Q1 2021 Lexicon Pharmaceuticals Inc Earnings Call
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At this time I would like to welcome everyone on to the lexicon Pharmaceuticals incorporated first quarter to any kind of on the earnings call.
All lines have been placed on mute to prevent any background noise I started the seek US remarks, there will be a question and answer session. If you would like to ask the question. During this time simply press Star then the number one on your telephone keypad. If you would like to reach all your question first of how and Keith. Thank you I would now like to hand.
The conference over to your first speaker for today, Chas Schultz executive director of corporate communication and Investor Relations. Thank you. Please go ahead Sir.
Thank you Donna and good afternoon, and welcome to the Lexicon Pharmaceuticals first quarter 2021 financial results Conference call.
Joining me today are Lanell coats, lexicons, President and Chief Executive Officer, and Jeff Wade Lexicons Executive Vice President of corporate and administrative affairs and Chief Financial Officer.
Earlier today lexicon issued a press release announcing our financial results for the first quarter of 2021, which is available on our website at.
<unk> dot and <unk> pharma dot com and through our SEC filings.
A webcast of this call along with a slide presentation is available on our web site.
During this call we will review the information provided in the release provide and update on our clinical programs 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 relating to the safety efficacy and the therapeutic and commercial potential of <unk> 91, one set of inflows and other drug candidates.
These statements May include characterizations of the expected timing and results of clinical trials of <unk> 91, one set of closing and our other drug candidates and the regulatory status and market opportunity for those programs.
This call May also contain forward looking statements relating to our growth and future operating results discovery and development of our drug candidates strategic.
The 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 and such forward. Looking statements. These risks include uncertainties related to the timing and the results of clinical trials and preclinical studies of <unk> 91, one set of good flows and our other drug candidates our dependence upon strategic alliances and our and.
The other third party relationships, our ability to obtain patent protection for our discoveries limitations imposed by patents owned or controlled by third parties and the requirements of substantial funding to conduct our research and development activities.
For a list and the description of the risks and uncertainties that we face. Please see the reports we have filed with the Securities and Exchange Commission.
I would now like to turn the call over to Leno coats.
Thank you Chad good afternoon, everyone and thank you for joining us on the call.
And we of course welcome the opportunity to provide you an update on the first quarter 2021, and the remainder of the year.
Patient enrollment is ongoing and our two phase III clinical studies of <unk> 91, one and neuropathic pain, we continue to navigate the challenges associated with patient enrollment given the current environment with the pandemic to help mitigate those challenges we have increased the number of clinical sites and our relief.
<unk> DP and one study we are keeping a close eye on enrollment and we'll continue to adjust to challenges as they arise to ensure we stay on target.
Late last year, our soloist and scored phase III outcome studies of soda the flows and and heart failure, both achieved their primary endpoints.
Based on the strong results from these studies and our subsequent discussions with the FDA. We made the decision to move forward expeditiously with a new drug application for the indication to reduce the risk of cardiovascular death, and hospitalization for heart failure, and urge and visits for heart failure and adult patients with type two.
<unk> would either worsening heart failure or additional risk factors for heart failure.
On the next slide there are a number of events to look forward to during the remainder of 2021 as mentioned we are working hard to reach our goal to have both of our proof of concept studies for Alex non tier one one readout by the end of the year.
We're very enthused by what we've seen from Alex now too and one and our preclinical and phase one studies and are looking forward to obtaining these face to the results we plan to share more about the data from these earlier, Alex natural and studies and upcoming publications.
We're moving forward with and the NDA filing facade of the flow of and in heart failure and expect to submit the NDA during the second half of the year.
We're also looking to establish a strategic alliance with <unk> of closing.
And heart failure and those business development discussions are ongoing in parallel with our NDA preparations.
Lastly, I should note that there are more analysis ongoing from the soloist and scored studies, which we expect to result in additional publications throughout the year.
There will be a presentation also to the flows and let the upcoming American College of Cardiology on may 16th entitled side of the flows and reduces total hospitalizations and increase of days alive and out of hospital and of Solus worsening heart failure trial.
The tone and I hope you get a chance to chime in to the meeting.
On the type one diabetes front, we continue to believe the soda the flows and demonstrated a positive benefit risk profile and the largest phase III development program and.
Ever conducted and Taiwan diabetes and that it has the potential to become an important new treatment option as an adjunct to insulin for type one diabetes patients.
We requested and opportunities for and administrative hearing with the FDA on whether they are ground force previous denial of our NDA for type one diabetes.
And March the FDA issued a public notice of opportunity for hearing and there was a period of the submission of public comments, which ended earlier. This week. We were very encouraged the seeded those public comments were overwhelmingly positive and their support for soda the flows and and type one diabetes last week we.
Submitted a written response to the Fda's position and look forward to continuing these discussions with the FDA.
I'd like to pause now and and by Jeff to take us through the financial results for the first quarter and our financial guidance for 2021.
Thank you line al to begin I will discuss key aspects of our first quarter financials.
More financial details can be found in the press release that we issued earlier today and also and our 10-Q filed with the SEC.
As indicated in our press release, we had minimal revenues and the first quarter of 2021, primarily due to the absence of product revenues as a result of our sale of Saar mellow during the third quarter of 2020.
Research and development expenses for the first quarter decreased to $12 6 million from $55 $2 million for the corresponding period in 2020.
This was primarily due to decreases and external clinical development costs relating to surgical floods and resulting from the completion of clinical studies.
Selling general and administrative expenses for the first quarter decreased to the $8 3 million from $14 7 million.
Same periods in 2020.
Primarily due to lower salaries and benefit costs as the results of reductions in personnel and such.
Of our 2020 and also lower marketing expenses.
In total we had a net loss for the first quarter of $21 million or <unk> 15 per share as compared to the net loss of $66 6 million or <unk> 63 per share and the corresponding period of 2020.
Our net loss for the first quarter of 2021, and 2020 included noncash stock based compensation expense of $2 9 million and $4 4 million respectively.
We ended the first quarter of 2021, with 141 4 million and cash and short term investments as compared to $152 3 million as of December 31, 2020.
Our.
<unk> guidance for 2021 has not changed from the guidance given on our March.
2020 year and financial results Conference call.
We continue to expect our 2021 operating expenses to be and the range of $85 million to $100 million.
As a sizable decrease from the $204 4 million and operating expenses that we had in 2020.
We expect non cash expenses to be approximately $11 million of our total operating expenses.
Research and development expenses are expected to be and the range of $60 million to $70 million.
This estimate includes the expected spend for our ongoing two phase II clinical studies of Alex 91, one.
And the remaining closeout of our set of the Pleasant studies and the expected cost to submit a new drug application for heart failure, as well as investment and preclinical and discovery stage programs.
We expect the G&A expenses to be and the range of $25 million to $30 million overall.
Overall, we expect that our current cash and investments will be sufficient to fund our operations through 2022 and into 2023.
I will now turn the call back till Enel.
And can document that we submitted to them and I encourage everyone that have an interest they can take a look at it when it becomes public.
The.
And the second thing in terms of of the hearing itself and what were requested this is very.
Very unique and.
And and.
It is very rare and so in terms of looking for whether the fda's out of all returned and so forth I don't think you're going to see much precedent either way because this is a very rare rare moment and.
The our objective certainly has to be able to work.
With the agency to come to the reasonable conclusion as to how we will make soda the flows of available available and the market for patient of 11 with type one diabetes.
I think this is one of the process and that will use to try to effect that opportunity and so.
Stay too and I think we will have a lot more opportunities to talk about this as as the process plays up.
Okay, and then just wondering I'll click on on 91, one and then just in the press release that the clinical trial sites to the D. P on trial and.
And it was bumped up from 30 to 40.
Has there been any struggle to enroll their and that's what's driving the additional sites or or was it from you read into that yeah.
No I think a little of your spot on on me.
Like like I think we're no different from many.
Enrollment was not meeting on our expectations given the folks were reluctant to come out and we have a number of business the scheduled and our protocols and therefore, we felt the only way to change the dynamics of of what we're saying was to increase the sites the.
The other thing I think is encouraging us as vaccinations have increased dramatically and people's confidence of going out and to the public and engaging again and these centers.
Should help us tremendously so I think with the number of sites that we've added along with the environment changing we have a good chance of the stangl Schedulers plain.
Okay. Thank you very much you bet.
Hi, Dan to ask the question <unk> spy on line on your friends keep on going.
Question comes from the line of services Channel from you then and company your line US now open.
Hi, Thanks for taking our questions.
But most important I think our data at this point and we will set the standard for what other competitors are going to have to meet.
Relative to once we get to market. So we remain very very confident and where we are but you are correct that.
Near term data certainly will have an impact on how we have conversations.
As for the.
And the outcome for the two neuropathic pain studies. The most important study as the DPM study as a broader and bigger market.
Significantly underserved market and so that's the one that we will prioritize and most likely upon success. We will we'll find a way quickly into a phase III program.
Okay.
Great. Thanks for taking my questions.
Net.
Thank you and again to ask the question you will need to press Star one on your parents Keypad. Your next question comes from the line of Nicole Mitchell and of its from Citi. Your line is now open.
Hi, This is Charlie on for Yigal. Thank you for TD and our questions. Great questions. We had was with regards to the NDA filing for physical flows and and heart failure.
Can you clarify if there are any additional pieces of feedback youre waiting on from the FDA at this point and at this stage what aspects of the filings have been completed and what still needs to be completed before you filings and the second half of year.
No I think we got the feedback that we need it and it was very encouraging and at this point, we are accelerating as fast as we can to get the NDA put together.
We've put it in and for the second half but for the.
Those two.
We push hard within the second half to get it done.
I think we're very fortunate that we did fall off of type one and so the CMC work.
Should be a little bit easier than if we had to start from from the beginning and there was quite of bit of work that we can certainly do around on some of the integrated sales.
Safety assessment, so I think were and are very good position us.
On a fairly large study so it will take some time for us to finish the work, but we're in a very good position to get it done as soon as we can and the second half.
Okay, Great and then we just have one follow up on the Alex nine Q1, one child can you talk about the the steps you're taking to mitigate.
Risk related to missed visits given the pandemic and just.
How will how will any missed visits are missing values be accounted for and the primary endpoint analysis for the study.
Yeah.
We are working through all of those kind of the dynamics I won't get into lot of.
Specifics, but I think of couple of things that we realized we had to Jack up a little bit one is that we have to help the sites due more to try to pool of patients and from the advertising point of view.
And so we're working hard to do that.
And give them the necessary support.
The second one is increasing the number of sites, while we make other sites productive allows us to stay on track So I mean those.
Those of the two things I would say that we have probably added into the mix to try to mitigate what we saw as risks of our timeline.
And I talked about this the last call I believe in March that we were starting to see some risk around the time line because of the enrollment and.
We were going to try to find a way to mitigate that through some work with the sites and trying to figure out how best to do that we made the determination to increase the sites and make the ones that we had a little bit more efficient and it really was around advertising and making sure of the people who are aware and understood. The situation, but I would tell you is probably the best thing Thats good.
Moving to help.
Our industry as well as the study is as the environment improves.
Vaccination of improves and people were willing to come to the site.
I think all of the studies will show a benefit as a result.
Okay. That's helpful. Thank you for taking the questions you bet.
Thank you and again to ask the question you will need to press star one on your phone's keypad again follow on on your phone's keypad.
And there are no further questions at this time I'll turn the call will revert to the speakers.
Well, thank you everybody for joining us.
And we're working diligently over the next couple of quarters to.
And sure we're able to deliver on what we see and the second half.
Alex now 211.
Hitting hitting the milestones we want to achieve as.
As well as the advanced and side of the flows to us to submission.
I've said it in March the more.
We did work around.
Out of the flows on and this uniqueness.
We made the decision to.
I asked us to an NDA as quickly as we can at.
It is impressive indeed, and we think it is a remarkable opportunity. So we look forward to continuing to keep you updated us as we have more information and share with you. However.
And you have of safe and the.
A wonderful rest of the week.
This concludes today's conference call you may now disconnect.
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