Yesterday afternoon, The Woodlands, Tex.-based Lexicon Pharmaceuticals Inc. (LXRX:NASDAQ) announced the termination of its alliance with Sanofi SA (SNY:NASDAQ ADR) for the development and commercialization of Zynquista (sotagliflozin) and the settlement of its related disputes with Sanofi, each effective September 9, 2019.
Under the terms of the alliance termination, Lexicon will regain all rights to Zynquista and assume full responsibility for its worldwide development and commercialization in both type 1 and type 2 diabetes. Under the terms of the settlement, Sanofi will pay Lexicon $260 million, of which $208 million is payable upfront, with the remaining $52 million payable within 12 months, and Sanofi will coordinate with Lexicon in the transition of responsibility for ongoing clinical studies and other activities.
Lonnel Coats, president and CEO of Lexicon Pharmaceuticals, commented, "Our four-year alliance with Sanofi has been a productive one, with Zynquista receiving marketing approval in Europe in type 1 diabetes and advancing into late-stage studies in type 2 diabetes...Regaining worldwide rights allows us to advance our efforts to realize the full value of the Zynquista program as we prepare for regulatory filings in the U.S. and in Europe in type 2 diabetes, with data coming over the next few months from the remainder of the core Phase 3 studies and over the longer term from two outcomes studies with potential for demonstrating cardiovascular and renal benefits. We believe that this potential, along with a European approval in type 1 diabetes, offers an attractive opportunity for potential collaborators as we work to maximize the global potential for Zynquista and to achieve greater operational flexibility."
The company explains in the release that Zynquista (sotagliflozin) as an oral dual inhibitor of two proteins responsible for glucose regulation known as sodium-glucose co-transporter types 1 and 2 (SGLT1 and SGLT2). SGLT1 is responsible for glucose absorption in the gastrointestinal tract, and SGLT2 is responsible for glucose reabsorption by the kidneys. The firm indicates that Zynquista is approved in the European Union (EU) for use as an adjunct to insulin therapy to improve blood sugar (glycemic) control in adults with type 1 diabetes with a body mass index ≥27 kg/m2, who could not achieve adequate glycemic control despite optimal insulin therapy. Outside of such approval, Zynquista is investigational and has not been approved by any other regulatory authority for type 1 or type 2 diabetes.
Lexicon describes itself as a fully integrated biopharmaceutical company with a mission of pioneering medicines that transform patients' lives. Through its Genome5000 program, Lexicon scientists studied the role and function of nearly 5,000 genes and identified more than 100 protein targets with significant therapeutic potential in a range of diseases. In addition to its first commercial product, XERMELO, Lexicon states that it has a pipeline of promising drug candidates in clinical and preclinical development in diabetes and metabolism, oncology and neuropathic pain.
Sanofi, based in Paris, France, is a $108.6 billion market cap global healthcare company involved in research, development, manufacture and marketing of therapeutic solutions. The company's Pharmaceuticals segment comprises the commercial operations of various franchises, including Diabetes and Cardiovascular, Specialty Care (Rare Diseases, Multiple Sclerosis, and Oncology), Established Prescription Products, and Consumer Healthcare and Generics. The Vaccines segment is dedicated to vaccines and includes the commercial operations of the company's vaccines division, Sanofi Pasteur.
Lexicon Pharmaceuticals began the day with a market capitalization of about $182.8 million. The company has 106.31 million shares outstanding, and as of yesterday had a short interest of around 7.3%. The stock has a 52-week price range of $1.125–11.51/share. This morning, LXRX shares opened at $2.36 (+$0.64, +37.21%) over yesterday's $1.72 closing price. The stock has traded on more than 10-times higher than average volume today between $2.17 and $2.71/share and at present is trading at $2.22 (+$0.50, +29.07%).
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