Lexicon Pharmaceuticals at Jefferies Conference: Strategic Partnerships and Pipeline Progress

On Thursday, 05 June 2025, Lexicon Pharmaceuticals (NASDAQ:LXRX) presented at the Jefferies Global Healthcare Conference 2025, highlighting its strategic advancements and challenges. The company emphasized key partnerships and promising pipeline developments, while also acknowledging the need for further funding and regulatory discussions to achieve its ambitious goals.

Key Takeaways

• Lexicon highlighted a significant partnership with Novo Nordisk for LX9851, a novel small molecule for obesity, expected to bring $30 million in near-term milestone payments.
• The company is progressing with pilovapitan for diabetic peripheral neuropathic pain, planning to meet with the FDA for Phase 3 trial discussions.
• Sotagliflozin is being explored for hypertrophic cardiomyopathy, with the Sonata Phase 3 trial underway and data expected in early 2027.
• Lexicon ended Q1 with $195 million in cash, focusing on strict resource allocation to advance its portfolio.

Financial Results

• Lexicon reported a cash position of approximately $195 million at the end of the first quarter.
• The company is funded to complete milestone-generating tasks for the year.
• An additional $30 million is anticipated from the Novo Nordisk partnership related to LX9851.
• The Phase 3 program for pilovapitan is expected to be funded through partnerships, not included in the current budget.

Operational Updates

• LX9851 (Obesity): An exclusive worldwide license was signed with Novo Nordisk for this preclinical asset.
• Pilovapitan (DPNP): Phase 2b trials showed significant pain reduction. Lexicon plans to meet with the FDA to discuss Phase 3 trial design, likely a two-arm trial.
• Sotagliflozin (HCM): Enrollment is progressing in the Sonata Phase 3 study, with data readout expected in early 2027. The drug targets both obstructive and non-obstructive patients.
• Global Expansion: Viatris partnership is advancing with filings in the UAE, Saudi Arabia, and planned filings in Canada and Australia.
• Zynquista: Ongoing discussions with the FDA regarding its application.

Future Outlook

• Pilovapitan Partnership: Lexicon is open to partnerships for Phase 3 development, seeking a partner with scientific rigor and experience.
• HCM Commercialization: The company will explore both self-commercialization and partnership options for sotagliflozin in HCM.
• Novo Nordisk Milestones: Lexicon expects to receive the remaining $30 million in near-term milestone payments, with the first milestone being the submission of the IND.

Q&A Highlights

• Pilovapitan FDA Meeting: Anticipated meeting with the FDA around the end of Q3 to discuss Phase 3 trial design.
• HCM Market Positioning: Lexicon believes sotagliflozin could see broad adoption in HCM, with the potential to charge up to 20% more than the weighted average cost of capital.
• HCM Data: Emphasis on symptomatic improvement as the gold standard in treatment.

For more detailed insights, please refer to the full transcript below.

Full transcript - Jefferies Global Healthcare Conference 2025:

Andrew Tsai, Senior Biotech Analyst, Jefferies: Okay. Thanks for tuning in to the next session. I’m Andrew Tsai, senior biotech analyst at Jefferies, and it’s my pleasure to have the Lexicon team with me today. To my direct left, Mike Exton, CEO. To his left, Craig Granowitz, CMO.

And to Craig’s left is Scott Coyante, CFO. Welcome, all of you.

Mike Exton, CEO, Lexicon: Yeah. Thank you. How’s it So

Andrew Tsai, Senior Biotech Analyst, Jefferies: maybe spend a couple minutes talking about the Lexicon story, what you’re working on, what you’re trying to achieve and then milestones over the next twelve to twenty four months would be helpful.

Mike Exton, CEO, Lexicon: Yeah, great. So Lexicon as a company broadly works in the area of cardiometabolic and associated disorders and we have portfolio of medicines ranging from preclinical, clinical development and through to commercialization. This year has been an eventful year for us already, just taking us back into the end of the first quarter where we signed an exclusive worldwide license for LX9851. This is a novel small molecule non incretin based asset for obesity and other related conditions. And we signed that deal with Novo Nordisk, which we were really pleased with not only because that allowed us some flexibility on the balance sheet and some pretty significant financial terms for a preclinical asset, but clearly partnering with a leader in this space who really believed in the science and saw a lot of value in this mechanism which we can talk about going forward in the presentation.

Furthermore, we read out the progress Phase 2b study for pilovapitan in diabetic peripheral neuropathic pain where we were able to achieve a significant reduction versus placebo in the ten milligram dose and feel confident taking that forward to the FDA for the end of Phase two meeting with a full data package, which we’ll release later this year in a medical meeting to prepare for the Phase three study for that particular indication. And then we also were really progressing well with our enrollment for sotagliflozin in hypertrophic cardiomyopathy and you know this is an area that particularly over the last quarter really seen an explosion of data readouts from other companies and other assets. And it really in our view demonstrates the potential value of sotagliflozin in both obstructive and non obstructive hypertrophic cardiomyopathy and the potential for broad adoption of that medicine upon success of the Sonata Phase three study which will conclude at the end of next year data readout into 2027. And so with all of those potential catalysts moving forward, we continue to differentiate sotagliflozin in the marketplace via other independent studies. And speaking of sotagliflozin to wrap out the story, we’re continuing the process with the FDA to conclude the discussions around Zynquista and the application that we had at the end of last year.

And so all of those factors really bode well for us moving forward throughout 2025 to continue to progress the pipeline towards finishing clinical studies and into commercialization.

Andrew Tsai, Senior Biotech Analyst, Jefferies: Perfect. And maybe in your remarks, answered my next question because you and Scott recently joined the company and I was about to ask, you know, what can you bring to the table that investors might not be appreciating. But you did mention you do you have struck a couple of partnerships. But would there be anything else you’d add? Just curious.

Scott Coyante, CFO, Lexicon: I think, look, just the broad based experience with these size companies and the flexibility of doing deals and pivoting and just being proactive in what is coming down the pipe for

Craig Granowitz, CMO, Lexicon: us.

Mike Exton, CEO, Lexicon: I think Scott is very humble. You know, since he joined a few short months ago he’s really brought a very strict discipline in resource allocation. And I think you saw that with our modeling of what we expect to spend this year, but we’re delivering on that and we continue to look to ensure that we’re really utilizing cash to drive the portfolio forward. And I’m very thankful that you’re on board for that reason because it brings an expertise and a discipline to really allow us to use the money in the best possible way.

Craig Granowitz, CMO, Lexicon: Perfect. Andrew, one other comment that I know Mike covered a lot of ground, our partnership with Viatris I think is also going extremely and I think it’s a real validator of their excitement and interest in sotagliflozin as a molecule going into challenging markets which are non Europe, non US. And they’ve certainly referred back to their efforts with sotagliflozin already having filed in The UAE and Saudi and their plans to file in additional markets this year such as Canada and Australia. So, you know, we see that as another validator of sotagliflozin as a molecule even competing in in challenging markets.

Andrew Tsai, Senior Biotech Analyst, Jefferies: Perfect. Very clear. And so why don’t we dig into your pipeline program starting with pilovapadin for DPN Maybe briefly, high level, summarize the efficacy that you’ve seen with this compound across studies, why it’s a clinically meaningful signal that gives you the conviction it will succeed in set of phase three studies in DPNPain.

Mike Exton, CEO, Lexicon: Maybe let me just provide some context of DPNP upfront and Craig can comment a little bit on the results

Andrew Tsai, Senior Biotech Analyst, Jefferies: of

Mike Exton, CEO, Lexicon: the studies across the phase two program. But you know clearly there’s a lot of need both from a patient and caregiver but importantly from a political will and access for non opioid medications for both acute and in our case chronic neuropathic pain. There’s been no options, no new options in neuropathic pain for two decades. The current options that people have are really inadequate. They don’t have great efficacy and they have pretty poor tolerability and dosing profiles and so it behoves us to really look to explore the opportunity for a new non opioid mechanism in neuropathic pain that commercially has a very significant and broad applicability.

So we’re delighted to be in this space and continue to deliver for folks with diabetes and we have what we think in our hands a very promising clinical candidate for neuropathic pain. Greg?

Craig Granowitz, CMO, Lexicon: Yeah, I’ll sort of backstop what Mike just said with some of the science in that AKA1 is a really novel, really interesting mechanism of action and is associated with clathrin endocytosis and we believe that this drug is acting in neuropathic pain and related states by increasing the duration of neurotransmitter occupancy in the cleft between the neuron and the cell. And we believe that that is a critical component of why pilavapitan is effective in neuropathic pain. The other important element in neuropathic pain is that you need to have an agent that is acting both centrally and peripherally and some of the other agents that are out there that people are talking about are only acting in the peripheral nervous system, not the central nervous system. When it comes to the trials, we now have over six hundred patients that have been dosed with pilovapentin at various dose levels in patients with DPNP and we’ve been able to demonstrate repeatedly in three separate dosing arms at ten milligrams that the drug has a rapid and meaningful clinically significant statistically observable and meaningful deviation from placebo and also from baseline. And when you think about the drops in pain score from baseline, you’re really talking about a one and a half to nearly two point drop in pain score from baseline which is certainly clinically meaningful for patients because that’s what they experience and that’s within six to eight weeks of treatment and we know that the efficacy trials are really out to about twelve weeks and that reduction in pain score continues throughout the entire eight week dosing interval.

We also demonstrated in the recently completed progress study that the loading dose is not necessary for efficacy and is largely the cause of the tolerability issues, particularly the ten milligram dose in that the completion rates of the ten milligram dose were identical to placebo at nearly ninety percent of both groups completing treatment in the eight week treatment phase. So, look forward to sharing all of this data later in the year, as Mike mentioned, at major medical meetings.

Andrew Tsai, Senior Biotech Analyst, Jefferies: Perfect. And any hints which medical meeting that would be later in the year and any other secondary analyses you plan to share at the medical meeting?

Craig Granowitz, CMO, Lexicon: Yeah. I think you can look to the major both endocrinology and pain or pain overlap endocrinology meetings that will be taking place in the second half of the year, some in Europe and some in The US. I think the additional analyses we’re really doing right now, and as a as a reminder to the listeners, we reported just like we did out of the relief, the pilot trial, there was a treatment phase and then a four week follow-up phase. We only reported the top line results so far for the treatment phase. We continue to get all of the data in from the follow-up phase as well as we shared last time more detailed efficacy and safety based on exposure.

This is very important to look at not just the liver dose but actually exposure and I think as you saw when we did that from the relief trial there was some additional good insight that we had and we hope to be able to share the same. Those analyses are ongoing right now.

Andrew Tsai, Senior Biotech Analyst, Jefferies: Understood. And with this data set, you plan to meet with the FDA when and when do you think you can get feedback from them to start the Phase three?

Mike Exton, CEO, Lexicon: Yeah, we obviously are waiting to complete all the secondary analyses so that we can make that submission. That will then determine the time it will take to meet with the FDA. We expect it’ll be obviously later in the year probably sort of end Q3 moving into the start of Q4 around that type of timeframe. That seems to be how we’re shaping up right now.

Andrew Tsai, Senior Biotech Analyst, Jefferies: And this should be fair to assume a straightforward meeting your base cases FDA says okay, start Phase 3s. Is that your thinking as well? And is there an upside case for you guys?

Mike Exton, CEO, Lexicon: I think the base case is where we’re shooting at right now. I think we will take the complete data package to them. As we’ve had discussions with you previously, we have concepts of what we think the plan going forward could be. Of course we need to engage with the FDA and particularly with although we haven’t seen any impact in our engagement across all of our programs with the FDA, know we need to have those discussions and see if they’re aligning with previous discussions that we’ve had.

Andrew Tsai, Senior Biotech Analyst, Jefferies: And then Craig mentioned earlier the 1.5 to two point drop seems pretty compelling. Then with this dataset, the data that you’ve generated, could you seek breakthrough designation with this compound and when would that happen?

Craig Granowitz, CMO, Lexicon: Yeah, I think with the breakthrough designation in this indication, we think that would really be contingent upon having something related to opiates and we did not specifically study the opiate dimension to this. So while we’re certainly going to bring our strongest data package to the FDA, think the base case should be we would not get breakthrough because based on some of the other conversations we’ve had that that breakthrough would likely be related to something, based on opiate and opiate avoidance.

Andrew Tsai, Senior Biotech Analyst, Jefferies: And, your plan your phase three plan that you you plan to bring to the FDA in terms of the design, What are some of the similarities or differences in the phase threes that can help maximize the chances of success with the drug?

Mike Exton, CEO, Lexicon: Yeah, look I think we obviously know post progress now a lot more than we even did post relief. I think we clearly know the dosing regime that we believe is important and by definition of a phase three trial it will extend out an additional four weeks, so out to twelve weeks which we think bodes well for the continued separation of the ten milligram dose from placebo. But really I think generally the trial design should be similar with the caveat that this will be placebo versus single active dose design, which is important certainly for managing placebo responses because as you can imagine if you’re a patient entering into a pain clinical trial and three of the four arms are active then your expectation is guided in a way to receive some sort of therapy and perhaps that was a contributing factor to the somewhat sizable placebo response despite the fact that we separated from placebo with the ten milligram dose. So having a single dose arm versus placebo I think helps. And then it’s more executional, so understanding exactly sites that did very well, understanding how you engage the patient to ensure that they’re adherent to the protocols, etc.

It’s more executional than trial design really.

Andrew Tsai, Senior Biotech Analyst, Jefferies: And remind me if there’s an open label phase in the phase two and when can we get additional follow-up data on those sets of patients?

Craig Granowitz, CMO, Lexicon: You’re talking about an extension study, Andrew?

Andrew Tsai, Senior Biotech Analyst, Jefferies: That’s right.

Craig Granowitz, CMO, Lexicon: Yeah, so we thought along and hard about that but until we finalized the dose with the agency, we weren’t going to do a long term extension because boy you’d hate to pick the wrong dose for that. So, you know, once we get the feedback from the FDA what we would probably be doing is at the same time launching a long term extension study at the same time with the collapsing of the arms around what would be seen as the most likely outcome. But as Mike said, our goal really is to go in with a two arm trial because that has the most simplified design and maximizes or I should say minimize the placebo effect because as opposed to saying I’ve got a three in four chance or a two in three chance I’m on active drug and that influences Say I’ve got a one in two chance, I think, does, based on past research experience, does lower the placebo effect.

Andrew Tsai, Senior Biotech Analyst, Jefferies: Right. And, how would you power the phase three this time to show what kind of separation versus placebo?

Craig Granowitz, CMO, Lexicon: Well, we believe that what we’ve seen in even as low as point four is going to be observable and statistically meaningful. And I think also clinically meaningful compared to placebo, but I think we would be looking to power it like we did with the first the relief trial. We’ve talked about a sample size with what we now understand having run two trials in DPNP with the variability of the data that we’d be looking at roughly 350 patients per arm in the two arm trial and probably doing that in duplicate. So two trials each of two arms active versus placebo.

Andrew Tsai, Senior Biotech Analyst, Jefferies: Right. And remind me if you have what kind of cash position you have to do you have cash to see this through the Phase III studies?

Scott Coyante, CFO, Lexicon: We do. We ended the first quarter with a hair under $195,000,000 in cash and we are funded to work on and complete the milestone generating tasks that we have set forth for this year.

Mike Exton, CEO, Lexicon: Great. But just to bring a finer point on it, the Phase three program as we’ve said we’re expecting that that will be done in partnership and therefore at the moment we are not funding the Phase three program and it’s not in our sort of forward budgeting exercise and that will be something that we do together with the partner to enable that to happen.

Andrew Tsai, Senior Biotech Analyst, Jefferies: And in terms of the type of partnership you would want, would you be willing to give away U. S. Rights or is this more of an ex U. S. Partnership?

Mike Exton, CEO, Lexicon: No, look we’re pretty open and we’ve said we’ve had a lot of discussions with a number of folks so far and we’re going to continue those as we process the secondary data to think around what not only the sort of geographical financial type of commitment could be, but like what we did with Nova what’s important to us is how these companies see that program because the program AAK1 as Craig alluded to upfront has breadth way beyond diabetic peripheral neuropathic pain and for a company that we believe has the scientific rigor and experience and interest to really explore the full breadth of potential is going to be very important to us.

Andrew Tsai, Senior Biotech Analyst, Jefferies: Right. And as this is all going on, as I think about the potential NDA filing ultimately, what other peripheral studies would you need to do before you filed an NDA ultimately? Abuse liability studies, DDI studies, what what kind of studies?

Craig Granowitz, CMO, Lexicon: Yeah. I think you’ve put your finger on a couple of most important studies. We don’t believe there’s any need for us to do anything beyond animal studies on dependency because there’s no clinical symptoms signals whatsoever.

Andrew Tsai, Senior Biotech Analyst, Jefferies: Makes sense. Okay. So that’s very clear. We’ll shift gears then to HCM with sotagliflozin. Enrollment started, I believe, mid twenty twenty four and then you mentioned earlier data early twenty twenty seven.

What exactly would you want to see or actually backtrack, big picture, how do you think this will be positioned in the marketplace ultimately?

Mike Exton, CEO, Lexicon: Yes, it’s a great question. As I mentioned earlier, there’s been really if you like an upswing of interest in HCM across the investor and scientific community as a lot of data has been released in Q1. And we believe SODA has this unique opportunity in HCM to have a broad potential across many different prescribers and many different patients. What do I mean by that? Across many different patients because the Sonata trial is enrolling both obstructive and non obstructive patients.

We believe and we have a lot of scientific rationale to believe that SODA as it looks to target the underlying root cause of HCM generally has the potential to be you know potentially the first indicated new medicine in non obstructive HCM depending on how other trials read out. So it has this broad sort of applicability across the patient population, but perhaps more importantly and Andrew as I was the Entresto guy for Novartis. I’ve been in pretty much every cardiology practice around the country in my seven or so years of doing this and I can tell you categorically that complex initiation and maintenance of a therapy in cardiology like what happens with the CMI, in my opinion will always be restricted to a very niche group of practitioners who have the time, ability, money quite frankly and desire to implement those therapies. Where sotagliflozin is very unique in this space is it’s approved in heart failure so it has outcomes in heart failure. If we get approved in HCM we have the potential to be prescribed by every pill prescribing cardiologist who treats HCM that’s about 20,000 of them and with a known safety profile and an easy initiation and maintenance protocol that really enable and a general class of drugs that is very well known by this group of doctors allows us access to a far broader prescribing population and patient population.

So that’s how I see it in the marketplace. I think the importance of it being a drug that can be used even in addition to other novel therapies like CMIs is also something that’s important. But overall, the penetration right now of CMIs in HCM is about one percent after a number of years of launch. I think that gives an indication of where the niche of REMS and other things really will position these agents.

Andrew Tsai, Senior Biotech Analyst, Jefferies: And sotagliflozin which is empathol, so approved in heart failure, should this make it through the goal line? Is the price the same ultimately or can you charge a higher price somehow?

Mike Exton, CEO, Lexicon: It’s a fantastic question. I think I can only use a proxy based on our discussions with Zynquista. And there’s a number of similarities here because you’re having and let’s back up in heart failure you know we entered into heart failures really the third of any substance SGLT inhibitor approved for this indication. That becomes problematic at a payer level because you get put in a market basket and you’re at the whim of those financial engagements if you like. With Zynquista as we were preparing for a potential launch of that last year, the discussions were very different.

Why is that? Because you were the first and only approved medicine for that particular indication and the indication that we had from all of our market research as well as the engagements we had is you could charge up to about a 20% higher WACC, but my feeling at the time was less worry about the WACC and much more about the gross to net, so managing the gross to net dynamics. And I believe I don’t have any data to confirm it yet, but I believe just based on my experience of engaging with them in cardiology now for the best part of a decade is that HCM will be similar to Zynquista. Long answer to your question but it’s an important one because the ability to launch and it’s this whole catch cry that we started last year of lead to succeed of being in spaces where the first and only has implications at the physician, the patient, but importantly the payer level That’s where we’re focused moving forward.

Craig Granowitz, CMO, Lexicon: Great. Andrew, if I could just add from a scientific standpoint, this is where the MACE data is so important. Having a publication in The Lancet now also having mechanistic data on platelets that differentiate sotagliflozin which is a dual inhibitor of both SGLT one and two from just pure SGLT two inhibitors when it comes to platelet aggregation and activation, I think become really defining. Because we believe that we can define our mechanism separate from the CMI’s and as Mike already mentioned, we have long term outcome data. I think the data in non obstructive is certainly mixed for the other classes that are out there.

I think non obstructive over the long run is going be seen as far more common than obstructive because obstructive is easy to see because of the outflow tract obstruction and echocardiography. But I think linking those three things together, our data in HFpEF with SOTA above and beyond that of the SGLT two inhibitors with, near normal ejection fraction, the MACE data, and then having the broad and only indication in the SGLT class for HCM altogether, I think becomes a very compelling profile for payers.

Andrew Tsai, Senior Biotech Analyst, Jefferies: Very good points. At the end of the day, you do have outcomes data, a lot of it. So going back to the phase three study, what kind of, what do you need to see to succeed?

Craig Granowitz, CMO, Lexicon: Well, the gold standard in HCM has been symptomatic improvement. And we already know that in heart failure we have symptomatic improvement and we’re powering the trial with a primary endpoint of KCCQ and a secondary of New York Heart because those are the things that really matter. And as you’ve already mentioned, we can couple that with outcomes data both in terms of heart failure outcomes and in terms of stroke and MI and MACE outcomes. So I think in in that regard, it it really is a compelling profile and we already know based on the nearly 11,000 patient trial in heart failure what we can expect to see an improvement in KCCQ score with the entry criteria of symptomatic patients with a KCCQ score of 80 or less which is really New York Heart stage two and three.

Andrew Tsai, Senior Biotech Analyst, Jefferies: I see. And to give us context then, if we think about the CMAIs approved for obstructive HCM, what do they show on KCCQ? They’re showing in again that

Craig Granowitz, CMO, Lexicon: rough rough range. I Again, I’m better off talking to them rather than me. But I think so there’s a very important element with KCCQ is that some of the data that’s been presented is without a placebo. And you see very large decrease or improvements in KCCQ score, but there’s a very large placebo effect and as Mike already mentioned, we we certainly become expert in understanding PROs with large placebo effects. So we believe that we have a pretty a very good handle on what the placebo adjusted KCCQ score is in patients with heart failure.

Andrew Tsai, Senior Biotech Analyst, Jefferies: I see. I see. And the other drugs do not have outcomes data which can set you apart? Absolutely. And would you expect an efficacy differential between these two subgroups?

You know,

Craig Granowitz, CMO, Lexicon: think that’s hard to say. As Mike mentioned, the underlying pathophysiology is probably very similar between the two and, you know, as some of our PIs like to talk about when you do septal reduction surgery, fifteen percent, twenty percent of those patients develop heart failure over the next number of years. So it’s not just about the outflow tract obstruction. It really is probably regarding the underlying genetic defect that leads to an overactive myocardium as well as altered energy dynamics. And we’ve already demonstrated in human explants that was presented at and ACC, a reduction in cardiac work and improved energetics as measured by fatty acid utilization and amino acid utilization in the coronary tissue.

Got it. And is this

Andrew Tsai, Senior Biotech Analyst, Jefferies: a program you would launch yourselves, commercialize yourselves or are you also open to a partnership?

Mike Exton, CEO, Lexicon: Look we’ll explore both options. I think we feel very strongly that we have both the clinical and scientific expertise. Clearly we would need to build back up again our commercial footprint, but between myself and Craig and the rest of the leadership team we’re very confident in this space. So we will make that judgment call, but I think there’s lots of promise here for us and all partners.

Andrew Tsai, Senior Biotech Analyst, Jefferies: And then maybe final question just speaking of non diluted capital. You mentioned earlier you have that nice partnership with Novo for the obesity pill. What are the near term milestone payments you could receive from that program?

Scott Coyante, CFO, Lexicon: We announced that we would have total $75,000,000 in near term milestones, 45,000,000 of which was received in the form of an upfront payment. So that leaves a balance of about $30,000,000 in additional near term milestones we would expect.

Andrew Tsai, Senior Biotech Analyst, Jefferies: Great.

Mike Exton, CEO, Lexicon: The first of which being the submission of the IND by Novo, which, you know, we have had a great relationship so far and expect that once we conclude the studies that will happen shortly thereafter.

Andrew Tsai, Senior Biotech Analyst, Jefferies: Great. Thank you for your time. Was a great discussion. Thanks everyone.

Mike Exton, CEO, Lexicon: Thank you. Thanks Andrew.

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