Sodium-glucose contransporter-2 inhibitors (or SGLT-2 inhibitors) are already starting to change the standard of care for some people with heart failure, and there’s mounting clinical evidence provided by a number of trials that suggests these drugs could become important and widely-used medications in an even broader range of heart failure types. That’s very encouraging news for Lexicon Pharmaceuticals (NASDAQ:LXRX), but there are still meaningful challenges between now and future commercial success.
Since my last update on Lexicon, these shares have lost a little more than 40% of their value – they had been modestly outperforming a weak biotech tape until Monday’s announcement regarding the need to resubmit the New Drug Application (or NDA) for sotagliflozin, the company’s entrant into the SGLT-2 heart failure market.
Although I believe many retail investors still seriously underestimate the marketing challenges ahead of the company, this decline has taken the shares back to an interesting place. While I'm very definitely concerned about the amount of dilution the company will likely face to raise funds to market sotagliflozin on its own, the shares may be worth a look again for very risk-tolerant investors.
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Lexicon Stumbles With Sotagliflozin, But The Heart Failure Opportunity Is Getting More Interesting
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