Greetings, ladies and gentlemen, and welcome to the Incyte Corporation’s Q2 2010 financial results. (Operator instructions.) As a reminder this conference is being recorded. It is now my pleasure to introduce your host, Ms. Pamela Murphy, Vice President Investor Relations and Communications. Thank you, Ms. Murphy – you may begin.

Good morning and thank you for joining us. On the call today are Paul Friedman, Incyte’s President and Chief Executive Officer; Dave Hastings, Executive Vice President, Chief Financial Officer; Rich Levy, Executive Vice President, Chief Development Officer and Medical Officer; and Pat Andrews, Executive Vice President, Chief Commercial Officer. To begin, Paul will review recent developments at Incyte and Dave will follow with a discussion of our Q2 financial results. We’ll then open up the call for Q&A. Before beginning we’d like to remind you that some of the statements made during the call today, including statements regarding our plans and expectations for our drug development programs including the timing of our clinical trials, regulatory submissions, and the potential safety and efficacy of our compounds, as well as the expected financial results and guidance are forward looking statements. These forward looking statements are subject to a number of risks and uncertainties that may cause our actual results to differ materially, including those described in our Form 10Q for the quarter ended March 31st, 2010, and from time to time in our SEC documents. Paul?

Okay. Thanks, Pam. Good morning to everyone. Our most advanced clinical programs are moving forward as planned. Our news flow for later this year is strong and we’re making good progress with our earlier-stage programs. We announced today our decision to exercise the option to co-develop Incyte 28050 with Lily for rheumatoid arthritis. Based on the phase II results we’ve seen so far we believe that 28050 represents a major commercial opportunity, and this decision dramatically expands our potential financial upside. And you will remember when we explained our rationale for picking Lily – one of the major drivers was this opportunity. And so with the results that we’ve seen we feel completely comfortable in making this opt-in decision. As a result of this decision we plan to fund 30% of future development costs up to regulatory approval for 050 in RA and our tiered royalty rate range would increase from up to 20% up to the high 20s. During our first call in May I described positive 12 week ACR scores for 050 in what was then an ongoing six month phase II dose ranging trial. All the patients have now completed the entire trial. Obviously we’ve seen the data and we look forward to sharing these results with you in November at the American College of Rheumatology meetings. Just to remind you, this phase II trial included RA patients who were considered to be inadequately controlled by any disease modifying anti-rheumatic drug therapy including patients previously treated with biologics, and we had a significant percentage of such patients. And the positive results we’ve seen with 050 thus far, including again, those patients treated with biologics, suggests that the compound has the potential to be of value for a broad range of RA patients. The results also suggest that…

Thanks, Paul, and good morning, everybody. I’ll start my overview this morning by discussing our cash position and guidance. We ended the Q2 with $422 million in cash and investments, excluding $47 million remaining in an escrow account reserved for interest payments through October, 2012, on the 4.75% convertible senior notes. So far our cash use this year has been $76 million. This amount excludes $183 million received by collaborators for milestones in upfront payments, and $159 million used to redeem the remaining 3.5% convertible senior and subordinated notes. Given our cash use to date we are adjusting our gross cash use guidance for the year from the previous range of $165 million to $175 million, to a range of $160 million to $165 million. As always this cash use guidance excludes actual or potential future milestones received from partners. In terms of milestones, we recorded $33 million from our Lily and Pfizer collaborations in the Q2. Our milestones are recorded as revenue in full in the quarter in which they are earned, and therefore they had a significantly favorable impact on our Q2 results. In terms of our operating expenses, our year-to-date R&D and SG&A expenses were $60 million and $13 million respectively. As we stated in the past we expect variability in our spending in these areas and we’re changing our 2010 guidance to reflect the expense amounts to date. For R&D expense we now expect that to range from $135 million to $142 million, which is a reduction from the previous range of $138 million to $145 million. For SG&A we now expect that to range from $35 million to $40 million, a reduction from the previous range of $40 million to $45 million. Importantly, despite these expense guidance reductions we remain on track in our key…

Okay, thanks, Dave. With that I think Operator, if you could please open the call for questions I think that would be the next obvious thing to do here.

Thank you, sir. (Operator instructions.) Our first question today comes from the line of Tom Russo with Robert W Baird. Please proceed with your question. Tom Russo – Robert W. Baird: Good morning and congratulations on the progress this quarter. First question, just looking ahead to ACR in November, can you help set expectations for weeks 12 through 24, whether we should expect efficacy for 050 increased, decreased, was maintained? And then whether there was anything kind of new or changed in the safety tolerability profile?

Well, so I’ll give you some top line stuff. I don’t want to get too granular because I think we definitely want to make that presentation at ACR. We think it’s going to be pretty well received. As we see across the board improvements in the scores when you go from 12 to 24 weeks – actually fairly impressive changes which mimic what was seen with Pfizer compound. We may actually be seeing a little bit more but these are, in the comparable studies, neither study is so large that you could say that it’s any different. It just may be that that’s the time course here for these smoldering joints to quiet down. But that definitely happens – it gets better. From a safety standpoint I would say there’s nothing, Rich may want to add to this, but there’s nothing of note beyond what we saw at 12 weeks.

Yeah, I have nothing to add to that. That’s correct. Tom Russo – Robert W. Baird: Okay. And then just one more and then I’ll hop out. Just switching over to 424 MTV, the regulatory discussions, can you…? You mentioned progress with FDA – are you willing to comment on whether there’s any change in your expectations for what design of the phase III trial might look like? And then also maybe whether there have been discussions yet over in Europe or is it still, you know, awaiting sort of agreement from FDA? And lastly are you still looking for an SPA there? Thanks.

Ideally we would like to do this under an SPA as long as the timing and the requirements make sense. We’ve had, I would say extremely cordial and very positive interactions with the same division that we worked with on myelofibrosis and tried to get to a final protocol that we all can agree on. And we are, I would say quite optimistic that we are going to get there in the near future. But it is the FDA and until it’s done it isn’t. And so that’s about as, I think that’s a pretty positive statement. Rich, you… I was not at the meeting. Do you want to add anything to that?

Yeah. Basically there would have to be a sudden change for things not to go well. They’re going really well there. And with respect to the other part of the question about Europe, I mean Novartis is going to be part of this study, it’s a global study and they’ve satisfied their needs from a European perspective so that there is no need to wait longer to get European regulatory buy-in to this study. Tom Russo – Robert W. Baird: Okay, thanks very much.

Thank you. Our next question comes from the line of Rachel McMinn with Bank of America/Merrill Lynch. Please proceed with your question. Rachel McMinn – Bank of America/Merrill Lynch: Yeah, thanks very much. Rich, just to clarify your last statement, I’m a little bit confused: “There’s no need to get EU regulatory buy-in.” Can you just explain that one more time?

No, I’m saying that everything is done in Europe with respect to the level of regulatory buy-in that Novartis needs. Rachel McMinn – Bank of America/Merrill Lynch: Okay.

I can’t go into detail as to what they chose to do, per se – that’s not really our purview to talk about. Rachel McMinn – Bank of America/Merrill Lynch: And I think before you had talked about potentially doing a single study for PV that would satisfy both EMEA and FDA requirements. Is that still reasonable or should we think about this as being two separate studies?

We are at this point planning on a single study, single global study for what would end up being an SNDA NDA submission. I mean that could change at the last minute, but again, unless there are some fairly radical alterations in feedback or from our partner that is the plan, to do the single global study. Rachel McMinn – Bank of America/Merrill Lynch: Okay, that’s very helpful. And then for 050, do you have a sense of the breadth of the phase II-B studies that you’re going to be conducting? I guess in terms of the different potential populations you could go into within RA. And then can you also talk about perhaps the cost of the phase II program all-in? I think you had mentioned that they’re similar to your expectations; I’m not sure if you’ve mentioned specifically what that is.

Well, so I think this would be Lily’s purview to get specific on the studies. I mean we did the II-A study but we are almost certainly not going to be the prime conductors of the II-B studies. And the way the contract is written I think they have to give you that information. There is more than one or there’s only going to be one… We don’t know. Just one? At least one. Rachel McMinn – Bank of America/Merrill Lynch’: Okay. And then on costs?

Yeah, again similar – we can’t discuss costs but what I would say is again the budget we reviewed recently was largely in line with what we saw during the negotiation and there’s nothing unusual in the study design that would make it either more expensive or less expensive than any of your traditional phase II-B studies. Rachel McMinn – Bank of America/Merrill Lynch: Okay, great. Thanks, guys.

Thank you. Our next question comes from the line of Brian Abrahams with Oppenheimer. Please proceed with your question. Ryan Tochihara – Oppenheimer & Co.: Hi guys, thanks. This is Ryan in for Brian. Just a quick question on 424. I guess given your progress with your ongoing discussions with PV and with the agency, what can you take from these discussions and how is that translating to kind of your thoughts in the future for the indication in ET? Thanks.

Yeah. So we have also had discussions, we had the opportunity when we last interacted face-to-face with the FDA, which is fairly recent, to also get into ET as a possible indication. And we were pleasantly surprised at the receptivity that we encountered in those discussions. We do want to put the PV study to bed before we you know, begin to grapple with ET and have further discussions with the division. But we were quite encouraged, would that be a fair term, Rich? Quiet encouraged?

That would be a fair term.

Based on the initial set of discussions that we had with them for ET. Ryan Tochihara – Oppenheimer & Co.: Great, thank you so much.

Thank you. Our next question comes from the line of Liisa Bayko with JMP Securities. Please proceed with your question. Liisa Bayko – JMP Securities: Hi there. I think most of my questions have been answered, but just wanted to get your take on the, I guess the increased level of activity that Pfizer’s going to take with the Ligand and JAK3 program and what you think that signals if anything at all about you know, Pfizer’s commitment to the space.

Could you be more specific about what phase? Liisa Bayko – JMP Securities: I mean do you think that that’s possibly signaling any concern they have over their own program, that the Ligand compound perhaps has some benefits or they may be trying to you know, tie up the space a little more? Do you have any thoughts just based on your perspective of Ligand’s program?

We don’t know much about Ligand’s program. Liisa Bayko – JMP Securities: Okay.

The data that we’ve seen on Pfizer’s compound continues to, we think, look quite good. I mean they have, they have the specter of JAK3 which we think is not an attribute that they have to deal with, and whether or not that’s raised its potentially ugly head in any way I don’t know. Certainly nothing that’s been presented would say that at this point, with this relatively modest number of patients who have been treated for relatively modest lengths of time, there has not been like, you know, any evidence that you’re seeing a lot of opportunistic infections, for example. They do have a liver signal, it seems sporadic. We haven’t seen it at all and it makes, it is conceivable that that bothers them and they want a structurally different compound as a backup. They also have a long history of wanting different entities, different molecules for different sets of indications. And that could well be what compelled them to take an interest in the Ligand program but we really don’t know. Liisa Bayko – JMP Securities: Okay, fantastic. That’s pretty much the end of my questions and we’ll look forward to more insights on the IDO program in the near future.

Okay, great. Thanks.

Thank you. Our next question comes from the line of Eric Schmidt with Cowen and Company. Please proceed with your question. Eric Schmidt – Cowen and Company: Good morning, Paul, a couple of questions and clarifications on your statements. First on the 4242 COMFORT I data you mentioned you’re on track to present, or sorry, to have the results in Q4 and I think most likely present the results at ASCO. Do you now definitively know that you won’t be able to get those into ACR?

Yeah, I think it’s a real stretch to do that based on last patient out and the time it’s going to take to log the database. Do you want to comment on that, Rich?

So first we won’t have the data for sure till after even the late breaker abstracts are due. So then you know, you take the option of putting a placeholder late breaker abstract, which is no guarantee that you would get, and then that still could see you into a position of if anything potentially were to require more time to go through quality assurance or whatever then you may not make it. So we’re now pretty much decided that we’re taking the approach that when the data comes out we will issue a press release, let everybody know the top line results and do a formal scientific presentation at ASCO. Eric Schmidt – Cowen and Company: And do you think that, that’s obviously an important press release for the company. Do you think you’ll be able to provide us with sufficient detail in that release and what kind of end points might we be looking at in the press release prior to ASCO?*

Well I think we’re also considering a call, right, to allow you and us to get slightly more granular than what would be in the press release, but not obviously so granular that we would not be able to present at ASCO. Eric Schmidt – Cowen and Company: Okay.

We’ll make the press release as meaty as we think we can and then if we you know, if we’re live we can continue the discussion and we’ll try to be as candid as we can. Eric Schmidt – Cowen and Company: And then on topical 424 do I interpret your comments to mean you’re now definitively seeking a partner and won’t go at this market alone?

Well, we didn’t quite say that. We have a plethora of assets which is good, but you know, we decided that for example, that we couldn’t do, that metabolism didn’t make a lot of sense for us to do and so we just have, we haven’t done any more studies with HSD1 or with HN74A, also by the way I think a pretty interesting program. But with topical, just yesterday I mean we have parallel tracks that we’re developing. One of them is to talk to partners and see if we can get back the value for the program at this point in its evolution that we feel would justify licensing it. And our preference if we could get that would be to license it because it’s really an outlier within the other things that we have ongoing. But we also had actually a pretty extensive discussion yesterday about what the next studies would be that we would do, and there are a few different avenues that you could go down. So that’s still an open possibility, and we just have to see where the negotiations lead us and where our internal discussions on the studies end up. Eric Schmidt – Cowen and Company: Okay, and the last question, maybe more for Dave: Now that you’ve opted into 050 and you stated that many of the milestones will offset your cost commitments there, can you help us understand when you’re entitled to a next milestone? Would that be at the start of phase II-B and any further milestones, and any kind of magnitude guidance you can provide around those milestones?

Yeah, we can’t give guidance in terms of the amounts but I would say though, a couple things: one, we were really pleased with the amounts of the milestones available under the contract and they’re very traditional, Eric, in terms of when you would get those. And you know, they’re usually at initiation of studies. Eric Schmidt – Cowen and Company: Thanks a lot.

Yep.

Thank you. (Operator instructions.) Our next question comes from the line of Josh Schimmer with Leerink Swann. Please proceed with your question. Joshua Schimmer – Leerink Swann: Thanks for taking the question. On 050 when should we expect phase II trials for additional indications to begin and how do you think about exploring the various indications that you may pursue? Do you try to stick within the arthritities bucket, do you extend beyond the bucket? How should we think about the way that those programs may stagger? Thanks.

Yeah, so that’s a complicated question, and you know, obviously I can’t definitively answer it. We’ve had again many internal discussions and many discussions with Lily about what the other indications in inflammation are that make sense, and when you would pursue them. And for example, I would just, I’ll just throw out some examples – things like juvenile rheumatoid arthritis, it’s pretty obvious; it’s an extension, actually it would be almost the pediatric part of an RA program. If you were looking at other indications where there’s proof of concept and where the prevalence, patient prevalence is interesting you would certainly be partial to ankylosing spondylitis and psoriatic arthritis indications that are lumped in into the seronegative spondyloarthropathy category. There are some other in there like reactive arthritis but those prevalences are significantly lower. But psoriatic arthritis indications and ankylosing spondylitis together, the prevalence is something like 35% of the prevalence of rheumatoid arthritis. And the biologics work there. And there is every reason to believe, in fact I would be incredibly surprised if this mechanism will not work there. So you could for example be doing pivotal trials almost in parallel with your phase III’s for RA, maybe staggered slightly. So that’s kind of low-hanging fruit and I think to me, pretty obvious. Now, can I guarantee at the end of the day since it’s Lily’s ultimate decision where they go with this, that we’ll go there? No, but to me it’s pretty logical. And it’s beyond that that it gets a little more esoteric and you have to think a little harder about where to go from there. And I think I don’t have anything else to say on that but Rich, you might.

Only that you also asked when we might start and the current plan is that phase II’s in other indications would start sometime next year, not this year. Joshua Schimmer – Leerink Swann: Okay, thanks very much.

Thank you. Ladies and gentlemen, we have no further questions at this time so I’d like to turn the floor back to management for any closing comments.

Okay. Thanks for your attention and the questions. We think that we’re in a very good place right now and we just need to also have the luck that you always need when you’re doing this drug discovery and development. But I think it was the Green Bay Packer coach, what did he say? “The harder you work, the luckier you get,” right, Vince Lombardi. So that’s what we’re doing and we look forward to being able to present what I think is going to be a very exciting presentation at the Rheumatology meetings on the full six-month study in RA. I’m anticipating that the results from COMFORT I and COMFORT II are going to be positive, the safety profile is not going to be any different than what we described to you with 251 – the 251 patients have been on drug a long time; and that we’ll be filing, get an exit study review and towards the end of next year we will be selling for our first indication with a drug that I think pretty profoundly affects a very sick population. So we’re very excited and we look forward to keeping you informed of our progress. Thanks again for listening to us today.

Ladies and gentlemen, this concludes today’s teleconference and you may disconnect your lines at this time. Thank you for your participation.