[Business and Pipeline Highlights](index=1&type=section&id=Business%20and%20Pipeline%20Highlights) Lexicon Pharmaceuticals reported significant progress across its R&D pipeline in Q2 2025, advancing key programs like pilavapadin, LX9851, and sotagliflozin - The company is executing its strategy as an R&D-focused organization, with **strong progress across all key programs**[3](index=3&type=chunk) [Pilavapadin (LX9211) for Diabetic Peripheral Neuropathic Pain (DPNP)](index=1&type=section&id=Pilavapadin%20(LX9211)%20for%20Diabetic%20Peripheral%20Neuropathic%20Pain%20(DPNP)) Pilavapadin, a potential first-in-class oral, non-opioid drug for DPNP, is in partnership discussions, with additional Phase 2b data expected in September - Partnership discussions for pilavapadin are underway following the completion of the **Phase 2b PROGRESS study**[1](index=1&type=chunk)[5](index=5&type=chunk) - Pilavapadin has the potential to be the **first new oral, non-opioid drug approved for neuropathic pain in over two decades**[5](index=5&type=chunk) [LX9851 for Obesity](index=1&type=section&id=LX9851%20for%20Obesity) Preclinical development of LX9851 for obesity is on track for 2025 completion, with Novo Nordisk's IND submission potentially triggering up to $30 million in milestone payments - IND-enabling studies for LX9851 are on track for **completion in 2025**[1](index=1&type=chunk)[11](index=11&type=chunk) - The licensing agreement with Novo Nordisk includes an **upfront payment of $45 million** (received in April) and potential for up to **$1 billion in total milestones**, plus tiered royalties[11](index=11&type=chunk) - Lexicon is eligible for up to an additional **$30 million in near-term milestone payments** upon planned IND submission and initiation of clinical development by Novo Nordisk[11](index=11&type=chunk) [Sotagliflozin Program](index=2&type=section&id=Sotagliflozin%20Program) The sotagliflozin program is advancing with accelerated enrollment in the SONATA Phase 3 HCM study, Viatris preparing ex-U.S./EU filings, and FDA review for Zynquista® in Type 1 Diabetes - Enrollment in the SONATA Phase 3 study for both obstructive and non-obstructive HCM is accelerating, with **completion targeted for 2026**[1](index=1&type=chunk)[12](index=12&type=chunk) - Licensee Viatris is preparing regulatory filings for sotagliflozin outside the U.S. and EU, which could lead to **royalty payments to Lexicon starting next year**[3](index=3&type=chunk)[12](index=12&type=chunk) - Lexicon is in the end-of-review process with the FDA to evaluate bringing **Zynquista® (sotagliflozin) to market for people with Type 1 Diabetes**[8](index=8&type=chunk) - Sotagliflozin remains commercially available in the U.S. for heart failure under the brand name **INPEFA®**[7](index=7&type=chunk) [Second Quarter 2025 Financial Highlights](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Lexicon's Q2 2025 financial performance dramatically improved to a net income of $3.3 million, driven by licensing revenue and significantly reduced operating expenses [Key Financial Results (Q2 2025 vs Q2 2024)](index=2&type=section&id=Key%20Financial%20Results%20(Q2%202025%20vs%20Q2%202024)) Q2 2025 saw total revenues surge to $28.9 million and operating expenses significantly reduced, resulting in a net income of $3.3 million compared to a prior-year loss Key Financial Results Table | Financial Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | $28.9M | $1.6M | +1655% | | R&D Expenses | $15.7M | $17.6M | -10.8% | | SG&A Expenses | $9.4M | $39.2M | -76.0% | | **Net Income (Loss)** | **$3.3M** | **($53.4M)** | **Turned to Profit** | | Net Income (Loss) per Share | $0.01 | ($0.17) | **Turned to Profit** | - The significant increase in revenue was primarily due to **$27.5 million in licensing revenue** from the agreement with Novo Nordisk[10](index=10&type=chunk) - The decrease in SG&A expenses reflects lower costs from the strategic repositioning in late 2024 and significantly reduced marketing for INPEFA in 2025[14](index=14&type=chunk) [Cash Position and Balance Sheet](index=3&type=section&id=Cash%20Position%20and%20Balance%20Sheet) As of June 30, 2025, Lexicon's total cash and investments stood at $168 million, a decrease from $238.0 million at year-end 2024, partly due to severance payments Cash Position and Investments | Balance Sheet Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and investments | $139.0M | $238.0M | | Restricted cash | $29.0M | $0 | | **Total Cash & Investments** | **$168.0M** | **$238.0M** | - The change in cash position includes **$7.5 million in severance payments** related to the strategic repositioning in late 2024[16](index=16&type=chunk) [Detailed Financial Statements](index=5&type=section&id=Detailed%20Financial%20Statements) This section provides a comprehensive breakdown of Lexicon's operating results for Q2 2025 and 2024, alongside consolidated balance sheet data for June 30, 2025, and December 31, 2024 Consolidated Statements of Operations (Three Months Ended) | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total revenues | $28,866 | $1,647 | | Total operating expenses | $25,130 | $57,001 | | Income (loss) from operations | $3,736 | ($55,354) | | **Net income (loss)** | **$3,252** | **($53,429)** | Consolidated Balance Sheet Data | (In thousands) | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Total assets | $225,583 | $298,420 | | Long-term debt, net | $56,107 | $100,298 | | Total stockholders' equity | $129,440 | $145,950 |

Core Insights - Lexicon Pharmaceuticals is making significant progress in its R&D strategy, with ongoing partnership discussions for pilavapadin and IND-enabling studies for LX9851 on track for completion in 2025 [3][4][8] - The company reported a substantial increase in total revenues for Q2 2025, reaching $28.9 million, compared to $1.6 million in Q2 2024, primarily driven by licensing revenue from Novo Nordisk [11][21] - Lexicon's net income for Q2 2025 was $3.3 million, a notable improvement from a net loss of $53.4 million in the same period last year [14][21] Partnership and Product Development - Partnership discussions for pilavapadin are ongoing, with full Phase 2 data expected to be presented at an upcoming medical meeting [3][8] - LX9851, a novel oral candidate for obesity, is in preclinical development, with an exclusive licensing agreement with Novo Nordisk that includes an upfront payment of $45 million and potential milestone payments up to $1 billion [8][11] - The SONATA Phase 3 study for sotagliflozin in hypertrophic cardiomyopathy (HCM) is progressing well, with over 100 sites initiated across 20 countries [3][16] Financial Performance - Total revenues for Q2 2025 were $28.9 million, consisting of $27.5 million in licensing revenue and $1.3 million from INPEFA® sales [11][21] - Research and development expenses decreased to $15.7 million in Q2 2025 from $17.6 million in Q2 2024, reflecting optimized resource allocation [12][21] - Selling, general, and administrative expenses significantly decreased to $9.4 million in Q2 2025 from $39.2 million in Q2 2024 due to strategic repositioning [13][21] Cash Position and Investments - As of June 30, 2025, Lexicon had $139 million in cash and investments, down from $238 million at the end of 2024, primarily due to severance payments related to strategic changes [15][21] - The company also reported $29 million in restricted cash as of the same date [15][21] Pipeline and Future Outlook - Lexicon is focused on advancing its pipeline, with sotagliflozin being commercially available in the U.S. for heart failure as INPEFA® [7][19] - The company is also preparing for regulatory filings for sotagliflozin in various international markets, with submissions already made in the UAE and Saudi Arabia [16][19]

Group 1 - Lexicon Pharmaceuticals has regained compliance with Nasdaq Listing Rule 5550(a)(2) as its common stock has maintained a closing bid price of $1.00 or greater for ten consecutive business days [1] - The update regarding compliance was previously disclosed in the Company's Current Report on Form 8-K filed on July 28, 2025 [1] Group 2 - Lexicon Pharmaceuticals is a biopharmaceutical company focused on pioneering medicines that transform patients' lives [2] - The company utilizes its Genome5000™ program to study nearly 5,000 genes, identifying over 100 protein targets with significant therapeutic potential across various diseases [2] - Lexicon has advanced multiple medicines to market and has a pipeline of promising drug candidates in areas such as heart failure, neuropathic pain, obesity, cardiology, and diabetes [2]

Company Announcement - Lexicon Pharmaceuticals, Inc. will release its second quarter 2025 financial results on August 6, 2025, prior to market open [1] - Management will conduct a conference call and live webcast at 8:30 a.m. ET on the same day to discuss the financial results and provide a business update [1] Conference Call Details - Participants can access the conference call live via webcast on the Company's website [2] - Those wishing to ask questions may register to receive dial-in numbers and a unique pin to join the call [2] - An archived version of the webcast will be available on the Lexicon website [2] Company Overview - Lexicon is a biopharmaceutical company focused on pioneering medicines that transform patients' lives [3] - The Genome5000™ program has enabled Lexicon scientists to study nearly 5,000 genes, identifying over 100 protein targets with significant therapeutic potential [3] - The company has advanced multiple medicines to market and has a pipeline of promising drug candidates in various therapeutic areas including heart failure, neuropathic pain, obesity, cardiology, and diabetes [3]

Core Insights - Lexicon Pharmaceuticals is presenting data on diabetic peripheral neuropathic pain (DPNP) at the 7th Annual Meeting of the American Society of Pain and Neuroscience, highlighting the impact of DPNP on patients despite standard treatments [1][2] - Approximately 9 million patients in the U.S. suffer from DPNP, affecting 30% of type 1 diabetes patients and 50% of type 2 diabetes patients [2] - The study aims to raise awareness among healthcare professionals about the burden of DPNP on patients and encourage discussions about treatment options [3] Product Development - Pilavapadin (LX9211) is an investigational, non-opioid treatment for DPNP, discovered through Lexicon's gene science approach, targeting AAK1 to inhibit pain signaling without affecting opiate pathways [4] - The Phase 2a proof-of-concept RELIEF-DPN-1 study demonstrated that pilavapadin met its primary endpoint by reducing average daily pain scores (ADPS) at week 6 compared to placebo, showing significant benefits in alleviating DPNP symptoms [5] - Pilavapadin has received Fast Track designation from the U.S. FDA for its development in treating DPNP [5] Company Overview - Lexicon Pharmaceuticals focuses on pioneering medicines that transform patients' lives, utilizing its Genome5000™ program to identify therapeutic protein targets across various diseases [6] - The company has a pipeline of drug candidates in clinical and preclinical development for conditions including neuropathic pain, hypertrophic cardiomyopathy, and obesity [6]

Pilavapadin (LX9211) for DPNP - The PROGRESS Phase 2b study identified the 10 mg dose of pilavapadin as the most clinically meaningful for treating Diabetic Peripheral Neuropathic Pain (DPNP) [7] - Post-hoc analysis of the PROGRESS study reaffirmed the 10 mg dose, showing statistically significant results (p = 0.04) when combining the 10 mg and 20/10 mg arms [11] - The 10 mg dose of pilavapadin had a study completion rate of 87.8%, similar to the placebo group's 87.9% [13] - Approximately 60% of U S patients with DPNP have tried multiple treatments, indicating a high unmet need and sizable market opportunity [15] LX9851 for Obesity and Related Metabolic Disorders - LX9851 is a first-in-class, potent, and selective orally bioavailable ACSL5 inhibitor with the potential to address unmet needs in obesity and related cardiometabolic disorders [17] - IND filing for LX9851 is on track for 2025 [20] Sotagliflozin - A Lancet Diabetes & Endocrinology publication highlighted the unique efficacy benefits of sotagliflozin, showing a reduced risk of major adverse cardiovascular events (MACE) with a Hazard Ratio (HR) of 0.77 (95% CI 0 65-0 91), p=0 0020 [23] - The cumulative incidence of total MACE was 10.0 per 100 patients in the sotagliflozin group [23] - Viatris is undertaking ex-US, ex-EU registration and regional development of sotagliflozin [21] Financials - Total revenues for FY 2024 were $31.1 million, compared to $1.2 million in FY 2023 [26] - Lexicon anticipates total operating expenses between $135 million and $145 million for full year 2025 [29]

Pipeline Development - Pilavapadin (LX9211) Phase 2b PROGRESS study identified the 10 mg dose as the most clinically meaningful for DPNP[13], with post-hoc analysis showing statistically significant pain reduction compared to placebo (p = 0.04) in combined 10 mg dosing arms[16] - The PROGRESS study enrolled 496 patients[12], and the 10 mg dose had a completion rate of 87.8%[18], similar to the placebo group's 87.9%[18] - LX9851 IND-enabling studies are underway for obesity and related metabolic disorders[6], showing potential for weight loss maintenance after semaglutide discontinuation in preclinical studies[34] - SONATA-HCM Phase 3 trial is enrolling globally to evaluate sotagliflozin in both obstructive and non-obstructive HCM patients[21, 29] Sotagliflozin & INPEFA - Sotagliflozin has shown a 0.77 hazard ratio (95% CI 0.65-0.91, p=0.0020) for reduced major adverse cardiovascular events (MACE) in patients with T2D, CKD, and high CV risk[23] - Approximately 1.1 million people in the U.S. have HCM[26, 27], presenting a significant market opportunity for sotagliflozin[26] - Viatris is undertaking ex-US, ex-EU registration and regional development of sotagliflozin[21] Market Opportunity & Partnerships - Approximately 9 million U.S. patients have progressive DPNP[20], with 60% experiencing moderate-to-severe pain and low satisfaction with current treatments[20] - Lexicon entered an exclusive licensing agreement with Novo Nordisk for LX9851, receiving $75 million in upfront and near-term milestones, with potential for up to $1 billion in aggregate payments[40] - Lexicon entered an exclusive licensing agreement with Viatris for sotagliflozin outside the U.S. and Europe, receiving $25 million upfront, with potential for almost $200 million in milestone payments[40]

Business Highlights - Lexicon entered an exclusive worldwide licensing agreement with Novo Nordisk for LX9851[5, 21] - Pilavapadin (LX9211) PROGRESS readout identified a de-risked dose of 10mg to move into Phase 3 trials[5] - The company reduced debt and strengthened its financial position[5] - Pilavapadin 10 mg has consistently delivered clinically meaningful pain reduction[7] Market Opportunity - Approximately 9 million people in the U S living with diabetes suffer from DPNP[10] - It is projected that there will be 13 million DPNP patients in the U S by 2035[10] - Approximately 70% of patients with neuropathic pain do not achieve partial pain management[10] - Approximately 11 million people in the U S have either obstructive or non-obstructive HCM[14] Financial Overview - As of March 31, 2025, Lexicon had $1948 million in cash, cash equivalents, and short-term investments[26] - Total debt was $586 million as of March 31, 2025[26] - Total revenues for Q1 2025 were $13 million compared to $11 million in Q1 2024[26] - The company expects total 2025 operating expenses to be between $135 million and $145 million[29]

Core Insights - Lexicon Pharmaceuticals presented a post-hoc analysis showing that treatment with sotagliflozin, when added to optimized insulin therapy, resulted in a reduction of hypoglycemic events in patients with type 1 diabetes (T1D) without increasing risk [1][5][6] Group 1: Clinical Findings - The analysis indicated that sotagliflozin significantly reduced hypoglycemic events, particularly in patients with blood glucose levels ≤55 mg/dL [1][5] - Chronic kidney disease (CKD) is a notable risk factor for hypoglycemia in T1D, with 20% to 40% of T1D patients developing CKD [3] - The study evaluated the effect of kidney function on hypoglycemia risk using data from two Phase 3 clinical trials, inTandem 1 and inTandem 2, which compared sotagliflozin to placebo [4][5] Group 2: Treatment Efficacy - Results showed that sotagliflozin maintained a consistent trend of reduced hypoglycemia across different estimated glomerular filtration rate (eGFR) subgroups [5] - The treatment led to lower rates of severe hypoglycemia compared to placebo, reinforcing its potential as a safer adjunct therapy for T1D patients [5][6] Group 3: Company Overview - Lexicon Pharmaceuticals focuses on pioneering medicines that transform patients' lives, utilizing its Genome5000™ program to discover therapeutic targets [7] - The company has a diverse pipeline of drug candidates in various stages of development, addressing conditions such as neuropathic pain, hypertrophic cardiomyopathy, and obesity [7]

Core Insights - Lexicon Pharmaceuticals is set to present data on sotagliflozin's ability to reduce hypoglycemic events in type 1 diabetes patients at the 85th Scientific Sessions of the American Diabetes Association on June 22, 2025 [1][3] - The company will also present topline data from the PROGRESS Phase 2b study on pilavapadin (LX9211) for diabetic peripheral neuropathic pain during the same event [1][3] Sotagliflozin Presentation - The presentation titled "Sotagliflozin Added to Insulin Reduces the Risk of Clinically Important Hypoglycemic Events in Adults with Type 1 Diabetes Regardless of Kidney Function" will take place on June 22, 2025, from 4:00-4:15 p.m. CT [3] - Clinical efficacy data for sotagliflozin will be segmented by kidney function subgroups based on Estimated Glomerular Filtration Rate (eGFR) [2] PROGRESS Study Overview - The PROGRESS study began in December 2023, enrolling 496 adult patients with diabetes and moderate to severe diabetic peripheral neuropathic pain [6] - The study is placebo-controlled, focusing on changes in pain levels over an 8-week period with various dosages of pilavapadin [6][7] About Sotagliflozin - Sotagliflozin is an oral inhibitor targeting SGLT2 and SGLT1 proteins, which are involved in glucose regulation [5] - The drug has been studied in approximately 20,000 patients across various conditions, including heart failure and chronic kidney disease [5] About Diabetic Peripheral Neuropathic Pain (DPNP) - DPNP is a chronic complication of diabetes affecting around 9 million patients in the U.S., causing symptoms like burning pain and numbness [8]