Welcome to the Amylin Pharmaceuticals Q4 2010 and Year End Earnings Call. [Operator Instructions] I would like to introduce your host, Michael York, Senior Director, Investor Relations. Sir, you may begin.

Good afternoon, and welcome to Amylin Pharmaceuticals quarterly update conference call. We have uploaded a presentation to accompany this conference call that provides additional background on the quarter. Today’s discussion will contain forward-looking statements that involve risks and uncertainties. These risks and uncertainties are outlined in today’s press release, the website presentation and in our recent filings with the Securities and Exchange Commission. Our actual results could differ materially from what is discussed on today’s call. Let me introduce the other members of the Amylin management team here today: Daniel Bradbury, President and Chief Executive Officer; Mark Foletta, Senior Vice President, Finance and Chief Financial Officer; and Vince Mihalik, Senior Vice President, Sales and Marketing and Chief Commercial Officer. I will now turn the call over to Dan Bradbury.

Thanks, Michael, and welcome to our fourth quarter and year-end call for 2010. This afternoon, our comments will build on the press release issued earlier today. In a few moments, Mark will provide additional details on the quarter's underlying financial results and comment on our outlook for 2011. Vince will then review our commercial activity during the fourth quarter of 2010 and highlight our plans for 2011. As those of you who followed us throughout 2010 were aware, we have placed great emphasis at Amylin on two highly interrelated goals: First, driving revenue while operating with financial discipline; and second, advancing our pipeline of first-in-class products, most notably BYDUREON. Since receiving our second complete response letter for BYDUREON in October, we have continued progress towards achieving our highest corporate priority, submitting our response to the FDA in 2011. I will now take a minute to provide you with an update regarding our efforts to address the key requests in the October complete response letter. As we have previously discussed, the complete response letter requested a thorough QT study, also known as a tQT study, with exposures of exenatide higher than typical therapeutic levels of BYDUREON. In addition to the request for a tQT study, the letter requested the submission of the results of the DURATION-5 study to evaluate the efficacy and the labeling of the safety and effectiveness of the commercial formulation of BYDUREON. With DURATION-5 having been completed in December of 2009, we are currently prepared to submit the results without substantive additional efforts. Regarding the request for tQT study, we submitted the protocol to the FDA and have recently received written feedback indicating their approval of the study design. Details of the exenatide infusion study, which we expect to begin early next month in healthy volunteers, are contained…

Thanks, Dan, and good afternoon. Today, we announced our financial results for the fourth quarter and the year ended December 31, 2010. As Dan mentioned and we have discussed in previous calls, we are managing the business with operational discipline and are focused on minimizing expenses, while maintaining a strong cash position. As we discussed previously, we believe the key metric to track our financial progress is non-GAAP operating results, which approximates our cash flow from operations before working capital changes. Non-GAAP operating loss is defined as our GAAP operating loss adjusted for non-cash items, including equity compensation, depreciation and amortization and any other unusual items such as restructuring charges. Non-GAAP operating loss in 2010 was $4.4 million, a 93% improvement from a loss of $58.7 million in 2009. Total revenues decreased 11.8% to $668.8 million in 2010 from $758.4 million in 2009, while our gross margins improved to 91% from 89% in 2009. Our operating expenses were $460 million in 2010, consisting of $288.7 million of selling, general and administrative expenses, and $171.3 million of research and development expenses. This represents a 13% decrease from 2009. The improvement in gross margins and the reduction in operating expenses reflect our disciplined efforts to drive efficiencies in our business and manage our spending closely in line with revenues. At the close of 2010, we remained in a strong financial position with $457.7 million in cash and investments and are well positioned to execute our plans in 2011. I'd like to make a few comments regarding the fourth quarter versus the third quarter results. We reported non-GAAP operating income of $22.9 million for the fourth quarter compared to a non-GAAP operating loss of $16.1 million in the third quarter. On our third quarter call, we stated that as a result of the…

Thank you, Mark. Before I move into a discussion of our currently marketed products, I'd like to quickly note that in spite of the delay facing BYDUREON, we now have a clear path forward to potential approval and for launch preparation. In the interim, we are continuing to advance the DURATION program, the EXSCEL cardiovascular outcomes study and are actively engaged in market development activities to support the successful launch of BYDUREON, a product that represents an opportunity to revolutionize the way patients and physicians manage Type 2 diabetes, with the power of continuous control in just one weekly dose. So let's move on to discuss BYETTA performance. In 2011, we intend to expand the indication for BYETTA and target new market segments for this product. As we have previously mentioned it in December of last year, we submitted an sNDA, a supplemental new drug application, for the use of BYETTA with basal insulin. Based on the data presented at the most recent American Diabetes Association Conference, we could not be more excited to have the opportunity to make BYETTA available to the millions of insulin-using Type 2 diabetes patients in the United States. With the potential to provide outstanding post-meal glucose control and help insulin-using patients achieve lower fasting plasma glucose levels and improve hemoglobin A1C relative to the patients using insulin alone, we believe this potential new indication for BYETTA could provide a compelling addition to the choices available to both patients and physicians. Now I'll briefly highlight the fourth quarter performance for BYETTA. BYETTA sales increased approximately 3% quarter-over-quarter. The increase was primarily driven by pricing actions and partially offset by a decline in total prescriptions of 5.9%. Although BYETTA prescriptions declined quarter-over-quarter, we continue to observe positive dynamics for the GLP-1 in the diabetes market during…

Thanks, Vince. Before the close of our prepared remarks, I'll add just a few more comments. I also would like to take a moment to acknowledge and thank the employees of Amylin, who's hard work and diligent efforts enabled several key achievements in 2010. While the receipt of the second complete response letter for BYDUREON has been especially challenging, we delivered several successes that have helped position us to build long-term shareholder value and advance our innovative therapies. These include the submission of the sNDA for BYETTA use in combination with basal insulin, the submission of the first portion of a rolling BLA submission for metreleptin to treat rare forms of lipodystrophy, the design and submission of a protocol for the tQT study requested by the FDA, and strong financial results driven by our company-wide focus on execution and financial discipline. As Mark noted during his review of our financial results, financial discipline will be a governing principle for Amylin in 2011. And I want to reaffirm that this focus will continue to define Amylin in the quarters ahead as we strive to further increase efficiency and build operating leverage. As we work with FDA and our partners to clear the final hurdles towards approval of BYDUREON, we intend to remain focused on managing the business and expenses as carefully as we have over the past two years, balancing spending against revenues and preserving our ability to invest in the products that will become our growth drivers in the years ahead. In closing, I'd like to reiterate that I, along with the Amylin leadership team, remain committed to creating value for our shareholders, our employees and most importantly, the millions of diabetes patients we're focused on serving. I will now ask the operator to open the lines for questions.

[Operator Instructions] The first question comes from Thomas Wei with Jefferies. Thomas Wei - Jefferies & Company, Inc.: I just wanted to ask a couple of questions about the thorough QT study. First, just in the course of discussions with the FDA, how would you guide us on the street to think about what this study needs to show? Did you and the FDA talk about the whole concept of an upper bound with a 95% confidence interval falling below 10 milliseconds? Is that the goal that we should be thinking about? And I guess, what do you think is the regulatory pathway if the data from the tQT study actually fall outside that?

In terms of the tQT study, they're actually, as I'm pretty sure you're aware, the ICH guidelines with respect to tQT studies and the definition of what's clinically meaningful, I think is guided within those guidelines. And we would expect the agency to be utilizing those guidelines as they have in past as guidance for their assessment of the outcome of the tQT study. Thomas Wei - Jefferies & Company, Inc.: What do you think though happens if you do show QT prolongation above 10 milliseconds?

I think at this point, it wouldn't be actually terribly useful to speculate. What we're going to do is look at the data at that time and make an assessment about what the potential relevance would be. I mean, I would remind you that we're sitting here today with extensive data that shows no increase in the QT in the DURATION-1 study. Additionally, we have extensive data from the BYETTA program, as well as all the preclinical data that would suggest that there isn't even a basis for QT prolongation. So I understand your question. However, I think it's speculative at this time to be able to respond without any absolute data to look at. Thomas Wei - Jefferies & Company, Inc.: And then maybe just one clarification on the target dose range that you talked about, 300 to 500 picograms per ml. How do we interpret that? Is it that you have to test patients through a range of doses that covers the entire span there from 300 to 500? Or is it that you've decided on a particular number as the peak concentration and it falls within this range, and you just don't want to be more specific about it?

The FDA's letter to us, which was the second complete response, specifically asked for us to conduct a thorough QT study at levels of exenatide that could be expected in patients using BYDUREON with impaired renal function. And we've agreed with the agency to explore two different levels of exenatide. That is 300 and 500 as being representative of patients using BYDUREON with impaired renal function.

The next question comes from Mark Schoenebaum, ISI.

Just a couple of follow-ups on Thomas' line of inquiry. Did you say how big the trial was going to be in terms of patients?

No, we didn't actually. But typically, tQT studies are undertaken with less than 100 patients in a study.

And then there's been a lot of -- obviously, I think it would make a lot of people feel good if we could see at some point the DURATION-1 QT data. Do you have any plans to make that data public in any kind of official form? And as a follow-up to that, could you tell us what the plasma levels were of exenatide in patients with renal failure in that study if possible?

Sure. So in terms of the DURATION-1 data, absolutely, at some point in the future, we will make those data available. Obviously, those data are key part of the component of our ongoing discussions with the agency with regards to the appropriate assessments of any potential effects on QT with BYDUREON. And until we complete the discussions with the agency, I think it's unlikely that we'll make those data public because we want to ensure, and if we do, that the interpretation that we put on those data would be consistent with the agency's interpretation. With regards to the levels in the BYDUREON study, actually the levels -- the DURATION-1 study, the levels in the DURATION-1 study were significantly higher than we will be testing in the tQT study. There's actually exposures over 1,000 picograms per ml in some patients in that study. So we do have extensive exposures at very high levels in the DURATION-1 study. I remind you, by the way, in the DURATION-1 study, 66 out of the patients that were in that study had impaired renal function, 10 of them with moderate renal function and 56 of them with mild renal impairment.

And what would be the primary method to correct for the heart rate?

So the agency has actually issued a working paper and in fact the publication in this area, and the FDA actually asks you to conduct a statistical analysis, which represents the best fit of the data set. And so therefore, the statistical analysis that would be undertaken on this would be one that once the study is completed, best fits the data set that results from the study.

If I could just slip last one in for Mark. Pretty simple one, Mark, what do you expect your debt payments to be in 2011?

Mark, carry on.

What payment?

You give specific guidance on, I think, cash you're going to use in operations, but I think that excluded debt payments. Can you help us get on the right track for what the cash out the door in 2011 for debt payments might be?

There's a $200 million convert that matures in April of 2011. And what we said, we have $458 million of cash at the end of the year. In fact, the use of cash declined throughout 2010, while our operations used approximately $117 million of cash during 2010. Actually in the fourth quarter, we used $10 million of cash in our operations. So obviously, we'll focus on continuing to manage the cash we have and continue to manage expenses closely in line with revenues, as we talked about in the prepared remarks. And we'll use less cash in the operations. So we'll have the maturity in April and continue to assess our capital structure as we move forward.

The next question comes from Yaron Werber with Citi.

Just a little bit of a follow-on, Dan, and apologizing just for continuing to try to really try and fine tune this point. But the Canadian label is out and it does mention that the QTC prolongation is positively correlated with the exenatide plasma concentration. And when you look at the upper end of the confidence intervals, anywhere between 4.5 and about 8.6. So maybe the first part of it again just and we recall that in that study, the average plasma concentration was 208 micrograms per mill. Just help us understand a little bit. The good news is it sounds like in DURATION-1, you had higher levels, and there was no impact, right, you said on the QTC. So can you help us maybe to the extent you can understand what you saw on the QTC on DURATION-1?

So I think the simple answer, well, a couple of things, Yaron. One thing I'd point you to into the Canadian label is that it's multiple statistical analysis in the Canadian label and in particular I point you to the QTCI analysis because you wouldn't come to the same conclusion as you just stated there. And then the second point regarding the DURATION-1 study, I think we've been pretty consistent in stating previously that in the DURATION-1 study, there was no correlation between an effect on QT and plasma concentration.

And so there was no correlation with using any of the physical plans or only the QTCI?

Well, in the DURATION-1 study, yes, we think it depends. You can do it on multiple different statistical methods and you don't see any effect on QT. You're correct.

And how do you -- as you said, that was sort of my second part of the question. When you looked at the QTCI, the confidence interval is better, it's anywhere between 4 and 4.47. So that's definitely reassuring with a maximum mean increase of 2.44. So certainly, well within the acceptable range. But as you said, there seems to be at least again according to the Canadian label, the optimal heart rate correction for the type of data available in the study is not known. So maybe could you help us understand that a little bit sort of what does the label mean there? It sounds like there was some challenges in trying to figure out how to correct for the interval.

Yes, there's multiple different techniques used to correct the heart rate. We believe, and I believe that most world experts would believe that the appropriate analysis to undertake for studying BYETTA and for studying BYDUREON potentially going forward depending on the data that's generated from the BYDUREON study is the QTCI analysis. The reason for that is because the QTCI analysis takes into account individual heart rate changes. And therefore, it's the most precise with regards to adjusting for heart rate changes in the study. So that's why I guided you to the QTCI. I would also note that in the QTCI analysis, that is reported in the Canadian label. It is a trend and there is no statistical significance associated with it.

And just a follow-on question for Mark, if I may. Just remind us, Mark, the credit line, has that been fully paid now? I think it was due in late December? It was originally $125 million credit line.

Yes. So in December, we paid the remaining $70 million of that. And so it's reflected out of our cash balance at 12/31.

The next question comes from Jim Birchenough, Barclays Capital.

Just on target levels, 300 to 500, I'm trying to reconcile that if you're seeing blood levels up to 1,000 in the DURATION-1 study, how does this really represent a thorough assessment of QT when you're looking at those ranges below that which you can see in patients with renal impairment as you've seen in DURATION-1? And I guess, what I'm trying to get at is how explicit was FDA's approval of the study design and what was the language they used to sign off on this being an appropriate range? Because again, I'm struggling with this really being a thorough assessment of QT.

So, Jim, I guess, a couple of points here. First and foremost, with regards to the agency sign off, we have written sign off on the agency's concurrence for the protocol design. So just to give you confidence there. But with regards to I think your understanding of what we're achieving here, so 300 and 500 picograms per ml are way above the average therapeutic Level that would be expected in people taking BYDUREON. And although there is, in people with impaired renal function, the average concentration that you'd expect to see would be higher, there' significant variability around that. Importantly, though, with having levels of 300 and 500, which are significantly above, as I said earlier, the therapeutic levels that would be expected on average. What you'll be able to do is make sure that you have a wide range of blood levels, which will enable you to have an effective statistical analysis looking at any correlation between plasma concentration and effect on QT. And that's I think what the key issue here is, and that's what we need to assess in this study.

And then, Dan, have you guys done some dose titration work to give yourselves comfort that you can titrate up to that range without running into undue problems with nausea and retain an adequate sample size? What sort of dose ranging studies have you done?

Yes, we have undertaken a small study, which has given us confidence that we will be able to complete this study at the plasma concentrations that the agency requested. That was done as part of our preparation for agreement with the agency on the protocol design.

And this is in the realm of things that might come up later. But we've seen some companies late in the review cycle be asked to do usability studies. I'm thinking of type A with United Therapeutics is one specific example. But what have you done in terms of usability testing? Has that been fully vetted by the FDA? And I was looking for some reassurance that usability of the reconstituted form in the dose packet has been something that's been signed off by FDA?

Yes. So the custom dosing kit that we've put together for BYDUREON actually has been extensively tested and we've done a lot of market research with patients as part of our preparation for the launch of BYDUREON last year. And indeed, I think we reported on our previous earnings calls and investor conferences that actually well over 90% of people were able to give themselves a dose of BYDUREON without any intervention or guidance from a medical practitioner. And that was tested across a wide range of different types of patients, elderly and also looking at people with dexterity challenges, et cetera. In terms of the agency signing off on that, it's a good question. That is not a question that we have been asked from the FDA. Given that we've received now two complete response letters, we would've expected that if that was a concern from the FDA, that they would've raised that at this time to us already and it has not been an issue that has been raised at all. Of course, if they do raise that, as I just stated, we do have a lot of data to support the usability of BYDUREON.

The next question comes from Robyn Karnauskas, Deutsche Bank.

I guess, the first question I had was, you talked about QTI being the most accurate form of statistical analysis to you. Are you going to predefine that analysis in the protocol, or does the FDA get to choose whatever analysis they want to look into data?

For the BYETTA tQT study, we believe that the QTCI analysis is the most appropriate because it's the statistical method of analysis that actually provides the best fit to the data set. And indeed, that's the guidance that the agency has given us for the, I guess, the exenatide high-dose infusion study that we're going to be undertaking, is the right to assess the most appropriate statistical analysis based on the best fit to the data set that is created.

So that's predefined as far as the analysis that you will actually do when you get the data?

That's right. Yes, that approach. Yes, absolutely.

Second question is really on timeline. So your last study took about three months to complete. Do you expect that this study will take longer?

We haven't guided on the study length itself. What we guided is that we expect to be able to submit a response to the second complete response letter in the second half of this year. I would caution overoptimism with regards to the timing of this study only because that whenever you undertake a study, there are often individual challenges in undertaking that study that will be different than undertaking perhaps a previous study. And of course, there's always the unexpected that you always have to take into account when providing guidance.

I guess my last question is just on the market then, so the [indiscernible] scripts have sort of stabilized and so the market, the GLP, sort of still remained flat as far as the percentage of the market that they're capturing. How much growth do you think that you can get with BYETTA with your new label?

I'm going to ask Vince to provide a response to that.

First, as you know, we have seen growth in the GLP-1 receptor market since the second GLP-1 receptor agonists has joined the market. In the last four week over four-week indication for TRx is we have seen growth of about 26% on TRx and about 29% on NRx. So overall, I would say we've seen about 30% volume growth and about 15% share growth for GLP-1s. And of course, our expectation is that as we continue to go forward, we do believe that from some recent market research that additional physicians are going to continue to look at putting patients on GLP-1s. In fact, we did a recent market research study. I commented at Morgan Stanley on one aspect of it. But we've done some additional work. And then in the next 90 days when we've talked to end-dose, three out of four expect to increase their use of GLP-1s. And the other part I would say is that a lot of times they're being used for different reasons. In BYETTA's case, we're seeing a lot of new scripts based on the, I would say, the well-characterized safety and efficacy history we have. In our competitors' case, we're seeing a lot of usage based on once a day, and I think that bodes very well for what we expect to see with BYDUREON with once a week.

The next question comes from Cory Kasimov with JPMorgan. Cory Kasimov - JP Morgan Chase & Co: My first question is for Mark, and thinking about the company spent beyond 2011, how much do you think you're going to have to re-ramp SG&A as you approach the potential commercialization of BYDUREON presumably in the first half of 2012?

I think the way you should be thinking about that is the efficiencies that we've been driving and we'll continue to drive in 2011 will stay with us. We do not see significant increases in spending with the caveat that obviously as we were incurring in the second of 2010, they'll be some launch-related costs that will come in. But in terms of the structure that we have to launch BYDUREON, we believe that we have the right structure at the company to enable an effective launch of BYDUREON. Cory Kasimov - JP Morgan Chase & Co: And then second question just for Vince, wondering if you can discuss what you believe the commercial implications might be for the upcoming DURATION-6 data. Should BYDUREON demonstrate either superiority or what it means if it demonstrates just non-inferiority relative to liraglutide Victoza?

I think first and foremost, we know that when you can demonstrate efficacy compared to maximum doses of competitive therapies, we saw that with the DURATION series of trials that we get real traction with managed care plans. And to us, competitive access is a key strategic advantage in launching any new drug. And secondly, I think we've been able to see that our demonstrated efficacy has been across a continuum of patients, both those I would say that are drug naive, as well as those failing orals that I think would lend both physician and payor's confidence that they could treat patients across the entire continuum and start them early on injectable therapy with greater confidence. So I do believe that it's important that we are successful and can demonstrate superiority with the DURATION-6 trial. And in fact, I'm pretty confident that we can. Of course, as you know, managed care plans don't pay for convenience, they pay for compliance. And we believe with BYDUREON that we not only will we give them the convenience of once a week dosing but we'll improve compliance as well.

The next question comes from Tom Russo with Baird. Thomas Russo - Robert W. Baird & Co. Incorporated: Just to follow up on that question. In the past, I think you've declined, but are you willing at this point to say what you're powered to detect for superiority on the DURATION-6 study?

Tom, we're going to be consistent here. We haven't provided that information, and we don't intend to. But I would just point out that the study itself is clearly a significantly larger study than we've undertaken in previous DURATION studies in terms of not only the total number of patients, but I think most importantly, because it's a direct head-to-head. When you look at the number of patients per arm, it's significantly greater than that we've had in previous DURATION studies, and that does increase the powers substantially over and above what we've had in the previous studies. Thomas Russo - Robert W. Baird & Co. Incorporated: Just in your recent dialogue with the FDA, have you had a chance to confirm how they're going to treat the resubmission not just with the tQT, but also the DURATION-5 data and how many months of a review they're indicating that they're going to need?

Yes. Actually, they haven't indicated that yet. We wouldn't expect them to until such time as the submission is in. That having been said, I would guide you to think of this as a Class II review likely because it is the submission of new data, and therefore you could expect up to six months for the review.

The next question comes from Ian Somaiya with Piper Jaffray.

First, can we go back to the DURATION-1 sort of the QT data from the DURATION-1 study. Can you just remind us of what dose levels, did you see QT even approaching 10 milliseconds. Was it closer to the 800 to 1,000, or was it below that?

In the DURATION-1 study, Ian, we used a 2-milligram dose of BYDUREON. There was a wide range of plasma concentrations associated with that dose. And as I said earlier, there was no correlation in that study between plasma concentrations and affect on QT.

And how long in the upcoming thorough QT study how long will you maintain patients at each one of those dose levels, whether it be 350 or 500, or are you just maintaining within the range?

We haven't given out the specific details relating to that. The study itself, as you can see from the slide, that's in the deck that's associated with the call. There's a fair amount of detail in there in terms of the design. It's a three-way crossover study, and we will be looking at the two different plasma concentration levels, as I said earlier. But in terms of the exact details, the conduct of the study, we've not provided that level of detail.

Just with the dialogue with the FDA, was there anything unique to the study you'll be conducting relative to maybe the guidance that the FDA has provided to other companies, which have potentially similar issues?

I'm not aware of anything that's unique to this study. I think, firstly, it is actually consistent with the ICH guidelines in terms of the way that the study will be conducted. And not to my knowledge that there's anything particularly unique except for the fact that of course it's, with exenatide, elevated levels of exenatide 300 and 500 picograms per ml.

Is this a check the box study for them? Just trying to gauge their level of concern and you also getting this filed.

I appreciate you trying to do that. I think it's very difficult when dealing with the regulatory authorities to really understand what is the level of concern. What we do now is that they've asked us to do the study. We've now got the agreement to the study design, and I'm confident that we'll be able to execute this study well and be able to submit it to the FDA in the second half of this year.

Inventory, how much will you have at the time of launch?

You're talking about BYDUREON inventory, I presume?

Yes, BYDUREON inventory.

We'll have plenty. I mean, we have adequate capacity at our facility in Ohio. And I would remind you that at this time, that facility is currently producing products to be used in Europe for the European launch of BYDUREON, which we are hopeful will occur in the first half of this year.

And the only thing I'll add to that, Ian, is that we also have inventory that potentially can be used that we built in 2010 in preparation for launch depending upon the ultimate timing of launch. So as Dan said, that facility has capacity to get going as soon as we're ready to get going. We have an indication that it's time to get going.

We are out of time for additional questions. I will now turn it back over to Dan Bradbury for closing remarks.

Well, thank you all for your interest and for your questions today. We have a huge opportunity as a company to continue to advance our mission of discovering and developing and commercializing medicines that improve the lives of patients with diabetes. Additionally, our leadership team and the many dedicated employees of Amylin remain focused on building the business today, and laying the foundation for success tomorrow.If you have any additional questions after today's call, please call Michael York, the head of our Investor Relations team. Thank you.

Thank you for your participation in today's conference call. The call has concluded. You may go ahead and disconnect at this time.