Analyst Conference Summary

conference date: November 6, 2007 @ 2:00 PM Pacific Time
for quarter ending: September 30, 2007 (3rd quarter 2007)

Forward-looking statements

Overview: Finally enough Nexavar revenue from partnership with Bayer to get just above break-even on a GAAP basis. Going in the right direction.

Basic data:

No official revenue, but because of partnership with Bayer, reported net $17.6 million due from venture under operating expenses.

Net income was $0.56 million. Up sequentially from a loss of $10.8 million and from a loss of $20.1 million year-earlier

EPS (earnings per share) came to $0.01. In prior quarter loss had been $0.22. In year-earlier quarter loss had been $0.49 per share.

Guidance:

Just ongoing sales growth, accelerating due to liver cancer approval.

Conference Highlights:

Nexavar revenue (including sales by Bayer) was $104.6 million, up 130% from year-earlier and up 29% sequentially. $41 million was in U.S., $64 million outside. Now approved in more than 60 nations for advanced kidney cancer.

Cash and equivalents ended at $451.2 million, down from $454.4 million in prior quarter.

R&D expense was $7.9 million, SG&A expense $15.2 million. With income from joint venture, that created total operating expense of $5.5 million. Interest income was $6.1 million. Stock based-compensation expense included in operating expense was $3.6 million.

Granted European regulatory approval in liver cancer and granted priority review by FDA; approval is expected this quarter. Seeking approval in other nations as well. Evaluating Nexavar for other types of cancer.

Kidney cancer marketplace is competitive due to multiple therapies become available. Liver cancer is 6th most common cancer globally.

Launch plan for liver cancer prepared in U.S.; hopes to ramp up sales immediately on approval.

Studies of Nexavar continue to have positive results. Lung cancer trial data should be available in second half of 2008. Breast cancer Phase II trial enrollment started.

$37.6 million of R&D expense was shared with Bayer, up sequentially because of increased number of trials. Shared SG&A expenses also increased, and will increase with liver cancer launch.

Q&A:

Nexavar off label growth in U.S.? Overall growth was driven by liver cancer uptake prior to approval, particularly in U.S.

Europe reimbursement for off-label use? In Germany sale can occur immediately and reimbursement is immediate. Other nations are slower. With approval sales in Europe will be on-label.

Asian approvals? Bayer is working on that, including China and Japan. They have requested local studies for confirmation of safety in Asian patients. China trial done and positive. Japan study enrolling now.

Market potential in China? Liver cancer is about 40,000 in Japan, over 300,000 in China, but there is an affordability issues. Seeing some use in renal cancer already.

Milestone based loans with Bayer? To extent is profitable, remit 40% back to Bayer. It is not a P&L item, just a balance sheet item.

Higher doses of Nexavar? Doing some clinical work, plus some anecdotal evidence of complete responses from physicians.

Profitability? Tipping towards that, but Q4 is typically seasonally more expensive, plus we have liver cancer trial costs.

Changes in Bayer agreement due to profitability? Nothing except loan repayment begins.

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