Good day, ladies and gentlemen, and welcome to the Q4 2010 Exelixis earnings conference call. My name is Keith, and I will be your operator for today. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. (Operator instructions) I would now like to turn the conference over to your host for today, Mr. Charles Butler, Vice President, Investor Relations. Please proceed, sir.

Thank you for joining us for the Exelixis fourth quarter and year-end 2010 earnings call. Joining me today as usual are Mike Morrissey, our President and CEO; and Frank Karbe, our CFO, who will review our financial results for the quarter and year-ended December 31, 2010. They will also discuss our 2011 financial guidance, corporate strategy, recent clinical data, and development plans and priorities for cabozantinib, our lead clinical development program, and provide a general business an update. 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 the development, financial objectives of our corporate strategy, the clinical, therapeutic and commercial potential of cabozantinib, the future development of cabozantinib, and our plans related thereto, potential partnering activities with respect to cabozantinib, our 2011 financial outlook, and future presentations and releases of data. 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 Q&A session, the Risk Factors section of our 10-Q for the quarter ended October 1, 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 statement. As a reminder, we’re reporting our financial results on a GAAP basis today, and as usual the complete press release with our results can be accessed through our website at Exelixis.com. I will note that during today’s presentation, we will discuss adjusted operating expense, which is a non-GAAP financial measure. A reconciliation of the difference between this non-GAAP financial measure and the most directly comparable financial measure calculated and presented in accordance with GAAP is included in today’s presentation materials. With that, I will turn the call over to Mike Morrissey.

Thank you Charles, and thanks to everyone for joining us on the call today. In December, I outlined our new corporate strategy focused on three simple objectives by which we would take Exelixis forward. First, we would focus exclusively on cabozantinib, which I will refer to as cabo going forward today, with the goal of maximizing its clinical and commercial value. Second, we would expedite the development of cabo in a variety of cancer indications, with the clear initial focus on prostate cancer. Third, we would aggressively manage and improve our P&L. These efforts were geared towards building shareholder value and improving the treatment and outcomes of patients with cancer. I’m pleased to say today that we have made substantial progress in each of these three corporate objectives. To date we have observed objective responses in 12 of 13 tumor types, including recent responses in small-cell lung cancer, gastric cancer, and differentiated thyroid cancer from the RDT and other cabo trials. The productivity of cabo in both metastatic soft tissue and bone lesions represents the hallmark of the clinical activity with cabo seen to date. Resolution of metastatic bone lesions by bone scan have been documented in patients with prostate cancer, melanoma, breast, renal and thyroid cancers, and is often accompanied by rapid resolution of severe bone pain. While our emerging data sets in CRPC highlighted last Thursday at ASCO GU is very encouraging. Cabo is more than just a potential prostate cancer drug, and it is more than a potential prostate cancer bone drug. The breadth of clinical indications that could be served by cabo include potentially large market opportunities. Cabo may address currently underserved populations of prostate cancer, breast cancer, and small cell lung cancer, renal carcinoma, hepatoma, and melanoma among others. Our strategy for achieving a clear…

Thanks Mike. Continuing with the new format we adopted last year, I will focus my comments on the highlights of our financial performance in the fourth quarter and full year 2010, and refer you to our press release and quarterly SEC filings for additional details. I will also provide financial guidance for year-end 2011, which will reflect significant changes in our P&L, particularly relating to our reductions in our operating expenses as a result of our 2010 restructuring activities. Let us first turn to our Q4 and year-end results. We continue to see the impact from our restructuring activities in March and December of 2010, bear out with a significant decrease of our net loss year-over-year both for Q4 as well as the full-year 2010. Note that the decrease in net loss for the quarter, as well as the full year was achieved despite the incurrence of significant restructuring expenses. These restructuring expenses relate mainly to the 65% reduction in our workforce in 2010, as well as the ongoing consolidation of our real estate footprint. Despite severance payments, we ended the payment with $256 million in cash, which puts us in a good financial position. Revenues for the fourth quarter were slightly down year-over-year to $40.8 million, mainly due to lower revenue recognition as a result of adjustments in the timeframe over which certain revenues were recognized, as well as low R&D reimbursements under some of our collaborations. The reduction in revenue compared to Q3 2010 is mainly due to the $17 million payment from BMS in connection with their opt out from the cabo program, which was recognized in full as revenue in the third quarter. Revenue for the full year increased by approximately 33 million or 22% to $185 million, mainly due to increased R&D support from Sanofi…

Okay. Thanks Frank. I think it is clear based on the latest encouraging data for cabo and CRPC, and our ability to transform our P&L in such a short period of time that we have started 2012 with a great deal of momentum. We plan to keep up our current pace, urgency and intensity moving forward, as we have several important catalysts coming up in the first-half of 2011. We have recently submitted 4 abstracts for cabo to the annual ASCO meeting in June that will provide an exhaustive look at the range of potential oncology indications that appear to be available for cabo. First and foremost is the CRPC cohort from the RDT trial. We anticipate that this report will include 170 patients from the completely enrolled cohort and give a thorough review of the key components of clinical benefit with advanced CRPC, including bone scan resolution, symptomatic bone pain improvements, soft tissue responses, impact on key biomarkers, and importantly updated duration of response data. We also plan to present a significant update on the ovarian cohort from the RDT, in addition to our first substantive update on cabo in RCC. We have also submitted an update on the overall RDT, which will allow us to present data on additional cohorts of interest. As I mentioned earlier, we completed enrolments in the pivotal trials for MTC and we plan to release top line results in the first half of this year once we have achieved the required number of events. In addition to all these activities, we will also continue our planning for the pivotal trial programs of prostate cancer, which we expect to initiate in the second half of 2011. So I will stop here today by thanking the entire Exelixis team for a job extremely well done. We have been through a lot together and recent events have certainly tested both our resilience and stamina. The significant progress we have made across all aspects of our business in the last six months reflects your individual and collective talents, commitment and sense of purpose, and I’m very proud of what we have accomplished together, and look forward to working with all of you to move both cabo and the company forward. So with that, I will stop here by saying thanks to all of us joining us today and open the call for questions. Operator?

(Operator instructions) Your first question is from the line of Ted Tenthoff with Piper Jaffray. Please proceed. Ted Tenthoff – Piper Jaffray: Thank you very much and congratulations on all the progress. I know it was a roller coaster year for you guys, so really congratulations. If I may just kind of picking up where we left off last week in Orlando, I think you mentioned that you guys are planning on potentially filing in the back half of this year on the 150 patient non-randomized cohort. Is that correct and can you give us a little bit more detail on what the endpoints are there? And I guess the big question is, maybe tell us a little bit more about how the bone activity correlates to improvement, overall improvement in patients.

I think, Ted it is Mike, just to be absolutely clear the only filing we expect and plan to do in the second half of 2011 is for MTC. So I think you might have got that part of it wrong last Thursday, relative to a potential subpart H filing based on the CRPC NRE. We haven’t given any guidance on a potential filing timeline for that. Again, we need to fully accrue that cohort, need to analyze the data, need to take a really hard look at if we have been to recapitulate the data that we saw in the RDT and the NRE, all those issues. So we have provided no specific guidance on any timing for a subpart H in regard to that. The only timing we have really focused on in terms of the second half of the year would be the initiation of the CRPC composite endpoint trial that we would expect to start in that time frame.

In regard to your other question, if I remember it correctly you talked about the correlation between improvements in bone scan or metastatic bone lesions by bone scan, and the associated severe bone pain that is seen with many patients. We are generating that data right now. We talked about it, I think to a fair degree last week in Orlando. That correlation is not 100%, but it is pretty good relative to many patients that come on the study with documented bone pain, as well as documented bone disease appear to have benefit, but certainly that is a big part of the NRE and CRPC is to be able to really with all the stringent recording tools, correlate bone scan improvement with bone pain improvement and a decrease in narcotic usage. So I would say the early data looks promising, and we are going to be doing a lot more of that with the NRE throughout 2011. Ted Tenthoff – Piper Jaffray: Thank you very much.

Your next question is from the line of Eric Schmidt with Cowen and Company. Please proceed. Eric Schmidt – Cowen and Company: All of your comments correctly, it sounds like you're going to start to approach the FDA in Q2 regarding an SPA for the pivotal prostate cancer study?

The plan right now is to have an end of phase II with the agency sometime in the second quarter. As we talked about last week, we would like to go there with pain data that we have been able to generate from the CRPC NRE that would certainly complement the pain data and the correlating bone scan responses that we got in the RDT, and our current projections would suggest that we could do that in the second quarter. Eric Schmidt – Cowen and Company: So you'd need kind of minimal follow up from that NRE and that NRE seems to be enrolling well?

That is correct. Eric Schmidt – Cowen and Company: Okay, and then for Frank on the numbers, can you talk about what assumptions are embedded in the cash guidance for year end of greater than $200 million in terms of either new business development activities or financings?

Sure Eric. So, this includes certain assumptions about inflows from new BD [ph] activities, which could come from our proprietary asset outside of cabo. You may recall we have a number of assets that as of yet unpartnered. And it could also potentially include a deal involving cabo. On top of that, it also includes certain assumptions about milestones that we expect to hit in the course of the year. Eric Schmidt – Cowen and Company: Okay, and last question just maybe more out of curiosity than anything else, it sounded like you've done away with the employee incentive program, and I guess I'm just kind of wondering whether that's permanent or whether you can – whether you plan on instituting a different program in the future, and I guess maybe a little bit more color as to why that was – that action was taken and basically I guess what you think you can get away with going forward without changing morale, et cetera?

Again, specifically what we did this year was agree to simply not pay out the 2010 bonus, cash bonus that is part of the overall compensation package. We are doing merit increases for 2011. We’re doing promotions for 2011. So, the overall compensation package remains unchanged. We simply did not pay out the bonus for 2010. That is a temporary step. It was done to again, I think very effectively reallocate a significant amount of cash that we had accrued for the bonus, and reinvest that if you will, in the cabo development program. And I think all the employees, well, everybody wants to get a bonus obviously, understand the rationale, and understand that it is an important time for the company to focus not only our efforts but also our spend. So that bonus amount again, kind of as a bonus, will allow us to do a number of important additional say ISTs [ph], and other activities that we think can help build value in cabo in the short term, and it is one that I think I am certainly, and the management team certainly is comfortable as a one-off going forward to really again expedite the value creation process with cabo at this important stage of the company’s history. Eric Schmidt – Cowen and Company: Got it. Thanks for the clarification.

Your next question is from the line of Cory Kasimov with JPMorgan. Please proceed. Matt – JPMorgan: Hi there, it is actually Matt [ph] for in Cory today. I appreciate it might be difficult to say too much on this, but I guess given the data today in prostate cancer, and assuming an approval in MTC, first do you expect any kind of position to demand for off label use potentially in prostate cancer?

Yes, Matt, it is Mike. It is really hard, if not impossible to comment on that or opine upon that. Our goal is to get the filing for MTC done in the second of this year, and that is our main focus and to advance the prostate program as quickly as possible. But to speak to that is impossible. Matt – JPMorgan: Okay. And then just as a follow up, do you have any feedback you could share with us on any progress with the partnered programs?

With the current partnered programs, nothing that I can share today because those are all proprietary programs relative to what our partners are doing with the compounds either by themselves, or in collaboration with us. I’m hoping, but not promising that we will have updates on many of those compounds at ASCO this year, but again that is really up to our partners in terms of the different compounds that we have currently in the clinic to make that decision. So we are excited about where those are going. We think there is a lot of embedded value in those compounds. We are not talking about those compounds very much any more, since that is not our main drive and our main focus going forward, but again our view is that we have exciting additional compounds in the PI3K space, in the MEK space, other areas that we think can build, again build value for patients and shareholders. So we are excited to have that and looking forward to how they evolving over time. Matt – JPMorgan: Okay. Thank you.

(Operator instructions) Your next question is from the line of David Miller with Biotech. Please proceed. David Miller – Biotech Stock Research: Hi, thanks for taking my question and good job this past year. ODAC has previously said there are no surrogate endpoints that are approvable for CRPC and Rich Pastor [ph] said just a week or two ago and ODAC hardily concurred that single arm approval trials for cancer are not preferred, I'll use for the term, so can you talk about how you're thinking about and what makes you think that the FDA would entertain a subpart H approval based on the single arm NRE?

Yes, that – it is David again. That is based upon the feedback that we have received from several of our clinical investigators with significant ODAC experience that have told us that they would advice us, and they would support us in the event that we had we were able to recapitulate the totality of clinical benefit that we saw in the RDT in the NRE. So, again, you were in Orlando, you saw the breath of data that we had suggesting that we had really good signs of clinical benefit across a variety of different components. But again, it is something that I mentioned in the prepared remarks is clearly a modest probability of success. It is not zero, but it is not large, and it certainly is not the cornerstone in the foundation of our comprehensive regulatory strategy. So we need to learn more about this cohort early in the process to begin with to really feel good about how we’re going to power our other individual randomized pivotal trials. We will have to do that anyway. If the occasion arises and the data continues to look extremely good then that is something that we would consider, and we would do that with the guidance and the support of some pretty important players in the area. So, I hope we have been very balanced in our approach here, and how we’re messaging this component of our plan, and if not I’m happy to clarify that further. David Miller – Biotech Stock Research: Okay, you have, and I appreciate the additional comments. Do you think it would be a lower bar for this subpart H approval if it comes as an amendment after approval of MTC, as opposed to the first time that the FDA takes a cut at approving this or does it not matter or are you not thinking of it that way?

Well, I think the timing of having MTC going first, followed by a second potential filing, whether it is a subpart H or a full filing is not fortuitous from the standpoint of how we are evolving the overall regulatory strategy around cabo. Certainly, it would allow us to derisk some of those secondary moves if we had a strong package going in for MTC. So, yes, that is not fortuitous, that is part of the plan, and again it is all data dependent. We are a data driven organization. We have great advisors who have been able to give us very clear-cut, and I think great advice, and we will continue to operate in such a way that we can look at the totality of the data we have at these important milestones, or these important time points and make the best decision for the company and hopefully for patients and shareholders as well. David Miller – Biotech Stock Research: Great. And then I just have one follow-up question on the – to what somebody asked before, you guided that you have $250 million roughly in cash now, you said you're going to spend about $130 million on cabo, and then you're going to end 2011 with about $200 million in cash. So the $80 million in – or $70 million in delta there is a combination of potential milestones and potential deals for non-Cabo or does that include Cabo deals?

Well, let me clarify this again. You are correct that this delta would be filled from a combination of things. As usual, our assumptions include a number of different elements. One element, potential deals around our proprietary assets other than cabo. There is a number of them that we have discontinued in the course of 2010, and around which we have a number of ongoing discussions. Secondly there is a possibility of a deal around cabo, and what this deal could look like, I think it is too early to comment on or speculate about. What I will tell you though is in our assumptions here, we have obviously not assumed a very large deal around cabo. And then thirdly, there is a number of other smaller items that also result in cash inflows. For example, with the increase in our stock price, we have seen a significant up tick in stock option exercise activity, we’re auctioning off some of the equipment that is leftover here following our restructurings, and things like that, which if you add it all up it is quite a few million, but as I said at the beginning it is a bolus of things that goes into these assumptions. Not all of these have to happen, it is a subset of these that need to happen, and when we provide this guidance, make the judgment about our level of comfort in reaching that number, and we obviously are comfortable with the 200 number we gave. David Miller – Biotech Stock Research: Great, answers my questions. Thank you very much. I appreciate it.

And there are no other questions at this time. I would like to turn the call back over to Mr. Morrissey for closing remarks.

Thanks again for joining us today. I really appreciate your interest and support, and I will be looking forward to discussions throughout the quarter, and certainly looking forward to seeing you all at ASCO in June. So we will stop there. Thanks again. Bye.

Ladies and gentlemen, that concludes today’s conference. Thank you for participating. You may now disconnect. Everyone have a great day.