Lexicon Pharmaceuticals(US:LXRX)2020-07-29 20:57Financial Performance - Total revenues for the three months ended June 30, 2020 were $9.2 million, a decrease of 5% compared to $9.7 million in 2019; for the six months ended June 30, 2020, total revenues were $17.2 million, down 9% from $18.9 million in 2019 [91]. - Net product revenue for the three months ended June 30, 2020 increased 21% to $9.0 million, and for the six months ended June 30, 2020 increased 19% to $16.9 million compared to the same periods in 2019 [93]. - Net loss increased to $69.1 million for the three months ended June 30, 2020, compared to $23.0 million in the same period in 2019, with net loss per common share rising to $0.65 from $0.22 [100]. Expenses - Research and development expenses for the three months ended June 30, 2020 were $57.3 million, a significant increase of 353% from $12.6 million in 2019; for the six months ended June 30, 2020, expenses were $112.5 million, up 356% from $24.7 million in 2019 [93]. - Selling, general and administrative expenses for the three months ended June 30, 2020 were $14.1 million, a slight decrease of 1% from $14.3 million in 2019; for the six months ended June 30, 2020, expenses were $28.8 million, an increase of 2% from $28.4 million in 2019 [94]. - Third-party and other services for the three months ended June 30, 2020 increased to $48.9 million from $3.2 million in 2019, and for the six months ended June 30, 2020 increased to $94.2 million from $5.6 million in 2019, primarily due to increased external clinical development costs [95]. Cash and Investments - Cash, cash equivalents, and short-term investments totaled $201.9 million as of June 30, 2020, down from $271.7 million as of December 31, 2019, with cash used in operations amounting to $68.4 million in the first half of 2020 [103]. - Investing activities generated cash of $120.9 million in the six months ended June 30, 2020, primarily due to net maturities of investments [103]. - The company has an accumulated deficit of $1.5 billion as of June 30, 2020, primarily due to research and development costs and administrative expenses [87]. Future Outlook - The company expects substantial future capital requirements to commercialize XERMELO and complete clinical development programs, with current cash and revenues expected to fund operations for at least the next 12 months [108]. - The company is developing LX9211 for neuropathic pain and has reported top-line results from two Phase 1 clinical trials, with plans to initiate a Phase 2 clinical trial [81]. Regulatory and Collaborations - The FDA has issued a complete response letter regarding the regulatory approval for Zynquista (sotagliflozin) for type 1 diabetes, which has been approved in the EU for use as an adjunct to insulin therapy [84]. - The company is collaborating with Ipsen for the commercialization of XERMELO outside the United States and Japan, which is expected to generate milestone payments and royalties [86]. - Zynquista was approved in the EU for use in type 1 diabetes, with future royalty payments totaling $4.5 million contingent on regulatory pricing approvals [104]. Debt and Interest - Interest expense for the three months ended June 30, 2020, was $5.1 million, consistent with the same period in 2019, while net interest and other income decreased slightly to $0.6 million from $0.7 million [99]. - The company has a mortgage loan of $12.9 million on its facilities, with a balloon payment of $10.3 million due in August 2020 [105]. - The company has not hedged interest rate exposure and does not hold derivative financial instruments in its investment portfolio [110]. Impairment - The company recognized an impairment loss of $1.6 million related to the write-down of buildings to estimated net selling price [98]. Operating Assets - The company had a net decrease in operating assets net of liabilities of $54.5 million during the six months ended June 30, 2020 [103].