UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from _____________ to _____________ Commission File Number: 000-30111 Lexicon Pharmaceuticals, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 76-0 ...

Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) Q3 2022 Earnings Conference Call November 9, 2022 5:00 PM ET Company Participants Mike Kelly – Investor Relations Lonnel Coats – Chief Executive Officer Jeff Wade – President and Chief Financial Officer Craig Granowitz – Senior Vice President and Chief Medical Officer Conference Call Participants Carly Kenselaar – Citigroup Yasmeen Rahimi – Piper Sandler Joseph Stringer – Needham & Company Operator Good day, ladies and gentlemen. Welcome to the Lexicon Pharmaceuti ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from _____________ to _____________ Commission File Number: 000-30111 Lexicon Pharmaceuticals, Inc. (Exact Name of Registrant as Specified in its Charter) (Sta ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Exact Name of Registrant as Specified in its Charter) (State or Other Jurisdiction of Incorporation or Organization) (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from _____________ to _____________ Commission ...

Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) Q2 2022 Earnings Conference Call August 2, 2022 5:00 PM ET Company Participants Mike Kelly - Investor Relations Lonnel Coats - Chief Executive Officer Jeff Wade - President & Chief Financial Officer Craig Granowitz - Senior Vice President & Chief Medical Officer Conference Call Participants Yigal Nochomovitz - Citigroup Joseph Stringer - Needham & Company Operator Good afternoon, ladies and gentlemen and welcome to the Lexicon Pharmaceuticals Inc. Second Quarter 2 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from _____________ to _____________ Commission File Number: 000-30111 Lexicon Pharmaceuticals, Inc. (Exact Name of Registrant as Specified in its Charter) (State o ...

Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) Q1 2022 Results Conference Call May 5, 2022 8:00 AM ET Company Participants Charles Schultz - Investor Relations Lonnel Coats - President and Chief Executive Officer Jeffrey Wade - President and Chief Financial Officer Craig Granowitz - Senior Vice President and Chief Medical Officer Conference Call Participants Jessica Fye - JP Morgan Joseph Stringer - Needham & Company Operator Good morning. This is Jesse, and I will be your conference operator today. At this ti ...

(Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2021 or UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from _____________ to _____________ Commission File Number: 000-30111 Lexicon Pharmaceuticals, Inc. (Exact Name of Registrant as Specified in its Charter) (State or Oth ...

Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) Q4 2021 Earnings Conference Call February 28, 2022 8:00 AM ET Company Participants Chas Schultz - Executive Director, Corporate Communications and Investor Relations Lonnel Coats - Chief Executive Officer Jeff Wade - President and Chief Financial Officer Craig Granowitz - Senior Vice President and Chief Medical Officer Conference Call Participants Joseph Stringer - Needham Julian Harrison - BTIG Disclaimer*: This transcript is designed to be used alongside the fre ...

[FORM 10-Q Details](index=1&type=section&id=FORM%2010-Q%20Details) Provides key filing information for Lexicon Pharmaceuticals, Inc.'s Quarterly Report on Form 10-Q for Q3 2021 - Lexicon Pharmaceuticals, Inc. filed a Quarterly Report on Form 10-Q for the period ended September 30, 2021[1](index=1&type=chunk) Company Information | Field | Value | |---|---| | Registrant Name | Lexicon Pharmaceuticals, Inc. | | State of Incorporation | Delaware | | IRS Employer ID | 76-0474169 | | Trading Symbol | LXRX | | Exchange | The Nasdaq Global Select Market | | Filer Status | Accelerated filer, Smaller reporting company | - As of November 8, 2021, **148,895,707 shares of common stock** were outstanding[6](index=6&type=chunk) [Factors Affecting Forward-Looking Statements](index=2&type=section&id=Factors%20Affecting%20Forward-Looking%20Statements) Highlights that the Form 10-Q contains forward-looking statements, which are predictions subject to known and unknown risks - Forward-looking statements are identified by terms like 'anticipate,' 'believe,' 'expect,' 'intend,' 'may,' 'plan,' 'potential,' 'predict,' 'should,' or 'will'[10](index=10&type=chunk) - Statements involve known and unknown risks, uncertainties, and other factors, including those outlined in 'Part II, Item 1A. - Risk Factors' and the annual report on Form 10-K[10](index=10&type=chunk) - The company does not undertake any duty to update forward-looking statements after the report date, unless required by law[11](index=11&type=chunk) [Part I – Financial Information](index=3&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) Presents the unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents Lexicon Pharmaceuticals, Inc.'s unaudited condensed consolidated financial statements for the period ended September 30, 2021 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Details the company's financial position, including assets, liabilities, and equity, as of September 30, 2021 Condensed Consolidated Balance Sheets (as of September 30, 2021 vs. December 31, 2020) | Metric | Sep 30, 2021 (in thousands) | Dec 31, 2020 (in thousands) | |---|---|---| | **Assets** | | | | Cash and cash equivalents | $92,118 | $126,263 | | Short-term investments | $28,800 | $26,012 | | Total current assets | $124,005 | $157,719 | | Total assets | $172,330 | $203,788 | | **Liabilities & Equity** | | | | Total current liabilities | $34,246 | $46,806 | | Total liabilities | $35,727 | $47,417 | | Total stockholders' equity | $136,603 | $156,371 | | Total liabilities and stockholders' equity | $172,330 | $203,788 | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) Presents the company's revenues, expenses, and net income or loss for the three and nine months ended September 30, 2021 Condensed Consolidated Statements of Comprehensive Income (Loss) (Three Months Ended Sep 30) | Metric | Sep 30, 2021 (in thousands) | Sep 30, 2020 (in thousands) | |---|---|---| | Total revenues | $23 | $6,634 | | Total operating expenses | $22,985 | $52,777 | | Gain on sale of XERMELO | $— | $132,818 | | Income (loss) from operations | $(22,962) | $86,675 | | Net income (loss) | $(23,122) | $82,603 | | Net income (loss) per common share, basic | $(0.16) | $0.77 | | Net income (loss) per common share, diluted | $(0.16) | $0.71 | Condensed Consolidated Statements of Comprehensive Income (Loss) (Nine Months Ended Sep 30) | Metric | Sep 30, 2021 (in thousands) | Sep 30, 2020 (in thousands) | |---|---|---| | Total revenues | $284 | $23,796 | | Total operating expenses | $62,044 | $196,956 | | Gain on sale of XERMELO | $— | $132,818 | | Income (loss) from operations | $(61,760) | $(40,342) | | Net income (loss) | $(62,147) | $(53,079) | | Net income (loss) per common share, basic | $(0.43) | $(0.50) | | Net income (loss) per common share, diluted | $(0.43) | $(0.50) | [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Outlines changes in stockholders' equity, including net loss and stock-based compensation, for the nine months ended September 30, 2021 Changes in Stockholders' Equity (Nine Months Ended Sep 30, 2021) | Metric | Dec 31, 2020 (in thousands) | Sep 30, 2021 (in thousands) | |---|---|---| | Total Stockholders' Equity | $156,371 | $136,603 | | Stock-based compensation | $8,349 | | | Issuance of common stock (Equity Incentive Plans) | $1,214 | | | Issuance of common stock (Open Market Sale Agreement) | $35,522 | | | Repurchase of common stock | $(2,675) | | | Net loss | $(62,147) | | | Unrealized gain (loss) on investments | $0 | | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows from operating, investing, and financing activities for the nine months ended September 30, 2021 Condensed Consolidated Statements of Cash Flows (Nine Months Ended Sep 30) | Metric | Sep 30, 2021 (in thousands) | Sep 30, 2020 (in thousands) | |---|---|---| | Net cash used in operating activities | $(64,189) | $(108,730) | | Net cash (used in) provided by investing activities | $(3,986) | $336,655 | | Net cash provided by (used in) financing activities | $34,030 | $(211,786) | | Net (decrease) increase in cash and cash equivalents | $(34,145) | $16,139 | | Cash and cash equivalents at end of period | $92,118 | $52,251 | - Cash paid for interest decreased significantly from **$16,892 thousand in 2020** to **$307 thousand in 2021** for the nine months ended September 30[23](index=23&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations of significant accounting policies and specific financial line items [1. Summary of Significant Accounting Policies](index=8&type=section&id=1.%20Summary%20of%20Significant%20Accounting%20Policies) Details the key accounting principles and estimation methods used in preparing the condensed consolidated financial statements - Financial statements are prepared in accordance with GAAP for interim financial information and SEC rules, not including all footnotes required for complete financial statements[25](index=25&type=chunk) - Management's estimates and assumptions affect reported asset/liability amounts and revenue/expense during the period[28](index=28&type=chunk) - Cash equivalents are highly-liquid investments with original maturities of three months or less, while short-term investments (U.S. treasury bills and corporate debt securities) are classified as available-for-sale and carried at fair value[29](index=29&type=chunk) Accrued Liabilities (in thousands) | Accrued Liabilities | Sep 30, 2021 | Dec 31, 2020 | |---|---|---| | Accrued R&D services | $7,544 | $21,962 | | Accrued compensation & benefits | $4,172 | $6,200 | | Short term lease liability | $1,027 | $553 | | Other | $1,465 | $976 | | Total accrued liabilities | $14,208 | $29,691 | - Revenue recognition for product sales (XERMELO, prior to sale) was net of variable consideration, and collaborative agreement revenues involve a five-step model[32](index=32&type=chunk)[33](index=33&type=chunk) - Research and development expenses are expensed as incurred, including third-party services, personnel costs, and facility costs, with estimates for preclinical and clinical studies based on work completed, patient enrollment, and study duration[39](index=39&type=chunk) - Stock-based compensation expense for stock options and restricted stock units is recognized over the service period based on fair value at grant date, using the Black-Scholes method for options[40](index=40&type=chunk)[41](index=41&type=chunk) Stock Option Valuation Assumptions (Weighted-Average) | Period | Expected Volatility | Risk-free Interest Rate | Expected Term | Dividend Rate | |---|---|---|---|---| | Sep 30, 2021 (Employees) | 102 % | 0.6 % | 4 | — % | | Sep 30, 2021 (Officers/Directors) | 90 % | 1.1 % | 7 | — % | | Sep 30, 2020 (Employees) | 91 % | 1.3 % | 4 | — % | | Sep 30, 2020 (Officers/Directors) | 78 % | 1.4 % | 8 | — % | Stock Option Activity (Nine Months Ended Sep 30, 2021) | Metric | Options (in thousands) | Weighted Average Exercise Price | |---|---|---| | Outstanding at Dec 31, 2020 | 8,397 | $7.12 | | Granted | 1,448 | $6.88 | | Exercised | (281) | $4.31 | | Expired | (191) | $12.50 | | Forfeited | (733) | $8.92 | | Outstanding at Sep 30, 2021 | 8,640 | $6.90 | | Exercisable at Sep 30, 2021 | 5,092 | $8.16 | Restricted Stock Units Activity (Nine Months Ended Sep 30, 2021) | Metric | Shares (in thousands) | Weighted Average Grant Date Fair Value | |---|---|---| | Outstanding at Dec 31, 2020 | 2,769 | $4.35 | | Granted | 663 | $8.22 | | Vested | (1,239) | $5.04 | | Forfeited | (217) | $4.96 | | Outstanding at Sep 30, 2021 | 1,976 | $5.15 | [2. Recent Accounting Pronouncements](index=12&type=section&id=2.%20Recent%20Accounting%20Pronouncements) Discusses the impact of recently adopted accounting standards on the company's financial statements - The adoption of ASU 2019-12, Income Taxes (Topic 740) Simplifying Accounting for Income Taxes, in Q1 2021 did not materially impact the condensed consolidated financial statements[45](index=45&type=chunk) [3. Cash and Cash Equivalents and Investments](index=12&type=section&id=3.%20Cash%20and%20Cash%20Equivalents%20and%20Investments) Provides a breakdown of cash, cash equivalents, and short-term investments, including their fair values Fair Value of Cash, Cash Equivalents and Investments (as of Sep 30, 2021) | Asset Type | Amortized Cost (in thousands) | Gross Unrealized Gains (in thousands) | Gross Unrealized Losses (in thousands) | Estimated Fair Value (in thousands) | |---|---|---|---|---| | Cash and cash equivalents | $92,118 | $— | $— | $92,118 | | U.S. treasury securities | $15,123 | $1 | $— | $15,124 | | Corporate debt securities | $13,683 | $— | $(7) | $13,676 | | Total | $120,924 | $1 | $(7) | $120,918 | Fair Value of Cash, Cash Equivalents and Investments (as of Dec 31, 2020) | Asset Type | Amortized Cost (in thousands) | Gross Unrealized Gains (in thousands) | Gross Unrealized Losses (in thousands) | Estimated Fair Value (in thousands) | |---|---|---|---|---| | Cash and cash equivalents | $126,263 | $— | $— | $126,263 | | Corporate debt securities | $26,018 | $5 | $(11) | $26,012 | | Total | $152,281 | $5 | $(11) | $152,275 | - No realized losses were incurred during the nine months ended September 30, 2021 and 2020[46](index=46&type=chunk) [4. Fair Value Measurements](index=12&type=section&id=4.%20Fair%20Value%20Measurements) Explains the categorization of fair value measurements into Level 1, 2, and 3 inputs for financial assets - Fair value measurements are categorized into Level 1 (quoted prices in active markets for identical investments, e.g., U.S. treasury securities), Level 2 (other significant observable inputs, e.g., corporate debt securities), and Level 3 (significant unobservable inputs)[47](index=47&type=chunk)[48](index=48&type=chunk) Fair Value Measurements (as of Sep 30, 2021) | Asset Type | Level 1 (in thousands) | Level 2 (in thousands) | Level 3 (in thousands) | Total (in thousands) | |---|---|---|---|---| | Cash and cash equivalents | $92,118 | $— | $— | $92,118 | | Short-term investments | $15,124 | $13,676 | $— | $28,800 | | Total | $107,242 | $13,676 | $— | $120,918 | Fair Value Measurements (as of Dec 31, 2020) | Asset Type | Level 1 (in thousands) | Level 2 (in thousands) | Level 3 (in thousands) | Total (in thousands) | |---|---|---|---|---| | Cash and cash equivalents | $126,263 | $— | $— | $126,263 | | Short-term investments | $— | $26,012 | $— | $26,012 | | Total | $126,263 | $26,012 | $— | $152,275 | - The company had no Level 3 assets or liabilities as of September 30, 2021, or December 31, 2020, and no transfers between Level 1 and Level 2 during the periods presented[50](index=50&type=chunk) [5. Property and Equipment](index=13&type=section&id=5.%20Property%20and%20Equipment) Details the company's property and equipment, net of depreciation, and significant changes during the period Property and Equipment, Net (in thousands) | Category | Sep 30, 2021 | Dec 31, 2020 | |---|---|---| | Computers and software | $3,112 | $3,826 | | Furniture and fixtures | $1,762 | $1,867 | | Leasehold improvements | $1,286 | $417 | | Total property and equipment | $6,160 | $6,110 | | Less: Accumulated depreciation and amortization | $(4,849) | $(5,815) | | Net property and equipment | $1,311 | $295 | - During the nine months ended September 30, 2021, the Company retired **$1.1 million of fully depreciated assets** and purchased **$1.2 million of new assets** (leasehold improvements, computers, software, furniture)[52](index=52&type=chunk) - In 2020, an impairment loss of **$1.6 million** was recorded on the Woodlands, Texas campus assets, which were sold in December 2020, and the company relocated its corporate offices in June 2021[53](index=53&type=chunk) [6. Debt Obligations](index=14&type=section&id=6.%20Debt%20Obligations) Outlines the company's outstanding debt, including Convertible Senior Notes and the BioPharma Term Loan - The company had **$11.7 million** in remaining 5.25% Convertible Senior Notes due 2021 as of September 30, 2021, included in current portion of long-term debt[55](index=55&type=chunk) - In September 2020, the company exchanged **$67.1 million principal amount of Convertible Notes** for common stock and cash, resulting in an **$8.4 million debt extinguishment gain**[55](index=55&type=chunk) - The Convertible Notes mature on December 1, 2021, with a conversion rate of **118.4553 shares per $1,000 principal amount**[56](index=56&type=chunk)[57](index=57&type=chunk) - The fair value of the remaining Convertible Notes was **$11.9 million** as of September 30, 2021, determined using Level 2 inputs[59](index=59&type=chunk) - The **$150.0 million BioPharma Term Loan** (9% interest, due Dec 2022) was fully repaid in September 2020 following the XERMELO sale, resulting in an **$8.6 million debt extinguishment loss**[60](index=60&type=chunk)[61](index=61&type=chunk) [7. Commitments and Contingencies](index=15&type=section&id=7.%20Commitments%20and%20Contingencies) Describes the company's operating lease obligations, legal proceedings, and arbitration matters - Operating lease obligations for office spaces in The Woodlands, Texas (expires Aug 2025) and Basking Ridge, New Jersey (expires Dec 2022)[62](index=62&type=chunk) Operating Lease Liability (as of Sep 30, 2021, in thousands) | Year | Undiscounted Cash Flows | |---|---| | 2021 | $286 | | 2022 | $1,163 | | 2023 | $531 | | 2024 | $544 | | 2025 | $370 | | Thereafter | $— | | Total undiscounted | $2,894 | | Less: amount of lease payments representing interest | $(386) | | Present value of future lease payments | $2,508 | | Less: short-term operating lease liability | $(1,027) | | Long-term operating lease liability | $1,481 | - Securities class action lawsuit (Daniel Manopla v. Lexicon Pharmaceuticals, Inc.) was dismissed with prejudice by the District Court in August 2020 and affirmed by the U.S. Court of Appeals in September 2021[64](index=64&type=chunk) - Arbitration proceedings against Sanofi initiated in October 2020 regarding a **$15.6 million disputed payment** from the Termination Agreement, with the arbitration panel issuing a judgment in Sanofi's favor on November 5, 2021[65](index=65&type=chunk) [8. Collaboration and License Agreements](index=16&type=section&id=8.%20Collaboration%20and%20License%20Agreements) Summarizes key agreements, including the Ipsen and Sanofi collaborations, and their impact on revenue - Ipsen Agreement for XERMELO development and commercialization outside US/Japan was assigned to TerSera in September 2020, with Lexicon earning **$0.3 million in revenue** from Ipsen for the nine months ended September 30, 2020[68](index=68&type=chunk)[69](index=69&type=chunk) - Sanofi Agreement for worldwide development of sotagliflozin was terminated effective September 9, 2019, leading Lexicon to regain all rights and assume full responsibility for its development and commercialization[70](index=70&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk) - Sanofi paid Lexicon **$208 million in Sep 2019** and **$26 million in Mar and Sep 2020** (less withheld amounts), while Lexicon closed out Phase 3 clinical studies for sotagliflozin in type 2 diabetes, heart failure, and chronic kidney disease starting March 2020[72](index=72&type=chunk) [9. Other Capital Agreements](index=16&type=section&id=9.%20Other%20Capital%20Agreements) Details capital-raising activities, specifically common stock sales under the Open Market Sale Agreement - Under an Open Market Sale Agreement with Jefferies LLC, Lexicon sold **2,000,000 shares in January 2021 for $16.4 million net proceeds** and **4,176,953 shares in August/September 2021 for $19.1 million net proceeds**[73](index=73&type=chunk) [10. Asset Sale](index=16&type=section&id=10.%20Asset%20Sale) Describes the sale of XERMELO and related assets, including the gain recognized and potential future milestone payments - In September 2020, the company completed the sale of XERMELO and related assets to TerSera for **$160.4 million upfront consideration**, recognizing a net gain of **$132.8 million**[74](index=74&type=chunk) - Lexicon remains eligible for up to **$65 million in development, regulatory, and sales milestone payments**, plus mid-teens royalty payments on net sales of XERMELO in biliary tract cancer, which are constrained until specific events are achieved[75](index=75&type=chunk) - The XERMELO sale did not meet criteria for discontinued operations, with a pretax net loss from XERMELO operations of **$2.1 million** (3 months) and **$12.1 million** (9 months) for Sep 30, 2020[76](index=76&type=chunk) - The sale led to a **50% workforce reduction**, incurring **$5.5 million in severance charges** through September 30, 2020 (**$2.5M R&D, $3.0M SG&A**)[77](index=77&type=chunk) [11. Earnings (Loss) Per Share](index=17&type=section&id=11.%20Earnings%20%28Loss%29%20Per%20Share) Presents the calculation of basic and diluted earnings per share for the three and nine months ended September 30, 2021 Net Income (Loss) and EPS (Three Months Ended Sep 30) | Metric | Sep 30, 2021 (in thousands) | Sep 30, 2020 (in thousands) | |---|---|---| | Net income (loss) | $(23,122) | $82,603 | | Adjusted net income (loss) | $(23,122) | $83,861 | | Basic EPS | $(0.16) | $0.77 | | Diluted EPS | $(0.16) | $0.71 | | Basic Shares (in thousands) | 145,820 | 107,309 | | Diluted Shares (in thousands) | 145,820 | 117,552 | Net Income (Loss) and EPS (Nine Months Ended Sep 30) | Metric | Sep 30, 2021 (in thousands) | Sep 30, 2020 (in thousands) | |---|---|---| | Net income (loss) | $(62,147) | $(53,079) | | Adjusted net income (loss) | $(62,147) | $(53,079) | | Basic EPS | $(0.43) | $(0.50) | | Diluted EPS | $(0.43) | $(0.50) | | Basic Shares (in thousands) | 144,558 | 106,974 | | Diluted Shares (in thousands) | 144,558 | 106,974 | - For periods with a net loss, weighted average shares outstanding are the same for basic and diluted EPS, as convertible debt, stock options, and restricted stock units are antidilutive[79](index=79&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Provides management's perspective on the company's financial condition and results of operations, highlighting key drug candidates and financial performance [Overview](index=18&type=section&id=Overview) Introduces Lexicon's biopharmaceutical focus, key drug candidates, and general revenue strategy - Lexicon is a biopharmaceutical company focused on developing sotagliflozin for heart failure and type 1 diabetes, and LX9211 for neuropathic pain[80](index=80&type=chunk)[84](index=84&type=chunk) - Sotagliflozin has positive Phase 3 results for heart failure, with regulatory approval application preparation underway in the US, and is approved in the EU for type 1 diabetes but not yet launched[80](index=80&type=chunk) - LX9211 is in Phase 2 clinical trials for diabetic peripheral neuropathic pain (Fast Track designation) and post-herpetic neuralgia[84](index=84&type=chunk) - The company's drug discovery efforts are driven by a systematic, target biology-driven approach using gene knockout technologies[81](index=81&type=chunk) - Revenues primarily stem from strategic collaborations, technology licenses, and previously XERMELO sales (until Sep 2020), with future revenues dependent on milestone payments and royalties from collaborators[83](index=83&type=chunk)[86](index=86&type=chunk) - Lexicon has incurred significant losses since inception, with an accumulated deficit of **$1.5 billion** as of September 30, 2021, primarily due to R&D and SG&A costs[87](index=87&type=chunk) [Results of Operations](index=20&type=section&id=Results%20of%20Operations) Analyzes the company's revenues, operating expenses, and net income or loss, explaining significant changes year-over-year Total Revenues (in millions) | Period | 2021 (in millions) | 2020 (in millions) | Dollar Decrease (in millions) | Percentage Decrease | |---|---|---|---|---| | Three Months Ended Sep 30 | $0 | $6.6 | $(6.6) | (100)% | | Nine Months Ended Sep 30 | $0.3 | $23.8 | $(23.5) | (99)% | - Net product revenue for XERMELO ceased after its sale to TerSera on September 8, 2020[94](index=94&type=chunk) - Royalties and other revenue decreased **21% to $0.3 million** for the nine months ended September 30, 2021, compared to 2020[94](index=94&type=chunk) Research and Development Expenses (in millions) | Period | 2021 (in millions) | 2020 (in millions) | Dollar Decrease (in millions) | Percentage Decrease | |---|---|---|---|---| | Three Months Ended Sep 30 | $15.7 | $40.1 | $(24.4) | (61)% | | Nine Months Ended Sep 30 | $38.5 | $152.6 | $(114.1) | (75)% | - Decrease in R&D expenses primarily due to lower external clinical development costs for sotagliflozin after wind-down activities began in March 2020, and lower personnel costs due to a September 2020 reduction in force[95](index=95&type=chunk)[96](index=96&type=chunk) Selling, General and Administrative Expenses (in millions) | Period | 2021 (in millions) | 2020 (in millions) | Dollar Decrease (in millions) | Percentage Decrease | |---|---|---|---|---| | Three Months Ended Sep 30 | $7.3 | $12.0 | $(4.7) | (39)% | | Nine Months Ended Sep 30 | $23.5 | $40.8 | $(17.3) | (42)% | - Decrease in SG&A expenses primarily due to lower personnel costs from the September 2020 reduction in force, lower marketing expenses, and reduced property taxes/depreciation after the December 2020 facility sale[99](index=99&type=chunk) - Stock-based compensation in SG&A increased **80%** for the three months ended Sep 30, 2021, but decreased **13%** for the nine months, primarily due to cancellation of unvested awards from the reduction in force[99](index=99&type=chunk) - A **$1.6 million impairment loss** on buildings was recognized in July 2020 due to the sale of facilities in The Woodlands, Texas[100](index=100&type=chunk) - A **$132.8 million gain** was recognized from the XERMELO sale in September 2020[101](index=101&type=chunk) - An **$8.6 million loss on debt extinguishment** was recognized in September 2020 from repaying the BioPharma Term Loan, partially offset by an **$8.4 million gain** from Convertible Notes exchange[102](index=102&type=chunk)[103](index=103&type=chunk) - Interest expense decreased **96%** for both three and nine months ended September 30, 2021, due to debt repayments and exchanges in 2020[104](index=104&type=chunk) Net Income (Loss) and EPS (in millions, except per share) | Period | Net Income (Loss) (in millions) | Basic EPS | Diluted EPS | |---|---|---|---| | Three Months Ended Sep 30, 2021 | $(23.1) | $(0.16) | $(0.16) | | Three Months Ended Sep 30, 2020 | $82.6 | $0.77 | $0.71 | | Nine Months Ended Sep 30, 2021 | $(62.1) | $(0.43) | $(0.43) | | Nine Months Ended Sep 30, 2020 | $(53.1) | $(0.50) | $(0.50) | [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses the company's cash position, cash flow activities, and future capital requirements and funding strategies Cash, Cash Equivalents and Short-Term Investments (in millions) | As of | Amount (in millions) | |---|---| | Sep 30, 2021 | $120.9 | | Dec 31, 2020 | $152.3 | - Net cash used in operating activities was **$64.2 million** for the nine months ended September 30, 2021, primarily due to net loss and decrease in operating liabilities[109](index=109&type=chunk) - Investing activities used **$4.0 million**, mainly from net purchases of investments and asset purchases[109](index=109&type=chunk) - Financing activities provided **$34.0 million**, primarily from **$36.7 million net proceeds** from common stock sales under the Open Market Sale Agreement, partially offset by **$2.7 million** for common stock repurchases[109](index=109&type=chunk) - The company expects current unrestricted cash and investment balances, plus anticipated revenues from collaborations, to fund operations for at least the next 12 months[113](index=113&type=chunk) - Future capital requirements are substantial and depend on development success, regulatory approvals, collaboration revenues, and R&D expenditures, potentially necessitating additional financing[113](index=113&type=chunk) - The company may repurchase common stock or convertible notes, which could deplete cash or dilute stockholders[114](index=114&type=chunk) - The company will be required to make **$4.5 million in royalty payments** (three annual installments of **$1.5 million**) upon achievement of certain European regulatory pricing approvals for sotagliflozin in type 1 diabetes[111](index=111&type=chunk) - A new office lease in The Woodlands, Texas (25,000 sq ft) from March 2021 to August 2025, with escalating yearly base rent from **$506,000 to $557,000**[111](index=111&type=chunk) [Disclosure about Market Risk](index=24&type=section&id=Disclosure%20about%20Market%20Risk) Identifies the company's exposure to market and credit risks, primarily from investments, and its approach to managing them - The company is exposed to limited market and credit risk on cash equivalents and short-term investments (U.S. Treasury bills and corporate debt securities maturing 3-12 months)[115](index=115&type=chunk) - No hedging of interest rate exposure or derivative financial instruments are held[115](index=115&type=chunk) - Not subject to interest rate sensitivity on outstanding Convertible Notes (fixed 5.25% rate, maturing Dec 2021)[116](index=116&type=chunk) - No material exposure to foreign currency rate fluctuations as operations are primarily in the U.S. and sales are in U.S. dollars[117](index=117&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Refers to the 'Disclosure about Market Risk' section for details on the company's market and credit risk exposures - Refers to 'Disclosure about Market Risk' under 'Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations' for relevant information[118](index=118&type=chunk) [Item 4. Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) States that disclosure controls and procedures were effective and no material changes to internal control over financial reporting occurred - Disclosure controls and procedures were effective as of September 30, 2021[119](index=119&type=chunk) - No material changes in internal control over financial reporting during the three months ended September 30, 2021[119](index=119&type=chunk) [Part II – Other Information](index=25&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) Contains additional information not covered in the financial statements, including legal proceedings and risk factors [Item 1. Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) Details ongoing legal matters, including a securities class action lawsuit and an unfavorable arbitration judgment - Securities class action lawsuit (Daniel Manopla v. Lexicon Pharmaceuticals, Inc.) was dismissed with prejudice in August 2020 and affirmed by the U.S. Court of Appeals on September 10, 2021[121](index=121&type=chunk) - Arbitration against Sanofi, initiated October 2020, regarding **$15.6 million in disputed costs** from the Termination Agreement, resulted in a judgment in Sanofi's favor on November 5, 2021[122](index=122&type=chunk) - The amount of Sanofi's attorneys' fees and costs subject to reimbursement cannot be reasonably estimated at this time[122](index=122&type=chunk) - The company is also party to normal course legal proceedings not expected to have a material adverse effect[123](index=123&type=chunk) [Item 1A. Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) Outlines significant risks that could materially affect the company's business, financial condition, and results of operations - Risks related to business and industry include potential failures in clinical testing, lengthy and uncertain regulatory processes, dependence on regulatory alignment for sotagliflozin, market acceptance, and competition[125](index=125&type=chunk)[126](index=126&type=chunk)[130](index=130&type=chunk) - Risks related to capital requirements and financial results include the need for additional capital, a history of net losses, fluctuating operating results, and indebtedness[127](index=127&type=chunk)[130](index=130&type=chunk) - Risks related to relationships with third parties involve dependence on collaborations for development and commercialization, potential conflicts, and reliance on third parties for nonclinical studies, clinical trials, and manufacturing[128](index=128&type=chunk)[130](index=130&type=chunk) - Intellectual property risks include inability to protect IP, patent litigation, and data breaches[129](index=129&type=chunk)[134](index=134&type=chunk) - Risks related to common stock include control by Invus, L.P., stock price volatility, and potential dilution from future issuances[133](index=133&type=chunk)[134](index=134&type=chunk) - The COVID-19 pandemic poses risks of business disruption, including delays in clinical trial enrollment and other operational impacts[130](index=130&type=chunk) [Item 6. Exhibits](index=30&type=section&id=Item%206.%20Exhibits) Lists the exhibits filed with the Form 10-Q, including certifications from the principal executive and financial officers List of Exhibits | Exhibit No. | Description | |---|---| | 31.1 | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | 31.2 | Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | 32.1 | Certification of Principal Executive and Principal Financial Officers Pursuant to Section 906 of the Sarbanes Oxley Act of 2002 | | 101.INS | XBRL Instance Document | | 101.SCH | XBRL Taxonomy Extension Schema Document | | 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | | 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | | 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | | 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | | 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | [Signatures](index=31&type=section&id=Signatures) Contains the official signatures of Lexicon Pharmaceuticals, Inc.'s principal executive and financial officers - Report signed by Lonnel Coats (Chief Executive Officer) and Jeffrey L. Wade (President and Chief Financial Officer) on November 9, 2021[141](index=141&type=chunk)