Why Lexicon Pharma Is Soaring

By Chris Lange Updated Jan 13, 3:45AM EST · Published Sep 9, 9:45AM EDT

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Why Lexicon Pharma Is Soaring — © Thinkstock

Shares of Lexicon Pharmaceuticals Inc. (NASDAQ: LXRX) saw a handy gain on Friday after late-stage results came out. The company announced that its pivotal inTandem1 Phase 3 clinical trial of sotagliflozin met its primary endpoint showing a statistically significant reduction in A1C at 24 weeks in patients with type 1 diabetes on a background of optimized insulin.

Two primary safety concerns for patients with type 1 diabetes are severe hypoglycemia and diabetic ketoacidosis (DKA).

In the trial, the statistically significant and clinically meaningful improvement in A1C for both doses of sotagliflozin was achieved without an increase in severe hypoglycemia, one of the most prevalent serious health challenges in type 1 diabetes, which was seen less frequently in both treatment arms than placebo.

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At the same time, Lexicon is conducting another similar pivotal Phase 3 clinical trial predominantly in Europe (inTandem2), which is expected to report top-line results by the end of the year.

The third type 1 diabetes Phase 3 clinical trial, inTandem3, is underway globally and is studying approximately 1,400 patients treated with sotagliflozin on a background of any insulin therapy, but without insulin optimization prior to randomization. Sanofi is expected to commence Phase 3 clinical trials for sotagliflozin in patients with type 2 diabetes by the end of the year.

Lonnel Coats, Lexicon president and chief executive, commented on the results:

We are extremely pleased with these top-line results and the potential long-term benefits that sotagliflozin may bring to people with type 1 diabetes. We believe these results provide evidence that sotagliflozin, with its novel dual inhibition of both SGLT-1 and SGLT-2, is particularly well suited to help these individuals achieve better A1C levels without increasing and possibly reducing the risk of severe hypoglycemia.

Jorge Insuasty, senior vice president and head of Global Development, Sanofi, added:

Our companies are working together to develop this compound for the treatment of type 1 and type 2 diabetes. These top-line results highlight potential benefits of sotagliflozin when treating adults with type 1 diabetes. We congratulate our partners on this positive outcome and look forward to further exploring this compound for the treatment of adults with type 2 diabetes when Sanofi begins the Phase 3 program later this year.

Shares of Lexicon were last trading up nearly 20 % at $18.35 just after Friday’s open, with a consensus analyst price target of $21.90. The stock hit a new high in its 52-week trading range of $7.65 to $18.60.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.