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Investing.com -- Lexicon Pharmaceuticals , Inc. (NASDAQ:LXRX) shares surged 30% following the announcement of an exclusive license agreement with Novo Nordisk (NYSE:NVO) for its developmental drug LX9851, aimed at treating obesity and related metabolic disorders.
The deal, which grants Novo Nordisk a worldwide license to develop, manufacture, and commercialize LX9851, has significantly buoyed investor confidence. Lexicon is set to receive up to $75 million in upfront and near-term milestone payments, with the potential to earn up to $1 billion in total payments including development, regulatory, and sales milestones. Additionally, Lexicon will receive tiered royalties on net sales of the drug.
LX9851 is a novel oral small molecule inhibitor of Acyl-CoA Synthetase 5 (ACSL5), which plays a crucial role in fat accumulation and energy balance. The drug has shown promising results in preclinical studies, particularly when used in conjunction with semaglutide, a medication already approved for weight management. The combination therapy demonstrated significant reductions in weight, food intake, and fat mass compared to semaglutide alone. LX9851 also showed potential in preventing weight regain and improving liver steatosis after the discontinuation of semaglutide.
Mike Exton, Ph.D., CEO and director of Lexicon, expressed enthusiasm about the partnership with Novo Nordisk, citing the agreement as a boon for the company’s financial stability and a catalyst for accelerating its R&D portfolio. Novo Nordisk, known for its leadership in diabetes and obesity treatments, also welcomed the collaboration, with Senior Vice President Jacob Sten Petersen highlighting the opportunity to delve into new biological pathways and treatment approaches.
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