Tuesday, December 3, 2013

Seeking Alpha: Another Setback For Lexicon, But Not In Diabetes

Lexicon Pharmaceuticals (LXRX) continues to see its pipeline winnowed down by clinical trial failures. A prospective drug for rheumatoid arthritis basically went away last year, and it was just about two months ago that the company announced that LX 1032 (telotristat etiprate) had failed to show significant efficacy in a Phase II study in ulcerative colitis. Now there's another piece of bad news to digest, as the company announced Tuesday morning that its Phase II study of LX 1033 in IBS-D (diarrhea-prominent irritable bowel syndrome) failed to meet its primary endpoint.

Lexicon may, or may not, go forward with another study of LX 1033 on the basis of post-hoc analysis that appears to suggest some efficacy. Either way, it's not a tremendously significant part of the overall valuation. What's far more important is whether the company can seal the deal and sign up a partner to fund a Phase III study of the company's LX 4211 SGLT-1/-2 inhibitor for diabetes. Lexicon still appears to be meaningfully undervalued on the basis of the potential value of LX 4211, but Lexicon is increasingly turning into a one-product story with a concomitant increase in the risks.

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Another Setback For Lexicon, But Not In Diabetes

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