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Welcome to the Lexicon Pharmaceuticals First Quarter 2026 Financial Results Conference Call. At this time, all participants are in listen-only mode. Following management prepared remarks, we will hold a brief question-and-answer session. As a reminder, this call is being recorded today, May 7th, 2026. I will now turn the call over to Lisa DeFrancesco, SVP, Investor Relations and Corporate Communications for Lexicon. Please go ahead, Lisa.

Thank you, Trisha. Good morning. Welcome to our first quarter 2026 earnings call. Joining me today are Dr. Mike Exton, Lexicon's Chief Executive Officer and Director, Dr. Craig Granowitz, Senior Vice President and Chief Medical Officer, and Scott Coiante, Senior Vice President and Chief Financial Officer. This morning, Lexicon issued a press release announcing our financial results for the first quarter of 2026, which is available on our website at www.lexpharma.com and through our SEC filings. A webcast of this call along with a slide presentation is also available on our website. During this call, we will review the information provided in the release, provide a corporate update, and then use the remainder of our time to answer your questions.

Before we begin, let me remind you that we will be making forward-looking statements, including statements related to the safety, efficacy, clinical development, regulatory status, and therapeutic and commercial potential of sotagliflozin, pilavapadin, LX9851, and our other drug programs, as well as our business generally. These statements may also include characterizations and projections relating to the clinical development, regulatory status, and market opportunity for our drug programs and the commercial performance of INPEFA for heart failure. This call may also contain forward-looking statements relating to our growth and future operating results, discovery and development of our drug candidates, strategic alliances and intellectual property, as well as other matters that are not historical facts or information.

Various risks may cause our actual results to differ materially from those expressed or implied in such forward-looking statements, and we refer you to our most recent annual report on Form 10-K and our other SEC filings for detailed information describing such risks. I would now like to turn the call over to Mike Exton, our CEO.

Yeah. Thanks, Lisa. Good day, everyone. Thanks for joining us this morning. Look, we began this year with an ambitious set of 2026 objectives, which are to firstly advance our late-stage regulatory programs, both of which have major potential milestones mid-year. Second, expand our internationally through both existing collaborations with Viatris and Novo Nordisk and a new collaboration for pilavapadin. Third, to remain operationally disciplined and focused, which is the foundation to support long-term growth and value creation. I'm really excited that we've executed on all of these fronts. Now, as I reflect back at where we were last year around this time, it's truly incredible to look at the evolution of Lexicon across the board. Our strong R&D execution has resulted in significant progress across each one of our late-stage programs.

Through our focus on operational excellence, including lowering our expenses, executing a successful capital raise earlier this year, and establishing a new debt facility, which we just announced this quarter, we've taken the steps to ensure we're financially solid. We're on the precipice of a number of pivotal milestones in the coming months with the potential to completely reshape the future of this company, as well as the treatment landscape for the patients we serve. We couldn't be more excited for what's to come. To summarize our year-to-date highlights in a bit more detail. Lexicon is advancing a portfolio of novel targeted therapies in two main therapeutic areas, cardiometabolic diseases and chronic pain. We've made meaningful progress across each of these programs. Starting with sotagliflozin in hypertrophic cardiomyopathy or HCM, we are on track to complete enrollment in the SONATA phase III study mid-year.

SONATA continues to enroll well, and we're seeing strong execution as we approach enrollment completion. Type 1 diabetes, we remain on track to resubmit our application for approval of

With LX9851, a first-in-class ACSL5 inhibitor for obesity, our licensee, Novo Nordisk, initiated the phase I study in March, marking the program's entry into clinical development and triggering a second $10 million milestone payment. We're incredibly pleased with the progress and applaud the Novo Nordisk team for how swiftly they advanced this novel treatment candidate to the clinic. We're excited to see the continued progress. Within chronic pain, we continue to deepen our understanding of the profile and potential of pilavapadin. We've met our regulatory objectives and remain in discussions with third parties regarding next steps for the program. Now, our initial objective in securing a partner for pilavapadin was really to secure non-dilutive capital to support the important late-stage cardiometabolic opportunities in HCM and T1D.

While we currently have no plans to fund the phase III development for this program, the steps taken to strengthen our financial position, including our recent capital raise and refinancing of our loan facility, provide us with the financial flexibility to find the right partner and explore structures that reflect the value of this novel asset, which we believe is significant. Lastly, in addition to the strong progress on our pipeline, the team has continued to deliver on our commitment to operational excellence and strengthening our balance sheet. Lots going on, lots to look forward to. With that, I'll ask Craig Granowitz, our Chief Medical Officer, to provide additional color on these pipeline updates. Craig?

Thank you, Mike, and good morning, everyone. I'll start with sotagliflozin, our novel oral SGLT1 and SGLT2 inhibitor, which is in late-stage development in both HCM and Type 1 diabetes. I want to take a moment and remind everyone of the important and unique effects of sotagliflozin's mechanism of action. Sotagliflozin is the only dual inhibitor of both SGLT1 and SGLT2, and I want to emphasize the importance of the SGLT1 effect. While SGLT2 is expressed primarily in the kidney, SGLT1 is expressed in the kidney, but also in other tissues, particularly the GI tract and the heart, as well as the endothelium. Inhibition of SGLT1 in the GI tract is important in postprandial glycemic control in people with T1D, and we believe the inhibition of SGLT1 in the heart has important effects on myocardial health, particularly in disease states like HCM.

It is also noteworthy that SGLT1 expression is upregulated in patients with ischemic heart conditions and in patients with hypertrophic cardiomyopathy. Lexicon continues to study and publish the biology of inhibition of the dual effects of both SGLT1 and SGLT2. As Mike mentioned, we are rapidly approaching two important potential catalysts for sotagliflozin, both of which are anticipated around mid-year. First, for HCM, we expect enrollment of our global phase III SONATA trial of sotagliflozin in HCM to be completed by mid-2026. This pivotal study is evaluating approximately 500 patients with HCM randomized across 130 enrolling sites in 20 countries and includes patients with obstructive and non-obstructive phenotypes. Based on current enrollment trends, we continue to anticipate top-line data from this study in the first quarter of 2027.

In Type 1 diabetes, we remain on track for an NDA submission of

As a reminder, SONATA-HCM is a large global registration trial with a primary endpoint of placebo-adjusted improvement in the KCCQ-CSS score and is designed to support a regulatory filing and broad label in HCM. The study randomized adults with symptomatic HCM, which includes both obstructive and non-obstructive phenotypes. With its unique dual mechanism of action, we believe sotagliflozin should provide clinically meaningful improvements in both symptoms and function in both the obstructive and non-obstructive disease. Sotagliflozin is acting through a dual mechanism or a distinct mechanism from CMIs. Patients on a stable dose of CMI who continue to have heart failure symptoms are also enrolling in the study. What makes sotagliflozin different is that it's acting both as a hemodynamic agent and as a metabolic agent to treat HCM.

To explain further, through SGLT1 inhibition, sotagliflozin acts as a metabolic agent directly on the heart to improve the heart, the functioning of the heart muscle. Additionally, sotagliflozin is acting as a hemodynamic agent by acting on the cardiorenal axis to improve the body's fluid balance and improve outcomes. In total, if you consider its once-daily dosing regimen, established safety profile in clinical studies and post-marketing use, and proven CV outcomes in patients with heart failure, we believe that sotagliflozin has the potential to be broadly adopted in the management of HCM with a strong benefit-risk profile. In recent months, we've continued to present additional evidence supporting sotagliflozin's unique potential. In addition to recent data presented on T1D, I'd like to focus on the SOTA-P-CARDIA study of sotagliflozin at the American College of Cardiology Annual Meeting.

These analyses provided further evidence of benefit across patient subgroups potentially related to its mechanism of action. As previously reported, results from SOTA-P-CARDIA demonstrated a placebo-adjusted 19-point improvement in the KCCQ score. These new analyses showed meaningful effects of sota on changes in patient functioning as measured by the six-minute walk test. Additionally, there was an impact on a number of metabolic parameters, including a reduction of epicardial fat in patients treated with sotagliflozin. While not shown in this slide, there was also a reduction in the left atrial volume in those patients treated with sotagliflozin. Collectively, the data from this study demonstrate meaningful benefits on symptoms, function, and physiology, which may validate the effectiveness of sota in HCM for clinicians. Turning now to

As we have previously discussed, the FDA has confirmed that data from STENO1, third-party funded investigator-initiated study being conducted by the Steno Diabetes Center in Denmark, is adequate to support a resubmission for our NDA, provided patient exposure and safety data requirements are achieved. Based on the data that we have seen to date, we are optimistic that we are on track for NDA resubmission mid-year with potential approval in 2026. There are three key points supporting our timelines and potential for

In short, there are a number of items that need to be completed in order to file mid-year, but we remain on track. If approved,

Pila is a novel investigative therapy targeting AAK1. Beyond DPNP, we believe that there are a number of potential applications for pilavapadin. The AAK1 pathway is central to a number of cellular processes, such as synaptic signaling between neurons involved in pain signaling and also spasticity. With this in mind, we are conducting IND enabling work in multiple additional neuroscience indications. Last month, we presented two additional data sets at the AAN Annual Meeting that further validate the development of pilavapadin in DPNP, as well as other neuroscience indications. First, we shared additional efficacy data from the PROGRESS [III], phase II-B study supporting the selection of pilavapadin 10 mg for phase III development in DPNP. Following the top line results from the PROGRESS phase II study last year, we knew we needed to deepen our understanding of these results through additional analyses.

The data presented at AAN provided additional validation needed to advance pilavapadin 10 mg, as well as a deeper understanding of the profile of this novel mechanism. The data we have seen to date give us further confidence that pilavapadin is phase III-ready in DPNP. Second, we presented preclinical evidence supporting pilavapadin as a novel oral therapy for spasticity, including evaluation in preclinical models of multiple sclerosis and spinal cord injury. The data shared at AAN underscore the opportunity to expand the potential of pilavapadin beyond DPNP, consistent with a pipeline in a pill opportunity that we have discussed. I'll now turn it over to Scott to provide an update on the company's financials.

Thank you, Craig. I'll begin with a summary of our results for the first quarter of 2026. Total revenues were $21.1 million for the quarter, compared to $1.3 million for the corresponding period in 2025. Revenues for the first quarter of 2026 include two $10 million dollar milestones recognized from the Novo Nordisk agreement and net sales of INPEFA of $1.1 million. Research and development expenses for the first quarter of 2026 were $12.8 million, compared to $15.3 million in the corresponding period of 2025, reflecting lower external research expense in 2026 due to the completion of our PROGRESS phase II-B clinical trial and the licensing of LX9851 to Novo Nordisk.

Selling general and administrative expenses for the first quarter of 2026 were $9.2 million, compared to $11.6 million in the corresponding period of 2025. The decrease in 2026 reflects reduced marketing efforts and lower personnel costs. Net loss for the first quarter of 2026 was $1.0 million, or less than $0.01 per share, compared to a net loss of $25.3 million, or $0.07 per share in the corresponding period of 2025. Net loss for the first quarter of 2026 included non-cash stock-based compensation expense of $3.1 million.

As of March 31st, 2026, Lexicon had $199.7 million in cash equivalents, short-term investments, and restricted cash, as compared to $125.2 million as of December 31st, 2025. Total debt as of March 31st, 2026, was $49.7 million, as compared to $54 million as of December 31st, 2025. I'd like to now highlight a few items from the first quarter. As I mentioned, revenue for the first quarter included two $10 million milestones recognized under our Novo Nordisk licensing agreement. Quarter-over-quarter, our operating expenses decreased by $4.8 million, reflecting our continued operational discipline and the strategic repositioning we began implementing in late 2024. We are also reaffirming our full year 2026 outlook for operating expenses. Earlier this week, we took steps to improve our balance sheet and enhance our financial flexibility.

We announced a $100 million debt facility with Hercules Capital. Under the terms of this agreement, an initial tranche of $55 million was funded at closing and was utilized to repay our existing loan facility with Oxford Finance. A second $20 million tranche is available for draw at Lexicon's option, subject to the achievement of certain clinical, regulatory, and financial milestones and specified time requirements. A third $25 million tranche is available for draw at Lexicon's option, subject to Hercules consent and specified timing requirements. The loan facility provides for an initial interest-only period of 18 months with the potential for two six-month extensions. We are incredibly pleased with our financial accomplishments thus far in 2026, including the completion of our capital raise in February and our new loan facility with Hercules.

We have strengthened our balance sheet and improved our financial flexibility while remaining prudent with our expenses ahead of our important milestones in the back half of this year. I will now turn it back to Mike for closing remarks.

Yeah. Thanks, Scott. Before we turn to Q&A, I just want to reiterate just how pivotal a year 2026 is for Lexicon. To ensure success for the year and to get us to this point where in H2 we will have a number of important things happen for the company, we've done two things. We've taken steps, firstly, to strengthen our financial foundation over the last few months. Second, we've executed incredibly well, and as a result, we have many significant milestones just weeks away. I'm excited for how the opportunities are really shaping up for us, both with our own actions but also importantly within the external environment, which is favoring our approach across the board for all of our programs. For HCM, as the field evolves, an awareness of both obstructive and now importantly non-obstructive disease really advance.

We are well-positioned with a therapy that has the potential for a strong benefit risk profile and ease of use at a time where market awareness will be high and the need will clearly remain significant. In T1D, we haven't given up. Indeed, our resolve is strengthened by the ongoing constructive dialogue with the FDA. Indeed, we're close to being able to submit new clinical data that we believe demonstrates a strong benefit risk for

Finally, with LX9851, our licensee, Novo Nordisk, continues to prioritize the clinical development of the asset and indeed just yesterday highlighted 9851 in their earnings call. By next quarter, even in just the next few weeks, we believe we'll be able to share a number of positive developments, and we thank you for your continued attention and support. With that, I'll turn it back to you, operator, to guide us through the Q&A.

No, thanks, Brian. Appreciate the question. I think first and foremost, it's really an exciting time to be in the field of HCM. I think there's a lot of enthusiasm and a lot of patient need. What we saw yesterday from the ACACIA study really gives us a lot of confidence that, you know, we have an asset where we believe we will have an incredibly strong benefit risk profile. We know the safety of sotagliflozin through many years of study and many thousands of patient exposure. If SONATA is positive, we believe that represents a strong benefit risk profile. Really the opportunity, particularly in non-obstructive, is incredibly large.

And so, we're really buoyed by that, and it gives us confidence in our step moving forward, particularly because with a strong benefit risk profile together with that simple once-a-day oral dosing. We really see ourselves positioned, particularly in non-obstructive as a first-line therapy. It makes a ton of sense where you don't have a REMS. You're a simple, well-known, safe product that provides significant symptom relief that a first-line asset can work very well for us. Importantly, really, these are two very different mechanisms, and like many types of cardiometabolic disease, using multiple mechanisms for shots on goal to relieve symptoms and improve outcomes is typically done. We're incredibly pleased that we have a strong opportunity in non-obstructive and obstructive disease.

Yeah. I'll just add, Brian, a couple other points. Thank you, Mike, for your comments. As Mike mentioned, the mechanisms of action here are not in conflict. In fact, they're probably complementary. I think the general feeling in the field is that CMIs are acting primarily as hemodynamic agents. As I tried to mention in my prepared remarks, sota's acting as a hemodynamic agent in a different manner, really acting on the cardiorenal axis and also improving a number of other parameters, some weight loss, increase in hemoglobin, decrease in blood pressure, all of which are beneficial for the heart in any heart failure state. In addition, we believe that the SGLT1 effects with SGLT1 receptors upregulated, particularly in the myocardium, that acting directly on the heart muscle tissue in a way that is novel and distinct from a CMI is important.

As we've mentioned in prior calls, we have not excluded patients on CMIs in this trial, and I can tell you that we are enrolling symptomatic patients on CMIs. Obviously, they're all mavacamten because that was the only product that's been commercially available heretofore. I also think that the results from ACACIA had, I would say, at least on a median basis, a relatively modest effect on KCCQ score. If the patients had baseline KCCQ scores similar to what was seen in ODYSSEY, my guess is a number of those patients will still remain symptomatic and will require additional therapy, which is consistent with what we're seeing in our trial enrollment that all the patients that are on CMIs remain symptomatic.

I think in that regard, as Mike said, the biggest issue in non-obstructive is gonna be patient identification because people have not been looking for non-obstructive disease, and I think historically have just sort of lumped them into a slightly different variant of HFpEF. I think that differentiation of a much thicker left ventricular wall has probably not been appreciated to date. Having another company out there really talking about the importance of non-obstructive HCM as a separate disease state from HFpEF, I think will be extraordinarily important for the field and for Lexicon.

Operator.

We'll take our next question.

Yeah, great questions. I'll answer them in the order that you asked them. We haven't given exact numbers of enrollment, but I can say confidently that we reaffirm the timelines that we have with enrollment middle of this year, in terms of last patient first visit of 500 target patients. We've seen as expected as all the sites come online, the expected and dramatic uptick in enrollment as the sites open and become familiar with the study and its availability. The distribution of patients, again, I don't wanna comment too early before we finalize enrollment. I think as we've said, the need is larger in the non-obstructive group since there is obstructive therapy available with CAM

Yeah. Thanks, Dominic. Let me start up. Craig can take some of the detailed SONATA questions as well. Yeah, we haven't finalized exactly the information that we will release at the time of enrollment, but we're certainly committed and understand that there's interest across a number of parameters. Of course, this split is given by the questions that are coming. This split of obstructive/non-obstructive is of interest and to really get the final baseline DEMS to compare that to SONATA. We will, we're very cognizant of that, and we will determine over the coming weeks exactly what we will release when. We haven't sort of finalized, but we will be providing updates 'cause we are cognizant that that's important for folks to understand. As it comes to the sort of the SONATA-specific questions, I might let you take those, Craig.

Thanks, Mike. I hope I have your questions correct. I'll answer the one on demographics first. We're still enrolling the trial and ACACIA has not really, to my knowledge, given details on the demographics, similar to what was done with ODYSSEY since ODYSSEY is now already published. I think we're seeing a patient population similar to what has been reported for ODYSSEY. You're really looking at population in their mid-50s to 60, pretty symptomatic disease, a good distribution by gender, equal distribution of gender.

We have a population I think was very consistent with what we expected, particularly the demographic and the geography that we're enrolling in this trial, which is U.S. and across Europe. I think in that regard, we've not seen anything unexpected. We haven't looked at detail yet at the KCCQ scores or anything else, but certainly we know that patients are symptomatic that are coming into the disease.

Broadly similar entry criteria, right?

Yeah. Exactly, Mike. Yeah. Thank you. Very similar entry criteria to the other trials. A clinically meaningful KCCQ score, I think the field is generally focused on five, four to five as the number. You know, I think there may be a rethinking of that in light of some of the more recent study results that have come out. Certainly historically, that has been seen as an important threshold for clinical meaningfulness. That's how we powered our trial is based on that range. Again, we haven't given the exact statistical plan that we're using, but we can certainly detect in that range comfortably with a high degree of probability of success.

There are no further questions at this time. I will now turn the call back over to Mike Exton for closing remarks.

Yeah. Thanks so much, everyone. Thanks for tuning in and listening to our update. As I mentioned, you know, the team has really worked incredibly hard to put us in a strong financial and strategic position and to execute across all of our programs. We're really looking forward to H2 here in 2026. I think as you see from our remarks, we've got many things that we've been working on diligently over the last wee while. They're going to come to fruition. Really look forward to updating you with a lot more information in the not-too-near future. Have a great day and look forward to speaking with you all again soon. Thank you very much.