Lexicon Pharmaceuticals, Inc. (Nasdaq: LXRX), today reported
financial results and provided a business update for the three
months ended September 30, 2019.
“We continue to make good progress on our
XERMELO business, with XERMELO net sales growing more than 30% in
the third quarter of 2019 versus the same period in 2018,” said
Lonnel Coats, Lexicon’s president and chief executive officer. “We
now have full rights for Zynquista. We expect to complete the core
Phase 3 studies in type 2 diabetes in the near term and anticipate
being in a position to file for regulatory approval for that
indication in the U.S. and in Europe in the first half of 2020. We
continue to have productive dialogue with the FDA on a path forward
for Zynquista in type 1 diabetes in the U.S.”
Third Quarter Product and Pipeline
Highlights
XERMELO® (telotristat
ethyl)
- XERMELO U.S. net sales were $8.4 million in the third quarter
of 2019.
- The Telotristat Ethyl for
Advanced Biliary Tract
Cancer, or TELE-ABC, study, a Phase 2a clinical
study of telotristat ethyl in patients with biliary tract cancer,
continues to enroll patients.
Zynquista™ (sotagliflozin)
- In September, Lexicon and Sanofi
terminated their alliance for the development and commercialization
of sotagliflozin. In connection with the termination, Lexicon
regained all rights to sotagliflozin and assumed full
responsibility for the worldwide development and commercialization
of sotagliflozin in both type 1 and type 2 diabetes. Under the
terms of the settlement, Sanofi will pay Lexicon $260 million, of
which $208 million was paid in September and the remainder is
payable within twelve months. Sanofi continues to coordinate with
Lexicon in the transition of responsibility for ongoing clinical
studies and other activities.
- Clinical data for sotagliflozin
were highlighted in two oral presentations at the European
Association for the Study of Diabetes (EASD) 55th annual meeting
(September 16-20; Barcelona, Spain), demonstrating the effect of
sotagliflozin on body weight and composition in adults with type 1
diabetes. In addition, five posters were presented, detailing the
reductions in glucose variability and risk for hyperglycemia in
adults with type 1 diabetes treated with sotagliflozin alone,
improved treatment satisfaction in patients with type 1 diabetes
treated with sotagliflozin and insulin versus insulin alone, lower
rates of clinically relevant hypoglycemic events at any A1C level
at 52 weeks in adults with type 1 diabetes, the positive impact of
sotagliflozin on renal function, albuminuria and blood pressure in
adults with type 1 diabetes and the reduction in markers of
arterial stiffness in patients with type 1 diabetes.
- In September, a post-hoc analysis
of hypoglycemia as a function of A1C in patients with type 1
diabetes receiving sotagliflozin or placebo in combination with
optimized insulin therapy was published in Diabetes Technology and
Therapeutics. The pooled analysis from inTandem1 and inTandem2
trials showed that at 52 weeks, level 1 and 2 hypoglycemia events
were 22% to 30% less frequent with sotagliflozin added to optimized
insulin therapy versus placebo in adults with type 1 diabetes at
any A1C level, with greater differences at lower A1C
values.
- In August, 52-week cardiorenal
results from a pooled analysis from the inTandem1 and inTandem2
studies of sotagliflozin in adults with type 1 diabetes were
published in Diabetes Care. Sotagliflozin demonstrated changes in
clinical biomarkers such as estimated glomerular filtration rate
(eGFR), hematocrit, serum albumin, uric acid, systolic blood
pressure and urinary albumin-to-creatinine ratio (UACR) that
suggest sotagliflozin may reduce cardiovascular risk and
progression of chronic kidney disease. Sotagliflozin was associated
with short- and long-term renal hemodynamic changes. After
cessation of 52 weeks of therapy, eGFR was comparable to baseline
and significantly higher than placebo in sotagliflozin-treated
patients.
- In July, Lexicon announced the
preliminary topline results received from Sanofi from SOTA-MET,
SOTA-CKD3 and SOTA-CKD4, the first three of a total of nine
clinical trials included in the core Phase 3 development program
for sotagliflozin in type 2 diabetes.
Third Quarter 2019 Financial
Highlights
Revenues: Revenues for the
three months ended September 30, 2019 increased to $294.4 million
from $7.0 million for the corresponding period in 2018, primarily
due to an increase of collaborative revenues of $260 million from
the termination of the alliance with Sanofi and recognition of the
remaining amount of $23.5 million allocated to performance
obligations from the initial agreement with Sanofi and an increase
in net product revenue. Net product revenues for the three months
ended September 30, 2019 consisted of $8.4 million from net sales
of XERMELO in the U.S., which were up 33% from the prior year
quarter.
Cost of Sales: Cost of sales
related to sales of XERMELO for each of the three months ended
September 30, 2019 and 2018 was $0.6 million.
Research and Development (R&D)
Expenses: Research and development expenses for the three
months ended September 30, 2019 increased to $26.7 million from
$13.8 million for the corresponding period in 2018, primarily due
to an increase in external clinical development costs related to
sotagliflozin subsequent to the termination of the alliance with
Sanofi, in which Lexicon regained the rights and responsibilities
for development and commercialization for sotagliflozin.
Selling, General and Administrative
(SG&A) Expenses: Selling, general and administrative
expenses for the three months ended September 30, 2019 decreased to
$13.9 million from $15.6 million for the corresponding period in
2018, primarily due to decreased marketing costs.
Impairment Loss on Intangible
Asset: An impairment loss for the three months ended
September 30, 2019 of $28.6 million was recognized to an indefinite
lived intangible asset associated with Lexicon’s 2010 acquisition
of Symphony Icon, due to the decision to terminate research and
development activities related to a program for irritable bowel
syndrome that was among the assets acquired.
Income Tax Benefit: An
income tax benefit of $6.0 million for the three months ended
September 30, 2019 was recognized in connection with the impairment
loss on the indefinite lived intangible asset, which resulted in a
decrease to the deferred tax liability and created an income tax
benefit.
Net Income (Loss): Net income
for the three months ended September 30, 2019 was $226.1 million,
or $1.95 per diluted share, as compared to a net loss of $27.4
million, or a loss of $0.26 per share, in the corresponding period
in 2018. For the three months ended September 30, 2019 and 2018,
net income included non-cash, stock-based compensation expense of
$3.6 million and $2.9 million, respectively.
Cash and Investments: As of
September 30, 2019, Lexicon had $296.3 million in cash and
investments, as compared to $160.1 million as of December 31,
2018. The cash position as of September 30, 2019 includes proceeds
of $208 million in connection with the termination of the alliance
with Sanofi.
Anticipated Near-Term
Milestones
- Q4 2019 – Topline Phase 1 data for LX9211
- Q4 2019 / early 2020 – Topline results from core Phase 3
studies for sotagliflozin in type 2 diabetes
- Q4 2019 – Completion of patient enrollment of the initial
safety cohort in the Phase 2 study of telotristat ethyl in biliary
tract cancer
Conference Call and Webcast
Information
Lexicon management will hold a live conference
call and webcast today at 8:00 am EST / 7:00 am CST to review its
financial and operating results and to provide a general business
update. The dial-in number for the conference call is 888-645-5785
(U.S./Canada) or 970-300-1531 (international). The conference ID
for all callers is 8189178. The live webcast and replay may be
accessed by visiting Lexicon’s website at
www.lexpharma.com/investors. An archived version of the webcast
will be available on the website for 14 days.
About XERMELO (telotristat
ethyl)
Discovered using Lexicon’s unique approach to
gene science, XERMELO (telotristat ethyl) is the first and only
approved oral therapy for carcinoid syndrome diarrhea. XERMELO
targets tryptophan hydroxylase, an enzyme that mediates the excess
serotonin production within metastatic neuroendocrine tumor (mNET)
cells. XERMELO is approved in the United States, the European Union
and certain additional countries for the treatment of carcinoid
syndrome diarrhea in combination with somatostatin analog (SSA)
therapy in adults inadequately controlled by SSA therapy. Carcinoid
syndrome is a rare condition that occurs in patients living with
mNETs and is characterized by frequent and debilitating diarrhea.
XERMELO targets the overproduction of serotonin inside mNET cells,
providing an additional treatment option for patients suffering
from carcinoid syndrome diarrhea.
Lexicon has granted Ipsen an exclusive
royalty-bearing right and license to commercialize XERMELO outside
of the United States and Japan. We are commercializing XERMELO in
the United States and Ipsen is commercializing XERMELO in multiple
countries, including the United Kingdom and Germany.
XERMELO
(telotristat ethyl) Important Safety
Information
- Warnings and
Precautions: XERMELO may cause constipation, which can be
serious. Monitor for signs and symptoms of constipation and/or
severe, persistent, or worsening abdominal pain in patients taking
XERMELO. Discontinue XERMELO if severe constipation or severe,
persistent, or worsening abdominal pain develops.
- Adverse Reactions:
The most common adverse reactions (≥5%) include nausea, headache,
increased gamma-glutamyl-transferase, depression, flatulence,
decreased appetite, peripheral edema, and pyrexia.
- Drug Interactions:
If necessary, consider increasing the dose of concomitant CYP3A4
substrates, as XERMELO may decrease their systemic exposure. If
combination treatment with XERMELO and short-acting octreotide is
needed, administer short-acting octreotide at least 30 minutes
after administering XERMELO.
For more information about XERMELO, see Full Prescribing
Information at www.xermelo.com.
About Zynquista
(sotagliflozin)
Discovered using Lexicon’s unique approach to
gene science, Zynquista is an oral dual inhibitor of two proteins
responsible for glucose regulation known as sodium-glucose
co-transporter types 1 and 2 (SGLT1 and SGLT2). SGLT1 is
responsible for glucose absorption in the gastrointestinal tract,
and SGLT2 is responsible for glucose reabsorption by the kidney.
Zynquista is approved in the European Union (EU) for use as an
adjunct to insulin therapy to improve blood sugar (glycemic)
control in adults with type 1 diabetes with a body mass index ≥ 27
kg/m2, who could not achieve adequate glycemic control despite
optimal insulin therapy. Outside of such approval, Zynquista is
investigational and has not been approved by any other regulatory
authority for type 1 or type 2 diabetes.
About Lexicon
Pharmaceuticals
Lexicon is a fully integrated biopharmaceutical
company with a mission of pioneering medicines that transform
patients’ lives. Through its Genome5000™ program, Lexicon
scientists studied the role and function of nearly 5,000 genes and
identified more than 100 protein targets with significant
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. In addition to its first commercial product,
XERMELO, Lexicon has a pipeline of promising drug candidates in
clinical and preclinical development in diabetes and metabolism,
oncology and neuropathic pain. For additional information, please
visit www.lexpharma.com.
Safe Harbor Statement
This press release contains “forward-looking
statements,” including statements relating to Lexicon’s long-term
outlook on its business, including the clinical development of, the
regulatory filings for, and the potential therapeutic and
commercial potential of XERMELO (telotristat ethyl), Zynquista
(sotagliflozin), and LX9211. In addition, this press release also
contains forward looking statements relating to Lexicon’s growth
and future operating results, discovery, development and
commercialization of products, strategic alliances and intellectual
property, as well as other matters that are not historical facts or
information. All forward-looking statements are based on
management’s current assumptions and expectations and involve
risks, uncertainties and other important factors, specifically
including Lexicon’s ability to meet its capital requirements,
successfully commercialize XERMELO, successfully complete the
transition from Sanofi of responsibility for ongoing clinical
studies and other activities relating to sotagliflozin,
successfully conduct preclinical and clinical development and
obtain necessary regulatory approvals of telotristat ethyl,
sotagliflozin, LX9211 and its other potential drug candidates on
its anticipated timelines, achieve its operational objectives,
obtain patent protection for its discoveries and establish
strategic alliances, as well as additional factors relating to
manufacturing, intellectual property rights, and the therapeutic or
commercial value of its drug candidates. Any of these risks,
uncertainties and other factors may cause Lexicon’s actual results
to be materially different from any future results expressed or
implied by such forward-looking statements. Information identifying
such important factors is contained under “Risk Factors” in
Lexicon’s annual report on Form 10-K for the year ended December
31, 2018, as filed with the Securities and Exchange Commission.
Lexicon undertakes no obligation to update or revise any such
forward-looking statements, whether as a result of new information,
future events or otherwise.
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Lexicon
Pharmaceuticals, Inc. |
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Selected
Financial Data |
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Consolidated Statements of Operations Data |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
(In
thousands, except per share data) |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
Net product revenue |
|
$ |
8,351 |
|
|
$ |
6,286 |
|
|
$ |
23,763 |
|
|
$ |
19,062 |
|
|
|
Collaborative agreements |
|
|
285,910 |
|
|
|
556 |
|
|
|
289,209 |
|
|
|
26,792 |
|
|
|
Royalties and other revenue |
|
|
187 |
|
|
|
124 |
|
|
|
374 |
|
|
|
284 |
|
|
|
Total revenues |
|
|
294,448 |
|
|
|
6,966 |
|
|
|
313,346 |
|
|
|
46,138 |
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of sales (including finite-lived intangible asset
amortization) |
|
|
577 |
|
|
|
551 |
|
|
|
2,457 |
|
|
|
1,922 |
|
|
|
Research and development, including stock-based compensation of
$1,698, $1,472, $5,369 and $4,522, respectively |
|
|
26,659 |
|
|
|
13,763 |
|
|
|
51,318 |
|
|
|
87,936 |
|
|
|
Selling, general and administrative, including stock-based |
|
|
|
|
|
|
|
|
|
|
compensation of $1,864, $1,405, $5,370 and $4,327,
respectively |
|
|
13,898 |
|
|
|
15,579 |
|
|
|
42,271 |
|
|
|
47,191 |
|
|
|
Impairment loss on intangible asset |
|
|
28,638 |
|
|
|
- |
|
|
|
28,638 |
|
|
|
- |
|
|
|
Total operating expenses |
|
|
69,772 |
|
|
|
29,893 |
|
|
|
124,684 |
|
|
|
137,049 |
|
|
|
Income
(loss) from operations |
|
|
224,676 |
|
|
|
(22,927 |
) |
|
|
188,662 |
|
|
|
(90,911 |
) |
|
|
Interest
expense |
|
|
(5,204 |
) |
|
|
(5,252 |
) |
|
|
(15,485 |
) |
|
|
(15,552 |
) |
|
|
Interest and
other income, net |
|
|
600 |
|
|
|
783 |
|
|
|
2,080 |
|
|
|
2,698 |
|
|
|
Net income
(loss) before income taxes |
|
|
220,072 |
|
|
|
(27,396 |
) |
|
|
175,257 |
|
|
|
(103,765 |
) |
|
|
Income tax
benefit |
|
|
6,014 |
|
|
|
- |
|
|
|
6,014 |
|
|
|
- |
|
|
|
Net income
(loss) |
|
$ |
226,086 |
|
|
$ |
(27,396 |
) |
|
$ |
181,271 |
|
|
$ |
(103,765 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) per common share, basic |
|
$ |
2.13 |
|
|
$ |
(0.26 |
) |
|
$ |
1.71 |
|
|
$ |
(0.98 |
) |
|
|
Net income
(loss) per common share, diluted |
|
$ |
1.95 |
|
|
$ |
(0.26 |
) |
|
$ |
1.59 |
|
|
$ |
(0.98 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
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Shares used
in computing net income (loss) per |
|
|
|
|
|
|
|
|
|
|
common share, basic |
|
|
106,272 |
|
|
|
105,881 |
|
|
|
106,200 |
|
|
|
105,800 |
|
|
|
Shares used
in computing net income (loss) per |
|
|
|
|
|
|
|
|
|
|
common share, diluted |
|
|
116,640 |
|
|
|
105,881 |
|
|
|
116,742 |
|
|
|
105,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
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As of |
|
As of |
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Consolidated Balance Sheet Data |
|
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|
|
September 30, 2019 |
December 31, 2018 |
|
(In
thousands) |
|
|
|
|
|
(Unaudited) |
|
|
|
|
Cash and investments |
|
|
|
$ |
296,304 |
|
|
$ |
160,052 |
|
|
|
Property and equipment, net |
|
|
|
|
14,540 |
|
|
|
15,865 |
|
|
|
Goodwill |
|
|
|
|
44,543 |
|
|
|
44,543 |
|
|
|
Other intangible assets |
|
|
|
|
20,157 |
|
|
|
50,119 |
|
|
|
Total assets |
|
|
|
|
444,588 |
|
|
|
284,136 |
|
|
|
Deferred revenue |
|
|
|
|
1,117 |
|
|
|
27,046 |
|
|
|
Current and long-term debt |
|
|
|
|
245,126 |
|
|
|
245,002 |
|
|
|
Accumulated deficit |
|
|
|
|
(1,290,306 |
) |
|
|
(1,471,577 |
) |
|
|
Total stockholders' equity (deficit) |
|
|
164,712 |
|
|
|
(26,405 |
) |
|
|
|
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For Investor Inquiries:
Kimberly Lee, D.O.Head of Investor Relations and
Corporate StrategyLexicon Pharmaceuticals(281)
863-3383klee@lexpharma.com
For Media Inquiries:
Chas SchultzExecutive Director, Corporate
Communications and Patient AdvocacyLexicon Pharmaceuticals(281)
863-3421cschultz@lexpharma.com
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