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Buy/High Risk Rating Given To Lexicon Pharmaceuticals By Citi Analysts

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Lexicon Pharmaceuticals, Inc’s (NASDAQ: LXRX) lead drug [telotristat etiprate] has orphan status, while the diabetes drug [sotagliflozin] addresses an underserved market. Citi’s Yigal Nochomovitz initiated coverage of the company with a Buy/High rating and a price target of $21.

Lead Drug

Telotristat etiprate met primary endpoints in two Phase 3 trials and was granted Priority Review by the FDA, with a PDUFA date of November 30, 2016. A timely approval and launch of the drug would support Lexicon Pharma’s stock in the near term, analyst Yigal Nochomovitz mentioned. He estimated peak sales of telotristat at ~$380M for the US and at ~$650M for worldwide sales.

Second Drug

Sotagliflozin has significant potential in diabetes, particularly type 1 [T1DM] and renally impaired type 2 [T2DM]. Positive Phase 2 data suggests the drug would succeed in the ongoing pivotal Phase 3 trials, Nochomovitz said.

“Lexicon's first-to-market advantage in T1DM is important given the limited/underserved market vs T2DM. Our work suggests that sotagliflozin's potentially differentiated benefit in patients with renal (kidney) impairment could be key to penetrating the broader T2DM setting,” the analyst wrote. He estimated peak worldwide sales of sotagliflozin at ~$2.1B for T1DM and at ~$2.0B for T2DM.

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