Preclinical Evidence for and Clinical Development of XERMELO in Cancer Ranuka Iyer, M.D

April 10, 2018

Welcome and Introduction

Kimberly Lee, D.O. Head of Investor Relations and Corporate Strategy

Precision Science. Pioneering Medicine. Patient Driven.

0 ©Precision 2018 Lexicon Pharmaceuticals, Science. Inc. Pioneering Medicine. Patient Driven. Forward-looking Statements

This presentation, including any oral presentation accompanying it, contains “forward- looking statements,” including statements about Lexicon’s strategy and operating performance and events or developments that we expect or anticipate will occur in the future, such as projections of our future results of operations or of our financial condition, the level of market acceptance and commercial success of XERMELO®, the results of and expected timing of the completion of our ongoing and future clinical trials, the expected timing and outcome of discussions with regulatory authorities regarding such trials, the expected timing of initiation of our other planned clinical trials, the expected enrollment in our ongoing and future clinical trials, our other research and development efforts, the status of activities performed under our collaborative agreements and the anticipated trends in our business. These forward-looking statements are based on management’s current assumptions and expectations and involve risks, uncertainties and other important factors that may cause Lexicon’s actual results to be materially different from any future results expressed or implied by such forward-looking statements. Information identifying such important factors is contained in our most recent annual report on Form 10-K and quarterly reports on Form 10-Q, including the sections entitled “Risk Factors,” as well as our current reports on Form 8-K, in each case filed with the Securities and Exchange Commission. Lexicon undertakes no obligation to update or revise any such forward- looking statements, whether as a result of new information, future events or otherwise.

Opening Remarks

Lonnel Coats President and Chief Executive Officer

Precision Science. Pioneering Medicine. Patient Driven.

2 ©Precision 2018 Lexicon Pharmaceuticals, Science. Inc. Pioneering Medicine. Patient Driven. R&D Day Agenda and Speakers

Time Topic Speaker 8:30 – 8:35 Introduction Lonnel Coats

8:35 - 8:40 XERMELO market opportunity Alex Santini

8:40 – 8:50 XERMELO life cycle management introduction Praveen Tyle, Ph.D.

8:50 – 9:15 Preclinical evidence for and clinical development of XERMELO in cancer Ranuka Iyer, M.D.

9:15 – 9:30 Q&A Session #1

9:30 – 9:40 Coffee break

9:40 – 9:45 Sotagliflozin – introduction Pablo Lapuerta, M.D.

9:45 – 10:00 Sotagliflozin mechanism of action David Powell, M.D.

10:00 – 10:20 Sotagliflozin Phase 3 program Pablo Lapuerta, M.D.

10:30 – 10:45 Unmet need in type 1 diabetes and management of risk/benefit Jake Kushner, M.D.

10:45 – 11:05 Pipeline progress – LX2761 and LX9211updates Praveen Tyle, Ph.D.

11:05 – 11:10 Finance overview Jeffrey L. Wade, J.D.

11:10 – 11:25 Q&A Session #2

Lonnel Coats, President and Chief Executive Officer and Director

Mr. Coats has been our president and chief executive officer and a director since July 2014. From 1996 through June 2014, Mr. Coats served in a series of leadership positions at Eisai Inc. and Eisai Corporation of North America, most recently as chief executive officer from 2010 to June 2014 and president and chief operating officer from 2004 to 2010. Prior to joining Eisai, Mr. Coats spent eight years with Janssen Pharmaceuticals, Inc., a division of Johnson & Johnson, where he held a variety of management and sales positions. Mr. Coats received his B.P.A. from Oakland University.

Alex Santini, Executive Vice President and Chief Commercial Officer

Alexander A. Santini has been our executive vice president and chief commercial officer since November 2016 and previously served as vice president, market access and head of market access and channel management since joining our company in April 2015. Mr. Santini served in a series of leadership positions at Bayer Healthcare Pharmaceuticals from 2006 to October 2014, most recently as vice president of market access and executive member, where he had executive responsibility for market access, pricing, trade and channel management and payer account management. Prior to 2006, Mr. Santini held executive leadership roles of increasing responsibility at Berlex Laboratories, where he worked for 22 years before joining Bayer. Mr. Santini served as a non-commissioned officer in the United States Air Force, where he completed the Radiologic Technology Program at the United States Air Force School of Health Care Science and an AAS in business marketing from Westchester Community College.

Praveen Tyle, Ph.D., Executive Vice President of Research and Development

Dr. Tyle has been our executive vice president of research and development since May 2016. Dr. Tyle was previously a member of the executive management team at Osmotic Pharmaceutical Corp., serving as president and chief executive officer from January 2013 through April 2016 and as executive vice president and chief scientific officer from August 2012 to December 2012. Prior to his service at Osmotica, Dr. Tyle held a series of leadership positions within the pharmaceutical industry, including executive vice president and chief science officer for the United States Pharmacopeia, senior vice president and global head of research and development and business development and licensing at Novartis OTC, corporate senior vice president of global research and development and chief scientific officer at Bausch & Lomb Incorporated and vice president and global head of pharmaceutical sciences at Pharmacia Corporation. Dr. Tyle received his B.Pharm. from the Indian Institute of Technology, Banaras Hindu University and his Ph.D. in pharmaceutics and pharmaceutical chemistry from the Ohio State University.

Renuka Iyer, M.D., Section Chief, GI Medical Oncology, Co-Director Liver and Pancreas Tumor Center, Roswell Park Cancer Center

Dr. Renuka Iyer is a Professor of Oncology and Co-Director of the Liver and Pancreas Tumor Program and Section Chief for Gastrointestinal Oncology for Roswell Park Comprehensive Cancer Center in Buffalo, NY. Her clinical and research focus is hepatocellular cancer, biliary cancer and neuroendocrine cancer and she does clinical and lab research in these diseases. Dr. Iyer received her MD at the University of Mumbai, Grant Medical College. She completed her residency at Lincoln Medical and Mental Health Center, Cornell University and her fellowship at Roswell Park before joining the faculty at Roswell Park where she has been for the last 14 years. She serves as co-chair of the regional meetings planning committee for NANETs and on the Medical and Nursing Advisory Board of the Cholangiocarcinoma Foundation. She is a member of the Alliance hepatobiliary clinical trials working group and a panelist on the NCCN hepatobiliary guidelines panel.

Pablo Lapuerta, M.D., Executive Vice President and Chief Medical Officer

Dr. Lapuerta is our executive vice president and chief medical officer and previously served in a number of other roles since joining Lexicon in 2011, including executive vice president, safety, pharmacovigilance and medical affairs and executive vice president, clinical development. Prior to joining Lexicon, Dr. Lapuerta was a vice president at Bristol-Myers Squibb Company with responsibility for global development of an Alzheimer’s disease drug candidate. He also served as senior vice president, clinical strategy and chief medical officer for Cogentus Pharmaceuticals, Inc. He holds a B.A. in biology from Harvard College and an M.D. from Harvard Medical School.

David Powell, M.D., Senior Vice President, Metabolism Research

Dr. Powell received a B.A. from Rutgers University and an M.D. from UMDNJ – New Jersey Medical School. After pursuing postgraduate pediatric fellowship training in nephrology at the University of California – San Francisco and endocrinology research at Stanford University Medical School, Dr. Powell joined the Baylor College of Medicine Pediatrics faculty in 1986 where he practiced medicine as a nephrologist and ran an NIH-supported research program focusing on the action of insulin and other hormones. In 2000, Dr. Powell joined Lexicon to lead our metabolism research program. To date, this program has identified telotristat ethyl, an approved treatment for carcinoid syndrome diarrhea in combination with SSA therapy in adults inadequately controlled by SSA therapy, and both sotagliflozin and LX2761, investigational drugs for individuals with diabetes.

Jake Kushner, M.D., McNair Medical Institute Scholar and Associate Professor at the Baylor College of Medicine

Dr. Jake Kushner is a McNair Medical Institute Scholar and an Associate Professor at the Baylor College of Medicine. For 6 years he served as Chief of Pediatric Diabetes and Endocrinology at the Baylor College of Medicine and Texas Children’s Hospital. A graduate of the University of California at Berkeley, Dr. Kushner earned his medical doctorate from Albany Medical College followed by pediatrics residency at Brown, pediatric endocrinology fellowship at Children’s Hospital Boston, and a 5-year research fellowship at the Joslin Diabetes Center (both of Harvard Medical School). Dr. Kushner has received numerous national honors, including a Basil O’Connor award from the March of Dimes and elected membership to the American Society of Clinical Investigation. He has also served as president of the Society for Pediatric Research. His research has been supported by the National Institutes of Health, the Juvenile Diabetes Research Foundation, and other sources. Dr. Kushner serves as an advisor to Lexicon Pharmaceuticals, Virta Health Inc., and the T1D Exchange. He is the current chair of DDK-B, an NIH study section that reviews training applications in diabetes research. Dr. Kushner’s clinical interests center around the care of children, adolescents, and young adults with type 1 diabetes.

Jeffrey L. Wade, J.D., Executive Vice President, Corporate and Administrative Affairs and Chief Financial Officer

Mr. Wade is our executive vice president, corporate and administrative affairs and chief financial officer. Mr. Wade has been with Lexicon since 1999 and has served in a number of roles, including executive vice president, corporate development and chief financial officer and executive vice president and general counsel. Prior to joining Lexicon, he was a corporate securities and finance attorney with the law firm of Andrews & Kurth L.L.P., most recently as a partner, where he represented companies in the biotechnology, information technology and energy industries. Mr. Wade is a member of the board of directors of the Texas Healthcare and Bioscience Institute. He received his B.A. and J.D. from the University of Texas.

XERMELO Market Opportunity

Alex Santini Executive Vice President and Chief Commercial Officer

Precision Science. Pioneering Medicine. Patient Driven.

8 ©Precision 2018 Lexicon Pharmaceuticals, Science. Inc. Pioneering Medicine. Patient Driven. XERMELO® (telotristat ethyl) - First and Only Oral Treatment Approved for Carcinoid Syndrome Diarrhea

• Reduces serotonin production • Reduces frequency of carcinoid Novel, oral tryptophan syndrome diarrhea hydroxylase (TPH) inhibitor

• U.S. approval February 28, 2017 • U.S. launch March 1, 2017 • EU approval September 19, 2017

DESCRIPTION PATIENT POPULATION*

Carcinoid syndrome results from metastatic neuroendocrine tum o r s ( m NE T s ) that produce large amounts of serotonin, a key mediator of gastrointestinal ~14,000 Patients in U.S. motility, pain and inflammation

DISEASE BURDEN

Includes: ~98% On SSA therapy in U.S. • Frequent, debilitating diarrhea • Facial flushing • Abdominal pain • Fatigue • Heart valve damage over time

WAC for SSA therapies ~ $6,111-$7,249/month ~11% CAGR in WAC over past 2 years

*EPI Research, NET Claims data from IMS, Lexicon-sponsored market research with 50 oncologists, August 2014; Yao et al. J Clin Onc. 26:3063-3072, 2008.

Physicians’ View Patients’ View

20% Controlled 45% 55% Uncontrolled Controlled 80% Uncontrolled 80%

There remains a significant difference between patients’ and physicians’ attitudes toward how well controlled the disease is

Source: Primary research with 80 oncologists and 24 patients (May 2015)

XERMELO Life Cycle Management – Introduction

Praveen Tyle, Ph.D. Executive Vice President, Research & Development

Precision Science. Pioneering Medicine. Patient Driven.

12 ©Precision 2018 Lexicon Pharmaceuticals, Science. Inc. Pioneering Medicine. Patient Driven. XERMELO® (telotristat ethyl) Life Cycle Management

Compound Indication Preclinical Phase 1 Phase 2 Phase 3 Registration Marketed

Carcinoid syndrome diarrhea FDA approval Feb 28, 2017; US launch Mar 01, 2017

Carcinoid syndrome diarrhea EMA approval Sept 19, 2017; EU launch ongoing

Neuro-endocrine Telotristat Ethyl Initiating Phase 2 in 2018 tumor (NET)

Biliary tract cancer Telotristat Ethyl (BTC) Initiating Phase 2 in 2018

Investigator- Telotristat Ethyl Initiated studies In discussion

Telotristat Ethyl/other TPH Other indications inhibitors

Neuroendocrine tumor (NET) cell Inside the Cell Tryptophan • Telotristat ethyl Telotristat inhibits TPH 1,3 Tryptophan ethyl • Telotristat ethyl hydroxylase (TPH) decreases serotonin 1 5-hydroxytryptophan (5-HTP) overproduction Outside the Cell • SSA blocks the release Serotonin (5-HT) SSA of serotonin 2,4 SSTR

Graphic adapted from: Kronenberg H, et al, eds. Williams Textbook of Endocrinology. 11th ed. 2008:1823-1824 and Van der Horst- Schrivers A, et al. Neuroendocrinology. 2004;80(suppl 1):28-32.

1XERMELO [prescribing information]. The Woodlands, TX: Lexicon Pharmaceuticals, Inc.; February 2017. 2Sandostatin LAR Depot [prescribing information]. East Hanover, NJ: Novartis Pharmaceuticals Corporation; July 2016. 3Molina-Cerrillo J, et al. Oncologist. 2016;21(6):701-707. 4Appetecchia M, Baldelli R. J Exp Clin Cancer Res. 2010;29:19.

➢Clinical studies have established anti-tumor activity of SSAs in patients with NETs ▪ Multiple pathways are involved, one of which relates to inhibition of serotonin release

➢Preclinical data show that inhibiting TPH and serotonin synthesis reduces cancer cell growth in cholangiocarcinoma and gallbladder cancer (biliary tract cancers – BTC)

➢Suggest an opportunity for XERMELO

➢Initiating Phase 2 studies

Renuka Iyer, M.D., Roswell Park Comprehensive Cancer Center Relevant Disclosure and Resolution

Under Accreditation Council for Continuing Medical Education, guidelines disclosure must be made regarding relevant financial relationships with commercial interests within the last 12 months.

Name/ Topic Company Role

Novartis; Consulting / Speaking / Teaching Ipsen Biopharmaceuticals, Inc. Merck; Renuka Iyer, MD Grant / Research Support Ipsen Biopharmaceuticals, Inc.

Eisai Oncology, Bayer Advisory Committee / Review Panel

In accordance with the ACCME® standards for Commercial Support these relationships were reviewed Overview

• Role of serotonin in solid tumors • 5HT blockade slows tumor growth • Neuroendocrine Tumor (NET) Overview- NET Space • Where Xermelo may fit (Rationale: 5HT+ mTOR/ 5HIAA) • Biliary Tract Cancer (BTC) Overview - BTC Space • Preclinical studies in BTC models • Chronic inflammation and Immunity - BTC and Tryptophan • Where Xermelo may fit • Takeaways Serotonin in Solid Tumors

• Serotonin is a mitotic factor

• Serotonin growth stimulatory effect also seen on several types of carcinoma and carcinoid cell lines

• Inhibition of cancer cell growth occurs in some cases through serotonin receptor antagonists

• Current evidence suggests inhibiting serotonin production via / NETs TPH1 could inhibit proliferation of cancer cells

Adapted from Sarrouilhe D, et al. Curr Mol Med. 2015;15:62-77. * Christensen DK 2016 Oncotarget Anti-5HT inhibits tumor growth - Synergy with mTOR

Rapa Rapa

SB 204

SB 204 SB 204 + rapa

SB 204 + rapa

Growth with rapamycin + SB 204 (antagonist of • Anti-5HT therapy showed slower growth rate (A, 5HT)1 B) (CHEMOPREVENTIVE EFFECT)

In presence of fetal calf serum (control) rapa • 4/12 mice developed tumors (33%) less did not inhibit proliferation but SB204 did incidence (C/D) in wild type and no tumors in TPH deleted 0/11

1 Soll C, Hepatology, 51(4) 2010: 1244-1254 Neuroendocrine Tumors – Overview

• Neuroendocrine tumors (NETs), a relatively rare and heterogeneous tumor type, affect approximately 171,321 people in the United States1 • Cause debilitating symptoms and potentially life-threatening issues2, many from dense fibrosis

• Classified by embryonic origin (foregut, midgut, and hindgut)3,4 • Diagnosis is complex, may remain asymptomatic for a long time and is often misdiagnosed due to non-specific symptoms5,6 • First-line systemic treatment of GEP-NETs is long-acting SSAs7,8 • Second-line systemic treatments include everolimus, chemotherapy, PRRTs and liver-directed therapies7,8 1 Dasari A JAMA Oncol. 2017 Oct 1;3(10):1335-1342. 2 Hallet J, et al. Cancer. 2015;121:589-597. 3 Lawrence B, et al. Endocrinol Metab Clin North Am. 2011;40:1-18. 4 Friling A, et al. Endocr Relat Cancer. 2012;19:R163-R185. 5 Mamikunian G, et al, eds. Neuroendocrine Tumors: A Comprehensive Guide to Diagnosis and Management. 4th ed. Inglewood, CA: Inter Science Institute; 2009. 6 Öberg K. Ann Oncol. 2010;21(suppl 7):vii72-vii80. 7 Kunz P. J Clin Oncol. 2015;33:1855-1863. 8NCCN clinical practice guidelines in oncology (NCCN Guidelines®): neuroendocrine tumors. V.3.2017. http://www.nccn.org/professionals/physician_gls/pdf/neuroendocrine.pdf. Accessed 10/12/2017 NET Space: New Antitumor Agents Needed

• SSA: Anti-proliferative effects (PROMID 13 months, CLARINET 29 months NR) control arm placebo

First line untreated, GEPNETs. Not lung.

• Everolimus: RR ~7-9%, PFS 11 months RADIANT 4 control arm placebo 3.9 months.

After SSA, progressed within last 6 months. All NETs, ECOG 0,1

• PRRT: RR 18%, PFS 25-40 months. Control arm Sandostatin 60 mg, Benefit varies.

Pancreas > GI NETs > Unknown primary NETs. Only for SSR positive disease, restricted to tertiary sites, good kidney function. Correlation Between u5-HIAA Levels and Outcome in NETs

Re-analysis of RADIANT 2: Everolimus + Octreotide vs Octreotide Median PFS was significantly longer for pts with baseline 5-HIAA median at baseline. 5-HIAA< median 17months vs 11 months > median; p<.001)

High 5HIAA correlated Telotristat effectiveness Everolimus was more with reduced survival in strongly correlated with effective in low 5HIAA, put retrospective studies of 5HIAA reduction3 another way less effective in NETs 1,2 high 5HIAA4

• TELESTAR study, Xermelo treatment associated with weight gain- unexplained- Was it due to stable disease? • PFS or QOL, or SD is the best response even in effective therapies in NETS: PROMID (66%), CLARINET (NR), RADIANT 4 (73%) AND NETTER- 1 (NR) in this disease

1 Van der Horst-Schrivers A, et al. Eur J Cancer. 2007;43:2651-2657. 2 Bartholomew T, et al. Poster. ENETS. 2014 (abstr H2). 3 Kulke MH et al, J Clin Oncol. 2017 ;35(1):14-23. 4 Yao J GI asco 2012 J ournal of Clinical Oncology 2012 30:15_suppl, 4014-4014 NET Proof-of-Concept (POC) Study Design

• Efficacy and safety of everolimus plus Xermelo will be studied in patients with well differentiated NETs of midgut origin • Single arm, open label study • Primary endpoint will be the rate of progression-free survival at 12 months – Historical control 12-month PFS from RADIANT-4 study is 44% Biliary Tract Cancers – Overview

• Approximately 10,000 cases per year were diagnosed as aggressive malignancies with poor prognosis1, but intrahepatic cholangiocarcinoma is increasing2 • Multiple molecular signatures identified in different biliary tract cancer types3 • Palliative first-line chemotherapy – cisplatin/gemcitabine 3-4 • No standard second-line palliative chemotherapy4 • Folfox or fluoropyrimidine based chemo is used

1 Marks & Yee. World J Gastroenterol. (2016); 22(4): 1335-1347. 2Goral V. Asian Pacific J. Cancer Prev. (2017); 18(6): 1469-73 3 Zhao & Lim. J. Gastrointestinal Oncol. (2017); 8(3): 430-40; 4 NCCN Clinical Practice Guidelines in Oncology. Hepatobiliary Cancers. Guidelines Version 3. 2017, August 15, 2017. https://www.nccn.org/professionals/physician_gls/PDF/hepatobiliary.pdf. Accessed on 10/04/17. Only One Approved Therapy  - Urgent Need in Biliary Cancer • GEM CIS (approved): versus gem alone, 12 weeks (stop or continue). 11.7 mo OS vs 8.1 with gem and PFS 8.0 vs 5.0 with gem alone. RR 20%.1 ABC-02 - Phase 3 study of advanced biliary cancer accrued 410 pts in 28 months.

• FOLFOX (off-label): PFS 3.6 months, less if no response to prior therapy2

• Gem cape, Gem abraxane cis, VERY few trials

Comprehensive exome and transcriptome analysis of intrahepatic, perihilar and distal cholangiocarcinomas and gallbladder cancers in Japanese patients. IDH1, IDH2, FGFR family, HER 2 main actionable 3

1 Valle J, Wassan H, Palmer Dh et al N Engl J Med. 2010. 362(14):1273-81. 2 Lamarca A et al Annals of Oncol 25: 2328-2338,2014 3 Razumilava N, Gores G. Nat Genet. 2015. 47(9):967-8. Evidence Supporting Serotonin’s Role in BTC Preclinical Models

• Dysregulation of serotonin may pCPA: p-chlorophenylalanine be associated with progression of BTC1 Vehicle • TPH1 is upregulated1 and monoamine oxidase-A is TPH markedly decreased in BTC2 inhibitor • Increased serotonin secretion in BTC cell lines and bile of BTC patients1 • Inhibition of serotonin synthesis by a TPH Inhibitor (pCPA) resulted in decreased cell proliferation in vitro and in vivo1 • Cholangiocarcinoma (CCA) shown to express similar markers as NETs1 NET markers 1 Alpini G et al, Cancer Res. 68:9184-9193, 2008 2 Huang L et al, Lab Invest. 92:1451-1460, 2012 Chronic Inflammation and Immune Dysfunction are Drivers in BTC Progression - Tryptophan Plays a Role in Regulation of Both

Tryptophan is a key factor BTC is caused by inflammation3 in chronic inflammation • Bile duct stones 1 and cancer • Liver fluke infections • Chronic HBV and HCV infection

Tumor infiltrating lymphocytes Tryptophan plays a role are prognostic in BTC4 in immunomodulation2 • Immune targeting is of great interest in BTC- Several ongoing trials

1 Romani L, Fallarino F, De Luca A et al Nature 2008. 451(7175):211-5 2 Li L et al, Front Immunol. 2012; 3:109. 3 https://www.cancer.gov/types/liver/patient/bile-duct-treatment-pdq 4 Goeppert B et al Br J Cancer 2013:109:2665–2674 BTC POC Study Design

• Efficacy and safety of Xermelo in combination with standard 1st-line chemotherapy (gemcitabine plus cisplatin) will be studied in patients with advanced BTC • Single arm, open label study • Primary endpoint will be the rate of progression-free survival at 6 months – Historical control 6-month PFS from ABC-02 study is 59.3% Takeaways

• Serotonin is overproduced in many cancers and has a role in cancer progression • Significant need exists in NETs and BTC, orphan diseases, but rising in incidence • In NETs, in combination with everolimus, especially in elevated 5HIAA where everolimus doesn’t work as well, Xermelo lowers 5HIAA and may improve patient outcomes • In BTC, survival is under one year with gemcitabine and cisplatin in first line. In addition, patients don’t tolerate cisplatin after 6 months. Adding Xermelo may maintain benefit from gemcitabine and improve quality of life. • Xermelo has potential in second line or alone, to slow progression, and demonstrate efficacy in clinical or lab biomarkers • Ongoing preclinical work and collaborations may help develop more indications THANK YOU! April 10, 2018

XERMELO Life Cycle Management – Opportunities for XERMELO

Praveen Tyle, Ph.D. Executive Vice President, Research & Development

Precision Science. Pioneering Medicine. Patient Driven. Precision Science. Pioneering Medicine. Patient Driven. Estimated Number of U.S. Patients Eligible for XERMELO by Indication, if Approved, By 2025

20,000 18,000 Progressing 10,000 Carcinoid Biliary Tract Mid-Gut NETs Syndrome Cancers Diarrhea +

US prevalence for NETs based on Dasari 2017. US growth rate to 2025 assumes the last 5-year (2007-2011) growth rate will continue to 2025. US prevalence for CSD assumes that 52% of NET patients have mid-gut tumors, of which 20% will experience Carcinoid Syndrome and of those, 84% will experience CSD (source: Mamikunian G, et al, eds. Neuroendocrine Tumors: A Comprehensive Guide to Diagnosis and Management. 4th ed. Inglewood, CA: Inter Science Institute; 2009. 2. DeVita V, et al, eds. Cancer: Principles and Practice of Oncology. 7th ed. Philadelphia, PA: Lippincott Williams & Wilkins; 2000). Overlap between the two NET-related indications represents tumor progressive patients who are on everolimus. Cholangiocarcinoma incidence assumed to be 1.6 per 100K in the US according to Kirstein et el. 75% are metastatic due to late/difficult diagnosis, and prevalence rate assumes a survival curve according to DeOliverira et al. Gallbladder cancer incidence assume to be 1.1 per 100K in the US according to Henley et al. 45% are metastatic, and prevalence is calculated by the survival rate based on hundal et. Al. NET patient eligible for XERMELO assumes 52% of all NET patients will have a midgut tumor (source: Dasari, 2017), and of those, 20% of the patients are on everolimus (Lexicon market research, Jan 2018). All CSD patients assumed to be XERMLEO eligible, even though penetration rate may differ depending on symptoms. 90% of BTC patients are on Gem/Cis and are deemed eligible for XERMELO.

Q&A Session #1

Precision Science. Pioneering Medicine. Patient Driven. Precision Science. Pioneering Medicine. Patient Driven. April 10, 2018

Sotagliflozin Discovery and Differentiation

Pablo Lapuerta, M.D. Executive Vice President and Chief Medical Officer

35 ©Precision 2018 Lexicon Pharmaceuticals, Science. Inc. Pioneering Medicine. Patient Driven. Sotagliflozin Development and Differentiation

• Genetic technology guided a discovery biology program that differentiated sotagliflozin - First company to develop a dual SGLT1/2 inhibitor

• A profile with robust efficacy and potential opportunities in safety has guided sotagliflozin clinical research

• Unmet needs in type 1 diabetes indicate opportunity for sotagliflozin to improve outcomes - Therapeutic innovation in type 1 diabetes has mostly been limited to variations on insulin and its delivery - Insulin has a narrow therapeutic window, with hypoglycemia being a significant challenge to intensive glucose management

• In type 2 diabetes sotagliflozin has an important opportunity for those with renal impairment - Selective SGLT2 inhibitors are less effective and, in some cases, contraindicated in patients with chronic kidney disease

Mechanism of Action of Sotagliflozin

David Powell, M.D. Senior Vice President, Metabolism

Precision Science. Pioneering Medicine. Patient Driven.

37 ©Precision 2018 Lexicon Pharmaceuticals, Science. Inc. Pioneering Medicine. Patient Driven. Sotagliflozin - First-in-Class Dual SGLT1/SGLT2 Inhibitor for Diabetes

SGLT2 SGLT2 reabsorbs 90% of filtered glucose in the kidney

Inhibiting SGLT2 in the kidney increases glucose excretion in the urine

Results in reduced glucose reabsorbed into the body

Mechanism is independent of insulin

Effect diminishes with declining renal function

SGLT2 SGLT1SGLT2 is the reabsorbs primary transporter90% of for glucose/galactosefiltered glucose in thein the kidney GI tract SGLT1 InhibitingInhibiting SGLT1SGLT2 inin thethe GIkidney tract reducesincreases glucose glucose absorption excretion afterin the a urinemeal

ResultsResults in elevated in reduced GI hormones glucose (GLP-1, PYY) andreabsorbed reduced peakinto the blood body glucose

Mechanism is independent of insulin

EffectEffect does diminishes not diminish with with declining renal function

40 ©Precision 2018 Lexicon Pharmaceuticals, Science. Inc. Pioneering Medicine. Patient Driven. SGLT2 Knockout (KO) Mice: Increased Urinary Glucose Excretion (MOA) Improved Glucose Tolerance

Initial Screen: SGLT2 KO Mouse Data

Oral Glucose Tolerance Test Oral Glucose Tolerance Test

WT 4 KO 4 WT 4 KO 4 Recent pooled WT

Recent pooled WT Glucose AreaGlucosetheCurveUnder t0 t30 t60 t90 WT KO Time in Minutes

Source: Powell DR et al 2013 Am J Physiol Endocrinol Metab

Initial Screen: SGLT1 KO Mouse Data

Oral Glucose Tolerance Test Oral Glucose Tolerance Test

WT 4 KO 6 WT 4 KO 6

Recent pooled WT Recent pooled WT Glucose AreaGlucosetheCurveUnder t0 t30 t60 WT KO Time in Minutes

Source: Powell DR et al 2013 Am J Physiol Endocrinol Metab

Glucose Tolerance: Improved Normal Impaired 500

400

300

SGLT2 200

DPP4 Number of KOLines of Number 100 SGLT1

0 0.4 0.6 0.8 1.0 1.2 1.4 1.6

KO / WT Glucose Excursion AUC

Source: Powell DR et al 2013 Am J Physiol Endocrinol Metab

Cecal Glucose Cecal pH Plasma Total GLP-1

Meal challenge provided at hr 0

N = 4-5 mice for each data point

Source: Powell DR et al 2013 J Pharmacol Exp Ther

Cecal Glucose Cecal pH Plasma Total GLP-1

Meal challenge provided at hr 0

N = 4-5 mice for each data point

Source: Powell DR et al 2013 J Pharmacol Exp Ther

Improved Glucose Tolerance Lower A1C Increased GLP-1

• Data from KKAy mouse model of T2D (n = 15 mice/group) • Favorable preclinical safety profile; no evidence of gastrointestinal side effects

Source: Powell DR et al 2014 J Pharmacol Exp Ther

Meal challenge provided at hr 0

N = 5 mice for each data point

Measures taken after 14 days of combination dosing in mice

Source: Zambrowicz et al 2013 Clin Ther

Study performed in NOD Mouse model of T1D (n = 9-10 mice/group) * * * * * * * * *

*Different from other groups, p < 0.05

Frequency of hypoglycemia (Number of samples): < 70 mg/dL <50 mg/dL 0.05U insulin/vehicle: 0/100 0/100 0.2U insulin/vehicle: 13/100 5/100 0.05U insulin/2 mg/kg sotagliflozin: 0/100 0/100 0.05U insulin/30 mg/kg sotagliflozin: 1/90 0/90

Source: Powell DR et al 2015 Diabetes Metab Syndr Obes

49 ©Precision 2018 Lexicon Pharmaceuticals, Science. Inc. Pioneering Medicine. Patient Driven. Postprandial Glucose Reduction is Characteristic of SGLT1 Inhibition in Subjects with T2D

Blood Glucose Above Fasting Level (from Randomized, Placebo- controlled Phase 2a Study of Sotagliflozin; n=12/group)

p < 0.001, placebo AUC vs AUC of 150 mg or 300 mg

Source: Zambrowicz et al 2012 Clin Pharmacol Ther

Meal Tissues

SGLT1 Glucose Glucose Filtration Absorption Blood Glucose SGLT2 Glucose Reabsorption No Urinary Glucose Post-meal Glucose Levels, T2D

Meal Tissues

SGLT1 Glucose Glucose Filtration Absorption Blood Glucose SGLT2 GlucoseX Reabsorption

Post-meal Increased Glucose Levels, Urinary Glucose T2D Excretion

Sources: Zambrowicz et al 2012 Clin Pharmacol Ther 52 © 2018 Lexicon Pharmaceuticals, Inc. Nishimura et al 2015 Cardiovasc Diabetol Glucose Absorption and Reabsorption in Patients with T2D on a Dual SGLT1/SGLT2 Inhibitor

Meal Tissues

SGLT1X Glucose Glucose Filtration Absorption Blood Glucose SGLT2 GlucoseX Reabsorption

Post-meal Moderately Glucose Levels, Increased T2D Urinary Glucose Excretion

Sources: Zambrowicz et al 2012 Clin Pharmacol Ther 53 © 2018 Lexicon Pharmaceuticals, Inc. Nishimura et al 2015 Cardiovasc Diabetol Single Dose of Sotagliflozin Elevates GLP-1 Over the Course of the Day in Subjects with Type 2 Diabetes

Baseline 2x150 mg Tablet 300 mg Liquid

Randomized, cross-over study of subjects with T2D (n = 12) treated with single oral doses of different sotagliflozin formulations. A 5-day washout period separated formulation dosing days. Sotagliflozin data were compared to baseline values. 54 © 2018 Lexicon Pharmaceuticals, Inc. Source: Zambrowicz et al 2012 Clin Pharmacol Ther Combining Sotagliflozin & Sitagliptin in Subjects with T2D

Increases Active GLP-1 Compared to Either Agent Alone *

* p < 0.001 * vs combination

Randomized, cross-over study of subjects with T2D (n = 18) treated with single oral doses of sotagliflozin, sitagliptin or the sotagliflozin/sitagliptin combination. 7-day washout periods separated compound dosing days.

Sotagliflozin Clinical Differentiation

Pablo Lapuerta, M.D. Executive Vice President and Chief Medical Officer

Precision Science. Pioneering Medicine. Patient Driven.

56 ©Precision 2018 Lexicon Pharmaceuticals, Science. Inc. Pioneering Medicine. Patient Driven. Sotagliflozin Differentiation - Dual Inhibition of SGLT1 and SGLT2

• Potential for more robust efficacy than SGLT2 inhibition alone - Greater post-prandial glucose reduction - GLP-1 elevation after meals - Consistent A1C reduction - Efficacy in the setting of renal impairment

• Potential for differentiation in safety - Less urinary glucose excretion • May be relevant to volume depletion, genitourinary infections, and DKA - Potentially less hypoglycemia than standard of care with insulin

The vision of dual inhibition has guided clinical development

24 hour Sotagliflozin Canagliflozin Empagliflozin Dapagliflozin Ertugliflozin UGE (g) 400 mg 300 mg 25 mg 10 mg 15 mg

Healthy Volunteers 24 hour UGE (g)1 36-44 70 56 40 58 Type 2 Diabetes 24 hour UGE (g)2 54 >100 80 68 >69-80 Type 1 Diabetes 24 hour UGE (g)3 70 NA* 134 88 NA*

1Lapuerta et al. Diabetes & Vascular Disease Research 2015;12(2) :101–110, and FDA Clin. Pharm. Reviews obtained at www.fda.gov 2Rosenstock et al. Diabetes Care 2015;38:431–438. Sha et al. PLoS One 2014;9(9):e110069, Heise et al. Diabetes Ther (2013) 4:331–345, List et al., Diabetes Care 32:650–657, 2009, Amin et al. Diab Obes Metab17: 591–598, 2015 3Lexicon data on file, study LX4211.206. Perkins et al. Diabetes Care 2014;37:1480–1483, Henry et al. Diabetes Care 2015;38:412–419 *No published data on UGE in T1DM

Reductions in post-prandial glucose from gastrointestinal SGLT1 inhibition may limit UGE

Example - Canagliflozin urinary glucose excretion after a meal is elevated for about 3 hours while glucose levels are high

– Canagliflozin – Placebo

Source: Diabetes Care 36:2154–2161, 2013

Green: Placebo, Blue: Sota 150 mg, Red: Sota 300 mg

Source: Lapuerta, P et al. Diabetes & Vascular Disease Research 2015, Vol. 12(2) 101–110

Sotagliflozin Canagliflozin Empagliflozin Dapagliflozin Ertugliflozin 400 mg 300 mg 25 mg 10 mg 15 mg Half-life 29 13.1 12 3* 15.3 (hours)1

Reductions in post-prandial glucose have been shown with sotagliflozin even 24 hours after the last dose2

*half-life estimation may have been affected by limits of assay 1Lapuerta et al. Diabetes & Vascular Disease Research 2015;12(2): 101–110 and FDA Clinical Pharmacology Biopharmaceutics Reviews 2Lexicon data on file, study LX4211.202

Sotagliflozin Placebo n=16 n=15

240 240

220 220

200 200

180 180

160 160

140 140

Glucose(mg/dl) Glucose(mg/dl)

120 120

100 100 -1 0 1 2 3 4 -1 0 1 2 3 4 Hours Hours Day -1 Day 7 Day -1 Day 7

Mean 24-hour Urinary Glucose Excretion: 34 g on sotagliflozin 400 mg

Source: Zambrowicz et al. Clin Ther. 2015 Jan 1;37(1):71-82

Sotagliflozin Placebo n=16 n=15

/L /L pmol pmol 15

1, 1,

- -

TotalGLP TotalGLP

5 5 -1 0 1 2 3 4 -1 0 1 2 3 4

Day -1 Day 7 Hours Day -1 Day 7 Hours

Source: Zambrowicz et al. Clin Ther. 2015 Jan 1;37(1):71-82

Baseline (Day -1) Day 1 Insulin without Sotagliflozin No insulin at breakfast Figure 1: Continuous Glucose Monitoring (CGM) Data by Study day and Time Figure 1: Continuous Glucose Monitoring (CGM) Data by Study day and Time LX4211 - 203 Study --- Pioneer Group LX4211 - 203+ Study Sotagliflozin --- Pioneer Group Subject ID=102_001 Study Day=-1 Subject Status=INPATIENT BASELINE Subject ID=102_001 Study Day=1 Subject Status=INPATIENT ON TREATMENT

Sensor Glucose (mg/dL) Sensor Glucose (mg/dL) 400 400

350 350 Insulin Only 300 300 Start Sotagliflozin with No Bolus Insulin 250 250

200 200

150 150

100 100 Insulin Bolus: 50 50 B L D Units B L D 0 0.7 0 0 3 2 3.75 0 0 0.7 0 0:00:00 4:00:00 8:00:00 12:00:00 16:00:00 20:00:00 24:00:00 0:00:00 4:00:00 8:00:00 12:00:00 16:00:00 20:00:00 24:00:00 Time Time

B=Breakfast L=Lunch D=Dinner Source: Lapuerta et al. Diabetes & Vascular Disease Research 2015;12(2): 101–110

Sotagliflozin Dapagliflozin Optimizing insulin as robustly as possible ✓  Enrolling patients with A1C < 7.0% ✓  Enrolling patients with A1C >10.5% ✓  Enrolling patients with eGFR < 60 mg/dL ✓  Including a study in patients at risk for DKA ✓  Including a large pragmatic trial ✓  Conducting the largest program of its kind ✓ 

The Vision: Robust efficacy with potential differentiation in safety

Phase 3 Studies Primary Top-Line Study in T1DM Patient Size/Dose Endpoint Results Completion Met primary • 750 patients Reduction of A1C vs. Completed endpoint of inTandem1 placebo on optimized • Placebo, 200mg, efficacy and (52-week total insulin (24 weeks) 400mg once-daily favorable safety study duration) Met primary • 750 patients Reduction of A1C vs. endpoint of Completed inTandem2 • Placebo, 200mg, placebo on optimized efficacy and (52-week total 400mg once-daily insulin (24 weeks) favorable safety study duration)

Met primary • 1,400 patients Proportion with A1C Completed endpoint of inTandem3 < 7.0% and no SH and • Placebo, 400mg efficacy and (24-week total no DKA (24 weeks) once-daily favorable safety study duration)

U.S. and EU regulatory filings for T1DM submitted in 1Q 2018

inTandem1 (n=793) inTandem2 (n=782) A1C reduction (%) after A1C reduction (%) after 24 weeks 24 weeks

400mg dose 200mg dose Placebo 400mg dose 200mg dose Placebo

-0.03% -0.08%

-0.43%

-0.49% -0.37% -0.39%

inTandem3 (n=1,405) Sotagliflozin Placebo 400 mg P-Value

Net benefit 15.2% 28.6% p<0.001

A1C (%) -0.33 -0.79 p<0.001

Body weight (kg) +0.8 -2.2 p<0.001

Blood pressure (mmHg)* -5.7 -9.2 p=0.002

Bolus insulin -1.1 IU/day -3.9 IU/day p<0.001

*16 weeks in patients with SBP>130 mm Hg

• Positive pooled continuous glucose monitoring (CGM) data from the pivotal inTandem1 and inTandem2 studies announced recently

- Sotagliflozin significantly increased the time in target glucose range of 70-180 mg/dL and decreased glucose variability

Sotagliflozin 200 mg  additional 1.3 hours per day in target glucose range

Sotagliflozin 400 mg  additional 2.8 hours per day in target glucose range

Severe Hypoglycemia DKA

24 week data Overall Rate Discontinuation Rate Overall Rate Discontinuation Rate

inTandem1 (n=793) • Placebo 6.7% 0.4% 0.0% 0.0% • Sotagliflozin 200 mg 4.2% 0.0% 1.1% 0.4% • Sotagliflozin 400 mg 4.6% 0.0% 3.1% 0.8% inTandem2 (n=782) • Placebo 2.7% 0.0% 0.0% 0.0% • Sotagliflozin 200 mg 3.8% 0.0% 0.4% 0.0% • Sotagliflozin 400 mg 2.3% 0.0% 1.1% 0.8% inTandem3 (n=1,405) • Placebo 2.4% 0.1% 0.6% 0.1% • Sotagliflozin 400 mg 3.0% 0.3% 3.0% 1.6%

• Hypoglycemia profile is relevant to patients - inTandem3: sotagliflozin vs. placebo; 11.8 vs. 15.4 events of glucose ≤55mg/dL per person-year (p<0.001) • Diabetic ketoacidosis (DKA) incidence low in setting of education and monitoring

• Background rate of DKA in people with type 1 diabetes ranges between 5-8% annually1

• Sotagliflozin’s inTandem program and dapagliflozin DEPICT-1 have demonstrated manageable incremental DKA risk over placebo that can be mitigated with appropriate care instructions and monitoring

Placebo-Adjusted Proportion of Patients Low Dose High Dose with DKA Event2 inTandem Program 0.6% 2.4% DEPICT-13 1.7% 2.5%

1 Beck et al, The T1D Exchange Clinic Registry, J Clin Endocrinol Metab 97: 4383-4389, 2012; Weinstock et al, Severe Hypoglycemia and Diabetic Ketoacidosis in Adults with Type 1 Diabetes: Results from the T1D Exchange Clinic Registry, J Clin Endocrinol Metab 98: 3411-3419, 2013 (proportion of patients reporting at least one DKA event in the previous 12 months). 2 Proportion of patients with DKA event classified as either definite or probable/possible through 24 weeks of treatment; 3 Dandona et al., Efficacy and safety of dapagliflozin in patients with inadequately controlled type 1 diabetes (DEPICT-1): 24 week results from a multicentre, double-blind, phase 3, randomised controlled trial, Lancet Diabetes Endocrinol 2017 (published online).

• 1.55 million adults are estimated to be living with type 1 diabetes in the United States in 2018 and has grown at 3.5%/year over the last 5 years • 75% of adults living with type 1 have an A1C > 7.0%

1.55 Million Adults Living With T1D in the U.S.

1.55 M 100%

• WAC of SGLT2i class is $14.35/day ($5,238/year) • 12.7% CAGR in WAC over the last two years

A1C distribution created from population data from T1D Exchange T1D population based on company research. © 2018 Lexicon Pharmaceuticals, Inc. Type 1 Diabetes Mellitus (T1DM) – Large Market Opportunity

DEPICT-1 excluded about 43% of the population (672K)

1.55Only Million 57% Adultsof the T1DLiving Community With T1D inStudied the U.S.

0.67 M 0.88 M 43% 57%

DEPICT-1 removed all patients who did not have an A1C after run-in between 7.5%-10.5%

SotagliflozinDapagliflozinis the was most restricted comprehensively to 57% of studied the population SGLT in T1D

0.02 M 1% 99+%57% of of the the T1D T1D Community Community Studied Studied

Sotagliflozin did not restrict patients: 0.67 M • Included participants with an A1C 0.88 M 43% 1.5 M after run-in between 5.6%-15.4% 57% 99% • Included patients with an eGFR < 60 (5.3% of participants) • Studied all adults – including those over 75 years old

We have submitted to the FDA the 1st application for approval of an oral adjunct to insulin

Jake A. Kushner, M.D.

[email protected] @JakeKushnerMD Disclosure: consultant for Lexicon, Virta Health, KNOW foods, and Sanofi Michael Bliss, The Discovery of Insulin, University of Chicago Press, 1982, 2007 Was insulin a “cure” for type 1 diabetes? Insulin-treated T1D patients began to suffer from unforeseen complications

The Cumulative Incidence of Long- Term Sequelae of Juvenile Diabetes, by Duration of Diabetes, Joslin Clinic, 1898-1956. Insulin-treated T1D patients had high rates of mortality, even into the 1990s Does improved glycemic control reduce complications?

Diabetes Control Complication Trial (DCCT): 1441 T1D patients, 1-5 years duration, ages 13-39 “intensive therapy” vs. “conventional therapy” IntensiveImproved glucose glucose control control for ~6.5 years in DCCT Decreased retinopathy with intensive T1D treatment! Intensive glucose control forfor ~10 only years 10 years in DCCT Decreased cardiovascular disease with intensive T1D treatment! Decreased mortality with intensive T1D treatment! Millions of people have type 1 diabetes • Injected insulin is the only available therapy • High burden of illness: Very challenging to keep blood sugars in normal range • Risk of weight gain & hypoglycemia with increased insulin • Frequent hypoglycemia (typically 1-2 episodes per week) • Severe hypoglycemia risk: ~10% per year • Pramlintide is the only FDA approved T1D adjuvant therapy, associated with hypoglycemia, and infrequently prescribed Most with T1D fail to achieve A1c target Most with T1D fail to achieve A1c target

A1c target: <7 in adults 18 y old, T1D for >10 yrs (High carb diet) Adverse consequences in typically treated T1D? Typically treated T1D results in excess risk of cardiovascular death Weight gain is associated with cardiovascular disease in intensive T1D treatment Sotagliflozin Results inTandem3

inTandem3 Sotagliflozin Placebo 400 mg P-Value Net benefit (A1c<7.0% without 15.2% 28.6% p<0.001 severe hypo or DKA)

A1C (%) change at 24 weeks -0.33 -0.79 p<0.001

Body weight (kg) +0.8 -2.2 p<0.001

Blood pressure (mmHg)* -5.7 -9.2 p=0.002

Bolus insulin -1.1 IU/day -3.9 IU/day p<0.001 Hypoglycemia (glucose ≤ 55 15.4 11.8 p<0.001 mg/dL) episodes per person-year

*16 weeks in patients with SBP>130 mm Hg. Access provided by Access provided by

Sotagliflozin Clinical Trial Safety Experience CORRESPONDENCE Effects of Sotagliflozin Added to InsulinCORRESPONDENCE in Type 1 Diabetes

• DKA education by healthcare providersMarch 8, 201Ef8 fects of Sotagliflozin Added to Insulin in Type 1 • Ketone monitoring recommendedN Engl J Med 2018; 378:966-968 DOI: 10.1056/NEJMc1800394 Diabetes • 3% DKA on sotagliflozin 400 mgMe tatrics 24 weeks March 8, 2018 TO TNHE EnEDIgTOl RJ Med 2018; 378:966-968 Garg DOI:et al. (D 1ec0. 14.1 0iss5ue6)/1N reEJMc1port the supe80riori03ty9 of4 adding sotagliflozin, an oral inhibitor of sodium– glucose cotransporters 1 and 2 (SGLT1/2), to insulin in patients with type 1 diabetes, as compared with placeMebo, intri thecs inT andem3 trial. They used a unique primary end point that assesses both risk and benefit simultaneously: a glycated hemoglobin of less than 7% without severe hypoglycemia or diabetic ketoacidosis at week 24 (i.e., benefit without harm).

AccordiTOng TtoH ourE cEalcDulIaTOtionsR of the number needed to treat that are based on data provided in the article, the number of patients who would need to be treated to show unqualified success (a situation in which benefit is achieved without harm2) is 8, which is very close to 7, the number of patients who would need to be Gtreaatregd foret oneal. pa(Dtieentc to. s14how i sbesneuefit).1 D reuringport a 24-w theee ks upeperiod,ri torihe numty ofbers a ofddi patngient ss wothoagliflozin, an oral inhibitor of sodium– would need to be treated to show harm from at least one episode of severe hypoglycemia, diabetic ketoaglcidosucisos, vole umcote deraplnsetiporton, ore gersni t1al amndycot i2c i(SnfeGctionLT w1/ith2), sota gltoifl ioznsin,ul asi ncom inpa pared twieithnt plsa cwebo,ith type 1 diabetes, as compared with are 167,pla 40,ce 64,bo, and in 23, the res peinTctivealndey, witmh P3 va tlriueasl of. T0.60,he y<0.001, use d0.009, a uni andque <0.001. pri (Pm vaalryues efornd the point that assesses both risk and benefit Garg SK and Strumph P. Nbet wEngleen-groupJ diMedfferenc 2018;es in adve rs378:966e events were- 968not provided in the article.) The corresponding numbesirsm oful pattaienentsous who lhay:d a l iglkelycihoodat eofd be heingm eioglther obihelpend orof ha lrmesesd atreha 24,n 6,7% 9, a wnd i3.thout3 Give ns tehevere hypoglycemia or diabetic short keduratoationc ofidos the tirisa la atnd w theee lkike 24ly w (iors.eeni.,ng be ofne numfibet rsw witithouth respe hact torm the). likelihood of harm or (In 52 week studies, incidencesbenefit i nof the reDKAal world, aon cont inuoussotagliflozin risk–benefit assessmwereent of sota gl~2ifloz-in4%) is warranted. According to our calculations of the number needed to treat that are based on data provided in the article, the number of patients who would need to be treated to show unqualified success (a situation in which benefit is achieved without harm2) is 8, which is very close to 7, the number of patients who would need to be treated for one patient to show benefit. During a 24-week period, the numbers of patients who would need to be treated to show harm from at least one episode of severe hypoglycemia, diabetic ketoacidosis, volume depletion, or genital mycotic infection with sotagliflozin, as compared with placebo, are 167, 40, 64, and 23, respectively, with P values of 0.60, <0.001, 0.009, and <0.001. (P values for the between-group differences in adverse events were not provided in the article.) The corresponding numbers of patients who had a likelihood of being either helped or harmed are 24, 6, 9, and 3.3 Given the short duration of the trial and the likely worsening of numbers with respect to the likelihood of harm or benefit in the real world, a continuous risk–benefit assessment of sotagliflozin is warranted. Patient Education and Monitoring for DKA

• Recognize potential symptoms of ketosis or DKA, even when glucose is normal or only mildly elevated - Nausea, vomiting, or stomach pain - Constantly feeling tired, general malaise - Thirst, frequent urination, or very dry mouth

• Check ketones If these symptoms are present, or in situations at risk for DKA, including - Acute illness - Prolonged fasting - Significant reductions or interruptions in insulin dosing

• Contact a healthcare provider if ketones are positive, or if the condition does not improve - If in doubt, stop sotagliflozin until contacting the provider - It is important to know that both carbohydrate and insulin are necessary for ketosis to resolve Sotagliflozin: Patient Perspective

Potential Benefits Patient commitment • Short-term • Recognize the potential for DKA – A1c reduction – Potentially 2% to 4% – Greater time in range incidence at 1 year • Less hyperglycemia and hypoglycemia • Monitor ketones to mitigate risk of – Weight loss DKA, with advice to stay in close – Treatment satisfaction contact with health care provider when ill • Long-term – Potential to address risks of nephropathy, neuropathy, retinopathy, and cardiovascular disease April 10, 2018

Sotagliflozin Program Summary

Pablo Lapuerta, M.D. Executive Vice President and Chief Medical Officer

Precision Science. Pioneering Medicine. Patient Driven.

100©Precision 2018 Lexicon Pharmaceuticals, Science. Inc. Pioneering Medicine. Patient Driven. Phase 3 Program in T1DM – Summary

• inTandem program has the largest efficacy and safety database of an oral anti-diabetic agent for T1DM

• Sotagliflozin profile - Robust A1C efficacy on top of insulin - Improved glucose time in range - Robust weight reduction - Lower rate of hypoglycemic episodes with glucose ≤ 55 mg/dL - Incremental incidence of positively-adjudicated DKA was low at 52 weeks • DKA can be managed with education and monitoring

Monotherapy Metformin Combination CV and Renal Glimepiride Study Study Study with Events (SOTA-GLIM) sulfonylurea (SCORED) Study or metformin Study 400 500 patients patients 500 10,500 930 patients patients patients

(NCT02926937) (NCT02926950) (NCT02926950) (NCT03315143) (NCT03332771)

Moderate Uncontrolled Severe renal Empagliflozin Efficacy and renal on basal impairment (SOTA-EMPA) Bone Safety impairment insulin or (SOTA- on DPP4 (SOTA-BONE) (SOTA-CKD3) CKD4) Study OADs (SOTA- background Study INS) Study Study 780 700 276 560 patients 360 patients patients patients patients

(NCT03242252) (NCT03242018) (NCT03285594) (NCT03351478) (NCT03386344)

• Type 1 diabetes - NDA and MAA filings submitted in 1Q 2018

• Type 2 diabetes - Data for majority of the Phase 3 studies expected in 2019 - MAA filing planned for 2H19 - NDA filing planned for early 2020

Pipeline Progress – LX2761 (diabetes) and LX9211 (neuropathic pain)

Praveen Tyle, Ph.D. Executive Vice President, Research & Development

Precision Science. Pioneering Medicine. Patient Driven.

104©Precision 2018 Lexicon Pharmaceuticals, Science. Inc. Pioneering Medicine. Patient Driven. Lexicon’s Scientific Platform Has Produced a Commercial Product and a Pipeline of Innovative Drug Candidates

Compound Partner Target Indication Preclinical Phase 1 Phase 2 Phase 3 Registration Marketed

Wholly Carcinoid owned (U.S./ TPH1 syndrome FDA approval Feb 28, 2017; US launch Mar 01, 2017 Japan) diarrhea

Ipsen Carcinoid TPH1 (ex-U.S./ syndrome EMA approval Sept 19, 2017; EU launch ongoing ex-Japan) diarrhea

Sanofi (WW, SGLT1/ Type 1 diabetes Sotagliflozin NDA / MAA filed March, 2018 ex-Japan) SGLT2 (T1DM)

Sanofi (WW, SGLT1/ Type 2 diabetes Sotagliflozin Phase 3 ongoing ex-Japan) SGLT2 (T2DM)

Wholly Neuroendocrine owned (U.S./ TPH1 Initiating Phase 2 tumors (NETs) Japan) Wholly Biliary tract Initiating Phase 2 owned (U.S./ TPH1 cancer (BTC) Japan) Phase 1b ongoing Wholly SGLT1 LX2761 Diabetes owned (GI tract) Phase 1a Wholly Neuropathic LX9211 AAK1 owned pain ongoing

106©Precision 2018 Lexicon Pharmaceuticals, Science. Inc. Pioneering Medicine. Patient Driven. LX2761 – Locally-acting SGLT1 Inhibitor for Diabetes

SGLT2 SGLT1SGLT2 is the reabsorbs primary transporter90% of for glucose/galactosefiltered glucose in thein the kidney GI tract SGLT1 InhibitingInhibiting SGLT1 SGLT2 in the in GI the tract kidney delays & reducesincreases glucose glucose absorption excretion afterin the a urinemeal

ResultsResults in elevated in reduced GI hormones glucose (GLP-1) andreabsorbed reduced peak into blood the body glucose

Mechanism is independent of insulin

MechanismEffect is diminishes independent with of renal decliningfunction renal function

➢ Potent, orally-delivered small molecule strategically designed to maximize SGLT1 inhibition locally in the gastrointestinal tract with no urinary glucose excretion ➢ Ability to minimize PPG excursions ➢ Ability to maximize GLP-1 release ➢ Minimal systemic exposure

➢ Phase 1a clinical trials completed

➢ Phase 1b clinical trials ongoing

➢ Lexicon has granted Sanofi certain rights of first negotiation

Oral delivery of LX2761 results in very low systemic exposure in mice

Source: Goodwin NC et al 2017 J Med Chem

24-hour urine glucose on day 1 and day 2 after oral delivery with a single dose in mice

Source: Goodwin NC et al 2017 J Med Chem

Data from oral glucose tolerance tests in rats

Source: Powell DR et al 2017 J Pharmacol Exp Ther

Note: The adult male C57 mice studied were fed ad lib between the last oral dose of LX2761 and the OGTT

Source: Powell DR et al 2017 J Pharmacol Exp Ther 112© 2018 Lexicon Pharmaceuticals, Inc. LX2761 and DPP-4 Inhibitor Sitagliptin Synergistically Increase Postprandial GLP-1 Levels in Preclinical Testing

➢ Adult male mice received vehicle, LX2761 and/or sitagliptin by oral delivery ➢ Each mouse received 4 g/kg glucose by oral delivery

Source: Powell DR et al 2017 J Pharmacol Exp Ther

➢Potent, oral, locally-acting SGLT1 inhibitor

➢Robust preclinical efficacy and good safety profile ▪ Reduces PPG ▪ No increase in UGE, consistent with local action ▪ Synergy with DDP-4 inhibitor in preserving active GLP-1

➢ Phase 1a clinical trials completed in healthy subjects and patients with type 2 diabetes

➢ Phase 1b clinical trials in patients with type 2 diabetes ongoing, with data expected mid-2018

LX9211 - Neuropathic Pain

Discovering Breakthrough Treatments for Human Disease

115©Precision 2018 Lexicon Pharmaceuticals, Science. Inc. Pioneering Medicine. Patient Driven. R&D in the Pain Market – Overview

In contrast, oncology has >2,000 clinical programs (1,700 NCEs) 220 clinical programs Only 125 NCEs Most approved pain products since 2007 87% are non-opioid have been receptors reformulations or have pre-2007 market history

2 approved NCEs for pain in a decade (milnacipran and tapentadol)

Source: Bio Industry Analysis: The State of Innovation in Highly Prevalent Chronic Diseases Volume II: Pain and Addiction Therapeutics

➢ Discovered in Lexicon’s neuroscience drug discovery alliance with Bristol-Myers Squibb ➢ Lexicon has acquired exclusive development and commercialization rights ➢ Potent, highly-selective, oral small molecule inhibitor of target discovered and extensively characterized in alliance. Robust efficacy in preclinical models ➢ IND filed; Phase 1 clinical trial underway

Substantial need for new therapies with improved efficacy and tolerability for neuropathic pain and for new therapies for pain without addictive potential

➢A late-stage complication in patients with diabetes mellitus, affects approximately 15% of patients.

➢Complicates diabetes treatment by limiting the patient’s ability to exercise, which improves glucose management

➢Severely interferes with sleep, which can also negatively impact glycemic control

➢Symptoms differ in clinical course, distribution, fiber involvement and pathophysiology

Mouse Spinal Nerve Ligation Model

Source: Kostich et al 2016, J Pharmacol Exp Ther

150 140 130 120 110 **** 100 **** **** **** 90 80 70 **** 60 **** 50 **** 40 **** **** 30 20 **** * 10 * 0 -10

Inhibition of Mechanical Allodynia Allodynia (%) Mechanical Inhibitionof 0 1.5 3.5 5.5 Time After Treatment (h) Vehicle in Non-diabetic Animals LX9211 (0.3 mg/kg) Vehicle in Diabetic Animals LX9211 (1 mg/kg) LX9211 (0.1 mg/kg) LX9211 (3 mg/kg)

*P<0.05, ****P=0.0001 compared to vehicle in diabetic animals

Source: Unpublished data from Lexicon

300

* 200 ** ****

100 Riding TIme (s) TIme Riding

0 1 3 5 Time After Treatment (h)

Vehicle LX9211 (3 mg/kg) LX9211 (30 mg/kg) Gabapentin (100 mg/kg)

*P<0.05, **P<0.01, ****P=0.0001 compared to vehicle

Source: Unpublished data from Lexicon

➢ Mechanism involves α2 adrenergic pathway

➢ Mechanism thought to involve GABAergic pathway

➢ Target does not have the same motor side effects seen with gabapentinoids

➢ Spinal dorsal horn key site of action (central nervous system target)

➢ Mechanism does not involve opioids

➢ High potency and specificity for AAK1 inhibition

➢ Robust target engagement and efficacy

➢ Superior profile to the current standard of care

➢ Excellent brain penetration

➢ Opioid target sparing

➢ Phase 1a clinical study ongoing

➢ Market opportunity for safe and effective medications

Financial Overview

Jeffrey L. Wade, J.D. Executive Vice President, Corporate and Administrative Affairs and Chief Financial Officer

Precision Science. Pioneering Medicine. Patient Driven.

Selected Income Sheet Data: 2017 2016

Revenue $90.3M1 $83.3M Operating Expenses2 R&D $156.8M $178.2M

SG&A $66.2M $43.0M

Total Operating Expenses $227.0M $220.5M Net Loss $(129.1)M $(141.4)M Net Loss Per Common Share $(1.23) $(1.36)

Selected Balance Sheet Data: As of Dec 31, 2017

Cash & Investments $310.8 million

Total Assets $436.5 million 1Includes $15.9M in net product revenue Total Debt $245.7 million 2Includes stock-based compensation expenses

Common Shares Outstanding 105.7 million

2018 Financial Selected Income Sheet Data: Guidance Revenue Revenue from collaborations $30-$40M At least double year- Net product revenue over-year Operating Expenses1 R&D $125-$135M

SG&A $80-$90M

Total Operating Expenses $205-$225M Non-Cash Expenses ~$17M Net Cash Used in Operations $190-$205M

1Includes stock-based compensation expenses

Investments in sotagliflozin through 2018 may begin to yield returns in 2019 and 2020

Regulatory Development Sales Milestones Milestones Milestones and Royalties

•$220M – •$110M – •$990M – Sales Milestones linked to Milestones linked to milestones first commercial sale Phase 3 study •Royalties on net after regulatory results in T2D sales approval for T1D •$100M – Milestone and T2D in U.S. and linked to success in Europe either of two T2D outcomes studies

• Commercialization - Investments in XERMELO commercialization and medical affairs activities, with a view towards achieving positive cash flow on the brand in the next 12-24 months - Initiation of investments in sotagliflozin U.S. T1D commercialization and medical affairs activities, shared with Sanofi

• Research and development - Significant wind-down in R&D expenses for sotagliflozin • Phase 3 program in T1D complete, with Q1 2018 global filings • Lexicon’s share of T2D development costs to be fully satisfied in 2018 - Investment in XERMELO clinical studies in biliary tract cancers and neuroendocrine tumors (NETs) - Continued investment in earlier-stage R&D programs (including LX2761, LX9211 and additional research)

Q&A Session #2

Precision Science. Pioneering Medicine. Patient Driven.

Closing Remarks

Lonnel Coats President and Chief Executive Officer

Precision Science. Pioneering Medicine. Patient Driven.