Lexicon Pharmaceuticals, Inc. (Nasdaq: LXRX), a biopharmaceutical company focused on discovering and developing breakthrough treatments for human disease, today announced that it has exercised a restructured purchase option under its drug development financing collaboration with Symphony Icon Holdings LLC and acquired all the equity of Symphony Icon, Inc., thereby reacquiring all rights to LX1031, LX1032, LX1033 and the other drug programs subject to the collaboration.
"The encouraging results we have obtained with our portfolio of serotonin synthesis inhibitors, LX1031 for irritable bowel syndrome, LX1032 for carcinoid syndrome, and LX1033 for other gastrointestinal disorders, informed our decision to reacquire all development and commercialization rights to these promising drug candidates," said Arthur T. Sands, M.D., Ph.D., Lexicon's president and chief executive officer. "We have restructured our agreement with Symphony in a manner that enables us to both defer a sizable portion of the purchase option exercise price as well as make a significant portion contingent on the success of the drug candidates, allowing us to make payments as we receive licensing proceeds to fund them."
Lexicon and Symphony Icon Holdings agreed to revised terms under which Lexicon paid Symphony Icon Holdings $10 million upon closing and agreed to make certain additional deferred and contingent payments, payable at Lexicon's option in cash, common stock or a combination of cash and common stock, subject to certain conditions. The additional deferred payments, which will be due on or before July 30, 2013, will be in an amount equal to $50 million less a 50% share of the expenses Lexicon incurs for the future development of LX1031, LX1032, LX1033 and related drug candidates, subject to certain exceptions and up to an aggregate reduction of $15 million. Lexicon may make the deferred payments in whole or in part at any time that it chooses within the payment period. The contingent payments will consist of a 50% share of any consideration Lexicon receives from licensing LX1031, LX1032, LX1033 and related drug candidates up to a maximum of $30 million plus the amount of any reduction in the deferred payment amount. The contingent payments will be due if and when Lexicon receives such licensing consideration. Lexicon will make an alternative contingent payment in lieu of a share of licensing consideration in the event that Lexicon receives regulatory approval in the United States for the marketing and sale of a product resulting from such programs prior to entering into a licensing transaction for the commercialization of such product in the United States. The total of the up-front payment and all deferred and contingent payments by Lexicon will not exceed the $90 million exercise price applicable under the terms of the purchase option that were in effect before the restructured agreement was signed.
The deferred payments and the contingent payments may be paid in cash, common stock, or a combination of cash and common stock, at Lexicon's discretion, provided that at least 50% of any payment made on or prior to July 30, 2012 will be paid in common stock and no more than 50% of any payment made after such date will be paid in common stock.
LX1031 is an orally-delivered serotonin synthesis inhibitor that acts locally in the gastrointestinal tract targeting tryptophan hydroxylase (TPH), an enzyme necessary for the production of serotonin. LX1031 recently demonstrated positive results in a Phase 2 clinical trial in patients with diarrhea-predominant and mixed forms of irritable bowel syndrome (IBS-D and IBS-M). LX1032 is an orally-delivered serotonin synthesis inhibitor that acts peripherally to inhibit tryptophan hydroxylase without affecting brain serotonin levels. LX1032 is currently in a Phase 2 clinical trial in patients with carcinoid syndrome. LX1033 is a locally acting serotonin synthesis inhibitor with enhanced potency in IND-enabling studies.
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