Seeking Alpha: FDA Rejection Of Dapaglifozin Means Little For Lexicon

Shares of small biotech Lexicon Pharmaceuticals (LXRX) sold off sharply in the wake of news that the FDA issued it's much-expected rejection letter to Bristol-Myers Squibb (BMY) and AstraZeneca (AZN) for their experimental diabetes drug, dapaglifozin ("dapa"). Although there are certainly similarities between dapaglifozin and LX4211, arguably the key compound in Lexicon's pipeline, it is the differences that will ultimately decide this contest.

Bad News, As Expected
It interests me how analysts and financial commentators will talk about an event occurring "as expected" and nevertheless still managing to surprise a few investors. In this case, the rejection of dapa was hardly surprising. When Bristol-Myers and AstraZeneca had their panel meeting, the panel voted 9-6 to recommend rejecting the application. Although the FDA has been known to override these votes and grant approval anyway, the safety issues raised by the panel and the FDA's generally very conservative stance on diabetes drug made rejection a virtual no-brainer.

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FDA Rejection Of Dapaglifozin Means Little For Lexicon