Good day ladies and gentlemen and welcome to the Q2 2010 Nektar Therapeutics financial results call. My name is Glen and I will be your coordinator for today. At this time all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of today’s conference. (Operator Instructions). I’d like turn the presentation over to your host for today’s conference, Ms. Jennifer Ruddock. Please proceed, ma’am.

Thank you. Good afternoon and thank you for joining us for Nektar Therapeutics second quarter 2010 financial results conference call. With us today are Howard Robin, our President and CEO, John Nicholson, our Chief Financial Officer, Bharatt Chowrira our Chief Operating Officer; Dr. Lorianne Masuoka, our Chief Medical Officer; and Stephen Doberstein, our Chief Scientific Officer. Before we get started please note that in today’s discussion we will make forward-looking statements regarding the value and potential of our advanced polymer chemistry technology platforms. The timing and availability of future results from our clinical program, the potential and timing of future regulatory submissions, the status and future plan for certain of our partnered program in research and clinical development, the timing and potential for completion of certain transaction, the market potential of our drug candidates and development; potential future revenues that maybe realized under one or more of our collaboration agreements; our financial guidance for 2010; and certain other featured events and opportunities relating to our company. These forward-looking statements involve significant risks and uncertainties that are detailed in Nektar’s reports and other filings with the SEC, including our Form 10-Q quarterly report filed with the SEC on May 5th 2010, and our report on Form 8-K filed today. Actual events could differ materially from these forward-looking statements. We assume no obligation to update any forward-looking statements as a result of new information, future events or development. A webcast of this call is available for replay on the IR page of Nektar’s website at www.nektar.com. With that I would like to hand the call over to our CEO Howard Robin. Howard?

Thank you Jennifer. Thanks to everyone for joining us today. Nektar has built a strong and impressive R&D pipeline based on our proven advanced polymer conjugate technology platform. Over this past year, we’ve advanced several clinical candidates and achieved clinical validation in two distinct areas of our technology with small molecules. I will talk more about these important advances in a minute. Today, I would also like to update you on specific achievements in the second quarter of 2010, including the very exciting day that we announced for NKTR-102 in both breast and ovarian cancers. Finally, we’ll also highlight a number of upcoming data milestones and anticipated future events for Nektar. Our pipeline now has numerous drugs in various stages of development ranging from preclinical compounds to candidates preparing for Phase III. As this pipeline advances, Nektar could see our first commercial launch as early as 2012. The number of drug candidates advanced by Nektar in just three years, highlights the unique potential of our polymer conjugation technology. This proprietary platform is highly flexible and powerful drug discovering engine and it could be applied to both large and small molecules in different therapeutic classes to create new chemical entities. Our technology puts us in an enviable position within a biopharmaceutical industry, allowing us create a steady stream of innovative and potentially valuable product opportunities. Literally hundreds of drugs, both protein and small molecules could be candidates for our technology platform. And because we begin our discovery process with well-understood pharmacophores, we are able to greatly reduce the target biology risks associated with drug candidates and focus instead on changing, improving and extending their action within the body. In oncology we are using our releasable conjugate approach to create targeted cytotoxic prodrugs such as NKTR-102, NKTR-105 and NKTR-107. With these products…

Thank you Howard and good afternoon everyone. We ended the second quarter with $338.2 million in cash. Revenue in the second quarter increased to $42.6 million as compared to $13 million in the second quarter of 2009. This increase was primarily related to the amortization of the upfront payment from AstraZeneca for NKTR-118 which will be fully amortized following technology transfers to AstraZeneca by the end of this year. Research and development expense increased to $25.6 million in the second quarter of 2010 as compared to $24 million for the second quarter in 2009. G&A expenses were $10.2 million in the second quarter of 2010 compare to $9.1 million in the second quarter of 2009. Total operating costs and expenses in the second quarter of 2010 declined by 6% to $40.7 million compared to $43.5 million in the second quarter of 2009. Our financial guidance for 2010 remains unchanged. Revenue for 2010 is expected to be between $155 million and $165 million. As I mentioned this revenue projection includes the amortization of approximately $100 million from the upfront payment of a $125 million received from AstraZeneca in 2009. R&D expense for 2010 is expected to be between $110 million and $115 million, an increase over the $95 million spent in 2009. These development expenses for 2010 include a continuing investment into our Phase 1 clinical study of NKTR-105 and Phase 1 and Phase 2 studies of NKTR-102 in ovarian, breast and colorectal cancers. In addition, these expenses include the expansion of the Phase 2 trial for NKTR-102 in ovarian cancer and the manufacture of NKTR-102 Phase 3 clinical supply. Our research expenses also include preclinical studies for a new pain and oncology compound as well as the activities necessary to bring NKTR-181 to an IND filing later this year. G&A expense for 2010 is still anticipated to be approximately $41million essentially consistent with 2009 levels. Including this amount is approximately $12.1 million of noncash item consisting mainly of depreciation and stock compensation expense. Capital expenses for ongoing operations is still expected to be $10 million for 2010, also expected tenant improvements which are projected to be about $25 million are proceeding on budget and according to schedule for Nektar’s new mission-based research and development center in San Francisco. As I previously said, we anticipate moving into the facility by the end of this year. As a reminder, under the terms of the lease, we will not pay any rent for this facility until August 2014. Our yearend cash guidance remains unchanged. We expect to end this year with $265 million to $275 million in cash and investments. Importantly this anticipated yearend cash balance does not include any potential payments related to our NKTR-102 partnerships. With that, I will now open the call to questions. Operator?

(Operator Instructions). The first question comes from the line of Bert Hazlett, BMO Capital. Please proceed.

Hi, thanks its Jim Tumbrink for Bert. Howard I know you said enrollment and the extension study for ovarian cancer is going well. Just wondering if you could put any numbers behind that and then secondly on a partnership now that you are sort of focusing on potential filing assuming that study goes well, have you changed your thinking around the terms of how much you might like to retain for yourself of that compound?

Let me answer the second half of the question first and then I'll turn it over to Lorianne for a little description of the program. I think it hasn’t changed our thinking on partnering the program, but of course the partnering structure could take many, many different avenues and approaches. I think what we are looking to do is come up with the most logical structure for a relationship that as I have said gives our shareholders the best value and I think there is many, many different ways to do that. But clearly, we are very excited for the program and we are very excited to potentially have a drug that could be on the market as early as 2012. Lorianne, you want to discuss the program a little more?

Sure, thanks. With regard to the expansion of the Phase 2 study, we as mentioned are planning to enroll an additional 50 patient, some of whom have already been enrolled. Based on the high degree of enthusiasm that the investigators have for putting patients into the study as many as they possibly can, we anticipate that the enrollment of this extension portion will go at least as quickly as not more quickly than what we saw with the main study.

And let me add one other point to what I said earlier. Clearly this strategy at Nektar for partnering programs is not to out license them, it’s to retain a significant economic ownership in these drugs. If you look at NKTR-118, NKTR-119, if you look at the royalty structure, approximate the royalty structure Nektar still owns about a third of that program and I think whatever we do with NKTR-102 given its enormous potential and given the type of breakthrough it is in treating refractory ovarian cancer, clearly whatever structure we come up within a partnership Nektar will retain a significant ownership of that drug in some fashion.

The next question comes from the line of John Sonnier of William Blair.

Howard, I appreciate the update on this 50-patient on extension study with 102. I think what would be helpful is, talk a little bit about, maybe, Lorianne, what the doxil NDA package looked like back in 2002, and compare that to 102. So when you finished this extension study. What will that body of data look like, how many patients, and how does that compare to what doxil got approved on?

So, I think as we have mentioned previously, the expansion of the Phase 2 study will include not only the patients that are extremely resistant, in fact in many cases refractory to platinum based therapy, these are also patients who have failed prior doxil. So, fundamentally these are patients that really no longer have doxil as an option. So this is a very different approach as compared to the original doxil approval as well as the follow on submission that they made. So, these are patients that really have no good available therapy. So, I suppose in a way that’s very similar to when doxil was first being approved, they certainly did receive an accelerated approval. I can’t comment or speculate as to whether or not that will positively or negatively influence our chances with our NDA package, but I think we have given you a pretty good sense of what the patients are going to look like when that submission comes together.

I guess more than the clinical response, I'm trying to get a sense of what the respective data packages look like from the standpoint of patient numbers, the number of trials, et cetera, because that's the pushback I get sometimes, is that you won't have enough data on the extension study to file?

Well, clearly we think that we can enroll the 50 patients that we currently have planned very, very quickly and if it seems to be in our best interest to modify that slightly, we certainly can, but at least in our opinion, the package that we are currently planning is adequate for our intended purpose.

The next comes from the line of Ian Sanderson of Cowen & Company. Ian Sanderson - Cowen & Company: Just a follow-up on that same line of questioning, will the expansion programs for NKTR -102 yield any survival data, or are you planning to try to go forward here with PFS results?

Well, the NKTR-102 Phase 2 study just to remind you is a non-comparative study, so in that setting, objective response rate is really the most appropriate measure of anti-tumor activity. We of course are collecting data related to progression which enables us to calculate a progression-free survival at the end of the study and of course we are collecting mortality data in order to give us an estimate of overall survival. But in this type of trial design, the most reliable measure of anti-cancer activity is the objective response rate. All of the other secondary endpoints will, of course, be included in any submission going forward. Ian Sanderson - Cowen & Company: Okay. And could you update us on this status of PEG (inaudible)?

Could you repeat the question? I didn’t quite get it. Ian Sanderson - Cowen & Company: This was for Baxter's PEGylated (inaudible). Is that still in development?

So our collaboration with Baxter is ongoing, we have had some nice preclinical results, I don’t think that we have actually given a formal update to the outside world, but that work continues, we have a really strong collaboration with Baxter across a couple of different molecules. So, I think you will be hearing more about that in the coming months. Ian Sanderson - Cowen & Company: Is anything in the clinic at this point, or is it still preclinical formulation?

Not yet, it’s not actually formulation work going on, but there is advanced preclinical development going on for one of the candidates right now.

(Operator Instructions) Your next question comes from the line of Pamela Bassett of Cantor Fitzgerald.

Will you talk about how you might proceed with 181 from a clinical development standpoint? I'm assuming that this could move forward rather quickly?

As I said, we plan to have an IND filed this year for NKTR-181 and I think what we are looking to measure is quite easy to understand. If we have less sedation, if we have less respiratory depression, if it is not as addictive, we certainly know that the molecule is inherently tamperproof in the molecule, the polymer is covalently bound to the opioid. So, it is inherently a tamperproof molecule, that can't readily be diverted and I think there is of course a great need for this, so my guess is it can move forward very, very rapidly. It really does address every major issue the FDA has with opioid.

Yes, so you raised a really excellent point with regard to the development plan of NKTR-181 Pain therapeutics have a couple of very, very big advantages, one of which is that much of the work can actually be done in healthy volunteer. So these studies can be done very efficiently with very clear results and because secondly our target product profile for this is so clear and it’s very obvious what it is that we need to achieve to have a highly valuable product. Again this is going to lead to a potentially a very efficient program going forward in development. So you might see very rapid development at this program going forward. You are absolutely right.

And what's also very important to notice that at least in the development of opioid painkillers, the preclinical models are very, very well established and there is a very, very high correlation of results in the preclinical models to humans. So, we are seeing excellent results in these preclinical models and that should transfer directly hopefully to success in our clinical programs. So, we are very, very excited about this and it may very well be an opioid that dramatically changes how pain is treated in the US.

Howard, could that compound move into position number three from a partnering standpoint?

Well I think it’s too soon to partner that compound.

But, say, next year after you've had some Phase 1 results, will you be able to correlate the animal models?

For me partnering these programs is really an economic decision relative to the value they can bring to Nektar and it shareholders. If the value is recognized and appropriate at the end of Phase 1, then I'm certainly willing to talk to companies that the value has to be demonstrated by Phase 2. That works for me as well. I think overall it's pretty easy to understand the potential for a drug like NKTR-181. Look, if Nektar-181 works, there are $10 billion worth of opioid sales that are at great risk. The FDA already has a huge problem with those drugs and is looking for a solution. If this works, if this is a solution and until it looks great in the preclinical models until we put into human of course we don’t have that answer. But if this works and I take your point as a good point. If the Phase 1 study as Lorianne defined validate what we saw in the preclinical models which we know are well correlated, then this drug does have enormous potential and let’s see how that evolves.

There are no further questions at this time. I'd like to turn the call over to Howard Robin for closing remarks.

Well, thank you everybody for participating in today's call and I of course want to thank our employees for their dedication and very, very hard work. I believe we are building an extraordinary company and we are absolutely committed to continuing to create significant value for our shareholders. That’s what we do. So stay tuned and good afternoon. Thank you very much.

Thanks for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.