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You can read our first interview with Mike Exton from Sept 2024 here.
It’s great to speak with you again! Can you give us a flavor of what you were hoping to achieve from Jefferies this year, and how it went for Lexicon?
It was a really great meeting for us, and it was my second time at Jefferies. Thankfully, it didn’t rain this time, which was fantastic, and I always love coming to London and just being amongst the Brits!
But Jefferies, this year, was really quite phenomenal. From a Lexicon perspective, we had a brilliant fireside chat, which really summarized the great progress that we’ve made in 2025.
We had fantastic engagements - very busy back-to-back meetings across two days. As you can imagine, a number of investors were talking about the Lexicon story, our progress, and how we see 2026 panning out. Those were a good 60% of our meetings.
The other 40% were to do with potential partnering, both European-based partners, commercial partners, as well as more international and US partners, for some of our development candidates. So, it was really a brilliant meeting, and we all had a great time - both professionally and personally!
You’ve previously spoken about Lexicon’s lead-to-succeed strategy focusing on first in class assets for white space diseases. How has that strategy evolved over the past year?
It’s really evolved across three main areas.
We’ve progressed our discussions with the FDA for Zynquista in type-1 diabetes, where we’ll, potentially, be the first and only adjunct to insulin for glycemic control. In type-1 diabetes, they really only have insulin, and that’s been the bedrock for over 100 years.
This could be the first adjunct to help them control blood sugar. So that’s the front-end of the lead-to-succeed strategy. We’re looking forward to an approval next year.
Secondly, we have taken Sotagliflozin, one of our assets, into hypertrophic cardiomyopathy, which has become an area of great interest, with a huge unmet medical need.
Again, this would be the first and only in its class to treat this condition, and for a really underserved population.
And thirdly, we finished our phase 2 program for diabetic peripheral neuropathic pain. In the last 20 years, there’s been nothing approved, apart from oral opioids, to treat that.
In the US, at least, it’s a really big problem - and there’s bipartisan support to get new non-opioid medicines to treat these kinds of conditions.
That gives you a snapshot of the areas we’re contributing towards, where, as a small company, we can be the first and only. This gives us leverage in the marketplace - so it’s really playing out quite nicely for us.
How’s Lexicon’s progress with the FDA?
Still a lot of work to do, of course, but our strategy is paying dividends so far.
The FDA, I have to say, despite all the tumult with the agency, has been very engaged. In fact, just mentioning Zynquista, our asset for type-1 diabetes - we’ve had regular dialogue, back and forth, in a very timely way.
Despite potential job shortages and not getting paid for the best part of a month, they’ve been incredibly engaged and innovative in their thinking.
So that hasn’t delayed any of our timelines. And, in fact, the collaborative nature of those engagements has been very productive.
What was your key message to investors at Jefferies, and what kind of milestones can we look forward to over the next year?
The key message was firstly that we delivered on everything that we set out to do at the start of 2025, where we pivoted the company to really focus on the pipeline assets and ensure that we hit all of our development milestones.
After our interview in January, we sold our obesity asset to Novo Nordisk at the start of the year. That was part of our focusing on the portfolio, to really ensure that we maximize the things that we’re really good at, which is the cardio space.
So, we’ve progressed all the pipeline in 2025. Between a potential Zynquista approval - finalizing the end-of-phase-2 meeting with the FDA and moving it into pivotal phase 3 trials, in 2026 – as well as concluding the hypertrophic cardiomyopathy enrollment next year with a potential readout, either at the end of next year or early 2027, there’s still a lot to look forward to.
There are several catalysts that are really going to serve both our internal stakeholders, our potential shareholders, as well as patients in the near future.
With that deal from Novo, I imagine that provides a good deal of runway. Could you elaborate as to how that deal has helped to fund things?
Our other medicines, both in neuropathic pain and HCM, type-1 diabetes, is a really novel class of medicines against a target that no one else is looking at. That’s kind of a blessing and a curse, because we had to educate potential partners on what this medicine can do.
It targets an enzyme in the gut called ACSL5. The important thing to remember is that this is a preclinical asset. So, it hasn’t reached humans yet. But it shows substantial weight loss on top of semaglutide. If you add it together with semaglutide, you get significantly more weight loss.
And like all of our medicines, this is an oral, once-a-day dose medicine.
We saw the future of obesity medicines, and where we feel the market will turn, is to become like most other chronic cardiometabolic diseases and be taken orally.
That’s where you’re able to adjust accordingly to an individual patient, as to the right combination of medicines that gets them the best efficacy and tolerability. Despite the fact that GLP 1s reduce body weight significantly, at least in the US, the average duration of treatment is about six months. People take them, lose some weight, and they don’t really tolerate them that well.
And so that’s where we at Lexicon - and Novo, too, I think - believe this field is going, in terms of using combinations of different MOAs in oral dosage form,
So, we had a few interested parties, but Novo was the company that really showed great enthusiasm for the mechanism, and we sold them the exclusive rights.
We got a substantial upfront payment, which obviously helped us with our balance sheet. And most importantly, we have pretty significant milestones across the development pathway. It will go into humans early next year.
We’ve completed all the IND enabling work, which we submitted to them in October. It’s now fully in their hands to take it forward into the phase 1 studies, early next year.
In terms of Lexicon being an ‘old’ biotech, how do you balance having commercialized products with these clinical pipeline assets?
Lexicon celebrates its 30th birthday, this year. That’s old, as the standards go. And it’s really been a company that’s had three lives, if you like.
Originally, it was developed, back in the late 90s, around the time the human genome was being described. It wasn’t actually finally published. They developed this knockout mouse model for 5,000 genes.
Really, it was a genetics target company. Through that huge database, they identified about 200 genes that were of interest. That was about a decade of significant amounts of work.
The next decade, they focused on medicinal chemistry, bought a chemistry company, and looked at developing novel assets that would hit the targets that they had proprietary knowledge of.
And the last 10 years has really been to develop the company into a commercial-level entity, with a couple of assets that have been approved.
Now, I think we’re getting to that maturation that the company should have reached a number of years ago, but, for whatever reason, it didn’t occur. But we’re now getting to the level of maturity where we have late-stage development candidates. We’ve got medicines on the market, and that will drive the revenue projections of the company, as we continue to develop clinical candidates, and, in fact, bring new chemical entities in from our targeting research.
So, it’s been a long time in the making, but having been here, now, for a year and a half, I think we’re really on the precipice of moving the company into that next stage of maturity.
What can you tell us about the INPEFA launch, and how did that give you insights and reflections that will inform the future strategy?
That’s a great question. If you remember when I first started at Lexicon, we were deep in the launch of INPEFA for heart failure. And the lessons from that launch were the genesis of the lead-to-succeed strategy, because, although INPEFA is a fantastic medicine in heart failure, we continue to bring really good data that shows that this is actually a novel class of medicines.
At the payer level for heart failure, it was put in a market basket with SGLT2 inhibitors. As you recall, INPEFA is an SGLT1 and 2 inhibitor, and it’s that SGLT1 component that’s proving to be really important for type-1 diabetes, for hypertrophic cardiomyopathy, and so on.
But when, in the US at least, you’re put in a similar market basket to two behemoths, Farxiga and Jardiance, which basically built their volume by treating type-2 diabetes, it becomes very difficult to get proper access.
Those behemoths will essentially rebate another half-a-percent back to the payer, which is real money, but it keeps prospective new medicines in their place. So, in that position, it becomes a very difficult place to compete.
We’ve continued to provide the medicine to the marketplace, and we’ve been promoted by our virtual sales team, which has been very resource effective. We don’t really spend much promoting it, but we’ve sold about as much INPEFA this year as we did last year, with a full field force of about 150 people, which shows that we’ve got a very loyal prescriber and patient base. That bodes well for the use of the medicine.
As we launch into type-1 diabetes and hypertrophic cardiomyopathy, we’ve got opportunities to use that portfolio to get better access in heart failure and really look to promote across those three distinct disease areas.
In terms of running an expanded label type for INPEFA, what has that been like?
Not too different, to be honest.
So, Zynquista is the same molecule as INPEFA, but a different NDA for type-1 diabetes.
But, as we develop hypertrophic cardiomyopathy, that will likely be under the INPEFA label. But we haven’t reached that stage yet.
That actually fits very nicely because HFpEF (heart failure with preserved ejection fraction) has a large number of similarities to nonobstructive hypertrophic cardiomyopathy. Having both within a single label should provide a sort of umbrella that benefits both indications.
So, in terms of the development pathway, there’s been no real difference. I think it does impact how you commercialize, promote and educate. But it’s two similar brushes, but which are used slightly differently.
There are whispers that, after a tumultuous time in biotech, capital markets are starting to recover. How are you approaching financing at Lexicon? What’s the strategy for advancing multiple stage assets?
Yeah, I think you’re right. There is a little buoyancy in the financial markets at the moment.
Certainly, in the last couple of months, the biotech ETF, here in the US, has traded another 25% higher or so, which has been good because health care has taken the rough end of the stick to AI for a long time in the US equities market.
But that, combined with a number of pretty significant M&A deals, has freed up a lot of cash among investors that they need to redeploy. Folks are obviously seeing that there are opportunities either to raise capital, or to continue to promote their story.
For us, we’re lucky since we have a pretty significant amount of cash at the moment. We’ve got about a year’s operating cash, and we’re looking at partnering this neuropathic pain asset, which may bring in nondilutive capital, which would really get us through a Zynquista launch and potential approval.
However, we’re staying open to the possibility of a potential raise in 2026. It’s not the highest priority at the moment - but the markets seem to be opening up somewhat, which bodes well, should we decide that we need to do that.
If we could speak for a moment on neuropathic pain, how big of an addressable market is it, and why is it so important to tackle?
Neuropathic pain is a very distinct category to acute pain, typically coming from an injury or surgery, lasting for two or three weeks, and then you subsequently recover. It’s actually very different to even a chronic sort of muscular pain that you may have in your back, for example.
Neuropathic pain results from direct damage to the nerves, which most commonly happens through chronic conditions, like diabetes. Folks with diabetes get a range of complications, retinopathy, and those sorts of things. Diabetic peripheral neuropathy (DPN) affects nine million people in the US.
So, it’s very significant, and of course, that continues to grow as the diabetic population ages. This is a massive unmet need. These patients are living with pain that typically affects their extremities, in the hands and feet, every day.
Beyond that, they also get a loss of sensation which affects the way that they walk, and the way that they perceive injury. It’s actually one of the largest causes of leg and foot amputations - people get injuries to their feet and can’t recognize them, and that festers and becomes gangrenous.
People suffer through this for years. For this condition, the medicines that are used to treat it were approved more than 20, or 25, years ago; in fact, they’re not very efficacious either. And so, people cycle through. They try one medicine, then another one. They end up trying a bunch of medicines and, typically, get to a place where they don’t find adequate relief, and so they turn to opioids.
Of course, opioids do provide fantastic pain relief, but they have concomitant addictive issues. Really, that’s the root cause for a bunch of legislation being presented both in the US Senate and the House, that will really facilitate the use of new nonopioid medications, once they’re approved.
It’s really only Lexicon that is developing medicines in this area. It’s challenging because few people understand it, meaning we need to educate, and help them to see the potential of this medicine.
And, just to give you an idea of how big the market is, the largest medicine used in neuropathic pain is gabapentin. It has been generic for a decade, and it still sells about 5 billion dollars worldwide.
So, you can imagine the market is a multibillion-dollar opportunity. One of the reasons why we believe it is best partnered is neuropathic pain, particularly diabetic neuropathy, is treated by a number of different physician types depending on the country and market.
Endocrinologists, diabetologists, and pain specialists can be involved. Even podiatrists can be, as well, due to a lot of foot problems. So, having a partner with a broad commercial footprint will, I think, be important for the commercialization of this medicine and help it to reach its full potential.
It’s an enormous opportunity, because, clearly, with the lead-to-succeed strategy, if we get into a position where it’s approvable, and we can get it to patients, I think the market opportunity, and the potential benefit that we can bring patients, is massive. So, it’s a really exciting, groundbreaking, and unique program that we continue to drive forward.
As someone who’s been on both sides of the table, what advice do you have for other biotech CEOs when it comes to fighting off an acquisition; or going for it alone versus getting a really good royalty deal?
I’ve always been big on focus. I think you, yourself, need to be very clear on what you want to take command of, and really chart that path forward.
Likewise, be very clear on where you think assets are best off being partnered and really demonstrate that value to potential partners and engage with them early and often.
There are many stakeholders involved in big pharma that are going to make a decision for an acquisition or partnering. Continuing that engagement with what might seem like an incredibly large and complex infrastructure takes resilience, persistence, and tenacity, while really keeping belief and focus.
And finally, what would you say is the long-term vision here for Lexicon? Is it going to converge on a few related therapeutic targets or are you looking for something else?
I think where we are going to focus our efforts, internally, and not necessarily think of partnering, is within that cardiometabolic space. I think hypertrophic cardiomyopathy, type-1 diabetes, and heart failure, are really our sweet spots, from a capabilities perspective.
Other assets that we have, we will look to partner in varying ways. The vision is that, in the next two years, as we bring type-1 diabetes and HCM to the market, that we become a self-standing, profitable, fully integrated company.
I think that’s a great path for us to take, going forward, towards becoming a fully independent public company and driving our own commercial success. I look forward to updating you along the way!
