Lexicon Pharmaceuticals , Inc. (NASDAQ:LXRX), a biopharmaceutical company, has entered into an exclusive licensing agreement with Viatris Inc (NASDAQ:VTRS). for the development and commercialization of the diabetes drug sotagliflozin outside of the United States and Europe, as disclosed in a recent SEC filing.
Under the terms of the agreement signed today, Viatris will have the exclusive rights to develop and sell the drug in the specified territories, with a commitment to adhere to a jointly approved commercialization plan. Viatris will handle all necessary regulatory processes and is tasked with conducting any additional clinical trials required for approval in the licensed regions.
Lexicon is set to receive an upfront payment of $25 million from Viatris. Furthermore, the agreement stipulates potential regulatory milestone payments totaling up to $12 million and sales milestone payments that could reach $185 million. Additionally, Lexicon will earn royalties on net sales, with rates varying from low double-digits to upper-teens percentages.
In conjunction with this agreement, Lexicon and Viatris will establish a manufacturing and supply deal, where Lexicon will provide sotagliflozin to Viatris for both development and commercial use. Viatris will purchase the supply at a predetermined transfer price.
The complete terms of the agreement will be disclosed in Lexicon's annual report on Form 10-K for the year ending December 31, 2024. This strategic partnership is expected to enhance the global reach of sotagliflozin, potentially benefiting patients with diabetes in markets outside of Lexicon's direct commercial focus.
The information for this article is based on a press release statement.
In other recent news, Lexicon Pharmaceuticals has entered into a global licensing agreement with Viatris for the commercialization of the diabetes and heart failure drug sotagliflozin. This partnership aims to extend the drug's reach to patients across the globe. In financial developments, Lexicon reported a net loss of $53.4 million in Q2 2024, with revenues of $1.6 million, primarily from sales of INPEFA, the marketed form of sotagliflozin.
The company has also seen changes in its executive team, with Jeffrey L. Wade ending his tenure as president and COO, and Kristen L. Alexander stepping into the role of principal financial officer. Analyst firms Piper Sandler and H.C. Wainwright have maintained positive ratings for Lexicon, highlighting the potential of the company's drugs.
Lexicon is preparing for an FDA review of Zynquista and has initiated patient enrollment for the Phase 3 SONATA trial of sotagliflozin in hypertrophic cardiomyopathy. The company also anticipates top-line data for the LX9211 study in diabetic peripheral neuropathic pain by Q2 2025. These are among the recent developments at Lexicon Pharmaceuticals.
InvestingPro Insights
Lexicon Pharmaceuticals' recent licensing agreement with Viatris for sotagliflozin aligns with the company's financial position and growth prospects. According to InvestingPro data, Lexicon's revenue growth has been impressive, with a 794.59% increase in the last twelve months as of Q2 2024. This substantial growth rate suggests that strategic partnerships like the one with Viatris could further boost the company's revenue streams.
InvestingPro Tips highlight that Lexicon holds more cash than debt on its balance sheet, which provides financial flexibility to support the development and commercialization efforts required by this new agreement. Additionally, analysts anticipate sales growth in the current year, which may be partly attributed to such strategic moves.
However, investors should note that Lexicon is quickly burning through cash and is not currently profitable. The company's gross profit margin is weak, with a negative 1,674.48% in the last twelve months as of Q2 2024. These factors underscore the importance of the upfront payment and potential milestone payments from the Viatris deal in strengthening Lexicon's financial position.
For those interested in a deeper analysis, InvestingPro offers 7 additional tips for Lexicon Pharmaceuticals, providing a more comprehensive view of the company's prospects and challenges.
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