Lexicon Enters Into Loan Facility With Oxford Finance for Up to $150 Million to Support Planned Commercialization of Sotagliflozin
March 17 2022 - 4:14PM
Lexicon Pharmaceuticals, Inc. (Nasdaq: LXRX) today announced it
entered into a loan facility with Oxford Finance LLC that provides
up to $150 million in borrowing capacity designed primarily to
support commercial preparations and the potential launch of
sotagliflozin in heart failure.
“This loan facility provides us with access to a
committed source of funding to support commercial preparations and
the potential launch of sotagliflozin in heart failure along with
substantial financial flexibility as we approach the planned
resubmission of our New Drug Application for sotagliflozin in heart
failure and expected topline results from two Phase 2
proof-of-concept studies of LX9211 in neuropathic pain,” said
Jeffrey L. Wade, Lexicon’s president and chief financial
officer.
The loan facility consists of up to four
tranches, each maturing in March 2027. An initial $25 million
tranche was funded at closing. The second $25 million tranche is
available for draw at Lexicon’s option prior to August 31, 2022
contingent upon the acceptance of filing by the U.S. Food and Drug
Administration of Lexicon’s planned resubmission of its application
for U.S. regulatory approval of sotagliflozin for heart failure.
The third $50 million tranche is available for draw at Lexicon’s
option prior to June 30, 2023 contingent upon U.S. regulatory
approval of sotagliflozin for heart failure. The final $50 million
tranche is available for draw, at Lexicon’s option and subject to
Oxford’s consent, at any time prior to the expiration of a three or
four-year interest-only payment period.
The loan facility carries a floating interest
rate equal to the 30-day U.S. Dollar LIBOR plus 7.90%, with a floor
not less than 8.01%.
In connection with the initiation of the
facility and first tranche funding, Lexicon granted Oxford a
warrant to purchase 420,673 shares of Lexicon’s common stock at an
exercise price of $2.08 per share, exercisable through March 17,
2027. Upon funding of the second and third tranches,
Lexicon will grant Oxford warrants to purchase additional shares of
its common stock having a value equal to 1.75% and 0.875%,
respectively, of each such tranches. Each warrant will have an
exercise price equal to an average closing price of the shares
prior to the warrant’s grant and will be exercisable for a
five-year period.
Lexicon’s obligations under the loan facility
are secured by a first lien security interest in all of the assets
of Lexicon and its subsidiaries and are subject to customary
affirmative and negative covenants, including a financial covenant
relating to net sales of sotagliflozin following regulatory
approval.
About Oxford Finance LLC
Oxford Finance is a specialty finance firm
providing senior secured loans to public and private life sciences
and healthcare services companies worldwide. For over 20 years,
Oxford has delivered flexible financing solutions to its clients,
enabling these companies to maximize their equity by leveraging
their assets. Since 2002, Oxford has originated approximately $8.8
billion in loans. Oxford is headquartered in Alexandria, Virginia,
with additional offices in California (San Diego, Palo Alto, and
Los Angeles), and the greater Boston and New York City metropolitan
areas. For more information, visit www.oxfordfinance.com.
About Sotagliflozin
Discovered using Lexicon’s unique approach to
gene science, sotagliflozin is an investigational 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. Sotagliflozin 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, but has not yet been commercially
launched.
About Lexicon
Pharmaceuticals
Lexicon is a 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. Lexicon advanced
one of these medicines to market and has a pipeline of promising
drug candidates in discovery and clinical and preclinical
development in heart failure, neuropathic pain, diabetes and
metabolism and other indications. For additional information,
please visit www.lexpharma.com.
Safe Harbor Statement
This press release contains “forward-looking
statements,” including statements relating to Lexicon’s financial
position and long-term outlook on its business, including the
clinical development of, regulatory filings for, and potential
therapeutic and commercial potential of sotagliflozin, LX9211 and
its other potential drug candidates. In addition, this press
release also contains forward looking statements relating to
Lexicon’s growth and future operating results, discovery and
development 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 conduct preclinical and clinical development and
obtain necessary regulatory approvals of sotagliflozin, LX9211 and
its other potential drug candidates on its anticipated timelines,
successfully commercialize any products for which it obtains
regulatory approval, 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, 2021, 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.
For Inquiries:
Chas SchultzExecutive Director, Corporate
Communications and Investor RelationsLexicon Pharmaceuticals(281)
863-3421cschultz@lexpharma.com
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