Current Report Filing (8-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________

FORM 8-K

__________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 5, 2015

Lexicon Pharmaceuticals, Inc.

(Exact name of registrant as specified in its charter)



Delaware	000-30111	76-0474169
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification Number)

8800 Technology Forest Place

The Woodlands, Texas 77381

(Address of principal executive

offices and Zip Code)

(281) 863-3000

(Registrant’s telephone number,

including area code)

Check the appropriate box below if the Form 8‑K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:


o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


o	Soliciting material pursuant to Rule 14a‑12 under the Exchange Act (17 CFR 240.14a‑12)


o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d‑2(b))


o	Pre-commencement communications pursuant to Rule 13e‑4(c) under the Exchange Act (17 CFR 240.13e‑4(c))


Item 1.01	Entry into a Material Definitive Agreement.

On November 5, 2015, we entered into a Collaboration and License Agreement (the “Agreement”) with Sanofi for the worldwide development and commercialization of our diabetes drug candidate sotagliflozin.

Under the Agreement, we granted Sanofi an exclusive, worldwide, royalty-bearing right and license under our patent rights and know-how to develop, manufacture and commercialize sotagliflozin. Subject to specified exceptions, neither party may (a) perform clinical development activities relating to any other compound which inhibits sodium-glucose cotransporters type 1 or type 2 or (b) commercialize any such compounds in the United States, countries of the European Union and certain other specified countries, in each case during the royalty terms applicable in such countries. Among the specified exceptions is a right we retained to pursue the development of our LX2761 drug candidate, with respect to which we granted Sanofi certain rights of first negotiation specified in the Agreement.

Under the Agreement, Sanofi will pay us an upfront payment of $300 million. In addition, we are eligible to receive from Sanofi (a) up to an aggregate of $430 million upon the achievement of specified development and regulatory milestones and (b) up to an aggregate of $990 million upon the achievement of specified sales milestones. We are also entitled to tiered, escalating royalties ranging from low double digit percentages to forty percent of net sales of sotagliflozin, based on indication and territory, with royalties for the higher band of such range attributable to net sales for type 1 diabetes in the United States, and subject in each case to customary royalty reduction provisions. Royalties payable with respect to net sales of sotagliflozin for type 1 diabetes in the United States will also be reduced in the event we do not exercise our co-promotion option described below.

We will continue to be responsible for all clinical development activities relating to type 1 diabetes and will retain an exclusive option to co-promote and have a significant role, in collaboration with Sanofi, in the commercialization of sotagliflozin for the treatment of type 1 diabetes in the United States. If we exercise our co‑promotion option, we will fund forty percent of the commercialization costs relating to such co-promotion activities. Sanofi will be responsible for all clinical development and commercialization of sotagliflozin for the treatment of type 2 diabetes worldwide and will be solely responsible for the commercialization of sotagliflozin for the treatment of type 1 diabetes outside the United States. We will share in the funding of a portion of the planned type 2 diabetes development costs over the next three years, up to an aggregate of $100 million. Sanofi will book sales worldwide in all indications.

The parties are responsible for using commercially reasonable efforts to perform their development and commercialization obligations pursuant to mutually approved development and commercialization plans.

The parties’ activities under the Agreement are governed by a joint steering committee and certain other governance committees which reflect equal or other appropriate representation from both parties. If the applicable governance committee is not able to make a decision by consensus and the parties are not able to resolve the issue through escalation to specified senior executive officers of the parties, then Sanofi will have final decision-making authority, subject to limitations specified in the Agreement.

The Agreement will expire upon the expiration of all applicable royalty terms for all licensed products in all countries. The royalty term for each licensed product in each country is the period commencing on the effective date of the Agreement and ending on the latest of expiration of specified patent coverage, expiration of specified regulatory exclusivity and 10 years following the first commercial sale in the applicable country. Either party may terminate the Agreement in the event of an uncured material breach by the other party. Prior to completion of the core development activities for type 2 diabetes specified in the development plan, Sanofi may terminate the Agreement on a country-by-country and licensed product-by-licensed product basis, in the event of (a) notification of a material safety issue relating to the licensed product or the class of sodium-glucose cotransporters type 1 or type 2 inhibitors resulting in a recommendation or requirement that we or Sanofi cease development, (b) failure to achieve positive results with respect to certain clinical trial results, (c) the occurrence of specified fundamental adverse events or (d) the exploitation of the licensed product infringing third party intellectual property rights in specified major markets and Sanofi is unable to obtain a license to such third party intellectual property rights.

The effectiveness of the Agreement is contingent upon satisfaction of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

We issued a press release announcing the Agreement on November 6, 2015, a copy of which is attached to this current report on Form 8-K as Exhibit 99.1.

The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the Agreement, which we expect to file as an exhibit to our annual report on Form 10-K for the year ending December 31, 2015.


Item 9.01	Financial Statements and Exhibits

(d) Exhibits



Exhibit No.	Description
99.1	—	Press Release of Lexicon Pharmaceuticals, Inc. dated November 6, 2015

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	Lexicon Pharmaceuticals, Inc.


Date: November 6, 2015	By:	/s/ Brian T. Crum
		Brian T. Crum
		Vice President and General Counsel

Index to Exhibits



Exhibit No.	Description
99.1	—	Press Release of Lexicon Pharmaceuticals, Inc. dated November 6, 2015

Exhibit 99.1

Sanofi and Lexicon Pharmaceuticals to Collaborate on Sotagliflozin, an Investigational New Oral Medicine for People with Diabetes

Paris and The Woodlands, TX - November 6, 2015 - Sanofi (EURONEXT: SAN and NYSE: SNY) and Lexicon Pharmaceuticals, Inc. (NASDAQ: LXRX) announced today that they have entered into a collaboration and license agreement for the development and commercialization of sotagliflozin, an investigational new oral dual inhibitor of sodium-glucose cotransporters 1 and 2 (SGLT-1 and SGLT-2), which could be a potential treatment option for people with diabetes.

“This agreement with Lexicon reinforces our commitment to helping people living with diabetes,” said Pascale Witz, Executive Vice President, Sanofi, who will lead the Global Diabetes and Cardiovascular Care Business Unit in the company's new organizational structure. “Adding sotagliflozin to our portfolio, which includes medicines at virtually every stage of the treatment pathway, highlights our focus on providing a large and diverse set of therapeutic options for people with this disease.”

The developmental medicine sotagliflozin (LX4211) is currently being studied in two pivotal Phase 3 trials in type 1 diabetes, which are expected to report top-line results during the second half of 2016. Phase 3 trials in type 2 diabetes are expected to begin in 2016. Sotagliflozin has previously shown encouraging results in exploratory (Phase 2) studies, including reduction of blood sugar (HbA_1c), improvement in glycemic variability and reduced meal-time insulin dose compared with placebo in type 1 diabetics. Phase 2 studies exploring treatment in people with type 2 diabetes, including those with renal impairment, showed lowering of blood sugar (HbA_1c), weight loss and blood pressure improvements. No increase in hypoglycemic events was seen with sotagliflozin compared to background therapy in the Phase 2 program. The adverse event profile in the Phase 2 program was similar to other products in this class and reflective of the urinary glucose excretion associated with sotagliflozin’s inhibition of SGLT-2.

These results indicate that sotagliflozin could have the potential to become an important option among oral anti-diabetic medicines and provide a strong rationale for the further investigation of this compound as a treatment for people with diabetes.

“Lexicon firmly believes in the potential of sotagliflozin for patients living with diabetes. It has been our strategy to focus our resources on the development of sotagliflozin for type 1 diabetes and to pursue a strategic partnership with respect to type 2 diabetes only if it would strengthen stakeholder value under a fully integrated diabetes program. We believe this arrangement with Sanofi achieves that objective,” said Lexicon President and Chief Executive Officer Lonnel Coats. “Sanofi's patient-centric focus in diabetes, and its rich history of innovation in diabetes, make it an exceedingly attractive partner which is well positioned to unlock the full potential of sotagliflozin for patients living with diabetes. Also consistent with our strategy, Lexicon will continue to lead the development of sotagliflozin for type 1 diabetes and have rights to participate in the commercialization of sotagliflozin for type 1 diabetes in the United States.”

Under the terms of the agreement, Lexicon will receive an upfront payment of $300 million and is eligible to receive development, regulatory and sales milestone payments of up to $1.4 billion. Lexicon is also entitled to tiered, escalating double digit percentage royalties on net sales of sotagliflozin.

Sanofi obtains an exclusive worldwide license to develop, manufacture and commercialize sotagliflozin. Lexicon will continue to be responsible for all clinical development activities relating to type 1 diabetes and will retain an exclusive option to co-promote and have a significant role, in collaboration with Sanofi, in the commercialization of sotagliflozin for the treatment of type 1 diabetes in the United States. Sanofi will be responsible for all clinical development and commercialization activities of sotagliflozin for the treatment of type 2 diabetes worldwide and will be solely responsible for the commercialization of sotagliflozin for the treatment of type 1 diabetes outside the United States. Lexicon will share in the funding of a portion of the planned type 2 diabetes development costs over the next three years, up to an aggregate of $100 million.

The agreement is subject to customary filing and review under the Hart-Scott-Rodino Antitrust Improvements Act.

The investigational agent described above is currently under clinical development and its safety and efficacy have not been evaluated by any regulatory authority.

About Sanofi

Sanofi, a global healthcare leader, discovers, develops and distributes therapeutic solutions focused on patients' needs. Sanofi has core strengths in the field of healthcare with seven growth platforms: diabetes solutions, human vaccines, innovative drugs, consumer healthcare, emerging markets, animal health and the new Genzyme. Sanofi is listed in Paris (EURONEXT: SAN) and in New York (NYSE: SNY).

About Lexicon

Lexicon is a fully integrated biopharmaceutical company that is applying a unique approach to gene science, based on Nobel Prize-winning technology, to discover and develop precise medicines for patients with serious, chronic conditions. Through its Genome5000™ program, Lexicon scientists have studied the role and function of nearly 5,000 genes over the last 20 years and have identified more than 100 protein targets with therapeutic potential in a range of diseases. Through the precise targeting of these proteins, Lexicon is pioneering the discovery and development of innovative medicines to safely and effectively treat disease. Lexicon has a pipeline of promising drug candidates in clinical and pre-clinical development in oncology, diabetes and metabolism. For additional information please visit www.lexpharma.com.

Forward Looking Statements

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are statements that are not historical facts. These statements include projections and estimates and their underlying assumptions, statements regarding plans, objectives, intentions and expectations with respect to future financial results, events, operations, services, product development and potential, and statements regarding future performance. Forward-looking statements are generally identified by the words "expects", "anticipates", "believes", "intends", "estimates", "plans" and similar expressions. Although Sanofi's and Lexicon’s management believes that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of Sanofi and Lexicon, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include among other things, the uncertainties inherent in research and development, including the timing of clinical trials, the uncertain predictive nature of clinical trials with respect to subsequent clinical trials, future clinical data and analysis, including post marketing, decisions by regulatory authorities, such as the FDA or the EMA, regarding whether and when to approve any drug, device or biological application that may be filed for any such product candidates as well as their decisions regarding labelling and other matters that could affect the availability or commercial potential of such product candidates, the absence of guarantee that the product candidates if approved will be commercially successful, the future approval and commercial success of therapeutic alternatives, Sanofi’s and Lexicon’s ability to benefit from external growth opportunities, trends in exchange rates and prevailing interest rates, the impact of cost containment policies and subsequent changes thereto, as well as those risks and uncertainties discussed or identified in the public filings with the SEC and the AMF made by Sanofi and with the SEC made by Lexicon, including those listed under "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" in Sanofi's annual report on Form 20-F and in Lexicon’s annual report on Form 10-K for the year ended December 31, 2014. Other than as required by applicable law, Sanofi and Lexicon do not undertake any obligation to update or revise any forward-looking information or statements.

Contacts:



Sanofi
Media Relations Jack Cox Tel.: + (33) 1 53 77 45 02 jack.cox@sanofi.com	Investor Relations Sébastien Martel Tel.: + (33) 1 53 77 45 45 ir@sanofi.com
Global Diabetes Communications	U.S. Diabetes Communications
Philip McNamara Tel.: +1 908 981 5497 philip.mcnamara@sanofi.com	Susan Brooks Tel.: +1 908 981 6566 susan.brooks@sanofi.com

Lexicon Pharmaceuticals, Inc.
Media Relations Mariann Caprino Tel.: +1 917 242 1087 m.caprino@togorun.com	Investor Relations Chas Schultz Tel.: + 1 281 863 3421 cschultz@lexpharma.com