Lexicon Pharmaceuticals reports fiscal 2009 third-quarter results and updates of its clinical trials

Lexicon Pharmaceuticals, Inc.Oct 27 2009

Lexicon Pharmaceuticals, Inc. (Nasdaq: LXRX), a biopharmaceutical company focused on discovering and developing breakthrough treatments for human disease, today updated its drug development progress and reported financial results for the three and nine months ended September 30, 2009.

"We advanced our fourth drug candidate into Phase 2 clinical trials during the third quarter, as we continue to focus our resources on the research and development of our most promising programs," said Dr. Arthur T. Sands, president and chief executive officer of Lexicon. "We are now looking forward to reporting Phase 2 clinical results from our four programs in patients over the next 12 months, including top-line results from LX1031 in November 2009."

Key Developments

• Lexicon completed patient enrollment ahead of schedule in a Phase 2a clinical trial of its drug candidate for non-constipating irritable bowel syndrome (IBS), LX1031, an inhibitor of tryptophan hydroxylase that acts locally in the gastrointestinal tract. Top-line data from the trial is expected to be available in November 2009, with detailed results available in the first quarter of 2010.
• Lexicon completed Phase 1 studies of its drug candidate for type 2 diabetes, LX4211, an inhibitor of sodium-glucose cotransporter 2 (SGLT2). The company also initiated a Phase 2a clinical trial of the drug candidate in patients with diabetes. In the Phase 1 clinical trial, LX4211 was well tolerated at all dose levels and produced a dose-dependent increase in urinary glucose excretion. LX4211 also demonstrated a favorable pharmacokinetic profile supporting the potential for once daily dosing. The Phase 2 clinical trial is designed as a four-week, randomized, double-blind, placebo-controlled study to evaluate the safety and tolerability of LX4211 and its effect on biomarkers associated with type 2 diabetes. The trial will be conducted in the United States and is expected to enroll 36 patients with non-insulin dependent type 2 diabetes. Top-line data from the trial is expected to be available in the first quarter of 2010.
• Lexicon advanced LX2931, an inhibitor of sphingosine-1-phosphate (S1P) lyase, into a Phase 2a study in patients with rheumatoid arthritis. The Phase 2 clinical trial is designed as a 12-week, randomized, double-blind, placebo-controlled study to evaluate the safety and tolerability of LX2931 and its effects on symptoms associated with rheumatoid arthritis. The study will include up to 120 patients and will be conducted at multiple centers in the United States and Eastern Europe. Top-line data from the trial is expected to be available in the third quarter of 2010.
• Lexicon continues to enroll patients in a Phase 2a study of its drug candidate for carcinoid syndrome, LX1032, an inhibitor of tryptophan hydroxylase that reduces peripheral serotonin production without affecting brain serotonin levels. The Phase 2 clinical trial is designed as a randomized, double-blind, placebo-controlled study to evaluate the safety and tolerability of LX1032 and its effects on symptoms associated with carcinoid syndrome. The study will include up to 28 patients with carcinoid syndrome who are symptomatic despite treatment with currently available therapy. Top-line data from the trial is expected to be available by the third quarter of 2010.
• In October 2009, Lexicon completed the public offering and sale of 38.3 million shares of its common stock at $1.50 per share. The net proceeds of the offering were $55.2 million, after deducting underwriting discounts and offering expenses.

Financial Results

Revenues: Lexicon's revenues for the three months ended September 30, 2009 decreased 72 percent to $2.1 million from $7.5 million for the corresponding period in 2008. The decrease was primarily attributable to reduced revenues under Lexicon's alliances with Bristol-Myers Squibb, N.V. Organon and Genentech, Inc., partially offset by increases in revenue under the company's collaboration with Taconic Farms, Inc. For the nine months ended September 30, 2009, revenues decreased 64 percent to $9.3 million from $26.0 million for the corresponding period in 2008.

Research and Development Expenses: Research and development expenses for the three months ended September 30, 2009 decreased 29 percent to $19.3 million from $27.3 million for the corresponding period in 2008. The decrease was primarily attributable to lower external preclinical research and development expenses as well as lower salary and benefit costs. For the nine months ended September 30, 2009, research and development expenses decreased 26 percent to $62.4 million from $84.9 million for the corresponding period in 2008.

General and Administrative Expenses: General and administrative expenses for the three months ended September 30, 2009 decreased eight percent to $4.6 million from $5.0 million for the corresponding period in 2008. The decrease was primarily attributable to lower consulting expenses. For the nine months ended September 30, 2009, general and administrative expenses decreased 10 percent to $15.0 million from $16.7 million for the corresponding period in 2008.

Net Loss Attributable to Lexicon Pharmaceuticals, Inc.: Net loss for the three months ended September 30, 2009 was $19.1 million, or $0.14 per share, compared to a net loss of $23.5 million, or $0.17 per share, in the corresponding period in 2008. Net loss for the nine months ended September 30, 2009 was $60.8 million, or $0.44 per share, compared to a net loss of $61.4 million, or $0.45 per share, for the corresponding period in 2008. For the three and nine months ended September 30, 2009, net loss included non-cash, stock-based compensation expense of $1.3 million and $4.1 million, respectively. For the three and nine months ended September 30, 2008, net loss included non-cash, stock-based compensation expense of $1.4 million and $4.8 million, respectively.

Cash and Investments: As of September 30, 2009, Lexicon had $87.3 million in cash and investments net of its obligations under the credit line secured by its auction rate securities, as compared to $106.9 million as of June 30, 2009 and $158.8 million as of December 31, 2008. The $87.3 million in cash and investments as of September 30, 2009 does not include the $55.2 million in net proceeds the company recently received from its public offering in October 2009.