Good afternoon, my name is Lisa and I’ll be your conference operator today. At this time, I would like to welcome everyone to the Lexicon Third Quarter 2014 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will a question-and-answer session. (Operator Instructions). Thank you. Chas Schultz, Senior Director of Finance and Communications. Sir, you may begin your conference.

Thank you, Lisa. Good afternoon, and welcome to the Lexicon Pharmaceuticals third quarter 2014 conference call. I am Chas Schultz and with me today are Lonnel Coats, Lexicon’s President and Chief Executive Officer; Dr. Pablo Lapuerta, Lexicon’s Executive Vice President and Chief Medical Officer; Dr. Brian Zambrowicz, Lexicon’s Executive Vice President and Chief Scientific Officer; Jeff Wade, Lexicon’s Executive Vice President of Corporate Development and Chief Financial Officer; and John Northcott, Lexicon’s Vice President of Marketing and Commercial Strategy and Operations. 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. 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 clinical development of telotristat etiprate or LX1032 and Sotagliflozin or LX4211. These statements may include territory patients of the results of and projected timing of clinical trial of such compounds and the potential therapeutic and commercial potential of such compounds. This call may contain forward-looking statements relating to Lexicon’s growth and future operating results, discovery and development of products, strategic alliances and intellectual property as of other matters that are historical facts or information. Various risks may cause Lexicon’s actual results to differ materially from those expressed or implied in such forward-looking statements. These risk include 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 from 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 Mr. Coats.

Thank you Chas and thank you to all those who have joined this call today. During Lexicon’s second quarter earnings call, I may clear that we will work diligently to unlock value of Lexicon’s assets. Today, I’ll provide with our plans on both of our late stage clinical programs. We will start with telotristat etiprate precautionary syndrome. We will cover our Phase 3 progress. We will also provide insights into our commercial planning in our current best thinking on peak sales of this Fast Track in United States. Lastly, we will reiterate the terms of the deal (indiscernible) for territories outside of North American and Japan. Next, we will share with you the opportunity and strategy for Type I program Sotagliflozin also known as LX4211 and our intention to move into Phase 3 with this program. We will give you recap of our third quarter 2014 earnings and we’ll make time available to take your questions. Now let’s move into the heart of presentation. I’ve asked our Head of Commercial Strategy and Operations John Northcott to walk you through the telotristat etiprate opportunity and strategy as this program I moving toward near term commercialization in the United States. John, floor is yours.

Great, thank you, Lonnel. This is John Northcott speaking. I’ll take the next few minutes to provide an overview of the commercial opportunity that exist for telotristat etiprate, Lexicon’s first commercial candidate, which is in Phase 3 development for the treatment of carcinoid syndrome. I’ll focus my section on the follow three topics. First being where telotristat etiprate fits in the market. Secondly, I’ll provide description of the unmet medical need that telotristat etiprate is addressing. Thirdly, I’ll speak about the size of the opportunity in terms of patients and sales as Lonnel indicated. So firstly a little bit about the condition. Carcinoid syndrome is the condition that occurs in people with neuroendocrine tumors then (indiscernible). When the (indiscernible) it can opt results in the overproduction of serotonin. This overproduction of serotonin is believed to be the trigger of carcinoid syndrome. Carcinoid syndrome result in devastating consequences such as excessive life altering diarrhea. Some patients can experience more intend per day. This has significant impact of people’s lives, as you can imagine this can reply the person to their home because they need to be in very, very close (indiscernible) to bathroom. In addition, people suffer from flushing, they feel also reddish in the face, sweating and tightening of the chest and in some cases, it can lead to carcinoid heart disease which can be fatal. Telotristat etiprate is a novel agent designed to specifically reduce serotonin, which is previously stated into predominant driver of carcinoid syndrome. Lastly on the slide is important to note that telotristat etiprate has received Fast Track in orphan designation from the FDA and orphan designation from EMA. We’ll now transition to the next slide. While I like to take a moment to clearly describe where we believe telotristat etiprate can fit into carcinoid syndrome…

Thank you John. The Phase 2 results support our vision for the product profile to telotristat etiprate. The population is a population that had carcinoid syndrome not adequately controlled with octreotride therapy. We studied about 15 patients and we have here as ranking of the reductions and bowel movement frequency (indiscernible). We see the most profound action in bowel movement frequency on the left and then lesser reduction in bowel movement frequency on the right. So the patients are right in terms of best towards response. These patients had an average of about 6,000 per day coming into the study and they control telotristat etiprate. The majority of them have reductions are great than 30% in bowel movement frequency. There reductions were associated with reduction in serotonin production and report of adequate release on the majority of the patients. Next one. With our vision we developed our Phase 3 program and that Phase 3 program is progressing well towards completion. We have one pivotal study telotristat and that is 80%. We’re on track to complete enrolment in last 2014 or early in 2015. Telotristat is a Phase 3 randomized, placebo-controlled study. We were taking approximately 120 to 130 patients with carcinoid syndrome treated with somatostatin analog and then adequately controlled. We’re treating them in a double-blind for 12 weeks after which they will come through an open label extension period of 36 weeks. The primary end point will reflect bowel movement frequency, it will be the change from baseline and bowel movements and the 12 week double-blind. Secondary endpoints, if we look a biomarker of serotonin production, which is urinary 5-HIAA, flushing episodes of abdominal pain and other natures. With this, I’ll turn the call back to John.

Great. Thank you, Pablo. Just a couple of words on where we are (indiscernible) telotristat etiprate in a carcinoid syndrome market, significant progress has made to ensure that the telotristat etiprate in carcinoid syndrome market. We strongly believe the carcinoid syndrome market is an excellent entry point for Lexicon and are pursue to become a commercial biopharmaceutical company, because the market is well defined and that need a significant, there is no direct competition and treating finished in University relatively small, it can be easily targeted to leveraging IMS data. Our physicians that are currently prescribing SSA therapy for carcinoid syndrome. And with this, we anticipate relatively small commercial infrastructure will be required to support telotristat etiprate’s launch in the ongoing commercialization effort. So going to my last slide regarding telotristat etiprate. I’d like to cover the recent announcement that we put out a couple of weeks ago with respect to the new collaboration that we have with Ipsen for the commercialization of telotristat etiprate in the ex-North America and ex-Japan markets. We are very pleased to be in collaboration with Ipsen, Ipsen is a leader for the carcinoid syndrome and neuroendocrine tumors with its SSA drugs somatostatin. We believe strongly the Ipsen will really have accelerate the launch success with telotristat etiprate in Europe and other countries given their establish presence in record of success. A few other financial detail throughputs noting Lexicon retains all rights in the US, Canada and Japan markets for telotristat etiprate. Lexicon will potentially receive 145 million in upfront in milestone payments during the course of the collaboration plus future royalties. The upfront payment is 23 million and additional payment are contingent upon achievement of clinical regulatory in commercial milestones. In addition, Lexicon will receive royalties on net sale of telotristat etiprate in the Licensed Territory. So I’ll now had it over to Brian Zambrowicz, Lexicon’s Chief Scientific Officer to discuss some of the closing previously referred to as spoke one, one who describe our Phase 2 data to date Type 1 diabetes and where we’re headed with our Phase 3 program for Type 1 diabetes.

Thank you John. Sort of the closing I’ll go first in class to SGLT1 and SGLT 2 inhibitor for diabetes. (indiscernible) inhibition of SGLT2 in the kidney resulting in early for glucose cotransporter. What makes that unique is that some addition of that SGLT1 transport in the gastrointestinal tract. SGLT1 is a transporter primarily responsible for uptake glucose after a meal. So in addition of this target results in decrease absorption of glucose decrease, while glucose storing after meal and elevate GLP-1 release. We have other side this SGLT1 and this would be particularly beneficial for Type 1 diabetes. By improving glycemic control l and with (indiscernible) insulin needs. Next slide. Type I diabetes in an area of very high medical need with no important new treatment option since – of insulin nearly essential now. The need is pretty need has three quarter of Type 1 diabetes patents have HbA1c levels about 88 and 7% showing that they do not have good glycemic control. Part of a reason for this is there are few type of glycaemia which can occur by overshooting on insulin dose, which here is understandable since several longitudinal studies indicate sort of 10% of patients with Type I will (indiscernible). Insulin is also associated with weight gain. This is become an important issue as about 25% of Type 1 diabetes patients of 25 are obese and about half have metabolic syndrome. Finally, there is a great deal availability in the glucose levels through the day and the challenge imagine these glucose level has a negative impact on the quality of life for these patients. Next slide. Sort of (indiscernible) extensively are how having over 600 people in point of trials, that these includes in healthy subjects, and patients with Type 1 and 2 diabetes. We continue…

Great, thank you Brian. As Brian indicated in his opening slides, approximately 25% of all adults Type 1 diabetes patients have an elevated A1c, they are not achieving the target set by the American Diabetes Association. But many of them having an elevate A1c can have serious long-term consequences, heart disease, kidney disease and blindness. Sphingosine target profile is designed to address the key patient barriers and challenges that exist and prevent people from achieving the American Diabetes Association A1c target. I’d like to spend a few more minutes to describe the slide and describe some of the reason why people are not achieving their A1c targets. So focusing first under the title 1a boxes, perhaps the patients, our market research indicated reason why they are not achieving A1c targets is because they have a low level of engagement in their disease. And the reasons vary, for some patients is because they not well informed and do not appreciate the long term consequences of an elevated A1c. For others, they are very well informed and as (indiscernible) for various and so why they are constituting not to achieve A1c. Some of the reason are, one, they don’t want to gain weight. This is often more common in younger females as increasing insulin can cause weight gain. Another consider that to be too much work and they do not be want to be bothered testing and monitoring the glucose levels or taking frequent injections. And lastly, some patients have a bad severe hypoglycemic event from taking too much insulin and now have decided to not be aggressive with their A1c management. Moving over the 1d which is people monitoring the A1c target but have high engagement, for this group this is a completely different story. These patients were very, very hard…

Thank you John. I will provide a brief financial update and then I’ll wrap up. As indicated in our press release today, we had revenues from the 2014 third quarter of $0.4 million an increase of $0.2 million in the prior year period. The increase was primarily due to increase technology license fees. Our revenues were $1.4 for the nine months ended September 30, 2014 reflected the 69% increase from 0.8 million for the prior year period. Our research and development expenses for the 2014 third quarter decreased 5% to $24.1 million from $25.4 million for the prior year period. The decrease was primarily attributable to decreases in personal cost as a result of the restricting announced in January 2014 and decreases on last cost. As we further saw our resources on late state credit. These production were partially offset by increases in external clinical and pre-clinical research. For the nine months ended September 30, 2014 our R&D expenses decreased to $69.2 million for $69.4 in the prior year period. The 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 fair value of the Symphony Icon purchase liability decreased by $1.1 million in the third quarter and increased by $0.5 million in the nine months ended September 30, 2014. Our general and administrative expenses for the 2014 third quarter were $4.6 million, a slight decrease from $4.7 million in the prior year period. Our G&A expenses of $15.4 million for the nine months ended September 30, 2014, reflected a 13% increase from $13.7 million for the…

Well, thank you Jeff. As we have now grown over both of our program, our strategic intend to advance our first program telotristat etiprate toward maker we have sort of opportunity the moment of Phase 3 quite rapidly, we think we have an opportunity to significantly value of our (indiscernible). With that being said, I’d like to think you for talking the time to be on this today and open the flow up for additional question.

(Operator Instructions) And you first question comes from (indiscernible)

Good afternoon. Thanks for taking my question. My first to – like to start, I think a couple of times in the prepared remarks you made something the Phase 3 trial is 80% enrolled, but that enrolment could complete by the end of the year, about seven weeks passed in the year, that seems like a very rapid acceleration in enrolment over the prior Phase just finished by the end of year. Is that possible or should we be really thinking about sometime in Q1 enrolment competed?

This is Lonnel, you know PMA a significant progress over the last quarter itself we plan innovation and I think innovation profit looks pretty good for the rest of the year, but we’re not going to give up on their objective until we get to the end. But your point it is very likely there is great chance that we end up in January before we complete the progress. But we feel very good right now with the current level amortization that we could get it done by the end of year.

Okay. And what’s the disclosure strategy, we see there that shortly after that 12 week Phase or I guess just more generally when should we expect to see this?

Yeah, our goal is to have top line date available by the December and at that time we will definitely make that to the public.

Okay. My last is on 4011, you mentioned in the Phase 3 trial FDA they did make control no increase in hypoglycemia but it just seems much more if you more you want seeing some patients probably small interest in hypoglycemia, do have the qualitative sense for what it is – is around hypoglycemia like what percentage point increase in patients who have it will be acceptable to them and above what increase to be really begin to that?

Well that’s a great question. Brian, let me turn that over to you?

We actually we believe of the mechanism of action of sort of a to informing the pennant mechanisms of action that you can improve glycemic control with no interest with type of glycaemia and that was born out in Type 1 study today. If you think of the two informant dependence mechanism of action is sort of plots reducing your insulin I think we can expect Phase 3 data that is consistent that that. Likewise we just really not seen a hypoglycemia single in Type 2 diabetes, it’s just not as not an issue this drug and it’s mechanisms of action.

That’s very helpful. Thanks for taking my question.

Your next question comes from the line of (indiscernible).

Hi, thanks for talking my questions. A couple of them, one of them when you come back to Sotagliflozin around the Phase 3 plans there, can you give us a some little better sense the size of the three different trials here you know the safety versus two efficacy ones and maybe on timing? And then the other one, you had a few personal today that you mentioned in separate press release, can you talk about where think stand in terms of the infrastructure and maybe can you give us a sense in ‘15 how much more we can expect that to be built upon and any sense on spending on that? Thanks.

Alan, those are two very good questions. Let me first pitch the question the question over to Brian relative to (indiscernible) and then I’ll come back and answer the question related to the personal.

Sure, we know that the five at the two studies to show efficacy the studies for Type 1 diabetes which were going to using two doses Sotagliflozin and placebo with about (indiscernible) where they are about to 750 patients studies. And then the additional study to get our safety data would be maybe Pablo speak to the size of that one.

Yeah, I believe would be an additional 1,500. We’re targeting to get safety exposure for falling for Type 1 diabetes.

And the time, how long the exposure to drug for that safety study?

Yeah, I believe that study will provide a 12 months of safety exposure and then package, there won’t some patients where they can see the exposure.

Okay. Thanks.

But your question, do you point its size 12 months, so I think that’s the desire, relative to the personal I’d like spoke to this the last time there were two areas that I thought we could continue to involve more greatly here Lexicon one was to strengthen our overall clinical operations. Although I think the change has done fairly good job of really advanced since launch adequate in the clinic, but as we move in the Phase 3 and a much bigger population further we’ll need to get more space to see how we run our operations and get ever better and be most cost effective that how we do it. So the objective here is to synergize a lot of operations so that we can reduce our cost and be much more efficient in how we run our Phase 3 program. And for on the commercial side, as John as laid out to you, if we have top line data next year, we are less than two years from now to being in market. Therefore we have to start the process to bringing in commercial talent to ready our opportunity. So with (indiscernible) I think he – an addition to us that he had objective. And (indiscernible) would be a great addition to us and helping synergize our clinical operations as we move in the Phase 3 we get progress.

Anyway thanks very much.

You bet.

And your next question comes from (indiscernible).

Hi this is (indiscernible) Thanks for taking the questions. Just I am partnering like 4211, can you just give us some updates on the progresses?

Well let me – what I – as I’ve stated from the last meeting, my objective from the time I came here is to start preventing the company toward a program that we can do on our own. The partnering discussions of – and therefore they were taking too much control of our destiny. So when we talk about how do we maintain our own control and the best way to do that is to advance our own development and stay in control of our own development and move this program into Phase 3 for Type 1 diabetes. So we know that we can do that by ourselves, we know we can commercialize by ourselves. We also know very clearly that in the Type 1 space, there are few more competitive new innovations in that space, if it continue on that medical needs, there is lower cost of clinical development commercialization. And therefore we think with the opportunity to have bidding on a plus drought in peak sales, we think if there is going to be a partnership, that partnership much add value beyond that opportunity. So the conversations of float that last my focus more my focus now how to create value today using the as such resources in Lexicon.

And your next question comes from Steven Willy.

Hi thanks for talking the question. I guess now that you been able to kind of now in some of these travel comments, do you have a better estimation of about the real cost of the Phase 3 type programs going to be?

(indiscernible) The cost I think as we balanced previously, the cost of clinical studies for the pivotal studies as the two pivotal studies would be less than $100 million, and that cost is more than $100 million as we – and that per saying that stabilizing products would be the additional safety studies. We’re continuing to work to find that but that’s and sort of ballpoint that’s medical cost.

How much than a 100 and then it coming to the safety study or is not good as good safety study?

If we include in the safety study will be more than $100 million for the clinical study, so their cost.

And then I guess seeking it right from both you may and FDA, are there two agencies relatively consistent with respect to the preference for a more integrated development program. I know FDA has been obviously quite honorees in terms of see the requirements in the mid of (indiscernible)

Well I think Steven to your question, as we stated before it has the preference of both the agency that they are like seeing fully integrated program to Type 1 and Type 2 but that does not close after pursuing Type 1 of the standalone by itself. Relative to CBOT requirement as you know the CBOT requirement is specific to Type 2 on a patient type relation and the other way we would do that be something Lexicon cannot do that alone. The only way we will be able to do that is go into Type 2 and a partnership arrangement. However we feel very confident with the advice and the discussions we’ve that we have a clear pathway for the Type 1 and we can move there alone on a standalone bases and create value.

Understood, and with respect to the upfront Ipsen payment then I am assuming that I guess based the arrangement with Symphony Icon that after than those two Symphony and then like exactly you mentioned the remaining amount of the contingency payments can be made at some point on both the cash and/or stock basis? Pablo Lapuerta: Half of that will end up having to you pay the company, it can beat that, can be paid either and cash and stock at our option and that requires to the remaining to the payment. And then at some point we’ll hit the gap which we think may happen on the pre-commercialization payments arrangement so we are on our way that turning to pull right again.

Okay, and then just lastly, I know there is being some development/excitement around Symphony as target and I know that you guys had a Symphony asset that was in development and that let you kind went back and bit of an exploratory dosing that seem to be suggestible some kind of another thing we’ve really heard much you guys are obviously focused on for just adding and for (indiscernible) I’m just wondering if there is been any kind of interest on the downside whether or not you think that also maybe and if the other really a stand of assets, that you guys have a lot or somewhere would be a really – or any interest to any parties? Pablo Lapuerta: Steven it might be little lot, it might be but to be frank with you and it is three and half months I’ve been here, I am not focused on that very much about. And the reason for it is these late stage assets we had to figure out that’s an important value and probably build that quickly as well can and make sure we have the resources be there to achieve. The most value of is close to us and front us and start to create opportunities to drive revenue. But at some point to your point, we will look at and we will try to figure out the value for all the assets and we have in our Phase 2 are currently on hold but I think moment is several months ahead us and that was (indiscernible)

Okay. Thanks.

Next question comes from Kevin Kedra.

Hi, I want to follow up on the question about partnership, just wondering if you guys feel like you have enough data with you have now but you could be actively engaged in partnership discussions on Phase 2, would you feel like there is (indiscernible). I need to be generated there. And then secondly on (indiscernible) I was wondering if you got any sort preliminary discussion with payers take away around that sort of price point that you kind of implied in your peak sales and around 4900 or so, I am just want to know if you have any discussions on that point? Lonnel Coats: Let me now do the partnership question and then I will pitch it over to our Head of our Commercial Strategy John Northcott. So I think LX4211 has been well characterized today for Type 2. And I think the best way for us to eventually if we decided afford long program is to advanced type one program interface three and make headway there. I don’t believe there is any additional update and then we do it steady other than going in Phase 3 on Type 1, they would attract a partner anymore unless that we’ve already done to date. And best opportunity always create value and our partnership is continuing and develop and I think we now have that pathway it’s very clear, Type 1 is where we can absolutely win. We can control that pathway, we can get there, we can get there quicker because we have already created data in type and Phase two and so we have to chase to burdens and hand well that and then they trade additional value and opportunity the part in the future, but that will be a decision that we will make and could it be in control are in development. One of things we can do is love slow process of discussions really dictate the page by which we pursue the development. So at this point, all hand on debt can do a lot on Type 1 and hopefully and as future unfold we may have the opportunity partner in the Type 2 safety. With that I said John I pitch it over to you for the second part of that question.

Great, thank you. So the positioning of Telotristat etiprate is in patients that are not adequately controlled on nearly 30 milligrams are satisfying alone. And the one of the leading (indiscernible) for the cause of that point is really the doubling or tripling is kind of starting build the pitch which then doubles and triples the cost of somatostatin LAR in the US base. And so therefore we believe that there are certainly a great opportunity to price a parity of premium to the SSA therapy that’s existing on the market today. We had conducted market research and we are going to continue to better understand the market access dynamic and the price of point where telotristat etiprate for a modeling we use a parity of SSA, we’ll continue to access that opportunity as we get closer to commercialization.

(Operator Instructions) And there are no more further question is the queue at this time.

Let me say thank you to everyone for participating in this call today. And we also always appreciate the interest you have on Lexicon. Have a great evening.

That concludes today’s conference call. Thank you for your participation and you may now disconnect.