```markdown Factors Affecting Forward-Looking Statements This section outlines the inherent risks and uncertainties associated with forward-looking statements in the report - This report contains forward-looking statements, identified by terms like "anticipate," "believe," "expect," etc., which are predictions involving known and unknown risks and uncertainties, particularly those detailed in "Part II, Item 1A. - Risk Factors."[10](index=10&type=chunk) - Actual results, levels of activity, performance, or achievements may vary materially from expectations, and the company is not obligated to update these statements unless required by law[11](index=11&type=chunk) Part I – Financial Information [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents Lexicon's unaudited Q1 2020 condensed consolidated financial statements and detailed accounting notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric (in thousands) | March 31, 2020 | December 31, 2019 | | :-------------------- | :------------- | :---------------- | | Total Assets | $370,567 | $417,715 | | Total Liabilities | $315,790 | $300,614 | | Total Stockholders' Equity | $54,777 | $117,101 | | Cash and cash equivalents | $55,592 | $36,112 | | Short-term investments | $193,545 | $235,547 | | Accounts receivable, net | $30,135 | $56,532 | - Total assets decreased by **$47.148 million**, while total liabilities increased by **$15.176 million**, leading to a **$62.324 million** decrease in total stockholders' equity from December 31, 2019, to March 31, 2020[13](index=13&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) | Metric (in thousands) | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Total Revenues | $7,999 | $9,216 | | Total Operating Expenses | $70,437 | $26,685 | | Loss from Operations | $(62,438) | $(17,469) | | Net Loss | $(66,611) | $(21,797) | | Net Loss per Common Share, basic and diluted | $(0.63) | $(0.21) | | Comprehensive Loss | $(65,835) | $(21,752) | - Net loss increased significantly by **$44.814 million** (**206%**) year-over-year, primarily driven by a substantial increase in research and development expenses from **$12.022 million** in Q1 2019 to **$55.181 million** in Q1 2020[14](index=14&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity (Deficit)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity%20(Deficit)) | Metric (in thousands) | March 31, 2020 | December 31, 2019 | | :-------------------- | :------------- | :---------------- | | Total Stockholders' Equity | $54,777 | $117,101 | | Accumulated Deficit | $(1,408,055) | $(1,341,444) | | Additional Paid-In Capital | $1,466,604 | $1,462,172 |\ | Unrealized gain on investments | $860 | $84 | - The net loss of **$66.611 million** for the three months ended March 31, 2020, was the primary driver of the increase in accumulated deficit and the **$62.324 million** decrease in total stockholders' equity[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activity (in thousands) | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(22,054) | $(25,620) | | Net cash provided by (used in) investing activities | $42,778 | $(7,726) | | Net cash used in financing activities | $(1,244) | $(1,262) | | Net increase (decrease) in cash and cash equivalents | $19,480 | $(34,608) | | Cash and cash equivalents at end of period | $55,592 | $45,778 | - Net cash provided by investing activities significantly increased to **$42.778 million** in Q1 2020 from net cash used of **$7.726 million** in Q1 2019, primarily due to **$76.000 million** from maturities of investments[20](index=20&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Summary of Significant Accounting Policies](index=7&type=section&id=Summary%20of%20Significant%20Accounting%20Policies) - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP for interim financial information and SEC rules, with management's opinion that all necessary adjustments have been included[22](index=22&type=chunk)[23](index=23&type=chunk) | Inventory Component (in thousands) | March 31, 2020 | December 31, 2019 | | :------------------------------- | :------------- | :---------------- | | Raw materials | $2,218 | $3,182 | | Work-in-process | $1,117 | $153 | | Finished goods | $812 | $908 | | Total inventory | $4,147 | $4,243 | - Revenue recognition for product sales (XERMELO) is net of variable consideration, while collaborative agreement revenues follow a five-step model, including assessing performance obligations and allocating transaction prices[29](index=29&type=chunk)[30](index=30&type=chunk) - Research and development expenses are expensed as incurred, including third-party preclinical and clinical trial costs, with accruals based on estimated work completion and patient enrollment[36](index=36&type=chunk) - Stock-based compensation expense is recognized based on fair values at grant date, using the Black-Scholes method for stock options with specific assumptions for volatility, interest rate, and term[37](index=37&type=chunk)[38](index=38&type=chunk) [Recent Accounting Pronouncements](index=10&type=section&id=Recent%20Accounting%20Pronouncements) - The adoption of ASU No. 2018-18 (Collaborative Arrangements) and ASU No. 2017-04 (Intangibles-Goodwill and Other) did not have a material impact on the condensed consolidated financial statements[40](index=40&type=chunk)[41](index=41&type=chunk) [Cash and Cash Equivalents and Investments](index=11&type=section&id=Cash%20and%20Cash%20Equivalents%20and%20Investments) | Asset (in thousands) | March 31, 2020 (Fair Value) | December 31, 2019 (Fair Value) | | :------------------- | :-------------------------- | :----------------------------- | | Cash and cash equivalents | $55,592 | $36,112 | | Short-term investments (U.S. treasury securities) | $193,545 | $235,547 | | Total | $249,137 | $271,659 | - Short-term investments, primarily U.S. treasury bills, are classified as available-for-sale securities and carried at fair value, with unrealized gains and losses reported as a separate component of stockholders' equity[26](index=26&type=chunk)[42](index=42&type=chunk) [Fair Value Measurements](index=12&type=section&id=Fair%20Value%20Measurements) - All cash, cash equivalents, and short-term investments are classified as **Level 1** fair value measurements, based on quoted prices in active markets for identical investments[44](index=44&type=chunk)[46](index=46&type=chunk) - The company did not have any **Level 3** assets or liabilities as of March 31, 2020, or December 31, 2019[46](index=46&type=chunk) [Debt Obligations](index=13&type=section&id=Debt%20Obligations) - The company has **$87.5 million** in **5.25%** Convertible Senior Notes due December 1, 2021, with a carrying value of **$86.7 million** and a fair value of **$55.2 million** as of March 31, 2020[49](index=49&type=chunk)[50](index=50&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) - A **$12.9 million** mortgage loan on its facilities in The Woodlands, Texas, bears interest at **LIBOR + 5.5%** (or **7.5%** minimum) and has a balloon payment of **$10.3 million** due in August 2020. The company is in the process of selling these facilities[55](index=55&type=chunk)[56](index=56&type=chunk) - The **$150.0 million** BioPharma Term Loan, maturing in December 2022, bears **9%** interest and is secured by substantially all company assets (excluding The Woodlands facilities). Its carrying value was **$147.8 million** as of March 31, 2020[57](index=57&type=chunk)[59](index=59&type=chunk)[61](index=61&type=chunk) [Commitments and Contingencies](index=16&type=section&id=Commitments%20and%20Contingencies) - A securities class action lawsuit was filed on January 28, 2019, alleging violations of federal securities laws due to materially false and misleading statements regarding Phase 3 clinical trials of sotagliflozin and its FDA approval prospects for type 1 diabetes[62](index=62&type=chunk) - The lawsuit seeks unspecified monetary damages, interest, fees, and other relief on behalf of purchasers of the company's securities from March 11, 2016, through July 29, 2019[62](index=62&type=chunk) [Collaboration and License Agreements](index=16&type=section&id=Collaboration%20and%20License%20Agreements) - Under the Ipsen Agreement, Lexicon granted Ipsen exclusive, royalty-bearing rights to commercialize XERMELO outside the U.S. and Japan, receiving **$47.2 million** in upfront and milestone payments through March 31, 2020, and is eligible for additional milestones and tiered royalties[65](index=65&type=chunk)[66](index=66&type=chunk) - Revenue recognized under the Ipsen Agreement was **$0.1 million** for the three months ended March 31, 2020, a decrease from **$2.4 million** in the prior year, primarily due to a milestone payment in 2019[70](index=70&type=chunk) - The Sanofi Agreement was terminated effective September 9, 2019, resulting in Lexicon regaining all rights to sotagliflozin and receiving **$208 million** in September 2019 and **$26 million** in March 2020, with **another $26 million** due within twelve months[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) - Lexicon announced plans in March 2020 to close out the **Phase 3** clinical studies for sotagliflozin in type 2 diabetes, heart failure, and chronic kidney disease[73](index=73&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, liquidity, and key product development and commercialization efforts [Overview](index=19&type=section&id=Overview) - Lexicon is commercializing XERMELO for carcinoid syndrome diarrhea in the U.S. and developing it for biliary tract cancer; Ipsen commercializes XERMELO outside the U.S. and Japan[75](index=75&type=chunk)[78](index=78&type=chunk) - The company is developing LX9211, an orally-delivered small molecule drug candidate, as a treatment for neuropathic pain and is preparing to initiate a **Phase 2** clinical trial[75](index=75&type=chunk) - Lexicon regained worldwide rights to sotagliflozin but is closing out **Phase 3** development programs for type 2 diabetes, heart failure, and chronic kidney disease. Zynquista (sotagliflozin) is approved in the European Union for type 1 diabetes in specific adult patients[75](index=75&type=chunk)[78](index=78&type=chunk) - As of March 31, 2020, the company had an accumulated deficit of **$1.4 billion**, primarily from research and development and selling, general and administrative costs, and expects to continue incurring significant R&D expenses[81](index=81&type=chunk) [Critical Accounting Policies](index=20&type=section&id=Critical%20Accounting%20Policies) - There have been no significant changes in critical accounting policies as discussed in the Annual Report on Form 10-K for the year ended December 31, 2019[82](index=82&type=chunk) [Recent Accounting Pronouncements](index=20&type=section&id=Recent%20Accounting%20Pronouncements) - There are no recent accounting pronouncements that have a material impact on the condensed consolidated financial statements[83](index=83&type=chunk) [Results of Operations](index=21&type=section&id=Results%20of%20Operations) | Metric (in millions) | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | Dollar Change | Percentage Change | | :------------------- | :-------------------------------- | :-------------------------------- | :------------ | :---------------- | | Total Revenues | $8.0 | $9.2 | $(1.2) | (13)% | | Net Product Revenue | $7.9 | $6.7 | $1.2 | 17% | | Collaborative Agreements | $0.0 | $2.4 | $(2.4) | (100)% | | Total R&D Expense | $55.2 | $12.0 | $43.2 | 359% | | SG&A Expense | $14.7 | $14.1 | $0.6 | 4% | | Net Loss | $(66.6) | $(21.8) | $(44.8) | 206% | | Net Loss per Common Share | $(0.63) | $(0.21) | $(0.42) | 200% | - The **359%** increase in research and development expenses was primarily due to higher external clinical development costs related to sotagliflozin subsequent to the Termination Agreement with Sanofi[87](index=87&type=chunk)[89](index=89&type=chunk) - Selling, general and administrative expenses increased by **4%**, driven by higher stock-based compensation (**37%** increase) and professional and consulting fees (**10%** increase), despite a 4% decrease in personnel costs[90](index=90&type=chunk)[94](index=94&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) | Metric (in millions) | March 31, 2020 | December 31, 2019 | | :------------------- | :------------- | :---------------- | | Cash, cash equivalents and short-term investments | $249.1 | $271.7 | - Net cash used in operating activities was **$22.1 million**, while net cash provided by investing activities was **$42.8 million**, primarily from net maturities of investments[96](index=96&type=chunk) - The company expects substantial future capital requirements dependent on XERMELO commercialization, Ipsen collaboration, sotagliflozin program close-out, and other R&D efforts[101](index=101&type=chunk) - Lexicon believes current unrestricted cash and investment balances, along with expected revenues, will fund operations for at least the next 12 months, but additional financing may be needed thereafter[101](index=101&type=chunk) - The company is in the process of selling its facilities in The Woodlands, Texas, for **$15.0 million**, subject to closing conditions and a leaseback agreement[99](index=99&type=chunk) [Disclosure about Market Risk](index=24&type=section&id=Disclosure%20about%20Market%20Risk) - The company is exposed to limited market and credit risk on its cash equivalents and short-term investments, which consist of U.S. Treasury bills and corporate debt securities[103](index=103&type=chunk) - Lexicon does not hedge interest rate exposure or hold any derivative financial instruments in its investment portfolio[103](index=103&type=chunk) - The Convertible Notes (**5.25%**) and BioPharma Term Loan (**9%**) have fixed interest rates, limiting the company's interest rate sensitivity[104](index=104&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 Item 2 for market risk disclosures, providing no additional information here - Quantitative and qualitative disclosures about market risk are provided under "Disclosure about Market Risk" in "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations."[106](index=106&type=chunk) [Item 4. Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were effective as of March 31, 2020, with no material changes to internal financial reporting controls - The company's disclosure controls and procedures were concluded to be effective as of March 31, 2020[107](index=107&type=chunk) - There were no material changes in internal control over financial reporting during the three months ended March 31, 2020[107](index=107&type=chunk) Part II – Other Information [Item 1. Legal Proceedings](index=25&type=section&id=Item%201.%20Legal%20Proceedings) Lexicon faces a securities class action lawsuit regarding sotagliflozin clinical trials and FDA approval, seeking damages - A securities class action complaint was filed on January 28, 2019, alleging violations of federal securities laws concerning data from Phase 3 clinical trials of sotagliflozin and its FDA approval prospects for type 1 diabetes[108](index=108&type=chunk) - The lawsuit seeks unspecified monetary damages, interest, fees, and other relief for a class of purchasers of the company's securities from March 11, 2016, through July 29, 2019[108](index=108&type=chunk) - Other legal proceedings arising in the normal course of business are not expected to have a material adverse effect on operations, financial condition, or liquidity[109](index=109&type=chunk) [Item 1A. Risk Factors](index=25&type=section&id=Item%201A.%20Risk%20Factors) Details various risks impacting Lexicon's business, including COVID-19, product dependence, clinical trials, and capital [Risks Related to Our Business and Industry](index=25&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) - Business disruption and operational impacts from the COVID-19 outbreak, including restrictions on commercial and medical teams and delays in clinical trials, could materially affect the business[112](index=112&type=chunk) - Heavy dependence on the commercial success of XERMELO and the ability to obtain regulatory approval for sotagliflozin in type 1 diabetes poses significant risks[112](index=112&type=chunk) - Risks include inherent challenges in clinical testing (safety and efficacy), lengthy and uncertain regulatory processes, and achieving market acceptance by physicians, patients, and payers[112](index=112&type=chunk) - Challenges in maintaining an effective sales force, obtaining adequate reimbursement, manufacturing products in commercial quantities, and complying with extensive healthcare laws and regulations are critical risks[115](index=115&type=chunk) [Risks Related to Our Capital Requirements and Financial Results](index=27&type=section&id=Risks%20Related%20to%20Our%20Capital%20Requirements%20and%20Financial%20Results) - The company will need additional capital in the future, and its unavailability could force delays or elimination of commercialization efforts or product development programs[115](index=115&type=chunk) - Lexicon has a history of net losses and expects to continue incurring losses, with no guarantee of achieving or maintaining profitability[115](index=115&type=chunk) - Substantial indebtedness may limit cash flow available for business needs, and failure to manage affirmative and restrictive covenants under the BioPharma Term Loan could adversely affect financial condition[115](index=115&type=chunk) [Risks Related to Our Relationships with Third Parties](index=27&type=section&id=Risks%20Related%20to%20Our%20Relationships%20with%20Third%20Parties) - Significant dependence on collaborations with Ipsen and other pharmaceutical/biotechnology companies means failure to successfully develop and commercialize products would greatly reduce milestone and royalty revenues[115](index=115&type=chunk) - Conflicts with collaborators could jeopardize collaborative agreements and harm product development efforts[115](index=115&type=chunk) - Reliance on third-party manufacturers (including sole source suppliers) for commercial quantities of XERMELO and a single third-party logistics provider for distribution poses risks of supply disruptions and adverse effects on sales[115](index=115&type=chunk)[116](index=116&type=chunk) [Risks Related to Our Intellectual Property](index=29&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) - Inability to adequately protect intellectual property could allow third parties to use products and technologies, adversely affecting market competitiveness[120](index=120&type=chunk) - Potential involvement in patent litigation and other intellectual property disputes, and the need to obtain licenses from third parties for development and commercialization activities[120](index=120&type=chunk) - Data breaches and cyber-attacks pose risks of compromising intellectual property or other sensitive information, leading to significant damage to business and reputation[120](index=120&type=chunk) [Risks Related to Employees and Facilities Operations](index=29&type=section&id=Risks%20Related%20to%20Employees%20and%20Facilities%20Operations) - Inability to manage growth could adversely affect business, financial condition, results of operations, and prospects[120](index=120&type=chunk) - Loss of key personnel or inability to attract and retain additional personnel could impair operations and expansion[120](index=120&type=chunk) - Facility security breaches and the location of facilities near coastal zones (vulnerable to hurricanes) pose risks to operations and equipment[120](index=120&type=chunk) [Risks Related to Environmental and Product Liability](index=29&type=section&id=Risks%20Related%20to%20Environmental%20and%20Product%20Liability) - The use of hazardous chemicals and radioactive/biological materials in business operations could lead to time-consuming and costly claims related to improper handling, storage, or disposal[120](index=120&type=chunk) - The company faces a substantial risk of product liability exposure, potentially far exceeding its limited insurance coverage[120](index=120&type=chunk) [Risks Related to Our Common Stock](index=29&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) - Invus, L.P., Invus C.V., and their affiliates own a controlling interest in common stock, potentially leading to conflicts of interest with other stockholders[120](index=120&type=chunk) - The company's stock price may be extremely volatile, and it is subject to expensive securities litigation[120](index=120&type=chunk) - Future sales of common stock or the perception of such sales, and conversion of **5.25%** Convertible Senior Notes due 2021, may depress the stock price and dilute existing stockholders' ownership[120](index=120&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=26&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details common stock purchases for tax withholding obligations related to restricted stock units under the 2017 Equity Plan | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :------------------ | :------------------------------- | :--------------------------- | | January 1-31, 2020 | — | — | | February 1-29, 2020 | 333,440 | $2.77 | | March 1-31, 2020 | — | — | - The shares purchased represent shares retained by the company to satisfy the tax withholding obligations of recipients of restricted stock units granted under the 2017 Equity Incentive Plan[124](index=124&type=chunk) [Item 6. Exhibits](index=27&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with Form 10-Q, including agreements, equity plans, certifications, and XBRL taxonomy documents - Exhibits include amendments to the Real Estate Purchase and Sale Agreement (Exhibit 10.1, 10.2), the 2017 Equity Incentive Plan (Exhibit 10.3), and certifications of principal executive and financial officers (Exhibit 31.1, 31.2, 32.1)[125](index=125&type=chunk) - XBRL instance and taxonomy extension documents are also filed as exhibits[125](index=125&type=chunk) [Signatures](index=33&type=section&id=Signatures) The report is signed by the President, CEO, EVP, and CFO on April 27, 2020 - The report is signed by Lonnel Coats, President and Chief Executive Officer, and Jeffrey L. Wade, Executive Vice President, Corporate and Administrative Affairs and Chief Financial Officer, on April 27, 2020[130](index=130&type=chunk) [Index to Exhibits](index=34&type=section&id=Index%20to%20Exhibits) Provides an index to all exhibits filed with the Form 10-Q, detailing exhibit numbers and descriptions - This section provides an index to the exhibits filed with the Form 10-Q, detailing the exhibit number and description[132](index=132&type=chunk) ```

Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) Q1 2020 Earnings Conference Call April 27, 2020 8:00 AM ET Company Participants Dr. Kimberly Lee - Head, IR and Corporate Strategy Lonnel Coats - President and CEO Alex Santini - EVP and Chief Commercial Officer Dr. Pablo Lapuerta - EVP and Chief Medical Officer Dr. Praveen Tyle - EVP, Research and Development Jeff Wade - EVP, Corporate and Administrative Affairs and CFO Conference Call Participants Yigal Nochomovitz - Citigroup Liana Moussatos - Wedbush Securitie ...

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, 2019 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) Q4 2019 Results Conference Call March 12, 2020 8:00 AM ET Company Participants Dr. Kimberly Lee - Head, IR and Corporate Strategy Lonnel Coats - President and CEO Alex Santini - EVP and Chief Commercial Officer Dr. Pablo Lapuerta - EVP and Chief Medical Officer Dr. Praveen Tyle - EVP, Research and Development Jeff Wade - EVP, Corporate and Administrative Affairs and CFO Conference Call Participants Samantha Semenkow - Citi Kambiz Yazdi - Wedbush Securities Stephen ...

Lexicon Pharmaceuticals, Inc (NASDAQ:LXRX) Q3 2019 Earnings Conference Call November 7, 2019 8:00 AM ET Company Participants Lonnel Coats - President and Chief Executive Officer Alex Santini - Executive Vice President and Chief Commercial Officer Dr. Pablo Lapuerta - Executive Vice President and Chief Medical Officer Dr. Praveen Tyle - Executive Vice President, Research and Development Jeff Wade - Executive Vice President, Corporate and Administrative Affairs and Chief Financial Officer Dr. Kimberly Lee - H ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2019 or q 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 ...

[Part I – Financial Information](index=3&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for the period ended June 30, 2019, providing a comprehensive overview of the company's financial position, performance, and cash flows [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet as of June 30, 2019, shows a decrease in total assets to $233.1 million from $284.1 million at year-end 2018, primarily driven by a significant reduction in cash and cash equivalents Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | June 30, 2019 (unaudited) | December 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $11,106 | $80,386 | | Total current assets | $122,459 | $173,324 | | Total assets | $233,143 | $284,136 | | **Liabilities & Equity** | | | | Total current liabilities | $22,469 | $36,751 | | Long-term debt, net | $243,953 | $243,887 | | Total liabilities | $298,029 | $310,541 | | Total deficit | $(64,886) | $(26,405) | [Consolidated Statements of Comprehensive Loss](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss) For the second quarter of 2019, the company reported a net loss of $23.0 million, or $0.22 per share, an improvement from a net loss of $34.5 million, or $0.33 per share, in the same period of 2018 Financial Performance Summary (in thousands, except per share data) | Metric | Q2 2019 | Q2 2018 | Six Months 2019 | Six Months 2018 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $9,682 | $13,798 | $18,898 | $39,172 | | Research and development | $12,637 | $26,477 | $24,659 | $74,173 | | Loss from operations | $(18,545) | $(30,272) | $(36,014) | $(67,984) | | Net loss | $(23,018) | $(34,549) | $(44,815) | $(76,369) | | Net loss per share | $(0.22) | $(0.33) | $(0.42) | $(0.72) | [Consolidated Statements of Stockholders' Equity (Deficit)](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity%20%28Deficit%29) The statement details the changes in stockholders' deficit, which increased from $(26.4) million at December 31, 2018, to $(64.9) million at June 30, 2019 - The total stockholders' deficit grew to **$(64.9) million** as of June 30, 2019, from **$(26.4) million** at the end of 2018, mainly due to the net loss incurred during the period[21](index=21&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2019, net cash used in operating activities was $52.5 million, a significant improvement from $99.3 million in the prior-year period Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :--- | :--- | :--- | | Net cash used in operating activities | $(52,520) | $(99,298) | | Net cash (used in) provided by investing activities | $(15,176) | $54,430 | | Net cash used in financing activities | $(1,584) | $(1,749) | | **Net decrease in cash and cash equivalents** | **$(69,280)** | **$(46,617)** | | Cash and cash equivalents at end of period | $11,106 | $15,044 | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of significant accounting policies, debt obligations, and key collaboration agreements, including a material dispute with Sanofi - The company's revenue recognition policy involves a five-step model for collaborative agreements, assessing performance obligations and allocating transaction prices. Milestone payments are generally deemed constrained until achievement is probable[42](index=42&type=chunk)[43](index=43&type=chunk) - As of June 30, 2019, the company had significant debt, including **$87.5 million** in 5.25% Convertible Senior Notes due 2021, a **$150.0 million** BioPharma Term Loan due 2022, and a mortgage loan[60](index=60&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk) - On July 25, 2019, Sanofi issued a notice purporting to terminate the collaboration agreement for sotagliflozin. Lexicon considers this notice invalid and the agreement to be in full force, initiating dispute resolution procedures[78](index=78&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's strategic focus on key drug programs, analyzes the significant decrease in revenues and R&D expenses, and assesses liquidity, noting sufficient funds for the next 12 months despite decreased cash and investments - The company is focused on four key drug programs: commercializing XERMELO®, developing Zynquista™ (sotagliflozin), developing LX9211 for neuropathic pain, and developing LX2761 for diabetes[98](index=98&type=chunk)[99](index=99&type=chunk) - As of June 30, 2019, the company had an accumulated deficit of **$1.5 billion**, with losses resulting primarily from R&D and SG&A costs[104](index=104&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) For Q2 2019, total revenues decreased 30% YoY to $9.7 million, driven by an 87% drop in collaborative agreement revenue, partially offset by a 19% increase in net product revenue from XERMELO Revenue Breakdown (in millions) | Revenue Source | Q2 2019 | Q2 2018 | % Change | | :--- | :--- | :--- | :--- | | Net product revenue | $8.7 | $7.3 | +19% | | Collaborative agreements | $0.9 | $6.4 | -87% | | **Total revenues** | **$9.7** | **$13.8** | **-30%** | Operating Expense Breakdown (in millions) | Expense Category | Q2 2019 | Q2 2018 | % Change | | :--- | :--- | :--- | :--- | | Research and development | $12.6 | $26.5 | -52% | | Selling, general and administrative | $14.3 | $16.8 | -15% | - The decrease in R&D expenses was primarily due to lower external clinical development costs related to sotagliflozin[113](index=113&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2019, the company had $106.0 million in cash, cash equivalents, and short-term investments, a significant decrease from $160.1 million at the end of 2018 - Cash, cash equivalents, and short-term investments decreased from **$160.1 million** at Dec 31, 2018 to **$106.0 million** at June 30, 2019[119](index=119&type=chunk) - Net cash used in operations for the first six months of 2019 was **$52.5 million**[119](index=119&type=chunk) - Management believes that current cash and expected revenues will be sufficient to fund operations for at least the next 12 months[125](index=125&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=26&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports limited exposure to market and credit risk, with its investment portfolio primarily in short-maturity cash equivalents and U.S. Treasury bills, and no material foreign currency exposure - The company's investment portfolio consists of cash equivalents, U.S. Treasury bills, and corporate debt securities with short maturities, which are believed to have limited market and credit risk[127](index=127&type=chunk) - The company does not hedge interest rate exposure or hold derivative financial instruments[127](index=127&type=chunk) - There has been no material exposure to foreign currency rate fluctuations as operations are primarily in the U.S.[129](index=129&type=chunk) [Controls and Procedures](index=26&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, and a previously identified material weakness in internal control over financial reporting was remediated - The company's principal executive and financial officers concluded that disclosure controls and procedures were effective as of the end of the period[131](index=131&type=chunk) - A material weakness in internal control over financial reporting related to clinical trial expense accruals, identified in the 2018 audit, was remediated during the six months ended June 30, 2019[131](index=131&type=chunk) [Part II – Other Information](index=27&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) [Legal Proceedings](index=27&type=section&id=Item%201.%20Legal%20Proceedings) This section details a securities class action lawsuit and a significant ongoing dispute with Sanofi regarding the purported termination of their collaboration agreement for sotagliflozin - A securities class action lawsuit was filed against the company and certain officers, alleging violations of federal securities laws related to statements about sotagliflozin's Phase 3 clinical trials and FDA approval prospects[133](index=133&type=chunk) - On July 25, 2019, Sanofi provided written notice of its purported termination of the sotagliflozin collaboration agreement. Lexicon disputes Sanofi's right to terminate and considers the notice invalid and a breach of the agreement[134](index=134&type=chunk) - Lexicon has referred the disputes with Sanofi to senior officers for resolution through good faith negotiations, as required by the collaboration agreement before initiating binding arbitration[139](index=139&type=chunk) [Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) This section outlines key business and financial risks, including the ongoing dispute with Sanofi, heavy dependence on core drug programs, inherent clinical and regulatory uncertainties, and the need for future capital - A primary business risk is the inability to successfully and timely resolve disputes with Sanofi regarding the purported termination of the sotagliflozin collaboration agreement[143](index=143&type=chunk) - The company depends heavily on the commercial success of XERMELO and Zynquista (sotagliflozin), and faces significant risks related to clinical development and obtaining regulatory approvals[143](index=143&type=chunk) - Financial risks include a history of net losses, substantial indebtedness that may limit cash flow, and the need to raise additional capital in the future[144](index=144&type=chunk) [Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications from principal officers and XBRL data files - The exhibits filed with this report include Certifications of the Principal Executive Officer and Principal Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, as well as XBRL data files[152](index=152&type=chunk)

Lexicon Pharmaceuticals Inc. (NASDAQ:LXRX) Q2 2019 Results Conference Call August 1, 2019 9:00 AM ET Company Participants Kimberly Lee - Head of Investor Relations and Corporate Strategy Lonnel Coats - President and Chief Executive Officer Alex Santini - Executive Vice President and Chief Commercial Officer Dr. Pablo Lapuerta - Executive Vice President and Chief Medical Officer Dr. Praveen Tyle - Executive Vice President of Research and Development Jeff Wade - Executive Vice President and Chief Financial Of ...

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2019 or q 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 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) Lexicon Pharmaceuticals, Inc. (Exact Name of Registrant as Specified in its Charter) (State o ...

Financial Data and Key Metrics Changes - In Q1 2019, total revenues were $9.2 million, down from $25.4 million in the prior-year period, primarily due to lower revenue from collaboration with Sanofi [30] - Net loss for Q1 2019 was $21.8 million or $0.21 per share, compared to a net loss of $41.8 million or $0.40 per share in the same period last year [33] - Cash and short-term investments at the end of Q1 2019 were approximately $133 million, down from $160.1 million as of December 31, 2018 [34] Business Line Data and Key Metrics Changes - US net sales of XERMELO reached $6.7 million in Q1 2019, representing a 24% increase from the same period in 2018 [14] - Research and development expenses decreased to $12 million from $47.7 million in the prior-year period, mainly due to lower external clinical development costs related to sotagliflozin [31] - Selling, general and administrative expenses were $14.1 million in Q1 2019, down from $14.9 million in the same period last year [32] Market Data and Key Metrics Changes - The approval of sotagliflozin in Type I diabetes in Europe marks the second product from the company's labs approved in a major region within 26 months [15] - The first Phase III study results for sotagliflozin in Type II diabetes are expected to be released in the current quarter [16] Company Strategy and Development Direction - The company aims to continue executing its growth strategy focused on the XERMELO business and advancing its pipeline for long-term sustainability [18] - The company is committed to exploring the therapeutic utility of telotristat ethyl in biliary tract cancer and advancing LX9211 for neuropathic pain [26][27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory of XERMELO, expecting 20% or greater growth in US net sales year-over-year [14][36] - The company is well-capitalized to execute its business growth, with a focus on managing resources effectively [17][35] Other Important Information - The company has concluded major Phase III investments in Type I diabetes and is nearing significant milestones for sotagliflozin in Type II diabetes [18] - The anticipated operating expenses for 2019 have been revised to a range of $115 million to $135 million, down from $120 million to $140 million [38] Q&A Session Summary Question: Anticipation of next steps after FDA interactions on Type I diabetes - Management indicated that they still anticipate data release for Type II diabetes this quarter but could not provide a specific timeline for FDA interactions [46][47] Question: Key endpoints for Phase III studies in Type II diabetes - Management highlighted renal impairment studies and a direct comparison with empagliflozin as key areas of focus [50][51] Question: Differentiation of sotagliflozin versus CREDENCE study conclusions - Management noted that A1C reduction will be a key differentiator, alongside renal and hemodynamic effects [59][60] Question: Updates on early-stage pipeline for neuropathic pain - The company is considering diabetic neuropathy as a lead indication for Phase II studies but has not finalized other indications yet [55] Question: Metrics around XERMELO in Q1 2019 - The company reported 104 new patient starts and a 17% growth in TRX for XERMELO in the first quarter [79]