Good day, ladies and gentlemen, and welcome to the Q1 2010 Exelixis' earnings conference call. My name is Kyana and I'll be your operator for today. At this time, all participants are in a listen-only mode. Later, we will be conducting a question-and-answer session. (Operator instructions) I would now like to turn the conference over to your host for today, Mr. Charles Butler. You may proceed.

Before we get started, I would like to note that during our presentation and question-and-answer session today, we will be making certain statements that are forward looking, including without limitation statements related to data to be presented at ASCO, expectations regarding development activities, expectations regarding our 2010 year-end cash balance and future funding, our 2010 goals and financial outlook with respect to revenues, operating expenses, and cost savings and charges related to the restructuring, and the continued development and therapeutic and commercial potential of XL184, XL147, and XL765. These statements are only predictions and are based upon our current assumptions and expectations. Our actual results and the timing of events could differ materially from those anticipated in such forward-looking statements because of risks and uncertainties discussed in the presentation materials, the comments made during this presentation, and the risk factors section of our 10-Q for the quarter ended April 2, 2010, and our other reports filed with the Securities and Exchange Commission. We expressly disclaim any duty to make any updates or revisions to any forward-looking statements. With that, I'll turn the call over to George who will start the formal remarks.

Okay. Thanks, Charles, and thanks to all of you for joining us today. On today's call as usual, I'll give an overview of the business and the quarter, and then Frank and Mike will give you updates on the financials and R&D respectively. At this point, ASCO is less than a month away and we are really focused on getting ready. There will be 12 presentations on Exelixis compounds at ASCO, four on XL184 alone and the amount of data we’re presenting is more substantive than we have previously. So we are looking at ASCO as an important event for us. We believe that data will reflect the potential of 184 in thyroid cancer, in glioblastoma, and beyond those first indications in some of the major tumor types as well. The abstracts for ASCO will be released next week. We will have the 12 presentations at ASCO itself, and in addition we hold two investor meetings at ASCO. Consequently, we won't spend a lot of time today discussing our clinical program, but we would release a lot of data in the next month or so. So please stay tuned. As we described previously, we are focused on the development of our late stage compounds. However, it's important to remember we have retained a world-class drug discovery group with the ability to bring forward a select number of earlier stage compounds. Our discovery group has repeatedly demonstrated its ability to bring forward high-quality compounds, and currently there are 14 Exelixis compounds in clinical development by us and our partners. It should come as no surprise, then that we're engaged in multiple advanced business development discussions with potential partners who are interested in accessing our discovery capabilities. We are confident that we will successfully conclude some of these discussions during the course…

Thanks, George. Before I review the Q1 results in detail I would like to provide an update where we stand vis-a-vis our financial objectives for the year. Summary, we believe we are on track to meet our year-end financial goals for revenue, operating expense and cash. We ended Q1 with almost $170 million in cash. We anticipate that we will bring in substantial additional funding through a variety of channels; including new business development activities, as George has just point out, though increased reimbursements and our collaborations with BMS and Sanofi-Aventis, through potential milestones, and possibly by refinancing the remaining tranches of the GSK loan. We made significant progress in reducing our expenses following the restructuring in Q1, and we are on track to meet our target of reducing cash expenditures by $90 million net of restructuring cost through 2011. This includes subletting one of our buildings for which we have entered into a letter of intent. Revenue is expected to increase throughout the year, and we expect revenues in the second half of the year to be substantially higher than in the first half. This increase in revenues is driven by two factors; one, our increase in reimbursements from BMS and Sanofi-Aventis as a result of the continued expansion of our clinical programs XL184 as well as XL147 and XL765; and two, the commencement of quarterly reimbursements, specifically from BMS, as a result of the exhaustion of certain prepayments made by BMS on the XL184 program. As we have mentioned previously, when we signed the collaboration with BMS they prepaid their portion of the first $100 million of development expenses on XL184. We exhausted these prepayments in the second quarter of this year and now expect to receive further payments from BMS to reimburse us for their 65% share…

Thanks, Frank. The Exelixis R&D team has continued to focus on advancing XL184, XL147 and XL765 as our most advanced clinical compounds. I’ll provide a short R&D update on the call today as we’ll have a full data download in a couple of weeks at ASCO. You will have 12 presentations covering our dual MET/VEGFR inhibitor XL184; our leading PI3K inhibitors, XL147 and XL765; our IGF1R/SRC inhibitor, XL228; and our Hedgehog antagonist, XL139. Let's start first with XL184. The clinical and commercial opportunity for dual MET/VEGFR inhibition is significant and we with BMS have built our XL184 clinical development program to maximize success from both the medical and commercial perspective. A growing body of clinical data for XL184 clearly validates dual MET/VEGFR inhibition as a promising mechanism approach for cancer therapy. MET plays a key role in nearly all aspects of tumor biology, including cellular proliferation, invasiveness, migration and angiogenesis. In addition, a growing body of preclinical evidence demonstrates that MET may be the key component that drives the acquired resistance to antigenic therapies, which highlights the potential advantage of simultaneously inhibiting both MET and VEGF receptors. As the most clinically advanced MET inhibitor, we believe that XL184 has the potential to be a first-in-class and best-in-class therapy that could provide the treatment options for large numbers of cancer patients. We will have for substantial data presentations for XL184 at ASCO. First, we’ll have an oral presentation of the data from the XL184-201 trial, which is currently evaluating a 125 milligram daily dose of XL184 in patients with recurrent glioblastoma. Second, we'll have a poster presentation with the first data from our randomized discontinuation trial evaluating XL184 in melanoma, small cell and non-small cell lung, gastric and GE junction, breast, ovarian, pancreatic, prostate, and hepatocellular cancers. Third, a poster presentation…

Thanks, Mike. There really are two factors that are important for Exelixis right now. First is the clinical data on our compounds and moving up through the clinic and on to the market as quickly as possible; and second, it is the strong financial position that will enable the continued aggressive development of the compounds. So I'm not going to say more about the data, we’ll save that for ASCO. But financially, we believe that the factors that we outlined, our reduced expense base and expected increase in reimbursement and our projected BD [ph] activities give us a solid base on which to move forward. The goals that we laid out on our last call were to ensure that the organization is focused on our late stage compounds, to extend our cash runway into the second half of 2011, to reduce our unfunded expense base and end 2010 with approximately $200 million in cash. We’ve made significant progress towards all four of these goals and we are on track to meet them all. We are looking forward to ASCO and believe that the data presented at the meeting will help to position Exelixis as a leading innovator in oncology. Before we conclude, I’d like to say that as the clinical trials progress and the data from the various trials mature, we are preparing for the potential approval and market introduction of our compounds. With that in mind we’ve hired a new VP of Strategic Marketing who was previously at Genentech where he was a key member of the Avastin marketing team and led the Avastin marketing effort in glioblastoma. His first day at Exelixis was yesterday and we are very happy to have him on board. He obviously will play a key role as move XL184 and our other compounds through the clinic and on to the market. The first quarter of this year has been a very challenging and busy time for all of our employees and I'd like to thank them all for their dedication, for their hard work to advance the pipeline and help improve the treatment of patients with cancer. So I believe Exelixis is well positioned to meet our near and our long-term objectives and I look forward to updating you all on our progress as we continue to execute on our strategic plan. So with that, I think, we’ll close our remarks and be happy to open up the call for questions.

(Operator instructions) Our first question comes from the line of Cory Kasimov of JPMorgan. You may proceed. Karen Jehn – JPMorgan Chase & Co.:

Additionally, I think as we said on our last call, we have a number of compounds that are un-partnered, which have very interesting data as far as – and we are numerous discussions, I would say, with pharma companies as well. Some of those discussions involve single assets, some of them involve multiple compound. And we are moving a number of discussions forward in parallel, but there are enough discussions going on and they are serious enough and they are late stage enough. So we are very confident about bring couple of those two conclusion during the course of the year. Now, I am not going to speculate on what month that will be certainly. But I think we are very confident that we’ll get the deals done this year. Karen Jehn – JPMorgan Chase & Co.: Okay. Great. Thanks. And my second question is on the randomized discontinuation trial for 184. I know you're waiting until ASCO to give us the majority of the detail but any update or a sense of how enrollment is going along and how extensive a look we might get at ASCO?

Yes, this is Mike. I would say enrollment in the RDT trial has gone extremely well. I’ll save all the quantitative details for ASCO. We’ve been very pleased by the interest of the PIs, the broad enrollment across all nine histologies included in that trial, and the initial signs of clinical activity. So I will hold further comments for the ASCO presentation and update. But we are very excited about how well that’s going and I would say the broad signal that we are seeing across multiple histologies in that trial. Karen Jehn – JPMorgan Chase & Co.: Great. Okay. One more quick one. The original Phase I trial in MTC, are there patients that are still on drug in that trial?

Yes, there are and we are very happy to provide the long-term follow up at the oral session as well at ASCO. Karen Jehn – JPMorgan Chase & Co.: Okay. Great. Thanks for the update.

Our next question comes from the line of Joel Sendek of Lazard Capital Markets. You may proceed. Joel Sendek – Lazard Capital Markets: Hi, thanks a lot. I just wondered if you could talk a little qualitatively about the data we'll get at ASCO. I mean, you seem very bullish in tone and in the press release about the potential for us to get new data that will – you say in the release, you know, clarify the potential of different tumor types. Are you going to show objective responses in many different tumor types or is it just going to be the extent of the – I mean, the efficacy of the drug or is there anything new with regard to different evidence of efficacy of this pathway? Can you help us with that, just to frame it going into the meeting?

Joel Sendek – Lazard Capital Markets: Right.

But I can tell you there will be both new data and quantitatively more data on some of the indications that we talked about previously for the MTC trial where we published very high response rate, very high disease control rate in the Phase I study. We will now have data on the long-term follow up in those patients. So we will know about how long the response is, how durable the response is. There will be data there. For the GBM study, we will have a meaningful number of patients treated at 125 milligram and we will be able to – you will get some insight into the potential of the compound in glioblastoma. I think in both patients who have been treated with prior anti-atherogenic therapy and patients who are naive for prior anti-atherogenic therapy. There is a long trial going on with combination with Erlotinib, we'll have data from that where I think we'll give you some insight into the potential for XL184 there. And we will have the first data coming out of the random discontinuation trial in a number of those indications. I think we are looking at much broader dataset and a larger number of indications than we’ve shown previously as well as more in-depth data in those indications where we’ve already saw some data. That's why we're enthusiastic about the data. I think people will get a much better view of the potential of XL184. Joel Sendek – Lazard Capital Markets: Okay, great.

Maybe I could add a few comments as well just from the standpoint of we have been very aggressive in terms of our enrollment activities in a very proactive manner across certainly the 184 trial has been very successful at really ramping up enrolments. And I think you are going to see a very deep dataset with several hundred patients across these different presentations. So it's as George said, I think it's more qualitatively and quantitatively a very deep dataset. We are really carried about and look forward to getting it out there and to get some feedback. Joel Sendek – Lazard Capital Markets: Excellent. I'll look forward to seeing the data. Thanks.

Our next question comes from the line of Ted Tenthoff of Piper Jaffray. You may proceed. Ted Tenthoff – Piper Jaffray:

Ted Tenthoff – Piper Jaffray: But those percentages do include amortization, correct?

It does include amortization as well. Ted Tenthoff – Piper Jaffray: Excellent. And just to be sure of this, but we will start to recognize the cost savings from the restructuring really more in the second quarter, correct?

Well, the impact from the restructuring will really be seen in Q2 and beyond because the restructuring was implemented in March of this year. So the real savings impact will not really be visible until Q2 and beyond. With regards to the charges, however, the majority of the charge was taken in Q1 with about $16 million and there is essentially one other significant charge in Q1 of about $9 million, which is related to us subletting and vacating one of our buildings. Ted Tenthoff – Piper Jaffray: Excellent. Thanks for the extra color there.

Our next question comes from the line of Eric Schmidt of Cowen & Company. You may proceed. Eric Schmidt – Cowen & Company: Good afternoon. Mike, you mentioned the rapid enrollment you're seeing in many of your trials. I was just wondering if you could give us an update on 184 in MTC and whether there's a more defined target for closing out enrollment in that trial?

Yes. I think we are on track to, again, complete enrollment there in the second half of the year as we’ve guided previously, and looking forward to getting that done and moving that forward. Eric Schmidt – Cowen & Company: Okay. And then still on 184, over in GBM, is there a sense of when you might be able to provide us with a regulatory strategy forward?

Eric Schmidt – Cowen & Company: Great. And then last question, maybe either for Frank or for George, in terms of the targeted moneys that you hope to bring in in order to reach your year-end cash guidance, will most of the influx of cash be coming from new collaborations or are there any milestones under the existing deals that are pretty significant that we should know about?

It’s really a mixture of variety of things. And a portion of it we expect to come from new deals. A portion of it from milestones, maybe characterizes it, we expect some milestones, not huge milestones, but we do expect some cash inflows from that. And I think the reimbursement factor is an important one too. We have significant ongoing cash inflows from the cost reimbursements under the BMS and sanofi-aventis collaborations. And it’s a mixture of all of those. Eric Schmidt – Cowen & Company: Are there any specific milestones we should be aware of, Frank?

No. Eric Schmidt – Cowen & Company: Okay. Thank you. We'll see you in a couple weeks.

With no further questions, ladies and gentlemen, that concludes today’s conference. We want to thank you for your participation. You may now disconnect and have a great day.

Thanks, everybody.