Good morning. My name is Mandy and I will be your conference operator today. At this time, I would like to welcome everyone to the Halozyme Therapeutics 2008 pipeline update conference call. (Operator Instructions) Thank you. Mr. David Ramsay, sir you may begin.

Thank you everyone for participating in today's call. Joining me from Halozyme are Jonathan Lim, our President and CEO; Gregory Frost, Vice President and CSO; Robert Little, Vice President and Chief Commercial Officer; and Robert Uhl, our new Senior Director of Investor Relations. Yesterday afternoon, Halozyme released 2008 first quarter financial results. If you have not received this news release, or if you would like to be added to the company's distribution list, please call [Alex Schlam] at 858-704-8288. This call is also being 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 provides the Safe Harbor for forward-looking statements. All statements made during this conference call that are not statements of historical facts constitute forward-looking statements. The matters referred to in forward-looking statements could be affected by the risks and uncertainties of Halozyme's business. Such risks inherent to this business are described in our filings with the Securities and Exchange Commission, as well as in our press releases. The company's actual results may differ materially from these 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. We are excited to be able to give you an update on the current progress of our proprietary and partnered programs. I will be updating you on our newest program call, 'Cheetah'. Greg Frost will be reporting on the status of our other proprietary programs. Bob Little will be updating you on our partnered programs with Roche, Baxter Medication Delivery and Baxter BioScience. And David Ramsay will give you a financial overview. But before we begin, I am very happy to welcome on Board Robert Uhl who has over 20 years of Wall Street experience on both the buy side and the sale side, and just joined Halozyme this week from Friedman Billings Ramsey as our Senior Director of Investor Relations. Robert, could you please take a moment to introduce yourself.

Thank you, Jonathan, and thanks also to the rest of the Halozyme management team for this great opportunity. I am very happy to be on Board and I am looking forward to getting to know all of the existing and future shareholders of the company. I intend to increase awareness and understanding of our development programs, as well as their significant commercial potential among investors and among other groups as well. It is really great to be here and thank you again.

All right. Thanks, Robert. So, I am going to start with an overview of the proprietary programs. There are five key programs that we are focusing on in 2008 as part of our own proprietary product development portfolio, which we had updated you folks on last quarter. Three are based on taking the PH20 enzyme and applying it to existing marketed products to develop new proprietary products and two additional programs involve new molecular entities that target the matrix and have the applications in oncology and dermatology. So, the first program is one that we refer to it in our prior conference call as 'Cheetah' and we are publicly disclosing for the first time today. The target is insulin, which allows Halozyme to develop a potentially best-in-lass therapeutic, targeting a $10 billion global market. We've recently completed a Phase I clinical trial that evaluated PH20 in combination with Humulin R, which is a regular human insulin product and Humalog, a fast-acting insulin analog. Both formulated as subcutaneous injections, which is still the preferred route of administration for this product. This study conducted by Halozyme explored the impact of PH20 on the PK or pharmacokinetics and PD or pharmacodynamics of each insulin product. Specifically, with a co-formulation with PH20 results in a more physiologic PK/PD profile, such as one would find with the body's own natural insulin. Halozyme plans to publicly release the data from this study at the upcoming American Diabetes Association, or ADA, Conference which takes place in San Francisco from June 6 to June 10. Halozyme's market research and discussions with diabetes experts suggest that while fast-acting insulin analogs, such as Humalog, NovoLog and Apidra are widely used in both type 1 and type 2 diabetic patients. The PK/PD profile of these products differs substantially from that of…

Thanks, Jonathan. Our second program is the novel formulation of bisphosphonates with PH20 for osteoporosis. Bisphosphonates as class represent a multi-billion dollar market that includes both oral and intravenous products. While oral products have widespread use, long-term compliance is poor, impart due to insufficient efficacy, gastrointestinal toxicity and difficult dosing regimens. This leads to discontinuation of therapy in more than three quarters of patients within three years. The IV administered products Reclast and Boniva, currently marketed by Novartis and Roche respectively, are attractive compounds to explore for converting to subcutaneous usage via formulation with PH20. Subcutaneous administration of bisphosphonates is attractive because access to IVs are inconvenient for patients. Additionally, general practitioners, the primary prescribers of bisphosphonates have limited capabilities to administer them. Development of a subcutaneous bisphosphonates with reasonable dosing schedules is problematic due to injection site reactions, which maybe mitigated via formulation with PH20. Halozyme is exploring the development of Sub-Q formulation of these products using PH20, for which we presented preclinical data last month. The animal studies produced three important findings. First, injection of bisphosphonates into the skin created injection site reactions characterized by erythema, indurations and alteration, in a concentration dependent manner. Secondly, when bisphosphonates were co-administered with PH20, the maximum dose that could be administered without producing ISR was increased three to five foot higher. This reduced injections site reaction profile could be a significant advantage. Finally, absolute bioavailability by subcutaneous injection with PH20 was comparable to IV infusions. Based upon these favorable preclinical results, we are targeting to enter the clinic for at least one of these combinations in the third quarter of this year. Turning to oncology, the Chemophase bladder cancer program represents one of our most advanced proprietary products in clinical development and continues to move forward according to plan. Tumor recurrence…

Thank you, Greg. Regarding our partnerships with Roche, Baxter Bioscience for Enhanze Technology and a partnership with Baxter Medication Delivery for HYLENEX, our FDA approved drug. I'll be updating you on all three partnered programs, firstly beginning with Roche. We've been conducting a number of activities to advance our partnership with Roche. This is evidenced by the continued R&D reimbursement we've received from Roche during the first quarter. These activities include implementation of a higher yielding manufacturing process that is being scaled up to support Roche, as well as Halozyme's internal programs and other partnerships. In addition, preclinical and toxicology studies have been conducted with the second generation PH20, as those presented in March by Dr. Walter Bee, in which Halozyme found that very doses was well tolerated and revealed no changes in standard toxicity parameters or in male fertility assessment. We continue to ship our PH20 enzyme to Roche so they may conduct their preclinical and production formulation work with that biologic compounds. Moving to Baxter Medication Delivery, on the HYLENEX front, we continue to be encouraged by this partnership and the HYLENEX product has significant advantages and sales potential. Halozyme is working closely with Baxter's top management to accelerate sales efforts across various markets. Baxter is able to leverage its general strength across multiple sales forces to assess multiple markets. Initial areas that the Baxter currently targeting are the pediatrics market, long-term care or nursing homes and the ambulatory surgical centers. Pediatrics is a market believe to represent roughly $170 million sales potential. The current focus is on completing environment of the infused pediatric rehydration study which is designed to assess the clinical utility and safety of HYLENEX in infants and children with dehydration. Baxter has now enrolled more than 90% of the patients and is starting seeing…

Thank you, Bob. Net loss for the first quarter of 2008 was $10 million or $0.13 per share, compared with a net loss for the first quarter of 2007 of $3.4 million or $0.05 per share. Revenues for the first quarter of 2008 were $1.8 million, compared with $810,000 for the first quarter of 2007. Cumulase product sales for the first quarter of 2008 were $127,000, compared with $171,000 for the first quarter of 2007. Revenues under collaborative agreements for the first quarter of 2008 were $1.7 million, compared with $623,000 million for the first quarter of 2007. Revenues under collaborative agreements for 2008 primarily consisted of the amortization of upfront fees received from Baxter and Roche, totaling $588,000 and research and development reimbursements from Baxter of $452,000 and Roche of $624,000. This is reflective of the increased activities and work that we were doing for our partners during the first quarter. Research and development expenses for the first quarter of 2008 were $8.4 million, compared with $2.8 million for the first quarter of 2007, reflecting increased headcount, R&D spending on our various program such as insulin, bisphosphonates and our PEG PH20 clinical and preclinical program and production costs associated with the manufacturing scale-up of the company's PH20 enzyme. Selling, general and administrative expenses for the first quarter of 2008 were $4.2 million, compared with $2 million for the first quarter of 2007, also reflecting increases in headcount as well as legal and facilities expenses compared with the prior-year quarter. We continue to remain on a strong financial position with cash and cash equivalents of $92.6 million as of March 31, 2008, compared with $97.7 million as of December 31, 2007. Additionally, during the first quarter, the company received a $3.5 million product-based payment from Baxter for HYLENEX. And with that, I'll turn the call back over to Jonathan Lim.

Thank you. Over the next several months, we'll continue to discuss the progress we're making with our preclinical and clinical efforts in our various programs. Halozyme has a unique and exciting business strategy. Unlike many companies developing one or two products, Halozyme is leveraging its multifunctional core technology across a number of therapeutic categories, as well as expanding our expertise into other areas of the matrix that should help drive significant value for our shareholders. As you can tell from our five proprietary programs and three partnered programs, there is a tremendous amount of activity going on at the company. While we can't promise success on all of these programs, we're convinced that success in any combination of these programs will drive significant value and that's the main reason why we are taking a portfolio approach towards these activities. Thank you all for your support. We're looking forward to reporting our progress on these programs in 2008. And with that overview, I'll now turn the call over to questions.

(Operator Instructions). Your first question comes from the line of Eun Yang. Eun Yang - Jefferies & Company: Thanks very much. Jonathan, I wasn't clear in your Cheetah program whether you are reformulating insulin using generic insulin or fast-acting insulin?

Yeah Eun, we are taking both, so we are taking both the fast-acting insulin analogs and we are also taking regular insulin, and checking to co-formulate them with our enzyme. Eun Yang - Jefferies & Company: So when you would see use of fast-acting insulin's and as a Humalog on Novolog but those are patent protected. So, what would be your development strategy for those compounds?

Yeah, it gives us a very flexible strategy where we can seek to partner the analogs, as well as develop the regular products on our own. And so we are open to all strategic scenarios at this point. Eun Yang - Jefferies & Company: Okay. And then second question, it is a little bit more general. Just looking at the drug industry in general, the business of reformulating existing drugs is somewhat under stress. So what I want to ask you is that, obviously, you guys are in a business over co-formulating existing products and try to make it better. So I am wondering in the clinical development, and as well as for our potential regulatory approval, whether you may need to provide some clinical benefits in terms of efficacy or when you reformulate existing products beyond, just providing convenience, as well as the compliance benefit?

That's right. And Eun that's why we are excited about Cheetah because we hope that the data will show advantages relative to the existing agents in the market, not just from a convenience and compliance perspective but from a meaningful clinical benefit perspective. And by shifting the PK and PD in this particular class of molecules, we believe that a meaningful clinical benefit can be demonstrated by achieving a more physiologic insulin profile which means better glycemic control in terms of fewer hypo and hyperglycemic excursions. And then also, the home run would be if there can be a weight control or less weight gain in the type 2 Diabetic population which is a much more significant patient base in terms of numbers. But this is one opportunity where PK and PD actually translates into a meaningful clinical benefit from an efficacy perspective. Eun Yang - Jefferies & Company: Yeah, so in the Cheetah program with the insulin, I think it's clear, but how about we've partnered programs for Enhanze Technology with Baxter and Roche. Are they actually pursuing to show some additional clinical benefits in co-formulating products?

Yeah, I'll let Greg comment on that.

Sure. Actually Eun, if you take a look, for example, at the IGIV program for primary immunodeficiency. This is a particular area where the reformulation if you will is more about actually changing the route of delivery. And the advantage in that particular studying of care is that, there is no current options available for these patients for lifelong therapy. So, in that particular area it's something where we feel that the increased convenience in compliance from patients being able to self-administer therapies at home rather than going to infusion clinics. In as is, of itself a significant value driving event and also from a health economic perspective can be a major driver both for the payers. So, one only needs to take a look at the current product opportunities that are available with subcutaneous delivery which require frequent administration, and the ability to give a four months doze, Sub-Q, is something which we believe, and our partners believe is something that can make for a best-in-class agent. Eun Yang - Jefferies & Company: Okay. And going back to the Cheetah program and there, in addition to better PK, PD profile, are you also pursuing like a lesser frequent dosing of injection?

No, we would keep the injection frequency the same. Eun Yang - Jefferies & Company: Okay. The last a question is to David. In the first quarter, Halo received about $30.5 million productive base to payment for HYLENEX. I'm just wondering why wasn't that booked in the revenue line?

Yeah Eun, and that's -- if you recall back when we signed our collaboration with Baxter in February of 2007. There were $10 million in the prepayments if you will, and upon signing that collaboration we received the first million. And then the remaining $9 million is gated out between 2008 and 2009. So it's really a prepayment if you will on future royalties or product based payments. So we'll amortize that $3.5 million as product based payments or royalties are earned from the sale of HYLENEX. Eun Yang - Jefferies & Company: Okay, Thanks very much.

Sure.

Your next question is from the line of Chris Geston with UBS.

Hello, gentlemen.

Hey, morning Chris. How are you

Very good, thank you. Back to the Cheetah program, on the insulin analogs that you are using in the studies or the fast acting insulin's, lets say -- could you tell us how much of the market, the $10 billion market that currently make up? Secondly, are the problems that you discussed associated with those analogs or is that just the insulin market problems in general? And thirdly, if they are -- if those problems are associated only with these faster acting or insulin analogs, have you done enough study to know if those problems were solved by your combination? What kind of market share jump that could create?

Sure. So Chris, I'll give you some just market statistics here. So, around 30% of insulin use is with the analogs and that means those -- the three that I named in terms of Humalog, Novolog and Apidra, 10% of all diabetics use a fast-acting insulin and within this number, about 90% of type 1 Diabetic patients use a fast-acting insulin. And this translates into about $3.5 billion US market for the analogs and around double that worldwide. Now in terms of -- sorry actually, my math is off here, it's about $2 billion US market for the analogs. In terms of the shortcomings, these analogs while they are very fast during the meal-time administration, what's called prandial administration of insulin. They still had shortcomings in terms of the glycemic control, and the weight gain, and the other aspects that we discussed. And so we believe that if PH20 helps to optimize the PK and PD of the analogs and/or the regular insulin, then that could lead to a meaningful clinical benefit. And what does that mean in terms of market share, well, if you've got a best in-class therapy in a multi-billion dollar market, I would imagine that it would be amongst the market leaders.

Perfect. Thank you.

You're welcome.

Your next question is from the line of Andrew Vaino with Roth Capital.

Thanks for taking the call. Just had a quick question on the Cheetah PK-PD study. What specifically, what is the -- that you guys measured in the study?

Hey, Andy, it's Greg Frost here. Effectively what this study is designed to do, it's what called the euglycemic clamp. And so what you are doing is, it's got pharmacokinetics and pharmacodynamics. So, effectively what you are looking at is a study to do examine the rate of onset and absorption of the insulin itself, both the regular and the analog with/without enzyme. So four different groups there. And what you are looking at is the PK profile of the insulin in the blood, and then you are looking at the glucodynamic response, in other words, the glucose lowering activity. So what you do with these clamps is, it allows you to identify or model what this would look like in a patient population, but in a more controlled setting.

Okay. And how many patients were involved in that study?

It is randomized crossover that was done on that, and that was with 12 patients going through for each set.

Okay. And how long do you anticipate the Phase II study to be?

We are still scoping up the Phase II studies at this point. But the data will be presented at ADA on Saturday, June 7, from about 6:00 pm to 7:15 pm.

On the 501 program, is there any chance you'll mention the specific enzymes you are using?

We are going to be able to describe the enzyme in great detail; everything is short of the name.

Okay. And then, any -- just guess on how stable the liposome you guys [results] have thought it's --?

It's actually not a liposome, it's a lysosome.

Oh.

I am sorry, Andy that -- maybe that, didn't pronounce that very well. It's a lysosomal protease, it's an acid active protease.

Sorry. I completely misheard that. Thanks you very much.

You are welcome.

Your next question is from the line of Kevin Degeeter with Oppenheimer.

Good morning, guys.

Hi, Kevin.

Good morning, Kevin.

Couple of quick questions, most of mine have been answered but I mean, just help me understand around the Cheetah program, sort of how we move forward specifically, I guess on the IP side of this, let's sort of start with that. I mean are there opportunities here to file unique IP around -- I mean, I'm just trying to understand ultimately how you get on the federal to fast acting of potential partner to take you on the most sort of advantages terms you'll be on kind of -- though the clinical data, I'm just trying to appreciate where, how we go forward from an IP standpoint, frankly, what's the incentive?

Sure.

Point that really come up what is here?

Yeah, so our current pattern this state for PH20 includes both, a composition of matter on the DNA including the protein, but then we also have [chase GP] pattern that covers the enzyme itself. And then we also have additional patterns that cover combinations of the PH20 enzyme with a number of small molecules and large molecules, and named in that, and those patterns are the combinations with the various types of insulin. So that's the first layer of IP if you will. And then we also have file additional layers around specific aspects of insulin with PH20.

Have you began discussions with any of the branded fast-acting insulin's with regard to either -- there is some sort of exploratory relationship. I mean, I'm trying to understand what the next step here is on the fast-acting side?

Yeah, Kevin the goal is to keep all strategic options open which means initiating discussions with all the fast-acting players. So there is three major ones. And then also keeping the option open in terms of taking regular with PH 20. And so we are open to all of those options, as well as potential geographic scenarios.

And, I mean, presumably you would need to get something done before you could do kind of Phase IIb kind of work, is that a reasonable way there to think about the landscape here?

Get something done in terms of a partnership or --

Definitely some kind of agreement here, whether it be a formally wholly hatched our partnership or your agreement where coming --?

Yeah, there is nothing from a business standpoint that prevents us from going right in the Phase IIb with various products and that's our intention.

All right. And can you -- yeah, I appreciate the update on HYLENEX. Can you just give us a sense of one from your perspective, you hold to see the work that HYLENEX is doing, actually begin to hit the income statement here?

Sure. I mean, what I could say is that things are moving in the right direction. And so the first thing really is to make sure that we are executing on the various clinical, as well as commercial strategies that are underway with Baxter, and even relative to last quarter things are moving in the right direction.

Okay. Thanks so much guys.

All right. Thanks, Kevin.

Thanks, Kevin.

(Operator Instructions). And you have a question from the line of [Jesse Grossman].

Good morning, guys.

Good morning, Jesse.

Good morning, Jesse.

Do you have any -- I guess, maybe this is a David question. Do you have any idea of projections, what the incremental revenue would be to the $2 billion analog market in the US for the insulin when it's combined with the Cheetah product?

No, Jesse we really don't. Our immediate goal is to present the data from our Phase I trial at the ADA conference upcoming. And we are excited to be able to do that. But in terms of any kind of revenue projections, it would be premature for us to do that.

Okay. The second question is assuming that you are going to generate approximately another $35 million from April 1 to December 31 in cash expenses. I'm assuming that you get the Baxter royalty payment to $5.5 million balance due. Would it be a fair assumption to say, you are going to have approximately $65 million in the bank by the end of the year?

You know Jesse, we haven't giving guidance as to what our year-end cash position would be. But we have given guidance of is, what our cash expenses for 2008 are forecasted to be. In those cash expense numbers obviously, there is not any estimate of revenue or milestone payments or anything like that. So we continue to just give cash expense guidance for 2008.

Okay. Thank you, guys.

Thank you.

(Operator Instructions). Sir, at this time there are no further questions. Do you have other comments.

All right, yes. Thank you, everyone. So with the addition of the insulin program, Halozyme's five proprietary programs, just a recap consisted of the following; PH20 insulin, a potentially best-in-class prandial insulin for the treatment of diabetes. PH20 bisphosphonates, which is the only subcutaneous bisphosphonate for treatment of osteoporosis. Chemophase, which is an improved first line chemotherapy for treatment of superficial bladder cancer. PEG PH20, our first in class chemoadjuvant for the treatment of solid tumors. And HTI501, a recombinant human lysosomal protease which is a best-in-class, conditionally active matrix degrading enzyme for therapeutic and aesthetic dermatology. So all of these are first-in-class or best-in-class therapies that leverage our multi-functional technology and expertise in the extracellular matrix, and provide further proof of the power of our platform. We'd make substantial progress so far in 2008 and we look forward to making continued progress with our insulin program. We hope the data will show advantages over the existing agents in the market. And we are excited about the opportunity this program could offer. As we mentioned, we'll be presenting our initial data at the ADA meeting next month in San Francisco. Our efforts continue to move forward with Baxter Medication Delivery to commercialize HYLENEX, and with Baxter Bioscience to advance GAMMAGARD into the clinic or in the clinic. We plan to provide more visibility on the Roche programs, advance our own proprietary programs, and continue our active business development efforts for Enhanze Technology during 2008. As a reminder, we'll be presenting at the BOA conference next week in Las Vegas and at the Citigroup conference the following week in New York. We look forward to reporting to you again soon on our progress. And again, thank you for your support as our shareholders, and for your participation in today's call.

Thank you for participating in today's Halozyme Therapeutics 2008 pipeline update conference call. You may now disconnect.