Good day, everyone, and welcome to Neurocrine Biosciences Report Second Quarter 2013 Financial Results. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the Q&A session. (Operator Instructions). Please note, today's call is being recorded and I will be standing by should you need any assistance. It is now my pleasure to turn the program over to Kevin Gorman. Please go ahead.

Thank you very much and welcome everyone to our call this afternoon. As usual, we are going to have Tim Coughlin, our Chief Financial Officer run you through our quarterly results, and then that will be followed by Chris O’Brien, our Chief Medical Officer, to take you through an update of our efforts. But first before we start out, Jane, could you read our Safe Harbor statement?

Yes. Good afternoon. 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. Tim?

Thanks, Kevin. Good morning or good afternoon everyone and thank you for joining us today. After market closed, we released our second quarter 2013 financial results, and these results were as expected consistent with the prior quarter. The main driver of the difference between the 2012 and 2013 results is reduction in revenue that was earned by the collaboration agreements. This is due to successful completion of the collaboration agreements. Our collaboration has agreements both under the AbbVie and Boehringer Ingelheim license agreements as planned during 2012. Our loss for the past quarter was $0.18 per share compared to $0.01 per share loss during the second quarter of last year. Our 2013 year-to-date loss is $0.36 per share compared to $0.02 per share for the first half of 2012. We expect our net loss for the year to approximate $50 million to $55 million. We remain on target for an annualized operational cash flow of around $50 million to $55 million, consistent with the guidance provided at the beginning of the year, and we ended this past quarter with approximately $167 million in cash, investments or receivables and (indiscernible) with over $130 million in cash and investments. Revenue for the quarter was consistent with the first quarter, approximately $700,000, and revenue for the year is expected to be $2.9 million. Research and development expense increased quarter-over-quarter and year-over-year. This is primarily driven by our VMAT2 program as we continue to move our clinical candidate, NBI-98854 forward in Phase IIb development. We expect R&D expense to continue to increase in the third quarter of 2013. Our general and administrative expenses are relatively flat, both from the first quarter of 2013 to the second quarter and when comparing the first half of last year to the first half of this year. We expect this flat-line G&A expense trend to continue for the balance of the year. Our 10-Q will be filed with the SEC tomorrow and now I'll turn it back over to Kevin and Chris for the balance of the call.

Thanks Tim. So as you see there are no surprises here and it's in line with our guidance that we gave at the beginning of the year. We continue to be in that strong cash position. So with that, I turn it over to Chris.

Thanks Kevin. Happy to give an update on the clinical activities, there's quite a bit going on and we are very pleased with the progress of our programs. Before I get into the details of the Phase IIb studies with our VMAT2 inhibitor, just a reminder that the program is also notable for our activities as we plan for our ultimate entry into second indication in Tourette’s syndrome, and so the preclinical work to establish an appropriate juvenile toxicology profile, safety profile, is ongoing. This will enable us, we hope, to have onsite into Tourette’s syndrome with a new IND for that indication in 2014. So that preclinical work is ongoing and moving as planned. In addition, we have ultimately our goal of an NDA for tardive dyskinesia, and as you are well aware, that NDA includes a number of obligatory Phase I trials that the FDA requires, and so we are in the process of starting some additional Phase I work. There is a drug interaction study that we'll be starting shortly and a study in subjects with varying degrees of liver disease, that is hepatic impairment, and to see how hepatic impairment affects or doesn't affect metabolism in PK profile of our compound NBI-98854. I'd like to get this data to help us enable our Phase III studies which we hope to start in 2014 mid-year and having a good data set from the DBI and that compare then will allow us to hopefully open up the inclusion/exclusion criteria and help us power our recruitment efforts for those Phase III trials. So having said that, you will be able to see the postings on ClinicalTrials.gov of these Phase I studies shortly if you want to get some more detail there, they are very standard studies. So, the real…

Thanks, Chris. So, right now we are available to take your questions please.

(Operator Instructions) We'll go first to Marko Kozul with Leerink Swann. Please go ahead.

Looking forward to your progress here in the second half of the year and then to 2014 with the data readouts. A quick question for you VMAT2, can you talk about the kind of market research you're conducting in terms of scope and utility and when we might see some of your findings, is this limited only to tardive dyskinesia or also Tourette’s and beyond?

Marko, thanks for the question. Yes, we're doing quite a bit of work, we're in the midst of it right now and the work is several-fold, one of which is also to better understand the size and the makeup and really the patient characteristics of the TD market, and so we are getting all of that together. We've come at it as you know in the past from an academia logical standpoint and come up with numbers, so about 0.5 million patients here in the United States. We are doing the work right now where we're actually using ICD-9 codes and looking for the actual diagnosis of these patients, and so we'll be sharing that with you probably towards the end of the year, is when we'll have all that compiled. As we've also talked about, we've done some initial work with payers in order to understand their sensitivities and where they are so that when we have the Phase II data, we're ready then to do the quantitative payer research. Now in addition, side-by-side with doing the work on TD, we are doing on Tourette’s syndrome also, and so we'll have that in the same timeframe, and we're not only doing this work here in the United States but we are also expanding it into ex-U.S. regions too so we understand that both in Asia and over in Europe. So, Chris, do you have anything to add?

No, I think the qualitative work that we're doing in tardive dyskinesia has been extremely rewarding because it helps spill over in some of the work that I'm planning to include in our Phase III trials, mainly what are the kinds of things that will help economics point of view, quality of life, secondary and tertiary area end points. As you know, we've been defining and will be validating an additional scale, and so this turns out to be interwoven with the market sizing and payer requirements.

Marko, this is Tim, one last thing just to add a little color around the database Kevin referenced. This database has access to about 115 million covered lives in the United States for both the commercial and medicated standpoint. The other thing, it has about 18 billion healthcare records in it. So we go in there, look at the UB-92, the 1500s, and pull the actual ICD-9 codes, the diagnosis codes, to generate this quantitative database that we will triangulate back multiple ways to basically assure ourselves we have the right numbers.

Alright, terrific, looking forward to that presentation then in the fourth quarter. The other question I had has to do with the preclinical work on Tourette’s. You've mentioned juvenile toxicology work I guess. Can you explain a little bit further the similarities of the differences between the preclinical work being done for Tourette's versus that's already been done for tardive dyskinesia?

Sure. So the key difference there, Marko, is the word juvenile. So to go into tardive dyskinesia, it's a fairly standard preclinical toxicology package. The unique requirement to go into a pediatric population means that you have to have some understanding about the safety profile in developing animals. And so unlike an adult toxicology package where you treat adult animals and then look at impact on organ toxicity and whatnot, in the developmental juvenile toxicology model, you dose very young animals, the equivalent of whatever that would be in a young human. So for example, if you're going to start potentially treating tourette's syndrome patients as young as six years of age, or even younger, two years of age, you have to start dosing rodents when they are only a couple of weeks old, and that's quite a challenge. Those are difficult studies to do, there are only a couple of labs or vendors that have that kind of expertise. It has to be done in close collaboration with the FDA as far as study design and methodology, doses, exposure, duration, follow-up, assessments, et cetera. So, it is a lot of work, it's very specialized work, it's very different than the standard toxic package and we've been doing that exactly as the FDA likes. I must say, we have wonderful interactions with the psychiatry division and the various functional groups at the FDA today.

That's terrific, very helpful, thanks a lot.

Thank you. We'll go next to Jason Napodano with Zacks. Please go ahead.

Just curious as to the reason why maybe the discontinuation rates in Kinect 2 are lower than Kinect 1, is there anything going on there with the patient population or the design that would make patients – the discontinuation rate be as low as 5% or you think it's just anecdotal at this point?

I think that the numbers are so small and it's still early, it's going to go up. My guess is it will be family similar, but one difference though between the two studies that reflects I think the underlying diagnosis. So far, about half the patients in the Kinect 2 Study have underlying diagnosis of the bipolar disorder or mood disorder depression, and those subjects may have a different bias for why they wanted to be in the trial, they have different motivations. And remember also that Kinect 2 Study is a six-week study, the Kinect Study is a 12-week study. So, the longer studies have longer opportunity to drop out. I don't know, there are a lot of those things that will take the sword out.

That's okay, that's helpful. And then just a final question, going into potential end of Phase II or requesting an end to Phase II meeting by the end of the year, what's your goal in terms of for Phase III, you think that's something that you would request an SPA for?

The answer is, probably or maybe. It kind of depends on how the end of Phase II meeting goes. I am not adverse at all to requesting an SPA, I like that idea, particularly in this case where there is really no history of drugs getting registered for tardive dyskinesia, you're going to be the first one out, you want to lock everything down, but we'll see how the end of Phase II meeting goes and whether we think that's beneficial or not.

And maybe also Jason, prior to the end of Phase II meeting, that we'll have more guidance on that too because, as Chris would attest to, we do have regular communication with the division, we'll see what the Phase II data looks like, how the package is coming together, and I'm sure we'll get some informal input from them on how they are thinking along those lines. They've been very nice and proactively communicating with us at times.

Thanks guys.

Thank you. It appears we have no further questions at this time. I'll turn it back to Kevin Gorman for any further final remarks.

Thank you. So this has been very straightforward, as all of you realized, for this quarter's call. We all anxiously await the Kinect and the Kinect 2 data that is coming out. As Chris has said, we're real happy with the design and the conduct of these trials, and so we are right there with you in anticipating this data. As you can tell from Chris' statements with the Phase I trial that we have ongoing or about to start, we're fully exploiting this asset and also we didn't go into all the CMC work that is being going on. We've already manufactured all the drug – the active pharmaceutical ingredient that we'll need for the foreseeable future for this compound. So we are well invested in this. And then to effort what Chris has said, that AbbVie is on track with the guidance that they've given for the elagolix program, both for their Phase III in endometriosis and Phase II program in uterine fibroids and we are very pleased with their team's performance. So, we are continuing to move along with all the work that we have done here, and right now, we're looking for to talking to you in just a few short weeks. So, thank you very much for your participation in the call today.

This does conclude today's program. We appreciate your participation. You may disconnect at any time and have a great day.