Good day, everyone and welcome to today’s program. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. (Operator Instructions) Please note, this call maybe recorded and I will be standing by should you need any assistance. It’s now my pleasure to turn the call over to Kevin Gorman, President and CEO of Neurocrine Biosciences. Please go ahead, sir.

Thank you very much, and welcome everyone to our year end earnings call. I am joined this morning by Tim Coughlin, our CFO and Chris O’Brien, our CMO. Before we get started, I would like to turn it over to Jane Sorensen who will read our Safe Harbor statement. Jane?

Good morning. I want to remind you of Neurocrine’s Safe Harbor cautions. Certain statements made in the course of this conference call that state the company’s or management’s intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements, which are subject to risks and uncertainties. Information concerning factors that could cause actual results to differ materially from those contained in or implied by the forward-looking statements is contained in the company’s SEC filings, including but not limited to the company’s Annual Report on Form 10-K and quarterly reports on Form 10-Q. Copies of these filings may be obtained by visiting the Investor Relations page on the company’s website at neurocrine.com. Any forward-looking statements are made only as of today’s date and we undertake no obligation to update these forward-looking statements to reflect subsequent events or circumstances. Kevin?

Thank you, Jane. So, hopefully, you’ve had a chance to take a brief look at the press release this morning, which had our financial statements in it. Tim is going to walk you through that at first. After Tim, then Chris is going to give you an update on our pipeline and our research activities. After that, we will be happy to take any questions. So Tim, could you start off?

Sure. Thanks Kevin. Good morning, everyone for participating on the call. About an hour ago, we released our earnings for the fourth quarter and the year ended December 31, 2012. It was another good quarter for Neurocrine highlighted by progress in both the clinic with the start of our second Phase IIb study of our VMAT2 inhibitor, and financially exceeding our year end cash, investments, and receivables target. At the beginning of 2012, we guided to revenue of $40 million to $45 million and a net loss of $9 million to $14 million. We also said that we would end 2012 with at least $170 million in cash investments and receivables yielding cash burned from operations of $40 million to $45 million. We exceeded these revenue targets ending 2012 with revenue of $53 million and net income of $5 million. This reduced our net burn to approximate $27 million, representing a $13 million improvement of our original guidance in revenue, operating results, and cash burn. Now, this improvement was due exclusively to $13 million of one-time revenue from add fee. We recognized this revenue during the fourth quarter of 2012. This revenue related to the completion of the collaborative development period and had originally been anticipated to occur early in 2013. As a result of this, we ended 2012 with approximately $188 million in cash, investments, and receivables. Our net income for the fourth quarter was $9.5 million or $0.14 per fully diluted share. This compares to net income of $1.3 million or income of $0.02 per fully diluted share last year. For the full year of 2012, our net income was $5 million or income of $0.08 per fully diluted share compared with net income of $37.6 million or $0.67 per fully diluted share for the full year of…

Thanks Tim. So, as you can see from what Tim had just said, we were in a very good financial position right now. We ended the year with more cash than what we had anticipated. We are fully funding our programs here to move them as rapidly as possible and with that I will turn it over to Chris. Chris O’Brien - Chief Medical Officer: Thanks, Kevin and good morning to the listeners. As you know our elagolix program is fully in hands of AbbVie and they are working very hard both on the Phase III endometriosis project, as well as the Phase IIb uterine fibroids. The endometriosis program is moving along briskly as we have described before, Abbott is enrolling women in the Violet Petal Study at approximately 160 to 170 sites in the U.S., Puerto Rico and Canada. They are describing this program is on track and have said publicly that they will be reporting out data in early 2014. At the same time they are very rapidly moving the uterine fibroids program along. As Abbott has disclosed publicly or AbbVie sorry has disclosed publicly they are intending to initiate the Phase IIb trial in uterine fibroids this year and anticipate starting the Phase III trials in uterine fibroids in 2014. So, we are very pleased with the really quite intense focus that AbbVie has placed on the program. We are very pleased with the rapid pace that has being made with uterine fibroids program and looking forward to good things as that moves along the pipeline. Our efforts internally obviously are focused on our VMAT2 program. And it’s really all hands on deck as we are intensely focused on the two Phase IIb trials that are currently being conducted in the United States. The first Phase IIb…

Thanks, Chris. So, as you see we are moving the program forward as rapidly as we can. We have all the resources that we need in order to do that. So, right now, I’d be very happy to take your questions.

Thank you. (Operator Instructions) And we will take our first question from Robyn Karnauskas with Deutsche Bank. Your line is open.

Hi, guys. Thanks for taking my question. I guess, first for the second uterine fibroids trial, is that going to be still in the pre-op setting, and do you have any sense of whether or not the pre-op setting is where you will be for Phase III. And then second, you mentioned starting Tourette’s syndrome in ‘14, does that mean given some of the safety data that you see, I assume on an ongoing basis that you’re more comfortable with the VMAT profile? Thanks. Chris O’Brien: Thanks Robyn. So, for the first question I don’t think the phrase pre-op setting is one that has really been part of the discussion about elagolix for uterine fibroids. That’s not a concept that the FDA has really been using as a regulatory target. There is an historical use of that kind of concept in European literature in trials. But here in the U.S. elagolix is seen as an iconic medical therapy allowing women with heavy uterine bleeding to bridge to menopause, so it is not seen as a pre-op goal. The second question on the VMAT2 study, for Tourette’s, there is nothing about the safety profile that we see that we need to get comfortable with for Tourette’s. What we are doing is the kind of work that you always have to do when you want to go into a pediatric population. You go into adults first, you get clinical data in hand. You do the supportive juvenile toxicology studies in their preclinical setting to meet FDA requirements. Typically, you do a bridging kind of study whether it’s a PK study or a small Phase II bridging study in adolescence. And then with that data package and the blessing of the FDA you go into the pediatric study. So, I’m comfortable with the VMAT2 inhibition as an appropriate target and mechanism for children with Tourette’s. What we just need to do is walk through this process to get us where we need to be. And obviously we focused our initial efforts on the TD population and adults. But Juvenile Tox can only happen after you complete the initial adult tox package and that just takes a little while and that’s exactly what we’re doing.

We’ll take our next question from Sara Slifka with Morgan Stanley. Your line is open.

Hi, thanks I have two quick ones. The first one on VMAT2, it sounds like you still have – based on your last comment, it sounds like you still have some preclinical work to do, pre-Phase III. Can you just tell us kind of what’s left to do there before Phase III in tardive dyskinesia? And then secondly, your revenue guidance does not include any milestones and I’m just wondering if this was conservative and if there are some potential milestones you could possibly be receiving this year? Thanks.

Sara, this is Tim. Yes, the revenue guidance for 2013 does not include milestones. We expect the milestone stream to pick back up in 2014 and we think that the $3 million is the number for the year. We don’t see any milestones in 2013. Chris O’Brien: As far as the VMAT question, there are of course a whole range of preclinical programs that are necessary to get to the NDA. A lot of these things happen in parallel overlapping as we march through Phase II and into Phase III. So, for example, the chronic toxicity in the six-month and nine-month studies, those are ongoing. And they’re going very nicely, so those are not things that are hanging out there that our rate limiting. Likewise, we have a series of Phase I studies that are necessary to get to the NDA. Some of those, depending on the programs, some you do in parallel with Phase III, some you do prior to Phase III. In our case with VMAT2 inhibitor, we have a some Phase I studies that will be initiated this year that will help support the overall safety profile of our drug. Those will include the requisite special population studies like for example patients with hepatic impairment will do a Phase I study and those individuals, patients will do a drug, drug interaction studies, will do a series of those. And we will do the requisite thorough QT study to look for any QTs, see for elongation. Having said that you may have heard me say before, we’ve been very pleased with our molecule. We did extensive testing in preclinical. We have no HERG signal with 854. We have also done extensive 12-lead digital Holter monitoring in our Phase I studies and triplicate ECG monitoring in our Phase II studies all to help give us some assurance that our molecule doesn’t have any QTC prolongation. And so far it looks very nice in that regard, but we will do the thorough QT study to meet FDA requirements.

And the only thing I would add is that our preclinical group has started the discussion with the CAC Committee at the agency in order to design the carcinogenicity studies.

Great, thank you.

We will take our next question from Ian Somaiya with Piper Jaffray. Your line is open.

Thanks. Just had a couple questions. First, on the VMAT2, I guess if you go back to the Phase III data, I think you mentioned previously that the trial despite its goal to enroll moderate-to-severe patients, they have in fact enrolled milder patients with TD. And you still saw about a 41% reduction in the AIMS scale. And I was just wondering if you are right, the patients in the Phase IIb study are spot on and you did enroll moderate to severe patients, what kind of a treatment effect should we anticipate? Chris O’Brien: Yeah, thanks, Ian. So, I’d also expect in this trial about a 50% reduction in AIMS score in the TD in the active treatment arm. And I am guessing about – not guessing that my educated estimate is about a 20% reduction in AIMS in the placebo recipients based on the nature of this condition and the assessment tool. The earlier trial that you are referring to, the figure of 41% reduction was in a very small open label trial that was in Canada, with six subjects. The Phase II crossover trial that was done, as you recall, when we had the blinded expert go out and review and score the blinded videos at all the sites. What he found was that overall there were quite a few mild subjects. And with that population the AIMS score on active drug 50 milligrams was about a 4-point difference from their AIMS score on placebo and that was highly statistically significant and a clinically meaningful reduction. Now, the overall, the absolute number, the point reduction in our current trial maybe larger, because I anticipate the baseline scores will actually be higher than when the AIMS expert scored the videos on that crossover trial. One point, I would just reemphasize is that in that crossover trial, the investigators were the ones who determined subject eligibility. And they did that by generating an AIMS score and there was a threshold where the AIMS score had to meet this threshold for the patient to be eligible. When we went back and scored the blinded videos, the actual baseline AIMS score was much lower than what the sites had generated. And that kind of baseline score inflation as you know is not an uncommon problem. We have completely mitigated that by having the inclusion of subjects in our Kinect and Kinect 2 studies be determined by an outside expert. So, the site doesn’t determine eligibility, that’s done by the outside experts. And that’s why we are confident that the moderate and severe patients are being enrolled.

Okay, it makes sense. Just one question on the uterine fibroid program, can you just share with us a little bit intent or the goal of the Phase IIa study was, and what would prompt AbbVie to be as local if not aggressive as they are being with the development program? Given that they still have two more arms in the Phase IIa study, that have to complete? Chris O’Brien: Sure. So, the Phase IIa study was for Abbott, a proof-of-concept study. It was a series of cohorts that were looked at sequentially at a range of doses and dose regimens. They are a very careful company and they are trying to understand the molecule and its application in a very detailed and broad way. And what they have said was that once they saw proof-of-concept from any one of these cohorts they were going to pull the trigger on the Phase IIb study. So, they have done that. It doesn’t mean they’re done exploring all range of dosing and dose regimens and so that’s what they are looking at with these sequential cohorts. But what they needed proof-of-concept they saw hence their aggressive move into the Phase IIb study.

Thanks a lot, Chris.

We will take our next question from Jon LeCroy with MKM Partners. Your line is open.

Okay. Thanks. Just three quick ones, can you update on AbbVie’s expectations for the filing for elagolix again. And then on your partnering plans for VMAT2, can you discuss just generally what you guys are thinking about post-Phase II. And then also on that, can you talk about timing to start Phase III if everything runs smoothly in Phase II for VMAT. And then finally, just after VMAT what is next in the pipeline we should start looking at?

So Jon, I’ll take the first question that you had there. What AbbVie has up on its website and what they’ve been publicly stating is that they will have – they anticipate filing and approval in 2016, I believe is what they have. And I’ll hand other questions over to Chris. Chris O’Brien: So, in reverse order – so, for the VMAT2 Phase III question Jon, I would anticipate kind of the Q2 timeframe of 2014. Obviously, we’re hoping the FDA schedule allows us to have our end-of-Phase II meeting in the end of this year. And then we will be completing some of the activities around some of the Phase I studies I have mentioned earlier like the tQT and the (indiscernible) will be getting sites qualified, will be pulling together what we think is a pretty ambitious educational campaign about tardive dyskinesia to help our – support our recruitment efforts and so Q2 start in 2014. As far as was what’s in the pipeline, we don’t talk about that in much detail. We have been very much focused on CNS activities. At any given time there are eight to ten programs that our discovery research group is working on. Some of them include some movement disorders or orphaned CNS diseases. And the goal is to get one of these through its IND-enabling tox studies this year. Obviously, this is a tough uphill battle, but we’ve got some very attractive targets, very novel targets in movement disorders and neurological disease. And I very much would like to get one of these into clinic in the near-term. I don’t know Kevin if you have any other thoughts?

No, other than that, as you all know we are very active also looking outside with our business development efforts. We have performed in the last 14 months over 52 due diligences, on-site due diligence on compounds and companies. We demand a lot from our internal programs and we have those same demands from external and we have yet to find something that we are willing to pull the trigger on, but that does not stop us and we are continuing to look at the number of opportunities external. So, between external and internal, our goal still is to have something that is ready for the clinic by the end of this year. Chris O’Brien: If not in the clinic.

Or if not in the clinic, yeah.

And then on the partnering plans for VMAT?

Oh, yes, so. Chris O’Brien: So, on the partnering plans for VMAT, we don’t – we have got a lot of interest coming into us on VMAT from regional partners and for multinationals. As you know, we are going to keep VMAT to ourselves and commercialize it ourselves in North America. So we are talking about doing a regional partnership in the rest of the world. We are not going to actively engage anyone in partnering discussions until after the Phase IIs have read out. We have had our end-of-Phase II meeting because we would really – it is we focusing to try to bring in a partner while we are getting our Phase IIIs up and running. So, don’t look for us to pull the trigger on a partnership on that prior to having our Phase III protocols locked.

Okay, thanks.

We will take our next question from Marko Kozul with Leerink Swann. Your line is open.

Hey, good morning. I just wanted to come back briefly to previous question and ask if you could remind us specifically what needs to be seen in the Phase IIa elagolix uterine fibroid study to advance into Phase IIb testing? In other words, how would you define proof-of-concept and would it be clinical and statistical significance in lowering bleeding rates? Chris O’Brien: That’s exactly it, Marko. It’s a clinically meaningful reduction in uterine bleeding. And as you know, these women have very high amounts of uterine bleeding in the order of 300 millimeters as measured by the quantitative alkaline hematin method. And so what Abbot had done last year and what AbbVie is doing this year is looking for that profound reduction in uterine bleeding. They have not disclosed details of with kind of specificity that I think you are asking about. And I would suggest that you direct those questions to AbbVie since it’s their program and we get our quarterly reports just like you too at this stage. So, I would have you ask them for details.

Alright, that’s helpful. Thanks a lot. And just a quick question on endometriosis, can you talk at all or little more about patient enrollment in the Phase III? I know you said that data will be available in early 2014? Chris O’Brien: Yeah, that’s – so you know what we know, they have said Q1, 2014 for the top line results and that enrollment is on track. That’s the extent of what we know.

Okay, great. Thanks for taking the questions.

We’ll take our next question from Phil Nadeau with Cowen & Company. Your line is open. Phil Nadeau - Cowen & Company: Good morning. Thanks for taking my questions. First, on the Kinect 1 and 2 studies, could you remind us of your pressure offered breaking apart tardive dyskinesia into the underlying neuropsychological disorders that have caused it? Is there something in the literature that’s just that TD could respond differently to VMAT based on its – based on the underlying disease of the patient or are you just kind of digesting the patients into smaller groups to get more consistent data? Chris O’Brien: Thanks, Phil. So, the real – it’s not an efficacy question, the pathophysiology of TD is the same whether it’s from Reglan and GI patients, bipolar disorder patients or schizophrenia patients. My interest in the Phase II environment is to thoroughly understand the nature of the patients, the safety profile, the dosing requirements, before I got to Phase III. And so as you know an important part of this stage of development is understanding the safety profile with respect to the kinds of scale that the FDA likes to see. And so well, for example, the Columbia Suicidality Scale, that’s common to all drugs that have any impact on CNS. So, that’s an FDA requirement. In our case, we believe that our drug 854 has the potential for some beneficial effects potentially on the schizophrenia symptoms. So, we would monitor the pains. Now, that’s an efficacy sale in safety trial, but it’s a safety scale – sorry it’s an efficacy sale in schizophrenia trials. It’s a safety scale in our study, but it’s unique to schizophrenia. And obviously, we wouldn’t be administering that to bipolar patients. Likewise in the bipolar population, one might use the MADRS…

We will take our next question from Yale Jen with ROTH Capital. Your line is open.

Thanks for taking the questions and most of them have been answered. So, I have just a few quick short ones. First of all, for the VMAT2 study, do you guys have a sense for the upcoming potential Phase III study, would that be rolled up into one or the underlying causes of the disease – rolled up to one type of it or would it be mixed with the different ones. And secondly, would that be just one study or – actually one or two consecutive studies? Chris O’Brien: Thanks, Yale. So, at the present time without the readout of the Kinect and Kinect 2 studies, I’d say it’s hard for me to tell you whether I will pool the underlying populations or run separate trials. My guess is we will pool them, but that’s a guess. Obviously, this will be a data-driven decision made in conjunction with the FDA at the end of Phase II meeting. But I think what we’ll end up with is two fixed doses, 12-week placebo controlled trials, pooled populations of patients, and an open label extension up to a year. And there will be two of them. And I will run them in parallel, not sequentially. And I will start them in Q2 of 2014 and I’d like to be ready to file an NDA at the end of the 2015 or early 2016.

Okay, great. Thanks a lot. And just a quick one in terms of the data from uterine fibroid, is would there be possibly to provide some sort of clinical information of the Phase IIa study to where if not the mid-year maybe toward end of the year or those data could be kept until much later to be reported to the public?

Yeah, to be quite honest, Yale we don’t know. That is a good question for AbbVie to see what they are going to be disclosing, and when they are going to be disclosing at both for the Phase IIa and also the Phase IIb that they are going to be starting this year. So, we are listening and I imagine many of you are to their conference calls and their presentations to see if we can get more color on when those presentations would take place.

Okay, great. Thanks a lot for taking the questions.

Thanks, Yale.

We’ll take our next question from Josh Schimmer with Lazard Capital Markets. Your line is open.

Hey, thanks for taking the questions. Chris, how does the 25% screening failure rate in Kinect 1 for severity specifically compared with the previous Phase 2 experience, and then when you say that there is no safety signals to-date, does that include CNS and other clinical features or is that just limited to lab and ECG? Thank you. Chris O’Brien: Thanks. So, with respect to the safety signal question, it includes any serious adverse events or any early terminations due to adverse events, labs, and ECGs. It does not include the normal kinds of mild AE that a patient would report to the investigator that I am not privy to until the database is locked, and we start the data analysis. So, I don’t see those minor headache or dizziness or something cold, bladder infection. I don’t see those if they are not serious or if they don’t lead to study discontinuation until the study is over. With respect to the screen fail rate, in the prior studies, in those trials we didn’t have the same mechanisms in place for screening, and so it’s really hard to compare. If I had to go back and say how many of the subjects in that crossover trial would have screen failed, it probably would have been about another 50% of them probably might not have met our current stringent criteria 5% of what we expect, yeah. So, for these trials, we are expecting 50%, we are getting 50%.

Got it. Thank you.

(Operator Instructions) We’ll take our next question from Jason Napodano with Zacks Investment Research. Your line is open.

Hi, guys. Just a quick question on your BD efforts interesting that you looked at 52 molecules or 52 companies that you have spoken to, can you give us a sense of why you have turned down 52, is it just the things expensive out there or what?

No, it’s not that. I am actually fairly agnostic to structure when it comes to what the price of a deal as long as the value is correct then that’s fine. A good hard number is 92% of the compounds that we look at fail on IP. As you know, we are very rigorous in all of our internally developed programs, they all come with composition of matter, patents, and methods of use on top of that, and then a good patent sense around them on composition. 92% of everything we look at dies, because it doesn’t have good patent protection and we won’t touch anything without good patent protection for an orphan drug designation along with it. With the other things that have not a method it has to do with finding that there is either a clear signal on safety or then finally a lack of evidence of efficacy that goes along with it. So, that’s kind of how they’ve been following out. Over the past two and a half years, I would say we probably lost two opportunities, because we couldn’t compete with the major pharmas that came in on there and so and in two opportunities they did beat us out. I would say in one of those opportunities it turned out the drug did eventually fail in Phase III, but those things happen. So, it’s not really that we’ve been (stood) based on the price. And also the last thing which Tim just reminded me on too is that there have been a couple of occurrences now where we don’t just look at the clinical regulatory risk when we are looking at bringing another compound in regardless of stage, whether we’re talking preclinical Phase I, Phase II type of compounds, we actually do research to go into the market of this. And by the market we mean both the docs, the patients and the payers and we have found a couple of instances where there’ve been very attractive compounds, very attractive programs, good science, good IP. But you know what, there wasn’t a payer for it. And so we passed there and so ultimately you have to look all the way through the entire chain before you pull the trigger on internal programs for funding and also on external programs.

Good info. Thanks, guys.

Thank you.

I would like to turn the call back to Mr. Gorman for any closing remarks.

Thank you very much. I really appreciate all of your participation this morning and the good questions that we got. I know you guys are probably getting ready to batten down the hatches on the East Coast and I wish you well with the storm that’s coming in. Just finally 2013 is a huge year for us obviously. We’ve got a lot of data and that’s going to be coming through a little later this year on our VMAT2 program and then meeting with the FDA and getting that program buttoned up to go into Phase IIIs. In addition, now having with AbbVie as they are going to be pulling the uterine fibroids program into Phase IIb studies, all of that happening this year. Next year in addition is going to be a very large year for us where we are going – our partner AbbVie is going to be completing the top line data for the first Phase III clinical trial in endometriosis, and they have given guidance that in 2014 they will be entering into Phase IIIs with uterine fibroids, will be in Phase IIIs, knock on wood with our VMAT2 program. So, there is a lot going on with us over 2013 and 2014 and we will stay close to keep you appraised with all of that. So, thank you once again. And we look forward to meeting you at the meetings that are coming up in just a few weeks.

This does conclude today’s teleconference. You may now disconnect and have a great day.