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Why Lexicon Pharma Shares Are Moving Lower

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Why Lexicon Pharma Shares Are Moving Lower

Lexicon Pharmaceuticals, Inc. (NASDAQ: LXRX) shares were retreating sharply Monday morning on an adverse development with its Type 1 diabetes drug candidate sotagliflozin.

Lexicon was co-developing the pipeline asset with Sanofi SA (NASDAQ: SNY) but has terminated the alliance effective Sept. 9.

FDA Firm On Rejection Decision

The actively traded, small-cap biotech Lexicon said it has been notified by the Office of New Drugs of the FDA that the agency is standing by its prior position and denying the company's appeal of the complete response letter related to its NDA for its Type 1 diabetes drug sotagliflozin.

Sotagliflozin, going by the trade name Zynquista, is an oral dual inhibitor of two proteins responsible for glucose regulation known as sodium-glucose co-transporter types 1 and 2.

It has been approved in the European Union as an adjunct to insulin therapy to improve blood sugar control in adults with Type 1 diabetes with a body mass more than or equal to 27 kg/square meter.

The FDA handed down a CRL to the NDA for the investigational compound on March 25. Ahead of the FDA rejection, FDA's Endocrinologic and Metabolic Drugs Advisory Committee issued a split verdict (8-to-8) on the question of whether the overall benefits of sotagliflozin outweighed the risks to support approval.

Lexicon to Appeal Again

Lexicon said it intends to appeal the decision to the Center for Drug Evaluation and Research.

Lexicon has a commercial product in Xermelo, which is being marketed for carcinoid syndrome diarrhea, and it also markets sotagliflozin as Zynquista in the EU. Aside of these, sotagliflozin is the most advanced asset in its clinical pipeline. The company is also studying it for Type 2 diabetes.

Lexicon shares were down 8.36% at $3.24 at the time of publication Monday. 

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