Good day, everyone, and welcome to today's DexCom fourth quarter and full year 2007 earnings results conference call. (Operator Instructions) At this time, for opening remarks, I'd like to turn the call over to Mr. Terry Gregg, President and CEO. Please go ahead, sir.

Thank you, and good afternoon, everyone. I am excited to give you an update for the full year 2007. And I'll go through our agenda, but we will start off with having Steve Pacelli, our Senior Vice President of Corporate Affairs go through the Safe Harbor statement. Steve?

Thanks, Terry. Some of the statements that we will make in today's call may constitute forward-looking statements. These statements reflect Management's expectations about future events, operating plans, and performance, and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. A list of the factors that could cause actual results to be materially different from those expressed or implied by any of these forward-looking statements is detailed under risk factors and elsewhere in our annual report on Form 10-K, our quarterly reports on Form 10-Q, and our other reports filed with the SEC. We undertake no obligation to update publicly or revise these forward-looking statements for any reason. Terry?

Thanks, Steve. I'll give you a brief idea of the agenda today. We are going to go through the financial review, Jess Roper our Interim CFO is going to present the data. Next, commercialization update, followed by our partnership update, the development and regulatory update, remarks on our in-hospital continuous glucose monitoring, give you a brief preview and review of what we are doing in the reimbursement side and summarize and conclude the call. Jess?

Great, thank you, Terry. Dexcom reported revenues of $4.6 million for the year ended 2007, compared to $2.2 million in 2006. Sequentially, revenues increased 25% from the third quarter of 2007, and totaled $1.5 million for Q4. We added approximately 840 new customers during Q4. As of December 2007, we have upgraded over 1200 first generation three-day customers to our second generation Seven System. Sensor revenues were up 39% sequentially from Q3. A small portion of our Q4 sensor sales include first generation three-day sensors. We anticipate the sales of these first generation sensors to end near the later part of the first quarter of 2008. Cost of sales for the year ended 2007 totaled $12.7 million, compared to $11million in 2006. The increase was primarily due to greater product sales, and included additional fixed overhead spending. Our gross margin loss for 2007 was $8.1 million, compared to a loss of $8.8 million in 2006. Research and development expense decreased $3.3 million to $16.1 million for 2007, compared to $19.4 million in 2006. Changes in R&D expense included lower tooling, facilities, and share based compensation costs. SG&A expenses totaled approximately $22 million in 2007, compared to $21 million in 2006. The increase was primarily attributed to $3.5 million additional selling related costs, as we incurred such cost for full 12 months in 2007, compared to lower levels incurred throughout 2006, when we were building our sale force. The $3.5 million increase in selling related cost was partially offset by $2.4 million in lower marketing cost in 2007 Net interest income totaled approximately $800,000 for 2007 compared to $2.7 million in 2006. The decrease in net interest income was due to additional interest expense related to the $60 million in convertible senior notes that we issued in March of 2007. Our net loss was down slightly from the prior year and totaled $45.9 million in 2007, compared to $46.6 million in 2006. There was approximately $9 million of non-cash expense related to share based compensation, depreciation, and amortization in 2007, which was up from $8.6 million in 2006. We ended the year with $64 million in cash and marketable securities, and working capital of $59 million. During the year we invested $3.5 million in capital equipment and facilities to support our business. In January of 2008 we amended our equipment line, which allows us to borrow an additional $3 million for the purchase of equipment in other related items. I would like to now turn it back to our CEO and President, Terry Gregg.

Thanks, Jess. As we near the end of our first quarter of 2008, we continue to be extremely pleased with the performance of the Seven, our second generation continuous glucose monitoring system. We believe that Seven is proving to be the industry leading CGM product with noticeable performance benefits and greater ease-of-use for our patients versus our competition. We believe that Seven continues to create the positive experiences for patients and healthcare professionals, that we need to build this emerging category. Highlighting some key performance metrics for Q4 and full year 2007, as Jess mentioned, revenue grew 25% sequentially from Q3 to Q4, and was up a 113% from 2006. And adding approximately 840 new customers in the fourth quarter, we continue to see an increase in the number of new patients added in our key accounts. In addition, we have successfully upgraded over 1200 of our existing customers from the STS three-day to the seven-day system as of the end of 2007. We expect to continue to upgrade STS three-day customers during Q1 ’08, as we look to discontinue production of the STS three-day entirely by the end of Q1 this year. Most encouraging for the long-term viability of the business was a 39% increase in sensor revenues quarter-to-quarter, and a 98% increase compared to the fourth quarter of 2006. As we look to the first half of 2008, we will continue to focus our selling efforts on approximately the largest 100 diabetes centers in the U.S. At this point, we continue to believe our sales force is appropriately sized at approximately 45 field based individuals. However, as we look to expand our region to additional diabetes centers in the second half of 2008, we may expand the size of the sales force slightly. Additionally we may expand the…

Thank you. (Operator Instructions). We’ll go first to Tom Gunderson with Piper Jaffray

Hi, good afternoon guys.

Hey, Tom.

I just want to make sure I understood this right. Are you, Terry, did you say that you are moving for a focus on the top 50 centers to the top 100.

That’s correct.

And how long do you expect that to last before that expands out further.

We are going to look at it through the first half of ’08, and then look out at what we need to do from an expansion standpoint. I’d also say, Tom, that, during that timeframe, we are also completing our commercialization agreements with both J&J and Animas, which, by the end of this year, they will have some 200 people in the field, as well as additional work with Insulet, and they will have some more, close to 50 to 60 individuals, in the field by the end of this year. So we really get the benefit of that, obviously, in that endeavor. Although it's not an integrated product, their teams are talking about the utilization of CGM along with their pump therapy, even as we speak.

Got it. So they are not going to wait to market until middle of ’09, they will get going later this year.

Quite frankly, our team members out in the field are already doing some informal co-marketing, regardless of what management says.

What a surprise. And then help me out with manufacturing. You are going to have the, you will have all manufacturing in your facility integrated in Q2. But then you've got a second vendor choice that you can do as volumes ramp up.

No, what that means is on the sensor side, we will relocate everything. We've got FDA approval to do all of the sensor manufacturing, both all parts, the transmitter, the sensor and the receiver. Our goal has long been to use the experience of one of our largest vendors in order to do the receiver portion that [do it] electronic equipment. So we are going to outsource that.

Okay. And then last minor question, I suppose for Jess. Cash burn in the quarter was?

Yeah, we've been averaging about $10 million to $11 million per quarter.

Okay.

I mean it fluctuated as low as $9 million.

Okay. So 35 to 40 for the year is what we should expect in ’07?

In '07 we are in a $40 million range, but we haven’t given guidance on 2008.

Want to?

No.

Okay. All right. Thanks guys.

We'll go next to Sara Michelmore with Cowen And Company. Sara Michelmore - Cowen & Company: Yes. Thank you. Terry, can you talk a little bit, at least in terms of the sequential plan, Terry, you have got two quarters under your belt where you have seen, looks like reasonably consistently, a quarter-to-quarter sequential growth. Can you just, at least, and I know you don’t want to put it down in exact numbers, but qualitatively, do you feel like we can comfortably model continued sequential quarterly increases for the revenue line?

Yes. Sara Michelmore - Cowen & Company: Okay.

If we can't, I shouldn’t be here. Sara Michelmore - Cowen & Company: Okay. And you know, in terms of, it sounds like are almost through this upgrade cycle here. Has that at all been time consuming, in terms of the sales focus there? Should we think of you guys having little bit more sales resources coming out of that, or was that something that you handled without distracting any other sales commercial part of business.

No. I think it was something that we handled without any issue with regards to the sales force. I think always when you have a program like that, Sara, you are going to get a little pushed back from some of the patients, they would want to wait. I think we, in order to have the product in their hands, rather than going ahead and knowing that there is going to be a download available, I think our sales folks did an excellent job of convincing patients that it would be better to have the product now, and it would simply be an internet download at a later point. So, I think we have done a real good job in that category. Sara Michelmore - Cowen & Company: Okay. And then in terms of the R&D trajectory, here? Shall we think about you spending about the same in absolute dollars that you did last year? Or should we assume that that number is going to be up?

I can't give you any guidance on that from the standpoint. We're comfortable with what we have been spending on R&D. Sara Michelmore - Cowen & Company: Okay. And the big projects, obviously, in terms of dollar amounts are the hospital glucose monitoring and then the third gen, is that the right way to think about the big incremental dollar costs for you?

I would say that, yes. To the one side it's certainly the [IBBG] program. But I would also say, on the ambulatory sensor, we are already in humans with our fourth generation sensor. And we are in animals with our fifth generation sensor. Sara Michelmore - Cowen & Company: Okay.

So, I believe in strong iterations of development cycles. And so, we are going to continue to pursue that strategy. Sara Michelmore - Cowen & Company: Okay. Wonderful, I think that's it from me, for now. I'll get back in the queue. Thanks.

Thanks, Sara.

Question now from Ben Andrew with William Blair.

Good afternoon, Terry.

Hey, Ben.

Couple of quick things, gross margin impact of the manufacturing and facilities move, anything we should be looking for there or on the SG&A side?

We did disclose that we had some additional fixed overhead costs. Right now we do have two facilities. So that has increased the cost for the product.

Okay. And will that then normalize after what point?

That would normalize as we gain, as we have scales of economy in our production. We intend to look at options on our prior headquarter facilities and potentially sublet that out.

Okay. So, you haven’t done that yet though?

We have not done that as of today.

Okay. And then, if we think about the international market, Terry, you talked about the CE process there. How do you think about distribution and scale of that opportunity in say '09, 2010?

Yeah, well certainly in '09, we'll launch the product in that domain. We've got certain centers, we won't be in all 27 countries of the Europe. We're going through the reimbursement strategy now, understanding what that's going to require. We do have target accounts already set up. Given my previous experience, I am currently in the process of interviewing a key individual that might have been previously associated with, to handle our international experience and distribution. So, I would look to, and we have couple of different ways to go, as you know the current relationship with our partners is US only. We can look to expand that, given their distribution thrust, particularly obviously J&J and/or alternatively look at a more traditional distribution where distributors that certainly are well known to me.

Sure, okay. Just a couple of other quick topics, you mentioned that JDRF trials fully enrolled and hopefully they will see a data set out, on an interim basis, over the summer. Can they make ADA in your view, or is this more a double ADE likely target?

Ben, that's a good question. I was just with Aaron Kowalski, who is the director of research, their goal is possibly to talk about it at ADA, but until the data is in and they have had a chance to analyze it, my guess is, probably little bit later.

Okay yes.

They are shooting for ADA.

Sounds like it's going to be tight. And then on the reimbursement process, I mean we've had obviously the movement on (inaudible), we've had the lot of the anecdotal experience you got the JDRF trial pending. What do you think the blow-by-blow is going to be, if assuming the JDRF data are positive, as we are go into the back half of '08 and '09 and when we could get a national policy? And is that in fact what you are looking for?

It is what we are looking for, clearly. We currently have signed contracts, I can’t disclose to you because of the relationship with the contracts, of who they are, the payers, they are regional payers. I think we are continuing to expand that, but I would expect, as I have stated previously, that we have the opportunity for a national payer to possibly issue a coverage decision later this year in ’08. And then off course, it becomes the domino effect.

Right. Okay, great. That’s encouraging. And then the hospital product, any thing you can tell us about what you are seeing with the performance of the product, and what’s the form factor? Other details, as you flush it out here through the animal testing, that you can disclose?

Yeah. When we did our last model, we were absolutely 100% in A, region of the Clark Air Grid.

A 100%.

A 100%. We were totally within the requirements for therapeutic queues, as established by the Food & Drug Administration. And what that means, quite literally is, rather than trend and tracking that we have with the ambulatory sensors, this is therapeutic used at physician and healthcare providers could make insulin adjustment decisions based on that data. That said it’s in a, it’s a small number, will be back into human later this month again on a prospective basis. We couldn’t be more thrilled with the outcome of what we are seeing in these clinical trials and really a significant progress made in this particular sector.

Have you seen a 100% Region A before telling your experience?

No.

Okay. I have not. So that’s surprising. And then is there anything you can say about gen four and five, in terms of changes on the ambulatory product or other performance parameters. Is it implementing some of the things you’ve learnt from the hospital, or is there any crossover there, what are the directional changes you are looking at?

We look at it in two different - they cross over to each other. From a standpoint, things that we learn about in the ambulatory sensor with respect to membrane technology, which we really are exquisite with in order to reduce noise, that’s been one of the reasons we are able to go out Seven, now 10 days if you looked at the trial that's going to be presented at ADA. We understand the membranes quite well. So we've been able to leverage that over to the hospital side, because there is obviously a large number of drugs that are administered in the ICU. We are able to demonstrate lack of significant drug interference on the same side. Looking at development work from our IBBG in order to get those kind of Clarke Error Grid and MARD. There are some configurations that we’ll leverage back to the ambulatory side. But right now, they’re both driving each other from - the third generation is more membrane related, I’m sorry, fourth generation and the fifth generation is both membrane and electrochemistry related.

It’s very helpful. Thanks Terry.

You bet.

We will hear next from Bill Plovanic with Canaccord Adams

Great, thank you. Good Evening.

Hey Bill.

A lot’s been asked, I just have two follow-ups. Just in terms of the blocking and tackling on the reimbursement front. I know you can't give names but, are you willing to give, number of lives covered at this point, in terms of contract signed, just to give us kind of a yardstick to measure by.

Well, I am reluctant to do that, obviously for some competitive reasons. I will just say that we have made great progress. We have, although still regionally based and we need to understand that, but it is really in a very positive direction.

Okay. And then, I think in the past you've given us a feel for the number of sensors placed or sold in the period. I was wondering if you would be willing to share that data with us again?

I am not sure that I have done that in the past. I am getting a lot of shaking of the heads around the table. So no, no. They are telling me no, so.

Okay. And then in terms of the upgrade, I believe when we last talked it was, I think, [$150] roughly per system. Is that going to continue in the future?

Well we are trying to get all of these upgrades done in the next 30 days basically, so at this point we are winding that down. My goal here is to be out of STS three-day production by the end of this month.

Okay, I guess the question on top of that is, you have a little over 1200 of the 4300 on the three-days that's been replaced, it does not seem like the other 3000 or so you sound very optimistic that those are going to switch over. Or is that kind of the push that we are in the month of January, in Q1 we will see more of those kind of a bigger number as we end out.

Yeah, Bill, this is Steve. Yeah, you hit it right. So the number that we released today was as of 12/31. So we will obviously give another update. We've continued to make a big push here in Q1, and we will wind that down by the end of this month, but we'll give another update, kind of an aggregate. And as we've indicated previously, that we would like to give some more, some additional metrics on the business, we would be a position to do that in the first quarter call.

Okay, great. That is all I had. Thanks so much.

And our final question today will come from Mimi Pham with JMP Securities.

Hi. Good afternoon. Just turning off to Sara's question on sales growth in 2008, do you think you can keep this sequential sensor growth rate in this high 30s, and the new patient adds at the 700 to 900 range per quarter through '08?

You know we don’t give those projections, Mimi. I can only tell you that as reimbursement broadens, that we obviously feel that that’s the number one barrier to adoption. So, it will be contingent to some degree. We are seeing good positive movement in that. But I would hate to predict, not knowing exactly what the reimbursement landscape is going to look like as we go forward this year.

Well, can you at least comment on, does that sound conservative or is that probably like a --

Mimi, I can't really comment. You guys have to make your models, based on available information. And don’t put me in a situation, where then I see it in print and I have to live up to that expectation.

Okay. On the critical care product, can you give us a ballpark per day pricing, I am assuming something premium to the $8 per day for the Seven.

Yeah. So it would be premium to $8 per day for the Seven. We haven’t even talked about pricing with our potential partners at this point. So, I think it is in feasibility stage and we haven't set it that through exactly what our cost would be, and therefore what our end pricing would be.

Okay. And then lastly, is there a way to give us a ballpark number of patients you think you are reaching, potential patients you think you are reaching at these 50 centers that you have concentrated on? I am just trying to get a sense of the 6,000 patients you had so far purchase the STS, what that penetration is?

Well, we set the standard that they had to have at least somewhere north of 1,500 Type 1 patients at a particular center to call it one of our key target centers. And obviously, that ranges from that number to well beyond that, if you look at some of the centers that we call on, Joslin as an example, or some of the other larger center. So I don't think we have the total population of patients within those centers that we currently have identified.

Would you characterize the next 50 centers that you're going after to be similar in terms of patient size?

Yeah. They would typically now be in, what I'll call, less areas where they are not as concentrated. The goal here has been, spend as much time to train the physicians. Obviously, we think that we've done an excellent job of that, not only domestically but, quite frankly, when we were at the Prague meeting, we were the darling of the meeting, but also I think even more important than that was the concept that glycemic variability is becoming such a common term. So from that standpoint, that message is now resonating from the key opinion leaders. We need to get that out to really the rank-and-file, who treat the bulk of the disease and so they are at less than those -- what I'll call real urban centers and we don't want our sales folks spending a lot of windshield time driving from one location to another. So we will expand it when it makes sense.

Okay, thank you.

And gentlemen, I'll turn the conference back to you for closing remarks.

Well, again a great year, we are running hard in Q1. I am very pleased with the performance of the company, and I look forward to updating you at the close of the first quarter of 2008. We are making a huge impact in the way patients are being treated, we are making huge impact in the way physicians are better able to help their patients to avoid some of their negative aspects in clinical locations of excessive Glycemic variability and look forward to keeping you informed thank you.

That concludes today's conference call. Have a pleasant day.