Lexicon Pharmaceuticals Q2 2026 Earnings Call: Complete Transcript

Lexicon Pharmaceuticals (NASDAQ: LXRX ) held its second-quarter earnings conference call on Thursday. Below is the complete transcript from the call. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

The full earnings call is available at Summary Lexicon Pharmaceuticals completed enrollment in the Sonata HCM Phase 3 study for sotagliflozin, marking a significant milestone with over-enrollment, and expects to announce top-line data in Q1 2027. Progress on Zynquista includes nearing completion for resubmission of the NDA to the FDA, anticipated by the end of October 2026, supported by encouraging data from the STENO-1 study. 8 million. 6 million in cash and equivalents as of June 30, 2026.

The company is optimistic about the future, with sotagliflozin having the potential to be a first-line treatment for HCM, and continues to progress its pipeline with collaborations with Novo Nordisk. Full Transcript OPERATOR Welcome to the Lexicon Pharmaceuticals Second Quarter 2026 Financial Results Conference Call. At this time, all participants are in 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, August 6, 2026. I will now turn the call over to Lisa DeFrancesco, SVP, Investor Relations and Corporate Communications for Lexicon. Please go ahead, Lisa. Thank you.

Lisa DeFrancesco, SVP, Investor Relations & Corporate Communications Thanks. Good morning and welcome to our second quarter 2026 earnings call. Joining me today are Dr. Mike Exton, Lexicon's Chief Executive Officer and Director, Dr.

Craig Granowitz, Senior Vice President and Chief Medical Officer, and Scott Chianti, Senior Vice President and Chief Financial Officer. This morning, Lexicon issued a press release announcing our financial results for the second quarter of 2026, which is available on our website at 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 our 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 relating to the safety, efficacy, clinical development, regulatory status and therapeutic and commercial potential of sotagliflozin, pilavapidan, LX9851 and our other drug programs, as well as our business generally. This call may also contain forward-looking statements relating 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 the most recent annual report on Form 10-K and other SEC filings for detailed information describing such risks. I would now like to turn the call over to Mike Exton. Mike? Mike Exton, PhD — Chief Executive Officer Yeah.

Thank you. Thank you, Lisa. And g'day everyone. Thanks for joining us.

Look, I want to begin by focusing on our most recent and major accomplishment, the completion of enrollment in Sonata HCM, our Phase 3 study of sotagliflozin in hypertrophic cardiomyopathy, or HCM. This study is the largest Phase 3 study to date in both obstructive and non-obstructive HCM. This marks an important milestone for patients living with the symptoms of HCM, as sotagliflozin would be a completely novel and complementary treatment for their disease as compared to all approved treatments currently available and other agents in development. We're thrilled with the outcome of our enrollment efforts, which resulted in the study being significantly over-enrolled.

I couldn't be more pleased with the accomplishment of this critical milestone and we eagerly await the top-line data, which we expect to announce in Q1 of next year. In addition to the completion of enrollment in Sonata, we've also made other important progress across our portfolio. I'll start by providing an update on Zynquista, where we're at an important and exciting moment for the program. If you recall, the FDA asked for three things to support a resubmission of our new drug application: a prospective study, adequate patient exposure, and DKA rates below those observed in our previous clinical trials.

I'll ask Craig to take over here. Craig Granowitz, Chief Medical Officer The FDA has previously confirmed that STENO-1, an open-label investigator-initiated study of sotagliflozin being conducted by the Steno Diabetes Center in Denmark, may serve as that prospective study. STENO-1 is on the verge of achieving the exposure levels previously identified by FDA as necessary to support a resubmission, and the DKA rates observed to date in the study in patients treated with sotagliflozin are similar to patients on the standard of care in the trial and below those observed in our earlier trials.

As a result, we believe that each of the FDA's criteria for resubmission of the NDA will soon be satisfied. We expect that STENO-1 will achieve adequate exposure levels by the end of August, and following that we will quickly move to finalize the administrative aspects of patient-level data collection and transfer from Denmark. We currently anticipate that we will complete a resubmission of our NDA during the fourth quarter of this year. While there's a slight delay from our previous timeline, we could not be more pleased with the data we've received to date.

This is a huge step forward for Zynquista, for Lexicon and for patients with type 1 diabetes who for many years have pleaded for another option besides insulin to manage their blood sugar. Furthermore, in heart failure, our licensee Viatris has also continued to submit regulatory applications for sotagliflozin across an increasing number of markets outside the US and Europe. To date, Viatris has obtained regulatory approval in the United Arab Emirates and in Bahrain and has submitted applications for regulatory approval in more than a dozen other countries, including Saudi Arabia, Canada and Australia.

Viatris anticipates regulatory decisions in Australia and Canada and additional regulatory submissions in other markets this year. Turning to LX9851, a first-in-class ACSL5 inhibitor for obesity. A Phase 1 study is underway and being conducted by our licensee, Novo Nordisk. We have previously received two $10 million milestone payments under our license agreement with Novo and have the potential to receive a third $10 million milestone payment later this year.

We are excited to see the continued progress on this promising compound. Finally, turning to pilavapetin, our belief in the potential of this agent and its novel AAK1 inhibition mechanism of action only continues to grow. We have exciting work underway exploring its utility in other potentially high-value indications, and we look forward to sharing data from these preclinical studies as early as later this year. Mike Exton, PhD — Chief Executive Officer Yeah, sorry about that everyone.

Thanks, Craig, for taking that on, but really I couldn't be more pleased with where we are at both for HCM and importantly for Zynquista. This is a really important milestone for us in this program. As many of you know, we've been working with the FDA very constructively and are now on the precipice of having all the requirements needed to move forward with the NDA. So with that I'll ask Craig to continue and give you the pipeline update.

Craig Granowitz, Chief Medical Officer Thank you, Mike, and good morning, everyone. I'll start with sotagliflozin, our novel oral SGLT1 and SGLT2 inhibitor, which is in late-stage development in both HCM and type 1 diabetes. I'd like to begin by discussing the underlying pathology of HCM and why we at Lexicon Pharmaceuticals believe that sotagliflozin is uniquely positioned to address a tremendous unmet need in this space. Hypertrophic cardiomyopathy, or HCM, is a genetic disease characterized by adverse cardiac remodeling associated with myocardial hypertrophy, diastolic dysfunction, and fibrosis.

This fundamental biology is present across both non-obstructive and obstructive HCM, which I'll refer to as NHCM and OHCM, independent of underlying anatomy. It is important to note that even in OHCM, symptoms and progression are not explained by left ventricular outflow tract obstruction alone. It is noteworthy that in OHCM patients in which the outflow tract obstruction has been eliminated through surgery or other means, patients may still remain symptomatic due to the underlying disease process. Diastolic dysfunction is the underlying disease process observed in both NHCM and OHCM.

This dysfunction is characterized by an abnormally thick and stiff left ventricle and impaired diastolic relaxation. These metabolic and anatomical changes negatively impact cardiac function. Both types of HCM are characterized by a thickened left ventricle associated with fibrosis, which results in a less pliable and improperly functioning left ventricle. These changes in cardiac structure and function result in the physical manifestations of shortness of breath and exercise intolerance that often impact patient quality of life.

Sotagliflozin’s unique dual SGLT1 and SGLT2 inhibition directly addresses the underlying diastolic dysfunction that characterizes HCM by improving how the heart uses energy and other mechanisms. We believe that sotagliflozin has the potential to demonstrate similar benefits in both NHCM and OHCM. SGLT1 is expressed by cardiac myocytes, and the level of expression is increased in cardiac diseases such as HCM and other cardiomyopathies. And, as a reminder, SGLT2 is not routinely expressed in the myocardium.

By inhibiting SGLT1, sotagliflozin improves cardiac cell function in the heart through mechanisms such as enhanced calcium flux, improved energy utilization, reduced inflammatory and fibrosis markers, and reduced epicardial fat. In addition to the cardiac benefits of SGLT1 inhibition, SGLT2 inhibition also has a positive effect on the cardiorenal dysfunction that is a hallmark of all patients with heart failure. As a result, sotagliflozin is the only agent that works both inside and outside the heart to reduce the symptoms of HCM.

As Mike highlighted earlier, we are excited to have completed enrollment in the Sonata HCM trial, which is evaluating the effects on symptoms, function, and other patient-reported outcomes as well as safety in patients with symptomatic HCM. We are pleased that the trial was significantly over-enrolled and as such should positively impact the overall study powering. The study included a substantial majority of patients with NHCM, providing a robust opportunity to evaluate sotagliflozin in a patient group for whom effective treatment options remain limited, as well as a meaningful cohort of patients with OHCM.

As a reminder, the primary efficacy endpoint is improvement in symptoms as measured by the change from baseline to week 26 in the Kansas City Cardiomyopathy Questionnaire Clinical Summary Score, or KCCQ-CSS, for the overall patient population. Patients with symptomatic HCM on a stable dose of guideline-directed HCM therapy, including cardiac myosin inhibitors, were permitted to enroll in the trial. Our objective was to conduct a pragmatic study where the enrolled patients truly reflect the treatment paradigm for this disease.

We believe that the final study population will enable a thorough assessment of sotagliflozin’s potential across the spectrum of symptomatic HCM, and we look forward to sharing top-line results in the first quarter of 2027. Moving to Zynquista, I'd like to elaborate a bit on where we are in the resubmission process for our new drug application. By the end of August, we expect that the STENO-1 study will have achieved the number of patient-years of sotagliflozin exposure that FDA had previously identified as being necessary to support refiling.

The DKA rates observed in the STENO trial amongst patients treated with sotagliflozin remain similar to those observed in the standard-of-care group in the study and well below that observed in our previous inTandem studies. Based on our previous discussions with FDA, we believe that these levels of exposure and DKA rates support a resubmission of the NDA. We have been providing these data, along with additional information from the study, to the FDA on an ongoing basis, including, and most recently as this week.

Concurrent with our FDA discussions, we have been in continuous dialogue with the STENO group to ensure the appropriate collection and formatting of the necessary data fields and analysis parameters for NDA resubmission, which we believe could occur at the end of October 2026 based on our current estimates. Turning to our earlier-stage pipeline, LX9851, a first-in-class, non-incretin, oral small-molecule inhibitor of ACSL5, is currently in Phase 1 development by our licensee Novo Nordisk. We could not be more pleased with the continued collaboration with Novo on this promising compound, and we look forward to future results.

I'll now turn it over to Scott to provide an update on the company's financials. Scott, Chief Financial Officer Thank you, Craig, and good morning, everyone. I'll begin with a review of our financial results for the quarter. 9 million for the corresponding period in 2025.

5 million in licensing revenue recognized from the Novo Nordisk licensing agreement, in addition to net sales of INPEFA. 7 million in the corresponding period of 2025, reflecting higher external costs in 2026 related to our ongoing SONATA HCM Phase 3 clinical trial. 4 million in the corresponding period of 2025. 3 million, or a penny per share, in the corresponding period in 2025.

2 million, respectively. 3 million, or a penny per share, resulting from the early repayment of the company's term loans with Oxford Finance. The company replaced its debt facility in May of this year, which I will expand on momentarily. 2 million of cash, cash equivalents, short-term investments, and restricted cash as of December 31, 2025.

As previously noted, we have taken steps to improve our balance sheet and enhance our financial flexibility, and in May of this year announced a $100 million debt facility with Hercules Capital. Under the terms of this agreement, an initial $55 million tranche was funded at closing and was utilized to repay our previous loan facility with Oxford Finance. A second $20 million tranche is available for draw at Lexicon's option, subject to the achievement of certain clinical, regulatory, and financial milestones and specified timing requirements.

A third $25 million tranche is available for draw at Lexicon's option, subject to Hercules' consent and specified timing requirements. The loan facility provides for an initial interest-only period of 18 months, with the potential for two six-month extensions. We are also reiterating our operating expense guidance for 2026 of between $100 and $110 million, and continue to anticipate R&D to be between $63 and $68 million and SG&A to be between $37 and $42 million. During the second quarter, we initiated targeted investments in pre-commercial activities focused primarily on medical education and marketing preparation.

These investments will also include market access activities as we approach the late-stage development of our assets, which is included in our estimates. We are incredibly pleased with our financial accomplishments thus far in 2026, including our capital raise in February and the new loan facility with Hercules. We have strengthened our balance sheet and improved our financial flexibility while remaining prudent with our expenses ahead of our important milestones expected in the coming months. I will now turn it back to Mike for closing remarks.

Mike Exton, PhD — Chief Executive Officer Yeah, thanks, Scott. Look, this quarter we're really starting to see the output of the Lead to Succeed strategy, which we put in place a year and a half ago. We're focused on driving opportunities that have the highest probability of impact, where we believe we can truly make a difference and have the greatest chance for success. Indeed, using Lead to Succeed as our guiding principle, we believe the next 12 months have the potential to be one of the most transformational periods in Lexicon's history.