Lexicon Continues To Drift Ahead Of An Expected FDA Approval And A High-Risk Commercialization Effort

The biotech sector has stabilized since a summer rally, but it is still a difficult market for smaller biotechs, and particularly those that the market is likely to need substantial further funding (which, honestly, is most of them…). That's a challenging enough backdrop for Lexicon Pharmaceuticals (NASDAQ:LXRX) before considering challenges/issues like building a sales infrastructure to support the launch of sotagliflozin in congestive heart failure and the uncertain clinical and financial pathway for its pain drug LX9211.

My feelings on Lexicon remain mixed since I wrote in July. I do see significant commercial potential for sotagliflozin based upon the size of the market and the clinical efficacy of the drug, but the challenges of building a go-it-alone marketing infrastructure capable of maximizing the opportunity are not at all trivial. Likewise, I'm encouraged by the potential of LX9211, but there's still a long road ahead to realizing that potential. I think a fair value estimate of $5.50/share is valid, but this remains a high-risk/high-reward sort of opportunity.

 

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Lexicon Continues To Drift Ahead Of An Expected FDA Approval And A High-Risk Commercialization Effort