Lexicon Pharmaceuticals, Inc.

Good morning. This is Jesse, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Lexicon Pharmaceuticals Inc. Fourth Quarter 2021 Earnings Conference Call. Please note 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'd like to ask a question during this time, simply press the star key followed by the number one from your telephone keypads. If you'd like to withdraw your request, You may press the pound key. Thank you. I'll now turn the call over to your Hulse, Cash Hulse, Executive Director, Corporate Communications, and Investor Relations. Sir, you may now begin.

Thank you, Jesse. Good morning, and welcome to the Lexicon Pharmaceuticals first quarter 2022 financial results conference call. Joining me today are Lynelle Coates, Lexicon's Chief Executive Officer, Jeff Wade, Lexicon's President and Chief Financial Officer, and Dr. Craig Granowitz, Lexicon's Senior Vice President and Chief Medical Officer. Earlier this morning, Lexicon issued a press release announcing our financial results for the first quarter of 2022, 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 information provided in the release, provide a corporate update, 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 sotocoplosum, LX9211, and other drug candidates. These statements may include characterizations of the expected timing and results of clinical trials of Sotocloplozin, LX9211, and our other drug candidates, and the regulatory status and market opportunity for those programs. The call may also contain forward-looking statements relating to our growth and future operating results, discovery and development of our drug candidates, launching commercialization plans for any approved products, strategic alliances and intellectual property, as well as other matters that are not historical facts or information. Various risks may cause or actual results to differ materially from those expressed or implied in such forward-looking statements. These risks include uncertainties related to the timing and outcome of our planned NDA resubmission for sotocloplozin and heart failure and our discussions with the FDA regarding sotocloplozin relating to heart failure and type 1 diabetes, the success of our commercialization efforts with respect to any approved products, the timing and results of clinical trials and preclinical studies of Sotocloplozin, LX9211, and our other drug candidates, our dependence upon strategic alliances, and our other third-party relationships, our ability to obtain patent protections for our discoveries, limitations imposed by patents owned or controlled by third parties, and the requirements of substantial funding to conduct our planned research, development, and commercialization 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 would now like to turn the call over to Lynell Coates.

Thank you, Chas, and good morning, everyone, for joining us on the call. Let me jump right to slide three. We expect that the second quarter of 2022 will be a pivotal quarter for Lexicon, with major anticipated milestones for both our dual SCLT1 and 2 inhibitor, stodogaflozin, in our AAK1 inhibitor, LX9211. We plan to resubmit our new drug application for Sotocoflozin for the treatment of heart failure this month. Our dialogue with the FDA regarding the resubmission has been ongoing, and we received confirmation from the FDA in late April that it's aligned with our resubmission plans. This alignment was a significant step, and we expect to have a relatively straightforward path to resubmit in the next few weeks. We believe the data from our soloist phase III trial provides compelling support for a unique label for sotocoflozin and recent and worsening heart failure, which would provide us with a strong entry point into the heart failure market if approved. The overall heart failure market is already a very large multibillion dollar market and is anticipated to further grow at nearly 20% per year for most of this decade, which we feel could enable peak blockbuster potential for Sotagiflozin. Pending market approval from the FDA, we're planning to launch Sotagiflozin in the first half of next year. Also in this quarter, we expect to announce top-line results from our Phase II study of LX9211 and diabetic peripheral neuropathic pain. Neuropathic pain is a very large market that is extremely underserved and unsatisfied. We believe LX9211 has the potential to provide an innovative approach to treating neuropathic pain without the many treatment issues that we see with the current treatment options. Slide four. Let me spend a quick moment on what we are now seeing play out in the heart failure market. These figures are from a 2019 report in which global data estimated that the heart failure market will grow to $22 billion in 2028, representing a compound annual growth rate of nearly 20%. Not only did they project that the market will grow at this tremendous rate over the next decade, but they also forecasted that that growth would be largely driven by the adoption of SGLT inhibitors for the treatment of heart failure, which we are now seeing play out. with major heart failure treatment guideline revisions both in the United States and in Europe. Let me go to slide five. Traditionally, there have been three pillars of therapy constituting the cornerstones of care in heart failure, ACE, ARBs and ARNs, beta blockers and MRAs. New guidelines issued by major medical associations of both the United States and Europe have now established SGLT inhibitors as a fourth pillar therapy in the standard of care for heart failure. European guidelines were issued in August of 2021, and the United States guidelines were jointly issued by the three largest cardiology societies just this last month. Ideally, patients are prescribed drugs from each of these pillars of care to give your prospective abuse Approximately 90% of heart failure patients are on a beta blocker, and 80-plus percent are on an ACE or an ARB. SGLT inhibitors are currently only used in approximately 5% of heart failure patients. So we are currently at the very beginning of a tremendous growth opportunity for the utilization in this space. Let's turn to slide six. In the most recent guidelines, SGLT2 inhibitors were elevated to first-line prevention and treatment of heart failure by the three largest U.S. cardiology societies. Specifically, SGLT2 inhibitors received the top endorsement for the prevention of heart failure in patients with a high cardiovascular risk. For the treatment of symptomatic heart failure, SGLT2 inhibitors were adopted as a standard of care for heart failure with reduced ejection fraction and received a stronger recommendation than any other class of therapy for heart failure with mildly reduced injection fraction and heart failure with preserved ejection fraction. The United States guidelines also highlighted the need to improve optimization of medical therapies during heart failure hospitalizations when changing therapy can have a long-term benefit to patients. This particular point A treatment intervention was the focus of our soloist recent heart failure study, which was cited in the guidelines. I want to provide a quick update to LX9 on the next slide, LX9211, which is our selective inhibitor of AAK1. We believe that LX9211 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. We made significant progress over the last few months in our two ongoing phase two proof of concept studies and expect top line results in the near term. For relief DPN, our study in diabetic peripheral neuropathic pain, I am pleased to report that we have completed enrollment and the final patients are now reaching the end of their treatment periods. I can also report that we exceeded our patient number goal for the study, and we expect to report top-line results by the end of June 2022. For relief PHN, our study in post-hepatic neuralgia, we continue to enroll patients and expect to report top-line results in the third quarter of 2022. With that, I'd like to invite Jeff to take us through the financial results for the first quarter of 2022. Jeff? Thank you, Lionel.