Welcome and Introduction - Lexicon Pharmaceuticals · and business development and licensing at...

© 2018 Lexicon Pharmaceuticals, Inc. 0 Precision Science. Pioneering Medicine. Patient Driven.

Welcome and Introduction

Precision Science. Pioneering Medicine. Patient Driven.

Kimberly Lee, D.O.Head of Investor Relations and Corporate Strategy

April 10, 2018

© 2018 Lexicon Pharmaceuticals, Inc. 1

This presentation, including any oral presentation accompanying it, contains “forward-

looking statements,” including statements about Lexicon’s strategy and operating

performance and events or developments that we expect or anticipate will occur in the

future, such as projections of our future results of operations or of our financial condition,

the level of market acceptance and commercial success of XERMELO®, the results of and

expected timing of the completion of our ongoing and future clinical trials, the expected

timing and outcome of discussions with regulatory authorities regarding such trials, the

expected timing of initiation of our other planned clinical trials, the expected enrollment in

our ongoing and future clinical trials, our other research and development efforts, the

status of activities performed under our collaborative agreements and the anticipated

trends in our business. These forward-looking statements are based on management’s

current assumptions and expectations and involve risks, uncertainties and other important

factors 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 in our most recent annual report on Form 10-K and

quarterly reports on Form 10-Q, including the sections entitled “Risk Factors,” as well as

our current reports on Form 8-K, in each case 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.

Forward-looking Statements


Opening Remarks


Lonnel CoatsPresident and Chief Executive Officer

April 10, 2018


R&D Day Agenda and Speakers

Time Topic Speaker

8:30 – 8:35 Introduction Lonnel Coats

8:35 - 8:40 XERMELO market opportunity Alex Santini

8:40 – 8:50 XERMELO life cycle management introduction Praveen Tyle, Ph.D.

8:50 – 9:15 Preclinical evidence for and clinical development of XERMELO in cancer Ranuka Iyer, M.D.

9:15 – 9:30 Q&A Session #1

9:30 – 9:40 Coffee break

9:40 – 9:45 Sotagliflozin – introduction Pablo Lapuerta, M.D.

9:45 – 10:00 Sotagliflozin mechanism of action David Powell, M.D.

10:00 – 10:20 Sotagliflozin Phase 3 program Pablo Lapuerta, M.D.

10:30 – 10:45 Unmet need in type 1 diabetes and management of risk/benefit Jake Kushner, M.D.

10:45 – 11:05 Pipeline progress – LX2761 and LX9211updates Praveen Tyle, Ph.D.

11:05 – 11:10 Finance overview Jeffrey L. Wade, J.D.

11:10 – 11:25 Q&A Session #2

11:25 – 11:30 Closing remarks Lonnel Coats


Speaker Biographies

Lonnel Coats, President and Chief Executive Officer and Director

Mr. Coats has been our president and chief executive officer and a director since July 2014. From 1996 through June 2014, Mr. Coats served in a series of leadership positions at Eisai Inc. and Eisai Corporation of North America, most recently as chief executive officer from 2010 to June 2014 and president and chief operating officer from 2004 to 2010. Prior to joining Eisai, Mr. Coats spent eight years with Janssen Pharmaceuticals, Inc., a division of Johnson & Johnson, where he held a variety of management and sales positions. Mr. Coats received his B.P.A. from Oakland University.

Alex Santini, Executive Vice President and Chief Commercial Officer

Alexander A. Santini has been our executive vice president and chief commercial officer since November 2016 and previously served as vice president, market access and head of market access and channel management since joining our company in April 2015. Mr. Santini served in a series of leadership positions at Bayer Healthcare Pharmaceuticals from 2006 to October 2014, most recently as vice president of market access and executive member, where he had executive responsibility for market access, pricing, trade and channel management and payer account management. Prior to 2006, Mr. Santini held executive leadership roles of increasing responsibility at Berlex Laboratories, where he worked for 22 years before joining Bayer. Mr. Santini served as a non-commissioned officer in the United States Air Force, where he completed the Radiologic Technology Program at the United States Air Force School of Health Care Science and an AAS in business marketing from Westchester Community College.


Speaker Biographies

Praveen Tyle, Ph.D., Executive Vice President of Research and Development

Dr. Tyle has been our executive vice president of research and development since May 2016. Dr. Tyle was previously a member of the executive management team at Osmotic Pharmaceutical Corp., serving as president and chief executive officer from January 2013 through April 2016 and as executive vice president and chief scientific officer from August 2012 to December 2012. Prior to his service at Osmotica, Dr. Tyle held a series of leadership positions within the pharmaceutical industry, including executive vice president and chief science officer for the United States Pharmacopeia, senior vice president and global head of research and development and business development and licensing at Novartis OTC, corporate senior vice president of global research and development and chief scientific officer at Bausch & Lomb Incorporated and vice president and global head of pharmaceutical sciences at Pharmacia Corporation. Dr. Tyle received his B.Pharm. from the Indian Institute of Technology, Banaras Hindu University and his Ph.D. in pharmaceutics and pharmaceutical chemistry from the Ohio State University.

Renuka Iyer, M.D., Section Chief, GI Medical Oncology, Co-Director Liver and Pancreas Tumor Center, Roswell Park Cancer Center

Dr. Renuka Iyer is a Professor of Oncology and Co-Director of the Liver and Pancreas Tumor Program and Section Chief for Gastrointestinal Oncology for Roswell Park Comprehensive Cancer Center in Buffalo, NY. Her clinical and research focus is hepatocellular cancer, biliary cancer and neuroendocrine cancer and she does clinical and lab research in these diseases. Dr. Iyer received her MD at the University of Mumbai, Grant Medical College. She completed her residency at Lincoln Medical and Mental Health Center, Cornell University and her fellowship at Roswell Park before joining the faculty at Roswell Park where she has been for the last 14 years. She serves as co-chair of the regional meetings planning committee for NANETs and on the Medical and Nursing Advisory Board of the Cholangiocarcinoma Foundation. She is a member of the Alliance hepatobiliary clinical trials working group and a panelist on the NCCN hepatobiliary guidelines panel.


Speaker Biographies

Pablo Lapuerta, M.D., Executive Vice President and Chief Medical Officer

Dr. Lapuerta is our executive vice president and chief medical officer and previously served in a number of other roles since joining Lexicon in 2011, including executive vice president, safety, pharmacovigilance and medical affairs and executive vice president, clinical development. Prior to joining Lexicon, Dr. Lapuerta was a vice president at Bristol-Myers Squibb Company with responsibility for global development of an Alzheimer’s disease drug candidate. He also served as senior vice president, clinical strategy and chief medical officer for CogentusPharmaceuticals, Inc. He holds a B.A. in biology from Harvard College and an M.D. from Harvard Medical School.

David Powell, M.D., Senior Vice President, Metabolism Research

Dr. Powell received a B.A. from Rutgers University and an M.D. from UMDNJ – New Jersey Medical School. After pursuing postgraduate pediatric fellowship training in nephrology at the University of California – San Francisco and endocrinology research at Stanford University Medical School, Dr. Powell joined the Baylor College of Medicine Pediatrics faculty in 1986 where he practiced medicine as a nephrologist and ran an NIH-supported research program focusing on the action of insulin and other hormones. In 2000, Dr. Powell joined Lexicon to lead our metabolism research program. To date, this program has identified telotristat ethyl, an approved treatment for carcinoid syndrome diarrhea in combination with SSA therapy in adults inadequately controlled by SSA therapy, and both sotagliflozin and LX2761, investigational drugs for individuals with diabetes.


Speaker Biographies

Jake Kushner, M.D., McNair Medical Institute Scholar and Associate Professor at the Baylor College of Medicine

Dr. Jake Kushner is a McNair Medical Institute Scholar and an Associate Professor at the Baylor College of Medicine. For 6 years he served as Chief of Pediatric Diabetes and Endocrinology at the Baylor College of Medicine and Texas Children’s Hospital. A graduate of the University of California at Berkeley, Dr. Kushner earned his medical doctorate from Albany Medical College followed by pediatrics residency at Brown, pediatric endocrinology fellowship at Children’s Hospital Boston, and a 5-year research fellowship at the Joslin Diabetes Center (both of Harvard Medical School). Dr. Kushner has received numerous national honors, including a Basil O’Connor award from the March of Dimes and elected membership to the American Society of Clinical Investigation. He has also served as president of the Society for Pediatric Research. His research has been supported by the National Institutes of Health, the Juvenile Diabetes Research Foundation, and other sources. Dr. Kushner serves as an advisor to Lexicon Pharmaceuticals, Virta Health Inc., and the T1D Exchange. He is the current chair of DDK-B, an NIH study section that reviews training applications in diabetes research. Dr. Kushner’s clinical interests center around the care of children, adolescents, and young adults with type 1 diabetes.

Jeffrey L. Wade, J.D., Executive Vice President, Corporate and Administrative Affairs and Chief Financial Officer

Mr. Wade is our executive vice president, corporate and administrative affairs and chief financial officer. Mr. Wade has been with Lexicon since 1999 and has served in a number of roles, including executive vice president, corporate development and chief financial officer and executive vice president and general counsel. Prior to joining Lexicon, he was a corporate securities and finance attorney with the law firm of Andrews & Kurth L.L.P., most recently as a partner, where he represented companies in the biotechnology, information technology and energy industries. Mr. Wade is a member of the board of directors of the Texas Healthcare and Bioscience Institute. He received his B.A. and J.D. from the University of Texas.


XERMELO Market Opportunity


Alex SantiniExecutive Vice President and Chief Commercial Officer

April 10, 2018


XERMELO® (telotristat ethyl) - First and Only Oral Treatment Approved for Carcinoid Syndrome Diarrhea

• Reduces serotonin production

• Reduces frequency of carcinoid syndrome diarrheaN o v e l , o r a l t r y p t op h a n

h y d r o x y l a s e ( T P H ) i n h i b i t o r

• U.S. approval February 28, 2017

• U.S. launch March 1, 2017

• EU approval September 19, 2017


Carcinoid Syndrome Diarrhea – Meaningful Market Opportunity

D E S C R I P T I O N P A T I E N T P O P U L A T I O N *

Includes:

• Frequent, debilitating diarrhea

• Facial flushing

• Abdominal pain

• Fatigue

• Heart valve damage over time

Carcino id syndrome resu l ts f rom metas tat ic neuroendocr ine tumors (mNETs ) that produce la rge amounts o f serotonin , a key med iator o f gas tro intest ina l mot i l i ty , pa in and inf lammat ion

D I S E A S E B U R D E N

~14,000 Patients in U.S.

~98% On SSA therapy in U.S.

*EPI Research, NET Claims data from IMS, Lexicon-sponsored market research with 50 oncologists, August 2014; Yao et al. J Clin Onc. 26:3063-3072, 2008.

WAC for SSA therapies ~ $6,111-$7,249/month~11% CAGR in WAC over past 2 years


Perception Study – Physicians’ vs. Patients’ View of Symptom Control

Source: Primary research with 80 oncologists and 24 patients (May 2015)

45% Uncontrolled

80%

20% Controlled

80% Uncontrolled

55% Controlled

Physicians’ View Patients’ View

There remains a significant difference between patients’ and physicians’ attitudes toward how well controlled the disease is


XERMELO Life Cycle Management –Introduction


Praveen Tyle, Ph.D.Executive Vice President, Research & Development

April 10, 2018


XERMELO® (telotristat ethyl) Life Cycle Management

Compound Indication Preclinical Phase 1 Phase 2 Phase 3 Registration Marketed

Carcinoid syndrome diarrhea

Carcinoid syndrome diarrhea

Telotristat EthylNeuro-endocrine tumor (NET)

Telotristat EthylBiliary tract cancer(BTC)

Telotristat EthylInvestigator-Initiated studies

Telotristat Ethyl/other TPH inhibitors

Other indications

FDA approval Feb 28, 2017; US launch Mar 01, 2017

EMA approval Sept 19, 2017; EU launch ongoing

Initiating Phase 2 in 2018

Initiating Phase 2 in 2018

In discussion


XERMELO (telotristat ethyl) and Somatostatin Analogs (SSAs) Have Different and Complementary Mechanisms of Action

Tryptophan

5-hydroxytryptophan (5-HTP)

Serotonin (5-HT)

Tryptophan hydroxylase

(TPH)

Neuroendocrine tumor (NET) cell

SSASSTR

Telotristatethyl

Graphic adapted from: Kronenberg H, et al, eds. Williams Textbook of Endocrinology. 11th ed. 2008:1823-1824 and Van der Horst-Schrivers A, et al. Neuroendocrinology. 2004;80(suppl 1):28-32.

1XERMELO [prescribing information]. The Woodlands, TX: Lexicon Pharmaceuticals, Inc.; February 2017.2Sandostatin LAR Depot [prescribing information]. East Hanover, NJ: Novartis Pharmaceuticals Corporation; July 2016. 3Molina-Cerrillo J, et al. Oncologist. 2016;21(6):701-707. 4Appetecchia M, Baldelli R. J Exp Clin Cancer Res. 2010;29:19.

Inside the Cell• Telotristat ethyl

inhibits TPH 1,3

• Telotristat ethyl decreases serotonin overproduction 1

Outside the Cell• SSA blocks the release

of serotonin 2,4


XERMELO (telotristat ethyl) Life Cycle Management –

Anti-tumor Activity Driven by Mechanism of Action

➢Clinical studies have established anti-tumor activity of SSAs in patients with NETs▪ Multiple pathways are involved, one of which relates to inhibition

of serotonin release

➢Preclinical data show that inhibiting TPH and serotonin synthesis reduces cancer cell growth in cholangiocarcinoma and gallbladder cancer (biliary tract cancers – BTC)

➢Suggest an opportunity for XERMELO

➢ Initiating Phase 2 studies

Preclinical evidence for and

clinical development of

XERMELO in cancer

Renuka Iyer, M.D.,

Roswell Park Comprehensive Cancer Center

Name/ Topic Company Role

Renuka Iyer, MD

Novartis;

Ipsen Biopharmaceuticals, Inc.

Merck;

Ipsen Biopharmaceuticals, Inc.

Eisai Oncology, Bayer

Consulting / Speaking / Teaching

Grant / Research Support

Advisory Committee / Review Panel

Relevant Disclosure and Resolution

In accordance with the ACCME® standards for Commercial Support these relationships were reviewed

Under Accreditation Council for Continuing Medical Education, guidelines disclosure must be made regarding relevant financial

relationships with commercial interests within the last 12 months.

Overview

• Role of serotonin in solid tumors

• 5HT blockade slows tumor growth

• Neuroendocrine Tumor (NET) Overview- NET Space

• Where Xermelo may fit (Rationale: 5HT+ mTOR/ 5HIAA)

• Biliary Tract Cancer (BTC) Overview - BTC Space

• Preclinical studies in BTC models

• Chronic inflammation and Immunity - BTC and Tryptophan

• Where Xermelo may fit

• Takeaways

Serotonin in Solid Tumors

• Serotonin is a mitotic factor

• Serotonin growth stimulatory

effect also seen on several types

of carcinoma and carcinoid cell

lines

• Inhibition of cancer cell growth

occurs in some cases through

serotonin receptor antagonists

• Current evidence suggests

inhibiting serotonin production via

TPH1 could inhibit proliferation of

cancer cells

Adapted from Sarrouilhe D, et al. Curr Mol Med. 2015;15:62-77. * Christensen DK 2016 Oncotarget

/ NETs

Anti-5HT inhibits tumor growth - Synergy

with mTOR

• Anti-5HT therapy showed slower growth rate (A,

B) (CHEMOPREVENTIVE EFFECT)

• 4/12 mice developed tumors (33%) less

incidence (C/D) in wild type and no tumors in

TPH deleted 0/11

Growth with rapamycin + SB 204 (antagonist of

5HT)1

In presence of fetal calf serum (control) rapa

did not inhibit proliferation but SB204 did

1 Soll C, Hepatology, 51(4) 2010: 1244-1254

SB 204 + rapa

SB 204

Rapa

SB 204

SB 204 + rapa

Rapa

Neuroendocrine Tumors – Overview

• Neuroendocrine tumors (NETs), a relatively rare and heterogeneous tumor type, affect approximately 171,321 people in the United States1

• Cause debilitating symptoms and potentially life-threatening issues2, many from dense fibrosis

• Classified by embryonic origin (foregut, midgut,

and hindgut)3,4

• Diagnosis is complex, may remain asymptomatic for a long time and is often misdiagnosed due to non-specific symptoms5,6

• First-line systemic treatment of GEP-NETs is long-acting SSAs7,8

• Second-line systemic treatments include everolimus, chemotherapy, PRRTs and liver-directed therapies7,8

1 Dasari A JAMA Oncol. 2017 Oct 1;3(10):1335-1342. 2 Hallet J, et al. Cancer. 2015;121:589-597. 3 Lawrence B, et al. Endocrinol

Metab Clin North Am. 2011;40:1-18. 4 Friling A, et al. Endocr Relat Cancer. 2012;19:R163-R185. 5 Mamikunian G, et al, eds.

Neuroendocrine Tumors: A Comprehensive Guide to Diagnosis and Management. 4th ed. Inglewood, CA: Inter Science Institute;

2009. 6 Öberg K. Ann Oncol. 2010;21(suppl 7):vii72-vii80. 7 Kunz P. J Clin Oncol. 2015;33:1855-1863. 8NCCN clinical practice

guidelines in oncology (NCCN Guidelines®): neuroendocrine tumors. V.3.2017.

http://www.nccn.org/professionals/physician_gls/pdf/neuroendocrine.pdf. Accessed 10/12/2017

http://www.nccn.org/professionals/physician_gls/pdf/neuroendocrine.pdf. Accessed 10/12/2017

NET Space: New Antitumor Agents

Needed

• SSA: Anti-proliferative effects (PROMID 13 months, CLARINET 29 months NR) control arm placebo

First line untreated, GEPNETs. Not lung.

• Everolimus: RR ~7-9%, PFS 11 months RADIANT 4 control arm placebo 3.9 months.

After SSA, progressed within last 6 months. All NETs, ECOG 0,1

• PRRT: RR 18%, PFS 25-40 months. Control arm Sandostatin 60 mg,

Benefit varies.

Pancreas > GI NETs > Unknown primary NETs. Only

for SSR positive disease, restricted to tertiary sites, good kidney

function.

Correlation Between u5-HIAA Levels and

Outcome in NETs

• TELESTAR study, Xermelo treatment associated with weight gain- unexplained-

Was it due to stable disease?

• PFS or QOL, or SD is the best response even in effective therapies in NETS:

PROMID (66%), CLARINET (NR), RADIANT 4 (73%) AND NETTER- 1 (NR) in

this disease

1 Van der Horst-Schrivers A, et al. Eur J Cancer. 2007;43:2651-2657. 2 Bartholomew T, et al. Poster. ENETS. 2014 (abstr H2).3 Kulke MH et al, J Clin Oncol. 2017 ;35(1):14-23. 4 Yao J GI asco 2012 J ournal of Clinical Oncology 2012 30:15_suppl, 4014-4014

Re-analysis of RADIANT 2:

Everolimus + Octreotide vs

OctreotideMedian PFS was significantly longer

for pts with baseline 5-HIAA

<median vs >median at baseline.

5-HIAA< median 17months vs 11

months > median; p<.001)

Everolimus was more

effective in low 5HIAA, put

another way less effective in

high 5HIAA4

High 5HIAA correlated

with reduced survival in

retrospective studies of

NETs 1,2

Telotristat effectiveness

strongly correlated with

5HIAA reduction3

NET Proof-of-Concept (POC) Study

Design

• Efficacy and safety of everolimus plus Xermelo will be

studied in patients with well differentiated NETs of midgut

origin

• Single arm, open label study

• Primary endpoint will be the rate of progression-free survival

at 12 months

– Historical control 12-month PFS from RADIANT-4 study is 44%

Biliary Tract Cancers – Overview

• Approximately 10,000 cases per year were diagnosed as

aggressive malignancies with poor prognosis1, but

intrahepatic cholangiocarcinoma is increasing2

• Multiple molecular signatures identified in different biliary tract

cancer types3

• Palliative first-line chemotherapy – cisplatin/gemcitabine 3-4

• No standard second-line palliative chemotherapy4

• Folfox or fluoropyrimidine based chemo is used

1 Marks & Yee. World J Gastroenterol. (2016); 22(4): 1335-1347. 2Goral V. Asian Pacific J. Cancer Prev.

(2017); 18(6): 1469-73 3 Zhao & Lim. J. Gastrointestinal Oncol. (2017); 8(3): 430-40; 4 NCCN Clinical

Practice Guidelines in Oncology. Hepatobiliary Cancers. Guidelines Version 3. 2017, August 15, 2017.

https://www.nccn.org/professionals/physician_gls/PDF/hepatobiliary.pdf. Accessed on 10/04/17.

https://www.nccn.org/professionals/physician_gls/PDF/hepatobiliary.pdf

Only One Approved Therapy -

Urgent Need in Biliary Cancer• GEM CIS (approved): versus gem alone, 12 weeks (stop or continue).

11.7 mo OS vs 8.1 with gem and PFS 8.0 vs 5.0 with gem alone. RR 20%.1

ABC-02 - Phase 3 study of advanced biliary cancer accrued 410 pts in 28

months.

• FOLFOX (off-label): PFS 3.6 months, less if no response to prior therapy2

• Gem cape, Gem abraxane cis, VERY few trials

Comprehensive exome and transcriptome analysis

of intrahepatic, perihilar and distal

cholangiocarcinomas and gallbladder cancers in

Japanese patients. IDH1, IDH2, FGFR family,

HER 2 main actionable 3

1 Valle J, Wassan H, Palmer Dh et al N Engl J Med. 2010. 362(14):1273-81. 2 Lamarca A et al Annals of Oncol 25: 2328-2338,20143 Razumilava N, Gores G. Nat Genet. 2015. 47(9):967-8.

Evidence Supporting Serotonin’s Role in

BTC Preclinical Models• Dysregulation of serotonin may

be associated with progression

of BTC1

• TPH1 is upregulated1 and

monoamine oxidase-A is

markedly decreased in BTC2

• Increased serotonin secretion in

BTC cell lines and bile of BTC

patients1

• Inhibition of serotonin synthesis

by a TPH Inhibitor (pCPA)

resulted in decreased cell

proliferation in vitro and in vivo1

• Cholangiocarcinoma (CCA)

shown to express similar

markers as NETs1

1 Alpini G et al, Cancer Res. 68:9184-9193, 2008 2 Huang L et al, Lab Invest. 92:1451-1460, 2012

TPH

inhibitor

Vehicle

NET markers

pCPA: p-chlorophenylalanine

Chronic Inflammation and Immune Dysfunction are Drivers

in BTC Progression - Tryptophan Plays a Role in

Regulation of Both

1 Romani L, Fallarino F, De Luca A et al Nature 2008. 451(7175):211-5 2 Li L et al, Front Immunol. 2012; 3:109. 3 https://www.cancer.gov/types/liver/patient/bile-duct-treatment-pdq 4 Goeppert B et al Br J Cancer 2013:109:2665–2674

Tryptophan is a key factor

in chronic inflammation

and cancer1

Tryptophan plays a role

in immunomodulation2

• Bile duct stones

• Liver fluke infections

• Chronic HBV and HCV infection

BTC is caused by inflammation3

Tumor infiltrating lymphocytes

are prognostic in BTC4

• Immune targeting is of great

interest in BTC- Several

ongoing trials

BTC POC Study Design

• Efficacy and safety of Xermelo in combination with

standard 1st-line chemotherapy (gemcitabine plus

cisplatin) will be studied in patients with advanced BTC

• Single arm, open label study

• Primary endpoint will be the rate of progression-free

survival at 6 months

– Historical control 6-month PFS from ABC-02 study is 59.3%

Takeaways• Serotonin is overproduced in many cancers and has a role in cancer

progression

• Significant need exists in NETs and BTC, orphan diseases, but rising

in incidence

• In NETs, in combination with everolimus, especially in elevated 5HIAA

where everolimus doesn’t work as well, Xermelo lowers 5HIAA and

may improve patient outcomes

• In BTC, survival is under one year with gemcitabine and cisplatin in

first line. In addition, patients don’t tolerate cisplatin after 6 months.

Adding Xermelo may maintain benefit from gemcitabine and improve

quality of life.

• Xermelo has potential in second line or alone, to slow progression,

and demonstrate efficacy in clinical or lab biomarkers

• Ongoing preclinical work and collaborations may help develop more

indications

THANK YOU!


XERMELO Life Cycle Management –Opportunities for XERMELO



April 10, 2018


Estimated Number of U.S. Patients Eligible for XERMELO by Indication, if Approved, By 2025

US prevalence for NETs based on Dasari 2017. US growth rate to 2025 assumes the last 5-year (2007-2011) growth rate will continue to 2025.US prevalence for CSD assumes that 52% of NET patients have mid-gut tumors, of which 20% will experience Carcinoid Syndrome and of those, 84% will experience CSD (source: Mamikunian G, et al, eds. Neuroendocrine Tumors: A Comprehensive Guide to Diagnosis and Management. 4th ed. Inglewood, CA: Inter Science Institute; 2009. 2. DeVita V, et al, eds. Cancer: Principles and Practice of Oncology. 7th ed. Philadelphia, PA: Lippincott Williams & Wilkins; 2000).Overlap between the two NET-related indications represents tumor progressive patients who are on everolimus.Cholangiocarcinoma incidence assumed to be 1.6 per 100K in the US according to Kirstein et el. 75% are metastatic due to late/difficult diagnosis, and prevalence rate assumes a survival curve according to DeOliverira et al. Gallbladder cancer incidence assume to be 1.1 per 100K in the US according to Henley et al. 45% are metastatic, and prevalence is calculated by the survival rate based on hundal et. Al.NET patient eligible for XERMELO assumes 52% of all NET patients will have a midgut tumor (source: Dasari, 2017), and of those, 20% of the patients are on everolimus(Lexicon market research, Jan 2018).All CSD patients assumed to be XERMLEO eligible, even though penetration rate may differ depending on symptoms.90% of BTC patients are on Gem/Cis and are deemed eligible for XERMELO.

+20,000

Progressing

Mid-Gut NETs

18,000

Carcinoid

Syndrome

Diarrhea

10,000

Biliary Tract Cancers


Q&A Session #1


April 10, 2018


Sotagliflozin Discovery and Differentiation

Pablo Lapuerta, M.D.Executive Vice President and Chief Medical Officer

April 10, 2018


Sotagliflozin Development and Differentiation

• Genetic technology guided a discovery biology program that differentiated sotagliflozin

- First company to develop a dual SGLT1/2 inhibitor

• A profile with robust efficacy and potential opportunities in safety has guided sotagliflozin clinical research

• Unmet needs in type 1 diabetes indicate opportunity for sotagliflozin to improve outcomes

- Therapeutic innovation in type 1 diabetes has mostly been limited tovariations on insulin and its delivery

- Insulin has a narrow therapeutic window, with hypoglycemia being asignificant challenge to intensive glucose management

• In type 2 diabetes sotagliflozin has an important opportunity for those with renal impairment

- Selective SGLT2 inhibitors are less effective and, in some cases, contraindicated in patients with chronic kidney disease


Mechanism of Action of Sotagliflozin


David Powell, M.D.Senior Vice President, Metabolism

April 10, 2018


Sotagliflozin - First-in-Class Dual SGLT1/SGLT2 Inhibitor for Diabetes

SGLT2 SGLT2 reabsorbs 90% of filtered glucose in the kidney

Inhibiting SGLT2 in the kidneyincreases glucose excretion in the urine

Results in reduced glucosereabsorbed into the body

Mechanism is independent of insulin

Effect diminishes with declining renal function


SGLT2 reabsorbs 90% of filtered glucose in the kidney





Sotagliflozin - First-in-Class Dual SGLT1/SGLT2 Inhibitor for Diabetes

SGLT2 SGLT1 is the primary transporterfor glucose/galactose in the GI tract

Inhibiting SGLT1 in the GI tractreduces glucose absorption after a meal

Results in elevated GI hormones (GLP-1, PYY) and reduced peak blood glucose


Effect does not diminish with declining renal function

SGLT1


Mechanism of Action (MOA):Preclinical Data


SGLT2 Knockout (KO) Mice: Increased Urinary Glucose Excretion (MOA) Improved Glucose Tolerance

WT 4 KO 4

Oral Glucose Tolerance Test

Recent pooled WT

WT KO

WT 4 KO 4

Recent pooled WT

Oral Glucose Tolerance Test

t0 t30 t60

Time in Minutes

t90G

lucose A

rea U

nd

er

the C

urv

e

Initial Screen: SGLT2 KO Mouse Data

Source: Powell DR et al 2013 Am J Physiol Endocrinol Metab


SGLT1 KO Mice: Reduced Glucose Absorption (MOA) Profoundly Improved Glucose Tolerance

WT 4 KO 6

Recent pooled WT

t0 t30 t60

Time in Minutes

WT 4 KO 6

Recent pooled WT

WT KO

Initial Screen: SGLT1 KO Mouse Data

Glu

cose A

rea U

nd

er

the C

urv

e

Oral Glucose Tolerance Test Oral Glucose Tolerance Test



0

100

200

300

400

500

0.4 0.6 0.8 1.0 1.2 1.4 1.6

Nu

mb

er

of

KO

Lin

es

KO / WT Glucose Excursion AUC

Glucose Tolerance: Improved Normal Impaired

SGLT2

DPP4

SGLT1

Lexicon Screen of Gene Knockouts Identified SGLT1 and SGLT2 as Top Anti-Diabetic Targets



Plasma GLP-1 Levels Increase in SGLT1 KO Mice after a Glucose Challenge

Meal challenge provided at hr 0

N = 4-5 mice for each data point

Cecal Glucose Cecal pH Plasma Total GLP-1

Source: Powell DR et al 2013 J Pharmacol Exp Ther


Plasma GLP-1 Levels Do Not Increase in SGLT2 KO Mice after a Glucose Challenge


N = 4-5 mice for each data point

Plasma Total GLP-1Cecal Glucose Cecal pH



Sotagliflozin Improved Glycemic Control and Increased GLP-1 in a Preclinical Model of Type 2 Diabetes

Improved Glucose Tolerance Lower A1C

• Data from KKAy mouse model of T2D (n = 15 mice/group)

• Favorable preclinical safety profile; no evidence of gastrointestinal side effects

Increased GLP-1



Combination of Sotagliflozin and Sitagliptin Synergistically Increased Active GLP-1 Levels


N = 5 mice for each data point

Measures taken after 14 days of combination dosing in mice

Source: Zambrowicz et al 2013 Clin Ther


Sotagliflozin Lowered Blood Glucose While Avoiding Hypoglycemia in Preclinical Model of Type 1 Diabetes

Frequency of hypoglycemia(Number of samples):

< 70 mg/dL <50 mg/dL 0.05U insulin/vehicle: 0/100 0/100

0.2U insulin/vehicle: 13/100 5/1000.05U insulin/2 mg/kg sotagliflozin: 0/100 0/100

0.05U insulin/30 mg/kg sotagliflozin: 1/90 0/90

Study performed in NOD Mouse model of T1D (n = 9-10 mice/group)

* ** *

** **

*

*Different from other groups, p < 0.05

Source: Powell DR et al 2015 Diabetes Metab Syndr Obes


Mechanism of Action: Clinical Data


Postprandial Glucose Reduction is Characteristic of SGLT1 Inhibition in Subjects with T2D

p < 0.001, placebo AUC vs AUC of 150 mg or 300 mg

Blood Glucose Above Fasting Level (from Randomized, Placebo-controlled Phase 2a Study of Sotagliflozin; n=12/group)

Source: Zambrowicz et al 2012 Clin Pharmacol Ther


Glucose Absorption and Reabsorption in Individuals with Type 2 Diabetes (T2D)

No Urinary Glucose


Meal

SGLT1 Glucose

Absorption

Glucose Filtration

SGLT2Glucose

Reabsorption

Blood Glucose

Tissues

Post-meal Glucose Levels,

T2D


Increased Urinary Glucose

Excretion

Glucose Absorption and Reabsorption in Patients with T2D on an SGLT2 Inhibitor


T2D

Sources: Zambrowicz et al 2012 Clin Pharmacol TherNishimura et al 2015 Cardiovasc Diabetol

Meal

SGLT1 Glucose

Absorption

Glucose Filtration

SGLT2Glucose

Reabsorption

Blood Glucose

Tissues

X


Meal

SGLT1 Glucose

Absorption

Glucose Filtration

Blood Glucose

Moderately Increased

Urinary Glucose Excretion

X

Glucose Absorption and Reabsorption in Patients with T2D on a Dual SGLT1/SGLT2 Inhibitor

X


T2D

Sources: Zambrowicz et al 2012 Clin Pharmacol TherNishimura et al 2015 Cardiovasc Diabetol

Tissues

SGLT2Glucose

Reabsorption


Single Dose of Sotagliflozin Elevates GLP-1 Over the Course of the Day in Subjects with Type 2 Diabetes

Randomized, cross-over study of subjects with T2D (n = 12) treated with single oral doses of different sotagliflozin formulations. A 5-day washout period separated formulation dosing days. Sotagliflozin data were compared to baseline values.

Baseline 2x150 mg Tablet 300 mg Liquid



Combining Sotagliflozin & Sitagliptin in Subjects with T2D Increases Active GLP-1 Compared to Either Agent Alone

Randomized, cross-over study of subjects with T2D (n = 18) treated with single oral doses of sotagliflozin, sitagliptin or the sotagliflozin/sitagliptin combination. 7-day washout periods separated compound dosing days.

*

*

* p < 0.001

vs combination

Source: Zambrowicz et al 2013 Clin Ther


Sotagliflozin Clinical Differentiation



April 10, 2018


Sotagliflozin Differentiation - Dual Inhibition of SGLT1 and SGLT2

• Potential for more robust efficacy than SGLT2 inhibition alone- Greater post-prandial glucose reduction- GLP-1 elevation after meals- Consistent A1C reduction- Efficacy in the setting of renal impairment

• Potential for differentiation in safety- Less urinary glucose excretion

• May be relevant to volume depletion, genitourinary infections, and DKA

- Potentially less hypoglycemia than standard of care with insulin

The vision of dual inhibition has guided clinical development


Sotagliflozin - Modest Urinary Glucose Excretion (UGE)

24 hour UGE (g)

Sotagliflozin400 mg

Canagliflozin300 mg

Empagliflozin25 mg

Dapagliflozin10 mg

Ertugliflozin15 mg

Healthy Volunteers

24 hour UGE (g)1 36-44 70 56 40 58

Type 2 Diabetes

24 hour UGE (g)2 54 >100 80 68 >69-80

Type 1 Diabetes

24 hour UGE (g)3 70 NA* 134 88 NA*

1Lapuerta et al. Diabetes & Vascular Disease Research 2015;12(2) :101–110, and FDA Clin. Pharm. Reviews obtained at www.fda.gov2Rosenstock et al. Diabetes Care 2015;38:431–438. Sha et al. PLoS One 2014;9(9):e110069, Heise et al. Diabetes Ther (2013) 4:331–345, List et al., Diabetes Care 32:650–657, 2009, Amin et al. Diab Obes Metab17: 591–598, 2015 3Lexicon data on file, study LX4211.206. Perkins et al. Diabetes Care 2014;37:1480–1483, Henry et al. Diabetes Care 2015;38:412–419*No published data on UGE in T1DM


Urinary Glucose Excretion from SGLT2 Inhibition -Function of Plasma Glucose

Example - Canagliflozin urinary glucose excretion after a meal is elevated for about 3 hours while glucose levels are high

Source: Diabetes Care 36:2154–2161, 2013

Reductions in post-prandial glucose from gastrointestinal

SGLT1 inhibition may limit UGE

– Canagliflozin– Placebo


Sotagliflozin Phase 2 Results in Type 2 Diabetes -Large Reductions in Postprandial Glucose

Green: Placebo, Blue: Sota 150 mg, Red: Sota 300 mg

Source: Lapuerta, P et al. Diabetes & Vascular Disease Research 2015, Vol. 12(2) 101–110


Sotagliflozin Differentiation - Long Half-life Supports Gastrointestinal SGLT1 Inhibition

Sotagliflozin400 mg

Canagliflozin300 mg

Empagliflozin25 mg

Dapagliflozin10 mg

Ertugliflozin15 mg

Half-life (hours)1

29 13.1 12 3* 15.3

Reductions in post-prandial glucose have been shown with sotagliflozin even 24 hours after the

last dose2

*half-life estimation may have been affected by limits of assay

1Lapuerta et al. Diabetes & Vascular Disease Research 2015;12(2): 101–110 and FDA Clinical Pharmacology Biopharmaceutics Reviews2Lexicon data on file, study LX4211.202


Sotagliflozin in Renal Impairment- Reduction in Postprandial Glucose

100

120

140

160

180

200

220

240

-1 0 1 2 3 4

Day -1 Day 7

100

120

140

160

180

200

220

240

-1 0 1 2 3 4

Day -1 Day 7

Sotagliflozinn=16

Placebon=15

Hours Hours

Glu

cose (m

g/dl)

Glu

cose (m

g/dl)

Mean 24-hour Urinary Glucose Excretion: 34 g on sotagliflozin 400 mg

Source: Zambrowicz et al. Clin Ther. 2015 Jan 1;37(1):71-82


Sotagliflozin in Renal Impairment - Elevation in Total GLP-1

Sotagliflozinn=16

Placebon=15

Hours Hours

Tota

l G

LP-1

, p

mol/

L

Tota

l G

LP-1

, p

mol/

L5

10

15

20

-1 0 1 2 3 4

Day -1 Day 7

5

10

15

20

-1 0 1 2 3 4

Day -1 Day 7

Source: Zambrowicz et al. Clin Ther. 2015 Jan 1;37(1):71-82


Advancing Sotagliflozin into Type 1 Diabetes -Reducing Glycemic Variability

Sensor Glucose (mg/dL)

0

50

100

150

200

250

300

350

400

Time

0:00:00 4:00:00 8:00:00 12:00:00 16:00:00 20:00:00 24:00:00

Figure 1: Continuous Glucose Monitoring (CGM) Data by Study day and TimeLX4211 - 203 Study --- Pioneer Group

Subject ID=102_001 Study Day=-1 Subject Status=INPATIENT BASELINE

B L D

B=Breakfast L=Lunch D=Dinner

Insulin Only

3 2 3.75 0 0.7 0

Sensor Glucose (mg/dL)

0

50

100

150

200

250

300

350

400

Time

0:00:00 4:00:00 8:00:00 12:00:00 16:00:00 20:00:00 24:00:00

Figure 1: Continuous Glucose Monitoring (CGM) Data by Study day and TimeLX4211 - 203 Study --- Pioneer Group

Subject ID=102_001 Study Day=1 Subject Status=INPATIENT ON TREATMENT

B L D

Start Sotagliflozinwith No Bolus Insulin

0 0.7 0

Insulin Bolus: Units

Source: Lapuerta et al. Diabetes & Vascular Disease Research 2015;12(2): 101–110

Baseline (Day -1)Insulin without Sotagliflozin

Day 1No insulin at breakfast

+ Sotagliflozin


Sotagliflozin Dapagliflozin

Optimizing insulin as robustly as possible ✓

Enrolling patients with A1C < 7.0% ✓

Enrolling patients with A1C >10.5% ✓

Enrolling patients with eGFR < 60 mg/dL ✓

Including a study in patients at risk for DKA ✓

Including a large pragmatic trial ✓

Conducting the largest program of its kind ✓

Type 1 Diabetes- Key Development Choices

The Vision:Robust efficacy with potential differentiation in safety


Sotagliflozin – Largest Phase 3 Program for an Oral Anti-Diabetic Agent in Broad Range of T1DM Patients

Phase 3 Studies in T1DM Patient Size/Dose

Primary Endpoint

Top-LineResults

StudyCompletion

inTandem1

• 750 patients

• Placebo, 200mg, 400mg once-daily

Reduction of A1C vs. placebo on optimized insulin (24 weeks)

Met primaryendpoint of efficacy and

favorable safety

Completed

(52-week total study duration)

inTandem2

• 750 patients

• Placebo, 200mg, 400mg once-daily

Reduction of A1C vs. placebo on optimized insulin (24 weeks)

Met primary endpoint of efficacy and

favorable safety

Completed


inTandem3

• 1,400 patients

• Placebo, 400mg once-daily

Proportion with A1C < 7.0% and no SH and no DKA (24 weeks)

Met primary endpoint of efficacy and

favorable safety

Completed


U.S. and EU regulatory filings for T1DM submitted in 1Q 2018


Sotagliflozin – Significant A1C Reductions on Top of Optimized Insulin in Patients with T1DM

-0.37%-0.39%

-0.03%

400mg dose 200mg dose Placebo

inTandem1 (n=793)A1C reduction (%) after24 weeks

-0.49%

-0.43%

-0.08%

400mg dose 200mg dose Placebo

inTandem2 (n=782)A1C reduction (%) after24 weeks


inTandem3 Phase 3 Clinical Trial – NEJM Publication in Sept 2017 Validates Need for New T1DM Therapy


inTandem3 Data from the NEJM – Primary Endpoint and All Secondary Endpoints Achieved

inTandem3 (n=1,405)

PlaceboSotagliflozin

400 mg P-Value

Net benefit 15.2% 28.6% p<0.001

A1C (%) -0.33 -0.79 p<0.001

Body weight (kg) +0.8 -2.2 p<0.001

Blood pressure (mmHg)* -5.7 -9.2 p=0.002

Bolus insulin -1.1 IU/day -3.9 IU/day p<0.001

*16 weeks in patients with SBP>130 mm Hg


Continuous Glucose Monitoring Data - SotagliflozinImproved Time in Range by Up to 3 Hours/day

• Positive pooled continuous glucose monitoring (CGM) data from the pivotal inTandem1 and inTandem2 studies announced recently

- Sotagliflozin significantly increased the time in target glucose range of 70-180 mg/dL and decreased glucose variability

Sotagliflozin 200 mg additional 1.3 hours per day in target glucose range

Sotagliflozin 400 mg additional 2.8 hours per day in target glucose range


inTandem3 Weight Data – Body Weight Significantly Reduced


Safety – Largest and Most Comprehensive Safety Database, Lower Hypoglycemia and Manageable DKA in High-Risk Patients

Severe Hypoglycemia DKA

• Hypoglycemia profile is relevant to patients- inTandem3: sotagliflozin vs. placebo; 11.8 vs. 15.4 events of glucose

≤55mg/dL per person-year (p<0.001)• Diabetic ketoacidosis (DKA) incidence low in setting of education and monitoring

24 week data Overall Rate Discontinuation Rate Overall Rate Discontinuation Rate

inTandem1 (n=793)• Placebo• Sotagliflozin 200 mg• Sotagliflozin 400 mg

6.7%4.2%4.6%

0.4%0.0%0.0%

0.0%1.1%3.1%

0.0%0.4%0.8%

inTandem2 (n=782)• Placebo• Sotagliflozin 200 mg• Sotagliflozin 400 mg

2.7%3.8%2.3%

0.0%0.0%0.0%

0.0%0.4%1.1%

0.0%0.0%0.8%

inTandem3 (n=1,405)• Placebo• Sotagliflozin 400 mg

2.4%3.0%

0.1%0.3%

0.6%3.0%

0.1%1.6%


Sotagliflozin and SGLT Inhibition – Incremental DKA Risk that Can Be Managed with Proper Care Instructions

Placebo-Adjusted Proportion of Patients with DKA Event2 Low Dose High Dose

inTandem Program 0.6% 2.4%

DEPICT-13 1.7% 2.5%

• Background rate of DKA in people with type 1 diabetes ranges between 5-8% annually1

• Sotagliflozin’s inTandem program and dapagliflozin DEPICT-1 have demonstrated manageable incremental DKA risk over placebo that can be mitigated with appropriate care instructions and monitoring

1 Beck et al, The T1D Exchange Clinic Registry, J Clin Endocrinol Metab 97: 4383-4389, 2012; Weinstock et al, Severe Hypoglycemia and Diabetic Ketoacidosis in Adults with Type 1 Diabetes: Results from the T1D Exchange Clinic Registry, J Clin Endocrinol Metab 98: 3411-3419, 2013 (proportion of patients reporting at least one DKA event in the previous 12 months).2 Proportion of patients with DKA event classified as either definite or probable/possible through 24 weeks of treatment;3 Dandona et al., Efficacy and safety of dapagliflozin in patients with inadequately controlled type 1 diabetes (DEPICT-1): 24 week results from a multicentre, double-blind, phase 3, randomised controlled trial, Lancet Diabetes Endocrinol 2017 (published online).

© 2018 Lexicon Pharmaceuticals, Inc.

A1C distribution created from population data from T1D ExchangeT1D population based on company research.

Type 1 Diabetes Mellitus (T1DM) – Large Market Opportunity

• 1.55 million adults are estimated to be living with type 1 diabetes in the United States in 2018 and has grown at 3.5%/year over the last 5 years

• 75% of adults living with type 1 have an A1C > 7.0%

• WAC of SGLT2i class is $14.35/day ($5,238/year)

• 12.7% CAGR in WAC over the last two years

1.55 Million Adults Living With T1D in the U.S.

1.55 M100%


0.88 M57%

0.67 M43%

1.55 Million Adults Living With T1D in the U.S.



DEPICT-1 excluded about 43% of the population (672K)

Only 57% of the T1D Community Studied



DEPICT-1 removed all patients who did not

have an A1C after run-in between 7.5%-10.5%



57% of the T1D Community Studied99+% of the T1D Community Studied

0.88 M57%

0.67 M43%

1.5 M99%

0.02 M1%

Dapagliflozin was restricted to 57% of the populationSotagliflozin is the most comprehensively studied SGLT in T1D

Sotagliflozin did not restrict patients:

• Included participants with an A1C after run-in between 5.6%-15.4%

• Included patients with an eGFR < 60 (5.3% of participants)

• Studied all adults – including those over 75 years old




We have submitted to the FDA the 1st application for approval of an oral adjunct to insulin

Unmet needs in type 1 diabetes

Jake A. Kushner, M.D.

[email protected]

@JakeKushnerMD

Disclosure: consultant for Lexicon, Virta

Health, KNOW foods, and Sanofi

Michael Bliss, The Discovery of Insulin,

University of Chicago Press, 1982, 2007

Was insulin a “cure” for type 1 diabetes?

The Cumulative Incidence of Long-

Term Sequelae of Juvenile Diabetes,

by Duration of Diabetes, Joslin Clinic,

1898-1956.

Insulin-treated T1D patients began to suffer from

unforeseen complications

Insulin-treated T1D patients had high rates of mortality,

even into the 1990s

Does improved glycemic control reduce

complications?

Diabetes Control Complication Trial (DCCT):

1441 T1D patients, 1-5 years duration, ages 13-39

“intensive therapy” vs. “conventional therapy”

Improved glucose control Intensive glucose control for ~6.5 years in DCCT

Decreased retinopathy with

intensive T1D treatment!

for only 10 yearsIntensive glucose control for ~10 years in DCCT

Decreased cardiovascular disease with intensive T1D

treatment!

Decreased mortality with intensive T1D treatment!

• Injected insulin is the only available

therapy

• High burden of illness: Very challenging

to keep blood sugars in normal range

• Risk of weight gain & hypoglycemia

with increased insulin

• Frequent hypoglycemia (typically 1-2

episodes per week)

• Severe hypoglycemia risk: ~10% per

year

• Pramlintide is the only FDA approved

T1D adjuvant therapy, associated with

hypoglycemia, and infrequently

prescribed

Millions of people have type 1 diabetes

Most with T1D fail to achieve A1c target

A1c target: <7 in adults

Most with T1D fail to achieve A1c target

18 y old, T1D for

>10 yrs

(High carb diet)

Adverse consequences in typically treated T1D?

Typically treated T1D results in

excess risk of cardiovascular

death

Weight gain is associated with cardiovascular

disease in intensive T1D treatment

Sotagliflozin Results

inTandem3

inTandem3

Placebo

Sotagliflozin

400 mg P-Value

Net benefit (A1c<7.0% without

severe hypo or DKA)15.2% 28.6% p<0.001

A1C (%) change at 24 weeks -0.33 -0.79 p<0.001

Body weight (kg) +0.8 -2.2 p<0.001

Blood pressure (mmHg)* -5.7 -9.2 p=0.002

Bolus insulin -1.1 IU/day -3.9 IU/day p<0.001

Hypoglycemia (glucose ≤ 55

mg/dL) episodes per person-year15.4 11.8 p<0.001

*16 weeks in patients with SBP>130 mm Hg.

• DKA education by healthcare providers

• Ketone monitoring recommended

• 3% DKA on sotagliflozin 400 mg at 24 weeks

Garg SK and Strumph P. N Engl J Med 2018; 378:966-968

(In 52 week studies, incidences of DKA on sotagliflozin were ~2-4%)

Sotagliflozin Clinical Trial

Safety Experience

Access provided by

CORRESPONDENCE

Effects of Sotagliflozin Added to Insulin in Type 1Diabetes

March 8, 2018

N Engl J Med 2018; 378:966-968

DOI: 10.1056/NEJMc1800394

Metrics

TO THE EDITOR

Garg et al. (Dec. 14 issue) report the superiority of adding sotagliflozin, an oral inhibitor of sodium–

glucose cotransporters 1 and 2 (SGLT1/2), to insulin in patients with type 1 diabetes, as compared with

placebo, in the inTandem3 trial. They used a unique primary end point that assesses both risk and benefit

simultaneously: a glycated hemoglobin of less than 7% without severe hypoglycemia or diabetic

ketoacidosis at week 24 (i.e., benefit without harm).

According to our calculations of the number needed to treat that are based on data provided in the article,

the number of patients who would need to be treated to show unqualified success (a situation in which

benefit is achieved without harm ) is 8, which is very close to 7, the number of patients who would need

to be treated for one patient to show benefit. During a 24-week period, the numbers of patients who

would need to be treated to show harm from at least one episode of severe hypoglycemia, diabetic

ketoacidosis, volume depletion, or genital mycotic infection with sotagliflozin, as compared with placebo,

are 167, 40, 64, and 23, respectively, with P values of 0.60, <0.001, 0.009, and <0.001. (P values for the

between-group differences in adverse events were not provided in the article.) The corresponding

numbers of patients who had a likelihood of being either helped or harmed are 24, 6, 9, and 3. Given the

short duration of the trial and the likely worsening of numbers with respect to the likelihood of harm or

benefit in the real world, a continuous risk–benefit assessment of sotagliflozin is warranted.

1

2

3

Access provided by

CORRESPONDENCE

Effects of Sotagliflozin Added to Insulin in Type 1Diabetes

March 8, 2018

N Engl J Med 2018; 378:966-968

DOI: 10.1056/NEJMc1800394

Metrics

TO THE EDITOR

Garg et al. (Dec. 14 issue) report the superiority of adding sotagliflozin, an oral inhibitor of sodium–

glucose cotransporters 1 and 2 (SGLT1/2), to insulin in patients with type 1 diabetes, as compared with

placebo, in the inTandem3 trial. They used a unique primary end point that assesses both risk and benefit

simultaneously: a glycated hemoglobin of less than 7% without severe hypoglycemia or diabetic

ketoacidosis at week 24 (i.e., benefit without harm).

According to our calculations of the number needed to treat that are based on data provided in the article,

the number of patients who would need to be treated to show unqualified success (a situation in which

benefit is achieved without harm ) is 8, which is very close to 7, the number of patients who would need

to be treated for one patient to show benefit. During a 24-week period, the numbers of patients who

would need to be treated to show harm from at least one episode of severe hypoglycemia, diabetic

ketoacidosis, volume depletion, or genital mycotic infection with sotagliflozin, as compared with placebo,

are 167, 40, 64, and 23, respectively, with P values of 0.60, <0.001, 0.009, and <0.001. (P values for the

between-group differences in adverse events were not provided in the article.) The corresponding

numbers of patients who had a likelihood of being either helped or harmed are 24, 6, 9, and 3. Given the

short duration of the trial and the likely worsening of numbers with respect to the likelihood of harm or

benefit in the real world, a continuous risk–benefit assessment of sotagliflozin is warranted.

1

2

3

Patient Education and Monitoring for DKA

• Recognize potential symptoms of ketosis or DKA, even when glucose is

normal or only mildly elevated

- Nausea, vomiting, or stomach pain

- Constantly feeling tired, general malaise

- Thirst, frequent urination, or very dry mouth

• Check ketones If these symptoms are present, or in situations at risk for

DKA, including

- Acute illness

- Prolonged fasting

- Significant reductions or interruptions in insulin dosing

• Contact a healthcare provider if ketones are positive, or if the condition

does not improve

- If in doubt, stop sotagliflozin until contacting the provider

- It is important to know that both carbohydrate and insulin are

necessary for ketosis to resolve

Sotagliflozin: Patient Perspective

• Short-term

– A1c reduction

– Greater time in range

• Less hyperglycemia and

hypoglycemia

– Weight loss

– Treatment satisfaction

• Long-term

– Potential to address risks of

nephropathy, neuropathy,

retinopathy, and

cardiovascular disease

• Recognize the potential for DKA

– Potentially 2% to 4%

incidence at 1 year

• Monitor ketones to mitigate risk of

DKA, with advice to stay in close

contact with health care provider

when ill

Potential Benefits Patient commitment

© 2018 Lexicon Pharmaceuticals, Inc. 100Precision Science. Pioneering Medicine. Patient Driven.

Sotagliflozin Program Summary



April 10, 2018


Phase 3 Program in T1DM – Summary

• inTandem program has the largest efficacy and safety database of an oral anti-diabetic agent for T1DM

• Sotagliflozin profile- Robust A1C efficacy on top of insulin- Improved glucose time in range- Robust weight reduction- Lower rate of hypoglycemic episodes with glucose ≤ 55 mg/dL- Incremental incidence of positively-adjudicated DKA was low at

52 weeks• DKA can be managed with education and monitoring


T2DM Phase 3 Program – Ten Ongoing Studies Targeting Over 15,000 Patients with More to Come This Year

Metformin Study

500patients

Severe renal impairment

(SOTA-CKD4) Study

276patients

Combination Study with

sulfonylurea or metformin

500patients

Monotherapy Study

400patients

Moderate renal

impairment (SOTA-CKD3)

Study

780patients

(NCT03242018)(NCT03242252)

(NCT02926950)(NCT02926950)(NCT02926937)

Uncontrolled on basal insulin or

OADs (SOTA-INS) Study

560 patients

(NCT03285594)

CV and Renal Events

(SCORED) Study

10,500patients

(NCT03315143)

Empagliflozin (SOTA-EMPA)

on DPP4 background

700patients

(NCT03351478)

Glimepiride (SOTA-GLIM)

Study

930patients

(NCT03332771)

Efficacy and Bone Safety

(SOTA-BONE) Study

360 patients

(NCT03386344)


Sotagliflozin Program – Summary

• Type 1 diabetes- NDA and MAA filings submitted in 1Q 2018

• Type 2 diabetes- Data for majority of the Phase 3 studies expected in 2019- MAA filing planned for 2H19- NDA filing planned for early 2020


Pipeline Progress – LX2761 (diabetes) and LX9211 (neuropathic pain)



April 10, 2018


Lexicon’s Scientific Platform Has Produced a Commercial Product and a Pipeline of Innovative Drug Candidates

Compound Partner Target Indication Preclinical Phase 1 Phase 2 Phase 3 Registration Marketed

Whollyowned (U.S./ Japan)

TPH1Carcinoid syndrome diarrhea

Ipsen(ex-U.S./ ex-Japan)

TPH1Carcinoid syndrome diarrhea

SotagliflozinSanofi (WW, ex-Japan)

SGLT1/SGLT2

Type 1 diabetes (T1DM)

SotagliflozinSanofi (WW, ex-Japan)

SGLT1/SGLT2

Type 2 diabetes (T2DM)


TPH1Neuroendocrine tumors (NETs)


TPH1Biliary tract cancer (BTC)

LX2761Wholly owned

SGLT1 (GI tract)

Diabetes

LX9211Wholly owned

AAK1Neuropathic pain

NDA / MAA filed March, 2018

FDA approval Feb 28, 2017; US launch Mar 01, 2017

EMA approval Sept 19, 2017; EU launch ongoing

Phase 3 ongoing

Phase 1b ongoing

Phase 1a ongoing

Initiating Phase 2

Initiating Phase 2


LX2761 - Diabetes


SGLT2 reabsorbs 90% of filtered glucose in the kidney





LX2761 – Locally-acting SGLT1 Inhibitor for Diabetes

SGLT2 SGLT1 is the primary transporterfor glucose/galactose in the GI tract

Inhibiting SGLT1 in the GI tract delays &reduces glucose absorption after a meal

Results in elevated GI hormones (GLP-1) and reduced peak blood glucose


Mechanism is independent of renal function

SGLT1


LX2761 - Drug Candidate for Diabetes Focused on SGLT1 in GI Tract

➢ Potent, orally-delivered small molecule strategically designed to maximize SGLT1 inhibition locally in the gastrointestinal tract with no urinary glucose excretion➢ Ability to minimize PPG excursions➢ Ability to maximize GLP-1 release➢ Minimal systemic exposure

➢ Phase 1a clinical trials completed

➢ Phase 1b clinical trials ongoing

➢ Lexicon has granted Sanofi certain rights of first negotiation


LX2761 - Designed to Remain in the Intestine After Oral Delivery to Inhibit Local SGLT1

Oral delivery of LX2761 results in very low systemic exposure in mice

Source: Goodwin NC et al 2017 J Med Chem


LX2761 - No Increase in Urinary Glucose Excretion

24-hour urine glucose on day 1 and day 2 after oral delivery with a

single dose in mice

Source: Goodwin NC et al 2017 J Med Chem


LX2761 Blunted Glucose Excursions in Preclinical Testing

Data from oral glucose tolerance tests in rats



Decreased Glucose Excursions When Oral Glucose was Administered 15 Hours After the Last Dose of LX2761

Note: The adult male C57 mice studied were fed ad lib between the last oral dose of LX2761 and the OGTT



➢ Adult male mice received vehicle, LX2761 and/or sitagliptin by oral delivery

➢ Each mouse received 4 g/kg glucose by oral delivery

LX2761 and DPP-4 Inhibitor Sitagliptin Synergistically Increase Postprandial GLP-1 Levels in Preclinical Testing



LX2761 – Key Takeaways

➢Potent, oral, locally-acting SGLT1 inhibitor

➢Robust preclinical efficacy and good safety profile ▪ Reduces PPG▪ No increase in UGE, consistent with local action▪ Synergy with DDP-4 inhibitor in preserving active GLP-1

➢ Phase 1a clinical trials completed in healthy subjects and patients with type 2 diabetes

➢ Phase 1b clinical trials in patients with type 2 diabetes ongoing, with data expected mid-2018


LX9211 - Neuropathic Pain

Discovering Breakthrough Treatments for Human Disease

April 10, 2018


R&D in the Pain Market – Overview

Source: Bio Industry Analysis: The State of Innovation in Highly Prevalent Chronic Diseases Volume II: Pain and Addiction Therapeutics

2 approved NCEs for pain in a decade

(milnacipran and tapentadol)

87% are

non-opioid

receptors

Only 125

NCEs

220 clinical

programs

In contrast, oncology has >2,000 clinical programs (1,700 NCEs)

Most approved pain products since 2007 have been reformulations or have pre-2007 market history


LX9211- A Novel Therapeutic Approach for Neuropathic Pain: Adaptor Associated Kinase-1 (AAK1) Inhibitor

➢ Discovered in Lexicon’s neuroscience drug discovery alliance with Bristol-Myers Squibb

➢ Lexicon has acquired exclusive development and commercialization rights

➢ Potent, highly-selective, oral small molecule inhibitor of target discovered and extensively characterized in alliance. Robust efficacy in preclinical models

➢ IND filed; Phase 1 clinical trial underway

Substantial need for new therapies with improved efficacy and tolerability for neuropathic pain and for new therapies for pain without

addictive potential


Diabetic Neuropathic Pain Disease - Overview

➢A late-stage complication in patients with diabetes mellitus, affects approximately 15% of patients.

➢Complicates diabetes treatment by limiting the patient’s ability to exercise, which improves glucose management

➢Severely interferes with sleep, which can also negatively impact glycemic control

➢Symptoms differ in clinical course, distribution, fiber involvement and pathophysiology


Lexicon’s Genome 5000 Program - AAK1 Knockout Mice Have Anti-Nociceptive Phenotype

Mouse Spinal Nerve Ligation Model

Source: Kostich et al 2016, J Pharmacol Exp Ther


AAK1 Inhibitor LX9211 Reduces Streptozotocin-induced Diabetic Neuropathic Pain in Rats

-10

0

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

0 1.5 3.5 5.5Inhib

itio

n o

f M

echa

nic

al A

llodynia

(%

)

Time After Treatment (h)

Vehicle in Non-diabetic Animals LX9211 (0.3 mg/kg)

Vehicle in Diabetic Animals LX9211 (1 mg/kg)

LX9211 (0.1 mg/kg) LX9211 (3 mg/kg)

****

********

****

****

****

*P<0.05, ****P=0.0001 compared to vehicle in diabetic animals

**** **** **** ****

Source: Unpublished data from Lexicon

**


LX9211 Does Not Impair Motoric Coordination in the Rat

- Rotarod Performance Test

0

100

200

300

1 3 5

Rid

ing T

Ime (

s)

Time After Treatment (h)

Vehicle LX9211 (3 mg/kg) LX9211 (30 mg/kg) Gabapentin (100 mg/kg)

*P<0.05, **P<0.01, ****P=0.0001 compared to vehicle

*

******

Source: Unpublished data from Lexicon


AAK1 Inhibitors - Mechanisms of Action

➢ Mechanism involves α2 adrenergic pathway

➢ Mechanism thought to involve GABAergic pathway

➢ Target does not have the same motor side effects seen with gabapentinoids

➢ Spinal dorsal horn key site of action (central nervous system target)

➢ Mechanism does not involve opioids


LX9211- A Potent and Selective AAK1 Inhibitor for Neuropathic Pain: Key Takeaways

➢ High potency and specificity for AAK1 inhibition

➢ Robust target engagement and efficacy

➢ Superior profile to the current standard of care

➢ Excellent brain penetration

➢ Opioid target sparing

➢ Phase 1a clinical study ongoing

➢ Market opportunity for safe and effective medications


Financial Overview


Jeffrey L. Wade, J.D.Executive Vice President, Corporate and Administrative Affairs and Chief Financial Officer

April 10, 2018


2017 Financials

Selected Income Sheet Data: 2017 2016

Revenue $90.3M1 $83.3M

Operating Expenses2

R&D $156.8M $178.2M

SG&A $66.2M $43.0M

Total Operating Expenses $227.0M $220.5M

Net Loss $(129.1)M $(141.4)M

Net Loss Per Common Share $(1.23) $(1.36)

Selected Balance Sheet Data: As of Dec 31, 2017

Cash & Investments $310.8 million

Total Assets $436.5 million

Total Debt $245.7 million

Common Shares Outstanding 105.7 million

1Includes $15.9M in net product revenue

2Includes stock-based compensation expenses


2018 Financial Guidance

Selected Income Sheet Data:2018 Financial

Guidance

Revenue

Revenue from collaborations $30-$40M

Net product revenueAt least double year-

over-year

Operating Expenses1

R&D $125-$135M

SG&A $80-$90M

Total Operating Expenses $205-$225M

Non-Cash Expenses ~$17M

Net Cash Used in Operations $190-$205M

1Includes stock-based compensation expenses


2018 Marks a Year of Transition - Sotagliflozin

Investments in sotagliflozin through 2018 may begin to yield returns in 2019 and 2020

Regulatory

Milestones

•$220M –

Milestones linked to

first commercial sale

after regulatory

approval for T1D

and T2D in U.S. and

Europe

Development

Milestones

•$110M –Milestones linked to

Phase 3 study

results in T2D

•$100M – Milestone

linked to success in

either of two T2D

outcomes studies

Sales Milestones

and Royalties

•$990M – Sales

milestones

•Royalties on net

sales

$430M


Investment in the Future – Commercial and R&D

• Commercialization- Investments in XERMELO commercialization and medical affairs

activities, with a view towards achieving positive cash flow on the brand in the next 12-24 months

- Initiation of investments in sotagliflozin U.S. T1D commercialization and medical affairs activities, shared with Sanofi

• Research and development- Significant wind-down in R&D expenses for sotagliflozin

• Phase 3 program in T1D complete, with Q1 2018 global filings• Lexicon’s share of T2D development costs to be fully satisfied in 2018

- Investment in XERMELO clinical studies in biliary tract cancers and neuroendocrine tumors (NETs)

- Continued investment in earlier-stage R&D programs (including LX2761, LX9211 and additional research)


Q&A Session #2


April 10, 2018


Closing Remarks


Lonnel CoatsPresident and Chief Executive Officer

April 10, 2018

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