Lexicon Pharmaceuticals first-quarter revenues down 61%

Lexicon Pharmaceuticals, Inc.May 10 2010

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 months ended March 31, 2010.  

"Achieving the remarkable results from our Phase 2a trial of LX4211 in patients with type 2 diabetes was the defining event of the first quarter," said Dr. Arthur T. Sands, president and chief executive officer of Lexicon.  "This is the second of our four mid-stage drug development programs to deliver positive proof-of-concept Phase 2a results.  In addition, the completion of our recent stock offering has placed us in a strong financial position to execute on our clinical development and business strategies."

Key Progress in Clinical Pipeline

• Diabetes:  Top-line Phase 2a clinical data from a four-week study of Lexicon's dual sodium-glucose cotransporter 2 (SGLT2) and SGLT1 inhibitor, LX4211, in patients with type 2 diabetes demonstrated significant and rapid improvements in multiple parameters, including improved glycemic control and reduced HbA1c. Also noted in this study were trends toward reduced weight, blood pressure, and triglyceride levels.
• Irritable Bowel Syndrome:  Lexicon recently presented additional findings demonstrating that measures of 5-HIAA, a biomarker of serotonin synthesis, could distinguish between patients with irritable bowel syndrome (IBS) who responded to LX1031 in its Phase 2a clinical trial versus those that did not. LX1031 is an inhibitor of tryptophan hydroxylase that acts locally in the gastrointestinal tract to reduce serotonin synthesis.  Top-line data from the trial demonstrated that the high dose of LX1031 produced statistically-significant improvements in a global assessment of relief of IBS pain and discomfort and in stool consistency as compared to placebo — clinical benefits that corresponded with a reduction in serotonin synthesis.  The results from additional analyses were presented at the Digestive Disease Week Convention in New Orleans.
• Rheumatoid Arthritis: Lexicon expanded its Phase 2a clinical trial of its drug candidate for rheumatoid arthritis, LX2931, an inhibitor of sphingosine-1-phosphate (S1P) lyase.  The study is being conducted at multiple centers in the United States and Eastern Europe and is expected to enroll approximately 200 patients.  Top-line data are expected to be available around the end of the year.
• Carcinoid Syndrome:  Lexicon initiated an open-label, Phase 2a trial in Europe of its drug candidate for carcinoid syndrome, LX1032, an inhibitor of tryptophan hydroxylase that reduces peripheral serotonin production without affecting brain serotonin levels. Enrollment is continuing in the separate placebo-controlled, Phase 2a trial in the United States. Top-line data from both trials are expected to be available in the second half of 2010.

Financial Results and Events

In March 2010, Lexicon completed an offering of its common stock resulting in net proceeds to Lexicon of approximately $181.5 million.

Revenues:  Lexicon's revenues for the three months ended March 31, 2010 decreased 61 percent to $1.6 million from $4.2 million for the corresponding period in 2009.  The decrease for the three months ended March 31, 2010 was primarily attributable to reduced revenues under Lexicon's alliance agreements with N.V. Organon and Bristol-Myers Squibb Company.

Research and Development Expenses:  Research and development expenses for the three months ended March 31, 2010 decreased eight percent to $21.1 million from $22.9 million for the corresponding period in 2009.  The decrease was primarily attributable to lower salary and benefit costs, partially offset by higher external clinical research and development costs.  

General and Administrative Expenses:  General and administrative expenses for the three months ended March 31, 2010 increased 13 percent to $5.5 million from $4.9 million for the corresponding period in 2009.  The increase was primarily attributable to higher patent-related legal costs.    

Net Loss Attributable to Lexicon Pharmaceuticals, Inc.:  Net loss for the three months ended March 31, 2010 was $26.1 million, or $0.13 per share, compared to a net loss of $21.6 million, or $0.16 per share, in the corresponding period in 2009.  For the three months ended March 31, 2010, net loss included non-cash, stock-based compensation expense of $1.3 million, compared to $1.4 million in the corresponding period in 2009.    

Cash and Investments:  As of March 31, 2010, Lexicon had $278.7 million in cash and investments net of its obligations under the credit line secured by its auction rate securities, as compared to $125.1 million as of December 31, 2009.  Lexicon's cash and investments at December 31, 2009 included $5.4 million held by Symphony Icon, Inc.  As a result of Lexicon's adoption as of January 1, 2010 of a new accounting pronouncement regarding variable interest entities, the results of Symphony Icon are no longer consolidated in Lexicon's financial statements after December 31, 2009.  Accordingly, Lexicon's cash and investments at March 31, 2010 do not include the $4.4 million in cash and investments held by Symphony Icon at March 31, 2010.