Lexicon, Sanofi Agree to Diabetes Drug Pact
November 06 2015 - 12:54PM
Dow Jones News
By Ezequiel Minaya
Lexicon Pharmaceuticals Inc. agreed to a licensing pact in which
Sanofi would pay $300 million up front, with the potential for $1.4
billion more, for rights to a developmental diabetes treatment.
Following the news, shares of Lexicon surged as much as 38%. The
stock has since come off its highs, rising 22% to $12.86 in midday
trading. Separately, Lexicon reported a narrower-than-expected loss
for its third quarter.
The deal with Sanofi involves sotagliflozin, an investigational
oral drug that is part of a class that inhibits sodium-glucose
transporters 1 and 2. This class of drugs prevents the kidney from
absorbing blood sugar, or glucose, as urine is formed. As a result,
more glucose is excreted, which helps keep blood sugar down.
Other SGLT-2 inhibitors include Invokana from Johnson &
Johnson, Farxiga from AstraZeneca PLC and Jardiance from Eli Lilly
& Co. and Boehringer Ingelheim GmbH.
Lexicon's sotagliflozin is being studied in two late-stage
trials for type 1 diabetes, with results expected during the second
half of 2016. A late-stage trial for type 2 diabetes is expected to
begin in 2016.
Sanofi is a significant player in the diabetes market but has
seen such sales decline recently. Diabetes sales, which account for
about 20% of the company's revenue, have fallen because Sanofi has
been forced to offer larger discounts to the government, insurers
and health-care providers to push its products on the U.S. market.
Sanofi said recently that it expected diabetes sales to decline
every year by 4%-8% at constant exchange rates until 2018.
Lexicon said the extra $1.4 billion is dependent upon the
company reaching certain development, regulatory and sales
milestones. Lexicon also is entitled to royalties of net sales. In
response, Sanofi obtains an exclusive world-wide license to
develop, manufacture and commercialize sotagliflozin.
For the third quarter, Lexicon posted a loss of $35.3 million,
or 34 cents a share, narrower than its year-ago loss of $40.5
million, or 55 cents a share. During the quarter the company cut
back on research and development expenses by 4%, helping to lessen
the loss in the latest quarter.
Revenue rose 35% to $566,000.
Analysts had expected a loss of 36 cents per share on $400,000
in revenue.
Write to Ezequiel Minaya at Ezequiel.Minaya@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 06, 2015 12:39 ET (17:39 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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