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Executives

Christoph Westphal - Chief Executive Officer and Vice Chairman

Garen Bohlin - Chief Operating Officer

Peter Elliott - Senior Vice President of Development

Michael Jirousek - Senior Vice President of Research

Paul Brannelly - Vice President of Finance

Michelle Dipp - Director of Corporate Development

Analysts

Corey Casamov - JPMorgan

Bret Holley - CIBC World Markets

Edward Tenthoff - Piper Jaffray

Mike King - Rodman & Renshaw

Sirtris Pharmaceuticals, Inc. (SIRT) Q3 2007 Earnings Call November 12, 2007 4:30 PM ET

Operator

Good day, everyone, and welcome to the SirtrisPharmaceuticals Third Quarter 2007 Investor Conference Call on November 12,2007. At this time all participants are in a listen-only mode. There will be aquestion-and-answer session to follow.

Please be advised this call is being recorded at theCompany's request and will be available on the Company's website for two weeksfrom today.

At this time I would like to introduce Dr. Christoph Westphal,Sirtris’s Chief Executive Officer and Vice Chair. Please go ahead, Sir.

Christoph Westphal

Thank you very much. Welcome and thank you for joining us todiscuss Sirtris Pharmaceuticals financial results and corporate highlights forthe third quarter of 2007. My name is Christoph Westphal and I'm the ChiefExecutive Officer and Vice Chair of Sirtris Pharmaceuticals.

I am joined today by Mr. Garen Bohlin, Chief OperatingOfficer; Dr. Peter Elliott, Senior Vice President of Development; Dr. MichaelJirousek, Senior Vice President of Research; Mr. Paul Brannelly, Vice Presidentof Finance; and Dr. Michelle Dipp, Director of Corporate Development.

We hope you have had the opportunity to review the quarterlyresults press release we issued earlier this morning.

Before moving into a discussion of the quarterly resultsplease note that, in this call we will be making forward-looking statementswithin the meaning of the Safe Harbor provision of Section 21E of theSecurities and Exchange Act of 1934.

All forward-looking statements involve risks anduncertainties that could cause actual results to differ materially. Theforward-looking statements we make on today's call are based on our beliefs andexpectations as of today only and are subject to potential change.

We refer you to the Risk Factor section of our registrationstatement on Form S1 for a discussion of the Company's risks and uncertaintiesthat could affect these forward-looking statements. We caution listeners not toplace undue reliance on any forward-looking statements as there are noassurances that the matters contained in such statements will be achieved.

With that said, I will make some summary comments on theCompany's activities and then ask Garen Bohlin, Chief Operating Officer, tocomment on our financial results. We will conclude this morning's call with aquestion-and-answer session.

On the clinical side, we continue to progress SRT501, ourproprietary version of resveratrol, in clinical studies in both Type IIdiabetes and MELAS, a rare mitochondrial disorder.

We recently initiated a Phase II A study with SRT501 incombination with metformin in patients with Type II diabetes whose glucoselevels are not adequately controlled by their metformin treatment.Approximately, 130 patients are expected to be enrolled in the primary endpoint at levels of HBA-1C.

Secondary end points include levels of fed and fastingglucose and insulin. We have two ongoing Phase I B studies with SRT501 inpatients with Type II diabetes and we expect to announce results from the firstof these studies at the end of 2007 or in early 2008.

The primary end points are safety and pharmacokinetics.Results for the second study will be announced in the first half of 2008.

We also have an ongoing Phase 1 B study with SRT501 inpatients with mitochondrial encephalopathy, lactic acidosis and stroke likeepisodes also known as MELAS. A total of 20 patients, five in the placebo groupand 15 in the treatment group, will be dosed once daily for three months in theprimary end point for safety and pharmacokinetics.

Secondary end points include measurements of exercisetolerance. We are also considering additional clinical studies of SRT501 forthe treatment of other diseases of aging such as cancer.

In addition, we have positive preclinical data that maysupport the use of SIRT1 activators in neurodegenerative disease, as presentedat the American Neurological Association in October, and in lipid disorders asdescribed in the October 11th issue of Molecular Cells.

With regard to our new chemical entities or NCEs, which arestructurally unrelated to and up to 1000 times more potent than resveratrol, weplan to enter the clinic in a Phase I-a study in the first half of 2008. Thesirtuins are a broad platform of therapeutic targets for diseases of aging.

The Company's focus to date has been on SIRT1 and now recentdata provides support for expanding into members of the sirtuin targetplatform. Specifically SIRT3 has emerged as a possible target for metabolicdisease as published in Cell on September 20, 2007.

Finally, in terms of our expanding intellectual propertyestate, we recently end licensed IP described as cholesterol regulating complexof SIRT1 and LXR in methods of use from the lab of Professor Leonard Guarenteat the Massachusetts Institute of technology.

I will now hand it over to Garen Bohlin, Sirtris's ChiefOperating Officer to discuss our third quarter financial highlights.

Garen Bohlin

Thank you, Christoph. Our net loss for the quarter ended September30, 2007 was $9.7 million or $0.34 per share as compared to $4.9 million or$5.57 per share for the quarter ended September 30, 2006.

Net loss includes $1.3 million of stock-based compensationexpense non-cash for the quarter ended September 30, 2007 and $199,000 ofstock-based compensation expense for the quarter ended September 30, 2006.

Research and development expense for the third quarter of2007 was $9.5 million as compared to $4.2 million for the third quarter of2006. The increase is due primarily to increases in pre-clinical studies costs,external clinical trial costs, stock-based compensation expense, formulationexpense for our product candidates, sponsored research costs, allocatedoccupancy and information technology costs, and personnel costs relatedprincipally to increases in research and development headcount.

General and administrative expense for the third quarter was$1.6 million compared to $1.1 million for the third quarter of 2006. Theincrease is due primarily to increases in professional fees associated withbeing a public company, stock-based compensation expense, personnel costs andallocated occupancy and information technology costs.

As of September 30, 2007, Sirtris had cash, cash equivalentsand short-term investments of $127.1 million as compared to $50 million onDecember 31, 2006.

With that, I will turn it back over to Christoph.

Christoph Westphal

Thanks Garen. I will now ask the operator to open up ourcall for questions, and we would be happy to answer any questions you mighthave.

Question-and-Answer Session

Operator

(Operator Instructions) We will go to Corey Casamov (ph)with JPMorgan.

Corey Casamov - JPMorgan

Great, good afternoon guys. Thanks for taking my questions.Just a couple of them for you here. First of all, regarding the upcoming datafor the Phase 1b study for SRT501. First of all, what type of efficacy datacould we realistically expect to see in a 28-day trial?

Is there anything about sirtuins as a class that might allowthis drug to show a clear signal in such a short period of time?

Christoph Westphal

Thanks very much Corey from JP Morgan. We expect to announcedata at the end of this year or very early next year for the first Phase 1-Bstudy. That's once a day dosing in Type II diabetes.

We’ve not yet disclosed the setting where we will presentthose data, but I would like to take this opportunity to emphasize that wecontinue to progress SRT501 in the clinic for multiple diseases of aging. Theinitial data set will be PK and safety as our primary end points as we'vecontinued to articulate to the street.

We are also confident in moving our MTs into the clinic inthe first half of 2008 and just as a reminder our NCEs are structurallyunrelated to and 1000 times more potent then SRT501 and certainly focus in thepharmaceutical world, they are interested in our NCEs as well.

Corey Casamov - JPMorgan

Okay. Then, as far as how you may present the data, itsounds like no clear decision has been made? Do you at this point should welook for a press release once you have the results or is this more somethingyou would hold for publication in a journal?

Christoph Westphal

So, you are alluding to, appropriately, to the fact that wein general ultimately prefer to publish in the academic press. I think giventhe interest in these data you can imagine top line data at a conference and apress release accompanying that.

Corey Casamov - JPMorgan

Okay. And then, a last question I have is regarding your IP.You've obviously set a pretty good wall around sirtuins and metabolic studies.Can you describe, however, the type of protection that you may or may not havein non-metabolic settings in particular? I'm talking about in oncology giventhe recent developments there surrounding the potential impact of sirtuins inthat area?

Christoph Westphal

Yes, I will let Garen take that question.

Garen Bohlin

Yes, Corey, that's a good question. In the broadest form, wehave claims pending right now that would cover any activators of SIRT1 appliedto treat a broad range of diseases including cancer, as well as metabolic andmany, many other therapeutic disease areas. So, essentially methods andmechanisms claims that would be highly protective across a broad range oftherapeutic disease areas.

Christoph Westphal

And I would just add we have increasing confidence in thestrength of our broad patented state and that's validated as we talk to folks.

Corey Casamov - JPMorgan

Okay. Great. Thanks for taking my questions.

Christoph Westphal

Thank you.

Operator

We will go next to Bret Holley with CIBC World Markets.

Bret Holley - CIBC World Markets

Yes, hi guys. How are you? Thanks for taking my questions.First question has to do with your partnership plans with the NCEs. It strikesme that a third party might be interested in seeing these proof of concept datafor 501 before they may act on a partnership with the NCEs. What kind offeedback are you getting in your discussions along those lines?

Christoph Westphal

Bret, that’s a great question and certainly something on themind of many folks on the buy side. We would seek to partner our programs whenwe can receive the most value for our investment.

We currently believe at that point will be in Phase II-Adata range and at least some education such as Type II diabetes that requirelarge patient trial numbers and significant commercialization capability.

So again I would like to say the same thing we say when wemeet with the buy side, which is, we are not setting expectations forpartnership in the next 12 to 18 months; but we continue discussion at seniorlevels of pharmaceutical companies.

Bret Holley - CIBC World Markets

Okay. Fair enough. And then, on SIRT3, what kind of timeline would be reasonable? I mean obviously the science is becoming moreevolved; it's fair to say, over the last six months. I'm just wondering howfast you can act and how fast frankly you need to act is your perception?

Christoph Westphal

It’s a great question. We continue to believe, we areseveral years ahead of probably half a dozen pharmaceutical companies that areinterested in this space. At current, we continue to be encouraged by the dataon the additional sirtuins such as SIRT3 and we plan to expand our platformbeyond SIRTE1 at the right point. I should emphasize that SIRT3 is stillunder devaluation as potentially the next most likely sirtuin target area.Currently we are not really providing a time line.

Bret Holley - CIBC World Markets

Okay. So there's no idea of what would be critical path tomake that decision at this point? Just that that is kind of where you'reheading?

Christoph Westphal

Yes. I mean we will continue as we've done to be, I think,quite transparent with the buy side and to continue to keep folks up-to-date.

Bret Holley - CIBC World Markets

Okay. Thank you very much.

Christoph Westphal

Thank you.

Operator

We’ll go next to Edward Tenthoff with Piper Jaffray.

Edward Tenthoff - Piper Jaffray

Great thanks very much and our congrats on the progress thisyear. Just one quick housekeeping question and then another sort of larger kindof pass forward question. We did see R&D spike up pretty significantly inthe third quarter. Is this more of an appropriate go forward rate way with allof the clinical and pre-clinical work that is ongoing?

And as you look at new indications including cancer, withthe NCEs close to advancing into the clinic, does it make more sense to maybewait for more potent compounds before advancing into cancer or is the goal hereto kind of begin to establish proof of concept?

Christoph Westphal

These are great questions Ed. We appreciate them. First ofall you pointed out, I think rightly, that our increase in spending is come inR&D and really much more modestly in G&A. I think that is a strongindication where we want to spend our money.

We are very focused on a lean infrastructure. We still haveroughly 50 folks here. We've barely hired any since our IPO and we are focusedon maintaining a strong balance sheet so that we have no interesting andimportant control of our strategic fate.

I think that probably answers your first question. You alsoasked about cancer as an indication. There are data from numerous pre-clinicalstudies supporting SIRT1 activation for the treatment of cancer. We arein the process of evaluating various oncology indications for SRT501 andmore broadly speaking for SIRT1 activation.

We do expect that those trials could initiate in the secondhalf of 2008. I think the final question was 501 versus NCEs. In our view ofthem we think that 501 is really a unique advantage that our Company has justas we are mimicking a natural process and to remind you, I knew you know this,maybe other folks on the call will not. But we always do emphasize we believehave genetic validation of our approach.

We have this cohort in Finland that seems to be healthierwith increased SIRT1 activation. We published that in Cell. We havephysiological validation for our approach that the data on calorie-restrictedhumans in Louisiana that we publish.

Also in JAMA and German we have pre-clinical therapeuticvalidation and we are obviously in the stage now of hoping to show validationon a clinical level. So on that front we think 501 is a very important, veryinteresting tool for us. And we do continue to believe that it is a potentialdrug opportunity.

Edward Tenthoff - Piper Jaffray

And actually, Christoph, I'm sorry just to clarify, thequestion was more along the lines of I think we understand that 501 isadvancing in Type II diabetes now for proof of concept and potentiallyimportant in MELAS and other indications.

But I guess my question was more in new indications such ascancer, especially considering we will be starting those trials probably in thelate half of next year as you described. Does it make sense to wait for morepotent compounds than NCEs to advance into cancer versus 501? So it's more aquestion of why go into cancer with 501 since the NCEs are close by?

Christoph Westphal

Well that's a great question. It's actually and I'm glad youmade it more precise sorry to not have answered it originally. There is awealth of data regarding resveratrol and SIRT1 activation for the treatment ofcancer. There's actually nearing 20 papers published on that.

And so we think it is a really unique advantage we have withSRT501 and resveratrol specifically in cancer. We do believe and I think it'sfair to assume that SIRT1 activation in general is attractive. But certainlySRT501 specifically could be very attractive.

Edward Tenthoff - Piper Jaffray

Thanks that’s very helpful.

Operator

(Operator Instructions) We’ll go next to Mike King, withRodman & Renshaw.

Mike King - Rodman & Renshaw

Yeah, hi. I think you took care of most of my questions andanswered to Ted's questions, but maybe Christoph you could cite for us unlessyou're keeping it under wraps for now. But where you think the greatestbiologic validation is of SIRT1 activation in cancer?

Christoph Westphal

I think it's fair to say that you could look at both solidand liquid tumors. We think there's actually quite interesting data points inboth of those arenas. We are continuing to still evaluate which ones one mightconsider going after.

But we actually think that SIRT1 activation, specificallyresveratrol on its own and, then, even you go back to the calorie restrictionliterature which has a wealth of data related to prevention and actuallytreatment of cancer. We think it is a pretty strong case.

Mike King - Rodman & Renshaw

And just in terms of strategy do you think early on in thosetypes of studies you would go into sort of broad signal seeking types ofstudies or do you think you might do some kind of enriched study where youwould select certain tumor types to focus on more definitively?

Christoph Westphal

You know we're still early in our evaluation. We haven'tdecided, but you obviously have been in biotech and covering the industry along time and, certainly, the latter option is quite an interesting one andPeter Elliott who runs our development you know developed Velcade with JulianAdams.

So we certainly feel we have a lot of internal expertise inthe area.

Mike King - Rodman & Renshaw

Great. Thank you.

Operator

Ladies and gentlemen, this will conclude ourquestion-and-answer portion of the call. I'd like to turn the conference backover to management now for any additional or closing comments.

Christoph Westphal

Yes. Thank you very much. We appreciate everybody dialing inand the thoughtful questions from the analysts who called in and asked thosequestions. We look forward to speaking with each of you in the near future.

Operator

Ladies and gentlemen, this does conclude our conference fortoday. We appreciate your participation and you may now disconnect.

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