It’s been an interesting 30 days for Lexicon Pharmaceuticals (LXRX), with positive data from the company’s cardio studies of sotagliflozin (“sota”) presented at the American Heart Association virtual meeting, a Fast Track designation for LX9211, and some renewed love from the sell-side. With that, the shares have shot up from a little over $1.00 at the time of my last piece to over $3.30 before recently settling back down around $3.00.
Positive clinical data are never a bad thing, but I continue to believe that Lexicon faces a sizable challenge in differentiating sota from other drugs in the SGLT-2 group and securing a partner who can help the company maximize the value of this drug. While the FT designation for LX9211 is certainly welcome, and should shave off about a year in the development timeline, we still have yet to see efficacy data in humans.
With the share price move, I believe Lexicon is fairly valued on the basis of its LX9211 pain asset. Whether sota has meaningful value is once again a key question; while I still believe that Lexicon faces a steep uphill climb with this drug, the size of the market opportunities are large enough that even a token chance of success can shift the valuation argument.
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