Lexicon Pharmaceuticals Inc (LXRX) Q1 2025 Earnings Call Highlights: Strategic Partnerships and ...

Release Date: May 13, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Lexicon Pharmaceuticals Inc (NASDAQ:LXRX) announced an exclusive license agreement with Novo Nordisk for LX 9,851, potentially generating up to $1 billion in milestone payments and tiered royalties. The company identified a well-tolerated dose for Pillovapidin in its Phase 2B study, paving the way for Phase 3 trials. Lexicon Pharmaceuticals Inc (NASDAQ:LXRX) successfully reduced operating costs and improved its balance sheet by utilizing upfront payments to reduce debt. The Sonata HCM study for sotocoflozin is progressing well, with all Phase 3 sites expected to be operational by Q3 2025.

The company ended Q1 2025 with $194.8 million in cash and short-term investments, providing a strong financial position for future developments. Negative Points Net loss for Q1 2025 was $25.3 million, although reduced from the previous year, it still indicates financial challenges. Research and development expenses increased to $15.3 million, reflecting higher costs associated with late-stage development programs. Revenue from MPEFA sales was limited, with minimal promotional activity impacting potential growth. The company faces significant competition in the HCM market, with other companies also targeting this space.

There is uncertainty regarding the FDA's feedback on the Phase 3 trial designs for Pillovapidin, which could impact future development timelines. Q & A Highlights Warning! GuruFocus has detected 3 Warning Signs with LXRX. Q: Can you discuss the intended trial designs for the pain program and whether it makes sense to conduct three studies instead of two? A: Craig Granowitz, Chief Medical Officer, explained that the plan is to run two parallel trials with similar designs. One trial will be US-only, and the other will be worldwide, including US and non-US sites. Each trial will have about 300-350 patients per arm, testing a 10 mg dose versus placebo.

They believe the clinical signal is robust and do not see the need for a third trial unless advised by the FDA. Q: Assuming the phase 2 goes well, when would the phase 3 pain data sets be available, and what additional studies are needed for an NDA filing? A: Craig Granowitz mentioned that addiction liability studies, likely in animal models, and additional metabolism studies are necessary. They are also validating renal clearance levels. Long-term CARC studies and preclinical trials are planned. They are confident in their manufacturing process and expect FDA feedback to guide any additional requirements.

Story Continues Q: How are the IND enabling studies for LX 9,851 progressing, and how involved is Novo Nordisk in this stage? A: Mike Eton, CEO, stated that the IND enabling studies are on track to finish this year. Novo Nordisk is highly engaged and collaborative, with direct access to data outputs. The studies are expected to conclude this year, after which Novo will submit the IND. Q: With recent updates in the HCM space, including the failed Odyssey trial, how does this affect your strategy for Soda in non-obstructive HCM? A: Mike Eton expressed confidence in Soda's potential for both obstructive and non-obstructive HCM. The Sonata trial is powered to see effects in both groups, and they do not plan to increase sample sizes.

The trial design allows for rapid enrollment, and they believe Soda can be a significant treatment option. Q: Regarding the Sonata study, how are you ensuring a homogeneous population for non-obstructive HCM, and what are the inclusion criteria? A: Craig Granowitz explained that the trial focuses on symptomatic disease, reflecting diastolic dysfunction, a key aspect of HCM. They are confident in their HEFA results and believe non-obstructive HCM is a subset of HEFA. The trial design aims to capture a broad patient population, and they have confidence in the efficacy of Soda in this group. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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