Lexicon Hits 52-Week High on Positive Type I Diabetes Data

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Lexicon Pharmaceuticals, Inc. 's LXRX shares have been on an upswing after the company reported positive top-line data from a pivotal phase III study (inTandem1) on one of its most advanced pipeline candidate, sotagliflozin. The candidate is being studied for the treatment of patients suffering from type I diabetes on a background of optimized insulin.

Shares of the company touched a new 52-week high of $19.19 on Sep 9, eventually closing a little lower at $17.85. Overall, the stock has gained 16.6% on the news.

Sotagliflozin Hits Phase III Primary Endpoint

The double-blind, placebo-controlled phase III study, which enrolled 793 patients, evaluated two doses of sotagliflozin - 200 mg and 400 mg - each taken once daily before the first meal of the day, in comparison to placebo. Results demonstrated that patients, when treated with 200 mg once daily sotagliflozin dose, witnessed a statistically significant mean A1C reduction from baseline of 0.43% and a reduction of 0.49% when on 400 mg once daily sotagliflozin dose, as compared to a 0.08% reduction on placebo after 24 weeks of treatment, thereby meeting the primary endpoint of the study.

Improvement in A1C for both doses of sotagliflozin was achieved without an increase in severe hypoglycemia, though a small risk of diabetic ketoacidosis (DKA) was observed. We note that both severe hypoglycemia and DKA are the two primary safety concerns associated with patients with type I diabetes. On the safety front, sotagliflozin was found to be well tolerated with no deaths reported in the study.

We are encouraged by the phase III study results. Per Lexicon's press release, the inTandem1 study is part of the largest phase III program on an oral anti-diabetic agent for type I diabetes so far.

Note that sotagliflozin is a first-in-class, oral dual inhibitor of both SGLT1 and SGLT2. Sotagliflozin is expected to help patients achieve improved A1C levels without increasing, and in fact, reducing the risk of severe hypoglycemia. Also, sotagliflozin could be a significant addition to the current standard of care and possibly allow type I diabetic patients better manage their diabetes while on insulin, subject to approval.

Meanwhile, another pivotal phase III study - inTandem2 - is being conducted by Lexicon, primarily in Europe. Top-line data is anticipated by year end. A third type I diabetes phase III study - inTandem3 - is ongoing globally. This study is evaluating patients on sotagliflozin (400 mg once daily) or placebo on a background of any insulin therapy, but without insulin optimization prior to randomization.

We note that Lexicon is collaborating with Sanofi SNY for sotagliflozin. Lexicon had entered into a collaboration and license agreement with Sanofi in Nov 2015 under which the former granted the latter an exclusive, worldwide, royalty-bearing right and license to develop, manufacture and commercialize sotagliflozin. While Lexicon is responsible for clinical development activities related to type I diabetes, Sanofi is responsible for clinical development activities for type II diabetes.

Per the terms of the agreement, Sanofi is expected to commence phase III studies on sotagliflozin for the treatment of patients with type II diabetes by the end of 2016.

Lexicon's other pipeline candidate, telotristat etiprate, is currently under priority review in the U.S. for the treatment of carcinoid syndrome. A response from the FDA is expected by Nov 30, 2016. It is also under review in the EU.

Investor focus is expected to remain on pipeline updates from the company.



Lexicon currently has a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the health care sector are Geron Corporation GERN and Anika Therapeutics Inc. ANIK . Both stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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