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. 1 © 2018 Lexicon Pharmaceuticals, Inc. Our Strategic Intent – Innovations that Transform Standard of Care 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 2 © 2018 Lexicon Pharmaceuticals, Inc. 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 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 3 © 2018 Lexicon Pharmaceuticals, Inc. XERMELO® (Telotristat Ethyl) 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 5 © 2018 Lexicon Pharmaceuticals, Inc. Carcinoid Syndrome Diarrhea – Meaningful Market Opportunity 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. 6 © 2018 Lexicon Pharmaceuticals, Inc. XERMELO – Q3 2018 U.S. Launch Highlights 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 7 © 2018 Lexicon Pharmaceuticals, Inc. Collaboration with Ipsen – Commercialization of XERMELO® in Europe and Other ROW Markets 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 8 © 2018 Lexicon Pharmaceuticals, Inc. Telotristat Ethyl Life Cycle Management – Mechanism of Action of TPH and Serotonin • 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 9 © 2018 Lexicon Pharmaceuticals, Inc. Sotagliflozin 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 11 © 2018 Lexicon Pharmaceuticals, Inc. Sotagliflozin - First-in-Class Dual SGLT1/SGLT2 Inhibitor for Diabetes 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 12 © 2018 Lexicon Pharmaceuticals, Inc. Type 1 Diabetes Mellitus (T1D) – High Unmet Medical Need 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). 13 © 2018 Lexicon Pharmaceuticals, Inc. Sotagliflozin – Largest-Ever Phase 3 Program for an Oral Anti-Diabetic Agent in Type 1 Diabetes 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) 14 © 2018 Lexicon Pharmaceuticals, Inc. inTandem Studies – Publications in Diabetes Care and the New England Journal of Medicine John B. Buse,1 Satish K. Garg,2, Julio Rosenstock,3