Lexicon Pharmaceuticals Q1 2025 Earnings Call Transcript

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Provided by Quartr
May 13, 2025
Earnings Conference Call
Lexicon Pharmaceuticals Q1 2025
00:00 / 00:00

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Operator

Welcome to the Lexicon Pharmaceuticals First Quarter twenty twenty five Financial Results Conference Call. At this time, all participants are in a listen only mode. Following management's prepared remarks, we will hold a brief question and answer session. As a reminder, this call is being recorded today, 05/13/2025. I will now turn the call over to Lisa DiFrancesco, SVP, Investor Relations and Corporate Communications for Lexicon. Please go ahead,

Lisa DeFrancesco
Lisa DeFrancesco
SVP of Investor Relations & Corporate Communications at Lexicon Pharmaceuticals

Thank you, Shannon. Good afternoon, and welcome to the Lexicon Pharmaceuticals First Quarter twenty twenty five Financial Results Conference Call. Joining me today are Doctor. Mike Exton, Lexicon's Chief Executive Officer and Director and Scott Chianti, Senior Vice President and Chief Financial Officer. Doctor.

Lisa DeFrancesco
Lisa DeFrancesco
SVP of Investor Relations & Corporate Communications at Lexicon Pharmaceuticals

Craig Granowitz, Senior Vice President and Chief Medical Officer, will join us for Q and A. Earlier this afternoon, Lexicon issued a press release announcing our financial results for the first quarter of twenty twenty five, which is available on our website at www.lexpharma.com and through our SEC filings. A webcast of this call, along with a slide presentation, is also available on our website. During this call, we will review the information provided in the release, provide a corporate update, and then use the remainder of our time to answer your questions. Before we begin, let me remind you that we will be making forward looking statements, including statements related to the safety, efficacy, clinical development, regulatory status, and therapeutic and commercial potential of pilavapitan, LX9851, sotagliflozin, and our other drug programs, as well as our business generally.

Lisa DeFrancesco
Lisa DeFrancesco
SVP of Investor Relations & Corporate Communications at Lexicon Pharmaceuticals

These statements may include characterizations and projections related to the clinical development, regulatory status, and market opportunity for our drug programs and the commercial performance of MPEFA for heart failure. This call may also contain forward looking statements related to our growth and future operating results, discovery and development of our drug candidates, strategic alliances, and intellectual property, as well as other matters that are not historical facts or information. Various risks may cause our actual results to differ materially from those expressed or implied in such forward looking statements, and we refer you to our most recent annual report on Form 10 ks and other SEC filings for detailed information describing such risks. I would now like to turn the call over to Mike Eckson. Mike?

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

Hey, good day, everyone. Thanks for joining us. As those of you following Lexicon know, the first quarter of twenty twenty five was a busy and productive one for us. Starting with our most recent announcement, at the March, we announced an exclusive license agreement with Novo Nordisk for LX9851, our first in class oral non incretin candidate for obesity and other metabolic conditions. Now, this agreement grants Novo an exclusive worldwide license to develop, manufacture and commercialise nine thousand eight and fifty one in all indications.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

Under the terms, Lexicom was eligible to receive upfront near term milestone payments of up to $75,000,000 of which $45,000,000 was received in April and up to $1,000,000,000 in aggregate upfront and development, regulatory and sales milestone payments as well as tiered royalties on future net sales of $9,008.51. Lexicom will be responsible for completing agreed upon investigational new drug application enabling activities for 09/1951 and providing clinical supply to Novo Nordisk at an agreed upon transfer price for a limited time period, while Novo will be responsible for filing the IND and conducting all further development, manufacturing and commercialisation of LX9851. Now, we couldn't be more pleased with this collaboration. Novo Nordisk's experience and global capabilities in obesity make them an ideal partner to maximize the value of LX9851. This truly is a validation of the science and the potential of this novel asset.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

We're gratified that we have continued to make great progress in our partnering strategy find the highest quality partners that augment our capabilities and realize the full value of our assets. Now, the other major development in the first quarter was the top line readout of our progress Phase 2b study of pilavapitan, which is our oral non opioid drug candidate for DPNP. We're pleased to have identified a well tolerated dose that has repeatedly shown clear evidence of effect to take forward in Phase three studies. Once we have the full data package later in Q2, we look forward to engaging the FDA on the Phase III design using ten milligrams of pilobapentin. And finally, we completely revised our cost structure to reflect our pivot to an R and D focused company by reducing our operating costs and utilising the upfront payment from the Novo Nordisk agreement to reduce our debt, while ensuring we have the cash runway to meet our objectives and support continued development of our R and D programs.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

So all in all, we ended the first quarter in a very strong position. We have a clear path forward for pilavapitan in DPNP, having cleared the hurdle of identifying the appropriate dose for Phase three. We improved our balance sheet and are on a strong financial footing for the milestones ahead. So I'd like to dive a little bit deeper now into our DPNP program and primarily reiterate two key points here. First, and importantly, across both the relief and progress studies, we've now demonstrated three times that a ten milligram dose shows early and sustained separation versus placebo.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

And second, while absence of a day one loading dose improved the tolerability of all pillavapitan arms in progress, that ten milligram dosing schedule was particularly well tolerated, showing placebo like completion rates. Collectively, in our view, these data derisk our advancement into Phase III with a ten milligram dose and give us great confidence in the potential of kilovapitan to be the first novel oral non opioid DPNP medication in more than two decades. I can't emphasise enough the opportunity for innovation in this market. As I talk with patients, caregivers and payers, it's absolutely clear that there's a tremendous need for new non opioid treatment options for neuropathic pain. DPNP is a relatively common complication of diabetes, impacting one in every four people with diabetes.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

Today, there are approximately nine million people in The U. S. With DPNP, and that number is expected to grow to thirteen million by 02/1935. This is a chronic and progressive pain disorder that severely impairs people's quality of life. Not only is it painful, but it's unrelenting and burdensome to patients and can lead to other complications like a loss of sensation, falls, fractures, even limb amputation.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

And so the message from all stakeholders is loud and clear. The community needs new and better medications to manage DPNP. For seventy percent of people with DPNP, currently available treatment options don't provide adequate relief. Sixty percent have tried multiple therapies, either by switching or by adding on to their treatment regimen. But people with DPNP often feel like they're stuck in a cycle of trial and failure with different treatments.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

But the need for new non opioid treatments for pain is also underscored by recent proposed legislation such as the Alternatives to Pain Act that's been proposed supporting greater access to non opioid therapies. We're committed to advancing our pilavaptan development program as quickly as possible with the aim of providing a novel oral treatment that can improve the lives of people with DPNP. So we look forward to providing further updates as the year progresses, including full data from the PROGRESS study at an upcoming medical meeting. We're targeting a Phase III study initiation for filovapentin in DPNP later this year following our end of Phase II review meeting with the FDA. Moving on now to sotagliflozin.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

We remain on track with enrollment in our global pivotal Sonata HCM study of sotagliflozin in hypertrophic cardiomyopathy, or HCM. HCM represents an area of significant opportunity and need, where we feel SODA has the potential to offer a differentiated treatment option. Now in The U. S, there are just over a million people with HCM, and of those approximately a third have non obstructive HCM, which the heart muscle is thickened but doesn't block flow, whereas two thirds are diagnosed with obstructive HCM, in which the thickening of the heart muscle wall blocks or reduces blood flow from the heart. An important characteristic of HCM that may not be fully appreciated is that as a chronic progressive disease HCM can deteriorate over time, leading to other complications including heart failure.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

Indeed, forty three percent of people with HCM also have progressive heart failure. Now we have great confidence in soda as an option for HCM. As you're all aware, there have been a number of innovations that target the sarcomere being developed for this disease, one of which is approved for the treatment of obstructive HCM. Nevertheless, despite significant investment and increasing awareness in HCM, these novel agents have only penetrated about one percent of the market. So we believe the potential approval of SODA would significantly expand the population treated with novel agents.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

Our confidence derives from a number of SOTA's features. First of all, besides its approval in The U. S. For heart failure, there are important data that give us confidence that SOTA will be effective in both obstructive and non obstructive HCM. Namely, we've observed significant benefit of sotagliflozin in heart failure and MACE in patients with left ventricular hypertrophy with normal blood pressure.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

Furthermore, mechanistically, soda appears to reduce cardiac work and improve cardiac metabolism. Importantly, we would expect no REMS for soda in HCM, consistent with our heart failure label, which would provide access to a broad prescriber base. And finally, we can have confidence that to date in clinical trials and post marketing experience, soda has not been associated with an increased risk of atrial fibrillation. Therefore, we expect soda has the potential to become a disruptor in this space and become widely used in the market across the spectrum of disease. The next slide provides an overview of our global Phase III SODA study of SODA in HCM.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

SODA is enrolling at full speed with EU and LatAm sites either already online or imminent. Now we expect that all of the Phase III sites will be up and running by the third quarter of this year, so we're pleased with that progress. SONATA is the only ongoing study evaluating a treatment in both obstructive and nonobstructive HCM. We feel that there's potential for this study to support an sNDA with a broad label. Once the SONATA study is complete and we have that data in hand, we will also have an opportunity to revisit the totality of the sotagliflozin potential opportunity across indications in The U.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

S, where we continue to build differentiating evidence that the mechanism of dual inhibition of SGLT1 and two does have different outcomes in MACE events, including MI and stroke, as most recently published in The Lancet. Now touching briefly on business development. As I mentioned at the top of our call, we're very pleased with our recently announced collaboration with Novo Nordisk for LX9851, which both strengthens our financial position and provides LX9851 the best possible chance of success by benefiting from the expertise, resources and capability of Novo Nordisk, an established leader in the obesity market. As the obesity treatment landscape continues to grow and evolve, we expect to see an opportunity for next gen treatments to build on the success of the earlier incretin based therapies. Based on 9,850 one's unique mechanism, oral administration, preclinical findings to date, and possibility for both monotherapy and combination applications, we feel LX9851 has the opportunity to occupy a unique space in the treatment landscape for obesity and metabolic conditions.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

And we look forward to working with Novo to maximize the potential of this innovative medicine. So zooming out to look at business development more broadly, our innovative and flexible partnership approach is unlocking long term value for Lexicon. Beatrice has been a committed and collaborative partner for SOTA outside of The U. S. And Europe and is extending the geographical reach for SODA across cardiometabolic and other indications.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

This agreement included a $25,000,000 upfront payment and potential milestone payments of up to almost 200,000,000 This collaboration leverages Beatrice's global scales and capabilities, allowing us to reach more patients worldwide. Beatrice recently announced it's been preparing regulatory approval applications for SOTA in a number of ex U. S. Markets. Filings in The UAE and Saudi Arabia have been submitted and the filing in Canada is expected to be submitted shortly.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

So as you can see, we've been working closely with Beatrice and making significant progress together. Now, as I just noted, our partnership with Novo has the potential to generate significant value for LX9851 in obesity and for Lexicon as a partner. And as we look to our future partnerships, we're heavily focused on filovabatin, where our aim is to unlock value globally across multiple indications with a partner that has complementary capabilities, therapeutic area expertise, and a global commercial footprint to help fully realize pill of Apadin's pipeline and appeal potential. With our significant clinical expertise in the space, we have flexibility in the types of partners that would be a great fit for this asset. And we've been having a significant amount of interest and dialogue with these potential partners.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

And with that, I'd like to now turn it over to Scott to walk you through our financial results for the quarter ended 03/31/2025.

Scott Coiante
Scott Coiante
SVP and CFO at Lexicon Pharmaceuticals

Thank you, Mike. For the first quarter of twenty twenty five, we reported revenue from sales of Impefa compared to $1,100,000 for the first quarter of twenty twenty four. Research and development expenses for the first quarter of twenty twenty five increased to $15,300,000 from $14,400,000 for the same period in 2024 and primarily reflect expenses associated with our late stage development programs, including the SONATA Phase III study for HCM and our PROGRESS Phase IIb study of filovapitan in DPNP. Selling, general and administrative expenses for the first quarter of twenty twenty five decreased to $11,600,000 compared to $32,100,000 for the first quarter of twenty twenty four, primarily due to the efforts of our strategic repositioning in late twenty twenty four and the reduced marketing efforts for Mpefa. Net loss for the first quarter of twenty twenty five was $25,300,000 or $07 per share as compared to a net loss of $48,400,000 or $0.20 per share for the same period in 2024.

Scott Coiante
Scott Coiante
SVP and CFO at Lexicon Pharmaceuticals

We ended the first quarter with $194,800,000 in cash and short term investments as compared to $238,000,000 of cash and short term investments as of 12/31/2024. I'd like to take a minute to note a few items. The first quarter is typically the quarter with the greatest use of cash and included in the cash used for Q1 twenty twenty five was approximately 7,500,000.0 in severance payments related to our restructuring, which were accrued in Q4 twenty twenty four. We expect the use of cash to be less in the subsequent quarters of this year. Revenue associated with the $45,000,000 upfront payment from Novo has been deferred and will be recognized over the estimated completion period of our obligations under the exclusive licensing agreement. We anticipate stable US MPEFA revenues this year despite limited promotional activity.

Scott Coiante
Scott Coiante
SVP and CFO at Lexicon Pharmaceuticals

And we are also reiterating our previously provided operating expense guidance and expect total operating expenses to be between $135,000,000 and $145,000,000 for 2025 with R and D expected between $100,000,000 and $105,000,000 and SG and A expected between $35,000,000 and 40,000,000 We also expect lower interest expense for the remainder of the year as a result of our partial debt repayment in April. We are confident that we are capitalized to meet our objectives to support our Phase three readiness for DPNP, our ongoing Phase III trial in HCM and all IND enabling activities related to 09/1951. I'd now like to turn it back to Mike for closing remarks.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

Yes, thanks a lot, Scott. So in summary, with the significant amount of progress we've made so far this year, we're incredibly well positioned with a number of pipeline in appeal assets that we can continue to explore ways to leverage and add value to Lexicon with potential for new indications, new partnerships and late stage regulatory developments. Our goal is to advance these additional programs on our own or, in the case of pilovapitan, in partnership with a committed collaborator with therapeutic expertise and global scale. And we have demonstrated our ability to find the right high quality partners for our assets where appropriate. Earlier in the year, we introduced LEED to Succeed.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

And I think it's important that we continue to discuss this as an important pillar of our strategy as we think about the opportunities that we have in our pipeline. In particular, I feel it's important that we focus on areas where we believe we have the greatest chance of success, where we can be first or only in large markets with significant unmet need, and where we have the internal clinical and medical experience necessary to be successful. We'll continue to apply this lens to our future opportunities as we develop our path forward. Now, we've got a number of very important and impactful catalysts as we look towards the remainder of this year. For pilobapentin in DPNP, we anticipate sharing full progress data in Q3, along with an end of Phase II meeting.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

We're also preparing to present data at upcoming medical meetings, and partnership discussions are ongoing. For ALX-nine thousand eight fifty one in obesity and weight management, we'll collaborate with Novo Nordisk on IND enabling activities, and Novo will be responsible for the IND submission. For sotagliflozin in HCM, we're actively enrolling our Sonata HCM study with all Phase III study sites expected to be operational by Q3. Viatris continues to advance regulatory submissions for sotagliflozin in heart failure outside of The U. S.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

And Europe, with The UAE and Saudi Arabia complete and Canada anticipated shortly. As we discussed last quarter, we see opportunities to differentiate soda as a mechanism and believe that the recent MACE data potentially supports expanding the use of this medicine into adjacent indications. We plan to engage in a regulatory process regarding this data later this year. Finally, regarding Zynquista for type one diabetes with CKD, while we're not currently actively investing in this program, it's important that we continue to move forward with the end of review process in support of the significant number of patients that continue to actively and strongly advocate for approval of this drug, underscoring the need in T1D. To that end, we held an end of review meeting with the FDA in Q2, and we expect to continue discussions with the FDA.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

We remain enthusiastic as we look to the potential updates in the remainder of this year and we look forward to keeping you all informed of progress across all of these programs in the coming months. With that, Craig, you can join us and we'll have time to take everyone's questions. So over to you, operator.

Operator

Thank you. Our first question comes from the line of Andrew Tsai of Jefferies. Your line is now open.

Andrew Tsai
Andrew Tsai
SVP at Jefferies Financial Group

Hi, thanks for the updates. Appreciate you taking my questions. First is on the pain program. I know the base case is going to be running two pivotal phase three studies. Can you talk about the intended trial designs, whether they're identical, and could it actually make sense to do three studies instead with the third one serving as a backup?

Craig Granowitz
Craig Granowitz
SVP & Chief Medical Officer at Lexicon Pharmaceuticals

Andrew, it's Craig Groenowitz. Thank you for your question. Our plan is still as we've previously communicated to run two parallel trials with very similar design. One would most likely be US only and the other would be a worldwide trial, including US and non US sites. There's been nothing since our last update that would change our plans in that regard.

Craig Granowitz
Craig Granowitz
SVP & Chief Medical Officer at Lexicon Pharmaceuticals

As a reminder, the sites would be roughly about 300 or three fifty patients per arm, two arm trials of a ten milligram dose flat from the outset versus placebo, and run-in parallel in patients with moderate to severe pain with a subset of that group stratified for an underlying DPNP medication. With respect to the third trial, we don't believe, as Mike mentioned during the prepared remarks, we believe that we have a robust clinical signal in these trials that is observable and reproducible and rapidly separating from placebo in each case with a ten milligram dose arm. And also as a reminder, the reduction of pain score from patient baseline is approaching one and a half to two point drop from baseline, which is what the patients would experience. So with all of that and a drug that we feel confident that's once daily, has placebo like completion rates, no identified yet drug drug interactions or other safety concerns of significance, we feel quite confident in this program. Depending upon what we hear from the FDA, that would obviously be subject to change, But that is certainly our intention going into the end of phase two meeting.

Andrew Tsai
Andrew Tsai
SVP at Jefferies Financial Group

Right, and assuming the end of phase two does go well, and you start the phase three and let's just say Q4, when would the pain data sets be? And then, as those phase three are studying, what other peripheral studies do you think you need to accomplish or finish to ensure you can file an NDA right after the phase three data? Thank you.

Craig Granowitz
Craig Granowitz
SVP & Chief Medical Officer at Lexicon Pharmaceuticals

Yeah, great questions, Andrew. I think as all drugs that are centrally acting in this category, we need to look at addiction liability. We believe and hope that those would be animal model studies only because we have no indication, we've seen no rebound or other unusual liking behavior with the use of pilavapitan. That would be a critical study. There are some additional metabolism studies that we're looking at as a reminder, this drug is renally cleared.

Craig Granowitz
Craig Granowitz
SVP & Chief Medical Officer at Lexicon Pharmaceuticals

And we're looking to validate the clearance and the level of renal impairment that we can include in the trials. Those studies we think will be important. And then obviously, are long term CARC studies and a few other preclinical trials. We feel quite confident that we have a robust manufacturing process, that we're ready to go right into phase three and pre commercial scale manufacturing with a process that is robust. And I don't think we'll be cost prohibitive in that regard.

Craig Granowitz
Craig Granowitz
SVP & Chief Medical Officer at Lexicon Pharmaceuticals

So I think there's always more things to do. I'm sure that FDA might have some suggestions for us in addition. But based on our interactions with the FDA, we believe that those are gonna be the the major components of things we need to look at.

Andrew Tsai
Andrew Tsai
SVP at Jefferies Financial Group

Thank you.

Operator

Thank you. Our next question comes from the line of Roana Ruiz with Leerink Partners. Your line is now open.

Roanna Ruiz
Senior Managing Director, Biotechnology Analyst at Leerink Partners

Hey, good afternoon everyone. So a couple from me. I'll start with 900851. How are the IND enabling studies progressing and could you talk a bit about any remaining gating factors for this stage of development and eventually entering the clinic? And I was also curious how closely involved is Novo with your work and development here for this asset at this stage?

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

Yes. Thanks for the question, Rana. Actually, the IND enabling studies are going splendidly. They're all on track for finishing this year, and the relationship with Novo was very strong. They're very engaged in the data and we're actually giving them direct line to the outputs of that data.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

So they're very collaborative and engaged as we go through this process and are very pleased with the progress so far. And so as we have outlined, we expect that that will all conclude this year and then the information will be over to Novo to submit the IND.

Roanna Ruiz
Senior Managing Director, Biotechnology Analyst at Leerink Partners

Got it. Thanks. And one more follow-up from me. I noticed we've had a couple updates in the HCM space from other companies, including the failed OHDIESY trial for mavacamten and non obstructive HCM. I was curious if that updates or refined some of your thinking around SOTA's potential going after non obstructive HCM.

Roanna Ruiz
Senior Managing Director, Biotechnology Analyst at Leerink Partners

Would you actually consider upsizing the SOTA trial or making any modifications based on what you're seeing in this field?

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

Yes, look, it's really been an amazing quarter for HCM. There's been a lot of information, a lot of updates and a lot of And I think what a number of the outputs that we've seen from Odyssey and others just reinforces our belief in SODA. As we outlined in the prepared remarks, there's a number of pieces of evidence that we collected both preclinically and in clinical and preclinical studies that give us confidence in the efficacy of sotagliflozin in non obstructive HCM. And we're actually powered to see an effect in both non obstructive and obstructive as it is. So we don't think that it's necessary to increase to any degree the sample sizes that we see in Sonata and are confidently moving forward with that. So Craig, do you have any thoughts?

Craig Granowitz
Craig Granowitz
SVP & Chief Medical Officer at Lexicon Pharmaceuticals

Yeah, well said, Mike. Ryan, I think the other important development really is the opportunity now to rapidly enroll the trial. So as BMS mentioned, there is no further work that they're doing on OHDSI. So, the long term extension trial is my understanding not taking place.

Craig Granowitz
Craig Granowitz
SVP & Chief Medical Officer at Lexicon Pharmaceuticals

And as Cytokinetics mentioned, they have now fully enrolled in Acacia. So, there are no other large trials that are running currently right now actively enrolling patients. And I think between the ease of our protocol for sites to complete, and as a reminder, we allow the use of CMIs or not CMIs, We have an ejection fraction down to fifty percent. We include both obstructive and non obstructive patients. The burden on the sites is relatively limited in terms of the number of echos, which is a rate limiting step, I think for some other companies just in terms of the capacity to do all those echos.

Craig Granowitz
Craig Granowitz
SVP & Chief Medical Officer at Lexicon Pharmaceuticals

The lack of the need for doing the peak VO2 measurements or other difficult to execute physiologic tests, the feedback we've had from really all sites, whether we've talked to sites in Europe, The US, or Latin America, is that this is a trial that people are excited to participate in both patients and the study sites themselves.

Roanna Ruiz
Senior Managing Director, Biotechnology Analyst at Leerink Partners

Got it. Thanks again.

Operator

Thank you. Our next question comes from the line of Yasmeen Rahimi with Piper Sandler. Your line is now open.

Yasmeen Rahimi
Yasmeen Rahimi
Sr. Research Analyst at Piper Sandler Companies

Good afternoon, team. Thank you so much for all the updates. I guess the first question is, after, obviously, you guys have been engaging with the agency on Pelobactam end of Phase II meetings and in preparation for Phase III. Do you think getting the minutes in the line, in the sign off on the Phase III, is that a gating factor for the strategic discussions you're having in parallel? Or is it just both are kind of concurrently ongoing, one is not necessary for the other to occur? That's maybe the first Thanks,

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

Yaz. It doesn't seem to be a gating factor at the moment. That's not the conversations that we're having. As we sort of await full dataset and all of the full analyses, we will continue to have those discussions with the strategics and that will be the sort of natural course of the engagement going forward. Now we don't see at this stage the FDA end of Phase II meeting being a gating factor.

Yasmeen Rahimi
Yasmeen Rahimi
Sr. Research Analyst at Piper Sandler Companies

Thank you. And maybe the second question is, obviously top line data was very helpful and thoughtful, but I think you guys have said we will, and I think even in the press release today, planning to share more data in medical meetings. Could you help us understand the type of data that we could see, what are some of the key additional analyses that you hope to present and maybe the significance of it. Then I have a third last question.

Craig Granowitz
Craig Granowitz
SVP & Chief Medical Officer at Lexicon Pharmaceuticals

Yes, it's Craig Greno. Thanks for your question. What we intend to show later on in the year will be additional detail on the secondary analyses, which would be the qualitative aspects related to the quality and types of pain and functionality, which were a series of secondary endpoints. I also think we might be able to place into better context the twenty milligram dose arm with exposure and some other pharmacokinetic and other data to place that in additional context of why that arm performed the way that it performed. So, I think this data will be very helpful for both the medical community and the investor community to provide additional context of our confidence in the trial and the results that we've seen.

Yasmeen Rahimi
Yasmeen Rahimi
Sr. Research Analyst at Piper Sandler Companies

Thank you. And then last question on the Sonata study. Sort of consistent with Rohanah's question that she asked around non obstructive study of recently OddiSY failing. I think it was clear that the commentary at least peripherally has been just saying non obstructive is a very distinct population different from obstructive. So I think it has raised sort of the bar for a lot of investors of thinking about how do companies create a homogeneous population.

Yasmeen Rahimi
Yasmeen Rahimi
Sr. Research Analyst at Piper Sandler Companies

Obviously, we haven't seen the data. But could you maybe talk about as you guys design Sonata in terms of inclusionexclusion, what was built in to create maybe a more homogeneous population within the non obstructive specifically to the extent you can comment on that would be helpful. And I'll jump back in the queue.

Craig Granowitz
Craig Granowitz
SVP & Chief Medical Officer at Lexicon Pharmaceuticals

Yeah, thanks. Again, yes, great, great question. The major criteria we have for the trial is symptomatic disease. And I think that is really reflective of the diastolic dysfunction, and that is sine qua non of HCM. And it's funny, I think we've had this conversation in other calls previously about people feeling more confident, at least from the investor community, of the activity of sotagliflozin in the non obstructive group as opposed to the obstructive.

Craig Granowitz
Craig Granowitz
SVP & Chief Medical Officer at Lexicon Pharmaceuticals

We believe that non obstructive is really a great surrogate and is a subset of HFpEF. And we feel very confident in our HFpEF results in that the high degree of efficacy that we see both in heart failure reduction and MACE reduction in those with HFpEF. I think that on top of the data that we've demonstrated in terms of that left ventricular hypertrophy group with normal blood pressure, which is a real surrogate for HCM, and again, that fifty percent reduction in both MACE and heart failure is really encouraging to us. And as a reminder, one of the reasons why we try to highlight the MACE data that was recently published in The Lancet is that patients with HCM remain at significant elevated risk of MI and stroke. So I think having that additional benefit in a group of heart failure patients is all continue to be supportive, particularly in the non obstructive group.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

Yes. And it's important for us, as we think across the breadth of the HCM market that the non obstructive HCM as we know it's about a third of all HCM patients, which at the moment, as you know, doesn't have an indicated CMIs haven't shown robust efficacy there. And so it's all aligning with our approach of broad potential application for a broad prescriber base and broad applicability across the patient population as well. So, we actually have a lot of data now that gives us great confidence in non obstructive HCM and the SONARDA trial was built to capitalise on both opportunities.

Yasmeen Rahimi
Yasmeen Rahimi
Sr. Research Analyst at Piper Sandler Companies

Thank you so much.

Operator

Thank you. Our next question comes from the line of Yigal Nakamovitz with Citigroup. Your line is now open.

Yigal Nochomovitz
Yigal Nochomovitz
Director at Citigroup

Hi guys, thank you for taking the question. A few more on the design of Sonata. I think you'd mentioned Craig that it's powered for both obstructive and nonobstructive. I'm just curious, are those co primary endpoints? What is the exact detail around how that measurement is structured in the protocol?

Yigal Nochomovitz
Yigal Nochomovitz
Director at Citigroup

And then with regard to the relative proportions of obstructive and non obstructive, you just mentioned there was a third, two thirds. How is that playing out in terms of the enrollment? Is it balanced and is it adhering to those ratios? Are you trying to go for more of a fiftyfifty? Thank you.

Craig Granowitz
Craig Granowitz
SVP & Chief Medical Officer at Lexicon Pharmaceuticals

Yeah, great questions, Yuval. Similar to what we did in the SCORED trial and SOLOIST trial, the study is powered for the overall endpoint. And that in the case of the preserved ejection fraction and reduced ejection fraction, it really is the issue of consistency across results. So FDA has not asked for, in a sense, two independently powered arms. And if I gave that a misimpression in one of my answers, I apologize for any misunderstanding on that.

Craig Granowitz
Craig Granowitz
SVP & Chief Medical Officer at Lexicon Pharmaceuticals

So the study is powered on the base of 500 patients with a difference in KCCQ compared to placebo. And really what FDA would be looking for, similar to what we showed and scored in SOLOIST, is that there would be consistency, but not necessarily formally powered for each one of the two subgroups. So I think that really is the critical design element. The trial is designed as a stratified with a one to one enrollment of obstructive and non obstructive. And right now, we don't really have enough patients in the study for me to say whether we're going to have more or less difficulty enrolling one or other of those two groups.

Craig Granowitz
Craig Granowitz
SVP & Chief Medical Officer at Lexicon Pharmaceuticals

And as Mike had mentioned, a vast majority of the patients right now are not being treated. And again, we're looking for just patients with symptomatic disease, whether or not they're on CMI. So we think that there are certainly adequate patient number. And again, we are up, the study includes patients with an ejection fraction down to fifty percent, which is one that the currently approved agent is not indicated to treat. So we think we have a number of opportunities to enroll patients, especially with no competing trials right now and the drug really not being available outside The United States.

Yigal Nochomovitz
Yigal Nochomovitz
Director at Citigroup

Okay, got it. Thank you. And then on the choice of the endpoint specifically, KCCQ CSS, I'm just wondering, you mentioned peak VO2 has got cumbersome and complicated endpoint. Was that the reason you picked KCCQ? Or was it also because since you're doing HCM and non obstructive that it's just the easier endpoint to deal with given the broader population as opposed to what we saw this morning with Maple HCM where they did peak VO2 but that was only obstructive?

Craig Granowitz
Craig Granowitz
SVP & Chief Medical Officer at Lexicon Pharmaceuticals

Yeah, no, great question as always, Yigal. The advantage with SOTA is we have outcomes. So we have heart failure outcomes in twelve thousand patients. And we have an FDA approval for outcomes. And we've demonstrated reductions in MACE as well as heart failure events.

Craig Granowitz
Craig Granowitz
SVP & Chief Medical Officer at Lexicon Pharmaceuticals

I think one of the issues with the newer class of agents is they don't have the experience to have anything with outcome. So what they're really looking for is a surrogate for outcome besides functionality is that they're looking for some sort of metabolic parameter. And I think that is gonna be really one of the long term questions is are they modifying the disease in any way? We know we modify the disease. We prevent heart failure events and cardiovascular death, and we reduce stroke and MI in overlapping and similar groups of patients.

Craig Granowitz
Craig Granowitz
SVP & Chief Medical Officer at Lexicon Pharmaceuticals

So from that standpoint, the FDA didn't ask for any additional endpoints, and we really wanted to run a pragmatic study. We wanted to have it as open and inclusive as possible to give us the broadest possible label, just like what we did with SCORG and SOLOIST is we have a very broad label that provides the maximum opportunity for labeling and for patient inclusion in the criteria. And we took that same mindset and approach to how we structured Sonata with a lot of input from the medical community and agreement from the FDA.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

And just to pile on, on top of that, really coming from a patient's perspective, you know, a patient with HCM, not too dissimilar from a patient with heart failure, quite frankly. The primary issue or the primary want, the primary need that they have is the symptomatic benefit. You know, the primary thing that a patient with HCM wants to be able to do is to have the energy to walk outside, walk to the letterbox, to feel better. And that's frankly what the CMIs do as well. Yes, they're indicated for symptomatic and functional benefit, but the primary reason to believe is that they make the patients feel better, at least in obstructive HCM.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

And so you combine the pragmatism of the trial with developing something for what patients actually need. And in fact, we've seen the benefit in case CQ already in diastolic dysfunction. It not only gives us confidence in the outcome that we're going to produce, but confidence in that should the trial be positive, but something that patients really, really want.

Craig Granowitz
Craig Granowitz
SVP & Chief Medical Officer at Lexicon Pharmaceuticals

Yeah. I mean, to make it really pragmatic, Yigal, mean, having the primary as KCCQ and the secondary as New York Heart, at the end of the day, as Mike said, people want functionality. I think it's very hard to explain to a patient, you can achieve 15 meters more in a six minute walk test. I think that's pretty hard to try to wrap your head around as a patient and a provider, but to say it's very likely that you'll be able to do your activities of daily living with an improvement for patients. Again, we're focused on symptomatic patients.

Craig Granowitz
Craig Granowitz
SVP & Chief Medical Officer at Lexicon Pharmaceuticals

That I think is meaningful and that's really why the CMIs have been approved is for symptom benefit.

Yigal Nochomovitz
Yigal Nochomovitz
Director at Citigroup

Got it. Thank you very much.

Operator

Thank you. Our final question comes from the line of Joe Pantginis with H. C. Wainwright. Your line is now open.

Lander Egaña-Gorroño
Senior Associate, Biotech Equity Research at H.C. Wainwright & Co., LLC

Hello everyone. This is Landon on for Joe. Thanks for taking our questions. So, to follow-up with the pain program and regarding additional progress data anticipated soon, do you expect Pilivaptan to have a differential effect in the stratification analysis based on background therapy? And if so, would these observations change the design of the upcoming registration and Phase III studies? Thank you.

Craig Granowitz
Craig Granowitz
SVP & Chief Medical Officer at Lexicon Pharmaceuticals

I think what we can say, and I think we've already communicated is we see a benefit whether or not the patient is on an underlying DPNP medication. Again, the sample sizes, and I think we've had some of these conversations, so I apologize if I'm being redundant, but there were only thirty percent or fifty percent of one hundred patients in each one of the trials. So I wouldn't want to over interpret the data of whether it's better with or without an underlying DPNP medication. And as a reminder, about ninety percent of the patients were on gabapentin. So that is the most widely used agent.

Craig Granowitz
Craig Granowitz
SVP & Chief Medical Officer at Lexicon Pharmaceuticals

I think what we've already published on and we presented previously on progress as well as relief is that we're seeing a benefit regardless of whether they're on an underlying DPNP medication, which is not surprising because they have different mechanisms of action. And it's not surprising you'll get additive benefit whether or not they're on a DPNP medication.

Lander Egaña-Gorroño
Senior Associate, Biotech Equity Research at H.C. Wainwright & Co., LLC

Perfect. Thanks a lot.

Operator

Thank you. I would now like to turn the call back over to Mike Exton for closing remarks.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

Thanks very much and thanks for the question guys. Always very engaging. So that wraps up our Q1 earnings call. It's been a busy and productive quarter for us and a lot more to do in quarter two and throughout the year. We've got a lot of important catalysts coming up for the rest of the year and look forward to updating you as the year progresses.

Mike Exton
Mike Exton
CEO & Director at Lexicon Pharmaceuticals

So thanks very much for your time and we'll speak to you soon.

Operator

This concludes today's conference call. Thank you for your participation. You may now disconnect.

Executives
    • Lisa DeFrancesco
      Lisa DeFrancesco
      SVP of Investor Relations & Corporate Communications
    • Mike Exton
      Mike Exton
      CEO & Director
    • Scott Coiante
      Scott Coiante
      SVP and CFO
    • Craig Granowitz
      Craig Granowitz
      SVP & Chief Medical Officer
Analysts
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