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Lexicon Pharmaceuticals (LXRX)
NASDAQ:LXRX
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Lexicon Pharmaceuticals (LXRX) AI Stock Analysis

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LXRX

Lexicon Pharmaceuticals

(NASDAQ:LXRX)

Rating:61Neutral
Price Target:
$1.50
▲(38.89% Upside)
Lexicon Pharmaceuticals' overall score is driven by strong earnings call results and positive technical analysis, despite financial performance challenges. The company's strategic repositioning and regained Nasdaq compliance are positive, but profitability and cash flow issues remain significant risks.
Positive Factors
Analgesic Market
LX9211 has shown significantly greater reductions in average daily pain score and other pain-related symptoms compared to placebo in clinical trials.
Cardiovascular Treatment
Sotagliflozin demonstrated reduced risk of cardiovascular death, major adverse cardiovascular events, and hospitalizations for heart failure, particularly among older adults.
Financial Position
The exclusive licensing agreement with Novo Nordisk significantly strengthens Lexicon's financial position, providing a cushion that should allow Lexicon to focus resources on pilavapadin's Ph.3 program in DPNP and the Ph.3 SONATA trial for sotagliflozin in Hypertrophic Cardiomyopathy (HCM).
Negative Factors
Clinical Trial Efficacy
The Ph.2b PROGRESS study data for pilavapadin in Diabetic Peripheral Neuropathic Pain (DPNP) shows modest efficacy versus placebo.
Research and Development
Lexicon has notably lowered its FY2025 operating expense guidance, primarily driven by a revised R&D expense projection, largely due to the transfer of costs to Novo Nordisk under the licensing agreement.
Treatment Efficacy
There is significant unmet need in the DPNP therapeutic space as current treatments focus on symptoms without addressing the root cause, and LX9211 aims to fill this gap.

Lexicon Pharmaceuticals (LXRX) vs. SPDR S&P 500 ETF (SPY)

Lexicon Pharmaceuticals Business Overview & Revenue Model

Company DescriptionLexicon Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the discovery, development, and commercialization of pharmaceutical products. Its orally-delivered small molecule drug candidates under development comprise Sotagliflozin that completed Phase III clinical trials for the for the treatment of heart failure and type 1 diabetes; and LX9211, which is in Phase II clinical development for the treatment of neuropathic pain. The company has strategic collaboration and license agreements with Bristol-Myers Squibb Company, and Genentech, Inc. Lexicon Pharmaceuticals, Inc. was incorporated in 1995 and is headquartered in The Woodlands, Texas.
How the Company Makes MoneyLexicon Pharmaceuticals generates revenue primarily through the commercialization of its pharmaceutical products and potential milestone payments from partnerships with larger pharmaceutical companies. The company may receive royalties on product sales in addition to upfront payments for licensing agreements. Lexicon's strategic collaborations with industry partners allow it to leverage resources for drug development, which can lead to shared revenues upon successful product launches. Furthermore, the company may also benefit from grants and research funding aimed at supporting innovative therapeutic research.

Lexicon Pharmaceuticals Earnings Call Summary

Earnings Call Date:Aug 06, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
The earnings call for Lexicon Pharmaceuticals was largely positive, marked by significant revenue growth, successful strategic repositioning to an R&D-focused company, and promising advancements in the drug pipeline. However, challenges remain in terms of reduced cash reserves and the dependence on partnerships for future progress.
Q2-2025 Updates
Positive Updates
Strong Revenue Growth
Q2 2025 revenue was $28.9 million, a significant increase from $1.6 million in Q2 2024, primarily due to $27.5 million of licensing revenue from the Novo Nordisk agreement.
Successful Strategic Pivot
Lexicon has successfully transformed into an R&D-focused company, reducing operating expenses significantly and focusing on the advancement of its innovative portfolio.
Promising Drug Development
Advancements in the pilavapadin program with the conclusion of a scientific advisory board validating the 10-milligram dose for future studies and plans for Phase III trials in DPNP.
Partnerships and Global Expansion
Viatris progressing with regulatory submissions and approvals of sotagliflozin in multiple countries, and ongoing collaboration with Novo Nordisk for LX9851.
Reduced Operating Expenses
Quarter-over-quarter operating expenses decreased by $31.9 million due to strategic repositioning and reduced marketing efforts, with full-year operating expense guidance lowered.
Negative Updates
Declining Cash Reserves
Cash, short-term investments, and restricted cash decreased to $168 million from $238 million as of December 31, 2024.
Dependence on Partnerships
The future progress of certain drug programs relies heavily on partnerships, which introduces risk if these partnerships do not proceed as planned.
Challenges in Drug Development
The pilavapadin program requires two parallel Phase III trials for FDA approval, reflecting the complexity and cost involved in advancing this program.
Company Guidance
During the Lexicon Pharmaceuticals second quarter 2025 financial results conference call, the company provided several key updates and metrics. Revenue for Q2 2025 was reported at $28.9 million, a significant increase from $1.6 million in the same period in 2024, primarily due to $27.5 million in licensing revenue from an agreement with Novo Nordisk. Research and development expenses decreased to $15.7 million from $17.6 million in Q2 2024, reflecting reduced external research costs. Selling, general, and administrative expenses also saw a substantial reduction to $9.4 million from $39.2 million in the prior year, driven by strategic repositioning. Consequently, Lexicon posted a net income of $3.3 million, or $0.01 per share, compared to a net loss of $53.4 million, or $0.17 per share, a year earlier. The company ended the quarter with $168 million in cash, short-term investments, and restricted cash. Lexicon revised its full-year 2025 operating expense guidance downward to a range of $105 million to $115 million, focusing on advancing its clinical programs while maintaining cost discipline.

Lexicon Pharmaceuticals Financial Statement Overview

Summary
Lexicon Pharmaceuticals exhibits strong revenue growth but faces significant challenges with profitability and cash flow. The company has improved its leverage but continues to struggle with operational inefficiencies and negative cash flows.
Income Statement
45
Neutral
Lexicon Pharmaceuticals shows a significant revenue growth rate of 87.2% in the TTM period, indicating strong top-line expansion. However, the company is struggling with profitability, as evidenced by negative net profit margins and EBIT margins. The gross profit margin is high at 98.9%, but the substantial operating losses suggest high operational costs or inefficiencies.
Balance Sheet
40
Negative
The company's debt-to-equity ratio has improved to 0.47 in the TTM period, indicating a moderate level of leverage. However, the return on equity remains negative, reflecting ongoing net losses. The equity ratio is not explicitly calculated, but the balance sheet shows a reasonable level of equity relative to assets.
Cash Flow
35
Negative
Lexicon Pharmaceuticals has negative operating and free cash flows, with a declining free cash flow growth rate of -39.05% in the TTM period. The operating cash flow to net income ratio is negative, indicating cash flow challenges. However, the free cash flow to net income ratio is slightly above 1, suggesting some alignment between cash flow and reported earnings.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue58.43M31.08M1.20M139.00K298.00K24.00M
Gross Profit57.77M30.46M1.12M-288.00K-54.75M22.07M
EBITDA-109.84M-184.29M-163.46M-98.74M-86.66M-41.10M
Net Income-120.62M-200.40M-177.12M-103.13M-88.27M-70.18M
Balance Sheet
Total Assets225.58M298.42M229.43M194.30M136.91M203.79M
Cash, Cash Equivalents and Short-Term Investments139.01M237.96M170.03M138.36M86.74M152.28M
Total Debt61.45M108.40M106.06M55.29M2.28M12.81M
Total Liabilities96.14M152.47M136.32M77.17M23.31M47.42M
Stockholders Equity129.44M145.95M93.11M117.12M-1.49B156.37M
Cash Flow
Free Cash Flow-102.68M-179.81M-162.37M-90.18M-88.24M-143.06M
Operating Cash Flow-101.89M-178.78M-161.90M-88.85M-87.02M-142.97M
Investing Cash Flow163.23M-15.38M-49.94M-71.08M2.11M380.76M
Financing Cash Flow-46.59M238.35M187.96M142.21M22.71M-147.64M

Lexicon Pharmaceuticals Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price1.08
Price Trends
50DMA
1.09
Negative
100DMA
0.87
Positive
200DMA
0.77
Positive
Market Momentum
MACD
0.01
Positive
RSI
46.57
Neutral
STOCH
9.52
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LXRX, the sentiment is Neutral. The current price of 1.08 is below the 20-day moving average (MA) of 1.13, below the 50-day MA of 1.09, and above the 200-day MA of 0.77, indicating a neutral trend. The MACD of 0.01 indicates Positive momentum. The RSI at 46.57 is Neutral, neither overbought nor oversold. The STOCH value of 9.52 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LXRX.

Lexicon Pharmaceuticals Risk Analysis

Lexicon Pharmaceuticals disclosed 39 risk factors in its most recent earnings report. Lexicon Pharmaceuticals reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Lexicon Pharmaceuticals Peers Comparison

Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
69
Neutral
$130.76M21.6215.99%62.79%
61
Neutral
$407.01M-65.30%1504.83%56.81%
51
Neutral
$7.91B-0.36-41.70%2.23%23.45%-1.86%
49
Neutral
$298.48M322.49%-31.30%36.26%
48
Neutral
$244.51M-148.73%-22.49%
45
Neutral
$609.08M-35.02%20.37%
35
Underperform
$588.92M-783.37%-58.02%-57.23%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
LXRX
Lexicon Pharmaceuticals
1.07
-0.54
-33.54%
PLX
Protalix
1.59
0.59
59.00%
DBVT
DBV Technologies SA - American
9.22
5.22
130.50%
GOSS
Gossamer Bio
2.51
1.60
175.82%
FHTX
Foghorn Therapeutics
5.39
-2.14
-28.42%
TERN
Terns Pharmaceuticals
7.06
-0.75
-9.60%

Lexicon Pharmaceuticals Corporate Events

Delistings and Listing ChangesRegulatory Filings and Compliance
Lexicon Pharmaceuticals Regains Nasdaq Compliance
Positive
Jul 28, 2025

On July 23, 2025, Lexicon Pharmaceuticals, a company listed on The NASDAQ Stock Market, received confirmation from Nasdaq that it has regained compliance with the minimum $1 bid price requirement for its common stock, resolving a previous issue. This development marks a positive step for Lexicon Pharmaceuticals, potentially stabilizing its market position and reassuring stakeholders about the company’s adherence to listing standards.

Delistings and Listing ChangesStock SplitRegulatory Filings and Compliance
Lexicon Pharmaceuticals Granted Nasdaq Compliance Extension
Neutral
Jul 3, 2025

On July 3, 2025, Lexicon Pharmaceuticals received a letter from Nasdaq indicating eligibility for an additional 180-day period to regain compliance with the minimum $1 bid price requirement for its common stock. The company applied to transfer its stock from the Nasdaq Global Select Market to the Nasdaq Capital Market, which was approved, and the transfer will occur on July 7, 2025. This move allows Lexicon Pharmaceuticals more time to meet the bid price requirement, with plans to potentially implement a reverse stock split if necessary.

Executive/Board ChangesShareholder MeetingsStock Split
Lexicon Pharmaceuticals Holds Annual Stockholder Meeting
Neutral
Jun 3, 2025

On June 2, 2025, Lexicon Pharmaceuticals held its annual meeting of stockholders to vote on several key proposals. The meeting resulted in the election of Class I Directors, amendments to the company’s equity incentive plans, approval of a potential reverse stock split, an advisory vote on executive compensation, and the ratification of Ernst & Young LLP as independent auditors for the fiscal year ending December 31, 2025. These decisions reflect strategic moves to enhance corporate governance and financial management, potentially impacting shareholder value and market perception.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 19, 2025