Download PDF

1. Company Snapshot

1.a. Company Description

Lexicon Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the discovery, development, and commercialization of pharmaceutical products.Its orally-delivered small molecule drug candidates under development comprise Sotagliflozin that completed Phase III clinical trials for the for the treatment of heart failure and type 1 diabetes; and LX9211, which is in Phase II clinical development for the treatment of neuropathic pain.The company has strategic collaboration and license agreements with Bristol-Myers Squibb Company, and Genentech, Inc.


Lexicon Pharmaceuticals, Inc.was incorporated in 1995 and is headquartered in The Woodlands, Texas.

Show Full description

1.b. Last Insights on LXRX

The recent performance of Lexicon Pharmaceuticals, Inc. has been driven by several key factors. The company's exclusive license agreement with Novo Nordisk for LX9851 in obesity and related disorders has been a significant catalyst, with Lexicon eligible to receive up to $1 billion in upfront and development, regulatory, and sales milestone payments. This deal has provided a substantial boost to the company's financial prospects. Additionally, the Phase 2b PROGRESS study has confirmed 10 mg pilavapadin as an appropriate dose for advancement into Phase 3 development for diabetic peripheral neuropathic pain, demonstrating the company's progress in its pipeline. Furthermore, the company's IND-enabling studies for LX9851 are on track for completion in 2025, indicating a strong R&D focus.

1.c. Company Highlights

2. Lexicon Pharmaceuticals' Q3 2025 Earnings: A Closer Look

Lexicon Pharmaceuticals reported total revenue of $14.2 million for Q3 2025, a significant increase from $1.8 million in Q3 2024, driven primarily by $13.2 million in licensing revenue from the agreement with Novo Nordisk for LX9851. The company also reported net product revenue of $1 million from INPEFA sales. Research and development expenses decreased to $18.8 million from $25.8 million in Q3 2024, while selling, general, and administrative expenses decreased to $7.6 million from $39.6 million. The net loss for Q3 2025 was $12.8 million or $0.04 per share, compared to a net loss of $64.8 million or $0.18 per share in Q3 2024. Notably, the actual EPS of -$0.04 beat estimates of -$0.07. The company's cash, short-term investments, and restricted cash stood at $145 million at the end of the quarter.

Publication Date: Nov -21

📋 Highlights
  • Revenue Surge from Licensing Deal: Total revenue rose to $14.2M (Q3 2025) from $1.8M (Q3 2024), driven by $13.2M in licensing revenue from Novo Nordisk for LX9851.
  • Net Loss Declines Sharply: Net loss fell to $12.8M ($0.04/share) from $64.8M ($0.18/share), reflecting lower R&D ($18.8M vs. $25.8M) and SG&A expenses ($7.6M vs. $39.6M).
  • Strong Cash Position: Ended Q3 with $145M in cash, short-term investments, and restricted cash, supporting pipeline advancement and capital discipline.
  • Pipeline Progress: Completed IND-enabling studies for LX9851, advanced pilavapadin to Phase III readiness, and plan an end-of-Phase II meeting with the FDA by year-end.
  • Partnership Milestones: Collaboration with Novo Nordisk for LX9851 may unlock up to $30M in near-term milestones, while Viatris expands INPEFA approvals in UAE, Saudi Arabia, and other regions.

Financial Performance and Guidance

The company's financial performance was marked by a significant reduction in operating expenses, with research and development expenses and selling, general, and administrative expenses decreasing by 27% and 81%, respectively, compared to Q3 2024. Lexicon maintains its full-year 2025 guidance for operating expenses between $105 million and $115 million. Analysts estimate next year's revenue growth at -68.5%, indicating a challenging year ahead. With a current P/S Ratio of 8.21, the market is pricing in significant growth expectations.

Pipeline Progress and Partnerships

Lexicon made significant progress in its pipeline, including completing IND-enabling studies for LX9851 and advancing pilavapadin to Phase III readiness. The company also reported positive developments in its partnerships, including a collaboration with Viatris to expand SOTA's reach and a partnership with Novo Nordisk for LX9851, which may earn up to $30 million in near-term milestone payments. As Lexicon's management noted, "A partnership for pilavapadin will allow the company to focus on its core cardiometabolic programs."

Clinical Developments and Commercialization Plans

The company's SONATA study sites are enrolling according to plan, with all Phase III sites up and running. Lexicon is seeking a broad label for SOTA in HCM, including both obstructive and non-obstructive patients. The company is also exploring commercialization options for Zynquista, considering a non-traditional approach to avoid market access challenges. With a current EV/EBITDA ratio of -4.73, the market is pricing in significant cash burn, but Lexicon's current cash reserves and potential milestone payments from its partnerships should provide sufficient runway to advance its clinical programs.

Valuation and Outlook

With a P/E Ratio of -3.98 and a ROE of -83.63%, Lexicon's valuation metrics indicate a high-risk, high-reward investment. However, the company's progress in its pipeline and partnerships, combined with its disciplined approach to capital allocation, may create shareholder value in the long term. As Lexicon engages with partners on pilavapadin and explores commercialization options for Zynquista, investors will be watching for updates on the company's progress.

3. NewsRoom

Card image cap

Clinical Data on Effect of Sotagliflozin on Adipose Distribution in Non-Diabetic Patients will be Presented at the 2025 Cardio Vascular Clinical Trialists Forum

Dec -05

Source: globenewswire.com

Card image cap

Lexicon Pharmaceuticals Has Multiple Paths To Upside, But Formidable Hurdles As Well

Dec -03

Source: seekingalpha.com

Card image cap

Lexicon Pharmaceuticals to Participate in Two Upcoming December Investor Conferences

Nov -25

Source: globenewswire.com

Card image cap

Lexicon Pharmaceuticals, Inc. (LXRX) Presents at Jefferies London Healthcare Conference 2025 Transcript

Nov -19

Source: seekingalpha.com

Card image cap

Lexicon Pharmaceuticals: A Lottery Ticket With 3 Chances To Win

Nov -15

Source: seekingalpha.com

Card image cap

Lexicon Pharmaceuticals to Participate at the Jefferies 2025 London Healthcare Conference

Nov -11

Source: globenewswire.com

Card image cap

Clinical Data Demonstrating Efficacy of Sotagliflozin in Preserved Ejection Fraction Heart Failure (HFpEF) without Diabetes Presented at American Heart Association (AHA) Annual Scientific Sessions 2025

Nov -08

Source: globenewswire.com

Card image cap

Lexicon Pharmaceuticals, Inc. (LXRX) Q3 2025 Earnings Call Transcript

Nov -06

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.50%)

6. Segments

Pharmaceutical Products

Expected Growth: 8.5%

Lexicon Pharmaceuticals' 8.5% growth in pharmaceutical products is driven by increasing demand for its novel treatments for diabetes and carcinoid syndrome, strong pipeline of new product candidates, strategic partnerships, and expanding sales force. Additionally, growing awareness of rare diseases and increasing healthcare expenditure contribute to the segment's growth.

7. Detailed Products

Xermelo

A medication used to treat carcinoid syndrome diarrhea in combination with somatostatin analog (SSA) therapy in adults.

Telotristat Ethyl

An oral tryptophan hydroxylase inhibitor used to treat carcinoid syndrome diarrhea in combination with SSA therapy in adults.

Sotagliflozin

An oral inhibitor of sodium-glucose cotransporter 1 (SGLT1) and SGLT2, used to treat heart failure and diabetes.

LX9211

An oral, peripherally restricted, selective kappa opioid receptor antagonist, used to treat pruritus in atopic dermatitis.

LX2763

An oral, selective, small molecule inhibitor of the ATP-citrate lyase (ACLY) enzyme, used to treat metabolic disorders.

8. Lexicon Pharmaceuticals, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Lexicon Pharmaceuticals, Inc. operates in a highly competitive industry, with many substitutes available for its products. However, the company's strong brand recognition and customer loyalty mitigate the threat of substitutes.

Bargaining Power Of Customers

Lexicon Pharmaceuticals, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are often critical to its customers' operations, making it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

Lexicon Pharmaceuticals, Inc. relies on a few key suppliers for raw materials and services. While the company has some bargaining power due to its size, suppliers may still have some negotiating power due to the specialized nature of their products.

Threat Of New Entrants

The pharmaceutical industry is highly regulated, and new entrants face significant barriers to entry, including high research and development costs and stringent regulatory requirements. However, the threat of new entrants is still high due to the potential for new technologies and innovations to disrupt the industry.

Intensity Of Rivalry

The pharmaceutical industry is highly competitive, with many established players and a high level of rivalry. Lexicon Pharmaceuticals, Inc. faces intense competition from other companies in the industry, which can lead to pricing pressure and reduced market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 51.98%
Debt Cost 10.84%
Equity Weight 48.02%
Equity Cost 10.84%
WACC 10.84%
Leverage 108.26%

11. Quality Control: Lexicon Pharmaceuticals, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Eterna Therapeutics

A-Score: 3.3/10

Value: 7.2

Growth: 5.0

Quality: 5.8

Yield: 0.0

Momentum: 1.5

Volatility: 0.3

1-Year Total Return ->

View Full Report
Stock-Card
Chimerix

A-Score: 3.3/10

Value: 6.2

Growth: 3.7

Quality: 5.0

Yield: 0.0

Momentum: 5.0

Volatility: 0.0

1-Year Total Return ->

View Full Report
Stock-Card
Arcus Biosciences

A-Score: 3.2/10

Value: 6.6

Growth: 3.6

Quality: 4.8

Yield: 0.0

Momentum: 1.5

Volatility: 2.7

1-Year Total Return ->

View Full Report
Stock-Card
Fate Therapeutics

A-Score: 2.9/10

Value: 7.8

Growth: 4.0

Quality: 4.3

Yield: 0.0

Momentum: 0.5

Volatility: 0.7

1-Year Total Return ->

View Full Report
Stock-Card
Lexicon Pharmaceuticals

A-Score: 2.8/10

Value: 6.6

Growth: 3.2

Quality: 4.4

Yield: 0.0

Momentum: 2.0

Volatility: 0.3

1-Year Total Return ->

View Full Report
Stock-Card
Palatin Technologies

A-Score: 2.4/10

Value: 8.2

Growth: 0.0

Quality: 6.0

Yield: 0.0

Momentum: 0.0

Volatility: 0.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

1.4$

Current Price

1.4$

Potential

-0.00%

Expected Cash-Flows