Welcome everyone to the Leerink Global Healthcare Conference. My name is Roanna Ruiz, and I'm one of the senior biotech analysts here at Leerink, and it is my pleasure to welcome Lexicon Pharmaceuticals to the conference. With me, I have Mike Exton, CEO, and Craig Granowitz, CMO. Thanks so much for joining me.
Thank you.
Thank you.
Wonderful to be here in Miami.
Yeah, great. I'll kick it off with a bigger picture question before-
Mm-hmm
... we dive in. For any investors that are new or possibly revisiting the story, could you talk about your strategic focus this year, some of your main goals?
Yeah.
You know, how has the company evolved up to this point?
Yeah, great. So really, 2025 was a very important year for us. We refocused the company into focusing on our pipeline, our R&D pipeline, and really in two major areas, in cardiometabolic disease and chronic pain, particularly neuropathic pain. Throughout 2025, we really progressed those programs across the broad portfolio incredibly well, to be honest. That's kicked through into 2026 such that we've got a number of lead programs, and I'll sort of take you through a bunch of them. The first, we have a Phase 3 trial in hypertrophic cardiomyopathy for sotagliflozin, that's enrolling incredibly well, where we will complete enrollment by midyear and have data readout in Q1 of next year.
As you know, HCM is a really interesting area for investors at the moment with a lot of activity, and we see that as a fantastic opportunity for the company. Secondarily, we are on the precipice of being able to resubmit our NDA for Zynquista, sotagliflozin, for glycemic control type 1 diabetes. It would be the first non-insulin adjunct to insulin, which is pretty remarkable given that was over 100 years ago. We have the opportunity with a six-month review for that to be reviewed and approved this year. Really that's very exciting for us and a major milestone in the company after a number of years of engagement with the FDA.
We see that as a particularly important milestone, not only for the company, but for patients who've been really advocating for this for a long time. Thirdly, we completed our Phase 2 program for pilavapadin, which is an oral non-opioid medicine for diabetic peripheral neuropathic pain, last year. Now we have received following the end of Phase 2 meeting, a very favorable meeting minutes, which have essentially given us the green light for that program to go into pivotal trials. Importantly, with no sort of additional studies required for addiction potential, which is clearly very important as a non-opioid, but centrally acting medicine that they recognize that there's no addiction potential in this medicine, so that's very important.
Because we have these major late-stage programs for sotagliflozin type 1 diabetes and HCM, we're really looking to partner that program so that we can get the best value out of it and focus our efforts on these other two pretty important areas where we feel we have a great opportunity. Last but not least, a couple of partnered programs, the first of which is LX9851, as you know, for obesity, which we licensed to Novo Nordisk last April. That's, in 2025, we completed all IND- enabling studies and handed that over to Novo, and we recently had a $10 million milestone payment triggered, and expect a couple more payments of $10 million each as that progresses through human trials in Phase 1 this year.
Finally, Viatris, who we licensed sotagliflozin to outside of the U.S. and Europe, has really done an incredible job of submitting their regulatory applications around the world. Had their first approval and launched in the UAE in January. That will continue to really progress very nicely. They're very enthusiastic about that program. As you can tell from my somewhat long-winded overview, there's a lot going on, and really pleased with how we've started the year and looking forward to a number of great updates throughout 2026.
Yeah. A lot to go into. I'll start with sotagliflozin and HCM.
Mm-hmm
'Cause I've been getting, and I'm sure you are too, getting a bunch of questions with that coming up soon with the Phase 3. Could you just help refresh us on how is enrollment progress going? Anything that we should think about your recruitment there and thinking about going for both obstructive and non-obstructive HCM patients in the Phase 3?
Well, Roanna, this is Craig Granowitz, Chief Medical Officer. The program is really designed to provide the broadest possible label of any agent that's being studied in hypertrophic cardiomyopathy in the most cost-effective and time-efficient manner. The example we have is what we did with heart failure, where we combined both HFrEF and HFpEF into a single pragmatic study that had very broad entry criteria. That's the same philosophy we brought to the FDA prior to initiating this trial, and got the concurrence of the FDA to initiate and run the trial the way that we're running it with the endpoint that we've selected. I think there are a couple of very important points we wanted to stress with the protocol design. You've already identified it includes both obstructive and non-obstructive patients.
It includes patients that are on a cardiac myosin inhibitor or any other underlying therapy, as long as we're on a stable dose. For those not on a CMI, which is the majority of patients, the ejection fraction cutoff is 50%, unlike 60%. Even with those on a CMI, the cutoff is 55%. We've really tried to have a very broad, inclusive patient population that allows sites to more easily enroll patients with having a single endpoint of KCCQ, which has been recognized by the FDA as a sole and primary endpoint for approval without the complexity and the challenges of doing peak VO2, which is a difficult test for most patients to go through. You really need specialized centers. It limits the number of patients that would participate, and the sites that can participate.
Could you also frame just how has enrollment been going for the trial? What are you thinking about in terms of the overall split between obstructive and non-obstructive? Do you have any targets there for the trial?
Yeah. I'll answer the first part first, is that I think there's two things that have been driving our confidence in the enrollment, and enrollment continues to meet our expectations in that regard. The first is that there's a tremendous interest in studying sotagliflozin in this disease because patients, there's still a significant unmet need, whether it's obstructive and particularly in non-obstructive. So I think that's been a huge help. The other is that there are no large competing trials that are running at the moment that are global studies. So there's an enrollment window that sites have patients and have infrastructure that they can devote to this trial.
When you think about the composition of the patients that are enrolling, and again, the trial is still enrolling, so I wanna be very careful about what I say, is that there's unmet need of both obstructive and non-obstructive. We're enrolling significant numbers of patients of both obstructive and non-obstructive, whether it's in the U.S. or outside the U.S. I think, as one would expect, there now is an approved agent for obstructive disease. I would say the demand is even greater than that in non-obstructive. We are seeing a lot of non-obstructive patients, but we're seeing significant numbers of both.
Got it. Okay, great. To help frame it for investors, could you update us on regulatory discussions so far in the HCM space, in talking about this design and, you know, like, help explain how some of the differences that investors are seeing between some of the studies that BMS and Cytokinetics have done in HCM versus your current SONATA trial design?
Well, again, I don't wanna overstep because I don't know what their conversations necessarily have been with the FDA. I'm gonna really focus on ours. Again, I think if there are some things we can clarify, I'm happy to try to do that, but I don't wanna speak for another company. The design that we had, again, was informed by not only our scientific steering committee, which are some of the most experienced academic sites that have run all of the trials, but also we did seek guidance and input from the FDA regarding this trial design and the adequacy of this endpoint prior to initiating the trial. I think as you've seen with other companies that have run trials, at least in the non-obstructive space, they also started their trial with a single endpoint.
We have a lot of confidence in KCCQ as an endpoint because we have a lot of experience with KCCQ, with sotagliflozin in various stages of heart failure. We've run multiple trials with KCCQ as an endpoint in our trials, and so we have a good understanding of that study. Most recently, we supported an investigator-initiated trial called sotagliflozin-P-CARDIA that was presented at AHA. This was in dedicated HFpEF patients with, again, a KCCQ endpoint. The primary endpoint was left ventricular mass, but there were significant benefits on KCCQ as well.
Yeah.
I think it's noteworthy, though, Craig, as well to mention that, look, both KCCQ and peak VO2 are regulatory constructs. They're not something that happens naturally in clinical practice. Certainly, with KCCQ, although that's not administered in clinical practice, doctors, of course, ask, "How are you feeling? How active are you? Can you do these sorts of natural things in daily living, et cetera?" That's a part of a natural clinical consult.
I think most cardiologists would say they're not asking them, "What's your peak exercise capacity and, you know, how far can you run, et cetera?" You know, for us, not needing peak VO2 as a part of the regulatory process, it's not only important to the speed and effectiveness of the trial, but I think it's unnecessary for us, and it's not all that relevant once you have approval because really patients are worried about how they feel.
Yeah, I mean, Mike raised some really important points about, you know, the inability to really understand the clinical relevance of peak VO2. I think the other important element that we discussed with the agency, and I'm glad, Mike, you brought up some of those points, is that we have long-term outcomes. The CMIs really don't have long-term outcomes with their agents. We have 12,000-patient heart failure program. We have 4,000 or more patient years of exposure post-marketing surveillance. We have a lot of safety and long-term benefit and have demonstrated, again, not specifically in HCM, but in related conditions like HFpEF and overall heart failure, significant early and late benefits that are both radiological, clinical, hard clinical outcomes, biochemical.
I think that is also a context where a new agent with no long-term history, I think the burden is on them to say, "What other benefits can you demonstrate that this therapy brings to patients?
Yep. Got it. Talking about the KCCQ endpoint for SONATA, what would be a really exciting and clinically meaningful result coming out of this trial?
Yeah. We've powered this study in a similar way to what the CMIs did, which is also something that based on our experience, we believe that should be achievable. We've both sized the study and picked that endpoint and picked a statistical plan that would be consistent with those endpoints. Just an example, the HFpEF trial that ran, that was just presented, and again, I think this is one extreme, but you're really looking at a double-digit placebo adjusted difference in KCCQ. It is very important to always run any trial with a KCCQ endpoint with a placebo. It's very hard to run a single-arm uncontrolled study with a PRO endpoint, as we know so well with our neuropathic pain. KCCQ is similar in that you really do need a placebo control.
Yep.
Cardiologists, I would say, think that a change of about five placebo-adjusted, that's clinically meaningful, and that's what CMI is and, you know, ours are thereabouts, so that's the powering. You know, that would be a fantastic result for us to get that type of change.
Speaking of CMIs and thinking about mechanisms in the HCM space.
Mm.
Taking a step back, could you talk a bit about sotagliflozin's mechanism, why you're excited about it going into HCM, and contrast it a little bit with the CMIs?
Yeah. Maybe I'll start off.
Please
Craig, you can follow up. You know, I think, you know, clearly at the moment, there's some pretty significant differences here with two approved agents in obstructive, which are clearly quite effective in obstructive, because they're really having a very strong hemodynamic effect. The importance of sotagliflozin is a completely novel mechanism and orthogonal mechanism to the CMIs, is that it's treating the underlying diastolic dysfunction, the underlying basis of the disease in both obstructive and non-obstructive. Foundationally, with sotagliflozin improving energetics across both obstructive and non-obstructive, that will be a very complementary agent to CMIs, certainly in obstructive and we'll see about non-obstructive.
We get into the other thinking around, well, what is a once a day oral medicine that has a number of years of safety and tolerability data? What's the utilization of that versus, you know, quite a significantly more complex and arduous treatment regime that involves REMS, et cetera. We believe should sotagliflozin be successful in SONATA trial, that this would fit very naturally as a first-line agent, you know, once a day oral medicine effective, and then reserving, you know, the more complex medicines for later in the treatment paradigm. That's kind of how we're thinking about it.
Yeah, I think you said that well. The only thing I would add is, you know, we sort of look at sotagliflozin as very different and potentially complementary to CMI because we're acting both on the heart itself in a different way because there are SGLT1 receptors on the heart, not SGLT2 receptors on the heart. The receptor number is upregulated in stress states like heart failure and also in HCM. We know we're acting on the heart. We know we act to reduce diastolic dysfunction, which is the underlying fundamental issue in HCM because 30% of patients with obstructive HCM, when you remove the obstruction, they're either still symptomatic or they go on to heart failure. We know and we're targeting that fundamental underlying physiologic issue that's associated with continued thickening of the left ventricle fibrosis and ultimately cardiac dysfunction.
Mm-hmm.
In addition, we have the SGLT2 benefits above and beyond the SGLT1 benefits that are acting on the kidney and on the glycemic control, and that also is a well-studied agent in heart failure by reducing preload and afterload. You're getting all the benefits of an SGLT2 on the kidney. You're getting the direct benefits of the SGLT1 on the heart and the myocardial function, and those might be either better or certainly complementary to that which you're achieving or has been demonstrated with a CMI, which is purely, at this point, hemodynamic, not as much physiologic.
Yep. Interesting. Okay. Last question on HCM before I switch gears to your multiple other programs that you're working on. In terms of the regulatory path, let's say in a hypothetical scenario, let's say the SONATA trial, maybe it has a strong signal in maybe one of the HCM groups, like obstructive, for example, and maybe just misses on non-obstructive or vice versa. How would you be thinking about going forward with that kind of data set?
Yeah, it's a great question, Roanna. Again, we faced this when we were designing the SCORED and SOLOIST-WHF trials for heart failure, the same issue. What we've discussed with the FDA both in that case and in this case, and we feel very comfortable with this because we've done it before, is that the trial is not independently powered for each group. The study is stratified by group, but not powered for each group. What some of the secondary analyses in the statistical plan will look at the interaction p-value. As long as there's not an overwhelming interaction p-value, the understanding we have with the FDA is that we would be approved in both. The other advantage of that, like we were able to demonstrate in SCORED and SOLOIST-WHF, is we can look dynamically across the range of activity of benefit.
That's where we had that insight that sotagliflozin works particularly well in HFpEF in addition to HFrEF because we had a continuous variable studying in a single trial. I think the SGLT2 inhibitors have demonstrated when you look at a pure HFpEF group, they're just not as effective as they are in HFrEF. We think that there's a lot of actual advantages of running the trial this way.
Yep, makes sense. I'll switch gears now to pilavapadin for DPNP. Could you just recap the planned Phase 3 design, some of the components there, and goals of the study?
Yeah. Thank you, Roanna, for that question, and this was the key question we had at the end of Phase 2 meeting with the FDA. Again, for those that might not be as familiar with the end of Phase 2 meeting, there's really only a couple times that the whole FDA division comes together. The first one, you file your IND, second is your end of Phase 2, and the third is the review. There's only three times you get all the groups at one time to give you feedback. The end of Phase 2 is a really important milestone. I can say during the meeting, we had 18 people from the FDA across multiple different disciplines participating in this discussion.
Again, I wanna give a quick call-out to the FDA of their professionalism throughout this entire year across a range of review divisions that I've been working with. The most important thing coming out of that, first of all, is that they didn't raise any new issues that we hadn't thought about before. You always go into a meeting like that as, "What haven't I thought of?" That some statistical group or some preclinical group will bring up and say, "Oh, that's a showstopper," or, "You gotta address that prior to starting." We didn't have any of that. The second, as Mike already mentioned his opening comments, is the FDA said you don't need to do any additional work on addiction potential, which is pretty unusual for a CNS acting drug.
They were comfortable with both our preclinical data, all of our drug-drug interaction data, as well as our clinical results, that the modest dizziness in a minority of patients was not something that they're worried about like behavioral. The third and most important thing for Phase 3 is they agreed on our design, that we would run two parallel studies of a single 10-milligram dose compared to placebo in Phase 3 with a 12-week ADPS score as the primary and sole endpoint for the trial.
Yep, sounds good. Considering your prior Phase 2b PROGRESS study, how should investors think about the bar for success in Phase 3 going forward?
I think the FDA has been very clear with us on this, and that is they expect statistical significance. It's up to the sponsor to determine the powering, what placebo-adjusted separation they're estimating, and then powering it according to that. Really, they didn't give guidance on what the size of the placebo-adjusted reduction in pain needed to be, just so long as it hit statistical significance.
Yep. Okay.
Yeah, I mean, I think to Mike's point, the FDA recognizes this is an extraordinarily unmet need, and they also recognize the challenges of running studies in chronic pain. I think in that regard, to Mike's point, I mean, it was really quite refreshing that they were not concerned about what was necessarily the magnitude of the placebo-adjusted ADPS scores, just can you demonstrate convincing evidence that the drug has activity?
Yep. Tagging on to that, I know there's relatively recent FDA guidance about non-opioid chronic pain drug development.
Mm.
Can you just frame how that sort of sentiment is sort of helping drive forward, like, your program and thinking about the pain market overall?
Yeah, I think overall, actually, the draft guidance was very much in line with previous conversations we've had with them as well as the current end of Phase 2 meeting that we had, and really giving guidance on using ADPS as a primary endpoint and needing 12-week design, which is what we have thought would be the case all along. There were some other suggestions in there that really have little bearing on the program going forward. Although, you know, the other piece that has of course come out of the FDA recently is this concept from the commissioner that potentially for you know national emergencies, that there could be single trial applicability for these types of programs. You know, that's something we're exploring right now.
As we all know, there is an opioid crisis, so that sort of sits in the national emergency program. Although, you know, it's not clear exactly how applicable that is in this particular case, but that's something we're exploring.
Yeah, I mean, we already do have expedited review with Fast Track, but there is certainly a way to stack other expedited review opportunities. We're looking at every single one of those as the time and the program continues.
Yep. Makes sense. I wanted to ask a couple questions about Zynquista as well.
Right.
It's been a little bit of a long road for Zynquista.
That's euphemistic.
I was just curious in terms of, you know, what sort of maybe recent evidence or discussion points with the FDA is encouraging you going forward and refiling this time?
Maybe I'll start and ask you, Craig, to fill in some details as well. Really, you know, ever since the end of review meeting last April, I guess it was, the FDA has been pretty clear and actually very encouraging. Their perspective all along has been that they need new prospective data. They don't want, you know, a rehash of and a reanalysis of data, old, if you like, but really new prospective data. You know, fortuitously and thankfully, Craig and the team in alignment with a group in Denmark, the Steno Diabetes Center has got a large trial ongoing, and the FDA has adjudicated that that trial would be sufficient to answer the questions that we need to answer, which is really twofold.
The FDA has been very clear with us, and that is we need a certain level of exposure in that particular trial, so a certain number of patients on sotagliflozin for a certain amount of time, and a DKA rate that is less than what was observed in the phase III program in tandem. As we've sort of talked about, this is an open label trial, so we receive the data in real time. We have very good relationship, thanks to Craig and his team, with this institute and the research group. The data that we see is very consistent with us being able to resubmit, and we're just waiting for the exposure to accumulate to a point at which, you know, it's aligned with the FDA expectations.
It really is, I think, you know, obviously Zynquista has this, somewhat checkered history of engagement with the FDA, but I can tell you this has been a very constructive dialogue, and a very collaborative way of working with them. We're all loath to see another adcomm and another CRL, so we're working very constructively with them.
Yeah, I mean, I think having dealt with this with the FDA since I came to the company about four years ago, they've been consistent in what their ask was. Their ask was they wanted to see a prospective trial. They reaffirmed in the end of review meeting that the efficacy was established, that that was not even a question. The issue we'd always had with the FDA, and I think we'd raised it in our written comments and certainly during the advisory committee, is it was not ethical to run a trial looking at rates of diabetic ketoacidosis as a primary endpoint prospectively. I couldn't get an IRB to sign off on that, and I certainly couldn't raise capital to go do that kind of study, which would be a three-to-five-year study that would cost tens of millions of dollars, if not more.
We had tried to work with the FDA over a period of time to become familiar with Steno as an opportunity because that was a trial, 2,000-patient study, 1,000 patients on what's called enhanced therapy, of which at least a third of those would be on sotagliflozin, treating that group of patients out for five years. After a lot of discussion and pre-positioning of Steno before it started with this eventuality in mind, we had the FDA to agree that the criteria used for established DKA, to manage DKA, educate patients on DKA was acceptable.
It was just a matter of aligning with them, as Mike already said, on the level of patient year exposure and rate of DKA, and now it's really just waiting for that data to accumulate and doing all the work in parallel on preparing a submission that goes in, and it should be a very straightforward review. Is this rate consistent with the target we set? And are we comfortable with your definition of DKA?
Yep. Great. I also wanna squeeze in a question about LX9851.
Yeah.
You're partnered with Novo Nordisk on that. You know, can you just refresh us on how's the partnership going? You know, what's exciting you about the program? Any timelines that we should keep track of going forward?
Yeah, great. You know, we've said all along we're incredibly enthusiastic about this relationship and that the future of weight management and obesity management is in oral meds, and the ability to combine mechanisms of action. Really, Novo has continued that enthusiasm both with words and deeds so to speak. You know, ever since we completed the IND- enabling studies, they've powered ahead, not only rapidly but extensively. I can tell you they're fully invested in this program. In fact, when the new CEO came on board, they did a complete review of their portfolio, and LX9851 received the top ranking among other medicines of course, but received the top ranking. This is an incredibly high priority for them and, that's fantastic for us.
You know, in January, they triggered a milestone payment of $10 million, and that's on the precipice of going into humans. The phase one trial program is imminent. We have the possibility of two further milestone payments of $10 million each this year as those Phase 1 trials progress. We'll await the outcomes and see what happens. We're incredibly impressed by the effort, resource, and intensity that Novo's putting behind this program.
Yeah.
Yeah, I mean, I think everything Mike says is 100% spot on. From a scientific standpoint, this is an incredibly competitive area. This is a first and only mechanism, though. Novo is way out in front. There is no one else that has an ACSL5 inhibitor, and it's a clearly articulated mechanism in a number of different animal models and now moving into humans. You know, I think part of the problem in the obesity space for competitors is everybody is in everything. This is not an incretin, it's not an amylin, it is a novel mechanism. I think that's one of the other elements that our partner is looking at to differentiate themselves in an oral format that has already demonstrated activity alone and in combination with other classes of medication.
Yep. Great. I know you've got a lot going on, so working on multiple things like SONATA and HCM, you're pushing forward pilavapadin.
Mm-hmm.
You've got your pipeline programs and refiling for Zynquista. Like, how are you prioritizing execution and focus across these different initiatives?
Yeah, no, that's a fantastic question. It's a lot, and actually we did a lot to ensure we focused in 2025. Doing the deals with Viatris and Novo were part of that focus. We're very much focused at the moment on HCM. We see that as an incredible opportunity that's perhaps, until now, a little bit underappreciated, you know, given sort of the enthusiasm and investment for other companies that are in this space. I think really ever since the start of the year, you get, you know, within this 12 months of data, the enthusiasm and the questions and the level of the detail in those questions becoming pretty significant.
HCM is very much our focus, together with ensuring that we get Zynquista submitted and potentially approved. I think that's where we feel we've got significant expertise. We've got the ability to get those trials done and or get the commercialization of those medicines done, which are huge opportunities of course for the company, notwithstanding all the other rest of the pipeline, as you mentioned.
Yep. Sounds great. I think with that, we're at time, so thank you so much for joining me.
It was a pleasure.
Thank you.
Thanks for the invite. Thanks, Leerink.