Lexicon Pharmaceuticals, Inc. Q2 FY2025 earnings call

Program Updates - Pilavapadin: Completed secondary analysis of Phase IIb progress results, with 10-milligram dosage strength deemed appropriate for late-stage development. Scientific advisory board reviewed evidence and validated key findings. - LX9851: On track to complete IND-enabling studies in 2025, collaborating with Novo Nordisk. - Sotagliflozin: Phase III SONATA study in hypertrophic cardiomyopathy (HCM) making progress, with over 100 sites initiated globally. - Financials: Used $45 million upfront payment from Novo to reduce long-term debt, lowered operating expense projections for 2025, with R&D expenses now projected at $70-75 million and SG&A between $35-40 million.

For the second quarter of 2025, Lexicon Pharmaceuticals reported $28.9 million in revenue. This included $27.5 million of licensing revenue from the Novo Nordisk agreement and $1.3 million in net product revenue from sales of INPEFA. Research and development expenses decreased to $15.7 million from $17.6 million in the second quarter of 2024. Selling, general and administrative expenses dropped to $9.4 million compared to $39.2 million in 2024. Net income for the quarter was $3.3 million or $0.01 per share.

• Lowered operating expense projections for 2025, with total operating expenses expected to be $105-115 million (previously $135-145 million). - R&D expenses projected at $70-75 million, down from $100-105 million, due to cost transfer to Novo under licensing agreement. - SG&A expenses remain between $35 million and $40 million. - Remaining $17.5 million of licensing revenue from Novo agreement expected to be recognized in the second half of 2025.

Forward-looking statements may not materialize due to various risks, including those detailed in the most recent annual report on Form 10-K and other SEC filings, which could cause actual results to differ from forward-looking statements.

Q: How does the small sample size of the SOTA-CROSS trial affect expectations for efficacy endpoint separation?

A: The crossover design uses patients as their own control, and the study has important imaging and physiologic outcomes. Inclusion criteria is similar to SONATA-HCM trial.

Q: Could pilavapadin take advantage of the new development of non-opioid pain drugs?

A: Yes, pilavapadin's development is supported by bipartisan enthusiasm for non-opioid medications, and once commercialized, it would provide access to a non-opioid pain treatment.

Q: What is the 'worst-case scenario' from the FDA meeting for pilavapadin?

A: Likely needing 2 parallel studies in the lead indication for neuropathic pain, with a single study unlikely to get a broad neuropathic pain indication.