Morningstar Rating

Stock Research and Analysis

by Karen Andersen, CFA

Bulls Say

Lexicon's LX4211 has generated strong data in midstage clinical trials, and we think the product looks differentiated from SGLT-2 inhibitors on the market.
The diabetes market is growing rapidly due to demographic trends and innovative new products, and we think the market for SGLT-2 inhibitors could reach $5 billion by 2018.
LX4211 and rare disease drug telotristat etiprate could make Lexicon an acquisition target. Read more 

Bears Say

Regulatory hurdles for safety in diabetes are particularly high, and extensive Phase III and post-marketing trials will require either a larger partner or significant additional shareholder dilution.
J&J's Invokana was approved in the U.S. in 2013 and Lilly's empagliflozin is set to reach the market in 2014, putting pressure on Lexicon to find a partner and show LX4211's differentiation.
DPP-IV inhibitors like Januvia and GLP-1 analogs like Victoza are possible treatment options for diabetes patients with renal impairment, giving LX4211 strong competition outside the SGLT-2 space. Read more 

Management

We give Lexicon standard marks for stewardship, as a qualified management team has brought the firm's pipeline closer to the market, despite diluting shareholders and bringing in private equity firm (and now majority shareholder) Invus to fund this   Read more 

Profile

Lexicon Pharmaceuticals is a biopharmaceutical company that uses mouse genetics to discover the function of genes and find promising drug targets. Lexicon then designs and   Read more 

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