Lexicon Pharmaceuticals, Inc.

Good afternoon. My name is Chantal, and I'll be your conference operator today. At this time, I would like to welcome everyone to Lexicon Pharmaceuticals' fourth quarter 2020 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, you can press star then number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your speaker today, Chad Schultz, Executive Director of Corporate Communications and Investor Relations. Thank you.

Thank you, Chantel. Good afternoon and welcome to the Lexicon Pharmaceuticals fourth quarter 2020 financial results conference call. Joining me today are Lynelle Coates, Lexicon's President and Chief Executive Officer, Dr. Praveen Tile, Lexicon's Executive Vice President of Research and Development, and Jeff Wade, Lexicon's Executive Vice President of Corporate and Administrative Affairs and Chief Financial Officer. Earlier today, Lexicon issued a press release announcing our financial results for the fourth quarter of 2020, which is available on our website at www.lexpharma.com and through our SEC filings. A webcast of this call, along with a slide presentation, is available on our website. During this call, we will review the information provided in the release, 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, efficacy, and the therapeutic and commercial potential of LX9211, Sotocoflozin, and other drug candidates. These statements may include characterizations of the expected timing and results of clinical trials of LX9211, Cetacloplozin, and 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 risks may cause our actual results to differ materially from those expressed or implied in such forward-looking statements. These risks include uncertainties related to the timing and results of clinical trials and preclinical studies of LX9211, Sotocloplozin, and our other drug candidates, our dependence upon strategic alliances and other third-party relationships, our ability to obtain patent protection for our discoveries, limitations imposed by patents owned or controlled by third parties, and the requirements of substantial funding to conduct our research and development activities. For a list and a description of the risk and uncertainties that we face, please see the reports we have filed with the Securities and Exchange Commission. I will now turn the call over to Lionel Coase.

Thank you, Chas. Good afternoon, everyone, and thank you for joining us on the call. We welcome the opportunity to discuss what was a very busy quarter for Lexicon. in which we made significant advancements with our two lead compounds, LX9211 and Sotagliflozin. During the fourth quarter, we commenced patient enrollment for relief, PHN1, a Phase II clinical study of LX9211 for the treatment of post-hepatic neuralgia. This is our second Phase II clinical study for LX9211, which we have initiated in neuropathic pain. Patient enrollment in our other Phase II clinical study, relief DPN1, and Diabetic Peripheral Neuropathic Pain is ongoing. In December, we were very pleased to announce that we received fast track designation from the FDA for the development of LX9211 and Diabetic Peripheral Neuropathic Pain. This designation is indicative of a serious unmet medical need of this patient population. Also in the fourth quarter, the soloists and scored phase three outcome studies Asotica flozen and heart failure both achieved their primary endpoints. The results of those studies were presented by Dr. Deepak Bhat during the late-breaking science session of the American Heart Association Scientific Sessions and were simultaneously published in two separate articles in the New England Journal of Medicine. Based on the strong results from these studies and our subsequent discussions with the FDA, we made the decision to move expeditiously with a new drug application for an indication to reduce the risk of cardiovascular death, hospitalization for heart failure, and urgent visits for heart failure in adult patients with type 2 diabetes with either worsening heart failure or additional risk factors for heart failure. We expect a new drug application to be filed in the second half of the year. We also closed out the year by raising $70 million in net proceeds from sales of our common stock. Combined with our decision to strengthen our balance sheet by eliminating 95% of our debt, we entered into 2021 in a solid financial position with cash sufficient to fund our planned operations for two years. On the next slide, looking ahead to 2021, we anticipate a number of events during the year. We expect both of our proof-of-concept studies for LX9211 to read out by the end of the year. We're very enthused by what we have seen from LX9211 in our preclinical and Phase 1 studies and are looking forward to obtaining the Phase 2 results. We plan to share more about the data from these earlier LX9211 studies in the upcoming publications. As I mentioned, we are moving full steam ahead with an NDA filing for Soticoflosan in heart failure. and expect to submit the NDA during the second half of the year. We will need to establish a strategic alliance for Soda Gaflozin in order to achieve the best long-term value for the asset, as well as for millions of people suffering from heart failure worldwide, and those business development discussions are moving ahead in earnest. Important data from Soloist and SCORD was presented at AAH and in the New England Journal of Medicine articles and there are more analysis ongoing which we expect to release results in additional publications throughout the year. Now on to type 1 diabetes. We continue to believe that Sotocoflozin demonstrated a positive benefit risk in the largest phase 3 development program ever conducted in type 1 diabetes and that it has the potential to become an important new treatment option as an adjunct to insulin for type 1 diabetes. We have requested an opportunity for an administrative hearing with the FDA on whether there are grounds for its previous denial of our NDA for type 1 diabetes, and the FDA issued a public notice of opportunity for hearing just last week. We look forward to continuing these discussions with the FDA. Now, let me start out by providing an update on LH9211, which we are developing for neuropathic pain. Neuropathic pain affected millions of people. There remains a high level of unmet need for those suffering from the condition. The current approved therapies are limited by lack of efficacy, compounded by debilitating side effects. As a result, many people turn to opioids to experience some level of relief, which, of course, carries their own risk of potential abuse and addiction. We feel that LX9211, through its inhibition of AAK1, independent from the opioid pathway, has the potential to overcome many of the shortcomings of current therapies and could become a welcome new innovation for those suffering from neuropathic pain on a daily basis. I'm going to pause here and turn things over to Dr. Pyle to provide an update on LX9211 and to take you through the data from SOLUS and SCORE studies and share a little more on why we think our data may be especially compelling because of Sotocliflozin's inhibition of SGLT1. Dr. Kyle?