Lexicon Pharmaceuticals (LXRX)
management reported earnings for the second quarter on July 31 and
provided a little more context and detail about the situation with Sanofi (SNY)
regarding the latter’s attempt to exit the development and marketing
collaboration for SGLT-1/2 drug Zynquista in diabetes. Although the
update does reinforce the notion that Lexicon has some enforceable
rights here, management is realistic that the collaboration is
effectively over.
Lexicon is in a precarious place.
Relative to cash burn, the company probably has around a year’s worth of
cash left, and it seems unlikely that any legal disputes with Sanofi
could be resolved that quickly. Although the pipeline has some upside
potential and Zynquista could still be a marketable drug, management
will really have to thread the needle for the potential value of the
stock to be a relevant concern.
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Lexicon Pharmaceuticals Now Walking A Fine Line
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