Sanofi Wants Out, Dealing Lexicon's Hopes In Diabetes Another Major Blow

Lexicon Pharmaceuticals’ (LXRX) tortuous path to success in the diabetes market took another big hit late on Friday July 26, when Sanofi (SNY) issued a press release containing a brief summation of top-line results of three Phase III Type 2 diabetes studies of Zynquista and notification that it was terminating the collaboration with Lexicon to develop and market the drug for Type 1 and Type 2 diabetes. Lexicon issued its own statement shortly thereafter, casting the Phase III results in a more positive light and declaring Sanofi’s notice of termination to be invalid.

What happens now is open for debate, but it is difficult to see a positive spin for Lexicon. If Sanofi’s termination was legally invalid, Lexicon may be able to get some funding from Sanofi as part of a settlement, but forcing an unwilling partner to market a drug is effectively a non-starter. Given the significant costs to a commercial launch of a diabetes drug, the unlikelihood of another partner, and Lexicon’s iffy financial condition, this is another serious blow to a company that has already taken quite a few of them.

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Sanofi Wants Out, Dealing Lexicon's Hopes In Diabetes Another Major Blow