A Split Decision From The AdCom Leaves Another Crack In Lexicon Pharmaceuticals

It’s been a tough road for Lexicon (LXRX) with its dual-SGLT inhibitor Zynquista (also known as sotagliflozin), even though the drug has shown solid efficacy from its initial Phase II trials and even though there is still a significant need for more than just insulin therapy for people with Type 1 diabetes. The recent FDA advisory committee meeting (or AdCom) and its 8-8 split decision on whether Zynquista should be approved only muddies the water further, and it is up to the FDA’s reviewers to decide whether the improvements in blood glucose management outweigh the acknowledged higher risks of diabetic ketoacidosis (or DKA) from taking the drug.

Because of the “safety first” mentality of the FDA with respect to diabetes, not to mention the elevated DKA risks that have been seen in trials, I’ve never given Zynquista the sort of approval odds in my model that a drug with its net efficacy benefit would otherwise normally get. Although I’m still positive on balance regarding the drug’s approval chances, a significant source of value for Lexicon's shares is very much still at risk.

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A Split Decision From The AdCom Leaves Another Crack In Lexicon Pharmaceuticals