Good day everyone and welcome to today's program. Neurocrine announces third quarter 2009 financial results. At this time all participants are in a listen-only mode. (Operator Instructions). Please note this call may be recorded, I will be standing by in case you need any assistance. It's now my pleasure to turn the conference over to Kevin Gorman

Thank you very much and good morning everyone. Today I am joined by Chris O'Brien, our Chief Medical Officer; Tim Coughlin, our Vice President and CFO and Jane Soresen, Investor Relation. We are going to run you through this morning our third quarter financials and our year-to-date and then we are going to spend time with Chris taking you through the progress which has been significant since the last call on all our clinical programs in the company. Before we get started I would like to ask Jane to read out Safe Harbor statement.

Good morning. I want to remind you of Neurocrine's Safe Harbor cautions. Certain statements made in the course of this conference call that state the company's or management's intentions, hopes, beliefs, expectations or predictions of the future, are forward-looking statements, which are subject to risks and uncertainties. Information concerning factors that could cause actual results to differ materially from those contained in or implied by the forward-looking statements is contained in the company's SEC filings, included but not limited to the company's annual report on Form 10-K, and quarterly reports on Form 10-Q. Copies of these filings may be obtained by visiting the Investor Relations page on the company’s website at www.neurocrine.com. Any forward-looking statements are made only as of today's date and we undertake no obligation to update these forward-looking statements to reflect subsequent events or circumstances.

Thank you, Jane. Tim?

Thanks Kevin and good morning to everyone. We released our financial results for the third quarter yesterday afternoon we remained on plan from a financial standpoint. Our launch for the quarter was $8.2 million or $0.21 per share based on 39 million shares outstanding. For the same period last year, we had a loss of $17.7 million or $0.46 per share. Our year-to-date loss is $1.11 per share compared to $1.56 per share last year. We are slightly ahead of budget for the year based on expense management efforts throughout the company. Research and development as well as general and administrative cost were inline with our expectations and significantly lower than the prior year due to lower personnel cost, lower external development cost and professional service cost. We continued to invest in our GnRH program kicking of the 901 Daisy Petal Study and also our VMAT2 program with our Phase I work in Canada. As we have explained during the first and second quarter calls. There are a couple of accounting nuances that one have consider when comparing 2009 and 2008 numbers. They all relate to have your required accounts for the building in 2008 versus 2009; the first is related to rent expense. In 2008, rent expense is treated as interest expense in accordance with generally accepted accounting principles. In 2009, the same rent expense is now characterized as a component of operating expenses. Secondly, during 2009, we began to recognize a deferred gain on the sale of the building that occurred in December of 2007. This accounts for approximately 700,000 of non-cash other income each quarter. Finally, we record rent on a straight line basis over the terminal lease. And this adds approximately $200,000 of non-cash expense each quarter to the income statement. From a cash and investment perspective, we are managing our cash flow and expenses closely. We ended the quarter with $63.7 million in cash and investments. During the third quarter, we added in the two significant financial agreements. The first agreement was our Committed Equity Financing Facility or CEFF with Kingsbridge. We're the first company to negotiate in [warrantless] CEFF of Kingsbridge or we plan to follow [S3] today with the SEC to finish all the applicable terms of this agreement. The second agreement was amendments for building lease that was effective September 25, 2009. This amendment will save us approximately $27 million over the term of our lease agreement and also ship to the certain liabilities from short-term to long-term. We will follow our 10Q today with the SEC and with that I'll turn it back over to Kevin for the balance of the call.

Thank you, Tim. Actually now it would be good time for Chris to bring us all up to speed on all of the programs in the progress today particularly with our VMAT account elagolix programs.

Thank you very much Kevin. Lots going on as you mentioned earlier since our last call. I'm very happy with the progress that's being made across multiple funds as you are aware we have Urocortin 2 our Phase II program that is currently in development for patients with Acute Decompensated Heart Failure. And as mentioned in previous calls we have been keen to move from the stable heart failure patient populations into patients with Acute Decompensated Heart Failure and our long-term academic collaborators in the Christchurch, New Zealand at the Cardioendocrine Research Group have initiated a clinical trial in patients with the acute decompensated heart failure. And this trial began recruiting patients earlier this quarter and enrollment is expected for approximately 50 subjects. So very happy with the progress made on that front as we continue to move the Urocortin program along. Little closer to homes in New Zealand and North America is our VMAT2 program. As mentioned on our last call we had prepared and filed a clinical trial application or CTA in Canada for our first Phase I study, this is a single ascending dose trial. And the key here for us with the VMAT2 program is not a question of mechanism we know that VMAT2 inhibition is effective for a number of central nervous system disorders and our goal of this program is to go after an unmet medical need in a condition called tardive dyskinesia. So we know VMAT2 inhibition can be effective but there are no approved drugs for TB and there are some problems with current VMAT2 inhibitors that render difficult for this population. What we need is was a drug that had a good safety profile and a very specific pharmacokinetic or PK profile so the Phase I program offered an opportunity for…

Thank you very much, Chris. So as you can see this was been a busy quarter for us, quite a bit of work has been done and I've got to say that I'm very pleased with the results that we are already seeing out of the 901 study at least and far as blinded screening data goes as Chris has mentioned. At this point let's open it up for questions.

Thank you. (Operator Instructions). Our first question comes from Brian Abrahams with Oppenheimer & Company.

All right, thanks very much for taking my question and congratulations on getting the Daisy Petal study started so quickly. I have couple of questions regarding some of the modifications, the amendments that you have made to that study I guess. Can you give us a sense of what your initial target was for the mean base line score with this modified pain scale?

In the clinical trial, you have certain assumptions that go into any kind of simplified estimate in power calculation. And we know that for these 0 to 3 scale there are 4 point scales that the FDA has been in favor of and we know that a moderate to severe is a score of 2 or greater for things like dysmenorrhea which is the most disabling and intense symptom of endometriosis. We typically see scores in the 2, 2.5, 2.6 range and that’s indeed what we are seeing here. As you know in the Lilac Petal Study with that version of the scale, about 40% of the daily values during the placebo lead-in period were zero and 40% of the values were one. And the base line value on the non-menstrual days was kind of 0.83 or if you look at all days rolled up it was 0.9. That value just doesn’t give you any room to improve. So what we have done with this population in 901 is make sure that the scale is appropriate that has a wide dynamic range and that women enrolling in the trial are women who have moderate to severe endometriosis with moderate to severe and non-menstrual pain and moderate to severe dysmenorrheal. And such I would expect the main scores to be somewhere in the 1.5 to 2 range considering that most women with moderate to severe endometriosis only have about 8 to 10 days per months of non-menstrual symptoms.

It seems like you are in a better place than you were with the prior scale but I am just wondering if you think the modifications were as successful as you had hoped where you hoped. I do hope to fall into the closer to the two to three range for the value to detect a greater difference.

No because as I mentioned women even with severe endometriosis typically report only eight to 10 days of a say a 20 to 25 days a month with non-menstrual pain. So, they have days of no symptoms or every mild symptoms and so one of the other things that we have enjoyed in our discussion with the FDA is that may be mean scores are not the best way to assess non-menstrual pain. If you have many zero days per month but you also have days of two and three your mean score may be 1.2. Is that the best statistical method? And the FDA told us may be that’s not the best way to do it. May be a responder analysis would be a more appropriate way of assessing this kind of scale. So, they have given us some latitude in how we will do the statistical analysis for these endpoint. One other piece of that just to emphasize this is in fact confirmed what we know about non-menstrual pain. Even in our previous studies for example 603 or petal study, where we use the monthly scales, the monthly recall scales such as CPSSS. Non-menstrual pain is typically in the 1.8 region even on the monthly scale of that old version whereas the monthly look back for dysmenorrheal within the 2.3 or 2.4 region. So I am very comfortable that this is appropriately reflecting how women suffer and we have some options of how to work with this including both a mean change from baseline as well as responder analysis.

Got you. Okay, that makes a lot more sense now. One more quick question, then I'll hop back in the queue. Can you help us understand what influence the decision to now expand the study, obviously its going to push back timelines for the results at the end of Phase II and presumably the start of the Phase III? Can you just maybe help us understand why you decided now to try to achieve statistical significance rather than just achieve results that will give you a sense of (Inaudible) for the Phase III, I mean is your thought that maybe this study could be potentially considered one of the pivotal studies? Just help us understand your thoughts on that.

I don’t think this would be considered a pivotal study in that. We know from our discussions with the FDA that we need to get to the end of Phase II and SPA This include the support of trial obviously and add tremendous weight to the NDA when we get there, but my anticipation is that we will still go ahead with the full Phase III program as planned and that’s a program that as you know from previous comments we won’t begin the Phase III trials until the partnership deal is done. I think to be honestly the utility of the expanded sample size doesn't change anything for me about the trial, its still giving me what I need to go into Phase III but as you know we've kind of been beaten up by people and it adds a robustness and some weight to the Phase II study that will probably be useful.

(Operator Instructions). Our next question comes from Craig Gordon with Cowen and Company.

Just a couple of questions for you; first because you guys have modified this daily non-menstrual pain scale is this I guess is asking most focus on this is this they are really preferred and [point] for the Phase III or are they just trying to get a better feel as to whether or not its about end points as we know that this has not been typically used in the past.

Couple of important points; in fact the reason we’ve had these discussions with the FDA is because all the other aspects of assessment in particular dysmenorrheal, dyspareunia, analgesic use all those other things have been sorted out and till what we’re talking to the FDA is the one piece that we needed to get some clarity on because of the problem that we uncovered with the conversion from the monthly scale to the daily scale. All of these things in fact are not new, the reason we have dysmenorrhea and non-menstrual pain is because these are the components of the old B&B scales that have been used for decades since the early 1980s and these are the scales that were used for the approval of Lupron, Depo-Provera, Danazol, Clinoril et cetera. In fact so these are not new scales, these are new twist to the scale and specifically requested by FDA to change from a monthly dysmenorrhea to a daily dysmenorrheal, from a monthly non-menstrual pain to a daily non-menstrual pain and some modification to the wording. So, it is the fact that FDA considers these modifications of the B&B scale that allows us to proceed with the testing plan as we’re doing it now. The thing that the FDA has been very clear about not only to us, Neurocrine, but to other sponsors who have worked in the endometriosis space is that they consider the treatment of pain a very important aspect of endometriosis and they want therapies, new therapies, effective therapies that will treat both dysmenorrhea and non-menstrual pain and that’s we have had so much back and forth with them. Its relatively easy to get a drug that works on dysmenorrhea, the trickier part has been non-menstrual pain partly because of the variable and intermittent nature of that symptom among women with moderate to severe endometriosis and so that’s why we’re doing what we are doing.

In terms of partnering the SPA and having to conduct the Daisy trial when do you and of course I know the [hinges] of a partnership. Is it still seasonal to start a Phase III inch in the second half of 2010 or do you think that’s possible or likely that’s going to slip into 2011?

No, the plan is still 2010. As I mentioned the modification to the sample size for the 901 study, it adds I don’t know 10 weeks or so to the program and so we will request, the goal is to request and end the Phase II meeting and to submit that request in Q2 in parallel with the SPA submission. And with output from the end of Phase II and SPA, sometime presumably in summer, we will have the opportunity of starting a Phase III program in the second half of the 2010.

And everything else that has to do with the program that goes into starting of Phase III trial is being done will be completed in time for that such as the manufacturing of clinical trial drug. So, that is all going on and including all the planning stages for the registration batches that are necessary for that. And the entire preclinical program is actually completed except for the two-year cross genecity studies which were ongoing right now in both rat and mouse.

Okay. And if I made -- I'm sorry go ahead.

No, that was it.

And then if I may, just one other question. Is your projected cash fund for the year, is that remaining $50 million to $55 million, can you give us an update on that?

That’s remaining at that number.

Okay, great. Thank you very much and congratulations.

Thank you.

So, I'd like to take this opportunity right now just to reiterate, it was only a last quarter when we had spoken. There was a significant amount of uncertainty around this program. We had report of the trial results in which we had clearly demonstrated efficacy in a number of end points. But there was one that we still needed to hit and that was the non-menstrual pelvic pain. We had not yet met with the agency at that point in time. We've shown throughout this entire program that the drug works and it works as well as the gold standards. We did a head to head non-inferiority trial and given some DMPA and showed that we were as good as DMPA, which was as good as Lupron in its non-inferiority trial. But in this one short quarter, we were able to meet with the HNCA and have an extremely productive meeting with them. We have nailed down an end point that we did, we came about through all of the clinical trial data that we had. But in addition we had performed a number of individual patient interviews and a number of focused groups with patients. So that we could better understand how they suffer both in dysmenorrhea and particularly in non menstrual pelvic pain and to get their reaction to different types of ways to uncover the way that they suffer. We took all of this work to the HNCA and they appreciated that very much and we suggested to the HNCA pass forward with this revised language. And I must say that its language that actually takes us back closer to the original CPSSS or [B&B] source which we've always set up on and the agency appreciated that. And that's why we are so pleased now that…