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Executives

Michael V. Novinski – President, Chief Executive Officer

Michael Garone – Vice President, Chief Financial Officer

Bob Madison – Senior Director, Corporate Communications

Analysts

Stephen Brozak – WBB Securities

Rick Elkin – Private Investor

Abe Schloss – Maxim Group

Hyam Davis – Riva Fund

Bill Stein – Sipp Companies

Ross Muner – Jimsco Capital

Emisphere Technologies, Inc. (OTCQB:EMIS) Q4 2007 Earnings Call March 19, 2008 10:00 AM ET

Operator

Good morning. My name is Greg and I will be your conference facilitator today. At this time I would like to welcome everyone to the Emisphere Technologies, Inc., 2007 fourth quarter and year-end financial results conference call. All lines have been placed on mute to prevent any background noise.

After the speakers’ remarks there will be a question and answer period. (Operator Instructions).

I will now turn the conference over to Bob Madison of investor relations. Sir, you may begin your conference.

Bob Madison

Thank you, Greg. Good morning, everyone. Welcome to Emisphere’s fourth quarter and year-end earnings conference call. As usual, the press release for today’s call is posted on our website. As a reminder, this call will be webcast live via the Internet. To access the webcast of this conference in listen-only mode please go to the investor relations portion of Emisphere’s website or directly to the link provided in the press release. An audio replay of this conference call will also be posted to Emisphere’s website two hours after the completion of this call where it will be archived for one week.

On the call this morning are Michael V. Novinski, Emisphere’s President and Chief Executive Officer, Michael Garone, Vice President and Chief Financial Officer, and Dr. Gary Riley, Vice President, Nonclinical Development and Applied Biology.

Before we begin please note that the forthcoming discussion may contain forward-looking statements. These particular forward-looking statements and all statements made on this call that are not historical facts are subject to a number of risks and uncertainties and actual results may differ materially. Please refer to Emisphere’s most recent filings with the SEC for more information on the risk factors that cause actual results to differ.

I will now turn the call over to Michael Garone. Michael?

Michael Garone

Thank you, Bob, and thank you, everyone, for joining us on the call this morning. I’d like to summarize our financial results for the fourth quarter and year ending December 31st, 2007.

For the fourth quarter Emisphere reported a net loss of $3.9 million or $0.13 per basic and $0.18 per diluted share for the quarter ended December 31st, 2007, compared to a net loss of $3 million or $0.11 per basic and $0.30 per diluted share for the quarter ended December 31st, 2006.

The fourth quarter operating loss was $7.5 million compared to an operating loss of $8.4 million for the same period last year.

Total operating expenses were $7.8 million for the fourth quarter, a decrease of $900,000 or 11% compared to the same period last year. Total operating expenses included research and development costs of $4.2 million, a decrease of $500,000 or 11% decrease compared to last year’s fourth quarter, and general administrative expenses of $3.3 million, an increase of $200,000 or 7% compared to the same period last year. That was primarily due to an increase in severance costs.

Other income for the fourth quarter of 2007 was $3.6 million compared to $5.4 million in the fourth quarter of 2006.

For the year end Emisphere reported a net loss of $16.9 million or $0.58 per basic share and $0.76 per diluted share for the year ended December 31st, 2007, compared to a net loss of $41.8 million or $1.58 for both basic and diluted shares for the year ended December 31st, 2006.

Revenue for 2007 was $4.1 million compared to $7.3 million during 2006.

Total operating expenses excluding the net proceeds from the settlement of the Lilly litigation of $12 million were $36.6 million for the year ended December 31st, 2007. That represents an increase of $2.2 million or 6% compared to the year ended December 31st, 2006.

Total operating expenses include research and development costs of $21.1 million, an increase of $2.2 million or 12% compared to last year primarily due to increases in severance and clinical trial costs, and general and administrative expenses of $14.5 million, an increase of $2.8 million or 24% compared to last year primarily due to increases in severance costs and expenditures associated with the settlement of the Lilly litigation.

Other income for the year ended December 31st, 2007, was $3.7 million compared to other expenses of $14.6 million in the year ended December 31st, 2006.

Weighted average basic diluted shares outstanding for the year ended December 31st, 2007 were $29 million and $29.1 million diluted versus $26.9 million for both basic and diluted as of December 31st, 2006.

Cash, cash equivalents, restricted cash, and investments held as of December 31st, 2007, were $14.1 million, a net decrease of $7.4 million from such amounts held on December 31st, 2006.

The slight increase in total operating expenditures during 2007 was primarily due to one-time costs associated with cost control initiatives to position the company to achieve approximately a 20% reduction in operating expenses for 2008.

The company registered 7 million shares on the shelf registration during September, which we were put in a previous quarter, which is consistent with past fundraising practices and is currently evaluating various financing options to address its future cash needs.

With that I will turn the call over to Michael Novinski.

Michael V. Novinski

Thank you, Mike. Thank you, Bob. Ladies and gentlemen, most importantly let me thank all of you for taking the time to be with us this morning and have the opportunity to listen to what it is we have to say about Emisphere and the way forward, what we’re doing, and most importantly perhaps to answer any questions and answers you may have.

There are basically three things that I would like to talk about today. The three things that I want to talk about are, number one, I want to provide you with an update on our product pipeline and what’s going on with that. Number two, I’d like to talk to you about our cash situation. And third, and probably most importantly, what I really want to talk about is what we need to do over the course of the next year or so to move forward and create value starting now.

We had a strategy call about six weeks ago, so I’m not going to try to repeat everything that was put forward in that strategy call. I hope I don’t create any gaps if there are things that I miss.

Also, I’m not going to spend any time today discussing the past. I’m not going to claim to understand what went on with every single activity in this organization over the course of the last 12 to 15 years. I’m certainly not going to claim to understand it. But what I am going to do is bring forward to you what I believe I do understand. And that is what we need to do over the next 12 to 15 months. I want our focus to be on moving forward and what needs to be done to move forward.

So with that in mind, let me update you on the pipeline. We have a lot of exciting progress. Some of it you probably already have heard. We’re doing a lot of good things. In the Phase III program with our partner Novartis the osteoporosis trial is almost fully enrolled. And for the osteoarthritis, which there are two trials going on, we expect the first study to be fully enrolled slightly before mid-year. We also expect the second study for osteoarthritis to start just prior to mid-year and we would think that about four publications are coming forward from the earlier data, which when you look at this collectively one’s going to see that there are now thousands of patients taking Salmon Calcitonin with the eligen(NYSE:R) technology for the treatment and prevention of osteoporosis and for the treatment of osteoarthritis in the late stage of development.

For Phase II we mentioned a few weeks ago that we are exploring our options for both the oral insulin and the oral heparin and that really hasn’t changed. We’re looking at what options are available to us and how best we can use the investments that were made in these compounds to bring forth value.

In Phase I we have two projects that are ongoing with our partner Novartis. They are PTH and growth hormone and they are continuing. There’s really not a lot to be said. There are some studies that are ongoing. One particularly that’s going to be initiated shortly, still in Phase I, expected to be completed somewhat before the start of the fall. We also have a Phase I study with native GLP-1 and PYY. Actually, this is our second study in humans and we expect the clinical portion of this study to be completed around mid-April and we expect to have the analysis of the results, with some luck, somewhere towards the end of May-beginning of June. So hopefully that will be forthcoming.

The publication of the first study for GLP-1 and PYY is due somewhere around mid-year. So you should be seeing that. And another compound that we have listed in our Phase I program is Acyclovir and we are actually evaluating the data and we are in discussions with our potential partner in that area and evaluating what steps need to be taken. Regarding this, there may be limited opportunity in the US for this particular compound, however, there could be opportunities in selected markets ex-US and that needs to be discussed based on the analysis and the discussions that we have.

So that’s Phase III, II and I. In the pre-clinical area we are still expecting two partnerships to emerge this year from two of those collaborations that were started last year. So as not to confuse anybody, I made a statement back in February that I expect three partnerships for this year of 2008 and that still is the case. But don’t be confused that two of these partnerships will more than likely come out of our pre-clinical process.

As far as other pre-clinical, we have three other collaborations that are in process. And as far as other pre-clinical there are several projects that are ongoing without any collaboration. Where we are placing the primary focus is our B12 project. You may have seen today that we released the second animal study. Dr. Riley is here; he can comment a little bit more on that if there are any questions. That was released earlier this morning.

We’re on track to complete really the core pre-clinical program, which includes one more study, probably within the next several weeks and then with good results we expect to move forward into human trials with PKPD studies.

So that’s a summary of Phase III, II, I, and pre-clinical. Again, a lot of exciting things are going on. We’ve had very few setbacks, if any. The Phase III program again with Novartis is going very, very well for OA and osteoporosis. The Phase I projects are ongoing. From pre-clinical we do have some exciting things going on.

Now, in terms of the cash situation, everybody has seen the going concern that we have put forward and that’s something that we have to do. Our cash situation basically takes us into the middle of the third quarter or so and I wouldn’t disagree that this in fact does present a challenge. However, if we need to we will raise money and we’ll raise money based on what the needs of this organization are.

Before we talk, though, about what needs to be done I think it’s really important that we talk a little bit about identifying just what may be holding this organization back from establishing what is the real value. I mean, obviously the real value is not seen at today’s prices. I think the critical question remains posed to us at Emisphere. And it remains posed to us by a lot of investage. The key question that I think a lot of people still have is, can this technology come out of the experimental stage? If so, can this technology sustain this company into a profitable operation? If so, how are you going to manage your operations in such a way to build an organization without cash? I think that is the question that is preventing us from creating value as we see it today.

I don’t think there’s anybody in the room I’m in or perhaps even on this call, that would not hesitate to guess that the answer to the first question about whether or not this technology can sustain this company and come out of the experimental stage. I mean, the obvious answer to that question is yes. I mean, we have thousands of patients that, although we can’t say it, are beneficially receiving this technology even in the Phase III program. I think a lot of those questions are being answered as we speak.

So yes, I do believe that the technology is going to come out of the experimental phase and we’re going to be able to bring this technology to the commercial level. I also believe we’ve identified a way that we can bring the technology to the commercial level next year. And we’ve identified that.

So, to answer the question, the technology can sustain the organization into a profitable organization. And we can manage the operations. But, ladies and gentlemen, one of the objectives of this organization needs to be that we have to bring this technology to the commercial level as soon as possible in the best way that meets a specific unmet market need. We believe we have identified one potential avenue by using B12 to do that. And we also believe we’ve embarked on a very aggressive and what will be a successful program from pre-clinical into clinical to achieve that goal possibly as early as next year. And we believe it’s possible.

But that doesn’t answer the second part of the question. And that is, how are you going to be able to do this given the current cash concerns? Well, there’s no doubt we need to bring in new partnerships into this organization to ease the burden of the cash situation. I’ve already stated that I expect three for next year. And I’ll go so far as to say that we need to bring two in by mid-year. I think we can do that. I think we can bring in two new partnerships that will assist us with up-front cash payments to ease the burden on the organization, but at the same time I don’t think that we can forget about the first objective. And that is to be able to bring this technology to the commercial level. If we are able to do that we are going to establish sound fundamentals that have not been part of this organization for a long time. It’s not just one. Bring the technology to the commercial level and bringing in new partnerships needs to be done and needs to be done rapidly, and they both go hand in hand.

Of course, at the same time, you can’t forget about building the early stage portion of the pipeline and we’ll continue to do that with our pre-clinical programs and other projects that are ongoing. But as I stated before, I’m not going to claim to know everything that went on in this organization over the course of the last 12 to 15 years, but I’m fairly confident that we know what needs to be done to bring this organization to the brink of becoming a profitable organization. That is, we need to get this technology to the commercial level. When we do that that’s going to begin to change the landscape for Emisphere.

Now, doing that, of course, is a process. And we are embarking on that process as we speak right now. We’ve released part of the data and information from that process this morning. And hopefully next month we’ll release more of that data and we’ll then initiate the human trials so that we can move forward to the commercial level as soon as next year. At the same time we need to bring in partnerships to ease the cash situation so the company can move forward with less concern. It doesn’t solve all of our problems, but it angles the organization in the right direction and I believe we’re going to be able to achieve that.

I’ll take questions and answers, please.

Question-and-Answer Session

Operator

(Operator Instructions). We’ll go first to Steve Brozak with WBB Securities.

Stephen Brozak – WBB Securities

Good morning, gents. Can you, because I think what’s at the top of everyone’s mind is, can you describe what your top three projects are and can you give an idea of what the commercial ramifications would be of those projects to Emisphere so that we can get an idea of what we’re looking at as far as the potential and the routes that you would take. Obviously everyone is looking for the commercial stage.

Michael V. Novinski

Thanks, Steve. I appreciate the question. I think that the answer to that is, the top three priority projects are divided into short and long term. They’re not necessarily one, two, three. I think they’re all one, one, and one. As I mentioned on the outset, I think the objective of the organization has to be to get the technology to the commercial level as rapidly as possible. That would put a lot of effort behind what we think can be through the B12 project.

Secondly, you have to look at the organization on a more immediate to longer-term basis, and of course that would be the focus on successfully enrolling and completing the trials that are ongoing in osteoporosis and osteoarthritis. I mean, surely those two are going to be an enormous part of Emisphere in the future.

And thirdly, I think the work that’s going on with GLP-1 and PYY is going to indicate where we’re going to be in this particular area for the treatment of diabetes that’s long term.

So I think right now those are the three most critical areas going on for the organization from a project standpoint and what the commercial impact is.

The diabetology area, as well as the OA and osteoporosis, of course, are longer term, but we have to then look shorter term and we have to look at that objective that we talked about of the commercial viability of the technology and getting it there. So that’s right in line with our priorities.

Does that answer your question?

Stephen Brozak – WBB Securities

Yeah, it does. I’ll jump back in the cue after this follow up. In terms of timetables that you would be looking at, how would you on a rough Gantt chart show the timetable that you would be comfortable with? No one’s ever going to hold you to it, but just what are you thinking?

Michael V. Novinski

You said no one’s ever going to hold me to it. You don’t get a chance to talk to these shareholders on Saturday morning sometimes. Nobody ever misses a word that is said on these conference calls, Steve. You know that.

Stephen Brozak – WBB Securities

Yeah, all right. Well, in a general timeframe, what are we looking at?

Michael V. Novinski

Well, let’s look at it this way. I think that in 2009 you have to look at, the hopes would be to get it on the market to the commercial level with B12. I think in 2010 if everything would flow out of the Genta project you may see that around 2010, late 2009 or 2010. I think they’ve been saying that. I think 2011 or 2012 you’re talking about the osteoporosis/OA. And then you’re talking about the work with GLP-1 and PYY putting itself out there around a little later than 2011 and 2012.

Stephen Brozak – WBB Securities

Great. I’ll jump back in the cue. Thanks.

Operator

We’ll go next to Rick Elkin, private investor.

Rick Elkin – Private Investor

Hi, Mike. How are you doing?

Michael V. Novinski

Hi, Rick. Very good, thank you. Thanks for joining us.

Rick Elkin – Private Investor

You’re more than welcome. Can you talk about what your plans are for the oral GLP-1? Are you planning further studies? Are you talking to independent third parties about it? Where does that go beyond the study that’s recently started?

Michael V. Novinski

Rick, I don’t want to forgo the question, but I think we may put the cart in front of the horse here. I think, first of all, we already talked about GLP-1 and PYY.

Rick Elkin – Private Investor

Okay.

Michael V. Novinski

They’re both in combination with each other. And I think before we get the data it’s hard to determine from a scientific standpoint what conclusions and information we get from that data. We’ve had discussions, I’ve had discussions just as late as last week with Professor Beglinger, who is carrying on the study, and you know I can’t reveal those discussions and everything’s blinded at the time. I think it would be pretty prudent to sit back and wait and see what the data have to say and then what information that data generated and then determine what the next step is. You don’t have the data in front of you, so it’s not that far away. Then based on that we march forward.

Rick Elkin – Private Investor

Okay. I guess just one other thing. On your funding plans for the company. Could you maybe just give us an idea of what your best case and what your worst case is and then we would hope that what would happen would fall somewhere in the middle? I mean, is there any possibility of just sketching those out a little bit?

Michael V. Novinski

Well, I tried to do that this morning. Perhaps I wasn’t clear and I apologize for that. But as I stated, we need to ease the situation, the burden on the company for the cash situation. We need to bring in a couple of partnerships and I need to do that by mid-year. I think that’s best case scenario. Maybe do more than that, but I don’t see it. I mean, mid-year to ease the burden on the organization and then at the same time continue with the current B12 project for this commercialization of technology.

I think they kind of go hand in hand because I think that with every study that we complete and with every set of data that gives good information then you are basically proving that you’re going to hopefully be able to accomplish what it is that you set out to achieve. That’s going to occur through the course of this year. I would hope that doing that we would be able to demonstrate that Emisphere is now a company that sets out to achieve what it puts forward and the valuation will follow accordingly.

In a worst case scenario, I guess for some reason none of this happens and somewhere around the third quarter or so you have to into raising money, I don’t really think that’s going to be the case. We’re talking about projects that I’ve started back in August, September, and October, and I’m hoping that some of these will be able to be brought to a conclusion by mid-year.

Rick Elkin – Private Investor

Okay. That’s helpful. Thank you. I’ll get back in the cue.

Operator

(Operator Instructions). We’ll go next to Abe Schloss with Maxim Group.

Abe Schloss – Maxim Group

Good morning. This sounds like B12 is going to be our first product. I’d just like a little more update. What tests have we completed so far? You say we’re going to start human trials. How long would human trials take? Say human trials are effective; what’s the time schedule after that? What’s step by step after that?

Michael V. Novinski

Hi, Abe. Thanks very much for attending. Thanks for the question this morning. Before I turn the question for an answer over to Dr. Riley let me point out that any good development program has a solid pre-clinical course in front of it and then there’s the human clinical development step in front of it. Given the course that we’re following with this, and that is the potential new dietary ingredient and/or GRASdaged, generally recognized as safe. They are different regulatory routes than most people probably are used to hearing about.

With that I’m going to ask Gary if he can follow in on that and we can talk about that. Hopefully we’ll lay out what is a clear path for you and the rest of the shareholders. Gary?

Dr. Gary Riley

Thanks, Michael. The path to development of B12 is involving proof of concept studies in reps and to date we’ve reported two studies, the last one today. What we’ve established in the course of those is the fact that we do get enhanced delivery of B12, of course, but quite importantly we showed that over a range of 150 (inaudible) dose going down to a near physiological level we get the same effect. And that translates into a robust effect.

The plan ahead of that is to enlist a second species, a dog, which will give us further proof of concept and show the broader species applicability, and because of the size of the dog it also allows us to do a formation optimization that is a tweaking of the formulation to get the best effect in a dosage form that we would actually use in humans.

We’ve got a time schedule to complete that formulation optimization stage by the end of April and we are looking forward to going into a human PK study very soon thereafter, in the very first part of May. So the PK data that we’ll get from humans will hopefully be available probably sometime in June. This will demonstrate the effect of the formulation in humans and provide the basis for our claims of the efficacy of the formulation in that species.

Michael?

Michael V. Novinski

To follow up on that for clarification to the other people on the call, in parallel the application is being put together where we would look to submit the combination of our carrier snack and B12 as a new dietary ingredient somewhere, say mid-third-quarter. That would include a review by an expert panel. That expert panel would weigh in and we would attach that to our application and notification to the food and drug administration.

And of course, based on the input that we’ve received from quite a few experts, we’re fairly confident that we have a fairly strong application where there may be questions and we may have to answer questions, but we’re fairly confident that we would be able to get approval, although there are no guarantees with the Food and Drug Administration. We are relatively, I should say more than relatively confident. We’re very, very confident that we should be able to achieve that. And at the same time, while we have this expert panel, we’ll also perhaps use this expert panel to help us determine to achieve GRAS status, which would be generally recognized as safe as well.

So I hope that gives you some idea of the activities that will be going on this year. Does that clear it up, Abe?

Abe Schloss – Maxim Group

Yes. Thank you very much.

Operator

(Operator Instructions). We’ll go next to Hyam Davis with Riva Fund.

Hyam Davis – Riva Fund

Hi, Michael. How are you?

Michael V. Novinski

Hi, Hyam.

Hyam Davis – Riva Fund

What’s the magnitude of the raise that you’d be looking to raise if you need to raise money in the third quarter? How much are you looking to raise?

Michael V. Novinski

Hyam, I would only be able to answer that question based on what the situation was when we decided to go forward because at this point in time I think it’s really prudent to only raise as much as you need to to reach certain milestones that those milestones would establish further valuation of the company. So there’s no set figure in mind at this stage. I think for all shareholders they have to know that we would only try to raise money that would be needed to get to the next milestone. Nobody likes being in a hand-to-mouth situation, but given the fact that the company’s embarking on these projects that are in fact predicted to put milestones forward and achieve them, you know, you really don’t want to put a set amount in front of you and say I want to raise x-billion dollars because that’s certainly not the case. That question would be put forward to the board of directors at that time.

Hyam Davis – Riva Fund

Okay. But can you ensure investors that you will not be triggering the ratchet provision with MHR at these levels which would be highly diluted to shareholders? The common shareholders?

Michael V. Novinski

What I could ensure investors of is what I spoke about this morning. That is, we are looking to bring in partnerships to ease the situation of the cash situation on the company. At the same time we are ploughing forward, which I think is the most important objective. I know this is a favourite topic of yours, but the most important objective for this organization is to get this technology to the commercial level and at the same time to bring in partnerships to ease that. And I think the rest of it will take care of itself.

Hyam Davis – Riva Fund

I’ve just been thinking long and hard about this and I really do believe that while it is appropriate and morally and business-wise appropriate for there to be a ratchet which was negotiated in good faith, it is not appropriate and a conflict of interest for MHR to have board members because I believe that they have conflicting interest with shareholders. It’s in their best interest to have a raise as diluted as possible and it’s in our best interest to have a raise as non-diluted as possible. And therefore, you know, they should have the ratchet provision if that’s what they negotiated, but they should recluse themselves from any sort of decisions around financing or any decisions having to do with the company. And frankly, as somebody that believes that the technology does work, this is the thing that I’m a little scared about. I just want assurances that the exemption will be used and that we’ll never have to see this take the light of day.

Michael V. Novinski

Hyam, I understand your point and it will be discussed with the board.

Hyam Davis – Riva Fund

Do you think that we would have updates on this point in future conference calls?

Michael V. Novinski

I will bring it forward to the board, Hyam.

Hyam Davis – Riva Fund

Thank you.

Operator

We’ll go next to Bill Stein with SIP and Company.

Bill Stein – Sipp Companies

Hi, Mike. I just wanted a clarification on what you had said earlier. You had said that when you were dealing with GLP-1 that you were only doing studies in combination with PYY and I guess my question comes in there. Clearly GLP-1 works, I mean as far as injected, I guess. So GLP-1 works there. And PYY, I guess, is still an unknown or maybe you can clarify more on it to me. Is there any, I mean, I don’t have any scientific knowledge of this, but could theoretically, even though the two drugs may both do similar things, could they also counteract each other? Or why are you not pursuing GLP-1 alone? Maybe you could tell me that.

Michael V. Novinski

Thanks, Bill. And thanks for joining us this morning. I’m going to pass your question over to Dr. Riley, who’s poised to answer that.

Dr. Gary Riley

Bill, the reason for the, to conduct clinical trials with PYY and GLP is, in the final analysis, to judge the compatibility of the formulation at a pharmaceutical level and also ultimately to get information on the possible clinical utility of using them together. Dosing GLP and/or PYY alone is something that you could expect to see a company do in the course of looking at a construct like that. We think that investigating GLP alone is useful from the pharmaceutical research standpoint and we’re also interested in coupling it with any other peptides that might contribute to the treatment of Type 2 Diabetes.

I don’t know if that answers your question completely, but I just want to highlight the fact that this is an evolving argument. We first of all prove feasibility and then consider a clinical utility later on.

Bill Stein – Sipp Companies

Well, are you still pursuing GLP-1 partnerships and GLP-1 analog partnerships other than just GLP-1 and PYY, I guess is my question.

Michael V. Novinski

Bill, to answer your question, they are two distinct and separate efforts.

Bill Stein – Sipp Companies

So you’re continually pursuing GLP-1 and GLP-1 analogues completely separate with the combination of GLP-1 and PYY.

Michael V. Novinski

Yes, that’s correct.

Bill Stein – Sipp Companies

Okay. Thank you for that.

Michael V. Novinski

Thank you for helping us clarify it.

Bill Stein – Sipp Companies

Thank you.

Operator

We’ll go next to Ross Muner (sp) with Jimsco (sp) Capital.

Ross Muner – Jimsco Capital

Good morning, Michael. To put a different spin on one of the questions a previous caller asked. As you know, a number of shareholders have concerns, not only over the share price, but also the intentions of MHR as the largest shareholder and controlling the board. Some shareholders believe that there’s a strategy in place – I’m not one of them – that says that what we’re witnessing of a $5 to $6 stock since you took over dropping to $1.50, is it part of the strategy to make limited progress, burn through cash, give no hope, and drive the stock price down and then when cash is just about out have MHR come in on very dilutive terms to shareholders. What can you tell us that would either support or dispel those concerns, including the role of MHR and its representatives on the board?

Michael V. Novinski

Well, first of all let me make a statement. That is, I clearly stated what I believe has to be done with this organization moving forward and what we need to do to build this organization into a profitable organization and a growing company. The reason I am here is because of the efforts of certain board members and the assurance of certain board members that their priorities were the same as mine and that their values were the same as mine. Some of those board members of course happen to be part of MHR. So I have absolutely no reason to believe that there is nothing but the best intentions, although I surely understand how one could construct a scenario where one could begin to believe that perhaps this isn’t the case.

I’ll make it very, very perfectly clear, and that is I have absolutely no reason to believe – or I should say it differently. I am not of the belief that the board of directors along with the management of this organization, including those from MHR, is clearly behind building this organization into a growing and profitable concern. I want to make that perfectly clear.

However, on the same time I note your concerns and I will bring them up to the board and I can understand how one could construct the scenario to begin to say is this happening? But certainly it is not my belief whatsoever.

Ross Muner – Jimsco Capital

Okay. Thank you.

Operator

There are no further questions, so at this time I would like to turn the call over to Mr. Madison for any closing or additional remarks.

Michael V. Novinski

Greg, thank you. Before you do, let me just again have the opportunity personally to thank all these shareholders or potential shareholders who took the opportunity and the time today to join us. Not only to join us, but also to put forward their questions. And also, as some did, to put forward their concerns. We are an organization that understands that all shareholders have concerns and some of these concerns are greater than others and in some cases I need to take these concerns to certain levels of management, as well as the board of directors.

I also want to take this time to thank the shareholders who have been communicating to us, and particularly to me, and I would like to encourage the shareholders to continue to communicate. I would like to think that we are an organization where regardless of the number of shares that one has if there is a concern about where the organization is going or perhaps what actions have been taken that you would feel comfortable enough contacting the organization or even contacting me. It’s not unusual for me to be talking to shareholders on a Saturday morning. I would encourage you to contact the organization and share your concerns or share your questions with us.

With that I would like to turn it back over to Bob.

Bob Madison

Thank you, Michael. And again, let me underscore Michael’s thanks to our callers for your attention and your good questions. This concludes Emisphere’s fourth quarter and year-end call. This is Bob Madison from Emisphere saying thank you and good morning.

Operator

Once again, that does conclude today’s conference call. We appreciate your participation. You may disconnect at this time.

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Source: Emisphere Technologies, Inc. Q4 2007 Earnings Call Transcript
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