Lexicon Pharmaceuticals, Inc. (

LXRX

)

Q4 2011 Earnings Call

February 22, 2012 11:00 AM ET

Executives

Wade Walke – Director, IR

Arthur Sands – President and CEO

Brian Zambrowicz – EVP and Chief Scientific Officer

Pablo Lapuerta – SVP, Clinical Development and Chief Medical Officer

Jeff Wade – EVP, Corporate Development and CFO

Analysts

Philip Nadeau – Cowen & Company

Stephen Willey – Stifel Nicolaus

David Friedman – Morgan Stanley

Presentation

Operator

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Thank you for holding. Welcome to the Lexicon Pharmaceuticals Fourth Quarter and Year End 2011 Conference Call. At this time, all participants are in a listen-only mode. There will be a question and answer session to follow. Please be advised that this call is being taped at Lexicon’s request.

At this time, I would like to introduce your host for today’s call, Wade Walke, Senior Director of Communications and Investor Relations. Please go ahead, Dr. Walke.

Wade Walke

Good morning and welcome to the Lexicon Pharmaceuticals fourth quarter and year end 2011 conference call. I’m Wade Walke and with me today are Dr. Arthur Sands, Lexicon’s President and Chief Executive Officer; Dr. Brian Zambrowicz, Lexicon’s Executive Vice President and Chief Scientific Officer; Dr. Pablo Lapuerta, Lexicon’s Senior Vice President and Clinical Development and Chief Medical Officer; and Jeff Wade, Lexicon’s Executive Vice President and Corporate Development and Chief Financial Officer.

We expect that you have seen a copy of our earnings Press Release that was distributed this morning. During this call, we will review the information provided in the release, provide an update on our clinical programs then use the remainder of our time to answer your questions.

The call will begin with Dr. Sands who will discuss our key accomplishment for 2011. Dr. Zambrowicz will then give an update on our LX4211 programs Dr. Lapuerta will then review his status of our LX1032, LX1033, LX2931 and LX7101 programs and Mr. Wade will review our financial results for the fourth quarter and full year 2011 and discuss our financial guidance for 2012.

We will then open the call to your questions.

If you’d like to view the slide for today’s call, please access the Lexicon website at www.lexpharma.com. You will see a link on our Home page for today’s webcast.

Before we begin, I would like state that we will be making forward-looking statements, including statements relating to Lexicon’s research and development of LX1031, LX1032, LX1033, LX2931, and LX4211 and LX7101 in the potential therapeutic and commercial potential of those drug candidates. This call may also contain forward-looking statements relating to Lexicon’s future operating results, financing arrangements, cash and investments, discovery and development of products, strategic alliances, and intellectual property.

Various risks may cause Lexicon’s actual results to differ materially from those expressed or implied in such forward-looking statements, including uncertainties relating to the timing and results of clinical trials and preclinical studies of our drug candidates. Our dependence upon strategic alliances and ability to enter into additional collaboration and license agreements, the success on productivity of our drug discovery efforts, our ability to obtain patent protection for our discoveries, limitations imposed by patents owned or controlled by third parties and the requirements of substantial funding to conduct our drug discovery and development activities.

For a list and a description of the risks and uncertainties that we face, please see the reports we have filed with the Securities and Exchange Commission.

I will now turn the call over to Dr. Sands.

Arthur Sands

Thank you Wade and welcome everyone to the call. As we looked at our pipeline today I think it’s clear 2011 was characterized by significant amount of effort placed and progressing and enhancing our pipeline as we move through Phase 2 development on number of programs that we’ll be talking about each of these today. We also initiated a new program so it’s our fifth program now in clinical development that is LX7101 in glaucoma and we’ll be providing a brief update on the status of that as well.

Also in 2011, we fortified Lexicon’s with respect to our financial position and of course this is key so that we are able to progress our pipeline independently and pursue our business model that is to seek partnerships in certain key areas of for large primary care indications so at the end of the call Jeff Wade will be discussing our financials for the year.

If you look at – looking forward to on the next slide to 2012, there is a significant amount of activity associated with such a broad pipeline of now five programs. And so I would like to take a moment to walk through those slides and draw your attention to some of the key milestones over the next 6 to 24 months. So, starting from where we stand now at the end here of Q1 and the bottom of this pipeline slide that this – pipeline slide you see the progression of each program with respect to initiations and launches. And at the top our key events we expect with respect to results and milestones for each program.

So, starting from the top left, of course the milestone that is perhaps most significant is for LX4211 in diabetes our Phase 2b results are expected at the end of Q2. And so that is coming up here that’s a study of as about 300 patients with type 2 diabetes and we’re on track to have those results.

In the similar timeframe we expect to have results from LX2931 in rheumatoid arthritis that’s a bridging study in the middle of Phase 2 where we’re exploring higher doses of LX2931. And then as they progress towards the end of the year we see results from LX7101 in its initial proof-of-concept trial in glaucoma and that should provide us really the first insight as to be that mechanism of action in patients.

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