Lexicon Pharmaceuticals, Inc.

Welcome to the Lexicon Pharmaceuticals fourth quarter 2024 financial results conference call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we will hold a brief question and answer session. As a reminder, this call is being recorded today, March 6, 2025. I will now turn the call over to Lisa DeFrancesco, SVP, Investor Relations, and Corporate Communications for Lexicon. Please go ahead, Lisa.

Thank you, Gigi. Good afternoon and welcome to the Lexicon Pharmaceuticals fourth quarter and full year 2024 financial results conference call. Joining me today for prepared remarks are Dr. Mike Exton, Lexicon's Chief Executive Officer and Director, and Scott Chianti, Senior Vice President and Chief Financial Officer. Dr. Craig Granowitz, Senior Vice President and Chief Medical Officer will also join us for Q&A. Earlier this afternoon, Lexicon issued a press release announcing our financial results for the fourth quarter of 2024, which are available on our website at www.lexpharma.com and through our SEC filings. A webcast of this call, along with a slide presentation, is also available on our website. During this call, we will review the 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 related to safety, efficacy, clinical development, regulatory status, and therapeutic and commercial potential of pilobapidin, LX9851, sodagliflozin, and our other drug programs, as well as our business generally. These statements may also include characterizations and projections relating to the clinical development, regulatory status, and market opportunity for our drug programs, and the commercial performance of Inpefa for heart failure. This call may also contain forward-looking statements related 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, and we refer you to our most recent annual report on Form 10-K and other SEC filings for detailed information describing such risks. I would now like to turn the call over to Mike Exton. Mike?

Hey, great. Thanks, Lisa, and good afternoon, everyone. Thanks for joining the call. Look, we've had a busy start to 2025 already, including our announcement on Monday of top-line results from our progress phase 2b study of pilavapidin in diabetic peripheral neuropathic pain, or DPNP. But as we take a moment to look back and reflect on 2024, I'm immensely proud of the resilience and adaptability of the team in keeping our pipeline of novel medicines moving forward and advancing our lead to succeed strategy. Last year, we strategically repositioned Lexicon to focus the company and its resources on our clinical development programs. And some key highlights from these programs included the early completion of enrollment for our progress study, Great progress in our pivotal phase three Sonata HCM study of Sotagliflozin in hypertrophic cardiomyopathy, HCM, where we continue to enroll patients as planned. Advancing IND enabling studies of LX9851 in obesity and related cardiovascular disorders. And lastly, we reinvigorated our business development efforts, including a significant licensing agreement with Beatrice for Sotagliflozin outside of the US and Europe. Now, I want to begin today's overview with our most recent significant development. On Monday, we issued a press release and held a conference call to discuss the top-line results for PROGRESS, the Phase 2b dose-finding study of pilobapidin, our oral non-opioid drug candidate for DPMP. Now, the two most important takeaways from our top-line announcement this week are, first, in all doses in the PROGRESS study, including placebo, we observed a clear separation in ADPS from baseline with a 10 milligram dose also showing meaningful improvement compared to placebo. Secondly, all pilavapidin treated arms showed improved tolerability when compared with our previous relief DPN study. Indeed, the 10 milligram dose of pilavapidin showed particularly better tolerability as compared to relief. And for these reasons, we successfully achieved our corporate objectives for progress with the 10 milligram dose. And so these data in combination with the data from the release study give us greater confidence in the potential of pilobapidin to be the first novel oral non-opioid DPNP medication in more than two decades. And we're moving forward with a 10 milligram dose. As you can see in this slide, pilobapidin 10 milligrams performed strongly improving ADPS at week eight, reducing it by 1.74 points from baseline. Now, as we continue to analyze the data, there are already signals that give us even greater confidence to advance the 10 milligram dose in the pivotal trials. Pooling the two arms that utilize 10 milligrams, the 10 milligram dose plus the 20 plus 10 arm, This POCOC analysis shows an approximately 0.6 ADPS reduction versus placebo as early as week two, which is maintained throughout the treatment period. Interestingly, while the pain reduction curve of the placebo arm appears to flatten out in the last four weeks of the trial, the 10 milligram dose continues to consistently reduce ADPS scores, suggesting that in pivotal trials of 12 weeks duration, further separation may be achievable. Furthermore, as we outlined on Monday, the 10 milligram dose was well tolerated. In progress, as many patients with 10 milligram pilavapidin as with placebo completed the trial, conclusively ascribing the tolerability performance in the previous relief study to the day one 10-fold loading dose. This gives us confidence in the tolerability of 10 milligrams of pilavapidin in phase three trials. We continue to analyze further data and look forward to presenting the full findings from the progress study at a future medical meeting. So now I want to talk about what pilavapidin can potentially mean for patients. DPNP is a large and growing condition that impacts approximately 9 million people in the US. It's a chronic and progressive pain disorder that severely impairs people's quality of life, with the majority of patients experiencing moderate to severe pain. When we speak with patients and physicians, it's truly devastating to hear how it impacts their everyday life, their ability to sleep at night, their mental health and their relationships. CPNP can also lead to loss of sensation, loss of balance, falls and fractures and a wealth of other complications. But importantly, currently available treatments simply don't provide adequate relief. It's estimated about 60% of patients have tried multiple therapies, and only a third are somewhat satisfied with their treatment. Now, market research, we heard numerous HCPs and patients report an immense need for new treatment options. And in particular, a simple, easy to use non-opioid treatment options for DPNP. And finally, with about a third of DPNP patients still resorting to short-term opioid use for pain relief, even today, when we know the potentially devastating effects of these treatments, This space is primed for reform. HCPs, legislators, and policymakers, via initiatives such as the Alternative to Pain Act, provide tailwinds to support movement towards new non-opioid options. Next, I'd like to discuss LX9851, where we are continuing to advance IND enabling studies. LX9851 is our first-in-class oral ACSL5 inhibitor, for the treatment of obesity and related cardiometabolic disorders. In November, we presented clinical in vivo efficacy data from two studies related to LX9851 at obesity week. The first study showed the treatment with LX9851 resulted in significant reductions in weight, food intake, and fat mass in diet-induced obese mice, and that LX9851 mitigated weight regain following discontinuation of the GLP-1 analog semaglutide. The second study characterized the novel mechanism of action of LX9851 and how it activates the ileal break to induce satiety and lower desire for additional food consumption. We remain on track for an IND submission for LX9851 in 2025 as we evaluate potential partnership opportunities for this innovative mechanism. So now I want to briefly touch on the current status of Sotagliflozin. We have a significant potential opportunity to expand our label in hypertrophic cardiomyopathy, a disease state with high unmet need that impacts about 1 million patients in the US. We're currently enrolling Sonata HCM, a global pivotal phase three study, including patients with both obstructive and non-obstructive HCM. Upon completion of the HCM study with additional evidence and data in hand, we will revisit the totality of the Sotagliflozin asset potential in the U.S. In terms of what we're doing today, though, as we bridge to this future opportunity, as you can recall, we made the necessary decision to cease all promotion of IMPEFA in the U.S. for heart failure due to the difficult market access environment dominated by two major SGLT2 inhibitors. Currently, Sotagliflozin is available on the U.S. market with our continued commitment to maintain awareness and provide tools to support patients in an extremely cost-effective approach. Outside of the US and Europe, we're actively working with our exclusive licensee, Vietris, on supporting their efforts towards registration and regional development. Our medical affairs, data generation, and publication activities remain ongoing, and we continue to engage with the scientific community through numerous investigator-initiated third-party funded studies to build upon our compelling body of medical evidence in CV conditions and outcomes and support Sotagliflozin as a differentiated inhibitor of both SGLT1 and 2. Now, to that end, I wanted to briefly acknowledge a notable recent publication in the Lancet Diabetes and Endocrinology, which highlighted the effects of Sotagliflozin to reduce major adverse cardiovascular events, or MACE. myocardial infarction, and stroke among patients with type 2 diabetes, chronic kidney disease, and high cardiovascular risk. The findings show that sotagliflozin significantly and meaningfully reduces MACE versus placebo, demonstrating early and broad cardiovascular protection in this population. This research also highlighted that sotagliflozin is the only SGLT inhibitor to show significant reductions in both MI and stroke. indicating the potential role of SGLT1 inhibition in reducing ischemic events, an important distinction from selective SGLT2 inhibitors. As I shared just a moment ago, this supports our goal of demonstrating differentiation of Sotagliflozin and presents compelling additional support as Beatrice on regulatory submissions in key ex-US and ex-European markets throughout 2025. I'll now turn it over to Scott to walk you through our financial results for the quarter, and the year ended December 31, 2024.