Thank you so much for joining us. My name is Jason Zemansky, I'm one of the NewsMidCap analysts here at B of A, and it's my pleasure to both kick off our 2024 healthcare conference as well as introduce our first speaker of the day, Jeffrey Wade, President and Chief Financial Officer of Lexicon Pharmaceuticals. Jeff?
Thanks, Jason. Very happy to be here today and have the opportunity to present about Lexicon, and importantly on behalf of the creative and committed people of our company, which really make it a great company. I will be making some forward-looking statements today, which are subject to risks and uncertainties that are outlined in our SEC filings, and we'll refer you to those filings for understanding of those risks and uncertainties. So a little bit of background on the company. The company was really founded on a foundation of mammalian genetics to understand the functions of genes in mammalian physiology, behavior, to identify new drug targets, to bring forth discovery efforts around those targets, and to bring those into clinical development. And at this point, we've brought two products all the way from our own labs into market.
We have other ones that are in development, which I'll talk about today, and some really exciting opportunities ahead, which I'll get into a little bit more detail around. This is looking at what our pipeline is. Right now, we have an approved product, INPEFA, sotagliflozin. It's approved for heart failure. It's launched in a large and fast-growing market, and we're excited about the opportunity for INPEFA in heart failure, and we're continuing to make progress on that launch. Zynquista is a sotagliflozin which we're going to be resubmitting for type 1 diabetes approval around the middle of this year, and we believe that this is a tremendous opportunity in an area of great unmet need as an adjunct to insulin therapy for people who have type 1 diabetes and chronic kidney disease, and I'll talk a little bit more about that as well.
And then another opportunity for sotagliflozin in the life cycle management opportunity is in hypertrophic cardiomyopathy, where we're starting and studying this year looking at patients with both obstructive and non-obstructive hypertrophic cardiomyopathy, and we believe that sotagliflozin has an opportunity to really make a difference in the standard of care for these patients. Going further back into our pipeline, LX9211 addresses a novel target, adaptor-associated kinase 1, for neuropathic pain. We have a study ongoing that is a dose optimization phase 2B study that has been enrolling patients. We expect to complete enrollment this year, and we're expecting data beginning of or the first half of next year for that program. And then just recently announced at our investor day about a month ago is LX9851, which addresses another novel target, ACSL5.
We believe that this has a really compelling profile for chronic weight management and treatment of obesity. We're taking that into IND-enabling studies. Again, another target that came out of our discovery pipeline and for which we've brought forth a development candidate that will now be going into preclinical and then clinical development. So this year has been a big year for the company. We have been continuing to make progress on the commercial launch of INPEFA in heart failure. As I mentioned, we're about to resubmit the NDA for Zynquista around the middle of this year. This follows on a couple of rounds of discussions with the FDA about the path forward for Zynquista in type 1 diabetes, and we're starting up the study in a phase III study of sotagliflozin in hypertrophic cardiomyopathy, and that enrollment is expected to begin around the middle of this year.
That's a study that we just launched this year and was, among other things, and has been supported by the capital that we raised earlier this year, $250 million of capital, that allows us to bring forward these programs. We are continuing enrollment of the phase 2B study of LX9211 in diabetic peripheral neuropathic pain. As I mentioned, we expect data second quarter of 2025, and then LX9851 is an asset that we're now bringing into IND-enabling studies. Looking forward to catalysts for the company through the next year. We expect to have a potential launch inflection for INPEFA in the second half of 2024 as we continue to make progress with payers and with coverage. We are expecting to begin the study for hypertrophic cardiomyopathy mid-year.
With Zynquista, we expect to have that NDA resubmitted middle of this year, and because of the nature of the resubmission, we expect that that would be a six-month review, which means that we have an opportunity to launch in type 1 diabetes patients with chronic kidney disease in the first quarter of next year if that is approved. In LX9211, we're expecting the enrollment to complete this year, top-line data second quarter of next year, and this is a program where we believe that the opportunity is really for a partnership because the mechanism of action and all of the data that we have preclinically and from two clinical proof of concept studies suggests that this will have broad application across multiple types of neuropathic pain.
And with a partner, we would have the opportunity to develop those different types of neuropathic pain in parallel, and so we think that after this study is complete, that's a real opportunity for us to engender a partnership around that asset. And then, as I mentioned as well, LX9851, we are beginning IND-enabling studies. This compound has a really promising profile that we're excited about and is also something that has generated a lot of early potential partnership interest since we announced the program. So we are really focused now that we've brought in the capital to be able to execute against this. We're focused on several key elements. First of all, really executing seamlessly against that plan, bringing forward all of these assets to achieve the catalysts that we've outlined here.
We're looking as well to be very targeted in our capital allocation to support near-term value creation, and as I mentioned as well, we have a number of assets where there are opportunities for partnership and that we believe have an opportunity to create greater value in partnership than we might be able to achieve on our own, and that's a core part of our business plan. So with that, I'm going to give the opportunity to have a few questions and look forward to having a further conversation about some of the assets and opportunities ahead of the company.
Well, perfect. Thank you, Jeff, for a great presentation. I think a topic that's easily top of mind for most investors. Let's turn to your planned phase III in hypertrophic cardiomyopathy. Can you tell us a little bit about the study as it is and sort of what prompted it? Obviously, I think SGLT2s have been looked at for that indication, but thinking about the differentiated profile of sotagliflozin, what gives you confidence that you could have a differentiated profile there?
Yeah. So this is important because what we're in terms of our long-term strategy with sotagliflozin, we are looking for opportunities where there's no indication for SGLT2 inhibitors and where there is really good evidence that having an SGLT1 inhibition is going to add to or create value for that asset. So hypertrophic cardiomyopathy is one, but so is type 1 diabetes because of the SGLT1 mechanism improving glycemic control and reducing glycemic excursions. In hypertrophic cardiomyopathy, the opportunity is really related to the data that we saw in HFpEF in heart failure with preserved ejection fraction. So we have really compelling data across the full range of left ventricular ejection fraction from our very large heart failure program, which involved two studies and about 12,000 patients in total, almost 12,000 patients in total.
So when we looked at the data there, we saw in the patients who had left ventricular hypertrophy without hypertension, hypertension being the most common cause of left ventricular hypertrophy, so you kind of carve out hypertension, but you look at the other ones who had left ventricular hypertrophy, the causes of that hypertrophy, things like HCM. So we probably had a number of undiagnosed HCM patients in that program. We have other causes that are similar and have similar phenotypes in that patient population. And what we saw was between a 50%-60% reduction in the key outcomes endpoints in cardiovascular death, heart failure hospitalizations, myocardial infarction, and stroke, which is an area in which sotagliflozin is distinguished from SGLT2 inhibitors, and the like.
With that in hand, we took those data to the FDA and had a discussion with them about what we would need to do to get and label within HCM, so leveraging the existing data that we had from our heart failure program with outcomes and then looking at symptoms in patients who had HCM. We aligned around a single 500-patient study. Half the patients would be on placebo, half of them would be on sotagliflozin, and this would be on top of standard of care. That would include beta-blockers and calcium channel blockers for those patients who were receiving those, which is most, and CMIs to the extent that they were still symptomatic and were able to be in the study, so the full spectrum of existing medical therapies, and looking at both obstructive and non-obstructive patients in a single study.
So it's a very broad label, very broad opportunity for the program. And so we aligned around this study. That's the study that we're taking forward. We are looking at the primary endpoint is KCCQ score, which we have demonstrated benefit in the heart failure studies, and we're also looking at NYHA class as a key secondary endpoint. So with that, the success of that study would enable us to get a label in HCM. We would be uniquely labeled, and based on the data that we have from the heart failure population and the differentiation that we see in the heart failure with preserved ejection fraction population, we believe that this would really be uniquely useful among SGLT2 inhibitors in that indication.
Interesting. You kind of mentioned the label would be rather broad in terms of optionality there, but where's the sweet spot? I mean, in between beta-blockers and the CMIs, there's a lot of open space, and as you said, you can take it along with in combination with these agents, but where do you think the ideal sweet spot is?
Yeah. So right now, the treatment options are very inexpensive generic drugs, which actually don't have a whole lot of really good rigorous scientific and medical evidence, and extremely expensive $100,000-a-year cardiac myosin inhibitors or surgery. And so the opportunity in between those to have something that is basically priced like a heart failure drug and has broad utility could be something that could be used in almost every patient and could be used throughout that life cycle for management of their HCM and the associated symptoms.
Got it. Well, real quickly, in the time we have left, let's talk Zynquista. What gives you confidence in the resubmission here? What have you heard from FDA, and how did that influence the resubmission?
Yeah. So we submitted for approval in Type 1 diabetes based on what was the largest and still is the largest study for a phase III study for an oral adjunct to insulin. One of the benefits of having that large study is that we also had a lot of patients who had Chronic Kidney Disease. Since the time that we originally submitted for that, there's been a lot of evidence about the importance of managing blood glucose in patients who have Chronic Kidney Disease. Better management of blood glucose slows the progression of Chronic Kidney Disease. Worse management, patients have more rapid progression of Chronic Kidney Disease.
So based on kind of our data and data external to us, we went back to the FDA to have a conversation about a potential path forward aligned with the discussions that we had had with them at the time of our initial submission. We've aligned around an approach where we're going to be resubmitting our NDA in that patient population, which is a sizable patient population. Almost everybody who has type 1 diabetes is going to eventually get chronic kidney disease, and about 20%-25% of people who have type 1 diabetes who are adults have chronic kidney disease. So it's an important population. The benefits of sotagliflozin are extensive across that in terms of glycemic control, and we're really looking forward to being able to bring this forward to patients.
Well, perfect. Well, thank you so much, Jeff, for that insightful presentation. Appreciate your being here.
Thank you very much.
I'm not sitting under that for you. Thanks so much for being here this morning.
Well, thanks for having us, and thank you all for joining and listening to the Sight Sciences story.
I'm missing this clicker. It's not. Uh-oh. It's Sight Sciences.
The clock is ticking fast.
Great. Paul, Ali, I apologize. We do not have your deck this morning. I'm not sure if you have a printed version that you can have.
No, I mean, we can wing it, I guess. That's fine. It might be easier, actually, to get the story across in 13 minutes. All right. Well, thanks, everybody, for joining. Sight Sciences, we're a publicly traded ophthalmic medical device company. We are developing transformative interventional technologies that help eye care providers procedurally elevate the standard of care. We've developed two leading technologies in two major categories in eye care: glaucoma and dry eye disease. Glaucoma is the world's leading cause of irreversible blindness. It's a huge problem in eye care. Dry eye disease, in terms of prevalence, it's one of the most common reasons for a visit to an eye care provider. It's also a major problem in eye care, and it's getting worse with increased screen time, with age, hormone-related, screen-related staring.
The primary problem in dry eye is actually due to diseased meibomian glands in the eyelids, preventing the tear layer from being protected with a lipid oil layer. So we have a procedure that helps fortify that lipid layer, treating the signs and symptoms of dry eye disease. On the glaucoma side, our technology also does something similar in that it treats the underlying cause of disease, the OMNI Surgical System, helps reduce pressure by addressing the diseased outflow anatomy in glaucoma. We're commercial stage. Our lead product is the OMNI Surgical System, which is, clinically speaking, an efficacy leader in the category. It's a very comprehensive treatment. It allows the surgeon, through a single, bloodless, sutureless, clear corneal incision, to access the entire diseased outflow anatomy in the eye and treat it, addressing all three sources of resistance in the outflow pathway: the trabecular meshwork, Schlemm's canal, and the collector channels.
So it's a very comprehensive treatment. We are competing today in the existing MIGS market. It's combination cataract MIGS, so glaucoma surgery performed at the time of cataract surgery. That's estimated to be about a billion-dollar market opportunity. We launched OMNI in 2018. We've been growing every year nicely since. That's kind of a take-share market opportunity. And then there's also a much larger market expanding opportunity called standalone surgical glaucoma. That's estimated to be a $5 billion market opportunity. It's earlier stage. We're leading the way in terms of market development. And the thesis is, today, glaucoma, for standalone glaucoma patients, they're typically treated with one medication. Maybe the doctor, the pressure's not controlled. They'll add a second medication, maybe do a laser in the office. Pressure's still not controlled. And at that point, they have to think, do I offer this patient a third medication?
Do I refer them out to the glaucoma specialist for highly invasive surgery? Well, both of those options are suboptimal, but that's today's standard of care. What needs to happen when that patient's on one med or two meds and their pressure's uncontrolled, there needs to be a less invasive, minimally invasive, yet highly effective, safe procedure with reproducible outcomes like OMNI that is then offered to the patient. So that's the market expansion opportunity, this $5 billion TAM standalone glaucoma with OMNI. We have a broad FDA label based on our compelling clinical evidence in both combination cataract glaucoma surgery as well as standalone glaucoma surgery. Our label allows us to educate the surgeon community on intervening surgically earlier and effectively, both in combo cataract as well as standalone. Ali can talk about our growth profile shortly in glaucoma.
But again, there's a take-share opportunity and then a market expanding opportunity in standalone. On the dry eye side of our business, today, it's another huge category, multibillion-dollar category, millions of patients diagnosed with dry eye disease. Historically, the medical community believed most dry eye had to be due to aqueous deficiency. A patient would have symptoms and signs of dry eye disease because they must not be producing enough tears. Well, in reality, the vast majority of dry eye patients produce plenty of tears. The problem is their tears are evaporating too quickly. So they're produced, and they evaporate almost immediately from the surface of the eye. And the reason why tears evaporate prematurely is due to a compromised outermost lipid layer. It's that outer oil layer that helps keep that aqueous, the thicker aqueous layer around on the tears for a longer period of time.
That protects the cornea. That helps alleviate the signs and symptoms of dry eye disease. So it's estimated 86% of this massive category of 15 million-20 million diagnosed dry eye patients in the U.S., it's estimated that 86% of them suffer primarily from the evaporative form of dry eye disease. And that's what our technology, the TearC are technology, it's an interventional technology and interventional procedure. It's in office. It helps alleviate the obstructions within the oil-producing glands within your eyelids, the meibomian glands. It helps melt those obstructions, clear them, evacuate them effectively and comprehensively, allowing the patient's own underlying anatomy to resume the production of good liquid oil so that with every blink, the meibomian glands, there's force applied to the meibomian glands. Good liquid oil is expressed from those glands.
The upper lid, when you open your eyes following at the end of the blink, it pulls a nice, clear oil layer over the tear, keeping those tears around for much longer. We've proven the technology's clinical utility. Doctors love to use it. Ophthalmologists love it. Optometrists love it. Patients benefit from it immediately, near-term, mid-term, and long-term outcomes. We've rolled it out today in the cash pay world, and patients are paying. However, this needs to be reimbursed. Patients need to have access to an interventional procedure that addresses their root underlying cause of dry eye disease. We set out many, many years ago to pioneer a strategy to create market access, to create patient access to interventional eyelid procedures. We are now proud of our RCT that we've completed, at least we've completed phase II out of a III phase RCT.
phase I was six months. We went head-to-head, TearCare interventional procedure against the market-leading dry eye therapeutic on record. That's Allergan's Restasis, dry eye drop, which peaked at $1.5 billion in sales. We went head-to-head with Restasis. We talked to payers before we designed this protocol, and we said, patients need to have access to this technology and to this procedure. What clinical data do you need to see so that if we're successful in this clinical trial, you'll create coverage and provide access for patients to this technology and procedure? Well, they said, we'd like to see you randomize, ideally, against what we know very well, the market-leading dry eye therapeutic. That was Restasis. Ideally, we'd like you to show superiority. That was the first goal of the study. The second is also show us durability of treatment effect.
So how long does the TearCare treatment, how long does it last? If we decide to cover it, how many treatments will we be paying for per year? Is it one treatment a year, two treatments a year, more than that? We've done over 50,000 cases in the cash pay world, and we've seen how effective the technology and procedure is for patients. We've also seen how long it lasts. So our experience in the market on a larger scale gave us the confidence to do this ambitious RCT, going head-to-head against twice daily Restasis and its oil emulsion that it's delivered in, twice daily for six months straight. We had two TearCare treatments randomized against twice daily Restasis for six months straight compliant. And we had to make sure that the patients were compliant.
We published the six-month results not long ago showing superiority on our primary signs endpoint of tear breakup time. And we also showed clinically and statistically significant improvements in every single sign and every single symptom measured at every single time point in the study. That's through six months. It's published. We're about to publish our 12-month study where we crossed over all of the Restasis patients. This is a 340 patient study, randomized one-to-one, about 170 patients in each arm. We crossed over the 170 Restasis patients to get a single TearCare treatment at six months. And then we saw how they were doing at 12 months. And soon that will be published. At a high level, it was presented at the recent ASCRS conference. We showed further improvement when they've improved from six months of Restasis.
That's the new baseline for the 12-month phase II part of the study. We showed further improvement, pulling the patients off Restasis, giving them a single TearCare treatment, all signs and symptoms further improved. So that's very, very compelling data to payers, as you can imagine. We're showing not only if you're starting off treatment naive and you do TearCare or Restasis, how the TearCare patients do better. We also showed, for all of those patients today who were on prescription Rx, if you offered them instead a TearCare treatment, how would they do? So those are both very important data points for payers. We are happy that we are now engaging with payers, having coverage discussions. We've stated publicly that we would expect coverage policy decisions, assuming we're successful.
We have a lot of confidence in, based on the SAHARA RCT, that we would see coverage policies in the 2025 time frame and beyond. So there's three great opportunities here and now today: continue to grow OMNI in combination with cataract surgery as one of the leading efficacy players in MIGS. Continue to develop the much larger standalone MIGS market with OMNI, which we're doing. It's growing. And lastly, develop the MGD, the interventional MGD procedure market with TearCare based on the SAHARA RCT and eventual coverage. Behind that, we have a rich pipeline of technologies. Everything we've developed, OMNI TearCare, was designed in-house internally. We've got a very strong capability and innovation. We've got a very nice pipeline that we're looking forward to talking about in due course, also in the glaucoma and dry eye categories. So that's a snapshot of Sight Sciences.
Ali, do you want to talk about financial performance?
Sure. Yeah. So we started the year with a great start. And we do expect, looking into the second quarter now, that we'll have low double-digit growth sequentially from the first quarter. And then really looking at the back half of the year, we do expect to be double-digit growers year-over-year for the second half. So we're very proud of the revenue growth that we're seeing in the business and returning to that growth profile over time. And we do expect to continue that going into 2025 as well. As Paul mentioned, these are two very large, incredible opportunities for us on both surgical glaucoma and dry eye. Dry eye is really foundational this year in terms of building that market access function. So we don't expect growth this year in that business.
We do expect in 2025 to really start seeing accelerated growth in that business. When we look at our gross margin profile, we have very healthy gross margins in the 85% range. We expect that to continue. It's something we're very proud of in our business. We've continued to be able to invest in our innovation, in our commercial strategy while also having a focus on being more cost-efficient and making sure that we use our capital in the right way. So we ended the first quarter with about $127 million of cash. We continue to be diligent with that. We expect to have the appropriate capital in order to reach our objectives without having to raise additional equity capital.
So we think we're in a very solid place from a financial perspective, with lots of huge opportunities for us in the future to grow our revenue and, of course, grow our total business. So really exciting time for us with both the standalone market opportunity on the surgical glaucoma as well as the market access activities on the dry eye side. And we look forward to continuing to keep all of our investors updated on our progress as we move forward.
And that is perfect timing. 20 seconds for questions. Well, thank you all for joining us today. Look forward to seeing some of you in the one-on-ones. Thank you.
Thank you.