Good day, everyone, and welcome to today's program. At this time all participants are in a listen-only mode. Later you will have the opportunity to ask questions during the question-and-answer session. Please note, this call may be recorded and it is now my pleasure to turn the call over to Mr. Kevin Gorman, President and CEO. Please go ahead, sir.

Thank you very much, and thank you, everyone, for joining us this afternoon for our fourth quarter earnings call. Today I am joined by Chris O'Brien, our Chief Medical Officer; Tim Coughlin, our CFO. Before we begin, I would like Jane Sorenson in Investor Relations to read our Safe Harbor Statement. Jane?

Good afternoon. 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 you undertake no obligation to update these forward-looking statements to reflect subsequent events or circumstances.

Thank you, Jane. So today as always what we're going to do here is Tim will take you through our financials for the quarter and for the year. I'm very pleased that we were able to perform right to our guidance for the entire year, actually getting us right into the low end of the guidance for our burn. Then Chris O'Brien is going to take us through, each of our programs and the progress that we have made. This has been a very good year for us as it turns out for each of our programs and we're very excited as Chris will talk to you about the number of events that we have coming up this year. So first, I would like to turn it over to Tim.

Thank you, Kevin, and good afternoon to everyone. We released our financial results today, and met our primary financial goal for 2009 of maintaining a cash burn of 50 to $55 million. During 2009 we used just over 50 million in cash and ended the year with approximately 60 million in cash and investments. For the fourth quarter of 2009 the burn was inflated due to a one-time $4 million release payment made to our landlord to vacate approximately 70,000 square feet of real estate. Exclusive of this payment, our burn from operations was approximately $10 million for the fourth quarter. Our loss for the quarter was 7.9 million or $0.20 per share. This compares to a loss of 28.8 million or $0.75 per share for the fourth quarter of last year. The yearly loss was 51 million or $1.30 per share, compared to loss of 88 million or $2.30 per share in 2008. The reduction in net loss is due to strong cost control measures across all functions within the company and a prioritization of work among clinical and research programs. Research and development costs, as well as general and administrative costs were in line with our expectations for the fourth quarter and significantly lower than the prior year due to lower personnel costs, lower external development costs and lower professional services costs. We continue to invest in our elagolix program with the 901 Daisy study, which is now fully enrolled as well as the VMAT2 program, which is preparing for the second Phase I trial in Canada. Additionally, we have been industrious in moving our programs forward through joint ventures with academic or other researchers at little so no cost to Neurocrine. Chris O'Brien, our Chief Medical Officer, will speak to this in his comments as it relates…

Thank you very much, Tim. It was very important that we get out of our obligations on that front building here on our campus, and I want to take this time to congratulate Tim in accomplishing that last year. That significantly decreases our burn in a going-forward rate. Tim is also working with our landlord currently to see what more we can do. Right now, I'd like to turn it over to Chris O'Brien and he will take us through our programs.

Thanks very much, Kevin, and thanks to the participants on the call this afternoon. Let's walk through the programs one at a time. As many are aware, we've had a longstanding collaboration with GSK that has resulted into the several molecules moving into clinic targeting the CRF1 receptor. Currently the lead CRF1 antagonist is in a Phase II trial for the treatment of major depressive disorder. In our recent discussions with GSK, we know this program is moving well and we're on track for the last patient to finish up clinic visit in the summer of late June timeframe, I believe. Then GSK will, obviously, go through the process of cleaning and processing that data. As soon as we get topline results, we'll share them externally. So that's something that we're looking forward to very much for this 679 molecule. You may also be aware with the CRF1 antagonist 679, GSK has been involved with a program looking at this molecule for the treatment of post-traumatic stress disorder, or PTSD. If you're interested, you can also go on to clinicaltrials.gov and look at two studies that are currently underway with 679. The first of which announced earlier this year is a collaboration between Emory University and Mt. Sinai Medical Center in New York in conjunction with GSK and this study is a randomized, double-blind, placebo-controlled trial of 679 in approximately 150 patients for six weeks treatment duration. It is a more typical academic style study, so we would expect that enrollment will be rather prolonged given the fairly careful and rigorous inclusion/exclusion criteria for PTSD subjects in this trial. Again, I think it helps support our understanding that this target is an extremely attractive target and the faith that both GSK and Neurocrine have in the unique pharmacology of 679…

Thank you very much, Chris. So as you can see we've had a lot of progress. It's very encouraging with the 901 study. What was crucial there is that we needed to see that that the scoring system that we're now using is one that can utilize the full dynamic range and as Chris has told you, that appears to be the case. It's actually parallel and quite well that all CPSSS look back score for a non non-menstrual pelvic pain that we utilized and hit on every single time. That was when we also showed non-inferiority, already in the 603 study to Depo-Provera. So this year, we have a number of milestones that are going to be coming up early, mid and later year. As Chris has talked about this the initiation of VMAT2 multi-dose studies and then the readout of the 901 that's coming early on in the middle of the year, where we start our in the Phase II meeting, initiate the SPA process, little later in the year we're going to have the VMAT2 readout and on then complete the SPA process and have elagolix ready for Phase III studies at that point in time. Also near the end of the year, we will start the POC study for VMAT2. Its going to be next year that we'll get the urocortin 2 readout and also let's not forget very importantly that we're going to hear this year on our lead CRF antagonist in that Phase II major depression study. What I think is, sometimes under appreciated and not realized is, that we have five compounds in clinical development currently in this company, two of them in later stage development. Of those five compounds, four of them were discovered and developed here at Neurocrine, including both of the CRF receptor antagonists that are being carried forward by GSK. Elagolix was completely discovered here in our research group, in addition to the three backup compounds that are poised to enter the clinic, and then VMAT2, of course, was discovered and developed here at Neurocrine. So the research group, while having been currently as lean, we still have several programs in research. The automated processes that we have in place are such that we still anticipate to be able to add a new clinical program each year. They're doing quite well, with our entire automated process here. So with that, what I'd like to do is open it up for questions at this time.

(Operator Instructions). We'll take our first question from the line of Brian Abrahams with Oppenheimer & Co. Please go ahead. Brian Abraham - Oppenheimer & Co.: Hi. Thanks very much for taking my questions. First question is for Chris. You mentioned the mean baseline non-menstrual pelvic pain score in the 901 study was 1.4. Does this represent a more recent look compared to that initial look that you were able to take in October? If so, about what percent of patients now have been screened to call have that baseline score?

So that initial score, what we have seen, Brian, is that as we've taken a couple looks, and I have one more coming up shortly, there is less and less change. So the although, there was a little higher variability and the mean was closer to 1.5, the first look it came down to 1.4, with a second look, that was a reduction in the SD and I think that that number reflects about three quarters of the subjects that will be randomized so far. Brian Abraham - Oppenheimer & Co.: Okay.

It should be a pretty stable number. Likewise, the percentage of non-menstrual days that are moderate or severe that's and over the various looks it vary between 47 and 51%. So that's why I say nearly half in the press release

Again having that 50% of the days being moderate to severe and utilizing the old scale that the FDA had given us the language initially that we tested in the 702 study, their 80% of the days were actually absent or mild. So this is performing much better than that old scale. Brian Abraham - Oppenheimer & Co.: Great. Then, Kevin, can you maybe talk a little bit about, where you are with respect to potential partnership for elagolix at this point? Obviously, the data is coming fairly soon. Is that the main gating factor? Is it possible we might see a partnership before that or should we look for something potentially after that?

Yes, thanks, and we are in negotiations with several partners. Obviously, my preference is to have a deal done with a partner who shares our vision with that as quickly as possible. We do have the 901 data coming up, but, quite honestly, that is going to carry more or less weight depending on the individual partners that we're talking to. Some of them realize that the 901 data has already shown that it is utilizing the full extent of the scale here and so it can be less important to them, others it may be more important to them. So we'll just continue with our process, which is moving along actually quite briskly right now, but it's not done until it's done at this point. Brian Abraham - Oppenheimer & Co.: Thank you very much.

Thank you.

(Operator Instructions). We'll move now to the line of Phil Nadeau with Cowen and Company. Please go ahead.

Good afternoon. Thanks for taking my questions. First one is on 901 data and progression into Phase III trials. It seems given what you've said that starting Phase III by the end of the year is very likely, but could you maybe talk about some of the risks to that that would necessarily wouldn't be able to see, like what's the key risk to the timelines at this point?

Well, that's very clear. What we've said repeatedly I think publicly is that, we won't initiate Phase III trials without a partnership in place. Because the cost of this Phase III program is substantial and it would not be wise to start a Phase III study program that you couldn't complete.

Right. So I would say is following-on on that is the key risk there is how quickly the partner can come up to speed on this program while all diligence is completed and everything like that is done. The manufacturing supplies for Phase III, most of that manufacturing supplies start Phase III, actually all of the manufacturing supplies start Phase III are already completed. The resupply of Phase III is going to be started fairly shortly. It would be up to the partner to then takeover for the commercial supply. It would be how quickly can the partner come up to speed and get these activities on their docket, so the sooner they come on board, obviously, as the partners realize the more quickly that this can transition into Phase III.

The other timing piece, of course, is if we submit an endo Phase II meeting request in June, the FDA, obviously, they get to pick when the meeting is and typically that's a couple of months after the meeting request. So for an end of Phase II or Type B meeting that's usually a 60-day clock, but obviously the FDA controls the calendar. The SPA process, which we would submit shortly after that, typically has a 30-day clock for each review cycle. Usually for an SPA, you don't get by with just one review cycle. They're usually say two. Again, that's been baked into the timelines when we talk about being ready both from a regulatory and clinical and CMC point of view to initiate Phase III later in the year.

To be clear, the submission for the endo Phase II meeting would take place in June, very shortly thereafter would be the first SPA submission. As Chris said that normally the FDA will grant the end of Phase II meeting within 60 days, the SPA is within 30 days.

Okay. Great. Then what about on the clinical side? You all sound pretty convinced that this new measure that you're using is going to be the right one, but is there still some risk that although it seems like on baseline. The 1.4 number is right where you want to be that it doesn't pick up the typical changes that you'd see in an endometriosis patient brought out by elagolix or kind of anything long those lines, any risks on a clinical side at this point or are we 99.9% of the way through what you need to see clinically?

I've been doing clinical development long enough that I never know 99.9%. No, of course, there is risk. It's a Phase II study. There is always risk. Am I comfortable with that risk? Absolutely. Am I encouraged that the two pieces we needed, number one, the reduction of the possibility of a floor effect and number two, the separation of elagolix from placebo? I think we've addressed the first and the second will only be when we get the data. Now, we've obviously modeled this closely, and if you've been watching this really carefully, you maybe aware that we initially had this trial, an 80-subject trial, because it was just going to be a directional study. In fact, as we started to see the early screening data, we realized that was a slightly larger sample size. We could have a very robust statistical output from this study, and so that's why we bumped the sample size to 120. So we actually are very comfortable with the assumptions that go into that assessment and the likelihood of having a favorable statistical result.

Yes. It's great. That's very helpful. Thank you.

We'll go next to the line of Thomas Wei with Jefferies. Please go ahead.

Hi, thanks for taking my questions. I wanted to just follow up on the last comment there, with the 120 patients now, what sort of improvement in non-menstrual pain are you powered to show off that baseline of 1.4?

Thomas, thank you. Normally, for power calculations, you kind of know what the effect size is and what the variance is, so you predict that.

Sure, I will take that, too.

Yes. So, well, we haven't used this scale, it's only estimates or assumptions. For a small Phase II study and the effect sizes that we think we get, this is 80% power to see a separation of elagolix from placebo. One of the luxuries of our interaction with the FDA has been their suggestion that we not limit ourselves to simply a look at mean change from baseline that, in fact, for something like non-menstrual pain, which is variable in frequency, variable in intensity, i.e., women don't have it every day, and when they do have it, it is not necessarily severe. For something like that, sometimes a mean score and a change from baseline is not the appropriate method, sometimes you're better off looking at a responder analysis. Let's say, half of your days are moderate or severe at baseline, and at the end of treatment, let's say you have a 30, 40, 50% reduction in the proportion of days that are moderate to severe. That's a nice responder type analysis. So we have the luxury of actually being able to do both mean change and responder analysis. So I am looking forward to being able to explore both of those.

I guess this gets to the question of how do you interpret the numbers coming out of this, now that you've changed the wording of the scale, so that all the baseline numbers are different? I am still struggling with how to interpret whatever difference it is that you see in the end on this scale. So, I know you're looking at other measures as secondary end points to try to correlate that, may be what might be helpful for me as if you can share with us what you think are? Just remind us what are clinically meaningful improvements on those secondary end points, so that we make sure that we interpret the data correctly when it comes out?

So in the old days when there was a once a month scale on the old B&B or CPSSS, the definition of clinically meaningful was a one point change in the monthly recall of dysmenorrhea or a one point change in the monthly recall of non-menstrual pain. Now clearly that definition doesn't work any more because if women came in, they had a score of three and they had a one point change, they were considered a responder. Now when in the 702 and 703 studies with the original wording that the FDA proposed there, the magnitude of change is tiny, so one point change doesn't mean anything. If you come in at 0.8 and you have a 0.3 reduction that actually would be a pretty change. So one, typically what you do exactly as you just pointed out, you take something like one of the secondary end points, in our case the Patient Global Impression of Change at a 7-point Likert-type scale where a four is no change and you have improved side and the worsened side. What we've done with our trials is taken the PGIC and looked at the magnitude of change in those subjects, only those subjects who say they were either much improved or very much improved, and then you get a rough idea of what kind of numeric value on the daily scale might be considered clinically meaningful. In fact, what you see is that like with most pain scales, clinical meaningfulness begins usually around a 30% reduction and anything over that is typically associated with clinical meaningfulness on the other scale. That's very consistent with the pain literature. I am not disclosing any of the details of my conversations with the FDA, but we have in place a series of things that go to support clinical meaningfulness.

That's very helpful. Then just lastly, in the 901 study, the other thing that I am still a little bit confused about is, why not do a single-blind placebo run in during this first month when you're collecting these baseline scores and trying to make sure that you've the right baseline? Wouldn't it have made sense to do a placebo run in so that you just eliminate any sort of unblinded effect on those scores being reported?

So, that's an interesting question. There are two factors that we put into consideration. In the 702 study, we had a single-blind placebo lead-in period. Surprisingly, it didn't eliminate subjects from randomization too often. We learned a lot about what was required, and we've actually built that in to the inclusion exclusion criteria for the 901 study at baseline. So we're holding the women to a slightly higher standard for randomization in 901 than we have before. That's reflected obviously in the fact that the B&B score that we're seeing in these trials is slightly higher than we have seen before. Now, the other point was, again as I mentioned, as a Phase II study I just wanted some experience with the modified wording of the non-menstrual scale. This wasn't set up to be the definitive pivotal trial. Given the fact that time was really important for that, I needed a rapid readout from 901 and I wanted to keep cost under control on balance, adding the single-blind placebo lead-in, it didn't seem to add that much for this Phase II effort. You can be sure that as I think as we're putting in the SPA for the Phase III, that's an important component going forward.

Okay. Thank you.

(Operator Instructions). We'll go now to the line of Stephen Willey with Thomas Weisel. Please go ahead.

Yes, hi. Thanks for taking my question. I was just wondering if you could maybe remind us what the standard deviation where was around the means in the Lilac and Tulip studies and then I guess just based on where you see baseline now and based on the changes of and wording on the scale if you think that there is reason to believe that those deviations will be tightened at all as well?

So the answer to the first question is I don't remember exactly, but I think they were in the 0.8 range. They were almost the same size as the mean if I remember correctly. So it would have been 0.8 and as a mean with a standard deviation like 0.7, something like that. I don't have it in front of me. Sorry, Steven, as to the latter question, we won't know until we see the data since we truly haven't looked at this one before, but I would assume based on the way these scales that tend to work that let say you see a 50% reduction from 1.4, so 0.7, that the standard deviation will be, remain fairly similar in the 0.6 range.

Then just kind of thinking about VMAT2, looks like you're going to have proof-of-concept data here by the end of the year. Just kind of wondering how you're thinking about that program strategically and maybe whether your intention to move forward in the Phase II on your own is a function of someone picking up on the elagolix side or is that just something that you intend to move forward right now on your own or would you look to partner that drug?

Yes, Stephen. So just to be clear, we'd be starting the proof-of-concept study in the fourth quarter of this year.

Okay.

That will read out towards the middle of next year, but to your point, once elagolix was partnered, then that puts us in a position where we can retain VMAT2. Clearly, it's nice to have an asset like VMAT2 that is performing so well, such that we could choose the partner early, we could choose the partner late, and then, ideally, we could choose to take this compound all the way through commercialization since the clinical program is very straightforward. The endpoints there are already assigned and utilized. The competitive landscape is actually wide open for us there. It's a small prescriber base of basically a movement specialist and neurologist that could be handled by a small company moving forward there. So it does offer us quite a bit of latitude.

Great. Thank you.

(Operator Instructions). We'll move now to the line of Jason Napodano with Zacks. Please go ahead.

Hi, guys. Thanks for taking the question. I think in the past you've mentioned that you were receiving requests from physicians for elagolix use in a compassionate basis. I am wondering if those are still going on and if you got any kind of update on that?

Yes, you are correct. We have, in the past, had investigators come to us requesting that elagolix could continue to be used on a compassionate basis. However, because we're still in a Phase II program and while those requests continue to go on and it is not a life threatening disease, this isn't something that we could actually do until we're well into Phase III.

Okay. So none of that has actually started.

Correct.

Okay. Thank you.

Our next question will come from the line of Scott Gibbs with Odyssey. Please go ahead.

Yes, hi, guys. Can you provide some insight into why you did the Venrock financing?

Certainly. Venrock is an extremely high quality firm. It's known to be a long only. They do a tremendous amount of due diligence. So I've got to commend Venrock for the amount of due diligence that they did on us. Towards the end of the year, when they came to us and we had the opportunity to bring them on board, and we did it through a registered direct process, we decided that we wanted that. They, again, for what I just said, a very high quality firm that has every intent to continue with us for quite a long time.

Okay, great. Thank you.

This will conclude today's question-and-answer session. I would like to turn the program back over to our presenters for any closing remarks.

Thank you very much. I want to thank everyone for participating today. As you can see, we keep a very tight reign on our burn rate here, again with working on reducing the cost of our facilities which has been substantial in '09 and will continue to work ongoing forward, and we'll utilize every opportunity to control our costs as we go forward. We have, as I said before, a number of (inaudible) events coming up throughout this year. We're looking forward to it. Our drugs are performing well at this point. So, we will keep you posted as we go along and we look forward to interacting with you at the investor conferences, which we're always active in. Then as the data reads out, you will know it almost in real-time with us. So with that, again, I'd like to thank you all, and have a good day.

This does end today's teleconference. Thank you for your participation. You may now disconnect and please enjoy the rest of your day.