Lexicon Pharmaceuticals, Inc. Our Strategic Intent – Innovations That Transform Standard of Care

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Building a Fully-Integrated, Commercial- Stage Biopharmaceutical Company with a Deep Pipeline

Stifel 2018 Healthcare Conference

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

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.

Innovative Product Focus

Commercial Product

Targeting Unmet Needs and Large Market Opportunities

Integrated Platform

Patient-Centric Team with Experienced Collaborators

Building a fully-integrated, commercial-stage biopharmaceutical company with a deep R&D pipeline

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 ex-Japan) SGLT2 (T1D) NDA / MAA filings accepted

Sanofi (WW, SGLT1/ Type 2 diabetes Sotagliflozin ex-Japan) SGLT2 (T2D)

Wholly Telotristat Biliary tract owned (U.S./ TPH1 ethyl cancer (BTC) Japan)

Wholly SGLT1 LX2761 Diabetes owned (GI tract)

Wholly Neuropathic LX9211 AAK1 owned pain

4 ©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; launch progressing

DESCRIPTION PATIENT POPULATION*

Carcinoid syndrome results from metastatic neuroendocrine tumor s ( mN ETs ) 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 Patients: Physicians: • Facial flushing ~80% of patients are not ~40-45% of patients are not • Abdominal pain well controlled on SSAs well controlled on SSAs • Fatigue • Heart valve damage over time

*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.

1,227 132 Total Paid Prescriptions New paid (TRx) patient starts

~80% Compliance Rate

U.S. net XERMELO sales up 19% over prior year quarter and 5% from 2Q 2018 $6.3M Q3 2018 U.S. Net XERMELO Sales

Lexicon benefits from Ipsen’s substantial market presence in Europe and other countries in the Lexicon retains Ipsen to licensed territory, and from all rights in U.S. commercialize in coordination on medical and Japan EU and ROW and scientific matters

Potential for up to $150 million in upfront and milestone payments, plus future royalties: • Upfront payment of $23 million • Development/regulatory milestone payments and upfront payment for Canadian rights expansion total $35+ million • European sales milestone payments of up to €72 million • Royalties on net sales in licensed territory, from low 20s to mid-30s percent inclusive of supply

• Potential applications for serotonin synthesis and TPH inhibition in several key areas beyond carcinoid syndrome diarrhea, based on mechanism of action of serotonin and preclinical data: - Tumor-directed therapy (NETs, BTC, other tumor types) - Fibrosis

• Near-term life-cycle management plans: - Phase 2 study initiating this year in biliary tract cancer (BTC)/cholangiocarcinoma • Telotristat ethyl plus first-line cisplatin/gemcitabine combination chemotherapy, progression-free survival (PFS) endpoint - Support for investigator-initiated studies in NETs and other areas in which TPH or serotonin is implicated

10 ©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 glucoseinto the inbody the body

Mechanism is independent of insulin

EffectEffect does diminishes not diminish with with declining renal function

DESCRIPTION A S N A P S H O T *

Diabetes is a chronic disease that People Adults with occurs either when the pancreas does ~1.66M with T1D ~1.55M T1D in US not produce enough insulin or when in US the body cannot effectively use the insulin it produces

75% A1C >7% 50% A1C >8% TYPE 1 DIABETES Complete insulin deficiency due to destruction of beta cells in the pancreas • Hypoglycemia common (severe Over 25 years 25% old are obese hypoglycemia annual rate of 7-12%1) • DKA common (annual rate 5-8%2)

*Sources: Center for Disease Control and Prevention; Dall TM, et al. Diabetes Care. 2014;37(12)3172-3179.; Claims data 1 Beck et al, The T1D Exchange Clinic Registry, J Clin Endocrinol Metab 97: 4383-4389, 2012 2Weinstock 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 (in each case, proportion of patients reporting at least one severe hypoglycemia or DKA event in the previous 12 months).

Phase 3 Studies Primary Top-Line Study in T1DM Patient Size/Dose Endpoint Results Completion Met primary • 793 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 • 782 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 • 1,405 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)

John B. Buse,1 Satish K. Garg,2, Julio Rosenstock,3 Timothy S. Bailey,4 Phillip Banks,5 Bruce W. Bode,6 Thomas Danne,7 Jake A. Kushner,8 Wendy S. Lane,9 Pablo Lapuerta,5 Darren K. McGuire,10 Anne L. Peters,11 John Reed,12 Sangeeta Sawhney,5 and Paul Strumph5

Thomas Danne,1 Bertrand Cariou,2 Phillip Banks,3 Michael Brandle,4 Helmut Brath,5 Edward Franek,6 Jake A. Kushner,7 Pablo Lapuerta,3 Darren K. McGuire,8 Anne L. Peters,9 Sangeeta Sawhney,3 and Paul Strumph3

inTandem1 (n=793) inTandem2 (n=782) A1C reduction (%) after A1C reduction (%) after 24 weeks 24 weeks (post insulin-optimization baseline A1C 7.6%) (post insulin-optimization baseline A1C 7.7-7.8%)

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

-0.03% -0.08%

-0.43% -0.37% -0.39% -0.49%

p<0.001 for both doses vs placebo p<0.001 for both doses vs placebo

inTandem3 (n=1,405) Sotagliflozin Placebo 400 mg P-Value Net benefit (Proportion of patients achieving A1C<7% 15.2% 28.6% p<0.001 without severe hypoglycemia or DKA)

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.

Mean Daily Glucose (mg/dL) 2-Hour Post-prandial Glucose Mean Amplitude of (mg/dL) Glycemic Excursion (mg/dL)

Placebo 200 mg 400 mg 2.0 Placebo 200 mg 400 mg Placebo 200 mg 400 mg

-3.6 -3.0 -5.9

-15.7* -16.9 *

-25.1 *

-38.3 ** *p<0.001 vs. placebo **p=0.009 vs. placebo ***p=0.02 vs. placebo

-53.3*

Source - Danne et al. Increased time in range with sotagliflozin as adjunct therapy to insulin in adults with type 1 diabetes as demonstrated by 24-week continuous glucose monitoring. Presented at American Diabetes Association 78th Scientific Sessions; June 22–26, 2018; Orlando, FL. 18 © 2018 Lexicon Pharmaceuticals, Inc. CGM Data - Sotagliflozin Improved Time in Range by Up to 3 Additional Hours/Day

(Pooled inTandem1 and inTandem2 Data) Placebo Sotagliflozin 200 mg Sotagliflozin 400 mg 24 h 24 h 24 h 1 h 1 h 1 h 24 min 25 min 18 min 12 h 12 h 12 h 18 h 10 h 6 h 18 h 10 h 6 h 18 h 10 h 6 h 33 min 32 min 10 min Baseline 3 min 3 min 33 min

12 h 12 h 12 h

24 h +1 h, 17 min +2 h, 49 min p=0.026 24 h p<0.001 24 h 1 h vs PBO vs PBO 25 min 1 h 1 h 19 min 19 min 12 h 18 h 6 h 7 h 23 min 10 h 13 h 8 h 15 h 18 h 6 h 18 h 16 min 6 h

13 min 52 min 48 min 25 min Week 24 Week

12 h -1 h, 13 min -2 h, 49 min 12 h p=0.055 12 h p=0.001 vs PBO vs PBO <70 mg/dL 70–180 mg/dL >180 mg/dL

inTandem1/inTandem2 inTandem3 Pooled Analysis (52 Weeks)1 (24 Weeks)2 Sotagliflozin Sotagliflozin Sotagliflozin Placebo Placebo 200 mg 400 mg 400 mg (n=526) (n=703) (n=524) (n=525) (n=699) ≥1 positively adjudicated severe 39 (7.4) 30 (5.7) 23 (4.4) 17 (2.4) 21 (3.0) hypoglycemia event, n (%)

1 Henry R, et al. Sotagliflozin further improves percentage of patients achieving HbA1c goal without weight gain in adults with type 1 diabetes (T1D) after insulin therapy optimization (inTandem1, NCT02384941 and inTandem2, NCT02421510). Presented at American Association Clinical Endocrinologists 27th Annual Scientific & Clinical Congress, May 16-20, 2018, Boston, MA.

2 Garg SK, et al. N Engl J Med. 2017;377(24):2337-2348.

Sotagliflozin Sotagliflozin Documented hypoglycemia Placebo 200 mg 400 mg (≤ 55 mg/dl) N=1,229 N=524 N=1224 inTandem1 & inTandem2 studies (52 n=526 n=524 n=525 weeks) Patients with at least 1 event, % 90.9 91.8 91.8

Events per patient per year 19.0 14.9 15.0

InTandem3 study (24 weeks) n=703 - n=699

Patients with at least 1 event, % 79.5 - 75.5

Events per patient per year 15.4 - 11.8

In every Phase 3 study, there was evidence that sotagliflozin significantly reduced the rate of hypoglycemia

Positively adjudicated DKA 52 Weeks1 24 Weeks2 event*, n (%) Placebo 200 mg 400 mg Placebo 200 mg 400 mg inTandem1/inTandem2 0.2% 2.9% 3.8% 0% 1.0% 2.3% Pooled Analysis inTandem3 - - - 0.6% - 3.0%

*Positively adjudicated DKA was characterized by the adjudication committee as “yes with certainty” or “yes, probably.”

1 Pettus JH, et al. Sotagliflozin in combination with optimized insulin therapy reduced A1c levels with a decreased daily insulin requirement after 52 weeks in adults with T1D. Presented at American Diabetes Association 78th Scientific Sessions; June 22–26, 2018; Orlando, FL.

2 Garg SK, et al. N Engl J Med. 2017;377(24):2337-2348.

• ~30 thought leaders representing Advanced Technology & Treatments for Diabetes (ATTD) met at ADA 2018 to draft a consensus statement on the management of SGLT inhibitor- mediated DKA risk in patients with T1D

• Strong consensus reached on benefit/risk and the need for patient/physician educational initiatives, optimization of insulin therapy prior to start of SGLT inhibitors, patient identification and ketone testing

Guidelines for DKA risk management expected to be presented at an international medical meeting followed by publication in a peer-reviewed journal by year-end

• Largest-ever development program for an oral anti-diabetic in T1D - Broad population representative of widest range of people with T1D

• Success in all three Phase 3 studies, with improvements in A1C, net benefit, body weight and glycemic variability - Data reflects benefits addressing key unmet medical needs in T1D - Safety data shows manageable incremental DKA risk with less hypoglycemia

• Filed with FDA and EMA - FDA PDUFA action date: March 22, 2019

A S N A P S H O T

DESCRIPTION Expansion of Type 2 Diabetes Population

1000 2% CAGR Diabetes is a chronic disease that 500

occurs either when the pancreas does (Millions) not produce enough insulin or when 0 the body cannot effectively use the NumberPeopleof 2017 2040 insulin it produces T2D patients People will have chronic OUT develop T2D in OF kidney disease 1 3 their lifetime1 40% TYPE 2 DIABETES (CKD)2 Body does not make or use insulin well; Insulin resistance Stage Contraindication 15–18% Stage 3 CKD2,3 for many T2D • Hypoglycemia uncommon unless person 3/4 CKD therapies 1–2% Stage 4 CKD2,3 is taking insulin/certain diabetes drugs • DKA very rare Obesity Driver of T2D

Sources: 1Center for Disease Control and Prevention.2 Plantinga et al. Prevalence of Chronic Kidney Disease in US Adults with Undiagnosed Diabetes or Prediabetes. Clin J Am Soc Nephrol 5;673-682, 2010. 3 Koro et al. Antidiabetic Medication Use and Prevalence of Chronic Kidney Disease Among Patients with Type 2 Diabetes Mellitus in the United States. Clinical Therapeutics; 2009;31:2608-2617.

Moderate Severe renal Uncontrolled Glimepiride renal impairment on basal (SOTA-GLIM) impairment (SOTA- insulin or Study (SOTA-CKD3) CKD4) Study OADs (SOTA- Study INS) Study 780 276 560 930 patients patients patients patients

(NCT03242252) (NCT03242018) (NCT03285594) (NCT03332771)

CV and Renal Empagliflozin Efficacy and Monotherapy Events (SOTA-EMPA) Bone Safety Study (SOTA-BONE) (SCORED) on DPP4 Study Study background 400 10,500 700 360 patients patients patients patients

(NCT03315143) (NCT03351478) (NCT03386344) (NCT02926937)

Worsening Combination Metformin Heart Failure Study with Study (SOLOIST- sulfonylurea WHF) Study or metformin 500 4,000 500 patients patients patients

“The major change…is based on new evidence that specific SGLT2 inhibitors or GLP-1 receptor agonists improve cardiovascular outcomes, as well as secondary outcomes such as HF and progression of renal disease, in patients with established CVD or CKD”1

• Consensus for use of SGLT2 inhibition and GLP-1 agonists - 1st-line treatment in type 2 diabetes with established cardiovascular disease or chronic kidney disease - 2nd-line treatment in type 2 diabetes for obese patients

1Diabetologia https://doi.org/10.1007/s00125-018-4729-5

“Reduced intestinal glucose uptake may protect from long-term cardiometabolic outcomes, providing support for therapies that target SGLT1 function”1

• Genetic variants in SGLT1 function had less obesity, hypertension, type 2 diabetes, congestive heart failure and mortality1

1J Am Coll Cardiol 2018;72:1763–73

• Evidence continues to build that SGLT inhibitors should be treatment of choice for T2D - Strong A1C benefits - Benefits beyond A1C in weight loss and blood pressure - Improvements in cardiovascular outcomes, demonstrated only by SGLT inhibitors and select GLP-1 analogs among T2D therapeutics - Building evidence for renal protection, slowing progression of chronic kidney disease (CKD)

• Sotagliflozin’s dual SGLT1/SGLT2 mechanism offers opportunity for potential best-in-class profile - SGLT1 mechanism reduces post-prandial glucose, elevates GLP-1 release, reduces SGLT2-associated urinary glucose excretion - Nearly 20,000-patient Phase 3 program designed to demonstrate differentiation and broad benefits in T2D population

• Core Phase 3 studies scheduled to complete enrollment this year, data coming in 2019

Lexicon retains development responsibility for T1DM; Exercised Sanofi has responsibility for option to co-promote and have lead development in T2D and worldwide role in U.S. T1D commercialization commercialization (ex-Japan)

• Potential $1.7 billion in upfront and milestone payments to Lexicon – Upfront payment: $300 million – Development/regulatory milestones: Up to $430 million – Sales milestone payments: Up to $990 million • Lexicon responsible for T1D development costs; Sanofi responsible for T2D development costs, with Lexicon sharing up to $100 million in costs • Royalties on net sales of sotagliflozin – Tiered, escalating royalties based on territory and indication – Ranging from low double digit percentages to 40% of net sales

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

32 ©Precision 2018 Lexicon Pharmaceuticals, Science. Inc. Pioneering Medicine. Patient Driven. LX2761 - Drug Candidate for Diabetes Focused on SGLT1 in GI Tract

• Potent, orally-delivered small molecule designed to inhibit SGLT1 locally in the gastrointestinal tract without any significant inhibition of Directed towards achievement of better SGLT2 in the kidney glycemic control based on local inhibition of SGLT1 in the GI tract with minimal systemic absorption, and • In preclinical studies, LX2761 without the significantly-elevated delayed and reduced intestinal urinary glucose excretion that glucose absorption and reduced characterizes inhibitors of SGLT2 postprandial glucose while increasing plasma levels of GLP-1, Lexicon has granted Sanofi certain consistent with inhibition of rights of first negotiation with respect intestinal SGLT1, with minimal effect to the future development and commercialization of LX2761 on urinary glucose excretion

• Phase 1b clinical trial underway, with data expected in Q4 2018

• Discovered in Lexicon’s neuroscience drug discovery alliance with Bristol- Myers Squibb

• Lexicon acquired exclusive development and commercialization rights

• Potent, highly-selective, oral small molecule inhibitor of AAK1, a target discovered and extensively characterized in alliance

• Preclinical data demonstrate: • Excellent CNS penetration Substantial need for new therapies for • Reduction in pain behavior in neuropathic pain without addictive models of neuropathic pain potential

• Phase 1a clinical trial near completion, data expected in Q4 2018

Compound Indication Key Accomplishments / Milestones / Estimated Timing

• U.S. launch – Ongoing Carcinoid • Launch in additional countries – Ongoing XERMELO® syndrome diarrhea • Initiation of clinical development in oncology – 4Q 2018 • Manuscript publications – Ongoing

• U.S. and EU filings for regulatory approval – 1Q 2018  • Data presentations at ADA – June 2018  Sotagliflozin Type 1 diabetes • Data presentations at EASD –October 2018  • Manuscript publications – Ongoing • PDUFA date – March 22, 2019 • Patient enrollment in 11 Phase 3 studies targeting nearly 20,000 patients - Ongoing Sotagliflozin Type 2 diabetes • Completion of patient enrollment in core Phase 3 studies – 2018 • Completion of core Phase 3 studies – Starting 1H 2019

LX2761 Diabetes • Phase 1b data – 4Q 2018

• Phase 1a data – 4Q 2018 LX9211 Neuropathic Pain • Initiation of Phase 1b study – 1H 2019

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