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On Tuesday, H.C. Wainwright reaffirmed its Buy rating and $4.00 price target for Lexicon Pharmaceuticals (NASDAQ:LXRX) stock, which currently trades at $0.29, near its 52-week low of $0.28. According to InvestingPro data, the stock appears undervalued based on its Fair Value analysis, despite falling over 86% in the past year. The firm’s analyst highlighted the company’s recent announcement of positive topline results from its Phase 2b PROGRESS clinical trial. The trial evaluated pilavapadin, also known as LX9211, in patients suffering from diabetic peripheral neuropathic pain (DPNP).
The PROGRESS trial was designed to build on the efficacy and safety results from the earlier Phase 2 RELIEF DPN-1 trial and to determine an optimal dose for advancing into Phase 3 clinical development. Although the full data analysis is still underway and expected to be presented at a medical conference later this year, likely the American Diabetes Association (ADA) meeting in June, the preliminary results have shown encouraging signs. With the next earnings report due on March 12, 2025, and four analysts recently revising their earnings estimates upward, investors seeking detailed analysis can access comprehensive research through InvestingPro’s exclusive Pro Research Report.
The topline data revealed that pilavapadin achieved significant average daily pain score (ADPS) reductions, particularly with the 10 mg dose, which also exhibited a high level of tolerability with study completion rates similar to placebo. The PROGRESS trial, which did not include the 10-fold loading dose used in the RELIEF DPN-1 trial, tested single daily doses of 10 mg and 20 mg over one week, followed by either 10 mg or 20 mg thereafter, in a total of 496 patients.
Results at week eight showed ADPS reductions in all pilavapadin treatment arms compared to the placebo group. Specifically, the 10 mg, 20 mg/10 mg, and 20 mg dose arms saw reductions of 1.74, 1.70, and 1.38, respectively, versus a reduction of 1.31 in the placebo group. A post-hoc analysis combining the 10 mg and 20 mg/10 mg arms versus placebo yielded a p-value of 0.04, indicating statistical significance.
These results are particularly notable when compared to the RELIEF DPN-1 trial, which had shown ADPS reductions of 1.39 points in the low dose arm and 1.27 points in the high dose arm, against a 0.72 reduction in the placebo group, with p-values of 0.007 and 0.03, respectively.
In light of these findings, H.C. Wainwright has reiterated its confidence in Lexicon Pharmaceuticals, maintaining both its Buy rating and the $4.00 price target on the company’s stock. The full data from the PROGRESS trial is eagerly awaited by both the firm and the medical community, as it may provide further insights into the potential of pilavapadin as a treatment for DPNP. InvestingPro analysis reveals the company maintains a healthy balance sheet with more cash than debt and a strong current ratio of 7.45, though investors should note the company is currently burning through cash. Additional insights and 15+ more ProTips are available exclusively to InvestingPro subscribers.
In other recent news, Lexicon Pharmaceuticals reported mixed outcomes from its Phase 2b PROGRESS study, which evaluated the drug pilavapadin for diabetic peripheral neuropathic pain (DPNP). The study showed that the 10 mg dose achieved meaningful pain reduction and improved tolerability, but the 20 mg dose did not meet statistical significance on the primary endpoint. Despite this, Lexicon plans to advance the 10 mg dose into Phase 3 development, aiming to fill a critical gap in DPNP care with a non-opioid treatment. Concurrently, Lexicon faces a potential Nasdaq delisting after failing to meet the minimum bid price requirement for its stock. The company has until July 2025 to regain compliance, potentially through measures like a reverse stock split. Piper Sandler has highlighted Lexicon Pharmaceuticals as one of several companies with significant Phase 2b readouts expected in 2025. The recent developments underscore the challenges and opportunities facing Lexicon as it navigates clinical progress and market requirements.
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