Friday, May 1, 2015

Seeking Alpha: Lexicon Undervalued As It Approaches A Major Event

Lexicon Pharmaceuticals (NASDAQ:LXRX) has gone through many odd twists and turns as it has tried to migrate from a provider of drug targets to a developer of experimental compounds. Like most biotechs, Lexicon has had several clinical failures but has moved past those failures to continue developing the more promising candidates in its pipeline. Included among those twists and turns is an unusual ownership structure where an investor group effectively controls the company by virtue of its 60% ownership of the shares.

Adding to the strangeness is that the pipeline candidate that gets the most attention for Lexicon is not necessarily its highest-potential drug. While successful commercialization of sotagliflozin would be a significant event, the odds of the company gaining significant share in the large diabetes market aren't all that favorable. On the other hand, telotristat etiprate gets less attention but could actually be the more valuable drug to Lexicon today. As it stands, I still believe Lexicon offers a good potential return in spite of its high risk.

Read the full article here:
Lexicon Undervalued As It Approaches A Major Event

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