This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Lexicon Pharma: Blockbuster Potential From A Diabetes Drug

Weight loss reported in the phase IIb trial was approximately 2 kg to 2.5 kg per patient at the two highest LX4211 doses compared to a slight weight gain for placebo. This is similar to what was seen in the SGLT-2 inhibitor drugs. There were also statically significant reductions in both systolic and diastolic blood pressure favoring LX4211.

HbA1c reduction increased steadily as the LX4211 dose increased but the amount of sugar secreted in the urine stayed fairly steady at about half the levels measured in the phase III studies of dapaglifozin and canaglifozin. This is a very interesting finding, which again, underscores why LX4211 could be safer than the other SGLT inhibitors.

There were no drug-associated severe adverse events reported in Lexicon's phase IIb trial. Targeting SGLT-1 has raised concerns about gastrointestinal side effects but nausea was reported in just 10% of LX4211-treated patients.

Lexicon plans to meet with the FDA soon to discuss a phase III program for LX4211. Studies should begin next year. The company has been open about wanting to find a partner, so I would expect a Big Pharma deal to be signed within the next few months.

Lexicon' pipeline outside of LX4211 includes a drug to treat carcinoid syndrome moving into phase III studies, and drugs to treat ulcerative colitis and irritable bowel syndrome in phase II.

Lexicon shares closed Monday at $2.55 but don't make the mistake of thinking of the company as a small-cap biotech stock. With 500 million shares outstanding, Lexicon's market cap is more than $1.2 billion. Lexicon required a lifeline during the market collapse of 2008-2009 that forced the company to push through a highly dilutive, below-market financing. Fortunately, the investment company that saved Lexicon remains a large shareholder and is not a flipper.

I usually balk at owning stocks with balance sheet weighed down with too many outstanding shares, but Lexicon is very attractive at its current valuation because LX4211 has real potential to be a blockbuster diabetes drug.

Rosenblum is long Lexicon.

Dan Rosenblum has been a full-time stock trader since 1999 after leaving a job at a publicly held medical-device company. Rosenblum joined SharkInvesting.com that year and has been the online trading community's resident biotech expert ever since. Rosenblum writes the SharkBiotech.com newsletter, which has outperformed the S&P 500 and the Nasdaq Biotechnology Index every year since its inception in 2006. Rosenblum lives with his wife and kids in Rockland County, New York.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
BMY $64.50 -1.92%
AZN $68.43 -2.16%
JNJ $100.60 -0.94%
LXRX $0.94 -2.94%
AAPL $124.43 -1.54%

Markets

DOW 17,776.12 -200.19 -1.11%
S&P 500 2,067.89 -18.35 -0.88%
NASDAQ 4,900.8850 -46.5560 -0.94%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs