Lexicon Pharmaceuticals, Inc.

Welcome to the Lexicon Pharmaceuticals Second Quarter 2020 Financial Results and Business Update Conference Call. At this time, all participants are in listen-only mode. Following managers' prepared remarks, we will hold a question and answer session. As a reminder, this call is being recorded today, July 30, 2020. I will now turn the call over. to Kim, Dr. Kimberly Lee, Head of Investor Relations and Corporate Strategy. Please go ahead.

Thank you, Crystal. Good morning and welcome to the Lexicon Pharmaceuticals Second Quarter 2020 Financial Results and Business Update Conference Call. Joining me on today's call are Lynelle Coates, Lexicon's President and Chief Executive Officer, Alex Santini, Executive Vice President and Chief Commercial Officer, Dr. Pablo La Puerta, Executive Vice President and Chief Medical Officer, Dr. Praveen Tile, Executive Vice President of Research and Development, and Jeff Lloyd, Executive Vice President of Corporate and Administrative Affairs and Chief Financial Officer. After formal remarks, we will open the call-up for Q&A. Earlier today, Lexicon issued a series of press releases, one announcing our financial results for the second quarter of 2020, Thank you so much for joining us. and in the case of the financial results and asset sales press releases through our SEC filings. A webcast of this call along with a slide presentation will be accessible in the investor relations section of our website. During this call, we will review the information provided in the releases, provide an update on our clinical programs and then use the remainder of our time to answer your questions. Before we begin, let me remind you that we will be making forward-looking statements, including statements relating to the safety and efficacy and the therapeutic and commercial potential of LX9211, Dermelo, Cetagliflozin, and our other drug candidates. These statements may include characterizations of the commercial performance of Dermelo, the expected timing and results of clinical trials of and our other drug candidates and the regulatory status and market opportunity for those programs. This call may also contain forward-looking statements relating to our growth and future operating results, discovery and development of our drug candidates, strategic alliances and intellectual property, as well as other matters that are not historical facts or information. Various may cause our actual results to differ materially from those expressed or implied in such forward-looking statements. These risks include insurgencies related to our ability to complete the sale of Zermelo, the timing and results of clinical trials and preclinical studies of LX9211 and our other drug candidates, our dependence upon strategic alliances and other third-party relationships, our ability to obtain patent protections for our discoveries, limitations imposed by patents owned and controlled by third parties, and the requirements of substantial funding to conduct our research, development, and commercial activities. For a list and a description of the risks and uncertainties that we face, please see the reports we have filed with the Securities and Exchange Commission. I would now like to turn the call over to our President and CEO, Lynell Coates.

Thank you, Kim, and good morning to everyone, and thanks for joining us on the call today. I mean, today's presentation will be made on behalf of all the extraordinary men and women here at Lexicon who work tirelessly every day to advance our science into the hands of patients. So let me jump in and talk about our second quarter. We made very good progress on Zamello business and our pipeline while effectively managing our resources and spending. I will elaborate on some of the key achievements and will then turn the call over to Jeff and Praveen for updates on our financial results and pipeline developments, respectively. Starting with Zomelo, we achieved U.S. net sales of $9 million in the second quarter of 2020. That's up 21% from the corresponding period in 2019. Earlier this morning, we announced that we entered into an agreement with Tessera Therapeutics for the sale of Zomelo and related assets. Tessera will pay Lexicon approximately $159 million in cash at closing, which includes $155 million upfront payments. and approximately $4 million for existing inventory. Lexicon may receive additional development, regulatory and sales milestone payments of up to an aggregate of $65 million for the development and commercialization of telotrastate ethyl in patients with biliary tract cancer. Additionally, Lexicon will be eligible to receive mid-teens royalties on net sales as a mellow in biliary tract cancer. As part of the transaction, CSERA has agreed to assume the currently ongoing tele-ABC Phase II clinical study of Zamello in biliary tract cancer patients and offer employment to at least 20 Lexicon employees currently dedicated to Zamello. The transaction is expected to close in the third quarter of 2020, subject to the satisfaction or waiver of customary closing conditions. This transaction allows us to rely and other early stage candidates. This also allows us to efficiently use our resources and importantly, significantly reduce our debt, including the full repayment of our $150 million secure term loan. Jeff will talk more about this later. We ended the second quarter with approximately $202 million in cash and short-term investments, and we continue to prudently manage our balance sheet. With that, I'll now turn the call over to Jeff.