On March 13, 2019 ArQule, Inc. (Nasdaq: ARQL) reported that Peter Lawrence, President and Chief Operating Officer, and Brian Schwartz, MD, Chief Medical Officer and Head of Research and Development, of ArQule will present at Oppenheimer’s 29th Annual Healthcare Conference on March 20, 2019 at 10:20 a.m. ET at the Westin New York Grand Central in New York City (Press release, ArQule, MAR 13, 2019, View Source [SID1234534276]).

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The live webcast of the presentation will be available via the "Investors & Media" section of ArQule’s website, www.arqule.com, under "Events & Presentations." A replay of the webcast will be available shortly after the conclusion of the presentation.

On March 13, 2019 Sophiris Bio Inc. (NASDAQ: SPHS) (the "Company," "We" or "Sophiris"), a biopharmaceutical company developing topsalysin (PRX302), a first-in-class, pore-forming protein, in late-stage clinical trials for the treatment of patients with urological diseases, today reported financial results for the fourth quarter and full year 2018 and recent corporate highlights (Press release, Sophiris Bio, MAR 13, 2019, View Source [SID1234534299]).

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"During the past year, Sophiris has made important progress in determining the ideal method for topsalysin administration as a focal treatment for localized prostate cancer," said Randall E. Woods, president and CEO of Sophiris. "The Phase 2b study provided a compelling look at this potential, showing that a single administration of topsalysin led to a clinical response in 27% of patients, including a complete ablation of tumor in 16% of patients. Our investigators have also noted that a drug capable of delaying or obviating the need for radical therapy in nearly a third of the patient population with the potential safety profile that we have seen to date could be very attractive for patients with localized intermediate risk prostate cancer."

Allison Hulme, Ph.D., chief operating officer and head of R&D for Sophiris, added: "In recent weeks we have made significant progress on a key next step for the development of topsalysin: the development of a Phase 3 protocol for localized prostate cancer. Based on both the efficacy and the encouraging safety data from our Phase 2 program and the invaluable input from our Scientific Advisory Board who are supportive of our continuing development of topsalysin as a focal therapy, we have finalized a proposed Phase 3 design and initiated the process of obtaining formal scientific advice from the European Medicines Agency (EMA). We are on track to obtain feedback from the EMA in the first half of this year."

Woods added, "In addition to working with regulatory authorities to determine the potential path to market, we have been actively pursuing options to move topsalysin into the final stages of clinical development, and we currently believe that the ideal funding option will either be a potential development partnership or other strategic transaction. We have also re-prioritized some development activities enabling us to extend our cash runway through the third quarter of this year."

Recent Corporate Highlights:

Completion of Phase 2b trial in localized prostate cancer. In December, we provided top-line data from patients who received a second administration of topsalysin in the trial. Eleven of the 37 patients evaluated six months after receiving a single administration of topsalysin went on to receive a second administration. It was determined that both the first and the second administration of topsalysin continue to appear safe and well-tolerated by patients. There were no adverse events considered related to topsalysin that were experienced by more than one patient following the second administration. Importantly, a total of 27% of patients (10/37) demonstrated a clinical response six months following the first administration of topsalysin. Six of the ten clinical responders experienced a complete ablation of their tumor with no remaining tumor detected following a targeted biopsy of the treated area.
Preparations for Phase 3 trial in localized prostate cancer. We, along with our Scientific Advisory Board and our other scientific advisors, believe that the data generated in the single-administration portion of the Phase 2b prostate cancer study supports the advancement of the program into a single Phase 3 pivotal trial. Currently, we have initiated formal scientific advice with EMA and in the coming weeks plan to initiate dialog with the U.S. Food and Drug Administration on the single confirmatory Phase 3 design.
Completion of topsalysin drug substance manufacturing. We recently completed the manufacture of a batch of topsalysin drug substance, which is planned for use in the upcoming Phase 3 confirmatory study in localized prostate cancer.
Funding of future development of topsalysin. The management team remains focused on determining the best path forward for funding future clinical development for topsalysin and continues to engage in strategic discussions as part of this effort.
Financial Results:

At December 31, 2018, the Company had cash, cash equivalents and securities available-for-sale of $12.5 million and working capital of $8.2 million. The Company expects that its existing cash and cash equivalents will be sufficient to fund its operations through September 2019, assuming no new clinical trials are initiated and the Company continues operating as a going concern. The Company will require significant additional funding to advance topsalysin in clinical development. As of December 31, 2018, the outstanding principal balance of the Company’s term loan was $7 million on which the Company is currently making monthly interest only payments and is scheduled to begin making principal payments in April 2019.

For the three months ended December 31, 2018

The Company reported a net income of $5.5 million or $0.18 per share for the three months ended December 31, 2018, compared to net loss of $4.0 million or ($0.13) per share for the three months ended December 31, 2017. The net income for the three months ended December 31, 2018 was driven by a non-cash gain related to the revaluation of the Company’s warrant liability.

Research and development expenses

Research and development expenses were $2.0 million for the three months ended December 31, 2018, compared to $1.9 million for the three months ended December 31, 2017. The increase in research and development costs was primarily attributable to increases in the costs associated with manufacturing activities for topsalysin offset in part by a decrease in personnel related costs.

General and administrative expenses

General and administrative expenses were $0.9 million for the three months ended December 31, 2018, compared to $1.3 million for the three months ended December 31, 2017. The decrease in general and administrative expense was primarily due to decreases in personnel related expenses and marketing research activities.

Gain (loss) on revaluation of the warrant liability

Gain on revaluation of the warrant liability was $8.5 million for the three months ended December 31, 2018, compared to a loss on the revaluation of the warrant liability of $0.6 million for the three months ended December 31, 2017. The Company’s outstanding warrants may require it to pay the warrant holder cash under certain provisions of the warrant therefore the Company accounts for these warrants as a liability, and the Company is required to calculate the fair value of these warrants each reporting date. The non-cash gain reported for the three months ended December 31, 2018, was associated with a decrease in the fair value of the Company’s warrant liability from September 30, 2018 to December 31, 2018, which is calculated using a Black-Scholes pricing model. The decrease in the fair market value of the Company’s warrant liability was directly related to a decrease in the Company’s stock price from September 30, 2018 to December 31, 2018. Certain inputs utilized in the Company’s Black-Scholes fair value calculation may fluctuate in future periods based upon factors which are outside of the Company’s control. A significant change in one or more of these inputs used in the calculation of the fair value may cause a significant change to the fair value of the Company’s warrant liability, which could also result in a material non-cash gain or loss being reported in the Company’s consolidated statement of operations and comprehensive loss.

For the year ended December 31, 2018

The Company reported a net loss of $6.8 million or ($0.23) per share for the year ended December 31, 2018 compared to a net loss of $8.6 million or ($0.29) per share for the year ended December 31, 2017.

Research and development expenses

Research and development expenses were $10.7 million for the year ended December 31, 2018 compared to $6.2 million for the year ended December 31, 2017. The increase in research and development costs was primarily attributable to increases in the costs associated with manufacturing activities for topsalysin.

General and administrative expenses

General and administrative expenses were $4.4 million for the year ended December 31, 2018 compared to $5.7 million for the year ended December 31, 2017. The decrease in general and administrative expense was primarily due to decreases in non-cash stock-based compensation expense, marketing research activities and its personnel related costs.

Gain on revaluation of the warrant liability

Gain on revaluation of the warrant liability was $8.7 million for the year ended December 31, 2018 as compared to a gain of $3.3 million for the year ended December 31, 2017. The non-cash gain is associated with the change in the fair value of our warrant liability which was calculated using a Black-Scholes pricing model.

On March 13, 2019 MorphoSys Presents Results for Fiscal Year 2018 (Press release, MorphoSys, MAR 13, 2019, View Source [SID1234534320]).

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Conference call and webcast (in English) tomorrow, March 14, 2019 at 2:00pm CET (1:00pm GMT/9:00am EDT)

Highlights in R&D and corporate development

– Interim data from all patients enrolled in ongoing L-MIND trial of MOR208 in combination with lenalidomide in relapsed/refractory DLBCL confirm activity suggested by earlier data cuts

– Productive discussions with FDA regarding path to approval for MOR208 based on L-MIND trial as potential therapy for aggressive lymphoma (DLBCL) under existing breakthrough therapy designation

– MorphoSys US Inc. established in July 2018 to build commercial capabilities in the U.S.

– Global license agreement with Novartis for MOR106 signed in July 2018

– Pivotal clinical trials announced by GSK for MOR103 in rheumatoid arthritis and by I-Mab for MOR202 in multiple myeloma expected to start in 2019

– Tremfya(R) development expanded by pivotal studies in Crohn’s disease and pediatric psoriasis; further country approvals and U.S. FDA approval for Tremfya(R) OnePress self-injection device achieved

Financial highlights

– Revenues 2018 up 14% to EUR 76.4 million compared to 2017 (guidance EUR 67 to 72 million)

– EBIT loss 2018 as expected at EUR -59.1 million (guidance EUR -55 to -65 million)

– Proprietary R&D expenses 2018 of EUR 98.3 million (guidance EUR 87 to 97 million)

– Tremfya(R) royalty revenues increased from EUR 1.9 million in 2017 to EUR 15.4 million in 2018 (royalty income for 2018 negatively affected by EUR 1.7 million due to contractually triggered currency conversion effect)

– U.S. Nasdaq listing and a capital increase with total gross proceeds of USD 239.0 million closed in April 2018

– EUR 454.7 million cash at year-end 2018 (December 31, 2017: EUR 312.2 million)

MorphoSys AG (FSE: MOR; Prime Standard Segment, MDAX & TecDAX; NASDAQ: MOR) reports results for the financial year 2018 and provides a financial and operational outlook for 2019.

"The year 2018 was an outstanding one for MorphoSys. Our achievements in R&D, corporate development and in strengthening the company’s finances combine to take us significantly closer to our objective of making MorphoSys a fully integrated biopharmaceutical company," said Dr. Simon Moroney, Chief Executive Officer of MorphoSys AG. "We are very encouraged by our most recent clinical data from the ongoing L-MIND study of MOR208 in combination with lenalidomide in relapsed or refractory diffuse large B-cell lymphoma (DLBCL). Pursuing the potential opportunity to bring MOR208 to market to help patients suffering from this particularly aggressive form of cancer is our top priority and we look forward to continuing our fruitful interactions with FDA with this goal in mind."

"We also made excellent progress elsewhere in our Proprietary Development segment, with licensing deals for MOR106 and MOR210 and encouraging advances with MOR202 and MOR103. The highlight in our Partnered Discovery segment was the commercial success of Janssen’s Tremfya(R)", Dr. Moroney continued.

"MorphoSys is financially and operationally in excellent shape. Based on our solid financial position, which we successfully strengthened in 2018 through our Nasdaq IPO, an attractive partnership with Novartis for MOR106 and an increasing royalty stream from Tremfya(R) product sales, we are well-positioned to continue the advancement of our pipeline products. In particular, we aim to drive our lead program MOR208 towards the market and build our commercial capabilities in the United States in preparation for a potential commercialization of MOR208, subject to FDA approval," said Jens Holstein, Chief Financial Officer of MorphoSys AG.

Financial Review for the Fiscal Year 2018 (IFRS)

In 2018, MorphoSys continued to focus on applying its proprietary technology and expertise to the research and development of innovative drug candidates, both for partners and for its own account. Group revenues for 2018 increased 14% to EUR 76.4 million (2017: EUR 66.8 million). Revenues for 2018 include EUR 19.3 million for success-based payments received primarily from Janssen (2017: EUR 7.3 million) including royalties on net sales of Tremfya(R) amounting to EUR 15.4 million for 2018 (2017: EUR 1.9 million). Due to a contractually triggered currency conversion effect, the Tremfya(R) royalty revenue for 2018 was lowered by EUR 1.7 million.

In its Proprietary Development segment, MorphoSys focuses on the research and clinical development of its own drug candidates. In 2018, this segment recorded revenues of EUR 53.6 million (2017: EUR 17.6 million), mainly due to the upfront payment of EUR 47.5 million received from Novartis in connection with a global licensing agreement for MOR106.

In the Partnered Discovery segment, MorphoSys applies its proprietary technology to the discovery of new drug candidates for pharmaceutical companies, benefiting through R&D funding, licensing fees, success-based milestone payments and royalties. Revenue in the Partnered Discovery segment decreased from EUR 49.2 million in 2017 to EUR 22.8 million in 2018. The decrease was primarily driven by the contractual ending, as planned, of the active collaboration agreement with Novartis at the end of November 2017. The segment revenue for 2018 included EUR 3.5 million for funded research and license fees (2017: EUR 41.9 million) as well as EUR 19.3 million for success-based payments received primarily from Janssen (2017: EUR 7.3 million).

Total operating expenses increased slightly from EUR 133.8 million in 2017 to EUR 136.5 million in 2018, mainly due to higher selling and administrative expenses. In 2018, research and development expenses decreased by 6% to EUR 106.4 million (2017: EUR 113.3 million), primarily due to the ending of the Novartis collaboration in November 2017. Expenses for proprietary R&D, including technology development, increased by 2%, or EUR 2.0 million, from EUR 96.3 million in 2017 to EUR 98.3 million in 2018, mainly due to higher research and development expenses for MOR208. To reflect the build-up of commercial structures for MOR208 in the U.S. initiated in July 2018, MorphoSys started presenting "selling expenses" as a separate line item on January 1, 2018. In 2018, selling expenses amounted to EUR 6.4 million (2017: EUR 4.8 million). Splitting out selling expenses led to a change in the presentation of research and development expenses and general and administrative expenses for 2017, which were reduced by EUR 3.5 million and EUR 1.3 million, respectively. General and administrative expenses increased by 39% from EUR 15.7 million in 2017 to EUR 21.9 million in 2018 mainly due to higher personnel expenses as well as costs for external services, primarily related to the Nasdaq listing that took place in April 2018.

Earnings before interest and taxes (EBIT) amounted to EUR -59.1 million (2017: EUR -67.6 million) in line with the updated guidance from September 2018 (EUR -55 to -65 million). The Proprietary Development segment reported an EBIT of EUR -53.3 million (2017: EUR -81.3 million). EBIT in the Partnered Discovery segment was EUR 13.3 million (2017: EUR 30.3 million). In 2018, the consolidated net loss amounted to EUR -56.2 million (2017: EUR -69.8 million). The loss per share for 2018 was EUR -1.79 (2017: EUR -2.41).

At year-end 2018, the Company had EUR 454.7 million in cash, reported on the balance sheet, due to the adoption of IFRS 9 "Financial Instruments", under the line items "cash and cash equivalents"; "financial assets at fair value through profit or loss"; and current and non-current "other financial assets at amortized cost". In the previous year, this position had comprised the line items "cash and cash equivalents", "available-for-sale financial assets"; and current "financial assets classified as loans & receivables" and amounted to EUR 312.2 million as of December 31, 2017. The number of shares issued totaled 31,839,572 at year-end 2018 (year-end 2017: 29,420,785).

Financial Guidance and Operational Outlook for 2019

For the financial year 2019, MorphoSys will continue to invest strongly in the development of its proprietary candidates, with the primary goal of driving MOR208 to market and preparing the Company for its commercialization. Revenues in the 2019 financial year are expected to be below those achieved in 2018, mainly due to a positive one-time payment of EUR 47.5 million in 2018 in connection with a global licensing deal for MOR106. For 2019, MorphoSys expects to generate Group revenues in the range of EUR 43 to 50 million. Revenues are expected to include royalty income from Tremfya(R) of between EUR 23 and 30 million at constant exchange rate to the US dollar. Expenses for proprietary R&D are anticipated in a corridor of EUR 95 to 105 million. The Company expects earnings before interest and taxes (EBIT) of EUR -127 to -137 million. This guidance does not include a potential larger milestone for the start of a phase 3 clinical trial for MOR103/GSK3196165 that could occur in the course of 2019. The guidance also does not include revenues from potential future partnership or licensing agreements for MOR208 or any other compound that is in MorphoSys’s proprietary development. Effects from potential in-licensing or co-development deals for new development candidates are also not included in the guidance.

In its Proprietary Development segment, MorphoSys expects the following events and activities in 2019:

– MOR208

– L-MIND: Complete data evaluation for primary completion analysis for all 81 patients enrolled under the current study protocol of the fully recruited L-MIND trial in r/r DLBCL and present the results at an upcoming scientific conference.

– Regulatory: Complete the submission of the Biologics License Application (BLA) to U.S. FDA for MOR208 by year-end.

– B-MIND: Continue the pivotal phase 3 study evaluating MOR208 plus bendamustine versus rituximab plus bendamustine in r/r DLBCL and conduct a pre-planned, event-driven, interim analysis of B-MIND, which is projected to take place in the second half of 2019.

– COSMOS: Continue the phase 2 trial of MOR208 plus idelalisib or venetoclax in CLL/SLL and present data.

– Front-line DLBCL: Initiate phase 1b trial with MOR208 in 1st line DLBCL in H2 2019.

– Commercial activities: Continue the set-up of commercial capabilities in the U.S. in order to prepare for expected commercialization of MOR208, assuming FDA approval.

– MOR202

– MorphoSys: Prepare for and start an exploratory clinical trial of MOR202 in an autoimmune indication.

– I-Mab: MorphoSys expects I-Mab to commence a pivotal development program with MOR202 in multiple myeloma in the Chinese region in 2019. A first study in China and Taiwan is expected to start soon.

– MOR106

– Continue phase 2 intravenous IGUANA study and phase 1 subcutaneous bridging study towards primary completion (program runs under a global licensing agreement with Novartis).

– Prepare for and initiate additional clinical studies in atopic dermatitis.

– MOR107: Continue preclinical investigation of MOR107 with a focus on oncology indications.

– MOR103/GSK3196165: Based on announcements made by GSK earlier this year, the initiation of a phase 3 development of MOR103/GSK3196165 in rheumatoid arthritis by GSK is expected for the second half of 2019 and could trigger a respective milestone payment.

In its Partnered Discovery segment, MorphoSys expects the following events in 2019:

According to information provided on clinicaltrials.gov, by the end of 2019 primary completion may be reached in up to 15 clinical trials in phases 2 and 3 from partners evaluating antibodies made using MorphoSys’s technology. This includes a potentially pivotal phase 2b study by Mereo Pharma in osteogenesis imperfecta (brittle bone syndrome) of the HuCAL antibody setrusumab (BSP804) directed against the target molecule sclerostin and generated within the scope of the Novartis partnership. Phase 3 trials with Tremfya(R) conducted by Janssen in psoriasis and in psoriatic arthritis are also scheduled for primary completion in 2019. Whether, when and to what extent news will be published following the primary completion of trials in the Partnered Discovery segment is at the full discretion of MorphoSys’s partners.

MorphoSys will continue to support its proprietary development activities by evaluating potential in-licensing, co-development, and/or acquisition opportunities or the potential initiation of new proprietary development programs with the goal of maintaining and expanding the Company’s position in its current therapeutic and technological fields of activities.

MorphoSys Group Key Figures (IFRS, end of financial year: December 31)

in EUR million 2018 2017 Change Q4/2018 Q4/2017 Change

Revenues 76.4 66.8 +14% 10.5 28.2 (63%)
Total operating expenses (136.5) (133.8) +2% (56.5) (41.3) +37%
Cost of sales (1.8) 0 n/a (0.9) 0 n/a
R&D expenses (106.4) (113.3) (6%) (45.4) (34.1) +33%
thereof expenses for proprietary R&D and technology development (98.3) (96.3) +2% (43.2) (29.2) +48%
Selling expenses (6.4) (4.8) +33% (2.8) (3.0) (7%)
G&A expenses (21.9) (15.7) +39% (7.4) (4.1) +80%
Other income/expense 1.0 (0.6) >(100%) 0 (0.7) (100%)
EBIT (59.1) (67.6) (13%) (46.1) (13.8) >+100%
Net profit / (loss) (56.2) (69.8) (19%) (43.4) (14.7) >+100%
Net profit / (loss) per share (in EUR) (1.79) (2.41) (26%) (1.37) (0.51) >+100%
Cash position (end of period) 454.7 312.2 +46% 454.7 312.2 +46%
Equity ratio (end of period) (in %) 91% 86% +5 PP* 91% 86% +5 PP*
No of R&D programs (end of period) 115 114 +1% 115 114 +1%
No of clinical programs (end of period)** 29 28 +4% 29 28 +4%
No of proprietary clinical programs (end of period)*** 5 5 - 5 5 -
* Percentage point
** Including MOR107, which concluded a phase 1 study in 2017 and is currently in preclinical investigation with a focus on oncology indications. Tremfya(R) is still considered as a clinical program due to ongoing studies in various indications.
*** Including MOR103/GSK3196165, which is fully out-licensed to GSK and MOR106, for which MorphoSys and Galapagos have signed a global licensing agreement with Novartis.

MorphoSys will hold its conference call and webcast tomorrow, March 14, 2019 to present the annual financial results 2018 and the outlook 2019.

Dial-in number for the analyst conference call (in English) at 2:00pm CET; 1:00pm GMT; 9:00am EDT (listen-only):

Germany: +49 69 201 744 220

For UK residents: +44 203 009 2470

For US residents: +1 877 423 0830

Participant PIN: 88207738#

Please dial in 10 minutes before the beginning of the conference.

A live webcast and slides will be made available at View Source

Approximately two hours after the call, a slide-synchronized audio replay of the conference and a transcript will be available on View Source

Consolidated Financial Statements 2018 (IFRS) are available for download at: View Source

On March 13, 2019 Scholar Rock presented a perentation named "From New Insights To New Medicines" (Press release, Scholar Rock, MAR 13, 2019, View Source [SID1234534319]).

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On March 13, 2019 Lexicon Pharmaceuticals, Inc. (Nasdaq: LXRX), reported financial results for the three months and full-year ended December 31, 2018 and provided a business update (Press release, Lexicon Pharmaceuticals, MAR 13, 2019, View Source [SID1234534256]).

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"In 2018, we achieved continued growth in XERMELO net sales and executed well against our strategic priorities," said Lonnel Coats, Lexicon’s president and chief executive officer. "We made significant progress on our pipeline, which included Sanofi’s submission of marketing applications for sotagliflozin in type 1 diabetes in the U.S. and Europe as well as advancement of our earlier-stage product candidates, LX2761 in diabetes and LX9211 in neuropathic pain. In 2019, our focus remains on creating long-term value for the company by executing on our strategic and financial objectives."

Fourth Quarter and Full-Year 2018 Product and Pipeline Highlights

XERMELO (telotristat ethyl) 250 mg

•
XERMELO U.S. net sales reached $25.0 million in 2018.
•
XERMELO received national reimbursement approval in Scotland, Denmark, Sweden, Greece, Luxemburg, Northern Ireland, Wales, Germany, Belgium and the Netherlands for the treatment of carcinoid syndrome diarrhea in combination with somatostatin analog (SSA) therapy in adults inadequately controlled by SSA therapy.
•
Positive analyses on time to sustained improvement in bowel movement frequency with XERMELO were presented at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper)’s Gastrointestinal Cancers Symposium (ASCO GI) and the European Neuroendocrine Tumor Society Conference (ENETS).
•
Favorable changes in weight in patients on XERMELO with neuroendocrine tumors (NETs) and carcinoid syndrome who participated in the TELESTAR study along with biochemical and metabolic improvements in diarrhea severity and nutritional status were published in Clinical Therapeutics.

Sotagliflozin
Type 1 Diabetes

•
Additional positive 52-week data from the pivotal inTandem1 and inTandem2 studies for sotagliflozin in type 1 diabetes were presented at the 78th annual American Diabetes Association Scientific Sessions (ADA) and the European Association for the Study of Diabetes (EASD) 54th annual meeting and published in Diabetes Care.
•
Lexicon’s collaborator, Sanofi, submitted a New Drug Application (NDA) and a Marketing Authorization Application (MAA) for sotagliflozin in type 1 diabetes and the regulatory filings were accepted by the Food and Drug Administration (FDA) and European Medicines Agency (EMA), respectively.

o
On January 17, 2019, the FDA Endocrinologic and Metabolic Drugs Advisory Committee voted eight to eight on the question of whether the overall benefits of sotagliflozin outweighed the risks to support approval in type 1 diabetes.
o
On February 28, 2019, the EMA Committee for Medicinal Products for Human Use adopted a positive opinion recommending regulatory approval of sotagliflozin for use as an adjunct to insulin therapy to improve glycemic control in adults with type 1 diabetes with a body mass index of 27 kg/m2 or greater, who have failed to achieve adequate glycemic control despite optimal insulin therapy.
o
A target FDA action date under the Prescription Drug User Fee Act (PDUFA) is set for March 22, 2019 and a regulatory decision by the European Commission is expected in Q2 2019.

Type 2 Diabetes

•
Patient enrollment continued for eleven Phase 3 sotagliflozin clinical trials in type 2 diabetes being conducted by Sanofi.
•
Patient enrollment was completed in the nine Phase 3 clinical trials that support the planned filings for regulatory approval of sotagliflozin in type 2 diabetes.
•
Sanofi initiated two additional Phase 3 studies for sotagliflozin in Chinese patients with type 2 diabetes (NCT03760965, NCT03761134).

LX2761

•
Lexicon announced topline results from Phase 1 clinical studies of LX2761, an orally-administered, selective sodium-glucose cotransporter type 1 (SGLT1) inhibitor, in healthy subjects and patients with type 2 diabetes that confirmed the drug’s unique preclinical profile as a potent gastrointestinal tract-selective SGLT1 inhibitor.

LX9211

•
Lexicon announced positive topline results from a Phase 1a clinical study of LX9211, an orally-administered, selective adapter-associated kinase 1 (AAK1) inhibitor that is being developed for neuropathic pain. The Phase 1a study met its primary objectives, identifying a maximum tolerated dose and demonstrating a safety and tolerability profile in healthy human subjects supporting progression of the clinical program.

Fourth Quarter and Full-Year 2018 Financial Highlights

Unless otherwise stated, all comparisons are for the fourth quarter and full year of 2018 compared to the fourth quarter and full year of 2017.

Revenues: Revenues for the fourth quarter decreased to $17.1 million from $34.0 million for the corresponding period in 2017, primarily due to lower revenues recognized under collaboration and license agreements. Full-year 2018 revenues decreased to $63.2 million from $91.7 million, primarily due to timing of revenues recognized from clinical trial activities under the collaboration and license agreements with Sanofi and decreases in milestone payments from Ipsen, partially offset by an increase in net product revenue. Net product revenues for full-year 2018 included $25.0 million and $1.6 million, respectively, from net sales of XERMELO in the U.S. and the sale of bulk tablets to Lexicon’s collaborator, Ipsen.

Cost of Sales: Cost of sales related to sales of XERMELO was $0.6 million and $0.5 million, respectively, for the fourth quarter of 2018 and 2017. Full-year 2018 and 2017 cost of sales was $2.5 million and $1.9 million, respectively.

Research and Development (R&D) Expenses: Research and development expenses for the fourth quarter decreased to $12.3 million from $46.3 million for the corresponding period in 2017, primarily due to decreases in our external clinical development costs relating to sotagliflozin. Full-year 2018 R&D expenses decreased to $100.2 million from $152.2 million, primarily due to lower external clinical development costs relating to sotagliflozin and professional and consulting fees.

Selling, General and Administrative (SG&A) Expenses: Selling, general and administrative expenses for the fourth quarter were $16.6 million compared to $16.1 million for the same period in 2017. Full-year 2018 SG&A expenses decreased to $63.8 million from $66.1 million, primarily due to lower salaries and benefits, and decreased marketing costs.

Income Tax Benefit: During 2018, there was no income tax benefit. During 2017, Lexicon recognized an $8.7 million income tax benefit when the intangible assets relating to XERMELO were reclassified from indefinite-lived to finite-lived assets. The income tax benefit was remeasured to $12.7 million for full year 2017.

Net Loss: Net loss for the fourth quarter was $16.8 million, or $0.16 per share, compared to a net loss of $26.6 million, or $0.25 per share, in the corresponding period in 2017. For the fourth quarter 2018, net loss included non-cash, stock-based compensation expense of $2.8 million. For the fourth quarter 2017, net loss included non-cash, stock-based compensation expense of $2.3 million. Net loss for the full-year 2018 was $120.5 million, or $1.14 per share, compared to a net loss of $123.0 million, or $1.17 per share, in 2017. For the full-year 2018, net loss included non-cash, stock-based compensation expense of $11.7 million. For the full-year 2017, net loss included non-cash, stock-based compensation expense of $9.5 million.

Cash and Investments: As of December 31, 2018, Lexicon had $160.1 million in cash and investments, as compared to $310.8 million as of December 31, 2017.

Anticipated Upcoming Milestones

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Q1 2019 – Manuscript publications for XERMELO in carcinoid syndrome diarrhea
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Q1 2019 – Initiation of a Phase 1b study for LX9211
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March 22, 2019 – PDUFA date for sotagliflozin in type 1 diabetes in the U.S.
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Q2 2019 – European Commission decision on marketing application for sotagliflozin in type 1 diabetes in the EU
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June, September 2019 – Presentation of new analyses from pivotal studies of sotagliflozin in type 1 diabetes at the annual ADA and EASD meetings
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2H 2019 – Topline Phase 1b data for LX9211
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2019 – Topline data from core Phase 3 studies for sotagliflozin in type 2 diabetes
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2019 – Patient enrollment in a Phase 2 study for telotristat ethyl in biliary tract cancer

Conference Call and Webcast Information

Lexicon management will hold a live conference call and webcast today at 8:00 am EDT / 7:00 am CDT to review its financial and operating results and to provide a general business update. The dial-in number for the conference call is 888-645-5785 (U.S./Canada) or 970-300-1531 (international). The conference ID for all callers is 6598765. The live webcast and replay may be accessed by visiting Lexicon’s website at www.lexpharma.com/investors. An archived version of the webcast will be available on the website for 14 days.

About XERMELO (telotristat ethyl)

Discovered using Lexicon’s unique approach to gene science, XERMELO (telotristat ethyl) is the first and only approved oral therapy for carcinoid syndrome diarrhea in combination with SSA therapy in adults inadequately controlled by SSAs. XERMELO targets tryptophan hydroxylase, an enzyme that mediates the excess serotonin production within metastatic neuroendocrine tumor (mNET) cells. Lexicon has built the in-house capability and infrastructure to launch and market XERMELO in the U.S., where it retains all commercialization rights. Lexicon also retains rights to market XERMELO in Japan. Lexicon has established a license and collaboration agreement with Ipsen to commercialize XERMELO in Europe and other countries outside of U.S. and Japan.

XERMELO was approved by the U.S. Food and Drug Administration on February 28, 2017 and by the European Commission on September 19, 2017 for the treatment of carcinoid syndrome diarrhea in combination with SSA therapy in adults inadequately controlled by SSA therapy. Carcinoid syndrome is a rare condition that occurs in patients living with metastatic NETs (mNETs) and is characterized by frequent and debilitating diarrhea. XERMELO targets the overproduction of serotonin inside mNET cells, providing an additional treatment option for patients suffering from carcinoid syndrome diarrhea.

XERMELO (telotristat ethyl) Important Safety Information

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Warnings and Precautions: XERMELO may cause constipation, which can be serious. Monitor for signs and symptoms of constipation and/or severe, persistent, or worsening abdominal pain in patients taking XERMELO. Discontinue XERMELO if severe constipation or severe, persistent, or worsening abdominal pain develops.
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Adverse Reactions: The most common adverse reactions (≥5%) include nausea, headache, increased gamma-glutamyl-transferase, depression, flatulence, decreased appetite, peripheral edema, and pyrexia.
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Drug Interactions: If necessary, consider increasing the dose of concomitant CYP3A4 substrates, as XERMELO may decrease their systemic exposure. If combination treatment with XERMELO and short-acting octreotide is needed, administer short-acting octreotide at least 30 minutes after administering XERMELO.

For more information about XERMELO, see Full Prescribing Information at www.xermelo.com.

About Sotagliflozin

Sotagliflozin is an investigational oral dual inhibitor of two proteins responsible for glucose regulation known as sodium-glucose co-transporter types 1 and 2 (SGLT1 and SGLT2). SGLT1 is responsible for glucose absorption in the gastrointestinal tract, and SGLT2 is responsible for glucose reabsorption by the kidney.

Lexicon entered into a collaboration and license agreement with Sanofi in November 2015 under which Lexicon granted Sanofi an exclusive, worldwide (excluding Japan), royalty-bearing right and license to develop, manufacture and commercialize sotagliflozin. Lexicon is responsible for all clinical development activities relating to type 1 diabetes and has exercised an exclusive option to co-promote and have a significant role, in collaboration with Sanofi, in the commercialization of sotagliflozin for the treatment of type 1 diabetes in the U.S. Sanofi is responsible for all clinical development and commercialization of sotagliflozin for the treatment of type 2 diabetes worldwide (excluding Japan) and is solely responsible for the commercialization of sotagliflozin for the treatment of type 1 diabetes outside the U.S. (excluding Japan). A New Drug Application and Marketing Authorization Application for sotagliflozin in type 1 diabetes are currently under review at the U.S. Food and Drug Administration and European Medicines Agency, respectively. The product has not yet been approved for use in the U.S., European Union or any other jurisdiction.