entered the area of moderate to severe renal impairment and our primary objective was to show…

Thank you, Pablo. On Slide 12, we have an update to our milestone slide that’s looking forward through Q4 and Q1 of 2014. You can see that as I mentioned earlier, we are now expecting the 1033 IBS results in the second half of November, and it appears to us that the type 1 proof-of-concept trial, we should have results in Q1. We hope to complete enrollment during this year and then allow time for data collection and analysis, so that is our current view of the timeline. With that, we can now move into the financials and debts.

Thank you, Arthur. I will provide a brief financial update. As indicated in our press release today, our revenues for the 2013 third quarter decreased to $0.2 million from $0.4 million in the prior year period. For the nine months ended September 30, 2013, our revenues decreased to $0.8 million from $0.9 million in the prior year period. Our research and development expenses for the 2013 third quarter increased 32% to $25.4 million from $19.2 million in the prior year period. The increase was primarily attributable to increases in the external, clinical and preclinical research and development, resulting from the advancement of our clinical pipeline. Our R&D expenses of $69.4 million for the nine months ended September 30, 2013, reflected a 13% increase from $61.6 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 those payments are expected to be made, are recorded in our consolidated statements of operations. the associated increase in fair value of the Symphony Icon purchase liability was $1.3 million in the third quarter and $3.1 million for the nine months ended September 30, 2013. Our general and administrative expenses for the 2013 third quarter were $4.7 million, an increase of 7% from $4.4 million in the prior year period. The increase was primarily attributable to increases in the consulting and personnel costs. Our G&A expenses of $13.7 million for the nine months ended September 30, 2013, reflected a 4% increase from $13.1 million for the prior year period. Our net loss for the 2013 third quarter was $31.7 million or $0.06 per share, compared to a net…

Thank you, Jeff. We can now open up for questions.

(Operator Instructions) Your first question comes from the line of Cory Kasimov with JPMorgan. Cory W. Kasimov – JPMorgan Securities LLC: Hey. Good morning, guys. Thanks for taking the questions. A couple for you, first I wanted to ask about partnership discussions for 4211, obviously interested in what the latest is there and at what point, do you begin a Phase 3 program without a partner?

Okay. Cory W. Kasimov – JPMorgan Securities LLC: And I have a follow-up to that too.

All right. Thanks, Cory. We’re continuing to make progress in our partnership discussions and our objective remains to move into Phase 3 with the partner in the near-term. We do want to have a partner in place, in particularly in type 2 diabetes before launching that Phase 3 program and that timing is going to depend upon getting that finalized? Cory W. Kasimov – JPMorgan Securities LLC: Do you have a contingency plan in place to begin a Phase 3 without a partner, if you can’t secure one?

Well, we’re continuing to look at a variety of different possible partnership options. So there are different options that we’re evaluating as part of that process. Cory W. Kasimov – JPMorgan Securities LLC: Okay, fair enough. And then, one on 1033, just wondering if you can try to set expectations for us ahead of the upcoming IBS data and what are you hoping to show there and maybe, what would be clinically meaningful? Thanks.

Pablo, do you want to lead off on that?

Yes, in terms of the primary endpoint, it’s an improvement in stool consistency and we chose that primary endpoint based on our experience with LX1031, but in terms of clinically meaningful change, we feel that that should be guided by a responder analysis. That’s something that the FDA has recommended where we combine the stool consistency response with the abdominal pain response and there are certain ways to look at a responder. but one way that we’re looking at it is, a responder is someone who over more than half of the days in the trial has had good days and a good day would be a day where you have a reduction in the abdominal pain and good stool consistency at the same time. Now what should the responder rates be? We have a sense from LX1031, what the opportunity may be in terms of responder rates for a study like this. and I believe that at previous earnings call, I suggested somewhere between say 25% to 50% responder rate on treatments and somewhere between 10% and 20% on placebo. Cory W. Kasimov – JPMorgan Securities LLC: I think that’s…

Brian, did you want to add something to that?

Sure. Another important component of the analysis would be the pre-classified correlation between our 5-HIAA biomarker reduction and those effects on stool consistency, pain and responder analysis. Cory W. Kasimov – JPMorgan Securities LLC: Okay. That’s helpful. Thanks, guys, and good luck for the partnerships talks and the data.

Thank you, Cory.

Your next question comes from the line of Thomas Wei with Jefferies. Thomas A. Wei – Jefferies LLC: Thanks. Just to follow-up on the last question about starting Phase 3 trials, are there particular studies that you could get underway and that you would have the funding to be able to complete as part of the 4211 program in the event that partnerships are delayed into 2014? [Audio Gap] if any adverse events that were deemed by investigators to be related to study drug, in particular, if there were any renal related adverse events? And then, what sort of A1c benefit, do you think you would need to show in a renally impaired population to enable the label claim that you are speaking for in patients especially with those – with GFRs below 45? Thanks.

Okay, Thomas, so let me – I’ll answer the first part of that question, then like to ask you to repeat the second part, because you were breaking up for some of that. But on the first part of your question, there are many different ways to compose a Phase 3 program in type 2 diabetes and many different opportunities in terms of sequencing different studies, some of which can be done sooner and are more, let’s say, straightforward or part of the core package for approval and others of which are more focused on marketing and various combination therapies that may be recovered. So we’ve developed difference scenarios of those and some of these are also part of the whole discussion framework for interested parties, and so there is a fair amount of judgment calls made there. We’re in that process, but there is a whole spectrum we’re considering that could allow for different sequencing, let’s put it that way, into the Phase 3 program. I think the funding arrangements would be partnership contingent, and so again, our primarily goal is to complete one, and then the other part that I think we’re also exploring and we’ll continue to be of high interest to Lexicon, in particular, is the type 1 diabetes Phase 3 opportunity, which is going to more fully described when we see our proof-of-concept results from the ongoing trial. So it’s a fairly complicated set of considerations and we’re trying to be very thorough in how we outline the Phase 3 start for the drug. So with that, perhaps, Tom, if you could repeat the second part of the question regarding adverse events, I think… Thomas A. Wei – Jefferies LLC: Sure.

Yes. Thomas A. Wei – Jefferies LLC: So in the renal impairment study, I’m wanting to know if there were any renal related adverse events, particularly in the drug treatment arm, even though the numbers look balanced on overall AEs or any investigator deemed drug related adverse events? And then the other question was just about what would you need to do in order to get a label claim in patients with the GFR less than 45, in particular, A1c and whatever the FDA told you, you would need to do for the Phase 3 development program?

And Pablo, do you want to pick that question?

Yes, we only have top line data and overall safety for the renal impairment study. So I don’t think I could really go into detail about specific renal related adverse events. I can say we’re comfortable with what we’ve seen, and so far – and all the evidence we have so far suggest that our LX4211 and added dose of 400 milligrams once daily will be proper for valuation in Phase 3. and in Phase 3, we have to show a significant reduction in the hemoglobin A1c and in terms of what magnitude of reduction, I would give you a ballpark of anywhere between an improvement in 0.4 to 0.7 in hemoglobin A1c will be achievable with LX4211 in this population and would be meaningful to patients with an area that has very few treatment options.

Yes, I’d go further and say I think a precedent has been set about what would be required by the FDA in the renal impaired population that comes from canagliflozin, they’re only approved with – in patients with moderate renal impairment from estimated glomerular filtration rate 45 to 60. they’re only approved at their lower dose of 100 milligrams, but we know from their Phase 3 data that 100 milligrams achieved 0.3% reduction in hemoglobin, A1c. I think certainly, we think we can do better than that, but that’s what would be required and particularly, as we move into the lower GFR patients where canagliflozin is not approved.

Okay. Thank you, Thomas.

Your next question comes from the line of David Friedman with Morgan Stanley. David Friedman – Morgan Stanley & Co. LLC: Hi, thanks for taking my question. Just to – I was wondering just in terms of the partnership discussion, I was wondering if you could talk a little bit about what have been some of the major areas of debate, given that they have been going on for north of the year now. And then the other is, whether you’re still developing your SGLT1 only or your SGLT1 selective throughout we didn’t see it in the pipeline chart? Thanks.

Okay. Jeff, do you want to give some color and the answer to the first part of David’s question?

Yes, sure. So the diligence and that has really been focused on differentiating relative to SGLT2, the selective SGLT2 inhibitors and how to develop LX4211 in a way that best positions the product from a competitive standpoint, relative to other diabetes agents. This helped canagliflozin to prove up to clear away some of the lingering questions that SGLT2 quest, so that was helpful. The recent results for a steady and type 2 diabetes with renal impairment have – has also been hopeful, but in defining the importance of SGLT1 mechanistically and reinforcing differentiation from the selective SGLT2 inhibitors. And I think that the type 1 diabetes or early type 1 diabetes data has opened an avenue, but for a game changing therapy, but also highly main full area of differentiation. So overall, we think the discussions have been going well and it’s really been focused on differentiation.

Then further, Brain, on the second part?

Sure. with respect to LX2761, our locally acting inhibitor that inhibits SGLT1 only in the gastrointestinal tract, that’s moving forward with its currently undergoing IND-enabling studies with the projected initiation of Phase 1, somewhere around midyear next year.

Okay. And so thank you, David. Are there questions?

(Operator Instructions) Your next question comes from the line of Kevin Kedra with Gabelli & Company. Kevin Kedra – Gabelli & Co.: Just a first follow-up on the – on your last comments, you mentioned that the type 1 indication was something that some partners have been looking at. Should we be looking at that as potentially a rate limiting study on doing a partnership or could you secure a partnership before we should update it?

It is not a rate limiting study for a partnership, and although, I will say that some parties we’re talking to are more focused on that than others. So there is a spectrum of interest levels depending on the interpretation of their own clinical sort of priorities for their pipeline. But it is definitely not rate limiting and so did you have the second part of your question or? Kevin Kedra – Gabelli & Co.: Yes. Also in partnerships, have you seen any change in the way that potential partners are sort of looking at the diabetes space or their commitment toward or what is worth committing the dollars of the space, we’ve seen some companies talk about a weakness in the market for diabetes, I’m wondering if that’s potentially giving anybody cold feet about giving further investing in the pace?

All right. Well, we have not seen that, I think that we’ve actually heard some positive impressions about the space given canagliflozin’s launch and sales with ramp, which is then considered to be positive and impressive. So I think that’s been another important data point with respect to the opportunity in diabetes with novel mechanisms. I think part of the challenge for us has been that we are promoting not only obviously a partial SGLT2 effect, but the novel mechanism is SGLT1. and so that has carried a higher – say burden approved with respect to differentiation, and I think we’ve achieved that with a number of studies. But it is not a trivial thing to bring forward new mechanism of action in diabetes and than prove out the opportunity. So I think people are positive about this phase. I think the novel mechanisms offer that new opportunity. and so I think we’re in a good position so.

Thank you. any other questions?

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

Well, I’d like to thank everyone for participating and we look forward to keeping you updated in the near future. Thank you and goodbye.

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