Back in April of this year, I thought that the Street was focusing too much on the failure of Lexicon Pharmaceuticals (NASDAQ:LXRX)
to find a partner for its diabetes drug sotaglifozin and the risks of
its go-it-alone strategy focusing on development of the drug for Type 1
diabetes. In contrast, I thought there was an unappreciated opportunity
in the company's Phase III asset for carcinoid patients refractory to
somatostatin analogs (or SSAs) like octreotide, as Phase II results were
encouraging and a global market opportunity of $1 billion could be in
play.
On Monday morning Lexicon investors got the news they were
hoping to see. Although the company didn't offer all that many
specifics, management did announce that the Phase III TELESTAR study did
see the drug (telotristat etiprate) achieve a statistically significant
benefit for the primary endpoint. The data that the company did release
suggest solid efficacy relative to placebo, with the magnitude of
benefit improving over time and a generally good safety/tolerability
profile.
With this result, there is an outside chance that the
company could have its first drug approval in hand before the end of the
2016. This clinical update adds about $4 to my fair value estimate,
though risks remain in securing approval and commercializing the drug in
the U.S.; partner Ipsen (OTCPK:IPSEY) will handle marketing outside of the U.S. and Japan.
Read more here:
A Long-Awaited Success For Lexicon Pharmaceuticals
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