Lexicon Pharmaceuticals(LXRX) - 2025 Q2 - Quarterly Report

Factors Affecting Forward-Looking Statements This section outlines the nature of forward-looking statements, associated risks, and the company's policy on updates - This report contains forward-looking statements identified by terms like "anticipate," "believe," "expect," etc., which are predictions involving known and unknown risks and uncertainties[11] - Actual results may vary materially from expectations due to risks outlined in "Part II, Item 1A. - Risk Factors" and the annual report on Form 10-K for the year ended December 31, 2024[11][12] - The company does not undertake any duty to update forward-looking statements unless required by law[12] Part I – Financial Information This section presents the company's unaudited condensed consolidated financial statements and management's analysis of financial condition and operations Item 1. Financial Statements Lexicon Pharmaceuticals, Inc. presents its unaudited condensed consolidated financial statements and accompanying notes Condensed Consolidated Balance Sheets This section presents Lexicon Pharmaceuticals, Inc.'s condensed consolidated balance sheets, detailing assets, liabilities, and equity Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Assets | | | | Total current assets | $145,084 | $246,193 | | Total assets | $225,583 | $298,420 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $34,836 | $45,248 | | Long-term debt, net | $56,107 | $100,298 | | Total liabilities | $96,143 | $152,470 | | Total stockholders' equity | $129,440 | $145,950 | | Total liabilities and stockholders' equity | $225,583 | $298,420 | - Total assets decreased by $72.8 million from December 31, 2024, to June 30, 2025, primarily due to a reduction in cash, cash equivalents, and short-term investments[15] - Total liabilities decreased by $56.3 million, largely driven by a $44.2 million reduction in long-term debt, net, and decreases in accounts payable and accrued liabilities[15] Condensed Consolidated Statements of Comprehensive Income (Loss) This section presents Lexicon Pharmaceuticals, Inc.'s condensed consolidated statements of comprehensive income (loss), detailing revenues, expenses, and net results Condensed Consolidated Statements of Comprehensive Income (Loss) (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $28,866 | $1,647 | $30,128 | $2,777 | | Total operating expenses | $25,130 | $57,001 | $52,071 | $103,464 | | Income (loss) from operations | $3,736 | $(55,354) | $(21,943) | $(100,687) | | Net income (loss) | $3,252 | $(53,429) | $(22,043) | $(101,826) | | Net income (loss) per common share, basic | $0.01 | $(0.17) | $(0.06) | $(0.37) | | Comprehensive income (loss) | $3,213 | $(53,572) | $(22,176) | $(102,050) | - Total revenues significantly increased for both the three and six months ended June 30, 2025, primarily due to $27.5 million in licensing revenue from the Novo Nordisk agreement[18][85] - The company reported a net income of $3.3 million ($0.01 EPS) for the three months ended June 30, 2025, a substantial improvement from a net loss of $53.4 million ($0.17 loss per share) in the prior year period[18][91] Condensed Consolidated Statements of Stockholders' Equity This section presents Lexicon Pharmaceuticals, Inc.'s condensed consolidated statements of stockholders' equity, detailing changes in equity components Condensed Consolidated Statements of Stockholders' Equity (in thousands) | Metric | December 31, 2024 | June 30, 2025 | | :----------------------------------- | :---------------- | :------------ | | Total Stockholders' Equity | $145,950 | $129,440 | | Common Stock Shares Outstanding | 363,020 | 365,781 | | Additional Paid-In Capital | $2,117,325 | $2,123,560 | | Accumulated Deficit | $(1,967,242) | $(1,989,285) | - Total stockholders' equity decreased from $145.95 million at December 31, 2024, to $129.44 million at June 30, 2025, primarily due to a net loss of $25.3 million in Q1 2025, partially offset by stock-based compensation and net income in Q2 2025[24] - Stock-based compensation contributed $3.04 million and $3.20 million to additional paid-in capital for the periods ended March 31, 2025, and June 30, 2025, respectively[24] Condensed Consolidated Statements of Cash Flows This section presents Lexicon Pharmaceuticals, Inc.'s condensed consolidated statements of cash flows, detailing movements from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (in thousands) - Six Months Ended June 30, | Cash Flow Activity | 2025 | 2024 | | :----------------------------------- | :--------- | :---------- | | Net cash used in operating activities | $(26,785) | $(103,670) | | Net cash provided by (used in) investing activities | $56,065 | $(122,547) | | Net cash (used in) provided by financing activities | $(45,572) | $239,369 | | Net (decrease) increase in cash, cash equivalents and restricted cash | $(16,292) | $13,152 | | Cash, cash equivalents, and restricted cash at end of period | $50,364 | $35,617 | - Net cash used in operating activities significantly decreased from $(103.7) million in 2024 to $(26.8) million in 2025, primarily due to a reduced net loss[26][95] - Investing activities provided $56.1 million in cash in 2025, a reversal from using $(122.5) million in 2024, mainly driven by net maturities of investments[26][95] - Financing activities used $45.6 million in 2025, compared to providing $239.4 million in 2024, primarily due to debt repayments in 2025 and preferred stock issuance in 2024[26][95] Notes to Condensed Consolidated Financial Statements This section provides detailed notes to the condensed consolidated financial statements, explaining accounting policies, fair values, collaborations, debt, and equity 1. Summary of Significant Accounting Policies This section outlines the significant accounting policies used in preparing the unaudited condensed consolidated financial statements, emphasizing GAAP compliance - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP for interim financial information and SEC rules, with all necessary adjustments included[29] - Management makes estimates and assumptions that affect reported amounts, and actual results may differ[30] - There have been no significant changes to the company's accounting policies since the December 31, 2024, annual report on Form 10-K[31] 2. Cash and Cash Equivalents, Restricted Cash and Investments This section details the fair value of Lexicon Pharmaceuticals, Inc.'s cash, cash equivalents, restricted cash, and investments Fair Value of Cash, Restricted Cash, and Investments (in thousands) | Category | June 30, 2025 (Fair Value) | December 31, 2024 (Fair Value) | | :------------------------------------------------- | :------------------------- | :--------------------------- | | Cash and cash equivalents | $21,364 | $66,656 | | Restricted cash | $29,000 | — | | Short-term investments (U.S. treasury & corporate debt) | $117,643 | $171,301 | | Total cash, cash equivalents, restricted cash, and short-term investments | $168,007 | $237,957 | - As of June 30, 2025, investments in an unrealized loss position had an estimated fair value of $76.4 million, significantly higher than $12.9 million at December 31, 2024[33] 3. Fair Value Measurements This section explains Lexicon Pharmaceuticals, Inc.'s categorization of fair value measurements into Level 1 and Level 2 - The company categorizes fair value measurements into Level 1 (quoted prices in active markets for identical assets, e.g., U.S. treasury securities) and Level 2 (other significant observable inputs, e.g., corporate debt securities)[36] Assets at Fair Value by Level (in thousands) | Category | Level 1 (June 30, 2025) | Level 2 (June 30, 2025) | Level 1 (December 31, 2024) | Level 2 (December 31, 2024) | | :------------------------------------------------- | :---------------------- | :---------------------- | :-------------------------- | :-------------------------- | | Cash and cash equivalents | $21,364 | — | $66,656 | — | | Short-term investments | $94,846 | $22,797 | $127,990 | $43,311 | | Restricted cash | $29,000 | — | — | — | | Total | $145,210 | $22,797 | $194,646 | $43,311 | 4. Supplemental Financial Information This section provides supplemental financial details, including net property and equipment, accrued liabilities, and share-based awards Net Property and Equipment (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :---------------- | | Total property and equipment | $4,570 | $4,570 | | Less: Accumulated depreciation and amortization | $(2,438) | $(2,086) | | Net property and equipment | $2,132 | $2,484 | Accrued Liabilities (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :---------------- | | Accrued research and development services | $4,257 | $12,251 | | Accrued compensation and benefits | $4,292 | $14,712 | | Short-term lease liability | $909 | $1,175 | | Other | $2,023 | $2,309 | | Total accrued liabilities | $11,481 | $30,447 | - For the three months ended June 30, 2025, approximately 0.3 million share-based awards were included in the calculation of diluted earnings per share due to net income[42] 5. Collaborations and Strategic Alliances This section details Lexicon Pharmaceuticals, Inc.'s collaborations, including the exclusive license agreement with Novo Nordisk for LX9851 and associated payments - In March 2025, Lexicon entered an exclusive license agreement with Novo Nordisk for LX9851 (obesity/cardiometabolic disorders), receiving an upfront payment of $45 million in April 2025[43] - Lexicon is eligible for up to $485 million in regulatory/commercial launch milestones and up to $475 million in sales milestones, plus tiered royalties on net sales of LX9851[43] - The company recognized $27.5 million as licensing revenue in Q2 2025 from the Novo Nordisk agreement, with the remaining $17.5 million recorded as deferred revenue[45] 6. Debt Obligations This section details Lexicon Pharmaceuticals, Inc.'s debt obligations, including Oxford Term Loans, repayment activities, and financial covenant compliance - Lexicon has Oxford Term Loans totaling $100 million funded across three tranches, with a current weighted average interest rate of 11.9% as of June 30, 2025[51][52] - In April 2025, the company repaid $45 million (including final payment exit fees) to Oxford, reducing the carrying value of long-term debt to $56.1 million as of June 30, 2025[53][54] - The loan agreement requires maintaining a minimum balance of unrestricted cash, cash equivalents, short-term investments, and restricted cash (including $29 million in a blocked account), and the company was in compliance as of June 30, 2025[56][57][60] 7. Commitments and Contingencies This section outlines Lexicon Pharmaceuticals, Inc.'s operating lease obligations and legal proceedings, assessing their potential financial impact - Operating lease obligations include office space in Texas and New Jersey, with a new lease for the Texas office starting September 2025 and extending through January 2031, totaling $4.1 million in undiscounted cash payments[61] Undiscounted Operating Lease Liability Reconciliation (in thousands) as of June 30, 2025 | Year | Amount | | :--------- | :----- | | 2025 | $518 | | 2026 | $865 | | 2027 | $881 | | 2028 | $898 | | 2029 | $914 | | Thereafter | $3,832 | | Total undiscounted operating lease liability | $7,908 | | Less: amount of lease payments representing interest | $(2,564) | | Present value of future lease payments | $5,344 | | Less: short-term operating lease liability | $(909) | | Long-term operating lease liability | $4,435 | - The company is involved in routine legal proceedings, which are not expected to have a material adverse effect on its operations, financial condition, or liquidity[65] 8. Equity Incentive Awards This section details Lexicon Pharmaceuticals, Inc.'s stock-based compensation expense and activity for stock options and restricted stock units - Stock-based compensation expense was $3.2 million for the three months ended June 30, 2025 (down from $4.9 million in 2024) and $6.2 million for the six months ended June 30, 2025 (down from $9.2 million in 2024)[66] Stock Option Activity (in thousands, except price) | Metric | Stock Options | Weighted Average Exercise Price | | :----------------------------------- | :------------ | :------------------------------ | | Outstanding at December 31, 2024 | 15,389 | $3.20 | | Granted | 10,594 | $0.69 | | Expired | (310) | $6.41 | | Forfeited | (2,388) | $2.41 | | Outstanding at June 30, 2025 | 23,285 | $2.10 | | Exercisable at June 30, 2025 | 7,835 | $4.03 | Restricted Stock Unit (RSU) Activity (in thousands, except fair value) | Metric | RSUs | Weighted Average Grant Date Fair Value | | :----------------------------------- | :----- | :------------------------------------- | | Outstanding at December 31, 2024 | 6,300 | $2.27 | | Granted | 14,323 | $0.69 | | Vested | (2,761) | $2.35 | | Forfeited | (1,539) | $1.39 | | Outstanding at June 30, 2025 | 16,323 | $0.95 | 9. Other Capital Agreements This section describes Lexicon Pharmaceuticals, Inc.'s other capital agreements, including the sale and conversion of Series A Convertible Preferred Stock - In March 2024, Lexicon sold 2,304,147 shares of Series A Convertible Preferred Stock, generating net proceeds of $241.3 million[70] - In May 2024, each share of preferred stock was converted into 50 shares of common stock, totaling 115,207,350 common shares[70] 10. Segment Information This section clarifies Lexicon Pharmaceuticals, Inc. operates as a single reportable segment, focused on pharmaceutical product discovery, development, and commercialization - Lexicon operates as a single reportable segment, focused on the discovery, development, and commercialization of pharmaceutical products[71] - The CEO, as the chief operating decision maker (CODM), manages and allocates resources on a total company basis, assessing financial performance based on consolidated net income (loss) and consolidated cash/investments[72][73] Summary of Segment Net Income (Loss) and Expenses (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $28,866 | $1,647 | $30,128 | $2,777 | | Research and development | $14,127 | $15,964 | $27,736 | $28,742 | | Sales and marketing | $1,233 | $28,982 | $3,908 | $51,662 | | General and administrative | $6,466 | $6,839 | $14,292 | $13,474 | | Income (loss) from operations | $3,736 | $(55,354) | $(21,943) | $(100,687) | | Net income (loss) | $3,252 | $(53,429) | $(22,043) | $(101,826) | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Lexicon's financial condition and results of operations, covering business developments, performance drivers, liquidity, and capital Overview This section provides an overview of Lexicon Pharmaceuticals, Inc.'s biopharmaceutical focus, key drug candidates, and accumulated financial losses - Lexicon is a biopharmaceutical company focused on pioneering medicines, with primary resources dedicated to the research, development, and commercialization of INPEFA (sotagliflozin) and other drug candidates[76] - Key drug candidates include INPEFA (for heart failure/type 2 diabetes), pilavapadin (for neuropathic pain, with Fast Track designation), LX9851 (for obesity, licensed to Novo Nordisk), and sotagliflozin (for hypertrophic cardiomyopathy and type 1 diabetes)[76][77][80] - The company has incurred significant losses, with an accumulated deficit of approximately $2.0 billion as of June 30, 2025, primarily from R&D and SG&A costs[83] Critical Accounting Policies This section states no significant changes occurred in Lexicon Pharmaceuticals, Inc.'s critical accounting policies since the December 31, 2024, Annual Report - There have been no significant changes in the company's critical accounting policies as discussed in its Annual Report on Form 10-K for the year ended December 31, 2024[84] Results of Operations This section analyzes Lexicon Pharmaceuticals, Inc.'s financial performance, detailing changes in revenues, cost of sales, R&D, SG&A, and interest expenses Revenues This section details Lexicon Pharmaceuticals, Inc.'s total revenues, highlighting the significant increase from the Novo Nordisk licensing agreement Total Revenues (in millions) | Period | 2025 | 2024 | Change (YoY) | | :----------------------------------- | :--- | :--- | :----------- | | Three Months Ended June 30, | $28.9 | $1.6 | +$27.3M | | Six Months Ended June 30, | $30.1 | $2.8 | +$27.3M | - Revenues for 2025 included $27.5 million in licensing revenue recognized from the Novo Nordisk licensing agreement[85] Cost of Sales This section details Lexicon Pharmaceuticals, Inc.'s cost of sales, primarily for INPEFA, noting the impact of 'zero-cost' raw materials - Cost of sales for the three and six months ended June 30, 2025 and 2024, were less than $0.2 million, primarily consisting of third-party manufacturing costs and freight for INPEFA sales[86] - The low cost of sales is due to the utilization of 'zero-cost' INPEFA raw materials, which were either received in conjunction with a terminated agreement or expensed as R&D prior to regulatory approval[86] - The company estimates its cost of goods sold as a percentage of net product revenue will be less than 10% after the utilization of all remaining 'zero-cost' inventory[86] Research and Development Expenses This section analyzes Lexicon Pharmaceuticals, Inc.'s research and development expenses, highlighting decreases from lower third-party services and personnel costs Research and Development Expenses (in millions) | Period | 2025 | 2024 | Change (YoY) | | :----------------------------------- | :--- | :--- | :----------- | | Three Months Ended June 30, | $15.7 | $17.6 | $(1.9) (-11%) | | Six Months Ended June 30, | $31.1 | $32.0 | $(0.9) (-3%) | - The decrease in R&D expenses was primarily driven by lower third-party services (down 14% for Q2, 4% for H1) due to reduced clinical external research for current drug candidates[87] - Personnel costs decreased by 12% for Q2 and 4% for H1, while stock-based compensation remained relatively stable[87] Selling, General and Administrative Expenses This section analyzes Lexicon Pharmaceuticals, Inc.'s selling, general and administrative expenses, noting significant decreases due to company restructuring and reduced headcount Selling, General and Administrative Expenses (in millions) | Period | 2025 | 2024 | Change (YoY) | | :----------------------------------- | :--- | :--- | :----------- | | Three Months Ended June 30, | $9.4 | $39.2 | $(29.8) (-76%) | | Six Months Ended June 30, | $21.0 | $71.3 | $(50.3) (-71%) | - The significant decrease in SG&A expenses was primarily due to lower personnel costs (down 79% for Q2, 74% for H1) and professional/consulting fees (down 82% for Q2, 73% for H1) resulting from the company restructuring in late 2024[92] - Stock-based compensation within SG&A decreased by 50% for Q2 and 48% for H1 due to reduced headcount from the field force reduction[92] Interest and Other Expense This section details Lexicon Pharmaceuticals, Inc.'s interest and other expense, noting a decrease reflecting changes in outstanding debt Interest and Other Expense (in millions) | Period | 2025 | 2024 | | :----------------------------------- | :--- | :--- | | Three Months Ended June 30, | $2.3 | $2.2 | | Six Months Ended June 30, | $4.2 | $7.2 | - Interest and other expense for the six months ended June 30, 2025, decreased to $4.2 million from $7.2 million in the prior year, reflecting changes in outstanding debt principal and related amortization[89] Interest Income and Other This section details Lexicon Pharmaceuticals, Inc.'s interest income and other, noting a decrease reflecting lower cash and investment balances Interest Income and Other (in millions) | Period | 2025 | 2024 | | :----------------------------------- | :--- | :--- | | Three Months Ended June 30, | $1.8 | $4.1 | | Six Months Ended June 30, | $4.1 | $6.0 | - Interest income and other decreased for both the three and six months ended June 30, 2025, compared to 2024, reflecting lower cash, cash equivalents, and short-term investment balances[90] Net Income (Loss) and Net Income (Loss) per Common Share This section analyzes Lexicon Pharmaceuticals, Inc.'s net income (loss) and earnings per common share, highlighting significant improvements Net Income (Loss) and EPS | Period | Net Income (Loss) (in millions) | EPS (Diluted) | | :----------------------------------- | :------------------------------ | :------------ | | Three Months Ended June 30, 2025 | $3.3 | $0.01 | | Three Months Ended June 30, 2024 | $(53.4) | $(0.17) | | Six Months Ended June 30, 2025 | $(22.0) | $(0.06) | | Six Months Ended June 30, 2024 | $(101.8) | $(0.37) | - The company achieved a net income of $3.3 million ($0.01 per diluted share) for the three months ended June 30, 2025, a significant improvement from a net loss of $53.4 million ($0.17 per share) in the prior year[91] - Net loss for the six months ended June 30, 2025, was $22.0 million ($0.06 per share), substantially lower than the $101.8 million net loss ($0.37 per share) in the corresponding period of 2024[91] Liquidity and Capital Resources This section discusses Lexicon Pharmaceuticals, Inc.'s liquidity and capital resources, including financing, collaborations, commitments, and future capital needs Financing Obligations This section details Lexicon Pharmaceuticals, Inc.'s financing obligations, including loan amendments, debt repayments, and cash balance covenants - In March 2025, Lexicon entered a seventh amendment to its loan agreement with Oxford, providing for a $45 million prepayment in April 2025 and modifying amortization and financial covenants[97] - Additional debt payments of $20.2 million, $30.2 million, and $11.6 million (including debt principal and final exit fees) are due in fiscal years 2027, 2028, and 2029, respectively[98] - The company must maintain a minimum balance of unrestricted cash, cash equivalents, short-term investments, and restricted cash, including $29 million in a blocked account, and was in compliance as of June 30, 2025[99][100] Collaborations and Strategic Alliances This section highlights key upfront payments received by Lexicon Pharmaceuticals, Inc. from collaborations with Novo Nordisk and Viatris - In March 2025, Lexicon received a $45 million upfront payment from Novo Nordisk for the exclusive license of LX9851[101] - In October 2024, the company received a $25 million upfront payment from Viatris for the exclusive license of sotagliflozin outside the U.S. and Europe[102] Other commitments This section outlines Lexicon Pharmaceuticals, Inc.'s other financial commitments, including royalty payments for sotagliflozin and a milestone for pilavapadin - Upon regulatory approval of sotagliflozin for type 1 diabetes in a major market, the company will owe $4.5 million in royalty payments, in three annual installments of $1.5 million[103] - A $5 million milestone payment is due to Bristol-Myers Squibb upon dosing of the first patient in a Phase 3 clinical trial of pilavapadin[103] Outlook This section discusses Lexicon Pharmaceuticals, Inc.'s future capital requirements, funding sufficiency, and potential impacts of additional financing - Future capital requirements will be substantial and depend on R&D success, regulatory approvals, new collaborations, and commercialization expenditures[105] - Current unrestricted cash and investment balances, along with expected revenues from collaborations, are believed to be sufficient to fund planned operations for at least the next 12 months[106] - If additional financing is needed and unavailable on acceptable terms, the company may have to delay or reduce commercialization efforts or R&D programs, and equity/debt sales could dilute stockholders[107] Disclosure about Market Risk This section discusses Lexicon Pharmaceuticals, Inc.'s market and credit risk on investments, interest rate sensitivity on debt, and limited foreign currency risk - The company has limited market and credit risk on its cash equivalents and short-term investment portfolio (U.S. Treasury bills and corporate debt securities maturing within 3-12 months)[108] - Lexicon is subject to interest rate sensitivity on its Oxford Term Loans, which bear a floating interest rate based on the 1-month CME Term SOFR rate[109] - The company has no material exposure to foreign currency rate fluctuations as substantially all sales have been in U.S. dollars[110] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section refers to market risk disclosures provided in Item 2, 'Management's Discussion and Analysis of Financial Condition and Results of Operations' - Quantitative and qualitative disclosures about market risk are provided under 'Disclosure about Market Risk' in Item 2[111] Item 4. Controls and Procedures The principal executive and financial officers concluded the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control - The principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of June 30, 2025[112] - There were no material changes in internal control over financial reporting during the three months ended June 30, 2025[113] Part II – Other Information This part presents other information not included in the financial statements, such as legal proceedings, risk factors, and exhibits Item 1. Legal Proceedings Lexicon Pharmaceuticals, Inc. is involved in routine legal proceedings not expected to materially affect its operations, financial condition, or liquidity - The company is party to claims and legal proceedings that arise in the normal course of business[114] - Management believes these proceedings will not have a material adverse effect on its results of operations, financial condition, or liquidity[114] Item 1A. Risk Factors This section outlines significant risks impacting Lexicon's business, including R&D success, capital needs, third-party reliance, intellectual property, and stock price volatility - The company's success heavily depends on its ability to successfully complete research and development, gain positive clinical trial results, and obtain necessary regulatory approvals for its drug candidates[115] - Lexicon will need additional capital in the future, and its unavailability could force delays or elimination of R&D programs, or lead to financing on unattractive terms[117] - The company relies on collaborations with pharmaceutical and biotechnology companies for development and commercialization, and conflicts or failures in these arrangements could significantly reduce revenue opportunities[117] - Risks related to intellectual property include the inability to adequately protect it, potential patent litigation, and the need for third-party licenses[117] - The company's stock price may be extremely volatile, and future issuances or sales of common stock could depress its price[122] Item 5. Other Information This section reports no directors or executive officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025 - No directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[123] - No directors or executive officers adopted or terminated a non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[123] Item 6. Exhibits This section lists all exhibits filed as part of the Form 10-Q, including equity incentive plans, officer certifications, and XBRL documents - Exhibits include the 2017 Equity Incentive Plan and the 2017 Non-Employee Directors' Equity Incentive Plan, both as amended[124] - Certifications of the Principal Executive Officer and Principal Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are filed herewith[124] - XBRL Instance Document and Taxonomy Extension Documents (Schema, Calculation, Definition, Label, Presentation) are included[124] Signatures This section contains the official signatures of the company's principal executive and financial officers, certifying the report - The report was signed on August 6, 2025, by Michael S. Exton, Ph.D., Chief Executive Officer, and Scott M. Coiante, Senior Vice President and Chief Financial Officer[128]