Good afternoon, everyone. Welcome to the 44th Annual J.P. Morgan Healthcare Conference. My name is Alex Morrison. I'm an associate on JPM's healthcare team. Today, it's my pleasure to introduce Lexicon Pharmaceuticals. We'll have CEO Mike Exton speak, as well as Craig, Chief Medical Officer, and Scott, CFO , on stage for Q&A.
Great. So thanks so much, Alex, and thanks to J.P. Morgan for the invitation to present the Lexicon story, so for those of you who are unfamiliar with Lexicon, oh, let me go back, I'll be making some forward-looking statements. Please refer to the SEC filings for further details, but Lexicon was founded 30 years ago with a bold, ambitious plan at the time, around before the human genome was described, before the mouse genome was even described, to take 5,000 genes and create knockout mouse lines for all of those genes. Creating those mouse lines, then running them through a battery of tests to see what would be the impact of those genes, and as a result, they identified 200 genes of interest.
Fast forward through the Lexicon story, and we're pleased that over that time, we've had over 80 clinical trials looking at a number of new medicines, and has resulted in the approval of two medicines in the United States. And, excuse me, and the approval and commercialization of INPEFA, and taking new, novel mechanisms into the clinic. We now have a medicine for non-opioid approach in neuropathic pain, and a new non-incretin mechanism in obesity. Excuse me. The Lexicon approach is to take oral medicines that we dose once daily across a number of different cardiometabolic and pain indications.
What we are trying to do is create a pipeline and a pill using oral medicines dosed once daily that really give a dosing opportunity both for combination therapies, as well as having the possibility for monotherapies in areas that are very simple to dose against, and create medicines that have applicability across a number of different indications. We've proven that with sotagliflozin, where we have indications and research going for heart failure, where we have an approved medicine for hypertrophic cardiomyopathy, or HCM, and in type 1 diabetes for the control of glucose in T1D. We've proven that again in neuropathic pain, where with pilavapadin we have clinical data for neuropathic pain, as well as a number of different other indications for the applicability of pilavapadin.
Finally, LX9851, which is a new, novel non-incretin for obesity and related conditions, where we also see preclinical evidence in MASH and lipid control. So we've landed on a focused company in two primary therapeutic areas. The first is cardiometabolic disease, and the second is pain. In cardiometabolic disease, we've really landed on a number of areas that are of hot interest to the clinical and investor community at the moment. The first, INPEFA for heart failure, has been commercialized in the U.S. We now have that same molecule in phase III clinical trials for hypertrophic cardiomyopathy, or HCM. And we're engaging the FDA in regulatory discussions around Zynquista for type 1 diabetes. LX9851, a first-in-class non-incretin mechanism that's complementary to GLP-1s and other incretin-based assets, is the first development candidate against ACSL5, and we're investigating that in obesity and related metabolic disorders.
On the other hand, in pain, it's an area of high unmet need where there's been very little developed over the last two decades. And we have pilavapadin, a first-in-class inhibitor of AAK1, which is a novel target, completely new target, and Lexicon is the leader of AAK1 biology. And this seems to be highly involved in the development of neuropathic pain. And we now have progressed the program to enter into phase III clinical trials in 2026. So last year, we pivoted to really focus on our R&D portfolio. We really set up a bold ambition of developing and progressing the pipeline to be able to really come into 2026 into a commercial-ready company. In HCM, we've initiated all the sites for the phase III clinical trial, and we've accelerated the enrollment.
For T1D, we have aligned with the FDA about resubmitting for type 1 diabetes and sotagliflozin with third-party investigator data, the Steno- 1 data. That data and that process continues. For pilavapadin, we concluded the PROGRESS trial, the phase II trial, and completed analyses across the phase II program, such that we recently held the end-of-phase II meeting and are continuing to engage potential partners to progress that into phase III. Finally, for LX9851, we secured a worldwide exclusive license with Novo Nordisk. We're incredibly pleased with that arrangement. We completed all the R&D enabling work towards the end of last year. All of this is built on operational excellence, where we've really taken very tight control of our spend. We have an INPEFA virtual sales force to be able to make INPEFA continually available to patients with heart failure.
We've had the first ex-U.S. approval of INPEFA via our relationship with Viatris, and submissions are ongoing outside of the U.S. and outside of Europe. So in 2026, we've set up with a very clear goal of what we need to achieve. We need to partner pilavapadin and progress that into phase III trials. We need to complete the enrollment of the SONATA phase III trial for HCM. We're evaluating the regulatory pathway for Zynquista with a potential resubmission and approval in 2026. We're supporting the international expansion of sotagliflozin by Viatris and really maintaining our discipline to support long-term growth. Let me take a deep dive into our cardiometabolic platform. Really, HCM has become a topic of huge investor and clinical interest.
As more agents come online, the two approved agents, CMIs, for obstructive HCM. We have a plan and have an ongoing trial, phase III trial in HCM called the SONATA trial, where we're looking at both obstructive and non-obstructive HCM in the one trial. That's accelerating nicely. The enrollment's going very well, such that we will conclude the enrollment in the first half of this year with potential top-line data in the first quarter of next year. In type 1 diabetes, we're on track for a resubmission to the FDA for the treatment of glycemic control in type 1 diabetes as an adjunct to insulin. It's hard to believe that since the invention of insulin, there's been no adjunct to control blood glucose in type 1 diabetes. This could potentially be the first adjunct in that over a century of history.
Like I mentioned, hypertrophic cardiomyopathy has been an area of intense interest recently. There's about a million people living with HCM, and it's really a very debilitating disease. People have shortness of breath and fatigue. Activities of daily living are highly impacted, and it has significant downstream consequences. It can lead to heart failure and stroke, and of that million people, about 50% have an outflow tract obstruction or obstructive HCM, and about half have non-obstructive HCM with underlying disease pathogenesis of altered metabolism, cardiac energetics across both of those, and that's what sotagliflozin targets. Sotagliflozin, because of SGLT1 and SGLT2 dual inhibition, is the only drug that works inside and outside the heart in HCM.
The SGLT1 is expressed on the myocardium, and it's via the expression of SGLT1, which has been up until now pretty underappreciated, that sotagliflozin has its impact on altering cardiac energetics in the heart, and thereby allows it to potentially be a first-line agent with no REMS in obstructive and non-obstructive HCM. As I mentioned, we continue our phase III SONATA trial, but that is really complemented by two other investigator-initiated trials that give us significant read-through into the phase III outcome. SOTA-P-CARDIA was presented at the American Heart Association meeting last November, and it looked at the mechanistic benefits of sotagliflozin in patients with true HFpEF, with an ejection fraction above 50. Importantly, SGLT2 inhibitors, which have been around for a while, have both shown no efficacy in this type of population. Clinically, these patients really present very similar to non-obstructive HCM.
The data showed that both from a symptomology perspective as well as from a functional perspective, sotagliflozin significantly improved disease dynamics in this group of patients, which really gives us confidence that this has the potential to impact non-obstructive HCM. SOTA-CROSS is a crossover study looking at sotagliflozin in non-obstructive HCM. It's a 12-week crossover study, and that is ongoing. Now, finally, in addition to both heart failure and HCM, sotagliflozin is on the precipice of being potentially resubmitted and potential approval to the FDA in 2026. When we were issued the CRL in 2025, at the end of 2025, the FDA was very explicit that they were needing more prospective data to demonstrate that the risk of diabetic ketoacidosis with sotagliflozin was acceptable. They'd already accepted that the efficacy of Zynquista supports an approval, and they needed new prospective data.
It just so happened that an investigator study called Steno, probably the largest study in type 1 diabetes ever, 2,000 patients looking at cardiac outcomes over five years, was acceptable to look within that enrollment of patients to look at the exposure to sotagliflozin and what the rate of DKA could potentially be. That open-label ongoing study, in our estimation, would allow us to both file and potentially have an approval in type 1 diabetes this year. We've been really impressed with the ongoing support of the type 1 diabetes patient population who continue to support and advocate for the approval of this medicine. Let me switch now to pain. It's been an area that is really starting to get significant attention across the scientific community. We are focused very much on neuropathic pain, a form of chronic pain.
Pilavapadin is being investigated for diabetic peripheral neuropathic pain, or DPNP, which is a huge unmet need. Neuropathic pain is chronic pain that comes about from damage to the nerve. The biggest cause of that is diabetes. There are about nine million patients in the U.S. living with DPNP, and the treatment paradigm for this typically involves gabapentinoids, so pregabalin, Lyrica, which was brought to the market over two decades ago. Patients are really dissatisfied with these treatment options. They're not well tolerated. They're not very effective. Typically, patients cycle in and out of treatments over time and eventually drop out of treatment altogether. It's a really high unmet need, and there's been little innovation in this area in a long time. Nevertheless, there's a huge desire politically to have new non-opioid medicines.
The Alternatives to Pain Act and the recent submission of the Relief of Chronic Pain Act show that the government has, or there's bipartisan support, to ensure that there is access to new non-opioid medicines going forward. Pilavapadin is an inhibitor of AAK1, which is involved in the mediation of endocytosis, essentially involved in modulating the receptor vesicle recycling, which modulates the neurotransmitter exposure in the synaptic cleft, thereby leading to downstream abrogation of pain signals in the dorsal horn of the spinal cord. And we've been the first company to really show very significantly placebo-adjusted improvements in pain score in DPNP across a number of studies in our phase II program. We've shown biological activity. We've demonstrated that the 10-milligram dose of pilavapadin reduces ADPS, the average daily pain score, by two points. And it has an acceptable tolerability profile.
So this really now supports advancement into phase III trials, and it would potentially be the first non-opioid treatment for DPNP in two decades. As I mentioned, there's significant political and advocacy interest in developing new medicines. The FDA has recently provided draft guidelines on how to develop new medicines for DPNP and other forms of neuropathic pain. And we continue to advocate for new medicines in this space. So what's next? We've completed the end of phase II meeting. We continue to refine our phase III protocol to ensure that we manage variability, in particular, placebo responses moving forward. And we're re-engaging with partners as soon as we receive the minutes from that meeting in the very near future. So finally, let me just wrap up with where the company is right now.
We are very pleased that we've been able to do two very significant deals in the recent past. Firstly, we've expanded the geographic reach of sotagliflozin by a deal with Viatris to promote sotagliflozin across indications outside of the US and outside of Europe. They've submitted in Saudi, Canada, Australia, New Zealand, Mexico, and Malaysia, and in fact had their first launch in the UAE on Monday. And secondarily, we licensed LX9851, a novel non-incretin oral medicine to Novo Nordisk. And we recently triggered a $10 million milestone payment. We're on track to receive another $20 million payment this year as we move, as they move that into the clinic. That's an incredibly exciting option as we now have oral semaglutide, and they are really focusing on how do they bring other oral medicines, either as standalone or combination.
At the end of last year, we ended with about $125 million in cash and cash equivalents, which supports our operations into 2027. And as I mentioned, the milestones from Novo are excluded in that forecast. So what does 2026 bring for us? Well, we're going to advance our late-stage pipeline in SONATA, HCM, and for Zynquista in type 1 diabetes. We'll continue to support our partnerships with Novo and with Viatris and continue our discipline in managing cash so that we really allocate capital in a way that benefits the long-term value of the company. So with that, I thank you very much for your attention and look forward to questions.
Thanks, Mike. Maybe starting with the cardiometabolic side, what gives you confidence in the potential utility in HCM and where everything would fit in the current treatment paradigm?
Yeah, thanks, Alex. So we have a number of pieces of evidence that both in our own clinical trials and in investigator-initiated trials that have read-through into the ability of sota to be a significant factor in helping non-obstructive HCM in particular. So we're confident that that gives us good grounds to believe that SONATA will be positive. Further to that, we're very pleased to ensure and look that we will have a place in the treatment paradigm that is likely earlier on in the management of HCM than what you're seeing with those medicines that have a complex REMS, a complex logistics in getting them initiated. So that gives us a feeling that if SONATA is positive, we have the potential to have a broad patient population that could be applicable for sotagliflozin and not just be restricted to certain high-throughput centers.
Great.
Yeah, I'll add a little bit more context. Thanks, Mike. It's Craig Granowitz. I'm the chief medical officer at Lexicon. The important thing to think about with sotagliflozin, as Mike mentioned during his prepared remarks, it's the only agent that acts both on the heart directly and indirectly. So you're getting all of the SGLT2 effects on the renal and the SGLT1 effects on renal function, reducing preload and afterload, and overall heart failure benefits, symptomatic relief reduction, particularly improvement in KCCQ score and six-minute walk. The unique attributes of sotagliflozin as the only dual inhibitor of SGLT1 and 2 is that you're getting direct effects on the myocardium. As Mike mentioned in his prepared remarks, the issue with HCM is you have both a hyperdynamic contractility, which is where the CMIs are acting, but you also have a metabolic disorder in the myocardium that's probably both mitochondrial-driven and ex-mitochondrial-driven.
As Mike mentioned, we've demonstrated with significant both clinical tissue explants and animal model data that sota is acting to improve the energetics and much more efficient use of ATP and energy in the cells. It's that long-term diastolic dysfunction that leads to cardiac fibrosis and ultimate heart failure with a stiff, large left ventricle.
Great. Maybe as we're thinking about the market sizing between obstructive versus non-obstructive, where do you see that going and fitting in, and especially with the recent regulatory timelines for oHCM?
Yeah, so our best knowledge is currently it's about a 50/50 split between obstructive and non-obstructive. Most of the obstructive patients have been diagnosed because it's very easy to see it on an echo. And what we're finding now is, in fact, the non-obstructive population is growing significantly faster, not because all of a sudden there are more non-obstructive HCM patients, but in fact, the awareness is being raised by new medications, and people are thereby discerning non-obstructive HCM patients from what may have previously just been diagnosed as a HFpEF patient. So we think with SONATA, because we're having a single study across both obstructive and non-obstructive, there's an opportunity for us to be broadly applicable across the two categories of disease. They may be applied a little bit differently. The CMIs are clearly having an indication currently for obstructive HCM.
They're quite effective at reducing that outflow tract obstruction. And so sota could be potentially used on top of the CMI for obstructive. For non-obstructive, we think that there really is the potential for broad use in that population because, as Craig mentioned, sota is really getting to the underlying root pathology of the disease, the cardiac energetics.
On Zynquista, so needed for type 1, right? Aiming to submit an NDA. What's been your recent dialogue with the FDA? Kind of, your timeline of resubmission and just what gives you confidence this time?
The FDA only had a single question in the CRL is: Can you bring to us prospective data that would give us confidence that in another data set, the rate of diabetic ketoacidosis would be acceptable? And so we needed to find with FDA a few things. What was acceptable in their mind? And I think they've clarified that. They've also clarified how much exposure do you need? Because DKA, fortunately, is a pretty rare event, so that you need a significant amount of patient exposure and experience in order to accumulate enough patient years of exposure to have a rate of diabetic ketoacidosis that you can have confidence in. So the more data you have, the more confidence you have in that point estimate of the rate of DKA and that the confidence interval starts to shrink.
Primarily, the discussion with the FDA around the Steno trial has been, first of all, that FDA has agreed that this trial is suitable to address their question. That was a critical milestone. The second is that we've agreed with FDA of what an acceptable rate of diabetic ketoacidosis would be. And the third is we've also gained alignment with FDA of roughly how much total patient exposure do we need in order to achieve that. And those are really the parameters that we're working against as we accumulate that data to reach those thresholds that FDA and we have agreed, working very closely with this third-party group in Denmark called Steno, which has a 40-year history of running really world-class type 1 diabetes studies and includes nearly every type 1 center in the entire country of Denmark.
As Mike mentioned, Steno- 1 is probably the largest type 1, largest and longest type 1 study that's ever been conducted with 2,000 patients as the target enrollment.
Gotcha. Thanks, Craig. Maybe shifting to pain on DPNP, phase II data from the potential, how would you describe the overall opportunity and what are you hoping for ultimately in a partner?
The opportunity is massive for a couple of reasons. The size of the patient population is very large, as I mentioned, just in the U.S. alone, 9 million diagnosed patients, 9 million patients who have received some sort of treatment recently, but perhaps more importantly, the fact that there are just no good options, and as we mentioned, that patients cycle through the available options, which are the gabapentinoids, the dual reuptake inhibitors, mostly duloxetine, as well as then the potential to move to opioids, and opioids clearly have significant efficacy in this space, but come both with side effects and social issues that may not make them optimal.
So for that reason, having Pilavapadin potentially be the first and only approved agent, I think there'll be significant demand both from patients and physicians for that medicine, as well as the tailwinds of legislative support, if you like, for ensuring that passes through payers and access in a smooth way.
Got it. And then on obesity, obviously exploding, everything's going on there. Partner program with Novo LX9851. What's differentiating about that and what do you think the bar will be ultimately for these next-gen therapies coming to market?
Yeah, I think the question is going to be any drug that's acting on absorption is going to be GI tolerability, and GI tolerability both independently and on top of GLP-1 in the case of Novo with semaglutide. The benefits of this agent is currently a large majority of patients don't stay on these drugs for very long.
In fact, you see even in the media today, various media stars coming out and saying, "I can't stay on my GLP-1, and when I go off my GLP-1, I regain 20 or 30 pounds." So I think the long-term future of this category, if you listen to those at Lilly, Novo, and other leading companies, is to switch from an injectable market to an oral market and a market that you can either cycle therapies that you have non-overlapping toxicities or that you have something that is better tolerated over the long run.
Gotcha. And last one from me, then we'd love to open it up to everyone else. But what are you most excited for in 2026 with Lexicon?
Just continuing to advance our pipeline, both with HCM, but perhaps most importantly, getting Zynquista over the line. The demand there and the need from patients is extreme for a new option to help them manage their blood glucose. We're really excited for that. Of course, finally, then partnering pilavapadin and having that move into late-stage development to make it available for a patient group that really has a huge need.
Great. Thank you. Awesome. Well, thank you very much. Thanks, everyone, for coming.
Thanks so much.
Thank you.