Good day, ladies and gentlemen, and welcome to the first quarter 2008 Jazz Pharmaceuticals earnings conference call. My name is Fab, and I'll be your coordinator for today. (Operator Instructions) I would now like to turn the presentation over to your host for today's call, Mr. Matt Fust, Chief Financial Officer. Please proceed.

Thank you, Fab. Good afternoon, everyone, and welcome to our financial results conference call. With me today are Dr. Sam Saks, our CEO; and Bob Myers, our President. Following our prepared remarks, we'll be opening the call up for Q&A. Our first quarter financial results press release was issued earlier this afternoon and is also available on our website. I'll remind you that remarks we may make on this call about future expectations, plans or prospects for Jazz Pharmaceuticals constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and that our actual results may differ. I'll ask Bob to begin today's call with an update on our commercial activities and the recent launch of LUVOX CR.

Thanks, Matt. Good afternoon, everyone, and thank you for joining us today. I'll begin with the topic, I know it is on top of your mind for all of you just as it is for us here at the company, the progress of the commercial launch of LUVOX CR. During the next few minutes, I'll provide you some updates on our ongoing LUVOX CR activities. We are very pleased with our successful preparations to bring this product to the market. These efforts have been underway at our company for more than a year now. As you recall, we received final FDA approval for LUVOX CR on February 28th for the treatment of both social anxiety disorder or SAD and obsessive compulsive disorder or OCD. Following approval by the FDA, our supply chain team worked closely with our manufacturing partners to ensure rapid commercial availability of LUVOX CR. We completed initial shipments to wholesalers in late March, achieving our corporate objective to launch LUVOX CR in the first quarter of this year. Our field force of nearly 200 sales professionals completed their LUVOX CR trading based on the final FDA approved product label and began active sales promotions to physicians in mid-April. In parallel, numerous commercial preparations were underway, including producing promotional materials and educational literature on LUVOX CR. We began running now available ads for LUVOX CR to more than 20 psychiatry, pharmacy and managed care journals in April. We also initiated the new LUVOX CR launch campaign in medical journals in May. This launch journal ad highlights the key features of LUVOX CR: Proven efficacy in OCD and SAD, a weight-neutral profile and low instance of sexual adverse events, controlled release technology designed to minimize peak-to-trough plasma level fluctuations over 24-hour period and once-daily dosing at bedtime with or…

Thanks, Bob. In addition to the energy and commitment demonstrated throughout our company in preparing for a successful launch of LUVOX CR, I'm happy to report progress in the advancement of our development programs. On today's call, we're pleased to announce the attainment of a key milestone in our JZP-6 clinical development program for fibromyalgia syndrome. As you will recall, we are running two pivotal Phase III clinical programs together with an open-label safety and efficacy continuation study for those patients who have completed one of the Phase III trials. On April 25th, we closed screening of new subjects for the first Phase III trial. The enrollment goal of 525 patients in the trial has been achieved and final enrollment is expected to be completed in the next several weeks. We anticipate providing topline results from this first Phase III trial in the fourth quarter of 2008, as we've previously discussed. Meanwhile, we're continuing to screen patients in the second Phase III trials and sites in the US and Europe. Since we recently provided a comprehensive review of our development programs during the investor meeting on March 13th, I'll be providing only brief updates today. Patient enrollment continues in our Phase II clinical trial for JZP-8 our intranasal formulation of clonazepam for the treatment of recurrent acute repetitive seizures in patients with epilepsy. This is an open-label study intended to evaluate the safety and efficacy in pharmacokinetics of JZP-8 and we anticipate completion by the end of 2008. In JZP-7, our noble gel formulation of ropinirole to treat restless legs syndrome. We have completed analysis of both pharmacokinetics we conducted and [confirm] that doses were well-tolerated locally and systemically with only mild adverse events. With these results in hand, we are currently designing the JZP-7 Phase III program in collaboration with leading experts in the field. We shared extensive data on March 13th, during our investor presentation on JZP-4. Our product candidate from the treatment epilepsy and bipolar disorder recalled that JZP-4 is a controlled released once-a-day formulation of an anticonvulsant that has a chemical structure similar to Lamictal or lamotrigine, an antiepileptic drug marketed by GlaxoSmithKline. We are preparing to initiate Phase II trials with this program in epilepsy. Our commercial development program is active discussions with potential ex-US partners for JZP-4 along with JZP-7 and JZP-8. As we mentioned during our Investor Day presentation, we intend to limit our net R&D expenses during 2008 to the range of $60 million to $70 million. In order to stay within that net expense range, we will seek to obtain development partner financing, and if need be, delay advancing one or more programs until the necessary financial resources have been obtained. We will look forward to updating you about partnering progress in the coming months. And now, I will turn the call over to Matt for our financial review of the quarter.

Thank you, Sam. We are pleased to be able to report another quarter of strong sales growth. Total revenues for the quarter ended March 31st, 2008, were $14.6 million led, as Bob mentioned, by growth in XYREM sales to $11.3 million. Please note that for purposes of comparing with last year, revenue in the first quarter of 2007 also included a $2 million payment from UCB in connection with the XYREM commercialization milestone. Because the first quarter of 2008 included the initial shipments of LUVOX CR to our wholesale customers, let me discuss briefly our approach to recognizing sales revenue for the LUVOX CR product launch. As is typical for new product launches in our industry, we are initially applying a sell-through accounting approach to LUVOX CR, which means that we will recognize sales revenue based upon prescription data. We shipped approximately $3 million of LUVOX CR to wholesalers in March. However, in our financial statements, the entire $3 million in LUVOX CR sales has been deferred, which means that does not appear as first quarter sales revenue on the P&L and it is not included in accounts receivable on the balance sheet. On the P&L, we have also deferred the LUVOX CR cost of product sales, which relates to the product that we shipped during the first quarter. The first quarter 2008 cost of products shipped amount on the P&L does include, however, approximately $350,000, which relates to LUVOX CR and which represents cost incurred after LUVOX CR received marketing approval, but which do not relate directly to the product quantities shipped to wholesalers in March. With that context, let's turn next to looking at gross margin on net product sales. For the first quarter of 2008, our report gross margin on net product sales was approximately 84%. Cost…

(Operator Instructions) And your first question will come from the line of Rich Silver with Lehman Brothers.

Good afternoon.

Hi, Rich.

Hi. Could you provide a little bit more detail on the managed care discussions? You did mention that there is no need for prior authorization with any customers, but perhaps discussion of tier-3 status and how for along you are in the process of the managed care discussions?

Hi, Rich. It's Bob. It is still very early in the launch. So I'd rather not get in too much detail in managed care discussions. I will say that, what we're seeing is that almost exactly what we expected which is tier-3 and our coverage is very good in terms of not requiring a prior authorization, which is what we expected. And it puts us on a similar plain build with other branded products, others SSRIs or SNRIs. So, from a managed care perspective, it's very early but exactly what we have planned for.

And as far as, the $40 million to $60 million on changed guidance, can you now give us a better sense of how heavily year end loaded that number is? We know that it obviously is second half end loaded. But at this point, with one quarter under your belt and out there and you're getting obviously a little bit more feedback, any additional clarity on the progression and what you might even be expecting in the current quarter?

Hi Rich, it's Matt. As Bob mentioned, we're still so early in the launch with just a few weeks of our IMS prescription data in hand. We're not yet at this time to provide more granularity on what we think the growth progression will be over the course of a year. We would agree with your assessment and we expect growth throughout the year and certainly expect the second half to be considerably larger than the first. But beyond that it's just too early to have a sense for what the trajectory will look like.

Okay. Thanks.

Your next question will come from the line of Marc Goodman with Credit Suisse.

Yeah. First question is on the stocking for LUVOX, you had mentioned $3 million. Will there be further stocking in this quarter?

Yeah. The initial stocking of $3 million, which went to the wholesalers at the end of the first quarter was intended to ensure that we had a product available at the wholesalers that could then be moved down to the retail pharmacies in order to ensure that patients had access to the product rapidly after the LUVOX CR script was written. We don't intend to do more, [more than] characterize as the initial channel fills and, in fact, we're already beginning to see reorders coming in from wholesalers to fill beyond the initial channel stocking.

Okay. And then can you help us just with the share count and how we should think about that and how this deal with Kingsbridge? How does that -- you know that's kind of part two to the question, but how should we think about the share count and how that factors in overtime?

Sure. So the share count as summarized briefly in the press release and will be available in detail with our 10-Q that will be filed in the next day or so, is actually pretty straight forward and reflects the shares that our outstanding. The transaction with Kingsbridge Capital is an option, a Jazz Pharmaceuticals option to sell shares in the future to Kingsbridge Capital. So unless or until we sell those shares to Kingsbridge those won't show up in our share count.

But you have to hit certain LUVOX CR revenue numbers, is that what you have to hit?

No. The reference to hitting certain sales numbers actually is in connection with the further expansion of our senior term debt facility. We received $40 million in the expansion of that facility in March. And we -- at the company's option can take up to another $30 million of additional senior term debt if we had certain sales targets as we move through 2008. The relationship with Kingsbridge doesn't have any sales target requirements.

Thanks.

Your next question will come from the line of Corey Davis with Natexis.

Thanks very much. I think we all know that sampling always dilutes the actual script numbers, but would you say that your sampling on LUVOX CR has been more aggressive, less aggressive or right on par with industry standards?

Corey, its Bob Myers. Corey, I'd say that when we modeled our sampling plan we looked at other products in this therapeutic category and exceptionally our sampling is on track for what we were expecting. So yeah, I think, that we're doing heavy sampling at the beginning that physicians can start patients on 100 milligrams and titrate to 115 milligrams after a week and then go on to a commercial prescription. But we certainly want to get trial and usage early in the trajectory of our launch.

And as you could image Corey, this is Sam. We're sampling more heavily with our highest value targets. So as is typical we're trying to direct the sampling towards the people who can use them productively.

I think that's all I had. Thanks very much.

Thanks, Corey.

(Operator Instructions) There are no further questions at this time. I would now like to turn the call back over to Mr. Matt Fust for closing remarks.

Great. Thank you all for your participation in the call today and we look forward to keeping you updated on our development in commercial progress. Also, I want you let you know that we'll be participating in several conferences during the next few months, including the Credit Suisse Small and Mid Cap Healthcare Forum in New York on May 16th, the Citigroup Healthcare Conference in New York on May 21st, the UBS Global Specially Pharmaceuticals Conference in London on May 28th and the FBR Capital Markets Spring Investor Conference in New York on May 29th. And we certainly hope to see many of you at those upcoming conferences. Thanks very much, and have a great afternoon.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a wonderful day.