Lexicon first quarter revenues decrease 50% to $0.3 million

Lexicon Pharmaceuticals, Inc. (Nasdaq: LXRX), a biopharmaceutical company focused on discovering breakthrough treatments for human disease, today updated its drug development progress and reported financial results for the three months ended March 31, 2012.

"We continue to make excellent progress in our clinical-development stage programs and preclinical pipeline.  Our Phase 2b study of LX4211 in patients with type 2 diabetes has completed enrollment and is on track to obtain top-line data by mid-year," said Dr. Arthur T. Sands, president and chief executive officer of Lexicon.  "In addition, in the first quarter of 2012, we initiated Phase 2 studies of LX1033 in patients with diarrhea-predominant irritable bowel syndrome (IBS-d) and of LX1032 in patients with ulcerative colitis, and we launched a Phase 1-2 proof-of-concept study of LX7101 in glaucoma patients.  We look forward to obtaining data from these and our other ongoing studies and continuing the advancement of our clinical pipeline."

Key Progress in Clinical Pipeline

• Lexicon completed enrollment in the ongoing 12-week Phase 2b study of LX4211, a dual inhibitor of sodium-glucose cotransporters 1 and 2, in patients with type 2 diabetes.  Top-line data from this study are anticipated by mid-year.
• Lexicon is proceeding with preparations for Phase 3 registrational trials of telotristat etiprate (LX1032), an inhibitor of tryptophan hydroxylase that reduces peripheral serotonin production without affecting brain serotonin levels, in patients with carcinoid syndrome.  Lexicon also initiated a Phase 2 proof-of-concept trial of telotristat etiprate in patients with ulcerative colitis. 
• Lexicon launched a Phase 2 trial of LX1033, a serotonin synthesis inhibitor, in patients with IBS‑d. 
• Lexicon recently completed enrollment in a dose-ranging study to explore higher doses of LX2931, an inhibitor of sphingosine-1-phosphate lyase, in patients with rheumatoid arthritis. 
• Lexicon initiated a Phase 1-2 proof-of-concept study of LX7101 in glaucoma patients.  LX7101 targets LIM domain kinase 2 (LIMK2), a novel mechanism of action that Lexicon research identified in preclinical models as reducing intraocular pressure by allowing more fluid to flow through the trabecular meshwork of the anterior chamber of the eye.

Revenues:  Lexicon's revenues for the three months ended March 31, 2012 decreased 50 percent to $0.3 million from $0.6 million for the corresponding period in 2011.  The decrease for the three months ended March 31, 2012 was primarily attributable to reduced revenues from the United States Army Medical Research Acquisition Activity and Lexicon's alliance with Taconic Farms.

Research and Development Expenses:  Research and development expenses for the three months ended March 31, 2012 decreased four percent to $23.0 million from $23.9 million for the corresponding period in 2011.  The decrease was primarily attributable to decreases in facility and personnel costs, partially offset by an increase in external manufacturing, clinical research and development costs.

Increase in Fair Value of Symphony Icon Purchase Liability:  In connection with the acquisition of Symphony Icon, Lexicon made an initial estimate of the fair value of the liability for the associated base and contingent payments.  Changes in this liability, based on the development of the programs and the time until such payments are expected to be made, are recorded in Lexicon's consolidated statements of operations.  The increase in fair value of the Symphony Icon purchase liability was $2.1 million and $1.1 million for the three months ended March 31, 2012 and 2011, respectively. 

General and Administrative Expenses:  General and administrative expenses for the three months ended March 31, 2012 decreased four percent to $4.6 million from $4.8 million for the corresponding period in 2011.  The decrease was primarily attributable to decreases in personnel and facility costs.

Consolidated Net Loss:  Net loss for the three months ended March 31, 2012 was $29.9 million, or $0.06 per share, compared to a net loss of $29.6 million, or $0.09 per share, in the corresponding period in 2011.  For the three months ended March 31, 2012, net loss included non-cash, stock-based compensation expense of $1.7 million, compared to $1.5 million in the corresponding period in 2011.

Cash and Investments:  As of March 31, 2012, Lexicon had $253.7 million in cash and investments, as compared to $281.7 million as of December 31, 2011.