Piper Sandler has maintained a positive outlook on Lexicon Pharmaceuticals (NASDAQ: NASDAQ:LXRX), reiterating an Overweight rating and a $10.00 price target for the company's stock.
The firm's stance comes in anticipation of the upcoming Prescription Drug User Fee Act (PDUFA) date on December 20th for ZYNQUISTA's treatment for type 1 diabetes (T1D) with chronic kidney disease (CKD), a market with an estimated 400,000 addressable patients in the United States.
Piper Sandler noted that the market is currently undervaluing Lexicon's potential, especially considering the possibility of a favorable Advisory Committee (AdCom) meeting outcome on October 31st, which could lead to subsequent approval and significant share gains.
The firm also highlighted the potential of LX9211, a treatment for diabetic peripheral neuropathic pain (DPNP), with Phase 2b trial results expected in the second quarter of 2025, and sotagliflozin's Phase 3 trial for heart complications in diabetes, with results anticipated around the second half of 2026.
The analyst at Piper Sandler believes that investor interest in Lexicon is growing due to the company's promising pipeline and the potential for significant value creation. In a recent note, the firm outlined eight key reasons to invest in Lexicon now, emphasizing the strategic timing for stakeholders to engage with the company's stock.
In other recent news, Lexicon Pharmaceuticals has been in the spotlight with several significant developments. The company reported a net loss of $53.4 million in Q2 2024, with revenues of $1.6 million, primarily from INPEFA sales. H.C. Wainwright maintained its Buy rating for Lexicon, highlighting the potential of Lexicon's drug, sotagliflozin, which is currently the only approved dual SGLT2/SGLT1 inhibitor in the U.S.
The firm's focus is on the upcoming Advisory Committee meeting, which could potentially lead to an expanded use of sotagliflozin for patients with type 1 diabetes and chronic kidney disease. Lexicon 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.
The company is also preparing for an FDA review of Zynquista and has initiated patient enrollment for the Phase 3 SONATA trial of sotagliflozin in hypertrophic cardiomyopathy. Lexicon is also advancing LX9851 into preclinical development for obesity and weight management. The company anticipates top-line data for the LX9211 study in diabetic peripheral neuropathic pain by Q2 2025.
InvestingPro Insights
Adding to Piper Sandler's optimistic outlook on Lexicon Pharmaceuticals (NASDAQ:LXRX), recent data from InvestingPro provides additional context to the company's financial position and market performance. Despite the current lack of profitability, with a negative gross profit margin in the last twelve months as of Q2 2024, Lexicon has shown impressive revenue growth. The company's revenue increased by 794.59% in the same period, aligning with the InvestingPro Tip that analysts anticipate sales growth in the current year.
Moreover, Lexicon's stock has demonstrated strong performance, with a 45.54% price total return over the past year. This positive trend supports Piper Sandler's bullish stance and suggests growing investor confidence in the company's potential.
It's worth noting that Lexicon holds more cash than debt on its balance sheet, which could provide financial flexibility as it pursues its promising pipeline developments. However, investors should be aware that the company is quickly burning through cash, a common characteristic of biotech firms in the development stage.
For those interested in a deeper analysis, InvestingPro offers 7 additional tips for Lexicon Pharmaceuticals, providing a more comprehensive view of the company's financial health and market position.
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