What Lexicon Pharmaceuticals (LXRX) Said on Its Q3 Earnings Call

Key Points

• Lexicon expects SONATA-HCM Phase 3 results in Q1 2027, following enrollment of 542 patients; the trial is testing sotagliflozin in symptomatic hypertrophic cardiomyopathy.
• The company also plans to resubmit its ZYNQUISTA application for type 1 diabetes in Q1 2027. The timeline slipped as Lexicon prepares STENO1 data requested by the FDA, including DKA findings it says were comparable to standard care.
• Lexicon reported a $14 million Q3 net loss and revenue of $11.3 million, including a $10 million Novo Nordisk milestone; it ended September with $183.2 million in cash and short-term investments.

Lexicon Pharmaceuticals NASDAQ: LXRX expects two key milestones in the first quarter of 2027: results from a pivotal heart disease trial and a resubmission of its application for a type 1 diabetes treatment, executives said on the company’s third-quarter earnings call.

The company reported a third-quarter net loss of $14.0 million, compared with $12.8 million a year earlier, as revenue declined to $11.3 million from $14.2 million. Revenue in the latest quarter included a $10 million milestone from its licensing agreement with Novo Nordisk and $1.2 million in net sales of INPEFA.

Heart disease trial results expected in early 2027

Lexicon has completed enrollment in SONATA-HCM, a Phase 3 study testing sotagliflozin, also called SOTA, in patients with symptomatic hypertrophic cardiomyopathy, or HCM. The trial enrolled 542 patients, including 440 with non-obstructive disease and 102 with obstructive disease at baseline.

Chief Medical Officer Craig Granowitz said the study’s primary endpoint is the change in symptoms from baseline to week 26, compared with placebo, as measured by the Kansas City Cardiomyopathy Questionnaire, or KCCQ. The mean baseline KCCQ score was 59 across the study population.

Chief Executive Officer Mike Exton said the high proportion of non-obstructive patients may reflect the availability of approved treatments for obstructive disease and the need for options in non-obstructive HCM. The study also includes patients on stable background therapies, including cardiac myosin inhibitors.

In response to analyst questions, Granowitz said 49 of the 542 patients were taking a myosin inhibitor. All had obstructive disease before starting that treatment, although patients could have been classified differently when they entered SONATA-HCM.

Granowitz said the company plans to report top-line primary and secondary endpoint results and major safety findings. More detailed subgroup analyses will likely require further work and may not be included in the initial release, he said.

Diabetes application preparation takes longer than expected

Lexicon now expects to resubmit its new drug application for ZYNQUISTA in type 1 diabetes in the first quarter of 2027. Exton said the process has taken longer than initially anticipated because data from the investigator-initiated STENO1 study must be analyzed and prepared to meet regulatory submission standards.

The Food and Drug Administration had requested additional prospective data on diabetic ketoacidosis, or DKA, before a resubmission. Granowitz said Lexicon has received the necessary STENO1 data and met the patient-exposure level agreed with the agency.

As of the end-of-August cutoff used for the submission, STENO1 included 496 patients randomized to sotagliflozin and 708 receiving standard care, Granowitz said. He said the sotagliflozin group experienced approximately one DKA event per 100 patient-years of exposure, comparable to the study’s standard-of-care group and historical rates in Denmark.

Granowitz said the company has provided additional resources to help clean the study database. He also cited work involving data quality, disclosures and consent for transferring European study data as part of preparing the package for FDA review.

Early obesity findings and partnered programs

Lexicon also presented preclinical weight-loss findings for pilavapadin, an AAK1 inhibitor that the company has studied for neuropathic pain. In a mouse study, a 10-milligram-per-kilogram dose reduced body weight by 14% after 28 days, Granowitz said. Mice receiving pilavapadin with semaglutide lost 31% of body weight, compared with 25% for semaglutide alone.

Granowitz said a review of the company’s PROGRESS pain study also showed weight reductions in the 10-milligram and 20-milligram groups. He cautioned that the trial was not designed as an obesity study and that nausea and vomiting may have contributed to the observed changes.

Exton said the preclinical findings could allow Lexicon to move into a Phase 2 proof-of-concept study in obesity. He also said the company had discussed the data with a few people at Novo Nordisk, its partner on the separate obesity candidate LX9851.

Novo is conducting a Phase 1 study of LX9851. Lexicon received its third $10 million milestone payment of 2026 from Novo during the third quarter, with potential for additional payments as development advances, executives said.

Expenses and cash position

Research and development expenses fell to $16.2 million from $18.8 million a year earlier, while selling, general and administrative expenses rose to $9.5 million from $7.6 million. Chief Financial Officer Scott Coiante attributed the latter increase to higher employee benefit costs and pre-commercialization spending.

Lexicon ended September with $183.2 million in cash equivalents and short-term investments. It maintained its 2026 operating expense guidance of $100 million to $110 million, including $63 million to $68 million for research and development and $37 million to $42 million for selling, general and administrative expenses.

About Lexicon Pharmaceuticals (NASDAQ:LXRX)

Lexicon Pharmaceuticals, Inc is a biopharmaceutical company focused on discovering, developing and commercializing medicines for serious and chronic diseases. The company uses its drug discovery platform to identify small-molecule treatments designed to target specific biological pathways, with an emphasis on metabolic, cardiovascular and neurological conditions.

Lexicon's commercial products include INPEFA (sotagliflozin), an oral medicine approved in the United States to reduce the risk of cardiovascular death, hospitalization for heart failure and urgent heart-failure visits in certain adults with heart failure or type 2 diabetes and chronic kidney disease.

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