On Wednesday, H.C. Wainwright maintained a positive outlook on Lexicon Pharmaceuticals (NASDAQ:), reiterating a Buy rating and a price target of $10.00. The firm’s analyst highlighted recent data from a secondary analysis of the Phase 3 SOTA-INS clinical trial, which evaluated the efficacy of sotagliflozin in Type 2 Diabetes (T2D) patients who are on basal insulin therapy but still have inadequate glycemic control.
The SOTA-INS Continuous Glucose Monitoring (CGM) substudy, which included 133 patients, aimed to assess the impact of sotagliflozin on the time-in-range (TIR) metric, a measure of how long patients’ blood glucose levels stay within the target range. The results showed that after 18 weeks, patients taking sotagliflozin achieved a TIR that approached the American Diabetes Association’s recommended target.
The American Diabetes Association suggests that most patients with Type 1 or Type 2 diabetes should maintain their blood glucose levels within the target range for at least 70% of the day. The SOTA-INS CGM substudy indicated that sotagliflozin, administered once daily at doses of 200 mg and 400 mg, resulted in patients reaching an average of 15.3 and 15.9 hours within the target range, respectively. This performance aligns closely with the ADA’s guideline.
The study also documented slight reductions in the time above range (TAR) and minor increases in the time below range (TBR) for patients on sotagliflozin. These findings add to the evidence of sotagliflozin’s potential to assist in glycemic control for patients struggling to maintain their blood sugar levels.
The affirmation of the $10.00 price target and Buy rating by H.C. Wainwright reflects the firm’s confidence in sotagliflozin’s capabilities following the new data from the SOTA-INS trial. Lexicon Pharmaceuticals’ continued development of sotagliflozin could potentially offer improved treatment options for individuals with Type 2 diabetes.
In other recent news, Lexicon Pharmaceuticals has reported positive results from a Phase 3 clinical trial of its diabetes drug, sotagliflozin, which was shown to improve glucose control in type 2 diabetes patients.
Despite these promising results, Lexicon will not pursue an indication for type 2 diabetes treatment with sotagliflozin. The company has also reported a net loss of $53.4 million in their second quarter 2024 earnings call, revealing revenues of $1.6 million for the quarter, primarily from INPEFA sales.
Lexicon is preparing for an FDA review of Zynquista, a drug intended for glycemic control in adults with type 1 diabetes and chronic kidney disease. This is in line with Lexicon’s strategic shift to focus on its heart failure drug, INPEFA, and the anticipated launch of ZYNQUISTA, which is expected to save around $40 million in operating costs for 2025.
The company has also initiated patient enrollment for the Phase 3 SONATA trial of sotagliflozin in hypertrophic cardiomyopathy and is advancing LX9851 into preclinical development for obesity and weight management. Lexicon anticipates top-line data for the LX9211 study in diabetic peripheral neuropathic pain by Q2 2025 and is preparing for the potential launch of Zynquista in early 2025.
InvestingPro Insights
As Lexicon Pharmaceuticals (NASDAQ:LXRX) continues to make strides in the development of sotagliflozin for Type 2 diabetes, recent data from InvestingPro offers investors a snapshot of the company’s financial health. With a market capitalization of approximately $603.69 million, the company holds a significant cash position that outweighs its debt, an InvestingPro Tip that suggests a solid balance sheet. This financial stability may support Lexicon’s ongoing research and development efforts.
Another InvestingPro Tip indicates that analysts are expecting sales growth in the current year, which aligns with the positive clinical trial results and may reflect the market’s optimism about sotagliflozin’s potential. Additionally, the company has experienced a dramatic revenue growth of nearly 794.59% over the last twelve months as of Q2 2024, a metric that bodes well for its future prospects.
However, it’s important to note that analysts do not anticipate the company will be profitable this year, and Lexicon has been quickly burning through cash. The InvestingPro product, which includes additional tips, lists a total of 10 InvestingPro Tips for Lexicon Pharmaceuticals, providing investors with a more comprehensive understanding of the company’s financial position and future outlook. For those interested in a deeper dive into Lexicon’s financials and prospects, these tips can be found at: https://www.investing.com/pro/LXRX.
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