Lexicon Pharmaceuticals, Inc. Price & Performance (LXRX)

Before we begin, let me remind you that we will be making forward looking statements. Including statements related the safety, efficacy, clinical development, regulatory status and therapeutic and commercial potential of pillabapadin LX9851, sotagliflozin and our other programs as well as our business generally. These statements may also include characterizations and projections relating to the clinical development, regulatory status and market opportunity for our drug programs, the commercial performance of IMVEVA for heart failure. This call may also contain forward looking statements related to our growth and future Discovery and development of our drug candidates, strategic alliances and intellectual property as well as other matters that are not historical facts or information. Various risks may cause our actual results to differ materially from those expressed or implied in such forward looking statements and we refer you to our most recent annual report on Form 10 ks and other SEC filings for detailed information describing such risks. I would now like to turn the call over to Mike Exton. Mike? Hey, great.

Thanks, Lisa, and good afternoon, everyone. Thanks for joining the call.

Look, we've had a busy start to 2025 already.

Including our announcement on Monday of top line results from our progress Phase 2b study Telefapodin in diabetic peripheral neuropathic pain or DPNP. But as we take a moment to look back and reflect on 2024, I'm immensely proud of the resilience and adaptability of the team in keeping our pipeline of novel and advancing our lead to succeed strategy, Last year, we strategically reposition Lex to focus the company. And its resources on our clinical development programs And some key highlights from these programs included The early completion of enrollment for our PROGRESS study great progress in our pivotal Phase three Sonata H3 study of sotagliflozin in hypertrophic cardiomyopathy or HCM where we continue to enroll patients as planned Advancing IND enabling studies of 851 in obesity and related cardiovascular we reinvigorated our business development efforts including a significant licensing agreement with Beatrice for sotagliflozin outside of The U. S. And Europe. I want to begin today's overview with our most recent significant development. On Monday, we issued a press release and held a conference call to discuss top line results for progress. The Phase 2b dose finding study of filobapadan our oral non opioid drug candidate for DPNP.

Now the two most important takeaways from our top line announcement this week are first, in all doses in the PROGRESS study, including placebo, we observed a clear separation in ADPS from baseline with the ten milligram dose also showing meaningful improvement compared placebo Secondly, all filobapadine treated arm showed improved tolerability when compared with our previous release DPN study. Indeed, the ten milligram dose of pillabapentin showed particularly better tolerability as compared to relief. For these reasons, we successfully achieved our corporate objectives for progress with the ten milligram dose So these data in combination with the data from the release study gives us greater confidence in the potential of pillabapentin to be the first novel oral, non opioid DPN medication in more than two decades, and we're moving forward with a ten milligram dose. As you can see in this slide, filobapadine ten milligrams performed strongly improving ADPS of week eight reducing it by 1.74 points from baseline. Now as we continue to analyze the data, there are already signals that give us even greater confidence to advance the ten milligram dose in the pivotal trials. Tooling the two arms that utilize ten milligrams, the ten milligram dose plus the ten plus plus the twenty plus ten arm this PROCOC analysis shows an approximately 0.6 ADS reduction versus placebo, as early as week two.

Which is maintained throughout the treatment period Interestingly, while the pain reduction curve of the placebo arm appears to in the last four weeks of the trial, the ten milligram dose continues to consistently reduce ADPS scores, suggesting that in pivotal trials of twelve weeks duration, further separation may be achievable. Furthermore, as we outlined on Monday, the ten milligram dose was well tolerated. In progress, as many patients with ten milligram pillabapadin as with placebo completed the trial. Conclusively ascribing the tolerability performance in the previous relief So the day one ten volt loading dose, This gives us confidence in the tolerability of ten milligrams of pilivapadine in Phase three trials. We continue to analyze further data look forward to presenting the full findings from the progress study at a future medical meeting. Now I want to talk about what pillabapadin can potentially mean for patients.

VPNP is a large and growing condition that impacts approximately nine million people in The U. S. It's a chronic and progressive pain disorder that severely impairs people quality of life with the majority of patients experiencing moderate to severe pain. When we speak with patients and physicians, it's truly devastating to hear how it impacts their everyday life. Their ability to sleep at night, their mental health, and their relationships. VPNP can also lead to loss of sensation, loss of balance, falls and fractures and a wealth of other complications. But importantly, currently available treatments simply don't provide adequate relief It's estimated about sixty percent of patients have tried multiple therapies and only a third are somewhat satisfied with their treatment. Now market research, we heard numerous HCPs and patients report an immense need for new treatment options. And in particular a simple easy to use non opioid treatment options for DPNP. And finally, with about a third of DPNP patients still resorting to short term opioid use for pain relief even today. When we know the potentially devastating effects of these treatments this space is primed for reform. HCPs, legislators and policymakers prior initiatives such as the Alternative to Pain Act provide tailwinds to support movement towards new non opioid options.

Next, I'd like to discuss 851. We are continuing to advance IND enabling studies. LX9851 is our first in class oral ACSL5 inhibitor for the treatment of obesity and related cardiometabolic disorders. In November, we presented clinical in vivo F data from two studies related to LX-nine thousand eight hundred and fifty one at a BC week. The first study showed the treatment with LX-nine thousand eight hundred and fifty one resulted in significant reductions in weight, food intake and fat mass in diet induced obese mice And that LX9851 mitigated weight regain following discontinuation of the GLP-one analog semaglutide. The second study characterized the novel mechanism of action of LX-nine eighty five and how it activates the ileal break to induce satiety and lower desire for additional food consumption. We remain on track for an IND submission for Lexicon eighty five in 2025 as we evaluate potential partnership opportunities for this innovative mechanism. So now I want to touch brief briefly touch on the current status of cytofluzan. We have a significant potential opportunity to expand our label in hypertrophic cardiomyopathy disease state with high unmet need that impacts about one million patients in The U. S. We're currently enrolling Sonata HCM, a global pivotal Phase three study including patients with both obstructive and non obstructive HCM.

Upon completion of the HCM study with additional evidence and data in hand, we will revisit the totality of the sotagliflozin asset potential in The U. S. In terms of what we're doing today though, as we bridge to this future opportunity, as you can recall, we made the necessary decision to cease all promotion of Impepper in The U. For heart failure. Due to the difficult market access environment, dominated by two major SGLT2 inhibitors, Currently, cytogliflozin is available on The U. S. Market with our continued commitment to maintain awareness and provide tools to support patients in an extremely cost effective approach. Outside of The U. S. And Europe, we're actively working with our exclusive licensee Beatrice on supporting their efforts towards registration and regional development. Our medical affairs, data generation and public patient activities remain ongoing. And we continue to engage with the scientific community through numerous investigator initiated third party funded studies to build upon our compelling body of medical evidence in CB conditions and our [indiscernible] and support sotagliflozin as a differentiator differentiated inhibitor of both SGLT1 and two to that end, I wanted to briefly acknowledge a notable recent publication in the Lancet Diabetes and Endocrinology.

Which highlighted the effects of sotagliflozin to reduce major adverse cardiovascular events myocardial infarction and stroke among patients with type two diabetes chronic kidney disease and high cardiovascular risk The finding shows that sotagliflozin significantly and meaningfully reduces MACE versus placebo demonstrating early and broad cardiovascular protection in this population. This research also highlighted that sotagliflozin is the only SGLT inhibitor to show significant reductions in both MI and stroke indicating the potential role of SGLT1 inhibition in reducing ischemic events an important distinction from selective SGLT2 inhibitors As I shared just a moment ago, this supports our goal of demonstrating differentiation of sotagliflozin and presents compelling additional is Beatrice on regulatory submissions in key ex U. S. And ex European markets throughout 2025. I'll now turn it over to Scott to walk you through our financial results for the quarter and the year ended December 31, 2024. Thanks, Mike. Lexicon ended 2024 with $238,000,000 in cash, cash equivalents and short term investments, as compared to $170,000,000 as of 12/31/2023. As noted in this afternoon's press release, we reported $26,600,000 in revenue in the fourth quarter and $31,100,000 in revenue for the full year 2024. Revenues for Impella were $1,700,000 in the fourth quarter of twenty and $6,000,000 for the full year 2024.

Total revenues for both the fourth quarter and full year include an upfront payment of $25,000,000 received in connection with the Beatrice licensing agreement. Research and development expenses for the fourth quarter increased to $26,700,000 from $14,800,000 in the fourth quarter of twenty twenty three.

Full year 2024 research and development expenses increased to $84,500,000 In the in 2023.

Primarily due to our investments in base two and Phase three clinical trials, including the Sonata Phase three study of sotagliflozin in HCM and the PROGRESS Phase 2b study of pilavapodin in DPNP. Selling, general and administrative expenses for the fourth quarter of of $32,300,000 comparable to the $32,600,000 of SG and A expenses in the fourth quarter of twenty twenty three. Full year 2024 SG and A expenses increased to 143,100,000.0 from $114,000,000 in 2023. This increase in 2024 reflects higher marketing costs related to commercialization of IMPEFA and increased employee salaries and benefit costs Prior to the reduction in our field sales force, in late twenty twenty four as well as severance costs associated with our strategic repositioning. Net loss for the fourth quarter of twenty twenty four was $33,800,000 or $0.09 per share as compared to a net loss of $49,800,000 or $0.2 per share in the corresponding period in 2023.

And net loss for the full year 2024 was $200,400,000 or $0.32 per share in 2024 as compared to a net loss of $177,100,000 or $0.8 per share for the same period in 2023. During 2024, Lexicon took steps to first reduce and then to eliminate all proportional efforts for IMPEFA. These included a significant reduction of employees and elimination of all promotional efforts for EMPHFA and heart failure in The U. S. We believe these steps will reduce operating expenses moving forward. For 2025, we expect total operating expenses to be in the range of $135,000,000 to $145,000,000 We expect research and development expenses to be in the range of $100,000,000 to $105,000,000 and G and A expenses to be in the range of $3,540,000,000. Research and development expenses include costs associated with the ongoing development of sotagliflozin for HCM preparations for the Phase three development of pilavaparinin, and preclinical costs associated with preparations for the IND filing of 851. Research and development expenses for 2025 do not include the [indiscernible] of pivotal Phase three trials for pilivapodin as the size and scope of these trials will be determined as part of our end of Phase two review discussions.

With the FDA. I'll now turn it back to Mike for closing remarks.

Thanks, Scott. And look, in summary, we've got a full and exciting year ahead. The work we did in 2024 really set the foundation and we look forward to updating you all as the year progresses. For Pillobapitan, we've got a number of important upcoming catalysts including disclosure of the full progress dataset The end of Phase two meeting with the FDA and data presentations at up coming endocrinology and pain focused medical meetings. In addition to the important upcoming milestones we discussed today, we're also very actively engaged in partnership discussions to enhance our clinical and commercial capabilities and help us maximize the potential of all of our novel therapies. This will be critical focus for the company in the coming months So with that, Scott, Craig and I have time to take all of your questions. So I'll turn it back to you, operator.

Our first question comes from the line of Joseph Stringer, from Needham and Co.

Hi. Thanks for taking our questions.

From us, what I ask on the 9,851 oral obesity asset and kind of the clinical development plan there. Couple of questions on that.

Is that only being considered as a combo therapy with say a GLP drug or is there an option for monotherapy what are the potential indications and or trial designs that you're thinking of an initial Phase one And then lastly, if if a decision is made to ultimately partner that program, how much clinical data do you think you'd need to generate before it would make sense to engage or turn it over to a So Joey, it's Craig. I'll answer the first two questions and probably turn it back over to Mike for the third. We really see this molecule is being developed both as monotherapy and combination therapy monotherapy alone or monotherapy after discontinuation of an injectable or other GLP-one agonist knowing with the data that's come in with the injectables at least that a vast majority of patients don't remain on therapy for more than a year. In fact, the median duration is somewhere between six and twelve months. So what we've demonstrated in the animal models is the activity of the drug is independent and additive on top of semaglutide. Even maximum dose semaglutide and if you withdraw the semaglutide and then add nine thousand eight hundred and fifty one, that you largely maintained the weight loss whereas if you don't add the nine thousand eight hundred and fifty one, weight returns very quickly to baseline, which is also the situation in patients.

We see that there's an opportunity in both mono and combination therapy. The second question on the clinical program, I think the Phase one program is going to be pretty standard. What we've communicated before is we have a few critical goals that would be a part of the Phase one program First and most importantly is do patients actually lose weight similar to what we see in the animal models?

The second is the tolerability of the therapy because again you always have to wonder in these treatments the question is will it be well tolerated especially with the novel mechanism of action like the legal break We haven't seen anything in the animal models to suggest that would be an issue with tolerability. But that would be an important component And the third is to demonstrate that there is a clear mechanistic differentiation from the GLP-one mechanism. So I think those would really be three critical goals that we've certainly thought about running the Phase one program. And I'll turn it back over to Mike for the the last part of your question. Thanks for the question. And As you could imagine, with a completely novel and orthogonal mechanism, to the GLP-one and incretin based mechanisms There's a number of companies that have not only been interested in this particular asset, but have engaged in the data over the last months. We've been talking to a number of players And what it would take to move into a partnership from a data perspective is really quite varied. And prepared if we do have the right partner with the right conditions at any particular time to move into partnership because ultimately we believe that this program is best served with a partner to really capitalize on the breadth of indication again, with the potential for indications beyond obesity as well as the the commercialization of this particular mechanism ultimately.

So that's where we're at with 9,851 and potential partner partnering opportunities.

Great. Thank you so much for taking our questions.

Thank you.

Our next question comes from the line of Yasmeen Hi.

This is Hina on for Yas.

Thank you for taking our questions. My first question is, could you kindly provide some color on how enrollment is progressing into your SONADA study and when you expect enrollment completion.

And with that, how soon could you engage with the FDA for the end of Phase two meeting for filivapodin and start planning for Phase three And finally, what are some of the rate limiting steps to complete for the IND filing for 09/1951, which was previously discussed.

Thank you.

Three great questions on three different programs. I'll let Craig have a stab at those. Thanks, Tina. I'll answer them in order. On the HCM program, we've been really pleased by the feedback we gotten. We've had a number of investigator meetings both in The U. S. And outside The U. S. We focused first and initially on opening sites in The U. S. We've communicated that we're targeting about 30 sites in The United States. 120 sites overall with a target enrollment of about 500 patients two fifty each stratified for Obstructive And Non Obstructive. I Can Say That We've Made Outstanding Progress In Getting All The Government Approvals Necessary To Have Those Conversations In Countries Outside The U. S. And we have sites open in non U. S. Countries right now. Again, we've not been forthcoming with exactly what those are, but we can say that we are opening sites on plan We have patients that are actively in screening and actively in treatment. Today similar to the timelines we've set. The timelines I think we've talked about is that we're looking to have final study results towards the end of twenty which means that we would be filing with the FDA probably sometime in the first quarter of 'twenty seven.

Those are our current time lines. Obviously, it's early days in the trial, but those are the timelines that we've put forward and there's nothing at this point that we think is going to be significantly changing those timelines at the moment. So if that answers your questions on HCM, I'll move forward to [indiscernible] For Philavapodin, we've communicated I'm sorry, I didn't mean to cut you off. For Pillavapodin, we're really as Mike mentioned and I think we mentioned in the call on Monday, We're really looking to get down to the FDA and have the end of Phase two meeting sometime in the second half of this year, with the possibility of starting Phase three program before the end of twenty twenty five. Obviously, that will be dependent on a number of other factors, but those are the timelines that we feel comfortable at. And just to reiterate what Mike said is that we are more confident than ever in that ten milligram dose as being the right dose and that the PROGRESS study really clarified the open issues that we had going into the study about what is the best dose to go into Phase three. Balancing both safety and efficacy and do you need the loading dose or not.

So we feel quite strongly positive now. To move to the end of Phase two, publish the data this year. And then move into Phase three. On 09/1951, we've mentioned, I think Mike talked about that our plan is to have all of the IND enabling studies done this year to get down to the FDA and have that meeting and be ready to start the first in human studies before the end of the year.

That's the timelines that we continue to track to. We're doing all of the IND enabling studies right now. We had to do the dose finding from the animal studies to do the final toxicology studies.

That are required as part of the standard IND package. And we're working actively against those targets.

Thank you so much. Thank you. Our next question comes from the line of Joe Pantginis from H. C. Wainwright.

Hey, everybody. Good afternoon. Thanks for taking the questions. Two questions, if you don't mind.

For pillabapadin data that you just put out, sort of a looking forward question.

Craig on the call earlier said some broad strokes as to what the Phase three program might look at. Look like. Can you discuss anything right now with regard to what you feel might be the key open questions and or wish list that you might have going into the FDA meeting and of course they could absolutely change tomorrow.

Joe, great question. I think we mentioned perhaps at least in passing on Monday some of the critical things that we're going to look at as we get the final data set in. A couple of them we really talked about some of the key secondary endpoints that we think are most meaning is particularly sleep interruption and burning pain So those are going to be important endpoints that we want to take a look at as we get the full data set in Another one that we believe is pretty important to look at is the use of the acetaminophen rescue.

Protocol as you remember from relief that correlated really nicely with response. That there was much greater and earlier use of the acetaminophen rescue in the placebo arm than in the active arm. And we feel comfortable that those three particularly are going to be important elements that will be consistent or hopefully consistent with the primary endpoint data that we shared and we're certainly consistent in the RELIEF study I think the other area that we have an interest and I know a number of people that have asked have interest is what was the response regardless of the underlying single DPNP medication use. And as a reminder, in relief, we demonstrated activity independent from the underlying DPNP medication and on top of the DPNP medication. So I think that is going to be another important question because I think going into Phase three, if we could demonstrate we have activity both with or without underlying DPMP So I think that will be very important for patients [indiscernible] payers to know We'll also continue to look at some of the additional safety parameters in reference to DPMP use. Looking at that in some of the demographic factors as I think we mentioned.

There were some notable differences in the demographics the representation of black Americans in the trial was nearly double So we will continue to look at some of those factors as well. Hope that wasn't too long a list, Joe. No, no, that's fantastic. I appreciate that color. And then just quickly, I guess, a financial logistical question if you will. Just wanted to make sure have the Impeva one time charges work through the system already or should we expect expect any for the first quarter? Hey Joe, it's Scott.

No, I would say that it's safe assumption that all the costs were accrued, certainly accrued as of the end of the year. Perfect. Thanks, Joe.

One moment for our next question. Our next question comes from the line of Andrew Tsusai from Jefferies.

Hey, thanks. Good afternoon. I appreciate all the updates. Maybe two questions on pain on my side.

For the upcoming FDA and the Phase two meeting, could it make sense to ask them if this Phase IIb counts as a supporting pivotal And by extension, do you have a base case or upside case internally? And then secondly, at this juncture, do you think you would be powering the Phase 3s to what you saw in the Phase 2A or the Phase 2B for the ten NEG dose? Thank you.

Yes, Andrew. Thanks for the question. Certainly, that would be an upside in our current scenario planning of having this trial be counted as a pivotal We would see it counting strongly as a supportive trial, but our base assumption would not be that this was a pivotal trial and I think as we've previously shared, our current thinking, which obviously will be impacted by FDA, is that we'd be looking at two pivotal trials going in into the Phase three program each one of which would have roughly 300 to 400 patients in size And to your question, we would probably power it similarly that we powered both of these current trials for the Rob, on a placebo adjusted basis. And I wanted to in passing we demonstrated in the PROGRESS study that at the ten milligram dose, the pain scores continue to decline at a linear rate that was really consistent from week three on. So you saw a sharp drop in the first couple of weeks and then the slope of the curve changed but remained pretty consistent from week three or so to week eight. We don't see any reason why that would particularly mitigate between week eight and week 12.

And if you sort of straight line that out, we think that that pain score is going to continue to significantly drop. If you look at the placebo and what has traditionally been seen in pain studies of placebo is that that tends to plateau at somewhere between four and eight weeks. And you can already see hints of that in this trial and in the relief trials at the plateau that the placebo is beginning to plateau. So we feel quite confident or comfortable that that wedge, that growing wedge of difference from the placebo [indiscernible] to the drug will continue to grow between week eight and week twelve. And that zero point six drop is something that we think is we can comfortably achieve.

Thanks. Appreciate it. Thanks, Andrew.

Thank you. One moment for our next question. Our next question comes from the line of Roanna Reese. From Leerink Partners.

Hi, all. This is Maiz on for Milana. I just we just had two commercialization questions kind of around sotagliflozin and H So for one, what are your thoughts around partnership and commercialization for that asset? And it's kind of a two parter and the second part being, how does that differ across different regions where CMI use may be impacted in countries of in Africa and Asia. I think that we have seen uses a lot less. And so I just kind of wanted your insights around that. No, great question. So firstly, for HCM ex U. S. And ex Europe, That is entirely licensed to Beatrice, our soda glowsin partner. [indiscernible] in if you like rest of world, Beatrice and where we're closely connected with them to help them in the registration process, etcetera, for HCM as well as the other indications. For The U. S. And well, for Europe, I think we've mentioned before, we don't have any any intention in expanding our our presence and certainly not our commercial presence outside of The U. S. So we would be seeking a partner for Europe where there is pretty substantial CMI use as you know. And then it comes to The U. S. And really we feel we've got the expertise and capabilities to commercialize Centimeters sotagliflozin for HCM.

And as we've mentioned [indiscernible] it's going to be a very different payer situation for HCM as the first and only SGLT inhibitor approved for HCM, to what we see for IMpeffer in heart failure. And so that will provide us with a much different potential commercialization trajectory Now one interesting and final aspect to that commercialization approach is unlike the CMIs, and I think this will continue both with currently approved and future approved CMIs, that will be used in a pretty focused way in centers of excellence that treat HCM patients. General cardiology CHCM patients and are able to diagnose and the SDLT as a class is very well known by general cardiologists. And so really there's an opportunity Although we certainly see ourselves playing a significant role commercially in The U. S, There may be other partnering opportunities as we move forward, but we will hold a very significant, if not sole approach to commercializing that in The U. S. Great. Okay. Thanks for the added color.

Actually to follow-up on that then, as we think about the baseline characteristics for Sonata, are there any targets for the amount of patients that could be on background beta blocker or CMI therapy? Great question, Mason. We have not put limitations on any baseline or background therapy took a very similar approach to what we did with the SCOR and SOLOIST trials where we included all patients with heart failure in those trials regardless whether they were HEF ref or HEF Def.

In this trial, we're taking all patients that remain symptomatic as defined by a baseline KCCQ score. So they can be on any underlying medication including a CMI, in that regard. And what we really care most about is that they have a adequate low KCCQ score at baseline that's really the major criteria As a reminder also, the ejection fraction that we allow is an EF down due 50%. So I think the opportunity to include both obstructive, non obstructive background therapies that exist including CMIs and in EF down to 50% as well as having the primary endpoint as KCCQ, the secondary endpoint is New York Heart, and no requirement for all of the echoes that the CMIs require that has all of the other physiologic testing, the peak VO2 and others that really make it very difficult to enroll those trials and limit the number of centers in those trials we believe that our trial offers a number of different upsides in that regard. Very helpful. Thank you all for the added color. [indiscernible] Thank you. At this time, I would now like to turn the conference back over to Mike Exton for closing remarks.

Well, thanks everyone for joining us this afternoon. It was great to have you all here and give you a complete update across the three pretty significant programs that we have for sotagliflozin for filivapatin in 851. We've got a busy quarter ahead of us. And really look forward to updating you as we progress throughout the quarter and indeed throughout the year. So thank you very much operator and see everyone later.

This concludes today's conference call. Thank you for participating. You may now disconnect.