Lexicon Pharmaceuticals Still On The Launch Pad, With An Uncertain Trajectory

 

Biotech is hard. Most biotechs never manage to develop one drug that can get through the FDA approval process, let alone two. With Lexicon Pharmaceuticals (LXRX), though, investors are getting a difficult lesson that while drug development may be the hardest part of the process, it’s not the only hard part. Whether Lexicon can get sotagliflozin onto the market on their own and make a dent against AstraZeneca (AZN) and Eli Lilly (LLY) remains an open question, as does the clinical fate of LX9211 in pain.

At least two key value-altering questions remain in front of Lexicon – can the company differentiate sotagliflozin from Farxiga and Jardiance in treating heart failure among people with Type 2 diabetes (or T2D), and can they find a marketing partner to take on the heavy lifting of commercializing the drug? There should be more clarity on these two questions by year-end, and while the shares do remain undervalued on a risk-adjusted analysis of both sotagliflozin and LX9211, it’s a high-risk proposition.

 

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Lexicon Pharmaceuticals Still On The Launch Pad, With An Uncertain Trajectory