Tuesday, June 22, 2010

A Little Good News From Lexicon

One of my least-successful investments, Lexicon Pharmaceuticals (Nasdaq: LXRX), re-reported some interesting news early today on one of its clinical programs.

Data from a Phase 2a study of LX4211 (a dual SGLT2 and SGLT1 inhibitor) in Type 2 diabetes showed a 1.15 reduction in HbA1c after just 28 days of use in the 150mg group, while the 300mg group showed 1.25 reduction. In this study, the placebo group showed a 0.49 improvement. Keep in mind, though, that this wasn't really "news" - the top line results from this study came out in January of this year.

Nevertheless, those numbers compare to a 1.5 improvement seen in a recently-announced 26-week study of Amylin's (Nasdaq: AMLN) Byetta, and the 1.2 reduction seen in Merck's (NYSE: MRK) Januvia in that same study.

In the big picture, then, these results would be competitive with most of the state-of-the-art diabetes medications. Better still, LX4211 is administered as a once-daily oral medication and so far SGLT1/2 inhibition has not shown any serious side-effects.

As I am an owner of these shares, I have a certain amount of built-in optimism, but I'm under no illusions that the path to approval will be quick or easy. Lexicon is looking at a minimum of five years before this drug could be approvable and will need even more money to make that happen (dilutive financings have already raised the sharecount here to over 330 million shares). And that, of course, assumes that the drug continues to show a competitive degree of efficacy and no serious side-effects.

All in all, it's a good reminder of why I'm holding out hope on this one, but it's definitely not a widows-and-orphans situation.

Disclosure: I own shares in Lexicon and Amylin.

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