Welcome to the first quarter 2008 Exelixis Earnings Call. My name is Amanda 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 this conference. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today's call, Mr. Charles Butler, the Senior Director of Investor Relations. Please proceed sir.

Thank you everyone for joining us today. Joining me on the call as usual is George, our CEO; Frank, CFO; and Mike Morrissey is also here, President of R&D; who will be joining us for the Q&A portion of the call. George will review our Q1 accomplishment and business activities and Frank will review the financials for the quarter, but before I turn the call over to George, I would like to take note that this afternoon we issued our earnings release for the first quarter 2008. We have posted the earnings release as well as a slide presentation of the company's prepared remarks today on our website at exelixis.com. Before we get started, I would like note that during our presentation today, we will be making certain statements that are forward-looking including without limitation those relating to the future development and potential efficacy of our compounds, timing for initiation of clinical trials, the duration of, and potential costs associated with our clinical trials, the timing of potential compound selections by our partners, and the timing and success of future partnerships and other business activities. These statements are only predictions and are based upon our current assumptions and expectations and are subject to risk and uncertainties. Our actual results and the timing of events could differ materially from those anticipated in such forward-looking statements because of risks discussed in the materials for this presentation and that comments made in the presentation and in the risk factor section of our 10-Q for the quarter ended March 28, 2008, and other reports filed with the SEC. We expressly disclaim any duty, obligation or undertaking to make any update or revisions to any forward-looking statements. With that, I will turn the call over to George for more on the quarter and further presentation.

Okay. Thanks Charles and thanks to everyone for joining us this afternoon. I just want to take a few minutes to update you on the status of our pipeline, highlight some of the data that will be presented at ASCO and provide a snapshot of our financial position and give you a little business outlook for the rest of the year. Frank, will then take you through the details of the Q1 financial performance and then I will come back at the end for some closing remarks and Q&A. So, as may know, we will have seven presentations at ASCO covering four of our compounds. I think, we will meaningful data presented on the following compounds, XL184 in patients with medullary thyroid cancer, XL765, which is an inhibitor of PI3 kinase and mTOR. We will have Phase I data and both of those compounds will be presented in oral presentations. We have 647 Phase I data and then Phase II from the first line trial and third line trial in non small-cell lung cancer. XL880 will have two posters which will be in GSK Orange, Exelixis Green. They will have the Exelixis number 880 as well as the GSK number, GSK 089. The first poster will be in patients with papillary renal cell carcinoma and the second in patients with gastric cancer. Additionally, we will present data on XL147, an inhibitor of PI3 kinase and an XL281, an inhibitor RAF at our analyst and investor briefing on Monday, June 2nd. Finally, data on a trial of XL228, our inhibitor of BCR-ABL, in patients with chronic myelogenous leukemia, will be presented at the EHA on June 13. So, in the next month or so, we will have presented substantial additional data on seven of the compounds in our pipeline. Remember that…

Thanks George. 2008 is off to a good start. We anticipated several opt-in decisions under our various partnerships for this year, and two of them occurred in the first quarter. Bristol-Myers Squibb opted in on our Hedgehog pathway inhibitor XL139. So we gain a $20 million milestone payment and Genentech opted in our MEK inhibitor, XL518, triggering $3 million milestone, which will be followed by an additional $7 million milestone once Genentech initiates a Phase II program for this compound. Importantly, each of these decisions involve potential of significant economic interest in the compound for Exelixis and helps offload substantial future development expenses. As George mentioned, there are now a total of six programs that were derived from our own discovery efforts, which are moving forward in the hands of high quality partners. Further more, our pipeline continues to advance rapidly and our financial results reflect our progress. Our first quarter financial results were right on target with our expectations and we are on track to achieve our financial goals for the year. Now let me turn to the first quarter financial results in detail, and as a reminder we are reporting our financial results on a GAAP basis only, and as usual the complete press release with our results can be accessed through our website at exelixis.com. I will start with revenues. Revenues for the quarter ended March 31, '08 were $27.9 million, compared to $28.1 million for the comparable period in '07. Revenues for '08 were generally consistent with '07, but reflect the completion of revenue recognition associated with our collaboration with the Daiichi-Sankyo for our mineralocorticoid receptor program, as well as the exclusion of revenue from our former German subsidiary, Artemis Pharmaceuticals, which is no longer consolidated as a result of the sale of 80.1% of our…

Okay. Thanks Frank. So the rest of the year I think could be a big step forward for Exelixis. We have, I think built a truly excellent pipeline of compounds, which are increasingly mature. And I'm optimistic that the data we will present at ASCO will help everyone to appreciate the potential therapeutic and economic value of our compounds and of the pipeline in general. So, let me quickly review the data presentations at ASCO but first I want to remind everyone that the abstracts for those presentations were submitted in January, and we have accumulated a lot of additional data since that time. So the data in the presentations will be substantially more than you see in the abstracts. So, on Saturday May 31st there will be three presentations on Exelixis' compound. There will be an oral presentation on XL765, our inhibitor of PI3 kinase and mTOR in a session beginning at 1:15 pm. There will be a poster presentation with discussions on Phase I data from XL647 and together with GSK, there will be poster presentation on XL880 in papillary renal cell carcinoma. On Sunday, June 1st, there will be two presentations on our compounds and there will be an oral presentation on an XL184 Phase I trial, including an expanded cohort of medullary thyroid cancer patients in a session that starts at 10 am. And there will be a poster presentation on 647 in the first-line non small-cell lung cancer patient. And then on Monday, June 2, there will two additional presentations. There will be a poster presentation with discussion on XL647 in third line non small-cell lung cancer patients and a poster presentation again together with GSK on XL880 in gastric cancer patients. And of course on Monday evening at 6 pm, we will have our analyst and investor briefing at the Hyatt McCormick Place. At that event, we will provide a review of the data that have been presented and provide additional data on XL147, our PI3-kinase inhibitor and XL281, an inhibitor of RAF. Also on June 13th, data on XL228 from the Phase I trial in patients with CML will be presented at EHA in Copenhagen. So, as usual we are in the midst of an important and busy year. I am excited about the prospects for our compounds and the company and I look forward to updating everyone on our progress in the months ahead. And before, I close, I just want to thank you all the employees for Exelixis. I think everyone here has been working incredibly hard and I just want to express my sincere appreciation to all of the employees who made all of this progress possible. So, with that we will close and open up the call for Q&A.

(Operator Instruction) Your first question comes from the line of Cory Kasimov, with JPMorgan, please proceed.

Hey, good afternoon guys, thanks for taking the question. First on 647, could you elaborate a little bit on the plan, design and the primary end point for this Phase II.

Yeah, Cory this is Mike. It is probably little bit early right now to do that, we have the trial designed and we are getting ready to roll that out. So, I think the plan would be to provide an update with the background of all the data at the ASCO investor presentation.

Okay, but as of this point you are comfortable that you have the data in hand or at least enough of it to make a decision with what to do with Symphony by next June, correct?

Yeah, that's the point.

Okay, and then as relates to Glaxo and the collaboration there, can you just remind us about when their decision is to have to extend this collaboration and what that does in terms of the number of opt-ins?

Sure, the collaboration comes to an end at the end of this October in its normal term, GSK has option to extend it for another year or two. If they do not extend it, they get a total of two picks, they've already picked 880, so they would get one additional pick, if they do extend it then they get a third pick and the extension is at their discretion.

Great and then last question just quick on 019, the number of patients in that two cohort dosing study?

We are -- again this is Mike, we're enrolling both right now we don't normally comment on patient numbers on these calls, but as we normally do we'll you guys posted on future calls and I would say the overall goal is to have a dataset to be able to present at ASH at the end of the year.

All right. Great. Thanks for taking the questions.

Okay.

Your next question comes from the line of Eric Schmidt with Cowen and Company. Please proceed.

Good afternoon. Thanks for taking the call. In terms of the XL647 strategy, is there anything changed commercially when you talk about the landscape, and I guess the competitive landscape? I assume you’ve got may be Erbitux in the bank of your mind, but it's not clear to me exactly what you were referring to?

Well, yeah sure, as you know lung cancer is a crowded space. If anything, it's gotten a little less crowded recently than some compounds that haven't done so well there. But, I think what's changed in our minds Eric is that we've done a very careful commercial analysis of the various trials we could do and of the potential market size that each of those trials would lead to. What label would be we get? And what would be the size of the market based on that trial? We then factored in what we think our chances of success in each of those trials are. The cost of the trial, the time of the trials and of course you can then back-calculate a rough net present value for each of those. And as we’ve gone thorough all of that, and looked at the data we believe that this focused trail that we have now presents the highest value indication. The market size it addresses is substantial, the cost of the trial is reasonable. The time is reasonable, and we think we have a good shot of success. So, with the philosophy that we are trying to put our resources behind those compounds in those trial, that really bring the most bang for the buck, we believe that this focused approach really is the best thing now for 647.

So we shouldn't read into your decision to abandon the refractory indication as a sign that the relapsed responder trial isn't going well from an efficacy standpoint?

What I said in the prepared remarks was that we saw efficacy comparable to what is being seen with other agents. And beyond that I don't want to get into the data right now and preempt to the presentation at ASCO and we'll have all the date laid out at ASCO.

And then for the 184, proof-of-concept opt-in from GSK, can you better quantify what is required to trigger that decision for that molecule?

Yeah, I mean we have to reach what's called proof-of-concept, which is a contractually defined term and it differs from compound to compound. And so when we reach a certain level of clinical efficacy for that compound, we submit the package to GSK and we believe we'll reach that some time in the summer and then submit the package.

Right, so you can't tell us how POC is defined in this case?

We have considered that in the past to be proprietary information together with GSK. I think you will see at ASCO a very impressive data set on this compound.

Okay. And is there any update on 518? I think that's the one molecule that you haven't talked much about today. I know you've got a lot in your plate, and I'm sure you didn't mean to ignore it?

I didn't mean to ignore it. I actually like that compound a lot but as you know, Genentech opted into the compound and so we have to respect the wishes of our partners.

So do they make the decision now on whether or not to present data at meetings like ASCO?

Yes.

Okay, thank you.

Your next question comes from the line of Ted Tenthoff with Piper Jaffray. Please proceed.

Great. Thank you very much. Just kind of revisiting a little bit the previous questions on this kind of refocusing on the 647 effort. What went into your thinking in terms of working at the chemo doublet versus some of the other new therapies that are coming along. And can you say anything about what kind of controls you should be using, would it be 647 chemo doublet versus chemo doublet alone?

Well, chemo doublet is a standard therapy for these patients, so that becomes the de facto comparator arm for 647. What you will see at ASCO is, efficacy and more data on efficacy in that population includes time to progression data, includes response rate, we have a lot of data on 647’s activity in that particular population. There is a lot of historical data on doublet chemotherapy, what the impact is of that in that same population. So, with all the caveats of looking at historical data and making those kind of comparisons that we all know, we think we have really good shot at success in this trial and that if we are successful, it is I say a really meaningful substantial market. So, it makes a lot of sense to us to carry out that focused program. So, in our view a relatively good chance of success and address the big market.

Great, thanks George. And obviously, we are excited to see the PI3K stuff at ASCO. Can you just kind of wet our appetite a little bit with potential future programs. I know you mentioned the 647 combo, so what are the common things are you thinking about with PI3K?

We have a number of trials planned for both 147 and 765 as both single agents and in combination variety of other targeted agents and chemotherapeutic agents and I think we will go into that in more at the analyst investor briefing at ASCO. But some of those trials are actually starting up in real time. I mean both of those compounds now have data which you will see, which indicate they are inhibiting the PI3-kinase pathway, we are excited about the data, and we are pushing those forward quite aggressively.

Your next question comes from the line of [Ying Huang] with Wachovia, please proceed.

Hi, thanks for taking my question. Do you still have plans to go into pivotal trials for XL019 this year?

Well, we are continuing the Phase I study at lower doses, 25 milligrams per day and 25 milligrams every Monday, Wednesday and Friday. To see the efficacy with those doses we will test even lower doses, we are going to use the majority of this year to probe those lower doses in terms of both efficacy and tolerability and towards the end of the year, we see that we have a dose and dosing regimen that appears to be efficacious and well tolerated, then we will immediately push that forward into pivotal trials and whether that get started up at the end of this year or in the first part in next year, its too early to say, it really depends on how the current trial goes.

And also on Phase II control trial of XL647, so it is going to just compared to paclitaxel and carboplatin combo, right?

Well, again I think we'll go in to more details at ASCO.

Okay, thanks.

(Operator Instructions) There are no further questions at this time.

Okay, then let me thank everybody for your attention. I think we had a really good quarter. We are looking forward to the rest of the year and we will see many of you at ASCO. So thanks a lot of for calling in today. Bye.

Ladies and gentlemen thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a good day.