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Lexicon Pharmaceuticals, Inc.

(

LXRX

)

F4Q10 Earnings Call

February 24, 2011 11:00 am ET

Executives

D. Wade Walke – Senior Director of Communications & Investor Relations

Arthur T. Sands – President & Chief Executive Officer

Brian P. Zambrowicz – Executive Vice President, Chief Scientific Officer

Jeffrey L. Wade – Executive Vice President & Corporate Development and Chief Financial Officer.

Analysts

TheStreet Recommends

Cory Kasimov – JP Morgan

Philip Nadeau – Cowen and Company

David Friedman – Morgan Stanley

Presentation

Operator

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Thank you for holding. Welcome to the Lexicon Pharmaceuticals fourth quarter and year end 2010 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 you to your host for today's call, Wade Walke, Senior Director of Communications and Investor Relations. Please go ahead, Dr. Walke.

D. Wade Walke

Good morning and welcome to the Lexicon Pharmaceuticals fourth quarter and year end 2010 conference call. I am 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; 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 accomplishments for 2010. Dr. Zambrowicz, will then discuss the status of our drug development programs and Mr. Wade will review our financial results for the fourth quarter and full year 2010 and discuss our financial guidance for 2011. We will then open the call to your questions. If you’d like to view the slides for today’s call, please access the Lexicon website at www.lexpharma.com. You will see a link on the 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. 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 T. Sands

Thank you, Wade, and thank you everyone for joining us this morning to discuss 2010 and also really focus on 2011 and some of the key goals we have for ourselves. We’ll be referring to slides, if you have access of those through out the talk and I am going to start on our first pipeline slide that pictures our four programs in Phase 2 development. And really our accomplishment for 2010 all centered on achieving proof-of-concept around these four programs.

And that is of course a key step in the progression of our new drug candidates that operates through novel mechanisms action. And I think in each one of these programs we have accomplished significant steps forward improving these mechanisms.

I think overall 2010 was clearly dominated by the results in our diabetes program LX4211, which really have I think throughout the year as we learn more and more about the drug candidate exceeded our expectations with regard to it’s mechanism of action and its effects in patients. And so I’d like to spend most of the call discussing that program as we go into the body of the call.

On the next slide I do want to highlight for each of the programs our 2011 objectives that are based on what we accomplished in 2010 and our logical steps forward for each of these. So the 2011 pipeline objective slide starting with LX4211, a key goal is to initiate the Phase 2b study in Q2 for this program. This will be approximately 300 patient trial and type II diabetes. And our goal is through the year to have enrollment be on track such that in the first half of 2012 will be able to complete that study and have the result.

So in addition to this, I should say we’re conducting a number of non-clinical procedures on steps such that the program can be essentially Phase 3 ready as we look forward to getting the Phase 2b results in 2012. So there is a high degree of activity and focused on this program to prepare it as it moves least forward into later stage development.

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