Welcome to the Halozyme 2007 fourth quarter pipeline update conference call. At this time all participants are in a listen only mode. Following managements prepared remarks we'll hold a Q&A session. (Operator Instructions) As a reminder this conference call is being recorded today March 14, 2008. I would now like to turn the call over to David Ramsay. Please go ahead.

Thank you. And thank you everyone for participating in today's call. Joining me from Halozyme are Jonathan Lim our President and Chief Executive Officer and Gregory Frost, Vice President and Chief Scientific Officer. Yesterday afternoon we've released our 2007 fourth quarter and full year financial results. If you have not received this news release or if you would like to be added to our distribution list, please call [Alex Slav] at 858 704-8288. This call has also been broadcast live over the internet at www. .halozyme.com and a reply of the call will be available on the company's website for the next 30 days. Before we begin, let me remind you that during this conference call we will be making forward-looking statements. The Private Securities Litigation Reform Act of 1995, provide the Safe Harbor for forward-looking statements. All statements made during this conference call there are not statements or historical facts constitute forward-looking statements. The matter is referred to in forward-looking statements could be effected by the risks and uncertainties of our business. Such risks inherent to the company's business are described in our filings with Securities and Exchange Commission as well as in our press releases. The company's actual results may differ materially from those expressed in or indicated by such forward-looking statements. With that I'd like to now turn the call over to Jonathan Lim.

Thank you, David. Good morning everyone. I am very excited to be able to give you an update on the current progress of our proprietary and partnered programs during this first conference call of 2008. Gregory Frost our Chief Scientific Officer and I will be reporting on the status of our proprietary programs. And I will be updating you on our partnered programs with Roche, Baxter Medication Delivery and Baxter BioScience. As we close on the first decade since the founding of our company in 1998, Halozyme has really come into it's own as a biotechnology company focused on developing and commercializing meaningful new therapeutic products based on the extracellular matrix, which we refer to as the matrix. The matrix is a key structural component found in both normal tissues such as skin and bone, as well as abnormal tissues such as tumors. By expanding on a broad and deep scientific expertise in the matrix, we plan to develop therapeutic and aesthetic drugs within therapeutic areas such as oncology, dermatology, and metabolism. One of the key reasons for our success to-date has been our decision to pursue paths to value creation in parallel, through both proprietary and partnered programs. In fact our achievements in 2007 have advanced our partnered programs with Baxter and Roche while building a strong foundation for our proprietary programs. These are existing times for Halozyme; I realize there are some questions regarding the evaluation of our strategy from largely a drug-delivery partnership-driven model to a focus on developing our own therapeutic products. As we put together our five-year strategic plan last year, we came up with a very compelling way to create value for our shareholders. We found that the PH20 hyaluronidase enzyme the core technology is proving to be a very compelling, multifunctional technology that…

Thanks, Jonathan. Earlier this year, Halozyme nominated to bring its first systemic oncology candidate. PEG rHuPH20 into the clinic for the targeted systemic treatment of solid tumors that accumulate peritumoral hyaluronin. A significant proportion of advanced cancers readily identifiable by primary tumor biopsy produce these HA-rich Halos, we can occupy large amounts of the tumor microenvironment. These Halos prevent tumor cells from coming in contact with one and other, and elevate interstitial fluid pressure in tissues such as bone metastasis where they may also contribute to chemotherapy resistance, as well as bone pain. The ability to eliminate these Halos by intravenous hyaluronidase enzyme therapy is historically been limited by the rapid elimination of the enzyme from the blood stream combined with the rapid turnover of HAN tissues. Halozyme has now demonstrated that these Halos can be completely eradicated in prostate carcinoma models in a dose-dependant fashion, resulting in an impressive 80% reduction of tumor interstitial fluid pressure following intravenous administration of PEG rHuPH20. Unlike angiogenesis inhibitors such Avastin that can require days to lower tumor pressure, PEG rHuPH20 rapidly collapses the extracellular matrix to reduce tumor IFP within hours of administration. The effect of these compounds appear to be very dependent upon the ability of tumors to produce HA-dependent Halos and is particularly active in large bulky tumor lesions that are traditionally resistant to chemotherapy. With a half-life nearly 2000-fold longer than the non- PEGylated enzyme, Halozyme is indeed confident that it has identified the optimal lead candidate for intravenous delivery. Similar pharmacokinetics have been demonstrated in pilot primate models where the agent was found to be very well tolerated at therapeutic doses. If applicable to all cancers that accumulate pericellular HA, these target selective compound could represent a multibillion dollar opportunity in the US alone, to treat currently incurable…

Thanks, Greg. As most of you know, we have partnerships with Roche and Baxter Biosciences for enhance technology and a partnership with Baxter Medication Delivery for Hylenex, our FDA approved drug. I'll be updating you on all three partnered programs beginning with Roche. While we have not provided you with much visibility regarding our Roche partnership, I can tell you that HALOZYME’s management team is happy with Roche's progress to-date. We're devoting significant resources to supporting this important partnership, including about four to six full time equivalence that are dedicated to this project. The relationship is positive and Roche and Halozyme have given about three to four joint presentations at Alliance Conferences over the last year, which really is a testament to Roche's excitement about this collaboration. We've been conducting a number of activities to advance the partnership with Roche. This is evidenced by the increased R&D reimbursement received from Roche in the fourth quarter. These activities include implementation of a second generation process that is being scaled up to support Roche, as well as HALOZYME’s internal programs. In addition, preclinical and toxicology studies have been conducted with this second generation PH20 such as those presented earlier this week by Dr. Walter Bee, our VP of Preclinical in which Halozyme found that doses up to $3.6 million units per kilogram, which is equivalent to about 1.7 million vials of Hylenex in a 150 pound person were well tolerated following either IV or subcutaneous dosing. In addition, daily administration of PH20 for one week was well tolerated with either IV or subcutaneous delivery at a daily bolus dose of 600,000 units per kilogram. A three-month interim analysis from an ongoing 39-week chronic toxicity study with weekly dosing up to 240,000 units per kilogram, revealed no changes in standard toxicity parameters or…

(Operator Instructions). Your first question comes from the line of Andrew Vaino of Roth Capital

Hey, I just had a quick question. Did I miss what you -- the first thing you talked about, the therapeutic area on your first new compound, did you mentioned what that was?

No, we did not, but it’s a multi-billion therapeutic area with targeting recombinant proteins.

Okay, and also looking at the PEGylated PH, I know that typically PEGylation doesn’t in invoke immune responses, it does not necessary does the opposite, is there is any indication that PEGylation of the hyaluronidase will give rise to an immune response?

No nothing to date that would suggest that to be the case.

Okay, I was also interested in how you control the activity of the product that indicated for destroying the cellulite dimples, can you mention how you control it, I assume you modify the enzyme a little bit, what are you doing there?

Andrew we are going to be reviewing more information about these enzymes in the coming months. So stay tuned on that front.

Okay, that’s all right. It’s just that can you then mention sort of what range can you control, or you can control, half-life in terms of minutes, seconds

We can actually control -- we have for example variance where we can control it down to having it active for a period of seconds to a period of less than 10 minutes.

Okay great thank you very much.

You are welcome.

Thank you

You are welcome

Your next question comes from the line of Eun Yang of Jefferies & Company. Eun Yang - Jefferies & Company: My first question is about Chemophase, you guys mentioned that you want to initiate the fibrillar trials in the fourth quarter this year. Are we still going to see the Phase I/II data in the first half of this year, are you sure of that?

Yeah we are still targeting a Q2 rollout of the data from the Phase I/IIa trial. Eun Yang - Jefferies & Company: And just another question on products sales this year, I mean this quarter it was came around 98,000. I was just wondering that weakness was both HYLENEX weakness or from Cumulase or you can give a breakdown of where are the sales came from the two products?

Yeah. It's mostly from cumulase product sales. We had a great third quarter for cumulase so we saw a sequential drop from Q3 to Q4 for cumulase. There wasn't any meaningful sales of Hylenex in the period, but it is important to know the year-over-year sales increase of cumulase was actually quite strong. Cumulase sales product sales for the year 2007, was approximately $516,000, for example compared to $342,000 for 2006, so we saw a good year-over-year sales. But there is -- it's a bit lumpy so quarters sequentially could be up or down, but year-over-year it's trending spending up. Eun Yang - Jefferies & Company: Okay. Thank you.

Sure.

(Operator Instructions) There are no -- I am sorry your next question comes from the line of Tim Bragg of UBS Financial Services.

Hi, guys.

Hi, Tim.

I just wanted to see a get a little more information if I could on this R&D reimbursement number, the $652,000, Jonathan I think you drilled into it, some in your presentation anyway explaining that most of that seem to be coming from Roche. Could you talk a little bit more about, is that the case I mean it's most of this because on the press release you said from Baxter and Roche, are wee led to believe that most of this is coming from the Roche efforts?

It's coming from of them Tim and it is for the research work that we do that our partners ask us to do in support of the collaboration. And it's full of variety of activities. But it's coming from both of them.

Is that when you say variety of activities, so it's not really focused in it's safe to say not in one specific area or it's pretty well spread.

It recently on the research and development side combination of things in terms of specific work to support Baxter for HYLENEX and our GAMMAGARD and to support Roche and the work that they are doing for the collaboration in various preclinical work perhaps or more importantly the co-formulation work that we do for them. But it's a number of a different things that we do to support the partnerships and it's a -- I think the way to look at it is signal that work is ongoing in these collaborations and we are moving forward.

Okay, a follow-up question if I could this expected cash burn $40 million to $50 million, is that the first time we've seen that number that '08 number and is that higher than original projection in line or is that basically the number that we pretty much expected throughout?

So that's the first time we've given definitive 2008 guidance there for '08.

Your next question comes from the line of Kevin Degeeter of Oppenheimer.

Hi, good morning guys.

Good morning Kevin.

Hi, Kevin.

One quick housekeeping item for David here the $3.5 million from Baxter's first to receive in January, how does that get treated, is that basically get the cash from assuming it doesn't flow through the income statement until certain sales or just help me understand how that's going to be treated from modeling perspective?

Sure and your assumption is correct. So debit cash, credit deferred revenue and then we will bring that deferred revenue into the P&L as product sales are recognized.

Okay. And then maybe just one more, just general, I mean there is a question here and there is an observation which is company continue to make a lot of progress on the internal pipeline, exciting update on Chemophase, moving additional programs into the clinic. And from the investor side, based on the folks I talked to, people want to see another deal. They want -- I mean you look at the performance of the stock, there is a zero sizable group out there, they are skeptical whether or not there is an additional Roche type deal out there. What do you tell those folks? How do you help those of us on the outside get comfortable that there is, both, a priority on the part of management to sign additional partnership arrangements and I realize, I understand the business development process, you're never there until you are there? But for those who have a skepticism that you can get over the finish line with the deal, help us understand why you are optimistic you will, I realized not to put timeframe on it, but -- just help us address those questions.

Yeah, Kevin, as I mentioned in our three corporate priorities, the first is advancing our proprietary pipeline. The second is optimizing the value of the existing relationships. And then the third is to continue to seek additional deals. So we haven't taken our eye off of that ball, but there is a criteria that we're applying. And the first is that, it's got to be -- the partner that we signed has to be an established market leader in their category. Also, we are open to signing deals when the party owns the molecule and when that's the best route for us to be able to explore that particular indication with that molecule. We are also looking for multi-product types of deals that can create significant value. So, we have two full-time people that are in the business development area, and they are actively pursuing these opportunities. If you look at the allocation of the roughly 95 employees at Halozyme, the lion's share of the organization is focused on priorities one and two, but we haven't lost sight of the fact that priority three is also value creating for shareholders.

I mean that is, it's -- you mean the dilemma here for an existing shareholders, the market focus is on additional validation of the platform and it's troubling to me that the priority slipped to -- what seems to be a pretty distant third, I realized you need to maximize relationships you have. Yeah, I mean can you help us out, I mean what in terms of news flow are we going to save? Are we actually going to get an update an Roche something concrete this year to share your enthusiasm than in fact that arrangement continues to move along aggressively?

Yeah, as I mentioned in my opening remarks, we're going to be seeking ways to increase the visibility around the progress of the Roche activities and I wouldn't characterize the priorities as a distant third but really these are three priorities that the organization as a whole is pursuing.

Okay. Thanks so much.

You're welcome.

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

We've made substantial progress during 2007 and we look forward to making continued progress with Baxter to commercialize Hylenex and to move GAMMAGARD forward in the clinic, providing more visibility on the Roche programs, advancing our five proprietary programs, and continuing our active business development efforts for enhanced technology during 2008. We look forward to reporting to you again soon on our progress. And thank you for your support as our shareholders and for your participation in today's call. Take care everyone.

This does conclude today's conference call. You may now disconnect.