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): October 30, 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
October 30, 2008, we issued a press release to report our financial results for
the quarter ended September 30, 2008. 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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— Press
Release of Lexicon Pharmaceuticals, Inc. dated October 30,
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: October
30, 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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— Press Release of Lexicon Pharmaceuticals, Inc.
dated October 30, 2008
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Exhibit
99.1
LEXICON
PHARMACEUTICALS REPORTS 2008
THIRD
QUARTER FINANCIAL RESULTS
Conference
Call and Webcast at 11:00 a.m. Eastern Time
The Woodlands, Texas, October 30,
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 and nine months ended September 30,
2008.
“We have
now advanced two drug candidates into Phase 2 clinical development and
selected our sixth drug candidate for preclinical development from our pipeline
of novel mechanisms,” said Dr. Arthur T. Sands, president and chief executive
officer of Lexicon. “We anticipate reporting data from several of our
clinical development programs by the end of the year as we continue to progress
our pipeline.”
Clinical
Update
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§
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Lexicon
has completed dosing in a Phase 2a clinical trial of its LX6171 drug
candidate for cognitive disorders. The trial is a double-blind,
randomized, placebo-controlled study in approximately 120 subjects with
age-associated memory impairment. Two dose levels of LX6171
were evaluated over a four week period to assess safety, tolerability, and
effects on cognitive performance. Results from this study are
expected by the end of the year.
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§
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Lexicon
has completed dosing in a Phase 1b clinical trial of its LX1032 drug
candidate for carcinoid syndrome. The trial is a double-blind,
randomized, placebo-controlled, multiple ascending-dose study in healthy
volunteers. Results from this study are expected to be reported
in the fourth quarter.
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§
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Lexicon
recently completed a Phase 1b clinical trial of its LX2931 drug candidate
for autoimmune disorders. Results from Lexicon’s Phase 1
clinical trials of LX2931 were presented recently at the American College
of Rheumatology annual meeting in San Francisco. The Phase 1b
trial was a double-blind, randomized, placebo-controlled, multiple
ascending-dose study in healthy volunteers. In the trial,
LX2931 was well tolerated at all doses tested, including the maximum dose
of 150 mg per day, over the seven day dosing period. Results
from the trial demonstrated a dose-dependent reduction in circulating
lymphocytes, confirming the mechanism of action of LX2931 in regulating
lymphocyte trafficking. The lymphocyte reductions observed in
the multiple dose study are similar to those associated with a beneficial
response obtained in animal models of arthritis after treatment with
LX2931. Lexicon is currently planning to commence a drug-drug
interaction study with methotrexate in patients with rheumatoid arthritis
in the first quarter of 2009.
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§
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Lexicon
expects to initiate a Phase 2a clinical trial of its LX1031 drug candidate
for irritable bowel syndrome (IBS) in the fourth quarter of this
year. The trial is designed as a double-blind, randomized,
placebo-controlled study to evaluate the safety, tolerability, and effects
of LX1031 on symptoms associated with IBS over a four-week
period.
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Other
Highlights for the Quarter
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§
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Lexicon
initiated formal preclinical development of LX7101, a new drug candidate
for glaucoma, in preparation for the planned filing of an
Investigational New Drug (IND) application with the U.S. Food and Drug
Administration (FDA). LX7101 is a small molecule compound that
may have application in treating glaucoma by lowering intraocular pressure
through a new mechanism of action that enhances the eye’s fluid outflow
facility. Impairment of fluid outflow is thought to be a major
contributing factor to the higher incidence of glaucoma that is observed
as people age.
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Financial
Results
Revenues: Lexicon’s
revenues for the three months ended September 30, 2008 decreased 26 percent
to $7.5 million from $10.2 million for the corresponding period in
2007. The decrease was primarily attributable to the completion in
2007 of the project funded by Lexicon’s award from the Texas Enterprise Fund and
reduced revenues in the three months ended September 30, 2008 under
Lexicon’s alliance with N.V. Organon due to its progress towards completing the
target discovery portion of the alliance. For the nine months ended
September 30, 2008, revenues decreased 28 percent to
$26.0 million from $36.3 million for the corresponding period in
2007.
Research and Development
Expenses: Research and development expenses for the three
months ended September 30, 2008 increased 13 percent to
$27.6 million from $24.5 million for the corresponding period in
2007. The increase was primarily due to higher preclinical and
clinical costs related to the advancement of Lexicon’s drug development
programs, partially offset by decreased research expenses as a result of the
company’s previously stated plans to reallocate resources from genetics research
efforts to drug development. For the nine months ended
September 30, 2008, research and development expenses increased
11 percent to $85.8 million from $77.4 million for the
corresponding period in 2007.
General and Administrative
Expenses: General and administrative expenses for the three
months ended September 30, 2008 decreased eight percent to
$4.7 million from $5.1 million for the corresponding period in
2007. The decrease was primarily attributable to lower salary and
benefit costs as well as lower legal fees. For the nine months ended
September 30, 2008, general and administrative expenses increased
three percent to $15.8 million from $15.4 million for the
corresponding period in 2007.
Net Loss: Net loss
for the three months ended September 30, 2008 was $23.5 million, or $0.17
per share, compared to net loss of $14.1 million, or $0.14 per share, in the
corresponding period in 2007. Net loss for the nine months ended
September 30, 2008 was $61.4 million, or $0.45 per share, compared to a net loss
of $46.6 million, or $0.53 per share, for the corresponding period in
2007. For the three and nine months ended September 30, 2008, net
loss included an impairment of long-term investments of $3.3 million, which
represents the decline in fair value of student loan auction rate securities
held by Lexicon. For the three months ended September 30, 2008, net
loss included non-cash, stock-based compensation expense of $1.4 million,
compared to $1.6 million in the corresponding period in 2007. For the
nine months ended September 30, 2008, net loss included non-cash, stock-based
compensation expense of $4.8 million, consistent with the corresponding period
in 2007.
Cash and
Investments: As of September 30, 2008, Lexicon had $177.3
million in cash and investments, including $21.1 million in cash and investments
held by Symphony Icon, as compared to $200.5 million as of June 30, 2008
and $258.8 million as of December 31, 2007.
Lexicon
Conference Call:
Lexicon
management will hold a conference call to discuss its clinical development
progress and financial results for the third quarter of 2008 at 11:00 a.m.
Eastern Time on October 30, 2008. The dial-in number for the
conference call is 888-220-1244 (within the US/Canada) or 706-679-5615
(international). The pass code for all callers is
67655964. Investors can access a live webcast of the call at www.lexpharma.com. An
archived version of the webcast will be available on the website through
November 4, 2008.
About
Lexicon
Lexicon
is a biopharmaceutical company focused on discovering and developing
breakthrough treatments for human disease. Lexicon currently has six
drug candidates in development for autoimmune disease, carcinoid syndrome,
cognitive disorders, diabetes, glaucoma and irritable bowel syndrome, all of
which were discovered by the company’s research team. The company is
using its proprietary gene knockout technology to characterize approximately
5,000 genes in its Genome5000™ program,
and has discovered more than 100 promising drug targets. Lexicon has
applied small molecule chemistry and antibody technology to these
biologically-validated targets to create its extensive pipeline of clinical and
preclinical programs. Lexicon’s goal is to advance 10 drug candidates
into human clinical trials by the end of 2010, the strategic objective of its
10TO10
program. 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 LX1031, LX1032, LX2931, LX6171 and
LX7101 and the potential therapeutic and commercial potential of LX1031, LX1032,
LX2931, LX6171 and LX7101. 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 LX1031, LX1032, LX2931, LX6171 and
LX7101 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 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, 2007, 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
September
30,
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Nine
Months Ended
September
30,
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(In
thousands, except per share data)
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2008
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2007
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2008
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2007
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||||||||||||
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(unaudited)
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(unaudited)
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Revenues:
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||||||||||||||||
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Collaborative research
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$ | 7,202 | $ | 9,712 | $ | 22,789 | $ | 34,460 | ||||||||
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Subscription and license fees
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310 | 455 | 3,182 | 1,850 | ||||||||||||
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Total revenues
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7,512 | 10,167 | 25,971 | 36,310 | ||||||||||||
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Operating
expenses:
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||||||||||||||||
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Research
and development, including stock-based compensation of
$836, $965, $2,913 and $3,000, respectively
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27,642 | 24,518 | 85,793 | 77,402 | ||||||||||||
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General
and administrative, including stock-based compensation of
$583, $635, $1,868 and $1,830, respectively
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4,692 | 5,091 | 15,824 | 15,395 | ||||||||||||
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Total operating expenses
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32,334 | 29,609 | 101,617 | 92,797 | ||||||||||||
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Loss
from operations
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(24,822 | ) | (19,442 | ) | (75,646 | ) | (56,487 | ) | ||||||||
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Impairment
of long-term investments
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(3,322 | ) | — | (3,322 | ) | — | ||||||||||
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Interest
income
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956 | 2,166 | 5,155 | 3,811 | ||||||||||||
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Interest
expense
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(675 | ) | (694 | ) | (2,020 | ) | (2,077 | ) | ||||||||
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Other
expense, net
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(535 | ) | (8 | ) | (1,621 | ) | (34 | ) | ||||||||
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Loss
before noncontrolling interest in Symphony Icon, Inc.
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(28,398 | ) | (17,978 | ) | (77,454 | ) | (54,787 | ) | ||||||||
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Loss
attributable to noncontrolling interest in Symphony Icon,
Inc.
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4,939 | 3,867 | 16,011 | 8,170 | ||||||||||||
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Net
loss
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$ | (23,459 | ) | $ | (14,111 | ) | $ | (61,443 | ) | $ | (46,617 | ) | ||||
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Net
loss per common share, basic and diluted
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$ | (0.17 | ) | $ | (0.14 | ) | $ | (0.45 | ) | $ | (0.53 | ) | ||||
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Shares
used in computing net loss per common share, basic and
diluted
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136,796 | 104,196 | 136,796 | 87,331 | ||||||||||||
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Consolidated
Balance Sheet Data
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As
of September 30,
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As
of December 31,
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||||||
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(In
thousands)
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2008
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2007
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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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$ | 177,264 | $ | 258,775 | ||||
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Property
and equipment, net
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66,444 | 70,829 | ||||||
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Goodwill
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25,798 | 25,798 | ||||||
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Total
assets
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283,703 | 369,296 | ||||||
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Deferred
revenue
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20,882 | 34,156 | ||||||
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Current
and long-term debt
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30,723 | 31,373 | ||||||
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Noncontrolling
interest in Symphony Icon, Inc.
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14,260 | 30,271 | ||||||
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Accumulated
deficit
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(471,978 | ) | (410,535 | ) | ||||
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Total
stockholders’ equity
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199,681 | 256,300 | ||||||