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.

 

Read more here: 

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

Lexicon Pharmaceuticals: Encouraging Signs Of Efficacy In Pain, But Still Looking For A Clear Win

The incomplete and somewhat ambiguous results that Lexicon Pharmaceuticals (NASDAQ:LXRX) reported in late June from its Phase II RELIEF-DPN-1 study of LX9211 ('9211) are, unfortunately, par for the course for a company that has a long record of struggling to deliver hoped-for results for its shareholders. That said, as a proof-of-concept study it was a success, and it continues to support the notion that there may be enough upside from this high-risk/high-reward biotech to merit attention from aggressive risk-tolerant biotech investors.

The story today at Lexicon basically boils down to two key opportunities and uncertainties - can the company effectively market its SGLT-1/2 drug sotagliflozin ("sota") in the heart failure market (assuming approval, of course), and can LX9211 generate enough high-quality data to coax a larger pharmaceutical company into a development partnership? There are legitimate bear arguments to be made with both questions, but also enough upside in a favorable outcome to make this worth ongoing attention.

 

Read the full article here: 

Lexicon Pharmaceuticals: Encouraging Signs Of Efficacy In Pain, But Still Looking For A Clear Win

Lexicon Stumbles With Sotagliflozin, But The Heart Failure Opportunity Is Getting More Interesting

 

Sodium-glucose contransporter-2 inhibitors (or SGLT-2 inhibitors) are already starting to change the standard of care for some people with heart failure, and there’s mounting clinical evidence provided by a number of trials that suggests these drugs could become important and widely-used medications in an even broader range of heart failure types. That’s very encouraging news for Lexicon Pharmaceuticals (NASDAQ:LXRX), but there are still meaningful challenges between now and future commercial success.

Since my last update on Lexicon, these shares have lost a little more than 40% of their value – they had been modestly outperforming a weak biotech tape until Monday’s announcement regarding the need to resubmit the New Drug Application (or NDA) for sotagliflozin, the company’s entrant into the SGLT-2 heart failure market.

Although I believe many retail investors still seriously underestimate the marketing challenges ahead of the company, this decline has taken the shares back to an interesting place. While I'm very definitely concerned about the amount of dilution the company will likely face to raise funds to market sotagliflozin on its own, the shares may be worth a look again for very risk-tolerant investors.

 

Read the full article here: 

Lexicon Stumbles With Sotagliflozin, But The Heart Failure Opportunity Is Getting More Interesting

Lexicon Pharmaceuticals Still On The Launch Pad, With An Uncertain Trajectory

 

Biotech is hard. Most biotechs never manage to develop one drug that can get through the FDA approval process, let alone two. With Lexicon Pharmaceuticals (LXRX), though, investors are getting a difficult lesson that while drug development may be the hardest part of the process, it’s not the only hard part. Whether Lexicon can get sotagliflozin onto the market on their own and make a dent against AstraZeneca (AZN) and Eli Lilly (LLY) remains an open question, as does the clinical fate of LX9211 in pain.

At least two key value-altering questions remain in front of Lexicon – can the company differentiate sotagliflozin from Farxiga and Jardiance in treating heart failure among people with Type 2 diabetes (or T2D), and can they find a marketing partner to take on the heavy lifting of commercializing the drug? There should be more clarity on these two questions by year-end, and while the shares do remain undervalued on a risk-adjusted analysis of both sotagliflozin and LX9211, it’s a high-risk proposition.

 

Read more here: 

Lexicon Pharmaceuticals Still On The Launch Pad, With An Uncertain Trajectory

Lexicon Pharmaceuticals Still A Very High-Risk/High-Reward Biopharma Name

 

As the clock keeps ticking, Lexicon Pharmaceuticals (LXRX) have continued to skid – falling about a third since my last update as investor enthusiasm over the company’s opportunity to disrupt the heart failure market with its SGLT-1/2 inhibitor Zynquista as faded. While nothing has changed, that’s actually part of the problem – Lexicon is going to need a partner to successfully launch this drug, and every month without a partner erodes Street confidence in the long-term potential of the drug.

Valuing Lexicon today remains exceptionally difficult as there are a lot of unknowables that have a big influence on the valuation. If AstraZeneca (AZN) and Lilly (LLY) (and Boehringer Ingelheim) report strong positive data from the DELIVER and EMPEROR-Preserved studies of their SGLT-2 drugs in patients with preserved ejection fraction, differentiating Zynquista in the market will be even harder. Likewise, if Lexicon has to go it alone (as opposed to securing a larger pharmaceutical company to market/co-market the drug), the road ahead is considerably rockier.

I’ve reduced my fair value on Lexicon to account for a longer, slower revenue ramp on Zynquista. Still, it’s worth mentioning again that this is a stock where the price could move rapidly on the basis of competitor clinical updates, FDA action on the Type 1 diabetes indication for Zynquista, and/or the results of the company’s Phase II proof-of-concept studies for pain drug LX9211.

Read more here: 

Lexicon Pharmaceuticals Still A Very High-Risk/High-Reward Biopharma Name

Back To "Hurry Up And Wait" With Lexicon

The frustrating reality for a lot of biotech shareholders is that while these stocks can enjoy strong runs on thesis-altering data announcements, a lot of time as a biotech investor is spent waiting. Such is the case for Lexicon Pharmaceuticals (LXRX) today. Whatever commercial sales potential remains in Xermelo for its current on-label indication of carcinoid-related diarrhea, it’s going to take time to develop. Likewise with follow-on opportunities in neuroendocrine tumors (or NET) and biliary tract cancer, new drug opportunities like LX9211 in pain, and whatever management may try to advance from its preclinical assets.

The “but” is that Lexicon’s clock is ticking. The company has the cash to see if there’s something to the idea of using Xermelo in those expanded oncology indications and LX9211 in pain, and management still has some cards to play with sotagliflozin at the FDA. On top of that, perhaps management will find some alternatives for restructuring debt maturities in 2021 and 2022. The shares do still have speculative value, but it’s tied to largely to the clinical development process now.

Read the full article here:
Back To "Hurry Up And Wait" With Lexicon

Lexicon Pharmaceuticals Moving On From Diabetes And Pivoting Toward Clinical Candidates

While I’m sure die-hards will claim that Lexicon Pharmaceutical’s (LXRX) sotagliflozin still has a future, the company’s recent announcement that it would shut down the SCORED and SOLOIST long-term studies and indefinitely postpone an NDA filing due to an inability to find a partner, after getting its second appeal to the FDA on the Type 1 indication rejected, essentially brings that program to a close.

Theoretically Lexicon could still find a partner for this drug, but the reality is that it’s done as a meaningful contributor to the story. Still, the company’s cupboard is not entirely bare; management has reported encouraging retrospective efficacy for Xermelo in neuroendocrine tumors (or NET), will be reporting initial efficacy data for Xermelo in biliary tract cancer (or BTC) later this year, and will be starting a Phase II proof of concept study in diabetic peripheral neuropathy later this year.

The loss of sotagliflozin is meaningful, but the clinical potential of Xermelo and the pain drug LX9211 can support a fair value above today’s price. Investors should note, though, that these are high-risk opportunities and the company’s balance sheet/funding situation is far from ideal.

Read more here:
Lexicon Pharmaceuticals Moving On From Diabetes And Pivoting Toward Clinical Candidates

Lexicon Waiting For Clarity On Its Diabetes Franchise

Lexicon Pharmaceuticals (LXRX) is now in a “hurry up and wait” limbo, as the company waits for clarity on its dispute resolution petition with the FDA regarding Zynquista in Type 1 diabetes and as investors wait for more information and clarity on the clinical profile of Zynquista in Type 2 diabetes and Lexicon’s efforts to re-partner the drug.

For now, I believe $4/share is still a pretty fair value for Lexicon shares. A manageable path to approval of Zynquista in Type 1 diabetes would be a significant value-driver for the shares, as would any improvement in the apparent clinical profile of the drug in Type 2 diabetes. Favorable data from the Xermelo biliary tract cancer study or LX9211 in pain would likewise be positives.

Said differently, there are a lot of things that could go right (and go right relatively quickly) for Lexicon and drive a much higher share price, but I believe shareholders need to go in with their eyes open to the downside risk if those favorable outcomes don’t develop.

Click here for more:
Lexicon Waiting For Clarity On Its Diabetes Franchise

Lexicon Gets Some Clarity And Cash For Its Zynquista Diabetes Program

For a company that badly needed some good news, Lexicon Pharmaceuticals' (LXRX) announcement of a settlement with now-former partner Sanofi (SNY) for its Zynquista SGLT-1/2 inhibitor is a welcome development. While the settlement, which returns full rights to the drug back to Lexicon and includes a significant cash payment, is not a home run for the company, it is at least a meaningful improvement over a protracted legal fight with Sanofi, and the company can now look to secure a new marketing partner.

The good news for Lexicon is that the Sanofi deal still resulted in a European approval for Type 1 diabetes and a data package that will support filings for Type 2 diabetes in both the U.S. and Europe. The bad news is that further funding will be necessary to finish all of the Zynquista studies, Lexicon absolutely needs a partner to market the drug, and the company is still looking at an uphill climb to gain market share with a drug that doesn’t look particularly differentiated in Type 2 diabetes at this point.

Read the full article here:
Lexicon Gets Some Clarity And Cash For Its Zynquista Diabetes Program

Lexicon Pharmaceuticals Now Walking A Fine Line

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.

Continue here:
Lexicon Pharmaceuticals Now Walking A Fine Line

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.

Read more here:
Sanofi Wants Out, Dealing Lexicon's Hopes In Diabetes Another Major Blow

Lexicon Pharmaceuticals Knocked Back By The FDA's Rejection Of Zynquista

Once again the FDA has shown that when it comes to new therapies for diabetes, particularly Type 1 diabetes, the agency believes in an abundance (perhaps an overabundance) of caution. To that point, Sanofi (SNY) and Lexicon (LXRX) announced on Friday March 22 that the FDA rejected the drug application for Zynquista, Lexicon’s SGLT-1/2 inhibitor for Type 1 diabetes.

Given the 50/50 split on the AdComm vote and that aforementioned precautionary principle that has long dominated the agency’s approach to diabetes, I had estimated the odds of approval at only slightly better than 50/50 and I cannot say that the rejection was a surprise. What makes evaluating the path forward more challenging, though, is the lack of information coming from the companies regarding the details of the CRL and the path forward from here.

With this rejection, and some modified expectations for what Zynquista could do in the market long term, I’ve lowered my fair value to around $10.50. Although there’s still some value here, I can’t call this low-hanging fruit for reasons I’ll go into a little later.

Read more here:
Lexicon Pharmaceuticals Knocked Back By The FDA's Rejection Of Zynquista

The FDA's Upcoming Decision On Zynquista Is Key To Lexicon's Performance

Lexicon Pharmaceuticals (LXRX) has long been a volatile stock, even by the standards of biotech, and whether it can move out of its current doldrums has everything to do with next week’s FDA decision on Zynquista for Type 1 diabetes (or T1D). With Xermelo relegated to an “is what it is” disappointment in carcinoid-related diarrhea and other clinical candidates in early stages of development, Zynquista is the key value-driver now.

I’m still guardedly optimistic that the FDA will approve Zynquista, albeit with warnings and risk mitigation strategies, but I don’t exclude the possibility of a rejection on procedural grounds or a requirement for a risk mitigation study. Still, with what I regard as overly-discounted expectations for Zynquista in both T1D and Type 2 diabetes (or T2D), these shares still look undervalued, albeit very risky, to me.

Read more here:
The FDA's Upcoming Decision On Zynquista Is Key To Lexicon's Performance

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.

Read more here:
A Split Decision From The AdCom Leaves Another Crack In Lexicon Pharmaceuticals

Lexicon Still Heavily Dependent On Its Pipeline

Although Lexicon Pharmaceuticals (LXRX) has done what many biotechs fail to do, getting a drug through the clinical trial and FDA approval processes and onto the market, the commercialization of Xermelo really hasn’t helped the company or the stock, as the shares are quite a bit lower than when the drug was first approved and launched. At the same time, Lexicon has seen other pharmaceutical companies announce relatively solid data for their SGLT-2 drugs in Type 1 diabetes, the same market that Lexicon hopes to target (in partnership with Sanofi (SNY)) with sotagliflozin (or “sota”).

I continue to believe that the market is undervaluing the opportunity Lexicon has in the diabetes space with sota, but investors are in no mood to give the benefit of the doubt to a company that has long tested their patience. Accordingly, while I do see value here (potentially significant value), this may not be the easiest way to generate alpha, particularly as the launch of sota could be more challenging than once hoped.

Click here for more:
Lexicon Still Heavily Dependent On Its Pipeline

Lexicon Likely Stuck For A Little While

One of the realities of biotech investing is that share prices can linger in no man's land when there's not much news to fire up the imaginations of investors. In the case of Lexicon Pharmaceuticals (NASDAQ:LXRX), a seemingly good initial launch of its first drug Xermelo is being greeted with little more than a "oh, that's nice … what else ya got?" by the market. What's more, with clinical data on sotagliflozin ("sota") more or less in hand for the Type 1 indication and a long wait for Type 2 data and/or FDA action, there's not a lot to really get the excitement going.

Lexicon shares have gone basically nowhere since my last update even though the biotech sector has done pretty well. I don't really see much to blame Lexicon for, as the clinical data that have been presented have been pretty consistent (if not a little better than expected) and the launch of Xermelo has gone well. Even so, with not a lot of mind-changing data on the way soon, it may take some patience to hang on through these doldrums. I continue to believe that Lexicon shares ought to trade in the high $20s on the basis of the value of both Xermelo and sota, but this isn't a biotech with the sort of sizzle that biotech investors often crave.

Click here for more:
Lexicon Likely Stuck For A Little While

Update on Lexicon

Since Seeking Alpha no longer allows meaningful updates to articles, I'll just post this here.

Lexicon announced on Sept 14 that the FDA was pushing back the PDUFA date on telotristat etiprate by 90 days (to the end of February). This was apparently triggered by a request for additional data analyses from the company and the agency's need for more time to review that.

This is not a positive development, but it's difficult to gauge its materiality. Obviously it takes away a "nice to have" positive news item, but it really doesn't impact the sales potential. The company had very little to say about this at today's BAML conference presentation, but it didn't sound like this was an especially material request.

Lexicon Checks A Key Box

There are times when it feels like the companies I own/follow conspire to make sure I can't take days off. That was the case on Friday, when Lexicon Pharmaceuticals (NASDAQ:LXRX) announced the first top-line Phase III results for its key drug sotagliflozin in Type 1 diabetes. The results were positive, taking the stock up almost 20%, but they don't answer all of the remaining questions on this drug.

I continue to believe that Lexicon is meaningfully undervalued, with about 50% upside to my new fair value. Lexicon still needs to fully prove out the efficacy and safety of sotagliflozin in Type 1 diabetes and Sanofi (NYSE:SNY) needs to do its part with the Type 2 indication. What's more, investors would do well to remember that the FDA can be very demanding and unpredictable when it comes to new treatments for diabetes. That said, I think the risk-reward here is still interesting and worthwhile.

Continue here:
Lexicon Checks A Key Box

Seeking Alpha: Steady As She Goes For Lexicon Ahead Of Life-Changing Events

Life is going to get very interesting at Lexicon Pharmaceuticals (NASDAQ:LXRX) in the relatively near future. The company will know by the end of November whether the FDA will approve LXRX's lead drug telotristat etiprate ("telotristat"), and investors will get an initial look at top-line results of sotagliflozin in about one month.

Both of these qualify, in my opinion, as life-changing events for the company. Approval of telotristat is generally expected, and I believe the drug should generate over $400 million in peak sales, and accounts for about 60% of my estimated fair value. The remainder is tied to sotagliflozin, which has the potential to be a differentiated option for Type 1 and Type 2 diabetics and generate over $1 billion in peak sales. While I continue to believe that the telotristat opportunity is underappreciated by the Street, the reality is that strong sotagliflozin data is a "must have" for bullish sentiment on the stock at this point.

Read more here:
Steady As She Goes For Lexicon Ahead Of Life-Changing Events

Seeking Alpha: Lexicon Moving Forward, But Nobody Really Seems To Care

Years of disappointment and misleading guidance from prior management put Lexicon Pharmaceuticals (NASDAQ:LXRX) in a deep hole with respect to Street sentiment, but the company's execution is helping it slowly dig its way out. This year (2016) should see the company get its first product approved by the FDA, as well as key pivotal data on the Type 1 diabetes program.

While I'd certainly count myself in the camp of "long-suffering investors", I'm still generally more bullish on Lexicon than the sell-side. I believe sales of the company's lead drug telotristat etiprate can total more than $500 million at peak, supporting a fair value above today's price on its own. There's considerably more room for debate about the potential (and potential value) of Lexicon's Sanofi-partnered (NYSE:SNY) diabetes program, not to mention Lexicon's future R&D development plans, but these shares look like a risky play with an interesting skew to outsized potential gains.

Read more here:
Lexicon Moving Forward, But Nobody Really Seems To Care