UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
__________________
FORM
8-K
__________________
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event
reported): March
6, 2008
Lexicon
Pharmaceuticals, Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
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000-30111
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76-0474169
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(State
or other jurisdiction of
incorporation
or organization)
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(Commission
File Number)
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(I.R.S.
Employer
Identification
Number)
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8800
Technology Forest Place
The
Woodlands, Texas 77381
(Address
of principal executive
offices
and Zip Code)
(281)
863-3000
(Registrant’s
telephone number,
including
area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligations of the registrant under any of the following
provisions:
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□
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Written
communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
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□
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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□
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
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□
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
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Item
2.02
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Results
of Operations and Financial
Condition
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On March
6, 2008, we issued a press release to report our financial results for the
quarter and year ended December 31, 2007. A copy of the press release
is attached to this current report on Form 8-K as
Exhibit 99.1.
The
information in this Form 8-K and the Exhibit attached to this Form 8-K shall not
be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of
1934 (the “Exchange Act”) or otherwise subject to the liabilities of that
section, nor shall it be deemed incorporated by reference in any filing under
the Securities Act of 1933 or the Exchange Act, except as expressly set forth by
specific reference in such a filing.
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Item
9.01
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Financial Statements and
Exhibits
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(d) Exhibits
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Exhibit No.
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Description
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99.1
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—
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Press
Release of Lexicon Pharmaceuticals, Inc. dated March 6,
2008
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Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
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Lexicon
Pharmaceuticals, Inc.
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Date: March
6, 2008
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By:
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/s/ Jeffrey L. Wade |
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Jeffrey
L. Wade
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Executive Vice President
and
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General
Counsel
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Index
to Exhibits
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Exhibit No.
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Description
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99.1
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—
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Press
Release of Lexicon Pharmaceuticals, Inc. dated March 6,
2008
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Exhibit
99.1
LEXICON
PHARMACEUTICALS REPORTS 2007 FOURTH QUARTER
AND
FULL YEAR FINANCIAL RESULTS
Company
Advancing Four Drug Candidates in Human Clinical Trials
The Woodlands, Texas, March 6,
2008 – Lexicon Pharmaceuticals, Inc. (Nasdaq: LXRX), a
biopharmaceutical company focused on discovering and developing breakthrough
treatments for human disease, today updated its drug development progress and
reported financial results for the three months and year ended December 31,
2007.
“Our team
has made significant progress in our 10TO10
program, an initiative to advance 10 drug candidates into human clinical trials
by the end of 2010. We now have four drug candidates in human
clinical testing as a result of the productivity of our drug discovery and
development engine through 2007,” said Dr. Arthur T. Sands, president and chief
executive officer of Lexicon. “Lexicon is poised for its next phase
of growth. With a robust pipeline of drug candidates, significant
collaborations established and a strong financial foundation, we look forward to
significant progress in 2008.”
Highlights
of the Year
Clinical
Achievements
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§
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Lexicon
advanced LX6171 into a Phase 2 clinical trial. LX6171 is the company’s
oral drug candidate for the treatment of cognitive
disorders. The initial stage of the Phase 2 trial assessed the
bioavailability of a new oral-suspension formulation. A second
stage evaluating safety, tolerability and cognitive effects in elderly
subjects with age-associated memory impairment (AAMI) is presently
underway. In Phase 1 clinical trials, LX6171 was well tolerated
at all dose levels and showed good systemic
exposure.
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§
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Lexicon
completed Phase 1a and initial Phase 1b clinical studies of LX1031, the
company’s oral drug candidate for the treatment of irritable bowel
syndrome (IBS). In Phase 1 clinical trials completed to date,
LX1031 was well tolerated at all dose levels studied. Lexicon
is conducting an additional Phase 1b dose escalation study to explore
additional dosage parameters.
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§
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Lexicon
initiated a Phase 1 clinical trial of LX2931, the company’s oral drug
candidate for rheumatoid arthritis and other autoimmune
conditions. The initial Phase 1 clinical trial of LX2931 is a
double-blind, randomized, placebo-controlled, ascending single-dose study
in healthy volunteers.
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§
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Lexicon
filed an investigational new drug (IND) application with the U.S. Food and
Drug Administration (FDA) for LX1032, an oral drug candidate for managing
gastrointestinal symptoms associated with carcinoid
syndrome. The initial Phase 1 clinical trial of LX1032, for
which dosing commenced in February 2008, is a double-blind, randomized,
placebo-controlled, ascending single-dose study in healthy
volunteers.
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Business & Financial
Accomplishments
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§
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Lexicon
announced the launch of its 10TO10
program, an initiative to advance 10 drug candidates into human clinical
trials by the end of 2010, and changed its name to Lexicon
Pharmaceuticals, Inc., reflecting its progression into drug
development.
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§
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Invus,
L.P. made an initial investment of $205 million in Lexicon common stock to
help fund the company’s transition into an integrated biopharmaceutical
company. The agreement with Invus provides for possible future
financings under which Lexicon stockholders, including Invus, may invest
an additional $345 million over the next several
years.
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§
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Lexicon
entered into a $60 million product development collaboration with Symphony
Capital Partners, L.P. and its co-investors. Under the terms of
the transaction, Symphony Icon, Inc., a new company, was established to
fund and accelerate the clinical development of three of Lexicon’s leading
10TO10
drug candidates LX6171, LX1031 and
LX1032.
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Additions to
Leadership
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§
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Tamar
Howson, formerly of Bristol-Myers Squibb Co., was appointed executive vice
president of business development, responsible for leading the company’s
pharmaceutical partnering and licensing efforts. During her
tenure at Bristol-Myers Squibb, she served as senior vice president of
corporate and business development, responsible for leading the company’s
efforts in external alliances, licensing and acquisitions, and a member of
the executive committee from 2001 to
2007.
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§
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Raymond
Debbane, president and chief executive officer of The Invus Group, and
Christopher Sobecki and Philippe Amouyal, both managing directors of The
Invus Group, joined the Lexicon board of
directors.
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§
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Kathleen
Wiltsey, a former vice president of Amgen, Inc., and Judith L. Swain,
M.D., currently executive director of the Singapore Institute for Clinical
Sciences within the Singapore Agency for Science, Technology, and Research
(A*STAR) and the Lien Chow Professor of Medicine at the National
University of Singapore, were elected to the company’s board as
independent directors.
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Financial
Results
“Lexicon
is in a uniquely strong position to advance its exciting pipeline of novel drug
candidates, having raised $265 million through two strategic financings last
year,” said Julia P. Gregory, Lexicon’s executive vice president and chief
financial officer.
Revenues: Lexicon’s
revenues for the three months ended December 31, 2007 decreased 14 percent to
$13.8 million from $16.1 million for the corresponding period in
2006. The decrease was primarily attributable to reduced revenue
under Lexicon’s neuroscience alliance with Bristol-Myers Squibb resulting from
the conclusion of the revenue recognition period for the upfront payment Lexicon
received under the alliance and the biotherapeutic alliance with N.V.
Organon. This was offset in part by increased revenue recognized
under Lexicon’s award from the Texas Enterprise Fund due to the early completion
of the knockout mouse embryonic stem cell library for the Texas Institute for
Genomic Medicine. For the year ended December 31, 2007, revenues
decreased 31% percent to $50.1 million from $72.8 million in 2006, reflecting
the company’s transition from drug discovery alliances to drug
development.
Research and Development
Expenses: Research and development expenses for the three
months ended December 31, 2007 increased five percent to $26.9 million from
$25.6 million from the corresponding period in 2006. Higher external
preclinical and clinical costs related to the advancement of Lexicon’s drug
development programs were largely offset by decreased research expenses as a
result of the company’s early 2007 realignment, reallocating resources from
genetics research efforts to drug development. For the year ended
December 31, 2007, research and development expenses decreased two percent to
$104.3 million, including $5.2 million in non-cash, stock-based compensation
expense, from $106.7 million in 2006.
General and Administrative
Expenses: General and administrative expenses for the three
months ended December 31, 2007 increased six percent to $5.3 million from
$5.1 million for the corresponding period in 2006. For the year
ended December 31, 2007, general and administrative expenses decreased three
percent to $20.7 million, including $2.8 million in non-cash, stock-based
compensation expense, from $21.3 million in 2006.
Net Loss: Net loss
for the three months ended December 31, 2007 was $12.2 million, or $0.09 per
share, compared to net loss of $13.8 million, or $0.19 per share, in the
corresponding period in 2006. Net loss for the year ended December
31, 2007 was $58.8 million, or $0.59 per share, compared to a net loss of $54.3
million, or $0.81 per share, in 2006. The net loss for the three
months and year ended December 31, 2007 included a benefit of $4.3 million
and $12.4 million, respectively, attributable to the loss from non-controlling
interest in Symphony Icon, resulting from Lexicon’s consolidation of Symphony
Icon. For the three months and year ended December 31, 2007, net loss
included non-cash, stock-based compensation expense of $3.1 million and $7.9
million, respectively.
Cash and
Investments: As of December 31, 2007, Lexicon had $258.8
million in cash and investments, including $36.7 million in cash and investments
held by Symphony Icon, as compared to $273.9 million as of September 30, 2007
and $80.0 million as of December 31, 2006.
Lexicon
Conference Call:
Lexicon
management will hold a conference call to discuss its clinical development
progress, financial results for 2007 and financial guidance for 2008 at
5:00 p.m. Eastern Time on March 6, 2008. The dial-in number for
the conference call is 877-681-3378 (within the United States) or 719-325-4842
(international). The pass code for all callers is
7721341. Investors can access www.lexpharma.com to
listen to a live webcast of the call. The webcast will be archived
and available for review through March 11, 2008.
About
Lexicon
Lexicon
is a biopharmaceutical company focused on the discovery and development of
breakthrough treatments for human disease. Lexicon currently has
development programs underway for such areas of major unmet medical need as
irritable bowel syndrome, cognitive disorders, autoimmune diseases, and
carcinoid syndrome. The company has used its proprietary gene
knockout technology to discover more than 100 promising drug targets and create
an extensive pipeline of clinical and preclinical programs in the therapeutic
areas of cardiology, gastroenterology, immunology and oncology, metabolism,
neurology and ophthalmology. To advance the development and
commercialization of its programs, Lexicon is working both independently and
through collaborators including Bristol-Myers Squibb Co., Genentech, Inc. and
N.V. Organon. For additional information about Lexicon and its
programs, please visit www.lexpharma.com.
Safe
Harbor Statement
This
press release contains “forward-looking statements,” including statements
relating to Lexicon’s clinical development of LX6171, LX1031, LX1032 and LX2931
and the potential therapeutic and commercial potential of LX6171, LX1031, LX1032
and LX2931. This press release also contains forward-looking
statements relating to Lexicon’s growth and future operating results, discovery
and development of products, strategic alliances and intellectual property, as
well as other matters that are not historical facts or
information. All forward-looking statements are based on management’s
current assumptions and expectations and involve risks, uncertainties and other
important factors, specifically including those relating to Lexicon’s ability to
successfully conduct clinical development of LX6171, LX1031, LX1032 and LX2931
and preclinical and clinical development of its other potential drug candidates,
advance additional candidates into preclinical and clinical development, obtain
necessary regulatory approvals, achieve its operational objectives, obtain
patent protection for its discoveries, obtain additional financing and establish
strategic alliances, as well as additional factors relating to manufacturing,
intellectual property rights, and the therapeutic or commercial value of its
drug candidates, that may cause Lexicon’s actual results to be materially
different from any future results expressed or implied by such forward-looking
statements. Information identifying such important factors is
contained under “Factors Affecting Forward-Looking Statements” and “Risk
Factors” in Lexicon’s annual report on Form 10-K for the year ended December 31,
2006, as filed with the Securities and Exchange Commission. Lexicon
undertakes no obligation to update or revise any such forward-looking
statements, whether as a result of new information, future events or
otherwise.
# # #
Contact for
Lexicon:
Bobbie
Faulkner
Manager,
Investor and Public Relations
281/863-3503
bfaulkner@lexpharma.com
Lexicon
Pharmaceuticals, Inc.
Selected
Financial Data
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Consolidated
Statements of Operations Data
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Three
Months Ended
December
31,
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Year
Ended
December
31,
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||||||||||||||
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(In
thousands, except per share data)
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2007
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2006
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2007
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2006
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||||||||||||
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(unaudited)
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(unaudited)
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|||||||||||||||
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Revenues:
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||||||||||||||||
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Collaborative
research
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$ | 13,620 | $ | 14,946 | $ | 48,080 | $ | 68,373 | ||||||||
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Subscription and license
fees
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188 | 1,120 | 2,038 | 4,425 | ||||||||||||
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Total
revenues
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13,808 | 16,066 | 50,118 | 72,798 | ||||||||||||
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Operating
expenses:
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||||||||||||||||
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Research
and development, including stock-based compensation
of
$2,150, $1,039, $5,150 and $4,394, respectively
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26,930 | 25,580 | 104,332 | 106,695 | ||||||||||||
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General
and administrative, including stock-based compensation
of
$946, $625, $2,776 and $2,636, respectively
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5,345 | 5,058 | 20,740 | 21,334 | ||||||||||||
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Total
operating
expenses
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32,275 | 30,638 | 125,072 | 128,029 | ||||||||||||
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Loss
from
operations
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(18,467 | ) | (14,572 | ) | (74,954 | ) | (55,231 | ) | ||||||||
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Interest
income
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3,475 | 976 | 7,286 | 3,653 | ||||||||||||
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Interest
expense
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(694 | ) | (816 | ) | (2,771 | ) | (3,253 | ) | ||||||||
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Other
income (expense),
net
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(760 | ) | 470 | (794 | ) | 401 | ||||||||||
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Loss
before noncontrolling interest in Symphony Icon, Inc.
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(16,446 | ) | (13,942 | ) | (71,233 | ) | (54,430 | ) | ||||||||
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Loss
attributable to noncontrolling interest in Symphony Icon,
Inc.
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4,269 | — | 12,439 | — | ||||||||||||
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Loss
before
taxes
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(12,177 | ) | (13,942 | ) | (58,794 | ) | (54,430 | ) | ||||||||
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Income
tax
benefit
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— | 119 | — | 119 | ||||||||||||
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Net
loss
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$ | (12,177 | ) | $ | (13,823 | ) | $ | (58,794 | ) | $ | (54,311 | ) | ||||
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Net
loss per common share, basic and diluted
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$ | (0.09 | ) | $ | (0.19 | ) | $ | (0.59 | ) | $ | (0.81 | ) | ||||
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Shares
used in computing net loss per common share, basic and
diluted
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136,794 | 73,405 | 99,798 | 66,876 | ||||||||||||
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Consolidated
Balance Sheet Data
|
As
of December 31,
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As
of December 31,
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||||||
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(In
thousands)
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2007
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2006
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||||||
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(unaudited)
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||||||||
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Cash
and investments, including cash and investments held by Symphony Icon,
Inc.
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$ | 258,775 | $ | 79,999 | ||||
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Property
and equipment, net
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70,829 | 78,192 | ||||||
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Goodwill
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25,798 | 25,798 | ||||||
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Total
assets
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369,296 | 190,266 | ||||||
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Deferred
revenue
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34,156 | 58,000 | ||||||
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Current
and long-term debt
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31,373 | 32,188 | ||||||
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Noncontrolling
interest in Symphony Icon, Inc.
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30,271 | - | ||||||
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Accumulated
deficit
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(410,535 | ) | (351,741 | ) | ||||
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Total
stockholders’ equity
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256,300 | 85,501 | ||||||