[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)

Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) Q3 2021 Earnings Conference Call November 3, 2021 5:00 PM ET Company Participants Chas Schultz - Executive Director of Corporate Communications & Patient Advocacy Lonnel Coats - President and Chief Executive Officer and Director Jeff Wade - Executive Vice President, Corporate and Administrative Affairs and Chief Financial Officer Craig Granowitz - Senior Vice President and Chief Medical Officer. Conference Call Participants Yigal Nochomovitz - Citigroup Jessica Fy ...

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 June 30, 2021 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) (281) 863 ...

Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) Q1 2021 Earnings Conference Call May 6, 2021 6:00 AM ET Company Participants Chas Schultz - Executive Director of Corporate Communications & Patient Advocacy Lonnel Coats - President and Chief Executive Officer and Director Jeff Wade - Executive Vice President, Corporate and Administrative Affairs and Chief Financial Officer Conference Call Participants Jessica Fye - JPMorgan Joseph Stringer - Needham & Company Operator Good morning, good afternoon and good evenin ...

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, 2021 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 ...

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, 2020 Code) 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) Delawar ...

Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) Q4 2020 Results Conference Call March 10, 2021 5:00 PM ET Company Participants Chas Schultz - Executive Director of Corporate Communications & Patient Advocacy Lonnel Coats - President and Chief Executive Officer and Director Praveen Tyle - Executive Vice President of Research and Development Jeff Wade - Executive Vice President, Corporate and Administrative Affairs and Chief Financial Officer Conference Call Participants Carly Kenselaar - Citigroup Stephen Will ...

(Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q For the Quarterly Period Ended September 30, 2020 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 ...

Financial Data and Key Metrics Changes - Lexicon Pharmaceuticals reported net product revenues of $6.5 million for Q3 2020, down from $8.4 million in the same quarter of the previous year, reflecting the sale of XERMELO and related assets [44] - The company recognized a gain of $132.8 million from the sale of XERMELO, resulting in a net income of $82.6 million or $0.71 per diluted share, compared to $226.1 million or $1.95 per diluted share in Q3 2019 [46] - Research and development expenses increased to $40.1 million from $26.7 million year-over-year, while selling, general and administrative expenses decreased to $12 million from $13.9 million [45] Business Line Data and Key Metrics Changes - The company completed the sale of XERMELO and related assets, allowing it to repay its $150 million term loan in full and retire over 90% of its outstanding debt [9][10] - The focus has shifted to advancing LX9211, with plans to initiate Phase 2 clinical trials for diabetic peripheral neuropathic pain and post-herpetic neuralgia [11][12] Market Data and Key Metrics Changes - The worldwide market for neuropathic pain is estimated at approximately $6.4 billion for 2020, expected to grow over 13% annually to $13.2 billion by 2026 [19] - There is a significant unmet need in the neuropathic pain market, with an estimated 12 million people suffering from diabetic peripheral neuropathic pain and 600,000 from post-herpetic neuralgia by 2026 [20] Company Strategy and Development Direction - The company aims to operate as a more streamlined and focused entity, with a substantial reduction in expected cash burn moving into 2021 [11][12] - Lexicon plans to engage with the FDA to establish a clear pathway for the approval of sotagliflozin in type 1 diabetes, emphasizing the importance of managing the risk of diabetic ketoacidosis [15][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the potential of LX9211 to become a new treatment option for neuropathic pain, highlighting its independence from the opioid pathway [22][26] - The company anticipates a significant reduction in operating expenses for 2020, with full-year operating expenses expected to be between $225 million and $231 million [48] Other Important Information - The company expects to report results from the Phase 2 studies of LX9211 by the end of next year [41] - Upcoming presentations of data from the SOLOIST and SCORED Phase 3 studies of sotagliflozin are scheduled for November 16 [52] Q&A Session Summary Question: Steps to mitigate placebo effect in trials - Management detailed steps taken to mitigate the placebo effect in both diabetic peripheral neuropathy and post-herpetic neuralgia studies, including a large patient cohort and extended efficacy period [58][60] Question: Reason for not extinguishing all debt - The CFO explained that the remaining debt was part of an agreed-upon exchange, and the current level of debt is deemed optimal for future operations [62] Question: Strategy for U.S. approval of sotagliflozin - Management emphasized the need for clear guidance from the FDA regarding the management of DKA risk and the importance of ongoing dialogue with the agency [66] Question: Concerns about competitors in type 1 diabetes - Management acknowledged the possibility of competitors benefiting from their efforts but expressed confidence in their unique position and data advantage [71] Question: Discovery pipeline and new compounds - Management indicated potential for moving another asset into IND-enabling studies in 2021, while focusing primarily on LX9211 and sotagliflozin [74] Question: Q4 spending and baseline for 2021 - The CFO noted that Q4 R&D spending will be higher than in 2021 due to winding down activities related to sotagliflozin [77] Question: Patient enrollment pace for Phase 2 trials - Management acknowledged the impact of COVID-19 on enrollment but expressed commitment to accelerating patient recruitment [81]

Financial Data and Key Metrics Changes - Revenues for Q2 2020 decreased to $9.2 million from $9.7 million in Q2 2019, primarily due to the absence of bulk tablet sales of XERMELO and a decrease in collaborative revenues, partially offset by an increase in U.S. net product sales [12] - U.S. net sales of XERMELO reached $9 million in Q2 2020, up 21% from the same period in 2019 [9] - Net loss for Q2 2020 was $69.1 million, or $0.65 per share, compared to a net loss of $23 million, or $0.22 per share, in Q2 2019 [13] - Cash and short-term investments at the end of Q2 2020 were approximately $202 million, down from $271.7 million as of December 31, 2019 [13] Business Line Data and Key Metrics Changes - Research and development expenses for Q2 2020 increased to $57.3 million from $12.6 million in Q2 2019, primarily due to increased external clinical development costs related to sotagliflozin [12] - Selling, general and administrative expenses for Q2 2020 were $14.1 million, slightly down from $14.3 million in Q2 2019 [13] Market Data and Key Metrics Changes - The neuropathic pain market reached nearly $6 billion globally last year, with a significant unmet need for effective treatments [16] - Diabetic peripheral neuropathic pain (DPNP) accounts for about 20% of drug sales for neuropathic pain, with an expected annual growth rate of nearly 4% driven by the increase in diabetes prevalence [17] Company Strategy and Development Direction - The company announced an agreement to sell XERMELO and associated assets to TerSera for up to $224 million, allowing a realignment around research and development assets, particularly focusing on the LX9211 program [4][10] - The company aims to build a franchise around LX9211, which targets neuropathic pain, and plans to initiate additional Phase 2 studies in other areas of neuropathic pain [27][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the potential of LX9211, highlighting its unique mechanism of action and the significant unmet need in the neuropathic pain market [16][27] - The company expects to manage its cash effectively to support the Phase 2 development of LX9211 and other R&D projects beyond 2021 [69] Other Important Information - The company is revising its 2020 operating and R&D expense guidance, reducing total operating expenses to a range of $230 million to $250 million [14] - Sanofi committed to pay Lexicon $260 million under a settlement agreement, with the final installment of $26 million due in September [15] Q&A Session Summary Question: Confirmation on term loan repayment related to XERMELO sale - Management confirmed that the repayment of the term loan is intended as part of the transaction to reduce debt, with a modest prepayment penalty expected [32][33] Question: Costs and timelines for LX9211 trials - The first study for LX9211 is expected to cost a little over $10 million, with results anticipated late next year [34][35] Question: Cash inflows and outflows - Management indicated that R&D spending will decrease significantly due to winding down the sotagliflozin program, focusing primarily on LX9211 [42] Question: Status of Type 1 diabetes program - Management confirmed that they are not giving up on the Type 1 diabetes program and plan to reengage with the FDA [43] Question: TerSera transaction and future decisions - All decisions regarding the development of XERMELO will be made by TerSera post-transaction [50][52] Question: LX9211 data expectations - Final results for the Phase 2 DPNP study are expected toward the end of next year, with the study well-powered due to its size [61][62] Question: Treatment landscape for DPNP - Most treatments are focused on moderate to severe patients, with mild cases often going untreated [65]